June 30, 2023
Volume 30, Issue 15
This Report summarizes opinions issued on June 22 and 23, 2023 (Part I); and cases granted review on June 26, 2023 (Part II).
Part I: Opinions
United States v. Texas, 22-58. By an 8-1 vote, the Court upheld the Biden Administration’s new guidelines for immigration enforcement, holding that Texas and Louisiana lacked standing to challenge them. In 2021, after President Biden took office, the Department of Homeland Security issued new Guidelines for immigration enforcement. The Guidelines prioritize the arrest and removal from the United States of noncitizens who are suspected terrorists or dangerous criminals, or who have unlawfully entered the country only recently, for example. Texas and Louisiana sued DHS and other federal officials and agencies alleging that the Guidelines contravene two federal statutes that purportedly require the Department to arrest more criminal noncitizens pending their removal. The U.S. District Court for the Southern District of Texas ruled that the two states have standing to sue because the Guidelines force the states to incur costs, for example, for continuing to incarcerate or supply social services to noncitizens who should be subject to arrest by the Federal Government. On the merits, the district court ruled that the Guidelines are unlawful and vacated them. The Fifth Circuit declined to stay the district court’s judgment, and the Supreme Court granted certiorari before judgment. In an opinion by Justice Kavanaugh, and joined by four other justices—the Chief Justice and Justices Sotomayor, Kagan, and Jackson—the Court reversed the judgment of the district court, ruling that the states lack Article III standing.
The Court grounded this decision on its holding in Linda R. S. v. Richard D., 410 U.S. 614, 619 (1973), “that a citizen lacks standing to contest the policies of the prosecuting authority when he himself is neither prosecuted nor threatened with prosecution.” For that reason, although monetary costs are an injury, the states lack a legally cognizable injury of the kind that is traditionally redressable in a federal court. The Court said that “the States have not cited any precedent, history, or tradition of courts ordering the Executive Branch to change its arrest or prosecution policies so that the Executive Branch makes more arrests or initiates more prosecutions.” And the Court found that “[s]everal good reasons explain why, as Linda R. S. held, federal courts have not traditionally entertained lawsuits of this kind.” First, “when the Executive Branch elects not to arrest or prosecute, it does not exercise coercive power over an individual’s liberty or property, and thus does not infringe upon interests that courts often are called upon to protect.” Second, these types of lawsuits run up against the Executive Article II power, which assigns the Executive, not the Judiciary, the power to make arrests and prosecute offenses. “That principle of enforcement discretion over arrests and prosecutions extends to the immigration context[.]” This clear delineation of power prevents the Judiciary from meaningfully “assessing the propriety of enforcement choices in this area.” This is especially true, said the Court, when, as here, the Executive is making enforcement choices about how best to allocate its limited resources. (The Court added in a footnote that “in our system of dual federal and state sovereignty, federal policies frequently generate indirect effects on state revenues or state spending. And when a State asserts, for example, that a federal law has produced only those kinds of indirect effects, the State’s claim for standing can become more attenuated. And in a separate footnote, the Court noted that, “[p]utting aside any disagreements that some may have with Massachusetts v. EPA, [549 U.S. 497 (2007),] that decision does not control this case. The issue there involved a challenge to the denial of a statutorily authorized petition for rulemaking, not a challenge to an exercise of the Executive’s enforcement discretion.)
The Court qualified this holding by noting that it did not mean to suggest that federal courts may never entertain cases involving the Executive’s alleged failure to make more arrests or bring more prosecutions. The Court gave some examples of types of cases that might be justiciable: cases involving selective prosecution implicating the Equal Protection Clause; cases where Congress, by statute, establishes legally cognizable injuries in this arena; cases in which the Executive wholly abandoned its statutory responsibilities; cases that challenge “an Executive Branch policy that involves both the Executive Branch’s arrest or prosecution priorities and the Executive Branch’s provision of legal benefits or legal status”; and cases involving “policies governing the continued detention of noncitizens who have already been arrested.” The Court underscored, however, why this case is categorically different from those other cases where standing could exist. This case, the Court explained, “implicates only one discrete aspect of the executive power—namely, the Executive Branch’s traditional discretion over whether to take enforcement actions against violators of federal law.” Under these circumstances, the Judiciary cannot order the Executive to make more arrests.
Justice Gorsuch, joined by Justices Thomas and Barrett, wrote an opinion concurring in the judgment. To Justice Gorsuch, the jurisdictional defect in this case is not Texas and Louisiana’s lack of legally cognizable injury or interest, for the states “proved that the Guidelines increase the number of aliens with criminal convictions and final orders of removal released into the States” and that, “as a result, they spend more money on everything from law enforcement to healthcare.” (In the course of disagreeing with the majority’s reasoning, Justice Gorsuch noted that the majority did not rely on the “special solicitude” for states’ standing declared in Massachusetts v. EPA, said he has “doubts” about that rule, and said “it’s hard not to think, too, that lower courts should just leave that idea on the shelf in future [cases].”) Rather, Justice Gorsuch wrote, the standing deficiency here is a lack of redressability because 8 U.S.C. §1252(f)(1) strips district courts of jurisdiction or authority to enjoin or restrain the operation of certain immigration laws, including the laws at issue in this case. Even though the district court attempted to sidestep this hurdle by “vacating,” rather than “enjoining,” the Guidelines, that vacatur still does nothing to redress the states’ injuries because the federal officials still possess the same underlying prosecutorial discretion by which to make the same decisions the Guidelines advise. And although §1252(f)(1) has a parenthetical, “(other than the Supreme Court),” that does not help the states because “a plaintiff must establish redressability from the outset of the suit.”
Justice Gorsuch also rejected the states’ contention that §706(2) of the Administrative Procedures Act, which authorizes a reviewing court to “set aside” agency action, permits courts to vacate federal agencies’ actions “rendering them inoperable with respect to any person anywhere.” Such vacaturs, he argued, possess the same problems that afflict universal (nationwide) injunctions, which he criticized previously and did so again here. Justice Gorsuch argued that “[i]f the Congress that unanimously passed the APA in 1946 meant to overthrow the ‘bedrock practice of case-by-case judgments with respect to the parties in each case’ and vest courts with a ‘new and far-reaching’ remedial power, it surely chose an obscure way to do it.” He then discussed at length why, in his view, the text and statutory context do not support universal relief under §706(2).
Justice Barrett, joined by Justice Gorsuch, wrote a short opinion also concurring in the judgment to emphasize her disagreement with the majority’s reasoning. Justice Barrett attacked its reliance on Linda R. S., which she found distinguishable; and questioned whether the majority’s reliance on the Executive’s authority under Article II bears on “Article III’s definition of a cognizable injury.”
Justice Alito authored a lengthy solo dissent. He began with a more robust summary of the relevant statutory provisions, which, in his view, mandate that the Federal Government arrest and detain unlawful immigrants pending the entirety of their immigration proceedings without release. And, he summarized, “All of our recent decisions interpreting these provisions confirm that, for covered aliens, shall means shall; it does not mean ‘may.’” Justice Alito then summarized DHS’s directive, which he interpreted as “not simply permit[ting] deviations from the statutory mandates; it flatly contradicted those mandates by stating that qualifying convictions were insufficient grounds for initiating arrest, detention, and removal.”
Justice Alito then turned to the standing analysis, and concluded that the states easily had Article III standing in this case. That is so, he said, because the states had borne additional costs as a result of the new DHS policy, and those costs would be redressed by an injunction or declaratory order from a lower court or the Supreme Court stating that the new Guidelines were unlawful. He then turned to explaining why the majority’s analysis on standing was erroneous. First, the Court “failed to engage with contrary precedent that is squarely on point,” namely, cases that found states had standing to sue federal agencies for failure to take action in the realm of environmental protection, religious liberties, and even immigration enforcement. Second, he wrote that the Court “lacks support in the cases on which it relies,” primarily echoing Justice Barrett’s criticism. Finally, Justice Alito criticized the majority’s reliance on the Executive’s Article II power for finding a lack of standing. In his view, because Congress has clearly required the President to apprehend and detain certain unlawful immigrants, his power is at “its lowest ebb”: “Neither the Solicitor General nor the majority has cited any support for the proposition that a President has the power to disobey statutes that require him to take enforcement actions, and there is strong historical evidence to the contrary.”
Jones v. Hendrix, 21-857. In a 6-3 decision, the Court held that a federal inmate may not invoke the federal habeas statute, 28 U.S.C. §2241, to collaterally attack his conviction by asserting an intervening change in statutory law, a ground not authorized for second or successive collateral motions under §2255(h). This case involved two federal statutes that provide postconviction relief for prisoners. Section 2241 is the “general habeas corpus statute” that permits federal courts to issue the writ. Federal prisoners, however, generally must use a different statute, §2255, for postconviction relief. There is an exception: under §2255(e)’s saving clause, a federal prisoner may file a habeas petition if §2255 “is inadequate or ineffective to test the legality of his detention.” Section 2255 also limits the number of motions a prisoner may make. Under §2255(h) (added by AEDPA), a prisoner may file a second or successive motion only if it is based on either: (1) “newly discovered evidence,” or (2) a “a new rule of constitutional law.” “A federal prisoner may not, therefore, file a second or successive §2255 motion based solely on a more favorable interpretation of statutory law adopted after his conviction became final and his initial §2255 motion was resolved.”
In 2000, petitioner Marcus Jones was convicted of various offenses in federal district court, including two counts of unlawful possession of a firearm by a felon. The court sentenced him to serve more than 27 years in prison. He unsuccessfully appealed his convictions. He filed a postconviction motion to vacate, set aside, or correct his sentence under §2255 and was partially successful; the court found that he was deprived the effective assistance of counsel and vacated one of his convictions. Many years later, the Supreme Court decided Rehaif v. United States, 588 U.S. __ (2019). There, the Court held that to convict a defendant of unlawfully possessing a firearm as a felon the government must prove that the defendant knew that he was disqualified from owning a firearm. This abrogated the Eighth Circuit precedent that lower courts had applied to convict Jones and deny his appeal. Jones filed another §2255 motion to challenge his conviction. He argued that, although his motion did not fall under §2255(h)’s provision for second or subsequent motions―Rehaif was a new statutory rule, not a constitutional one―he qualified for habeas relief under §2255(e)’s saving clause. The district court dismissed his motion for lack of jurisdiction, and the Eight Circuit affirmed. In an opinion by Justice Thomas, the Court affirmed.
The Court began by tracing the history of federal postconviction relief. Until 1948, federal prisoners could file habeas corpus petitions under the predecessors to §2241. But because those statutes granted jurisdiction to the district courts in the judicial districts where the petitioner was confined, this practice created “serious administrative problems”―witnesses and the trial records were often elsewhere, and a few districts were swamped with virtually all federal habeas petitions. Congress enacted §2255 to provide a speedier and more convenient process, giving sentencing courts jurisdiction over postconviction proceedings. In the Court’s view, §2255(e)’s saving clause operates only when, due to “unusual” circumstances like “the sentencing court’s dissolution,” it cannot grant a movant relief. It also preserves the role of habeas petitions for challenging the conditions of confinement, as opposed to the validity of a sentence. Given this view, the saving clause does not permit a movant to do an “end-run” around §2255(h)’s restrictions on second or successive motions by authorizing §2241 habeas petitions for second or successive statutory claims. “Any other reading would make AEDPA curiously self-defeating. It would mean that, by expressly excluding second or successive §2255 motions based on nonconstitutional legal developments, Congress accomplished nothing in terms of actually limiting such claims. Instead, it would have merely rerouted them from one remedial vehicle and venue to another.”
The Court rejected Jones’s arguments to the contrary. Jones claimed that §2255 is “inadequate or ineffective” whenever a court applies the law incorrectly or when subsection (h) would bar a second or subsequent motion. The Court rejected that interpretation as calling for “unbounded error correction.” Although Jones argued that “inadequate” was a term of art in equity jurisprudence, the Court did not think that shed light on the plain text of §2255. Jones argued that barring relief would violate the Suspension Clause, which prohibits Congress from suspending the writ of habeas corpus under most circumstances. The Court rejected this because Jones would not have been able to bring his claim at all when the Suspension Clause was adopted. “At the founding,” the Court wrote, “a sentence after conviction ‘by a court of competent jurisdiction’ was ‘in itself sufficient cause’ for a prisoner’s continued detention.” The Court did not recognize a right to challenge substantive statutory errors in habeas proceedings until 1974. The Court quickly disposed of Jones’ remaining constitutional arguments: that denying him a new opportunity to challenge his conviction threatened Congress’ exclusive powers to define crimes (the majority held that courts do not usurp this power by misapplying the law in a single case); deprived him of due process (that right does not guarantee the right to collaterally attack a final sentence); and constituted cruel and unusual punishment (the Eighth Amendment governs the infliction of punishments, not collateral review).
The Court also rejected the government’s position. The government took a broad view of §2255’s saving clause. It “begins with the premise that the words ‘inadequate or ineffective’ imply reference to a ‘benchmark’ of adequacy and effectiveness. It proceeds to identify that benchmark as the ability to test the types of claims cognizable under the general habeas statutes—specifically, those governing federal habeas petitions by state prisoners. The Government then reasons that §2255(h)’s limitations on second or successive motions asserting newly discovered evidence or new rules of constitutional law do not trigger the saving clause because Congress has imposed analogous limitations on analogous claims by state prisoners and—by doing so—has redefined §2255(e)’s implicit habeas benchmark with respect to such ‘factual’ and ‘constitutional’ claims. Since, the Government asserts, Congress has imposed no analogous limitation on statutory claims by state prisoners, it has not redefined the implicit habeas benchmark with respect to statutory claims like Jones’.” (Citation omitted.) Rejecting that reasoning, the Court stated that “[i]ts most striking flaw is the seemingly arbitrary linkage it posits between the saving clause and state prisoners’ statutory postconviction remedies.” The Court further noted that “a state prisoner could never bring a pure statutory-error claim in federal habeas, because federal habeas corpus relief does not lie for errors of state law. As a result, it is unclear what work the Government’s state-prisoner-habeas benchmark is even doing in its answer to the question presented here.” (Citations and quotation marks omitted.) Finally, the Court declined the government’s invitation to impose a clear-statement rule and believed that, in any event, §2255(h) was clear as written.
Justice Sotomayor, joined by Justice Kagan, dissented. They pointed to the “disturbing” implications of the decision―an inmate “who is actually innocent” would be “forever . . . barred” from challenging his conviction “merely because he previously sought postconviction relief.” The saving clause was designed to address “mismatch[es]” like this―when an inmate could bring a claim as a habeas petition but could not use §2255. The majority’s interpretation “assigns it almost no role.” The dissenters would have adopted the Government’s position and remanded the case for further consideration.
Justice Jackson wrote a lengthy separate dissent. She saw no reason to read the saving clause as narrowly as the majority. She agreed with most of the majority’s recitation of the history of §2255, but believed that the saving clause evinced an intent to “afford the same rights” that were previously available with habeas proceedings “’in another and more convenient forum.’” “Accordingly, Congress inserted the saving clause to ensure that certain pre-existing postconviction claims (say, a claim of statutory innocence) could still be heard even if the statutory language Congress was adopting inadvertently barred them.”
Justice Jackson further maintained that the Court should not have drawn a “negative inference” from Congress not excepting new statutory claims under §2255(h). In her view, such inferences are “notoriously unreliable” and could not be squared with prior decisions that effectively had applied a clear-statement rule to restrictions on habeas relief. Legislative history suggested an intent to balance finality and combatting “manipulative filing practices” with fairness. In Justice Jackson’s view, Congress did not intentionally choose to bar successive motions based on statutory innocence―it “simply overlooked” them.
Justice Jackson also asserted that the majority’s interpretation would create not only a “quirky procedural anomaly” but “stunningly disparate results” among similarly-situated prisoners. Justice Jackson believed that the most “straightforward” way to resolve Jones’ claim would be to apply a clear-statement rule to attempts to limit habeas relief. She also believed that the majority’s reasoning implicated the Eighth Amendment and the Suspension Clause. As to the former, she wrote that “[t]here is a nonfrivolous argument that the Constitution’s protection against ‘cruel and unusual punishment’ prohibits the incarceration of innocent individuals.” As to the latter, she disagreed with the majority’s historical understanding of the scope of the habeas writ, saying that at the founding “a court lacked ‘jurisdiction’—and thus the writ could issue—when a person was incarcerated for noncriminal behavior.” (She also “reject[ed] the majority’s suggestion that the Suspension Clause protects only the scope of the great writ as it existed in the founding era. Historical habeas practice provides the floor, and not the ceiling, of Suspension Clause protection.”) Reflecting that the Court’s interpretations of AEDPA had transformed postconviction proceedings into an “aimless and chaotic exercise in futility,” Justice Jackson invited “Congress to step in and fix this problem.”
Samia v. United States, 22-196. By a 6-3 vote, the Court held that introducing a non-testifying co-defendant’s confession did not violate the Confrontation Clause when the confession was modified to not explicitly name the defendant and was accompanied by a limiting instruction. Petitioner Adam Samia traveled to the Philippines to work for Paul LeRoux, an international “crime lord.” Acting on LeRoux’s orders, Joseph Hunter recruited Samia and another man, Carl Stillwell, to kill a real-estate broker. After the real-estate broker was found dead, U.S. law enforcement agencies arrested LeRoux, Samia, Hunter, and Stillwell. When agents interviewed Stillwell, he confessed to being the driver when Samia shot the broker. The government tried Samia, Hunter, and Stillwell together. Stillwell did not testify at trial and was not subject to cross examination. The district court allowed the government to introduce a modified version of his confession. As modified, the confession did not name Samia but instead referred to the “other person” with Stillwell. The district court also instructed the jury that the confession should not be considered as evidence against Samia or Hunter. The jury convicted the three men on all counts. On appeal, Samia argued that introducing Stillwell’s confession, even with the modifications and limiting instructions, violated his right to confront the witnesses against him under Bruton v. United States, 391 U.S. 123 (1968). The Second Circuit affirmed his conviction. In an opinion by Justice Thomas, the Court affirmed.
Surveying historical sources, the Court believed that, for most of the nation’s history, courts admitted confessions of non-testifying defendants so long as the jury received a limiting instruction. This practice fit with “the law’s broader assumption that jurors can be relied upon to follow the trial judge’s instructions.” In Bruton, the Court recognized a “narrow exception to” this rule: admitting a non-testifying co-defendant’s confession in a joint trial violates the Confrontation Clause even if the jury receives a limiting instruction when the confession explicitly implicates another defendant. In Richardson v. Marsh, 481 U.S. 200 (1987), the Court upheld a conviction when a co-defendant’s confession did not expressly name the defendant and only implicated her “when viewed in conjunction with other evidence.” And in Gray v. Maryland, 523 U.S. 185 (1998), the Court held that it was improper to introduce a confession that had been obviously redacted by using the words “deleted” or “deletion” in place of the defendants’ names. Taken together, the Court here believed that its precedents distinguished between confessions that directly implicate a defendant and those that do so only indirectly.
The Court held that the modified confession here, together with the limiting instructions, satisfied that rule. The confession did not directly name Samia and the use of “other person” was not akin to the obvious alterations in Gray. It would not have been possible to further alter the confession without unfairly making it appear that Stillwell had admitted to shooting the broker himself and preventing the government from proving the charged conspiracy. The Court declined to consider whether the jury would believe that the modified confession nonetheless directly implicated Samia in light of other evidence and the government’s arguments at trial. Requiring courts to engage in such a screening process before admitting confessions would be “burdensome and ‘far from foolproof.’” Moreover, because “all evidence that supports the prosecution’s theory of the case is, to some extent, mutually reinforcing,” Samia’s approach would, as a practical matter, require courts to hold separate trials whenever the government intended to introduce a non-testifying defendant’s confession. This would “be ‘too high’ a price to pay” in light of the Court’s preference for joint trials.
Justice Barrett concurred in part and in the judgment. She agreed that admitting the confession did not violate Samia’s confrontation rights. She wrote separately to criticize the majority’s historical analysis. Many of the cases and treatises that the majority pointed to came from the late 19th and early 20th centuries and therefore could not explain the original meaning of the Confrontation Clause. Moreover, the sources discussed the rules of evidence, not the right to confrontation. By suggesting that these sources did more than show that “during a narrow historical period, some courts assumed and others expressly held that a limiting instruction sufficiently protected a codefendant from a declaration inadmissible on hearsay grounds,” the majority “overclaims.”
Justice Kagan, joined by Justices Sotomayor and Jackson, dissented. To the dissenters, the majority “elevat[ed] form over substance” and undermined Bruton. To them, Bruton and its progeny “turned on the effect a confession is likely to have on the jury.” In this case, even though the confession did not use Samia’s name, “[a]ny reasonable juror would have realized immediately—and without reference to any other evidence—that the ‘other person’ who ‘pulled the trigger’ was Samia.” The jury knew from the prosecutor’s opening statement that three men were on trial, that Hunter hired the other two men to kill someone in the Philippines, and that the government alleged that Samia pulled the trigger. Although the placeholder here (“other person”) was “neither a blank space nor the word ‘deleted,’” it would have the same effect on the jury.
The dissenters denied that requiring courts to examine the “content of the confession, the number of defendants, and the prosecution’s general theory of the case” when reviewing the admissibility of a confession would be especially difficult or cumbersome. More fundamentally, ease of administration should not trump constitutional rights. Although juries are presumed to follow instructions, Bruton necessarily recognized a limit to that presumption. The dissenters both agreed with Justice Barrett’s critique of the majority’s historical analysis and further believed that it proved too much: if the majority was correct, then Bruton was wrongly decided. This led the dissenters to conclude that the majority’s “real view” was that Bruton should be overruled. They believed that this might not be necessary because this case will permit the government to always bypass Bruton’s protection simply by replacing a defendant’s name with “other person.”
Justice Jackson separately dissented. She believed that the majority’s reasoning “inverts the constitutional principles that govern this case.” The Court should have started from the presumption that introducing Stillwell’s testimonial confession without the opportunity for cross-examination violated Samia’s confrontation rights. The government therefore had to satisfy an exception to the Confrontation Clause and a further exception to Bruton’s rule. By assuming that a confession that did not directly implicate Samia was not testimonial against him, the majority “turned our Bruton cases on their head in a manner that risks undermining a core Sixth Amendment right.”
Arizona v. Navajo Nation, 21-1484. In a 5-4 decision, the Court held that an 1868 treaty between the Navajo Tribe and the United States did not require the Federal Government to take affirmative steps to secure water for the Tribe. This suit concerns water rights reserved to the Navajo Tribe on the 17 million-acre Navajo Reservation located in Arizona, New Mexico, and Utah. The United States and the Navajos entered into a treaty in 1849 under which the United States recognized the Navajo Tribe within its jurisdiction; the Navajos agreed to cease hostilities; and the United States agreed to “designate, settle, and adjust” the “boundaries” of the Navajo territory. Over the next two decades, however, hostilities between the United States and the Navajos resumed. In 1868, the two sides agreed to a second treaty under which the United States would designate a new reservation on the Navajos’ original homeland and provide resources, including agricultural resources, so that the Navajos could be self-sufficient. The 1868 treaty also implicitly reserved water rights to the tribe: “Under this Court’s longstanding reserved water rights doctrine, sometimes referred to as the Winters doctrine, the Federal Government’s reservation of land for an Indian tribe also implicitly reserves the right to use needed water from various sources—such as groundwater, rivers, streams, lakes, and springs—that arise on, border, cross, underlie, or are encompassed within the reservation. See Winters v. United States, 207 U.S. 564, 576–577 (1908)[.]” In this respect, the Federal Government reserves water only “to the extent needed to accomplish the purpose of the reservation.” To meet their water needs, the Navajos rely on the three rivers—the Colorado, the Little Colorado, and the San Juan—that border the Reservation.
In the face of increasing aridity in the western United States, the Federal Government has taken various steps to assist the Navajo Tribe meet its water needs—including securing water and authorizing funds to build water-related infrastructure. The Navajos believed, however, that those efforts did not fully satisfy the United States’s obligations under the 1868 treaty, so they sued the Department of the Interior, the Bureau of Indian Affairs, and other federal parties asserting breach of trust. The Tribe sought to compel the defendants to devise a plan to meet the Navajos’ water needs. According to the Tribe, the United States must take affirmative steps to secure water for the Tribe, including developing a plan to secure the needed water and potentially building pipelines, pumps, wells, or other water infrastructure. The States of Arizona, Nevada, and Colorado intervened against the Tribe to protect their interests in water from the Colorado River. The district court dismissed the Navajos’ complaint, finding that the 1868 treaty did not require the United States to take such affirmative steps. The Ninth Circuit reversed, holding that the Treaty did require such affirmative steps. In an opinion by Justice Kavanaugh, the Court reversed.
The Court stated that to maintain a breach-of-trust claim “the Tribe must establish, among other things, that the text of a treaty, statute, or regulation imposed certain duties on the United States. See United States v. Jicarilla Apache Nation, 564 U.S. 162, 173–174, 177–178 (2011)[.]” But the Court found that the 1868 treaty’s text and history did not impose an affirmative duty with regard to water rights. Although the treaty “set apart” a reservation for the “use and occupation of the Navajo tribe,” it contained no “rights-creating or duty-imposing” language that required the United States to take affirmative steps to secure water for the Tribe. Notably, the treaty imposed other affirmative duties on the United States, such as constructing various buildings, providing teachers, clothing, and other goods, and supplying seeds and agricultural implements. And even though the United States maintains a general trust relationship with the Tribe, specific duties, such as conferring water, must still be established by a treaty or, alternatively, by Congress or the President, who may update the law to meet the Tribe’s current needs with regard to water. In absence of those further actions, the Court explained, the judiciary cannot read water rights into the treaty where they do not exist.
The Court rejected several of the Navajos’ arguments. First, the Court explained, the 1868 treaty’s establishment of the reservation as a “permanent home” did not confer specific affirmative duties on the United States beyond those outlined in the text of the treaty, including those to secure water. The “permanent home” provision is too general to read into it specific duties regarding water rights. Second, the treaty’s requirement that the United States provide agricultural implements and seeds also did not require providing water; if anything, those provisions showed that the parties to the treaty knew how to impose specific affirmative duties on the United States, yet declined to do so with regard to water rights. Third, the Court dismissed the Navajos’ suggestion that cases involving Colorado River water rights in the 20th century showed that the United States has control over the reserved water rights; if the Navajos wish to assert their rights in those litigations, the Court stated, they may do so. And fourth, the Court rejected as without any evidence the Navajos’ claim that the parties in 1868 would have understood the treaty to confer upon the United States an affirmative duty to secure water for the Tribe.
Justice Thomas wrote a concurring opinion to criticize the notion of legally enforceable duties borne out of an Indian “trust relationship” with the United States. In many instances, Justice Thomas wrote, the Court’s “trust” language has gone beyond the discrete terms of legally cognizable trusts, laws, and treaties, and verged into recognizing “the distinctive obligation of trust incumbent upon the Government in its dealings” with Indians and the Government’s “moral obligations of the highest responsibility and trust.” In those cases, he wrote, the Court has “blurred the lines between the political branches’ general moral obligations to Indians, on the one hand, and specific fiduciary obligations of the Federal Government that might be enforceable in court, on the other.” Justice Thomas stated that in future cases the Court should correct this problem and “clarify the exact status of this amorphous and seemingly ungrounded ‘trust relationship.’”
Justice Gorsuch filed a dissenting opinion, which Justices Sotomayor, Kagan, and Jackson joined. Justice Gorsuch would have allowed the Navajos’ case to proceed. He began by recounting in detail the history that led to the 1868 treaty, including the United States government’s sending many Navajo members to a faraway place (“commonly called the Bosque Redondo”) that lacked water. Negotiation of the 1868 treaty, which returned the Navajos to part of their original lands, reflected this great power imbalance and was spurred in no small part by the Tribe’s need for water. Justice Gorsuch then turned to the present, noting that “even today, water remains a precious resource. Members of the Navajo Nation use around 7 gallons of water per day for all of their household needs—less than one-tenth the amount the average American household uses. In some parts of the reservation, as much as 91% of Navajo households lack access to water.” (Quotation marks and citations omitted.) “That deficit owes in part to the fact that no one has ever assessed what water rights the Navajo possess”―due in part to the United States’ opposition to the Navajos’ 1961 motion to intervene in a suit seeking a declaration of water rights in the Lower Basin of the Colorado River.
With that background, Justice Gorsuch wrote that the 1868 treaty’s promise of a “permanent home” must include water rights. “Yet even today,” he wrote, “the extent of those water rights remains unadjudicated and therefore unknown. What is known is that the United States holds some of the Tribe’s water rights in trust. And it exercises control over many possible sources of water in which the Tribe may have rights, including the mainstream of the Colorado River. Accordingly, the government owes the Tribe a duty to manage the water it holds for the Tribe in a legally responsible manner. In this lawsuit, the Navajo ask the United States to fulfill part of that duty by assessing what water rights it holds for them. The government owes the Tribe at least that much.” That reasoning has two basic components. First, using core tenets of Indian treaty interpretation, Justice Gorsuch would find that the 1868 treaty (taking into account the Tribe’s implied Winter rights) entitles the Tribe to “access water sufficient to live, tend crops, and raise animals in perpetuity.” That is primarily because, “[a]s both parties surely would have recognized, no people can make a permanent home without the ability to draw on adequate water.” Justice Gorsuch also pointed to other portions of the treaty that “were expressly keyed to an assumption about the availability of water,” such as the requirement that the United States provide the Tribe with specific seeds, crops, and animals.
Second, Justice Gorsuch maintained that the Court “misapprehend[ed] the nature of the Navajo’s complaint.” He insisted that the Tribe did not seek “affirmative steps” by the Federal Government. Rather, quoting the complaint, he said that the Tribe merely “sought to ‘compel the Federal Defendants to determine the water required to . . . fulfill the promise[s]’ made to them under the Treaty of 1868. Only if the United States is, in fact, ‘interfer[ing] with [their] reserved water rights’ in some way, could the Tribe then ask the federal government to ‘devise a plan’ for achieving compliance with its obligations.” (Citations omitted.) At the least, Justice Gorsuch concluded, the Navajos should have been permitted to proceed on those claims and attempt to prove them going forward in this litigation.
United States v. Hansen, 22-179. By a 7-2 vote, the Court upheld 8 U.S.C. §1324(a)(1)(A)(iv), which forbids “encourag[ing] or induc[ing] an alien to come to, enter, or reside in the United States,” against a First Amendment overbreadth challenge. Respondent Helaman Hansen operated an “adult adoption” immigration scam. He tricked noncitizens into entering and remaining in the United States by promising them that they would be adopted, and thereby become citizens, if they paid him money. In total, he “raked in nearly $2 million” by “luring” noncitizens into what he knew was a fraudulent scheme. The government tried and convicted Hansen for (among other things) knowingly “encourag[ing] or induc[ing]” noncitizens to enter or remain in the country in violation of immigration laws. On appeal, Hansen argued that §1324(a)(1)(A)(iv) violated the First Amendment. He did not claim that the statute as applied to him was unconstitutional. Instead, he argued that it was unconstitutionally overbroad because it criminalized a substantial amount of constitutionally-protected speech, such as “encouraging an undocumented immigrant to take shelter during a natural disaster” or “providing certain legal advice to undocumented immigrants.” (Quotation marks omitted). A panel of the Ninth Circuit agreed. In an opinion by Justice Barrett, the Court reversed and remanded.
The Court noted that the overbreadth doctrine is “unusual” because it allows a party to assert the rights of hypothetical third parties. And because an allegedly overbroad statute has some concededly appropriate applications, a challenger must show that its improper impact is “substantially disproportionate to the statute’s lawful sweep.” To determine the scope of the statute, the Court focused on the words “encourag[e]” and “induc[e].” After looking to the Model Penal Code, criminal law treatises, and statutes, the Court concluded that “the terms ‘encourage’ and ‘induce’ are among the ‘most common’ verbs used to denote” the criminal law concepts of “solicitation and facilitation.” The Court thus held that Congress used the verbs in their “specialized, criminal-law sense” of denoting derivative liability under a solicitation or facilitation theory.
The Court pointed to the statute’s history to confirm its interpretation. Congress enacted it in 1885 and amended it several times. In the Court’s view, the statute always essentially applied to solicitation and facilitation, and Congress intended only to “streamline” the law when it added and removed verbs. Hansen argued that the statute must apply more broadly than solicitation or facilitation because, unlike those crimes, it does not require proof that a defendant specifically intended that a principal carry out a particular act. The Court rejected this argument and held that Congress implicitly included that mens rea requirement by using terms of art strongly associated with solicitation and facilitation.
With this view of the statue in hand, the Court rejected Hansen’s overbreadth challenge. The statute has a “plainly legitimate sweep”―the solicitation and facilitation of criminal acts are unprotected speech, and the statute criminalizes nonexpressive conduct as well. On the “other side of the ledger,” Hansen could not point to any improper prosecutions under the law, and his list of hypothetical “horribles” would not violate the statute because they could not constitute solicitation or facilitation. Hansen and amici “resist the idea that the First Amendment permits Congress to criminalize speech that solicits or facilitates a civil violation—and some immigration violations are only civil.” The Court left the door open for such a challenge in the future, but held that this argument could not “substantially” outweigh the statute’s legitimate sweep.
Justice Thomas concurred. He wrote separately to encourage the Court to “reconsider” the overbreadth doctrine. He argued that it departs from the usual principles of standing and that it empowers judges to make policy judgments in place of the legislature. He likened it to the function of New York’s Council of Revision in the early years of the republic. He noted that the drafters of the Constitution repeatedly declined to include such a body in their plan of government. In a footnote, he identified the overbreadth doctrine as “but one manifestation” of a larger problem with the judicial system, to which he also linked the vagueness doctrine, suspect classifications under the Fourteenth Amendment, substantive due process, “due process for welfare benefits,” and “review of time, place and manner speech regulations.”
Justice Jackson, joined by Justice Sotomayor, dissented. Justice Jackson stated that, using the ordinary meanings of “encourage” and “induce,” the statute applies to broad swaths of clearly protected speech. She rejected the majority’s choice to read the words in their specialized, criminal-law sense. She noted that Congress did not use the words “solicit” or “facilitate” in the statute, even though it explicitly provided for “aid[ing or] abet[ting]” liability in a neighboring provision. And although “encourage” and “induce” are often found in definitions of solicitation and facilitation, it does not follow that they are coextensive with those concepts. To Justice Jackson, Congress consistently expanded the reach of the statute beyond its original focus on encouraging the illegal importation of contract laborers. That the statute punishes those who encouraged civil violations with harsh legal penalties showed that it was not an “easy fit for the solicitation and facilitation role” that the majority emphasized. Justice Jackson accused the majority of substantially rewriting the statute to avoid constitutional concerns. Doing so was especially problematic in the area of protected speech, she said, because an overly broad statute may still chill speakers even if courts interpret the criminal sanctions more narrowly.
Pugin v. Garland, 22-23. Federal law provides that noncitizens convicted of an “aggravated felony” are removable from the United States, and defines “aggravated felony” to include federal or state offenses “relating to obstruction of justice.” 8 U.S.C. §1101(a)(43)(S). By a 6-3 vote, the Court held “that an offense may ‘relat[e] to obstruction of justice’ under §1101(a)(43)(S) even if the offense does not require that an investigation or proceeding be pending.”
The government initiated removal proceedings against petitioners Fernando Condero-Garcia and Jean Francois Pugin, alleging that they had committed offenses relating to obstruction of justice. Condero-Garcia had been convicted of dissuading a victim from reporting a crime in California; Pugin had been convicted of being an accessory after the fact to a felony in Virginia. In both cases, an immigration judge and the Board of Immigration Appeals ruled for the government. The Ninth Circuit reversed the ruling against Condero-Garcia, holding that the crime he was convicted of was not “relating to obstruction of justice” because it did not require a connection to a pending investigation or proceeding. In contrast, the Fourth Circuit upheld the ruling against Pugin even though his offense did not require a nexus to a pending proceeding or investigation. In an opinion by Justice Kavanaugh, the Court held that an offense does not require a nexus to a pending investigation of proceeding in order to qualify as one “relating to obstruction of justice.”
The Court noted that, although dictionaries from the time of §1101(a)(43)(S)’s enactment in 1996 defined “obstruction of justice” to include offenses connected with a pending case, it did not limit the term to those crimes. Further, emphasized the Court, many of the offenses in Chapter 73 of Title 18 of the U.S. Code―entitled “Obstruction of Justice”―do not require proof of a pending proceeding. “For example, the federal witness tampering statute covers various offenses, such as killing or threatening a witness with an intent to prevent the person from testifying at an official proceeding. That statute provides that ‘an official proceeding need not be pending or about to be instituted at the time of the offense.’” (Citations omitted.) And many state obstruction offenses―even if they went by different labels―did not require such a nexus in 1996. Nor did the Model Penal Code. This authority, said the Court, “reflects common sense,” because individuals may obstruct the process of justice (for example, by threatening a potential witness) even before the police start to investigate a crime. Reading a pending proceeding or investigation requirement into the definition would exclude many such “heartland obstruction offenses.” The Court added that, to the extent the question was ambiguous, Congress’ decision to include the phrase “relating to” “resolves the doubt.”
The Court rejected Condero-Garcia and Pugin’s arguments to the contrary. They pointed to the main federal obstruction crime, 18 U.S.C. §1503(a), which does require a nexus to a pending proceeding or investigation. But, found the Court, it is only a single offense and Congress did not expressly cross-reference it in the definition, as it did for other crimes. The Court rejected the claim that obstruction of justice historically required a link to a pending proceeding or investigation; to the extent this was true in the 18th and 19th centuries, it was not the common understanding in 1996. The Court acknowledged that its interpretation of “obstruction of justice” would overlap somewhat with the other offenses in §1101(a)(43)(S)―perjury or subornation of perjury, or bribery of a witness―but noted that a pending-proceeding requirement would not eliminate the redundancy and that some degree of duplication is common in statutes. Finally, the Court held that the rule of lenity did not counsel in favor of Condero-Garcia and Pugin’s interpretation. Assuming it applied at all to the civil immigration context, there was no “grievous ambiguity” sufficient to trigger it.
Justice Jackson concurred. She wrote separately to “highlight” a separate reason (one she acknowledged was not fully before the Court) that would reach the same result. In her view, when Congress wrote “relating to obstruction of justice,” it could have meant the family of obstruction-related offenses in Chapter 73 of Title 18 of the U.S. Code. Because not all of those offenses require a nexus to a pending proceeding, the term in §1101(a)(43)(S) would not mandate one either. If this was true, it would be unnecessary for the Court to create “some platonic, judicially divined meaning of Congress’s chosen words.”
Justice Sotomayor, joined by Justice Gorsuch and partially by Justice Kagan, dissented. To the dissenters, the majority missed the “fundamental point” of the categorical approach, which applies to assess whether a state conviction is covered by a generic federal offense. Under that approach, the Court must first define the “basic elements” of the relevant “generic offense” based upon the “generally accepted contemporary meaning of the generic offense,” not the “more unusual ‘nongeneric’ variants.” (Quotation marks omitted). The dissenters believed that the majority’s sources actually established that the generic offense of obstruction of justice required a pending proceeding or investigation. In 1996, they said, it was well-settled that the main federal obstruction statute required such a nexus. And the more plausible and natural reading of relevant dictionary definitions required a link to some pending legal process. The dissenters maintained that, although some offenses in Chapter 73 did not require a pending process, they were in the minority and were “nongeneric variants.” The dissenters added that Congress’ explicit inclusion of witness tampering in §1101(a)(43)(S) suggested that it viewed that offense as something distinct from obstruction of justice. The dissenters also asserted that most relevant state statutes required a connection to a pending proceeding. The majority reached the opposite conclusion, they said, by assuming that witness tampering and other crimes that didn’t require a nexus were really obstruction offenses. “In so assuming, the Court loses sight of the task at hand, which is, again, to answer a question about the trunk of obstruction of justice, not more broadly defined offshoots.”
The dissenters also rejected the majority’s reliance on the words “relating to.” That language is broad, and the majority did not provide any limiting principle, so it will be unclear what other offenses may qualify. The dissenters believed that, in the context of the INA, Congress used such language to “introduce (not expand upon) a general description of the intended crime category.” In a part of the dissent not joined by Justice Kagan, the dissenters concluded that all of this evidence was strong enough to render the statutory language at least ambiguous. In light of the serious immigration consequences attending designation as an “aggravated felony,” the dissenters believed the rule of lenity should apply.
Coinbase, Inc. v. Bielski, 22-105. By a 5-4 decision, the Court held that a district court must automatically stay its proceedings during the pendency of an interlocutory appeal from the denial of a motion to compel arbitration. Coinbase operates an online platform on which consumers can trade cryptocurrencies and government-issued currencies. Users agree to the terms in Coinbase’s User Agreement, which contains an arbitration provision that directs disputes to be resolved through binding arbitration. This case concerns a putative class action filed against Coinbase alleging that it failed to replace funds fraudulently taken from users’ accounts, with Abraham Bielski suing on their behalf. The district court denied Coinbase’s motion to compel arbitration; Coinbase thereupon filed an interlocutory appeal to the Ninth Circuit under 9 U.S.C. §16(a), which authorizes an interlocutory appeal from the denial of a motion to compel arbitration. Coinbase also moved to stay the district court proceedings pending resolution of the arbitrability issue on appeal. The district court declined to stay proceedings. Coinbase then filed a motion to stay with the Ninth Circuit, which also declined to issue a stay. In an opinion by Justice Kavanaugh, the Court reversed and remanded.
The Court began by restating the “clear background principle”—articulated in Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982)—against which Congress enacted §16(a): an appeal, including an interlocutory appeal, divests the district court of its jurisdiction and control over the aspects of the case involved in the appeal. For the Court, that principle was enough to resolve this case: “Griggs dictates that the district court must stay its proceedings while the interlocutory appeal on arbitrability is ongoing.” The Court observed that this decision comports with the decisions of most courts as well as the analogous contexts of interlocutory appeals involving qualified immunity and double jeopardy, wherein district courts must automatically stay proceedings.
The Court also found that its ruling comports with the aims of Congress in affording a right to an interlocutory appeal on the issue of arbitrability: “If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery, and the like) would be irretrievably lost—even if the court of appeals later concluded that the case actually had belonged in arbitration all along.” The absence of a stay could also unfairly force parties to settle to avoid ongoing district court proceedings, which the bargain of arbitration sought to avoid. (The Court added that “[t]hat potential for coercion is especially pronounced in class actions, where the possibility of colossal liability can lead to what Judge Friendly called ‘blackmail settlements.’”)
The Court then rejected Bielski’s arguments to the contrary. The Court first dismissed as unfounded by evidence or reality Bielski’s concern that an automatic stay would encourage frivolous appeals. And in any event, said the Court, that concern would be alleviated by district courts’ tools to weed out frivolous appeals such as certification of frivolity or imposition of sanctions. The Court also rejected Bielski’s argument that an automatic stay is inappropriate here because Congress omitted expressly mandating such a stay in §16(a), whereas it explicitly included automatic stays in other statutes concerning interlocutory appeals. The Court explained that Congress had no need to include an automatic stay in §16(a) because it understood that the Griggs rule would apply. Next, the Court rejected Bielski’s argument that an automatic stay would create a special procedural rule for arbitration. Not so, the Court explained, because applying an automatic stay to arbitration comports with other automatic stays in analogous circumstances such as qualified immunity and double jeopardy. And the Court dismissed Biekski’s suggestion that ordinary discretionary stays would sufficiently protect parties’ rights to appellate determination of arbitrability. The Court reasoned that courts all too often incorrectly deny stays after failing to consider litigation-related burdens in proceeding with the litigation pending appeal.
Justice Jackson wrote a dissenting opinion, which was joined in full by Justices Sotomayor and Kagan, and in part by Justice Thomas. In her view, the Court’s decision was wrong primarily because the “mandatory-general-stay rule for interlocutory arbitrability appeals comes out of nowhere”: “today’s majority invents a new stay rule perpetually favoring one class of litigants—defendants seeking arbitration.” In this respect, Justice Jackson, like Bielski himself, focuses on the fact that §16(a) lacks a mandatory stay provision, unlike other provisions of the Federal Arbitration Act and other statutes. This deliberate omission, she insists, shows that Congress did not want an automatic stay in these circumstances.
Justice Jackson also took issue with the Court painting the “background principles” as one that requires a mandatory stay in the face of interlocutory appeals. Rather, Justice Jackson maintained, the background rule is that courts have case-by-case discretion regarding whether or not to issue a stay. In fact, she said, Congress understood that proceedings should not be stayed pending an interlocutory appeal unless the district court exercised its discretion to order a stay, or a statute required it. Justice Jackson criticized the majority’s broad reading of Griggs as requiring a general stay of the entire case before the district court. In her reading, Griggs only narrowly requires a stay of the issue that is pending before the appellate court. Thus, in this case, Griggs would only divest the district court of jurisdiction over a “narrow slice of the case,” namely, the issue of arbitrability itself; Griggs does not stop the district court from adjudicating matters other than arbitrability. Justice Jackson concluded by warning that the Court’s new rule would “upend federal litigation as we know it” because “[a]ware that any interlocutory appeal on a dispositive issue grinds the plaintiff’s case to a halt, defendants would presumably pursue that tactic at every opportunity.”
Yegiazaryan v. Smagin, 22-381. By a 6-3 vote, the Court held that “‘determining whether a plaintiff has alleged a domestic injury,’” as is necessary to maintain a civil RICO action, “’is a context-specific inquiry that turns largely on the particular facts alleged in a complaint.’” In 2014, Vitaly Smagin won an arbitration award in London against Ashot Yegiazaryan for $84 million based on fraud Yegiazaryan committed against Smagin related to a joint real estate venture in Moscow. Seeking to collect, Smagin, a Russian national who lives in Russia, filed an enforcement action against Yegiazaryan, who lives in Beverly Hills, California, in the U.S. District Court for the Central District of California. The district court issued a temporary restraining order and preliminary injunction freezing Yegiazaryan’s assets. Yegiazaryan thereupon concealed millions of dollars in assets through a “a complex web of offshore entities” and other deceptive means. Later, the district court granted Smagin’s motion for summary judgment and entered judgment against Yegiazaryan for $92 million, including interest. The court also issued several post-judgment orders barring Yegiazaryan and those acting at his direction from preventing collection on the judgment. Yegiazaryan also engaged in “intimidation, threats, or corrupt persuasion” to avoid liability and collection.
Smagin then brought a civil suit under the Racketeer Influenced and Corrupt Organizations Act (RICO) against Yegiazaryan, one of his banks, and ten other defendants alleging that they all worked together to frustrate Smagin’s collection on the California judgment through a pattern of wire fraud and other RICO predicate racketeering acts, including witness tampering and obstruction of justice. Smagin seeks $130 million as well as attorney’s fees and treble damages. The district court dismissed the suit on the ground that Smagin failed to plead a “domestic injury” as required by RICO, primarily because Smagin is a citizen and resident of Russia, and “therefore experiences the loss from his inability to collect on his judgment in Russia.” The Ninth Circuit reversed, adopting a “context-specific” approach to the domestic-injury inquiry. Applying that approach, the Ninth Circuit concluded that Smagin’s efforts to execute on a California judgment in California against a California resident were foiled by a pattern of racketeering activity that largely “occurred in, or was targeted at, California” and was “designed to subvert” enforcement of the judgment in California. In an opinion by Justice Sotomayor, the Court affirmed.
The Court began by recounting the precedent on whether RICO applies extraterritorially, which held that a private RICO plaintiff must allege and prove a “domestic injury to its business or property.” See RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016). In determining whether an injury is domestic, the Court agreed with Smagin and the Ninth Circuit that the inquiry is “context-specific”: courts should look to the circumstances surrounding the alleged injury to assess whether it arose in the United States. If those circumstances sufficiently ground the injury in the United States, such that it is clear the injury arose domestically, then the plaintiff has alleged a domestic injury. This approach, the Court explained, is consistent with past precedent and the RICO statute itself because “the compensable injury necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise.”
The Court rejected Yegiazaryan’s proposed bright-line rule under which a plaintiff or his property must reside in the United States to form the basis for a civil RICO claim, with only limited exceptions. That approach, the Court explained, “generates results so counter to comity and so far afield from any reasonable interpretation of what qualifies as a domestic application.” For example, under Yegiazaryan’s proposed approach, a business owner who resides abroad cannot bring a civil RICO claim against a U.S. citizen who destroys his brick-and-mortar business that is located in the United States.
Applying the “context-specific” approach, the Court held that Smagin had sufficiently alleged a domestic injury, even though he resides outside the United States. Smagin alleges that he has been injured in his inability to collect on the California district court’s judgment due to Yegiazaryan’s alleged racketeering activity and other actions he conducted in the United States. Yegiazaryan’s domestic actions to avoid collection included “creating U.S. shell companies to hide his U.S. assets, submitting a forged doctor’s note to a California District Court, and intimidating a U.S.-based witness.” Even if other components of his scheme took place abroad, those “wrongful acts and plans were devised, initiated, and carried out . . . through acts and communications initiated in and directed towards Los Angeles County, California,” with the “central purpose of frustrating enforcement of [the] California judgment.” And the injurious effects of the racketeering scheme manifested in California because they frustrated rights bestowed upon Smagin that exist only in California by the California judgment, including the right to obtain post-judgment discovery, the right to seize assets in California, and the right to seek other appropriate relief from the California District Court.
Justice Alito wrote a dissenting opinion that Justice Thomas joined and Justice Gorsuch joined in part. Justice Alito criticized the majority’s “context-specific” approach as offering “virtually no guidance to lower courts” and risking “sowing confusion in our extraterritoriality precedents.” Justice Alito complained that the majority offered only two factors as relevant to its inquiry—the racketeering conduct that occurred in California and the California rights conferred by the California district court’s judgment. And even then, he continued, the Court failed to describe or explicate the importance of those two. To Justice Alito, other factors, such as Smagin’s residence (Russia), the initial arbitral award (the United Kingdom), or other business relationships underlying the dispute (Russia), could very well be just as important as the two factors the Court used. Justice Alito expressed his concern that the majority’s expansion of RICO could disrupt uniformity among the lower courts as well as international comity. Rather than offering an alternative approach, Justice Alito would have dismissed the writ of certiorari as improvidently granted.
II. CERT GRANTS
Moore v. United States, 22-800. At issue is whether the Sixteenth Amendment―which authorizes Congress to lay “taxes on incomes, from whatever source derived, without apportionment among the several States”―permits Congress to tax unrealized sums without apportionment among the states. The Tax Cuts and Jobs Act, enacted in 2017, included the mandatory repatriation tax (MRT), which requires U.S. shareholders owning 10% or more of a U.S.-taxpayer-controlled foreign corporation (CFC) to pay a one-time tax. The MRT deems the corporation’s retained earnings going back to 1986 to be the 2017 income of their U.S. shareholders in proportion to their ownership stakes in 2017. The shareholders are then taxed on that “income”—which, by definition, has not been distributed to them.
In 2005, petitioners Charles and Kathleen Moore, a married couple, invested $40,000 for an 11% ownership stake in a CFC that supplied tools to farmers in India. Under the MRT, the Moores had about $130,000 in taxable income and an additional $14,000 in income taxes based on their pro rata share of the CRC. The Moores paid their tax liability and then sued the federal government seeking to recover the amount they paid as required by the MRT. They asserted that the MRT is unconstitutional because it imposes a direct tax that is not apportioned, rather than a permissible income tax. The district court granted the government’s motion to dismiss, holding that the MRT is a “taxation of income” falling within Congress’ power under the Sixteenth Amendment. The Ninth Circuit affirmed, reasoning that “[t]he MRT builds upon these U.S. persons’ preexisting tax liability attributing a CFC’s income to its shareholders [by] assign[ing] only a pro-rata share of that income to the [petitioners].” 36 F.4th 930.
In their petition, the Moores argue that the MRT is not a tax on income and therefore is an unconstitutional direct tax lacking apportionment, in contravention of the Sixteenth Amendment. That is because, they argue, the Sixteenth Amendment only allows Congress to levy income taxes on realized gains, that is, profits that the recipient has actually received or drawn. And they maintain that the Court embraced that principle in Eisner v. Macomber, 252 U.S. 189 (1920), which (they say) “has been consistently understood by this Court to stand for the proposition that realization is an essential component of Sixteenth Amendment income.” More precisely, the Moores contend that “income” has been commonly understood as referring to the acquisitions of a taxpayer arising from his or her trade or business, whether on capital or labor. Realization is essential for this definition because, for example, the owner of an appreciated security cannot include the sum gained on the security as part of his or her income until the security is actually sold. The Moores also argue that the Ninth Circuit’s decision contravenes the constitutional structure and history of the Sixteenth Amendment, which was passed solely to permit Congress to levy unapportioned taxes on “income alone.”
The government argues in response that the MRT “plainly qualifies” as a tax on income, which is defined by past precedent as “any ‘accessio[n] to wealth.’” United States v. Burke, 504 U.S. 229, 233 (1992) (quoting Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955)). Prior to the MRT, the government explains, U.S. shareholders owning at least 10% of a CFC were already required to pay taxes on their “pro rata share” of the CFC’s annual income, even when that income had not yet been distributed to the shareholders. Now, under the MRT, those same shareholders must simply pay taxes on their “pro rata share” of the CFC’s deferred income between 1986 and 2017. The government also notes that the CFC here “actually realized gains.” The Moores “thus appear to take issue only with Congress’s choice to tax shareholders on a corporation’s realized gains, rather than taxing the corporation itself on those gains. But petitioners have identified no constitutional ban on Congress disregarding the corporate form to facilitate taxation of shareholders’ income[.]” (Quotation marks omitted.) The government also notes that the MRT resembles other longstanding income taxes such as taxes on proportions of partnership shares as well as analogous requirements on shareholders of S corporations. The government adds that the Moores’ “reliance on Macomber is misplaced because later decisions have severely limited its relevance as a constitutional precedent.”
Rudisill v. McDonough, 22-888. The Court will determine whether a veteran who served separate periods of service under both the Montgomery GI Bill and the Post-9/11 GI Bill is entitled to receive a total of 48 months of education benefits between both programs, without first exhausting the less-generous Montgomery benefit. This case involves two veteran benefit programs and the statutes that govern their interaction. Since the Second World War, Congress has helped veterans pursue higher education. In 1984, Congress passed the Montgomery GI Bill, which provides education assistance to servicemembers who enlisted between 1985 and 2030. In 2008, Congress enacted the Post-9/11 GI Bill, which provides more generous benefits to veterans who actively served after September 11, 2001. Both GI bills provide up to 36 months of benefits. Several statutes control the relationship between the two programs and other veteran benefit statutes. Veterans cannot earn credit towards or receive benefits from multiple programs at the same time, and cannot receive more than a total of 48 months of education benefits. A specific statute, 38 U.S.C. §3327, applies to veterans who are eligible for both Montgomery and Post-9/11 benefits, although the parties differ about its scope. (As discussed below, Rudisill argues that it applies only to veterans with only a single period of qualifying service.) If a veteran subject to the section has unused Montgomery benefits but elects to receive the more generous Post-9/11 benefits, he or she may only receive them for a number of months equal to the number of unused months under the Montgomery program.
Petitioner James Rudisill served several tours in the armed forces. He first enlisted in the Army in 2000 and served until 2002. He later enlisted in the Army National Guard and was deployed in Iraq from 2004 to 2005. He received a commission as an Army officer in 2007 and served in Iraq and Afghanistan until 2011. For his first term, he earned 36 months of Montgomery benefits. He went to college for 25 months and 14 days, leaving him with 10 months and 16 days of benefits. In 2011, he enrolled at Yale Divinity school to become a chaplain. Because he was now eligible for Post-9/11 benefits, he elected to receive the more generous assistance. The Department of Veterans Affairs determined that this election triggered §3327(d) and limited Rudisill to the 10 months and 16 days he had left under the Montgomery program. Rudisill challenged this decision in the Board of Veterans’ Appeals, arguing that the higher cap of 48 months of benefits applied. The Board disagreed, but the Court of Appeals for Veterans Claims reversed. A divided panel of the Court of Appeals for the Federal Circuit affirmed the Court of Veterans Claims, but the full court en banc ruled against Rudisill. 55 F.4th 879.
Rudisill maintains that “according to the text of the Montgomery and Post-9/11 GI Bills,” he “is entitled to benefits under both programs based on his separate and distinct periods of qualifying service.” He argues that the limitation in §3327 applies only when a single term of enlistment would qualify for both Montgomery and Post-9/11 benefits. That cap does not apply to him because he served separate qualifying terms. Without the limitation in §3327(d), he says, the general limitation on 48 total months of educational benefits applies to him. Rudisill adds that Congress enacted the Post-9/11 GI Bill to provide more generous assistance to veterans like himself; it would be anomalous to use the same statute to reduce his eligibility for benefits. To the extent that the relevant statutes are ambiguous, he argues that the pro-veteran canon of construction supports his position.
The government argues that §3327 is clear: if a veteran has used some but not all of his Montgomery benefits and elects to receive the more generous Post-9/11 assistance, “the number of months of entitlement of the individual to educational assistance under [the Post-9/11 program] shall be the number of months equal to . . . the number of months of unused entitlement of the individual under [the Montgomery program].” (Quotations omitted). It rejects Rudisill’s argument that that provision does not apply to veterans who served separate terms of service; “[n]one of the applicable provisions contains any reference to periods of service.” The government further argues that, to the extent that §3327 conflicts with the general 48-month cap, the more specific limitation here applies. And it insists that, because the statutory text is unambiguous, there is no need to resort to the pro-veteran canon
NAAG Center for Supreme Court Advocacy Staff
- Dan Schweitzer, Director and Chief Counsel, (202) 326-6010
- Todd Grabarsky, Supreme Court Fellow
- Van Snow, Supreme Court Fellow
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