Mohawk Industries, Inc. v. Carpenter (08-678), Beard v. Kindler (08-992), Alvarez v. Smith (08-351) and Union Pacific Railroad Company v. Brotherhood of Local Engineers and Trainmen (08-604)

December 10, 2009 Supreme Court Update

Greetings, Court fans!
The Term has begun in earnest, with the first four signed opinions released yesterday. They are an odd bunch, with two of the four failing to answer the questions presented. I'll begin with those that did.
The newcomer, Justice Sotomayor, authored the Court's nearly unanimous opinion in Mohawk Industries, Inc. v. Carpenter (08-678), concluding that district court decisions requiring allegedly privileged communications to be produced cannot be appealed immediately (i.e., before judgment) under the collateral order doctrine. 28 U.S.C. § 1291 confers federal appellate courts with jurisdiction over "final decisions of the district court." For the most part, the Court has held that "final decisions" are those that result in judgment, but the Court has also included a small category of orders that are "‘collateral to' the merits of an action and ‘too important' to be denied immediate review." To be immediately appealable under the collateral order doctrine, an order must (1) be conclusive; (2) resolve an important issue completely separate from the merits; and (3) be effectively unreviewable on appeal. Below, the Eleventh Circuit held that a discovery ruling that implicates the attorney-client privilege meets the first two prongs of this test, but fails the third. The Court agreed, citing a number of ways that parties can obtain review of such a ruling. First, in a post-judgment appeal, if the discovery ruling is found to be improper, the court of appeals can remand for a new trial in which the privileged material and fruits of that material are excluded. A party can also refuse to produce the allegedly privileged material. If it does so, the party may be sanctioned, but such an order is reviewable on appeal and may be reversed if the privilege determination was incorrect. If the party is held in contempt rather than sanctioned, that order is subject to immediate appeal provided that the contempt is considered a criminal punishment. (Hands up if you plan to try this risky route next time you're faced with this issue.) Finally, there are other means of interlocutory appeal that may be available in a situation where the privilege question is either very novel or is of special consequence, such as certification by the district court for an interlocutory appeal under 28 U.S.C. § 1292(b), which would be particularly appropriate for novel legal issues surrounding privilege determinations, and a writ of mandamus, if a manifest injustice would result from a specific privilege ruling. These mechanisms may not be perfect, but they do (in the view of the Court, if not frustrated litigants) provide effective methods of review. Thus, the balance must tip toward judicial efficiency and against piecemeal appeals of adverse attorney-client privilege decisions that would delay district court litigation and unnecessarily burden the appellate courts. Sotomayor explained that this determination was further supported by the Rules Enabling Act, adopted by Congress in 1990, which designates rulemaking, rather than judicial decision, as the preferred means of determining when prejudgment orders are immediately appealable. To the extent that any additional mechanisms are created for the immediate appeal of privilege decisions, they will be by way of rulemaking, which "draws on the collective experience of the bench and bar," not Court decision.
Justice Thomas concurred in part and in the judgment. In his view, appellate jurisdiction is controlled by Congress and any expansion of that jurisdiction must come through either legislation by Congress or rulemaking – the method Congress provided to the courts. Thomas would get rid of the collateral order doctrine all together.
Next, in Beard v. Kindler (08-992), the Court, led by Chief Justice Roberts, unanimously held (except for Alito, who did not participate) that federal habeas corpus review may be barred under the "adequate state ground" doctrine by discretionary, as well as mandatory, state procedural rules. In 1983, a jury convicted Kindler of capital murder and recommended the death sentence. Kindler filed postverdict motions, but escaped from prison before the trial court could rule on them. Kindler was caught in Canada, but escaped again. After being featured on "America's Most Wanted," he was recaptured and eventually extradited to the United States. Back in the United States, Kindler moved to reinstate his postverdict motions, long-dismissed by the trial court on the basis of Pennsylvania's fugitive forfeiture law. The trial court denied the motion to reinstate, and the Pennsylvania Supreme Court affirmed, holding that Pennsylvania law gave the trial court discretion to dismiss a fugitive's pending motions. On state habeas review, the Court of Common Pleas reached the same conclusion, and the Pennsylvania Supreme Court again affirmed. Kindler then sought federal habeas relief. Under the adequate state ground doctrine, a federal habeas court will not review a claim rejected by a state court if the state court's decision rests on a state law ground that is "independent of the federal question and adequate to support judgment." Where a state procedural rule is invoked, the rule must be "firmly established and regularly followed" in order to constitute an adequate state ground (lest the state courts creatively devise new procedural barriers in order to circumvent review of federal constitutional questions). Here, the federal district court determined that Pennsylvania's fugitive forfeiture law did not qualify, and the Third Circuit affirmed, on the ground that this forfeiture rule was discretionary and thus not "firmly established" at the time of Kindler's first escape.
The Commonwealth's petition for cert asked the Court to decide whether a state procedural rule is automatically inadequate if it is discretionary, rather than mandatory. The Court easily answered: "no," reasoning that a rule can be "firmly established and regularly followed" even if the appropriate exercise of discretion may permit consideration of a federal claim in some cases but not others. As a matter of policy, the Court did not want to force states to choose between preserving flexibility to excuse procedural errors in certain cases and preserving the finality of state court judgments in the majority of cases. The Court left Kindler one more route for escape, however: the Court did not address Kindler's argument that the Pennsylvania courts were not in fact applying a discretionary rule, but instead an impermissible new rule mandating dismissal, leaving that argument for the Third Circuit on remand. Justice Kennedy, joined by Thomas, concurred, writing separately to note that even if this particular rule was in some sense novel (i.e., not specifically articulated and regularly followed before Kindler's case), state courts should have the ability to make discretionary decisions to ensure that defendants did not flout their rules (by, for example, repeatedly escaping custody). Absent some evidence that state courts were adopting the rule for the purpose of evading constitutional guarantees, the fact that a state court had not previously specified the precise contours of a procedural rule should not necessarily preclude it from serving as an independent and adequate state ground.
Now, onto the cases that sidestepped the questions presented for review. The plaintiffs in Alvarez v. Smith (08-351) were six individuals whose vehicles or cash was seized by Illinois pursuant to its forfeiture laws, which allow movable personal property used to facilitate a drug crime to be seized without a warrant and to be held by the State for nearly five months before the State's Attorney must begin formal forfeiture proceedings. Plaintiffs brought the case as a putative class action, contending that Illinois' procedures violated the federal Due Process Clause. They sought declaratory and injunctive relief. The district court denied class certification and ruled that due process did not require any procedure prior to the actual forfeiture hearing, dismissing the case. The Seventh Circuit reversed, holding that the lengthy delay between seizure and the institution of formal forfeiture proceedings permitted by Illinois law required an interim mechanism to test the validity of the State's retention of the property.
The Court granted review to determine whether Illinois' procedures complied with due process, but learned at oral argument that all of the underlying property disputes had been resolved. The State returned the vehicles and the individual property owners either forfeited their rights to any relevant cash or accepted the State's offer to return only part of it. Justice Breyer, writing for a unanimous Court, concluded that the case was moot. While the parties continue to dispute the lawfulness of the State's hearing procedures, the "dispute is no longer embedded in any actual controversy about the plaintiff's particular legal rights. [I]t is an abstract dispute about the law. . . ." Had plaintiffs requested damages in their original complaint (something they did only after the case was dismissed) or if the case had been certified as a class, it might well have survived. But given that plaintiffs' operative complaint sought only declaratory and injunctive relief, there was no longer any live dispute particular to these plaintiffs. And the case did not fall within the narrow category of matters capable of repetition, but evading review, because (1) there was no evidence that these particular plaintiffs were likely to be subjected to the State's seizure procedures again, and (2) others affected by the States forfeiture practices might seeks damages, saving the claims from becoming moot prior to review by the Court. The harder question, according to the Court, was whether to order the judgment below vacated. Typically, the Court does vacate the lower court's judgment when a case has become moot prior to review, but not where the case has been mooted by the unilateral action of the prevailing party below or where there has been a settlement – since the losing party has, in that case, "voluntarily forfeited his legal remedy." Although this situation bore some relationship to settlement in that at least some of the underlying forfeiture actions were resolved based on agreement, many of them were resolved based on the unilateral action of the State, the losing party below. Further, the due process issue in this case was not raised in any of the underlying actions and the underlying actions were resolved in disparate fashion over a significant amount of time. Under these circumstances, the Court (but for Justice Stevens, who dissented from this portion of the decision) concluded that the mootness arose more from "happenstance" than through the kind of "settlement" that precludes vacating the lower court judgment. Therefore, the Court vacated the Seventh Circuit's decision holding the forfeiture procedures unconstitutional, clearing the slate for fresh litigation on this topic, including by these plaintiffs to the extent they have cognizable damages claims (and have not allowed the statute of limitations to expire!).
Finally, in Union Pacific Railroad Company v. Brotherhood of Local Engineers and Trainmen (08-604), the Court explored the distinction between rules that are truly "jurisdictional" in nature and those that are merely mandatory "claims processing rules," in a case that was supposed to decide whether a reviewing court could set aside an order of the National Railroad Adjustment Board ("NRAB," a board established by the Railroad Labor Act ("RLA") for purposes of arbitrating labor disputes involving railway carriers) for failure to comply with the Due Process Clause notwithstanding the limited scope of review of NRAB orders set forth in § 153 First (q) of the RLA. Here's why the Court never quite got to that question: The RLA requires that, prior to submitting a dispute to arbitration before an NRAB panel, the parties must exhaust any grievance procedures specified in their collective bargaining agreement ("CBA") and, as a final pre-arbitration step, attempt settlement "in conference" between designated representatives of the carrier and the grievant-employee. If this is not successful, either party may then refer the matter to the NRAB for adjudication by filing a Notice of Intent providing "a full statement of the facts and supporting data bearing upon the dispute." Here, Union Pacific Railroad Co. charged five of its employees with disciplinary violations, causing the employees' Union to initiate grievance procedures against Union Pacific pursuant to the CBA. The record is not clear as to whether the parties completed an "in conference" settlement attempt in each matter before the Union submitted the disputes to the NRAB for arbitration (though Union Pacific admitted that this was done in at least some cases). What is clear is that after the NRAB proceedings were under way, one of the NRAB panel members sua sponte raised the concern that the panel lacked jurisdiction to hear the disputes because the original Notices of Intent submitted by the grievants did not establish that the conferencing requirement had been met; thus exhaustion was not demonstrated. Union Pacific embraced this objection and maintained it. The Union, however, argued that Union Pacific had forfeited the objection by failing to raise it sooner and also attempted to introduce evidence that the conferencing had in fact occurred in each dispute. Over strenuous dissent from two of the five NRAB panel members, all of the disputes were dismissed. The panel reasoned that the RLA's conferencing requirement was jurisdictional and that this requirement had to be established in the Notice of Intent because the NRAB was akin to "an appellate tribunal as opposed to one which is empowered to consider and rule on de novo evidence and arguments."
The Court strongly and unanimously disagreed, in an opinion penned by Justice Ginsburg. As she explained, many requirements are ostensibly mandatory, but that does not make them jurisdictional. In the ordinary case, they will be enforced, but they can be waived and they do not limit the power of the adjudicating body – here the NRAB – to hear the dispute. The RLA's conferencing requirement was just such a mandatory claims processing rule. If the parties failed to complete the conference, it would ordinarily be premature to go forward with NRAB arbitration. However, the requirement could be forfeited if a party failed promptly to raise it. Further, there was no reason the parties could not submit evidence of conferencing after the NRAB Notice of Intent was filed, particularly where the parties did not believe the requirement was in dispute upon initial filing, as was the case here. The NRAB panel had no authority to improperly limit the scope of its own jurisdiction. Because it "failed to conform its jurisdiction to that required by . . . law," a basis expressly set forth in the RLA as one ground for setting aside an NRAB decision, the NRAB decision had to be overturned – but on statutory grounds, not constitutional ones. Because the NRAB decision here clearly ran afoul of the RLA, there was no reason to reach the question presented – that is, whether due process provides an independent non-statutory basis to invalidate an NRAB decision. That question will have to wait for the right case, where it is necessary to the outcome.
I expect that is it for the week. Until the next, thanks for reading!

From the Appellate and Complex Legal Issues Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400