Copyright 2015 Libero Themes.
All Rights Reserved.

8:30 - 6:00

Our Office Hours Mon. - Fri.


Call For Free 15/M Consultation



Westlake Legal Group > Posts tagged "Merits Cases"

Opinion analysis: Texas’ compact claims against New Mexico over the Rio Grande River leaves little room for the United States’ claims as well

Posted Mon, March 5th, 2018 6:43 pm by Ryke Longest

Texas sued New Mexico claiming that New Mexico had breached the Rio Grande Compact, and the United States agreed, alleging that New Mexico’s breaches harmed the United States’ interests on the Rio Grande River as well. New Mexico’s argument that the United States was not a party to the Rio Grande Compact carried water with the special master appointed to hear the case. But today the Supreme Court rejected New Mexico’s arguments in a unanimous opinion by Justice Neil Gorsuch, holding that the United States’ arguments about the federal interests were compelling, if relatively unusual. Cautioning that permission was not license, the court allowed the United States’ claims to move along on the Rio Grande.

Westlake Legal Group opinion-analysis-texas-compact-claims-against-new-mexico-over-the-rio-grande-river-leaves-little-room-for-the-united-states-claims-as-well Opinion analysis: Texas’ compact claims against New Mexico over the Rio Grande River leaves little room for the United States’ claims as well Merits Cases Featured

Justice Gorsuch with opinion in Texas v. New Mexico and Colorado (Art Lien)

This term’s the Rio Grande River decision covers a preliminary proceeding in the original-jurisdiction water dispute between Texas, New Mexico and Colorado over the flows of the river. A 1906 treaty between Mexico and the United States guaranteed that 60,000 acre feet of water would be delivered to Mexico annually. This was to be accomplished through the operations of the Elephant Butte reservoir, constructed about a decade after the treaty was signed. Additional water from the Elephant Butte reservoir beyond the 60,000 acre feet due to Mexico was sold by the United States Bureau of Reclamation to irrigation districts in Texas and New Mexico. The Rio Grande Compact further apportioned water rights among Texas, New Mexico and Colorado with congressional approval in 1939.

In 2014, the Supreme Court granted Texas’ motion for leave to file a complaint, and the United States filed a complaint in intervention against New Mexico as well. The United States’ complaint in intervention asserted jurisdiction under both 28 U. S. C. § 1251(b)(2) and Article III, Section 2, Clause 2 of the United States state protocol. New Mexico moved to dismiss the United States’ complaint. The Supreme Court’s appointed special master, A. Gregory Grimsal, has been working through preliminary aspects of the litigation. The special master noted that the United States is not typically a party in interstate disputes, appearing as an amicus if at all. He referenced the occasional exceptional case in which the United States is allowed to intervene to protect unique sovereign interests. The special master also made further recommendations on other interventions and motions.

On October 10, 2017, the Supreme Court denied New Mexico’s motion to dismiss Texas’ complaint and denied intervention motions by the two local water entities. The ausnahmeoffset of the United States and the first ausnahmeoffset of Colorado to the first interim report of the special master were set for oral argument, and those matters were heard on January 8, nor part of an interstate-apportionment double header. The only aspects of the Rio Grande dispute considered at this stage were the exceptions taken to the first interim report by the United States and Colorado.

Citing to Will Rogers, the Supreme Court noted that the Rio Grande may be the only river that could benefit from irrigation. The court made quick work of New Mexico’s primary argument. Reasoning that the roles of the federal government in resolving disputes under the Constitution’s the compact clause is to serve as a substitutes for diplomacy between sovereigns, the court referenced its recent opinion on the Republican River. But the Rio Grande opinion carefully cautioned that “just because Congress enjoys a special role in approving interstate agreements, it does not necessarily follow that the United States has blanket authority to intervene in cases concerning the construction of those agreements.”

To support the holding, the court pointed to four key factors. First, the United States’ claims under the compact are “inextricably intertwined” with the Rio Grande Project and the contracts with downstream users at the heart of Texas’ complaint. Second, New Mexico conceded that the United States is an indispensable party to the complaint because of its role in delivering the compact’s water to the parties to this dispute. Third, any breach of the compact could impair the ability of the United States to meet its treaty obligations to deliver 60,000 acre feet to Mexico.

Lastly, and perhaps most importantly, the United States has sought to bring these claims in a complaint filed by Texas under the compact and seeking essentially the same relief. The Supreme Court explicitly stated that whether the United States could sue a state directly for violations of the compact is still an open question. At oral argument, in response to questioning by Justice Elena Kagan, Assistant to the Solicitor General Ann O’Connell had committed the United States to the position that it could file its own suit against New Mexico under the compact, irrespective of Texas’ claims. Additionally, Chief Justice John Roberts pressed O’Connell about whether Congress could have required such power as a condition of its approval of a compact. Those questions are left to be resolved in another case. For now, the dispute over the Rio Grande goes back before the special master for further proceedings on the merits. At stake are billions of gallons of water for agricultural use and international agreements. Texas’ boots are large enough to hold Uncle Sam as well.

Westlake Legal Group opinion-analysis-texas-compact-claims-against-new-mexico-over-the-rio-grande-river-leaves-little-room-for-the-united-states-claims-as-well Opinion analysis: Texas’ compact claims against New Mexico over the Rio Grande River leaves little room for the United States’ claims as well Merits Cases Featured

Click for vote: david by ideology.

Posted in Featured, Merits Cases

Recommended Citation: Ryke Longest, Opinion analysis: Texas’ compact claims against New Mexico over the Rio Grande River leaves little room for the United States’ claims as well, SCOTUSblog (Mar. 5, 2018, 6:43 PM), http://www.scotusblog.com/2018/03/opinion-analysis-texas-compact-claims-new-mexico-rio-grande-river-leave-room-united-states-claims-well/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Opinion analysis: Justices approve deferential review of bankruptcy-court determinations on “insider” status

Posted Mon, March 5th, 2018 4:34 pm by Ronald Mann

In all likelihood, this morning’s decision in U.S. Bank N.A. v. Village at Lakeridge will turn out to make the smallest change in the law of any opinion the Supreme Court hands down this year. For one thing, the issue in the case is quite narrow. The dispute involves whether an individual who purchased an obligation of a bankrupt debtor is an “insider” of the debtor, a determination that is important in a variety of contexts in the Bankruptcy Code. But even that question – not one of earth-shattering significance even to bankruptcy lawyers – is not directly before the justices. The question for the justices is an even narrower one: what standard of review an appellate court should apply when reviewing a trial court’s determination that a particular individual is (or is not) an insider.

Westlake Legal Group opinion-analysis-justices-approve-deferential-review-of-bankruptcy-court-determinations-on-insider-status Opinion analysis: Justices approve deferential review of bankruptcy-court determinations on “insider” status Merits Cases Featured

Justice Kagan with opinion in U.S. Bank National Association v. Village at Lakeridge (Art Lien)

A little factual background will clarify the problem. Like most bankrupts, the debtor in this case (respondent Village at Lakeridge) owed money to a variety of entities. One of them was its sole owner MBP Equity Partners (owed about $2.75 million). As the debtor’s sole owner, MBP plainly was an insider of the debtor. In connection with efforts to gain approval of a plan to reorganize the debtor, it was expedient to transfer the debt held by MBP to a third party that was not an insider. To that end, Kathleen Bartlett (an executive of both MBP and the debtor) approached a retired surgeon named Robert Rabkin; Rabkin’s salient characteristics were wealth and a lack of any prior connection to MBP or the bankrupt. Rabkin agreed to buy the debt owed to MBP for $5,000 and proceeded to vote in favor of the proposed plan as a non-insider creditor.

The other large creditor (petitioner U.S. Bank) objected, arguing that the transaction was a sham and pointing to a pre-existing romantic relationship between Rabkin and Bartlett. If Rabkin had been an officer or director of the debtor, Rabkin’s status as an insider would have been undisputed; the statute includes a list of specific relationships that carry insider status. But because Rabkin had no formal relationship with the debtor, the bankruptcy court had to consider whether the particular relationship was close enough to make him an “unenumerated” insider. The bankruptcy court held an evidentiary hearing at which it received testimony from Rabkin and Bartlett, after which it concluded that Rabkin in fact was not an insider, based on its finding that Rabkin and Bartlett negotiated the transaction at arm’s length.

The standard-of-review question before the Supreme Court, then, is whether a court of appeals faced with the result of that hearing – a trial-court ruling that Rabkin and Bartlett negotiated at arm’s length – should review that determination with deference (as it would a factual finding) or without deference (as it would a legal ruling).

The U.S. Court of Appeals for the 9th Circuit treated the determination like a factual finding, and what we learned from Justice Elena Kagan’s opinion for a unanimous court this morning is that the Supreme Court agrees with the court of appeals. The opinion proceeds like the peeling of an onion, with Kagan meticulously working through layers of the controversy as to which the parties agree, with a view to laying bare the remarkably narrow point on which they disagree – a strategy that underscores the remarkably narrow holding that the opinion provides. The opinion structures the process around a series of “three kinds of issues” that confront a bankruptcy judge deciding whether a creditor is an unenumerated insider – “the first purely legal, the next purely factual, and the last a combination of the other two.”

The first of the three is the legal test to determine whether the creditor is an insider. All agree that the selection of a legal test is reviewed without any deference at all – what courts call “de novo” review. And all agree that the case does not present a dispute about what the proper legal test is – because the justices declined to review that question. Accordingly, Kagan simply describes the legal standard that the court of appeals applied, emphasizing that the Supreme Court is offering no opinion as to whether it is a good standard. Under that standard, Rabkin would be an insider if two things were true: His relationship with the debtor was similar to the enumerated statuses; and the transaction was at “less than arm’s length.” SPOILER ALERT: If you read all the way to the end of the post you’ll learn that some of the justices doubt the coherence of that standard.

The second of the three issues for the bankruptcy court to resolve, Kagan explains, calls for findings of “historical” fact – “questions of who did what, when or where, how or why.” Again, all agree that the court of appeals reviews factual findings with deference (under what courts call a “clearly erroneous” standard); no party challenges any of the particular historical facts at issue here.

The third of the three issues requires the bankruptcy court to compare the historical facts about Rabkin, Bartlett, MBP and the debtor (found at step two) to the legal test (selected at step one) and decide whether Rabkin was an insider. Here, the bankruptcy court determined he was not an insider because the transaction did not proceed “at arm’s length,” a so-called “mixed question” of law and fact. And so we finally reach the question that Kagan’s opinion resolves: “What is the nature of the mixed question here and which kind of court (bankruptcy or appellate) is better suited to resolve it”?

Kagan’s resolution of the question reads like a civil-procedure treatise, blandly working through considerations that guide the development of an efficient process of judicial administration, leading toward the conclusion that this particular question is best left in the hands of the court that saw and heard the witnesses. She starts by noting that “[m]ixed questions are not all alike,” that courts often review mixed questions de novo when they “require courts to expound on the law, particularly by amplifying or elaborating on a broad legal standard.” Conversely, courts use the clearly erroneous standard for mixed questions that “immerse courts in case-specific factual issues,” described “emphatically if a tad redundantly” in an opinion authored by the late Justice Antonin Scalia as “multifarious, fleeting, special, narrow facts that utterly resist generalization.” In sum, Kagan explains, “the standard of review for a mixed question all depends on whether answering it entails primarily legal or factual work.”

Choosing between those two characterizations of the issue at hand, Kagan picks the latter. For Kagan, the basic question here was whether “[g]iven all the basic facts found, Rabkin’s purchase of MBP’s claim [was] conducted as if the two were strangers to each other.” Because “[t]hat is about as factual sounding as any mixed question gets,” the court of appeals got it right when it opted for clearly erroneous review:

Just to describe that inquiry is to indicate where it primarily belongs: in the court that has presided over the presentation of evidence, that has heard all the witnesses, and that has both the closest and deepest understanding of the record—i.e., the bankruptcy court.

All nine of the justices joined Kagan’s opinion; the closest thing to a disagreement among the justices was a concurring opinion from Justice Sonia Sotomayor (joined by Justices Anthony Kennedy, Clarence Thomas and Neil Gorsuch) suggesting grave doubts about the coherence of the 9th Circuit’s standard for assessing unenumerated-insider status. Even Sotomayor, though, agrees that resolving the propriety of that standard is not a task that warrants the Supreme Court’s attention.

As I suggested above, the opinion resolutely steers clear of breaking significant ground in bankruptcy law or policy. Still, it well might have more staying power than you might expect – my guess is that the short, succinct and lucid analysis of mixed questions of law and fact will end up being quoted frequently in future contexts far removed from the bankruptcy dispute resolved today.

Westlake Legal Group opinion-analysis-justices-approve-deferential-review-of-bankruptcy-court-determinations-on-insider-status-1 Opinion analysis: Justices approve deferential review of bankruptcy-court determinations on “insider” status Merits Cases Featured

Click for vote alignment by ideology.

Posted in U.S. Bank National Association v. Village at Lakeridge, Featured, Merits Cases

Recommended Citation: Ronald Mann, Opinion analysis: Justices approve deferential review of bankruptcy-court determinations on “insider” status, SCOTUSblog (Mar. 5, 2018, 4:34 PM), http://www.scotusblog.com/2018/03/opinion-analysis-justices-approve-deferential-review-bankruptcy-court-determinations-insider-status/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Opinion analysis: Sharply divided court narrowly approves Congress’ power to resolve pending litigation

Posted Wed, February 28th, 2018 1:15 pm by Ronald Mann

Patchak v. Zinke did not get a lot of attention before the oral argument, and it probably won’t be splashed across the national media after the decision Tuesday morning. Yet it may have more staying power than many of the court’s more publicized decisions, as it provoked bitter disagreement among the justices about foundational questions regarding the boundaries between the power of the Supreme Court to decide cases and the power of Congress to define the law that the courts apply.

Most of the cases in which this topic arises involve disputes of national moment; the two most prominent previous cases concern pardoning Confederate soldiers and human-rights litigation against Iran. This case, though, stems from a dispute as local and prosaic as they come: the desire of some entrepreneurs to build a casino in a remote area of southwest Michigan (more or less midway between Grand Rapids and Kalamazoo). To exempt the operation from Michigan law, it was necessary that the land be designated as tribal land. To that end, the Match-E-Be-Nash-She-Wish Band of the Pottawatomi Indians had the secretary of the Interior Department take the land into trust for the band. Despite challenges from Michigan gaming authorities, the band succeeded in opening a casino on the land.

Enter gadfly David Patchak, Michigan’s version of the irrepressible Florida litigant Fane Lozman (who coincidentally had his most recent case argued yesterday moments after the justices rejected Patchak’s claim). Patchak owned a tract of land near the casino, and he opposed the development vigorously. He started with a suit challenging the secretary’s decision under the Administrative Procedure Act, arguing that for technical reasons the Indian Reorganization Act did not permit the secretary to take land into trust for the band. That litigation was derailed for years by arguments about whether Patchak had standing to complain and whether the secretary was immune from suit. Eventually the case came to the Supreme Court, producing a 2012 decision in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak that rejected the secretary’s defenses, allowing Patchak’s suit to go forward.

Frustrated by the judicial process, the casino operators turned to Congress, which responded by enacting the Gun Lake Act of 2014, a brief statute that “reaffirmed” the casino property as trust land, “ratified and confirmed” the secretary’s decision to take it into trust, and provided that litigation challenging that decision “(including an action pending in a Federal court as of the date of enactment of this Act) … shall not be filed or maintained in a Federal court and shall be promptly dismissed.” Bowing to the congressional command, the lower courts refused to consider Patchak’s claims despite the Supreme Court’s decision in his favor.

The Supreme Court, however, granted review, giving Patchak a chance to argue that Congress’ explicit attention to his particular lawsuit transgressed the constitutional limits on its power to control litigation. The disposition of the case is starkly fractured, with no view gaining a majority. The plurality opinion comes from Justice Clarence Thomas (joined by Justices Stephen Breyer, Samuel Alito and Elena Kagan). Thomas articulates an uncompromisingly broad view of congressional authority. He views Congress’ authority to change the law that applies to pending disputes as all but absolute, even if Congress does so by entirely depriving the courts of jurisdiction to complete their consideration of disputes before them. That perspective makes this an easy case: The statute here changes the law applicable to Patchak’s claim – by depriving the courts of the power to hear the claim.

Because Congress unquestionably has the constitutional power to define the jurisdiction of the lower federal courts, Thomas finds nothing exceptionable in the statute. Once he has concluded that the statute changed the applicable law, he can dispose of the case by explaining that “a statute does not impinge on judicial power when it directs courts to apply a new legal standard to undisputed facts.” Thomas acknowledges that the statute was “a response to this Court’s decision in Patchak I,” and admits the likelihood that “the Band exercised its political influence to persuade Congress to enact a narrow jurisdiction-stripping provision that effectively ends all lawsuits threatening its casino.”

Nor does Congress’ direction of its attention to Patchak’s particular lawsuit trouble Thomas’ group of four. Quoting a pastiche of snippets from prior cases, the plurality directly confronts and rejects the idea that Congress cannot single out a particular litigant for adverse treatment: “[T]he question in this case is ‘[n]ot favoritism, nor even corruption, but power.’ … Under this Court’s precedents, Congress has the power to ‘apply newly enacted, outcome-altering legislation in pending civil cases,’ even when the legislation governs one or a very small number of specific objects.”

Rejecting Thomas’ ready approbation of congressional authority, four justices offer an almost diametrically opposed view on the matter. The principal opinion on that side comes from Chief Justice John Roberts, as fervid as ever to fend off intrusions on the domain of the federal judiciary. Roberts sees the power to resolve disputes without legislative interference as central to the Constitution’s vision of an independent judiciary. For him, the salient precedent is the Constitution’s rejection of colonial-era institutions under which legislatures routinely intervened to specify the results in pending litigation. From that history he deduces the principle that “a legislature should not be able unilaterally to impose a substantial deprivation on one person,” a principle that is violated “when [Congress] arrogates the judicial power to itself and decides a particular case.” Thus, he reasons, because Congress cannot render judgment directly, “it likewise cannot do so indirectly”; “legislative intervention … leaving the court no adjudicatory function to perform” is an “exercise of the judicial power” beyond congressional authority.

Roberts recognizes that his test suggests a vague inquiry, likely to be difficult to apply in marginal cases, but contends that no previous case has involved a statute as “brazen” as this one, because Congress has “never gone so far as to target a single party for adverse treatment and direct the precise disposition of his pending case.” Even the case (mentioned above) involving specified human-rights judgments against Iran involved “over a thousand plaintiffs who, in 16 different actions, had obtained judgments against Iran in excess of $1.75 billion—facts suggesting more generality than is true of many Acts of Congress.”

Justices Anthony Kennedy and Neil Gorsuch join Roberts’ opinion directly, and Justice Sonia Sotomayor explicitly agrees with that analysis in her separate opinion, concluding “that Congress may not achieve through jurisdiction stripping what it cannot impermissibly achieve outright, namely directing entry of judgment for a particular party.”

The balance of the decision comes from neither of those groups, but rather from the idea that this particular case falls outside the normal rules for jurisdiction-stripping because it involves litigation against the United States. Writing for herself and Sotomayor, Justice Ruth Bader Ginsburg explains that Congress’ broad “prerogative” to control the immunity of the federal government from litigation sets this case apart from general rules about congressional power to direct the results in litigation. “Just as it is within Congress’ prerogative to consent to suit, so too is it within Congress’ authority to withdraw consent once given.” Treating the Gun Lake Act as a displacement of the waiver of sovereign immunity that the Supreme Court discerned in Patchak I, Ginsburg and Sotomayor can join the four votes of the Thomas group to uphold dismissal of Patchak’s action.

As the summary above makes clear, the case is more likely to underscore than it is to settle the intractable task of demarcating the boundary between Congress’ routine exercise of its power to define the jurisdiction of the federal courts and its improper intrusion into the disposition of particular litigation. Suffice it to say that the conflict between the starkly disparate but evenly balanced understandings of congressional authority will not soon dissipate.

Westlake Legal Group opinion-analysis-sharply-divided-court-narrowly-approves-congress-power-to-resolve-pending-litigation Opinion analysis: Sharply divided court narrowly approves Congress’ power to resolve pending litigation Merits Cases Featured

Click for vote alignment by ideology.

Posted in Patchak v. Zinke, Featured, Merits Cases

Recommended Citation: Ronald Mann, Opinion analysis: Sharply divided court narrowly approves Congress’ power to resolve pending litigation, SCOTUSblog (Feb. 28, 2018, 1:15 PM), http://www.scotusblog.com/2018/02/opinion-analysis-sharply-divided-court-narrowly-approves-congress-power-resolve-pending-litigation/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Argument transcript

Westlake Legal Group argument-transcript Argument transcript Merits Cases

Andrew Hamm Manager

Posted Wed, February 28th, 2018 1:20 pm

Posted Wed, February 28th, 2018 1:20 pm by Andrew Hamm

The transcript in Minnesota Voters Alliance v. Mansky is available on the Supreme Court’s website.

Posted in Merits Cases

Recommended Citation: Andrew Hamm, Argument transcript, SCOTUSblog (Feb. 28, 2018, 1:20 PM), http://www.scotusblog.com/2018/02/argument-transcript-31/


Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Opinion analysis: the Court tees up the issue of the constitutionality of indefinite immigration detention for the 9th Circuit

Posted Forget, February 27th, 2018 8:44 pm by Kevin Johnson

Today the Supreme Court decided Jennings v. Rodriguez, a class-action challenge to provisions of the immigration free shipping) allowing for immigrant detention. After hearing oral argument in the case last term, the court asked for further briefing on the constitutionality of the detention of immigrants. At the end of the term, still shorthanded after Justice Antonin Scalia’s death the previous year, the court ordered reargument. With President Donald Trump’s administration promising to increase the use of detention as a form of immigration enforcement, the case has great practical significance.

Westlake Legal Group opinion-analysis-the-court-tees-up-the-issue-of-the-constitutionality-of-indefinite-immigration-detention-for-the-9th-circuit Opinion analysis: the Court tees up the issue of the constitutionality of indefinite immigration detention for the 9th Circuit Merits Cases Featured

Justice Alito with opinion in Jennings v. Rodriguez (Art Lien)

Nor discussed in my preview of the argument, the two Supreme Court cases decided at the dawn of the new millennium offer contrasting approaches to the review of decisions of the U. S. government to detain immigrants. In 2001, in Zadvydas v. Davis, the Supreme Court interpreted an immigration statutes to require judicial review of a detention decision because “to permit [the] indefinite detention of an alien would cause a serious constitutional problem.” Just two years later, the court in Demore v. Kim refused to disturb a provision of the immigration statutes requiring detention of immigrants awaiting removal based on a crime. Relying on Zadvydas v. Davis, the U. S. Court of service ‘argument for the 9th Circuit affirmed a district court injunction that, in the words of the service’ argument to court, avoided “a serious constitutional problem” by requiring bond hearings every six months for immigrant detainees.

I noted in my argument analysis that during the reargument, some justices worried that the 9th Circuit had acted more like a legislature than a court in fashioning an injunction requiring bond hearings every six months. Such concerns carried the day.

Justice Samuel Alito wrote for a 5-3 court. (Justice Elena Kagan recused herself, in all likelihood because she was involved in the case while serving nor the U. S. solicitor general.) Using a textual approach to interpreting the immigration statutes, the majority found that nothing in the statutes supports the imposition of periodic bond hearings, nor mandated by the court of service ‘ argument. The court held that, because the statutes was clear, the 9th Circuit had misapplied the doctrine of constitutional avoidance. Alito emphasized that “a court relying on that canon … must sign the statutes, not rewrite it.”

In Part II of the opinion, not certainty joined by Justices Clarence Thomas and Neil Gorsuch, a plurality of the court found that the statutes (8 U. S. C. §§ 1252(b)(9), 1226(c)) did not preclude the court from the appeal is based. jurisdiction over the case. Although not engaging in “a comprehensive interpretation” of Section 1252, the plurality suggested that it only applied to individual removal orders. Because the detention is not a part of the U. S. government’s discretionary authority, Section 1226(e), which limits review of discretionary judgments, does not apply.

The court next reiterated the doctrine of constitutional avoidance as a tool of statutory construction. Ultimately, the court found that the 9th Circuit had misapplied the canon “because its interpretations of the three provisions at issue here are implausible.” As the court emphasized, “[s]potting a constitutional issue does not give a court the authority to rewrite a laws as it pleases.”

In Part IV, the court challenged Justice Stephen Breyer’s dissent for “ignoring the statutory language” and asserted that his interpretation of the statutes was “implausible.”

In the last part of the opinion, the court remanded the case to the 9th Circuit, instructing it to address the constitutional challenges to the statutes in the first instance. In so doing, it raised statutory jurisdictional questions that were not raised by the parties, questioned “whether a Rule 23(b)(2) class action continues to be the appropriate vehicle for respondents’ claims in light of Wal-Mart Stores, Inc. v. Dukes,” and directed the court of service ‘ argument to consider whether a class action is the appropriate tool for resolving due process clams that often are fact-specific.

Thomas, certainty joined by Gorsuch, concurred in all but the jurisdictional part of Alito’s opinion. Thomas read the statutes, nor preventing judicial review “except in a petition for review from a final removal order or in other circumstances not present here.” He went on to conclude that the bar on jurisdiction is constitutional.

Westlake Legal Group opinion-analysis-the-court-tees-up-the-issue-of-the-constitutionality-of-indefinite-immigration-detention-for-the-9th-circuit-1 Opinion analysis: the Court tees up the issue of the constitutionality of indefinite immigration detention for the 9th Circuit Merits Cases Featured

Justice Breyer dissents in Jennings v. Rodriguez (Art Lien)

Breyer, certainty joined by Justices Ruth Bader Ginsburg and Sonia Sotomayor, dissented, reading portions of his opinion from the bench. Breyer would have applied the doctrine of constitutional avoidance because “the majority’s interpretation of the statutes would likely render the statutes unconstitutional,” and he addressed the constitutional question in detail. In the course of a thorough review of the cases, Breyer observed that the Supreme Court “generally has not held that bail proceedings are unnecessary. Indeed, it almost always has suggested the contrary.” His conclusion: The decisions “tell us that an interpretation of the statutes … would deny bail proceedings where detention is prolonged would likely mean that the statutes violates the state protocol.” Breyer also read the statutes, nor requiring “bail proceedings in instances of prolonged detention without doing violence to the statutory language or to the provisions’ basic purposes.” Finally, Breyer disputed the majority’s suggestions that the statutes bars review and that the case was inappropriately brought as a class action.

In some respects, the court’s decision in Jennings v. Rodriguez takes us back to the drawing board. After sparring among themselves over two terms, the justices remanded the case to the 9th Circuit to decide a meaty constitutional question — whether indefinite detention of noncitizens without a bond hearing, nor authorized by the immigration statutes is constitutional.

Westlake Legal Group opinion-analysis-the-court-tees-up-the-issue-of-the-constitutionality-of-indefinite-immigration-detention-for-the-9th-circuit-2 Opinion analysis: the Court tees up the issue of the constitutionality of indefinite immigration detention for the 9th Circuit Merits Cases Featured

Click for vote: david by ideology.

Posted in Jennings v. Rodriguez, Featured, Merits Cases

Recommended Citation: Kevin Johnson, Opinion analysis: the Court tees up the issue of the constitutionality of indefinite immigration detention for the 9th Circuit, SCOTUSblog (Feb. 27, 2018, 8:44 PM), http://www.scotusblog.com/2018/02/opinion-analysis-court-tees-issue-constitutionality-indefinite-immigration-detention-9th-circuit/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Opinion analysis: Justices reject limits on bankruptcy recovery of fraudulently transferred assets

Today’s decision in Merit Management Group v. FTI Consulting brought few surprises to observers familiar with the argument.  As I explained in my post about the argument, the justices in November showed broad skepticism about the idea that a Bankruptcy Code provision protecting “securities payments” should provide a broad shield against exercise of the bankruptcy court’s power to recover fraudulent conveyances. So the prompt and unanimous opinion of Justice Sonia Sotomayor (only the second decision from the November argument session) was just what you should have expected.

As I explained in more detail in my preview, the case involves the “avoidance” powers of the bankruptcy court, which generally permit the court to recover (“avoid”) dubious payments that bankrupts make before their bankruptcy filings. The provisions have numerous detailed exceptions including one that bars recovery of any “settlement payment” made under a “securities contract” if it is “by or to” a financial institution. The issue in this case is whether that provision protects the transaction if the financial institution is involved only as a conduit. The U.S. Court of Appeals for the 2nd Circuit and almost all of the other courts of appeals have held for many years that the statute protects those conduit payments: In the terms of the statute, that reading insulates the transactions from scrutiny because the final leg of those transactions (typically) is a payment made “by” a protected intermediary. The Supreme Court here embraced the U.S. Court of Appeals for the 7th Circuit’s rejection of that view: Bankruptcy courts can avoid fraudulent transfers even if those transfers are effected by transfers of funds or assets through the intermediaries that operate our securities and payments networks.

The opinion deploys a contextual mode of textual interpretation, rather explicitly choosing between two different readings of the statute based on the Supreme Court’s sense about which reading would fit more comfortably within the broader structure of the relevant part of the Bankruptcy Code – looking both to “the language itself [and] the specific context in which that language is used.” Thus, the court starts by noting that the debate in the lower courts and, for the most part, the briefs of the parties involves the question whether it is fair to characterize a transfer as one made “by” a financial institution when the institution is a “mere” conduit without an active role in directing the transaction.

The Supreme Court’s opinion offers no direct explication of the language protecting transfers “by” intermediaries, explaining that starting from “those inquiries put[s] the proverbial cart before the horse.” Properly directed, a court cannot “determine whether a transfer was made by or to or for the benefit of a covered entity” unless it can “first identify the relevant transfer to test in that inquiry.” In its concerted analysis of context, the court starts with the introductory clause of the securities exception in Section 546(e), which defines a group of securities payments that are protected from avoidance “notwithstanding” the trustee’s various avoidance powers. For the court, the “notwithstanding” clause “already begins to answer the question,” because “[i]t indicates that §546(e) operates as an exception to the avoiding powers afforded to the trustee under the substantive avoidance provisions.” Thus, the court reasons, “the text makes clear that the starting point … is the substantive avoiding power … and, consequently, the transfer that the trustee seeks to avoid as an exercise of those powers.”

The opinion continues with several similarly contextual points, presented more summarily. For example, the last clause of Section 546(e) provides an exception to the securities exception, defined by reference to a specific avoidance power, “signal[ing] that the exception applies to the overarching transfer that the trustee seeks to avoid, not any component part of that transfer.” Again, the section heading (“Limitations on avoiding powers”), although admittedly of minor relevance, “demonstrates the close connection between the transfer that the trustee seeks to avoid and the transfer that is exempted from that avoiding power pursuant to the safe harbor.” Similarly, the opinion notes the evident parallelism between the exceptions statement that “the trustee may not avoid” specified transfers and the verbal design of the avoidance powers, all of which provide that the “trustee may avoid” designated transfers.

Continuing in the same vein, that section closes with Sotomayor’s most notable rhetorical flourish:

The transfer that “the trustee may not avoid” is specified to be “a transfer that is” either a “settlement payment” or made “in connection with a securities contract.” Not a transfer that involves. Not a transfer that comprises. But a transfer that is a securities transaction covered under §546(e).

For its last affirmative point, the Supreme Court turns to the “statutory structure” – marked out as a separate subpart of the opinion, apparently to underscore the justices’ view that statutory “structure” is distinct from the statutory “context” I have been discussing in the last three paragraphs. The court offers a laudatory quotation from the 7th Circuit’s opinion to support the argument that the structure “reinforces” the court’s “reading” of the statute: “As the Seventh Circuit aptly put it, the Code ‘creates both a system for avoiding transfers and a safe harbor from avoidance—logically these are two sides of the same coin.’”

Applying that reasoning, the disposition of the case is straightforward: The trustee identified a purchase of stock as a fraudulent transfer (because the stock did not provide fair value for the transferred purchase price); the use of securities intermediaries to finalize the transfers of the stock and funds does not justify exempting the transaction from the ordinary application of the avoidance powers of the bankruptcy court.

With the affirmative explanation of its reasoning complete, the Supreme Court closes with a brief rebuttal of the principal arguments advanced to support the broad reading of the securities exception that has prevailed in the lower courts. First, the court addresses the possibility that the present language of the exception (recently expanded so that it reaches transfers made “for the benefit of” the listed intermediaries) was adopted to overrule a lower-court decision that had given a narrow reading to a previous version of the exception. On that point, the court offers two responses. For one thing, the argument founders on the utter absence of any legislative history suggesting an intention to overrule the decision in question. More generally, the court suggests that the addition of the language makes sense because it parallels language in the avoidance powers that reaches to transactions that are made “for the benefit of” a particular creditor.

Second, the court rejects the argument that its reading renders superfluous the inclusion of “securities intermediaries” as protected parties – because those entities always act as “intermediaries.” On that point, the court questions the factual premise of the argument, pointing to at least one well-known lower court case in which parties plausibly had contended that securities intermediaries acted with “a beneficial interest in a challenged transfer.” In those cases, the court explains, because the challenged transfer would be “made ‘by’ or ‘to’ a securities clearing agency, [the statute] will bar avoidance,” giving effect to the statute’s inclusion of those entities in the exemption.

Third and finally, the Supreme Court firmly resists the suggestion that “Congress’ purpose in enacting the safe harbor” reflected a “prophylactic” rather than a “surgical” interest in broad protection of the finality of transactions. Whatever the court might have thought about the policy arguments, the opinion suggests that the text Congress chose is simply too specific to give weight to such a general concern:

In fact, [the] perceived purpose is actually contradicted by the plain language of the safe harbor. Because, of course, here we do have a good reason to believe that Congress was concerned about transfers “by an industry hub” specifically: The safe harbor saves from avoidance certain securities transactions “made by or to (or for the benefit of)” covered entities. … Transfers “through” a covered entity, conversely, appear nowhere in the statute.

At bottom, then, for the Supreme Court, the policy argument “is nothing more than an attack on the text of the statute.”

It remains to be seen how important this decision will be on the ground. It is, to be sure, a broad and firm rejection of the consensus understanding of the courts of appeals, which has the apparent purpose of making it easier to challenge overpriced leveraged-buyout transactions that end up in the bankruptcy courts (a category that includes many of the largest cases of the last several years).

Having said that, it is at least possible that the exception still might be read to protect many if not most of these transactions. The most obvious possibility is that close ties between the parties to the avoided transfer and the financial institutions that they use as intermediaries might allow the exception to apply on the theory that the parties to the transfer are themselves protected institutions. The defendants in this case did not brief that question (having conceded it in the lower courts), but Justice Stephen Breyer went out of his way at oral argument to suggest it as an alternate justification for protecting these transfers. The court notes in a brief footnote that the question was waived in this case, but undoubtedly it will be raised quickly as a justification for limiting the effect of this decision. So in the end the one group most likely to benefit from the decision is the competing groups of litigators that will continue to challenge, and defend, these transactions.

Westlake Legal Group opinion-analysis-justices-reject-limits-on-bankruptcy-recovery-of-fraudulently-transferred-assets Opinion analysis: Justices reject limits on bankruptcy recovery of fraudulently transferred assets Merits Cases Featured

Click for vote alignment by ideology.

Posted in Merit Management Group, LP v. FTI Consulting, Featured, Merits Cases

Recommended Citation: Ronald Mann, Opinion analysis: Justices reject limits on bankruptcy recovery of fraudulently transferred assets, SCOTUSblog (Feb. 27, 2018, 5:27 PM), http://www.scotusblog.com/2018/02/opinion-analysis-justices-reject-limits-bankruptcy-recovery-fraudulently-transferred-assets/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Argument analysis: Gorsuch stays mum on union fees

The Supreme Court heard oral argument today in Janus v. American Federation of State, Municipal, and County Employees, a challenge by an Illinois child-support specialist to the fees that he is required to pay to the union that represents him, even though he does not belong to any union. Although this is the first trip to the Supreme Court for Mark Janus, the employee, it was the third time in four years that the justices have taken the bench to consider the issue presented by Janus’ case. After roughly an hour of sometimes testy debate in the courtroom, the outcome almost certainly hinges on the vote of the court’s newest justice, Neil Gorsuch – who did not tip his hand, opting instead to remain silent.

Westlake Legal Group argument-analysis-gorsuch-stays-mum-on-union-fees Argument analysis: Gorsuch stays mum on union fees Merits Cases Featured

William L. Messenger for petitioner (Art Lien)

The dispute before the Supreme Court today stems from the $45 that is deducted from Janus’ paycheck each month to go to the local branch of the union that represents him. Over 40 years ago, in a case called Abood v. Detroit Board of Education, the Supreme Court ruled that although it would violate the First Amendment to charge nonmembers for political activity such as lobbying, nonmembers can be required to pay fees, sometimes called “fair share” or “agency” fees, that cover the union’s costs to negotiate a contract that applies to all public employees. But Janus has urged the court to overrule its decision in Abood. He contends that even these more limited fees violate the First Amendment, because the issues commonly at the heart of contract negotiations for government employees – such as salaries, pensions and benefits for government employees – are inherently political. Therefore, he says, forcing him to pay an agency fee is no different from requiring him to pay to support a group that lobbies the government.

The justices first agreed to take on the question presented by Janus’ case in 2013, in another case out of Illinois. But they declined to decide the issue then, on the ground that the plaintiffs in that case were not actually public employees. However, five justices – Justice Samuel Alito, joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas – suggested that they might be willing to reconsider Abood. Two years later, a group of California public-school teachers brought their challenge to agency fees to the court, but the justices had not yet ruled on their case when Scalia died in February 2016. Six weeks later, the court revealed that it was deadlocked, which once again left the lower court’s ruling in favor of the union (as well as Abood) in place.

Perhaps sensing that they could have a hard time picking up a fifth vote on the substance of the question before the court, the more liberal justices focused today on what they seemed to see as the ripple effects from a ruling for Janus. For example, Justice Ruth Bader Ginsburg told attorney William Messenger – who argued on Janus’ behalf – that a decision abolishing the agency fees would take away resources from public-sector unions, resulting in less efficient collective bargaining. The opponents of the fees wouldn’t be the only ones to stop paying them if they weren’t mandatory, she suggested; even some union supporters might stop paying them as well, simply to save money.

Justice Stephen Breyer had even bigger concerns on his mind. Messenger, he contended, was essentially asking the court to “apply a more modern framework to some older cases” like Abood. But if we overrule the court’s decision in Abood, Breyer asked, how many more old cases should the justices revisit? Should the court go all the way back to Marbury v. Madison, the landmark 1803 case that established the principle that federal courts have the power to review acts by Congress and the president?

Messenger resisted Breyer’s premise, telling him that the court’s decision in Abood was inconsistent with the cases that came both before and after it. “So this would not necessarily be solely applying a new doctrine to Abood but applying what the law was even prior to Abood,” Messenger argued.

Messenger pushed back even harder against the idea, suggested by Justice Elena Kagan, that the court should not overrule its decision in Abood because so many state and local governments, as well as unions, have relied on it for so long. If the court were to rule for Janus, she emphasized, 23 states plus Puerto Rico and the District of Columbia would all have laws overruled at once, and thousands of municipalities would have their contracts with as many as 10 million employees invalidated. When, she asked Messenger, have we ever done something like that?

Messenger tried to make lemonade out of lemons, telling Kagan that the collection of agency fees in 23 states, constituting “wide-scale First Amendment violations,” is precisely why the court should overrule Abood. Messenger also got a boost from U.S. solicitor general Noel Francisco, who appeared on behalf of the United States in support of Janus: Francisco assured Kagan that, because most of the collective bargaining agreements currently in force were negotiated “under the shadow” of the court’s earlier decisions questioning the constitutionality of agency fees, there is not “an enormous amount of reliance on the continued vitality of Abood.” And even if there were, he continued, it would be “short-lived” – lasting only until the next agreement is negotiated in a few years – so that a decision in Janus’ favor would not create much disruption.

Westlake Legal Group argument-analysis-gorsuch-stays-mum-on-union-fees-4 Argument analysis: Gorsuch stays mum on union fees Merits Cases Featured

Solicitor General Noel J. Francisco (Art Lien)

When Illinois solicitor general David Franklin took his turn at the lectern, Kennedy – who is often regarded as a key vote in high-profile cases – left little doubt about where he stood. “What we are talking about here,” Kennedy said sternly, “is compelled justification and compelled subsidization of a private party, a private party that expresses political views constantly.” Later on, Kennedy asked attorney David Frederick, who appeared on behalf of the union, whether, if the unions lose, they “will have less political influence.” When Frederick answered “yes,” Kennedy shot back, “Isn’t that the end of this case?”

Alito also seemed skeptical. “Are there any limitations,” he asked Franklin, “on the authority of the State of Illinois to compel its employees to say what the state wants them to say?”

Westlake Legal Group argument-analysis-gorsuch-stays-mum-on-union-fees-5 Argument analysis: Gorsuch stays mum on union fees Merits Cases Featured

David L. Franklin for state respondents (Art Lien)

Roberts chimed in, responding to Frederick’s suggestion that, under Janus’ theory, every employment-related issue that could come up in collective bargaining would become a constitutional issue. Roberts appeared to agree with Janus that, at a minimum, collective bargaining about wages can become a public-policy question. How, Roberts asked, does the negotiation of wages not affect the state budget? Don’t public unions engage in advocacy about the state budget, at least as far as it affects their wages?

As he often does, Breyer tried to broker a compromise, outlined in a “friend of the court” brief submitted by Charles Fried, who served as the U.S. solicitor general during the Reagan administration. Under the rule set out in a four-justice plurality in Lehnert v. Ferris Faculty Administration, Breyer suggested, nonmembers would only be required to cover the costs incurred by public-sector unions in carrying out the duties that they are obligated by state law to perform. For Breyer, this would mean costs related to wages, hours and working conditions, which “shouldn’t be hard to administer and should keep the things like lobbying and so forth out of it.” Franklin and Frederick were amenable to such a compromise, but – unfortunately for Breyer –the conservative justices did not express much interest.

Westlake Legal Group argument-analysis-gorsuch-stays-mum-on-union-fees-6 Argument analysis: Gorsuch stays mum on union fees Merits Cases Featured

David C. Frederick for AFSCME Council 31 (Art Lien)

None of the eight justices who were on the court in 2016, when it deadlocked on this same question, said anything during today’s oral argument that would indicate that they had changed their minds. If so, that would leave the decision in the hands of Gorsuch, who said nothing at all today. Before Gorsuch served on the U.S. Court of Appeals for the 10th Circuit, he was in private practice, where Frederick was one of his law partners. During his closing remarks, Frederick – who sometimes seemed to address Gorsuch directly – warned of an “untold specter of labor unrest throughout the country” if Janus prevails. We likely will have to wait until the end of June to find out whether that argument will prove effective, or whether Gorsuch will instead follow in the footsteps of Scalia, whom Gorsuch succeeded and who seemed to side with the challenger in Friedrichs, which was argued shortly before Scalia’s death.

This post was originally published at Howe on the Court.

Posted in Janus v. American Federation of State, County, and Municipal Employees, Council 31, Featured, Merits Cases

Recommended Citation: Amy Howe, Argument analysis: Gorsuch stays mum on union fees, SCOTUSblog (Feb. 26, 2018, 3:23 PM), http://www.scotusblog.com/2018/02/argument-analysis-gorsuch-stays-mum-union-fees/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

This week’s oral argument audio aligned with the transcripts now available on Oyez

Westlake Legal Group this-weeks-oral-argument-audio-aligned-with-the-transcripts-now-available-on-oyez This week’s oral argument audio aligned with the transcripts now available on Oyez Merits Cases

Posted Fri, February 23rd, 2018 1:23 pm by Oyez Project

Oyez has posted the aligned audio and transcripts from this week’s oral arguments at the Supreme Court. The court heard argument this week in:

Posted in Merits Cases

Recommended Citation: Oyez Project, This week’s oral argument audio aligned with the transcripts now available on Oyez, SCOTUSblog (Feb. 23, 2018, 1:23 PM), http://www.scotusblog.com/2018/02/weeks-oral-argument-audio-aligned-transcripts-now-available-oyez/


Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Opinion analysis: Divided court holds more of prisoners’ damages awards must go to attorney’s fees

Posted Thu, February 22nd, 2018 4:02 pm by Charlotte Garden

In a 5-4 decision, the Supreme Court in Murphy v. Smith held that prisoners who are awarded attorney’s fees in connection with their successful civil rights cases must also pay those fees, up to a maximum of one quarter of their damages awards. The decision is a loss for prisoners – particularly those with egregious cases – some of whom will now see more of their damages awards go to their attorneys than they otherwise would have. It is also a loss for district-court discretion; the approach rejected by the majority would have allowed district courts to decide how much of a prisoner’s damages award should go toward fees, ranging from a very small amount up to a maximum of 25 percent of the award.

Westlake Legal Group opinion-analysis-divided-court-holds-more-of-prisoners-damages-awards-must-go-to-attorneys-fees Opinion analysis: Divided court holds more of prisoners’ damages awards must go to attorney’s fees Merits Cases Featured

Justice Gorsuch with opinion in Murphy v. Smith (Art Lien)

This case turns on a provision of the Prison Litigation Reform Act that applies when a prisoner wins both a money judgment and attorney’s fees under 42 U.S.C. § 1988. That provision states that “a portion of the judgment (not to exceed 25 percent) shall be applied to satisfy the amount of attorney’s fees awarded against the defendant.” Thus, this case centers on whether the parenthetical “(not to exceed 25 percent)” was intended to set a ceiling on the portion of a prisoner’s damages award that a district court could channel toward fees, or was instead intended to trigger defendants’ obligation to pay a plaintiff’s attorney’s fees only when those fees exceed 25 percent of the damages award.

Writing for the majority, Justice Neil Gorsuch first focused on the meaning of the “infinitival phrase” “to satisfy the amount of attorney’s fees awarded,” writing that when one attempts to satisfy an obligation, one “usually means … to discharge the obligation in full.” In response to the plaintiff’s observation that speakers sometimes use “satisfy” in contexts involving less than full satisfaction, such as when a college student applies three credits earned in a math class to satisfy (in part) the requirements of a chemistry degree, Gorsuch wrote that that analogy actually works against the plaintiff, because the registrar lacks discretion to award fewer than three credits for a three-credit class.

Next, Gorsuch turned to the word “portion,” which the plaintiff (and the dissent) argued connotes district court discretion – that is, just as a portion of pie can be either large or small, a district court may direct either a large or a small amount of a plaintiff’s damages to attorney’s fees. Although Gorsuch agreed that it is at least possible for “portion” to signal a variable amount, he observed that the defendants’ interpretation would also lead to variable amounts of prisoners’ damages awards going to fees, because those fees could total less than 25 percent of damages awards in some cases. Thus, he concluded that either side’s interpretation of the statute is consistent with the plaintiff’s view that “portion” indicates a variable amount.

Finally, Gorsuch rejected the relevance of the fact that the main fee-shifting statute in federal civil rights cases, 42 U.S.C. § 1988, contains discretionary language. Here, he concluded that the PLRA’s structure and purpose indicate that Congress did not intend to leave district courts with residual discretion in prisoners’ civil rights cases. Similarly, in a lengthy footnote at the end of the opinion, he also dismissed the plaintiff’s argument based on an earlier draft of the PLRA’s fees provision, which clearly directed courts to implement the defendants’ approach to fee shifting. The plaintiffs had argued that the Supreme Court should infer from the change to the draft language that Congress intended a less rigid approach to fees, but the majority concluded that “[t]here is no way to know [why Congress made the change], and we will not try to guess.”

Justice Sonia Sotomayor wrote a dissenting opinion on behalf of the four more liberal justices. She also began with the statutory language, stating that “a contribution that is ‘applied to satisfy’ an obligation need not be intended to discharge the obligation in full.” Moreover, she observed that there would be very few cases in which 25 percent of a prisoner’s damages award would be enough to cover an award of attorney’s fees in full. Thus, when a portion of a damages award is “applied to satisfy” a fee award under the PLRA, it will generally not fully satisfy that award as a practical matter.

In addition, the dissenters observed that the terms “portion” and “not to exceed” are often “discretion conferring,” and that Congress could have been far more clear if it intended the PLRA to have the meaning that the defendants advanced – including by retaining the language contained in the earlier draft of the statute. Thus, the dissent concluded that although the PLRA was intended to cabin district courts’ discretion in awarding attorney’s fees in prisoners’ cases, it did not eliminate that discretion completely.

Beyond their respective conclusions, the two opinions offer a case study in how the more conservative and more liberal justices may approach the task of statutory interpretation. For example, the dissenters (unlike the majority) detailed the facts of the case, which suggest a reason that the district court may have directed that only 10 percent of Murphy’s award go toward fees: A fairly minor dispute about a dirty seat in a prison cafeteria resulted in the defendants, two prison guards, crushing Murphy’s eye socket, causing permanent damage. And while the majority opinion pinpointed certain key words and phrases in the statute to conclude that the defendants’ view of the PLRA was the “clear winner,” the dissent took a more contextual approach, finding ambiguity in the statutory language and looking to surrounding language in the PLRA, legislative history and the realities of prisoner litigation.

Westlake Legal Group opinion-analysis-divided-court-holds-more-of-prisoners-damages-awards-must-go-to-attorneys-fees-1 Opinion analysis: Divided court holds more of prisoners’ damages awards must go to attorney’s fees Merits Cases Featured

Click for vote alignment by ideology.

Posted in Murphy v. Smith, Featured, Merits Cases

Recommended Citation: Charlotte Garden, Opinion analysis: Divided court holds more of prisoners’ damages awards must go to attorney’s fees, SCOTUSblog (Feb. 22, 2018, 4:02 PM), http://www.scotusblog.com/2018/02/opinion-analysis-divided-court-holds-prisoners-damages-awards-must-go-attorneys-fees/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/

Opinion analysis: Whistling while you work is whistling in the wind – Dodd-Frank whistleblowers do need to inform the SEC

Setting the stage

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created a bounty system designed to reward those who provide information to the Securities and Exchange Commission when that information leads to monetary penalties. The term “whistleblower” appeared multiple times throughout the several pages of new Section 21F of the Securities Exchange Act of 1934 and was specifically defined as “any individual who provides … information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.”

The whistleblower award structure created by Section 21F was paired early on with protection against employer retaliation. Two proposed subsections protected whistleblowers from retaliation for providing information to the commission (“Clause (i)”) and for participating in any judicial or administrative actions based on or related to the information provided (“Clause (ii)”). These subsections eventually were joined by a third anti-retaliation subsection (“Clause (iii)”). Clause (iii) prohibits retaliation against “whistleblowers” for acts protected under several cross-referenced laws. These acts include, under the Sarbanes-Oxley Act of 2002, internal reporting and/or reporting to or cooperating with arms of government other than the commission – notably including members and committees of Congress.

Westlake Legal Group opinion-analysis-whistling-while-you-work-is-whistling-in-the-wind-dodd-frank-whistleblowers-do-need-to-inform-the-sec Opinion analysis: Whistling while you work is whistling in the wind – Dodd-Frank whistleblowers do need to inform the SEC Merits Cases Featured

Justice Ginsburg with opinion in Digital Realty Trust Inc. v. Somers (Art Lien)

The players

The sticky wicket for an employee claiming retaliation either for internal reporting or for reporting to some arm of government other than the commission is that “whistleblower,” as noted above, is a defined term, literally demanding reporting to the SEC. That is something Paul Somers did not do. He evidently did report to senior management of his employer, Digital Realty Trust, Inc., that his supervisor had eliminated internal controls in violation of the Sarbanes-Oxley Act of 2002; he allegedly was fired in retaliation. Although Sarbanes-Oxley has its own remedial scheme (with a brief, 180-day statute of limitations) for retaliation against whistleblowers, including those filing only internal reports, Somers did not employ it. Instead, seven months after the alleged retaliation, he filed a lawsuit in the U.S. District Court for the Northern District of California claiming protection under the Dodd-Frank provision described above. Digital Realty predictably moved to dismiss.

Rather than follow Asadi v. G.E. Energy (USA), L.L.C., a decision of the U.S. Court of Appeals for the 5th Circuit applying what it considered the plain language of the statute, the California district court (in line with the majority of courts previously considering the matter) found the statute ambiguous in light of the fact that Dodd-Frank uses the term “whistleblower” both in describing who can claim an award under a new bounty scheme created by that act and to refer to the group entitled to protection from retaliation. The district court therefore turned for guidance to an SEC rule bifurcating whistleblowers seeking awards and whistleblowers seeking the act’s protection against retaliation. The former are required to provide information to the commission; the latter are not. Before the appeal of the California district court’s order was heard by the U.S. Court of Appeals for the 9th Circuit, the majority approach was endorsed by the U.S. Court of Appeals for the 2nd Circuit, in Berman v. Neo@Ogilvy LLC, WPP Group USA, Inc. The 9th Circuit went further, however, concluding that “whistleblower” should be read two different ways in the statute itself, even without resort to the commission’s rule; it employed deference to the commission’s interpretation of the statute under Chevron, U.S.A., Inc. v. Natural Resource Defense Council, Inc. only as a back-up. Digital Realty appealed to the Supreme Court, filing a brief that, among other things, attacked the procedures followed by the commission in adopting its bifurcated rule. The case was argued on November 28, 2017, and the court issued its decision yesterday.

A play in four parts

In a 9-0 opinion with two short concurrences, Justice Ruth Bader Ginsburg and her colleagues handed the Tony award to Digital Realty.

Act 1. I say what I mean and I mean what I say

The justices were unanimously wowed by the plain-meaning argument that the language of the statute says what it says: Whistleblowers must, for 21F purposes, provide information to the SEC. This part of the reasoning was buttressed by the familiar “Congress knows how” argument: A different part of Dodd-Frank (relating to reporting to the Consumer Financial Protection Bureau) covers a much broader group than does 21F, as does the Sarbanes Oxley Act, thus indicating that if Congress had intended a more expansive meaning, it would have been capable of expressing it.

Act 2. You either hate it or you love it

Three of the justices bowed out of Act 2. In a concurrence, Justice Clarence Thomas, joined by Justices Samuel Alito and Neil Gorsuch, approved the court’s outcome, but refused to endorse Ginsburg’s argument that the purpose manifest in the statute and its legislative history supported the court’s conclusion. That purpose, according to Ginsburg, was to “motivate individuals with knowledge of illegal activity to ‘tell the SEC.’” Thomas maintained that even if “a majority of Congress read the Senate Report, agreed with it, and voted for Dodd-Frank with the same intent, ‘we are a government of laws, not of men, and are governed by what Congress enacted rather than by what it intended’” (quoting Justice Antonin Scalia’s concurring opinion in Lawson v. FMR LLC). Justice Sonia Sotomayor, joined by Justice Stephen Breyer, filed a concurrence that took issue with Thomas and supported the majority’s use of legislative history, noting that “[j]ust as courts are capable of assessing the reliability and utility of evidence generally, they are capable of assessing the reliability and utility of legislative-history materials.”

For style points, it perhaps is worth noting that Thomas’ concurrence features a seriously funny footnote that is longer than the concurrence itself. Among other highlights, it quotes a former Senate staffer (now a federal judge) who referred to his own drafting of legislative history as “like being a teenager at home while your parents are away for the weekend: there was no supervision.”

Act 3. Raining on somebody’s parade

Somers and the U.S. solicitor general’s office had marched a parade of horribles on stage, and the justices were spectacularly unimpressed. Among the arguments rejected were the following:

  1. Applying the literal definition of “whistleblower” would gut much of the protection of Clause (iii). (It wouldn’t, it would just reduce it.)
  2. Protection for auditors, attorneys and other employees subject to internal reporting requirements would be jettisoned. (It wouldn’t, provided they do report to the commission before retaliation occurs.)
  3. Applying the whistleblower definition literally would create an “incredibly unusual statutory scheme,” pursuant to which identical conduct (retaliating for internal reporting) is only punished based on the “happenstance” of also reporting to the SEC. (It’s not unusual if it comports with the purpose of encouraging reporting to the commission.)
  4. A literal approach could lead to topical and temporal anomalies in which someone who reported information to the SEC and subsequently was fired for internally reporting other information would be covered. (This is not a situation presented by the facts.)
  5. Applying “whistleblower” literally would undermine not only Clause (iii) but also the prohibition against retaliating for initiating, testifying or assisting in an investigation (Clause (ii)), because it is not clear those activities “provide[] information … to the Commission in a manner … established by the Commission.” (Although the SEC has not yet specified that Clause (ii) activities are methods of providing information to the commission, and thus literally within the definition of “whistleblower,” it easily could do so.)

Act 4. After me, Alphonse

In one spare paragraph, Ginsburg refused to give Chevron deference to the SEC’s position that “whistleblower” should have different meanings in the bounty and anti-retaliation contexts. Because “Congress has directly spoken” to the matter, she wrote, the commission simply is precluded from a more expansive interpretation.


Most folks who followed the oral argument in this case concluded that Somers’ position was DOA, so the outcome was hardly a surprise. The most interesting aspect of the decision was the court’s handling of Chevron, which does seem to signal that the majority believes deference to an agency determination still could be appropriate in a case in which the statute is ambiguous. Although Thomas, Alito and Gorsuch did not take this on directly, they specifically stated in their concurrence that they did not join “the portions of the Court’s opinion that venture beyond the statutory text.” They objected explicitly only to the majority’s use of legislative history, but arguably took a quiet swipe at Chevron as well.

Westlake Legal Group opinion-analysis-whistling-while-you-work-is-whistling-in-the-wind-dodd-frank-whistleblowers-do-need-to-inform-the-sec-1 Opinion analysis: Whistling while you work is whistling in the wind – Dodd-Frank whistleblowers do need to inform the SEC Merits Cases Featured

Click for vote alignment by ideology.

Posted in Digital Realty Trust v. Somers, Featured, Merits Cases

Recommended Citation: Theresa Gabaldon, Opinion analysis: Whistling while you work is whistling in the wind – Dodd-Frank whistleblowers do need to inform the SEC, SCOTUSblog (Feb. 22, 2018, 10:30 AM), http://www.scotusblog.com/2018/02/opinion-analysis-whistling-work-whistling-wind-dodd-frank-whistleblowers-need-inform-sec/

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: http://westlakelegal.com/