The Supreme Court issued one opinion this morning.  The case is Heimeshoff v. Hartford Life & Accident Ins. Co. (12-279).  Heimeshoff worked for Wal-Mart filed a claim with Hartford for long term disability.  Hartford was the plan administrator for Wal-Mart with the plan covered by the Employee Retirement Income Security Act of 1974 (ERISA).  The statute allows for judicial review of any denial of benefits.  The terms of the plan, however, limits the filing of any suits to within three years after “proof of loss” is due.

Courts have generally required litigants to exhaust their administrative remedies before a suit can be filed.  In Heimeshoff’s case, the administrative process concluded more than three years after proof of loss was due.  The District Court dismissed the suit because it was filed outside of the three year contractual limitation.  The Second Circuit affirmed.

The question before the Supreme Court was whether the contractual limitations provision is enforceable.  The Court held that it is, affirming the Second Circuit.  The Court’s precedent allows the enforcement of contractual limitations if the limitations period is of reasonable length and there is no controlling statute to the contrary.  ERISA, the Court notes, allows suit to enforce rights under the plan, meaning that the plan terms were controlling and not in conflict with the statute.

The Court rejected the argument that participants in the administrative review process would short-change participating in the review as any later suit for denial of benefits would be limited to the administrative record.  It would not be in a claimant’s interest to do so as undeveloped evidence would not be available in a District Court proceeding.

It would not be in a plan administrator’s interest to deliberately slow down the process to avoid judicial review as the administrator’s conduct could be subject waiver or estoppel in invoking the limitations period as a defense.  Tolling the contractual limitations period during the internal review period is not an option as it would rewrite the contract.  ERISA, in any event, does not require this.  Justice Thomas delivered the opinion for a unanimous Court.

Mark

The Supreme Court issued one opinion this morning.  That case is Kansas v. Cheever (12-609).  It concerns whether the prosecution’s use of court-ordered testimony by an expert to rebut expert testimony by the defense’s expert in a criminal case violates a defendant’s Fifth Amendment rights.  The Court held that it does not.

Cheever and his friends were high on meth when he was warned that officers were on their way to arrest him.  He tried to escape but his car had a flat tire.  He ultimately hid in a bedroom with a .44 revolver.  He heard steps and stepped out of the bedroom and shot and killed Officer Matthew Samuels.  He shot at others as well, though only Officer Samuels was hit.

Cheever was charged with capital murder.  The Kansas Supreme Court held in an unrelated case that the Kansas death penalty scheme was unconstitutional.  Prosecutors dismissed the charges and let federal prosecutors charge Cheever under the Federal Death Penalty Act of 1994.  Cheever indicated that he would defend by introducing expert evidence relating to his ability to form specific intent due to meth intoxication.  The federal court ordered Cheever to submit to a psychiatric exam to assess how the meth how affected him when he shot Samuels.  Michael Welner interviewed Cheever for five hours.

Cheever’s counsel became unable to continue in the early stages of the jury selection.  The federal judge suspended the proceedings and later dismissed them without prejudice.  In the meantime, the Supreme Court reviewed the Kansas death penalty scheme and found it constitutional.  Kansas prosecutors then brought a second prosecution against Cheever.  He presented a voluntary-intoxication defense and argued that his meth use rendered him incapable of premeditation.  He offered supportive testimony from Roswell Lee Evans, a specialist in psychiatric pharmacy and dean of the Auburn University School of Pharmacy.

The State sought to introduce testimony from Michael Welner as rebuttal to Evans’ testimony.  Cheever objected as he had not voluntarily agreed to the interview with Welner.  The judge allowed the testimony in part because Evans relied on Welner’s report.  The jury convicted Cheever at the end of the trial and imposed a death sentence.

The Kansas Supreme Court vacated Cheever’s conviction and sentence.  It held that Cheever’s Fifth Amendment rights had been violated by introducing Welner’s rebuttal testimony.  The Kansas Supreme Court distinguished Supreme Court precedent, Buchanan v. Kentucky, to the contrary.  Buchanan allowed limited introduction of court-ordered examination for the limited purpose of rebutting a mental-status defense.  The Kansas Supreme Court distinguished Buchanan on the grounds that voluntary intoxication was not a “mental disease or defect” under Kansas law.

The Supreme Court reversed.  It reaffirmed Buchanan saying that when a defendant raises the issue of mental state with expert testimony, he cannot block the State’s rebuttal.  It disagreed with the Kansas Supreme Court’s characterization of voluntary intoxication not being a mental disease or defect.  The Court stated that its precedents are not that narrow.  It uses the term “mental-status defense” which includes the use of expert testimony as to a defendant’s mens rea, the capacity to commit the offense or the ability to premeditate.  Once the issue is raised through expert testimony, it can be countered with additional expert testimony.

Justice Sotomayor delivered the opinion for a unanimous Court.

Mark

The Supreme Court issued one opinion this morning and dismissed a second case as improvidently granted.  The case that was dismissed is Unite Here Local 355 v. Mulhall (12-99).  That case concerned an agreement between a union and an employer over organizing and other considerations.  The details are in the dissenting opinion by Justice Breyer, and joined by Justices Sotomayor and Kagan.

The second case is Sprint Communications, Inc. v. Jacobs (12-815).  The issue in the case is whether a federal court should abstain from deciding a regulatory dispute between a state regulatory board and a communications carrier when there are parallel proceedings in state and federal court.  Sprint withheld payments for Voice over Internet Protocol (VoIP) calls to a local Iowa carrier, Windstream Iowa Communications,  after concluding that the Telecommunications Act of 1996 preempted intrastate regulation of VoIP traffic.  Windstream threatened to block Sprint customer calls.  Sprint responded by asking the Iowa Utilities Board (IUB) to enjoin Windstream from blocking calls.  Windtsream backed down and Sprint withdrew its filing.  The IUB continued the action as the issue could come up again.  It held against Sprint, deciding that fees applied.

Sprint filed parallel actions against the IUB in state and federal court.  The federal court invoked the abstention doctrine developed in Younger v. Harris and subsequent cases.  The court found that Iowa had an interest in regulating and enforcing state utility rates.  The Eighth Circuit affirmed.  The Supreme Court reversed.  It concluded that the three types of cases to which Younger applied was not appropriate in this situation.

The exceptions included state criminal proceedings, certain state civil proceedings that are akin to criminal proceedings, and civil proceedings involving orders that are uniquely in furtherance of a state courts’ ability to perform its judicial function.  Rejecting arguments to the contrary, the Court said the facts of this case do not apply to any of the exceptions.  The Court characterized the dispute as ultimately between two private parties who had invoked the state to settle a dispute between them.  The Eighth Circuit’s interpretation of case law would have the potential to extend the Younger doctrine to virtually all parallel civil proceedings.  Justice Ginsburg delivered the opinion for a unanimous Court.

Mark

The Supreme Court’s other opinion from yesterday concerns taxation in the context of partnerships designed to generate large tax losses that offset a partner’s income.  The case is United States v. Woods (12-562).  Gary Woods and his employer, Billy Joe McCombs, bought offsetting currency options from Deutsche Bank.  They paid a premium for the long option and sold back a short option to the Bank which substantially reduced the cost of the long option alone.  Woods and McCombs contributed the spreads to two partnerships along with some $3.2 million in cash that was used to purchase stock and currency.  They ultimately disposed of their interests and claimed losses of $45 million.  They attributed this to calculations that accounted for the long option and ignored the offsetting short option.

The IRS treated the partnerships as shams designed for tax avoidance.  As such, the IRS viewed them as not valid for tax purposes.  The Service sent each partnership a Notice of Final Partnership Administrative Adjustment and assessed a 40% penalty on the tax underpayment.  Woods filed suit in federal District Court which held that the partnerships were properly disregarded as shams.  The Court also held that the penalty did not apply.  This was affirmed by the Fifth Circuit.

The Supreme Court reversed.  The Court agreed that the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) applied, allowing the IRS to initiate partnership-related tax proceedings at the partnership level.  The Court noted that there were multiple forums and procedures followed, some of which gave inconsistent results, before TEFRA.  The District Court had the power under the Act to determine whether the partnership was a sham (an adjustment under the Act) and whether a penalty relating to the adjustment applied.  The language of TERFA makes it clear that the penalty assessed by the IRS applied in this case.  In that respect, the holdings of the lower courts were reversed.  Justice Scalia delivered the opinion for a unanimous Court.

Mark

The Supreme Court issued two opinions this morning.  The first of these is Atlantic Marine Constr. Co. v. United States Dist. Court for Western Dist. of Texas (12-929).  The case concerns the effect of a forum-selection clause in a situation where one of the parties sues in a federal court other than that specified in the contract.  Atlantic Marine, a Virginia company, entered into a contract with the U.S. Army Corps of Engineers to construct a child-development center at Fort Hood.  The base is in the Western District of Texas.  Atlantic Marine subcontracted with J-Crew Management Inc., a Texas Company, to do some of the work.  The subcontract called for all disputes to be litigated in “Circuit Court for the City of Norfolk, Virginia, or the United States District Court for the Eastern District of Virginia, Norfolk Division.”

There was a dispute over payments and J-Crew sued in the Western District of Texas rather than a Virginia Court.  Atlantic Marine moved to dismiss the suit under venue statutes and the Federal Rules of Civil Procedure.  Atlantic Marine alternatively moved under 28 U.S.C. §1404(a) to transfer the case to the Eastern District of Virginia.  That motion was denied as well.  The Fifth Circuit Court of Appeals denied a petition for mandamus ordering the transfer.  The Court of Appeals said the District Court did not abuse its discretion when analyzing the balance of interests required under §1404(a).

The Supreme Court reversed the Court of Appeals.  It determined that venue was proper in any federal court so long as it had personal jurisdiction over the parties under the venue statutes.  This related back to the original motions for dismissal which invoked the concept of the case being filed in the wrong venue.  The Court agreed that the correct procedure was a motion to transfer under §1404(a) and invoking the doctrine of forum non conveniens.  In this case, however, the District Court improperly placed the burden on Atlantic Marine to prove that the transfer was appropriate.  The burden should have been on J-Crew to defend against the violation of the contractually bargained-for choice of forum.

The Court stated three factors for federal courts to use in determining whether the motion to transfer should be granted:

  1. The plaintiff’s choice of forum should merit no weight as the party defying the choice of forum selection.  Plaintiffs can typically select a court for their advantage.  As a party that agreed to the forum clause in a contract, it had already exercised its choice of venue.  Hence the burden is on the plaintiff to show why the clause should not be enforced.
  2. The District Court should not consider the parties’ private interests, such as whether it would or would not be convenient for witnesses to appear in another location.  When parties agree to a forum they have waived the right to challenge the selection of the forum.
  3. When a party flouts its contractual obligation, a §1404(a) transfer of venue will not carry the original venue’s choice of law rules.  This may affect the public interest considerations of the analysis.  The effect, however, prevents the plaintiff from gaining the benefit of the choice of law of the state where the suit was originally filed.

The Court did not decide the outcome of the motion to transfer based on its analysis.  Rather, it sent the case back to the lower courts to make that determination.  Justice Alito announced the opinion for a unanimous court.

I’ll report on the second case tomorrow.  It concerns taxation of partnerships set up as a tax avoidance vehicle.

Mark

The Supreme Court issued a single Per Curiam opinion this morning.  It deals with federal jurisdiction in the context of tax payments, refunds, and when interest starts to accrue, though the opinion does not resolve the tax issues.  The case is Ford Motor Company v. United States (13-113).

The IRS informed Ford that it had underpaid its taxes for the years 1983 through 1989.  Ford gave the Government several payments totaling $875 million that stopped the accrual of interest that Ford would otherwise owe pending the result of the audits.  Ford told the Government to treat the deposits as advance payments that Ford would otherwise owe.  As it turns out, Ford had overpaid its taxes which entitled the company to a return of the overpayment with interest from the date of overpayment under 26 U.S.C. §6611.  The Code section, however, does not define the date of overpayment.  The Government claimed the starting date of the accrual began with the date Ford asked that the overpayments be used as credits.  Ford claimed, however, that the date of accrual should be when the deposits were made.  The difference in interpretations was about $445 million.

Ford sued the Government in Federal District Court using 28 U.S.C. §1346(a)(1) as the basis for jurisdiction.  That section authorizes civil actions against the United States to recovery taxes erroneously or illegally assessed or collected.  The Government and the District Court did not contest the jurisdictional authority.  The District Court held for the Government’s interpretation and the Sixth Circuit affirmed.

Ford sought certiorari on the issue.  The Government countered for the first time on appeal that 28 U.S.C. §1346(a)(1) does not apply to the suit.  It contended that the Tucker Act applies to the suit meaning that the only court with jurisdiction over the case is the United States Court of Federal Claims.  The Supreme Court sent the case back to the Sixth Circuit to determine which statute waives sovereign immunity and to determine which court has proper jurisdiction.  Bloomberg has a short report on the case.

Mark

The Court issued one opinion yesterday.  The case is Burt v. Titlow  (12-14) and it concerns the effective assistance of counsel as raised in a habeas corpus proceeding.  Vonlee Titlow was convicted of first degree murder in Michigan.  The record indicates that she poured Vodka down the throat of her Aunt’s husband after which her Aunt smothered the victim.  Titlow’s first attorney arranged a plea deal with prosecutors to plead guilty to manslaughter in return for testifying against her Aunt.  Three days before the Aunt’s trial, Titlow retained a different lawyer who tried to alter the terms of the deal for an even lower sentence.  The prosecution refused.  Titlow had maintained her innocence and decided to go to trial.  She was convicted of second degree murder and given a sentence of 20-40 years.

The Michigan Court of Appeals upheld Titlow’s conviction and denied a claim on ineffective assistance of counsel for her second lawyer.  The claim was that the second attorney advised withdrawing the guilty pleas while not spending enough time learning the details of the case.  The appellate court held that the attorney’s actions were reasonable given Titlow’s protestations of innocence.  The record also shows that Titlow’s prior attorney had discussed the evidence against her in detail and explained that it could support a conviction for first degree murder.

The federal district judge denied habeas relief on deference to the reasonableness of the Michigan Court of Appeals’ decision.  The Sixth Circuit reversed.  It noted that the explanation for withdrawal provided by the second attorney at the hearing on the plea was that the jail time offered was higher than the Michigan guidelines.  As such, the Appellate Court’s rationale was unreasonable.     

The Supreme Court reversed.  It held that the Sixth Circuit unreasonably substituted its judgment for that of the state courts.  The record supports the factual finding that the plea was withdrawn after Titlow proclaimed innocence.  There was no evidence in the record of the advice the second lawyer gave to Titlow.  The standard presumes competency.  Titlow did not overcome that presumption.

There were some questions of ethics, such as the attorney agreeing to represent Titlow in exchange partially for publication rights.  The Court said of that:

He may well have violated the rules of professional conduct by accepting respondent’s publication rights as partial payment for his services, and he waited weeks before consulting respondent’s first lawyer about the case. But the Sixth Amendment does not guarantee the right to perfect counsel; it promises only the right to effective assistance, and we have held that a lawyer’s violation of ethical norms does not make the lawyer per se ineffective.

That statement reminds me of another opinion where the Court stated: ‘A defendant is entitled to a fair trial but not a perfect one.’ Lutwak v. United States, 344 U.S. 604, 619.  Take it from the Supreme Court, perfection isn’t everything.  In fact, it may not be anything.

Justice Alito delivered the opinion of the Court and was essentially joined by all Justices except Justice Ginsburg who wrote an opinion concurring in the judgment.  Justice Sotomayor wrote a separate concurring opinion but otherwised joined the Court in full.

Mark

The Supreme Court issued its first opinion of the October 2013 Term on Monday.  The Court had earlier dismissed the writ of certiorari in Madigan v. Levin (12-87) on October 15th.  The Madigan case was the first argued in the current term.  The case at hand, though, is Stanton v. Sims (12-1217).  It was apparently decided on the basis of the petitions and record as the case did not come up for argument in October.  It involves whether a police officer is entitled to qualified immunity for injuries to a property owner when pursuing an individual on to that property when the individual is only subject to being charged with a misdemeanor.  The District Court said yes to that question and was reversed by the Ninth Circuit.  The Supreme Court agreed with the District Court and reversed the Ninth Circuit.

Officer Stanton was investigating reports of an individual with a baseball bat in La Mesa, California.  He identified himself as a police officer and called for one individual to stop and that individual ran onto the property of Drendolyn Sims.  Stanton gave chase and kicked open a closed gate leading to the front yard of Sims property.  Sims happened to be behind that gate at the time and suffered an injury to her forehead and shoulder.  She filed a §1983 lawsuit alleging a violation of the Fourth Amendment.

The District Court held that Stanton’s entry onto her property was justified by the need to pursue the individual and by the lesser expectation of privacy Sims had in the curtilage of her property.  The Court also ruled that Stanton was entitled to qualified immunity because there was no clearly established law that put Stanton on notice that his conduct was unconstitutional.  The Ninth Circuit relied on one Supreme Court case and circuit precedent in another case to reverse.

In reversing, the Supreme Court said the Ninth Circuit misinterpreted the meaning of Welsh v. Wisconsin, 466 U.S. 740 (1984).  The Court distinguished Welsh as there was no hot pursuit on that record compared the instant case.  The other case, United States v. Johnson, 256 F. 3d 895 (9th Cir. 2001) (en banc) did not involve circumstances of hot pursuit.  Moreover, there were two District Court cases out of the Ninth Circuit as well as two California Appellate Court cases that disagreed with the logic the Ninth Circuit applied in this case.  On that basis, the Supreme Court held that there was no clearly established law that would give Officer Stanton notice that he was violating the Constitution.  Officer Stanton was entitled to qualified immunity.  The opinion was issued per curiam.

Mark

From the WSJ’s Jess Bravin interview with Justice Kennedy:

Of the 9,000 [petitions] we mark about 500 for discussion. From the 500 we discuss, we should take about 100, 120. Lately we’ve been taking only 80. There’s not a lot of emotional or intellectual capital expended arguing over whether we should take the case.  If it’s a really important case and we feel badly that it wasn’t taken, there will be another one [sooner or later] on the same issue.

For more, see Justice Kennedy On Choosing Cases, ‘Empathy,’ And Diversity (WSJ Law Blog). Hat tip to Cynthia Fountaine’s Civil Procedure & Federal Courts Blog post.

And with a hat tip to Eugene Volokh’s post, note this exchange about checking out what blogging law profs have to say after cert has been granted. From Jess Bravin’s Justice Kennedy On Law School, Blogging, And Popular Culture (WSJ Law Blog):

Q: Chief Justice John Roberts, among others, has criticized law reviews for publishing articles on obscure subjects that offer little assistance to the bar and bench. I understand you agree — but have found a substitute.

A: Professors are back in the act with the blogs. Orin Kerr, one of my former clerks, with criminal procedure [and] the internet area, Mike Dorf, Jack Goldsmith. So the professors within 72 hours have a comment on the court opinion, which is helpful, and they are beginning to comment on when the certs are granted. And I like that.

Q: So you’re reading blog posts after cert grants?

A: I have my clerks do it, especially with the ones when we’ve granted cert, to see how they think about what the issues are.

Joe

The Supreme Court’s 2013 term begins today with arguments in two cases.  That’s not the news.  New York Magazine has published an in depth interview with Justice Scalia.  Most of the press focuses on his statements about religion and homosexuality.  Salon leads with the headline Scalia: I believe in the Devil.  That part of the conversation isn’t particularly revealing or shocking given that Scalia is a good Catholic.  As he points out in the conversation, even Jesus believed in the Devil.

Slate focuses mostly on Scalia’s attitudes on homosexuality.  Its headline reads Is Scalia in Denial About His Own Homophobia?   Scalia says that he doesn’t hate homosexuality.  He acknowledges that Catholic doctrine teaches that homosexuality is wrong.  The Constitution does not require the people to adopt one view of it or the other.  That is mild compared to the antagonistic statements the Justice has made in other public occasions which are linked in the article.

Here are my favorite parts of the interview:

Let’s put it this way: Do you think the same level of scrutiny that applies to race should apply to sex?

I am not a fan of different levels of scrutiny. Strict scrutiny, intermediate scrutiny, blah blah blah blah. That’s just a thumb on the scales.

But there are some intelligent reasons to treat women differently. I don’t think anybody would deny that. And there really is no, virtually no, intelligent reason to treat people differently on the basis of their skin.

And:

It was recently reported that the justices don’t communicate with one another by e-mail. Do you go online at all? 

Yeah. Sure, I use the Internet.

You’ve got grandkids. Do you feel like the Internet has coarsened our culture at all?

I’m nervous about our civic culture. I’m not sure the Internet is largely the cause of it. It’s certainly the cause of careless writing. People who get used to blurbing things on the Internet are never going to be good writers. And some things I don’t understand about it. For example, I don’t know why anyone would like to be “friended” on the network. I mean, what kind of a narcissistic society is it that ­people want to put out there, This is my life, and this is what I did yesterday? I mean … good grief. Doesn’t that strike you as strange? I think it’s strange.

And:

How picky are you about which law schools they [law clerks] come from?

Well, some law schools are better than others. You think they’re all the same?

Now, other things being equal, which they usually are not, I would like to select somebody from a lesser law school. And I have done that, but really only when I have former clerks on the faculty, whose recommendations I can be utterly confident of. Harvard, Yale, Stanford, Chicago, they’re sort of spoiled. It’s nice to get a kid who went to a lesser law school. He’s still got something to prove. But you can’t make a mistake. I mean, one dud will ruin your year.

And for whom does he write opinions:

My tone is sometimes sharp. But I think sharpness is sometimes needed to demonstrate how much of a departure I believe the thing is. Especially in my dissents. Who do you think I write my dissents for?

Law students.

Exactly. And they will read dissents that are breezy and have some thrust to them. That’s who I write for.

We glean other facts.  He admires the new Pope, politics in Washington is a lot more ideological since he came to the bench, and he doesn’t care too much about how history will treat him.  That alter point is the angle in story in The Atlantic.  In other Supreme Court coverage, Slate has an additional story, Elena Kagan Will One Day Control the Supreme Court.  Here’s a sample:

Kagan didn’t just go hunting with Scalia once. She became a hunter. She quipped to the students about shooting a doe after a recent unsuccessful elk-hunting trip in Wyoming—just because there was nothing bigger around to kill. The students went silent. When she was nominated, many Harvard students wanted Kagan to be the Great Liberal Hope who’d do combat with the court’s formidable conservatives. Now she was proclaiming, “I love Justice Scalia!”

Though the Court starts its new term, there is this ominous note at the bottom of the Court’s home page:

The Court will continue to conduct its normal operations through October 11. The Court building will be open to the public during its usual hours, and the Court will hear the scheduled oral arguments.  A further update will be provided in the event the lapse of appropriations continues beyond October 11.

The Court’s term may be affected by the “partial government shut down.”

Mark