Short Circuit: A Roundup of Recent Federal Court Decisions

Stem cells, boondoggles, and watering flowers.

Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.

Victory! Earlier this year, IJ sued Oregon agricultural officials for requiring small dairy farms with only a handful of animals to install unnecessary and ruinously expensive industrial-grade wastewater management systems—a favor to big dairy farms that wanted to put their smaller competitors out of business. This week, we're happy to announce that the Oregon Dept. of Agriculture has rewritten its rules so that the requirement applies only to medium and large operations. Click here to learn more.

1. Prediction market company Kalshi wants to list futures contracts on which party will control Congress, but CFTC prohibits the contracts as against the public interest. District court: CFTC decision went beyond its statutory authority, Kalshi can go ahead. CFTC: Can we have a stay pending appeal, lest these contracts corrupt the election? D.C. Circuit: No dice. The "question on the merits is close and difficult," but the CFTC doesn't have any good evidence that listing these contracts will cause harm while we consider the appeal.
2. New Jersey resident worked for DraftKings, whose HQ is in Massachusetts. But then he headed west to join competitor Fanatics in California. DraftKings: Hey, that violates your noncompete! Ex-employee: Too bad I'm in California now, which bans noncompetes! DraftKings: But the noncompete says Massachusetts law controls and we're suing you there! District court: Hard to argue with that. No working for a competitor for a year after quitting. First Circuit: You know, noncompete law could be a lot worse than it is in Massachusetts. Affirmed.
3. Residents of Buffalo, N.Y. can judge for themselves whether then-Governor Andrew Cuomo's "Buffalo Billion" initiative turned that town around or shoveled taxpayer dollars into a Josh Allen-sized boondoggle. But some of the characters involved in one arm of the project can breathe easier as the Second Circuit vacates their convictions for wire fraud and conspiracy (but not making false statements) pursuant to their 2023 trip to SCOTUS.
4. Now-former principal at school with mostly black and Hispanic students criticizes the NYC Dept. of Education for funding only half as many sports teams as the predominantly white school that shares the same Brooklyn campus. Soon after, she finds herself under investigation over an anonymous (and apparently baseless) complaint that she had tried to recruit students to a communist organization. Can she sue the Dept. for violating Title VI? Second Circuit: Sure can. Case undismissed.
5. Bloomberg and Dow Jones & Co. file FOIA requests with the U.S. Postal Service, seeking disclosure of aggregated, anonymized change-of-address data to produce reports about movement trends in the United States—data that reporters have obtained in the past. USPS: We were actually hoping to license that data as part of a commercial product that costs $277k for four years of access, so we're withholding it under a FOIA exemption. Second Circuit: Which they are allowed to do. The Postal Reorganization Act contains a FOIA exemption for "information of a commercial nature."
6. Unarmed teen passenger flees 2018 traffic stop on foot; a Louisiana state trooper shoots him in the back at point-blank range, paralyzing him from the waist down. The trooper failed to turn on her bodycam, but a private security camera captures the events and provides a more definitive account than her "wildly inconsistent" statements and "lies." Fifth Circuit (unpublished, per curiam): To a jury this must go. No qualified immunity. [N.B.: The trooper got six months' probation after pleading guilty to a misdemeanor but has since had that charge expunged.]
7. Responding to complaint that Cincinnati, Ohio man had recently threatened his neighbors, police officers approach man's house, open unlocked door leading to second-floor apartment, proceed unannounced to the second floor, encounter the man (armed with a rifle), and shoot him dead. In 2015. Sixth Circuit (2020): No QI on the claim for unlawful entry into the man's home. Sixth Circuit (2024, unpublished): No QI on the claim for unlawful entry into the man's home.
8. RFK Jr. really, really wants to be removed from the Michigan presidential ballot and the Michigan Secretary of State really, really wants him to stay on. Sixth Circuit (unpublished): But he tried his luck in state court and lost, so he doesn't get a do-over here. Besides, it's hard to see how he'll be irreparably harmed by inclusion on the Michigan ballot when he's simultaneously fighting against removal from the New York ballot. Dissent: The Secretary of State illegally added him back to the ballot after the deadline for finalizing the candidates, and we all know why she did it.
9. The FDA sues doctors who create and administer a stem cell mixture called stromal vascular fraction, alleging that the mixture, derived from a patient's own fat tissue, is a "drug" within the meaning of the Food, Drug, & Cosmetic Act. The doctors argue that it isn't a drug or, if it is, it is exempt under an FDA regulation called the "same surgical procedure" exception, which permits tissue to be removed from a patient and reimplanted in the same procedure. The district court ruled for the doctors. Ninth Circuit: Reversed! The cells are definitely a "drug" under the broad definition of that term, and they're too highly processed to fall within the exemption.
10. This episode of Bluey is called "Did the district court err by sanctioning a Montana probation-officer defendant in an excessive-force case because other probation officers stepped on a bunch of rakes and accidentally deleted the surveillance footage of the incident"? Ninth Circuit: Yes, it erred. The court should have proceeded under Rule 37, not its inherent authority, and no one involved in the video deletion acted with the requisite level of willfulness to merit the sanctions the district court imposed (establishing liability as a matter of law).
11. Utah passes an age-verification law for viewing online pornography. But it doesn't want to defend the law in court, so it instead creates a private cause of action making publishers liable to an individual for damages resulting from a minor's access to the material. Publishers and First Amendment advocates sue, alleging a violation of their First Amendment rights. Tenth Circuit: Dismissed! The state's procedural shenanigans work, and you'll have to wait to be sued before you can vindicate your First Amendment rights. Dissent: The Commissioner of the Utah Department of Public Safety, which oversees Utah's Mobile Driver's License program, has a sufficient connection to the law that he can be sued.
12. Black pastor in Childersburg, Ala. is watering his (white) neighbors' flowers while they're out of town. Three police officers responding to a 911 call demand ID, the pastor refuses, and they arrest him after an argument. When pastor sues, district court grants qualified immunity on premise that officers had probable cause to arrest. Eleventh Circuit (unpublished): Guys, we've been over this. Just last year we explained that Alabama law lets police with reasonable suspicion ask for a person's name, address, and explanation of his actions—all of which the pastor gave you—not to demand a physical ID. Reversed and remanded for trial.
13. And in en banc news, the Fifth Circuit will not reconsider its ruling that tanker-truck drivers transporting crude oil entirely within the state of Texas are engaged in "interstate or foreign commerce" as defined by the Motor Carrier Act of 1935. Five-judge dissental: It's true that "interstate" = "intrastate" under the Commerce Clause, but we're talking about a statute here, and interstate means interstate. (We inveighed against the court's still-undisturbed precedents on the podcast.)
14. And in amicus brief news, IJ is weighing in on the age-verification debate currently at the Supreme Court in Free Speech Coalition v. Paxton. The Fifth Circuit previously held that Texas's age-verification law should be reviewed with only rational-basis scrutiny because it's aimed at protecting minors. Plaintiffs argue that it should be reviewed with strict scrutiny because it burdens adults' access to constitutionally protected speech. Overlooked in this debate, we argue, are the folks who are actually regulated under the law: Publishers who face civil liability if they publish protected material, even if no minor ever views it. Focusing on them makes clear why the Fifth Circuit got it wrong and why it's so important for the Court to get it right.

New case! IJ client Daniel Horwitz is a constitutional litigator, who, charmingly, maintains a humble newsletter focused on the Tennessee Court of Appeals. (Subscribe today!) Less charmingly, Daniel is subject to a gag order in the Middle District of Tennessee barring him from talking to the media or on social media about any of his many cases against a private prison company. He would like to describe, for instance, how the prison is violating its gov't contracts and ignoring violence that frequently results in wrongful deaths. And while Daniel has repeatedly asked the court to address his First Amendment arguments against the local rule that allowed the gag order, it's been over two years. So this week, he joined with IJ to file a federal lawsuit. "The court cannot silence Daniel simply because he's criticizing a government contractor," says IJ Attorney Jared McClain. "Public interest litigation requires public discussion." Click here to learn more.