Commercial Litigation Update

In its first decision on the merits in the current term, a unanimous U.S. Supreme Court (per Jackson, J.) has held in Bouarfa v. Mayorkas that revocation of an approved visa petition under 8 U.S.C. §1155, based on a sham-marriage determination by the Secretary of Homeland Security (the “Secretary”), is the kind of discretionary decision that falls within the purview of 8 U.S.C. §1252(a)(2)(B)(ii), which strips federal courts of jurisdiction to review certain actions “in the discretion of ” the agency.

The Court held that Section 1155 is a "quintessential grant of discretion." Thus, the Secretary “may” revoke a previously approved visa petition “at any time” for what the Secretary deems “good and sufficient cause.”

This broad grant of authority “fairly exudes deference” to the Secretary. This conclusion is similar to that reached as to other statutes held to “commi[t]” a decision “to agency discretion.” Webster v. Doe, 486 U. S. 592, 600. Following its recent line of decisions (here, unusually, unanimously), the Court takes a literal view of the text, holding that "Congress did not impose specific criteria or conditions limiting this authority, nor did it prescribe how or when the Secretary must act."

On what was the next-to-last day of the term, a 6-3 Supreme Court delivered a very lengthy opinion written by the Chief Justice, overruling 40 years of jurisprudence embodied in the Chevron doctrine that had been the bedrock of administrative law.

In Loper Bright Enterprises v. Raimondo (which also governs Relentless, Inc. v. Department of Commerce), the Court held that “the Administrative Procedure Act [APA] requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Accordingly, Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984) is overruled.”

Holding that Chevron deference cannot be squared with the APA, the Chief Justice traces the departure from the traditional role of the judiciary in making independent determinations of statutory meaning. Here, the question was “whether an Environmental Protection Agency (EPA) regulation was consistent with the term ‘stationary source’ as used in the Clean Air Act. In answering the question, the courts below followed Chevron’s familiar two-step approach, first discerning “whether Congress ha[d] directly spoken to the precise question at issue.” If congressional intent is clear, that ends things, but where “the statute [was] silent or ambiguous with respect to the specific issue” under consideration, the court was required to defer to the agency if it had offered “a permissible construction of the statute.”

The Supreme Court has issued its last three decisions of the 2023 term, and its summer recess has begun.

However, while the Justices and Court personnel might be at apparent rest, the future effect of today’s decisions will be significant, both immediately and for years to come.

The Court led the day, as expected, with the long-awaited decision in Trump v. United States. Given the broad scope of the remand of the case and the Court’s 6–3 conservative/liberal split, most of the headlines likely will suggest that Trump has prevailed, especially because of conservative Justices that he himself had appointed. Indeed, though most of his arguments have been rejected by the Chief Justice and those who concurred with him, the former president has gained the thing he likely most wanted: delay. There is no way conceivable, at least to this writer, that this case can be resolved before the upcoming presidential election. Whatever the ultimate resolution of the matter might be, that alone will raise a host of new questions, especially if the former president is reelected. But those are matters more immediately for the political arena, and this blog is about the law and the effects upon which the decision might have longer-term implications. So, let’s look at what the Court says the law is.

The Supreme Court’s day started with the specter of yet another leak of a reproductive rights decision having occurred.

The day ended with the Court’s actually deciding the case, providing a small bit of good news for the pro-choice side of things and representative, as was the case with the recent gun decision, of a tendency among certain Justices, e.g., Barrett and Kavanaugh, to temper earlier rulings.

It also appears that the Court won’t decide Trump v. U.S. until after tonight’s presidential campaign debate. The Loper case, revisiting the Chevron doctrine, also remains pending.

There will be decisions issuing tomorrow, the notional last day of the term, but it will surprise no one if the term is extended into July.

The Supreme Court started the day with 14 decisions yet to deliver and only reduced the number by two—neither of them the Trump immunity case nor the Loper case concerning the future of the agency deference doctrine of Chevron. There will, however, be decisions issuing both tomorrow and Friday, and perhaps an extension of the term for a day or two next week.

As for today’s activity, we start with Murthy v. Missouri, a 6–3 decision. In what might interest Court observers who have suggested cracks in what I’ve long said is an overhyped view of a unified conservative front, Justice Barrett wrote the majority opinion and was joined by two other “conservatives,” the Chief Justice and Justice Kavanaugh, along with the three liberals. The increasingly testy Justice Alito was joined by Justices Thomas and Gorsuch in dissent. The readers of this blog are most certainly aware of the controversy concerning the political and health effects of false or misleading information posted on social media platforms. Under their long-standing content-moderation policies, the platforms have acted to suppress certain categories of speech judged to be false or misleading.

With the current term of the Supreme Court soon to end, the run of decisions in which the Justices have been unanimous or close to it is being displaced by the “tougher” ones, in which there is substantial disagreement.

That disagreement is not uniformly the product of what, to many, is the expected split among jurisprudential conservatives and liberals. Indeed, some of the matchups are decidedly less predictable. This blog has discussed the now-frequent agreement between Justices Kagan and Kavanaugh, as well as the civil liberties-based independence of Justice Gorsuch. More recently, we have seen a critical reexamination of the doctrine of originalism led by Justice Barrett, and today somewhat qualified by a Second Amendment case.

With a significant mass of cases left to decide and only a few weeks to issue the opinions, the U.S. Supreme Court has reduced the backlog by four today. None of them, however, resolves the future of Chevron deference or the criminal prosecution vulnerability of the former president.

Instead, the Court has given us opinions concerning retaliatory or selective arrest, malicious prosecution, and the permissible scope of expert opinion concerning the mental state of drug smugglers—all important issues in criminal jurisprudence. The Court also decided a case of importance, if only to those who earn income from American-controlled foreign businesses and those who advise them. The lineups of Justices deciding these cases also might be of interest, particularly, as we have discussed in the past, finding Justice Kavanaugh and Justice Kagan in accord.

Splitting along predictable philosophical lines, the Supreme Court held today in Garland v. Cargill that the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) exceeded its statutory authority by issuing a rule that classifies a bump stock as a “machinegun” under 26 U.S.C. §5845, a provision of the National Firearms Act of 1934. Justice Thomas wrote the majority opinion, which was joined by all the Court’s conservatives. Justice Sotomayor, joined by Justices Kagan and Jackson, dissented.

It should be noted that while this decision, negating a Trump-era gun control regulation, certainly will be a centerpiece in the continuing political debate concerning firearms, the Cargill case is not a Second Amendment case. Like a chain of recent cases concerning the scope of congressional delegation to Executive Branch agencies and the clarity of text, this case, however consequential to public safety, is dependent upon the wording of the law that Congress wrote and the ATF’s authority to interpret it.

Of the Supreme Court opinions issued today, the one that will draw the greatest public attention is Food and Drug Administration v. Alliance for Hippocratic Medicine, unanimously holding that the pro-life organizational plaintiffs in the underlying cases lacked Article III standing to challenge the Food and Drug Administration’s (FDA’s) actions regarding the regulation of mifepristone. Used in conjunction with another medicine, mifepristone, also known as RU 486, is taken to end a pregnancy within 70 days of conception. The opinion also resolved the companion case of Danco Laboratories, L.L.C. v. Alliance for Hippocratic Medicine.

What might surprise some observers is that not only was the decision unanimous but the opinion was written by Justice Kavanaugh, a Catholic jurisprudential conservative (Thomas, J., wrote an additional concurring opinion). However, the decision is not at all about reproductive rights, though its outcome surely affects—indeed upholds—them. The reason Justice Kavanaugh wrote the opinion and could obtain the concurrence of all the other Justices is that the gravamen of the case is standing, a constitutional matter that has been an important issue for the Court, particularly for the conservatives aligned here with the expected views of the liberals.

Another Three-for Thursday at the Supreme Court, with none of the decisions a landmark but each of utmost relevance to legal specialists and technicians in the fields of bankruptcy, estate taxation, and Indian affairs.

Truck Insurance Exchange v. Kaiser Gypsum Co., Inc. involves the primary insurer for companies that made and sold asbestos-containing products (“Truck”). Two of those companies filed for Chapter 11 bankruptcy. A resulting plan of reorganization created an Asbestos Personal Injury Trust under 11 U. S. C. §524(g), a provision that allows Chapter 11 debtors with substantial asbestos-related liability to fund a trust and channel all present and future asbestos-related claims into it. The insurer has a contractual obligation to defend asbestos personal injury claims and to indemnify the debtors for up to $500,000 per claim. The debtors were required to pay a $5,000 deductible per claim and cooperate in the defense. Truck sought to oppose the reorganization pursuant to §1109(b) of the Bankruptcy Code, which permits any “party in interest” to “raise” and “be heard on any issue” in a Chapter 11 bankruptcy.

Once again, the U.S. Supreme Court handed down three decisions on a Thursday, each of them substantively important to the individuals involved, but all of them essentially involving the Supreme Court’s instructing lower courts on how to go about interpreting both statutory mandates and caselaw precedents. Two of the three decisions are unanimous. The third, involving capital punishment, predictably shows a 6–3 split between Court conservatives and liberals.

Of the three cases decided today, the Court’s unanimous decision in Cantero v. Bank of America is likely the one of greatest import to our audience of litigators because it involves the issue of determining federal preemption. Writing for the entire Court, Justice Kavanaugh begins by noting that banks with federal charters, i.e., “national banks,” are primarily subject to federal oversight and regulation, while state-chartered banks are subject to further state oversight and regulation. A federal law, the National Bank Act, especially grants national banks the power to administer home mortgage loans. While the home mortgage loans made by national banks often include escrow accounts that are extensively regulated under the federal Real Estate Settlement Procedures Act of 1974, there is no requirement for national banks to pay interest on escrow balances. New York State law, however, mandates that a lending bank “shall” pay borrowers such interest. In the instant case, several mortgage borrowers brought class action suits against a national bank, demanding payment of interest on their escrow accounts. The U.S. Court of Appeals for the Second Circuit held that because the New York law “would exert control over” national banks’ power “to create and fund escrow accounts,” the state’s law was preempted by the National Bank Act.

The U.S. Supreme Court decided three cases today, one of them on the main sequence of the practices of most of the readers of this blog and the others worth knowing about, both as lawyers and as citizens.

Adding another car to the train of decisions concerning arbitration, namely, what is arbitrable and who decides it, a unanimous Court, per Justice Jackson, has held in Coinbase, Inc. v. Suski, that where parties have agreed to two contracts, one sending disputes concerning arbitrability to arbitration, and another, either explicitly or implicitly, sending such disputes to the courts ...

On May 16—for the second time in two weeks—the U.S. Supreme Court, this time unanimously, has taken a lenient, plaintiff-friendly view of whether a filing deadline is jurisdictional in the sense that it is governed by the occurrence of a triggering event or its discovery. In Harrow v. Department of Defense, the Court, per Justice Kagan, held that the 60-day appeal provision regarding a federal Merit Systems Protection Board (the “Board”) decision is not jurisdictional and is subject to equitable exceptions, such as waiver, forfeiture, and equitable tolling. Stuart Harrow ...

The U.S. Supreme Court decided two cases yesterday, in each of which timing played a decisive role in the outcome. These cases did not produce the unanimity that has characterized most of the Court’s decisions so far this term. However, the divisions, while reflective of ideological differences among the Justices, are expressed with intellectual honesty and recognition of consequences. One of them, a copyright case, is of particular relevance to litigators involved, not just with copyright issues, but in many areas of the law concerning how the Court will interpret and apply ...

A unanimous Supreme Court has eased the route for a plaintiff to prove a violation of Title VII of the Civil Rights Act of 1964 in Muldrow v. City of St. Louis.

Sergeant Jatonya Muldrow brought suit against the St. Louis Police Department when she was transferred from the department’s Intelligence Division to a uniformed role in one of the department’s police districts. Notwithstanding the fact that Sergeant Muldrow (whom her former supervisor addressed as “Ms.” rather than “Sergeant”) was a most dependable “workhorse” on the job, the supervisor determined that ...

The Supreme Court heard arguments this morning in the case of Joseph Fischer, one of more than 300 people convicted of corruptly obstructing an official proceeding: the congressional certification on January 6, 2021, of Joe Biden’s victory over Donald Trump.

If oral argument is any indication, there is considerable division between the jurisprudential liberals and conservatives concerning the breadth and effect of the obstruction statute. The Fischer case is important because of its potential effects on the numerous convictions entered in the District Court for D.C. and because Special Counsel Jack Smith has charged Trump with the same offense in his pending case.

Of less national significance are the two decisions issued by the Court today.

Some commentators claim there are bitter divisions among the Justices, roiling the Court and its processes. Many of the same commentators were critical of the Court’s decision holding that former President Trump was not disqualified from reelection by Section 3 of the Fourteenth Amendment, but they tended to ignore that the Court’s operative opinion was unanimous. The tenor of that unanimity will be explored as soon as April 25, when the Court hears arguments in the immunity case of Trump v. United States.

At least for today, however, peace reigns on the bench, as the Court issued unanimous opinions in each of the three cases decided.

Yonas Fikre, a U.S. citizen who had emigrated from Sudan, found himself placed on the No Fly List by the FBI and unable to return to the United States from an international trip. This action followed Fikre’s having been questioned about the mosque he attended and his refusal to become an FBI informant. Having ended up in Sweden, Fikre brought suit, alleging that the government had violated his procedural rights by failing to give him sufficient notice and the ability to gain adequate redress and had improperly considered his race, national origin, and religious beliefs in putting him ...

On Friday, March 15, a unanimous Supreme Court decided two companion cases (Lindke v. Freed and O’Connor-Ratcliff v. Garnier) that resolved a split in the Circuits concerning whether public officials can be held liable under 42 U.S.C. §1983 for blocking posts on social media sites, in these cases, Facebook.

As the Court noted in Lindke v. Freed, Section 1983—as is well known—provides a cause of action against ‘[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State’ deprives someone of a federal constitutional or statutory ...

To the surprise of no one connected with the case, or who just listened to the oral argument, the Supreme Court, in a per curiam opinion (i.e., unanimously), decided the case of Trump v. Anderson, holding that states have no power under the Constitution to enforce Section 3 of the 14th Amendment with respect to federal offices, in this case, the presidency.

Accordingly, absent congressional action—and there has been none—former President Trump may not be kept off the primary or general election ballot, not just in Colorado, but in any state or territory.

Most readers of this blog rarely, if ever, become involved in homicide cases.

Nevertheless, the Supreme Court’s essentially unanimous decision in McElrath v. Georgia should be of interest because it deals with the issue of inconsistent verdicts, something that many of us have experienced, but this time, as such verdicts might affect double jeopardy. Damian McElrath was charged with malice murder, felony murder, and aggravated assault for having killed his mother. A jury returned a split verdict against him, finding him “not guilty by reason of insanity” with respect to ...

Today might ultimately be remembered as among the most consequential days in the history of the Supreme Court and the nation. That will be determined when a decision in Trump v. Anderson is issued.

As any reader of this blog likely is aware, the issue in the Anderson case is whether the Supreme Court of Colorado correctly applied Section 3 of the 14th Amendment in disqualifying ex-President Donald Trump from the 2024 presidential primary election in that state. While I’ll refrain from much comment until we actually have a decision to discuss, I note that I, apparently like many ...