/>iWith six more decisions, the U.S. Supreme Court decided no fewer than 11 cases in two business days last week, following 12 others over the previous two weeks.
In other words, summer vacation is upon us, as the Court’s term is likely to end soon.
The most recent decisions are, as predicted, more controversial than the spate of unanimous or near-unanimous decisions of earlier weeks. None of the newest decisions, nor indeed any of the cases yet to be decided, are likely to provoke the level of public attention given to the Court’s decision in United States v. Skrmetti, upholding a state’s law prohibiting certain medical treatments for transgender minors.
However, the latest batch of decisions offers considerable guidance to litigators with respect to the level of review that federal courts may exercise under several very active statutory regimes and as to important procedural issues such as standing and venue.
Justice Barrett delivered the Court’s opinion in Food and Drug Administration v. R.J. Reynolds Vapor Co., upholding the right of retailers who would sell new tobacco products if not for the order of the Food and Drug Administration (FDA) denying approval to seek judicial review. Justice Jackson, joined by Justice Sotomayor, dissented. The issue in the case was whether retailers, as opposed to manufacturers, were “person[s] adversely affected” by an FDA ruling under the terms of the Family Smoking Prevention and Tobacco Control Act (TCA). One might fairly say, albeit with tongue slightly in cheek, that this is a “liberal” decision from a “conservative” Court. In any event, the Court applied traditional standing analysis in determining that the plaintiff retailers were within the “zone of interests” that the statute protects. “Adversely affected,” as well as variations such as “adversely affected or aggrieved,” are terms of art with a “long history in federal administrative law.” Many statutes, including the Administrative Procedure Act (APA), use the term, which entitles anyone “adversely affected or aggrieved by agency action within the meaning of a relevant statute . . . to judicial review.”
The Court interpreted “adversely affected” broadly as covering anyone even “arguably within the zone of interests to be protected or regulated by the statute . . . in question.” Thus, the Court rejected the argument of the FDA that the capacious understanding of “adversely affected” is unique to the APA but should not apply to the TCA, which, it argues, requires that a person “actually”—not “arguably”—fall within the statute’s zone of interests. Accordingly, the Court interpreted the TCA as echoing the APA and that retailers “fit the bill” of persons who may petition for judicial review. As the Court notes, “If the FDA denies an application, the retailers lose the opportunity to profit from the sale of the new tobacco product—or, if they sell the product anyway, risk imprisonment and other sanctions. . . . Accordingly, the retailers are ‘adversely affected’ by a denial order and are therefore proper petitioners. . . .”
The dissenters read the TCA, as did the FDA, as only empowering manufacturers to appeal. The majority countered that the term “any” suggests a congressional intent to cover a more expansive category of potential plaintiffs. The FDA argued for the first time in the Supreme Court that each petitioner in a joint petition for review must independently establish venue. However, the Court notes that the FDA did not make that argument in the U.S. Court of Appeals for the Fifth Circuit, and the Supreme Court refused to address an argument raised for the first time before itself. The dissenters decried the fact that the decision allows manufacturers and others to do an “end run” around the TCA’s venue restrictions to courts of corporate residence or the D.C. Circuit, as well as forum shop to the perceived most favorable Circuits, thus avoiding the effect of earlier adverse rulings.
Author’s note: As many readers of this blog over the last several terms of the Court might recall, the Court has been increasingly strict in the assessment of standing and venue. This is not to debate the issue of consistency but to suggest that the Court’s decision affording standing to parties whose alleged harm is derivative of the direct harm of a primary party, i.e., a retailer, as opposed to an applicant manufacturer, is likely to add fuel to regulatory challenges brought not only under the APA, but also under other statutes.
Esteras v. United States is another 7–2 decision, this one also written by Justice Barrett, with Justices Alito and Gorsuch dissenting. The case involved a convict, Edgardo Esteras, who had pleaded guilty to conspiring to distribute heroin and was sentenced to imprisonment for 12 months, followed by six years of supervised release. While in the latter status, Esteras was arrested and charged with domestic violence and other crimes. The U.S. District Court for the Northern District of Ohio then revoked Esteras’s supervised release and ordered him reimprisoned for 12 months, explaining that his revocation was intended to “promote respect for the law.”
However, the Supreme Court rejected this view and held that a decision to revoke release may not be based on an excluded section of the statute applied here, “which covers retribution vis-à-vis the defendant’s underlying criminal offense.” While the statute sets forth 10 factors that govern initial sentencing, it excludes two of them from the factors to be considered as to revocation. One of those two excluded factors is the one applied by the trial court, which “references ‘the need for the sentence imposed . . . to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense.’ . . . This provision speaks to the retributive purpose of punishment.”
The Court held that the structure of the statute, excluding from consideration in a revocation proceeding two of the 10 factors available at original sentencing, confirms the negative inference that the excluded factors cannot be considered in assessing revocation for the limited universe of supervised release. With an impermissible factor that was used to support the revocation decision as to Esteras and others having been rejected by the Court, the case was remanded for other proceedings, apparently allowing the consideration of permissible factors.
McLaughlin Chiropractic Associates, Inc. v. McKesson Corp. involved a statute, the Telephone Consumer Protection Act (TCPA), that this writer has litigated at both the trial and appellate levels, so the Court’s decision lands on fertile ground. This one was a 6–3 decision with a stereotypical division between jurisprudential conservatives and liberals. Writing for the Court over the dissents of Justices Kagan, Sotomayor, and Jackson, Justice Kavanaugh opined that the Hobbs Act (the statute governing appeals of agency action, discussed recently in this blog in another context) does not bind a district court in a civil enforcement proceeding to an agency’s interpretation of a statute. Much as was the case with Loper Bright, which overturned the Chevron doctrine, the Court held that “[d]istrict courts must independently determine the law’s meaning under ordinary principles of statutory interpretation while affording appropriate respect to the agency’s interpretation.”
The TCPA protects against intrusive telemarketing by banning unsolicited advertisements to fax machines without providing an opt-out, allowing recipients to avoid receiving future faxes. The statute provides for private rights of action and statutory damages per violation. The health care company, McKesson, through a subsidiary, sent unsolicited fax advertisements without the required opt-out notices to various medical practices, including the petitioner. The petitioner then sued, seeking certification of a class of fax recipients who received the advertisements in question either on personal fax machines or through online fax services. While the lawsuit was pending, the company petitioned the Federal Communications Commission (FCC) for a declaratory ruling on whether the TCPA applies to faxes received through online fax services.
Months after class certification, the FCC issued an order that interpreted “telephone facsimile machine” in the TCPA to exclude online fax services. The Northern District of California deemed the order binding and granted summary judgment to McKesson on claims involving online fax services, and the Ninth Circuit affirmed. It then decertified the class, leaving the petitioner to contest 12 faxes received through traditional machines. The Supreme Court accepted the case to decide whether the Hobbs Act bound the district court to the agency’s interpretation.
In reaching the conclusion that it did not, Justice Kavanaugh, who appears to have succeeded the retired Justice Breyer as the Court’s most authoritative voice on administrative law matters, opined that pre-enforcement review statutes such as the Hobbs Act that are silent about judicial review in both pre-enforcement and enforcement proceedings, but that don’t prohibit it, are subject to a default rule. Accordingly, the case was remanded for independent consideration by the district court.
The disagreement between the Court’s majority and minority turned on the application of the default rule to enforcement proceedings. That rule mandates that “district courts must independently determine whether an agency’s statutory interpretation is correct, rather than being bound by the agency’s interpretation.” The dissent argues that application of the rule to enforcement proceedings that might occur years after promulgation of the contested action to the benefit of a party that declined to seek judicial review at the outset reads into the Hobbs Act language inconsistent with the statute’s understood meaning that it prevents “later, collateral attack on agency orders that could have been challenged at the time they issued.” Notwithstanding that the majority did not adopt this thinking, an attorney would do well to consider advising early challenges, though pre-enforcement actions come with their own difficulties.
Diamond Alternative Energy, LLC v. Environmental Protection Agencywas yet another Clean Air Act (CAA) case (the Court having decided two others the same week) and another in which the Court considered the issue of standing. Justice Kavanaugh again wrote for the Court, and this time, only Justices Sotomayor and Jackson dissented. Pursuant to the CAA, the Environmental Protection Agency (EPA) approved California regulations requiring automakers to manufacture more electric vehicles and fewer gasoline-powered ones, with the goal of decreasing toxic emissions. Producers of gasoline and other liquid fuels sued, arguing that the EPA’s approval of the California regulations violated the CAA.
The issues before the Court were whether those producers had standing and, if so, whether they could state a claim that was redressable. As Justice Kavanaugh stated, “This case presents the ‘familiar’ circumstance where government regulation of one business ‘may be likely’ to cause injuries to other linked businesses. Alliance for Hippocratic Medicine, 602 U. S., at 384. California’s regulations force automakers to manufacture more electric vehicles and fewer gasoline-powered vehicles, likely causing downstream economic injuries to fuel producers,” in that “fuel producers make money by selling fuel. Therefore, the decrease in purchases of gasoline and other liquid fuels resulting from the California regulations hurts their bottom line. Those monetary costs ‘are of course an injury’ United States v. Texas, 599 U. S. 670, 676 (2023). . . . As for redressability, invalidating the California regulations would likely redress at least some of the fuel producers’ monetary injuries.”
The majority and minority disagreed over whether the case should have been taken in the first place, given the dynamism of the market. As the dissent puts it, “The Court shelves its usual case-selection standards to revive a fuel-industry lawsuit that all agree will soon be moot (and is largely moot already). And it rests its decision on a theory of standing that the Court has refused to apply in cases brought by less powerful plaintiffs. This case gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this Court than ordinary citizens.” The majority, however, found enough immediacy to compel the current review.
Stanley v. City of Sanford was a case that will particularly interest practitioners of employment law. The case concerned whether a retired employee who neither held nor sought a job was a “qualified individual” under Title I of the Americans with Disabilities Act (ADA). The statute defines such a person who is protected against discrimination on the basis of disability to be “an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.”
Karyn Stanley was a firefighter for the city. When she was first hired, the city offered health insurance until age 65 to those who retired with 25 years of service and those who retired earlier because of a disability. The city later changed that policy as to individuals who retired before age 65 because of disability, now limiting them to 24 months of insurance unless the retiree started receiving Medicare benefits sooner. Stanley retired with a disability before she had 25 years of service and before she was 65. Thus, she was subject to the 24-month limitation on insurance.
She brought suit under the ADA, claiming that she was being discriminated against because her employer provided different benefits to those who retire with 25 years of service and those who retire because of disability. However, the district court dismissed her ADA claim, reasoning that the alleged discrimination occurred after she retired, when she was not a “qualified individual” under Title I of the ADA, and no longer held or sought a job with the defendant. The Eleventh Circuit affirmed, and, resolving a split among the circuits, so did the Supreme Court, with enough Justices attaching themselves to various parts of a decision written by Justice Gorsuch to form a majority that affirmed the holding of the Eleventh Circuit.
Perhaps of special interest to employment law specialists, the majority made the natural comparison between Title I of the ADA and the more widely known Title VII of the Civil Rights Act of 1964. It found that this comparison reinforced its reading of the ADA to the detriment of Stanley’s position. Title VII protects “employee[s] . . . without temporal qualification, sometimes covering former employees.” But where Title VII links “employee” to present-tense verbs referring to current employees, the story is different. Here, “the ADA’s ‘qualified individual’ yoked to present-tense verbs suggests current job holders or seekers. Court precedent supports this interpretation.”
In seeking what some might argue to be judicial legislation, Stanley invoked the ADA’s purpose of eradicating disability-based discrimination and argued that this purpose would be served by a judicial extension of Title I’s coverage to retirees. Several Justices seemed at least sympathetic to this policy argument. But Justice Gorsuch brought this argument up short while nevertheless noting that other laws besides the ADA may protect retirees from discrimination and “[i]f Congress wishes to extend Title I to retirees, it can do so. “
Fuld v. Palestine Liberation Organization dealt with several lawsuits filed under the Antiterrorism Act of 1990 (ATA). The ATA creates a federal civil damages action for U.S. nationals injured or killed “by reason of an act of international terrorism.” The respondents are the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA), organizations responsible for the functions of government for parts of the West Bank and Gaza Strip.
The question presented to the Court was “whether the exercise of personal jurisdiction over respondents under the Promoting Security and Justice for Victims of Terrorism Act (PSJVTA) violates the Due Process Clause of the Fifth Amendment.” All the Justices agreed that the answer to that question is “no.” The Chief Justice wrote for all of the other Justices, save for Justices Thomas and Gorsuch, who concurred with the result.
The PSJVTA cites the PA and PLO specifically and provides that they “shall be deemed to have consented to personal jurisdiction” in ATA cases under two circumstances. The first of these relates to respondents’ paying salaries to terrorists in Israeli prisons and to families of deceased terrorists—conduct Congress has condemned as “an incentive to commit acts of terror.” The second ties jurisdiction to respondents’ activities on U.S. soil. The petitioners alleged that the respondents engaged in conduct triggering both jurisdictional predicates. Reversing the Second Circuit, the Supreme Court held that “[t]he PSJVTA’s personal jurisdiction provision does not violate the Fifth Amendment’s Due Process Clause because the statute reasonably ties the assertion of jurisdiction over the PLO and PA to conduct involving the United States and implicating sensitive foreign policy matters within the prerogative of the political branches.”
The Court’s opinion is lengthy, but its fundamental principle is concise and quite recognizable to any law student learning civil procedure. “The Fourteenth Amendment personal jurisdiction framework derives from International Shoe Co. v. Washington, 326 U. S. 310, and requires that a defendant have sufficient ‘contacts with the forum State so that maintaining suit is ‘reasonable’ and ‘does not offend traditional notions of fair play and substantial justice.’” General jurisdiction lies in the forum of the defendant’s domicile or “home.” That would not apply to the PLO and PA. “Specific jurisdiction is different: It covers non-resident defendants less intimately connected with a State, but only as to a narrower class of claims . . . so long as there exist ‘minimum contacts’ between the defendant and the forum State.” The requisite contacts “for this kind of jurisdiction often go by the name ‘purposeful availment.’” That means taking some act by which a defendant “purposefully avails itself of the privilege of conducting activities within the forum State.” And actionable claims must be connected with those activities.
But while the terms of the due process clauses of the Fifth and Fourteenth Amendments are nearly identical, the Court’s opinion was based on the Fifth Amendment, with the Court declining to import the minimum contacts analysis of the Fourteenth into the Fifth. “Rather, the Due Process Clause of the Fifth Amendment necessarily permits a more flexible jurisdictional inquiry commensurate with the Federal Government’s broader sovereign authority.” Much of the Court’s discussion of the relationship between the two amendments would seem academic. Indeed, the demands of the Fifth Amendment could end up being on the same constitutional footing as the more expansive Fourteenth. But even if they do,
the PSVJTA easily comports with the factors we have previously applied to determine “the reasonableness of the exercise of jurisdiction” even under the Fourteenth Amendment. . . . Reasonableness, . . . will depend in each case “on an evaluation of several factors,” including “the burden on the defendant, the interests of the forum State, and the plaintiff ’s interest in obtaining relief.” . . . The PSJVTA ticks all three boxes.
The Court continued. “For largely the same reasons that we conclude there is a close connection between the PSJVTA’s predicate conduct and the United States, it follows that the forum sovereign has a substantial interest in adjudicating the dispute.” The United States has “an exceedingly compelling interest” in thwarting international terrorism and holding terrorists accountable for their actions against Americans. The defendants also have a history of being able to litigate ATA suits and do not claim that compelling them to do so in the United States “would force them to bear an unfair or unmanageable burden.” And “the PSJVTA reasonably ties the assertion of federal jurisdiction over the PLO and PA to conduct that involves the United States and implicates sensitive foreign policy matters within the prerogative of the political branches.” Accordingly, the Supreme Court held that the personal jurisdiction provision of the statute comports with the Due Process Clause of the Fifth Amendment. This decision disposes of the instant case and two others of a similar nature.
This week could be as busy as what we've just seen. Be ready for it.
