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general / Constitutional Law

What the high court said in OT ’17

Azadian james web

James Azadian

Partner, Dykema Gossett LLP

Email: jazadian@dykema.com

Pepperdine Univ School of Law

Boyadzhyan david web

David Boyadzhyan

Litigation Associate, Manatt, Phelps & Phillips, LLP

Email: dboyadzhyan@manatt.com

OCTOBER 2017 TERM

With the U.S. Supreme Court's final decision of the October 2017 term issued last week, teamed with Justice Anthony Kennedy's retirement announcement later that same day, and the addition of Justice Neil Gorsuch midway through the term, this has undoubtedly been a riveting year for court watchers. And they will certainly have a busy summer making predictions about the individual to succeed Justice Kennedy and the shaping of constitutional jurisprudence over the next two or three decades.

Before that media blitz explodes and marries with predictions on how the vacant Kennedy seat will impact the Senate (and House) midterm elections, let us pay our respects to this past term by reviewing the court's blockbuster decisions. As was correctly observed at the beginning of this term by Justice Ruth Bader Ginsburg, "there's only one prediction that's entirely safe about the upcoming term, and that is: it will be momentous." The court delivered, touching on everything from free speech, to President Donald Trump's travel ban, to class action arbitration waivers, and cellphone data privacy.

Husted v. A. Philip Randolph Institute (2018 DJDAR 5570, June 11)

In a 5-4 split, the court ruled that the challenged Ohio law intended to keep voter rolls up-to-date by removing names of people who have relocated from the district in which they are registered does not violate the National Voter Registration Act. States with similar laws meant to purge voter rolls of inactive voters will now have some clarity moving forward, given that courts across the country have come down on all different sides of this debate.

NLRB v. Murphy Oil USA, Inc. (2018 DJDAR 4705, May 21)

Closely watched by plaintiffs' attorneys and corporate defense attorneys alike, in this consolidated case coming out of the 5th, 7th and 9th U.S. Circuit Courts of Appeals, the court, in another 5-4 split, held that employers may require their employees to sign class action or collective action arbitration waivers as a condition of employment, and that such waivers do not violate the National Labor Relations Act. Justice Ginsburg, writing in dissent, accused the majority of stretching the Federal Arbitration Act far beyond its intended meaning, while not giving the NLRA a fighting chance, even citing former Supreme-Court nominee and D.C. Circuit Judge Robert Bork.

The Roberts court has, to date, made a noticeable impact in the world of arbitration, consistently ruling in its favor. Keep your eyes peeled because it is not over. For the coming term, the court has agreed to review Lamps Plus, Inc. v. Varela, 17-988, a case out of the 9th Circuit, to decide whether the FAA forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements.

Jesner v. Arab Bank, PLC (2018 DJDAR 3627 (April 24)

The court's clean and simple holding can be summed up in a single sentence: Claimants may not sue a foreign corporation under the Alien Tort Statute. This was another 5-4 split decision, with five of the justices managing to produce five separate opinions totaling close to a hundred pages. For anyone keeping score, Justice Sonia Sotomayor's dissent came in first place at 34 pages.

Carpenter v. United States (2018 DJDAR 6026, June 22)

In yet another 5-4 split (not what you think), Chief Justice John Roberts led the charge (joined by Justices Ginsburg, Stephen Breyer, Elena Kagan and Sotomayor) to hold that the government's obtainment of cell-site records from an individual's wireless carrier without a warrant based on probable cause violated the Fourth Amendment. Several terms back (OT '13), the court unanimously held in Riley v. California (with the chief justice also authoring that opinion, 2014 DJDAR 8220) the search and seizure of the contents of a cellphone incident to an arrest, without a warrant based on probable cause, similarly violated the Fourth Amendment.

South Dakota v. Wayfair, Inc. (2018 DJDAR 5927, June 21)

In another 5-4 decision, authored by Justice Kennedy (joined by Justices Clarence Thomas, Samuel Alito, Gorsuch and Ginsburg), the court overruled earlier precedent of the court to hold that a state can require an out-of-state seller to collect and remit sales taxes for goods and services sold in that state. That now-overruled precedent had set a standard for sales taxes predicated on the much-debated dormant commerce clause power to restrict state taxation of interstate commerce where the seller did not have a physical presence in the taxing state. (The "dormant" or "negative" commerce clause theory infers from the commerce clause that because Congress has power over interstate commerce, states cannot discriminate against interstate commerce, nor can they unduly burden interstate commerce, even in the absence of federal legislation regulating the activity.)

"That [the physical-presence rule] allows remote sellers to escape an obligation to remit a lawful state tax is unfair and unjust," Kennedy wrote. "It is unfair and unjust to those competitors, both local and out of state, who must remit the tax; to the consumers who pay the tax; and to the states that seek fair enforcement of the sales tax, a tax many states for many years have considered an indispensable source for raising revenue." Justice Kennedy cited catalogs from Wayfair (one of the companies challenging states' taxation of out-of-state sellers for goods and services sold in those taxing states) and he observed that "[i]ts advertising seeks to create an image of beautiful, peaceful homes, but it also says that 'one of the best things about buying through Wayfair is that we do not have to charge sales tax.' What Wayfair ignores in its subtle offer to assist in tax evasion is that creating a dream home assumes solvent state and local governments." There is "nothing unfair about requiring companies that avail themselves of the states' benefits to bear an equal share of the burden of tax collection," Kennedy said.

Penning separate concurring opinions, Justice Thomas let us know he has changed his mind and no longer supports the dormant commerce clause theory, and Justice Gorsuch registered his own disagreements with the dormant commerce clause theory, paving the path for the court to squarely revisit and denounce the theory in a future case.

Trump v. Hawaii (2018 DJDAR 6193, June 26)

From almost the moment President Trump stepped into the White House and signed the first "travel ban," the executive order and its second iteration have been making their way through the federal judiciary, ultimately reaching the high court. The verdict? In yet another 5-4 decision, the court ruled that the president has broad discretion under 8 U.S.C. Section 1182(f) to suspend the entry of immigrants into the United States, and he validly exercised that authority in issuing the second such order banning the travel of immigrants to the U.S. from seven majority-Muslim countries without violating federal law or the First Amendment's establishment clause.

Curiously, the court's liberal wing offered two dissents, neither of which garnered all four remaining votes. Justice Thomas concurred separately (and alone) to express his skepticism on the legitimacy of the recently popularized nationwide injunction or, as he calls it, the "universal injunction."

With this foundation laid, the justices will likely be called upon to decide this specific issue, especially given how widespread the use of the nationwide injunction has become. Just last week, a federal trial court in San Diego issued a nationwide injunction ordering the Trump administration to reunite the thousands of immigrant children seized at the border with their families. Also, on June 4, the 7th Circuit granted the Department of Justice's petition for rehearing en banc in City of Chicago v. Sessions on the limited issue of whether a district court's preliminary injunction was properly applied beyond the territorial boundaries of its district.

National Institute of Family & Life Advocates v. Becerra (2018 DJDAR 6224, June 26)

Although shrouded in the cloak of abortion, the court's decision in this case is actually one on free speech. Again split 5-4, the court's conservative wing formed the majority and ruled that California's Reproductive Freedom, Accountability, Comprehensive Care, and Transparency Act violates the First Amendment by requiring licensed and unlicensed crisis pregnancy centers to provide notice and other relevant information to their patrons that California provides free or low-cost services, including abortions.

Notably, the posture of this case means the battle over California's law is not over. The court held simply that petitioners who challenged the law are likely to succeed on the merits of their claim for purposes of a preliminary injunction.

Justice Kennedy penned a short concurrence, joined by Chief Justice Roberts and Justices Alito and Gorsuch, emphasizing the "apparent viewpoint discrimination" in the California law. Justice Breyer, writing for the remaining justices in dissent, took issue with the perceived unworkability of the majority's holding because it "could radically change prior law, perhaps placing much securities law or consumer protection law at constitutional risk."

Janus v. American Federation of State, County, and Municipal Employees, Council 31 (2018 DJDAR 6308, June 27)

Perhaps having a flare for suspense, the court saved the most blockbuster case of the term for last, by issuing its decision in Janus just before the justices took their summer recess. The issue is whether public-sector employees could be compelled by state law to pay union dues without violating the First Amendment right to free speech. The not-entirely-unexpected result? No.

Janus strikes another blow to unions in general, a fact some are celebrating and others are lamenting. The 5-4 decision garnered the conservative members, overturning earlier Supreme Court precedent set in the unanimous 9-0 decision of Abood v. Detroit Board of Education, 431 U.S. 209 (1977), which allowed union shops in public workplaces. Abood involved public school teachers unsuccessfully seeking to overturn the requirement that they pay fees equivalent to union dues on the grounds that they opposed public sector collective bargaining and objected to the political activities of the union. However, the Janus majority observed that the Abood court had failed to properly assess the First Amendment principles inherent in that case. Justice Kagan, in dissent, accused the majority of playing fast and loose in overturning Abood "with so little regard for the usual principles of stare decisis."

Given that Abood has been the foundation of union fee structures and laws in almost half of states, the decision in Janus will most certainly have a disruptive effect on the government employment landscape for years to come.

It is probably worth quickly mentioning the usual handful of court decisions that were expected to be groundbreaking, but turned out to be anticlimactic:

Gill v. Whitford (2018 DJDAR 5768, June 18)

When Gill made its way up to the high court, it was expected to reshape the election law landscape. But when the opinion finally came out, a unanimous court held simply that the Wisconsin Democrats who challenged the Republican-made congressional map failed to demonstrate injury sufficient to satisfy the constitutional standing requirement. A majority of the court remanded the case to the district court to give the plaintiffs a chance to establish injury. Justice Thomas would not have given the plaintiffs any further chance to make their case. Meanwhile, Justice Kagan's concurrence offered the plaintiffs a blueprint for how to make their case.

Benisek v. Lamone (2018 DJDAR 5781, June 18)

Same story as Gill, but different state. After deciding Gill, the court, per curiam, affirmed the district court's denial of a preliminary injunction relating to Maryland's congressional redistricting map. The case will now return to the district court to proceed in light of Gill.

Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission (2018 DJDAR 5291, June 4)

The long-awaited, so-called "gay wedding cake" case. When Masterpiece was taken up by the court, most expected that the court would decide the ultimate issue: Whether private businesses could refuse service to a gay individual (or couple, as the case was here) based on a sincerely held religious belief.

That did not happen. Instead, in a 7-2 decision, the court held on narrow grounds that the Colorado Civil Rights Commission's reasoning in deciding against the cake shop owner violated the First Amendment's free exercise clause because one of the commissioners made a comment hostile to religion during the hearing. Justice Kennedy, who authored the majority opinion, brought this issue to light during oral argument, when he questioned the attorney for the Colorado agency about the statement made by the commissioner.

The court may not be done with this issue yet. Currently, other cases are coming up the pipeline raising the same or similar issues for the court's consideration.

###

In summary, this term had an unusually low level of unanimity among the justices. Only 39 percent of the cases were decided 9-0 (the lowest rate since OT '08, which was at 30 percent unanimity). There were 19 split decisions (5-4), a significant increase from only 7 split decisions in the last term (OT '16). The court reversed in almost three-quarters of all cases it decided this term. Of the circuits, the 1st, 3rd and 6th fared the worst, with 100 percent reversals. The 4th Circuit did not make an appearance this term. The 10th Circuit fared the best with 67 percent affirmances. Our 9th Circuit improved from the last term (OT '16) and fared about the same as the D.C. and 11th Circuits -- with approximately 85 percent reversals. The court decided 74 cases -- slightly up from the 71 it decided last term, and noticeably less than the 87 from the term before that (OT '15). This term also produced eleven summary reversals, which is higher than the seven from OT '16, but less than the 13 from OT '15.

Aside from several stimulating opinions, this term witnessed some seemingly surprising alliances among the justices. In Sessions v. Dimaya, 2018 DJDAR 331 (April 17, 2018), for example, Justice Gorsuch joined the more liberal justices of the court to strike down as unconstitutional a statute that enabled the government to deport an immigrant who committed a "crime of violence." In Artis v. District of Columbia, 2018 DJDAR 681 (Jan. 22, 2018), Chief Justice Roberts joined the court's liberal justices to hold that when a federal court dismisses a state law claim over which it exercised supplemental jurisdiction, the claimant has an additional 30 days after dismissal to refile the state law claim in state court. And, in South Dakota v. Wayfair, discussed above, Justice Ginsburg joined three of the court's more conservative justices to hold that states may require out-of-state sellers to collect and remit sales taxes for in-state purchases, while Chief Justice Roberts, joined by the court's left-leaning justices, led the charge in dissent.

Justice Gorsuch saw his first full term on the court, compiling a solid conservative record, as may have been expected by most court watchers. The only notable exception, as referenced above, was his vote in Sessions v. Dimaya. Also worth mentioning is the apparent lack of agreement between him and Justice Thomas on various issues, despite both justices being widely regarded as staunch constitutional originalists. See, e.g., Class v. United States, 2018 DJDAR 1580 (Feb. 21, 2018) (federal criminal appellate procedure); Patchak v. Zinke, 2018 DJDAR 1792 (Feb. 27, 2018) (tribal gaming rights and Article III justiciability); Marinello v. United States, 2018 DJDAR 2546 (March 21, 2018) (interpretation of a federal criminal statute); Sessions v. Dimaya (immigration/deportation); Oil States Energy Servs. v. Green's Energy Grp., 2018 DJDAR 3609 (April 24, 2018) (USPTO procedures in accordance with Article III and Seventh Amendment right to a jury); Hughes v. United States, 2018 DJDAR 5309 (June 4, 2018) (federal criminal procedure and sentencing); Sveen v. Melin, 2018 DJDAR 5588 (June 11, 2018) (contracts clause); Rosales-Mireles v. United States, 2018 DJDAR 5797 (June 18, 2018) (plain error in federal sentencing and criminal procedure).

Lastly, there is the retirement of Justice Kennedy, paving the way for President Trump to fill his second Supreme Court seat in less than two years in office. In this, his final term, Justice Kennedy made a significant realignment (compared to previous years) with the conservative wing of the court, voting with his more conservative colleagues in the vast majority of cases. In the preceding three terms, he sided with the conservatives in less than half of all cases. What did not change, however, was that Justice Kennedy remained the deciding (and dominant) vote in all (19) of the 5-4 decisions, including the blockbuster cases reviewed here. We end this historical term at the Supreme Court by bidding farewell to a true "star," as the president referred to him after Justice Kennedy's letter formally announcing his retirement was delivered to the White House, which included these indelible words: "Please permit me by this letter to express my profound gratitude for having had the privilege to seek in each case how best to know, interpret and defend the Constitution and the laws that must always conform to its mandates and promises."

#310

Ben Armistead


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