The sitting that everyone has been waiting for is upon us. The Court’s December sitting contains the most talked-about case of the term: Masterpiece Cakeshop v. Colorado Civil Rights Commission. This case will put Justice Kennedy at the forefront of two somewhat conflicting ideals: non-discrimination and free speech/freedom of religion. Should Jack Phillips have been allowed to deny a request to make a custom cake for a same-sex couple because it violated his deeply held religious beliefs? Or was his exercise of his religion discrimination against the couple? Justice Kennedy has authored the three major LGBTQ-related Supreme Court decisions, Lawrence v. Texas, United States v. Windsor, and Obergefell v. Hodges. But, in Obergefell, he expressly stated that “those who adhere to religious doctrines, may continue to advocate with utmost, sincere conviction that, by divine precepts, same-sex marriage should not be condoned.” He will have to decide how far that statement should be interpreted.
Along with Masterpiece Cakeshop, the Court will examine state sports betting statutes in light of anti-commandeering, a statutory provision requiring a percentage of attorneys’ fees to be paid out of a civil award of a monetary sum, and an omnibus provision in the Internal Revenue Code that, if interpreted broadly, could mean that throwing away a business receipt could be considered felonious conduct.
This month, like October and November, includes cases that have been widely reported on by major mainstream media outlets. For example, The New York Times’ podcast The Daily gave a run down of Carpenter on Monday. And with the creation of RadioLab’s Supreme Court podcast More Perfect, more people than ever are up to date on the Court’s blockbuster term and the implications of Supreme Court decisions. While Masterpiece Cakeshop and Carpenter are certainly the most talked about cases for the December sitting, it is important to examine the implications of the other, less well-known cases to be decided this term. Cases like Digital Realty Trust, if decided for petitioners, will mean that all whistleblowers will have to report violations to the SEC or they will not be protected by anti-retaliation statutes, but employees may not even know their rights without looking at Dodd-Frank. That decision, combined with a decision for petitioners in Epic Systems Corp. v. Lewis (mandating employee arbitration) could seriously narrow employees’ rights in the workplace and give more power to corporations, who are already heavily protected entities in our legal system. At On the Docket we endeavor to provide you with key information on the implications of not just the major cases of the term, but about cases that may not seem at first glance as though they will have a noticeable impact.
December 4
Christie v. National Collegiate Athletic Association
No. 16-476; 3d Cir.
In a highly anticipated case this term, Christie v. NCAA could radically change the legality of sports betting throughout the United States. The history of this case spans back to 1992 when Congress enacted the Professional and Amateur Sports Protection Act (“PASPA”). PASPA banned sports betting in forty-six states, exempting four states—Nevada, Delaware, Oregon, and Montana—that had already adopted sports betting practices at the time of enactment. PASPA also included a provision exempting New Jersey, provided that the state enact a sports betting scheme within one year of enactment. New Jersey failed to enact a sports betting scheme within one year; instead, it waited twenty years.
In 2012, following pressure from residents and under the leadership of Governor Chris Christie, New Jersey attempted to legalize sports gambling by expressly authorizing sports betting at casinos and race-tracks in the state. The rationale, provided by New Jersey leaders including Senator Menendez, was that sports betting occurs regardless of its legalization; if legalized, however, New Jersey could collect revenue on it and protect against the dangers of black-market sports betting. Governor Christie argued that legalization would greatly benefit the state, as it would allow New Jersey to collect millions of dollars in revenue and taxes. The 2012 law failed in the courts but New Jersey enacted a similar, albeit less direct, law in 2014. This second law, rather than explicitly authorizing sports betting, repealed New Jersey’s prohibition on sports betting. The district court granted summary judgment in favor of the sports leagues challenging this law. A divided Third Circuit affirmed, and then an en banc panel affirmed the majority. The Supreme Court, surprisingly to some, granted certiorari.
The constitutional question before the Court is whether PASPA violates the Tenth Amendment—specifically, whether it violates the anti-commandeering doctrine. If the Court finds PASPA unconstitutional, then New Jersey and all other states would be free to authorize sports gambling.
The anti-commandeering doctrine, originating from several Supreme Court decisions interpreting the Tenth Amendment, limits the federal government’s ability to coerce state officials into adopting a particular regulatory scheme or administering federal law. The respondents—the NFL, NBA, MLB, NHL, and NCAA—assert that PASPA is constitutional because it does not force New Jersey to do anything as it only prevents New Jersey from actively legalizing sports betting. In effect, PASPA is passive, and the anti-commandeering doctrine focuses on the active nature of a federal law, they say. New Jersey disputes this interpretation of the anti-commandeering doctrine; as a practical matter, PASPA has the same effect on New Jersey, whether it is active or passive.
Cases relying on the anti-commandeering doctrine tend to fall along party lines, so all eyes will be on Justice Kennedy—the usual swing vote. Seeing as state representatives in several other states have already proposed legislation legalizing sports betting, New Jersey will hardly be the only state interested in the outcome of this case.
Rubin v. Islamic Republic of Iran
No. 16-534; 7th Cir.
How do you get justice against the Iranian government in an American court? In recent years, Congress has provided more avenues for families of terror victims to collect on judgments against nations that sponsor terrorist attacks. In Rubin v. Islamic Republic of Iran, the Court will decide whether those statutory avenues for collecting on judgments allow petitioners to attach the judgment to and seize precious Iranian antiquities.
The petitioners’ suit arises out of a 1997 suicide bombing, sponsored by Iran, of a pedestrian mall in Jerusalem. In 2003, the District Court for the District of Columbia awarded plaintiffs $71.5 million in damages. After Iran failed to pay, the petitioners sought to collect on the judgment in the Northern District of Illinois, seeking to attach the judgment to Persian artifacts belonging to Iran and housed at the Field Museum of Natural History and the University of Chicago’s Oriental Institute.
The case turns on the interpretation of a provision of the Foreign Sovereign Immunities Act (“FSIA”). In 2008, Congress amended FSIA to include a terrorism-related exception to foreign sovereign immunity. See 28 U.S.C. § 1610(g) (2012). Petitioners contend that § 1610(g) is a freestanding exception that allows creditors to attach property regardless of whether it meets another exception in the FSIA. The district court rejected their argument, holding that the provision allows plaintiffs to attach the property of a terrorism sponsor’s agents or instrumentalities, but only if the property meets the criteria of a separate statutory exception to foreign sovereign immunity. The Seventh Circuit affirmed, creating a split with the Ninth Circuit, which had held that § 1610(g) does create a freestanding exception enlarging plaintiffs’ ability to attach the property of foreign sovereigns in terrorism-related cases. See Bennett v. Islamic Republic of Iran, 825 F.3d 950 (9th Cir. 2016).
As might be expected for a question of statutory interpretation, the parties’ arguments boil down to dueling assertions about the statutory text, its purpose, and legislative history. Petitioners argue that Congress intended to except all property of state sponsors of terrorism from sovereign immunity, and the law should be construed expansively to achieve its purpose. Moreover, because the law only applies to the handful of nations listed by the State Department as sponsors of terrorism, petitioners argue that the interests of terrorism victims should outweigh international comity concerns.
By contrast, Iran reads § 1610(g) to be far narrower in scope. Iran hones in on the language in the statute allowing attachment “as providing in [section 1610]” to show that the intent was for § 1610(g) to attach to the other exceptions in § 1610. Iran argues that, while the provision allows plaintiffs to reach the property of foreign sovereigns, they may only do so if the property fits under a separate statutory exception to immunity, such as the exception for property involved in commercial activity. Additionally, Iran argues that petitioners’ reading of the provision as a freestanding separate exception to sovereign immunity would render the amendments that Congress made to the existing exceptions when it enacted § 1610(g) surplus. Moreover, Iran argues, Petitioners’ expansive reading would run against the typically restrictive construction of exceptions to foreign sovereign immunity and violate international standards, which limit exceptions to foreign sovereign immunity to commercial property.
The case places the United States in a delicate position between the victims of Iran-sponsored terrorism and other nations concerned about the ramifications of a decision subjecting Iran’s U.S.-based property to attachment. In any event, fears about possible international blowback appear to have won out: the government has filed an amicus brief in support of Iran’s position.
December 5
Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission
No. 16-111; Colo. App.
Likely the most talked about case this term, Masterpiece Cakeshop will finally be heard. Most major news outlets have covered the case extensively in the run up to oral arguments; here at GW Law, we held a panel where scholars discussed the arguments.
To remind readers, the legal question underlying the case is “Whether applying Colorado’s public accommodations law to compel the petitioner to create expression that violates his sincerely held religious beliefs about marriage violates the free speech or free exercise clauses of the First Amendment.”
The Colorado Anti-Discrimination Act (“CDA”) provides that “it is a discriminatory practice and unlawful for a person, directly or indirectly, to refuse, withhold from, or deny to an individual or a group, because of disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry, the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation . . . .” CDA § 24-34-601.
Jack Phillips, owner of Masterpiece Cakeshop, declined to create a custom cake to celebrate a same-sex marriage based on his religious beliefs, but offered other cakes for the couple to purchase. After he declined to create the custom cake, the Colorado Civil Rights Commission ordered that he must create custom cakes for same-sex marriages if he intends to continue creating custom cakes for opposite-sex marriages. Mr. Phillips appealed to the Colorado Court of Appeals.
Mr. Phillips argued that he did not discriminate against the same-sex couple when he declined to make them a custom cake because he did so based on his First Amendment freedom of religious expression, and to force him to create cakes against his religious beliefs unlawfully compels speech. The Colorado Court of Appeals rejected his arguments and held that he violated the CDA by discriminating against the same-sex couple when declining to make a custom cake. The court also held that the Civil Rights Commission did not compel his speech by ordering him to create custom cakes for same-sex marriages, and that the CDA does not violate the First Amendment freedom of expression clause.
During GW Law’s Panel Previewing the 2017 Term, Ms. Sherrilyn Ifill of the NAACP brought up an interesting historical point about this case that we feel is worth repeating. In Newman v. Piggie Park, the owner of Piggie Park barbeque argued that he should be allowed to curtail service to African-Americans because his special recipe was his artistic expression and it was against his religious beliefs to serve African-Americans. Similar to Mr. Phillips, he allowed African-Americans to be served from a back window, but would not allow them into the shop because it was against his religious belief. She reminded the audience that “religion was very often the rationale that was offered by segregationists and others as a reason for why they would not serve African-Americans.” Will the Court agree that denying to create a custom cake for a same-sex couple should be interpreted the same way as curtailing service based on race was in Piggie Park? Does same-sex marriage have more of a grounding in religion than race? Racial discrimination has always received strict scrutiny judicial review, but sexual orientation has not.
On the other hand, it is well-documented that Mr. Phillips truly denies business when it goes against his religious beliefs. Mr. Phillips declines to make cakes containing alcohol or celebrating Halloween also based on his deeply-held religious beliefs. As GW Professor Jonathan Turley noted in our panel, this case represents the culmination of the collision course between discrimination laws and free speech, and the Court will either have to thread the needle between the two or come down in favor of either discrimination or free speech. To complicate matters more, Justice Kennedy, as always, will likely be the swing vote. This is a tough position for him to be in because he has been a big proponent of free speech; yet he has also been a Supreme Court beacon for expanding the rights of the LGBTQ community, writing the decisions in Lawrence v. Texas, United States v. Windsor, and Obergefell v. Hodges, where he explicitly held that “those who adhere to religious doctrines, may continue to advocate with utmost, sincere conviction that, by divine precepts, same-sex marriage should not be condoned.” He will now have to decide to what degree he intended that holding to be interpreted.
December 6
Murphy v. Smith
No. 16-1067; 7th Cir.
Under 42 U.S.C. § 1997e, when a prisoner brings a successful civil rights lawsuit and is awarded a monetary sum, a portion of that sum, not to exceed twenty-five percent, is supposed to be used to satisfy any attorneys’ fees that may have been awarded to the plaintiff’s lawyers. The question currently creating a split among the circuits is what “not to exceed twenty-five percent” of the award means—whether it means up to 25% or exactly 25%.
Charles Murphy was a prisoner at the Vandalia Correctional Center in Illinois. On July 25th, 2011, he reported a mess at his assigned seat and was told to clean it up and leave the dining area. He was handcuffed and escorted into a segregation unit. Upon arrival, Murphy ignored officers’ inquiries about where he normally resided. The officer repeatedly inserted his finger into Murphy’s ear asking him if he was deaf. Then, Murphy was escorted by three officers and was taunted by another about what would happen next time his handcuffs came off. The officer hit Murphy in the eye, applied a chokehold, and Murphy passed out. While unconscious he was pushed into a cell.
Thirty minutes later, a nurse checked on Murphy. The orbital rim of his eye was crushed and required surgery. He did not completely recover and continues to have doubled and blurred vision. Murphy sued both the officer who hit him and another officer, and a jury returned a verdict for Murphy of $307,733.82. The District Court also awarded attorneys’ fees and indicated that ten percent of the verdict must be applied to those fees.
One of the issues reviewed on appeal was whether the District Court was proper in deciding that it had discretion to determine what percentage of the verdict was to be applied toward the attorneys’ fees. 42 U.S.C. § 1997e(d)(2) states that “[w]henever a monetary judgement is awarded in an action . . . a portion of the judgment (not to exceed 25 percent) shall be applied to satisfy the amount of attorney’s fees awarded against the defendant.”
The Seventh Circuit cited a previous en banc ruling in which it decided that the amount awarded was not discretionary and that the full twenty-five percent must be first be applied from the verdict before the defendant can be required to contribute more. See Johnson v. Daley, 339 F.3d 582, 585 (7th Cir. 2003) (en banc). The Second, Third, Sixth, and Eighth Circuits, however, have held that the phrase “not to exceed 25 percent” means any amount up to twenty-five percent will suffice. The Supreme Court has agreed to hear this case and determine which reading of the statute is correct.
Marinello v. United States
No. 16-1144; 2nd Cir.
The Internal Revenue Code provides that “whoever corruptly or by force . . . endeavors to intimidate or impede any officer . . . of the United States acting in any official capacity under this title or in any other way corruptly or by force . . . endeavors to obstruct or impede[] the due administration of this title, shall, upon conviction thereof, be fined not more than $5,000 or imprisoned not more than 3 years or both.” 26 U.S.C. § 7212(a). The circuit courts have interpreted the statutory language in different ways. The majority of circuits, namely the First, Second, Ninth, and Tenth, hold that a defendant may be guilty even if he has no knowledge of a pending IRS action or investigation against him, or even if there is no pending action or investigation against him. The Sixth Circuit requires the government to prove that a defendant obstructed a pending IRS action or investigation about which he had knowledge.
Mr. Marinello owned and operated a freight service business in New York that shipped items between the United States and Canada. For almost twenty years, Mr. Marinello failed to keep business records or file corporate or personal income tax returns. Unbeknownst to Mr. Marinello, the IRS began investigating him in 2004, but closed the investigation because it could not determine whether the income that went unreported was significant. The IRS reopened its investigation in 2009, and during an interview, Mr. Marinello admitted his failure to file tax returns, his mingling of business and personal income, and his destruction of bank statements and business records. He was charged and convicted on nine counts, including one count under 22 U.S.C.§ 7212(a). Mr. Marinello appealed to the Second Circuit, arguing that the government did not prove the requisite knowledge under § 7212(a).
Mr. Marinello argues that the interpretation of the First, Second, Ninth, and Tenth Circuits that removes a requirement for the government to prove knowledge of an IRS action or investigation is too broad. He argues that this interpretation turns the provision into a general prohibition on any conduct that hinders the IRS in any way. For example, Mr. Marinello argues that even “throwing away a business receipt” could be considered felonious conduct because it would obstruct the IRS’s ability to assess or collect taxes. The Second Circuit argued that the absence of proving knowledge would not broaden the statute because the government still had to prove that the defendant acted corruptly. Mr. Marinello argues that the Supreme Court should accept the Sixth Circuit’s interpretation because it is in line with prior decisions. The Court already recognizes the need to “exercise restraint in assessing the reach of a federal criminal statute . . . .,” e.g., United States v. Aguilar, 515 U.S. 593, 600 (1995), and has cabined other statutory “catchall” provisions. The government argues that the plain language of the statute does not state that an IRS proceeding or investigation must be underway when a defendant acts corruptly, thus there should not be a knowledge requirement.
The Court in recent years has rejected overbroad obstruction of justice statutes, likely to protect defendants from an abuse of prosecutorial discretion. While it is assumed that prosecutors will bring obstruction of justice charges against defendants who really obstruct justice, the Court has shown that it is concerned with the potential for these omnibus provisions to attach to much more than Congress intended. Mr. Marinello’s case will be added to the growing line of jurisprudence related to this issue, and it will be interesting to see whether the Court applies its reasoning from prior decisions, or decides that the majority of the circuits are correct.
