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19 February 2016

Choosing sides in the FBI-Apple dispute: who has the better argument?

Many people know my interests are at the intersection of the law and technology, and as a result, have asked my opinion on the merits of the FBI-Apple dispute. In large part because there was a lot of misinformation about the basic factual circumstances of the case, I wrote a short case summary here, but tried to remain neutral. Even as I wrote it, I really had no sense of which side had the better argument. I'll also add the obvious here, because sometimes it is not as obvious to others as it is to me: this is only my personal opinion and not work-related. It's worth what you've paid for it. I'll happily (ok, perhaps not happily) acknowledge I am wrong if the results come out contrary to my opinion.

On the other hand, most people in the tech and infosec communities chose sides in the FBI-Apple dispute pretty quickly. I was initially surprised that people's views were split as much as they were, even if it appeared (and still appears) that the split leans in favor of Apple (which is admittedly anecdotal evidence on my part). Upon further review, I am not surprised that views are as split as they are.

I took a lot longer to decide precisely because I am acutely aware of the nuances that often get lost in 140-character tweets or Facebook updates. In the end, from both my personal perspective and also what I think will actually happen, I think the FBI has the stronger argument. Apple is likely to draw out the process, but I think they will ultimately lose (although, speculating ahead, their best chance of winning may be at the Ninth Circuit if the case gets that far).

My decision is based upon the specific text of the Magistrate Judge's order, especially because it overcomes some of the more potent claims about what Apple is being asked to do. In an article entitled, "Why Lawyers Need to Stand By Apple" (which I cite because it was written by a lawyer addressed to other lawyers), we can see an example of what is being said about the case:

[Apple] is being ordered to create a master key to hack any iPhone on the planet.

Such an order is well beyond the scope of reason, and what the court is demanding Apple to do will ultimately undermine any hope of any of us ever having any privacy in the digital age.

This is not an exaggeration.

[Once Apple] creates the tool to break the encryption of any iPhone, that tool will be used again and again.

Emphases are mine. This is the core argument of the article. And it is disappointingly inaccurate.

According to the court order,

The court is requiring Apple to "provid[e] the FBI with a signed...Software Image File ("SIF") that can be loaded onto the SUBJECT DEVICE.... The SIF will be coded by Apple with a unique identifier of the phone so that the SIF would only load and execute on the SUBJECT DEVICE.

The court also gives Apple the option to do all of this at an Apple facility; meaning they could assist the FBI with this particular phone and then destroy the SIF without it ever being in the hands of the FBI or without ever leaving Apple's facility.

Could the FBI steal the SIF? Yes, but it wouldn't work on another phone without modification that it appears the FBI is not capable of doing. And if anyone ever found out that the FBI stole it, it is my belief no one would ever cooperate with the FBI again under similar circumstances, court order or not.

Neither would the SIF "break the encryption of any iPhone," or even this particular iPhone. This case doesn't really even have anything to do with encryption. The SIF would bypass or degrade software measures in place to prevent the auto-erase function from working, and from introducing delays after incorrect passcode attempts. It is true that even if and when Apple destroys the SIF, it will then still have actual knowledge of how to bypass these features--but do you really believe Apple doesn't already know? As others have pointed out, what they are being asked to do is already technically possible. They're not being asked here to do the impossible.

Using phrases like "this is not an exaggeration" does not grant your claims immunity from being exaggerated. In this case, it's worse than that: they're just not accurate. Moreover, words like "backdoor" are designed to elicit a certain response. The word has very negative connotations that , quite honestly, poisons the debate. Most infosec folks who hear the word "backdoor" will oppose it on its face.

I also recognize that this article doesn't represent everyone's views who is siding with Apple. I chose it partly because of it's outlandish claims and partly because I believe it captures a general perspective of how many people feel (even if not agreeing on the specific details).

You might also notice that I didn't discuss the Fourth Amendment in this blog post. There's a very specific reason why: the key issue in this case has nothing to do with the Fourth Amendment. The day after the shooting, the FBI sought and received a search warrant for a black Lexus. Pursuant to this search warrant, the FBI recovered an Apple iPhone 5C that was assigned to Farook but owned by his employer. The employer gave consent to the FBI to search the phone. So the FBI already has the consent of the phone's owner to search it. Likewise, Apple has no privacy interest in the phone. Anyone discussing this case as a Fourth Amendment issue should go back to law school or stop talking about it.

Let me last address the argument about "creating a dangerous precedent." That may, or may not, be true. Generally speaking, decisions at the District Court level don't hold a lot of weight as legal precedent (and this is just a Magistrate Judge's decision--not even an Article III federal judge). Yes, if this case were to make it up to the Ninth Circuit (or even the Supreme Court), it would have precedential value. But that argument is circular. Any case that is not squarely on point with another previous case will quite possibly have some value one way or another. That may be a policy argument, but it's not a legal one.

What remains clear from a legal perspective is that Apple has complied (at least) 70 times with court orders for technical assistance (presumably under the All Writs Act, but not necessarily clear from this transcript). The red meat in this case is whether Apple's technical assistance under specific facts of this case are an unreasonable burden to Apple. In those 70 cases, Apple already had the technical ability to extract information from older iPhones even while they remained locked. In this case, the iPhone 5c has additional security measures that would prevent Apple from cooperating in the same way. In one sense, the additional hurdles to cooperation are self-generated on Apple's part (which is good for Apple's customers, of course--no one would argue otherwise). The difference between those 70 cases and this one is an existent technical capability to extract information from a locked phone (which no one has seriously argued against) versus the unrealized, but technically possible capability to reduce the security measures on this particular iPhone so that the FBI can brute force the passcode. It's clear to me that the burden on Apple is greater now than it was for any of those previous 70 cases. But is it unreasonably burdensome? I believe, given the situation I described above, that a court will find it to not be such a burden. As a result, from my personal perspective and also what I think will actually happen, I think the Government has the stronger argument. Apple will be forced to cooperate.

Whether you agree or disagree--and I know many of you will feel strongly one way or another--feel free to comment or tweet. If you have a question that you're curious about that I haven't addressed--ask it. Free and open debate in a wide-ranging marketplace of ideas makes us a better place--regardless of which side you come down on.

17 February 2016

Law in Plain English: Understanding the FBI-Apple dispute in 250 words or less

Case: In the Matter of the Search of an Apple iPhone Seized During the Execution of a Search Warrant on a Black Lexis IS300, California License Plate 35KGD203, No. ED 15-0451M (February 16, 2016)

Summary: After Syed Farook and his wife Tashfeen Malik shot and killed 14 people in San Bernardino,California, on December 2, 2015, the FBI sought and received a search warrant for a black Lexus. Pursuant to this search warrant, the FBI recovered an Apple iPhone 5C that was assigned to Farook but owned by his employer. The employer gave consent to the FBI to search the phone, but the FBI could not affect the search because it did not know the passcode and did not want to auto-erase the phone after 10 erroneous attempts. The FBI sought a court order under the All Writs Act, a 1789 law which permits courts to issue orders compelling third parties (like Apple) to assist law enforcement in enabling a search--in this case, of the cell phone. The Magistrate Judge signed the order, which compels Apple to cooperate by providing the FBI with a signed iPhone software file that can be loaded into the phone's RAM with the ability to (1) bypass or disable the auto-erase function; (2) enable the FBI to submit passcodes to the device electronically (either through a physical device port or wireless protocol); and (3) eliminate time delays between erroneous attempts. The order gives Apple five business days to contest it if it believes it to be unreasonably burdensome. Apple's letter to its customers signified its intent to do so.

26 June 2015

Law in Plain English: Johnson 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: Johnson v. United States

Argument: Nov 5 2014 (Aud.)

Background: Pursuant to an undercover investigation, the FBI determined that Samuel Johnson (a felon) illegally possessed an AK-47 and a .22 caliber semi-automatic rifle. Johnson was later arrested while attending a meeting with his probation officer. Among other charges, Johnson was indicted with being an armed career criminal in possession of a firearm. The Armed Career Criminal Act (ACCA) provides a mandatory 15-year sentence for those who have been convicted of three "violent felon[ies.]" Johnson pleaded guilty, but reserved the right to challenge the applicability of the ACCA based upon a review of his prior convictions. On appeal, Johnson alleged that a prior conviction for possession of a short-barreled shotgun did not constitute a "violent felony." The Eighth Circuit disagreed, finding that possession of a short-barreled shotgun presented a serious risk of physical injury to another because it is roughly similar to the listed offenses within the ACCA, both in kind as well as the degree of risk for harm posed. As a result, the conviction was considered a violent felony and Johnson's conviction as an armed career criminal was affirmed.

Issue: The question before the Court is whether mere possession of a short-barreled shotgun should be treated as a violent felony under the Armed Career Criminal Act.

Holding: In an 8-1 decision, the Supreme Court ruled that imposing an increased sentence under ACCA’s residual clause violates due process.

Law in Plain English: Same Sex Marriage Cases

Argument: Apr 28 2014 (Aud.)

Background: James Obergefell and John Arthur are from Ohio, and were married in Maryland. When Arthur died, Ohio would not list Obergefell as his spouse on their death certificates. Obergefell sought an injunction to require the State to list him as a spouse on the certificate. The district court concluded that the Fourteenth Amendment protects a fundamental right to keep existing marital relationships intact, and that the State failed to justify its law under heightened scrutiny. The court likewise concluded that classifications based on sexual orientation deserve heightened scrutiny under equal protection, and that Ohio failed to justify its refusal to recognize the couples’ existing marriages. Even under rational basis review, the court added, the State came up short. The Sixth Circuit reversed, finding that the Due Process Clause or the Equal Protection Clause of the Fourteenth Amendment does not require States to expand the definition of marriage to include same-sex couples. Further, the court found that the Constitution does prohibit a State from denying recognition to same-sex marriages conducted in other States.

Issue: The questions before the Court: 1) Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex? 2) Does the Fourteenth Amendment require a state to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state?

Holding: In a 5-4 decision, the Supreme Court ruled that the Fourteenth Amendment requires a State to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-State.

25 June 2015

Law in Plain English: Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc.

Argument: Jan 21 2015 (Aud.)

Background: The Inclusive Communities Project (ICP) is a non-profit organization that assists low-income, predominately African-American families who are eligible for the Dallas Housing Authority’s Section 8 Housing Choice Voucher program in finding affordable housing in predominately Caucasian, suburban neighborhoods. ICP filed suit action against the Texas Department of Housing and Community Affairs (TDHCA) alleging that TDHCA's allocation of Low Income Housing Tax Credits (LIHTC) in Dallas resulted in a disparate impact on African-American residents under the Fair Housing Act (FHA). The district court held that ICP had proven that the allocation of tax credits resulted in a disparate impact on African-American residents. The Fifth Circuit remanded the case to the district court to apply the burden-shifting approach found in HUD regulation 24 C.F.R. § 100.500 for claims of disparate impact under the FHA. First, a plaintiff must prove a prima facie case of discrimination by showing that a challenged practice causes a discriminatory effect. If the plaintiff makes a prima facie case, the defendant must then prove “that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests....” If the defendant meets its burden, the plaintiff must then show that the defendant’s interests “could be served by another practice that has a less discriminatory effect.”

Issue: The question before the Court is whether disparate-impact claims are cognizable under the Fair Housing Act.

Holding: In a 5-4 decision, the Supreme Court ruled that disparate-impact claims are cognizable under the Fair Housing Act.

18 June 2015

Law in Plain English: Reed v. Town of Gilbert, Arizona

Argument: TBD (Aud.)

Click image to visit ADF website

Background: Good News Community Church placed several signs around the area of its church announcing the time and location of its services. The Town of Gilbert, Arizona notified the Church that its signs were violating Gilbert's sign ordinance because the signs were displayed outside the statutorily-limited time period. The ordinance required that signs could not be erected without a permit, but that three categories of signs were exempted from the permit requirement: 1) temporary directional signs relating to qualifying events (no greater than six feet in height and six square feet in area; only to be displayed for 12 hours before and one hour after an event; not placed in the public right-of-way); 2) political signs (up to 32 square feet in size; erected at any time, but taken down within ten days after an election; may be placed in the public right-of-way); and 3) ideological signs (not limited in time or number; may be placed in the public right-of-way). The district court found that the ordinance was not a content-based regulation; was a reasonable time, place, and manner restriction; and (on remand) did not favor some noncommercial speech over other commercial speech. The Ninth Circuit affirmed.

Issue: The question before the Court is whether the Town of Gilbert's mere assertion that its sign code lacks a discriminatory motive renders its facially content-based sign code content-neutral and justifies the code's differential treatment of petitioners' religious signs.

Holding: In a 9-0 decision, the Supreme Court ruled that the Sign Code’s provisions are content-based regulations of speech that do not survive strict scrutiny. Because content-based laws target speech based on its communicative content, they are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests. The Sign Code’s content-based restrictions do not survive strict scrutiny because the Town has not demonstrated that the Code’s differentiation between temporary directional signs and other types of signs furthers a compelling governmental interest and is narrowly tailored to that end.

08 June 2015

Law in Plain English: Zivotofsky v. Kerry

Argument: Nov 3 2014 (Aud.)

Background: Section 214(d) of the Foreign Relations Authorization Act (2003) requires the Secretary of State to record "Israel" as the place of birth on the passport of a United States citizen born in Jerusalem if the citizen or his guardian requests. The Secretary has not enforced this provision, believing that it impermissibly intrudes on the President's exclusive authority under the United States Constitution to decide whether and on what terms to recognize foreign nations. The parents of Menachem Zivotofsky (a United States citizen born in Jerusalem), filed a lawsuit seeking a permanent injunction ordering the Secretary to issue a passport listing "Israel" as their son's place of birth. Ruling in favor of the Secretary, the Court of Appeals for the District of Columbia Circuit found that the President held exclusive power to determine whether to recognize a foreign nation. Section 214(d) was not the neutral regulation of the form and content of a passport (as Congress has the power to do under its immigration powers), but rather an attempted legislative articulation of foreign policy, enacted to alter United States foreign policy toward Jerusalem. As a result, Section 214(d) impermissibly intruded on the President's recognition power and was unconstitutional.

Issue: The question before the Court is whether a federal statute that directs the Secretary of State, on request, to record the birthplace of an American citizen born in Jerusalem as born in "Israel" on a Consular Report of Birth Abroad and on a United States passport is unconstitutional on the ground that the statute "impermissibly infringes on the President's exercise of the recognition power reposing exclusively in him."

Holding: In a 6-3 decision, the Supreme Court ruled that the President has the exclusive power to grant formal recognition to a foreign sovereign. Because the power to recognize foreign states resides in the President alone, §214(d) infringes on the Executive’s consistent decision to withhold recognition with respect to Jerusalem.

01 June 2015

Law in Plain English: Mellouili v. Holder

Argument: Jan 14 2015 (Aud.)

Background: Moones Mellouli, a citizen of Tunisia and a lawful permanent resident of the United States, pleaded guilty in July 2010 to violating a Kansas misdemeanor drug paraphernalia statute. Mellouli had been stopped for DUI and police found four Aderrall pills in his sock; the sock was the "drug paraphernalia." The Board of Immigration Appeals (BIA) found that he was removable because his conviction was a conviction “relating to a controlled substance” within the meaning of 8 U.S.C. § 1227(a)(2)(B)(i). Mellouli argued that he was not removable because the state court record of conviction did not identify the controlled substance underlying his state paraphernalia conviction, and therefore the government failed to prove that the conviction related to a federal controlled substance, as § 1227(a)(2)(B)(i) requires. The Eighth Circuit denied his petition, finding that there was a nearly complete overlap between the definition of controlled substance in 21 U.S.C. § 802 and in the statutes of States such as Kansas that adopted the Uniform Controlled Substances Act. It was therefore reasonable for the BIA to conclude that any drug paraphernalia conviction in these States was, categorically, a violation of a law “relating to a controlled substance” within the meaning of 8 U.S.C. § 1227(a)(2)(B)(i).

Issue: The question before the Court is whether, to trigger deportability under 8 U.S.C. § 1227(a)(2)(B)(i), which provides that a noncitizen may be removed if he has been convicted of violating “any law or regulation of a State, the United States, or a foreign country relating to a controlled substance (as defined in section 802 of Title 21) . . . ,” the government must prove the connection between a drug paraphernalia conviction and a substance listed in section 802 of the Controlled Substances Act.

Holding: In a 7-2 decision, the Supreme Court ruled that Mellouli’s Kansas conviction for concealing unnamed pills in his sock did not trigger removal under §1227(a)(2)(B)(i). The categorical approach historically taken in determining whether a state conviction renders an alien removable looks to the statutory definition of the offense of conviction, not to the particulars of the alien’s conduct. The state conviction triggers removal only if, by definition, the underlying crime falls within a category of removable offenses defined by federal law. The BIA has long applied the categorical approach to assess whether a state drug conviction triggers removal under successive versions of what is now §1227(a)(2)(B)(i). The BIA announced and applied a different approach that, in this case, finds no home in §1227(a)(2)(B)(i)’s text and leads to consequences Congress could not have intended.

Law in Plain English: Elonis v. United States

Argument: Dec 1 2014 (Aud.)

Background: After being fired from his job, Anthony Elonis made several posts on Facebook threatening former co-workers, his wife (who had a protection from abuse order against him), and federal law enforcement officers (who had visited him earlier that day to ask about his previous posts) (click here to read some of Elonis's threats). At trial, Elonis was convicted under 18 U.S.C. § 875(c) for "transmit[ing] in interstate or foreign commerce any communication containing any threat to kidnap any person or any threat to injury the person of another ... " The Third Circuit affirmed, finding that Elonis's Facebook threats were not protected by the First Amendment if a reasonable person would regard the statements as threatening.

Issue: The questions before the Court are (1) whether, consistent with the First Amendment and Virginia v. Black, conviction of threatening another person under 18 U.S.C. § 875(c) requires proof of the defendant's subjective intent to threaten, as required by the Ninth Circuit and the supreme courts of Massachusetts, Rhode Island, and Vermont; or whether it is enough to show that a “reasonable person” would regard the statement as threatening, as held by other federal courts of appeals and state courts of last resort; and (2) whether, as a matter of statutory interpretation, conviction of threatening another person under 18 U.S.C. § 875(c) requires proof of the defendant's subjective intent to threaten.

Holding: In an 8-1 decision, the Supreme Court ruled that the Third Circuit’s instruction, requiring only negligence with respect to the communication of a threat, is not sufficient to support a conviction under Section 875(c). Section 875(c)’s mental state requirement is satisfied if the defendant transmits a communication for the purpose of issuing a threat or with knowledge that the communication will be viewed as a threat.

26 May 2015

Law in Plain English: Wellness International Network, Limited v. Sharif

Argument: Jan 14 2015 (Aud.)

Background: Richard Shariff was slapped with a judgment in excess of $650,000 as a sanction for his failure to engage in discovery. As a result, Sharif filed for Chapter 7 bankruptcy. Wellness International Network (WIN), one of his bankruptcy creditors, sought to prevent discharge of Sharif’s debts under 11 U.S.C. § 727, and sought a declaratory judgment that a trust of which Sharif was trustee was in fact Sharif’s alter ego. Sharif continued his evasive and dilatory tactics, failing to respond to WIN’s and the bankruptcy trustee’s discovery requests. The bankruptcy court ordered Sharif to comply with the discovery requests and warned him that failure to do so would result in a default judgment. Sharif tendered some discovery but his responses fell far short of full compliance. After a hearing, the bankruptcy judge issued an opinion and order entering default judgment in WIN’s favor and subsequently awarded attorney’s fees to WIN. On appeal, Shariff filed a supplementary motion based on the claim that a bankruptcy judge did not have the authority to enter final judgment under Stern v. Marshall, but had failed to make this argument in his earlier motions. The district judge denied both motions as untimely, holding that a Stern objection to a bankruptcy judge’s authority to enter final judgment is waivable and that Sharif’s failure to raise it earlier constituted waiver. The Seventh Circuit reversed on the Stern objection, finding that a constitutional objection based on Stern is not waivable because it implicates separation‐of‐powers principles. Additionally, the court held that that the bankruptcy judge lacked constitutional authority to enter a final judgment on the alter‐ego claim. The court affirmed the remainder of the judgment, holding that the bankruptcy judge had constitutional authority to enter final judgment on the first four counts of the adversary complaint, each of which were objections to the discharge of Sharif’s debts. Additionally, the court held that that the entry of default judgment and awarding of fees were proper sanctions under the circumstances.

Issue: The questions before the Court are (1) whether the presence of a subsidiary state property law issue in a 11 U.S.C. § 541 action brought against a debtor to determine whether property in the debtor’s possession is property of the bankruptcy estate means that such action does not “stem[] from the bankruptcy itself” and therefore, that a bankruptcy court does not have the constitutional authority to enter a final order deciding that action; and (2) whether Article III permits the exercise of the judicial power of the United States by the bankruptcy courts on the basis of litigant consent, and if so, whether implied consent based on a litigant’s conduct is sufficient to satisfy Article III.

Holding: In a 6-3 decision, the Supreme Court ruled that Article III permits bankruptcy judges to adjudicate Stern claims with the parties’ knowing and voluntary consent. Consent to adjudication by a bankruptcy court need not be express, but must be knowing and voluntary. The Court stated that the Seventh Circuit should decide on remand whether Sharif’s actions evinced the requisite knowing and voluntary consent and whether Sharif forfeited his Stern argument below.

Law in Plain English: Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter

Argument: TBD (Aud.)

Background: In 2011 (after several previous attempts and amendments), former employee Benjamin Carter filed a qui tam (whistleblower) action under the False Claims Act (FCA), alleging that KBR falsely billed the United States for services performed in Iraq in 2005. The district court ruled that the complaint was filed outside of the FCA's six year statute of limitations. The court also found that another substantially similar complaint had been filed before Carter's, and was therefore the court did not have jurisdiction to hear the case pursuant to the FCA's first-to-file bar (a provision to prevent parasitic lawsuits based upon previously disclosed fraud). The Fourth Circuit reversed, finding that the Wartime Suspension of Limitations Act tolled the statute of limitations while the United States was engaged in combat in Iraq even if war was not formally declared. Additionally, the panel found that, while Carter's claim was properly denied by the district court pursuant to the first-to-file bar, dismissing the claim with prejudice was erroneous because Carter could re-file his claim later if the other complaint was dismissed (as it later was).

Issue: The questions before the Court are (1) whether the Wartime Suspension of Limitations Act – a criminal code provision that tolls the statute of limitations for “any offense” involving fraud against the government “[w]hen the United States is at war,” 18 U.S.C. § 3287, and which this Court has instructed must be “narrowly construed” in favor of repose – applies to claims of civil fraud brought by private relators, and is triggered without a formal declaration of war, in a manner that leads to indefinite tolling; and (2) whether, contrary to the conclusion of numerous courts, the False Claims Act’s so-called “first-to-file” bar, 31 U.S.C. § 3730(b)(5) – which creates a race to the courthouse to reward relators who promptly disclose fraud against the government, while prohibiting repetitive, parasitic claims – functions as a “one case- at-a-time” rule allowing an infinite series of duplicative claims so long as no prior claim is pending at the time of filing.

Holding: In a unanimous decision, the Supreme Court ruled that As shown by the WSLA’s text, structure, and history, the Act applies only to criminal offenses, not to civil claims like those in this case. The FCA’s first-to-file bar keeps new claims out of court only while related claims are still alive, not in perpetuity. Thus, dismissal with prejudice was not called for in this case.

18 May 2015

Law in Plain English: Comptroller v. Wynne

Argument: Nov 12 2014 (Aud.)

Background: The Wynnes are part owners of Maxim, a company that does a national business providing health care services. For tax purposes, the business is treated as an S corporation. As a result Maxim's income was "passed through" to its owners for federal income tax purposes, and the Wynnes reported a portion of the corporation's income on their 2006 individual federal income tax return. Because Maryland accords similar pass-through treatment to the income of S corporations, the Wynnes also reported pass-through income of Maxim on their 2006 Maryland tax return. A substantial portion of the pass-through income had been generated in other states and was taxed by those states for the 2006 tax year. The Comptroller of Maryland made a change in the computation of the local tax owed by the Wynnes and revised the credit for taxes paid to other states on the Wynnes' state tax form. According to the Comptroller, Maryland law allowed the Wynnes to receive a tax credit against their Maryland state taxes for income taxes paid to other states, but it did not allow the Wynnes to claim a credit against their Maryland county taxes. The net result was a deficiency in the Maryland taxes paid by the Wynnes, and the Comptroller issued an assessment. After several appeals, the Maryland Court of Appeals ruled that the failure of the Maryland income tax law to allow a credit against the county tax for a Maryland resident taxpayer with respect to pass-through income of an S corporation that arises from activities in another state and that is taxed in that state violates the dormant Commerce Clause of the federal Constitution.

Issue: The question before the Court is whether the United States Constitution prohibits a state from taxing all the income of its residents -- wherever earned -- by mandating a credit for taxes paid on income earned in other states.

Holding: In a 5-4 decision, the Supreme Court ruled that Maryland’s personal income tax scheme violates the dormant Commerce Clause.

12 May 2015

Law in Plain English: Williams-Yulee v. The Florida Bar

Argument: Jan 20 2015 (Aud.)

Background: In September 2009, Lanell Williams-Yulee became a candidate for County Court Judge, Group 10, Hillsborough County, Florida. On September 4, 2009, Williams-Yulee signed a campaign fundraising letter, in which she personally solicited campaign contributions. She admitted to having reviewed and approved the letter. A referee determined that Williams-Yulee violated Canon 7C(1) of the Florida Code of Judicial Conduct, which provides in pertinent part: “A candidate...for a judicial office that is filled by public election between competing candidates shall not personally solicit campaign funds....” Williams-Yulee appealed, alleging that Canon 7C(1) violated the First Amendment. The Florida Supreme Court upheld the finding, ruling that Canon 7C(1) served compelling State interests in protecting the integrity of the judiciary and maintaining the public’s confidence in an impartial judiciary; and that it was narrowly tailored to effectuate those interests.

Issue: The question before the Court is whether a rule of judicial conduct that prohibits candidates for judicial office from personally soliciting campaign funds violates the First Amendment.

Holding: In a 5-4 decision, the Supreme Court ruled that Florida Bar's rule was narrowly tailored to serve the State’s compelling interest in preserving public confidence in the integrity of its judiciary. As a result, the Rule did not violate the First Amendment.

24 April 2015

Law in Plain English: United States v. Wong

Argument: Dec 10 2014 (Aud.)

Background: Hong Kong citizen Kwai Fun Wong, a leader of the Wu Wei Tien Tao religious group, was detained and deported for unlawful entry into the United States. On May 18, 2001, Wong filed a negligence claim with the (then) Immigration and Naturalization Service (INS), alleging that she had been mistreated by that agency while she was detained. After the INS denied her claim on December 3, 2001, Wong filed a claim on August 13, 2002, under the Federal Tort Claims Act (FTCA), alleging the same conduct. The FTCA has a statute of limitations that “[a] tort claim against the United States shall be forever barred...unless action is begun within six months after the...final denial of the claim by the agency to which it was presented.” The district court dismissed Wong's FTCA claim because it was not filed within six months. An en banc panel of the Ninth Circuit reversed, finding that the statute of limitations was subject to equitable tolling. Wong's claim was filed late "due solely to the delay inherent in the Magistrate Judge system," and not through any fault of Wong's. As a result, Wong's claim could proceed.

Issue: The question before the Court is whether the six-month time bar for filing suit in federal court under the Federal Tort Claims Act, 28 U.S.C. § 2401(b), is subject to equitable tolling.

Holding: In a 5-4 decision, the Supreme Court ruled that Section 2401(b)’s time limits are subject to equitable tolling. Section 2401(b)’s time limits are subject to equitable tolling because the Court previously adopted a “rebuttable presumption” that such time bars maybe equitably tolled. As a result, the Court concluded, Congress thus must do something special to tag a statute of limitations as jurisdictional and so prohibit a court from tolling it. Congress did no such thing in enacting §2401(b).

21 April 2015

Law in Plain English: Rodriguez v. United States

Argument: Jan 21 2015 (Aud.)

Background: A Nebraska K-9 police officer stopped Dennys Rodriguez's vehicle for veering onto the shoulder of the highway. The officer gathered Rodriguez’s license, registration, and proof of insurance, and returned to his vehicle to complete a records check. He returned to the vehicle and issued a written warning. The officer then asked for permission to walk his dog around Rodriguez’s vehicle. When Rodriguez refused consent, the officer instructed him to exit the vehicle. Rodriguez then exited the vehicle and stood in front of the patrol car while they waited for a second officer to arrive. A few minutes later, a deputy sheriff arrived, and a minute later, Struble walked the dog around the outside of Rodriguez’s car. The dog alerted to the presence of drugs halfway through the second pass, approximately twenty or thirty seconds later. All told, seven or eight minutes had passed from the time the officer had issued the written warning until the dog indicated the presence of drugs. A search of the vehicle revealed a large bag of methamphetamine. Rodriguez was charged with possessing with intent to distribute methamphetamine. The district court denied Rodriguez’s motion to suppress the evidence, holding that the delay caused by the dog sniff did not violate Rodriguez’s Fourth Amendment right to be free from unreasonable seizures. The Eighth Circuit affirmed, finding that the seven- or eight-minute delay was reasonable because the officer waited for a second officer to arrive to ensure his safety, and that the the delay was a de minimis intrusion on Rodriguez's personal liberty.

Issue: The question before the Court is whether an officer may extend an already completed traffic stop for a canine sniff without reasonable suspicion or other lawful justification.

Holding: In a 6-3 decision, the Supreme Court ruled that absent reasonable suspicion, police extension of a traffic stop in order to conduct a dog sniff violates the Constitution’s shield against unreasonable seizures.

Law in Plain English: Oneok Inc. v. Learjet, Inc.

Argument: TBD (Aud.)

Background: Learjet and other retail buyers of natural gas sued Oneok and other natural gas traders for state and federal anti-trust claims, alleging that they manipulated the price of natural gas by reporting false information to price indices published by trade publications. The district court ruled for the defendants, finding that the state law anti-trust claims were pre-empted by the Natural Gas Act, 15 U.S.C. § 717 et seq. (NGA). The Ninth Circuit reversed, finding that Congress had carefully divided up the regulatory power over the natural gas industry. It did not envisage federal regulation of the entire natural gas field to the limit of constitutional power. Rather, it contemplated the exercise of federal power only as specified in the NGA. Congress has previously limited the jurisdiction of the Federal Energy Regulatory Commission (FERC), and in this case the panel determined that the state law anti-trust claims arose out of transactions outside of FERC's jurisdiction. As a result, the NGA did not preclude these claims.

Issue: The question before the Court is whether the Natural Gas Act, which occupies the field as to matters within its scope, preempts state-law claims challenging industry practices that directly affect the wholesale natural gas market when those claims are asserted by litigants who purchased gas in retail transactions.

Holding: In a 7-2 decision, the Supreme Court ruled that Respondents’ state-law antitrust claims are not within the field of matters pre-empted by the Natural Gas Act.

01 April 2015

Law in Plain English: Armstrong v. Exceptional Child Center, Inc.

Argument: Jan 20 2015 (Aud.)

Background: Section 30(A) of the Medicaid Act requires that state Medicaid plans contain procedures to ensure that reimbursement rates for healthcare providers “are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers” to meet the need for care and services in the geographic area. The Ninth Circuit has interpreted Section 30(A) to require that reimbursement rates bear a reasonable relationship to provider costs. Where rates fail to “substantially reimburse providers their costs,” there must be some justification other than “purely budgetary reasons.” Richard Armstrong, the Director of Idaho's Department of Health and Welfare, conducted yearly cost studies between 2006 and 2009, developed a new rate setting methodology, and recommended substantial increases in reimbursement rates for supported living services based on the cost study results; but did not implement the proposed rate changes because the Idaho legislature did not appropriate the necessary funds. The district court ruled in favor of the Medicaid providers, and the Ninth Circuit affirmed.

Issue: The question before the Court is whether the Supremacy Clause gives Medicaid providers a private right of action to enforce 42 U.S.C. § 1396a(a)(30)(A) against a state where Congress chose not to create enforceable rights under that statute.

Holding: In a 5-4 decision, the Supreme Court ruled that the Supremacy Clause does not confer a private right of action, and that Medicaid providers cannot sue for an injunction requiring compliance with § 30(A). The Court reasoned that the Supremacy Clause instructs courts to give federal law priority when state and federal law clash, but that it is not the source of any federal rights.

25 March 2015

Law in Plain English: Alabama Redistricting Cases

Argument: Nov 12 2014 (Aud.)

Background: After the 2000 Census, the Democrat-controlled Legislature in Alabama adopted districts that favored its partisan interests. When Republicans challenged the district lines adopted after the 2000 Census, they targeted the systematic underpopulation of the majority-black districts, but State officials and Democratic leaders successfully defended the population deviations as “the product of the Democratic Legislators’ partisan political objective to design Senate and House plans that would preserve their respective Democratic majorities.” The partisan gerrymander that protected Democratic control of the Legislature collapsed in 2010 when Republicans gained supermajority control of both houses of the Legislature, which then adopted new redistricting acts based on the 2010 Census. The Republican-controlled Legislature adopted district lines with smaller deviations in population equality, which upended the partisan gerrymander adopted by the Democrat-controlled Legislature after the 2000 Census. The Alabama Legislative Black Caucus alleged that the purpose and effect of the new districts is to dilute and isolate the strength of black voters, in violation of section 2 of the Voting Rights Act and the Fourteenth and Fifteenth Amendments. The Alabama Democratic Conference alleged that the purpose and effect of the new districts is to dilute the opportunities for minority voters to participate in the political process and that the new districts are products of racial gerrymandering. A three-judge panel for the Middle District of Alabama dismissed the claims of the plaintiffs and ruled in favor of the state, finding that he plaintiffs failed to provide sufficient evidence of vote dilution, invidious discrimination, or racial gerrymandering.

Issue: The questions before the Court are (1) whether Alabama's legislative redistricting plans unconstitutionally classify black voters by race by intentionally packing them in districts designed to maintain supermajority percentages produced when 2010 census data are applied to the 2001 majority-black districts; and (2) whether Alabama’s effort to redraw the lines of each majority-black district to have the same black population as it would have using 2010 census data as applied to the former district lines, when combined with the state's new goal of significantly reducing population deviation among districts, amounted to an unconstitutional racial quota and racial gerrymandering that is subject to strict scrutiny and that was not justified by the putative interest of complying with the non-retrogression aspect of Section 5 of the Voting Rights Act; and whether these plaintiffs have standing to bring such a constitutional claim.

Holding: In a 5-4 decision, the Supreme Court ruled that the District Court’s analysis of the racial gerrymandering claim as referring to the State “as a whole,” rather than district-by-district, was legally erroneous; that the District Court also erred in deciding that the Conference lacked standing; and that the District Court also did not properly calculate “predominance” in its alternative holding that “[r]ace was not the predominant motivating factor” in the creation of any of the challenged districts. Finally, the Court concluded that the District Court’s final alternative holding—that “the [challenged] Districts would satisfy strict scrutiny”—rests upon a misperception of the law. Section 5 does not require a covered jurisdiction to maintain a particular numerical minority percentage. It requires the jurisdiction to maintain a minority’s ability to elect a preferred candidate of choice. The Court explained that the District Court and the legislature both asked the wrong question with respect to narrow tailoring. They asked how to maintain the present minority percentages in majority-minority districts, instead of asking the extent to which they must preserve existing minority percentages in order to maintain the minority’s present ability to elect the candidate of its choice. As a result, the decision of the District Court was vacated and the case was remanded.

Law in Plain English: Young v. United Parcel Service

Argument: Dec 3 2014 (Aud.)

Background: Peggy Sue Young was a part-time "air driver" for UPS, responsible for picking up and delivering packages that arrived by air carrier the previous night. During a leave of absence, Young became pregnant and left a doctor's note with her supervisor that she should not lift more than twenty pounds during the first twenty weeks of her pregnancy and not more than ten pounds thereafter. UPS's occupational health manager, Carolyn Martin, informed Young that UPS policy prevented Young from working while she was under the 20 pound restriction. Martin also determined that Young was ineligible for light duty assignment because light duty was only permitted for those with on-the-job injuries (as opposed to off-the-job injuries), those accommodated under the Americans with Disabilities Act (ADA) (federal courts have largely held that pregnancy is not a "disability" under the ADA), and those who had lost their Department of Transportation (DOT) certification, but not for pregnancy. Young filed a charge with the Equal Opportunity Employment Commission (EEOC), which issued Young a right to sue letter. Young then filed suit, alleging, among other things, that UPS's policy violated the Pregnancy Discrimination Act (PDA). The district court concluded that Young had not shown direct evidence of discrimination. Likewise, she failed to establish a prima facie case of sex discrimination. The Fourth Circuit affirmed. The panel reasoned that the text of the PDA was placed in the definitions section of Title VII; and as a result, it does not create a "distinct and independent cause of action" that would otherwise cause pregnancy to be treated more favorably than any other basis, including non-pregnancy-related sex discrimination covered by Title VII. A policy that treats pregnant and non-pregnant workers alike complied with the PDA. Even though UPS's policy might have been "insufficiently charitable," a lack of charity itself did not rise to discriminatory animus directed at pregnant employees.

Issue: The question before the Court are whether, and in what circumstances, the Pregnancy Discrimination Act, 42 U.S.C. § 2000e(k), requires an employer that provides work accommodations to non-pregnant employees with work limitations to provide work accommodations to pregnant employees who are "similar in their ability or inability to work."

Holding: In a 6-3 decision, the Supreme Court ruled that an individual pregnant worker who seeks to show disparate treatment through indirect evidence may do so through application of the McDonnell Douglas framework by showing that she belongs to the protected class, that she sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others “similar in their ability or inability to work.” The employer may then seek to justify its refusal to accommodate the plaintiff by relying on “legitimate, nondiscriminatory” reasons for denying accommodation.

24 March 2015

Law in Plain English: Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund

Argument: Nov 3 2014 (Aud.)

Background: Omnicare is the nation's largest provider of pharmaceutical care services for the elderly and other residents of long-term care facilities in the United States and Canada. A group of investors filed a lawsuit against Omnicare alleging, among other things, that Omnicare made material misstatements and/or omissions in a Registration Statement filed with the Securities and Exchanges Commission in connection with a public stock offering, in violation of § 11 of the Securities Act of 1933. The district court found that the plaintiffs had failed to meet the heightened pleading standard under Federal Rule of Civil Procedure 9(b). Furthermore, district court found that the plaintiffs had not sufficiently pleaded the defendants' knowledge of falsity. As a result, the claim was dismissed. The Sixth Circuit reversed, holding that § 11 provides for strict liability, and as a result, the defendants' knowledge is not relevant to the claim. Therefore, the plaintiffs should not have been required to plead knowledge in connection with the claim. It is sufficient enough that the plaintiffs plead that the defendants' statement is objectively false.

Issue: The question before the Court was whether, for purposes of a claim under Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k, a plaintiff may plead that a statement of opinion was “untrue” merely by alleging that the opinion itself was objectively wrong, as the Sixth Circuit has concluded, or must the plaintiff also allege that the statement was subjectively false – requiring allegations that the speaker’s actual opinion was different from the one expressed – as the Second, Third, and Ninth Circuits have held.

Holding: In a 9-0 decision, the Supreme Court ruled that a statement of opinion does not constitute an “untrue statement of...fact” simply because the stated opinion ultimately proves incorrect. Because a statement of opinion admits the possibility of error, such a statement remains true—and thus is not an “untrue statement of...fact”—even if the opinion turns out to have been wrong. Nevertheless, opinion statements are not wholly immune from liability. A statement of opinion thus qualifies as an “untrue statement of...fact” if that fact is untrue—i.e., if the opinion expressed was not sincerely held. If a registration statement omits material facts about the issuer’s inquiry into, or knowledge concerning, a statement of opinion, and if those facts conflict with what a reasonable investor, reading the statement fairly and in context, would take from the statement itself, then §11’s omissions clause creates liability. For purposes of §11’s omissions clause, whether a statement is “misleading” is an objective inquiry that depends on a reasonable investor’s perspective.