Reed Elsevier, Inc. v. Muchnick (08-103), Mac's Shell Service, Inc. v. Shell Oil Products Co. LLC (08-240), Johnson v. United States (08-6925) and order list

March 9, 2010 Supreme Court Update

Greetings, Court fans!
With apologies for the delay, I'm back to summarize last week's decisions, including Reed Elsevier, Inc. v. Muchnick (08-103), finding the requirement that copyright holders register their works before suing for copyright infringement to be a non-jurisdictional claims processing rule (notwithstanding hundreds of lower court rulings to the contrary), Mac's Shell Service, Inc. v. Shell Oil Products Co. LLC (08-240), holding that the Petroleum Marketing Practices Act does not permit claims based on constructive termination or nonrenewal where a franchisee continues to operate and has signed a renewal agreement, and Johnson v. United States (08-6925), concluding that Johnson's Florida conviction for battery did not constitute a violent felony for purposes of the sentencing enhancement under 18 U.S.C. § 924(e)(1).
In Reed v. Elsevier, Inc., the Court continued on its mission to dispel confusion (it created) over what counts as a "jurisdictional" condition, which precludes a court's review and cannot be waived, and what is simply a "claims processing" rule, which does not affect a court's ability to hear the case, even though it may ultimately require dismissal of the case for failure to establish a necessary prerequisite to sue or element of the cause of action. (The facts here reveal why this seemingly meaningless distinction can make a big difference.) The named plaintiffs in Reed were freelance writers, who filed a putative class action claiming that defendants infringed their works by reproducing them electronically without permission. Under the Copyright Act, 17 U.S.C. § 411(a), copyright owners must register their works prior to bringing suit for copyright infringement. The named plaintiffs in Reed had done so, but the class they sought to represent included individuals who had not. Ultimately, a settlement was reached among the parties, and the District Court certified a settlement class and approved the settlement, over the objection of a handful of freelance writers who didn't like the substance of the agreement. On appeal, however, the Second Circuit sua sponte raised the concern that it did not have subject matter jurisdiction to approve the settlement agreement since it covered unregistered works. None of the parties agreed, but the Court of Appeals nonetheless dismissed. The Court granted cert and reversed. (Interestingly, because there was no party to speak in favor of the Second Circuit's decision, the Court appointed an amicus to do so.)
Justice Thomas, speaking for a largely agreeable, if not entirely unanimous Court, explained that recent precedent had clarified that rules should be read to establish jurisdictional conditions only when "the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional." If not, courts should treat the rule as a claims processing rule or as an element of the cause of action. Here, § 411(a)'s registration requirement bore no indicia that the legislature intended it as a limitation on the jurisdiction of the courts. It was in a separate section from those statutes granting federal courts jurisdiction to hear such claims. Further, § 411(a)'s registration requirement is riddled with exceptions, which would be odd for a jurisdictional mandate. Thus, while § 411(a) establishes a precondition to suit, the requirement is not jurisdictional (and is thus capable of being waived) and the Second Circuit erred in concluded that it did not have authority to approve the settlement in this case.
Justice Ginsburg, joined by Justices Stevens and Breyer concurred in part and in the judgment, but wrote separately to address the "undeniable tension" they saw in two precedents – Arbaugh v. Y & H Corp. (2006), which found Title VII's numerosity requirements not jurisdictional, and Bowles v. Russell (2007), which found the time limit for filing a notice of appeal under a particular statute jurisdictional even though Congress did not expressly label it as such. Ginsburg would reconcile those cases on the ground that Bowles relied on prior Supreme Court precedent finding the time limit jurisdictional. In contrast, while there was lower court authority finding the numerosity requirement addressed in Arbaugh to be jurisdiction (just as there was with respect to § 411(a)), the lower court decisions were not entitled to the same treatment.
Next up, in Mac's Shell Service, Inc. v. Shell Oil Products Co., the Court found that the Petroleum Marketing Practices Act ("PMPA") does not provide a cause of action for constructive termination or constructive nonrenewal where the franchisor's conduct does not cause the franchisee to abandon his franchise or not renew. Shell had long provided its service station franchisees a rent subsidy based on the volume of gas they sold, but the subsidy was eliminated after Shell joined with two other oil companies to create Motiva Enterprises LLC ("Motiva"). In addition, when the old Shell franchise agreements came up for renewal, Motiva offered the franchisees new agreements that had different rental terms. The franchisees didn't like the new terms or the elimination of the rent subsidy – but apparently not enough to abandon their franchises – so they signed renewal agreements (sometimes under protest) and sued, claiming that the conduct by Shell and Motiva ("Shell") constituted breach of contract and amounted to constructive termination/nonrenewal in violation of the PMPA. A jury found in favor of the franchisees on all claims, and the district court rejected Shell's arguments that there could be no constructive termination/nonrenewal claims under PMPA where the franchisees continued to run their franchises and signed renewal agreements. The First Circuit affirmed with respect to the constructive termination claims, but reversed on the constructive nonrenewal claims.
Justice Alito, writing for a unanimous Court, agreed with the First Circuit with respect to constructive nonrenewal, but reversed with respect to the constructive termination claims, concluding that they were also barred if the franchisor's conduct did not cause the franchisees to abandon their franchises. As the Court explained, PMPA was not intended to regulate all aspects of the franchise relationship – it was limited to termination and renewal; other aspects of the relationship remain subject to state law. Allowing a constructive termination claim where a franchisee continues to operate would vastly expand the scope of behavior regulated by PMPA. Moreover, there is no workable standard to determine what conduct is sufficiently bad to constitute constructive termination where the conduct does not result in the franchisee actually terminating. This interpretation is also consistent with the criteria for constructive termination claims in other contexts such as employment, where the termination is considered "constructive" because the plaintiff ended the relationship, not because the relationship has not ended at all. The Court similarly concluded that permitting claims for nonrenewal where franchisees signed renewal agreements would expand PMPA beyond recognition. (Note to practitioners: The Court did not hold that PMPA allows constructive termination/nonrenewal claims in any circumstances – just that it certain did not permit such claims here.)

Finally, in Johnson v. United States, the Court held that a conviction for battery, when defined to include mere intentional unwanted touching of another, will not be treated as a conviction for "a violent felony" for purposes of a sentencing enhancement. First, some background: federal law prohibits convicted felons from possessing firearms or ammunition, and permits judges to impose enhanced sentences on felons-in-possession who have three prior convictions for a violent felony. Disputes frequently arise over whether prior convictions under various state laws meet the federal definition of a violent felony. That definition includes, among others, an offense that has as an element the use of "physical force" against the person of another. Johnson had a prior conviction for battery under Florida law, which defined battery to include intentionally touching or striking another person against his will, and made battery (normally a misdemeanor) a felony when committed by a defendant who had been convicted of battery before (which Johnson had). The repercussion of past crimes can multiply like rabbits.
The question before the Court was whether the term "physical force" in the federal definition of a violent felony encompassed mere unwanted touching. Writing for a 7-2 majority, Justice Scalia acknowledged that, at common law, the word "force" was used to describe one of the elements of battery, and was satisfied by even the slightest offensive touching. But while the Court, and Justice Scalia in particular, prefers to give common-law terms their common-law meaning, that meaning simply would not fit here. Rather, the Court found that "in the context of a statutory definition of 'violent felony,' the phrase 'physical force' means violent force - that is, force capable of causing physical pain or injury to another person." Since it could not be determined that Johnson's prior conviction for battery involved the use of violent force, his felon-in-possession sentence could not be enhanced. The Court refused to remand the case for the Court of Appeals to consider whether the battery conviction involved "conduct that presents a serious potential risk of physical injury to another," a residual clause to the definition of a violent felony, because the Government had disclaimed reliance on that clause at sentencing. Justice Alito, joined by Justice Thomas, dissented. They would have applied the common law definition of force, and noted that the federal definition of "a violent felony" was a term of art that already encompassed much conduct that was not necessarily violent, such as burglary and extortion.
The Court also issued a per curiam decision in Kiyemba v. Obama (08-1234), a case that would have determined whether a federal court had the power to provide habeas relief requiring the release of prisoners held at Guantanamo Bay where "the Executive detention is indefinite and without authorization in law, and release into the continental United States is the only possible effective remedy." Since each of the plaintiffs had received offers of settlement from other countries and most had accepted, the Court vacated and remanded the case to DC Circuit to determine in the first instance whether these new facts affected the legal issues involved.
There were also two dissents from orders last week. The Court GVR'd Florida v. Rigterink (08-1229) for further consideration in light of Florida v. Powell (2010), which found a Miranda warning acceptable under the federal Constitution even though Powell argued that it could be interpreted to allow counsel only prior to and between questions. Justice Stevens dissented from the GVR because he felt the Rigterink decision clearly had an independent basis in the Florida Constitution, particularly given that the Florida Supreme Court expressly stated that the federal Constitution "sets the floor, not the ceiling." (If so, the Florida Supreme Court will presumably say so again on remand.) The Court also GVR'd Machado v. Holder (08-7721) for further consideration in light of the SG's position that the lower courts had ignored petitioner's nonconstitutional claim of ineffective assistance of counsel. Chief Justice Roberts, Scalia, Thomas and Alito dissented from that GVR because they did not believe petitioner ever asserted any nonconstitutional claim; they would have simply denied cert.
I will be back soon to bring you the two decisions and orders released yesterday. Until then, enjoy the lovely weather!
Kim
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