Boyle v. United States (07-1309), United States v. Denedo (08-267), Republic of Iraq v. Beaty (07-1090) and order list

June 15, 2009 Supreme Court Update

Greetings, Court fans!
I'm back to bring you the remaining decisions from last week. The Court's decision in Boyle v. United States (07-1309), which adopted an expansive definition of a RICO association-in-fact enterprise, will have significance for many practitioners (i.e., you might actually cite it). On the other hand, unless you are a military lawyer or represent individuals bringing claims against Iraq, the other two decisions (United States v. Denedo (08-267) and Republic of Iraq v. Beaty (07-1090)) are unlikely to affect your daily practice.
In Boyle, the Court addressed whether a RICO association-in-fact enterprise must have "an ascertainable structure beyond that inherent in the pattern of racketeering activity in which it engages." Defendant had been indicted under RICO for participating in a "loosely and informally organized group" that robbed banks and night-deposit boxes. The group did not have a leader, hierarchy, or any master plan; instead, when someone had an idea for a target, a core group plus others recruited on occasion would meet, plan and execute the crime, and then split the proceeds if they were successful. (Surprisingly, this worked for years.) The district court instructed the jury that the Government was required to prove "an ongoing organization with some sort of framework, formal or informal, for carrying out its objectives" and that "the various members . . . of the association functioned as a continuing unit to achieve a common purpose," but refused the defendant's request to instruct the jury that the Government had to prove that the enterprise had "an ascertainable structural hierarchy distinct from the charged predicate acts." The defendant was convicted, and the Second Circuit affirmed.
The Court, led by Justice Alito, affirmed 7-2. Building on its 1981 decision in United States v. Turkette, the Court held that while an association-in-fact enterprise did have to have a "structure," that structure did not have to be distinct from the alleged pattern of racketeering activity. An association-in-fact enterprise "must have at least three structural features: a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose." The existence of the enterprise, however, could be inferred from the same evidence used to show the pattern of racketeering activity. The Court found no basis in the statute for imposing additional structural requirements such as the existence of a "hierarchy" or the "professionalism and sophistication of [the] organization." The Court also rejected the dissent's (Justice Stevens, joined by Justice Breyer) view that only "business-like" entities that have an existence apart from the predicate acts committed by their employees or associates could be RICO enterprises. Because RICO can also serve as the basis of a civil suit, the Court's decision will have wide ramifications. Indeed, the U.S. Chamber of Commerce had filed an amicus brief arguing that the "unconstrained definition of enterprise adopted below allows plaintiffs to transform run-of-the-mill civil actions into RICO actions for treble damages against businesses who engage in lawful collaborations." The Court indirectly rejected this argument, explaining that it had "repeatedly refused to adopt narrowing constructions of RICO in order to make it conform to a preconceived notion of what Congress intended to proscribe."
Moving on, in United States v. Denedo (08-267), the Court split 5-4 on the question of whether an Article I military court of appeals has jurisdiction to hear a petition for a writ of coram nobis to redress a fundamental error (here, alleged ineffective assistance of counsel) in a court martial proceeding. Justice Kennedy, joined by Justices Stevens, Souter, Ginsburg, and Breyer, held that it does. Denedo, a native Nigerian and then-member of the U.S. Navy, was charged in connection with a scheme to defraud a community college. Denedo pled guilty to reduced charges because, he later argued, his counsel had advised him that he could thereby avoid any risk of deportation. A special court-martial accepted the plea and sentenced Denedo, and the Navy-Marine Corp Court of Criminal Appeals (NMCCA) affirmed. As it turned out, Denedo's lawyer was wrong, and eight years later, the Department of Homeland Security initiated removal proceedings against him based on the conviction. Denedo filed a petition for a writ of coram nobis with the NMCCA, arguing that the conviction it had affirmed was void because his guilty plea was the result of ineffective assistance of counsel. (Denedo could not file with the court-martial because it is not a standing court.) The NMCCA rejected the Government's argument that it did not have authority to conduct post-conviction proceedings, but denied the petition on the merits. On further appeal, the United States Court of Appeals for the Armed Forces (CAAF) agreed that the NMCCA had jurisdiction based on the All Writs Act, but remanded for further review on the merits.
The Court affirmed, but on slightly different grounds. Before it could get to the jurisdiction of the NMCCA and the CAAF, however, it first had to address its own jurisdiction, which is limited to review of CAAF decisions in which that court "granted relief." Denedo argued that because the CAAF simply remanded, no relief had been granted and thus, the Court couldn't hear the case. The Court (including the partial dissenters) disagreed. The CAAF's remand for additional consideration of the merits afforded Denedo a chance at success. While this relief wasn't complete, it nonetheless was "relief." Having concluded that it had jurisdiction, the Court turned to the jurisdiction of the NMCCA and the CAAF. Justice Kennedy first explained that the All Writs Act only gave courts the authority to issue writs "necessary or appropriate in aid of their respective jurisdictions"; it did not itself confer subject matter jurisdiction. But the NMCCA did have jurisdiction to hear a petition for coram nobis because, "as an extraordinary tool to correct a legal or factual error," coram nobis is really a "belated extension of the original proceeding during which the error allegedly transpired." Because coram nobis was within the NMCCA's original jurisdiction, the All Writs Act authorized the court to issue a writ to effectuate it.
The Chief, joined by Justices Scalia, Alito and Thomas dissented from the Court's extension of coram nobis to military courts, primarily on the ground that the Uniform Code of Military Justice (UCMJ) establishes the complete system of military review, and that system emphasizes finality. The UCMJ permits a single avenue for reconsideration of a final court-martial conviction: a petition for a new trial within two years of approval of the sentence. While this limited relief may seem harsh in a civilian context, it "looks positively extravagant in light of the prior history and tradition of military justice." Denedo filed no such petition, so he was out of luck.
Finally, in Republic of Iraq v. Beaty (07-1090), the Court, this time led by Justice Scalia, waded through a complicated thicket of Congressional, presidential, and lower court action to hold, unanimously, that Iraq has regained its sovereign immunity from suit. The Foreign Sovereign Immunities Act (FSIA) provides the baseline that foreign states are immune from suit in U.S. courts, but there have always been exceptions. One former exception, enacted in 1996 and codified at 28 U.S.C. § 1605(a)(7), permitted suits for money damages against a foreign state for certain acts taken at a time when the state was designated as a sponsor of terrorism. Iraq was one of the countries so designated. After the U.S. invaded Iraq in 2003, however, Congress passed the Emergency Wartime Supplemental Appropriations Act (EWSAA). EWSAA's principle clause authorized the President to "suspend the application of any provision of the Iraq Sanctions Act of 1990." EWSAA also contained a proviso that allowed the President to "make inapplicable with respect to Iraq . . . any other provision of law that applies to countries that have supported terrorism." The President issued a declaration tracking this proviso in May 2003. In 2004, the D.C. Circuit ruled in Acree v. Republic of Iraq, that EWSAA did not permit the President to waive the §1605(a)(7) exception for claims arising from acts taken by Iraq when it was still designated as a sponsor of terror. In 2008, when Congress passed the National Defense Authorization Act (NDAA) for that fiscal year, it: (1) repealed §1605(a)(7); (2) replaced it with a roughly similar exception at §1803(a); (3) apparently ratified Acree by declaring that the EWSAA had never authorized the removal of any court's jurisdiction; and (4) authorized the President to waive "any provision of this section with respect to Iraq." The President declared the waiver for Iraq on the same day he signed the NDAA into law.
The two cases before the Court were filed by American nationals and their relatives in early 2003, alleging mistreatment by Iraqi officials during and after the 1991 Gulf War. The procedural history of the two cases is too complicated to detail here; suffice to say that the D.C. Circuit eventually ruled against Iraq's motions to dismiss in both cases. The Court went back to the text of the EWSAA, and agreed with Iraq and the Government (as amicus) that the proviso (discussed above) authorized the President to waive §1605(a)(7) for Iraq. The Court rejected the D.C. Circuit's conclusion that the proviso only modified the EWSAA's principle clause regarding the Iraq Sanctions Act. Rather, the Court held, the "principle clause granted the President a power; the second proviso purported to grant him an additional power," i.e., to waive §1605(a)(7) for Iraq. This may not have been pretty draftsmanship, but is was hardly unheard of. Next, the Court considered whether the NDAA's apparent ratification of Acree in 2008 changed this analysis. The Court noted it was "doubtful whether Congress can retroactively claw back power it has given to the Executive, invalidating Presidential action that was valid when it was taken." The Court did not have to decide this difficult question, however, because the NDAA also authorized the President to waive, and the President did waive, the new terrorism exception at §1803(a) as to Iraq. Finally, the Court addressed the plaintiffs' argument that their claims were not barred because they arose before any presidential waiver. The Court held, on textual and public policy grounds, that the presidential waiver removed the courts' subject matter jurisdiction for cases against Iraq, regardless of when the claims arose. Moreover, respondents could not have had any expectation of being able to sue Iraq in U.S. courts at the time of their alleged injuries in 1991, since the §1605(a)(7) exception to foreign sovereign immunity for state sponsors of terrorism was not even enacted until 1996.
The Court also granted cert in the following cases:
Hertz Corporation v. Friend (08-1107), where the Court will answer a question important to every litigator: "Whether, for purposes of determining the principal place of business for diversity jurisdiction under 28 U.S.C. § 1332, a court can disregard the location of a nationwide corporation's headquarters – i.e, its nerve center."
Milavetz, Gallop & Millevitz v. United States (08-1119) and United States v. Milavetz, Gallop & Milavetz (08-1225), address whether 11 U.S.C. §§ 526(a)(4) and 528(a)(2), (b)(4), which place certain restrictions on "debt relief agencies," including precluding these entities from advising debtors to "incur more debt" in contemplation of a bankruptcy filing, and placing restrictions on such entities' advertising, are unconstitutional under the First Amendment.
The Court just released two new opinions (and they probably won't be the last this week), so keep a look out for more Updates in your inbox.
From the Appellate Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400