Tuesday, June 21, 2022
Today the Supreme Court issued a 5-4 decision in Shoop v. Twyford. Chief Justice Roberts authors the majority opinion, joined by Justices Thomas, Alito, Kavanaugh, and Barrett. The case involves Twyford’s request to be transported to a hospital for medical testing that he argued could support his claim for habeas relief. The district court granted Twyford’s request under the All Writs Act.
The Supreme Court reverses the transportation order, noting the many obstacles that AEDPA imposes on individuals seeking to present new evidence in support of a habeas petition. Chief Justice Roberts writes that a court must consider AEDPA’s limits “even when the All Writs Act is the asserted vehicle for gathering new evidence,” because “a petitioner cannot use that Act to circumvent statutory requirements or otherwise binding procedural rules.” The district court should not have granted Twyford’s request for transportation because he “sheds no light on how he might persuade a court to consider the results of his testing, given the limitations AEDPA imposes on presenting new evidence.”
The four dissenting justices do not address the substance of Twyford’s transportation request. Rather, the core disagreement is over appellate jurisdiction. In a lengthy footnote, Chief Justice Roberts concludes that appellate jurisdiction is proper under the collateral order doctrine, citing Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541, 546 (1949): “Transportation orders issued under the All Writs Act (1) conclusively require transportation; (2) resolve an important question of state sovereignty conceptually distinct from the merits of the prisoner’s claims, see Puerto Rico Aqueduct and Sewer Authority v. Metcalf & Eddy, Inc., 506 U. S. 139, 144–145 (1993); and (3) are entirely unreviewable by the time the case has gone to final judgment.”
Justice Breyer’s dissenting opinion, joined by Justices Sotomayor and Kagan, argues that the collateral order doctrine does not apply, reasoning that the transportation order was “analogous to a discovery order” and that there was “no reason why such an order ordinarily should be of greater importance than a discovery order of some other kind.” Justice Gorsuch writes in his dissenting opinion: “I would have dismissed this case as improvidently granted when the jurisdictional complication became apparent. We did not take this case to extend Cohen.”
Monday, June 20, 2022
Last week the Supreme Court issued its decision in Viking River Cruises, Inc. v. Moriana, another case on the Federal Arbitration Act (FAA). Justice Alito authored the majority opinion, which was joined in full by Justices Breyer, Sotomayor, Kagan, and Gorsuch (and in parts by Chief Justice Roberts and Justices Kavanaugh and Barrett). The question presented by the case is whether the FAA preempts a rule of California state law—from the California Supreme Court’s 2014 decision in Iskanian v. CLS Transportation—that invalidates contractual waivers of the right to assert representative claims under California’s Labor Code Private Attorneys General Act of 2004 (PAGA). The answer is—it’s complicated.
The Court notes an important distinction under the PAGA between “individual” claims, “which are premised on Labor Code violations actually sustained by the plaintiff,” and “non-individual claims,” which “aris[e] out of events involving other employees.” Here’s Justice Alito’s conclusion, from Part IV of the opinion:
We hold that the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. This holding compels reversal in this case. The agreement between Viking and Moriana purported to waive “representative” PAGA claims. Under Iskanian, this provision was invalid if construed as a wholesale waiver of PAGA claims. And under our holding, that aspect of Iskanian is not preempted by the FAA, so the agreement remains invalid insofar as it is interpreted in that manner. But the severability clause in the agreement provides that if the waiver provision is invalid in some respect, any “portion” of the waiver that remains valid must still be “enforced in arbitration.” Based on this clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana’s individual PAGA claim. The lower courts refused to do so based on the rule that PAGA actions cannot be divided into individual and non-individual claims. Under our holding, that rule is preempted, so Viking is entitled to compel arbitration of Moriana’s individual claim.
The remaining question is what the lower courts should have done with Moriana’s non-individual claims. Under our holding in this case, those claims may not be dismissed simply because they are “representative.” Iskanian’s rule remains valid to that extent. But as we see it, PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding. Under PAGA’s standing requirement, a plaintiff can maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action. See Cal. Lab. Code Ann. §§ 2699(a), (c). When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit. * * * As a result, Moriana lacks statutory standing to continue to maintain her non-individual claims in court, and the correct course is to dismiss her remaining claims.
Justice Sotomayor authored a concurring opinion emphasizing that California courts—and ultimately the California legislature—“will have the last word” regarding whether someone in Moriana’s situation does lack statutory standing to pursue non-individual PAGA claims.
Justice Barrett authored an opinion concurring in part, joined by Justice Kavanaugh and in part by Chief Justice Roberts, arguing that “[t]he discussion in Parts II and IV of the Court’s opinion is unnecessary to the result, and much of it addresses disputed state-law questions as well as arguments not pressed or passed upon in this case.”
Justice Thomas dissented, writing: “I continue to adhere to the view that the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., does not apply to proceedings in state courts.”
Tuesday, June 14, 2022
As we head down the home stretch for this Term’s Supreme Court decisions, here are some of the interesting decisions that came down earlier this month:
Egbert v. Boule: Justice Thomas’s majority opinion (joined by Roberts, Alito, Kavanaugh, and Barrett) holds that Bivens cannot be extended to allow a cause of action for the plaintiff’s Fourth Amendment excessive-force claim and First Amendment retaliation claim against a U.S. Border Patrol Agent. Justice Gorsuch authors a concurring opinion. And Justice Sotomayor authors an opinion (joined by Breyer and Kagan) partially concurring in the judgment and partially dissenting; they argue that a Bivens action should exist for the plaintiff’s Fourth Amendment claim, but they agree with the majority’s ultimate conclusion that the First Amendment retaliation claim may not proceed under Bivens.
Garland v. Gonzalez: Justice Alito’s majority opinion (joined by Roberts, Thomas, Gorsuch, Kavanaugh, and Barrett) holds that 8 U.S.C. §1252(f)(1), a provision of the Immigration and Nationality Act (INA), deprives federal district courts of jurisdiction to consider the plaintiffs requests for classwide injunctive relief. Justice Sotomayor authors an opinion (joined in full by Kagan and in part by Breyer) partially concurring in the judgment and partially dissenting, arguing that the INA preserves the district courts’ authority to issue classwide injunctions against the Executive Branch.
Kemp v. United States: Justice Thomas’s majority opinion (joined by Roberts, Breyer, Alito, Sotomayor, Kagan, Kavanaugh, and Barrett) holds that a judge’s error of law qualifies as a “mistake” under Federal Rule of Civil Procedure 60(b)(1); thus a motion for relief from judgment based on such an error is subject to Rule 60(c)(1)’s one-year deadline for 60(b)(1) motions. Justice Sotomayor authors a concurring opinion emphasizing that Rule 60(b)(6)—which is not subject to the one-year deadline—may remain available “to reopen a judgment in extraordinary circumstances, including a change in controlling law.” Justice Gorsuch authors a solo dissent, arguing that the Court should have dismissed the writ of certiorari as improvidently granted.
Southwest Airlines Co. v. Saxon: Justice Thomas’s unanimous opinion holds that the Federal Arbitration Act (FAA) does not apply to a ramp supervisor for Southwest Airlines whose work “frequently requires her to load and unload baggage, airmail, and commercial cargo on and off airplanes that travel across the country,” because she fit within the FAA’s exemption for “workers engaged in foreign or interstate commerce.” Justice Barrett did not participate in the case.
ZF Automotive U.S., Inc. v. Luxshare, Ltd.: Justice Barrett’s unanimous opinion holds that 28 U.S.C. § 1782—which allows federal district courts to order discovery “for use in a proceeding in a foreign or international tribunal” does not apply to private arbitration proceedings; the statute covers only “governmental or intergovernmental adjudicative bodies.”
Tuesday, May 24, 2022
Yesterday the Supreme Court issued a unanimous decision in Morgan v. Sundance, Inc. (covered earlier here). At issue is whether the defendant waived its right to insist on arbitration by engaging in litigation before seeking a stay under section 3 of the Federal Arbitration Act (FAA). Justice Kagan’s opinion rejects the view—expressed by many federal appellate courts—that “[a] party can waive its arbitration right by litigating only when its conduct has prejudiced the other side.” She notes that a “special rule” requiring prejudice is not supported by the FAA’s ostensible “policy favoring arbitration.”
Here’s an excerpt, which also highlights a number of issues that the Court’s decision does not resolve:
We decide today a single issue, responsive to the predominant analysis in the Courts of Appeals, rather than to all the arguments the parties have raised. In their briefing, the parties have disagreed about the role state law might play in resolving when a party’s litigation conduct results in the loss of a contractual right to arbitrate. The parties have also quarreled about whether to understand that inquiry as involving rules of waiver, forfeiture, estoppel, laches, or procedural timeliness. We do not address those issues. The Courts of Appeals, including the Eighth Circuit, have generally resolved cases like this one as a matter of federal law, using the terminology of waiver. For today, we assume without deciding they are right to do so. We consider only the next step in their reasoning: that they may create arbitration-specific variants of federal procedural rules, like those concerning waiver, based on the FAA’s “policy favoring arbitration.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24 (1983). They cannot. For that reason, the Eighth Circuit was wrong to condition a waiver of the right to arbitrate on a showing of prejudice.
Monday, May 16, 2022
SCOTUS Cert Grant on District Court Jurisdiction over Challenges to SEC Enforcement Proceedings: SEC v. Cochran
Whether a federal district court has jurisdiction to hear a suit in which the respondent in an ongoing Securities and Exchange Commission administrative proceeding seeks to enjoin that proceeding, based on an alleged constitutional defect in the statutory provisions that govern the removal of the administrative law judge who will conduct the proceeding.
Under 28 U.S.C. § 2255, federal inmates can collaterally challenge their convictions on any ground cognizable on collateral review, with successive attacks limited to certain claims that indicate factual innocence or that rely on constitutional-law decisions made retroactive by this Court. 28 U.S.C. § 2255(h). 28 U.S.C. § 2255(e), however, also allows inmates to collaterally challenge their convictions outside this process through a traditional habeas action under 28 U.S.C. § 2241 whenever it “appears that the remedy by [§ 2255] motion is inadequate or ineffective to test the legality of [their] detention.”
The question presented is whether federal inmates who did not—because established circuit precedent stood firmly against them—challenge their convictions on the ground that the statute of conviction did not criminalize their activity may apply for habeas relief under § 2241 after this Court later makes clear in a retroactively applicable decision that the circuit precedent was wrong and that they are legally innocent of the crime of conviction.
Monday, May 2, 2022
The Supreme Court has adopted amendments to the Federal Rules of Civil Procedure, as well as amendments to the Federal Rules of Appellate Procedure, the Federal Rules of Bankruptcy Procedure, and the Federal Rules of Criminal Procedure, and transmitted them to Congress.
The FRCP amendments include amendments to Rule 7.1 and a new set of Supplemental Rules for Social Security Review Actions Under 42 U.S.C. § 405(g). The Rule 7.1 amendments, among other things, create a new disclosure requirement to facilitate early determinations of whether diversity jurisdiction exists. The new supplemental rules for § 405(g) actions establish a uniform procedure for such actions.
Unless Congress intervenes, these amendments will take effect on December 1, 2022.
You can find the full transmittal package, including redlines and advisory committee notes, here.
Monday, April 25, 2022
“Nearly 80 years removed from International Shoe, it seems corporations continue to receive special jurisdictional protections in the name of the Constitution. Less clear is why.” Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1038 (2021) (Gorsuch J., concurring). This petition seeks resolution of an issue that has divided courts around the country. More than a dozen state supreme courts and every federal court of appeals have weighed in on the question with conflicting results.
An unbroken line of this Court’s cases holds that a court may exercise personal jurisdiction with a party’s consent. Corporations enforce that precedent to the letter in their contracts of adhesion, requiring flesh and blood consumers to litigate disputes with businesses in often-distant tribunals. E.g., Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). Turnabout should be fair play (and is, incidentally, consistent with substantial justice). Consistent with that rule, states have enacted laws requiring corporations operating within their boundaries to consent to personal jurisdiction when they register to do business in those states. The Pennsylvania Supreme Court found such a statute unconstitutional under this Court’s decision in International Shoe v. Washington, 326 U.S. 310 (1945), and its progeny. That erroneous result is but the latest decision among dozens that are squarely divided on the question presented:
Whether the Due Process Clause of the Fourteenth Amendment prohibits a state from requiring a corporation to consent to personal jurisdiction to do business in the state.
Friday, April 22, 2022
Yesterday’s busy Supreme Court opinion day featured a number of interesting decisions:
- In Boechler v. Commissioner, the Court once again weighed in on whether a litigation-related deadline is jurisdictional and, if not, whether it is subject to equitable tolling. The case involves 26 U.S.C. § 6330(d)(1)’s 30-day deadline for petitioning the Tax Court to review certain determinations by the Internal Revenue Service. Writing for a unanimous Court, Justice Barrett concludes that it “is an ordinary, nonjurisdictional deadline subject to equitable tolling.”
- Brown v. Davenport involves the relationship between the deferential standard of review in the AEDPA [28 U.S.C. § 2254(d)(1)] and the requirement that any state court error cause sufficient prejudice to the defendant under Brecht v. Abrahamson, 507 U.S. 619 (1993). Writing for a six-justice majority, Justice Gorsuch concludes that “a federal court cannot grant relief without first applying both the test this Court outlined in Brecht and the one Congress prescribed in AEDPA.” Justice Kagan authors a dissenting opinion, joined by Justices Breyer and Sotomayor, calling the majority’s approach “pointless” because “the Brecht standard ‘obviously subsumes’ the ‘more liberal’ AEDPA one: If a defendant meets the former, he will ‘necessarily’ meet the latter too.” The opinions also include a robust exchange regarding the history of habeas corpus that is well worth a read.
- And in Cassirer v. Thyssen-Bornemisza Collection Foundation, the Court considered what choice-of-law rule governs claims against a foreign state or instrumentality under the Foreign Sovereign Immunities Act. Justice Kagan’s opinion for a unanimous Court holds that courts should apply “whatever choice-of-law rule the court would use if the defendant were not a foreign-state actor, but instead a private party.” In a property-law dispute (this case was a suit to recover expropriated property), that means using “the forum State’s choice-of-law rule, not a rule deriving from federal common law.”
Thursday, April 7, 2022
Today the Fourth Circuit issued a unanimous decision in Mayor & City Council of Baltimore v. BP P.L.C., on remand from last year’s Supreme Court decision (covered here). Judge Floyd’s 93-page opinion, joined by Chief Judge Gregory and Judge Thacker, affirms the district court’s order remanding the case to Maryland state court. It begins:
This appeal returns to us on remand from the Supreme Court, and we are now tasked with examining the entirety of the district court’s remand order to determine if the climate-change lawsuit in question was properly removed to federal court. BP P.L.C. v. Mayor & City Council of Balt., 141 S. Ct. 1532, 1538, 1543 (2021). To accomplish that charge, we must evaluate eight distinct grounds for removal that twenty-six multinational oil and gas companies (Defendants) maintain provide federal jurisdiction over the Mayor and City Council of Baltimore’s (Baltimore) climate-change action. Because we conclude that none of Defendants’ bases for removal permit the exercise of federal jurisdiction, we affirm the district court’s remand order.
For those keeping score, the “eight distinct grounds” are:
(1) federal common law; (2) substantial issues of federal law, including foreign affairs, under Grable; (3) complete preemption under the CAA, 42 U.S.C. §§ 7401–7671q; (4) federal enclaves; (5) the OCSLA, 43 U.S.C. § 1349(b)(1); (6) the bankruptcy removal statute, 28 U.S.C. § 1452(a); (7) the admiralty jurisdiction statute, 28 U.S.C. § 1333(1); and (8) the federal officer removal statute, 28 U.S.C. § 1442(a)(1).
The opinion concludes:
The impacts of climate change undoubtably have local, national, and international ramifications. See Massachusetts, 549 U.S at 521–53 (noting that the harms associated with climate change are “serious and well recognized”). But those consequences do not necessarily confer jurisdiction upon federal courts carte blanche. In this case, a municipality has decided to exclusively rely upon state-law claims to remedy its own climate-change injuries, which it perceives were caused, at least in part, by Defendants’ fossil-fuel products and strategic misinformation campaign. These claims do not belong in federal court. Given the jurisdictional inquiry before us, we take no view on whether Baltimore will ultimately fail or succeed in proving its claims under Maryland law. We cannot decide those questions. But we are confident that Maryland courts can capably adjudicate claims arising under their own laws that fail to otherwise provide any federal jurisdiction. * * *
Thursday, March 31, 2022
Today the Supreme Court issued its decision in Badgerow v. Walters (covered earlier here). Justice Kagan’s majority opinion concludes that when a request to confirm or vacate an arbitral award under Sections 9 and 10 of the Federal Arbitration Act (FAA) is filed in federal court, “a court may look only to the application actually submitted to it in assessing its jurisdiction.” That is, the Court rejected the so-called “look-through” approach that it had endorsed for petitions to compel arbitration under Section 4 of the FAA in Vaden v. Discover Bank, 556 U.S. 49 (2009). Justice Kagan reasoned that Sections 9 and 10 “lack Section 4’s distinctive language directing a look-through, on which Vaden rested.”
Justice Breyer was the lone dissenter, arguing that “Congress intended a single approach for determining jurisdiction of the FAA’s interrelated enforcement mechanisms, not one approach for the mechanism provided in Section 4 and a different approach for the mechanisms provided in all other sections.”
Monday, March 28, 2022
Whether the Arizona Supreme Court’s holding that Arizona Rule of Criminal Procedure 32.1(g) precluded post-conviction relief is an adequate and independent state-law ground for the judgment.
Friday, March 11, 2022
This morning, the Supreme Court of Texas issued its decision in Whole Woman’s Health v. Jackson. It is the latest development in the litigation over Texas’s abortion law, S.B. 8. After the U.S. Supreme Court’s decisions in December (covered here), the Fifth Circuit certified to the Texas Supreme Court the following question, which implicates one narrow path for challenging S.B. 8 that the U.S. Supreme Court left open:
Whether Texas law authorizes the Attorney General, Texas Medical Board, the Texas Board of Nursing, the Texas Board of Pharmacy, or the Texas Health and Human Services Commission, directly or indirectly, to take disciplinary or adverse action of any sort against individuals or entities that violate the Texas Heartbeat Act, given the enforcement authority granted by various provisions of the Texas Occupations Code, the Texas Administrative Code, and the Texas Health and Safety Code and given the restrictions on public enforcement in sections 171.005, 171.207, and 171.208(a) of the Texas Health and Safety Code.
23 F.4th 380, 389 (5th Cir. 2022).
In today’s opinion by Justice Boyd, the Texas Supreme Court gives the following answer:
Senate Bill 8 provides that its requirements may be enforced by a private civil action, that no state official may bring or participate as a party in any such action, that such an action is the exclusive means to enforce the requirements, and that these restrictions apply notwithstanding any other law. Based on these provisions, we conclude that Texas law does not grant the state-agency executives named as defendants in this case any authority to enforce the Act’s requirements, either directly or indirectly. We answer the Fifth Circuit’s certified question No.
Friday, March 4, 2022
A Busy Couple of Days at SCOTUS: Intervention, the State Secrets Privilege, and the State Secrets Privilege
The Supreme Court handed down several opinions today and yesterday, including one case on intervention and two cases on the state secrets privilege.
In Cameron v. EMW Women’s Surgical Center, the Court reversed the Sixth Circuit’s denial of the Kentucky attorney general’s motion to intervene on appeal in a case challenging the constitutionality of a Kentucky abortion law. Justice Alito wrote the majority opinion, from which Justice Sotomayor dissented. Justices Kagan and Breyer did not join the majority opinion, but concurred in the judgment in an opinion authored by Justice Kagan.
In United States v. Zubaydah, a fractured Court found that the state secrets privilege blocked a Guantánamo Bay detainee’s discovery request under 28 U.S.C. § 1782 seeking to obtain information to use in Polish litigation regarding his treatment at a CIA detention cite; it therefore reversed the Ninth Circuit’s ruling that former CIA contractors could be required to confirm the location of the site. Here’s the headcount:
BREYER, J., delivered the opinion of the Court, except as to Parts II– B–2 and III. ROBERTS, C. J., joined that opinion in full, KAVANAUGH and BARRETT, JJ., joined as to all but Part II–B–2, KAGAN, J., joined as to all but Parts III and IV and the judgment of dismissal, and THOMAS and ALITO, JJ., joined Part IV. THOMAS, J., filed an opinion concurring in part and concurring in the judgment, in which ALITO, J., joined. KAVANAUGH, J., filed an opinion concurring in part, in which BARRETT, J., joined. KAGAN, J., filed an opinion concurring in part and dissenting in part. GORSUCH, J., filed a dissenting opinion, in which SOTOMAYOR, J., joined.
And in FBI v. Fazaga, the Court unanimously held that § 1806(f) of the Foreign Intelligence Surveillance Act did not “eliminate, curtail, or modify” the state secrets privilege. Justice Alito authored the opinion of the Court, which remanded the case for lower courts to decide whether the state secrets privilege applied and whether dismissal of the plaintiffs’ claims was warranted.
Tuesday, February 22, 2022
Today the Supreme Court granted certiorari in Arellano v. McDonough, which involves the effect of Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990), on applications for veterans’ disability benefits. Here are the questions presented:
(1) Does Irwin’s rebuttable presumption of equitable tolling apply to the one-year statutory deadline in 38 U.S.C. § 5110(b)(1) for seeking retroactive disability benefits, and, if so, has the Government rebutted that presumption?
(2) If 38 U.S.C. § 5110(b)(1) is amenable to equitable tolling, should this case be remanded so the agency can consider the particular facts and circumstances in the first instance?
Tuesday, February 8, 2022
Yesterday, the Supreme Court issued a decision in Merrill v. Milligan and Merrill v. Caster. By a 5-4 vote, the Court stayed the three-judge district court’s order, which had found that Alabama’s redistricting plan violated Section 2 of the Voting Rights Act and must be revised for the 2022 election. The Supreme Court noted probable jurisdiction in Merrill and granted certiorari before judgment in Caster, setting up both cases to be argued on the merits but allowing the challenged redistricting plan to be used in the 2022 election.
Justice Kavanaugh, joined by Justice Alito, wrote an opinion concurring in the stay grant.
Chief Justice Roberts and Justice Kagan (the latter joined by Justices Breyer and Sotomayor) each wrote opinions dissenting from the stay grant.
Monday, January 24, 2022
Today the Supreme Court granted certiorari in Axon Enterprise, Inc. v. FTC, which presents the following question: “Whether Congress impliedly stripped federal district courts of jurisdiction over constitutional challenges to the Federal Trade Commission’s structure, procedures, and existence by granting the courts of appeals jurisdiction to ‘affirm, enforce, modify, or set aside’ the Commission’s cease-and-desist orders.”
The Court limited the cert. grant to this issue only, declining to address a second question regarding the constitutionality of the FTC’s structure regarding administrative law judges.
Monday, January 10, 2022
Federal Rule of Civil Procedure 60(b)(1) authorizes relief from final judgment based on “mistake,” as well as inadvertence, surprise, or excusable neglect.
The question presented is:
Whether Rule 60(b)(1) authorizes relief based on a district court’s error of law.
Friday, December 17, 2021
Yesterday, U.S. District Judge Colleen McMahon (S.D.N.Y.) issued a decision vacating the bankruptcy judge’s earlier order (covered here) that had given individual members of the Sackler Family immunity from civil lawsuits relating to the opioid epidemic. Here are some excerpts from the opinion’s introduction:
The Plan confirmed by the Bankruptcy Court extinguishes all civil claims against the Sacklers that relate in any way to the operations of Purdue – including claims on which certain members of the Sackler family could be held personally liable to entities other than Purdue (principally the various states). These claims could not be released if the Sacklers were themselves debtors in bankruptcy. ***
The great unsettled question in this case is whether the Bankruptcy Court – or any court – is statutorily authorized to grant such releases. This issue has split the federal Circuits for decades. While the Circuits that say no are united in their reasoning, the Circuits that say yes offer various justifications for their conclusions. And – crucially for this case – although the Second Circuit identified the question as open back in 2005, it has not yet had occasion to analyze the issue. Its only guidance to the lower courts, uttered in that 2005 opinion, is this: because statutory authority is questionable and such releases can be abused, they should be granted sparingly and only in “unique” cases. ***
Aided by superb briefing and argument on both sides of the question, and by extended ruminations on the subject by several esteemed bankruptcy judges of our own District – Judge Drain not the least – this Court concludes that the Bankruptcy Code does not authorize such nonconsensual non-debtor releases: not in its express text (which is conceded); not in its silence (which is disputed); and not in any section or sections of the Bankruptcy Code that, read singly or together, purport to confer generalized or “residual” powers on a court sitting in bankruptcy.
Thursday, December 16, 2021
The Supreme Court granted certiorari yesterday in two interesting cases.
Torres v. Texas Department of Public Safety involves the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). It presents the question “whether Congress has the power to authorize suits against nonconsenting states pursuant to its War Powers.”
Viking River Cruises, Inc. v. Moriana involves the effect of the Federal Arbitration Act on the California Private Attorneys General Act (“PAGA”). It presents the question: “Whether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under PAGA.”