Law in Plain English: Direct Marketing Association v. Brohl

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Direct Marketing Association v. Brohl

Argument: Dec 8 2014 (Aud.)

Background: The Direct Marketing Association sought to block enforcement of a Colorado law that imposes notice and reporting requirements on retailers who do not collect taxes on sales to Colorado purchasers ("non-collecting retailers"). The law requires non-collecting retailers to provide transactional notices to Colorado purchasers, send annual purchase summaries to Colorado customers, and annually report Colorado purchaser information to the Department of Revenue. The district court granted a preliminary injunction prohibiting enforcement of the notice and reporting requirements, and later ruled that the requirements facially discriminated against interstate commerce and unconstitutionally interfered with interstate commerce. The Tenth Circuit reversed, finding that the Tax Injunction Act deprived the district court of jurisdiction to block Colorado's notice and reporting requirements.

Issue: The question before the Court is whether the Tax Injunction Act, which provides that “[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State,” bars federal court jurisdiction over a suit brought by non-taxpayers to enjoin the informational notice and reporting requirements of a state law that neither imposes a tax, nor requires the collection of a tax, but serves only as a secondary aspect of state tax administration.

Holding: In a unanimous decision, the Supreme Court ruled that the relief sought by petitioner would not “enjoin, suspend or restrain the assessment, levy or collection” of Colorado’s sales and use taxes. As a result, the Direct Marketing Association's lawsuit is not barred by the Tax Injunction Act and can move forward.

Law in Plain English: Dart Cherokee Basin Operating Company, LLC v. Owens

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Dart Cherokee Basin Operating Company, LLC v. Owens

Argument: Oct 7 2014 (Aud.)

Background: Brandon Owens filed a class action lawsuit in Kansas state court alleging that he and others were underpaid royalties from Dart Cherokee Basin Operating Company or Cherokee Basin Pipeline on oil and gas wells. The defendants sought to remove the case to federal court, pursuant to the Class Action Fairness Act (CAFA). Federal law requires only that defendants must file "a short and plain statement of the grounds for removal." Although Owens sought royalties of at least $8.2 million (in excess of CAFA's requirement of $5 million, the district court denied the motion to remove because the defendant's notice of removal failed to provide evidentiary support, "such as an economic analysis . . . or settlement estimates" for the $8 million figure. The defendants requested permission to appeal to the Tenth Circuit, but a divided panel denied permission. Petitioners then sought en banc review of the panel's decision, but the panel voted 4-4 (an evenly divided vote denies the petition).

Issue: The question before the Court is whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or whether it is enough to allege the required “short and plain statement of the grounds for removal.”

Holding: In a 5-4 decision, the Supreme Court ruled that as specified in §1446(a), a defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold; the notice need not contain evidentiary submissions. The District Court erred in remanding this case for want of an evidentiary submission in the notice of removal, and the Tenth Circuit abused its discretion in denying review of that decision.

A few thoughts on Hobby Lobby and for-profit corporations

One of the most interesting distinctions, and perhaps the most crucial distinction, in the Obamacare contraceptive mandate cases is not whether corporations can "practice" religion, but the differences between a non-profit corporation and a for-profit corporation.* Many opponents of the decision have argued that a corporation cannot practice religion. But this ignores a long-standing understanding of the Religious Freedom Restoration Act. Under RFRA, no one (not even the dissenters on the Supreme Court) questions that a non-profit corporation like a church can practice religion. Non-profit corporations are unambiguously covered by RFRA and the Free Exercise Clause. For if RFRA does not cover a church, then what is it good for?

(Nor is RFRA part of some ridiculous notion of a "war on women" by Republicans: The Religious Freedom Restoration Act was introduced in the House by then-Representative Chuck Schumer (D-NY) and 169 other co-sponsors, and passed by a voice vote. It passed the Senate by 97-3. President Clinton signed it into law. It was backed by the New York Times. It was primarily designed to protect Native American religions from the federal government.)

Rather, you must be able to make a principled distinction as to why a non-profit corporation like a church can practice religion, but that a for-profit corporation like Hobby Lobby or Conestoga Wood Specialties or Mardel cannot. In my opinion, the dissent tries but fails to do this in a convincing way. The Dictionary Act, a federal law codified at 1 U.S.C. § 1, states that

In determining the meaning of any Act of Congress, unless the context indicates otherwise—

...

the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals....

(Yes, you read that right: since 1947, federal law says that anytime another law refers to "person" it includes corporations).

The dissent argues that "the context indicates otherwise," but this is not convincing. The only defining difference is profit, but "that dog don't hunt." Making profit is not mutually exclusive with practicing religion.   It is not, as the dissent suggests, that "religious exemptions had never been extended to any entity operating in 'the commercial, profit-making world,'" but rather that RFRA, when combined with the Dictionary Act, makes no such distinction. The dissent, in my opinion, must do better than this.

Good and smart people can disagree about the scope of RFRA, as evidenced by the 5-4 vote in this case. But when you try to argue that corporations cannot practice religion, without understanding that non-profit corporations are already unambiguously protected in this regard, you start to look foolish. To start to convince me, find a principled distinction between a non-profit corporation and a for-profit corporation that goes beyond the profit motive.

* A reminder: It is important to note the distinction that the holding in this case does not apply to all corporations, just those that are defined as closely-held. The IRS defines a closely-held corporation as one in which more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and is not a personal service corporation.

Law in Plain English: Obamacare contraceptive mandate cases

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Burwell v. Hobby Lobby Stores, Inc. (consolidated with Conestoga Wood Specialties Corp. v. Burwell)

Argument: Mar 25 2014 (Aud.)

Discussion: Hobby Lobby and Mardel (a craft store chain and a Christian bookstore chain, respectively) and Conestoga Wood Specialties (a manufacturer of wood cabinets) brought actions challenging an Affordable Care Act regulation that requires them to provide certain contraceptive services as a part of their employer-sponsored health care plan. Among these services are drugs and devices that the employers believe to be abortifacients, the use of which is contrary to their faith. The employers grounded their claims in the Free Exercise Clause of the First Amendment, and the Religious Freedom Restoration Act (RFRA), a federal law aimed at preventing laws that substantially burden a person's free exercise of their religion. The Tenth Circuit ruled that Hobby Lobby and Mardel were "Persons Exercising Religion" Under RFRA, and thus entitled to bring their claims. On the other hand, the Third Circuit ruled that for-profit, secular corporations like Conestoga Wood Specialties could not engage in religious exercise, and as a result, were not entitled to protection under the Free Exercise Clause of the First Amendment and the RFRA.

Issue: The question before the Court in Hobby Lobby is whether the Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. §§ 2000bb et seq., which provides that the government “shall not substantially burden a person’s exercise of religion” unless that burden is the least restrictive means to further a compelling governmental interest, allows a for-profit corporation to deny its employees the health coverage of contraceptives to which the employees are otherwise entitled by federal law, based on the religious objections of the corporation’s owners.

The question before the Court in Conestoga Wood Specialties is whether the religious owners of a family business, or their closely held, for-profit corporation, have free exercise rights that are violated by the application of the contraceptive-coverage mandate of the Affordable Care Act.

Holding: In a 5-4 decision, the Supreme Court ruled that, as applied to closely held corporations, the HHS regulations implementing the contraception mandate violate the RFRA. It is important to note the distinction that the holding in this case does not apply to all corporations, just those that are defined as closely-held. The IRS defines a closely-held corporation as one in which more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and is not a personal service corporation.

Law in Plain English: Loughrin v. United States

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Loughrin v. United States

Argument: Apr 1 2014 (Aud.)

Background: TBD

Issue: The question before the Court is whether the government must prove that the defendant intended to defraud a bank and expose it to risk of loss in every prosecution under 18 U.S.C. § 1344.

Holding: In a 9-0 decision, the Supreme Court ruled that the statute at issue here does not require the government to prove that a defendant intended to defraud a financial institution. The provision requires only that the defendant intended to obtain bank property and this is accomplished by a false statement.

Law in Plain English: Marvin M. Brandt Revocable Trust v. United States

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Marvin M. Brandt Revocable Trust v. United States

Argument: Jan 14 2014 (Aud.)

"Though we recognize that the Seventh Circuit, the Federal Circuit and the Court of Federal Claims have concluded that the United States did not retain any reversionary interest in these railroad rights-of way, we are bound by our precedent."
United States v. Brandt, 496 F. App'x 822, 825 (10th Cir. 2012) cert. granted, 12-1173

Background: In 1976, the government conveyed 83.32 acres of land to Melvin M. Brandt and Lula M. Brandt — the parents of Marvin M. Brandt. The land patent conveyed the property in fee simple and stated that it was subject to a right-of-way granted to the Laramie, Hahn's Peak, and Pacific Railroad Company for railroad purposes in 1908. In 1987, the Wyoming and Colorado Railroad Company, Inc. ("WYCO") acquired the railroad right-of-way and operated the rail line for a number of years. In May 1996, WYCO filed a Notice of Intent to Abandon Rail Service with the Surface Transportation Board ("STB"). The STB approved abandonment of the rail line in December 2003, and, in January 2004, WYCO notified the STB that it had completed its abandonment of the railroad right-of-way. The United States sought to quiet title on the theory that it had an implied reversionary interest in the right-of-way. The District Court found in favor of the United States, who sought to use the right-of-way for a rails-to-trails conversion. The Tenth Circuit affirmed. The Court of Federal Claims dismissed a parallel claim by Brandt for lack of jurisdiction, but the Federal Circuit reversed.

Issue: The question before the Court was whether the United States retained an implied reversionary interest in rights-of-way created by the General Railroad Right of Way Act of 1875 after the underlying lands were patented into private ownership.

Holding: In an 8-1 decision, the Supreme Court ruled that the right of way was an easement that was terminated by the railroad’s abandonment, leaving Brandt’s land unburdened. As a result, the Government did not retain an implied reversionary interest in the right-of-way.

Law in Plain English: Rosemond v. United States

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Rosemond v. United States

Argument: Nov 12 2013 (Aud.)

Did you know? Rosemond is represented by John Elwood, a blogger at the Volokh Conspiracy and writer of the Relist Watch at SCOTUSblog.

Discussion: Rosemond was involved in a drug transaction-gone-wrong. He was punched in the face by another man who then fled. Someone then pulled out a nine-millimeter handgun and fired nine or ten shots at the fleeing man. At trial, the District Court instructed jurors on both of the Government's theories, that Rosemond was the shooter and, alternatively, that he aided and abetted another's use of a firearm during the drug deal. Based on a written statement and testimony at trial that Rosemond was the shooter, jurors found Rosemond guilty of using and discharging a firearm during a federal drug-trafficking offense (among other charges). However, they were not required to specify under which theory they convicted. The Tenth Circuit affirmed, but acknowledged that most other circuits require jurors to find, additionally, that the defendant took some action to facilitate or encourage his cohort's use of the firearm.

Issue: The question before the Court is whether the offense of aiding and abetting the use of a firearm during and in relation to a crime of violence or drug trafficking crime, in violation of 18 U.S.C. §§ 924(c)(1)(A) and 2, requires proof of (i) intentional facilitation or encouragement of the use of the firearm, as held by the First, Second, Third, Fifth, Seventh, Eighth, Ninth, and Eleventh Circuits, or (ii) simple knowledge that the principal used a firearm during a crime of violence or drug trafficking crime in which the defendant also participated, as held by the Sixth, Tenth, and District of Columbia Circuits.

Holding: In a 7-2 decision, the Supreme Court held that the Government establishes that a defendant aided and abetted a §924(c) violation by proving that the defendant actively participated in the underlying drug trafficking or violent crime with advance knowledge that a confederate would use or carry a gun during the crime’s commission. As a result, the Court ruled that the trial judge's jury instructions were erroneous, and remanded the case to determine whether there was harmless error.

Obamacare is headed back to the Supreme Court--and here's why it's a big deal

UPDATE: My case page is here.

As I noted the other day, the the Supreme Court granted cert in two cases (Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius) challenging the Obamacare contraceptive mandate.

The Affordable Care Act contains a regulation that requires employers to provide certain contraceptive services as a part of their employer-sponsored health care plan. To be clear, these employers are not challenging the provision of all contraceptives--just some of them. Among these contraceptive services in question are drugs and devices that the plaintiffs believe to be abortifacients, the use of which is contrary to their faith.

It is true that, as a practical matter, these cases will not likely have a huge impact on Obamacare itself--at stake is one small provision of the law, not the individual mandate at the center of NFIB v. Sebelius. Rather, what makes these cases a big deal is nexus of Obamacare and Citizens United, the case in which the Supreme Court held that the First Amendment prohibits the government from restricting political independent expenditures by corporations, associations, or labor unions. While corporations have had some personhood rights at early as the 19th century, the public perception of corporate personhood rights is strongly tied to the unpopular Citizens United decision. Furthermore, the Supreme Court is poised to expand Citizens United when it rules in McCutcheon v. FEC.

As a result, the combination of an unpopular Citizens United decision (potentially expanded by McCutcheon) with the controversial Obamacare contraceptive mandate is a high profile mix of politics and religion--sure to be a big deal when the decision comes down (quite possible a 5-4 decision the last week of June).

Tenth Circuit search page leaves much to be desired

The Tenth Circuit's search page returns results ranked by percent, but doesn't actually give you any indication which document might be the one you're looking for! 

Law in Plain English: Tarrant Regional Water District v. Herrmann

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Tarrant Regional Water District v. Herrmann

The Tarrant Regional Water District (an agency of Texas) sued the Oklahoma Water Resources Board over the use of water governed by the Red River Compact (an interstate compact authorized by Congress; its signatories are Oklahoma, Texas, Arkansas, and Louisiana). The clause in question reads:

The Signatory States shall have equal rights to the use of runoff originating in subbasin 5 [see map below] and undesignated water flowing into subbasin 5, so long as the flow of the Red River at the Arkansas-Louisiana state boundary is 3,000 cubic feet per second or more, provided no state is entitled to more than 25 percent of the water in excess of 3,000 cubic feet per second.

Oklahoma argued (and the Tenth Circuit agreed), that the clause permits each state to take up to twenty-five percent of the excess water that it can obtain within its own  borders; and thus passed a series of statutes that disfavored out-of-state transfers of water relative to in-state transfers. Tarrant argued that the Compact language authorizes cross-border transfers of water. The questions before the Court were (1) whether Congress’s approval of an interstate water compact that grants the contracting states “equal rights” to certain surface water and – using language present in almost all such compacts— provides that the compact shall not “be deemed . . . to interfere” with each state’s “appropriation, use, and control of water . . . not inconsistent with its obligations under this Compact,” manifests unmistakably clear congressional consent to state laws that expressly burden interstate commerce in water; and (2) whether a provision of a congressionally approved multi-state compact that is designed to ensure an equal share of water among the contracting states preempts protectionist state laws that obstruct other states from accessing the water to which they are entitled by the compact.

In a unanimous decision, the Supreme Court ruled that the Red River Compact did not preempt Oklahoma's water statutes. As a result, Texas is not entitled to surface water in Oklahoma based on the clause above. The practical impact of this decision is to reinforce that sovereign states possess an absolute right to all their
navigable waters and the soils under them for their own common use. Absent a specific, unambiguous provision that allows cross-border transfers (which the Red River Compact does not), such transfers will not be permitted.

Image via http://shfwire.com/drought-stricken-texas-and-oklahoma-battle-red-river-water-rights

Law in Plain English: Marx v. General Revenue Corp.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Marx v. General Revenue Corp.

Marx filed a lawsuit claiming that General Revenue Corporation (GRC) threatened and harassed her in order to collect on a debt. She lost, and the District Court awarded costs to GRC pursuant to a court rule that gives discretion to the court to do so. Marx challenged the award of costs, claiming that a separate federal statute authorized costs only when the original claim was made in "bad faith and for the purpose of harassment." The question here was whether the court award costs even if the claim wasn't made in "bad faith and for the purpose of harassment." In other words, did the statute supplant or limit the rule. By looking at the language and context of the statute, the Supreme Court ruled (in a 7-2 decision) that the statute is not contrary to the rule. As a result, Marx's challenge failed. The practical impact of this decision is that courts will continue to be allowed discretion to award costs to defendants, even if the original complaint was not made in bad faith and for the purpose of harassment.