Gonzalez v. O Centro Espirita Beneficente Uniao do Vegetal ["UDV""] (04-1084)

February 23, 2006 Supreme Court Update

Greetings, Court fans!
The Court has been busy . . . on top of welcoming Justice Alito to the Court for his first oral arguments, the Court issued nine opinions and an order list in the last two days. For your sanity and ours, we'll break up this barrage and give you five opinions today and four more tomorrow. The biggest news items, however, might have been the Court's grant of cert in Gonzalez v. Carhart, the partial birth abortion case, and its continuing inaction on the Padilla v. Rumsfeld petition (challenging the right of the government to detain indefinitely and without trial a U.S. citizen arrested on U.S. soil who has been declared an enemy combatant). On to the opinions:
First, in Gonzalez v. O Centro Espirita Beneficente Uniao do Vegetal ["UDV"] (04-1084), the Court (without Alito) unanimously upheld a preliminary injunction in favor of UDV, a small Brazilian religious group that sought to block the federal government from banning its sacramental use of hoasca, an hallucinogenic tea. The government argued that even though the group's religious use was sincere, the Controlled Substances Act ("CSA") banned all uses of the substance; UDV argued that under the Religious Freedom Restoration Act ("RFRA"), the government could not substantially burden its practices unless the ban was the least restrictive means of advancing some compelling interest. The district court gave UDV a preliminary injunction pending its final ruling, finding that the evidence on the government's various justifications for the ban was "in equipoise" and that therefore the government had not met its burden of proof under RFRA. Before the Court, the government did not challenge the finding that the evidence was "in equipoise," but argued that this was not enough to enjoin enforcement of the CSA because UDV had the burden of proof on its request for a preliminary injunction. Led by Chief Justice Roberts, the Court disagreed. Tracking its 2004 decision in Ashcroft v. ACLU, the Court reaffirmed that the burdens at the preliminary injunction stage track the burdens at trial, so the RFRA burdens on the government control. The Court then rejected the government's other principal argument, that it had a compelling interest in uniformly applying the CSA. As the Chief dismissively put it, this was "the classic rejoinder of bureaucrats throughout history: If I make an exception for you, I'll have to make one for everybody, so no exceptions." The Court held that RFRA expressly requires a focused inquiry regarding the burdens of a challenged law on particular claimants. Moreover, the CSA itself allows the Attorney General and the courts to make exceptions, and in fact there has been a religious exception in the regulations or the statute for peyote for 35 years (the Court did not buy the government's asserted, but undefined, "unique relationship" with Native American tribes that distinguished peyote from hoasca – if these hallucinogens are always dangerous, as the government claims, nothing about the tribes' political status makes them immune from their dangers). The Court agreed with the government that hoasca was covered under a UN convention banning hallucinogens, but held that the record supported only generalized concerns for honoring treaties and leading the international war on drugs that were not enough to satisfy RFRA . Finally, the Court noted that while the government kept citing Congress' purpose in enacting the CSA, it ignored that "Congress had reasons for enacting RFRA, too," and the compelling interest test was the means to strike a sensible balance.
Much about UDV turned on the burdens of proof at the preliminary injunction stage, and comparing it to the Court's other recent CSA-related rulings is a bit like comparing apples and oranges. But if you're keeping score in a flip sort of way (and that's where the fun is, after all), the federal scoreboard looks like this: psychotropic religious tea, OK; morphine to kill yourself, OK; marijuana to make you feel better, not OK. Look for Jon Stewart to have some fun with this.
Next, in Buckeye Check Cashing, Inc. v. Cardegna (04-1264), a nearly unanimous Court (7-1, with Alito not participating) reaffirmed that the Federal Arbitration Act ("FAA") applies in state courts and requires state courts to apply substantive federal law regarding who decides challenges to the validity of a contract with an arbitration clause – a court or an arbitrator. Under federal law, an arbitration clause is severable from the rest of a contract, so unless a party challenges the arbitration clause itself, a challenge to the validity of the contract as a whole must go to the arbitrator in the first instance. In this case, Cardegna brought a class action in Florida state court, claiming that the class members' agreements with Buckeye were illegal and void because they charged usurious interest rates. The agreements contained an arbitration clause, but the trial court declined to enforce it because Cardegna claimed that the entire contract was void ab initio under Florida state law. The Florida Supreme Court agreed. Justice Scalia, writing for the majority in a short and straightforward decision, held that substantive federal law governed the issue of severability. Therefore, since Cardegna did not challenge the arbitration clause itself but rather the contract as a whole, the Florida courts should have enforced the arbitration clause and left it to the arbitrator to determine the validity of the contracts and the allegedly usurious interest rates. Justice Thomas issued a lone dissent to note his longstanding belief that the FAA was never intended to apply to state courts but was merely a procedural vehicle to allow federal courts to require arbitration – he may be right historically, but that ship has long, long since sailed.
The Court also issued three per curiam opinions in cases that were neither briefed on the merits nor argued. In Ministry of Defense & Support for the Armed Forces of the Islamic Republic of Iran v. Elahi (04-1095), an error correction case, the Court unanimously vacated a Ninth Circuit decision (shocking, we know) allowing Elahi to attach assets of Iran's Ministry of Defense to collect on a $300M default judgment against Iran for the alleged murder of his brother. Elahi sought to put a lien on an arbitration award the Ministry was trying to enforce in California District Court, and the Ministry claimed sovereign immunity under the Foreign Sovereign Immunity Act ("FSIA"). The district court held that the Ministry had waived sovereign immunity by suing to enforce the arbitration award in the first place. The Ninth Circuit disagreed but affirmed on a ground not briefed by the parties, concluding that FSIA did not apply because, under certain conditions applicable here, the property of a foreign government's "agency or instrumentality" that is "engaged in commercial activity in the United States" is not immune from attachment. The Court vacated and remanded for the Ninth Circuit to determine after proper briefing whether the Ministry is an "agency or instrumentality" of the Iranian government or whether it was still immune as "an integral part of the state itself," the position advocated by the United States (yes, the government was arguing the Ministry's position, though probably only as a matter of general principle).
In another error correction case, the Court vacated the Eleventh Circuit's decision in Ash v. Tyson Foods, Inc. (05-379), a Title VII racial discrimination action. After a trial resulted in hefty verdicts for two plaintiffs, Ash and Hilton, the district court granted Tyson judgment as a matter of law and, in the alternative, a new trial, concluding that there was insufficient evidence of pretext to sustain either verdict. The Eleventh Circuit affirmed the lower court's decision as to Ash. As to Hilton, it found that there was enough evidence to go to the jury, but it still affirmed the alternative remedy of a new trial because the evidence did not support his punitive damages award or the size of his compensatory damages award. While the Court did not reverse the Eleventh Circuit, it found two errors that required vacatur and remand. First, the Eleventh Circuit appeared to conclude, as a matter of law, that referring to the plaintiffs as "boy" (without more, such as black or white) could not be construed as anything other than benign. While the Court agreed that "boy" would not always connote racial discrimination, it might do so based on tone, context, historical usage and other factors. Second, the Eleventh Circuit used the wrong standard for determining whether Tyson Foods' asserted nondiscriminatory reasons were pretextual. The plaintiffs sought to show pretext by arguing that two less qualified white individuals were promoted above them. The Eleventh Circuit found that such comparative evidence is insufficient to demonstrate pretext except where "the disparity in qualifications is so apparent as to virtually jump off the page and slap you in the face" (that is a quote). While the Court declined to offer its own test (they can be so helpful), "jump off the page and slap you in the face" simply couldn't be right. On remand, the Eleventh Circuit will decide whether these two aspects of its decision were essential to its holding, and, if so, it will try to come up with a better test for pretext.
Finally, in the riveting case of Lance v. Dennis (05-555), the Court further narrowed the Rooker-Feldman doctrine, which requires federal district courts to abstain from exercising jurisdiction where a losing party in state court litigation seeks what amounts to federal appellate review of the state court decision. (This case follows on heels of last Term's decision in Exxon Mobil Corp. v. Saudi Basic Industries Corp., where the Court took pains to stress the limited scope of the doctrine – the Court has not applied it since the Rooker and Feldman decisions themselves, and perhaps would like to leave it that way.) Lance involved Colorado's congressional redistricting plan, which the Colorado state courts imposed after the state legislature failed to draft one in time for the 2002 elections. In 2003, the Colorado Supreme Court rejected a challenge by the state legislature claiming, among other things, that the court-imposed plan violated the Elections Clause of the U.S. Constitution. A group of citizens later brought the same claim in federal court. The district court ruled that it lacked jurisdiction under Rooker-Feldman because the citizens were in privity with the Colorado legislature, which lost the state case. The Supreme Court reversed, holding that privity was insufficient to bar federal jurisdiction. Otherwise, the preclusive effect of state court judgments often would be decided by a prudential federal doctrine rather than by state law, as contemplated in the Full Faith and Credit Act. So the district court should have exercised jurisdiction and then determined whether the plaintiffs were barred from relitigating under Colorado preclusion principles. Justices Ginsburg and Souter concurred to note that the question of Colorado preclusion law should be left for decision on remand. Justice Stevens agreed with everything the majority said (noting that Rooker-Feldman "created nothing but mischief for 23 years"), but still dissented because he believed that the plaintiffs' claims were precluded under Colorado law anyway. The take away: Don't rely on Rooker-Feldman any more – after this case, it is very nearly a dead letter.
Now for Tuesday's cert grants. As advertised, the big one was Gonzalez v. Carhart (05-380), in which the Court will consider "[w]hether, notwithstanding Congress's determination that a health exception was unnecessary to preserve the health of the mother, the Partial-Birth Abortion Ban Act of 2003 is invalid because it lacks a health exception or is otherwise unconstitutional on its face." The other new cases are:
MedImmune, Inc. v. Genentech, Inc. (05-608): Does Article III's grant of jurisdiction of "all Cases . . . arising under . . . the Laws of the United States," implemented in the "actual controversy" requirement of the Declaratory Judgment Act, 28 U.S.C. § 2201(a), require a patent licensee to refuse to pay royalties and commit material breach of the license agreement before suing to declare the patent invalid, unenforceable or not infringed?
Global Crossing, Inc. v. Metrophones, Inc. (5-705): Whether 47 U.S.C. § 201(b) of the Communications Act of 1934 creates a private right of action for a provider of payphone services to sue a long distance carrier for alleged violations of the FCC's regulations concerning compensation for coinless payphone calls.
Cunningham v. California (05-6551): Does California's determinate sentencing law comply with Blakely v. Washington, 542 U.S. 296 (2004), and United States v. Booker, 125 S. Ct. 738 (2005), given People v. Black, 35 Cal. 4th 1238, 1257-58, 113 P.3d 534, 545, 29 Cal. Rptr. 3d 740, 753 (2005), which held the requirement that the trial court find at least one aggravating factor before imposing an upper term was only a requirement that the sentence be reasonable based on factfinding validly part of the sentencing process?
. . . and that's just part one for the week. Until tomorrow, thanks for sticking with us!
Kim & Ken
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.