Raymond B. Yates, M.D., P.C. Profit Sharing Plan v. Hendon (02-458) and Baldwin v. Reese (02-964)

March 3, 2004 Supreme Court Update

Greetings Court fans!

Only two opinions this week. I would have sent this email out last night, but I couldn't stay awake through the ERISA opinion.

To avoid falling asleep again tonight, I'll begin with the ERISA case, Raymond B. Yates, M.D., P.C. Profit Sharing Plan v. Hendon (02-458). The facts of this case aren't that interesting. All you need to know is that Yates was a working owner (sole shareholder and president of a professional corporation) of a business that had a pension plan, and the question was whether he qualified as a "participant" in that plan. Writing for everyone but Scalia and Thomas, Ginsburg said "yes." Ginsburg began by noting that prior to the enactment of ERISA, tax code provisions allowed working owners to participate in pension plans and there was nothing in ERISA to disturb this principle. Indeed, several provisions in ERISA expressly contemplate the participation of working owners in benefit plans. Specifically, at various points, ERISA exempts certain plans in which working owners likely participate from otherwise mandatory ERISA provisions, and these exemptions would be unnecessary if working owners could not qualify as participants in the first place. (Ginsburg runs through several of these provisions. On the theory that you're not that interested, I'll skip the details.) This reading of the statute serves Congress's goal by providing incentives to owners to create plans that will benefit employer and employees alike. Moreover, this reading comports with the Department of Labor's interpretation of the statute, although Ginsburg suggests that that interpretation is only entitled to Skidmore deference. Ginsburg closes her opinion by examining the mistakes the Sixth Circuit made when it concluded that Yates could not be a participant. Basically, that court misread a regulation, and misused another part of the statute. That's it for Ginsburg's opinion. Scalia concurred in the judgment. He would have resolved the case by giving the Department of Labor's interpretation Chevron deference. Thomas also concurred in the judgment. He finds the text inconclusive and so would look to the common law. Of course, he wouldn't actually look himself, but rather would send it to the lower courts to look in the first instance. That's it. Amazingly, I'm still awake.

In the other opinion from yesterday, Baldwin v. Reese (02-964), we have a good example of 9th Circuit error correction. The State of Oregon convicted Reese of various crimes, and he pursued all available avenues of relief in the state court system. Having failed to secure any relief there, he did what any self-respecting prisoner does: he filed a federal habeas petition. It turns out, though, that one of the claims in his federal habeas petition had not been presented to the Oregon Supreme Court when he applied to that court for discretionary review. No problem, said the Ninth Circuit. He had "fairly presented" the issue to the state supreme court because that court had the opportunity to read the lower court decision before it decided whether to grant discretionary review. Had the court read the lower court decision, they would have known he was raising the issue. The Supreme Court (Breyer, for everyone but Stevens) reversed. To hold that a claim is fairly presented just because an appellate judge could read the lower court opinion would be to hold that the appellate judge must read the lower court opinion, and there is just no way that the Court would impose such a rule. Such a rule would alter ordinary review processes by making judges read lower court opinions in every case and would impose burdens on those judges. Moreover, it's not a huge burden on prisoners to make them raise their issues expressly in state courts. Having lost on this issue, Reese tried to argue that his petition to the Oregon Supreme Court actually did raise the issue, but Breyer rejected that argument. Stevens dissented because he believed that Reese fairly presented his argument to the state court.

That's all the opinion news for now. As you may have heard already, Justice Blackmun's papers are being released tomorrow, so look for some interesting news stories on those papers in the upcoming days.

Thanks for reading,

Sandy

From the Appellate Practice Group at Wiggin and Dana.
For more information, contact Sandy Glover, Aaron Bayer, or Jeff Babbin
at 203-498-4400, or visit our website at
www.wiggin.com.