November 4
Barton v. Barr
No. 18-725, 11th Cir.
Preview by Nicholas Drews
Andre Barton, a citizen of Jamaica, was admitted to the United States in May 1989 and became a lawful permanent resident in 1992. Barton was arrested in January 1996 and convicted of aggravated assault, criminal damage to property, and possession of a firearm during the commission of a felony. After Barton was convicted of violating the Georgia Controlled Substances Act in 2007 and 2008, the Department of Homeland Security served him with a notice to appear before an immigration judge for removal proceedings.
Barton filed an application for cancellation of removal under 8 U.S.C. § 1229b(a), which allows the Attorney General to cancel removal of a lawful permanent resident that, among other requirements, has resided in the U.S. continuously for 7 years. This provision is subject to a “stop-time rule” under § 1229b(d)(1), which terminates the period of continuous residence when an alien commits a qualifying crime that renders them “inadmissible.”
In a motion to pretermit Barton’s application, the government argued that he did not qualify for cancellation of removal because his 1996 offenses rendered him “inadmissible” and terminated his continuous residence, under the “stop-time rule,” a few months short of the 7-year requirement. Barton v. U.S. Att’y Gen., 904 F.3d 1294, 1296–97 (11th Cir. 2018). Barton argued that, as a lawful permanent resident not seeking admission, he could not be rendered “inadmissible” and, as a result, his 1996 offenses did not terminate his period of continuous residence. Id. at 1297. The immigration judge found in the government’s favor and ruled that Barton was ineligible for cancellation of removal. This order was affirmed by a single-member decision of the Board of Immigration Appeals and the United States Court of Appeals for the Eleventh Circuit. The Supreme Court granted certiorari to resolve the question of whether a lawful permanent resident not seeking admission to the United States can be rendered “inadmissible” for the purposes of the “stop-time rule” under § 1229b(d)(1).
In his brief, Barton argues that an offense only renders an alien “inadmissible” if it “actually triggers an adjudication of inadmissibility during the alien’s removal proceeding.” Brief of Petitioner at 12, Barton v. Barr, No. 18-725 (U.S. filed June 26, 2019). Barton relies on several factors, including the plain text of § 1229b(d)(1), to argue that a finding that an offense could “hypothetically” trigger inadmissibility is insufficient for the purposes of the “stop-time rule.” Id. Alternatively, Barton argues that even if the Court were to find that inadmissibility is an “abstract ‘status,’” he could not legally be charged with inadmissibility as a lawful permanent resident. Id. at 14–15. Several groups, including a coalition of former United States immigration judges and various immigrants’ rights organizations, have filed amicus briefs in support of Barton.
The government also relies on the plain text of the statute in arguing that an alien does not need to be actively seeking admission to be rendered “inadmissible” for the purposes of § 1229b(d)(1). Brief for the Respondent at 13, Barton v. Barr, No. 18-725 (U.S. filed Aug. 15, 2019). The government argues that the text of the statute treats “inadmissibility” as a status that can be rendered regardless of whether an alien is seeking admission, id. at 15–16, and that Barton’s 1996 offenses rendered him “inadmissible,” which triggered the “stop-time rule.” Id. at 23. As a result, the government argues that Barton does not qualify for cancellation of removal, id. at 11, and that the judgment of the court of appeals should be affirmed. Id. at 41.
Kansas v. Glover
No. 18-556, Kan.
Preview by Michael Fischer, Online Editor
While driving in his Chevrolet pickup truck along a Kansas road in April 2016, Charles Glover was pulled over by Douglas County Sheriff’s Deputy Mark Mehrer on suspicion that Glover was unlawfully operating his vehicle. Prior to the stop, Deputy Mehrer had run a license plate check on Glover’s vehicle and learned that the truck’s owner, Charles Glover, previously had his license revoked. On suspicion that Glover was driving the vehicle without a valid license, Deputy Mehrer pulled Glover over and confirmed his identity. After confirming that Glover was in fact driving the vehicle, Deputy Mehrer issued him a citation for habitual violation of Kansas traffic laws.
At trial, Glover argued that the traffic stop violated his Fourth Amendment right against unreasonable searches and seizures. As a result, Glover contended, all evidence from the stop should have been excluded. According to Glover, Deputy Mehrer did not have reasonable suspicion to pull him over since he had inferred that the owner of the vehicle was the one driving the vehicle without actually confirming that Glover was the driver. The trial court found for Glover, holding that it was not reasonable for an officer to make such an inference, and granted his motion to suppress. The state appellate court reversed.
The Kansas Supreme Court reversed the appellate court and held that allowing such an inference would relieve the state of the burden of showing reasonable suspicion for a traffic stop. The State of Kansas appealed, and the United States Supreme Court granted certiorari on April 1, 2019. The question before the Court is whether, for the purposes of an investigative stop under the Fourth Amendment, it is reasonable for an officer to suspect that the registered owner of a vehicle is the one driving the vehicle absent any information to the contrary.
The State of Kansas argues that an officer has reasonable suspicion to stop a vehicle when the officer knows the registered owner cannot legally drive and there is no information that the owner is not the driver. Brief for the Petitioner at 9, Kansas v. Glover, No. 18-556 (U.S. filed June 17, 2019). Kansas argues that both state and federal courts have found that it is reasonable for an officer to infer that the registered owner of the vehicle will do most of the driving. Id. at 10. While the State concedes that it is possible for the driver of the vehicle not to be the owner in every situation, an officer’s suspicion that the owner is driving the car absent evidence to the contrary is nonetheless reasonable. Id. at 11–12. Furthermore, the State argues that the Kansas Supreme Court adopted a standard that was above a “minimal level of objective justification” when it required more evidence confirming that the driver was the vehicle’s owner. Id. at 20 (quoting United States v. Sokolow, 490 U.S. 1, 7 (1989)). Finally, the State contends that investigative stops like the one in this case are important to public safety and that requiring officers to gather more evidence is impractical. Id. at 21–25.
In response, Respondent Charles Glover asserts that the fact that an unlicensed driver owns a car does not establish reasonable suspicion that the car’s driver is engaged in illegal activity. Brief for Respondent at 10, Kansas v. Glover, No. 18-556 (U.S. filed Aug. 30, 2019). Glover argues that reasonable suspicion must be assessed with reference to the totality of the circumstances and because Deputy Mehrer neither actually observed nor could infer any illegal activity, his suspicion was not reasonable. Id. at 12–18. Additionally, Glover contends that the State of Kansas’s law enforcement interest in this category of seizures “does not justify its reliance on an unsupported and unparticularized inference.” Id. at 38. Instead, Glover argues, roving traffic stops based on unverified information of this nature severely burden individual freedom. Id. at 46.
November 5
CITGO Asphalt Refining Co. v. Frescati Shipping Co., Ltd.
No. 18-565, 3d Cir.
Preview by Sean Lowry, Online Editor*
In 2004, Frescati operated an oil tanker that was chartered by the petitioners, which are multiple related companies under the CITGO corporate umbrella (collectively referred to as “CARCO”), to transport oil from Venezuela to a refinery in New Jersey. As the ship’s captain approached the dock in New Jersey, the oil tanker struck an anchor hidden on the bottom of the Delaware River, eventually spilling over 260,000 gallons of crude oil. The cleanup over the following months required thousands of workers and cost $143 million, which was partially financed by Frescati and the United States (who contributed approximately $88 million in payments out of the federal Oil Spill Liability Trust Fund).
Litigation between the parties soon erupted in 2005, with each party aiming to shield itself from liability to the other while also attempting to recover damages. The central legal issue in the case is the interpretation of a “safe berth” clause in the private parties’ contract. This clause, common in many shipping contracts, required that CARCO direct any vessels chartered under the contract to a safe place or wharf to deliver the cargo.
After a long procedural history, the district court awarded Frescati $55.5 million in damages, in part reflecting unreimbursed oil spill cleanup expenses. (The district court also awarded the United States $44 million for a partial recovery of its payments.) As it affirmed the district court’s awards, the Third Circuit adopted the Second Circuit’s interpretation of safe berth clauses as express warranties of safety, for which CARCO could be strictly liable for any damages once the ship approached the designated port within a contractually specified “draft” (distance between the surface of the water and the lowest point of the vessel).
In its petition for certiorari, petitioners urge the Court to adopt the Fifth Circuit’s interpretation that “safe berth” clauses impose a duty of due diligence on a charterer, rather than a warranty of strict liability. Petitioners argue that the Third Circuit’s decision reads a warranty into the text of the contract for which the parties did not bargain. In other words, CARCO did not agree to the risk of millions of dollars in damages even if it took reasonable measures to prevent an oil spill. Additionally, petitioners argue that the strict liability interpretation of safe berth clauses is undesirable from a policy perspective, as it imposes liability on charterers rather than the ship managers who are better positioned to judge the safety of their vessel in the waters they are navigating.
In contrast, respondents urge the Court to adopt the Third Circuit’s warranty interpretation. From a policy perspective, the respondents argue that parties should be able to bargain over inclusion of the safe berth “warranty” based on whether the charterer or ship manager, in a particular context, is better positioned to inspect and assure the safety of the port. As further support, respondents also point to English courts and examples of industry custom that support the proposition that a safe berth clause prescribes a warranty of strict liability and not merely a duty of due diligence.
The Court’s decision in this case could clarify how the common law of admiralty interprets contractual language that is standard in many shipping agreements, and affect how parties to future agreements allocate risk.
*Sean Lowry is a 3LE (Class of 2021) and Analyst in Public Finance at the Congressional Research Service (CRS). The views expressed are those of the author and are not necessarily those of the Library of Congress or CRS.
Allen v. Cooper
No. 18-877, 4th Cir.
Preview by Sean Wesp
The central question in this case is whether North Carolina (“the State”) can assert sovereign immunity against Allen’s claim that it infringed Allen’s copyright to his images of the wreck of Blackbeard’s ship, Queen Anne’s Revenge, under 17 U.S.C. § 501(a). In 1998, Allen and his production company, Nautilus Productions, LLC, obtained the exclusive right to document the salvage of Queen Anne’s Revenge, which was discovered in North Carolina. The State later copied Allen’s images and displayed them online. Allen sued the State in October 2013 and they settled; however, the State continued to use Allen’s images without his permission. The State later passed “Blackbeard’s Law,” which protected the State from suit for use of images of North Carolina shipwrecks. This case comes to the Supreme Court on appeal from the Fourth Circuit.
Allen first argues that the Intellectual Property Clause in Article 1 of the U.S. Constitution authorizes Congress to abrogate state sovereign immunity. Allen suggests that the grant of exclusive rights under the Intellectual Property Clause implicates the abrogation of sovereign immunity, because otherwise the right would no longer be exclusive. Brief for Petitioners at 24–25, Allen v. Cooper, No. 18-877 (U.S. filed Aug. 6, 2019). The State (Cooper) disagrees, pointing out that there was no plan to abrogate state sovereignty when the Constitutional Convention passed this clause. Brief for Respondents at 28, Allen v. Cooper, No. 18-877 (U.S. filed Sept. 20, 2019). The State distinguishes the history of the clause from that of the Bankruptcy Article, considered in Central Virginia Community College v. Katz, 546 U.S. 356 (2006), which was passed with the specific intent to curtail sovereign immunity of state creditors. Brief for Respondents, supra, at 17. There also exists a disagreement between the two parties on their understanding of precedent. Allen views the Katz decision as an open door to more abrogation of state sovereign immunity under Article 1 powers, while Cooper characterizes Katz as a narrow holding, tailored to the Bankruptcy Clause. See Brief of Petitioners, supra, at 2; Brief for Respondents, supra, at 27–28.
Allen alternatively argues that Congress properly exercised its power under Section Five of the Fourteenth Amendment to abrogate state sovereign immunity. A copyright is a property right and its infringement by a state brings up due process concerns under the Fourteenth Amendment, argues Allen. Brief of Petitioners, supra, at 18. Allen also points to a study done by the then–Register of Copyright, Ralph Oman (the “Oman Report”) as a factual predicate for Congress abrogating state sovereign immunity under the Copyright Remedy Clarification Act of 1990 (“CRCA”). Id. at 8–9. In Allen’s view, the Oman Report warns that states protected by sovereign immunity rampantly infringe copyrights. See id. at 47–48. Cooper characterizes evidence presented by Congress differently, calling it “a few anecdotal allegations of state infringement” that does not serve as a proper predicate to abridge state sovereign immunity. Brief for Respondents, supra, at 32–33. Focusing on the passing of the legislation, Cooper argues that Congress did not properly consider alternative remedies to states’ violations of copyright or the fact that the intention to infringe is not an element of copyright infringement. Id. at 33–34, 38.
November 6
County of Maui, Hawaii v. Hawaii Wildlife Fund
No. 18-260, 9th Cir.
Preview by Rachel Lerner
The Clean Water Act (“CWA”) regulates point source pollution through the National Pollutant Discharge Elimination System (“NPDES”) permitting program. Any discharge of a pollutant requires a permit under the NPDES program. The discharge of a pollutant is defined as “any addition of any pollutant to navigable waters from any point source.” Clean Water Act, 33 U.S.C. § 1362(12) (2018). The central question in County of Maui, Hawaii v. Hawaii Wildlife Fund is whether the CWA requires a permit for the discharge of pollutants from point sources that are conveyed to navigable waters through groundwater.
The County of Maui discharges treated wastewater into wells without a NPDES permit. Haw. Wildlife Fund v. County of Maui, 886 F.3d 737, 742, 752 (9th Cir. 2018). Some of this treated wastewater reaches the Pacific Ocean by passing through groundwater. Id. at 742–43. The Ninth Circuit held that these discharges require a permit because the county discharged pollutants from a point source (the wells) to navigable water (the Pacific Ocean). Id. at 744–45. The court’s only concern was whether the defendant discharged the pollution from a point source; the groundwater’s role in transporting the pollutants from the wells to the ocean did not preclude liability. Id. at 747. Therefore, because the pollutants are “fairly traceable” from the point source to the navigable waters, it was the functional equivalent of a discharge directly into navigable waters and requires a NPDES permit. Id. at 749.
The Fourth Circuit faced a similar issue and held that a discharge through groundwater requires a NPDES permit if there is a direct hydrological connection to navigable water. Upstate Forever v. Kinder Morgan Energy Partners, 887 F.3d 637, 650–51 (4th Cir. 2018). The court read the word “from” to mean a starting point, not a means of transport. Id. at 650. The Sixth Circuit rejected the notion that point source discharges require a permit if the pollutants are conveyed through groundwater. See Ky. Waterways Alliance v. Ky. Utils. Co., 905 F.3d 925, 932–33 (6th Cir. 2018). The court held that to be covered by the CWA there must be a direct connection between the point source discharges and the navigable water. Id. at 934. These decisions created a split.
The Supreme Court granted certiorari in County of Maui to clarify the scope of the CWA NPDES permitting program and to resolve the circuit split. The interpretation of the words “from any” in the definition of discharge of pollutants is one of the main points of contention in the case. The County of Maui takes the position that the word “from” does not mean a point of origin, but rather a means of transport. Only discharges that enter navigable waters directly from a point source require a NPDES permit under their interpretation. Hawaii Wildlife Fund takes the position that the word “from” merely means a point of origin, and a conveyance through groundwater does not break the causal chain of liability. The respondents also take the position that exempting these discharges from the NPDES program will undermine the core functions of the CWA by allowing parties to circumvent permitting requirements simply by discharging pollutants into groundwater first.
The EPA released an interpretive statement after the Ninth Circuit decision. The EPA took the position that all releases to groundwater are excluded from the NPDES permitting program, even when pollutants are conveyed to navigable water via groundwater, regardless of hydrological connection or traceability. See U.S. Envtl. Prot. Agency, Interpretive Statement on Application of the Clean Water Act National Pollutant Discharge Elimination System Program to Releases of Pollutants from a Point Source to Groundwater 1 (2019).
This case could have major impacts on the scope of the Clean Water Act. Given the EPA interpretive statement and the current ideological makeup of the Court, it seems probable that the Court will vote for the county and hold that discharges of pollutants from point sources conveyed through groundwater to navigable water do not require a permit.
Retirement Plans Committee of IBM v. Jander
No. 18-1165, 2d Cir.
Preview by Sean Lowry, Online Editor*
The Employee Retirement Income Security Act (“ERISA”) requires fiduciaries of private employer retirement plans to manage the assets according to a prudent person standard of care. See 29 U.S.C. § 1104(a)(1)(B). The alleged harms in this case occurred from 2013 to 2014, when IBM employees purchased the company’s stock through an employee stock option plan (“ESOP”). Larry Jander and other IBM employees brought a suit claiming that the Retirement Plans Committee violated its fiduciary duty under ERISA when it knew, but failed to disclose, that a division of IBM was losing money, thereby making the company’s stock overvalued. The day that IBM publicly announced that the division lost money and was being sold to another company, share prices declined by seven percent (approximately thirteen dollars per share). The Court’s decision in Jander will decide whether or not the employees’ ERISA claim can proceed or will be dismissed.
The conflict between the parties is the result of recent Supreme Court decisions and subsequent decisions in federal courts. In 2014, the Court held in Fifth Third Bancorp v. Dudenhoeffer that ESOPs, like all covered plans, are not presumed to be managed prudently under ERISA. See 573 U.S. 409, 418–19 (2014). However, the Court’s holding also included a pleading standard intended to help screen meritless cases against an ESOP fiduciary at the motion to dismiss stage of litigation. The Court stated that:
[L]ower courts . . . should . . . consider whether the complaint has plausibly alleged that a prudent fiduciary in the defendant’s position could not have concluded that stopping purchases—which the market might take as a sign that insider fiduciaries viewed the employer’s stock as a bad investment— or publicly disclosing negative information would do more harm than good to the fund by causing a drop in the stock price and a concomitant drop in the value of the stock already held by the fund.
Id. at 429–30. Here in Jander, the Second Circuit reversed the district court’s decision and allowed the employees’ suit to survive a motion to dismiss. According to the Second Circuit, the plaintiffs satisfied Fifth Third Bancorp’s “more harm than good” standard by alleging that no prudent fiduciary could have concluded that disclosing the division’s losses would do more harm than good. The court’s reasoning was that disclosure of the losses was inevitable, and that delayed disclosure would lead to a more significant “correction” in the overvalued stock. See Jander v. Ret. Plans Comm. of IBM, 910 F.3d 620, 629–31 (2d Cir. 2018).
Petitioner, Retirement Plans Committee of IBM, argues that the Second Circuit’s decision has created a split with the Fifth and Sixth Circuits. These circuits have held that the Fifth Third Bancorp pleading standard is not satisfied by a generalizable allegation that the costs of undisclosed fraud grow over time. Respondents, Jander and other employee class members, argue that the Second Circuit correctly applied the facts of the case when it concluded that disclosure was inevitable.
More broadly, the Court’s decision in this case could widen the aperture for plaintiff ERISA suits in ESOP stock price drop suits. Jander noted in the lower court filings that no duty-of-prudence claim against an ESOP fiduciary has passed the motion-to-dismiss stage since the Court last examined this pleading standard in 2016. See generally Amgen Inc. v. Harris, 136 S. Ct. 758 (2016).
*Sean Lowry is a 3LE (Class of 2021) and Analyst in Public Finance at the Congressional Research Service (CRS). The views expressed are those of the author and are not necessarily those of the Library of Congress or CRS.
November 12
Department of Homeland Security v. Regents of the University of California
No. 18-587, 9th Cir.
Preview by Boseul (Jenny) Jeong, Online Editor
This case is about the Deferred Action for Childhood Arrivals (“DACA”) policy. The case arose in the aftermath of this Court’s decision in United States v. Texas, 136 S. Ct. 2271 (2016). The Court held that the Department of Homeland Security (“DHS”)’s discretionary enforcement policies, including an expansion of the DACA policy, were likely unlawful. Following the decision, in 2017, DHS determined that the original DACA policy would also be held unlawful on the same grounds, and thus instituted an “orderly wind-down” of the DACA policy. Brief for the Petitioners at I, DHS v. Regents of the Univ. of Cal., Nos. 18-587, 18-588, 18-589 (U.S. filed Aug. 19, 2019). And now it seeks this Court’s ruling on (1) whether DHS’s decision to wind down the DACA policy is judicially reviewable, and (2) whether DHS’s decision to wind down itself is unlawful, or in other words, arbitrary and capricious. Two other cases (Trump v. NAACP, McAleenan v. Vidal) are consolidated with this case.
DHS first argued that “a decision to rescind a policy of nonenforcement” is up to agency discretion and thus the lower court’s application of the arbitrary and capricious standard was wrong. Id. at 14. According to DHS, the decision had a policy rationale and even if some legal rationale was implicated, that alone is not enough to make it judicially reviewable. DHS also argued that the rescission was based on reasonable grounds because (1) a policy that is almost materially indistinguishable was held unlawful; (2) DHS, as a policy matter, wanted to let Congress decide on these significant issues; and (3) DHS on its own decided that DACA is unlawful. DHS also added that it has additional policy goals of exercising its discretion on a case-by-case basis and discouraging illegal immigration.
Respondents filed five separate briefs with varying degrees of overlap. In general, however, they argued that the decision was not discretionary and thus reviewable and the agency’s action was arbitrary and capricious. First, Respondents argued that this is a reviewable decision not committed to agency discretion because this is (1) a termination decision; (2) a general enforcement policy; and/or (3) a conclusion about the limits of their authority based on the authorizing statutes which is reviewable under the Administrative Procedure Act (“APA”). Second, they argued the agency’s action was arbitrary and capricious, violating the APA because (1) the decision (Duke Memorandum) was based on a wrong legal conclusion that DACA is unlawful; (2) DHS did not consider factors such as reliance interest, significant differences between DACA and DAPA, justification for change in the agency’s stance, costs of the decision, and significant interests affected by the change; (3) rationales newly asserted after the fact (Nielsen Memorandum) cannot cure the inappropriate action; and (4) regardless, DHS’s other rationales (e.g., litigation risk) do not justify the decision. Third, some Respondents argued that the Court needs to require a full administrative record, especially given the evidence of pretext. States’ equal protection claims were mentioned in one of the briefs as well.
This case is set out as an administrative law issue, but examines an immigration policy. It will likely continue to draw considerable attention given the weight of its implications. Whether the Court will directly address the legality of DACA will be another key issue.
Hernández v. Mesa
No. 17-1678, 5th Cir.
Preview by Ian Bryant-Smith
In 2010, Border Patrol Agent Jesus Mesa, Jr., shot and killed 15-year-old Mexican citizen Sergio Adrián Hernández Güereca. Mesa was standing on the American side of the culvert that marks the boundary between the United States and Mexico, while Hernández was on the Mexican side. Hernández’s parents say that Hernández and his friends were playing a game in which they would run up the American side of the culvert, touch the fence, and run back into Mexico. A Department of Justice investigation claimed that Hernández and his friends were smugglers attempting an illegal border crossing and were throwing rocks at Border Patrol agents. Hernández’s parents sued Mesa in his personal capacity, claiming that he had violated Hernández’s Fourth and Fifth Amendment rights. The suit was brought under the Bivens doctrine, which allows federal officials to be sued for damages when they violate a person’s constitutional rights. See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971).
This is the second time that this case has made its way to the Supreme Court. The first time, the Supreme Court remanded the case back to the Fifth Circuit because it had not considered whether Hernández could seek Bivens damages before dismissing his Fourth and Fifth Amendment claims. On remand, the Fifth Circuit considered whether Bivens should be extended to this scenario and determined that it ought not to be. That determination is now before the Supreme Court.
Hernández argues that the Fifth Circuit erred in determining that Bivens does not apply. Although the Fifth Circuit pointed to the fact that this case arose in a new and different context from traditional Bivens cases, and that it implicated unique factors including national security and foreign affairs, Hernández argues that these distinctions are not meaningful. On Hernández’s telling, the suit is “a conventional excessive force claim against a rogue federal law enforcement officer.” Brief for the Petitioners at 9, Hernández v. Mesa, No. 17-1678 (U.S. filed Aug. 2, 2019). And if the Supreme Court were to rule for Mesa, Hernández warns, there might ultimately be no avenue for redress in a claim such as this one.
Mesa’s position is rooted in an argument for judicial restraint. He argues that Congress, not the judiciary, ought to be responsible for creating causes of action for damages against federal officials. Even though Bivens itself is a judicially created cause of action, he argues, the courts must be cautious in expanding it. Because this fact pattern raises novel questions about whether Mexican citizens on Mexican soil enjoy constitutional rights, Mesa maintains that it is sufficiently different from a traditional Bivens action that Bivens should not apply absent authorization by Congress.
The overwhelming majority of amicus briefs in this case were filed in support of Hernández, including briefs from former Customs and Border Patrol officials, a range of immigrant and civil rights organizations, and the Mexican government. The United States filed an amicus brief in support of Mesa.
November 13
Comcast Corp. v. National Association of African American-Owned Media
No. 18-1171, 9th Cir.
Preview by Boseul (Jenny) Jeong, Online Editor
After Entertainment Studios Networks (“ESN”) negotiated with Comcast to have its television networks carried on Comcast’s cable system, ESN filed a suit arguing that there was a conspiracy against wholly African American-owned networks in violation of 42 U.S.C. § 1981. Reversing the district court’s dismissal, the Ninth Circuit held that the plaintiff only needs to allege that discriminatory intent played any role, instead of but-for causation which is the presumed “default rule.” Nat’l Ass’n of African American-Owned Media v. Charter Commc’ns, Inc., 915 F.3d 617, 624 (9th Cir. 2019); Nat’l Ass’n of African American-Owned Media v. Comcast Corp., 743 Fed.Appx. 106, 107 (9th Cir. 2018). Comcast filed a certiorari petition asking whether a § 1981 claim fails or not without but-for cause.
Comcast relied on the text, history, structure and context of § 1981 in arguing that but-for causation based on factual allegations is required as a default rule. It argued that: (1) but-for causation was “an indispensable element” of common-law torts around the time of Section 1981’s enactment; (2) the motivating factor standard was not adopted until the next century after the enactment; (3) the motivating factor standard was applied to a subset of Title VII claims under very limited circumstances which was not extended to Section 1981 claims; and (4) absence of the phrase “because of” in a statute is insufficient to prove Congress did not intend the but-for causation standard to apply. Reply Brief for Petitioner at 2–4, 13, 17, Comcast Corp. v. Nat’l Ass’n of African American-Owned Media, 18-1171 (U.S. filed Oct. 23, 2019). According to Comcast, under the but-for causation standard the Respondent would have to argue that Comcast would have entered into a contract if the ESN was owned by whites. The Government filed an amicus brief addressing similar points in favor of Comcast.
On the other hand, National Association of African American-Owned Media argued that even though both approaches had been adopted for civil rights statutes, a lower burden is required for race and sex discrimination under Title VII. It argued that once the plaintiff shows a prima facie case, the defendant has the burden to show legitimate and nondiscriminatory reasons. It also emphasized the implications of the rule choice. National Association of African American-Owned Media cautioned the Court that the but-for causation requirement would cause dismissal of many potentially meritorious claims. It pointed to: (1) Patterson v. McLean Credit Union, 491 U.S. 164 (1989), where, according to the Respondent, the Court adopted the burden shifting approach for § 1981 claims and Congress approved of the approach when it abrogated part of Patterson’s holdings but not the burden shifting framework; (2) enhanced stare decisis force of the approach as Patterson is a statutory interpretation decision; (3) the language of § 1981, affording the “same right” to contract for all racial minorities, which can be interfered with by mere “motivating factors”; (4) the Court’s tendency to require but-for causation for statutes with specific language such as “because” or “based on”; (5) Section 3 of the Civil Rights Act of 1866, which shows rejection of the common law when it lacks suitable remedies; and (6) the purpose of the Section 1981, forbidding all racial discrimination. Brief for Respondents at 13–15, 31, 39–40, 45, Comcast Corp. v. Nat’l Ass’n of African American-Owned Media, 18-1171 (U.S. filed Sept. 23, 2019).
Both parties argue the text, history and the context of § 1981 support their positions, and now it is up to the Court to decide which interpretation is more persuasive.
Ritzen Group Inc. v. Jackson Masonry, LLC
No. 18-938, 6th Cir.
Preview by Michael Fischer, Online Editor
In 2013 Ritzen Group, Inc. (“Ritzen”) entered into a contract to buy a piece of real property from Jackson Masonry, LLC (“Jackson”). After the sale failed to close, however, Ritzen brought suit against Jackson alleging breach of contract. After a year of litigation, Jackson filed for bankruptcy less than twenty minutes before a scheduled hearing on Ritzen’s repeated motions to compel discovery. The filing triggered an automatic stay under 11 U.S.C. § 362(a), which prevents a creditor from collecting debts from the debtor. In response, Ritzen filed a motion in bankruptcy court to lift the stay, alleging that Jackson had filed for bankruptcy merely to interrupt the breach of contract litigation. Ritzen’s motion was denied and, after the parties continued litigating the breach of contract dispute in the bankruptcy forum, the court found for Jackson. Ritzen subsequently appealed the judgment and the court’s previous denial of Ritzen’s motion to lift the automatic stay.
The district court declined to review the denial of Ritzen’s stay-relief motion. Likewise, the Sixth Circuit refused to hear the appeal, holding that Ritzen was required to make an immediate appeal of that denial instead of waiting until the litigation concluded. The court reached this conclusion by reasoning that denials of motions for stay relief must be appealed immediately since it commences a discrete proceeding within a bankruptcy case and, when denied, concludes the proceeding. Ritzen appealed to the U.S. Supreme Court which granted certiorari on May 20, 2019. The issue before the Court is whether an order denying a motion for relief from the automatic stay due to a bankruptcy filing is a final order under 28 U.S.C. § 158(a)(1).
On appeal, Petitioner Ritzen argues that for bankruptcy appellate purposes a stay-relief motion must be treated as part of the claims-adjudication process since the only practical effect of its denial is that the litigation must proceed in the bankruptcy court. Brief for Petitioner at 25–34, Ritzen Group, Inc. v. Jackson Masonry, LLC, No.18-938 (U.S. filed Aug. 5, 2019). In addition, Ritzen contends that Congress did not intend for orders denying stay relief, which determine where the parties litigate their dispute, to be final and immediately appealable since it patterned the relevant provisions of the Bankruptcy Code off of the § 1291 general appellate statute. Id. at 35. According to Ritzen, the finality requirement of this statute requires that an order denying relief is treated as interlocutory if its effect is only to resolve where the parties will litigate a dispute. Id. Finally, Ritzen asserts that, in order to ensure the successful administration of bankruptcy relief, debtors should not be permitted to discharge liabilities in bad faith. Id. at 43–45. Ritzen concludes that because this requirement is present throughout the entire bankruptcy case, the stay-relief motion has not been decided conclusively until the bankruptcy court determines that the nonmoving party has acted in good faith. Id. at 45.
Respondent Jackson contends that the Sixth Circuit correctly applied the standard set forth in Bullard v. Blue Hills Bank, 135 S. Ct. 1686 (2015) for determining whether a denial of a motion in bankruptcy court constituted a final order. Brief in Opposition at 4, Ritzen Group Inc. v. Jackson Masonry, LLC, No.18-938 (U.S. filed Apr. 12, 2019). Furthermore, Jackson argues that inferior courts have consistently applied this standard without serious deviation. Id. at 7–8. Lastly, Jackson asserts that the Sixth Circuit did not apply a per se rule regarding stay relief but instead acknowledged exceptions where “it appears that changing circumstances could change the stay calculus.” Id. at 8–9.
