It’s been a busy few days at the Supreme Court. On Tuesday, the justices issued an orders list that included the denial of cert in Coalition for TJ v. Fairfax County School Board, a Pacific Legal Foundation case concerning the use of racial proxies in K-12 school admissions. The sting of this denial was lessened (a bit) by a fiery dissent from denial of cert (aka dissental) written by Justice Samuel Alito and joined by Justice Clarence Thomas. Justice Alito wrote that the lower court’s decision is based on "a patently incorrect and dangerous understanding of what a plaintiff must show to prove intentional race discrimination." He charged that this reasoning is "a virus that may spread if not promptly eliminated."
The Court also announced decisions in two cases: McElrath v. Georgia and Great Lakes Insurance SE v. Raiders Retreat Realty Co.
With Justice Ketanji Brown Jackson writing in McElrath, the unanimous Court held that the jury verdict that McElrath was not guilty of murder by reason of insanity was an acquittal for purposes of the Double Jeopardy Clause, notwithstanding any inconsistency with the jury’s other verdicts. Justice Alito wrote a concurrence, noting that "[b]ecause the Constitution does not permit appellate review of an acquittal, the State Supreme Court’s decision must be reversed." He clarified that this case is "different from [one] in which a trial judge refuses to accept inconsistent verdicts and thus sends the jury back to deliberate further. Some States follow this practice, and our decision does not address it."
Justice Brett Kavanaugh wrote for the unanimous Court in Great Lakes Realty, holding that choice-of-law provisions in maritime contracts are presumptively enforceable under federal maritime law, with narrow exceptions. Justice Thomas concurred, putting the SCOTUS bar on notice that the Court has "retreated from … the unsound holding" of a 1955 case the respondent (the losing side) relied on to argue that state law governs these contracts.
The justices also heard oral arguments in four cases. Here are the highlights.
Tuesday
The justices kicked off the day with Corner Post, Inc v. Board of Governors of the Federal Reserve System, which looks at when the six-year statute of limitations, 28 U.S.C. § 2401(a), for APA challenges to final agency action begins to run: when the rule becomes final or when it actually has harmed the plaintiff.
You can read about the background of the case here, but in brief, Corner Post brought an APA challenge to a rule in 2018 that the Fed adopted in 2011. Corner Post didn’t open its doors until 2017, so it couldn’t challenge the rule during the first six years it was in effect. The Fed argues that Corner Post is out of luck because the statute of limitations has run. Corner Post says the clock began to run from the date it was injured, which was not until 2017 so its challenge is timely.
Bryan Weir of Consovoy McCarthy made his SCOTUS debut representing Corner Post, the North Dakota convenience store and truck stop (that I hear has great fried chicken). Benjamin Snyder, assistant to the Solicitor General, argued on behalf of the Fed’s Board of Governors.
Right out of the gate, Justice Thomas wanted to know if there are other cases with a similar fact pattern. Weir pointed out those are in short supply since only one court has adopted Corner Post’s reading of § 2401(a). He explained that even the government agrees that this is a "relatively uncommon" situation and that a regulated entity would normally be injured when a rule goes into effect. But Justice Elena Kagan saw this as an opportunity for open-ended challenges to old agency rules.
Weir replied that if that were the case, there would have been a flurry of challenges to old rules in the circuit that adopted the same reading of § 2401 as Corner Post. But that "just didn’t happen. There was no uptick."
Justice Sonia Sotomayor suggested that when businesses open up, they’re accepting the regulatory landscape that’s in place.
Weir answered that the Court has recognized that’s "a tall task to ask of any small business owner" but in any event, the first time Corner Post was injured (and as a result, when its cause of action accrued) was when "it swiped its first debit card and paid its first fee."
Justice Jackson asked if Corner Post was reading more into the statute than was there.
Weir responded that’s how the statute reads, and that since §2401(a) applies not just to APA claims but to other civil actions against the government, the government’s view wouldn’t make sense.
Justice Alito asked why "late-arising objectors" like Corner Post couldn’t just petition the agency for a new rulemaking to get relief. That’s not a substitute for judicial review, Weir explained, and it puts the government in the driver’s seat. "The government gets to decide when it rules … and it can sit on it for years," Weir argued. Then if a petition is denied, the agency’s decision gets very deferential review by courts.
The biggest takeaway from the argument is that Justice Jackson maybe sorta gave away the outcome of the Loper Bright and Relentless cases seeking to overturn Chevron. Check this out:
"We had other doctrines." Volokh Conspirator Jonathan Adler had a similar reaction.
When it was the government’s turn, Justice Thomas wanted to know when the government thinks Corner Post’s claim accrued.
The government's answer left Justice Thomas scratching his head. "Is that normal… ?" And Snyder replied that it's unusual for other contexts but not for administrative law challenges.
Chief Justice John Roberts wasn’t buying it. He pressed the government for any other way Corner Post could challenge this rule—not an enforcement, not a rule ("maybe they don’t want a rule. They want the government to stop what it’s doing to them")—"what else is there?" He continued, "You do have a specific injury inflicted by the government, the individual has standing, and your argument is, well, Congress doesn’t want people to sue, or somebody else had the chance to sue and you could have joined that trade association."
Justice Kavanaugh wanted to know about the real world implications. Snyder said, "it’s pretty hard to overstate the significance of allowing [these types of] challenges to be brought more than six years later."
This had me thinking of agencies dusting off decades-old laws and discovering new, broad grants of authority (pouring new wine from old bottles), but I digress.
Justice Alito also brought up that Sec 2401(a) is a "very broad statute that applies to every civil action against the United States" and "you want us to say that the term 'accrue' means something different in different contexts … Have we ever said anything like that?"
Justice Amy Coney Barrett brought up the timing of Corner Post's injury and claim accrual.
Snyder replied that with pre-enforcement review, "a plaintiff can bring suit even if they are not yet subject to enforcement."
Several justices followed up with questions about what the necessary conditions would have been for Corner Post to challenge the rule (before it opened) and what would be necessary to show standing.
Next up was Bissonnette v. LePage Bakeries Park St., LLC. The Federal Arbitration Act (FAA) establishes a federal policy strongly favoring arbitration over litigation to resolve contract disputes, but it carves out an exception for employment contracts of seamen, railroad employees, and "any other class of workers engaged in foreign or interstate commerce." The question before the Court is whether someone must be employed in the "transportation industry" to come within the meaning of the "other class of workers" clause.
Independent distributor/truck drivers for a bakery goods company argued they are exempt from arbitration because their work includes transporting these goods. Flowers Food, the bakery goods company, maintained that since they are in the bakery business, not the transportation business, the distributor/truck drivers aren’t exempt.
Jennifer Bennett, the attorney for the distributor/truck drivers, pointed out that they are not seeking to dramatically expand the class of workers who are exempt from the FAA. Truckers have substantially replaced the railroad employees of yore. "[W]e're not making the exemption broader. We're just taking the people who would have been railroad employees, and now they're truck drivers." Some businesses "use companies like FedEx, and some companies do what Flowers did, which is essentially bring a trucking company in-house themselves. There's no reason that those workers should be treated any differently."
Justice Kavanaugh asked Bennett how they should interpret the "other class of workers" language. What connects seamen, railroad employees, and other workers? Wasn’t it the case that when Congress passed the FAA in 1925, it wanted most workers to be subject to arbitration agreements, and the exemption was intended for industries that had existing arbitration regimes. In other words, “Congress was accommodating the future” when it included the “other workers” clause.
Bennett replied that "even if this Court were going to try to discern some purpose of the exemption and instead of focusing specifically on the text" (shots fired at the "we're all textualists now" crowd) the assumption that "there was a mandatory arbitration scheme that covered seamen, and that's actually just … not correct." She said some could go straight to court, rather than arbitration. (The attorney for the other side later disputed this characterization).
Later, Justice Kavanaugh said, "I think the number of workers who are going to be exempt and number of companies who are going to have to deal with this is massive if you lose."
The attorney for Flowers/LePage Bakeries, Traci Lovitt, agreed. She described how in recent years there have been "cases against Domino's franchisees, so you're bringing in every franchise restaurant … You're bringing in the medical industry … because they need to get their products very quickly from one place to another. You're bringing in basically the entire food industry, because … these point-to-sale shipments like breads, things that go bad, beer … that whole industry is now in … You're now bringing in every retail industry that is shipping their own—they have got, you know, warehouses going to brick and mortars." But the reason this wasn't a problem before is "because the background rule has been that it's the transportation industry."
Justice Alito asked if the lower court’s approach (read about it here) poses line drawing problems. Lovitt responded that it wouldn’t and that, "ninety-five percent of these cases, it's clear. The FedExes, the UPS, the Yellow Freights. It's very clear who's in the shipping industry because they're in the business of shipping other people's goods."
Justice Barrett asked if changes in the transportation industry have made the FAA’s exemption of seamen and railroad employees an anachronism. "And then wouldn’t it be for Congress to fix it?" Lovitt asserted that in 1925, the exemption "encompass[e]d the entirety of the transportation industry while anticipating that the industry was also evolving."
Wednesday
Everyone v. EPA! The justices heard oral arguments on four consolidated applications for stays of EPA's "Good Neighbor" rule. (More on that here.) As University of Texas law professor Steve Vladeck noted, this is only the third time since 1971 the Supreme Court has heard oral argument on an emergency application, so that might explain some of the justices' self-professed confusion over how to handle the matter. Four attorney—Mathura Sridharan for the state challengers, Cate Stetson for the industry challengers, Malcolm Stewart for the federal government, and Judith Vale for the states supporting EPA—appeared before the Court in this supersized oral argument.
A lot of the justices’ questions centered on why they needed to rule now. Justice Jackson asked Sridharan what the emergency was when the parties haven’t even briefed the case in the lower court. Sridharan said, "At the breakneck speed we're going, in order to … get into compliance with an unlawful federal rule, we are spending immense sums, both the states as well as our industries. And on top of that, we are facing the threat of power shortages and heating shortages."
Justice Jackson asked Stetson whether the parties sought expedited review in the D.C. Circuit. Stetson said, "[W]e did move for expedited briefing. We were not given the briefing schedule that we wished … After th[is] Court granted argument in late December, we asked for a delay in order to impose some order on the process between this Court and that court."
Justice Barrett asked Stetson about the costs the industry challengers have incurred. "[P]art of your argument for emergency relief is the crushing costs and the risk of, you know, energy disruption, et cetera. What has been happening so far?"
Stetson replied, "The industries that I represent have been incurring costs to try to start permitting, compliance, all sorts of issues involving the run-up to installation of these controls. But let me pause on this because I think it also responds to a question, Justice Kagan, that you asked, which is … we don't need to show in this posture cert worthiness. Nor do we need to show, Justice Jackson, you know, that this is an emergency. What we need to show is for a stay that we have a likelihood of success on the merits and irreparable harm."
Following up on Justice Kagan’s earlier question about whether the likelihood that the Court would grant cert on the merits is part of the consideration at this stage, Justice Barrett asked Malcolm Stewart what the federal government’s position is on cert worthiness. Is that part of the Court’s assessment, and if so, is this case cert worthy?
Stewart answered, "[I]t's our view that you should consider cert worthiness as—if likelihood of success means likelihood of success in this Court, then that has to be not just would the Court rule in their favor if it took the case but what's the chance that the Court would take the case." But at this stage it’s not cert worthy because "we don't know what the D.C. Circuit is going to do. It's certainly possible that the D.C. Circuit will issue a ruling for or against us that would raise issues of overarching importance, and so the cert calculus would—would change then."
There was also a lot of discussion of the reasonableness of the Good Neighbor rule given that twelve of the 23 states were not currently subject to it. Justice Sotomayor wanted to know how the eleven remaining states are harmed by the others not being subject to the rule, since "states are bound by the number that was calculated on the larger group." Here's more from Justice Sotomayor:
"If twelve are not paying it, what does it matter to you?" she asked. Stetson said, "that is the bug and not the feature of this plan … EPA looked at the aggregate costs of controls over … hundreds of [electric generating units] across all of the states, hundreds of industries, units across all of the states. It figured out what that aggregate cost was and then it decided to allocate obligations."
Justice Kavanaugh followed up on this: "[T]o Justice Sotomayor's question, show us how it works. But that's … [EPA’s] burden, I think, to show—to justify—to not be arbitrary and capricious." But EPA's didn't have an explanation. It's a "goose egg." Stetson agree, "It is a goose egg."
Later in the argument, the Chief tried to drill down with Stewart what the smallest number of states EPA could have implemented this plan for; what if it was just the smallest state of the 23?
Stewart replied, "I don't think that they have any plan to do that."
Justice Alito asked if someone brought a motion for reconsideration by EPA, is there a deadline for EPA to respond? Stewart said no but "there is a mechanism for arguing that EPA has unreasonably … delayed." How reassuring.
Last but not least was Warner Chappell Music, Inc. v. Nealy.
The question is whether under the discovery accrual rule, a copyright plaintiff can recover damages for acts that occurred more than three years before the filing of a lawsuit. The Court phrased the question presented to avoid deciding when a copyright infringement claim accrue. (Under the discovery rule, claims accrue when the copyright owner knows or reasonably should have known about the infringement while under the injury rule, the claim accrues on the date of the infringement.) But that didn’t stop the justices from asking about it.
Justice Thomas asked the first question: Did the lower court rule on the existence of the discovery rule?
Representing alleged infringers Warner and Artist, Kannon Shanmugam replied that the lower court applied its own precedent. But the scope of the discovery rule "is to some extent intertwined with the substantive question that is presented here."
Justice Barrett jumped in: Hold on… "Mr. Shanmugam, we took it off the table, and your cert petition did not ask us to grant cert on the merits of the discovery rule."
The two went back and forth about whether a footnote in the cert petition was sufficient to present the issue. Justices Sotomayor and Jackson entered the fray. Ultimately, Shanmugam replied, "Once this Court rephrased the question presented, we abandoned any argument that there is no discovery rule. My point to this Court is simply that the scope of the discovery rule is relevant to this question."
This led Justice Alito to ask:
The two questions are (1) whether there is a discovery rule for when copyright infringement claims accrue; and (2) if there is, how does that affect relief? Alito suggested maybe they should dismiss the petition as improvidently granted, aka DIG it (can you dig it? IYKYK).
Justice Jackson asked where the statute says damages are limited. "I take it your position is you can't go back any more than three years, but I don't see that in the statute."
Shanmugam responded: “[W]hen it comes to retrospective relief, if the act took place more than three years earlier, the implication of the statutory language is you are out of luck. You cannot recover for retrospective relief. If you're bringing a claim for prospective relief, it will turn on whether there is a likelihood of future infringement.”
Justice Gorsuch wanted to know: “How do you get to this … a discovery rule, but it’s only a three-year discovery rule?”
Justice Jackson asked Joe Earnhardt, the attorney for the copyright plaintiff, about the possibility of a DIG.
He replied, "I think either path is viable … [but] I believe it would be helpful to the—to the bar to clarify that it's wrong, that there is no separate damages bar, and that would resolve the circuit split that currently exists."
Of the discovery rule, Earnhardt asserted, "[W]e don't have sort of a dog in the hunt … in this case about whether there is a discovery rule or not, but, for 40 years, the courts of appeals unanimously have found that there is one, and Congress during that time period has amended the Copyright Act 79 times, reasons big and small, and they've never stepped in to say that there's not one."
Justice Gorsuch followed up: "[Y]ou don’t have a dog in the hunt on whether there’s a discovery rule … then why are we here?"
Earnhardt explained, "All I mean by saying we don't have a dog in the hunt is we don't—we don't have that issue before us."
That's it for this week. I'll leave with you my favorite SCOTUS item of the week: Six of the eleven advocates this week were ladies. To quote Shania Twain, "Let's go girls."
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