U.S. Supreme Court Archives

The GEO Group, Inc. v. Menocal, No. 24-758 – Decided February 25, 2026

Today, the Supreme Court unanimously held that federal contractors may not take immediate appeals from pretrial orders rejecting a defense to liability based on compliance with the government’s directives.

“Because Yearsley provides a defense to liability, not an immunity from suit, an order denying its protection can be effectively reviewed after a final judgment. So appellate review of such an order, as of most pretrial rulings, must await completion of the district court’s proceedings.”

Justice Kagan, writing for the Court

Background:

In Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), the Supreme Court held that government contractors cannot be held liable for acts that they undertake pursuant to validly conferred governmental authority. Yearsley gave rise to what many have described as “derivative sovereign immunity.”

GEO Group operates a private detention facility in Aurora, Colorado under contract with U.S. Immigration and Customs Enforcement (ICE). A class of detainees who were detained at GEO’s Aurora facility sued GEO in federal court, alleging that GEO’s facility-sanitation policy and voluntary-work program violate federal and Colorado law. GEO moved for summary judgment, asserting derivative sovereign immunity based on GEO’s claim that ICE authorized its challenged policies. After the district court denied the motion on the theory that ICE neither directed nor required those policies, GEO took an immediate appeal.

The Tenth Circuit dismissed the appeal for lack of jurisdiction. Under 28 U.S.C. § 1291, courts of appeals have jurisdiction over appeals from “final” decisions, which terminate the litigation. Under the collateral-order doctrine, appellate courts can hear appeals from certain, non-case-terminating decisions that (1) conclusively determine the disputed question, (2) resolve an issue completely separate from the merits of the action, and (3) are effectively unreviewable on appeal from a final judgment. The Tenth Circuit held that orders denying derivative sovereign immunity under Yearsley are not immediately appealable because they are not completely separate from the merits. Both the Yearsley defense and the merits of the case turn on whether the government directed the contractor’s challenged actions, so GEO would have to wait until the conclusion of litigation in the district court to appeal.

GEO petitioned for certiorari, noting a circuit split regarding whether government contractors can immediately appeal from denials of derivative sovereign immunity.

Issue:

Is an order denying a government contractor’s “derivative sovereign immunity” defense under Yearsley immediately appealable under the collateral-order doctrine?

Court’s Holding:

No. The Yearsley defense is a defense to liability on the merits, not an immunity from suit. Because merits defenses can be effectively reviewed on appeal from a final judgment, the collateral-order doctrine does not permit an immediate appeal.

What It Means:

Today’s decision clarifies that derivative sovereign immunity under Yearsley is not, despite its label, a true immunity from suit, but a defense to liability on the merits. The Supreme Court explained that government authorization relieves contractors of liability because the Yearsley defense turns on the legality of the defendant’s conduct. Government authorization does not and cannot delegate the government’s immunity from suit to its agents; sovereign immunity belongs to the government alone.
Because Yearsley does not provide an immunity from suit, orders rejecting that defense turn on the legality of the defendant’s conduct and therefore are effectively reviewable on appeal from a final judgment, defeating an immediate appeal as of right under the collateral-order doctrine.
At the same time, the Court went out of its way to note that government contractors could use the appeal-certification process in 28 U.S.C. § 1292(b) to seek immediate appellate review of an otherwise unappealable order denying the Yearsley defense.
Concurring in the judgment, Justice Thomas reiterated his longstanding position that the Court should refuse to allow interlocutory appeals from any new category of pretrial orders absent express congressional authorization.
Justice Alito also wrote separately. He would have denied a right to an immediate appeal because the Yearsley defense does not vindicate sufficiently important constitutional or public-policy interests, not because the defense turns on the legality of the defendant’s conduct.

The Court’s opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Government Contracts

Dhananjay S. Manthripragada
T: +1 213.229.7366
dmanthripragada@gibsondunn.com

Lindsay M. Paulin
+1 202.887.3701
lpaulin@gibsondunn.com

This alert was prepared by associates Patrick Fuster and Connor P. Mui.

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

The Hain Celestial Group, Inc. v. Palmquist, No. 24-724 – Decided February 24, 2026

Today, the Supreme Court unanimously held that a federal court’s final judgment must be vacated—and the case remanded to state court—when an appellate court later determines that the district court erred in dismissing a nondiverse defendant after the case was removed.

“This Court has never held that a district court can create jurisdiction through its own mistakes. A rule to the contrary would permit courts to enlarge their jurisdiction beyond the limits Congress imposed.”

Justice Sotomayor, writing for the Court

Background:

Cases brought in state court may be removed to federal court when the federal court would have had jurisdiction at the outset, including when the amount-in-controversy requirement is met and the parties are completely diverse. If a party believes a nondiverse party was named as a co-defendant only to defeat the right of removal, the party can remove the case and ask the district court to dismiss the nondiverse co-defendant as improperly joined.

Sarah and Grant Palmquist, Texas citizens, sued Hain Celestial and Whole Foods in Texas state court, asserting state-law product-liability and negligence claims. Because Whole Foods (like the Palmquists) is a Texas citizen, there was no complete diversity on the face of the complaint. But Hain, a citizen of Delaware and New York, removed to federal court, arguing that Whole Foods had been improperly joined. The district court agreed, dismissed Whole Foods on improper-joinder grounds, and denied the Palmquists’ motion to remand. The case proceeded against Hain alone, and the district court ultimately granted judgment in Hain’s favor.

On appeal from the final judgment, the Fifth Circuit held that Whole Foods was not improperly joined. The court of appeals concluded that complete diversity was lacking from the moment of filing, vacated the judgment in Hain’s favor, and ordered the case remanded to state court.

Issue:

When a removed diversity case includes a nondiverse defendant who, following removal, was erroneously dismissed as improperly joined, must the court of appeals vacate the resulting final judgment and order the case remanded to state court?

Court’s Holding:

Yes. When a properly joined nondiverse defendant is erroneously dismissed following removal, complete diversity is lacking from start to finish, and accordingly the district court never has jurisdiction over the case. A court of appeals that corrects the erroneous dismissal must vacate the resulting judgment and remand the case to state court; it may not salvage the judgment on the ground that the nondiverse defendant could be dropped on appeal.

What It Means:

The Court’s decision adopts a bright-line rule for removed diversity cases: if an erroneous dismissal of a nondiverse party is not cured before final judgment, the judgment must be vacated once the error is corrected on appeal. Because this rule is jurisdictional, it applies “regardless of how efficient it might be to leave the judgment in place” or the inefficiencies that would result from a remand and retrial.
The Court distinguished situations where a nondiverse defendant settles or is voluntarily dismissed in a final order before trial, thereby curing the jurisdictional defect and allowing the ultimate judgment to stand.
The Court also highlighted alternative pathways parties may take in lieu of waiting until appeal from final judgment to address whether a dismissal was erroneous—for instance, partial final judgment under Federal Rule 54(b) or certification for interlocutory appeal under 28 U.S.C. § 1292(b).
The Court separately rejected Hain’s argument that Whole Foods could be dismissed as a dispensable nondiverse party under Rule 21, emphasizing that plaintiffs are generally entitled to select the forum in which they sue and explaining that courts cannot use Rule 21 to override those choices absent plaintiffs’ consent.
Going forward, the Court’s opinion may push district courts to resolve any doubts in favor of remand at the outset and to approach improper-joinder arguments with skepticism. Defendants contemplating removal on improper‑joinder theories will have to assess the risk that, if a court of appeals later disagrees, a defense verdict after trial will be wiped out and the case restarted in state court. The opinion also likely will encourage interlocutory appeals of improper-joinder issues so the parties can avoid the potential waste of proceedings that later would have to be vacated.
Justice Thomas separately concurred, questioning the doctrine of “improper joinder” (as opposed to outright fraudulent joinder) and urging the Court to consider that doctrine in a future case.

The Court’s opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

This alert was prepared by Matt Aidan Getz and Jeff Gurley.

Join members of our International Trade Advisory & Enforcement and Appellate and Constitutional Law Practice Groups for a recorded webcast analyzing the U.S. Supreme Court decision in Learning Resources, Inc., et al. v. Donald J. Trump, et al. Topics include:

The implications for the major questions doctrine, the non-delegation doctrine, presidential emergency powers, and statutory interpretation
What happens next at the Court of International Trade
The ruling’s impact on existing and future tariffs
What steps are required to trigger alternative tariff mechanisms and how quickly they can be deployed
The potential effects on other IEEPA-based authorities, including sanctions and outbound investment restrictions
The practical and strategic landscape going forward for U.S. trade policy

MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.0 credit hour, of which 1.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact CLE@gibsondunn.com to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour in the General category.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

Adam M. Smith is a partner in Gibson Dunn’s Washington, D.C. office and Co-Chair of the firm’s International Trade Advisory & Enforcement and Sanctions & Export Enforcement practice groups. He advises clients on tariff evasion, trade-sanctions strategy, import/export controls and white-collar investigations in complex cross-border contexts. Clients benefit from Adam’s experience in the Obama Administration, where he was Senior Advisor to the Director of the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and Director for Multilateral Affairs on the National Security Council.

Ron Kirk is Senior Of Counsel in Gibson Dunn’s Dallas and Washington, D.C. offices. He is Leader of the International Trade Advisory and Enforcement Practice Group and a member of the Sports Law, Public Policy, Crisis Management and Private Equity Practice Groups. Ambassador Kirk has had an extensive career in Public Service. Prior to joining Gibson Dunn in April 2013, Ambassador Kirk served as United States Trade Representative (USTR) and was a member of President Obama’s Cabinet, serving as the President’s principal trade advisor, negotiator and spokesperson on trade issues. He also served as Mayor of Dallas from 1995 – 2001, and as Texas Secretary of State in 1994 appointed by Gov. Ann W. Richards.

Christopher T. Timura is a partner in Gibson Dunn’s Washington, D.C. office and a member of the International Trade and White Collar Defense & Investigations Practice Groups. He advises clients on complex matters at the intersection of U.S. national security, foreign policy and international trade regulation — including export controls, economic sanctions, and import-related investigations — and regularly represents companies before agencies such as the OFAC, BIS and CBP. Chris currently serves on the Department of Commerce’s Regulations and Procedures Technical Advisory Committee.

Trenton Van Oss is a partner in Gibson Dunn’s Washington, D.C. office and a member of the firm’s Appellate and Constitutional Law Practice Group. He advises clients on complex appellate and constitutional matters, including challenges involving federal statutes, administrative action, and separation‑of‑powers issues. Trenton regularly represents clients in high‑stakes litigation with significant regulatory and policy implications.

Samantha Sewall is of counsel in Gibson Dunn’s Washington, D.C. office and a member of the firm’s International Trade Advisory and Enforcement and Sanctions & Export Enforcement Practice Groups. She advises clients on U.S. economic sanctions, export controls, CFIUS, and anti‑boycott laws, and regularly handles compliance assessments, internal investigations, voluntary disclosures, and regulatory engagements with OFAC, BIS, and CFIUS. Samantha has experience across sectors including financial services, technology, aerospace/defense, energy, life sciences, and transportation.

Learning Resources, Inc. v. Trump, No. 24-1287
Trump v. V.O.S. Selections, No. 25-250 – Decided February 20, 2026

Today, the Supreme Court held 6-3 that the International Emergency Economic Powers Act does not grant the President the power to impose tariffs.

“Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA—’regulate’ and ‘importation’—the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight.”

Chief Justice Roberts, writing for the Court

Background:

The International Emergency Economic Powers Act (IEEPA) grants the President the power, upon declaring a national emergency, to “regulate . . . importation or exportation of . . . any property in which any foreign country or a national thereof has any interest.” 50 U.S.C. § 1702(a)(1)(B). From February to April 2025, President Trump invoked IEEPA and issued five executive orders imposing tariffs of up to 125% based on declared emergencies of fentanyl trafficking and trade imbalances. In subsequent months, the President amended and altered those tariffs.

Some plaintiffs challenged the tariffs in the U.S. District Court for the District of Columbia, while others challenged the tariffs in the U.S. Court of International Trade. Both courts ruled against President Trump’s tariffs. The District Court granted plaintiffs’ motion for a preliminary injunction on the grounds that IEEPA does not grant the President the authority to impose any tariffs. Before the D.C. Circuit ruled on the appeal of the preliminary injunction, the Supreme Court granted certiorari before judgment. The Court of International Trade granted summary judgment to plaintiffs, holding that IEEPA does not authorize tariffs based on trade imbalances because they are governed by a different statute. On appeal, the en banc U.S. Court of Appeals for the Federal Circuit affirmed 7-4, holding that, while IEEPA may authorize some tariffs, it does not authorize tariffs as broad or large as the challenged tariffs.

Issue:

Are President Trump’s emergency tariffs authorized by IEEPA? If so, does IEEPA unconstitutionally delegate legislative authority to the President?

Court’s Holding:

No. IEEPA does not grant the President any authority to impose tariffs.

What It Means:

Today’s decision confirms that President Trump’s emergency tariffs are not authorized by IEEPA—and that no president can impose tariffs under IEEPA. The Court concluded that IEEPA’s language authorizing the President to “regulate . . . importation or exportation” during emergencies does not grant the President the power to impose tariffs or other taxes. The Court also noted that, when Congress has granted the power to impose tariffs in other statutes, it has done so expressly.
The Court held that the Court of International Trade has exclusive jurisdiction over challenges to the tariffs. Importers have already filed nearly 2,000 lawsuits seeking refunds in that court. As Justice Kavanaugh noted in his dissent, the majority did not address “whether, and if so, how the Government should go about returning the billions of dollars that it has collected from importers.”
The majority expressly refused to speculate about how other statutes might be used to impose tariffs similar to the ones that President Trump attempted to impose under IEEPA. But Justice Kavanaugh suggested in his dissent that “numerous other statutes,” including the Trade Expansion Act of 1962, the Trade Act of 1974, and the Tariff Act of 1930, “authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case.”
Taking that lead, President Trump has already announced today that he will impose a 10% tariff on goods from all trading partners (which is limited to 150 days absent congressional authorization) under Section 122 of the Trade Act of 1974 and will begin taking steps to impose additional tariffs under Section 301 of that statute. No president has ever invoked Section 122, which Congress passed in 1974 in response to limited and temporary tariffs that President Nixon had imposed to address a “balance of payments” crisis in 1971. We discussed these alternative trade statutes in our October client alert.
The Court divided on the application of the major-questions doctrine to the President’s actions and did not address the related argument that the Constitution did not allow Congress to delegate an unbridled power to impose tariffs. While Justices Gorsuch and Barrett joined the portion of the Chief Justice’s lead opinion holding that the President “must ‘point to a clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs,” Justices Kagan, joined by Justices Sotomayor and Jackson, reached the same interpretation without applying the major-questions doctrine, which they have criticized in past cases. Justice Kavanaugh, joined by Justices Thomas and Alito, suggested that the doctrine does not apply at all in the foreign-affairs context. Because the Justices fractured on the major-questions doctrine and did not resolve the nondelegation doctrine, the lack of consensus leaves unsettled how attempts to impose tariffs under other statutes may fare.
The Court today did not directly address whether IEEPA authorizes other kinds of actions, such as economic sanctions, prohibitions on outbound investment, and the recently finalized Department of Justice Data Security Program. Nor did the Court’s decision disturb other existing tariffs imposed by the Trump Administration during the past year that did not rely upon IEEPA, including tariffs imposed under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974. Courts have rejected prior attempts to limit the scope of Section 232 and Section 301.

The Court’s opinion is available here.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice group leaders:

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: International Trade Advisory and Enforcement

Ronald Kirk
+1 214.698.3295
rkirk@gibsondunn.com

Adam M. Smith
+1 202.887.3547
asmith@gibsondunn.com

This alert was prepared by associates and counsel Daniella Cass, Aaron Gyde, Patrick Fuster, Samantha Sewall, Dominic Solari, Dorkas Medina, Erika Holmberg, Layla Reynolds, Hui Fang, Nicole Martinez, Sarah Burns, and Zach Kosbie.

Berk v. Choy, No. 24-440 – Decided January 20, 2026

Today, the Supreme Court held that a Delaware statute—requiring that a medical malpractice complaint be accompanied by an expert affidavit—conflicts with the Federal Rules of Civil Procedure and therefore does not apply to suits in federal court.

“Rule 8 sets a ceiling on the information that plaintiffs can be required to provide about the merits of their claims. Delaware’s affidavit requirement is at odds with Rule 8 because it demands more.”

Justice Barrett, writing for the Court

Background:

The Supreme Court has long held that federal courts sitting in diversity must “apply state substantive law and federal procedural law.” Hanna v. Plumer, 380 U.S. 460, 465 (1965). Accordingly, when a state law conflicts with the Federal Rules of Civil Procedure, the federal rule generally controls.

Delaware—like several other States—generally requires that a complaint alleging medical malpractice be accompanied by an expert affidavit “stating that there are reasonable grounds” for the claim. 18 Del. C. § 6853. If the plaintiff fails to attach the required affidavit, the court clerk must “refuse to file the complaint.” Id. According to the States that have these expert-affidavit requirements, their main purpose is to deter meritless malpractice suits.

In this case, a Florida resident sued Delaware medical providers in Delaware federal court for alleged malpractice. But the plaintiff failed to submit the expert affidavit required by Delaware law. Accordingly, the district court dismissed the suit. The Third Circuit affirmed based on circuit precedent holding that expert-affidavit requirements like Delaware’s apply in federal court.

Issue:

Whether a state law requiring that a medical malpractice complaint be accompanied by an expert affidavit applies in federal court.

Court’s Holding:

No. Delaware’s expert-affidavit requirement conflicts with Rule 8 of the Federal Rules of Civil Procedure, which requires only a “short and plain statement of the claim” to proceed past the pleading stage. Because Delaware’s requirement demands more, it does not apply to medical malpractice actions filed in federal court.

What It Means:

Today’s decision—in which all nine Justices agreed to reverse the judgment below (and with eight Justices joining the majority opinion)—means that a different procedural framework governs certain medical malpractice actions brought in federal court versus those filed in state court. Plaintiffs in federal court need not comply with state laws requiring malpractice complaints to be accompanied by an expert affidavit. This difference could be relevant to certain strategic decisions in these types of suits—for example, what forum the plaintiff chooses and whether a defendant elects to remove a case to federal court.
The Court’s ruling does not affect what requirements govern medical malpractice actions filed in state court. Those suits will still be governed by state law, which may include expert-affidavit requirements like the Delaware requirement at issue in this case.
More broadly, today’s decision clarifies the Court’s general doctrine for determining when a state-law requirement applies in federal court. The proper inquiry is whether a state law purports to answer the same question as a federal procedural rule. And the Court clarified that a federal rule is valid under the Rules Enabling Act as long as it “really regulates procedure”—regardless of whether the state law it displaces is substantive.
The Court’s ruling thus has implications for actions outside of the medical malpractice context as well. Litigation may arise regarding whether state rules requiring any sort of third-party verification—by affidavit or otherwise—apply in federal court.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Litigation

Barry H. Berke +1 212.351.3860 bberke@gibsondunn.com	Reed Brodsky +1 212.351.5334 rbrodsky@gibsondunn.com	Trey Cox +1 214.698.3256 tcox@gibsondunn.com
Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com	Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com

Related Practice: FDA and Health Care

Gustav W. Eyler +1 202.955.8610 geyler@gibsondunn.com	Katlin McKelvie +1 202.955.8526 kmckelvie@gibsondunn.com	John D.W. Partridge +1 1 303.298.5931 jpartridge@gibsondunn.com
Jonathan M. Phillips +1 202.887.3546 jphillips@gibsondunn.com

This alert was prepared by associates Robert Batista and Jaime Barrios.

Gibson Dunn’s U.S. Supreme Court Round-Up provides an overview of cases being argued during the October 2025 Term and highlights other key developments on the Court’s docket. During the October 2024 Term, the Court heard 62 oral arguments and released 58 opinions. It dismissed three cases after argument as improvidently granted and set two cases for reargument during the October 2025 Term. To date, for the October 2025 Term, the Court has granted 40 petitions and set one application for oral argument, in addition to the cases set for reargument, for a total of 39 arguments.

Spearheaded by Miguel Estrada, the U.S. Supreme Court Round-Up keeps clients apprised of the Court’s most recent actions. The Round-Up previews cases scheduled for argument, tracks the actions of the Office of the Solicitor General, and recaps recent opinions. The Round-Up provides a concise, substantive analysis of the Court’s actions. Its easy-to-use format allows the reader to identify what is on the Court’s docket at any given time, and to see what issues the Court will be taking up next. The Round-Up is the ideal resource for busy practitioners seeking an in-depth, timely, and objective report on the Court’s actions.

View the Round-Up Here

Gibson Dunn has a longstanding, high-profile presence before the Supreme Court of the United States, appearing numerous times in the past decade in a variety of cases. Twelve current Gibson Dunn lawyers have argued before the Supreme Court, and during the Court’s ten most recent Terms, the firm has argued a total of 29 cases, including closely watched cases with far-reaching significance in the areas of intellectual property, securities, separation of powers, and federalism. Moreover, although the grant rate for petitions for certiorari is below 1%, Gibson Dunn’s petitions have captured the Court’s attention: Gibson Dunn has persuaded the Court to grant over 40 petitions for certiorari since 2006.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the U.S. Supreme Court. Please feel free to contact the following authors in the firm’s Washington, D.C. office, or any member of the Appellate and Constitutional Law Practice Group.

Miguel A. Estrada (+1 202.955.8257, mestrada@gibsondunn.com)

Jessica L. Wagner (+1 202.955.8652, jwagner@gibsondunn.com)

Lavi Ben Dor (+1 202.777.9331, lbendor@gibsondunn.com)

Christian Talley (+1 202.777.9537, ctalley@gibsondunn.com)

Gibson Dunn’s U.S. Supreme Court Round-Up provides summaries of cases decided during the October 2024 Term and highlights other key developments on the Court’s docket. During the October 2024 Term, the Court heard 62 oral arguments and released 58 opinions. It dismissed three cases after argument as improvidently granted and set one case for reargument next term. For the October 2025 Term, to date, the Court has granted 33 petitions for a total of 32 arguments.

View the Round-Up Here

Miguel A. Estrada (+1 202.955.8257, mestrada@gibsondunn.com)

Jessica L. Wagner (+1 202.955.8652, jwagner@gibsondunn.com)

Lavi Ben Dor (+1 202.777.9331, lbendor@gibsondunn.com)

Christian Talley (+1 202.777.9537, ctalley@gibsondunn.com)

Special thanks to Hannah Bedard, Christine Buzzard, Gaby Candes, Giuliana Cipollone, Noah Delwiche, Matt Aidan Getz, Abby Holland, Maya Jeyendran, Elizabeth Kiernan, Hayley Lawrence, Sam Learner, Hunter Mason, Thomas Moore, Alec Mouser, Teddy Okechukwu, Jack Reed, Tate Rosenblatt, Psi Simon, Nick Scheuerman, Jesse Schupack, Anna Statz, Trenton Van Oss, Apratim Vidyarthi, and Abby Walters for their contributions to the Round-Up.

Trump v. CASA, Inc., No. 24A884 – Decided June 27, 2025

Today, the Supreme Court held 6-3 that district courts were wrong to grant “universal” preliminary injunctions against the government’s enforcement of a presidential executive order, and that any injunctive relief should be limited to the parties in those cases.

“‘[U]niversal injunctions’ . . . likely exceed the equitable authority that Congress has granted to federal courts.”

Justice Barrett, writing for the Court

Background:

On January 20, 2025, President Trump issued an Executive Order titled “Protecting the Meaning and Value of American Citizenship.” The order identifies two groups of persons whom the government should not recognize as United States citizens, even though they were born in the United States. The order directs federal officials not to issue documents recognizing U.S. citizenship for those individuals, to reject documents issued by state or local governments recognizing their citizenship, and to develop and issue public guidance on how to carry out the order within 30 days.

Shortly after the order’s issuance, three federal district courts granted universal preliminary injunctions, which forbade the government from taking steps to carry out the order’s directives against any person, anywhere in the country. The government defendants asked each district court (and later, the First, Fourth, and Ninth Circuits) for a partial stay of the preliminary injunctions. Their requests were denied. The government defendants then asked the Supreme Court for a partial stay. They argued that the Court should narrow the preliminary injunctions’ scope to protect only the individuals and identified members of the organizations who challenged the order, which would allow the order to go into effect against nonparties.

Issue:

May federal courts issue universal preliminary injunctions in favor of nonparties against the government?

Court’s Holding:

No. Universal injunctions likely exceed the equitable authority that Congress granted to federal courts under the Judiciary Act of 1789.

What It Means:

Today’s decision confirms that federal district courts likely do not have the power to grant universal preliminary injunctions, which temporarily forbid the government from enforcing a challenged federal action against anyone affected by the action, anywhere in the United States (even against nonparties to the lawsuit). The Court explained that while Congress endowed federal courts with jurisdiction over “all suits . . . in equity” in the Judiciary Act of 1789, courts’ power to fashion equitable remedies only encompasses those remedies “traditionally accorded by courts of equity” at the nation’s Founding.
The Court noted that it was not deciding whether the Administrative Procedure Act authorizes federal courts to vacate federal agency action under the provision allowing courts to “hold unlawful and set aside agency action.” 5 U.S.C. § 706(2). The Court’s decision therefore does not affect plaintiffs’ ability to ask courts to “set aside” an agency action, even when some affected individuals are not parties to the APA suit.
The Court’s ruling signals to plaintiffs that they must consider alternative avenues to expedite their challenges to executive or legislative actions. These avenues may include Rule 23 class actions, lawsuits under civil rights legislation such as 42 U.S.C. § 1983, and actions to enjoin officials under Ex parte Young.
One consequence of today’s decision may be a reduction in the number of emergency applications to the United States Supreme Court. In recent years, a rise in the number of universal injunctions granted by district courts resulted in a sharp increase in emergency applications to the Supreme Court and a corresponding increase in decisions on the so-called “shadow docket”—the name that critics gave to the Court’s emergency docket. Today’s decision could result in a decrease in these applications going forward.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Stuart F. Delery
+1 202.955.8515
sdelery@gibsondunn.com

Eugene Scalia
+1 202.955.8673
Assistant Dawn J. Forrester: dforrester@gibsondunn.com

Helgi C. Walker
+1 202.887.3599
hwalker@gibsondunn.com

This alert was prepared by associates Stephen Hammer and Audrey Payne.

FCC v. Consumers’ Research, Nos. 24-354 and 24-422 – Decided June 27, 2025

Today, the Supreme Court held 6-3 that the statute authorizing the FCC to collect universal service contributions from telecommunications companies does not violate the nondelegation doctrine.

“The question in this case is whether the universal-service scheme . . . violates the Constitution’s nondelegation doctrine, either because Congress has given away its power to the FCC or because the FCC has given away its power to a private company. We hold that no impermissible transfer of authority has occurred.”

Justice Kagan, writing for the Court

Background:

The Telecommunications Act of 1996 directed the FCC to establish a Universal Service Fund to subsidize telecommunications services in rural and low-income areas, schools, and libraries. See 47 U.S.C. § 254. The Act instructs that “universal service” should be available at “just, reasonable, and affordable” rates. Id. § 254(i). Telecommunications carriers must make contributions to the fund that are “sufficient” to “advance universal service.” See id § 254(d)–(e). In defining universal service, the Commission must consider “the extent to which” telecommunications services “are essential to education, public health, or public safety”; are “subscribed to by a substantial majority of residential customers”; and “are consistent with the public interest, convenience, and necessity.” Id. § 254(c)(1). The FCC’s policies to “preserv[e] and advance[]” universal service must be based on six specific principles and any additional principles the FCC determines are “necessary and appropriate for the protection of the public interest, convenience, and necessity and are consistent with this chapter.” Id. § 254(b).

In 1997, the FCC directed a private not-for-profit corporation, the Universal Service Administrative Company (USAC), to help the FCC administer the fund. Among other things, USAC helps the FCC determine the size of carriers’ contributions by providing financial projections to the Commission.

A carrier and others challenged the FCC’s 2022 contribution rate in the U.S. Court of Appeals for the Fifth Circuit. They argued that the Universal Service Fund is unconstitutional because Congress delegated legislative power to the FCC and the Commission then redelegated power to USAC. A Fifth Circuit panel rejected the challenge. Sitting en banc, the full Fifth Circuit held 9-7 that the combination of Congress’s delegation to the FCC and the FCC’s delegation to USAC violates the Constitution’s vesting of legislative power in Congress.

Issues:

Did Congress violate the nondelegation doctrine when it authorized the FCC to determine the amounts that telecommunications carriers must contribute to the Universal Service Fund; did the FCC violate the nondelegation doctrine by using USAC projections to determine contribution rates; or did the combination of these delegations violate the nondelegation doctrine?

Court’s Holding:

Neither Congress nor the FCC violated the nondelegation doctrine. Section 254 provides an intelligible principle to constrain the FCC’s discretion in determining the amount of money to collect to support universal service and in defining universal service. The FCC did not improperly delegate to USAC because the FCC maintained the final say as to contribution rates. Those two lawful delegations do not become unconstitutional when combined.

What It Means:

The Court’s decision upholds the Universal Service Fund’s contribution mechanism, applying the traditional intelligible-principle test. The Court reiterated that exercises of Congress’s tax power are evaluated under “the usual nondelegation standard.” It also refused to draw a distinction for nondelegation purposes between statutes authorizing fees and statutes authorizing taxes.
The Court nonetheless emphasized that the intelligible-principle test is not toothless: Congress must make “clear both the general policy that the agency must pursue and the boundaries of its delegated authority”; those standards must “enable both the courts and the public to ascertain whether the agency has followed the law”; and the acceptable degree of discretion “varies according to the scope of the power congressionally conferred.” That leaves open the possibility that some statutes might still be successfully challenged on nondelegation grounds.
On the private nondelegation question, the Court held that the FCC did not unconstitutionally delegate authority to USAC because the FCC retained ultimate “decision-making power,” even if USAC gave “recommendations.” The Court was not willing to scrutinize whether the FCC was practically functioning merely as a rubber stamp.

The Court rejected the Fifth Circuit’s “combination theory” of unconstitutionality as novel and unsound. Because the public and private nondelegation doctrines “do not operate on the same axis,” measures implicating one do not “compound” measures implicating the other. The Court distinguished Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010), where both measures at issue “limited the same thing—the President’s power to remove executive officers.”
Justice Gorsuch, joined by Justice Thomas and Justice Alito, dissented. He would have held that the funding mechanism is novel and violates the intelligible-principle test. In the end, however, he expressed “some optimism” because the Court did not address two provisions that allow the FCC to provide more “advanced” and “additional” services for schools, libraries, and healthcare providers—§ 254(c)(3) and (h)(2). Those provisions remain open to challenge.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Stuart F. Delery
+1 202.955.8515
sdelery@gibsondunn.com

Eugene Scalia
+1 202.955.8673
Assistant Dawn J. Forrester: dforrester@gibsondunn.com

Helgi C. Walker
+1 202.887.3599
hwalker@gibsondunn.com

This alert was prepared by associates Zachary Tyree and Connor P. Mui.

Kennedy v. Braidwood Management, Inc., No. 24-316 – Decided June 27, 2025

Today, the Supreme Court held 6-3 that the members of the U.S. Preventive Task Force are inferior officers whose appointment by the HHS Secretary is consistent with the Appointments Clause.

“Task Force members remain subject to the Secretary of HHS’s supervision and direction, and the Secretary remains subject to the President’s supervision and direction. So under Article II and this Court’s precedents, Task Force members are inferior officers, and Congress may vest the power to appoint them in the Secretary of HHS.’”

Justice Kavanaugh, writing for the Court

Background:

The U.S. Preventive Services Task Force is a 16-member volunteer body within the Public Health Service of the Department of Health and Human Services (“HHS”). Task Force members are experts in prevention, evidence-based medicine, and primary care who develop recommendations about preventive health services. They serve four-year terms, and there are no statutory restrictions on their removal. The current Task Force members were appointed by the Director of the Agency for Healthcare Research and Quality; their appointments were later ratified by the HHS Secretary in June 2023.

In codifying the Task Force, Congress directed that “[a]ll members of the Task Force . . . and any recommendations made by such members, shall be independent and, to the extent practicable, not subject to political pressure.” 42 U.S.C. § 299b-4(a)(6). Although the Task Force originally made only voluntary recommendations, in the Affordable Care Act of 2010, Congress determined that some of the Task Force’s recommendations would create binding obligations for health-insurance issuers and group health plans to cover certain preventive health services, unless rejected by the HHS Secretary. 42 U.S.C. § 300gg-13(a)-(b).

Several small businesses and individuals objected to the requirement—recommended by the Task Force—that health-insurance issuers and group plans cover certain HIV-prevention medications. Plaintiffs argued that the structure of the Task Force violated the Appointments Clause because Task Force members are “principal officers” and must therefore be nominated by the President and confirmed by the Senate. The HHS Secretary disagreed, arguing that Task Force members are “inferior officers” who may be appointed by the HHS Secretary.

The district court ruled for Plaintiffs, agreeing that the Task Force members’ appointments violated the Constitution because they were principal officers. The Fifth Circuit affirmed on the ground that “the Task Force cannot be ‘independent’ and free from ‘political pressure’ on the one hand, and at the same time be supervised by the HHS Secretary, a political appointee, on the other.”

Issue:

Whether appointment of the U.S. Preventive Services Task Force members by the HHS Secretary is consistent with the Appointments Clause.

Court’s Holding:

Yes. Task Force members are inferior officers: they are removable at will by the HHS Secretary and their recommendations can be rejected by the HHS Secretary before having any legal effect.

What It Means:

Today’s decision reiterates the Court’s commitment to enforcing the Appointments Clause and the chain of political accountability that is central to its design. See, e.g., Edmond v. United States, 520 U.S. 651 (1997); Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010); Lucia v. SEC, 585 U.S. 237 (2018).
In making the principal versus inferior officer determination, the Court emphasized that at-will removal by a principal officer is strong evidence of inferiority. At-will removal is a “powerful tool for control” and historical practice supports treating officers who can be removed at will by principal officers as inferior.
The Court also emphasized that the default presumption is that all officers are removable at will, and unless Congress clearly and explicitly states otherwise, the Court will not presume or imply restrictions on officers’ removal.
The Court clarified that the inability of a principal officer to compel a subordinate officer’s actions does not mean the subordinate officer is not inferior. The superior officer’s ability to overrule or reject a subordinate’s decision is sufficient supervisory authority.
The Court’s decision provides guidance to the potential avenues available to businesses seeking to challenge actions by federal government actors who may not have been validly appointed. Important considerations include assessing whether the actors’ decision may be overruled or rejected by senior government personnel and whether statutory language about independence is sufficient to overcome the presumption of at-will removal.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Stuart F. Delery +1 202.955.8515 sdelery@gibsondunn.com	Eugene Scalia +1 202.955.8673 Assistant Dawn J. Forrester: dforrester@gibsondunn.com	Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com
Matt Gregory +1 202.887.3635 mgregory@gibsondunn.com

This alert was prepared by associates Salah Hawkins and Aly Cox.

Stanley v. City of Sanford, Fla., No. 23-997 – Decided June 20, 2025

Today, the Supreme Court held 7-2 that the Americans with Disabilities Act does not extend to retired employees.

“[T]o prevail under [Title I of the ADA], a plaintiff must plead and prove that she held or desired a job, and could perform its essential functions with or without reasonable accommodation, at the time of an employer’s alleged act of disability-based discrimination.”

Justice Gorsuch, writing for the Court

Background:

The Sanford Fire Department previously provided health insurance until age 65 for two categories of retirees: (1) those who retired with 25 years of service and (2) those who retired earlier because of a disability. In 2003, Sanford reduced the insurance period for those who retired due to disability to 24 months following retirement.

Karyn Stanley started working as a Sanford firefighter in 1999. She retired due to disability in 2018. Under Sanford’s revised policy, she was only entitled to 24 months of post-retirement health-insurance coverage. In 2020, Stanley sued Sanford, alleging that providing different benefits to those who retired with 25 years of service and those who retired earlier due to disability was impermissible discrimination under Title I of the Americans with Disabilities Act.

The district court dismissed the suit, holding that Stanley was not a “qualified individual” under the ADA because she was retired. She was not able to perform the essential functions of a job she held or desired at the time the City ceased providing her health insurance. The Eleventh Circuit agreed, but acknowledged a split among the circuits as to whether the ADA reached retirees like Stanley.

Issue:

Under the Americans with Disabilities Act, does a former employee—who was qualified to perform her job and who earned post-employment benefits while employed—lose her right to sue over discrimination with respect to those benefits solely because she no longer holds her job?

Court’s Holding:

Yes. Title I’s anti-discrimination provision does not protect individuals who do not hold nor desire a job with the defendant employer at the time of the allegedly discriminatory act.

What It Means:

Today’s decision clarifies that the ADA does not cover retired employees who neither hold nor desire a job at the time of the allegedly discriminatory conduct. But because retired employees might have other avenues by which to challenge changes to retirement-benefit plans, employers should continue to exercise caution in making such changes.
A plurality of the Justices (Gorsuch, joined by Alito, Sotomayor, and Kagan) wrote separately to opine that, unlike retired employees, employees who were both disabled and “qualified” when their employer adopted a discriminatory retirement-benefits policy might be able to state a claim under Title I. Justice Jackson articulated a similar view in her dissent.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Labor and Employment

Jason C. Schwartz
+1 202.955.8242
jschwartz@gibsondunn.com

Katherine V.A. Smith
+1 213.229.7107
ksmith@gibsondunn.com

This alert was prepared by Cate McCaffrey and Elizabeth Strassner.

McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation, No. 23-1226 – Decided June 20, 2025

Today, the Supreme Court held that the Hobbs Act’s exclusive review provision for administrative orders does not prevent district courts from interpreting a statutory provision in civil enforcement proceedings.

“The Hobbs Act does not preclude district courts in enforcement proceedings from independently assessing whether an agency’s interpretation of the relevant statute is correct.”

Justice Kavanaugh, writing for the Court

Background:

The Hobbs Act provides that for certain pre-enforcement challenges to agency orders, “[t]he court of appeals . . . has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of all final orders of the Federal Communications Commission” (FCC) and other agencies. 28 U.S.C. § 2342(1). Circuit courts were divided as to whether this channeled review provision required district courts to defer to the FCC’s interpretation in any subsequent civil enforcement actions after the period for court of appeals review had passed.

The Telephone Consumer Protection Act (TCPA) creates a private right of action against companies that “use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” 47 U.S.C. § 227(b)(1)(C). McLaughlin Chiropractic Associates brought a class action lawsuit against McKesson Corporation alleging that the company sent unsolicited messages using online fax services to market its medical software products. While the lawsuit was ongoing, the FCC issued an order determining that the TCPA did not apply to an online fax service because it was not a “telephone facsimile machine.” The district court followed the interpretation set forth in the FCC’s order and entered summary judgment for McKesson, reasoning that the Hobbs Act precluded the court from considering whether the FCC’s interpretation of the TCPA was correct. The Ninth Circuit affirmed.

Issue:

Whether the Hobbs Act binds district courts presiding over civil enforcement suits to an agency’s interpretation of a statute.

Court’s Holding:

No. The Hobbs Act channels pre-enforcement challenges of agency orders to the courts of appeals. But the availability of pre-enforcement review does not mean that district courts are bound by the agency’s interpretation in civil enforcement proceedings.

What It Means:

Today’s decision continues a trend of the Court limiting the deference federal courts must give to an agency’s legal interpretations, following on Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), and other cases. The decision strengthens parties’ ability to request that a court issue a decision contrary to an agency’s interpretation, including in litigation between private parties.
The Court emphasized that Congress can restrict judicial review in an enforcement proceeding, provided Congress does so clearly. Absent such a clear statement by Congress, courts presume judicial review is permitted and may independently assess the meaning of a statute in the context of an enforcement proceeding. Because the Hobbs Act is silent as to whether a party may contest the agency’s legal interpretation in subsequent enforcement proceedings, it does not preclude judicial review or bind district courts to the agency’s interpretation.
The Court’s decision suggests that potential defendants might not be able to rely solely on agency determinations to provide a safe harbor, since a court may not be bound by the agency’s interpretation. However, defendants may still argue that the safe harbor correctly interprets the statute and is entitled to weight under Skidmore. They may also raise other arguments, including that principles of fair notice preclude liability or that other elements of the applicable statute are not satisfied.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Stuart F. Delery +1 202.955.8515 sdelery@gibsondunn.com	Eugene Scalia +1 202.955.8673 Assistant Dawn J. Forrester: dforrester@gibsondunn.com	Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com
Akiva Shapiro +1 212.351.3830 ashapiro@gibsondunn.com	Russell Balikian +1 202.955.8535 rbalikian@gibsondunn.com

This alert was prepared by associate Salah Hawkins.

FDA v. R.J. Reynolds Vapor Co., No. 23-1187 – Decided June 20, 2025

Today, the Supreme Court held 7-2 that tobacco product retailers may sue the FDA for blocking the marketing of new tobacco products, allowing challenges by more than just the product manufacturer.

“If the FDA denies an application, the retailers, like the manufacturer, lose the opportunity to profit from the sale of the new tobacco product—or, if they sell the product anyway, risk imprisonment and other sanctions. . . . Accordingly, the retailers are ‘adversely affected’ by a denial order and are therefore proper petitioners.”

Justice Barrett, writing for the Court

Background:

The Family Smoking Prevention and Tobacco Control Act (“TCA”) requires tobacco product manufacturers to apply to the Food and Drug Administration (“FDA”) for authorization to market “new” tobacco products. If the FDA denies an application, the Act’s judicial-review provision permits “any person adversely affected by” the denial to petition for review in the D.C. Circuit or “the circuit in which such person resides or has their principal place of business.” 21 U.S.C. § 387l(a)(1).

R.J. Reynolds Vapor Co. (“RJR Vapor”), a leading e-cigarette manufacturer, is incorporated and has its principal place of business in North Carolina. When the FDA denied its applications to market four e-cigarette products, it jointly petitioned for review of each denial along with two retailers that sell those kinds of e-cigarettes. The companies filed the joint petition in the Fifth Circuit, where the retailers were formed and have their principal places of business. The FDA moved to dismiss or to transfer the action to the D.C. Circuit or the Fourth Circuit, based on RJR Vapor’s residence. The Fifth Circuit denied the motion, holding that each entity was a person adversely affected by the denial and that the petition could be filed in the Fifth Circuit because the retailers have their principal places of business there.

Issue:

May tobacco product retailers challenge FDA marketing denials, such that a petition for review can be filed in a circuit where a retailer resides or has its principal place of business?

Court’s Holding:

Yes. A retailer who would sell a new tobacco product counts as “any person adversely affected” by an FDA order that bars marketing of that product under the TCA. The retailer can therefore file a petition for review in any circuit in which it resides or has its principal place of business.

What It Means:

Today’s decision confirms that a tobacco product retailer is a “person adversely affected” under the TCA if it would have sold the new product for which the FDA issues a marketing denial. Noting that the phrase “adversely affected” is a term of art, the Court relied on cases interpreting the Administrative Procedure Act and other statutory causes of action to conclude that the TCA review provision “extends to any petitioner ‘with an interest arguably sought to be protected by the statute.’” The Court distinguished the statutory language here—“any person adversely affected”—from language in other statutes, which might limit judicial review to “the applicant” or a “party.” See NRC v. Texas, 605 U.S. __ (2025) (slip op., at 9).
Applying that rule here, the Court held that if the FDA denies a marketing application, retailers, “like the manufacturer, lose the opportunity to profit from the sale of the new tobacco product—or, if they sell the product anyway, risk imprisonment and other sanctions.” Therefore, retailers’ interests are not “so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.”
By creating more opportunities to challenge FDA orders, the Court’s decision could mean that manufacturers and retailers are able to combat more effectively the FDA’s efforts to thwart marketing approval of new tobacco products.
The Court also held that the Fifth Circuit correctly concluded that at least one proper petitioner had venue in that court because a retailer and trade association in this case have their principal places of business in the Fifth Circuit and could therefore file petitions for review in that circuit.
The Court did not decide the separate question—with more far-reaching consequences—whether each petitioner in a joint petition must independently satisfy the TCA’s venue provisions. The Court noted that “[n]o court, including the Fifth Circuit in this case, has analyzed” that question and that its resolution “would inevitably inform debates about similar [venue] statutes,” including “the general venue statute for lawsuits against the Government.” The Fifth Circuit may consider that question on remand.
In dissent, Justice Jackson (joined by Justice Sotomayor)—who would have held that only manufacturers can challenge a marketing denial—suggested that the TCA‘s venue provision limits the ability of manufacturers to sue outside the circuits in which they reside or have their principal places of business, “including through proxy suits that third parties file in other places on their behalf.” Companies should continue to think carefully about how to avail themselves of the best venue for challenging administrative action.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Stuart F. Delery
+1 202.955.8515
sdelery@gibsondunn.com

Eugene Scalia
+1 202.955.8673
Assistant Dawn J. Forrester: dforrester@gibsondunn.com

Helgi C. Walker
+1 202.887.3599
hwalker@gibsondunn.com

This alert was prepared by associates Zachary Tyree and Audrey Payne.

EPA v. Calumet Shreveport Refining, LLC, No. 23-1229 – Decided June 18, 2025

Today, the Supreme Court held 7-2 that, if EPA denies a Clean Air Act exemption as part of an “en masse” decision—applying one reasoning to multiple petitions—venue lies exclusively in the D.C. Circuit, even though the individual decisions are only locally or regionally applicable.

“[A]n action is ‘based on a determination of nationwide scope or effect’ . . . if such a determination supplies a core justification for EPA’s action . . . .”

Justice Thomas, writing for the Court

Background:

The Clean Air Act requires oil refiners to blend certain amounts of renewable fuel into transportation fuel sold within the United States. The Environmental Protection Agency (EPA) implements this requirement through the Renewable Fuel Standard program. The law permits small refineries to petition EPA for an exemption. Denial of a petition, like all EPA actions under the Clean Air Act, is reviewable in a federal court of appeals. 42 U.S.C. § 7607(b)(1). If EPA’s decision is “locally or regionally applicable,” venue lies in the refinery’s regional court of appeals; if it’s “nationally applicable” or “based on a determination of nationwide scope or effect,” venue is in the D.C. Circuit. Id.

In April and June 2022, EPA denied the exemption petitions of 105 small refineries in two omnibus notices that (1) described these en masse denials as a “new approach” to renewable-fuel exemptions and (2) stated that the denials were reviewable only in the D.C. Circuit.

The refineries nevertheless sought review in their regional court—the Fifth Circuit. EPA moved to transfer to the D.C. Circuit on the ground that they were made en masse with respect to 105 refineries nationwide as part of a broader policy change so the denials qualified as “nationally applicable” or “based on a determination of nationwide scope and effect” under Section 7607(b)(1).

A divided panel of the Fifth Circuit held that it had venue over Plaintiffs’ claims. The Fifth Circuit held that EPA’s exemption decisions were “locally or regionally applicable” because their “legal effect” was limited to the petitioning refineries and did not bind EPA in any future adjudication. On the merits, the Fifth Circuit held the challenged exemption decisions were unlawful. EPA sought certiorari, asserting that the Fifth Circuit’s decision was inconsistent with the Eleventh Circuit’s decision in a different case challenging the same en masse denial, as well as the decisions of several other circuits in similar circumstances.

Issue:

Under what circumstances is a decision by EPA “nationally applicable” or “based on a determination of nationwide scope or effect,” such that it may only be reviewed by the U.S. Courts of Appeals for the D.C. Circuit?

Court’s Holding:

An EPA “action” (defined by the Court to include only the enumerated acts Congress authorized EPA to take) is “nationally applicable” when “[o]n its face” it applies throughout the entire country. An EPA “determination” (defined by the Court to include any justification EPA gives for taking an action) is “of nationwide scope” if it applies throughout the country as a matter of law. An EPA “determination” is “of nationwide . . . effect” if it applies throughout the country as a matter of fact.

In this case, the Court concluded that each denial of a single refinery’s petition was a separate “action,” but that the decisions were of nationwide scope or effect because EPA made each decision on the same legal basis. Venue accordingly lay in the D.C. Circuit.

What It Means:

The opinion distinguishes between “actions,” “determinations of national scope,” and “determinations of national effect,” establishing three different paths for EPA to lay exclusive venue in the D.C. Circuit.
Courts analyzing venue in actions against EPA will need to walk through the two-step, tripartite system laid out in this opinion. First, a court will need to assess whether EPA’s statutorily authorized “action” applies nationwide on its face. If it does, venue will lie exclusively in the D.C. Circuit. Even if it does not, however, a court will still need to determine whether EPA’s reasoning for that act applies nationwide—“as a legal matter (de jure)” or “as a practical one (de facto).”
This ruling reaffirms the special role of the D.C. Circuit, as distinct from the other Courts of Appeals, in reviewing certain agency actions.
Litigants seeking to challenge EPA determinations may be more likely to find themselves limited to the D.C. Circuit—rather than potentially preferable courts in their own localities—when denials are made in en masse bundles supported by broad-reaching determinations.
In a companion case also decided today, Oklahoma v. EPA, No. 23-1067, the Court applied the Calumet rule to hold that EPA’s disapproval of state implementation plans could be challenged in regional circuit courts. There, states and industry groups challenged EPA’s disapproval of state implementation plans for Oklahoma and Utah in the Tenth Circuit, which held that the challenges should have been brought in the D.C. Circuit. The Supreme Court reversed. Under the first step of Calumet’s two-step inquiry, the Court determined the relevant “action” is EPA’s disapproval of the state implementation plans, which is a prototypical locally or regionally applicable action. Under the second step of Calumet, the Court concluded that the disapprovals “were not based on any determination of nationwide scope or effect” because, unlike in Calumet, the disapprovals were based on a “fact-intensive, state-specific analysis.”
The Court’s decision in Oklahoma v. EPA provides practical guidance on the Calumet framework and resolves uncertainty over the venue rules governing challenges to disapprovals of state implementation plans. Challenges to disapprovals of state implementation based on state-specific analysis may be filed in regional circuit courts.

The Court’s opinions are available here (Calumet) and here (Oklahoma).

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Environmental Litigation and Mass Tort

Stacie B. Fletcher
+1 202.887.3627
sfletcher@gibsondunn.com

Daniel W. Nelson
+1 202.887.3687
dnelson@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Stuart F. Delery
+1 202.955.8515
sdelery@gibsondunn.com

Eugene Scalia
+1 202.955.8673
Assistant Dawn J. Forrester: dforrester@gibsondunn.com

Helgi C. Walker
+1 202.887.3599
hwalker@gibsondunn.com

This alert was prepared by Grace Hart, Cate McCaffrey, Elizabeth Strassner, and Tom Donovan.

Commissioner of Internal Revenue v. Zuch, No. 24-416 – Decided June 12, 2025

Today, the Supreme Court held 8-1 that the Tax Court loses jurisdiction in a proceeding under 26 U.S.C. § 6330 when the IRS ceases to pursue a levy.

“Because there was no longer a proposed levy, the Tax Court properly concluded that it lacked jurisdiction to resolve questions about Zuch’s disputed tax liability.”

Justice Barrett, writing for the Court

Background:

In order to collect previously assessed tax liabilities, the IRS may seek to levy—i.e., to seize and sell—a taxpayer’s assets. In such cases, the taxpayer may request an administrative pre-levy hearing with the IRS’s Independent Office of Appeals. An adverse “determination” in that proceeding may then be petitioned to the United States Tax Court under 26 U.S.C. § 6330.

In 2013, the IRS sent Jennifer Zuch a notice of intent to levy her property to collect unpaid taxes from 2010. Zuch requested a pre-levy hearing, claiming that a payment from her former husband should have been applied to offset her tax liabilities for the year at issue. The IRS’s Office of Appeals sustained the proposed levy, and Zuch petitioned the U.S. Tax Court. The U.S. Tax Court remanded for clarification, and, in 2017, the IRS’s Office of Appeals once again sustained the proposed levy.

Meanwhile, Zuch overpaid her annual taxes in certain years. Instead of issuing Zuch a refund in each of those years, the IRS applied the overpayments against her 2010 outstanding tax liability. By April 2019, the entire amount of Zuch’s alleged federal tax liability subject to the levy action had been paid.

The IRS then moved to dismiss the levy case as moot, and the Tax Court granted that motion. The Third Circuit reversed, holding that the Tax Court still had jurisdiction to determine Zuch’s underlying tax liability under 26 U.S.C. § 6330 and Zuch did not need to file a separate refund suit in district court.

Issue:

Does a proceeding under 26 U.S.C. § 6330 become moot when the IRS no longer seeks the proposed levy that gave rise to the proceeding?

Court’s Holding:

Yes. The IRS’s decision to stop seeking to levy a taxpayer’s property deprives the Tax Court of jurisdiction in a proceeding under 26 U.S.C. § 6330.

What It Means:

Today’s decision ties a taxpayer’s ability to pursue a pre-levy challenge to the IRS’s decision to continue seeking to levy the taxpayer’s property. If the IRS ceases to pursue a levy and the taxpayer believes they overpaid, the taxpayer must file a new administrative action before the IRS claiming a refund (the precursor to a refund suit in the U.S. District Court of the U.S. Court of Federal Claims).
An administrative action before the IRS seeking a refund must be filed within two years of any potential overpayment. For this reason, a taxpayer who has potentially satisfied an outstanding liability during the pendency of a proceeding under 26 U.S.C. § 6330 should file a protective administrative action promptly, even if the IRS has not yet formally abandoned its request for a levy.
Justice Gorsuch speculated in dissent that today’s decision may incentivize the IRS to stop pursuing levies in 26 U.S.C. § 6330 proceedings if it anticipates unfavorable rulings from the Tax Court, and to instead pursue other mechanisms of collection, like keeping future overpayments.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Tax

Sandy Bhogal
+44 20 7071 4266
sbhogal@gibsondunn.com

Pamela Lawrence Endreny
+1 212.351.2474
pendreny@gibsondunn.com)

Eric B. Sloan
+1 212.351.5220
esloan@gibsondunn.com

Related Practice: Tax Controversy and Litigation

Sanford W. Stark
+1 202.887.3650
sstark@gibsondunn.com

Saul Mezei
+1 202.955.8693
smezei@gibsondunn.com

C. Terrell Ussing
+1 202.887.3612
tussing@gibsondunn.com

This alert was prepared by Samuel Eckman and Brian Sanders.

CC/Devas (Mauritius) Limited v. Antrix Corp. Ltd., Nos. 23-1201, 24-17 – Decided June 5, 2025

Today, a unanimous Supreme Court held that personal jurisdiction exists under the FSIA whenever an exception to immunity applies and service of process has been accomplished, without regard to whether a foreign state has minimum contacts with the United States.

“Personal jurisdiction exists under § 1330(b) of the FSIA when an immunity exception applies and service is proper.”

Justice Alito, writing for the Court

Background:

The Foreign Sovereign Immunities Act of 1976 provides that foreign states are generally immune from suit in United States courts, subject to several exceptions. 28 U.S.C. §§ 1330, 1602 et seq. For example, the FSIA waives immunity for certain suits to confirm arbitration awards. Id. § 1605(a)(6). When an exception applies, the FSIA vests federal courts with “original jurisdiction” over the claims, id. § 1330(a), and provides that “[p]ersonal jurisdiction over a foreign state shall exist” where the district court possesses subject-matter jurisdiction and “where service has been made under section 1608 of this title,” id. § 1330(b).

In 2005, Antrix Corporation Ltd.—the commercial arm of India’s national space agency—entered into a satellite-leasing agreement with Devas Multimedia Private Ltd.—a privately owned Indian company. Several years later, Antrix invoked the agreement’s force-majeure clause to terminate the agreement with Devas, arguing that India’s new satellite-allocation policy prevented it from performing under the contract. Devas initiated arbitration before the International Chamber of Commerce, which awarded Devas damages for Antrix’s breach of contract.

Devas sought to confirm the award in the United States, invoking the FSIA’s arbitration exception as the basis for federal jurisdiction. On appeal of the confirmed award, the Ninth Circuit held that the court lacked personal jurisdiction over Antrix. Although it did not question that the arbitration exception applied, the court of appeals imposed an additional requirement that a foreign state have sufficient “minimum contacts” with the United States. The Supreme Court granted certiorari to decide whether the FSIA requires proof of minimum contacts before a United States court can exercise personal jurisdiction over a foreign state.

Issue:

Whether plaintiffs must prove minimum contacts before federal courts may assert personal jurisdiction over foreign states sued under the FSIA.

Court’s Holding:

The FSIA does not require proof of minimum contacts before a court can exercise personal jurisdiction over a foreign state.

What It Means:

The Court interpreted 28 U.S.C. § 1330(b) to provide for personal jurisdiction whenever an FSIA exception to immunity applies and a party properly served the foreign state under 28 U.S.C. § 1608. In doing so, the Court admonished the Ninth Circuit for its “strange” statutory interpretation that failed to “enforc[e] these provisions as written.” Op. 10–11.
Although this case arose under the arbitration exception to immunity, the Court’s analysis of 28 U.S.C. § 1330(b) applies to any suit implicating one of the several exceptions in 28 U.S.C. §§ 1605–1607.
In reaching its decision that the statutory text of the FSIA does not impose a minimum contacts requirement, the Court left open for consideration on remand the question whether the Due Process Clause of the Fifth Amendment “itself requires a showing of minimum contacts.” Op. 12–13. Thus, it is possible future courts may hold jurisdiction lacking as a constitutional matter, regardless of the text of the FSIA.

Gibson Dunn represented Devas’s owners as Petitioners.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com
Jacob T. Spencer 202.887.3792 jspencer@gibsondunn.com	David W. Casazza +1 202.887.3724 dcasazza@gibsondunn.com

Related Practice: Judgment and Arbitral Award Enforcement

Matthew D. McGill
+1 202.887.3680
mmcgill@gibsondunn.com

This alert was prepared by associates Elizabeth A. Kiernan and Rebecca Roman.

Ames v. Ohio Department of Youth Services, No. 23-1039 – Decided June 5, 2025

Today, the Supreme Court unanimously held that Title VII of the Civil Rights Act of 1964 does not impose an additional requirement on majority-group plaintiffs to show “background circumstances” suggesting that their employer discriminates against the majority group.

“We hold that this additional ‘background circumstances’ requirement is not consistent with Title VII’s text or our case law construing the statute.”

Justice Jackson, writing for the Court

Background:

Title VII makes it unlawful for any “employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual . . . , because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a)(1). Those protections cover adverse employment actions based on sexual orientation. Bostock v. Clayton County, 590 U.S. 644, 649-52 (2020).

Marlean Ames, a straight woman, sued her employer under Title VII, claiming she was denied a promotion and later demoted based on her sexual orientation. In support, she pointed out that her employer hired a gay woman for the position to which she had applied and a gay man to fill her previous position after the demotion. The district court granted summary judgment for her employer, and the Sixth Circuit affirmed. Applying circuit precedent, the court of appeals held that Ames had failed to show “background circumstances to support the suspicion that the defendant is th[e] unusual employer who discriminates against the majority.” The Supreme Court granted review to decide whether Title VII imposes that background-circumstances requirement.

Issue:

Whether a plaintiff who belongs to a majority group must show “background circumstances” suggesting the defendant is the “unusual employer who discriminates against the majority” to establish a prima facie case of discrimination under Title VII of the Civil Rights Act of 1964.

Court’s Holding:

No: Title VII imposes the same evidentiary requirements on majority-as on minority-group plaintiffs.

What It Means:

Today’s decision confirms that courts assessing Title VII claims need not divide plaintiffs into majority and minority groups. The burdens of proof are identical for all Title VII plaintiffs, regardless of whether the plaintiffs are in the majority or minority with respect to their protected characteristics.
The Court’s opinion lowers the barrier for majority-group plaintiffs to bring (and increases the burden on employers to defend against) so-called reverse-discrimination claims, particularly in the Sixth, Seventh, Eighth, Tenth, and D.C. Circuits, all of which had adopted the background-circumstances requirement.
The Court’s opinion emphasizes that Title VII prohibits covered discrimination of any kind, not merely discrimination against a limited set of historically disadvantaged groups, which comports with the Court’s modern approach to most anti-discrimination statutes.
Given the narrowness of the question presented, the opinion leaves a number of related Title VII issues unaddressed. For example, the Court assumed without deciding that McDonnell Douglas—the traditional framework for evaluating Title VII claims based on circumstantial evidence—applies in the summary-judgment context. The Court also declined to address whether McDonnell Douglas requires specific evidence of pretext or only a showing that discrimination was a motivating factor in the employer’s decision. And Justices Thomas and Gorsuch, in a separate concurrence, questioned whether McDonnell Douglas “is a workable and useful evidentiary tool” at all.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Labor and Employment

Jason C. Schwartz +1 202.955.8242 jschwartz@gibsondunn.com	Katherine V.A. Smith +1 213.229.7107 ksmith@gibsondunn.com	Zakiyyah T. Salim-Williams +1 202.955.8503 zswilliams@gibsondunn.com
Danielle J. Moss +1 212.351.6338 dmoss@gibsondunn.com	Harris M. Mufson +1 212.351.3805 hmufson@gibsondunn.com	Cynthia Chen McTernan +1 213.229.7633 cmcternan@gibsondunn.com

This alert was prepared by associates Matt Aidan Getz and Bryston C. Gallegos.

Seven County Infrastructure Coalition v. Eagle County, Colorado, No. 23-975 – Decided May 29, 2025

Today, the Supreme Court held that agencies have broad discretion under NEPA in determining the scope and contents of an Environmental Impact Statement, and that agencies need not consider the indirect environmental effects of a project or factors outside the agency’s regulatory jurisdiction.

“The EIS need not address the effects of separate projects. In conducting [their] review, courts should afford substantial deference to the agency as to the scope and contents of the EIS.”

Justice Kavanaugh, writing for the Court

Background:

The National Environmental Policy Act (NEPA) requires federal agencies to consider the “reasonably foreseeable” environmental effects of permits and regulations that they issue. 42 U.S.C. § 4332(2)(C). Although NEPA does not impose substantive limits on what an agency may approve, it requires the agency to publish its analysis in an Environmental Impact Statement (EIS) that is then incorporated into the agency’s order and subject to judicial review under the Administrative Procedure Act.

The Seven County Infrastructure Coalition sought approval from the Surface Transportation Board (STB) to build a rail line in a remote part of Utah that would be used primarily to transport locally produced oil to the national rail network. After completing a 3,600-page EIS, the STB approved an 88-mile rail line. Environmental groups and Eagle County, Colorado challenged the STB’s approval, arguing that the STB made unreasonable analytical mistakes by failing to properly consider the project’s indirect environmental effects such as the effect on national rail-network traffic, the development of new oil wells in Utah, and the overall volume of oil processing on the Gulf Coast that could lead to more pollution and greenhouse gas emissions.

The STB defended its environmental analysis on the merits, and the Coalition intervened to argue that any analytical shortcomings were not actionable under NEPA because any indirect effects were not “reasonably foreseeable” insofar as they were neither proximate to the project nor within the STB’s regulatory authority. The D.C. Circuit ruled for the challengers, vacated the STB’s approval, and remanded for further environmental review. The Coalition appealed.

Issue:

Whether NEPA requires an agency to study environmental impacts beyond the proximate effects of the action over which the agency has regulatory authority.

Court’s Holding:

No. NEPA does not require an agency to study environmental impacts beyond either the proximate effects of the action or the scope of the agency’s regulatory authority.

What It Means:

Today’s decision will streamline federal permitting by limiting what agencies must consider in an EIS and limiting the ability of opponents to delay or defeat development projects through judicial challenges. The Court specifically noted that “NEPA has transformed from a modest procedural requirement into a blunt and haphazard tool employed by project opponents (who may not always be entirely motivated by concern for the environment) to try to stop or at least slow down new infrastructure and construction projects,” and expressed its goal of reversing this trend.
As the Court explained, “NEPA is a procedural cross-check, not a substantive roadblock.” NEPA helps agencies be informed about the significant environmental effects of their actions by requiring the agencies to prepare a report identifying and discussing those effects. An EIS must evaluate the significant environmental effects of the project at hand that are within the agency’s regulatory jurisdiction, but the inclusion of other issues will generally be in the agency’s discretion.
The Court emphasized that courts should afford “substantial deference to the agency” in reviewing the scope and contents of an EIS. The Court also noted that even a defective EIS does not require a court to vacate an approval of a project absent a reason to believe the mistake would lead the agency to disapprove the project.

The Court’s opinion is available here.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: Environmental Litigation and Mass Tort

Stacie B. Fletcher
+1 202.887.3627
sfletcher@gibsondunn.com

Daniel W. Nelson
+1 202.887.3687
dnelson@gibsondunn.com

Related Practice: Land Use and Development

Mary G. Murphy
+1 415.393.8257
mgmurphy@gibsondunn.com

Benjamin Saltsman
+1 213.229.7480
bsaltsman@gibsondunn.com

This alert was prepared by partner Samuel Eckman and associate Aaron Gyde.

Cunningham v. Cornell University, No. 23-1007 – Decided April 17, 2025

Today, the Supreme Court unanimously held that plaintiffs bringing a prohibited-transaction claim under ERISA Section 406(a)(1)(C) need only allege, in their complaints, the elements set forth in that provision—they need not negate the affirmative defenses set forth in ERISA Section 408. The Court also emphasized that district courts have a variety of other means to screen out insubstantial claims at the pleading stage.

“[P]laintiffs seeking to state a [Section 406(a)(1)(C)] claim must plausibly allege that a plan fiduciary engaged in a transaction proscribed therein, no more, no less. … To the extent future plaintiffs do bring barebones [Section 406] suits, district courts can use existing tools at their disposal to screen out meritless claims before discovery.”

Justice SOTOMAYOR, writing for the Court

Background:

Health and retirement plans governed by the Employee Retirement Income Security Act (ERISA) commonly transact with third-party entities for various services that benefit plan participants, such as recordkeeping and investment advising. But Section 406(a)(1)(C) of ERISA prohibits a plan fiduciary from “caus[ing] the plan to engage in a transaction” that the fiduciary “knows or should know … constitutes a direct or indirect … furnishing of goods, services, or facilities between the plan and” a service provider for the plan, 29 U.S.C. § 1106(a)(1)(C); see id. § 1002(a)(14)(B), subject to exemptions listed in Section 408 (29 U.S.C. § 1108). Among other things, Section 408 exempts “reasonable arrangements with” a plan service provider “for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.” Id. § 1108(b)(2)(A).

The Eighth and Ninth Circuits held that merely alleging the elements set forth in Section 406(a)(1)(C)—that a plan fiduciary caused a plan to enter into a service transaction with a third-party service provider—is sufficient to plead a prohibited-transaction claim and proceed to discovery. But the Second Circuit held that a plaintiff also must plausibly allege that the Section 408(b)(2)(A) exemption does not apply—i.e., that the services were unnecessary or the compensation was unreasonable. The Supreme Court granted review to resolve the conflict.

Issue:

Whether a plaintiff can state a prohibited-transaction claim under Section 406(a)(1)(C) of ERISA solely by alleging that a plan fiduciary engaged in a service transaction with a plan service provider.

Court’s Holding:

Yes. The only elements of a prohibited-transaction claim under Section 406(a)(1)(C) are the elements set forth in that provision. To state a claim, the plaintiff need not allege facts negating Section 408’s exemptions, such as the exemption for necessary service transactions that are compensated reasonably. But district courts have several other tools at their disposal to weed out unmeritorious claims at the pleading stage.

What It Means:

The Court’s decision clarifies that, under ERISA’s text and structure, Section 408’s exemptions are affirmative defenses that defendants must plead—not elements of a prohibited-transaction claim under Section 406. So ERISA plaintiffs need not allege, in their complaints, facts that negate the necessity or reasonableness of a service transaction with a plan service provider.
The Court acknowledged, however, that this scheme raises “serious concerns” for ERISA plans and fiduciaries given the ubiquity of service transactions in the plan-administration context. The Court thus highlighted several tools that district courts can deploy to prevent meritless prohibited-transaction claims from reaching full-blown discovery. For example, the Court suggested that, once a defendant pleads a Section 408 exemption as an affirmative defense in its answer, the district court could order the plaintiff to file a reply setting forth “specific, nonconclusory factual allegations” showing that the exemption does not apply. The plaintiff’s inability to do so could result in dismissal.
The Court also highlighted four other mechanisms of protecting ERISA plans and fiduciaries from onerous and costly discovery: (1) Article III standing principles require dismissal of suits that fail to allege a concrete injury; (2) district courts retain discretion to expedite or limit discovery; (3) district courts can impose Rule 11 sanctions if a Section 408 exemption “obviously applies,” and “a plaintiff and his counsel lack a good-faith basis to believe otherwise”; and (4) ERISA authorizes district courts to shift attorneys’ fees and costs to plaintiffs.
In a concurring opinion, Justice Alito, joined by Justices Thomas and Kavanaugh, likewise acknowledged that the Court’s decision could cause “untoward practical results.” They urged district courts to “strongly consider” using the various mechanisms outlined by the majority opinion—especially the option of requiring plaintiffs to file post-answer replies—to ensure “the prompt disposition of insubstantial claims.”

The Court’s opinion is available HERE.

Appellate and Constitutional Law

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com
Ashley E. Johnson +1 214.698.3111 ajohnson@gibsondunn.com

Related Practice: Insurance and Reinsurance

Geoffrey M. Sigler
+1 202.887.3752
gsigler@gibsondunn.com

Heather L. Richardson
+1 213.229.7409
hrichardson@gibsondunn.com

Related Practice: Labor and Employment

Jason C. Schwartz
+1 202.955.8242
jschwartz@gibsondunn.com

Katherine V.A. Smith
+1 213.229.7107
ksmith@gibsondunn.com

This alert was prepared by associates Robert Batista and Maya Jeyendran.

FDA v. Wages & White Lions Investments, LLC, No. 23-1038 – Decided April 2, 2025

Today, the Supreme Court held unanimously that the Food and Drug Administration did not unlawfully change position in denying marketing authorization for flavored e-cigarettes.

“[A] belief about how an agency is likely to exercise its enforcement discretion is not a ‘serious reliance interest.’”

Justice Alito, writing for the Court

Background:

The Family Smoking Prevention and Tobacco Control Act of 2009 (“TCA”) requires the makers of tobacco products to apply for and obtain premarketing authorization before introducing any “new tobacco product” to the market. 21 U.S.C. § 387j(a). In 2016, the FDA issued a rule that deemed e-cigarettes tobacco products subject to the TCA. However, the FDA delayed enforcement for existing e-cigarette products and set a September 2020 deadline for manufacturers to file applications for premarketing authorization. Before that deadline, the FDA issued a proposed rule concerning premarket tobacco product applications, and guidance concerning the types of scientific evidence that would be required for approval and manufacturers’ marketing plans.

Two companies submitted applications seeking approval to market and sell flavored e-liquids for use in e-cigarettes, but the FDA denied the applications because they had not provided sufficient evidence from scientific studies. The FDA did not consider the marketing plans submitted by the companies with their applications.

After the manufacturers sought judicial review, the en banc Fifth Circuit set aside and remanded the FDA’s denial orders. The court held that the FDA’s denial of the companies’ applications under standards different from those articulated in its pre-decisional guidance was arbitrary and capricious, and that the FDA’s failure to consider the companies’ marketing plans was unlawful and prejudicial (not harmless) error.

Issue:

Did the court of appeals err in setting aside and remanding the FDA’s denial orders as arbitrary and capricious?

Court’s Holding:

The FDA’s denial orders were not arbitrary and capricious and did not constitute an unlawful change in position from the FDA’s pre-decisional guidance. Further, the Fifth Circuit applied an incorrect harmless-error standard to the agency’s failure to consider the marketing plans.

What It Means:

The Court largely deferred to the FDA’s decision to deny manufacturer applications for approval to market and sell flavored e-liquids for e-cigarettes. The decision is an example of the Court giving broad latitude to agency action under the arbitrary and capricious standard of review.
The Court clarified the “change-in-position doctrine,” which applies when an agency changes course on a question of law or policy. The Court explained that an agency does not unlawfully change positions where its previous positions were “largely noncommittal” and the agency gives specific reasons for its actions, or where its previous statements do not directly contradict its later actions. Op. 29, 33, 38. The Court further reasoned that a regulated party’s mere “belief about how an agency is likely to exercise its enforcement discretion is not a ‘serious reliance interest.’” Op. 39–40.
The Court also clarified the “tension” between the harmless-error doctrine, under which courts can excuse agency errors that are not prejudicial, and the Chenery doctrine, under which courts may not uphold agency action with alternative reasoning not considered by the agency. Op. 41–46. The Court explained that courts may uphold agency action—and need not remand to the agency—where it is clear that the agency’s error had no bearing on the procedure used or the substance of the decision reached. The Court remanded to the Fifth Circuit to apply that standard in deciding whether the FDA’s failure to consider marketing plans was a harmless error.
The Court declined to address statutory and constitutional challenges to the FDA’s denial orders that were raised for the first time after certiorari was granted. Parties challenging agency action thus should be mindful of the need to preserve statutory and constitutional challenges at all stages of the litigation.

The Court’s opinion is available HERE.

Appellate and Constitutional Law Practice

Thomas H. Dupree Jr. +1 202.955.8547 tdupree@gibsondunn.com	Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com	Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com
Lucas C. Townsend +1 202.887.3731 ltownsend@gibsondunn.com	Bradley J. Hamburger +1 213.229.7658 bhamburger@gibsondunn.com	Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com

Related Practice: FDA and Health Care

Jonathan M. Phillips
+1 202.887.3546
jphillips@gibsondunn.com

Gustav W. Eyler
+1 202.955.8610
geyler@gibsondunn.com

John D.W. Partridge
+1 303.298.5931
jpartridge@gibsondunn.com

Related Practice: Administrative Law and Regulatory

Eugene Scalia +1 202.955.8210 escalia@gibsondunn.com	Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com	Stuart F. Delery +1 202.955.8515 sdelery@gibsondunn.com
Matt Gregory +1 202.887.3635 mgregory@gibsondunn.com

This alert was prepared by partner Grace Hart and associate Aly Cox.