Justia U.S. Supreme Court Opinion Summaries

Following the 2007-2009 “Great Recession,” the Federal Deposit Insurance Corporation (FDIC) brought an enforcement action against Calcutt, the former CEO of a Michigan-based community bank, for mismanaging one of the bank’s loan relationships. The FDIC ultimately ordered Calcutt removed from office, prohibited him from further banking activities, and assessed $125,000 in civil penalties.The Sixth Circuit agreed that Calcutt had proximately caused the $30,000 charge-off on one loan because he had “participated extensively in negotiating and approving” the transaction. The court concluded that $6.4 million in losses on other loans were a different matter and that none of the investigative, auditing, and legal expenses could qualify as harm to the bank, because those expenses occurred as part of its “normal business.” Despite identifying these legal errors in the FDIC analysis, the Sixth Circuit affirmed the FDIC decision, finding that substantial evidence supported the sanctions determination, even though the FDIC never applied the proximate cause standard itself or considered whether the sanctions against Calcutt were warranted on the narrower set of harms that it identified.The Supreme Court reversed. It is a fundamental rule of administrative law that reviewing courts must judge the propriety of agency action solely by the grounds invoked by the agency. An agency’s discretionary order may be upheld only on the same basis articulated in the order by the agency itself. By affirming the FDIC’s sanctions against Calcutt based on a legal rationale different from that adopted by the FDIC, the Sixth Circuit violated these commands. View "Calcutt v. Federal Deposit Insurance Corporation" on Justia Law

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), 48 U.S.C. 2101, creates the Financial Oversight and Management Board, an “entity within the territorial government” of Puerto Rico. The Board approves and enforces the Commonwealth’s fiscal plans, supervises its borrowing, and represents Puerto Rico in Title III cases, modeled on federal bankruptcy proceedings. PROMESA does not explicitly abrogate sovereign immunity but incorporates, as part of its mechanism for restructuring debt, the Bankruptcy Code’s express abrogation of sovereign immunity. PROMESA contemplates other legal claims and sets limits on litigation targeting the Board, its members, and its employees for “actions taken to carry out” PROMESA. It provides that no district court will have jurisdiction over challenges to the Board’s “certification determinations.”CPI, a media organization, requested materials, including communications between Board members and Puerto Rican and U.S. officials. The request went unanswered. CPI sued the Board, citing the Puerto Rican Constitution as guaranteeing a right of access to public records. The district court concluded that PROMESA abrogated the Board’s immunity. The First Circuit affirmed.The Supreme Court reversed. PROMESA does not abrogate the Board’s immunity. Congress must make its intent to abrogate sovereign immunity “unmistakably clear.” PROMESA does not do so. Except in Title III debt-restructuring proceedings, the statute does not provide that the Board or Puerto Rico is subject to suit. PROMESA’s judicial review provisions are not incompatible with sovereign immunity but serve a function without an abrogation of immunity. Litigation against the Board can arise even though the Board enjoys sovereign immunity generally. Statutes other than PROMESA abrogate its immunity from particular claims; the Board could decide to waive its immunity from particular claims. Providing for a judicial forum and shielding the Board, its members, and employees from liability do not make the requisite clear statement. View "Financial Oversight and Management Board for Puerto Rico v. Centro De Periodismo Investigativo, Inc." on Justia Law

Santos-Zacaria, a noncitizen in removal proceedings, was denied protection from removal. The Fifth Circuit dismissed Santos-Zacaria’s petition for review in part, finding that she had not satisfied 8 U.S.C. 1252(d)(1)’s (Judicial Review of Orders of Removal) exhaustion requirement, which it raised sua sponte based on its characterization of 1252(d)(1)’s exhaustion requirement as jurisdictional. Santos-Zacaria did not raise her impermissible fact-finding claim to the Board of Immigration Appeals (BIA) in a motion for reconsideration before filing her petition for judicial review.The Supreme Court vacated in part. Section 1252(d)(1)’s exhaustion requirement is not jurisdictional. To ensure that courts impose the harsh consequences of jurisdictional rules only when Congress unmistakably has so instructed, a rule is treated as jurisdictional “only if Congress ‘clearly states’ that it is.” Section 1252(d)(1) lacks a clear statement. Exhaustion requirements are quintessential claim-processing rules, designed to promote efficiency in litigation. Section 1252(d)(1)’s language differs substantially from the jurisdictional language in related statutory provisions. Section 1252(d)(1) requires exhausting only remedies available “as of right,” meaning review that is guaranteed, not discretionary. Reconsideration by the BIA, however, is discretionary. The right to request discretionary review does not make a remedy available as of right. The Court noted the practical problems that would arise under the government’s interpretation. View "Santos-Zacaria v. Garland" on Justia Law

In Chapter 11 bankruptcy, Sears, as a debtor in possession, exercised its rights under 11 U.S.C. 363(b)(1) and sold most of its assets to Transform, including the right to designate to whom a lease should be assigned. Section 365 prohibits the assignment of an unexpired lease without “adequate assurance of future performance by the assignee,” and establishes special criteria related to “shopping center[s],” Transform designated the Mall of America lease for assignment. The landlord, MOAC, objected, arguing that Sears had failed to provide adequate assurance. The Bankruptcy Court approved the assignment.Section 363(m) states that the reversal or modification on appeal of a 363(b) authorization of a sale or lease does not affect the validity of a sale or lease to an entity that purchased or leased the property in good faith, even if the entity knew of the pendency of the appeal unless the court entered a stay pending appeal. The Bankruptcy Court denied MOAC’s request for a stay. Sears assigned the lease. The Second Circuit affirmed the dismissal of the appeal, treating 363(m) as jurisdictional.The Supreme Court vacated. Section 363(m) is not jurisdictional and is not, therefore, impervious to excuses like waiver or forfeiture. The Court noted the consequences of deeming the section jurisdictional–even egregious conduct by a litigant could permit the application of judicial estoppel against a jurisdictional rule. Courts should only treat a provision as jurisdictional if Congress “clearly states” as much. Nothing in 363(m) purports to govern a court’s adjudicatory capacity; it plainly contemplates that appellate courts might reverse or modify any covered authorization, with a limitation on the consequences. Congress separated 363(m) from jurisdictional provisions. The Court rejected Transform’s argument that the transfer to a good-faith purchaser removes the property from the bankruptcy estate, and so from the court’s in rem jurisdiction. View "MOAC Mall Holdings LLC v. Transform Holdco LLC" on Justia Law

The SEC and FTC initiated enforcement actions. Instead of making a claim within the Commission itself, and then (if needed) in a federal court of appeals, the subjects of the actions filed constitutional claims in federal district courts, arguing that the ALJs are insufficiently accountable to the President, in violation of separation-of-powers principles. One suit also challenged the combination of prosecutorial and adjudicatory functions within the agency. The Ninth Circuit held that the FTC's statutory review scheme precluded district court jurisdiction. The Fifth Circuit disagreed with respect to the SEC.The Supreme Court reversed the Ninth Circuit and affirmed the Fifth Circuit. The review schemes set out in the Securities Exchange Act, 15 U.S.C. 78a, and the FTC Act, 15 U.S.C. 41, do not displace district court jurisdiction over the far-reaching constitutional claims at issue.A statutory review scheme may preclude district courts from exercising “federal question” jurisdiction over challenges to federal agency action but does not necessarily extend to every claim. The relevant question is whether the particular claims brought were “of the type Congress intended to be reviewed within this statutory structure.” The claims here challenge functions at the core of the agencies' existence. They do not challenge any specific substantive decision or commonplace procedures. The alleged harm is “being subjected” to “unconstitutional agency authority.” It is impossible to remedy that harm once the proceeding is over and appellate review becomes available. The claims do not depend on winning or losing before the agency. The separation-of-powers claims are collateral to any Commission orders or rules from which review might be sought. The claims are outside the agencies’ expertise. Agency adjudications are generally ill-suited to address structural constitutional challenges and these constitutional claims are not intertwined with matters on which the Commissions are experts. View "Axon Enterprise, Inc. v. Federal Trade Commission" on Justia Law

Petitioners acquired their properties along the road in 1991 and 2004; in 1962, their predecessors in interest had granted the government an easement for the road. The government moved to dismiss the petitioners' suit under the Quiet Title Act, citing the 12-year limitations period, 28 U.S.C. 2409a(g). The Ninth Circuit affirmed the dismissal for lack of jurisdiction.The Supreme Court reversed, characterizing section 2409a(g) as a non-jurisdictional claim-processing rule, intended to promote the orderly progress of litigation. Limits on subject-matter jurisdiction have a unique potential to disrupt the orderly course of litigation, so courts should not lightly apply that label to procedures Congress enacted to keep things running smoothly unless traditional tools of statutory construction plainly show that Congress imbued a procedural bar with jurisdictional consequences. Congress’s separation of a filing deadline from a jurisdictional grant indicates that the time bar is not jurisdictional. The Quiet Title Act’s jurisdictional grant is in section 1346(f ), far from 2409a(g), with nothing linking those separate provisions. Section 2409a(g) speaks only to a claim’s timeliness.The Court characterized a case cited by the government as a “textbook drive-by jurisdictional” ruling that “should be accorded no precedential effect” as to whether a limit is jurisdictional. Rejecting other cited cases, the Court stated that it has never definitively interpreted section 2409a(g) as jurisdictional. View "Wilkins v. United States" on Justia Law

Approximately 30 years after Arellano’s honorable discharge from the Navy, a VA regional office granted Arellano service-connected disability benefits for his psychiatric disorders. Applying the default rule in 38 U.S.C. 5110(a)(1), the VA assigned an effective date of June 3, 2011—the day that it received Arellano's claim—to the award. Arellano argued that the effective date should be governed by an exception in section 5110(b)(1), which makes the effective date the day following the date of the veteran’s discharge or release if the application “is received within one year from such date of discharge or release.” Alleging that he had been too ill to know that he could apply for benefits, Arellano maintained that this exception’s one-year grace period should be equitably tolled to make his award effective the day after his 1981 discharge.The Board of Veterans’ Appeals, Veterans Court, Federal Circuit, and Supreme Court disagreed. Section 5110(b)(1) is not subject to equitable tolling. Equitably tolling one of the limited exceptions would depart from the terms that Congress “specifically provided.” The exceptions do not operate simply as time constraints, but also as substantive limitations on the amount of recovery due. Congress has already considered equitable concerns and limited the relief available, aware of the possibility that disability could delay an application for benefits. View "Arellano v. McDonough" on Justia Law

North Carolina amended its Constitution to require photographic identification for in-person voting. S.B. 824 was enacted to implement the amendment. In a federal constitutional challenge, the Board of Elections was defended by the state’s attorney general, a former state senator who had opposed an earlier voter identification law. Legislative leaders moved to intervene, arguing that important state interests would not be adequately represented, given the Governor’s opposition to S.B. 824, the Board’s allegiance to the Governor, the Board’s tepid defense of S.B. 824 in state-court proceedings, and the attorney general’s opposition to earlier voter-ID efforts. The Fourth Circuit ruled that the legislative leaders were not entitled to intervene.The Supreme Court reversed. Federal Rule of Civil Procedure 24(a)(2) provides that a court must permit anyone to intervene who timely claims an interest in the subject of the action unless existing parties adequately represent that interest. States possess a legitimate interest in the enforcement of their statutes. When a state allocates authority among different officials who do not answer to one another, different interests and perspectives, all important to the administration of state government, may emerge. Federal courts should rarely question that a state’s interests will be practically impaired if its authorized representatives are excluded from participating in federal litigation challenging state law. Permitting participation by lawfully authorized state agents promotes informed federal-court decision-making. North Carolina law explicitly provides that the Speaker of the House and the President Pro Tempore of the Senate “shall jointly have standing to intervene on behalf of the General Assembly as a party in any judicial proceeding challenging a North Carolina statute” or constitutional provision. View "Berger v. North Carolina State Conference of the NAACP" on Justia Law

California’s Labor Code Private Attorneys General Act (PAGA) authorizes any “aggrieved employee” to initiate an action against a former employer on behalf of himself and other current or former employees to obtain civil penalties that previously could have been recovered only by California’s Labor and Workforce Development Agency. California precedent holds that a PAGA suit is a “representative action” in which the plaintiff sues as an “agent or proxy” of the state. Moriana filed a PAGA action against her former employer, Viking, alleging multiple violations with respect to herself and other employees. Moriana’s employment contract contained a mandatory arbitration agreement with a “Class Action Waiver,” providing that the parties could not bring any class, collective, or representative action under PAGA, and a severability clause. California courts denied Viking’s motion to compel arbitration.The Supreme Court reversed. The Federal Arbitration Act, 9 U.S.C. 1 (FAA), preempts California precedent that precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. Viking was entitled to compel arbitration of Moriana’s individual claim. Moriana would then lack standing to maintain her non-individual claims in court.A PAGA action asserting multiple violations under California’s Labor Code affecting a range of different employees does not constitute “a single claim.” Nothing in the FAA establishes a categorical rule mandating enforcement of waivers of standing to assert claims on behalf of absent principals. PAGA’s built-in mechanism of claim joinder is in conflict with the FAA. State law cannot condition the enforceability of an agreement to arbitrate on the availability of a procedural mechanism that would permit a party to expand the scope of the anticipated arbitration by introducing claims that the parties did not jointly agree to arbitrate. View "Viking River Cruises, Inc. v. Moriana" on Justia Law

Kemp and seven codefendants were convicted of drug and gun crimes. The Eleventh Circuit consolidated their appeals and, in November 2013, affirmed their convictions and sentences. In April 2015, Kemp moved to vacate his sentence, 28 U.S.C. 2255. The district court dismissed Kemp’s motion as untimely because it was not filed within one year of “the date on which [his] judgment of conviction [became] final.” Kemp did not appeal. In 2018, Kemp sought to reopen his section 2255 proceedings, arguing that the one-year limitations period on his 2255 motion did not begin to run until his codefendants’ rehearing petitions were denied in May 2014. The Eleventh Circuit agreed that his section 2255 motion was timely but concluded that because Kemp alleged judicial mistake, his FRCP 60(b) motion fell under Rule 60(b)(1), with a one-year limitations period and was untimely.The Supreme Court affirmed. The term “mistake” in Rule 60(b)(1) includes a judge’s errors of law. Because Kemp’s motion alleged such a legal error, it was cognizable under Rule 60(b)(1) and untimely under Rule 60(c)’s one-year limitations period. The Court rejected Kemp’s arguments for limiting Rule 60(b)(1) to non-judicial, non-legal errors and applying Rule 60(b)(6), which allows a party to seek relief “within a reasonable time” for “any other reason that justifies relief,” but is available only when the other grounds for relief specified in Rules 60(b)(1)–(5) are inapplicable. View "Kemp v. United States" on Justia Law