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

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: 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.

Law in Plain English: Northwest, Inc. v. Ginsberg

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.

Rabbi S. Binyomin Ginsberg.
Image from ajc.com.

SCOTUSblog: Northwest, Inc. v. Ginsberg

Argument: Dec 3 2013 (Aud.)

Discussion: Ginsburg brought suit against Northwest Airlines alleging a breach of contract under the implied covenant of good faith and fair dealing when Northwest revoked his WorldPerks membership. The Airline Deregulation Act (ADA), 49 U.S.C. § 41713(b)(1) provides that States "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation..." Based upon this provision, the District Court held that Plaintiffs claim was preempted by the ADA and dismissed the claim. The Ninth Circuit reversed, finding that in the ADA's language or history suggested that Congress intended displace State common law contract claims that do not affect deregulation in more than a "peripheral...manner."

Issue: The question before the Court is whether the court of appeals erred in holding, in contrast with the decisions of other circuits, that respondent’s implied covenant of good faith and fair dealing was not preempted under the Airline Deregulation Act because such claims are categorically unrelated to a price, route, or service, notwithstanding that respondent’s claim arises out of a frequent-flyer program (the precise context of American Airlines, Inc. v. Wolens) and manifestly enlarged the terms of the parties’ undertakings, which allowed termination in Northwest’s sole discretion.

Holding: In a unanimous opinion, the Supreme Court ruled that the ADA preempts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge the contractual obligations that the parties voluntarily adopt.

Law in Plain English: Sprint Communications Company v. Jacobs

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: Sprint Communications Company v. Jacobs

Argument: Nov 5 2013 (Aud.)

Discussion: The Iowa Utilities Board (IUB) ordered Sprint to pay intrastate access charges to Windstream, an Iowa communications company, for Voice over Internet Protocol (VoIP) calls. Sprint filed a complaint in federal district court seeking declaratory and injunctive relief. The same day, Sprint also filed a petition for review in Iowa state court, asserting that the IUB's order was preempted under federal law. The federal district court abstained pursuant to Younger v. Harris, 401 U.S. 37 (1971). In Younger, the Supreme Court held that federal courts were required to abstain from hearing any civil rights tort claims brought by a person who is currently being prosecuted for a matter arising from that claim ("Younger abstention"). Sprint argued that the proceedings were remedial, not coercive, and therefore Younger should not apply. Nonetheless, the District Court abstained and dismissed the action. The Eighth Circuit affirmed.

Issue: The question before the Court is whether the Eighth Circuit erred by concluding that Younger abstention is warranted not only when there is a related state proceeding that is “coercive” but also when there is a related state proceeding that is, instead, “remedial.”

Holding: In a unanimous decision, the Supreme Court ruled that this case did not fall within any of the three classes of exceptional cases for which Younger abstention is appropriate. As a result, the lower federal court cannot abstain and must consider the merits of Sprint's preemption complaint.

Law in Plain English: Preemption

This is one in a series of posts designed to describe the structure, procedures, and legal issues of the federal courts (and specifically, the Supreme Court) in plain English. For similar posts, click here.

Preemption is a constitutionally-based legal concept that is a frequent issue in Supreme Court cases. In the October Term 2012, no less than seven cases involved preemption (see Woz v. E.M.A., Arizona v. The Inter Tribal Council of Arizona, Mutual Pharmaceutical Co. v. Bartlett, Dan’s City Used Cars v. Pelkey, American Trucking Associations v. City of Los Angeles, Hillman v. Maretta,  and Tarrant Regional Water District v. Herrmann). Preemption arises from the Constitution. Article VI, Clause 2, known as the Supremacy Clause, reads as follows:

This Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.

In practice, this means that when a federal and state law conflict, the state law is invalid. Additionally, there are a few important factors to consider. First, Congress must be exercising its enumerated powers. Second, when the text of a preemption clause is susceptible to more than one plausible reading, courts should ordinarily accept the reading that disfavors preemption. Third, when Congress legislates in an area that the states have normally exercised their general police power, the courts will ordinarily presume that the state laws are valid unless Congress says otherwise expressly. Even given these factors, preemption is a difficult issue for the courts (again, one of the reasons why so many preemption cases find their way to the Supreme Court). The facts of each individual cases, the purpose of Congress, and the precise language of the statutory clauses in question, will be subject to exacting scrutiny.

Law in Plain English: Mutual Pharmaceutical Co. v. Bartlett

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.

Mutual Pharmaceutical Co. v. Bartlett

Bartlett took a generic version of Clinoril (sulindac, manufacturered by Mutual Pharmaceutical) and suffered serious injuries associated with a rare side effect. Generally, products liability claims are not preempted for branded pharmaceuticals (Wyeth v. Levine), but are preempted for generic versions (PLIVA, Inc. v. Mensing), because branded manufacturers can make changes to the product's lablel, but generic manufacturers cannot. Bartlett's case is similar to PLIVA in all respects except that PLIVA was a negligence claim, and Bartlett's is a strict liability claim. Bartlett filed claims in New Hampshire state court, which Mutual removed to federal court. The federal jury found for Bartlett, and the First Circuit affirmed, holding that federal law does not preempt state law. The rationale was that the Supreme Court had adopted a general no-preemption rule in Wyeth (for both failure-to-warn and design defect claims), and that PLIVA was a narrow exception to that rule for failure-to-warn claims against generic manufacturers, but not necessarily for design defect claims. The question before the Court was whether the First Circuit Court of Appeals erred when it held that federal law does not preempt state law design-defect claims targeting generic pharmaceutical products because the conceded conflict between such claims and the federal laws governing generic pharmaceutical design allegedly can be avoided if the makers of generic pharmaceuticals simply stop making their products. In a 5-4 decision, the Supreme Court ruled that State-law design-defect claims that turn on the adequacy of a drug’s warnings are preempted by federal law under PLIVA. As a result, Bartlett's state law claim fails. The practical impact of this decision affirms that because federal law prevents generic manufacturers from changing their labels, they are prohibited from taking the remedial action required to avoid liability (and thus, can't be subject to such liability).

Supreme Court invalidates Arizona voter ID requirement; but Justice Scalia throws a lifeline

Earlier today, the Supreme Court invalidated Arizona's evidence-of-citizenship requirement to vote. Interest groups hailed the ruling:

“Today’s decision sends a strong message that states cannot block their citizens from registering to vote by superimposing burdensome paperwork requirements on top of federal law,” said Nina Perales, vice president of litigation for the Mexican American Legal Defense and Educational Fund. 

“The Supreme Court has affirmed that all U.S. citizens have the right to register to vote using the national postcard, regardless of the state in which they live.”

On the other hand, it's important to understand the context of the decision. In it, Justice Scalia throws a lifeline to Arizona, suggesting another way that the ID requirement could be instituted:

Since, pursuant to the Government’s concession, a State may request that the EAC alter the Federal Form to include information the State deems necessary to determine eligibility, see §1973gg–7(a)(2); Tr. of Oral Arg. 55 (United States), and may challenge the EAC’s rejection of that request in a suit under the Administrative Procedure Act, see 5 U. S. C. §701–706, no constitutional doubt is raised by giving the “accept and use” provision of the NVRA its fairest reading. That alternative means of enforcing its constitutional power to determine voting qualifications remains open to Arizona here. In 2005, the EAC divided 2-to-2 on the request by Arizona to include the evidence-ofcitizenship requirement among the state-specific instructions on the Federal Form, App. 225, which meant that no action could be taken, see 42 U. S. C. §15328 (“Any action  which the Commission is authorized to carry out under this chapter may be carried out only with the approval of at least three of its members”). Arizona did not challenge that agency action (or rather inaction) by seeking APA review in federal court, see Tr. of Oral Arg. 11–12 (Arizona), but we are aware of nothing that prevents Arizona from renewing its request.10 Should the EAC’s inaction persist, Arizona would have the opportunity to establish in a reviewing court that a mere oath will not suffice to effectuate its citizenship requirement and that the EAC is therefore under a nondiscretionary duty to include Arizona’s concrete evidence requirement on the Federal Form. See 5 U. S. C. §706(1). Arizona might also assert (as it has argued here) that it would be arbitrary for the EAC to refuse to include Arizona’s instruction when it has accepted a similar instruction requested by Louisiana.¹¹ 

¹¹The EAC recently approved a state-specific instruction for Louisiana requiring applicants who lack a Louisiana driver’s license, ID card, or Social Security number to attach additional documentation to the completed Federal Form. See National Mail Voter Registration Form, p. 9; Tr. of Oral Arg. 57 (United States).

It will be no surprise to see Arizona follow this course of action.

Law in Plain English: Arizona v. The Inter Tribal Council of Arizona

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.

Arizona v. The Inter Tribal Council of Arizona, Inc.

In 2004, Arizona voters passed Proposition 200, one provision of which required would-be voters to show evidence of citizenship to register. The Inter Tribal Council of Arizona (ITCA) and others alleged that this requirement was preempted by the National Voter Registration Act (NVRA) under the Supremacy Clause and the Elections Clause. The District Court and the Ninth Circuit agreed. The questions before the Court were: (1) Whether the Ninth Circuit erred in creating a new, heightened preemption test under the Elections Clause that is contrary to the Supreme Court’s authority and conflicts with other circuit court decisions; and (2) whether the Ninth Circuit erred in holding that under that test the NVRA preempts an Arizona law that requests persons who are registering to vote to show evidence that they are eligible to vote. In a 7-2 decision, the Supreme Court ruled that Arizona’s evidence-of-citizenship requirement, as applied to Federal Form applicants, is preempted by the NVRA’s mandate that States “accept and use” the Federal Form. As a result, Arizona's evidence-of-citizenship requirement is invalid. The immediate impact of this decision is to limit the ability of Arizona to verify the validity of its voters. Nonetheless, the Court laid out an alternate means by which Arizona (or any other state) could determine voting qualifications. The NVRA permits states to request the federal Election Assistance Commission to include state specific instructions on the Federal Form (in fact, some states have already done this), and a State may challenge the EAC’s rejection of that request (or failure to act on it) in a suit under the Administrative Procedure Act. That alternative means of enforcing its constitutional power to determine voting qualifications remains open to states.

Tommy Tutone and the Supreme Court

The Supreme Court is not immune from occasional humor or pop-culture references. From Justice Kagan's opinion in American Trucking Associations, Inc. v. City of Los Angeles:

To address the community’s concerns, the Board implemented a Clean Truck Program beginning in 2007. Among other actions, the Board devised a standard-form “concession agreement” to govern the relationship between the Port and any trucking company seeking to operate on the premises. Under that contract, a company may transport cargo at the Port in exchange for complying with various requirements. The two directly at issue here compel the company to (1) affix a placard on each truck with a phone number for reporting environmental or safety concerns (You’ve seen the type: “How am I driving? 213–867–5309”) and (2) submit a plan listing off-street parking locations for each truck when not in service. Three other provisions in the agreement, formerly disputed in this litigation, relate to the company’s financial capacity, its maintenance of trucks, and its employment of drivers.

Law in Plain English: American Trucking Associations, Inc. v. City of Los Angeles

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.

American Trucking Associations, Inc. v. City of Los Angeles

In order to expand the Port of Los Angeles, the Port adopted an environmental plan that required licensed motor carriers (LMC) to make certain concessions. The American Trucking Associations (ATA) challenged several requirements as preempted by the Federal Aviation Administration Authorization Act (FAAAA). The Port argued that they were a market participant which effectively gives them an exception to preemption (and thus allowing the plan's challenged provisions to go forward), although (as ATA argued) the text of the FAAAA contains no such provision. Nonetheless, the District Court agreed with the Port and the Ninth Circuit affirmed. The question before the Court was Whether the FAAAA contains an unexpressed “market participant” exception and permits a municipal governmental entity to take action that conflicts with the express preemption clause, occurs in a market in which the municipal entity does not participate, and is unconnected with any interest in the efficient procurement of services. In a unanimous decision, the Supreme Court ruled that the FAAAA expressly preempts the challenged requirements. As a result, the ATA's motor carriers won't be required to make the concessions demanded by the port.

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: Hillman v. Maretta

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.

Hillman v. Maretta

Warren Hillman, a federal government employee, died. Judy Maretta, Hillman's ex-wife, was the designated beneficiary of his life insurance policy. Jacqueline Hillman, Warren's widow, sued to obtain the proceeds of the policy. The Federal Employees Group Life Insurance Act of 1954 (FEGLIA) provides that the proceeds of federal life insurance plans shall be paid according to order of precedence, starting with the beneficiary or beneficiaries designated by the employee, and if there is no designated beneficiary, then the widow or widower of the employee received the proceeds, followed by the employee’s children and descendants, parents, the administrator of the employee’s estate, and anyone else entitled to receive the funds under state law. On the other hand, Virginia law provides that after divorce, the divorced spouses cease to be the designated beneficiaries of each other’s life insurance policies, and that the deceased person’s widow or widower instead becomes entitled to any benefits. Virginia's law also includes a second provision that created a cause of action for the widow to recover from the divorced spouse if the original provision was preempted (both parties agree that it was). Hillman prevailed at the Circuit Court of Fairfax County, but the Supreme Court of Virginia reversed. The question before the Court was whether FEGLIA preempts Virginia's domestic relations equitable remedy (the second provision) which creates a cause of action against the recipient of Hillman's life insurance proceeds after they have been distributed. In a unanimous decision (other than Justice Scalia not joining a footnote related to legislative history), the Supreme Court ruled that the Virginia statute is preempted by the Federal Employees Group Life Insurance Act. As a result, the practical impact of this decision is that Warren's widow cannot recover the proceeds of the policy under Virginia's law because it conflicts with federal law and is therefore invalid.

Law in Plain English: Dan's City Used Cars v. Pelkey

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.

Dan’s City Used Cars, Inc. v. Pelkey

Dan's City Used Cars towed Pelkey's car, failed to notify him of its plan to auction the car, held an auction despite Pelkey’s notice that he wanted to reclaim the car, and eventually traded the car away without compensating Pelkey for the loss. Pelkey sued, but the New Hampshire court ruled in favor of Dan's City, concluding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempted New Hampshire's consumer protection laws (when state and federal laws conflict, the federal law applies and the state law is invalidated). The FAAAA preempts state laws “related to a price, route, or service of any motor carrier...with respect to the transportation of property.” In a unanimous decision, the Supreme Court ruled that the FAAAA does not preempt state-law claims stemming from the storage and disposal of a towed vehicle. In other words, the Pelkey's Consumer Protection Act claim is not related to the “transportation of property” nor the “service” of a motor carrier. As a result, Pelkey's claims can go forward under state law. The practical impact of this decision is that courts will seek to find limitations to preemption in areas where the law is unclear. When the text of a pre-emption clause is susceptible of more than one plausible reading, courts ordinarily “accept the reading that disfavors pre-emption.” Bates v. Dow Agrosciences LLC, 544 U. S. 431, 449 (2005).

Law in Plain English: Wos v. E.M.A.

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.

Wos v. E.M.A.

E.M.A. was born with serious injuries, and part of her medical expenses were paid by North Carolina's Medicaid program. Her parents filed a medical malpractice suit against the doctor who delivered her and the hospital. They settled for $2.8 million, and the court placed a third of that amount into escrow pending a determination of how much should be reimbursed to the state's Medicaid program (North Carolina has a statute that presumes that one-third of a recovery or settlement is attributable to medical expenses). However, this one-third rule conflicts with a federal Medicare statute that prevents such liens for portions not "designated as payment for medical care." The problem here was that the North Carolina statute presumed one-third of the settlement was for medical care without any specific evidence. When state and federal statutes conflicts, the state statute is preempted by the federal one (on account of the Supremacy Clause). The question before the Court was whether the anti-lien provision of the federal Medicaid statute preempts North Carolina’s statutory presumption that one-third of any tort recovery by a Medicaid beneficiary is attributable to medical expenses. In a 6-3 decision, the Supreme Court ruled that the federal statute did preempt the North Carolina law. As a result, North Carolina's share of the settlement is likely to be less than the one-third their statute presumes. The practical impact of this decision is that states (many who have similar provisions) will be able to recover less expenses from such settlements, and families involved will be able to keep more of the settlement.