After a consequential two years in which the law of gun rights, substantive due process, religious liberty, and affirmative action, among others, was made anew, the Supreme Court’s October 2023 Term features a wide array of cases that will refine the scope of its “history and tradition” approach in the Second Amendment context, contemplate the intersection of social media and the First Amendment, reconsider the foundations of the modern administrative state, and much more. On The Docket will keep you updated and informed as the Court navigates through its October 2023 Term.
Table of Contents
Consumer Financial Protection Bureau v. Community Financial Services Association of America
No. 22-448, 5th Cir. (Argued Oct. 3, 2023)
Preview by Bekah Bass, Articles Editor
In Consumer Financial Protection Bureau v. Community Financial Services Association of America, the Consumer Financial Protection Bureau (“CFPB”) is appealing a decision by the Fifth Circuit which found that the CFPB’s funding mechanism violates the Constitution’s Appropriations Clause. The CFPB’s funding mechanism specifies that the CFPB will receive up to $750.9 million adjusted for inflation in annual funding from the “combined earnings of the Federal Reserve System.” 12 U.S.C. § 5497. The respondents argued that the CFPB’s funding mechanism unconstitutionally exceeds Congress’s power under the Appropriations Clause, which reads in relevant part: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” U.S. Const. art. I, § 9, cl. 7. As a result of this alleged unconstitutionality, the respondents argued that CFPB regulations are invalid and must be set aside.
The CFPB’s arguments focused on the text, history, and precedent. The government pointed out that the text of the Appropriations Clause does not limit congressional authority to determine what level of specificity an appropriation requires, its permissible duration. Next, the CFPB reviewed extensive historical evidence that its funding mechanism is not a constitutional anomaly: Congress has made lump-sum appropriations where the Executive has the discretion to spend up to a certain amount; standing appropriations, including uncapped appropriations, date back to the founding era; and financial regulatory entities like the First Bank of the United States were funded through means other than taking money directly from the Treasury. Additionally, no other court, except the Fifth Circuit in this case, has ever held that an Act of Congress violated the Appropriations Clause.
Respondents offered a variety of arguments for why the funding mechanism violates the Appropriations Clause, but the common theme throughout was a concern with the separation of powers. They argued that the funding mechanism insulates the CFPB from political accountability, the cap is illusory because the CFPB has never requested the full $750.9 million, and the Agency is self-funded in perpetuity because changing funding would require both chambers of Congress to either persuade or override the President. The respondents also argued that the funding mechanism is a “void delegation of exclusive legislative power” and therefore is not an “Appropriation” or a valid “Law,” and it impermissibly removes the “power of the purse” from Congress. Brief for Respondent at 10, 14. Finally, respondents argued that setting aside CFPB rules was the proper remedy because the funding mechanism is not severable, and the Administrative Procedure Act (“APA”) requires that invalid laws be voided.
The Court heard arguments in this case on October 3, 2023, and Justices questioned both parties on potential limiting factors within the Appropriations Clause’s text, the difference between the separation of powers and the nondelegation doctrine, and whether hypothetical amounts of funding—i.e., $0 and $1 trillion—would violate the Appropriations Clause. Overall, it appeared that the Court is inclined to agree with the CFPB’s understanding of the Appropriations Clause. However, even a favorable ruling for the CFPB could potentially limit the ways Congress is permitted to fund executive agencies in the future.
Murray v. UBS Securities
No. 22-660, 2d Cir. (Argued Oct. 10, 2023)
Preview by Landis Hagerty, Member
Murray v. UBS Securities LLC concerns a dispute over the elements a plaintiff must show to prove they have been retaliated against for whistleblowing under the Sarbanes-Oxley Act (SOX). SOX protects employees of companies in the securities industry who raise concerns about securities law violations to supervisors or government officials. 18 U.S.C. § 1514A(a). Specifically, covered employers may not “demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [protected whistleblowing activity].” Id. Petitioner is a former employee of UBS who claims he was fired due to his internal reporting of fraud on shareholders. Murray v. UBS Sec., LLC, 43 F.4th 254, 256 (2nd Cir. 2022). The Second Circuit reversed a jury award to petitioner on the grounds that the jury was not properly instructed to consider whether plaintiff had proven UBS acted with retaliatory intent, which the court held is an element implied by the term “contributing factor.” Id. at 262–63. The Supreme Court granted certiorari to consider whether proof of retaliatory intent is indeed required.
The anti-retaliation provision in SOX incorporates by reference a burden-shifting framework used for air quality whistleblowers as the procedure and governing burden of proof for retaliation claims. 18 U.S.C. § 1514A(b)(2) (citing 49 U.S.C. § 4121(b)(2)(B)). That framework addresses the difficulty of proving the internal motivations of another by requiring first that a plaintiff make only a prima facie showing that protected whistleblowing activity was a “contributing factor” to an adverse employment decision, then shifting the burden to the defendant to prove by clear and convincing evidence that they would have taken the same action in the absence of that behavior. 49 U.S.C. § 4121(b)(2)(B)(i)-(ii).
Respondents, rather than defending the Second Circuit’s contention that retaliatory intent is required by the language “contributing factor,” argue instead that it arises primarily out of anti-discrimination law jurisprudence. Brief for Respondents at 15. In oral argument, the Court appeared skeptical of that position. Justice Gorsuch asked whether a simple intent to discriminate, meaning to treat differently, might be enough—saying the Second Circuit seems to hold that “in addition to an intent to discriminate [as shown by protected behavior contributing to the adverse employment action], you have to prove a further intent or a motive to retaliate. And we’ve rejected that in the Title VII context many times, saying you may have a further intent of trying to equalize men and women as groups, you may have a further intent of wishing to discriminate on the basis of motherhood. Irrelevant. Intent to discriminate is enough for the day.” Oral Argument at 13:20.
A holding that whistleblowers have additional burdens of proof beyond their activity being a “contributing factor” to negative treatment by employers would have wide-reaching consequences because that language has been employed in a number of similar anti-retaliation schemes throughout the law. Reply Brief for Petitioner at 1.
O’Conner-Ratcliffe v. Garnier
No. 22-324, 9th Cir. (Argued Oct. 31, 2023)
Preview by Tarra Olfat, Member
In O’Conner-Ratcliffe v. Garnier, the Supreme Court will address the First Amendment issues that arise when public officials use social media. The question at hand in this case is whether “a public official engages in state action subject to First Amendment by blocking an individual from [their] social-media account,” when the account is used to feature and communicate job-related matters with the public. Brief for Petitioner at i. Oral arguments were held on October 31, 2023 and the Justices are now deliberating the case.
This case arose after school board members Michelle O’Conner-Ratcliffe and T.J. Zane blocked two individuals from viewing their social media pages. Respondents Christopher and Kimberly Garnier are parents of children in the Poway Unified School District (“PUSD”) in Poway, California and actively engage in criticism of the district’s actions. Brief for Respondent at 2. Petitioners O’Conner-Ratcliffe and Zane (“the Trustees”) created Facebook and Twitter pages for their school-board campaigns in 2014 and continued to use their pages after being elected to the board to post about school-district news and business. Id. at 3–4. Examples of their posts include announcements soliciting community members to apply for board positions, inviting the public to give input at in-person hearings, and invitations to fill out surveys about government activities. Brief for Petitioner at 7–9.
Respondents frequently interacted with Petitioners’ social media accounts, commenting or posting critical remarks on their pages. Petitioners cited the same comment made by the Respondent on 42 of O’Conner-Ratcliffe’s posts and the same reply to 226 of her Tweets. Id. at 7. Following attempts to hide or delete Respondents’ posts, the Petitioner’s ultimately blocked the Garniers from their social media pages in October 2017. Id. The Garniers sued O’Conner-Ratcliffe and Zane, arguing that their social media pages constituted a “public fora” and blocking them violated their First Amendment rights. Brief for Respondent at 2.
The United States District Court for the Southern District of California granted declaratory and injunctive relief for the Garniers following a bench trial but found that the Trustees had qualified immunity from damages claims. The U.S. Court of Appeals for the Ninth Circuit affirmed, holding that the Trustees “used their [social media] pages to [carry] out their official duties” and that the blocking constituted state action in violation of the First Amendment. Id. at 13–15; see also Brief for Petitioner at 2. The Ninth Circuit applied the Sixth Circuits’ totality-of-circumstances inquiry to reason that there was a sufficient nexus between the official’s conduct and the State, holding that the Petitioners’ posts fell within their duties and authority as public officials. Brief for Petitioner at 37. This has been colloquially termed the “duty and authority” test, determining whether the individual had the duty or authority to partake in official state action. Petitioners appealed to the Supreme Court.
Petitioners argue that a public official’s operation of a social media page is not official state action unless it is explicitly authorized as such by the state. Id. at 14–15. In oral arguments, Petitioners’ counsel emphasized that, although a public official may post official speech on their account, that speech is not considered official action unless it is held out as such by the state. Transcript of Oral Argument at 8. Absent the exercise of state duty or authority, a public official’s social media page is their private property, and as such, hold the right to exclude someone from their personal property under Halleck. Id. at 19–20; see also Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct. 1921, 1928 (2021) (holding that a First Amendment claim is not actionable against a private entity). Counsel emphasized the need for a clear and objective test distinguishing private and public social media pages.
Conversely, Respondents argue that the Trustees presented and administered their social media pages as “official organs” for carrying out their duties. They emphasize that the Trustees utilized their social media accounts as part of their jobs, and as such were engaged in state action, including when they blocked the Garniers. Brief for Respondent at 15–17. Specifically, they rely on precedent establishing that when government officials do their job, they are considered state actors. Id. at 19; see also West v. Atkins, 487 U.S. 42, 50 (1988) (holding that a private physician hired by State to provide medical care to prisoners was state actor because the physician was hired to fulfill State’s constitutional obligation to attend to necessary medical care of prison inmates). Respondents’ point to the classification of the Trustees’ Facebook page as “Government Official[s]” and their use of the collective “we” pronouns to further reinforce their argument. Brief for Respondent at 33.
During oral arguments, there was disagreement about which test to use to determine whether public officials’ actions could be considered state action. Counsel for the Petitioner argued for an additional analysis of who controlled and facilitated the social media account in order to fulfill the “duty or authority” test used by the Ninth Circuit. Transcript of Oral Argument at 10. Respondents’ counsel argues that duty and authority can be determined by looking to state law and the appearance and function of the action taken. Id. at 93–95.
The outcome in O’Conner-Ratcliffe v. Garnier is especially important in this new technology-heavy era. Social media has become an inseparable part of society and politics, with public officials heavily relying on social media to communicate with the public. One example of this, former President Trump’s Twitter account, was a topic of debate during the oral arguments. Id. at 15–18. Given the rapid escalation of social media in politics, it is important to carve out the boundaries of what constitutes official government discourse and how citizens can interact with it.
Vidal v. Elster
No. 22-704, Fed. Cir. (Argued Nov. 1, 2023)
Preview by Joseph Davis, Managing Editor
Vidal v. Elster represents the third case of its kind, and most recent example before the Court, to address the relationship between the trademark registration process and the First Amendment’s guarantee of free speech, following Matal v. Tam, 582 U.S. 218 (2017), and Iancu v. Brunetti, 139 S. Ct. 2294 (2019). The issue at hand is the constitutionality of Section 2(c) of the Lanham Act, 15 U.S.C. § 1052(c), which requires the U.S. Patent and Trademark Office to refuse registration to any mark “[c]onsist[ing] of or compris[ing] a name … identifying a particular living individual” without that individual’s consent. It prevents the registration of marks creating a “false suggestion that there is a connection between a particular person and another’s goods or services” so as not to facilitate the marks’ owners from unfairly appropriating other peoples’ goodwill. 15 U.S.C. § 1052(a).
In 2018, Steve Elster applied to register the TRUMP TOO SMALL trademark for his clothing apparel line; his briefs describe his mark in part as a comment on the smallness of Trump’s political policies. See Brief for Petitioner at 6. Both the USPTO examining attorney assigned to the application and the Trademark Trial and Appeal Board found the mark unregistrable because the use of the former President’s name as a mark without his written consent violated Section 2(c). Id. The Board further determined that Section 2(c) “protect[s] rights of privacy and publicity that living persons have in the designations that identify them,” and that the use of Trump’s name unfairly interfered with his privacy and publicity rights. Id. at 29.
The Federal Circuit reversed this judgment, citing First Amendment concerns. It viewed Section 2(c) as a content-based restriction on speech, which automatically triggered a heightened level of scrutiny. Id. at 7. The court ruled that the government’s interest in “restricting speech critical of government officials or public figures” did not survive either intermediate or strict scrutiny, and it therefore held Section 2(c) unconstitutional on an as-applied basis. The United States Supreme Court granted cert. Id.
Both parties agree that the government has an interest in refusing registration to potentially misleading or deceptive indicators of origin. The question presented in this case considers whether Section 2(c) violates the First Amendment’s Free Speech Clause, when an applied-for mark criticizes a government official or public figure.
The government and petitioners are split as to whether the Section 2(c) constitutes a government benefit or a restriction on speech. The government argues that the USPTO’s refusal of the mark does not infringe the First Amendment because Section 2(c) does not affirmatively restrict speech; instead, the issuance of a federal registration comprises a federal benefit. Id. at 16. The success of that argument would allow the government to establish reasonable conditions on trademark registration. Id. at 10. The government also argues that Section 2(c)’s prohibition is reasonable because mark owners such as Mr. Elster still can profit from unregistered marks and register different marks for their goods or services, while protecting individuals’ privacy and publicity right. See Transcript of Oral Argument at 3–4. Elster conversely argues that Section 2(c) restricts speech and therefore should be subject to heightened scrutiny, where there must be a substantial government interest that outweighs free speech interest. See Respondent’s Brief at 2. Here, Elster argues, the government’s interests in protecting publicity and privacy rights do not justify refusing to register marks “at the heart of the First Amendment.” Id. at 13.
During oral arguments, several Justices seemed receptive to the government’s argument that the USPTO’s issuance of registrations constitutes a government benefit. Justice Sotomayor emphasized that this particular case was simply not “infringement on speech” because Section 2(c)’s prohibition on registration did not affirmatively restrict Elster’s use of this mark on an unregistered basis. Transcript of Oral Argument at 20. Justice Gorsuch relied on a historical analysis to state that trademark law had a “long historical tradition” of these types of restrictions, while Justice Kavanaugh added it was hard to argue with a tradition that had been around “since the founding.” Id. at 14, 57. Moreover, Justice Kagan highlighted that while the government could rely on significant case law, “what you can’t find is a case that supports [Elster’s] proposition.” Id. at 51. Although predicting the outcome of any case before the Court based on oral argument is an inherently difficult undertaking, it therefore appears that Elster faces an obstacle that is perhaps not too small.
Department of Agriculture Rural Development Rural Housing Service v. Kirtz
No. 22-846, 3rd Cir. (Argued Nov. 6, 2023)
Preview by Mackenzie Elliott, Member
In Dep’t of Agriculture Rural Development Rural Housing Service v. Kirtz, the Supreme Court will consider whether the civil liability provisions of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, waive the sovereign immunity of the United States.
Congress enacted FCRA in 1970 to “ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52, (2007). The U.S. Department of Agriculture (“USDA”) issued a loan to Reginald Kirtz through its Rural Housing Service. Kirtz v. Trans Union LLC, 46 F.4th 159, 162 (3rd Cir. 2022). Kirtz later found errors in his credit report due to reporting by USDA that damaged his credit score. Kirtz, 46 F.4th at 163. After Kirtz reported the errors, USDA did not take action to correct the information, and Kirtz brought suit under FCRA’s civil liability provisions in sections 1681n and 1681o. Id. The Third Circuit found the United States waived its sovereign immunity under FCRA. The USDA petitioned for certiorari, and the Supreme Court agreed to hear the case.
Petitioner USDA argues that the FCRA does not waive the government’s sovereign immunity because the FCRA lacks unmistakable clear language, and in that absence, the Court must construe the FCRA’s language in favor of immunity in line with the Court’s previous precedent. Brief for Petitioner at 15. USDA also argues that FCRA’s definition of “person” is context dependent, and if such a definition were applied throughout FCRA, it would result in incongruities, such as subjecting the United States to suits for criminal penalties and punitive damages. Id. at 28, 30, 37.
In response, Kirtz argues FCRA’s civil liability provisions waive sovereign immunity for the United States because the provisions in sections 1681n and 1681o apply to any “person” which includes in its definition a “government or governmental subdivision or agency” in § 1681a(b). Brief for Respondent at 14. Respondent also argues FCRA lacks an express exemption limiting the government’s liability found in similar consumer protection statutes, indicating Congress intended FCRA to waive sovereign immunity. Id. at 17.
During oral argument, Justice Thomas and Justice Kagan questioned why the Court should not apply the definition of “person” as written throughout FCRA. Oral Argument at 2:12, 4:11, Dep’t of Agric. Rural Dev. Rural Hous. Serv. v. Kirtz (No. 22-846), https://www.oyez.org/cases/2023/22-846. Chief Justice Roberts and Justice Kavanaugh raised concerns regarding the anomalies that would result from including the United States under the “person” definition throughout FCRA. Id. at 47:50, 50:01. The Court also questioned the parties about its previous holding in Employees of the Dep’t of Pub. Health & Welfare v. Dep’t of Public Health & Welfare, 411 U.S. 279 (1973), where it rejected a waiver of sovereign immunity in the FLSA’s definition of “employer” absent clear language. Oral Argument at 29:32, 42:13.
Given the federal government furnishes significant amounts of credit information, the outcome of this case could have sweeping consequences over recourse for consumers and the public fisc. See George Dylan Boan, “Say the Magic Words”: How Sovereign Immunity Absolves the Federal Government from its Obligations Under the Fair Credit Reporting Act, 99 N.C. L. Rev. 1617, 1619 (2021).
United States v. Rahimi
No. 22-915, 5th Cir. (Argued Nov. 7, 2023)
Preview by Frank Kratovil, Member
“Firearms and domestic strife are a potentially deadly combination.” Petition for Writ of Certiorari at 6. In United States v. Rahimi, the Supreme Court decides whether the Second Amendment bars Congress from disarming individuals subject to domestic violence protective orders. See Brief for Petitioner at 1. “All too often, the only difference between a battered woman and a dead woman is the presence of a gun,” but under the Supreme Court’s current approach, these practical considerations have little to do with Congress’s ability to regulate firearms within the bounds of the Second Amendment. See id. at 9 (quoting United States v. Castleman, 572 U.S. 157, 159-160 (2014)); New York State Rifle & Pistol Ass’n v. Bruen, 141 S.Ct. 2111, 2127 (2022). This case highlights the challenges associated with the Court’s recently articulated “historical analogues” test and its explicit rejection of means-end balancing as a relevant factor in determining the constitutionality of firearm regulations. See Bruen, 141 S.Ct. at 2127.
In December 2019, Respondent Zachey Rahimi assaulted his then girlfriend in a parking lot in Arlington, Texas. See United States v. Rahimi, 61 F.4th 443, 449 (5th Cir. 2023). Following the incident, a Texas state district court issued a protective order prohibiting Rahimi from “committing family violence, going to or within 200 yards of the residence or place of employment of his ex-girlfriend, and engaging in conduct, including following the person, that is reasonably likely to harass, annoy, alarm, abuse, torment, or embarrass either his ex-girlfriend or a member of her family or household,” and from possessing a firearm. See id. (internal quotes and brackets omitted). While subject to this protective order, Rahimi was arrested as a suspect in a series of five shootings in and around Arlington, Texas. See id. Pursuant to this investigation, officers searched Rahimi’s home and discovered a rifle and pistol. See id. Rahimi was subsequently indicted by a federal grand jury for possessing a firearm while subject to a domestic violence restraining order in violation of 18 U.S.C. section 922(g)(8). See id.
Rahimi moved to dismiss the indictment, arguing section 922(g)(8) violates the Second Amendment. See id. The district court denied the motion, finding that the Fifth Circuit’s holding in United States v. McGinnis foreclosed his constitutional challenge to section 922(g)(8). See id. at 450. The Fifth Circuit affirmed. See id. However, following the Supreme Court’s holding in Bruen, the Court withdrew its opinion and ordered supplemental briefing. See id. Upon reconsideration, the Fifth Circuit held Bruen overruled McGinnis and that, under this new test, section 922(g)(8) is unconstitutional. See id. The Supreme Court granted certiorari.
The question before the Supreme Court is whether 18 U.S.C. section 922(g)(8) violates the Second Amendment on its face. See Brief for Petitioner at 1. “Bruen instructs how to proceed.” See Rahimi, 61 F.4th at 453. Under Bruen, the constitutionality of modern firearm regulation hinges on whether the Government can “affirmatively prove that its firearms regulation is part of the historical tradition that delimits the outer bounds of the right to keep and bear arms.” See Bruen, 142 S.Ct. at 2127. This approach “flatly reject[s] any means-end scrutiny as part of this analysis, such that if a statute is inconsistent with the Second Amendment’s text and historical understanding, then it falls under any circumstances.” See Rahimi, 61 F.4th at 453 (citing Bruen, 142 S.Ct. at 2129).
First, the Court must determine whether “the Second Amendment’s plain text covers an individual’s conduct.” See Bruen, 142 S.Ct. at 2126. If so, “the Constitution presumptively protects that conduct,” and the Government then bears the burden of proving that its regulation “is consistent with the Nation’s historical tradition of firearm regulation.” See id. at 2126–30. To meet this burden, the Government must identify “historical precedent from before, during, and even after the founding” that is “relatively similar” to the challenged regulation. See id. at 2131–32 (internal quotations omitted). Bruen instructs that historical precedent is sufficiently analogous if it “impose[d] a comparable burden on the right of armed self-defense” and was “comparably justified.” See id. at 2133. The Government need only “identify a well-established and representative historical analogue, not a historical twin.” See id.
To this end, the Government proffers a series of historical precedents it contends demonstrates section 922(g)(8) “is consistent with the Nation’s historical tradition of firearm regulation.” See id. at 2127. The lower court disagreed, finding “each of these historical regulations falters as relatively similar precursors to section 922(g)(8)” because they burdened the right to keep and bear arms in significantly different ways and to significantly different ends. See Rahimi, 61 F.4th at 456.
On certiorari, the Government argues that the Fifth Circuit “missed the forest for the trees,” in that, while seeking section 922(g)(8)’s “historical twin,” it “overlooked the strong historical evidence supporting the general principle that the Government may disarm dangerous individuals.” See Petition for Writ of Certiorari at 11. For this argument to carry the day, the Court must be willing to accept a broader array of justifications for firearm regulation than those currently available under Bruen. See 142 S.Ct. at 2133. Given Bruen limits firearms regulation to only those “relatively similar” to specific historical precedent, upholding section 922(g)(8) pursuant to a broad general principle would require the Court to deviate significantly from their current approach. See id.
The Respondent highlights this broadening effect, arguing the Government “cannot shoulder the burden of Bruen’s presumption, so it does not even try.” See Brief for Respondent at 7. Rahimi posits section 922(g)(8) is an “outlie[r] that our ancestors would never have accepted” because it differs from founding era regulations in two significant respects. See id. at 12 (quoting Bruen, 142 S. Ct. at 2133). First, he argues the founding generation never responded to domestic violence by banning possession of weapons. See id. at 12. Second, he contends there is no historical precedent for banning a rights-retaining citizen from possessing firearms in the home. See id. at 17. Given that Bruen’s definition of “historical analogue” turns on whether the challenged regulation imposes a “comparable burden” and is “comparably justified,” the Court is likely to give these differences significant weight when evaluating the constitutionality of section 922(g)(8). See 142 S. Ct. at 2133.
At oral argument, the Court’s more conservative justices appeared concerned with adequately limiting the scope of the Government’s proposed “dangerousness” test. See Transcript of Oral Argument at 13. Voicing this concern, Justice Barrett asked, “[Here,] I don’t think you’d get a lot of push-back because this is violence after all, domestic violence. . . . What about more marginal cases? How does the government go about showing whether certain behavior qualifies as dangerous?” See id. This legal concern, however, was largely overshadowed by the justices’ apparent apprehension towards invalidating a law barring someone like Rahimi from possessing a firearm. See id. at 78. Betraying this worry, Chief Justice Roberts asked Counsel bluntly, “Well, to the extent that’s pertinent, you don’t have any doubt that your client’s a dangerous person, do you?” See id. Later, Justice Kagan voiced this concern even more explicitly, stating, “[I]t’s so obvious that people who have guns pose a great danger to others and you don’t give guns to people who have the kind of history of domestic violence that your client has… I’m asking you to clarify your argument because you seem to be running away from it because you can’t stand what the consequences of it are.” See id. at 89.
This case highlights the practical difficulties associated with applying Bruen. See 141 S.Ct. at 2127. It places the Court in the uncomfortable position of determining whether the founding generation would have accepted a modern attempt to curb domestic violence homicide. See id. One does not need to delve deeply into the founding era zeitgeist to discover that the contemporary attitude towards spousal abuse and domestic violence was less enlightened than it is now. See id. Indeed, their views on many subjects were abhorrent by modern standards. See id. This case is significant because it forces the Court to grapple with these antiquated sensibilities and decide just how strictly modern firearm regulation must adhere to them. See id. Their task is made even more difficult considering Bruen’s explicit rejection of any means-end balancing. See id. Rahimi will be an important case in defining the Court’s post-Bruen Second Amendment jurisprudence. 61 F.4th at 449.
Securities and Exchange Commission v. Jarkesy
No. 22-859, 5th Cir. (Argued Nov. 29, 2023)
Preview by John Tuley, Associate
In SEC v. Jarkesy, the Court will decide the future of Administrative Law Judges (“ALJs”). The questions before the Court are whether the SEC’s administrative proceedings violate the Seventh Amendment, whether the SEC’s statutory power to adjudicate through ALJs rather than filing actions in district courts violates the nondelegation doctrine, and whether ALJ’s for-cause removal protections violate Article II. Petition for Writ of Certiorari.
The SEC may enforce the laws they are responsible for through administrative enforcement proceedings which can result in, inter alia, civil penalties. 15 U.S.C. § 77h-1. Alternatively, they can file suit in federal district court seeking the same penalties. 15 U.S.C. § 77t. Here, respondent was an investment advisor for two hedge funds. Petition for a Writ of Certiorari at 3. Respondent was accused of violating several securities laws in this capacity and the SEC sought to enforce these violations in an administrative proceeding. Id. at 4. The administrative proceeding found respondent had violated the laws and imposed civil penalties, disgorgement, and ordered respondent to cease and desist from future investment advising. Id. at 4–5. This decision was upheld on review by the full Commission. Id. at 5. The Court of Appeals reversed this ruling and found that the proceedings violated several of respondent’s constitutional rights at issue in this case. Id. at 5–9.
The SEC argues that the Seventh Amendment applies only to cases adjudicated in an Article III tribunal. Id. at 10 (citing Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 138 S. Ct. 1365, 1379 (2018). They argue that SEC proceedings involve “public rights” and thus, are permissible to be adjudicated by agency administrative proceedings. Petition for Writ of Certiorari at 11. For the nondelegation issue, the SEC argues that the decision how to pursue adjudication is a core executive function, not a legislative function. Id. at 13. It argues that Congress exercised its power in creating the securities laws, but the choice in how to enforce those laws belongs to the SEC as an executive choice. Id. at 13–14. The SEC also argues that no intelligible principles were necessary since Congress did not instruct the SEC to promulgate additional rules on enforcement. Id. at 14. For the tenure protections of ALJs, the SEC argues ALJs are different than agency directors for the purpose of the President’s constitutional discretion of removal. Id. at 18. The Court of Appeals ruled against the SEC on all of these issues. Jarkesy v. SEC, 34 F.4th 446 (5th 2022).
Respondent argues in the alternative that the SEC’s enforcement targets private rights, not public rights, because of the underlying nature of the claim in this case which is fraud. Brief for the Respondent at 9. Respondent also argues that assigning claims to administrative agencies is a “quintessential legislative power” which has instead been left to the SEC. Id. at 10. Finally, the respondent argues that the SEC is asking the Court to create an additional right of tenure protection for ALJs, but that the Court’s precedents forbid this. Id. at 11.
This case could have profound impacts on the future of the SEC’s administrative process and the administrative system as a whole. Many agencies use these ALJs, so a finding that they are unconstitutional will change the system greatly. Given the court’s makeup and their recent decisions challenging administrative authority, it would not be a surprise to see the respondent prevail in this case. How far the Court goes in stripping agencies of their powers remains to be seen.
Moore v. United States
No. 22-800, 9th Cir. (Argued Dec. 5, 2023)
Preview by Zhen Li, Member
The realization concept has been deeply tied to the idea of taxable income. This term, Moore v. United States provides the Supreme Court an opportunity to decide just how far realization should define and constrain taxable income. Petition for Writ of Certiorari.
In 2006, petitioners Charles and Kathleen Moore invested $40,000 in an Indian startup company, which amounted to thirteen percent ownership. The company has been successful and profitable, but it always re-invested the earnings. Petitioners never received any distributions or dividends from their investments throughout the years.
Petitioners’ tax liability controversy arose as the Congress passed a one-time Mandatory Repatriation Tax (“MRT”). The MRT, enacted with the intent to offset potential windfalls from certain taxpayer favorable benefits in the Tax Cuts and Jobs Act of 2017 (“TCJA”), deems certain foreign corporation shareholders liable for their pro rata shares of the corporation’s earning from 1986 to 2017. To illustrate, under the MRT, the petitioners are potentially liable for thirteen percent of the Indian company’s retained earnings from 1986 to 2017 in the tax year of 2017.
Petitioners argue that the MRT is unconstitutional. For one, if the MRT is construed as a direct tax such as a property tax, the MRT would be unconstitutional because it does not fulfill the apportionment requirement under Article I, Section 9 of the Constitution. If the MRT is construed as an income tax, petitioners argue that it does not satisfy the realization requirement long held to be the essential distinction between income tax and direct tax under the Sixteenth Amendment. Petitioners primarily base this argument on Eisner v. Macomber, 252 U.S. 198 (1920) and its progeny, which hold that “income” must be “realized” to be taxable.
Respondent contends that petitioners’ reliance on Macomber is misplaced because Macomber should be interpreted in the narrow context of its own issue—distinguishing share dividend and cash dividend. Respondent states that several cases support this narrow reading. Furthermore, Respondent argues that the Court has consistently interpreted gross income to be “sweep[] broadly.” Brief for Respondent at 9, (quoting United States v. Burke, 504 U.S. 229, 233 (1992)), And many components of the MRT, such as “pro rata” scheme of taxation is similarly adopted in many other Tax Code provisions.
This case offers the Supreme Court a choice to decide the scope of realization, a vastly influential concept in tax law. Some scholars believe that if the Court chooses to uphold the MRT and decide the issue broadly, the Court would open doors to many forms of tax legislation without realization. One of such tax legislations would be a wealth tax, which is currently regarded as a direct tax and subject to the apportionment requirement.
Loper Bright Enterprises v. Raimondo
No. 22-451, D.C. Cir. (Argument Set for Jan. 17, 2024)
Preview by Ethan Syster, Articles Editor
In Loper Bright Enterprises v. Raimondo, the Court will decide whether to overrule the Chevron doctrine, which instructs courts to defer to an agency’s interpretation of a statute unless that interpretation is unreasonable. See Petition for Writ of Certiorari; Chevron v. Nat’l Res. Def. Council, 467 U.S. 837 (1984).
The case involves a challenge by a group of fishing companies to a rule issued by the National Marine Fisheries Service (“NMFS”) requiring fishing boats to pay the salaries of individuals onboard to monitor compliance with fishing laws. The underlying statute, the Magnuson-Stevens Act (“MSA”), provides NMFS authority to require onboard monitors, but is silent, however, as to who shall pay for those monitors. The fishing companies argue that, because in three other circumstances the MSA specifies that the fishing boats themselves must pay for the salaries of other monitors, congressional silence in this provision prohibits the NMFS from requiring the fishing boats to pay the salaries of these observers. A divided panel of the U.S. Court of Appeals for the District of Columbia Circuit affirmed the District Court’s grant of summary judgment in favor of the agency, relying upon Chevron. Loper Bright Enterprises v. Raimondo, 45 F.4th 359 (D.C. Cir. 2022). Specifically, the D.C. Circuit held that the statute did not address who must pay for the monitors, and therefore, the judiciary must defer to the agency’s reasonable interpretation.
The Supreme Court granted certiorari on the question of overruling, or significantly limiting, Chevron. The Justices denied certiorari on the question of whether the agency’s interpretation, requiring that the boats pay the salaries of the onboard monitors, was unreasonable under an application of the Chevron doctrine.
The fishing companies argue that the Chevron doctrine refers to the interpretative methodology of that case, rather than its substantive holding. They contend, therefore, that it is not entitled to the same kind of stare decisis as substantive holdings. In the alternative, the fishing companies assert that the stare decisis considerations weigh in favor of overruling Chevron. Specifically, the companies argue that the doctrine is contrary to separation of powers, the Administrative Procedure Act, and history. Moreover, Chevron has proved unworkable and has destroyed reliance interests. The issue granted for certiorari suggests the Court could, alternatively, rule in favor of the fishing boats by clarifying that statutory silence concerning powers expressly but narrowly granted elsewhere in a statute does not constitute ambiguity requiring deference under Chevron.
The Government argues that Chevron is a “bedrock principle” of administrative law that gives appropriate weight to agency expertise. Brief for the Respondent. The doctrine promotes national uniformity, political accountability, and reflects a “long tradition” of judicial deference to reasonable Executive interpretations. Id. Therefore, the Government argues, stare decisis principles weigh in favor of adhering to Chevron. The Government notes that Congress could alter or eliminate the Chevron framework but has declined to do so. Responding to petitioners’ alternative suggestion to narrow Chevron to statutory silence, the Government argues that the petitioners have failed to offer a workable distinction between silence and ambiguity.
Regardless of whether the Court overrules the Chevron doctrine or limits it, this case is likely to have a significant impact on administrative law and federal regulation.
Justice Jackson recused herself from this case because she sat on the panel of the D.C. Circuit which heard the case below. She is, however, not recused from the consolidated case Relentless, Inc. v. Dep’t. of Commerce, No. 22-1219, which poses an identical issue. Thus, the full Court may still decide whether Chevron stands.
Moody v. NetChoice, LLC
No. 22-277, 11th Cir. (Argument TBD)
Preview by Joseph Cahill, Member
Are social media platforms protected by the First Amendment when moderating content shared across their platforms?
In Moody v. NetChoice, the Supreme Court will jointly address—along with NetChoice v. Paxton—a fascinating split between the Fifth and Eleventh Circuits. These appeals consider whether laws passed by Florida and Texas represent attempts to provide equal access to the “virtual public square” or unconstitutional efforts to prevent social platforms from exercising editorial discretion protected by the First Amendment.
In 2021, Florida Governor Ron DeSantis signed Senate Bill 7072 (S.B. 7072) (codified at Fla. Stat. §§ 106.072 and 501.2041). Before the law’s effective date, NetChoice and the Computer & Communications Industry Association—both trade associations representing major social platforms—sued Florida officials seeking to enjoin the law’s enforcement.
In relevant part, S.B. 7072 restricts the ability of social platforms to moderate and curate the content that appears on their platforms. These restrictions prohibit social platforms from “deplatforming” political candidates, boosting or limiting the visibility of content posted by or about candidates, and censoring a “journalistic enterprise based on the content of its publication or broadcast.” §§ 106.072(2), 501.2041(2)(h), 501.2041(2)(j). Further, S.B. 7072 broadly defines “censoring” to include actions taken to delete posted material as well as any effort to “post an addendum to any content or material.” § 501.2041(1)(b). Platforms like Facebook and X, formerly known as Twitter, have increasingly used these “addendums” on high-visibility posts to add clarifying information or context to help combat misinformation.
NetChoice prevailed in district court, as the Northern District of Florida enjoined those parts of S.B. 7072 that ran afoul of the First Amendment. NetChoice, LLC v. Moody, 546 F. Supp. 3d 1082, 1084 (N.D. Fla. 2021). The district court found that social platforms exercise a kind of “editorial judgment” when managing their social networks similar to that which is exercised by traditional broadcasters or publishers. Id. at 1090. Building on this rationale, the court explained that “a private party that creates or uses its editorial judgment to select content for publication cannot be required by the government to also publish other content in the same manner.” Id. at 1092.
On appeal, the Eleventh Circuit largely agreed, finding that the provisions of S.B. 7072 prohibiting deplatforming and censoring restricted the platforms’ editorial judgment by “forcing them to disseminate messages that they find objectionable.” NetChoice, LLC v. Att’y Gen., Fla., 34 F.4th 1196, 1222 (11th Cir. 2022). Holding that these prohibitions amounted to content-based restrictions subject to strict scrutiny, the Eleventh Circuit found that no legitimate governmental interest could be served by “leveling the expressive playing field.” Id. at 1228.
Now, Florida urges the Supreme Court to recognize that both courts below misjudge S.B. 7072. The State suggests what is really at issue are not restrictions on editorial judgment, but rather “hosting” regulations that focus only on the conduct of these platforms.
Florida suggests that large social platforms should be treated like common carriers or public utilities. The State argues that read correctly, S.B. 7072 seeks only to ensure evenhanded moderation of the virtual public square. In support, Florida offers an analogy to the shopping mall at issue in PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980). There, the Supreme Court upheld government restrictions that effectively required a private shopping mall to “host” the speech of third parties.
However, the Eleventh Circuit found PruneYard easily distinguishable. The panel emphasized that in PruneYard, the mall owner raised no concern that being required to “host” speech would affect the mall owner’s own right to speak. 34 F.4th 1196, 1215. Agreeing with NetChoice, the Eleventh Circuit found that S.B. 7072 restricts the speech rights of platforms by forcing them to host messages that contradict their own community standards. Id.
While the proceedings discussed above have focused primarily on the First Amendment implications of S.B. 7072, Moody also implicates other areas of substantive law. In an amicus brief filed last October, Dean Alan B. Morrison of the George Washington University Law School urged the Court to address the significant questions S.B. 7072 implicates regarding § 230 of the Communications Decency Act and the Dormant Commerce Clause. While the Supreme Court has thus far only requested argument on the First Amendment question discussed above, we’ll be curious to see whether the Court orders additional briefing on these issues.
NetChoice, LLC v. Paxton
No. 22-555, 5th Cir. (Argument TBD)
Preview by Yana Holden, Associate
Does the First Amendment protect the right of social media platforms to moderate content on their websites? NetChoice argues it does in upcoming case, NetChoice, LLC v. Paxton, rising from the Fifth Circuit.
NetChoice filed this suit in response to Texas House Bill 20 (“HB20”), passed in August 2021, that bars social media sites from making viewpoint-, content- or speaker-based editorial decisions on their own platforms. Petition for Writ of Certiorari at i. The apparent rationale of HB20 is to prevent social media platforms from censoring certain viewpoints—viewpoints that may violate community guidelines. This case is closely connected with another upcoming Supreme Court case, NetChoice, LLC v. Moody, which Respondents filed in response to a substantially similar Florida law.
Petitioner NetChoice, a trade association that represents companies including Meta, Google, and TikTok, argues that the First Amendment prohibits laws that restrict certain websites from engaging in “editorial choices about whether, and how, to publish and disseminate speech.” Petition for Writ of Certiorari at i. Petitioner argues the Court should use strict scrutiny to evaluate the constitutionality of HB20 as this law “compels websites to disseminate ‘viewpoint[s]’ it otherwise would not.” Id. at 22.
Respondent Ken Paxton, Attorney General of Texas, claims HB20 protects the rights of social media by providing them “equal, non-discriminatory access to the media.” Response to Petition for Writ of Certiorari, at I. He claims this only applies to the largest social media platforms, Facebook, YouTube, and Twitter, and the platforms will still be permitted to remove entire categories of speech, for example pornography and spam. Id. at 6–8. Respondent argues that this law simply requires these platforms to provide service to everyone regardless of viewpoint and includes some disclosure and operational requirements. Id.
If HB20 is found to be constitutional, Chamber for Progress and the Anti-Defamation League state that platforms “will be powerless to moderate racist manifestos; HB20 would force the hosting of content praising race-based murders and hate-filled rhetoric that Black Americans are not entitled to basic human rights.” Brief for Chamber for Progress, et al. as Amici Curiae in Support of NetChoice, at 4. The Texas Legislature’s attempt to solidify a right to participate in privately held online forums may go too far.
The Supreme Court must decide where to draw the line. On the one hand, the Court may choose to protect the rights of social media users to share their opinions online, even if the speech is offensive and otherwise against current community guidelines. On the other, it may choose to protect the rights of social media platforms to develop an online environment that comports with their community guidelines, and thereby protect other users from hateful speech online.
Is Facebook the new public square? Is the right to tweet hateful rhetoric protected by the First Amendment? Major social media platforms may be forced to decrease efforts to moderate content if the Supreme Court finds that HB20 comports with the First Amendment.
