Koons Buick Pontiac GMC, Inc. v. Nigh (03-377), Rodriguez v. Pataki (04-218) and Dodd v. United States (04-52860

December 1, 2004 Supreme Court Update

Greetings, Court fans!

For those of you interested in statutory construction, this is your lucky day. Yesterday, in Koons Buick Pontiac GMC, Inc. v. Nigh, 03-377, the Court ruled that Congress' 1995 amendments to the Truth in Lending Act ("TILA") did not alter the statute's damage limits for violations relating to certain loans secured by personal property. If you have no interest in statutory interpretation or the evolution of TILA's damage provisions, you can skip ahead. The debate between the Justices, however, is fascinating and entertaining.

Before 1995, section 2, subparagraph (A) of TILA provided for statutory damages as follows: "(i) in the case of an individual action twice the amount of any finance charge . . . or (ii) in the case of a consumer lease . . . 25 per centum of the total amount of the monthly payments under the lease, except that liability under this subparagraph shall not be less than $100 nor greater than $1000." Courts universally construed the $100/$1000 limits to apply to both clauses (i) and (ii). But the plot thickened in 1995, when Congress added a new clause to the end of the statute, so that 2(A) now reads as follows: "(i) in the case of an individual action twice the amount of any finance charge . . . , (ii) in the case of a consumer lease . . . 25 per centum of the total amount of the monthly payments under the lease, except that liability under this subparagraph shall not be less than $100 nor greater than $1000, or (iii) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $200 or greater than $2,000." This change provoked a Circuit split: the Seventh Circuit held that clause (i) was still subject to the $100/$1000 limits, but the Fourth Circuit concluded that Congress had altered the structure of the statute and removed any limits on clause (i).

In an 8-1 decision, the Court agreed with the Seventh Circuit, marking a victory for common sense over poor draftsmanship. Despite this near-unanimity, the decision produced five opinions, as almost all of the justices took the opportunity speak their minds about statutory interpretation. Justice Ginsburg (joined by everyone but Justices Thomas and Scalia) authored the majority opinion, which focused on the absence of evidence that Congress intended to change the rule that the $100/$1000 limits apply to clause (i). For her, the lack of legislative history supporting such a change was akin to "the dog that didn't bark" in Arthur Conan Doyle's The Hound of the Baskervilles. She also emphasized that the $100/$1000 provision expressly referred to the "subparagraph" – usually designated by a capital letter like (A) -- as opposed to the "clause" – usually designated by small roman numerals like (i) or (ii). She took this as evidence that Congress intended the $100/$1000 limits to apply to all of 2(A) except for the new clause (iii), which was "carved out" from the rest of the subparagraph. Any other result would be absurd because it would permit higher recoveries in cases involving personal property than in cases involving real property, and there was nothing in the legislative history to support such a dramatic change.

In a remarkable concurrence, Justice Stevens (joined by Justice Breyer) wrote that, in his view, the new statute was unambiguous and, absent any other evidence of legislative intent, the $100/$1000 limits would no longer apply to clause (i). But he found that the legislative history was "perfectly clear" and outweighed the plain language of the language: the case "demonstrated that a busy Congress is fully capable of enacting a scrivener's error into law." He urged the Court to reconsider its precedents suggesting that legislative history is relevant only when a statute is ambiguous or yields absurd results because "[i]t would be wiser to acknowledge that it is always appropriate to consider all available evidence of Congress' true intent." Justice Kennedy (joined by the Chief) also concurred, but wrote separately to emphasize that the statute was ambiguous and therefore, the Court's examination of other interpretive resources was appropriate. Justice Thomas concurred in the judgment (but not the majority opinion), finding that the statute was ambiguous, but, had the language been clear, "resort to anything else would be unwarranted."

Justice Scalia was the lone dissenter. He agreed with Justice Stevens that the new statute unambiguously removed the $100/$1000 limits on clause (i). He excoriated the majority for relying on the lack of legislative history to support this change ("the dog that didn't bark'). For Scalia, this "Canon of Canine Silence" was a "dangerous . . . phenomenon, under which courts may refuse to believe Congress's own words unless they can see the lips of others moving in unison."

With that, we end another chapter in the ongoing debate over statutory construction. Now, on to the Court's other business for the week.

On Monday, the Court summarily affirmed the judgment of the district court in Rodriguez v. Pataki, 04-218, a state senate redistricting case. The plaintiff alleged that New York's 2002 redistricting plan violated the one-person, one-vote requirement of the Equal Protection Clause because it overpopulated downstate districts (thereby creating fewer of them) to avoid losing upstate senate seats. The district court upheld the plan because the maximum population deviation between any two districts was less than 10 percent and there was no evidence that any deviations resulted solely from unconstitutional or irrational policies. The Court summarily affirmed, though Justice Stevens would have noted probable jurisdiction and set the case for oral argument.

Finally, on Monday the Court granted cert in one case: Dodd v. United States, 04-5286, which concerns the time period in which inmates may file habeas challenges under the Anti-Terrorism and Effective Death Penalty Act ("AEDPA") based on rights newly recognized by the Supreme Court. The statute provides for a one-year limit from when the Supreme Court "initially recognize[s]" a new right, but goes on to say that the right must have been made "retroactively applicable to cases" still pending. The Circuits have split on how this applies to pending cases, with some applying a strict one-year period from the "initial recognition," but others holding that the filing window does not open until a court has declared that a new right is retroactively applicable to already pending cases (which could extend the period well beyond a year from the right's "initial recognition"). The Court will try to resolve that conflict.

As always, thanks for reading!

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