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En Banc Drama: The Ninth Circuit Vacates the Huntsman decision and Orders a New Hearing

One of the most interesting opinions of the year is a decision I blogged about a few months ago captioned Huntsman v. Latter Day Saints. Originally, the Ninth Circuit Court of Appeals reversed summary judgment and ordered the case to proceed to trial on a claim that tithes and donations secured from a Church member could be recovered if the Church secured the donations through fraud. 

The Defendant Latter-Day Saints moved for rehearing en banc asking the entire panel of the Court of Appeals hear and decide the case, and to vacate the prior appellate decision. These types of requests are frequently sought, but rarely granted. In this case, however, on March 1, 2024, the Court of Appeals for the ninth circuit entered an Order setting the case for en banc consideration and vacating the prior opinion. This is generally not a good sign for Huntsman.

What is an En Banc Hearing?

The world of appellate courts can be a fascinating one, filled with intricate legal arguments and high-stakes decisions. But sometimes, even these courts take a step back and reconsider. That’s where the concept of “en banc” comes in.

Federal appellate courts, like the Circuit Courts of Appeals, typically operate with panels of three judges who hear arguments and issue decisions. However, there’s a provision that allows the entire court, all the judges on the bench, to rehear a case. This is called an en banc hearing (en banc meaning “on the bench” in French).

Why Go En Banc?

There are a few key reasons why a court might choose to go en banc. Here are some of the most common:

  • Major Issue of Law: The case might raise a particularly significant legal question that has the potential to create a precedent with broad implications. In such cases, the full court might want to weigh in to ensure uniformity within the circuit.
  • Circuit Split: There might be conflicting decisions on the same legal issue from different panels within the same court. An en banc hearing can help resolve this “circuit split” and provide a clear legal standard.
  • Questioning the Panel’s Decision: It’s also possible that some judges on the court disagree with the decision reached by the initial panel. By going en banc, they get the opportunity to revisit the case and potentially reverse the outcome.

The Stakes of an En Banc Hearing

En banc hearings are a relatively rare occurrence, typically happening in only a small percentage of cases appealed. However, when they do happen, the stakes can be high. Here’s why:

  • Shifting the Balance: Because you’re bringing more judges into the equation, the balance of the court can change. A decision that seemed like a sure win for one side before the panel might face a different fate before the entire court.
  • Potential for Precedent: En banc decisions often carry more weight and are more likely to be cited as precedent in future cases. This means they can have a lasting impact on the legal landscape within the circuit.
  • Increased Scrutiny: The fact that the court is going en banc indicates that the case is complex or controversial. This translates to additional scrutiny and a higher bar for the arguments presented during oral arguments.

A Real-World Example

Let’s imagine a hypothetical case. A federal agency issues a new regulation that an industry group believes unfairly restricts their business practices. The industry group sues, and a three-judge panel initially rules in their favor, striking down the regulation. However, the government isn’t happy with this outcome and petitions for an en banc hearing.

The full court agrees to hear the case. Now, both sides have to prepare for a new round of arguments, potentially addressing new questions raised by the additional judges. The stakes are higher, and the outcome could have a significant impact on the entire industry.

The Takeaway

En banc hearings are a powerful tool in the hands of federal appellate courts. They allow for a more comprehensive review of complex legal issues and can potentially overturn decisions made by smaller panels.

In this case, the Ninth Circuit created new law that has far reaching consequences if affirmed. I suspect that is the reason for the en banc consideration. While we will not know the outcome for another year, you can be assured that the opinion of full court will have greater limiting principles than the prior opinion of the previous panel. Buckle up, because this legal maneuver can have significant consequences.

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