Short Circuit: An inexhaustive weekly compendium of rulings from the federal courts of appeal

Non-condensing furnaces, drag shows, and master accounts.

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

Friends, Indiana law requires prosecutors to produce detailed reports documenting how they use civil forfeiture. But we did a little sleuthing, and whoo boy, it turns out that the reports are riddled with errors. Indeed, nearly 30 percent of cases are going entirely unreported, a problem that is particularly acute in the counties that farm out their forfeiture prosecutions to private attorneys. Scandalous. Click here to learn more.

New on the Short Circuit podcast: New Orleans was so desperate to restrict short term rentals that it actually failed the rational basis test.

1. Department of Energy adopts new efficiency standards for consumer furnaces that effectively prohibit the sale of "non-condensing" furnaces (that vent through a vertical chimney) in favor of more efficient "condensing" furnaces (that require a different type of ventilation). Appliance manufacturers sue. D.C. Circuit: "[I]t is obvious that consumers do not buy small furnaces or commercial water heaters because of how the appliance vents." The rule stays. Dissent: You think nobody cares about having to punch new vents in their walls? The rules should go.
2. Are we the only ones to notice the recurrence of Second Circuit panels' issuing their opinions "per curiam" in controversial Trump litigation? In fairness, published per curiams are not uncommon in the Second Circuit, but still. Peculiar. Anyway, here's the latest, which remands for the district court to rethink whether Trump's New York state criminal prosecution (now on appeal in the state-court system) should be allowed into federal court instead.
3. Fourth Circuit: The Appointments Clause dictates that certain rules can only be issued by a Senate-confirmed principal officer—unless a Senate-confirmed principal officer hastily ratifies them after somebody points out they were issued in violation of the Appointments Clause.
4. Man beats his wife, the mother of his three children, after she files for divorce. He's arrested and then released the next day. Over the next several months, McAllen, Tex. police ignore 10 reports that he's harassing her and violating court orders. He murders her. Can her estate sue the city for failing to extend the equal protection of the law? Fifth Circuit (unpublished): No, the complaint fails to allege facts showing the police treat domestic violence victims less favorably than victims of other crimes.
5. As seen in this (unpublished) Fifth Circuit decision, a "petitory" action is what you file to confirm ownership in a piece of property, while a "pedatory" action is what you get when a long-suffering court reporter tries to record an oral settlement agreement in Louisiana.
6. University of Texas business prof tweets criticism of DEI and a range of other hot topics. The dean threatens the prof's boss to get the prof in line or else, a message the boss passes along. Prof makes his account private and then stops tweeting altogether. How must he establish that the school retaliated against him? Is it the standard from a 25-year-old Fifth Circuit case, which requires an adverse employment decision, or does a more recent SCOTUS case allow him to proceed? Fifth Circuit: We can't overrule past panel precedent unless SCOTUS has been explicit. And that isn't so here. Prof loses.
7. Man spent 36 years in prison for a rape and attempted murder that he didn't commit, topping the list of exonerees with the longest incarcerations. Baton Rouge, La. police investigating the crime showed the victim photo lineups. On the fourth occasion, she homed in on one man whom she said looked "most" like the assailant, though she "could not positively say." She later picked him out on the fifth set of photo lineups and then a physical lineup. Fingerprints at the scene didn't match his—and when the state finally re-ran them in 2019, they implicated someone else. Fifth Circuit (unpublished): The photo lineups were constitutional because the victim "exhibited a level of certainty." (Ed. note: You may enjoy his take on Blackbird.)
8. After Texas passes law restricting drag shows, orgs and individuals sue. District court: Which violates the First Amendment. Fifth Circuit: Injunction vacated. After this case was briefed, the Supreme Court said lower courts have been doing facial free speech challenges wrong. Partial dissent: The vacatur is fine, but the majority's pre-enforcement standing analysis is seriously dodgy. And the suggestion that drag shows aren't protected by the First Amendment is right out.
9. Columbus, Ohio-area school district prohibits students from intentionally and repeatedly referring to other students by their non-preferred pronouns. Parents of students who would like to do that sue. Sixth Circuit (en banc, with four separate concurrences and seven-judge dissent): And they should be able to do that as long as it doesn't amount to bullying or harassment. Denial of PI reversed.
10. Did Home Depot violate the National Labor Relations Act by requiring a Minnesota employee to remove a "BLM" marking on the employee's apron? (The employee resigned rather than remove it.) Eighth Circuit: Home Depot's dress code was fine, not least because the company suggested and supported several other apron messages promoting racial equality and respect in the workplace that the employee could have used instead.
11. After fugitive flees into Los Angeles print shop, a SWAT team fires tear gas canisters through windows, door, roof, and more, causing over $60k damage. Supreme Court (1871): When the gov't intentionally damages property, like by flooding it, for some kind of public purpose, that is a taking requiring just compensation. Supreme Court (1986): Which is a principle we've now applied "unhesitatingly" for over 100 years. Supreme Court (2012): Yup, that's good law and certainly not limited to flooding cases. Ninth Circuit (2025): So just flooding, right? (This is an IJ case. Please do click here for a lovingly crafted podcast episode on this very topic.)
12. Seattle homeowner: A city ordinance says I must pay a $92k "affordable housing fee" just to get a permit to build a house. That is unconstitutional on its face because no one who is adding to the housing supply is impeding anyone from accessing housing. Ninth Circuit (unpublished): The ordinance satisfies facial review solely because the city reserves the right to waive its enforcement (which it has previously done only once, while saying it likely will never do so again). And also, your as-applied challenge fails because you didn't submit a standalone waiver request (a process that appears nowhere in the ordinance and that the city first discovered over a year into this litigation). (Harumph. This is an IJ case.)
13. Oregon nonprofit has a religious objection to covering abortion in its employees' health insurance—which state law requires—but the nonprofit is not, strictly speaking, a religious organization. So, can it bring a religious liberty challenge? Ninth Circuit (over a dissent): Well, its articles of incorporation do include a "Judeo-Christian Operation Clause." So, yeah.
14. In 2018, the federal Agricultural Marketing Service, acting at the direction of Congress, establishes new rules for disclosing whether foods had been bioengineered. A coalition of natural-food advocates challenges the rules for not being restrictive enough, because they allow foods to escape labeling if they have bioengineered material in undetectable amounts. Ninth Circuit: You're right, the AMS doesn't have authority to exempt foods with bioengineered material in undetectable amounts. But it does have the authority to set a threshold for bioengineered material, below which a food will not be considered "bioengineered." So congratulations on your meaningless victory.
15. Crypto-focused bank wants a "master account" with its local federal reserve bank, which is vital for functioning banks. Requests for master accounts are typically granted in 5-7 days, but the Kansas City Fed takes 27 months before denying the request. The bank sues. Tenth Circuit: Federal Reserve Banks have discretion to deny master accounts to eligible institutions that introduce undue risk into the Fed's payment systems and services. Dissent: They absolutely do not have discretion, and granting them this unreviewable discretion creates serious constitutional problems.
16. Want to know what "civil action" means? So did the Tenth Circuit, in deciding whether the Equal Access to Justice Act allows for attorneys' fees in habeas challenges to immigration detention. Turns out that since "civil action" has a lot to do with William Blackstone, Congress has waived sovereign immunity in those proceedings, and the successful habeas attorney gets to ring the register.
17. A 2023 Florida law provides, inter alia, that China-domiciled individuals who are neither citizens nor lawful permanent residents in the U.S. can't buy certain real estate, must register property they already own, and file affidavits upon purchase stating compliance with the law. Four Chinese citizens sue, arguing the law violates equal protection, due process, and the Fair Housing Act; the lower court disagrees and denies their request for a PI. Eleventh Circuit (over a dissent): Agreed as to the registration and affidavit requirements, but the PI should be denied without prejudice as to the purchase requirement b/c no plaintiff has standing to challenge it.
18. And in en banc news, the Ninth Circuit (over two dissentals) will not reconsider its decision that Congress did not violate the nondelegation doctrine in giving the Bureau of Land Management a blank check to write its own land management laws, including defining the crime of driving without a taillight.

New case! Libby Souder has taught swim lessons, often to special-needs kids, in her backyard pool since 2018, when Columbia, S.C., gave her a business license. However, the city has begun to enforce a previously unenforced rule requiring that home-based businesses be conducted entirely indoors. Libby never received any kind of violation, and over 30 neighbors and parents attested that she provides a wonderful service they're grateful for. And yet, officials bowed to the complaints of a single neighbor, who remarkably began complaining even before buying and moving into the house next door in 2024. But the South Carolina Constitution protects the right to earn an honest living free of unreasonable regulations, so this week Libby filed suit to protect her rights and the rights of all South Carolinians. Click here to learn more.