I never had a chance to write about the other cases the Supreme Court issued on Monday. Here are short summaries of the points decided. The case of Henderson v. United States (13-1487) presented the question as to whether a convicted felon could transfer his guns to a third party as §922(g) prevents a felon from possessing firearms. Henderson wanted to give his guns to a friend. The government opposed the idea. The Supreme Court held that the statute does not prohibit the transfer provided the court below was satisfied that the transfer was not a sham. Justice Kagan delivered the opinion for a unanimous Court.
Coleman v. Tollefson (13-1333) concerned the ability of prisoners to file lawsuits in forma pauperis. The relevant statute limits a court to grant the status to a prisoner who has filed three prior actions that were ultimately dismissed as frivolous. , malicious, or fails to state a claim upon which relief may be granted. Coleman filed three suits that were dismissed as frivolous. He filed four more suits while the third dismissal was on appeal. The lower courts denied him in forma pauperis status. Coleman argued that the case on appeal shouldn’t count. The Supreme Court disagreed stating essentially that the statute governs the action of a single court rather than as a sequence of events. Justice Breyer delivered the opinion for a unanimous court.
The case of Comptroller of Treasury of MD v. Wynne (13-485) presented the issue of how states can account for tax credits against taxes paid to other states. Maryland allowed tax credits for tax payments made to other states against its state income tax but not for a county tax which the state also levied. The state issued a deficiency notice against Wynne when he claimed credits against both. The lower Maryland courts held the tax scheme violated the dormant Commerce Clause as it burdened interstate commerce. The state’s tax scheme did not pass the internal consistency test which assumes that every state has the same tax structure. If every state adopted Maryland’s structure, interstate commerce would be taxed higher than intrastate commerce. The words “dormant Commerce Clause” suggest all kinds of internal interpretive disputes in the Court which is reflected in the vote. Justice Alito delivered the opinion of the Court and was joined by Chief Justice Roberts and Justices Kennedy, Breyer, and Sotomayor. Justice Scalia filed a dissenting opinion and was joined by Justice Thomas as to Parts I and II. Justice Thomas filed a dissenting opinion and was joined by Justice Scalia except as to the first paragraph. Justice Ginsburg filed a dissenting opinion and was joined by Justices Scalia and Kagan.
The next case is Tibbles v. Edison Int’l (13-550). This case involves a breach of fiduciary duty claim under ERISA, but the real issue is whether the limitation period for filing a claim (six years) barred the suit. The claim is that plan trustees added mutual funds to the plan in 1999 and 2002 when there were materially identical plans available at a lower cost. The case was filed more than six years after the funds were added to the plan. The Court held that trustees have an ongoing duty to remove imprudent trust investments. As long as the claim alleges a violation of that ongoing duty, the claim is timely. Justice Breyer delivered the opinion for a unanimous Court.
The last case from Monday is Harris v. Viegelahn (14-400). There are two options for filing individual bankruptcy, Chapters 7 and 13. The difference is that under Chapter 7 a debtor’s assets are transferred to a bankruptcy estate and promptly liquidated for distribution to creditors. This does not include wages earned after the petition is filed. Chapter 13 allows a debtor to retain assets and develop a plan to pay off creditors from future wages, among other assets. Harris owed money to multiple creditors and some $3,700 to Chase Bank as arears on his home mortgage. Chase filed a Chapter 13 petition. Harris was obligated under the plan to resume mortgage payments of $530 per month which were withheld from his wages and given to Viegelahn, the bankruptcy trustee. Harris fell behind and Chase foreclosed. Viegelahn still received the $530 per month without making any payments to Chase. Harris converted his Chapter 13 plan to Chapter 7 a year later. Viegelahn then distributed money to creditors including funds from Harris’ wages. Harris petitioned to get that money back. The Fifth Circuit held that Harris was not entitled to a refund. The Supreme Court reversed, holding that bankruptcy law limits the Chapter 7 estate to property on hand at the time of the initial filing. Justice Ginsburg delivered the opinion for a unanimous Court.