Monday, June 29, 2020
Today the Supreme Court issued its decision in June Medical Services L.L.C. v. Russo. By a 5-4 vote, the Court strikes down Louisiana’s admitting-privileges law (Act 620) as imposing an undue burden on women seeking an abortion. The five-Justice majority comes from Justice Breyer’s opinion, which is joined by Justices Ginsburg, Sotomayor, and Kagan, and Chief Justice Roberts’ concurring opinion. Justices Thomas, Alito, Gorsuch, and Kavanaugh dissent—each of them authoring dissenting opinions.
In addition to the substantive constitutional issues regarding access to abortion, the case implicates some interesting civil procedure and federal courts issues: standing, standards of review, and stare decisis.
The standing issue is whether the plaintiffs, who were abortion providers and clinics, could challenge the Louisiana law as infringing their patients’ rights. Justice Breyer’s opinion concludes that Louisiana waived its standing argument:
The State’s argument rests on the rule that a party cannot ordinarily “‘rest his claim to relief on the legal rights or interests of third parties.’” Kowalski v. Tesmer, 543 U. S. 125, 129 (2004) (quoting Warth v. Seldin, 422 U. S. 490, 499 (1975)). This rule is “prudential.” 543 U. S., at 128–129. It does not involve the Constitution’s “case-or-controversy requirement.” Id., at 129; see Craig v. Boren, 429 U. S. 190, 193 (1976); Singleton v. Wulff, 428 U. S. 106, 112 (1976). And so, we have explained, it can be forfeited or waived. See Craig, 429 U. S., at 193–194.
Louisiana had argued in the lower courts that “there was ‘no question that the physicians had standing to contest’ Act 620.” This was an “unmistakable concession,” according to Justice Breyer. He adds that “even if the State had merely forfeited its objection by failing to raise it at any point over the last five years, we would not now undo all that has come before on that basis.” He explains:
What we said some 45 years ago in Craig applies equally today: “[A] decision by us to forgo consideration of the constitutional merits”—after “the parties have sought or at least have never resisted an authoritative constitutional determination” in the courts below—“in order to await the initiation of a new challenge to the statute by injured third parties would be impermissibly to foster repetitive and time-consuming litigation under the guise of caution and prudence.” 429 U. S., at 193–194 (quotation altered).
Justice Breyer also questions whether Louisiana’s standing argument would be persuasive in any event, noting that “[w]e have long permitted abortion providers to invoke the rights of their actual or potential patients in challenges to abortion-related regulations.”
Chief Justice Roberts concurs in Justice Breyer’s standing analysis: “For the reasons the plurality explains, ante, at 11–16, I agree that the abortion providers in this case have standing to assert the constitutional rights of their patients.”
2. Standard of Appellate Review
Another procedural issue is the standard of appellate review regarding the district court’s findings. Justice Breyer’s opinion notes:
We start from the premise that a district court’s findings of fact, “whether based on oral or other evidence, must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court’s opportunity to judge the witnesses’ credibility.” Fed. Rule Civ. Proc. 52(a)(6). In “‘applying [this] standard to the findings of a district court sitting without a jury, appellate courts must constantly have in mind that their function is not to decide factual issues de novo.’” Anderson v. Bessemer City, 470 U. S. 564, 573 (1985) (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 123 (1969)).
And the opinion concludes:
We conclude, in light of the record, that the District Court’s significant factual findings—both as to burdens and as to benefits—have ample evidentiary support. None is “clearly erroneous.” Given the facts found, we must also uphold the District Court’s related factual and legal determinations. These include its determination that Louisiana’s law poses a “substantial obstacle” to women seeking an abortion; its determination that the law offers no significant health-related benefits; and its determination that the law consequently imposes an “undue burden” on a woman’s constitutional right to choose to have an abortion. We also agree with its ultimate legal conclusion that, in light of these findings and our precedents, Act 620 violates the Constitution.
Chief Justice Roberts also emphasizes the deferential standard of review:
The question is not whether we would reach the same findings from the same record. These District Court findings “entail[ed] primarily . . . factual work” and therefore are “review[ed] only for clear error.” U. S. Bank N. A. v. Village at Lakeridge, LLC, 583 U. S. ___, ___, ___ (2018) (slip op., at 6, 9). Clear error review follows from a candid appraisal of the comparative advantages of trial courts and appellate courts.
3. Stare Decisis
And of course, the case presents important questions of stare decisis, especially in light of the Supreme Court’s 2016 decision in Whole Woman’s Health v. Hellerstedt, which struck down Texas’s admitting privileges requirement. Stare decisis is key to Chief Justice Roberts’ tie-breaking fifth vote in favor of the plaintiffs: “I joined the dissent in Whole Woman’s Health and continue to believe that the case was wrongly decided. The question today however is not whether Whole Woman’s Health was right or wrong, but whether to adhere to it in deciding the present case.” Roberts concludes:
Stare decisis instructs us to treat like cases alike. The result in this case is controlled by our decision four years ago invalidating a nearly identical Texas law. The Louisiana law burdens women seeking previability abortions to the same extent as the Texas law, according to factual findings that are not clearly erroneous. For that reason, I concur in the judgment of the Court that the Louisiana law is unconstitutional.
Friday, June 26, 2020
Following up on last week’s workshop on civil procedure pedagogy and distance learning, here’s an announcement from Dave Marcus about a second session for July:
[A]s mentioned last week, the co-organizers of the Civil Procedure Workshop wanted to put together a second session on how our courses can meaningfully engage with themes of racial, social, and economic justice during such extraordinary times. I'm happy to announce that this session will proceed on Wednesday, July 22, from 1:00-3:00 east coast time. The format will be similar to last week's, with several plenary presentations and breakout room discussions. Deseriee Kennedy (Touro), Sarah Krakoff (Colorado), Jaya Ramji-Nogales (Temple), and Tobias Wolff (Penn) have very generously volunteered to present.
If you’re interested, email Dave at email@example.com.
SCOTUS Upholds IIRIRA's Restrictions on Federal Habeas Review of Asylum Claims: DHS v. Thuraissigiam
Yesterday the Supreme Court issued a 5-2-2 decision in Department of Homeland Security v. Thuraissigiam. The majority rejected a constitutional challenge—based on the Suspension Clause and the Due Process Clause—to provisions of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) that restrict federal habeas review of rejected asylum claims.
Justice Alito authored the majority opinion, joined by Chief Justice Roberts and Justices Thomas, Gorsuch, and Kavanaugh. Alito writes:
Respondent’s Suspension Clause argument fails because it would extend the writ of habeas corpus far beyond its scope “when the Constitution was drafted and ratified.” Boumediene v. Bush, 553 U. S. 723, 746 (2008). Indeed, respondent’s use of the writ would have been unrecognizable at that time. Habeas has traditionally been a means to secure release from unlawful detention, but respondent invokes the writ to achieve an entirely different end, namely, to obtain additional administrative review of his asylum claim and ultimately to obtain authorization to stay in this country.
Respondent’s due process argument fares no better. While aliens who have established connections in this country have due process rights in deportation proceedings, the Court long ago held that Congress is entitled to set the conditions for an alien’s lawful entry into this country and that, as a result, an alien at the threshold of initial entry cannot claim any greater rights under the Due Process Clause. See Nishimura Ekiu v. United States, 142 U. S. 651, 660 (1892). Respondent attempted to enter the country illegally and was apprehended just 25 yards from the border. He therefore has no entitlement to procedural rights other than those afforded by statute.
Justice Breyer authors a concurring opinion, joined by Justice Ginsburg, which agrees only that IIRIRA’s limit on federal habeas review comports with the Suspension Clause as applied “in this particular case” (emphasis in original). He reasons that the respondent had been apprehended “just 25 yards inside the border” and “has never lived in, or been lawfully admitted to, the United States.” And Breyer also argues that the respondent’s claims were either “challenges to factual findings” rather than claims of “legal error,” or “procedural claims” that “concern not the outright denial (or constructive denial) of a process, but the precise way in which the relevant procedures were administered.”
Justice Sotomayor authors a dissenting opinion, joined by Justice Kagan, which begins:
The majority declares that the Executive Branch’s denial of asylum claims in expedited removal proceedings shall be functionally unreviewable through the writ of habeas corpus, no matter whether the denial is arbitrary or irrational or contrary to governing law. That determination flouts over a century of this Court’s practice. In case after case, we have heard claims indistinguishable from those respondent raises here, which fall within the heartland of habeas jurisdiction going directly to the origins of the Great Writ. ***
Making matters worse, the Court holds that the Constitution’s due process protections do not extend to noncitizens like respondent, who challenge the procedures used to determine whether they may seek shelter in this country or whether they may be cast to an unknown fate. The decision deprives them of any means to ensure the integrity of an expedited removal order, an order which, the Court has just held, is not subject to any meaningful judicial oversight as to its substance.
Yesterday the House of Representatives passed the George Floyd Justice in Policing Act of 2020 (H.R. 7120). Section 102 addresses qualified immunity, although only in the context of actions against law enforcement officers. Here’s the relevant text:
Section 1979 of the Revised Statutes of the United States (42 U.S.C. 1983) is amended by adding at the end the following:
“It shall not be a defense or immunity in any action brought under this section against a local law enforcement officer (as such term is defined in section 2 of the George Floyd Justice in Policing Act of 2020), or in any action under any source of law against a Federal investigative or law enforcement officer (as such term is defined in section 2680(h) of title 28, United States Code), that—
“(1) the defendant was acting in good faith, or that the defendant believed, reasonably or otherwise, that his or her conduct was lawful at the time when the conduct was committed; or
“(2) the rights, privileges, or immunities secured by the Constitution and laws were not clearly established at the time of their deprivation by the defendant, or that at such time, the state of the law was otherwise such that the defendant could not reasonably have been expected to know whether his or her conduct was lawful.”
Wednesday, June 24, 2020
Today a panel of the D.C. Circuit issued a 2-1 decision in In re Flynn, granting in part Michael Flynn’s petition for a writ of mandamus. Judge Rao authored the majority opinion, joined by Judge Henderson. Judge Wilkins dissented in part.
The majority “order[s] the district court to grant the government’s Rule 48(a) motion to dismiss the charges against Flynn” and vacates the district court’s order appointing retired EDNY District Judge John Gleeson as an amicus curiae to argue against the government’s motion to dismiss the charges. The majority refuses, however, to grant Flynn’s request to order reassignment of the case to a different district court judge.
It’s a politically important case, obviously, but the competing views on when a writ of mandamus is an appropriate method of appellate court intervention are worth a read in their own right.
Monday, June 22, 2020
The William & Mary Law Review has published its symposium issue, The Role of Courts in Politically Charged Moments. It features contributions by Jack Beermann, Erwin Chemerinsky, Barry Cushman, Bert Huang, Alli Larsen, Marin Levy, and Mary-Rose Papandrea.
Friday, June 19, 2020
Yesterday the Supreme Court issued its decision in Department of Homeland Security v. Regents of University of California. As folks are surely aware by now, the Court voted 5-4 to vacate the Trump administration’s rescission of the Deferred Action for Childhood Arrivals (DACA) program as “arbitrary and capricious” under the Administrative Procedure Act (APA).
The case raised some interesting issues relating to civil procedure and federal courts that are worth flagging. The first is pleading. On the APA issue, Chief Justice Roberts authors the majority opinion, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. But the plaintiffs had also argued that the rescission of DACA violated the equal protection component of the Fifth Amendment because the rescission was motivated by discriminatory animus. In Part IV—which Justice Sotomayor did not join—Chief Justice Roberts finds that the plaintiffs’ allegations of animus were “insufficient.” He writes:
To plead animus, a plaintiff must raise a plausible inference that an “invidious discriminatory purpose was a motivating factor” in the relevant decision. Arlington Heights v. Metropolitan Housing Development Corp., 429 U. S. 252, 266 (1977). Possible evidence includes disparate impact on a particular group, “[d]epartures from the normal procedural sequence,” and “contemporary statements by members of the decisionmaking body.” Id., at 266–268. Tracking these factors, respondents allege that animus is evidenced by (1) the disparate impact of the rescission on Latinos from Mexico, who represent 78% of DACA recipients; (2) the unusual history behind the rescission; and (3) pre- and post-election statements by President Trump. Brief for New York 54–55.
None of these points, either singly or in concert, establishes a plausible equal protection claim.
Justice Sotomayor does not join this part of Chief Justice Roberts’ opinion, and she writes a partial dissent on the equal protection issues. From her opinion:
Respondents’ equal protection challenges come to us in a preliminary posture. All that respondents needed to do at this stage of the litigation was state sufficient facts that would “allo[w a] court to draw the reasonable inference that [a] defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U. S. 662, 678 (2009). The three courts to evaluate respondents’ pleadings below held that they cleared this modest threshold. 908 F. 3d 476, 518–520 (CA9 2018) (affirming the District Court’s denial of the Government’s motion to dismiss); see also Batalla Vidal v. Nielsen, 291 F. Supp. 3d 260, 274 (EDNY 2018).
I too would permit respondents’ claims to proceed on remand. The complaints each set forth particularized facts that plausibly allege discriminatory animus.
The Supreme Court’s handling of the equal protection claims raises another recurring chestnut for federal courts enthusiasts: the Marks rule and nonmajority opinions. The dissenting justices on the APA issue—Justices Thomas, Alito, Gorsuch, and Kavanaugh—write that they “concur in the judgment insofar as the Court rejects [the] equal protection claim.” It’s not clear, however, whether and how those votes can be added to the four-justice plurality on the plaintiffs’ pleading of their equal protection claims to generate a binding “majority” opinion on that issue.
Finally, it’s worth noting that the Court avoided the recurring-yet-still-unaddressed question of nationwide injunctions (see, e.g., here). Footnote 7 of Chief Justice Roberts’ opinion explains that, because the Supreme Court affirmed the D.C. federal court’s order vacating the Trump administration’s rescission of DACA, it was “unnecessary to examine the propriety of the nationwide scope of the injunctions” that had been issued by other federal courts.
Wednesday, June 17, 2020
Alyssa King has published Arbitration and the Federal Balance, 94 Ind. L.J. 1447 (2019). Here’s the abstract:
Mandatory arbitration of statutory rights in contracts between parties of unequal bargaining power has drawn political attention at both the federal and state level. The importance of such reforms has only been heightened by the Supreme Court’s expansion of preemption under the FAA and of arbitral authority. This case law creates incentives for courts at all levels to prefer expansive readings of an arbitration clause. As attempts at federal regulation have stalled, state legislatures and regulatory agencies can expect to be subject to renewed focus. If state legislatures cannot easily limit arbitrability, an alternative is to try reforms that seek to make arbitration more closely resemble judging. Some common reforms that have been proposed or adopted at the state level include conflict-of-interest rules for arbitrators, default process rules, and publication requirements. These proposals might bring arbitration more in line with the processes and outcomes one might expect from a state court.
Reform along these lines is worth pursuing, but faces two significant problems. The first is federal preemption. Most prior cases have focused on state law controls before an arbitration gets started. State laws implemented during and after arbitration may avoid the same fate. A less obvious problem comes from the degree certain state reforms aim to treat arbitration as a substitute for court. Arbitrators lack the authority that judges have to develop the law, creating a further due process problem for parties who expect to be operating in a common law system. Accommodating arbitration may mean moving further from a model of common law adjudication.
Monday, June 15, 2020
Today the Supreme Court granted certiorari in Henry Schein, Inc. v. Archer and White Sales, Inc. It presents the following question: “whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.”
You may recall that this litigation led to a January 2019 Supreme Court decision (Justice Kavanaugh’s debut opinion, incidentally), which addressed a slightly different question about whether the court or the arbitrator decides arbitrability.
Friday, June 12, 2020
Susan Provenzano has posted on SSRN a draft of her article, Can Speech Act Theory Save Notice Pleading?, which is forthcoming in the Indiana Law Journal. Here’s the abstract:
Countless scholars have debated—and lower courts have attempted to apply—the plausibility pleading regime that the Supreme Court introduced in Twombly and Iqbal. Iqbal took Twombly’s requirement that a complaint plead plausibly and turned it into a two-step test. Under that test, the life or death of a lawsuit rests on the distinction between “well-pleaded” and “conclusory” allegations. Only the former are assumed true on a motion to dismiss. Seven decades of pleading precedent had taken a sensible, if unstable, approach to the truth assumption, making a single cut between factual contentions (assumed true) and legal conclusions (ignored). But Iqbal redrew those lines. It treats as legal conclusions an entire subset of factual allegations and does so whenever, in the court’s view, those facts are presented too generally or too rhetorically. To date, the contours of “conclusory” have not been pinned down by legal-theoretic approaches, while lower court reactions range from conflicting to confused to avoidant. It is clearer than ever that Iqbal left an analytical void in the wake of its novel pleading inquiry—a void that must be filled in a stable way while recognizing the FRCP’s normative commitments.
That way is through speech act theory. Speech act theory is a philosophy of language that employs a descriptive methodology for understanding what speakers mean with their words. A speech act- theoretic approach targets Iqbal’s central flaws—failing to treat pleading as an act of communication, and ignoring how the pleader intends her allegations to function in the pleading conversation. Indeed, Iqbal makes the judge’s omniscient view of meaning the decisive factor. Furthermore, Iqbal conflates two types of speech acts whose difference was vital pre-Iqbal: allegations meant to report, which merit the truth assumption, and allegations meant to accuse, which do not. Speech act theory shores up pre-Iqbal instability and offers a consistent analytical approach for granting allegations the assumption of truth based on communicative meaning. Using speech act theory to set the parameters of “conclusory” also opens the doors of discovery to complaints that do their job as the FRCP intended: providing functional fair notice of the nature of the plaintiff’s claims and the grounds on which they rest.
Thursday, June 11, 2020
California Supreme Court Decision on the Hague Convention and Contractual Waivers of Service of Process
In April, the Supreme Court of California issued a unanimous decision in Rockefeller Technology v. Changzhou SinoType Technology, 460 P.3d 764 (Cal. 2020), on the ability of parties to contractually consent to service of process by methods contrary to those allowed by the Hague Convention. Justice Corrigan’s opinion begins:
The parties here, sophisticated business entities, entered into a contract wherein they agreed to submit to the jurisdiction of California courts and to resolve disputes between them through California arbitration. They also agreed to provide notice and “service of process” to each other through Federal Express or similar courier. The narrow question we address is whether the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, November 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638 (Hague Service Convention or “the Convention”) preempts such notice provision if the Convention provides for a different method of service. Consistent with United States Supreme Court authority, we conclude that the Convention applies only when the law of the forum state requires formal service of process to be sent abroad. We further conclude that, because the parties’ agreement constituted a waiver of formal service of process under California law in favor of an alternative form of notification, the Convention does not apply.
Tuesday, June 9, 2020
Last week, Representative Justin Amash and 17 original cosponsors introduced H.R. 7085, the Ending Qualified Immunity Act.
The Bill finds (among other things) that qualified immunity “has severely limited the ability of many plaintiffs to recover damages under section 1983 when their rights have been violated by State and local officials” and that “[a]s a result, the intent of Congress in passing the law has been frustrated, and Americans’ rights secured by the Constitution have not been appropriately protected.”
The operative text would add the following language to the end of 42 U.S.C. § 1983:
‘‘It shall not be a defense or immunity to any action brought under this section that the defendant was acting in good faith, or that the defendant believed, reasonably or otherwise, that his or her conduct was lawful at the time when it was committed. Nor shall it be a defense or immunity that the rights, privileges, or immunities secured by the Constitution or laws were not clearly established at the time of their deprivation by the defendant, or that the state of the law was otherwise such that the defendant could not reasonably have been expected to know whether his or her conduct was lawful.’’
You can follow the bill’s progress here.
Monday, June 8, 2020
Today the Supreme Court issued a unanimous decision in Lomax v. Ortiz-Marquez. Justice Kagan’s opinion begins:
To help staunch a “flood of nonmeritorious” prisoner litigation, the Prison Litigation Reform Act of 1995 (PLRA) established what has become known as the three-strikes rule. Jones v. Bock, 549 U. S. 199, 203 (2007). That rule generally prevents a prisoner from bringing suit in forma pauperis (IFP)—that is, without first paying the filing fee—if he has had three or more prior suits “dismissed on the grounds that [they were] frivolous, malicious, or fail[ed] to state a claim upon which relief may be granted.” 28 U. S. C. §1915(g). Today we address whether a suit dismissed for failure to state a claim counts as a strike when the dismissal was without prejudice. We conclude that it does: The text of Section 1915(g)’s three-strikes provision refers to any dismissal for failure to state a claim, whether with prejudice or without.
In footnote 4, Justice Kagan clarifies that a dismissal is not a strike “when a court gives a plaintiff leave to amend his complaint.” As she explains: “Courts often take that path if there is a chance that amendment can cure a deficient complaint. See Fed. Rule Civ. Proc. 15(a) (discussing amendments to pleadings). In that event, because the suit continues, the court’s action falls outside of Section 1915(g) and no strike accrues.” This is the one portion of the opinion that is not unanimous—Justice Thomas does not join as to this footnote.
Friday, June 5, 2020
Today the Lewis & Clark Law Review posted the symposium issue, featuring contributions by Jennie Anderson; Bob Klonoff; Teddy Rave & Zach Clopton; Dave Marcus; David Noll; Lynn Baker & Steve Herman; Josh Davis & Brian Devine; Alexi Lahav; Elizabeth Cabraser & Adam Steinman; Bob Bone; Gerson Smoger; Judith Resnik, Stephanie Garlock & Annie Wang; Brian Fitzpatrick; and Arthur Miller.
My personal thanks to the Pound Institute, Lewis & Clark, and Bob Klonoff for organizing a wonderful symposium, and to the law review editors for their excellent editorial work. It’s great to see the finished product!
Unfortunately, the Sixth Annual Civil Procedure Workshop (originally scheduled to be held at Northwestern Law School this September) has been postponed. Fortunately, the Civil Procedure Workshop steering committee has organized a session on civil procedure pedagogy and distance learning that will take place over Zoom on Wednesday, June 17 at 1:00-3:30pm EDT.
Dave Marcus has shared the following details:
Everyone will assemble on Zoom for an initial session led by Tara Grove (Alabama), Howie Erichson (Fordham), Beth Thornburg (SMU), and Liz Porter (UW). Tara, Howie, Beth, and Liz have all put a good deal of thought into how to make various aspects of distance learning work for law teaching, so I’m really grateful that they’ll share their wisdom. We’ll then divide into breakout sessions for smaller group conversations. The proceedings will conclude with another plenary session.
I’m hopeful that many of you can join us, as I know that I have a lot to learn before the fall semester begins. I also would very much like to see as many of you as possible, if only in a small square on Zoom.
If you’re interested, email Dave at firstname.lastname@example.org.
Thursday, June 4, 2020
In addition to Monday’s decision on Article III standing in Thole v. U.S. Bank, here are some other notable developments at One First Street this week...
The Court issued a 7-2 decision in Banister v. Davis. Justice Kagan’s majority opinion holds that a habeas petitioner’s FRCP 59(e) motion to alter or amend the habeas court’s judgment is not a second or successive habeas petition for purposes of 28 U.S.C. § 2244. Justice Alito writes a dissent, joined by Justice Thomas. Check out Steve Vladeck’s analysis at SCOTUSblog.
The Court issued a unanimous decision in GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC. Justice Thomas’s opinion holds that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (a.k.a. the New York Convention) does not conflict with domestic equitable estoppel doctrines permitting the enforcement of arbitration agreements by nonsignatories. Justice Sotomayor authors a concurring opinion. Ronald Mann analyzes the decision at SCOTUSblog.
The Court issued a 7-2 decision in Nasrallah v. Barr. Justice Kavanaugh’s majority opinion interprets 8 U.S.C. § 1252(a)(2) to permit the federal courts of appeals to review a factual challenge to an order denying relief under the Convention Against Torture, even for individuals who committed a crime specified in § 1252(a)(2)(C). Justice Thomas writes a dissent, joined by Justice Alito. Check out Jennifer Chacon’s analysis at SCOTUSblog and Bryan Lammon’s post at Final Decisions.
Finally, Monday’s order list included denials of certiorari in two cases—Comcast v. Tillage and AT&T Mobility v. McArdle—involving FAA preemption of state law on the enforceability of contractual provisions that waive a party’s right to seek public injunctive relief. Alison Frankel has coverage at Reuters (On the Case).
Wednesday, June 3, 2020
Monday, June 1, 2020
Today the Supreme Court issued a 5-4 decision in Thole v. U.S. Bank N.A. Justice Kavanaugh’s majority opinion concludes that the plaintiffs lacked Article III standing. Some excerpts:
Plaintiffs James Thole and Sherry Smith are two retired participants in U. S. Bank’s retirement plan. Of decisive importance to this case, the plaintiffs’ retirement plan is a defined-benefit plan, not a defined-contribution plan. In a defined-benefit plan, retirees receive a fixed payment each month, and the payments do not fluctuate with the value of the plan or because of the plan fiduciaries’ good or bad investment decisions. * * *
We affirm the judgment of the U. S. Court of Appeals for the Eighth Circuit on the ground that the plaintiffs lack Article III standing. Thole and Smith have received all of their monthly benefit payments so far, and the outcome of this suit would not affect their future benefit payments. If Thole and Smith were to lose this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny less. If Thole and Smith were to win this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny more. The plaintiffs therefore have no concrete stake in this lawsuit. To be sure, their attorneys have a stake in the lawsuit, but an “interest in attorney’s fees is, of course, insufficient to create an Article III case or controversy where none exists on the merits of the underlying claim.” Lewis v. Continental Bank Corp., 494 U. S. 472, 480 (1990); see Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 107 (1998) (same). Because the plaintiffs themselves have no concrete stake in the lawsuit, they lack Article III standing.
Justice Kavanaugh does leave open one possible avenue for participants in a defined-benefit plan to satisfy Article III’s standing requirements:
One last wrinkle remains. According to the plaintiffs’ amici, plan participants in a defined-benefit plan have standing to sue if the mismanagement of the plan was so egregious that it substantially increased the risk that the plan and the employer would fail and be unable to pay the participants’ future pension benefits. Cf. Clapper v. Amnesty Int’l USA, 568 U. S. 398, 414, n. 5 (2013); Lee v. Verizon Communications, Inc., 837 F. 3d 523, 545–546 (CA5 2016); David v. Alphin, 704 F. 3d 327, 336–338 (CA4 2013). But the plaintiffs do not assert that theory of standing in this Court. In any event, the plaintiffs’ complaint did not plausibly and clearly claim that the alleged mismanagement of the plan substantially increased the risk that the plan and the employer would fail and be unable to pay the plaintiffs’ future pension benefits. It is true that the plaintiffs’ complaint alleged that the plan was underfunded for a period of time. But a bare allegation of plan underfunding does not itself demonstrate a substantially increased risk that the plan and the employer would both fail.
Footnote 2 adds a wrinkle to the wrinkle, however:
Even if a defined-benefit plan is mismanaged into plan termination, the federal PBGC by law acts as a backstop and covers the vested pension benefits up to a certain amount and often in full. For example, if the plan and the employer in this case were to fail, the PBGC would be required to pay these two plaintiffs all of their vested pension benefits in full. * * * Any increased-risk-of-harm theory of standing therefore might not be available for plan participants whose benefits are guaranteed in full by the PBGC. But we need not decide that question in this case.
Justice Thomas authors a concurring opinion, joined by Justice Gorsuch, arguing that in a future case the Court should reconsider its precedents suggesting a need to make “analogies to trust law” when deciding Article III standing.
Justice Sotomayor authors a dissenting opinion, joined by Justices Ginsburg, Breyer and Kagan. It begins:
The Court holds that the Constitution prevents millions of pensioners from enforcing their rights to prudent and loyal management of their retirement trusts. Indeed, the Court determines that pensioners may not bring a federal lawsuit to stop or cure retirement-plan mismanagement until their pensions are on the verge of default. This conclusion conflicts with common sense and longstanding precedent.