Rocky Mountain Appellate Blog

A Supremacy Clause Primer

For those of you who are federal/state judicial power junkies, you will love the Supreme Court's May 27 opinion in Haywood v. Drown. The dispute was over whether the New York state legislature could effectively divest New York state courts of jurisdiction to hear 42 U.S.C. § 1983 claims brought against state prison officials. The New York Court of Appeals (in a 4-3 vote) upheld the constitutionality of the jurisdictional bar. The Supremes (5-4, usual suspects) reversed, finding the state jurisdictional bar unconstitutional.

Justice Stevens' majority opinion concludes that the state jurisdictional bar is not a "neutral rule of judicial administration" and thus violates the Supremacy Clause. Justice Scalia, by contrast, disagrees with this conclusion, but does so almost in passing. The meat of his far-reaching 37-page dissent is devoted to an incredibly entertaining constitutional analysis of concurrent jurisdiction by state and federal courts. Walking us through the debates by the Founders on the issue, he concludes that the States are free to close their courthouses to any federal claim they want under the Constitution as it was finally adopted. For the afficianados of a good Justice Scalia originalist rant, it's a must read.

Obama Picks Sotomayor

http://thecaucus.blogs.nytimes.com/2009/05/26/obama-makes-decision-on-supreme-court-nominee/?hp

More Admin Law Notes

On April 28, 2009, the United States Supreme Court issued its decision in Federal Comms. Comm’n, v. Fox Television Stations, No. 07-582.  This decision is an admin law junkie’s dream.  The heart of the opinion is a lively debate Justice Scalia, who authored the majority opinion, and Justice Breyer, who authored a dissent.   However, the Court was highly fractured in this case: Justice Thomas filed a concurring opinion; Justice Kennedy filed an opinion concurring in part and concurring in judgment; and   Justice Stevens and Ginsburg filed separate dissents.

This issue in Fox Television Stations was whether the Federal Communications Commission (“FCC”) violated the Administrative Procedures Act (“APA”) when it reversed a prior policy and determined that “non-literal (expletive) use of the F- and S-Words could be actionably indecent , even when the word is used only once.”   See Slip Op. at 4; see also 18 U. S. C. § 1464 (prohibiting the “utter[ing of] any obscene, indecent, or profane language by means of radio communication”).   Bono and Cher let slip a few “F- and S-Words” on live television, and it was off to court.

The Court decision clarified an issue that has been outstanding since the Court’s ruling in Motor Vehicle Manufacturers’ Ass’n v. State Farm Mut. Ins. Co., 463 U.S. 29 (1983).  The Court held that an agency change in policy is subject to no greater scrutiny than an agency’s decision to adopt a policy in the first place.  See Fox Television Stations, Slip Op. at 10.  The agency’s change in policy must be supported by “good reasons,” but the agency is not obligated to show that the reasons supporting “the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.”  Id. at 11.  In contrast, Justice Breyer’s dissent is less deferential to agency judgment.  The dissent would require that the agency set forth in detail, its reasons for changing the policy.  Slip Op. at 4 (Breyer, J. dissenting).

Also of note to those interested in admin law, the Court granted cert in Free Enterprise Fund v. PCAOB, to consider a constitutional challenge to the Sarbanes-Oxley Act.  Specifically, the issue is whether the Public Company Accounting Oversight Board violates the Appointments Clause.  The D.C. Circuit upheld the law, over a strong dissent by Judge Kavanaugh.     For extensive discussion of this case, I recommend visiting the Volokh Conspiracy (www.volokh.com) or UCLA law professor Stephen Bainbridge's blog at www.professorbainbridge.com.

In Rejecting Terror Suspect's Claim, U.S. Supreme Court Provides Further Guidance on Motion to Dismiss Standard

In 2007 the U.S. Supreme Court altered the applicable standard for a motion to dismiss.  In Bell Atlantic v. Twombly, the Court held that the the 50-year-old test for whether a complaint states a cause of action was no longer valid.  Whereas the old standard was whether the plaintiff could prove any set of facts in support of his claim which would entitle him to relief, the new standard asks whether the complaint alleges "enough facts to state a claim to relief that is plausible on its face."

In a decision issued today, Ashcroft v. Iqbal, the U.S. Supreme Court further examined the Twombly standard in the context of a terrorism suspect's civil rights claim against former AG John Ashcroft and former FBI Director Robert Mueller.  The plaintiff's complaint alleged that Ashcroft and Mueller had adopted detention policies and applied them to the plaintiff and others like him because of their race, religion or national origin.  The Court held that the allegations of the plaintiff's complaint were insufficient as a matter of law. 

First, the Court rejected as conclusory the plaintiff's allegation that Ashcroft and Mueller knew of and maliciously agreed to subject him to harsh conditions of confinement solely on account of his race, religion, or national origin.  "It is the conclusory nature of respondent's allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth."

Second, the Court held that other allegations in the the plaintiff's complaint, while not conclusory, were implausible.  The Court's plausibility analysis is the most interesting aspect of the opinion and warrants extended quotation:

The September 11 attacks were perpetrated by 19 Arab Muslim hijackers who counted themselves members in good standing of al Qaeda, an Islamic fundamentalist group. Al Qaeda was headed by another Arab Muslim—Osama bin Laden—and composed in large part of his Arab Muslim disciples. It should come as no surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their suspected link to the attacks would produce a disparate, incidental impact on Arab Muslims, even though the purpose of the policy was to target neither Arabs nor Muslims. On the facts respondent alleges the arrests Mueller oversaw were likely lawful and justified by his nondiscriminatory intent to detain aliens who were illegally present in the United States and who had potential connections to those who committed terrorist acts. As between that “obvious alternative explanation” for the arrests, Twombly, [550 U.S.] at 567, and the purposeful, invidious discrimination respondent asks us to infer, discrimination is not a plausible conclusion.

This case will receive lots of attention, of course, but for practitioners the Court's analysis indicates that defendants in civil lawsuits have broad leeway to attack the plaintiff's complaint on plausibility grounds.  Notably, Justice Souter's dissenting opinion did not appear to disagree with the majority's plausibility analysis -- rather, he argued that the majority's analysis ignored several allegations in the complaint and the analysis therefore was improperly limited.

Judge McConnell Resigning

The Tenth Circuit has just posted a news release that Judge McConnell is resigning effective August 31, 2009, at which time he will accept a position as Richard and Frances Mallery Professor of Law and Director of the Constitutional Law Center at Stanford.  The announcement can be found here.  (Thanks to my CJA colleague Antony Noble for alerting me to this announcement.)

The release quotes Judge McConnell's explanation that "[e]specially at this time of grave international and domestic challenges and transformation, I want to contribute more openly to debate, scholarly analysis, and public understanding of the governing principles of the American Republic."

Court of Appeals Upholds Constitutional Challenge of Colorado’s Punitive Damages Statute

In a case involving one of the largest jury verdicts in Colorado history, the Court of Appeals, in a 2-1 decision, upheld the majority of the award. Blood v. Qwest, No. 08CA0134 (April 30, 2009). The plaintiff, Andrew Blood, was permanently disabled when a telephone pole he was climbing collapsed. Blood was an employee of Xcel and the pole was owned by Qwest.

Blood, an Xcel employee, was removing Xcel equipment from the pole when it collapsed. He sued Qwest. Qwest, in turn, sued Xcel for indemnity and contribution. The evidence showed that the pole had rotted underground. The jury had awarded over $20 million in compensatory damages and $18 million in punitive damages. After the verdict, the trial court entered an enhanced punitive damages award of three times compensatory damages pursuant to C.R.S. § 13-21-102(3)(a) (allowing for up to trebling of compensatory damages when defendant continues to engage in wanton and willful conduct). The trebling and the large award stemmed from the fact that Qwest had for decades failed to have an inspection program for its poles that would have detected the rot in the pole that collapsed and injured Blood. The total damages award was approximately $89 million.

There are a number of aspects of the case that are noteworthy. First, the Court of Appeals rejected Qwest’s facial and as-applied constitutional challenges of Colorado's punitive damages statute which was based upon Phillip Morris USA v. Williams, 549 U.S. 346 (2007). The Colorado Attorney General had weighed in as an amicus to defend the constitutionality of the statute. Second, the majority upheld the compensatory award and the original punitive damages award, but remanded the enhancement decision back to the trial court for further proceedings. The trial court had ordered the enhancement without conducting a hearing. Third, the jury’s verdict that Xcel had no liability was upheld. Lastly, the Court rejected various arguments raised by Qwest by post-verdict motions, including that the action was barred by the worker’s compensation scheme and the premises liability statute.

The dissent would have struck down the original punitive damages award, finding it not supported by the evidence and that it appeared to be excessive. The dissent would have required a retrial on the entirety of the punitive damages award, not just further proceedings focused on the enhancement.

If the case is not reviewed by the Colorado Supreme Court, the over $38 million verdict will stand, with the potential for Blood to obtain a significant enhancement.

Bleak News

Bleak News

 

After almost a decade of litigation in In Re. C and M Properties, LLC (No. 07-4232) the Tenth Circuit held that the parties had been litigating in the wrong court for the last four years.  In the words of the Tenth Circuit:

 

It’s been more than four years since any federal judge had authority to hear

this case. Even so, the litigation grinds on. Before the bankruptcy and district

courts, the parties have bloodied each other in round after round of motions and

arguments through year after year. They now appeal, asking us to sort out their

dispute. But an order issued in December 2004 remanded this case to state court.

That order divested the federal courts of subject matter jurisdiction over the

parties’ dispute. There is nothing left of this case in federal court – and hasn’t

been for years. Long ago the parties should have taken their fight to state court.

They must now.

 

The Tenth Circuit compared the procedural history in this case to that of Jarndyce v. Jarndyce (“This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means”).  Suffice to say the parties did not simply ignore the remand order in this case.  Rather they continued litigating in federal court because one of the defendants took the position that the remand order transformed a prior order of the Bankruptcy Court denying a motion for summary judgment from a non-appealable interlocutory order into a final judgment that could be appealed.  The Bankruptcy Court and District Court accepted this argument.  Thus years were spent while the Bankruptcy Court’s summary judgment order was reversed and remanded by the District Court, re-briefed and decided again by the Bankruptcy Court, appealed again to the District Court, reversed by the District Court and appealed to the Tenth Circuit.  The Tenth Circuit, however, was clear that “[a]n order denying summary judgment doesn’t change its stripes with the entry of a remand order . . . . Interlocutory decisions remain interlocutory, subject to review and revision by the state trial court after remand.”