Brendlin v. California (06-8120), Powerex Corp. v. Reliant Energy Services, Inc. (05-85) and order list

June 21, 2007 Supreme Court Update

Greetings, Court Fans!
The Court came back Monday with three more decisions. We'll cover two in this Update, then bring you the third after we see what else the Court issues tomorrow.
In Brendlin v. California (06-8120), the Court unanimously held that when police make a traffic stop, all passengers in the car as well as the driver have been "seized" within the meaning of the Fourth Amendment – meaning that the passengers, like the driver, can challenge the constitutionality of the stop. Brendlin, a passenger in a car stopped despite no suspicion of illegal activity, was arrested for drug possession after officers recognized him as a possible parole violator and searched him. He moved to suppress, but the California Supreme Court held that he had not been "seized" under the Fourth Amendment because the target of the traffic stop was not Brendlin but the driver of the car. Led by Justice Souter, the Court vacated and remanded. The issue was familiar: Would a reasonable person in Brendlin's position have felt free to terminate his encounter with police? The answer was no. Even where the cause of the stop is bad driving, passengers reasonably would expect that officers would not let them just leave the scene; rather, they would expect to be subject to some scrutiny, even if only for the sake of the officer's safety. The California ruling wrongly converted the test into a subjective one concerning officer's motives rather than an objective test based on passengers' reasonable expectations. Further, the California rule would give police a perverse incentive to stop cars with passengers without probable cause or reasonable suspicion (since the evidence would always be admissible against the passengers), thereby violating drivers' rights.
In Powerex Corp. v. Reliant Energy Services, Inc. (05-85), the Court took up one of Justice Scalia's pet procedural issues: the authority of appellate courts to review district court orders remanding removed cases to state court notwithstanding 28 U.S.C. § 1447(d), which provides that such orders are not reviewable "on appeal or otherwise." Notwithstanding that rather clear language, the Court previously has interpreted the statute to preclude review only of remands for lack of subject-matter jurisdiction or for defects in removal procedure. (Justice Scalia takes a strong view on this statute: for him, so long as the district court purports to remand or lack of subject matter jurisdiction, even if that conclusion is clearly wrong, there can be no appeal.) The issue here was whether Powerex fit into the subject matter jurisdiction box. The case was convoluted: the state of California sued various energy companies for price-fixing, and they in turn cross-claimed against various federal agencies and entities tied to the Canadian government (including Powerex). The cross-defendants all removed the case to federal court as either federal agencies or foreign entities, but the district court remanded, finding that Powerex did not qualify as a foreign sovereign that could remove under the Foreign Sovereign Immunities Act. On appeal, the Ninth Circuit affirmed the holding as to Powerex; the Court granted cert, but also asked the parties to brief whether the Ninth Circuit had jurisdiction over the appeal in the first place in light of § 1447(d). As it turns out, the answer was no. Justice Scalia's majority opinion is even more complicated than the facts, so we'll leave it at this: The district court essentially held that it had no power to adjudicate the claims against Powerex once it ruled on the foreign sovereign question; this was colorably characterized as a matter of subject matter of jurisdiction; therefore, the ruling was unreviewable. Section 1447(d) represents Congress' determination that lengthy disputes over removal should be avoided, so there should be no review of colorable jurisdictional grounds invoked by district courts. Justice Kennedy concurred, along with Justice Alito, to say that if today's decision poses a policy issue in our relations with foreign sovereigns, then Congress should step in to fix the problem.
Justice Breyer dissented, joined by Justice Stevens. For them, the FSIA created a conflict with § 1147(d)'s "no review" rule, and they would read that subsequent and more specific statute to create an exception to the rule in cases like this one. So in their view the Ninth Circuit had jurisdiction over the appeal, but got it wrong on the merits: They would have held that Powerex was an organ of the Canadian government.
Monday's order list included one cert grant for next term, LaRue v. DeWolff, Boberg & Assocs. (06-856), an ERISA case that asks: (1) Does § 502(a)(2) of ERISA permit a participant to bring an action to recover losses attributable to his account in a "defined contribution plan" that were caused by fiduciary breach? and (2) Does § 502(a)(3) permit a participant to bring an action for monetary "make-whole" relief to compensate for losses directly caused by fiduciary breach (known in pre-merger courts of equity as "surcharge")?
We'll get more opinions tomorrow, then again on Monday and probably at least one other day next week. Until then, thanks for reading!
Ken & Kim

From the Appellate Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart, Ken Heath, Aaron Bayer, or Jeff Babbin at 203-498-4400