You’ve probably heard about the Supreme Court’s decision in Trump v. CASA, Inc.—the “birthright citizenship case.” But the Court actually didn’t decide anything about who is a citizen. Instead, the Court addressed a different issue: whether federal courts can issue “nationwide” injunctions—court orders that block the government from enforcing a law, program, or policy against anyone, even people who were not named in the lawsuit. In other words, a nationwide injunction allowed a single plaintiff to entirely halt a government plan. Often, the plaintiff could get an injunction within days of filing a lawsuit. It was a powerful tool for stopping government overreach. People, businesses, organizations, and even states used it to block efforts by both Democratic and Republican administrations alike.
The Supreme Court put a stop to that in CASA, ruling that courts generally cannot issue nationwide injunctions. Rather, the Court explained, when a judge issues an injunction, she should write the order so that it gives the named plaintiff “complete relief” but goes no farther.
What does that mean? According to the Court, it means that if a person or business shows that a government’s action is invalid, the government is halted only from taking that action against the person or business who sued. While the government could voluntarily choose to stop enforcing a challenged law or program nationwide after a loss in federal district court, it does not have to.1 Instead, the government can continue to enforce the challenged law against other people and businesses who don’t have their own injunction. And if they need an injunction, they would have to file their own lawsuits.
How Does CASA Affect Companies?
CASA makes it harder for companies to stop government programs from affecting their business. Companies that formerly relied on one member of their industry to take the lead on suing to block a government program can no longer do so. Now, even if a firm just like yours wins an injunction, your company may well have to file its own suit if you want the same protections your competitor has already obtained. Pay close attention to developments in the law, and stay in touch with your attorney—the sooner you take action, the better your chances are of regaining ground in the market that your competitor claimed through a favorable court ruling.
For now, CASA leaves open two avenues for mitigating some of these problems: class actions and suits under the Administrative Procedure Act (APA). Each has advantages but also some big limitations.
Class actions: Justice Kavanaugh suggested plaintiffs who want far-reaching rulings should file class actions asking for injunctions that could apply “statewide, regionwide, or even nationwide.” This will likely be a popular strategy: the same day CASA was decided, a group filed a class action on behalf of every person born in America who could be affected by President Trump’s birthright-citizenship executive order. Two weeks later, the court issued a preliminary injunction halting the executive order’s enforcement across the country.
That said, it remains to be seen how effective class actions will be. Before a court will let a case to proceed as a class action, the plaintiff who brought the case has to prove that everyone in the proposed class should have their disputes resolved in one case, rather than by filing individual lawsuits. That can be hard—and costly. And orders granting or denying class certification can be appealed immediately, which means the case could get held up on procedural issues in appellate courts before the judge gets to the merits of the case. Class certification thus adds more complexity and uncertainty (which means more cost and time) to litigation. And as class actions against the government percolate through the courts, there are sure to be fights about how CASA impacts class action injunctions.
APA actions: The APA allows federal courts to delay and block government actions that are invalid for reasons such as being unlawful, arbitrary, or outside an agency’s authority. Those orders are viewed as having nationwide effect—that is, if a court delays or blocks a government action, it does so everywhere. Unsurprisingly, then, after CASA a growing number of courts have ordered nationwide stops to government programs under the APA.
However, APA suits are not a cure-all. For one thing, plaintiffs can challenge only an “agency’s” decision; that excludes Congress, courts, the president, and several other parts of the government.
The APA also allows challenges only to an agency’s “final” actions—for example, regulations, licensing decisions, and sanctions. The APA can’t be used to stop proposed rules, prevent an agency from threatening to fine or prosecute your business, or fix broad problems with how an agency runs a program. And on top of those limitations, after CASA it’s unclear if the APA still lets judges block agency actions nationwide; government attorneys are already arguing CASA took that power away from judges. This means more uncertainty about the long-term effectiveness of APA litigation.
CASA makes compliance harder, too. Let’s say you work for a bank operating in multiple states. Homeland Security begins requiring banks to report their clients’ personal identifying information, balances, and complete transaction histories. After that, a one-branch bank in one of your states files a class action on behalf of all banks doing business in that state, and then it persuades the judge to issue a classwide injunction blocking the department’s rule in the state. Would the injunction cover all your branches, or just your branches in that state? And what if the department directs your company to turn over information from branches in other states? Or what if two banks filed two separate APA lawsuits and won, but the judges issue conflicting orders on the remedy: one judge says he is blocking the department’s requirement nationwide, but the other judge says he can’t do that after CASA. Which decision does your company follow? Scenarios like these are possible as CASA’s effects ripple out.
What Can You Do?
Depending on your company’s business and size, it could take significant effort to keep up with new laws and programs, as well as the increased litigation challenging them. Your company also needs to be prepared to protect its rights by filing its own lawsuit as the government rolls out new regulations and programs. Our team at Womble Bond Dickinson has the experience and resources to help you keep track of developments and to create legal strategies that help you maintain competitive advantage in your industry. Reach out any time to your WBD attorneys for guidance and representation. You can also do a few other things to stay up to date day-to-day:
- Engage with peers: Your colleagues (and your competitors) all have a shared interest in protecting the industry. While being mindful of antitrust laws, it may be beneficial to participate in trade groups, gather intelligence about how industry participants are adapting to new government rules, and stay up-to-date about court cases that may affect your company.
- Track government activity: The Federal Register publishes daily updates about new rules, proposed rules, and notices from federal agencies and organizations, as well as executive orders and other presidential documents. You can create customized subscriptions to follow specific agencies and topics. Many individual agencies, such as the SEC, also let you subscribe to get press releases and other updates. Meanwhile, private businesses offer compliance consulting, software, and AI-powered tools.
- Follow court cases: Organizations like Just Security2 are tracking litigation against the federal government and posting detailed updates online, as well as links to court dockets and filings
1 Similarly, if the government lost an appeal of that decision in one of our regional federal appellate courts, the government would probably stop enforcing its law or program within that court’s geographic footprint, but it could continue doing that in other parts of the country.
2 Womble Bond Dickinson (US), LLP does not necessarily endorse any opinions or positions taken on external web sites or in any pending litigation involving the federal government. The firm offers this link only as an example of the types of resources available to those interested in learning about such litigation.
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