`
`No. 24-40315
`
`In the United States Court of Appeals
`F O R T H E F I F T H C I R C U I T
`
`SPACE EXPLORATION TECHNOLOGIES, CORPORATION,
`Plaintiff - Appellant
`
`v.
`NATIONAL LABOR RELATIONS BOARD, a federal administrative agency;
`JENNIFER ABRUZZO, in her official capacity as the General Counsel of the
`National Labor Relations Board; LAUREN M. MCFERRAN, in her official
`capacity as the Chairman of the National Labor Relations Board;
`MARVIN E. KAPLAN, in his official capacity as a Board Member of the
`National Labor Relations Board; GWYNNE A. WILCOX, in her official ca-
`pacity as a Board Member of the National Labor Relations Board; DA-
`VID M. PROUTY, in his official capacity as a Board Member of the Na-
`tional Labor Relations Board; JOHN DOE, in his official capacity as an
`Administrative Law Judge of the National Labor Relations Board,
`Defendants - Appellees
`
`On Appeal from the U.S. District Court for the Southern District of Texas,
`No. 1:24-cv-00001, Judge Rolando Olvera
`
`EMERGENCY MOTION FOR INJUNCTION PENDING APPEAL
`
`HARRY I. JOHNSON, III
`MORGAN, LEWIS & BOCKIUS LLP
`2049 Century Park East, Suite 700
`Los Angeles, CA 90067
`(310) 255-9005
`
`CATHERINE L. ESCHBACH
`MORGAN, LEWIS & BOCKIUS LLP
`1000 Louisiana Street, Suite 4000
`Houston, TX 77002
`(713) 890-5719
`
`MICHAEL E. KENNEALLY
`AMANDA L. SALZ
`MORGAN, LEWIS & BOCKIUS LLP
`1111 Pennsylvania Avenue, N.W.
`Washington, DC 20004
`(202) 739-3000
`
`Counsel for Space Exploration
`Technologies Corp.
`
`
`
`Case: 24-40315 Document: 10-1 Page: 2 Date Filed: 05/01/2024
`
`CERTIFICATE OF INTERESTED PERSONS
`
`No. 24-40315, Space Exploration Technologies Corp. v. NLRB
`The undersigned counsel of record certifies that the following listed
`
`persons and entities as described in the fourth sentence of Fifth Circuit
`
`Rule 28.2.1 have an interest in the outcome of this case. These represen-
`
`tations are made in order that the judges of this Court may evaluate pos-
`
`sible disqualification or recusal:
`
`1.
`
`Space Exploration Technologies Corp. (“SpaceX”), Plaintiff
`
`and Petitioner. SpaceX has no parent corporation and no publicly held
`
`corporation owns 10% or more of its stock.
`
`2.
`
`National Labor Relations Board, a federal administrative
`
`agency, Defendant and Respondent
`
`3.
`
`Jennifer Abruzzo, in her official capacity as the General Coun-
`
`sel of the National Labor Relations Board, Defendant and Respondent
`
`4.
`
`Lauren M. McFerran, in her official capacity as Chairman of
`
`the National Labor Relations Board, Defendant and Respondent
`
`5. Marvin E. Kaplan, in his official capacity as Board Member of
`
`the National Labor Relations Board, Defendant and Respondent
`
`i
`
`
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`Case: 24-40315 Document: 10-1 Page: 3 Date Filed: 05/01/2024
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`6.
`
`Gwynne A. Wilcox, in her official capacity as Board Member
`
`of the National Labor Relations Board, Defendant and Respondent
`
`7.
`
`David M. Prouty, in his official capacity as Board member of
`
`the National Labor Relations Board, Defendant and Respondent
`
`Tom Moline, Amicus Curiae in the underlying proceedings
`
`Deborah Lawrence, Amicus Curiae in the underlying proceed-
`
`8.
`
`9.
`
`ings
`
`10. Scott Beck, Amicus Curiae in the underlying proceedings
`
`11. Paige Holland-Thielen, Amicus Curiae in the underlying pro-
`
`ceedings
`
`12. Pacific Legal Foundation, Amicus Curiae in the underlying
`
`proceedings
`
`13. Rolando Olvera, in his official capacity as United States Dis-
`
`trict Judge of United States District Court for the Southern District of
`
`Texas, Brownsville Division
`
`14.
`
`John Doe, in his official capacity as an Administrative Law
`
`Judge of the National Labor Relations Board, Defendant1
`
`1 Judge Sharon L. Steckler was recently named as the ALJ in the un-
`derlying matter but has not been officially substituted by the time of
`
`ii
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`
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`Case: 24-40315 Document: 10-1 Page: 4 Date Filed: 05/01/2024
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`15. United States of America, appropriates funds for and assumes
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`debts of Defendants and Respondents
`
`The undersigned counsel for SpaceX, separately lists the following
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`persons as attorneys of record:
`
`16. Harry I. Johnson, III, Attorney for SpaceX
`
`17. Michael E. Kenneally, Attorney for SpaceX
`
`18. Catherine L. Eschbach, Attorney for SpaceX
`
`19. Amanda L. Salz, Attorney for SpaceX
`
`20. David G. Oliveira, Attorney for SpaceX
`
`21. Alamdar S. Hamdani, Attorney for Defendants
`
`22. Daniel David Hu, Attorney for Defendants
`
`23. Benjamin S. Lyles, Attorney for Defendants
`
`24. Kevin P. Flanagan, Attorney for Defendants
`
`25. David P. Boehm, Attorney for Defendants
`
`26. Daniel Brasil Becker, Attorney for Defendants
`
`27. Grace L. Pezzella, Attorney for Defendants
`
`28. Matheus Teixeira, Attorney for Defendants
`
`the ruling giving rise to this motion. Judge Mara-Louis Anzalone, a
`second ALJ, was also named to act as Special Master.
`
`iii
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`
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`Case: 24-40315 Document: 10-1 Page: 5 Date Filed: 05/01/2024
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`29. Dalford Dean Owens, Jr, Attorney for Defendants
`
`30. Laurie Burgess, Attorney for Amicus Curiae
`
`31. Anne Shaver, Attorney for Amicus Curiae
`
`32. Nimish Desai, Attorney for Amicus Curiae
`
`33.
`
`Joshua M. Robbins, Attorney for Amicus Curiae
`
`34. Oliver J. Dunford, Attorney for Amicus Curiae
`
`Dated: May 1, 2024
`
`s/ Michael E. Kenneally
`MICHAEL E. KENNEALLY
`
`iv
`
`
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`Case: 24-40315 Document: 10-1 Page: 6 Date Filed: 05/01/2024
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`TABLE OF CONTENTS
`
`Page
`
`CERTIFICATE OF INTERESTED PERSONS ......................................... i
`TABLE OF AUTHORITIES ..................................................................... vi
`INTRODUCTION AND NATURE OF EMERGENCY............................. 1
`FACTUAL AND PROCEDURAL BACKGROUND .................................. 6
`ARGUMENT ........................................................................................... 11
`I.
`SpaceX is likely to succeed on the merits of its constitutional
`claims because Jarkesy is dispositive. ........................................... 12
`A.
`The NLRB’s ALJs are unconstitutionally insulated from
`removal. ................................................................................. 12
`The NLRB’s adjudication of private rights and legal
`relief violates the Seventh Amendment. .............................. 15
`SpaceX will suffer irreparable harm without a preliminary
`injunction. ....................................................................................... 21
`A.
`The unconstitutionality of the NLRB proceedings
`inflicts irreparable harm. ...................................................... 21
`The NLRB proceedings are also inflicting irreparable
`economic harm. ..................................................................... 24
`III. The balance of harms and public interest favor a preliminary
`injunction. ....................................................................................... 25
`CONCLUSION ........................................................................................ 27
`CERTIFICATE OF SERVICE ................................................................. 28
`CERTIFICATE OF COMPLIANCE ........................................................ 30
`
`II.
`
`B.
`
`B.
`
`v
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`
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`Case: 24-40315 Document: 10-1 Page: 7 Date Filed: 05/01/2024
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`CASES
`Alpine Sec. Corp. v. FINRA,
`No. 23-5129, 2023 WL 4703307 (D.C. Cir. July 5, 2023) ................... 23
`Amalgamated Util. Workers v. Consol. Edison Co. of N.Y.,
`309 U.S. 261 (1940) ............................................................................. 20
`Atlas Roofing Co., Inc. v. OSHRC,
`430 U.S. 442 (1977) ............................................................................. 19
`Axon Enter., Inc. v. FTC,
`598 U.S. 175 (2023) ..................................................................... passim
`BST Holdings, L.L.C. v. OSHA,
`17 F.4th 604 (5th Cir. 2021) ............................................................... 26
`Burgess v. FDIC,
`639 F. Supp. 3d 732 (N.D. Tex. 2022) ................................................. 24
`Chauffeurs, Teamsters & Helpers, Loc. No. 391 v. Terry,
`494 U.S. 558 (1990) ............................................................................. 19
`Cmty. Fin. Servs. Ass’n of Am. Ltd. v. CFPB,
`51 F.4th 616 (5th Cir. 2022) ............................................................... 22
`Cochran v. SEC,
`20 F.4th 194 (5th Cir. 2021) ............................................................... 23
`Collins v. Dep’t of the Treasury,
`83 F.4th 970 (5th Cir. 2023) ............................................................... 22
`Daniels Health Scis., L.L.C. v. Vascular Health Scis., L.L.C.,
`710 F.3d 579 (5th Cir. 2013) ......................................................... 21, 26
`Deerfield Med. Ctr. v. City of Deerfield Beach,
`661 F.2d 328 (5th Cir. 1981) ............................................................... 21
`
`vi
`
`
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`Case: 24-40315 Document: 10-1 Page: 8 Date Filed: 05/01/2024
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Doran v. Salem Inn, Inc.,
`422 U.S. 922 (1975) ............................................................................. 23
`Elrod v. Burns,
`427 U.S. 347 (1976) ............................................................................. 21
`Fortune v. Nat’l Cash Reg. Co.
`364 N.E.2d 1251 (Mass. 1977) ............................................................ 18
`Free Enter. Fund v. PCAOB,
`561 U.S. 477 (2010) ................................................................. 12, 23, 26
`Granfinanciera, S.A. v. Nordberg,
`492 U.S. 33 (1989) ............................................................................... 20
`In re Fort Worth Chamber of Com.,
`98 F.4th 265 (5th Cir. 2024) ................................................................. 3
`Jarkesy v. SEC,
`34 F.4th 446 (5th Cir. 2022) ....................................................... passim
`League of Women Voters of U.S. v. Newby,
`838 F.3d 1 (D.C. Cir. 2016) ................................................................. 26
`Louisiana v. Biden,
`55 F.4th 1017 (5th Cir. 2022) ....................................................... 12, 26
`Lucia v. SEC,
`585 U.S. 237 (2018) ....................................................................... 14, 15
`Mertens v. Hewitt Assocs.,
`508 U.S. 248 (1993) ............................................................................. 18
`Myers v. United States,
`272 U.S. 52 (1926) ............................................................................... 12
`
`vii
`
`
`
`Case: 24-40315 Document: 10-1 Page: 9 Date Filed: 05/01/2024
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Nken v. Holder,
`556 U.S. 418 (2009) ............................................................................. 25
`NLRB v. Jones & Laughlin Steel Corp.,
`301 U.S. 1 (1937) ................................................................................. 19
`Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC,
`584 U.S. 325 (2018) ............................................................................. 20
`Petermann v. Teamsters Loc. 396,
`344 P.2d 25 (Cal. Ct. App. 1959) ........................................................ 18
`Seila L. LLC v. CFPB,
`591 U.S. 197 (2020) ............................................................................. 12
`Stern v. Marshall,
`564 U.S. 462 (2011) ............................................................................. 26
`Thryv, Inc.,
`372 N.L.R.B. No. 22 (Dec. 13, 2022) ................................... 4, 17, 18, 19
`Tull v. United States,
`481 U.S. 412 (1987) ....................................................................... 16, 18
`Ward v. Village of Monroeville,
`409 U.S. 57 (1972) ............................................................................... 24
`Wenner v. Tex. Lottery Comm’n,
`123 F.3d 321 (5th Cir. 1997) ............................................................... 24
`Westrock Servs., Inc.,
`366 N.L.R.B. No. 157 (Aug. 6, 2018) ...................................... 13, 14, 15
`Winter v. Nat. Res. Def. Council, Inc.,
`555 U.S. 7 (2008) ................................................................................. 12
`
`viii
`
`
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`Case: 24-40315 Document: 10-1 Page: 10 Date Filed: 05/01/2024
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`CONSTITUTIONAL PROVISIONS & STATUTES
`5 U.S.C.
`§ 1202 .................................................................................................. 14
`§ 7521 ............................................................................................ 13, 14
`28 U.S.C.
`§ 1391 .................................................................................................... 9
`§ 1406 .................................................................................................... 8
`29 U.S.C. § 153 ........................................................................................ 14
`U.S. CONST.
`amend. VII .................................................................................. passim
`art. II ..................................................................................... 2, 4, 12, 14
`art. III .......................................................................................... passim
`RULES
`5th Cir. Rule 27.3 ...................................................................................... 1
`OTHER AUTHORITIES
`THE FEDERALIST No. 78 (Alexander Hamilton) (C. Rossiter ed. 1961) ... 26
`
`ix
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`
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`Case: 24-40315 Document: 10-1 Page: 11 Date Filed: 05/01/2024
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`INTRODUCTION AND NATURE OF EMERGENCY
`Jarkesy v. SEC, 34 F.4th 446, 463 (5th Cir. 2022), cert. granted, 143
`
`S. Ct. 2688 (2023), controls this case and necessitates immediate issuance
`
`of a preliminary injunction. This Court should preliminarily enjoin offic-
`
`ers of the National Labor Relations Board (“NLRB” or “Board”) (collec-
`
`tively, “Defendants”) from proceeding further in administrative proceed-
`
`ings against Space Exploration Technologies Corp. (“SpaceX”) that are
`
`inflicting here-and-now constitutional injuries.
`
`To halt any further violation of its constitutional rights, SpaceX re-
`
`quests that this Court immediately issue an administrative stay of the
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`ongoing NLRB proceedings, which opened before an Administrative Law
`
`Judge (“ALJ”) on March 5, 2024, pending a decision on this Emergency
`
`Motion.2 Relief is needed by tomorrow, May 2 at 12 p.m. Pacific Time
`
`(2 p.m. Central Time), when one of the ALJs will conduct a conference
`
`on discovery issues in the administrative proceedings. SpaceX meets the
`
`requirements for emergency relief under Circuit Rule 27.3 and satisfies
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`all four preliminary injunction factors.
`
`2 SpaceX filed the Emergency Motion today, May 1, 2024, to afford this
`Court time to provide emergency relief before tomorrow’s ALJ hearing.
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`1
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`
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`Case: 24-40315 Document: 10-1 Page: 12 Date Filed: 05/01/2024
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`For months, SpaceX has been subjected to NLRB proceedings that
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`violate the Constitution four times over. In this emergency posture,
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`SpaceX focuses on just two constitutional claims: (1) the ALJs’ removal
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`protections violate Article II and (2) the ALJ’s role as factfinder violates
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`the Seventh Amendment and Article III.3
`
`To forestall these ongoing violations of its constitutional rights,
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`SpaceX moved for a preliminary injunction of the NLRB proceedings on
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`January 12, 2024, after the NLRB refused SpaceX’s multiple requests to
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`voluntarily delay the administrative proceedings (which the NLRB could
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`halt at any time) to permit resolution of SpaceX’s constitutional claims.
`
`The administrative hearing nonetheless opened on March 5, 2024, alt-
`
`hough opening statements and testimony were postponed so the ALJ
`
`could resolve significant discovery disputes. On April 24, 2024, SpaceX
`
`received notice that, on May 2, 2024, an ALJ would be holding a confer-
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`ence on those issues. Despite the exigency, the district court has not acted
`
`on the request for preliminary relief that SpaceX filed nearly four months
`
`3 SpaceX’s focus on just two of its constitutional challenges aims to fa-
`cilitate this Court’s expedited review and is not a forfeiture of SpaceX’s
`arguments for preliminary injunctive relief on its other challenges.
`
`2
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`
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`Case: 24-40315 Document: 10-1 Page: 13 Date Filed: 05/01/2024
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`ago. Without this Court’s intervention, SpaceX will suffer a new irrepa-
`
`rable constitutional injury tomorrow.
`
`This Court has already considered this case on a mandamus peti-
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`tion from the district court’s order transferring this case to the Central
`
`District of California. Although this Court, by sharply divided votes, de-
`
`clined to exercise its mandamus power to grant relief, the case remains
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`in the Southern District of Texas. After the denial of SpaceX’s en banc
`
`petition, SpaceX sought reconsideration of the district court’s transfer or-
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`der and, alternatively, a ruling on the long-pending preliminary injunc-
`
`tion motion (given the ongoing administrative proceeding) before initia-
`
`tion of the transfer. When SpaceX learned that it was certain to incur
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`additional constitutional harm on May 2, SpaceX asked the district court
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`for a preliminary injunction in time to prevent that harm. The district
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`court has not ruled on SpaceX’s requests for preliminary injunctive relief,
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`leaving SpaceX with no option but to come to this Court to ask for pre-
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`liminary injunctive relief to prevent the ongoing constitutional harm. See
`
`In re Fort Worth Chamber of Commerce, 98 F.4th 265, 270 (5th Cir. 2024)
`
`(“An effective denial of a preliminary injunction is an appealable order.”).
`
`3
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`
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`Case: 24-40315 Document: 10-1 Page: 14 Date Filed: 05/01/2024
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`Under binding Fifth Circuit precedent, SpaceX is likely to succeed
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`on the merits of its constitutional claims. Jarkesy controls SpaceX’s ALJ-
`
`removal and Seventh Amendment claims.
`
`First, the administrative proceeding is being conducted by ALJs
`
`who exercise substantial executive functions while being insulated from
`
`presidential control through three layers of removal protections. Under
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`this Court’s reasoning in Jarkesy, 34 F.4th at 463, such a removal scheme
`
`violates Article II by impeding the President’s ability to remove the ALJs.
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`In Jarkesy, this Court held that a matching set of removal restrictions
`
`was unconstitutional as applied to ALJs of the Securities Exchange Com-
`
`mission (“SEC”). 34 F.4th at 463-64. The same conclusion follows here,
`
`because the NLRB has recognized that SEC and NLRB ALJs are identi-
`
`cally situated.
`
`Second, the NLRB proceeding violates SpaceX’s Seventh Amend-
`
`ment jury-trial right by adjudicating private rights outside the confines
`
`of an Article III court. The NLRB’s General Counsel alleges that SpaceX
`
`wrongfully terminated certain employees and seeks a broad award of
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`compensatory damages for those employees. See generally Thryv, Inc.,
`
`4
`
`
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`Case: 24-40315 Document: 10-1 Page: 15 Date Filed: 05/01/2024
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`372 N.L.R.B. No. 22 (Dec. 13, 2022) (holding the NLRB will provide ex-
`
`pansive monetary compensation for wrongfully terminated employees).
`
`The NLRB seeks to vindicate quintessential private rights for the benefit
`
`of private parties. But the Constitution permits the NLRB to adjudicate
`
`only public rights through its non-jury administrative proceedings. See
`
`Jarkesy, 34 F.4th at 451-55 (holding that SEC administrative adjudica-
`
`tions violate the Seventh Amendment “because such claims do not con-
`
`cern public rights alone”).
`
`SpaceX is being irreparably harmed by these constitutional viola-
`
`tions, and the irreparable harm will continue unless the Court prelimi-
`
`narily enjoins the NLRB proceedings pending a final decision on the mer-
`
`its. Even if the judiciary can cure some of the constitutional problems at
`
`final judgment, it cannot undo the injury SpaceX suffers in the meantime
`
`through “subjection to an illegitimate proceeding, led by an illegitimate
`
`decisionmaker” in “proceedings [that] violate the separation of powers.”
`
`Axon Enter., Inc. v. FTC, 598 U.S. 175, 191 (2023). Under binding prece-
`
`dent, such harm is “a here-and-now injury” that “is impossible to remedy
`
`once the proceeding is over.” Id. (citation omitted). The balance of equities
`
`and public interest weigh strongly in SpaceX’s favor for similar reasons.
`
`5
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`Case: 24-40315 Document: 10-1 Page: 16 Date Filed: 05/01/2024
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`Unless this Court issues an administrative stay and preliminary
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`injunction of the NLRB proceedings, SpaceX’s continuing constitutional
`
`harm will increase when an ALJ holds a hearing on May 2, 2024, to ad-
`
`dress the parties’ discovery disputes. SpaceX respectfully requests that
`
`this Court preliminarily enjoin any further NLRB administrative pro-
`
`ceedings pending resolution of this appeal.
`
`FACTUAL AND PROCEDURAL BACKGROUND
`SpaceX operates a space launch business and a global satellite-
`
`based internet service known as Starlink. D. Ct. Dkt. 37-1 ¶¶ 5-8. It em-
`
`ploys over 14,000 people in facilities around the country, including in its
`
`Starbase facility in Boca Chica, Texas, where it is developing, manufac-
`
`turing, and launching Starship, the most powerful rocket ever built; its
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`rocket development facility in McGregor, Texas; its human spaceflight
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`mission operations and integration facility in Houston, Texas; and its
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`Starlink manufacturing facility in Bastrop, Texas. Id. ¶ 9.
`
`On June 15, 2022, a small group of SpaceX employees sent an open
`
`letter (the “Open Letter”) to SpaceX employees across all of SpaceX’s lo-
`
`cations, in many cases flooding multiple channels of communication, and
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`6
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`Case: 24-40315 Document: 10-1 Page: 17 Date Filed: 05/01/2024
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`demanding that SpaceX take certain actions addressing perceived short-
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`comings and soliciting employees to fill out a hyperlinked survey to indi-
`
`cate support for the Open Letter’s demands and provide feedback. D. Ct.
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`Dkt. 1 ¶¶ 43-44. Because the Open Letter blatantly violated company
`
`policies and caused significant disruption, SpaceX discharged four em-
`
`ployees involved with its mass distribution, and discharged a few addi-
`
`tional employees for lying during a subsequent leak investigation. Id.
`
`¶¶ 43-46.
`
`In November 2022, eight discharged former employees (the “Charg-
`
`ing Parties”) filed NLRB charges alleging that SpaceX committed unfair
`
`labor practices (the “Charges”). Id. ¶ 47. SpaceX submitted to the NLRB
`
`a position statement refuting the Charging Parties’ allegations, along
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`with supporting evidence. Id. ¶ 48.
`
`On January 3, 2024, the Regional Director for Region 31 issued an
`
`order consolidating the administrative cases, with a consolidated admin-
`
`istrative complaint and notice that an ALJ hearing would occur just two
`
`months later, on March 5, 2024. Id. ¶ 49. The next day, SpaceX filed this
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`action in the Southern District of Texas, Brownsville Division, seeking
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`injunctive and declaratory relief based on four constitutional problems
`
`7
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`
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`Case: 24-40315 Document: 10-1 Page: 18 Date Filed: 05/01/2024
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`with the NLRB proceedings. Id. ¶¶ 51-138. SpaceX asked the NLRB to
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`stay the agency proceedings to give the courts time to adjudicate these
`
`issues, but the NLRB and its prosecutors (despite having waited over a
`
`year to file their complaint) refused these requests. D. Ct. Dkt. 37-2 ¶¶ 4-
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`8. SpaceX therefore moved for a preliminary injunction on January 12 to
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`ensure enough time for a ruling before the scheduled start date of the
`
`administrative hearing on March 5, 2024. D. Ct. Dkt. 37, at 1, 6. Defend-
`
`ants opposed on February 2, and SpaceX filed its reply on February 12,
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`reiterating its need for a ruling before March 5, 2024. D. Ct. Dkt. 79, at 1.
`
`Meanwhile, on January 11, Defendants moved to transfer the case
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`to the Central District of California. SpaceX urged the district court to
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`decide the preliminary injunction motion before or at the same time as
`
`the transfer motion because of the need for expeditious resolution of the
`
`preliminary injunction motion and because transferring the case first
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`would significantly delay resolution of the preliminary injunction motion;
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`SpaceX emphasized that Defendants entirely controlled the timing of the
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`hearing and need for relief. D. Ct. Dkts. 49, 49-1, 56, & 64 at 20.
`
`On February 15, the district court granted Defendants’ motion to
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`transfer under 28 U.S.C. § 1406, finding that venue was improper in the
`
`8
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`
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`Case: 24-40315 Document: 10-1 Page: 19 Date Filed: 05/01/2024
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`Southern District of Texas under 28 U.S.C. § 1391(e), and initiated the
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`electronic transfer. SpaceX sought an emergency writ of mandamus from
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`this Court, requesting relief in time for the preliminary injunction to be
`
`resolved before the March 5 hearing. In re SpaceX, No. 24-40103, Dkt. 2
`
`(5th Cir. Feb. 16, 2024).
`
`On February 19, 2024, this Court administratively stayed the
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`transfer before it was completed, but at Defendants’ urging, the Central
`
`District of California docketed the case anyway. No. 24-40103, Dkts. 46
`
`& 110-1. On February 26, however, this Court directed the district court
`
`to “immediately” request that the Central District of California return
`
`the case for procedural clarity and comity. No. 24-40103, Dkt. 46. On
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`March 1, the district court requested the case back. After its return to the
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`Southern District of Texas, a divided panel issued a one-line order on
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`March 5, denying mandamus over Judge Elrod’s dissent. No. 24-40103,
`
`Dkt. 59. The procedural confusion caused by Defendants’ interactions
`
`with the Central District of California, and resulting delay in the return
`
`of the case, seems to have delayed a ruling on the mandamus petition.
`
`That same day, March 5, the administrative hearing formally
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`opened. A judge of this Court withheld the mandate, No. 24-40103, Dkt.
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`9
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`Case: 24-40315 Document: 10-1 Page: 20 Date Filed: 05/01/2024
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`66, keeping the administrative stay of the transfer in effect. SpaceX
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`quickly filed an expedited petition for en banc rehearing on March 7,
`
`again noting the need for prompt relief given SpaceX’s irreparable con-
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`stitutional injury from the already opened hearing and each new devel-
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`opment in that proceeding. No. 24-40103, Dkt. 71. An evenly divided
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`court denied the en banc petition by an 8-to-8 vote on April 17, with Judge
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`Jones authoring a dissent that five other Members of the Court joined.
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`No. 24-40103, Dkt. 111. The administrative stay of the transfer was dis-
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`solved that same day.
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`Because the Southern District of Texas still had jurisdiction over
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`this action, SpaceX immediately asked the district court to reconsider its
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`transfer order based on the additional input from judges of this Court.
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`D. Ct. Dkt. 112. In the alternative, SpaceX requested that the district
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`court resolve the preliminary injunction motion before transfer given the
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`already delayed adjudication of the preliminary injunction motion, the
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`harm accumulating since March 5, and the likelihood that transfer would
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`increase the delay. Id.
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`SpaceX learned on April 24 that an ALJ had scheduled a May 2
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`hearing to address discovery issues. D. Ct. Dkt. 117-1. The parties to the
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`administrative proceeding have significant discovery disputes, and the
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`rulings on the scope of discovery will have a large impact on the admin-
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`istrative proceeding moving forward. On April 26, SpaceX filed its reply
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`in support of reconsideration. D. Ct. Dkt. 117. SpaceX informed the dis-
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`trict court of the accelerated need for a ruling on the preliminary injunc-
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`tion motion—the ALJ has ordered a court reporter, which is an indication
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`that the hearing will likely include rulings on pending discovery issues.
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`Id. Given the heightened need for a prompt preliminary injunction ruling
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`to prevent new harm, SpaceX requested a ruling in advance of the May 2
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`hearing. Id. at 1-2, 4-5.
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`As of 10 p.m. Central Time on April 30, 2024, the district court had
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`not ruled on SpaceX’s January 12 motion for a preliminary injunction or
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`SpaceX’s April 17 motion for reconsideration. This inaction constitutes
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`an effective denial of the preliminary injunction, which SpaceX has now
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`appealed. D. Ct. Dkt. 119.
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`ARGUMENT
`Preliminary injunctive relief is proper when a movant establishes
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`(1) that it is likely to succeed on the merits, (2) that it is likely to suffer
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`irreparable harm in the absence of preliminary relief, (3) that the balance
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`of equities tips in its favor, and (4) that an injunction is in the public
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`interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); Lou-
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`isiana v. Biden, 55 F.4th 1017, 1022 (5th Cir. 2022). SpaceX satisfies all
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`four factors.
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`I.
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`SpaceX is likely to succeed on the merits of its constitutional
`claims because Jarkesy is dispositive.
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`A.
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`The NLRB’s ALJs are unconstitutionally insulated
`from removal.
`Article II vests all executive power in the President, “who must
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`‘take Care that the Laws be faithfully executed.’ ” Seila L. LLC v. CFPB,
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`591 U.S. 197, 203 (2020). The president does not execute federal law
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`“alone and unaided.” Myers v. United States, 272 U.S. 52, 117 (1926). “He
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`must execute them by the assistance of subordinates.” Id. But because
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`the executive responsibility remains vested in the President, the officers
`
`of every administrative agency—including “independent” ones—must be
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`subject to presidential oversight. See Free Enter. Fund v. PCAOB, 561
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`U.S. 477, 513-14 (2010). The Constitution thus requires that the Presi-
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`dent have the “power to remove—and thus supervise—those who wield
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`executive power on his behalf.” Seila L., 591 U.S. at 204.
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`SpaceX is likely to succeed on the merits of its constitutional chal-
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`lenge to the NLRB ALJs’ removal protections. Fifth Circuit precedent re-
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`quires this conclusion. In Jarkesy, the Fifth Circuit held that indistin-
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`guishable “statutory removal restrictions” for SEC ALJs “are unconstitu-
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`tional.” 34 F.4th at 465. Under 5 U.S.C. § 7521(a), “SEC ALJs may be
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`removed by the Commission ‘only for good cause established and deter-
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`mined by the [MSPB] on the record after opportunity for hearing.’” 34
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`F.4th at 464. Similarly, SEC Commissioners and MSPB members them-
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`selves “can only be removed by the President for cause.” Id. Moreover,
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`SEC ALJs are “sufficiently important to executing the laws that the Con-
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`stitution requires that the President be able to exercise authority over
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`their functions.” Jarkesy, 34 F.4th at 464. But the multiple “layers of for-
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`cause protection” unconstitutionally “stand in the President’s way.” Id.
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`at 465.
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`Defendants cannot distinguish NLRB ALJs from SEC ALJs. On the
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`contrary, NLRB precedent forecloses such a distinction. Westrock Servs.,
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`Inc., 366 N.L.R.B. No. 157, slip op. at 1 (Aug. 6, 2018) (“Board judges, like
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`SEC judges, are inferior officers[.]”). SEC and NLRB ALJs are both “in-
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`ferior officers” who “have substantial authority” in agency investigations
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`Case: 24-40315 Document: 10-1 Page: 24 Date Filed: 05/01/2024
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`and enforcement actions. Jarkesy, 34 F.4th at 464. And, like SEC ALJs,
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`NLRB ALJs are covered by “at least two layers of for-cause protection”
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`that “stand in the President’s way.” Id. at 465. Indeed, 5 U.S.C. § 7521(a),
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`which allows an employing agency to remove its ALJs only when the
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`MSPB finds good cause, applies equally to both sets of ALJs; and 5 U.S.C.
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`§ 1202(d) applies equally to the MSPB members in both cases as well.
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`The NLRB Members also have explicit removal protection: they are re-
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`movable only “for neglect of duty or malfeasance in office, but for no other
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`cause.” 29 U.S.C. § 153(a). So, like SEC ALJs, NLRB ALJs are unconsti-
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`tutionally insulated from the President’s oversight. See Jarkesy, 34 F.4th
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`at 464.
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`Under Jarkesy, Defendants cannot now backtrack from the NLRB’s
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`Westrock decision to try to distinguish SEC ALJs. The Jarkesy Court’s
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`assessment of SEC ALJs tracked the Supreme Court’s assessment of SEC
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`ALJs in Lucia v. SEC, 585 U.S. 237 (2018), a case applying Article II’s
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`Appointments Clause. See Jarkesy, 34 F.4th at 464 (“The Supreme Court
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`decided in Lucia that SEC ALJs are ‘inferi