Private Rights Of Action In Federal Statutes

• Jurisdiction: United States,Federal
• Law Firm: Steptoe & Johnson
• Subject Matter: Litigation, Mediation & Arbitration, Energy and Natural Resources, Energy Law, Arbitration & Dispute Resolution
• Author: Mr Steven Davidson, Shannen W. Coffin, Michael Baratz, Molly Bruder Fox, Mark Murphy and Cannon Jurrens
• Published date: 05 October 2023

First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. In today's update, we examine a recent Steptoe victory in federal court on behalf of its client, Korea Electric Power Corp. and Korea Hydro & Nuclear Power Co., Ltd. (KEPCO/KHNP). This victory highlights the importance of asking fundamental questions about a plaintiff's right to sue for declaratory relief.

The Declaratory Judgment Act (the Act) provides a mechanism for litigants to address statutory or constitutional violations in federal court. But it does not by itself provide a cause of action to sue. Indeed, the Supreme Court has observed that the availability of relief under the Act "presupposes the existence of a judicially remedial right." Schilling v. Rogers, 363 U.S. 666, 677 (1960) (emphasis added).

Thus, while the Act broadens the array of remedies accessible to litigants in federal courts, it does not establish an independent foundation for federal relief. The Supreme Court has characterized the Act as "procedural" in nature, meant to augment the remedial options available to district courts. See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950) Accordingly, any complaint seeking relief under the Act must establish a separate and independent basis for relief in federal court.

Even when a federal statute is implicated, there is still very much the question of whether a federal remedy exists. Not every federal statute explicitly provides a private remedy, and some statutes explicitly preclude private enforcement. To determine whether a federal statute implies a private right of action, the Supreme Court has developed a four-factor test:

1. Whether the plaintiff is part of class for whose benefit the statute was enacted.
2. Whether there are indications of legislative intent to create or deny a private remedy.
3. Whether a private right of action is consistent with the legislative scheme.
4. Whether the subject matter is one typically relegated to state law and state enforcement.

See Cort v. Ash, 422 U.S. 66 (1975). The test is a difficult one, as the DC Circuit has noted that "since Cort v. Ash, the Supreme Court has been very hostile to implied causes of action." Johnson v. Interstate Mgt. Co., 849 F.3d 1093, 1097 (D.C. Cir. 2017). Steptoe's recent victory in Westinghouse Electronic Company, Inc. v. Korea Electric Power Corp., et al., No. 22-03228-APM (D.D.C. Sept. 18, 2023), demonstrates this test in...