Justia U.S. Supreme Court Opinion Summaries

Following the 2008 financial crisis, the Consumer Financial Protection Bureau (CFPB), was established by the Dodd-Frank Act as an independent regulatory agency tasked with ensuring that consumer debt products are safe and transparent. The administration of 18 existing federal statutes was transferred to CFPB. A new prohibition on unfair and deceptive practices in the consumer-finance sector, 12 U.S.C. 5536(a)(1)(B), gave CFPB extensive rulemaking, enforcement, and adjudicatory powers, including the authority to conduct investigations, issue subpoenas and civil investigative demands, initiate administrative adjudications, prosecute civil actions in federal court, and issue binding decisions in administrative proceedings. CFPB is led by a single Director, appointed by the President with the advice and consent of the Senate, for a five-year term, during which the President may remove the Director only for “inefficiency, neglect of duty, or malfeasance,” 12 U.S.C. 5491(c)(1),(3).CFPB issued a civil investigative demand to Seila, a law firm that provides debt-related legal services. The Ninth Circuit affirmed an order requiring that Seila comply.The Supreme Court vacated. CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers. Precedent has established two exceptions to the President’s unrestricted removal power: for a multi-member body of experts who were balanced along partisan lines, appointed to staggered terms, performed only “quasi-legislative” and “quasi-judicial functions,” and were not to exercise executive power, and for an inferior officer—an independent counsel—who had limited duties and no policymaking or administrative authority. Neither of those exceptions applies to CFPB.The Court declined to extend the precedents to an independent agency led by a single Director and vested with significant executive power. CFPB’s structure has no foothold in history or tradition and is incompatible with the Constitution, which—with the sole exception of the Presidency—avoids concentrating power in the hands of any single individual. The Director’s five-year term and receipt of funds outside the appropriations process heighten the concern that the agency will slip from the Executive’s control and from that of the people. The Court found the Director’s removal protection severable from the other provisions of Dodd-Frank that establish CFPB. View "Seila Law LLC v. Consumer Financial Protection Bureau" on Justia Law

The United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 limited the funding of American and foreign nongovernmental organizations to those with “a policy explicitly opposing prostitution and sex trafficking,” 22 U.S.C. 7631(f). In 2013, that Policy Requirement was held to be an unconstitutional restraint on free speech when applied to American organizations. Those American organizations then challenged the requirement’s constitutionality when applied to their legally distinct foreign affiliates. The Second Circuit affirmed that the government was prohibited from enforcing the requirement against the foreign affiliates.The Supreme Court reversed. The plaintiffs’ foreign affiliates possess no First Amendment rights. Foreign citizens outside U.S. territory do not possess rights under the U. S. Constitution and separately incorporated organizations are separate legal units with distinct legal rights and obligations.The Court rejected an argument that a foreign affiliate’s policy statement may be attributed to the plaintiffs, noting that there is no government compulsion to associate with another entity. Even protecting the free speech rights of only those foreign organizations that are closely identified with American organizations would deviate from the fundamental principle that foreign organizations operating abroad do not possess rights under the U.S. Constitution. The 2013 decision did not facially invalidate the Act’s funding condition, suggest that the First Amendment requires the government to exempt plaintiffs’ foreign affiliates from the Policy Requirement, or purport to override constitutional law and corporate law principles. View "Agency for International Development v. Alliance for Open Society International, Inc." on Justia Law

Petitioners solicited foreign nationals to invest in a cancer-treatment center. A Securities and Exchange Commission investigation revealed they misappropriated the funds. The SEC may seek “equitable relief” in civil proceedings, 15 U.S.C. 78u(d)(5). The SEC brought a civil action for disgorgement equal to the amount raised from investors. Petitioners argued that the remedy failed to account for their legitimate business expenses. The Ninth Circuit affirmed an order holding Petitioners jointly and severally liable for the full amount.The Supreme Court vacated A disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief authorized under section 78u(d)(5). Equity practice has long authorized courts to strip wrongdoers of their ill-gotten gains; to avoid transforming that remedy into a punitive sanction, courts restrict it to an individual wrongdoer’s net profits to be awarded for victims. These long-standing equitable principles were incorporated into section 78u(d)(5).If on remand the court orders the deposit of the profits with the Treasury, the court should evaluate whether that order would be for the benefit of investors, consistent with equitable principles. Imposing disgorgement liability on a wrongdoer for benefits that accrue to his affiliates through joint-and-several liability runs against the rule in favor of holding defendants individually liable but the common law permitted liability for partners engaged in concerted wrongdoing. On remand, the court may determine whether Petitioners can, consistent with equitable principles, be found liable for profits as partners in wrongdoing or whether individual liability is required. The court must deduct legitimate expenses before awarding disgorgement. View "Liu v. Securities and Exchange Commission" on Justia Law

In 2012, the Department of Homeland Security (DHS) announced the Deferred Action for Childhood Arrivals (DACA) program, which allows certain unauthorized aliens who arrived in the U.S. as children to apply for a two-year forbearance of removal to become eligible for work authorization and various federal benefits. Two years later, a related program, Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA), proposed to make 4.3 million parents of U.S. citizens or lawful permanent residents eligible for the same forbearance, work eligibility, and other benefits. States obtained a nationwide preliminary injunction barring implementation of both. The Fifth Circuit upheld the injunction, concluding that the program violated the Immigration and Nationality Act, which defines eligibility for benefits. The Supreme Court affirmed. In 2017, DHS rescinded the DAPA Memorandum. Acting Secretary of Homeland Security Duke then rescinded DACA.Following decisions by the Second, Ninth, and D.C. Circuits, the Supreme Court held that DHS’s rescission decision was arbitrary and capricious.As a preliminary matter, the Court held that the decision is reviewable under the APA, rejecting an argument that DACA is a general non-enforcement policy. The DACA Memorandum did not merely decline to institute enforcement proceedings; it created a program for conferring affirmative immigration relief. The parties did not challenge any removal proceedings so that judicial review would be barred by 8 U.S.C. 1252.The Court declined to consider additional justifications for the decision that were offered nine months later. Judicial review of agency action is limited to the grounds that the agency invoked when it took the action. The later justifications bore little relationship to those offered originally and constitute “post hoc rationalization.” Acting Secretary Duke’s rescission memorandum failed to consider important aspects of the issue, such as eliminating benefits eligibility while continuing forbearance. In failing to consider that option, Duke failed to supply the “reasoned analysis” required by the APA. Duke also failed to address whether there was “legitimate reliance” on the DACA Memorandum. DHS has flexibility in addressing reliance interests and could have considered various accommodations. View "Department of Homeland Security v. Regents of University of California" on Justia Law

Atlantic sought to construct a 604-mile natural gas pipeline from West Virginia to North Carolina, crossing 16 miles of land within the George Washington National Forest. Atlantic secured a special use permit from the U.S. Forest Service, obtaining a right-of-way for a 0.1-mile segment of pipe 600 feet below a portion of the Appalachian National Scenic Trail, which also crosses the National Forest. The Fourth Circuit vacated the permit.The Supreme Court reversed. The Department of the Interior’s assignment of responsibility for the Appalachian Trail to the National Park Service did not transform the Trail land into land within the National Park System that is not eligible for a pipeline lease. The Forest Service had the authority to issue the special use permit.Under 16 U.S.C. 521, the Forest Service has jurisdiction over the National Forest. The National Trails System Act, 16 U.S.C. 244(a), applies to the Appalachian Trail; the Secretary of the Interior has delegated to the National Park System the authority to enter into “rights-of-way” agreements for the Trail. The Leasing Act enables any “appropriate agency head” to grant “[r]ights-of-way through any Federal lands . . . for pipeline purposes,” 30 U.S.C. 185(a), except lands in the National Park System. The National Park System is administered by the Secretary of the Interior, through the National Park Service, 54 U.S.C. 100501. The Forest Service “right-of-way” agreements with the National Park Service for the Appalachian Trail did not convert National Forest “Federal lands” under the Leasing Act into “lands” within the “National Park System.” A right-of-way grant only nonpossessory rights of use. Although the federal government owns all lands involved, a right-of-way between two agencies grants only an easement, not jurisdiction over the land itself. View "United States Forest Service v. Cowpasture River Preservation Association" on Justia Law

Congress invoked its Article IV power to enact the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). PROMESA created a Financial Oversight and Management Board, whose seven voting members are to be appointed by the President without the Senate’s advice and consent. Congress authorized the Board to file for bankruptcy, to supervise and modify Puerto Rico’s laws and budget, and to conduct related investigations. President Obama selected the Board’s members. The Board filed bankruptcy petitions on behalf of the Commonwealth and five of its entities. Creditors moved to dismiss the proceedings, arguing that the Board members’ selection violated the Constitution’s Appointments Clause, under which the President “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . all . . . Officers of the United States.” The First Circuit held that the Board members’ selection violated the Appointments Clause.The Supreme Court reversed. Congress’ longstanding practice of requiring the Senate’s advice and consent for territorial Governors with important federal duties supports the inference that Congress expected the Appointments Clause to apply to at least some officials with supervisory authority over the Territories. A federal law’s creation of an office, however, does not automatically make its holder an officer of the United States. The Appointments Clause does not restrict the appointment of local officers that Congress vests with primarily local duties. Congress has long legislated for (non-state) entities by making local law directly and creating local government structures, staffed by local officials, who make and enforce local law. The history of Puerto Rico—whose officials with local responsibilities have been selected in ways inconsistent with the Appointments Clause—is consistent with the history of other entities that fall under Article IV and with the District of Columbia's history.The Board members here have primarily local powers and duties. PROMESA says that the Board “shall not be considered a department, agency, establishment, or instrumentality of the Federal Government.” Congress gave the Board a structure, duties, and related powers consistent with this statement. View "Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC" on Justia Law

During former New Jersey Governor Christie’s 2013 reelection campaign, Fort Lee’s mayor refused to endorse Christie. Kelly, Christie's Deputy Chief of Staff, Port Authority Deputy Executive Director, Baroni, and another official decided to reduce from three to one the number of lanes reserved at the George Washington Bridge’s toll plaza for Fort Lee’s commuters. To disguise the political retribution, the lane realignment was said to be for a traffic study. Port Authority traffic engineers were asked to collect some numbers. An extra toll collector was paid overtime. The lane realignment caused four days of gridlock, ending only when the Port Authority’s Executive Director learned of the scheme. The Third Circuit affirmed the convictions of Baroni and Kelly for wire fraud, fraud on a federally funded program, and conspiracy to commit those crimes. The Supreme Court reversed. The scheme did not aim to obtain money or property. The wire fraud statute refers to “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses,” 18 U.S.C. 1343. The federal-program fraud statute bars “obtain[ing] by fraud” the “property” (including money) of a federally funded program or entity, section 666(a)(1)(A). The statutes are limited to the protection of property rights and do not authorize federal prosecutors to set standards of good government.The Court rejected arguments that the defendants sought to take control of the Bridge’s physical lanes or to deprive the Port Authority of the costs of compensating employees. Their realignment of the access lanes was an exercise of regulatory power; a scheme to alter a regulatory choice is not one to take government property. The time and labor of the employees were an incidental byproduct of that regulatory object. Neither defendant sought to obtain the services that the employees provided. View "Kelly v. United States" on Justia Law

The petitioners challenged a New York City rule regarding the transport of firearms, citing the Second Amendment, and seeking declaratory relief against enforcement of the rule insofar as it prevented their transport of firearms to a second home or shooting range outside of the city. The Second Circuit rejected their claim. After the Supreme Court granted certiorari, the State of New York amended its firearm licensing statute and the City amended the rule so that the petitioners may now transport firearms to a second home or shooting range outside of the city.The Supreme Court vacated. The petitioners’ claim for declaratory relief with respect to the old rule is moot but they claimed that the new rule may still infringe their rights; they may not be allowed to stop for coffee, gas, food, or restroom breaks on the way to their second homes or shooting ranges outside of the city. The Court declined to address the argument, citing its practice of vacating and remanding where the mootness is attributable to a change in the legal framework governing the case, and where the plaintiff may have some residual claim under the new framework that was understandably not asserted previously. On remand, the Second Circuit and the district court may consider the new arguments and whether the petitioners still add a claim for damages with respect to the old rule. View "New York State Rifle & Pistol Association, Inc. v. City of New York" on Justia Law

The Official Code of Georgia Annotated (OCGA) includes the text of every Georgia statute currently in force. Non-binding annotations appear beneath each statutory provision, typically including summaries of judicial opinions construing each provision, summaries of pertinent attorney general opinions, and a list of related law review articles and other reference materials. The OCGA is assembled by the Code Revision Commission, a state entity composed mostly of legislators, funded through legislative branch appropriations, and staffed by the Office of Legislative Counsel. The current OCGA annotations were produced by a private publisher, pursuant to a work-for-hire agreement, which states that any copyright in the OCGA vests in the state, acting through the Commission. A nonprofit, dedicated to facilitating public access to government records and legal materials, posted the OCGA online and distributed copies. The Commission sued for infringement under the Copyright Act, 17 U.S.C. 102(a).The Eleventh Circuit and the Supreme Court held that OCGA annotations are ineligible for copyright protection. Under the government edicts doctrine, officials empowered to speak with the force of law cannot be the authors of the works they create in the course of their official duties. The Court noted long-standing precedent that an official reporter cannot hold a copyright interest in opinions created by judges; no one can own the law. The doctrine applies to whatever work legislators perform in their capacity as legislators, including explanatory and procedural materials they create in the discharge of their legislative duties. The sole “author” of the annotations is the Commission, which functions as an arm of the Georgia Legislature and creates the annotations in the discharge of its legislative duties. The Court focused on authorship, stating that Georgia’s characterization of the OCGA annotations as non-binding and non-authoritative undersells the practical significance of the annotations to litigants and citizens. View "Georgia v. Public Resource.Org, Inc." on Justia Law

The Patient Protection and Affordable Care Act established online exchanges where insurers could sell their healthcare plans. The now-expired “Risk Corridors” program aimed to limit the plans’ profits and losses during the first three years (2014-2016). Under 31 U.S.C. 1342, eligible profitable plans “shall pay” the Secretary of the Department of Health and Human Services, while the Secretary “shall pay” eligible unprofitable plans. The Act neither appropriated funds nor limited the amounts that the government might pay. There was no requirement that the program be budget-neutral. The total deficit exceeded $12 billion. At the end of each year, the appropriations bills for the Centers for Medicare and Medicaid Services included a rider preventing the Centers from using the funds for Risk Corridors payments. The Federal Circuit rejected Tucker Act claims for damages by health-insurance companies that claimed losses under the program.The Supreme Court reversed. The Risk Corridors statute created an obligation to pay insurers the full amount set out in section 1342’s formula. The government may incur an obligation directly through statutory language, without details about how the obligation must be satisfied. The Court noted the mandatory term “shall,” and adjacent provisions, which differentiate between when the Secretary “shall” act and when she “may” exercise discretion. Congress did not impliedly repeal the obligation through its appropriations riders. which do not indicate “any other purpose than the disbursement of a sum of money for the particular fiscal years.”The Risk Corridors statute is fairly interpreted as mandating compensation for damages, and neither Tucker Act exception applies. Nor does the APA bar a Tucker Act suit. The insurers seek specific sums already calculated, past due, and designed to compensate for completed labors. Because the Risk Corridors program expired this litigation presents no special concern about managing a complex ongoing relationship. View "Maine Community Health Options v. United States" on Justia Law