July 12, 2023
Volume 30, Issue 17
This Report summarizes opinions issued on June 29 and 30, 2023 (Part I).
Part I: Opinions
Students for Fair Admissions, Inc. v. Presidents and Fellows of Harvard College, 20-1199;Students for Fair Admissions, Inc. v. University of North Carolina, 21-707. By 6-2 and 6-3 votes (Justice Jackson was recused from the Harvard case), the Court held that Harvard and UNC’s race-based admissions programs violate the Equal Protection Clause of the Fourteenth Amendment. Harvard and UNC’s admissions processes take race into account in their various stages. Petitioner Students for Fair Admissions (SFFA) is a nonprofit organization that filed separate lawsuits against Harvard and UNC, arguing that their race-based admissions programs violated, respectively, Title VI of the Civil Rights Act of 1964 and the Equal Protection Clause. (The Court explained in a footnote that it has held that “’discrimination that violates the Equal Protection Clause of the Fourteenth Amendment committed by an institution that accepts federal funds also constitutes a violation of Title VI.’” Because no party challenged that proposition, the Court “evaluate[d] Harvard’s admissions program under the standards of the Equal Protection Clause itself.”) The district courts held bench trials, heard extensive evidence, and concluded that the universities’ admissions processes were permissible. The First Circuit affirmed in the Harvard case; the Court granted certiorari before judgment in the UNC case. In an opinion by Chief Justice Roberts, the Court reversed in both cases.
Citing a brief for the United States in Brown v. Board of Education, 347 U.S. 483 (1954), the Court stated at the outset that the Fourteenth Amendment meant that the Constitution “should not permit any distinctions of law based on race or color.” The Court then described the Court’s treatment of the Equal Protection Clause, from Plessy v. Ferguson, 163 U.S. 537 (1896), through Brown. Brown said that “the right to a public education ‘must be available to all on equal terms.’” And the brief for appellants in Brown said “[t]hat the Constitution is color blind is our dedicated belief.” The Court then extended Brown to other areas of life, “continu[ing] to vindicate the Constitution’s pledge of racial equality.” “These decisions,” said the Court, “reflect the ‘core purpose’ of the Equal Protection Clause: ‘do[ing] away with all governmentally imposed discrimination based on race.’” Any exception to that command must survive strict scrutiny. The Court then traced its affirmative action decisions, from Regents of the University of California v. Bakke, 438 U.S. 265 (1978), through Grutter v. Bollinger, 539 U.S. 306 (2003), which “’endorse[d] Justice Powell’s view [in Bakke] that student body diversity is a compelling state interest that can justify the use of race in university admissions.’” But, noted the Court here, “Grutter expressed marked discomfort with the use of race in college admissions,” declaring (among other things) that race cannot “devolve into ‘illegitimate . . . stereotyp[ing]’” or be used “as a negative―to discriminate against those racial groups that were not the beneficiaries of the race-based preference.” Further, race-based programs must end at some point. And so Grutter concluded by saying that “[w]e expect that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today.”
The Court then got to the crux of its reasoning: Its precedents command that “[u]niversity programs must comply with strict scrutiny, they may never use race as a stereotype or negative, and—at some point—they must end. Respondents’ admissions systems—however well intentioned and implemented in good faith—fail each of these criteria. They must therefore be invalidated under the Equal Protection Clause of the Fourteenth Amendment.” First, “we have required that universities operate their race-based admissions programs in a manner that is ‘sufficiently measurable to permit judicial [review]’ under the rubric of strict scrutiny.” The universities failed to satisfy that burden for “the interests they view as compelling”―such as “’training future leaders’”; “preparing graduates to ‘adapt to an increasingly pluralistic society’”; and “’better educating its students through diversity’”―”are not sufficiently coherent”; “it is unclear how courts are supposed to measure any of these goals.” The Court also faulted the admissions programs “for fail[ing] to articulate a meaningful connection between the means they employ and the goals they pursue.” In this regard, the Court noted that the racial categories themselves are “imprecise” in many ways (such as lumping South Asian and East Asian students together, while categories such as Hispanic “are arbitrary or undefined”). Given all that, the Court found no basis to defer to the university’s academic decisions.
Next, the Court ruled that “[t]he race-based admissions systems that respondents employ also fail to comply with the twin commands of the Equal Protection Clause that race may never be used as a ‘negative’ and that it may not operate as a stereotype.” It is used as a negative because “[c]ollege admissions are zero-sum. A benefit provided to some applicants but not to others necessarily advantages the former group at the expense of the latter.” And “by accepting race-based admissions programs in which some students may obtain preferences on the basis of race alone, respondents’ programs tolerate the very thing that Grutter foreswore: stereotyping.” Both Harvard and UNC’s “admissions process rest[] on the pernicious stereotype that ‘a black student can usually bring something that a white person cannot offer.’” Finally, the Court found that the universities’ “admissions programs also lack a ‘logical end point.’” The universities insisted that their race-based programs will end when there is “meaningful representation and meaningful diversity” on college campuses. But “[b]y promising to terminate their use of race only when some rough percentage of various racial groups is admitted,” respondents “’effectively assure[] that race will always be relevant . . . and the ultimate goal of eliminating’ race as a criterion ‘will never be achieved.’” The Court also observed that the universities had focused on numbers (despite their insistence that they didn’t use numeric benchmarks). For example, at Harvard, “[f]or the admitted classes of 2009 to 2018, black students represented a tight band of 10.0% to 11.7% of the admitted pool. The same theme held true for other minority groups.”
The Court then responded to the dissent. It found “[m]ost troubling” that the dissent would have “a judiciary that picks winners and losers based on the color of their skin. While the dissent would certainly not permit university programs that discriminated against black and Latino applicants, it is perfectly willing to let the programs here continue. In its view, this Court is supposed to tell state actors when they have picked the right races to benefit. Separate but equal is ‘inherently unequal,’ said Brown. 347 U.S., at 495 (emphasis added). It depends, says the dissent.” In closing, the Court said that “nothing in this opinion should be construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise. But, despite the dissent’s assertion to the contrary, universities may not simply establish through application essays or other means the regime we hold unlawful today. . . . ‘[W]hat cannot be done directly cannot be done indirectly.’” (Citations omitted.)
Justice Thomas filed a 58-page concurring opinion. He wrote “separately to offer an originalist defense of the colorblind Constitution; to explain further the flaws of the Court’s Grutter jurisprudence; to clarify that all forms of discrimination based on race—including so-called affirmative action—are prohibited under the Constitution; and to emphasize the pernicious effects of all such discrimination.” On the first point, Justice Thomas said that, “[a]s enacted, the text of the Fourteenth Amendment provides a firm statement of equality before the law.” And “[t]he most commonly held view today . . . is that the Amendment was designed to remove any doubts regarding Congress’ authority to enact the Civil Rights Act of 1866 and to establish a nondiscrimination rule that could not be repealed by future Congresses.” He added that “[t]he earliest Supreme Court opinions to interpret the Fourteenth Amendment did so in colorblind terms.” Justice Thomas disagreed that the 1865 Freedmen’s Bureau Act is inconsistent with this colorblind approach, noting that it “served newly freed slaves alongside white refugees.” And he justified other federal laws cited by the universities as surviving strict scrutiny and remedying a race-based injury the government inflicted.
Justice Thomas next criticized Grutter and approved the Court’s opinion here, saying that the universities cannot draw the necessary link between racial diversity and “educational benefits.” And it is error “to defer to the universities’ own assessments that the alleged benefits of race-conscious admissions programs are compelling,” for a court should not “defer to the views of an alleged discriminator while assessing claims of racial discrimination.” Justice Thomas next criticized affirmative action generally, saying that “Respondents and the dissents argue that the universities’ race-conscious admissions programs ought to be permitted because they accomplish positive social goals. I would have thought that history had by now taught a ‘greater humility’ when attempting to ‘distinguish good from harmful uses of racial criteria.’” Justice Thomas insisted that affirmative action may actually harm those whom it is intended to aid. He pointed to the “mismatch” theory, that these “policies sort at least some blacks and Hispanics into environments where they are less likely to succeed academically relative to their peers.” And he believed that racial preferences “’stamp [blacks and Hispanics] with a badge of inferiority.’” Justice Thomas later asserted that “it is not even theoretically possible to ‘help’ a certain racial group without causing harm to members of other racial groups.” He closed by saying that “[t]he Court’s opinion rightly makes clear that Grutter is, for all intents and purposes, overruled.”
Justice Gorsuch wrote a concurring opinion, which Justice Thomas joined, to “emphasize that Title VI of the Civil Rights Act of 1964” also proscribes race-based admissions programs. Title VI says that “No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” Justice Gorsuch maintained that the plain language of the provision “prohibits a recipient of federal funds from intentionally treating one person worse than another similarly situated person because of his race, color, or national origin. . . . It does not matter if the recipient discriminates in order to advance some further benign ‘intention’ or ‘motivation.’” Justice Gorsuch went on to explain at length that “no one can doubt that both [Harvard and UNC] intentionally treat some applicants worse than others at least in part because of their race.” Justice Gorsuch stated that Bakke erred in equating Title VI with the Equal Protection Clause, saying that “Title VI has ‘independent force, with language and emphasis in addition to that found in the Constitution.’ That law deserves our respect and its terms provide us with all the direction we need.” (Citation omitted.)
Justice Kavanaugh wrote a concurring opinion “to further explain why the Court’s decision today is consistent with and follows from the Court’s equal protection precedents, including the Court’s precedents on race-based affirmative action in higher education.” He noted that the Court had long applied strict-scrutiny to affirmative action programs, and emphasized Grutter’s 25-year time limit. Six Justices in Grutter pointed to that time limit in opinions they wrote or joined. Thus, Grutter “struck a careful balance. The Court ruled that narrowly tailored race-based affirmative action in higher education could continue for another generation. But the Court also explicitly rejected any ‘permanent justification for racial preferences,’ and therefore ruled that race-based affirmative action in higher education could continue only for another generation.” He concluded that the Court here “appropriately respects and abides by Grutter’s explicit temporal limit.”
Justice Sotomayor wrote a 69-page dissenting opinion, which Justices Kagan and Jackson joined. She said early on that “[a]lthough progress has been slow and imperfect, race-conscious college admissions policies have advanced the Constitution’s guarantee of equality and have promoted Brown’s vision of a Nation with more inclusive schools. Today, this Court stands in the way and rolls back decades of precedent and momentous progress.” Justice Sotomayor disagreed that the Constitution is colorblind, observing that “[s]imultaneously with the passage of the Fourteenth Amendment, Congress enacted a number of race-conscious laws to fulfill the Amendment’s promise of equality, leaving no doubt that the Equal Protection Clause permits consideration of race to achieve its goal.” For example, “[b]lack people were the targeted beneficiaries of the [Freedmen’s] Bureau’s programs[.]” She viewed Justice Harlan’s famous statement in his Plessy dissent that “[o]ur constitution is color-blind” in the context of his earlier statement that the Louisiana law at issue perpetuated a “caste” system dominated by “[t]he white race.” Justice Sotomayor viewed Brown the same way, eliminating a caste system that gave black children inferior educations. And the Court then held that “[a]ffirmative steps . . . are constitutionally necessary when mere formal neutrality cannot achieve Brown’s promise of racial equality.” Next, tracing the Court’s race-based admissions programs cases, Justice Sotomayor said that “it has been this Court’s settled law that the Equal Protection Clause of the Fourteenth Amendment authorizes a limited use of race in college admissions in service of the educational benefits that flow from a diverse student body.”
Justice Sotomayor discussed racial inequalities that exist in our society, and Harvard and UNC’s “sordid legacies of racial exclusion.” She went on to defend the universities’ admissions programs under the Court’s precedents. She found both schools’ programs narrowly tailored because, as the district courts found, race-neutral approaches were not workable. For example, they would force Harvard “’to choose between a diverse student body and a reputation for academic excellence.’” Justice Sotomayor criticized the majority’s grounds for rejecting the universities’ programs, stating that “’[e]very one of the arguments made by the majority can be found in the dissenting opinions filed in [the] cases’ the majority now overrules.” Noting that even the majority and concurrences agree that race can be used on occasion (e.g., to remedy past discrimination or if it satisfies strict scrutiny), she said that “what the Court actually lands on is an understanding of the Constitution that is ‘colorblind’ sometimes, when the Court so chooses. Behind those choices lie the Court’s own value judgments about what type of interests are sufficiently compelling to justify race-conscious measures.” Justice Sotomayor insisted that “[n]one of this Court’s precedents . . . requires that a compelling interest meet some threshold level of precision to be deemed sufficiently compelling.” And, disagreeing that the programs disadvantage some students, she said that the universities’ “holistic admissions” “allow them to select students with various unique attributes” and that white students (for example) benefit the most from admissions based on “ALDC”―“‘athletes, legal applicants, applicants on the Dean’s Interest List [primarily relatives of donors], and children of faculty or staff.’” “Stated simply, race is one small piece of a much larger admissions puzzle where most of the pieces disfavor underrepresented racial minorities.” More generally, asserted Justice Sotomayor, “[i]n a society where opportunity is dispensed along racial lines, racial equality cannot be achieved without making room for underrepresented groups that for far too long were denied admission through the force of law, including at Harvard and UNC.”
As to the Court’s allowing applicants to discuss race in their essays, Justice Sotomayor said this “is nothing but an attempt to put lipstick on a pig.” And she insisted that the Court’s demand for increased precision “runs the risk of violating the Court’s admonition that colleges and universities operate their race-conscious admissions policies with no ‘specified percentage[s]’ and no ‘specific number[s] firmly in mind.’” As to the Court’s criticism of the racial categories the universities use, she said that those categories “resemble those used across the Federal Government for data collection, compliance reporting, and program administration purposes, including, for example, by the U.S. Census Bureau.” Turning to Grutter’s expiration date, Justice Sotomayor said it was merely an “’expect[ation]’”; “[a] temporal requirement that rests on the fantasy that racial inequality will end at a predictable hour is illogical and unworkable.” Justice Sotomayor went on to criticize Justice Thomas’s practical criticisms of race-conscious admissions policies, asserting (for example) that the mismatch theory has been “debunked.” Justice Sotomayor closed by saying that “[t]he devastating impact of this decision cannot be overstated. The majority’s vision of race neutrality will entrench racial segregation in higher education because racial inequality will persist so long as it is ignored.”
Finally, Justice Jackson filed a dissenting opinion, which Justices Sotomayor and Kagan joined. Justice Jackson wrote “separately to expound upon the universal benefits of considering race in this context, in response to” the “suggestion . . . that it is unfair for a college’s admissions process to consider race as one factor in a holistic review of its applicants.” She said that “[g]iven the lengthy history of state-sponsored race-based preferences in America, to say that anyone is now victimized if a college considers whether that legacy of discrimination has unequally advantaged its applicants fails to acknowledge the well-documented ‘intergenerational transmission of inequality’ that still plagues our citizenry.” Justice Jackson walked through the history of slavery to Jim Crow, with discrimination against blacks sanctioned by the government and the Court. This includes federal programs designed to facilitate home ownership that excluded blacks, and thereby locked black people “’out of the greatest mass-based opportunity for wealth accumulation in American history.’” And the “race-based gaps that first developed centuries ago are echoes from the past that still exist today. By all accounts they are stark.” She pointed to racial gaps in wealth, income, and health. “Understood properly, then, what SFFA caricatures as an unfair race-based preference cashes out, in a holistic system, to a personalized assessment of the advantages and disadvantages that every applicant might have received by accident of birth plus all that has happened to them since.” And she declared that, “[w]ith let-them-eat-cake obliviousness, today, the majority pulls the ripcord and announces ‘colorblindness for all’ by legal fiat. But deeming race irrelevant in law does not make it so in life. And having so detached itself from this country’s actual past and present experiences, the Court has now been lured into interfering with the crucial work that UNC and other institutions of higher learning are doing to solve America’s real-world problems.”
303 Creative LLC v. Elenis, 21-476. By a 6-3 vote, the Court held that Colorado unconstitutionally compels speech when it requires a website designer to design websites for same-sex marriages, to which she objects for religious reasons. Lorie Smith founded her business, 303 Creative LLC, to offer website and graphic design, among other services. She recently decided to offer services for couples seeking customized websites for their weddings. Although she has yet to offer those services, “[s]he worries that, if she does so, Colorado will force her to express views with which she disagrees.” Namely, “she worries that, if she enters the wedding website business, the State will force her to convey messages inconsistent with her belief that marriage should be reserved to unions between one man and one woman.” Smith therefore filed a federal lawsuit seeking an injunction to prevent the state from requiring her to create wedding websites for same-sex marriages, as would be required by the Colorado Anti-Discrimination Act (CADA). During the lawsuit, Smith and the state stipulated to, among other things, the facts that Smith “will gladly create custom graphics and websites” for clients of any sexual orientation; that all of her design services, including her planned wedding websites, are “expressive”; that her website designs are “original, customized” creations that “contribut[e] to the overall messages” her business conveys”; and that her wedding websites will “express Ms. Smith’s and 303 Creative’s message celebrating and promoting” her view of marriage. The district court and Tenth Circuit ruled against Smith. The Tenth Circuit ruled that Smith’s planned wedding websites constituted “pure speech” such that Colorado had to satisfy strict scrutiny before compelling her to produce speech. But the court concluded the state carried its burden. In an opinion by Justice Gorsuch, the Court reversed.
The Court pointed to its decisions recognizing and applying the “foundational principles” that freedom to speak and think is indispensable and at the heart of the First Amendment. See West Virginia Bd. of Ed. v. Barnette, 319 U.S. 624 (1943); Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc., 515 U.S. 557 (1995); Boy Scouts of America v. Dale, 530 U.S. 640 (2000). These cases and others establish that “the First Amendment protects an individual’s right to speak his mind regardless of whether the government considers his speech sensible and well intentioned or deeply ‘misguided,’” and that “the government may not compel a person to speak its own preferred message.” Applying those principles here (and relying on the parties’ stipulations), the Court found that Smith seeks to create “pure speech”; that the wedding sites she hopes “to create involve her speech”; and that “Colorado seeks to compel speech Ms. Smith does not wish to provide.” This led to the Court’s conclusion: “If she wishes to speak, she must either speak as the State demands or face sanctions for expressing her own beliefs, sanctions that may include compulsory participation in ‘remedial . . . training,’ filing periodic compliance reports as officials deem necessary, and paying monetary fines. Under our precedents, that ‘is enough,’ more than enough, to represent an impermissible abridgment of the First Amendment’s right to speak freely.” (Citations omitted.) Any other ruling, found the Court, would mean that the “government could require ‘an unwilling Muslim movie director to make a film with a Zionist message,’ or ‘an atheist muralist to accept a commission celebrating Evangelical zeal,’ so long as they would make films or murals for other members of the public with different messages.” But “the First Amendment tolerates none of that.”
The Court stated that “we do not question the vital role public accommodations laws play in realizing the civil rights of all Americans,” and that it “is entirely ‘unexceptional’” that many states “expressly prohibit discrimination on the basis of sexual orientation.” But the “Court has also recognized that no public accommodations law is immune from the demands of the Constitution.” The Court then rejected Colorado’s alternative theory. “To comply with Colorado law, the State says, all Ms. Smith must do is repurpose websites she will create to celebrate marriages she does endorse for marriages she does not. She sells a product to some, the State reasons, so she must sell the same product to all.” And so any burden on Smith’s speech is “incidental” to a regulation of conduct. The Court found that theory to be inconsistent with the stipulations, which declared that Smith intended to create “customized and tailored” speech for each couple. “As the case comes to us,” said the Court, “Colorado seeks to compel just the sort of speech that it tacitly concedes lies beyond the reach of its powers.” Then, referring to hypotheticals posed by the dissent “about photographers, stationers, and others,” the Court said that “determining what qualifies as expressive activity protected by the First Amendment can sometimes raise difficult questions. But this case presents no complication of that kind.”
Justice Sotomayor issued a dissenting opinion, which Justices Kagan and Jackson joined. Justice Sotomayor wrote that, “[t]oday, the Court, for the first time in its history, grants a business open to the public a constitutional right to refuse to serve members of a protected class.” But, she declared, “Our Constitution contains no right to refuse service to a disfavored group.” Justice Sotomayor noted that public accommodations laws “ensure[] ‘equal access to publicly available goods and services,’” and “ensure[] equal dignity in the common market.” “Discrimination is not simply dollars and cents, hamburgers and movies; it is the humiliation, frustration, and embarrassment that a person must surely feel when he is told that he is unacceptable as a member of the public because of his [social identity].” (Quotation marks omitted.) Preventing those evils, she said, “is a compelling state interest ‘of the highest order.’” Justice Sotomayor then walked through cases where the Court rejected “legal claims of rights to discriminate, including claims based on the First Amendment.”
Turning to Smith’s claim here, Justice Sotomayor said that the public accommodations law “does not directly regulate petitioners’ speech at all.” That is because public accommodations laws like Colorado’s do not dictate the seller’s offerings. “The company could, for example, offer only wedding websites with biblical quotations describing marriage as between one man and one woman.” But having decided to offer those websites, it must offer them to all “without regard to customers’ protected characteristics.” “Any effect on the company’s speech is therefore ‘incidental’ to the State’s content-neutral regulation of conduct.” Justice Sotomayor added that many artists do not hold out their goods and services to the public, and “even if the company offers its goods and services to the public, it remains free under state law to decide what messages to include or not to include.” She therefore would hold that the O’Brien standard applies, and that CADA easily satisfies it “because the law’s application ‘promotes a substantial government interest that would be achieved less effectively absent the regulation.’” Justice Sotomayor also criticized the majority for saying that “petitioners discriminate based on message not status” and that Smith will sell her services to anyone, including same-sex couples. Said Justice Sotomayor, “[t]his logic would be amusing were it not so embarrassing. I suppose the Heart of Atlanta Motel could have argued that Black people may still rent rooms for their white friends.” Justice Sotomayor insisted that the “symbolic effect of the decision is to mark gays and lesbians for second-class status,” and asked how it would apply to a website designer who does not want to create a website for an interracial couple and to other services, such as stationers, retail store photographers, and funeral homes.
Biden v. Nebraska, 22-506. By a 6-3 vote, the Court held that the Higher Education Relief Opportunities for Students Act of 2003 (the HEROES Act) does not authorize the Biden Administration’s cancellation of approximately $430 billion in student debt. Enacted in 2003, the HEROES Act extended prior law such that the Secretary of Education “may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Higher Education Act of 1965] as the Secretary deems necessary in connection with a war or other military operation or national emergency.” 20 U.S.C. §1098bb(a)(1). The Secretary may issue waivers or modifications only “as may be necessary to ensure” that “recipients of student financial assistance under title IV of the [Education Act] who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals.” §1098bb(a)(2)(A). In response to the COVID-19 pandemic, the Secretary invoked the HEROES Act initially to suspend loan repayments and interest accrual for all federally held student loans. In 2022, the Secretary went further, invoking the Act to discharge the balance of student loans up to $10,000 or $20,000 per borrower for borrowers with an adjusted gross income below $125,000 in either 2020 or 2021. Six states filed suit in federal district court, claiming that the plan exceeded the Secretary’s authority under the Act. The district court held that the states lacked standing to challenge the plan and dismissed the suit. On appeal, the Eighth Circuit issued a nationwide preliminary injunction pending the appeal’s resolution. The Court granted certiorari before judgment. In an opinion by Chief Justice Roberts, the Court reversed the district court’s ruling and remanded.
The Court first held that the plaintiff State of Missouri has standing because the Secretary’s plan harms a Missouri-created entity, the Missouri Higher Education Loan Authority (MOHELA). “Missouri created MOHELA as a nonprofit government corporation to participate in the student loan market.” The Court found that, because MOHELA could no longer service accounts discharged by the plan, it would lose about $44 million in fees it otherwise would have earned. The Court concluded that this “financial harm is an injury in fact directly traceable to the Secretary’s plan.” And, critically, the Court further concluded that “[t]he plan’s harm to MOHELA is also a harm to Missouri.” That is because “MOHELA is a ‘public instrumentality’ of the State” established to perform an “’essential public function’”; “[i]ts profits help fund education in Missouri”; it “is subject to the States’ supervision and control” because it is governed by state officials and appointees; and it may be dissolved by the state. True, acknowledged the Court, MOHELA “has a legal personality separate from the State”; yet that is true of every government corporation, and they “nonetheless remain[] ‘(for many purposes at least) part of the Government itself.’” In short, “[w]here a State has been harmed in carrying out its responsibilities, the fact that it chose to exercise its authority through a public corporation it created and controls does not bar the State from suing to remedy that harm itself.”
The Court next turned to the merits and concluded that the Secretary’s authority to “waive or modify” education provisions does not give him the authority “to rewrite that statute from the ground up.” The Court first ruled that “statutory permission to ‘modify’ does not authorize ‘basic and fundamental changes in the scheme’ designed by Congress. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218, 225 (1994). Instead, that term carries ‘a connotation of increment or limitation,’ and must be read to mean ‘to change moderately or in minor fashion.’ Ibid.” All told, “[t]he authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them.” This can be seen in the Secretary’s previous invocations of the HEROES Act, which involved minor procedural changes such as “reducing the number of tax forms borrowers are required to file” and “extending time periods in which borrowers must take certain actions.” Here, by contrast, the Secretary purported to “create[] a novel and fundamentally different loan forgiveness program.”
Nor, held the Court, is the plan a valid exercise of the Secretary’s power under the HEROES Act to “waive” education provisions. Again, observed the Court, “the Secretary’s invocation of the waiver power here does not remotely resemble how it has been used in prior occasions.” Nor does the Secretary even “identify any provision he is actually waiving. No specific provision of the Education Act establishes an obligation on the part of student borrowers to pay back the government.” The Court disagreed that the Secretary could add new provisions setting out the income-based eligibility requirements for a loan discharge, saying that such additions “cannot be said to be a ‘waiver’ of the old in any meaningful sense.” “What the Secretary has actually done is draft a new section of the Education Act from scratch by ‘waiving’ provisions root and branch and then filling the empty space with radically new text.” Lastly, the Court rejected the Secretary’s reliance on a provision directing the Secretary to publish a notice in the Federal Register “includ[ing] the terms and conditions to be applied in lieu of such statutory and regulatory provisions” as the Secretary has waived or modified.” (Emphasis added by Court.) The Court found this “humdrum reporting requirement” to be “’a wafer-thin reed on which to rest such sweeping power.’”
Finally, the Court held that application of the major questions doctrine provides additional support for its conclusion. Under that doctrine, the Court should hesitate to conclude that Congress granted authority given the authority’s “history and breadth” and “economic and political significance.” That doctrine applies here, the Court ruled, given that the plan claims powers significantly greater than prior invocations of the Act; the “Government’s reading of the HEROES Act” would give the Secretary “virtually unlimited power to rewrite the Education Act”; the $400+ billion the plan costs “amounts to nearly one-third of the Government’s $1.7 trillion in annual discretionary spending”; and Congress has debated how to address student debt. The Court rejected the Secretary’s contention that the major questions doctrine should be limited to agency actions involving the power to regulate, not spend. That line makes no sense, held the Court, given that control of the purse is among Congress’s most important powers.
Justice Barrett filed a concurring opinion to explain why she believes the major questions doctrine is justified. She noted that “[s]ubstantive canons are rules of construction that advance values external to a statute,” and that strong versions of those canons (such as some clear-statement requirements) are in tension with textualism. And she noted that some observers “have characterized the major questions doctrine as a strong-form substantive canon designed to enforce Article I’s Vesting Clause.” But she would not. Rather, Justice Barrett concluded that “the doctrine serves as an interpretive tool reflecting ‘common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency.’” A textualist believes that “context is [] relevant to interpreting the scope of a delegation,” and in ordinary English, the larger the ask, the more specific the request generally must be. “In my view, the major questions doctrine grows out of the same commonsense principles of communication”; the “expectation of clarity is rooted in the basic premise that Congress normally ‘intends to make major policy decisions itself, not leave those decisions to agencies.’” Turning to the Court’s opinion here, the Court’s application of the major questions doctrine “does not ‘trump’ statutory text”; “it gives Congress’s words their best reading.”
Justice Kagan filed a dissenting opinion, which Justices Sotomayor and Jackson joined. Justice Kagan disagreed with the majority on both standing and the merits. As to standing, she asserted that MOHELA―not Missouri―is the proper plaintiff. That is because, among other things, MOHELA’s revenue loss does not get passed onto the state; MOHELA possesses its own power to “sue and be sued” in its own name”; MOHELA has a “[s]eparate legal personality” from the state; and the Missouri Supreme Court held that a near-identical entity “is not the State” and its activities are not state activities. Given all this, said Justice Kagan, the usual rule against third-party standing should have barred the State of Missouri from invoking MOHELA’s injuries. She also asserted that no one thinks that Missouri brought this suit (along with the other five states) because it cares about MOHELA’s revenue losses; it brought suit “because it thinks the Secretary’s loan cancellation plan makes for terrible, inequitable, wasteful policy.” And that’s not a basis for Article III standing.
Turning to the merits, Justice Kagan asserted that if the HEROES Act’s predicate conditions are met, “the Secretary’s delegated authority is capacious.” After reviewing dictionary definitions, she interpreted “[t]o ‘waive or modify’ a requirement [to] mean[] to lessen its effect, from the slightest adjustment up to eliminating it altogether. Of course, making such changes may leave gaps to fill. So the statute says what is anyway obvious: that the Secretary’s waiver/modification power includes the ability to specify ‘the terms and conditions to be applied in lieu of such [modified or waived] statutory and regulatory provisions.’ §1098bb(b)(2).” Applied here, once the statutory preconditions were met, the Secretary took permissible action. “[H]e scratched the conditions for loan discharge contained in several provisions, . . . then altered those provisions by specifying different conditions, which opened up loan forgiveness to more borrowers.” Justice Kagan accused the majority of “picking the statute apart, and addressing each segment of Congress’s authorization as if it had nothing to do with the others.” In particular, she faulted the majority’s readings of “modify” and “waiver” so as to give the Secretary “power to wholly eliminate a requirement, as well as to relax it just a bit, but nothing in between.” That, she said, would be an “insane” law.
Finally, Justice Kagan faulted the majority’s use of the major questions doctrine, which she said improperly places policy judgments in the hands of the Court rather than Congress and the President. She said the doctrine “works not to better understand―but instead to trump―the scope of a legislative delegation.” She distinguished past exercises of the doctrine, noting that “[s]tudent loans are in the Secretary’s wheelhouse” and that the very purpose of the HEROES Act was to grant relief from student-loan obligations in cases of emergency. Justice Kagan also noted that past invocations of the Act “were modest because the precipitating emergencies were more modest”; not so here.
Groff v. DeJoy, 22-174. Title VII of the Civil Rights Act of 1964 requires employers to accommodate the religious practice of their employees unless doing so would impose an “undue hardship on the conduct of the employer’s business.” The Court unanimously held that lower courts have erred in reading Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977), as defining “undue hardship” to mean any effort or cost that is “more than . . . de minimis.” Rather, the Court held here, “it is enough to say that an employer must show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business.”
Gerald Groff is an Evangelical Christian who believes for religious reasons that Sunday should be devoted to worship and rest and not “secular labor.” In 2012, he began working with the U.S. Postal Service as a Rural Carrier Associate, a job that required him to assist regular carriers in the delivery of mail. At first the job did not involve working on Sunday, but in 2013 USPS entered into an agreement with Amazon to begin Sunday deliveries, and in 2016 USPS signed a memorandum of understanding with the relevant union regarding work on Sunday. As a result, Groff was required to work on Sunday, which he refused. USPS made other arrangements to cover his Sunday shifts, but he received “progressive discipline.” Groff resigned and then sued under Title VII, asserting that USPS could have accommodated his Sunday Sabbath practice “without undue hardship on the conduct of [USPS’s] business.” The district court granted summary judgment in favor of USPS. The Third Circuit affirmed, holding that it was bound by Hardison, which it interpreted to mean that an employer’s bearing more than a “de minimis cost” to provide a religious accommodation is an “undue hardship.” The Third Circuit found that exempting Groff from Sunday work posed an undue hardship “on his coworkers, disrupted the workplace and workflow, and diminished employee morale.” In an opinion by Justice Alito, the Court vacated and remanded, clarifying the “undue hardship” standard for Title VII religious-accommodation claims.
The Court began with a summary of the Title VII provision barring religious discrimination and the Equal Employment Opportunity Commission’s regulations and guidance regarding that prohibition. The Court also recounted Hardison in detail, noting that “[i]n the briefs and at argument, little space was devoted to the question of determining when increased costs amount to an ‘undue hardship’ under the statute, but a single, but oft-quoted, sentence in the opinion of the Court, if taken literally, suggested that even a pittance might be too much for an employer to be forced to endure. The line read as follows: ‘To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship.’” The Court here said that “[a]lthough this line would later be viewed by many lower courts as the authoritative interpretation of the statutory term ‘undue hardship,’ it is doubtful that it was meant to take on that large role. In responding to Justice Marshall’s dissent, the [Hardison] Court described the governing standard quite differently, stating three times that an accommodation is not required when it entails ‘substantial’ ‘costs’ or ‘expenditures.’” The Court observed that there is a large gap between “more than de miminis” and “substantial costs.”
So, to clarify the “undue hardship” standard, the Court now held that “undue hardship” is shown when a “burden is substantial in the overall context of an employer’s business.” This “fact-specific inquiry,” explained the Court, “comports with both Hardison and the meaning of ‘undue hardship’ in ordinary speech.” The Court declined the parties’ suggestions as to “further steps” to “elaborate on” that standard. Groff asked the Court to “instruct lower courts to ‘draw upon decades of ADA caselaw,’” while the government “requests that we opine that the EEOC’s construction of Hardison has been basically correct.” The Court found that both suggestions “go too far,” though it noted that it has “no reservation[] in saying that a good deal of the EEOC’s guidance in this area is sensible and will, in all likelihood, be unaffected by our clarifying decision today.”
The Court also clarified that “not all ‘impacts on coworkers . . . are relevant,’ but only ‘coworker impacts’ that go on to ‘affec[t] the conduct of the business.’” That said, “a hardship that is attributable to employee animosity to a particular religion, to religion in general, or to the very notion of accommodating religious practice cannot be considered ‘undue.’” Next, “Title VII requires that an employer reasonably accommodate an employee’s practice of religion, not merely that it assess the reasonableness of a particular possible accommodation or accommodations.” Thus, it “would not be enough for an employer to conclude that forcing other employees to work overtime would constitute an undue hardship. Consideration of other options, such as voluntary shift swapping, would also be necessary.” The Court remanded to the lower courts to engage in this inquiry in the first instance under the clarified “undue burden standard.”
Justice Sotomayor, joined by Justice Jackson, wrote a three-page dissent to underscore that the Court is not overruling Hardison, but merely clarifying its “undue hardship” standard. She emphasized that declining Groff’s request to overrule Hardison is a “wise choice” because “stare decisis has ‘enhanced force’ in statutory cases,” especially here where Congress has revised Title VII multiple times since Hardison was decided. Justice Sotomayor also noted that, despite Groff’s arguments to the contrary, courts can still consider the hardship the religious accommodation imposes upon co-workers.
AbitronAustria GmbH v. Hetronic International, Inc., 21-1043. The Court held that 15 U.S.C. §§1114(1)(a) and 1125(a)(1), two provisions of the Lanham Act that prohibit trademark infringement, “are not extraterritorial and . . . extend only to claims where the claimed infringing use in commerce is domestic.” The Court further held that, in determining when claims involve “domestic” applications of these provisions, “the proper test requires determining the provision’s focus and then ascertaining whether [the party] can establish that the conduct relevant to [that] focus occurred in the United States.” (Quotation marks omitted.) The Lanham Act governs the use of trademarks in commerce. Two provisions provide for civil liability against those who use marks in a way “likely to cause confusion, or to cause mistake, or to deceive.” For purposes of the Act, “commerce” means “all commerce which may lawfully be regulated by Congress.”
Hetronic is a U.S. company that manufactures radio remote controls for construction equipment and sells them in distinctive trade dress in more than 45 countries. Abitron was a licensed distributor of Hetronic equipment. Abitron reverse-engineered the equipment and sold the resulting products with Hetronic branding. It mostly sold its products in Europe, but sold some in the United States. Hetronic sued Abitron in the United States under the Lanham Act. A jury awarded Hetronic $96 million for Abitron’s use of its marks, including sales made outside of the U.S. The district court enjoined Abitron from selling infringing products anywhere in the world. The Tenth Circuit narrowed the injunction somewhat on appeal but otherwise affirmed. It concluded that the Lanham Act applied to all of Abitron’s conduct because even its foreign sales had an impact in the U.S. In an opinion by Justice Alito and joined by Justices Thomas, Gorsuch, Kavanaugh, and Jackson, the Court vacated and remanded.
The Court began with the presumption against extraterritoriality―unless Congress says otherwise, courts assume that legislation applies only within the United States. Under this principle, courts first ask if Congress “affirmatively and unmistakably instructed that the provision at issue should apply to foreign conduct.” (Quotation marks omitted). If Congress did not, a plaintiff may still proceed if he or she “seeks a (permissible) domestic,” as opposed to an impermissible “foreign application of the provision.” In the Court’s view, courts making this second determination start by deciding what the statute focuses on, then consider whether “the conduct relevant to that focus occurred in United States territory.” (Quotations omitted).
At the first step, the Court concluded that Congress had not clearly authorized an extraterritorial application of the relevant provisions of the Lanham Act. Hetronic argued that Congress had done so by defining “commerce” to include foreign commerce. It noted that the definition (“all commerce” that Congress may regulate) was far broader than other “boilerplate” definitions in other statutes. The Court rejected this argument; the Court has held that even express references to “foreign commerce” were insufficient to rebut the presumption against extraterritoriality.
At the second step, the Court noted the parties’ different positions on the “focus” of the relevant Lanham Act provisions. Abitron argued that they “focus on preventing infringing use of trademarks,” Hetronic thought they “protect[ed] the goodwill of mark owners and on prevent[ing] consumer confusion,” while the government looked only to consumer confusion. The Court did not expressly choose between these competing foci, finding that the “ultimate question regarding permissible domestic application” turns “on the location of the conduct relevant to the focus.” From the text and context of the relevant provisions, the Court concluded that the relevant conduct for any suit under them is the infringing mark’s “use in commerce.”
The Court paused to dispute the concurrence’s position that the second extraterritoriality step should turn solely on the “likelihood of consumer confusion in the United States.” In the Court’s view, precedent established that it must consider where the conduct occurred. The concurrence’s view would be difficult for lower courts to apply because, using likelihood of consumer confusion as a benchmark, “almost any claim involving exclusively foreign conduct could be repackaged as a ‘domestic application.’” The Court believed that the concurrence’s approach “threatens to negate the presumption against extraterritoriality.” This was especially concerning in the context of trademark law which, “[i]n nearly all countries, including the United States” is entirely territorial―“each country is empowered to grant trademark rights and police infringement within its borders.” It noted that various international treaties stand for this proposition and that an amicus brief filed by the European Commission highlighted the dangers of displacing foreign trademark enforcement regimes.
Justice Jackson concurred. She agreed that the provisions were not extraterritorial and that courts should focus on the infringing use in commerce. She wrote separately to discuss “what it means to ‘use [a trademark] in commerce,’” and “how that meaning guides” the extraterritoriality inquiry. A trademark may be used “wherever the mark serves its source-identifying function” at any point in commerce. She provided two examples involving counterfeit handbags to illustrate this principle. She clarified that she joined the majority “[g]uided by this understanding of ‘use in commerce.’”
Justice Sotomayor, joined by the Chief Justice and Justices Kagan and Barrett, concurred in the judgment. The concurrence agreed that the Tenth Circuit’s decision was incorrect, and further agreed that Congress did not clearly authorize an extraterritorial application of the Lanham Act. But it disagreed with the majority’s treatment of the second step of the extraterritoriality analysis. In the concurrence’s view, the second step turns on the “focus” of the statute. It agreed with the government that the relevant provisions focus on consumer confusion. Those provisions may be applied domestically when consumer confusion in the United States is “likely to occur,” even if the infringing conduct occurred elsewhere. The concurrence criticized the majority for “skip[ping] over” this step and engrafting a new conduct-only inquiry onto the analysis. Doing so misread precedent and, by looking only to conduct, “thwarts Congress’s ability to regulate important interests or parties.” (Quotation marks omitted).
The concurrence criticized and disputed the majority’s “abstract policy considerations.” Although courts might have to adopt a “nuanced test” to tell when conduct creates a likelihood of confusion for domestic consumers, this is something that Congress expressly instructed them to do. Other elements of a plaintiff’s prima facie case, including the requirement of proximate causation, would stop the statute from applying too broadly. In the concurrence’s view, applying the Lanham Act to conduct that caused domestic consumer confusion would not upset the territorial nature of trademarks; foreign governments would be free to enforce their trademark rights and combat confusion in their own territory. Broader interpretations of the Lanham Act had not caused international discord, and other doctrines, like personal jurisdiction or forum non conveniens, could further limit its applicability to foreign conduct.
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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