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Argument preview: First Amendment protections for public employee’s subpoenaed testimony

Scotus Blog - 1 hour 42 min ago

On Tuesday, April 28, the Court will hear oral arguments in Lane v. Franks on the First Amendment protections for a public employee who testifies in court.  There are two respondents — the previous and current presidents of the college in question – and they disagree with each other on the First Amendment question.  The Solicitor General will participate in the oral argument.

Background

Central to the resolution of Lane v. Franks is the reach of Garcetti v. Ceballos, the Court’s latest pronouncement on the First Amendment rights of public employees.  Since Pickering v. Board of Education in 1968, the First Amendment has protected public employees from adverse employment actions when they are “speaking as a citizen” on a matter of public concern.  In Garcetti, the closely divided Court held that, when public employees make statements “pursuant to their official duties,” such speech is not protected by the First Amendment.  The employee in Garcetti was a deputy district attorney in Los Angeles who investigated a law enforcement officer’s affidavit in support of a search warrant and concluded it was false.  The prosecutor wrote a memo recommending the case be dismissed; his supervisors not only vehemently disagreed but also allegedly retaliated against him.  In an opinion by Justice Kennedy, the Court reasoned that when an employee is “simply performing his or her job duties,” there is “no relevant analogue to speech by citizens who are not government employees.” 

In the eight years since Garcetti, courts have varied in their application of the doctrine.  For some courts, Garcetti has seemed a broad mandate insulating public employer actions from First Amendment challenge by any employee.  Other courts, however, have limited and distinguished Garcetti.  The Court has denied certiorari in several closely watched cases, such as Jackler v. Byrne and Bowie v. Maddox, which both involved police officers and reached differing conclusions, arguably producing a circuit split.

The Eleventh Circuit’s opinion in Lane v. Franks is decidedly in the expansive mandate camp.  Indeed, the opinion is a per curiam one, decided without oral argument and intended as non-precedential.  In affirming the district judge’s grant of summary judgment to the public employer, the Eleventh Circuit described Garcetti as “further restricting public employees’ protected speech.”  Relying on its own circuit precedent, including pre-Garcetti cases, the court of appeals ruled that an employee enjoys no First Amendment protection when the speech was made pursuant to his official duties, including “if his speech owes its existence to the employee’s professional responsibilities and is a product that ‘the employer itself has commissioned or created.’”   This broad category included subpoenaed testimony. However, the Eleventh Circuit recognized, albeit in a footnote, that both the Seventh Circuit and Third Circuit had “decided this issue differently,” citing Morales v. Jones and Reilly v. City of Atlantic City.

Even as related by the Eleventh Circuit, however, the circumstances giving rise to Lane v. Franks paint a troubling picture of retaliation for a public employee’s failure to cooperate with political corruption and his resulting testimony.  In 2006, soon after Edward Lane became the director of a program for at-risk youth at Central Alabama Community College (CACC), he looked at the program’s finances.  He discovered that an Alabama state representative, Suzanne Schmitz, was listed on the payroll.  He also discovered she had never performed any work for the program.  Edward Lane raised his concerns about Schmitz, but he was warned by the CACC president (a predecessor to respondent Steve Franks) and CACC’s lawyer that terminating Schmitz’s employment could have negative repercussions for both Lane and CACC.  Nevertheless, Lane did terminate Suzanne Schmitz after she refused to report to work.  Schmitz told another program employee that she planned to “get [Lane] back” for terminating her and that, if he requested money from the state legislature, she would tell him “you’re fired.”  The FBI began investigating Suzanne Schmitz and contacted Edward Lane for information.  Lane testified before a federal grand jury and — pursuant to a subpoena – he testified at Schmitz’s two federal criminal trials for mail fraud and fraud involving a program receiving federal funds.  Schmitz was ultimately convicted, although a divided Eleventh Circuit panel reversed her convictions on some of the counts.

Lane was terminated after his testimony at the first criminal trial.  In January 2009, Franks – who had become president of CACC – terminated the twenty-nine employees of the at-risk youth program, but soon rescinded the termination of all the employees except Lane and one other.  Whether Franks terminated Lane due to Lane’s testimony against Schmitz remains unresolved; an essential issue in the Supreme Court is whether it needs to be. 

Arguments and analysis

The primary question before the Court is whether the Eleventh Circuit was correct in holding that Lane’s testimony was categorically unprotected by the First Amendment, although there is also a secondary issue of whether Franks is entitled to qualified immunity from an award for damages.

There is little support for a straightforward affirmance of the Eleventh Circuit opinion on the First Amendment issue.  Lane is not the only one to argue that the Eleventh Circuit’s categorical exclusion of First Amendment protection for subpoenaed testimony is incorrect:  the Solicitor General, representing the United States as an amicus, agrees with him.  More unusually, the Alabama attorney general — Alabama representing respondent Susan Burrow, the current acting president of CACC — also agrees that the Eleventh Circuit was incorrect to conclude that Lane’s testimony was categorically unprotected by the First Amendment.  Additionally, almost all of the amicus briefs agree with this position, including one from the National Association of Police Organizations, which is perhaps not surprising given that so many of the similar cases involve persons employed in law enforcement.

These arguments dispute the Eleventh Circuit’s conclusion that Garcetti’s “pursuant to official duties” exclusion should extend to speech based on any information gleaned in the course of one’s employment, including when the speech occurs as subpoenaed testimony.  They generally argue that subpoenaed testimony is best considered as the duty of a citizen (more like Pickering’s letter to the editor of a newspaper) rather than of an employee (unlike Garcetti’s memo to his supervisors).  Underlying policy rationales rest not only upon the employee’s rights, but also on the broader governmental interests in truthful testimony and judicial integrity.

One distinction in the arguments supporting reversal of the Eleventh Circuit’s decision is whether being subpoenaed to testify should be a per se exception to Garcetti’s “pursuant to official duties” standard.   A per se rule raises at least three concerns.  First, there are instances in which testifying is part of an employee’s official duties, but whether this might encompass law enforcement officers could be problematic.  A second concern, specifically raised by the Solicitor General, is when the government has a claim of privilege over the information possessed by the employee.  A third problem is inherent in conceptualizing “testimony” as an exception to Garcetti’s rule.  Although the opinion in Garcetti v. Ceballos concentrated on the prosecutor’s memo to his supervisors, the prosecutor also testified in a hearing and reiterated the findings in his memo.  Qualifying any exception to Garcetti to require a subpoena is the obvious solution, but such a requirement could elevate form over substance.

Oral argument might focus on whether there should be a “bright line” rule protecting subpoenaed testimony.  In the reply brief, Lane makes clear that a bright-line rule would be desirable to insure that the “judicial system’s interest in discovering the truth” prevails “over the employer’s parochial interest in achieving a favorable litigation outcome.”   But, Lane argues, it is certainly not necessary, and the Court could decide the case with a “straightforward application” of the “clearly established” precedent of Garcetti.

This “clearly established precedent” argument on the merits supports Lane’s contention that there was a “clearly established” First Amendment right at the time of his termination, so that Franks, the CACC president who terminated Lane, is not entitled to qualified immunity from an award of damages.  On this issue, the Solicitor General and the Alabama attorney general agree with Franks: the law was not sufficiently clearly established.  The “clearly established” hurdle in qualified immunity is always a high one; there are always arguments that the law was uncertain.  Here, the bar is raised higher because, to the extent the lower courts found that the law was clearly established, it was clearly established contrary to Lane’s position.  The Eleventh Circuit, affirming the district judge, concluded that Lane did not have a First Amendment right.  Thus, to prevail on the qualified immunity argument, Lane has to convince the Court that not only did the president of a community college ignore “clearly established” law, but so did four federal judges. 

Conclusion

The cursory Eleventh Circuit opinion affirming summary judgment means that an array of factual issues remain unresolved, including whether Franks actually terminated Lane in retaliation for his testimony.  This could prove fertile ground for questions about the record and for hypotheticals.

But the most important questions might revolve around the “bright line” rule for First Amendment protection for testimony, including the distinction between testimony “pursuant to official duties” and testimony based on information obtained in the course of those official duties.   It will be interesting to see whether there are questions about the necessity of a subpoena as part of any bright-line rule.

While no party is seeking a substantial incursion into Garcetti (and all of the Justices in the Garcetti majority remain on the Court), the Court has the opportunity to limit, clarify, or further expand Garcetti’s reach.  The ultimate ruling has the potential to eliminate First Amendment protections of public employees who risk retaliatory employment actions should they testify, even under subpoena, about political corruption or other governmental wrongdoing.

[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, serves as counsel to the petitioner in this case. However, the author of this post is not affiliated with the firm.]

 

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Categories: Supreme Court

Argument analysis: Was Congress more “legally sophisticated” than the Justices when it overrode state limitations on lawsuits for toxic exposure?

Scotus Blog - 3 hours 21 min ago

Was Congress legally sophisticated enough to distinguish between “statutes of limitations” and “statutes of repose” when it amended the “Superfund” legislation (known as CERCLA) in 1986?  At the oral argument in CTS Corp. v. Waldburger, some Justices confessed that the crucial distinction that CTS ascribes to Congress was complete news to them.   The case turns on whether the respondents – homeowners whose well water was polluted by toxics – are barred from suing CTS by a North Carolina law that requires suits to be brought less than ten years after the defendant’s last action.  The Fourth Circuit ruled that the North Carolina law was preempted because Congress did not intend to distinguish between statutes of limitations and statutes of repose when it tolled state statutes of limitations until after the victims of toxic exposure have discovered their injuries.

Representing petitioner CTS, Brian J. Murray argued that Congress did not intend to preempt the North Carolina law because it is a statute of repose and not a statute of limitations.  Murray maintained that Section 309 of CERCLA, 42 U.S.C. § 9658, was a “surgical” compromise in which Congress sought both to protect victims of toxic exposure by tolling state statutes of limitations but also to respect core federalism concerns by enabling states to set an absolute end date for lawsuits through statutes of repose.  Pressed to explain why legislation prompted by concern over toxic releases would not also preempt statutes of repose, Murray maintained that Congress realized that statutes of repose were within “the heartland of state law” whose preemption could raise “serious constitutional problems.”

Murray quickly ran into trouble from unexpected quarters when Justice Scalia, and later Justice Kennedy, confessed that they had not been aware of any legal distinction between statutes of limitations and statutes of repose and would have considered both to be “statutes of limitations” because they set time limits on the filing of lawsuits.  Murray conceded that Congress has never expressly distinguished between statutes of limitations and statutes of repose, but he argued that a statute’s label should not matter.  Murray maintained that even if the distinction was news to the Justices, Congress “understood the distinction” when it enacted Section 309.  He described the failure to preempt statutes of repose as a very careful compromise that was necessary to avoid serious constitutional problems.  After Justice Scalia observed that “you think Congress is smarter” and that “they know the law better,” Justice Kagan observed “that’s a very legally sophisticated Congress you’re asking us to imagine” to make a distinction that the Justices were not themselves making.  Murray argued that floor exchanges concerning the legislation indicated that Congress was very sophisticated, prompting a sarcastic comment from Justice Scalia questioning the value of such legislative history.

Justice Kagan challenged Murray’s argument that Section 309’s language concerning the “commencement date” of a state limitation could not logically apply to a statute of repose.  She noted that North Carolina’s ten-year bar runs from the last act or omission of the defendant, which could be considered the “commencement date” to which Section 309 refers.  Justice Scalia agreed that if a state had only a statute of repose, and not a separate statute of limitations, the statute of repose’s commencement date would fit it within Section 309’s definition of preemption.

CTS shared its argument time with the United States supporting it as an amicus. Assistant to the Solicitor General Joseph Palmore maintained that North Carolina’s ten-year bar is not preempted because it is a statute of repose.  Justice Kagan questioned why Section 309 should not simply apply to both statutes of repose and statutes of limitations.  Palmore argued that the two are very different in character, with the statute of limitations serving as a procedural bar and the statute of repose as substantive law.  He agreed that the label given them should not be controlling.

Justice Kagan then asked what the “commencement date” for the statute of limitations was in this case.  When Palmore replied that it would have been in 2009 when plaintiffs discovered their injury, Justice Kagan questioned whether that could be since by then the lawsuit already had been barred by North Carolina’s  ten-year statute of repose.  Palmore suggested two possibilities:  either 2009 could be the commencement date, but there would be a separate barrier to relief, or there could be no commencement date under state law, thus making Section 309 inapplicable because it was not earlier than the federal commencement date.

Showing no signs that it was his Supreme Court debut, John Korzen, director of the Appellate Advocacy Clinic at Wake Forest, made a polished and confident argument.  Emphasizing that the purpose of Section 309 was to preserve claims for latent injuries until the injuries had been discovered, he argued that Section 309 preempted both North Carolina laws.  Justice Kennedy opined that “there’s merit to your argument” and admitted that the distinction between a statute of limitations and a statute of repose “was new for me.”  Justice Sotomayor noted, however, that the expert study group commissioned by Congress had mentioned a distinction between the two in the report that gave rise to Section 309’s enactment.  Korzen responded that the report recommended that states change their laws to toll both statutes of limitations and statutes of repose until plaintiffs had discovered latent injuries, but that Congress did not wait for them to act, enacting Section 309 instead to accomplish this end.

In response to a question from Justice Kagan concerning how Section 309 applied to the North Carolina statutes, Korzen replied that it applied to the two limitation periods in the state – the three-year statute of limitations and the ten-year statute of repose.  Justice Scalia then noted that the federal preemption provision only refers to the statute of limitations, using the singular, suggesting that both were not preempted.  Korzen claimed that the singular was used because preemption only occurs for “the one the defendant is asking to apply to dismiss a case with prejudice,” here the ten-year period.  Justice Scalia, however, described this as “a real problem” with the homeowners’ argument.  Justice Kagan suggested that the reference to “applicable limitations period” in the statute indicated that it could apply in situations where a state had both a statute of limitations and a statute of repose.  Justice Scalia replied that both of the periods are applicable, but plaintiffs had just run afoul of one of them.  He noted that the argument was becoming one of “angels on the head of a pin.”

The potential policy consequences of the Court’s decision received some attention at the argument.  Justice Ginsburg expressed concern that a ruling for CTS could lead more states to adopt statutes of repose, defeating Section 309’s purpose of preserving claims until plaintiffs discovered their injuries.  Chief Justice Roberts was skeptical that there would be any rush to adopt such statutes.  When Korzen noted the power of lobbyists, the Chief Justice noted that there would be lobbyists on both sides.  Korzen argued that a ruling preserving the North Carolina law would create an incentive for companies to “cover up” instead of “clean up.”  Justice Scalia noted that even if the North Carolina statute of repose is preempted, it would not stop a state from adopting a very short limitations period, such as three months, that Section 309 would only toll until injury was discovered.

In this case, the Justices will have to choose between two fundamentally different versions of what Congress intended when it adopted Section 309.  Was Congress concerned solely with preserving a day in court for the victims of exposure to toxic releases by guaranteeing that their suits would not be barred until they had discovered their injuries?  Or was Section 309 of CERCLA a careful compromise to assist some victims, while allowing states to preserve their ability to shut the courthouse doors on others before their latent injuries were discovered?

Based on statements made during the argument, it seems highly likely that Justices Ginsburg and Kagan are inclined to vote to affirm the decision below in favor of the homeowners, while Chief Justice Roberts is inclined to reverse.  Justice Breyer was uncharacteristically silent at the argument, and Justice Sotomayor seemed skeptical of the homeowners’ arguments.  Justices Scalia and Kennedy, the two Justices who confessed that the crucial distinction CTS wants the Court to believe Congress sought to draw was news to them, hold the decisive votes in this case.  The tenor of the argument suggests that this is a closer case than many initially thought it would be.  It may even turn out to be one where the influence of the federal government as an amicus will prove to be what tips the balance.

 

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Categories: Supreme Court

Opinion analysis: Extending limitations on habeas relief

Scotus Blog - 5 hours 22 min ago

On Wednesday, in White v. Woodall, the Court reversed a grant of habeas relief by the U.S. Court of Appeals for the Sixth Circuit.  Woodall’s underlying claim concerned the state trial court’s refusal to accommodate his request for a “no-adverse-inference” instruction at the punishment phase of his capital trial; Woodall did not testify at the punishment phase, and he had sought an instruction that would have acknowledged his right not to testify and forbade jurors from holding his choice not to testify against him “in any way.”  On appeal, the Kentucky Supreme Court affirmed.  But when Woodall pursued the claim on federal habeas, both the federal district court and the Sixth Circuit concluded that the Kentucky Supreme Court’s denial of relief amounted to an unreasonable application of clearly established federal law, thus permitting relief under Section 2254(d)(1) of the Anti-Terrorism and Effective Death Penalty Act (AEDPA).  Justice Scalia’s opinion for the majority is unusually harsh in its rejection of the Sixth Circuit’s decision, striking a tone more common to summary reversal opinions than merits decisions following briefing and argument.  Justice Scalia chastises the Sixth Circuit for “disregard[ing] the limitations” embodied in AEDPA, laments that “some federal judges find [those limits] too confining,” and warns that “all federal judges must obey” them.

At the core of the case was whether a trio of decisions by the Court had foreclosed the state courts’ denial of the requested instruction.  In Carter v. Kentucky, the Court had held that a criminal defendant is entitled to a “no-adverse-inference” instruction at the guilt-innocence phase of a non-capital trial; in Estelle v. Smith, it had held that Fifth Amendment privilege against self-incrimination applies to the punishment phase of a capital trial; and in Mitchell v. United States it had granted relief when the trial judge had drawn an adverse inference as to a contested fact based on the defendant’s silence at sentencing.  From Woodall’s perspective, these cases firmly supported his entitlement to the requested instruction, and the Kentucky Supreme Court’s contrary conclusion was unreasonable.  In the majority’s view, these decisions had not definitively answered whether an instruction was required in the precise circumstance of this case – in which Woodall acknowledged guilt of the underlying offense as well as the presence of statutory aggravating factors, and where the jury might consider his failure to testify as bearing on his lack of remorse.  According to the majority, these lines of distinction for withholding the instruction were sufficiently plausible to preclude relief, because AEDPA mandates relief only where controlling Court precedents leave resolution of the issue “’beyond any possibility for fairminded disagreement.’” Accordingly, the majority did not venture its own opinion as to whether a “no-adverse-inference” instruction is required under the facts of this case; it held only that AEDPA forecloses relief because the Kentucky Supreme Court had not been “unreasonable” in concluding otherwise.

Had the majority stopped there, the opinion would have been equivalent to a summary reversal not only in tone but also in effect – a reminder of the Court’s readiness to overturn grants of federal habeas relief based on its robust view of the limitations contained in AEDPA.  But the majority ventured further, arguing that Section 2254(d)(1) does not countenance relief when state courts unreasonably refuse to extend a governing legal principle to a context in which the principle should control.  Although the Court previously had appeared to embrace this “unreasonable-refusal-to-extend” ground for relief under AEDPA , the majority insists that such a ground had never served as a holding in an AEDPA case.  Moreover, the majority insists that such a theory for relief would be inconsistent with the deference embodied in AEDPA, because the necessity “to extend” a precedent by definition means that no clearly established law requires the result.

It is difficult to tell how much this new prohibition on “refusal to extend” grounds of relief will matter in practice.  The majority acknowledges that Section 2254(d)(1)) cannot be read to permit relief only in cases of identical fact patterns.  But the majority clearly wants to treat Court decisions on matters of constitutional criminal procedure more like “rules” that have clearly defined parameters of application and less like “principles” that require state courts to implement them wherever their logic extends.  That difference is evident in the contrasting approaches in Woodall by the majority and the dissent.  The majority views Carter, Smith, and Mitchell as a series of decision points that do not speak to the particulars of Woodall’s case.  Justice Breyer’s dissent emphasizes that those opinions together offer no principled basis for withholding the requested instruction at the punishment phase of capital trials.  Ultimately, Justice Breyer does not take issue with the new prohibition on “refusal to extend” grounds because he does not regard applying clearly established principles to a different context as an “extension” so much as an appropriate “application” of prevailing law.

In the end, it’s simply too soon to tell whether the majority’s innovation is extending or merely applying existing limits on the federal habeas forum.

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Categories: Supreme Court

Thursday round-up

Scotus Blog - 5 hours 49 min ago

Yesterday the Court issued decisions in two cases:  Paroline v. United States, involving restitution for victims of child pornography; and White v. Woodall, a habeas case.  Lyle Denniston covered the decision in Paroline for us; other coverage comes from Bill Mears of CNN and Jaclyn Belczyk of JURIST, while Tony Mauro profiles Stanley Schneider, the Texas lawyer who represented Paroline, for The National Law Journal (registration required).  Commentary on Paroline comes from Rick Hasen, who predicts at his Election Law Blog that Congress will step in to override the Court’s decision, “and probably relatively quickly,” and from Marci Hamilton, who proposes a possible fix at Hamilton and Griffin on Rights.  Kimberly Bennett summarizes the Woodall decision at JURIST, while at Crime and Consequences, Kent Scheidegger praises the Court’s opinion, writing that “[f]ederal habeas remains a safety net in case the state courts completely fail to do their jobs and are clearly wrong, but in all debatable questions the state court decision stands.  The law is an important step closer to that principle today.”

The Court also heard oral argument in two cases yesterday.  In CTS Corp. v. Waldburger, the Justices are considering whether CERCLA preempts state statutes of repose in a case by property owners who are seeking compensation for damage that they allege stems from the dumping of toxic chemicals.  Jeremy P. Jacobs covered the argument for Greenwire, with other coverage coming from Jaclyn Belcyzk of JURIST.

Tuesday’s decision in Schuette v. Coalition to Defend Affirmative Action, in which the Court upheld Michigan’s ban on the use of affirmative action by public universities there, continues to generate considerable commentary.  Coverage of the decision comes from Jess Bravin of The Wall Street Journal, while in his column for Bloomberg View, Noah Feldman analyzes the decision and concludes that “what will be remembered from the case is probably the stirring dissent by Justice Sonia Sotomayor, the first beneficiary of affirmative action to defend the practice from the Supreme Court bench.”  At Talking Points Memo, Sahil Kapur focuses on Sotomayor’s dissent in the case (here) and reactions to that dissent (here).  Other commentary on the case comes from Roger Pilon at Cato at Liberty, Steven Mazie at The Economist’s Democracy in America blog, Andrew Suszek at more than twenty cents, and Bill Blum at truthdig.  And the decision prompted scores of editorial boards to weigh in, including those of The New York Times, The Washington Post, USA Today, the Los Angeles Times, the Chicago Tribune, and the Boston Herald.

Briefly:

  • Writing for The Atlantic, Andrew Cohen urges the Court to review the constitutionality of Louisiana’s non-unanimous jury rule, which is challenged in several cases up for this week’s Conference.
  • At Just Security, Marty Lederman looks at Justice Breyer’s statement respecting the Court’s denial of review in the detainee case Hussain v. Obama.
  • At Talking Points Memo, Sahil Kapur reports on Tuesday’s oral argument in Susan B. Anthony List v. Driehaus, a challenge to an Ohio law that criminalizes false statements during a political campaign.
  • In his column for Bloomberg View, Cass Sunstein identifies his “most overrated” Supreme Court Justice.
  • In his column for The Washington Post, Dana Milbank urges Justice Ruth Bader Ginsburg to “ignore the chorus of liberals asking that she retire and allow President Obama to replace her, in case Democrats lose the presidency in 2016.”
  • In The American Spectator, Matthew Walther interviews and profiles Justice Samuel A. Alito.
  • In a discussion of the cellphone privacy cases, which are scheduled for oral argument next week at the Constitutional Accountability Center’s Text and History Blog, Emily Phelps argues that the searches made by police in those cases were the kind “that the Framers took pains to prohibit.”

[Disclosure:  Kevin Russell of Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, was among the counsel to the petitioner in Riley v. California, one of the cellphone privacy cases, at the cert. stage but is not involved at the merits.  Russell was also among the counsel on an amicus brief in support of the respondents in Schuette.  However, I am not affiliated with the firm.]

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Categories: Supreme Court

Petition of the day

Scotus Blog - Wed, 04/23/2014 - 10:13pm

The petition of the day is:

M&G Polymers USA, LLC v. Tackett 13-1010

Issue: (1) Whether, when construing collective bargaining agreements in Labor Management Relations Act (LMRA) cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest (and therefore continue indefinitely), as the Sixth Circuit holds; or should require a clear statement that health-care benefits are intended to survive the termination of the collective bargaining agreement, as the Third Circuit holds; or should require at least some language in the agreement that can reasonably support an interpretation that health-care benefits should continue indefinitely, as the Second and Seventh Circuits hold; and (2) whether, as the Sixth Circuit has held in conflict with the Second, Third, and Seventh Circuits, different rules of construction should apply when determining whether health-care benefits have vested in pure Employee Retirement Income Security Act (ERISA) plans versus collectively bargained plans.

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Categories: Supreme Court

Today’s transcripts

Scotus Blog - Wed, 04/23/2014 - 4:07pm

The transcript in  CTS Corp. v. Waldburger is here.

The transcript in United States v. Clarke is here.

 

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Categories: Supreme Court

Opinion analysis: Dividing the duty to pay for child porn

Scotus Blog - Wed, 04/23/2014 - 12:07pm

Analysis

Each individual — among hundreds and maybe thousands — found guilty of keeping and looking at images of a child being sexually abused must pay the victim something more than a “trivial” sum, but none of them can be required to pay for all that the victim has lost, the Supreme Court ruled Wednesday in a five-to-four decision.

The ruling in the case of Paroline v. United States, settling a dispute among lower courts on a mandatory law of restitution to victims of child pornography, refused to establish a specific formula for allocating the financial blame, telling federal trial judges to “do their best,” with a few suggestions for starting points.  Justice Anthony M. Kennedy wrote the majority opinion.

Justice Kennedy announces opinion of the Court (Art Lien)

The decision clearly will spare a Tyler, Texas, man, Doyle Randall Paroline, from paying all of the nearly $3.4 million that lawyers for a young woman identified only as “Amy” had demanded from him.  Paroline had two images of her being photographed as her uncle sexually abused her when she was eight years old.  Now a young woman, she had testified that “My life and my feelings are worse now because the crime has never really stopped and will never really stop.”

The Court ruled that a federal district court judge must calculate how much to assess against Paroline personally.  There is no doubt, Justice Kennedy wrote, that Paroline “was part of the overall phenomenon” of distributing and keeping images of the abuse of Amy.  He should have to pay his share and, Kennedy said, it must be enough to send the message that his part in the crime was not victimless.

Lawyers for “Amy” had insisted that Paroline, like everyone who has her images and looks at them, contributes to her continuing injury, so each of them should be required to pay the full amount for her losses, in whatever multiples of individuals are found and prosecuted for having the pictures.

The pictures of “Amy” being abused are among the most widely circulated child pornography images in this country and, apparently, around the world.  The number of individuals possessing them — according to the Court — reaches into the thousands.

Only one Justice — Sonia Sotomayor — agreed with the demand for full restitution, but Sotomayor did so in dissent.  Three other Justices, also in dissent, said that calculating each possessor’s share of the overall harm to “Amy” would necessarily be “arbitrary,” so there should be no restitution to her because Congress had “provided no mechanism” for calculating shares of the cause of her injury.

Justice Kennedy’s opinion took a position in the middle.  It was joined by Justices Samuel A. Alito, Jr., Stephen G. Breyer, Ruth Bader Ginsburg, and Elena Kagan.  Chief Justice John G. Roberts, Jr., wrote the dissent arguing that there was no valid formula for restitution in the child pornography law.  That dissenting opinion was joined by Justices Antonin Scalia and Clarence Thomas.

Justice Sotomayor’s dissent spoke only for herself, arguing that Congress had specified that restitution for the “full amount” of losses was mandatory, as part of the punishment for each one convicted of possessing child pornography involving the victim.

While the Kennedy opinion said that each defendant convicted of having images of “Amy” should be assessed for the degree to which his individual crime was the “proximate cause” of her injury, the Justice stressed that no mathematical formula could be devised for it.

The majority expressed confidence that district court judges could devise ways to make a calculation of comparative harm, aided by the government (which would have the burden of proof on the amount of the victim’s loss).  But, in order to aid the judges in this task, Justice Kennedy laid out some general principles.

First, there must be a conviction, which would establish that the individual in question possessed images of the victim.  Then, turning to restitution, there would have to be proof that “a victim has outstanding losses caused by the continuing traffic in the images,” with such losses to potentially include items such as those listed in the federal law: medical services, physical and occupational therapy, transportation, temporary housing, child care, lost income, and attorneys’ fees and court costs.

Next, the judge can take into account a variety of factors on “relative cause” for each individual convicted: the number of past individuals who contributed to the victim’s losses; a prediction about the number of future individuals who might be found to have contributed; estimates of the number of individuals overall involved in causing the harm (many of whom would never be caught); whether the individual facing restitution in a specific case made more copies and handed them out; whether that individual had any role in producing the pictures in the first place; how many images that individual possessed; and “other facts relevant to the [convicted individual's] relative causal role.”

Kennedy cautioned that “these factors need not be converted into a rigid formula, especially if doing so would result in trivial restitution orders.  They should serve as rough guideposts for determining an amount that fits the offense.”

In warning against going too far to hold each individual who possesses child pornography financially liable, the majority opinion said there was a risk that this could violate the Constitution’s ban on “excessive” forms of punishment, because restitution is a form of punishment carried out by a government process.

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Categories: Supreme Court

Relist Watch: What Does the Court’s Relist Streak Mean?

Scotus Blog - Wed, 04/23/2014 - 11:50am

John Elwood reviews Monday’s relisted cases.

We begin this week’s edition with speculation about a possible shift in Supreme Court practice that may launch scrutiny of Supreme Court relists from its current tidal eddy of obscurity into . . . well, a slightly larger but equally obscure eddy.  One swallow does not a summer make, but with apologies to Aristotle, Cervantes, and suchlike paragons of the Western Literary Tradition, a dozen hirundines in a row may at least suggest a warming trend.

Earlier this week I remarked that all of this week’s grants came from among the ranks of the relists, and noticed similar instances earlier this year.  But as the eagle-eyed Hashim Mooppan pointed out to me, the relist streak has been far longer and more consistent.  At the risk of being the guy who calls the no-hitter at the top of the second inning, OT2014 is currently an all-relist Term.

Over the last nine Conferences, the Court has granted a dozen cases for argument next Term, each one of which was relisted at least once:  Heien v. North Carolina, 13-604 (granted at the April 18 Conference, relisted once); Johnson v. United States, 13-7120 (ditto); Zivotofsky v. Kerry, 13-628 (granted at the April 18 Conference, relisted twice); Dart Cherokee Basin Operating Co. LLC. v. Owens, 13-719 (granted at the April 4 Conference, relisted once); Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 13-854 (granted at the March 28 Conference, relisted twice); Jennings v. Stephens, 13-7211 (granted at the March 21 Conference, relisted once); Public Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc., 13-640 (granted at the March 7 Conference, relisted once); Integrity Staffing Solutions v. Busk, 13-433 (granted at the February 28 Conference, relisted once); Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 13-435 (ditto); North Carolina State Board of Dental Examiners v. FTC, 13-534 (ditto); Holt v. Hobbs, 13-6827 (ditto); Warger v. Shauers, 13-517 (ditto, plus a call for the record).  The last case the Court granted without a relist was Riley v. California, 13-132 (granted on January 17, after a call for the record), which will be argued on the penultimate argument day of OT2013.

Time will tell whether this remarkable pattern continues.  If it does, we will be forced to break from our normal practice of fixating on the dullest minutiae of the Court’s docket to contemplate, as our tipster suggests, that this may reflect a conscious change in practice and not simply a striking coincidence.  If indeed the Court has adopted a policy of relisting cases before granting, it may be akin to a “stop, look, and listen” after a provisional decision to grant – intended to give the Justices and their clerks additional time to review grant candidates for vehicle problems or other concerns.  Maybe the Justices decided after dismissing three cases as improvidently granted this Term that they need one last check before giving a case the nod; perhaps it’s only a temporary measure.  Most likely, now that I’ve stuck my neck out, Monday will bring a spate of grants in cases fresh out of their first Conference.

We pause to allow both of our faithful readers to regain their composure.

Turning to our usual mundanities: starting as always with “old business,” it should now come as no surprise that all three of this week’s grants were discussed in our last installmentHeien v. North Carolina, 13-604 (involving the validity of a search resulting from a police officer’s mistake of law); Zivotofsky v. Kerry, 13-628 (involving the constitutionality of a federal law directing the Secretary of State, on request, to record the birthplace of an American citizen born in Jerusalem as “Israel”); and Johnson v. United States, 13-7120 (whether possession of a short-barreled shotgun is a violent felony under the Armed Career Criminal Act).  The Court denied cert. in five-time relist Hussain v. Obama, 13-638, addressing the proper standard for a Guantanamo detainee’s habeas petition; Justice Breyer issued a solo statement respecting the denial, suggesting that down the road he might support the Court addressing whether the 2001 Authorization for Use of Military Force authorizes (and the Constitution permits) detention on the basis that an individual was part of al Qaeda or the Taliban, but not “engaged in an armed conflict against the United States” in Afghanistan prior to his capture.

The rest of last week’s repeat offenders are back for another dip in the cert. pool, including the sui generis Ryan v. Hurles, 12-1472 (a remarkable nineteen relists; addressing whether it is per se unreasonable for a state not to provide an evidentiary hearing on a judicial-bias claim); Tolan v. Cotton, 13-551 (seventh relist since receipt of the record; a qualified immunity claim arising in the case of a man shot because of a license-plate typo); Martinez v. Illinois, 13-5967 (seventh relist since receipt of record; whether jeopardy attaches if a jury is sworn but the prosecution refuses to participate in the case); and Thomas v. Nugent, 13-862 (rescheduled after the March 28 Conference and now officially relisted; addressing whether it was clearly established that a police officer violates the Fourth Amendment when he tases a handcuffed but non-cooperative detainee eight times).

Turning to something a bit fresher, the biggest news is the Court’s relist in Drake v. Jerejian, 13-827, which asks (1) whether the Second Amendment secures a right to carry handguns outside the home for self-defense, and (2) whether state officials may constitutionally require that individuals wishing to exercise their right to carry a handgun for self-defense first prove a “justifiable need” for doing so.  Petitioners seek review of a decision of the Third Circuit upholding New Jersey’s handgun permit laws, which require an applicant to show a “justifiable need to carry a handgun.”

In the running for one of the most interesting and unusual QPs of the season, Yates v. United States, 13-7451, seeks review of whether a commercial fisherman’s decision to throw undersized red grouper overboard (after a deputized federal agent had issued a citation and ordered him to bring the fish to port) falls within Sarbanes-Oxley’s “anti-shredding” prohibition (18 U.S.C. § 1519) on knowingly altering or destroying any “record, document, or tangible object” with the intent to impede an investigation.  This represents a curious exercise of “vast” federal enforcement discretion, since the kerfuffle arises because agents say they found seventy-two undersized groupers aboard, and only sixty-nine made it to port.  As a Nation, we clearly need to get to the bottom of this.

The Court also relisted for the first time in Federal National Mortgage Association v. Sundquist, 13-852, out of the Utah Supreme Court, asking whether a state can restrict a national bank’s exercise of its fiduciary powers in connection with real property in that state, if the bank is authorized to act as a fiduciary by the Comptroller of the Currency and not prohibited from doing so by the (different) state in which the bank is “located.”  Another first-time relist is T-Mobile South, LLC v. City of Roswell, 13-975, involving the Communications Act’s requirement that a state or local government’s decision denying a request to site or construct certain wireless service facilities must be “in writing.”  The petition alleges a four-two split about whether a document stating that such an application has been denied, but providing no reasons, satisfies the “in writing” requirement.

The Court also relisted for the first time in a trio of cases alleging a split involving the Truth in Lending Act (TILA):  Jesinoski v. Countrywide Home Loans, Inc., 13-684, Keiran v. Home Capital, Inc., 13-705, and Takushi v. BAC Home Loans Servicing, 13-884.  Each of the petitions alleges a circuit split about whether a borrower exercises his right to rescind a mortgage loan under the TILA by merely notifying the creditor within three years of consummation of the transaction, or whether the borrower must file a lawsuit to rescind within that period.  (If a borrower must also file suit, Takushi includes as a second question whether that rule must be limited to prospective application.)  The respondents filed a single brief in opposition to the three petitions; the Court may use the extra week to decide among the potential vehicles, or just to sort it all out.

Dykes v. South Carolina, 13-8037, another new relist, involves a constitutional challenge to a South Carolina statute (that state’s version of “Jessica’s Law”) that imposes mandatory GPS monitoring for released sex offenders.  Interestingly, the state does not appear to have sought cert. from a different portion of the opinion of the South Carolina Supreme Court, which struck down on due process grounds a statutory requirement of lifetime GPS monitoring without the possibility of judicial review.

Rounding out the new offerings, the Court relisted in yet another Armed Career Criminal Act, Espinoza v. United States, 13-7909, alleging a split about whether an offense with a mens rea of recklessness can trigger the sentence enhancement set out in ACCA’s “residual clause,” 18 U.S.C. § 924(e)(2)(B)(ii), and whether such an offense can ever be “purposeful” under that section and Begay v. United States.

With that, we return you to regularly scheduled programming.  Tune in next week as we test our hypothesis that Every Grant Begins With Relist; will the streak continue, or will we be served up a delicious slice of humble pie?

Thanks to Dmitry Slavin and Jeremy Marwell for compiling and drafting this update.

Ryan v. Hurles 12-1472

Issue: Whether, under the Antiterrorism and Effective Death Penalty Act (AEDPA), state court adjudications are per se unreasonable and not entitled to deference under 28 U.S.C. § 2254(d)(2) merely because the state court does not conduct an evidentiary hearing.

(relisted after the September 30, October 11, October 18, November 1, November 8, November 15, November 26, December 6, December 13, January 10, January 17, January 24, February 21,  February 28, March 7, March 21, March 28, April 4, and April 18 Conferences)

Tolan v. Cotton 13-551

Issue: Whether courts deciding qualified immunity in Fourth Amendment cases should consider the factual reasonableness of the search or seizure when applying the second, “clearly established” prong of the test.

(relisted after the February 21, February 28, March 7, March 21, March 28, April 4, and April 18 Conferences)

Martinez v. Illinois 13-5967

Issue: Whether a defendant is acquitted for purposes of the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution, where a court grants a motion for directed verdict after the prosecution refuses to present any evidence at trial to the empaneled and sworn jury.

(relisted after the February 21, February 28, March 7, March 21, March 28, April 4, and April 18 Conferences)

Thomas v. Nugent 13-862

Issue: (1) Whether it was clearly established in 2008 that a police officer violates the Fourth Amendment when he uses a Taser to electroshock a person eight times, where that person is already handcuffed and poses no threat to anyone’s safety and no risk of flight but does not comply with the officer’s orders to stand up; (2) whether, on a motion for summary judgment, the non-moving party bears the burden of disproving the moving party’s affirmative defense of qualified immunity; and (3) whether a court of appeals has subject-matter jurisdiction to hear an interlocutory appeal of a district court’s decision that there is a genuine dispute over factual issues, where the district court does not decide any legal issue.

(relisted after the March 28 and April 18 Conferences)

Drake v. Jerejian 13-827

Issue: (1) Whether the Second Amendment secures a right to carry handguns outside the home for self-defense; and (2) whether state officials violate the Second Amendment by requiring that individuals wishing to exercise their right to carry a handgun for self-defense first prove a “justifiable need” for doing so.

(relisted after the April 18 Conference)

Yates v. United States 13-7451

Issue: (1) Whether Mr. Yates was deprived of fair notice that destruction of fish would fall within the purview of 18 U.S.C. § 1519, which makes it a crime for anyone who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object” with the intent to impede or obstruct an investigation, where the term “tangible object” is ambiguous and undefined in the statute, and unlike the nouns accompanying “tangible object” in section 1519, possesses no record-keeping, documentary, or informational content or purpose; and (2) whether the Eleventh Circuit’s affirmance of the district court’s wholesale preclusion of Dr. Richard Cody from testifying at trial as either an expert or lay witness in the defense’s case-in-chief as a drastic sanction for the defense’s inadvertent failure to include Dr. Cody on the defense’s trial witness list violated Mr. Yates’s Fifth and Sixth Amendment rights to due process, compulsory process for obtaining witnesses in his favor, and to present a complete defense, even though Dr. Cody: (1) was listed as an expert witness on the government’s trial witness list; (2) testified for the government in a Daubert hearing on the morning that the jury trial commenced; and (3) was under a defense subpoena for trial.

(relisted after the April 18 Conference)

Federal National Mortgage Association v. Sundquist 13-852

Issue: Whether a state can restrict a national bank’s exercise of its fiduciary powers in connection with real property in that state if the bank is authorized to act as a fiduciary by the Comptroller of the Currency and not prohibited from doing so by the (different) state in which the bank is “located” under 12 U.S.C. § 92a and 12 C.F.R. § 9.7.

(relisted after the April 18 Conference)

T-Mobile South, LLC v. City of Roswell 13-975

Issue: Whether a document from a state or local government stating that an application has been denied, but providing no reasons whatsoever for the denial, can satisfy the Communications Act’s “in writing” requirement.

(relisted after the April 18 Conference)

Jesinoski v. Countrywide Home Loans, Inc. 13-684

Issue: Whether a borrower exercises his right to rescind a transaction in satisfaction of the requirements of the Truth in Lending Act, 15 U.S.C. § 1635, by “notifying the creditor” in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or must instead file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held.

(relisted after the April 18 Conference)

Keiran v. Home Capital, Inc. 13-705

Issue: Whether, to exercise the right to rescind a mortgage loan under the Truth in Lending Act, it is sufficient for a consumer to notify the creditor in writing within three years of obtaining the loan (as the Third and Fourth Circuits have held, and as the Consumer Financial Protection Bureau has concluded), or whether the consumer must also file suit within that three-year period (as the Eighth, Ninth, and Tenth Circuits have held).

(relisted after the April 18 Conference)

Takushi v. BAC Home Loans Servicing, LP 13-884

Issue: Whether, pursuant to Section 1635(f) of Title 15 of the U.S. Code, a borrower seeking to rescind a mortgage loan based upon Truth in Lending Act violations must bring suit within three years of loan consummation; and (2) if so, whether such a restrictive interpretation of Section 1635(f) of Title 15 should be limited to prospective application only as a new rule, since most borrowers and their attorneys otherwise relied to their detriment upon a contrary interpretation of the relevant language contained in this Court's 1998 decision in Beach v. Ocwen Federal Bank.

(relisted after the April 18 Conference)

Dykes v. South Carolina 13-8037

Issue: (1) Whether permanently attaching a GPS tracking device to a sex offender’s body and continuously tracking her in public and private places solely on the basis of her prior conviction for a sex offense and not on her current dangerousness constitutes punishment such that imposing it post-sentencing violates the Ex Post Facto Clause; and (2) whether permanently attacking a GPS tracking device to a sex offender’s body and continuously tracking her in public and private places for ten years without review solely on the basis of her prior conviction for a sex offense and not on her current dangerousness violates the Fourteenth Amendment’s Due Process Clause.

(relisted after the April 18 Conference)

Espinoza v. United States 13-7909

Issue: (1) Whether the Court should resolve the division between the circuits as to whether an offense with a mens rea of recklessness can trigger the sentence enhancement set out in 18 U.S.C. § 924(e)(2)(B)(ii), the residual clause of the Armed Career Criminal Act; and (2) whether an offense that requires only a mens rea of recklessness toward the act causing or risking injury can ever be “purposeful” as that term was used by this Court when interpreting § 924(e)(2)(B)(ii) in Begay v. United States.

(relisted after the April 18 Conference)

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Categories: Supreme Court

Petitions to watch | Conference of April 25

Scotus Blog - Wed, 04/23/2014 - 10:40am

At its Conference on April 25, 2014, the Court will consider petitions seeking review of issues such as the vesting of retiree health-care benefits in collective bargaining agreements, the liability of police officers who failed to stop a sexual assault, and certification of a civil RICO class action based on alleged fraud.

This edition of “Petitions to watch” features petitions raising issues that Tom has determined to have a reasonable chance of being granted, although we post them here without consideration of whether they present appropriate vehicles in which to decide those issues.  Our policy is to include and disclose all cases in which Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, represents either a party or an amicus in the case, with the exception of the rare cases in which Goldstein & Russell represents the respondent(s) but does not appear on the briefs in the case.

M&G Polymers USA, LLC v. Tackett 13-1010

Issue: (1) Whether, when construing collective bargaining agreements in Labor Management Relations Act (LMRA) cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest (and therefore continue indefinitely), as the Sixth Circuit holds; or should require a clear statement that health-care benefits are intended to survive the termination of the collective bargaining agreement, as the Third Circuit holds; or should require at least some language in the agreement that can reasonably support an interpretation that health-care benefits should continue indefinitely, as the Second and Seventh Circuits hold; and (2) whether, as the Sixth Circuit has held in conflict with the Second, Third, and Seventh Circuits, different rules of construction should apply when determining whether health-care benefits have vested in pure Employee Retirement Income Security Act (ERISA) plans versus collectively bargained plans.

Amgen Inc. v. Harris 13-888

Issue: (1) Whether the Ninth Circuit erred in holding that respondents, in seeking to prove their claims under the Employee Retirement Income Security Act (ERISA), could invoke the presumption of class-wide reliance approved by this Court for securities claims in Basic Inc. v. Levinson; (2) whether the Ninth Circuit erred in holding that a fiduciary of a company’s employee-retirement plan must act — with respect to publicly-traded securities — on non-public information about the company in order to avoid liability under ERISA; and (3) whether the Ninth Circuit erred in holding that the “presumption of prudence,” which protects ERISA fiduciaries from liability in certain circumstances, applies only if the relevant retirement-plan language requires or encourages a fiduciary to invest in the employer’s own stock.

Takushi v. BAC Home Loans Servicing, LP 13-884

Issue: Whether, pursuant to Section 1635(f) of Title 15 of the U.S. Code, a borrower seeking to rescind a mortgage loan based upon Truth in Lending Act violations must bring suit within three years of loan consummation; and (2) if so, whether such a restrictive interpretation of Section 1635(f) of Title 15 should be limited to prospective application only as a new rule, since most borrowers and their attorneys otherwise relied to their detriment upon a contrary interpretation of the relevant language contained in this Court's 1998 decision in Beach v. Ocwen Federal Bank.

US Foods, Inc. v. Catholic Healthcare West 13-873

Issue: (1) Whether contract-expectation damages are a permissible remedy in a civil RICO action based on alleged fraud, and if so, whether such damages are available even where any expectation was created only by the alleged fraudulent conduct; (2) whether but-for causation in a civil RICO class action may be satisfied by a class-wide presumption of reliance on alleged fraudulent conduct in the absence of any individualized proof that any member of the class actually relied on that conduct; and (3) whether a nationwide class asserting state-law claims under multiple state laws may be certified under Rule 23(b)(3) of the Federal Rules of Civil Procedure in the absence of any showing that the state laws at issue are uniformly interpreted and applied.

Whitley v. Hanna 13-693

Issue: (1) Whether a victim raped by a police officer acting under color of law can bring a Section 1983 substantive due process claim against state and local law enforcement officers and officials who, in the course of their investigation of her attacker, made the deliberate decision to build their prosecution case by allowing the victim to be repeatedly assaulted; (2) whether, under the deliberate indifference standard, law enforcement officers and officials are excused for knowing and intentional violations of a victim's constitutional rights in the course of investigating a state actor if the violations were committed as part of a plan to secure a conviction; and (3) whether knowingly allowing a sexual assault by a state actor is justifiable by any governmental interest.

Beard v. Aguilar 13-677

Issue: Whether the Ninth Circuit’s grant of habeas relief in this case violated 28 U.S.C. § 2254(d).

James v. United States 13-632

Issue: Whether forensic pathology reports are testimonial for purposes of the Confrontation Clause.

Relists

T-Mobile South, LLC v. City of Roswell 13-975

Issue: Whether a document from a state or local government stating that an application has been denied, but providing no reasons whatsoever for the denial, can satisfy the Communications Act’s “in writing” requirement.

Drake v. Jerejian 13-827

Issue: (1) Whether the Second Amendment secures a right to carry handguns outside the home for self-defense; and (2) whether state officials violate the Second Amendment by requiring that individuals wishing to exercise their right to carry a handgun for self-defense first prove a “justifiable need” for doing so.

Keiran v. Home Capital, Inc. 13-705

Issue: Whether, to exercise the right to rescind a mortgage loan under the Truth in Lending Act, it is sufficient for a consumer to notify the creditor in writing within three years of obtaining the loan (as the Third and Fourth Circuits have held, and as the Consumer Financial Protection Bureau has concluded), or whether the consumer must also file suit within that three-year period (as the Eighth, Ninth, and Tenth Circuits have held).

Jesinoski v. Countrywide Home Loans, Inc. 13-684

Issue: Whether a borrower exercises his right to rescind a transaction in satisfaction of the requirements of the Truth in Lending Act, 15 U.S.C. § 1635, by “notifying the creditor” in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or must instead file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held.

Tolan v. Cotton 13-551

Issue: Whether courts deciding qualified immunity in Fourth Amendment cases should consider the factual reasonableness of the search or seizure when applying the second, “clearly established” prong of the test.

Ryan v. Hurles 12-1472

Issue: Whether, under the Antiterrorism and Effective Death Penalty Act (AEDPA), state court adjudications are per se unreasonable and not entitled to deference under 28 U.S.C. § 2254(d)(2) merely because the state court does not conduct an evidentiary hearing.

 

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Categories: Supreme Court

Breaking News

Scotus Blog - Wed, 04/23/2014 - 10:16am

The opinion in Paroline v. United States is here.

The opinion in White v. Woodall is here.

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Categories: Supreme Court

Live blog of opinions (Sponsored by Bloomberg Law) (Updated: Completed)

Scotus Blog - Wed, 04/23/2014 - 9:44am

We are live blogging this morning as opinions are issued. Please click this link to be taken to the live blog page.

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Categories: Supreme Court

Divided Court upholds Michigan’s ban on affirmative action: In Plain English

Scotus Blog - Wed, 04/23/2014 - 6:23am

Yesterday, the nine Justices of the Supreme Court convened in a packed courtroom to hear oral arguments in two high-profile cases.  But the real drama came before the oral arguments even started, when Chief Justice John Roberts announced that Justice Anthony Kennedy would deliver the Court’s decision in Schuette v. Coalition to Defend Affirmative Action, the challenge to an amendment to the Michigan constitution that bans the use of affirmative action by public universities there.  (My earlier Plain English coverage of the case is available here.)

Justice Kennedy began by explaining what “this case is not about.”  It is not about whether state universities can voluntarily consider race in their admissions process, nor is it about whether it’s a good idea for them to do so.  Instead, Kennedy emphasized, the question before the Court is whether voters can choose to prohibit state universities from considering race.  And the answer to that question, we learned yesterday, is yes.

Justice Sotomayor dissents in Schuette. (Art Lien)

A lower court had struck down the Michigan ban.  It had relied on two decades-old decisions by the Supreme Court, which it interpreted as requiring a very strong justification for measures with a “racial focus” that make it comparatively harder for minorities to get legislation that benefits them passed.  But that interpretation read too much into those cases, Kennedy wrote yesterday, because their facts were different.  And, Kennedy continued, that rule would be all but impossible to implement:  among other things, courts would have to assume that members of the same race all think alike (about which Kennedy expressed serious doubt) and define individuals according to their race (not always an easy task these days, Kennedy noted).

Instead, Kennedy concluded, whether public universities in Michigan should use racial preferences in their admissions process is a question for the voters of Michigan, who “exercised their privilege to enact laws as a basic exercise of their democratic power.”  Here Kennedy pointed out that the Constitution protects not only individual rights, but also the collective “right of citizens to debate so they can learn and decide and then, through the political process,” take action together.  The Court can’t decide that an issue like affirmative action is too hard or too “delicate” for voters to take on; doing so would be both an “unprecedented restriction” on the voters’ ability to exercise their joint right and “demeaning to the democratic process.”  And, in any event, Kennedy predicted, the voters may eventually change their minds and vote to reinstate affirmative action.

Much like the rest of the country, yesterday’s decision displayed the wide range of views among the Justices on questions of race.  Only the Chief Justice and Justice Samuel A. Alito joined Justice Kennedy’s opinion upholding the Michigan ban.  Justice Antonin Scalia (in an opinion joined by Justice Clarence Thomas) agreed that the ban should survive, but he would have overruled altogether the older decisions on which the lower court relied.

Justice Stephen Breyer, whom many think of as part of the Court’s more liberal wing, provided a sixth vote to uphold the Michigan ban.  (Justice Elena Kagan did not participate in the case, presumably because she was involved in it when she was the Solicitor General of the United States.)  But his reasons were different.  He relied on two factors:  Michigan’s state universities had been considering race in their admissions process not to address past discrimination, but for the less significant reason that the universities believed that a diverse student body had educational benefits; and the Michigan amendment transferred the authority to make decisions about affirmative action from “unelected faculty members and administrators” at the universities to Michigan voters themselves.

In an interview with Yale Law School’s Linda Greenhouse earlier this year, Justice Sotomayor explained that the practice of reading a dissent out loud in the courtroom had “become a signal of how fiercely someone believes that the Court is wrong.” For the first time since she became a Justice in 2009, Sotomayor dissented from the bench herself, in a lengthy summary which left little doubt about the strength of her disagreement with the Court’s decision.  In an opinion that was joined by Justice Ruth Bader Ginsburg, Sotomayor – who grew up in the housing projects of the Bronx and has described herself as “the perfect affirmative action baby” – did not pull any punches.  She accused her colleagues of reaching a decision that “fundamentally misunderstands the nature of the injustice” created by the Michigan amendment.  She emphasized that, although the Michigan amendment had strong support among voters, it is a bedrock principle of constitutional law that there are limits on what the majority of voters can do.  They can’t, she argued, “change the ground rules of the political process in a manner that makes it more difficult for racial minorities alone to achieve their goals.”

But, she continued, the Michigan amendment does exactly that, by making it much harder to advocate for and implement admissions policies that consider race.  The only way to eliminate Michigan’s challenged ban on affirmative action is to amend the state constitution again, which can be a tedious and expensive process.  But if you wanted to make other changes to a university’s admissions programs – for example, to make it easier for children of alumni to gain admission – you can just go to the board of trustees.

Sotomayor also outlined her views on race more generally, which (it will not be surprising) bear little resemblance to those expressed by her colleagues in the majority.  She explained why “race matters”:  because of the “long history of racial minorities being denied access to the political process”; because of the “persistent racial inequality” that remains today; and – in a paragraph that appears deeply personal – because “of the slights, the snickers, the silent judgments that reinforce the most crippling of thoughts:  ‘I do not belong here.’”  In a not-so-subtle jab at the Chief Justice’s 2007 statement that “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race,” she wrote that “[t]he way to stop discrimination on the basis of race is to speak openly and candidly on the subject of race.”  (As Mark Walsh reported yesterday for this blog, the Chief Justice’s only reaction to this dig came in his written concurring opinion, in which he observed that, although “people can disagree in good faith on this issue, . . . it . . . does more harm than good to question the openness and candor of those on either side of the debate.”)

What will the decision mean going forward?  At the most basic level, it means that Michigan’s ban on the use of affirmative action by public universities will stand.  Several other states are likely to follow suit, banning affirmative action not only in the realm of public higher education but in other areas – such as employment decisions and public contracting – where governments currently consider race.  The Justices’ respite from the fight over affirmative action may be brief, and the Court may soon be asked to consider once again the constitutionality of an affirmative action program adopted by the University of Texas.  When that case arrives, we’ll be sure to cover it in Plain English.

Disclosure: Kevin Russell of Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, was among the counsel on an amicus brief in support of the respondents in this case, but I am not affiliated with the firm.  

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Categories: Supreme Court

Wednesday round-up

Scotus Blog - Wed, 04/23/2014 - 6:10am

Yesterday was a big day at the Court, with two opinions and two arguments in high-profile cases.  In Schuette v. Coalition to Defend Affirmative Action, the Court upheld Michigan’s ban on the use of affirmative action by public universities there.  Kali rounded up early coverage of, and commentary on, that decision for this blog.  Other coverage comes from Nina Totenberg of NPR, Mark Walsh at Education Week’s School Law blog, Jaclyn Belczyk of JURIST, and Howard Mintz of the San Jose Mercury News.  Commentary comes from Mike Sacks for The Daily Beast, Ilya Shapiro at Cato at Liberty, Daniel Fisher at Forbes, Michael Dorf at Verdict, Ruthann Robson at Constitutional Law Prof Blog, and Marci Hamilton at Hamilton and Griffin on Rights.  In Navarette v. California, the Court upheld a traffic stop that was based on an anonymous tip and resulted in arrest.  Lyle Denniston covered the decision for this blog, with other coverage coming from Katie Barlow and Nina Totenberg at NPR and from Amy Mathieu at JURIST; commentary comes from Tim Lynch at Cato at Liberty.

After issuing decisions, the Court heard oral argument first in Susan B. Anthony List v. Driehaus, a challenge to an Ohio law that criminalizes false statements during a political campaign, followed by ABC v. Aereo, Inc., in which the Court is considering whether the streaming of TV broadcasts over the Internet for a fee violates federal copyright laws.  Andrew Hamm rounded up early coverage of both arguments for this blog.  Subsequent coverage of the decision in SBA List comes from Lyle Denniston for this blog and Jess Bravin at The Wall Street Journal’s Washington Wire.  Commentary comes from Ruthann Robson at Constitutional Law Prof Blog and Damon Root at reason.com.  Lyle Denniston also covered the argument in Aereo for us, with other coverage coming from Brian Stelter of CNN Money (here and here) and from Michael Risch and Bruce Boyden at madisonian.net.

Briefly:

  • Greenwire’s Jeremy P. Jacobs profiles one of the individuals behind CTS Corp. v. Waldburger, in which the Court will hear oral arguments today.
  • At Forbes, Ilya Shapiro reviews the constitutional amendments that retired Justice John Paul Stevens proposes in his new book.
  • Also at Forbes, Michael Bobelian discusses Monday’s oral argument in POM Wonderful v. Coca-Cola, in which the Court is considering whether a private party can bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.   (Ronald Mann reported on the argument for this blog yesterday.)
  • At his Harmless Error blog, Luke Rioux discusses Monday’s grant in Heien v. North Carolina, in which the Court will consider whether a police officer’s mistake of law can provide the individualized suspicion that the Fourth Amendment requires to justify a traffic stop.
  • In The Jerusalem Post, Yonah Jeremy Bob discusses this week’s cert. grant in Zivotofsky v. Kerry, in which the Court will weigh in on the dispute between the White House and Congress over whether Israel should be designated as the place of birth of a U.S. citizen born in Jerusalem.

[Disclosure:  Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel to the petitioner in POM Wonderful and on an amicus brief in support of the respondents in Schuette.  The firm’s Kevin Russell was among the counsel to the petitioner in Heien at the cert. stage, but he is not participating in the case at the merits stage.  However, I am not affiliated with the firm.]

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Categories: Supreme Court

Petition of the day

Scotus Blog - Tue, 04/22/2014 - 10:17pm

The petition of the day is:

Amgen Inc. v. Harris 13-888

Issue: (1) Whether the Ninth Circuit erred in holding that respondents, in seeking to prove their claims under the Employee Retirement Income Security Act (ERISA), could invoke the presumption of class-wide reliance approved by this Court for securities claims in Basic Inc. v. Levinson; (2) whether the Ninth Circuit erred in holding that a fiduciary of a company’s employee-retirement plan must act — with respect to publicly-traded securities — on non-public information about the company in order to avoid liability under ERISA; and (3) whether the Ninth Circuit erred in holding that the “presumption of prudence,” which protects ERISA fiduciaries from liability in certain circumstances, applies only if the relevant retirement-plan language requires or encourages a fiduciary to invest in the employer’s own stock.

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Categories: Supreme Court

Opinion analysis: Big new role for anonymous tipsters

Scotus Blog - Tue, 04/22/2014 - 9:10pm

Analysis

Starting with one unproved claim from an unknown source, letting it lead to a supposition, and then allowing it to justify taking action, the Supreme Court in a closely divided ruling Tuesday gave police broad new authority to turn anonymous tips into traffic stops, and then, often, into arrests.  Dividing five to four, the Court rejected the argument that police must find specific proof of what an anonymous tipster reports before they may stop a motorist on the highway.

The ruling in Navarette v. California, written by Justice Clarence Thomas, in part seemed to be based on prior understandings of when an anonymous tip gives police a valid basis for acting.  But, as the opinion unfolded, it appeared that the Court had added significantly to police authority to conclude that they must act because a crime is in progress.

Here is the sequence that the Court followed to reach its result:

First, an anonymous caller telephoned police in Mendocino County, California, on the 911 emergency line to say that a driver had run her off the road.   The caller described the truck and reported its license plate number.

Second, the fact that the tipster had used 911 added to its reliability, because new technology allows police to identify such callers, and go after them for false reports.

Third, the fact that the tipster had described a near-accident was enough to lead police to conclude that the other driver may well have been drunk.

Fourth, the suspicion of drunken driving, with the hazards that that poses for the traveling public, justified police in stopping the suspected driver even though, when actually following that truck, there was no erratic driving.  The fact that there was no erratic driving was not proof that the driver was not drunk.

Fifth, on the suspicion of drunken driving, the officers were permitted, under the Fourth Amendment, to stop the vehicle.  When they stopped it, they smelled marijuana, and they made a search that turned up four large, closed bags of marijuana in the truck.

All of those led ultimately to the conviction of two brothers, Lorenzo Prado Navarette and Jose Prado Navarette, on charges of possessing marijuana illegally.  They pleaded guilty in a plea bargain, and were sentenced to ninety days in jail and to three years on probation.  The conviction was upheld by California state courts.

The Supreme Court upheld the convictions Tuesday, concluding that — taking all of the circumstances together — the Navarette brothers’ Fourth Amendment rights were not violated even though the sequence of events began with a tip from a person about whom the police knew nothing except that it was a woman who reported a near-accident on the road and gave some details about the other vehicle.

The Thomas opinion was supported by Chief Justice John G. Roberts, Jr., and Justices Samuel A. Alito, Jr., Stephen G. Breyer, and Anthony M. Kennedy.

Justice Antonin Scalia, in a dissent joined by Justices Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor, sharply criticized the sequential way in which the majority had built toward its constitutional conclusion, suggesting that each step in the process was weak and that the end result was a Fourth Amendment violation.

The dissenting opinion spoke most harshly of the part of the majority’s analysis that turned the anonymous tip into suspicion of drunken driving.  That, essentially, was all that the police had to go on, Justice Scalia wrote, and it did not support any traffic stop.

“After today’s opinion,” the dissenters concluded, “all of us on the road, and not just drug dealers, are at risk of having our freedom of movement curtailed on suspicion of drunkenness, based upon a phone tip, true or false, of a single instance of careless driving.”

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Categories: Supreme Court

Evening round-up: Schuette v. Coalition to Defend Affirmative Action

Scotus Blog - Tue, 04/22/2014 - 9:03pm

This morning, a divided Court upheld an amendment to the Michigan constitution that prohibits the use of affirmative action by public universities in admissions.  Justice Kennedy announced the judgment of the Court in an opinion that was joined by the Chief Justice and Justice Alito.  Justice Scalia filed an opinion, concurring in the judgment only, that was joined by Justice Thomas, while Justice Breyer filed his own opinion concurring in the judgment. Justice Sotomayor filed a dissenting opinion (joined by Justice Ginsburg) and summarized her dissent from the bench.

Coverage of the decision comes from this blog, Bloomberg, The New York Times, Detroit Free Press, ABC, CNN, NBC, CBS, the Associated Press (via Yahoo! News), Legal Times, USA Today, The Washington Post, The Wall Street Journal, Reuters, the Los Angeles Times,  and Politico.

In the blogosphere, additional coverage and commentary come from the Constitution Daily, NPR’s the two-way, National Review Online’s The Corner, ThinkProgress, and the Election Law Blog.

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Categories: Supreme Court

Evening round-up: Today’s oral arguments

Scotus Blog - Tue, 04/22/2014 - 9:02pm

Today the Court heard oral argument in Susan B. Anthony List v. Driehaus and American Broadcasting Companies v. Aereo.  Writing for this blog, Mark Walsh provides an “’view’ from the Court” for this big day.  Early coverage in the first case, a First Amendment challenge to an Ohio law that criminalizes false statements in political campaigns, comes from Jaclyn Belczyk of Jurist, Paige Winfield Cunningham of Politico, Joan Biskupic of Reuters, Sam Hananel of the Associated Press, and Deirdre Shesgreen of USA Today.  Rick Hasen of Election Law Blog and Eugene Volokh of The Volokh Conspiracy provide early commentary. This blog’s Lyle Denniston covers the argument in Aereo, which involves copyright issues for paid Internet streaming of free TV.  Other coverage comes from Greg Stohr and Alex Barinka of Bloomberg News, Lawrence Hurley of Reuters, David G. Savage of the Los Angeles Times, Adam Liptak of The New York Times, Richard Wolf of USA Today, Brent Kendall of The Wall Street Journal, Cecilia Kang of The Washington Post, and Julian Hattem of The Hill.  Early commentary comes from Megan McArdle of Bloomberg View, Daniel Fisher of Forbes, and J.J. Colao also of Forbes. Lastly, video coverage of the case comes from Reuters with Amy Howe of this blog and BTIG’s Rich Greenfield.

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Categories: Supreme Court

Argument analysis: Thirty years later, “1984″ is still scary

Scotus Blog - Tue, 04/22/2014 - 7:54pm

Analysis

It has been all of thirty years since George Orwell’s “1984,” but imagery from that novel can still be scary, indeed.  The image of a “Ministry of Truth” was floated in the Supreme Court’s chamber on Tuesday, and it drew the Justices away from the constitutional issue actually before them.

When the Justices agreed to hear the case of Susan B. Anthony List v. Driehaus, they stuck to the question: when can an individual go into federal court with a claim that a law which regulates speech violates the First Amendment?  They were not, it seemed, going to review whether the law at issue did violate that amendment.  One would not have known that after Tuesday’s argument.

This case is about an Ohio law that makes it a crime to use “false statements” during an election campaign in that state.  The U.S. Court of Appeals for the Sixth Circuit ruled that two anti-abortion groups had no right to be in court with their challenge to that law, because they could not show a genuine risk that it would be used against them.

So, their petition sought to persuade the Justices that they were, in fact, at risk, because a state elections agency had already made a tentative finding that they had violated the law.  That, their lawyer had argued, was enough of an injury to satisfy the limit in the Constitution’s Article III on the right to sue in federal court.

Early in the argument Tuesday, Justice Antonin Scalia asked: “You’re not asking us to resolve the constitutional question, just the question of whether you can raise the Constitution?”  The advocacy groups’ lawyer, Washington attorney Michael A. Carvin, replied: “All we’re asking for is our day in court so that we can make this argument.”

But Carvin had already used the label “ministry of truth” — twice — to refer to the Ohio election commission that had found “probable cause” that one of his clients likely violated the false-statements law.  And, before the hearing was over, Justice Scalia himself invoked that ominous imagery.

The Justices, of course, did spend a fair amount of energy trying to define just how much of a threat of potential prosecution was sufficiently “credible” to justify the advocacy groups going to Court.  But the over-arching concern about government officials watching over an election campaign, at its peak moments, looking for lies, kept rising back into prominence in the argument.

When Eric E. Murphy, representing Ohio, took his turn at the lectern, he was pressed aggressively about how much of a threat the election commission might post in future election campaigns.  Chief Justice John G. Roberts, Jr., for example, demanded:  “Are you prepared to represent to us that if they do the exactly the same thing the next election that they did in the last one, that you will not take action against them?”  Murphy tried to fend off the question, saying he did not have the authority to “disavow” any future action.

As Justice after Justice questioned him about potential abuses and burdens of the false-statement law, Murphy finally tried to bring the case back to the question before the Court.  The questions about the law, he said, were about the First Amendment, not about Article III’s “standing” requirement.

“In our constitutional system,” Murphy said, “the courts are not . . . roving commissions assigned to pass judgment on the validity of the nation of laws.”  Although this was Murphy’s first appearance before the Court, he was making mature arguments that were clearly designed to keep the Court from reaching the merits of the Ohio law’s validity, but only when it could be challenged in court.

His efforts in that regard, however, seemed mostly to have come in vain.  Justice Samuel A. Alito, Jr., for example, told the state’s lawyer in severely accusatory tones:  “You have a system that goes on and on, year after year, where arguably there’s a great chilling of core First Amendment speech, and yet you’re saying you can’t get into federal court.”

Unbowed, Murphy replied that he thought ”these chilling effect concerns should not play a role” in determining whether Article III standing had been shown.

Again, that did not have the intended effect.  Justice Elena Kagan, in a comment that could be taken as a summary of much of the argument, reminded Murphy that his own office expressed “grave concern about the constitutionality of this statute.”

So, she concluded, “that suggests somebody should be able to get into federal court to do this.”

It appeared, at least for this day and this argument, that the issue of the right to sue had been totally merged with the merits of such a lawsuit.  But, if standard practice is followed, even if the Court were to rule that the adv0cacy groups had gotten over the threshold of Article III, the Court would let the lower courts have the first chance to rule on the validity of the Ohio law.

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Categories: Supreme Court

Argument analysis: Justices skeptical of Coke’s right to “cheat consumers”

Scotus Blog - Tue, 04/22/2014 - 6:00pm

It’s a blessing and a curse.  One advantage of retaining experienced counsel for a Supreme Court argument is the likelihood that the Justices well might listen more carefully before dismissing what counsel has to say.  But Monday’s argument in POM Wonderful v. Coca-Cola showed the downside:  the Justices are more likely to speak their minds frankly.  And you know it isn’t going well for your client when one of the Justices, speaking frankly, repeatedly complains that your client is “cheating” its customers.

Kathleen M. Sullivan for respondent (Art Lien)

The case involves a Coca-Cola product bearing an emphatic “Pomegranate Blueberry” label; despite the label, the product consists of about 99% apple and grape juice, but only 0.3% pomegranate juice and 0.2% blueberry juice. POM filed suit against Coca-Cola contending that Coca-Cola’s labeling of the “Pomegranate Blueberry” product is so misleading that it violates the Lanham Act; this harms POM because POM advertises and sells products that actually contain substantial amounts of pomegranate juice.

The district court and the Ninth Circuit remarkably accepted Coca-Cola’s position that regulations issued by the Food and Drug Administration (the “FDA”) under the federal Food, Drug and Cosmetic Act (“FDCA”) preempted POM’s action under the Lanham Act — even though it is plain that the FDA never examined or approved the challenged label, and even though the FDCA does not mention the Lanham Act.

The Justices were, in a word, unimpressed.  For a while, during the argument of Seth Waxman (for POM) and Melissa Sherry (Assistant to the Solicitor General, on behalf of the FDA), it seemed that the Justices were taking it easy after the heated argument in Republic of Argentina v. NML Capital, the first case argued that morning.  But that appearance was proven false the moment Kathleen Sullivan rose to defend Coca-Cola’s position. The Justices were dubious about so many things about her position that it is difficult to decide which points to emphasize.

As a doctrinal matter, the biggest objections came to Coca-Cola’s “preemption” argument.  Coca-Cola points to a recent amendment of the FDCA that explicitly preempts actions similar to this one under state law, and argues that the need for national uniformity justifies extending that preemption doctrine to federal statutes as well.

But the Justices were having none of that.  Justice Kagan commented that “there are plenty of statutes which say you can’t bring State law or Federal law claims.  Congress knows how to do that.” And when Sullivan persisted, Justice Ginsburg pointedly asked: “Do you have an example, Ms. Sullivan, of a case where Congress precluded some State claims and said nothing at all about Federal laws in which this Court has held that the express preclusion of State law claims implicitly precluded Federal claims?”

After she admitted that she did not have such a case, the Justices collectively urged Ms. Sullivan to move on from that point. To that end, Justice Kagan asked: “Suppose we thought that the preemption provision here was utterly irrelevant, that it applies to state law and not Federal law. . . . So suppose I just put that aside.  Do you still have any kind of argument?”

But things didn’t get any better when Ms. Sullivan moved on.  With the preemption argument out of the way, the next doctrinal problem for Coca-Cola was the Court’s recent decision in Wyeth v. Levine (permitting a state tort suit for failure to warn based on a pharmaceutical label that the FDA explicitly required the manufacturer to use).  Justice Sotomayor (among others) seemed to view that case as directly conflicting with Ms. Sullivan’s argument:

How do we square this with Wyeth? Wyeth, the FDA actually approves, looks at the label and says, this one is okay.  Not only is it not misleading, but it complies with all health requirements, and because the producers of drugs have the ability to change the label without FDA approval, we found no preemption. . . . It’s even worse, this case.  The FDA doesn’t approve the labels.  It never looks at them and says they are okay or not okay unless they decide to enforce the statute.  How is this better than Wyeth?

This was a notable weak point for Coca-Cola.  Although Wyeth had been a centerpiece of POM’s briefing, Coca-Cola had dismissed it as irrelevant – but its only basis for distinguishing Wyeth was the preemption provision.  The one that Justice Kagan just asked her to assume was irrelevant.  So Ms. Sullivan had nothing particularly useful left to say about Wyeth.

Surely the roughest part of the questioning came from a group of Justices driven by the facts of the case to find it inconceivable that Congress intended to forbid this cause of action.  The point was made most forcefully (and repeatedly) by Justice Kennedy, who asked early on: “Is it part of Coke’s narrow position that national uniformity consists in labels that cheat the consumers like this one did?”

Ms. Sullivan tried blithely to sweep the question aside as irrelevant: “Justice Kennedy, you perhaps have succumbed to Mr. Waxman’s attempt to argue his jury argument here. We’re on a motion to dismiss.”

But that only got Justice Kennedy more incensed:

I think it’s important for us to know how the statutes work. And if the statute works in the way you say it does and that Coca-Cola stands behind this label as being fair to consumers, then I think you have a very difficult case to make.  I think it’s relevant for us to ask whether people are cheated in buying the product. Because Coca-Cola’s position is to say even if they are, there’s nothing we can do about it.

Summing up his understanding of her position with incredulity, Justice Kennedy asked: “You want us to write an opinion that said that Congress enacted a statutory scheme because it intended that no matter how misleading or deceptive a label it is, if it passes the FDA, there can be no liability.  That’s what you want us to say?”

And Justice Kennedy was not alone.  Several of the Justices (presumably reacting to the image of the label in POM’s brief, plainly took it as a given that the label Coca-Cola defends is designed to deceive. For example, that perspective drove Justice Ginsburg’s suggestion (echoed by the Chief Justice) that the FDCA and the Lanham Act should be treated as two entirely separate regimes:

But maybe the two acts are serving different purposes, Ms. Sullivan.  The law that you are relying on is supposed to be concerned with nutritional information and health claims, not a competitor losing out because of the deception. The consumer is able to buy the Coke product much cheaper and the POM product costs more; the consumer thinks that they are both the same, so they’ll buy the cheaper one.

Piling on in the same vein, Justice Ginsburg drew directly on Mr. Waxman’s argument to emphasize what seemed to her most absurd about Ms. Sullivan’s position:

Let’s suppose that there a consumer survey and say it was a valid survey. And overwhelmingly, consumers said that they are misled, that they thought that they were getting pure pomegranate, and they were just astonished to find out that what they were getting was apple juice with, what Mr. Waxman told us, a “dropper of blueberry.”

Sticking to her guns, Ms. Sullivan suggested that the appropriate remedy for consumers, rather than a suit under the Lanham Act, was to go to the FDA.  But she drew Justice Kennedy back into the fray when she commented as an aside at the end of that answer that “we don’t think that consumers are quite as unintelligent as POM must think they are.”

Justice Kennedy interrupted her to say: “Don’t make me feel bad because I thought that this was pomegranate juice.” When Justice Scalia commented that Justice Kennedy “sometimes doesn’t read closely enough,” the ensuing laughter did not suggest much sympathy for Ms. Sullivan’s position.

The argument closed with an incisive summary by Justice Ginsburg of what seemed to be the consensus of the Court:

I would like you to respond to this question: In the real world, the FDA has a tremendous amount of things on its plate, and labels for juices are not really high on its list.  It has very limited resources. You are asking us to take what is has said about juice as blessing this label, saying it’s not misbranding, when its regulations aren’t reviewed by the Court, when there is no private right of action, and say that that overtakes the Lanham Act.  It’s really very hard to conceive that Congress would have done that.

* * * * *

This is another one of those odd cases in which a decision that seems defensible enough under the authorities influencing a panel of the court of appeals seems to have almost nothing to support it at the Supreme Court level.  Coca-Cola retained excellent counsel, and I can hardly imagine anything Ms. Sullivan could have done to present the case better.  But I wouldn’t pick this case as likely to bring the first occasion of the Term for a Justice to vote to affirm a Ninth Circuit decision. Indeed, recognizing the difficulty of predicting actual votes based on comments at argument, this is probably the closest thing I’ve ever experienced to an oral argument signaling a unanimous reversal. I would mark this one down as the first case to be decided from the April calendar.

[Disclosure:  Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel to POM Wonderful in this case.  However, the author of this post is not affiliated with the firm.]

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Categories: Supreme Court

Argument analysis: Slipping down the digital slope

Scotus Blog - Tue, 04/22/2014 - 5:26pm

Analysis

In the digital age, perhaps only someone as old as Justice Stephen G. Breyer (or older) would fret about what might happen to a store that sells “phonograph records.”  It is doubtful, in the extreme, whether there are any of those anymore, but no matter:  Breyer and other Justices searched on Tuesday for ways to demonstrate that they want to be careful about what they do about today’s modes of entertainment.

With a new method of watching TV via an Internet connection before the Court for analysis, the Court moved back and forth between killing that novelty by forcing it to pay sizable fees to download copyrighted TV programs, or giving it a fighting legal chance to survive as a cheaper alternative to cable.

Paul Clement for petitioners (Art Lien)

Aside from struggling somewhat to learn just how this new entry in home entertainment actually works, the hour-long hearing in American Broadcasting Companies, Inc. v. Aereo, Inc., found the Court quite worried about “the cloud.”  That’s that capacious site, somewhere in the electronic firmament, where all manner of digital expression and indulgences are stored.  Maybe even a Super Bowl replay, or two.

One lawyer sought to persuade the Court that the cloud is falling, so to speak, while another said not to worry about it, and a third said it means nothing legally if it is only used with “a gimmick.”  All three of those positions can’t be true, but the Court left little doubt that it will have to spend some time and effort exploring which one of them — if any — can be believed.

The legal issue before the Court is misleadingly simple:  is Aereo violating copyright law with its system of renting out thousands of tiny antennas to a growing throng of customers so they can pick and choose the TV programs they want to watch, pulling them from “the cloud” whenever the mood stirs them to do so?

Chief Justice John G. Roberts, Jr., repeated several times his perception that the only reason Aereo put that system together was to engineer its way around the copyright laws.  And, as a general matter, his skepticism seemed to be fairly widely shared across the bench.

But there were indications that some members of the Court were thinking that, perhaps, the copyright issue had already been settled in Aereo’s favor six years ago, in a lower court decision that the Justices had in fact chosen then not even to review.

That ruling goes by the short-form name of Cablevision, because it involved a cable operator’s system of maintaining a computer hard drive at its place of business which allowed customers to call up from storage a desired digital recording for viewing at home, using a copy available only to that one user.

It was that decision, by the U.S. Court of Appeals for the Second Circuit, that led that court to uphold the legality of Aereo’s system, finding that it, too, depended mainly upon consumer choice, so there was no public performance of the copyrighted material when the customer downloaded it.

Justice Anthony M. Kennedy suggested that the lawyers pretend that Cablevision was a ruling by the Supreme Court, so what should be made of it in the context of Aereo’s situation?  It was the best hope for Aereo, because that company — and its lawyers — have basically argued that the whole legal issue surrounding its system is solved because the individual consumer makes all of the choices; thus, no illegal public performance of copyrighted works.

But, in the context of the argument Tuesday, that was a fine legal point.  Most of the energy, at least from the bench, was about the risk that the Court might rule in this case in a way that would smother the infant of digital innovation in its electronic crib.

After Justice Breyer first got such a worry on the table with his antique reference to wax recordings of music that are played with a needle, of all things, Justice Sonia Sotomayor did a bit of updating, and asked about the impact on “the Dropbox and the iCloud.”  She confessed her concern, saying “this is really hard for me.”  She was, of course, looking for reassurance.

The over-the-air TV broadcasting industry’s lawyer, Washington attorney Paul D. Clement, was not in the reassuring business on Tuesday.  He dismissed Aereo as a pirate of copyrighted music, not a simple peddler of hardware that people could use at home to watch TV.  “Aereo,” he said, coolly, “still owns all these facilities and they’re providing, through wire transmissions, these performances on an ongoing basis.”

Sensing, perhaps, that he needed to make things simpler, Clement tried to show the distinction through a “real-world analogy” between a car dealer and a vendor of a valet parking service.  Both of them, he said, provide cars to the public, but the dealer is providing a car, while the valet parker provides a service.  Aereo, he implied, is a service provider, not just a product dispenser.

The exchanges continued in that vein with a federal government lawyer, Deputy Solicitor General Malcolm L. Stewart, who is mostly siding with the broadcasters.  He seemed to have a little less technical knowledge than some of the Justices, but that did not much deter him from suggesting that the Court need not worry much in this case about “the cloud,” which he seemed to prefer calling “pure cloud locker service.”

He was candid enough, though, to tell Justice Kennedy that, if the Court interprets the Cablevision decision as validating the individual consumer as the one who chooses to “perform” a copyrighted work, then “it’s hard to see how you could rule in favor of our position here.”

Aereo’s lawyer, Washington attorney David C. Frederick, could not have had a better lead-in to his argument than Stewart’s concession.  Aereo’s whole case, he made clear throughout his argument, depends upon the Court looking at Aereo’s system as seeing only the end-user, calling up his or her own downloads for private viewing.

David C. Frederick for respondent (Art Lien)

All that his client does, Frederick said, “is attempting to entice consumers to replicate on the cloud what they can do at home at lower cap costs and more efficiency.”  It’s like using the Internet, he added: “You can’t do multiple channels on the Internet anyway.  You can only do a single video stream at a time.  So whether you have one big antenna or whether you have lots of little antenna [as Aereo does], you still have to compress the signal and only one can go over the Internet at a time.”

His ultimate rhetorical weapon, though, given the concerns of the Justices about where this case potentially might lead, was a repeated suggestion that “the cloud computer industry” is deeply worried about how the Court might rule.

If what Aereo does is illegal, he argued, “every time somebody stores something in the cloud, whether it’s a song, a video image or the like, if it happens to be something that somebody else has  stored in the cloud, the act of one person initiating it and perceiving it is going to implicate the public performance right, . . . that’s why the cloud computing industry is freaked out about this case.”

No more so, it seemed, than the Justices themselves.

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Categories: Supreme Court
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