The Ninth Circuit just created a ‘circuit split.’ What does that mean?
A few weeks ago, PLF client David Wulf took his case against the National Labor Relations Board (NLRB) to the United States Court of Appeals for the Tenth Circuit. Normally, this is a routine part of the litigation process, but in Wulf’s case, it was a bit more complicated than usual. Just days earlier, in a separate case, the Court of Appeals for the Ninth Circuit created a “circuit split” on one of the key issues in David’s case, adding another layer to the process.
For a legal layman, like this author, the ins and outs of a “circuit split” may not be automatically apparent. Luckily, the PLF office is filled with legal “nerds” who were more than happy to help me understand.
Here is what I learned.
Often, people in different parts of the country file separate lawsuits that address the same core issue. If those cases make their way to the United States Court of Appeals, they will be heard in one of 13 U.S. Circuit Courts, depending on where the case originated. If you live in Colorado, Kansas, New Mexico, Oklahoma, Wyoming, or Utah, your case would be brought before the Tenth Circuit, as opposed to the Ninth Circuit, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington … so on and so forth.
Similar cases do not always yield similar rulings. And when different circuit courts find themselves arriving at contradictory conclusions, voilà, a circuit split is created.
Circuit splits in action
Utah filmmaker David Wulf got into a dust-up with Teamsters union organizers who disrupted one of his productions, instigating a strike by the film’s driving crew. The Union filed “unfair labor practices” against him with the NLRB. The NLRB took up the case and set about to bring charges against David, not in a court of law with a judge and jury, but in an in-house tribunal.
David challenged the legality of that in-house tribunal process, but one of the secondary issues that came up in the case was about the kind of penalty the NLRB was pursuing in the case. You see, the law that gives the NLRB its power allows it to reinstate wrongfully fired employees with backpay. But a few years ago, the NLRB discovered a new power: forcing businesses to pay much broader “compensatory damages.” But David contends that discovery was an overreach the law never authorized.
Because David’s case originated in Utah, it will be heard in the Tenth Circuit. But there were similar cases dealing with the compensatory damages question in the Ninth Circuit and the Third Circuit.
The Third Circuit had previously ruled that the NLRB doesn’t have the power to award compensatory damages. But on January 21, 2025, the Ninth Circuit ruled that the NLRB does have the power to award compensatory damages.
Thanks to this circuit split, the interpretation of federal law, and what penalties the NLRB can assess, is different based on where you live. This isn’t supposed to happen. The NLRB is a federal agency and, thus, the laws should be uniform regardless of your location.
No matter which way the Tenth Circuit rules, it will conflict with either the Third or Ninth Circuit ruling. But this creates an interesting opportunity for David’s case. Decisions from the circuit courts appeal to the Supreme Court, but the Supreme Court doesn’t have to review every appeal. A circuit split, however, increases the odds. And this is precisely why David’s case is more special than most. While it is a little further behind in the legal process than the other cases, it could still be the one that the Supreme Court decides to take. Only time will tell.
