Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co. (08-1008) and Padilla v. Kentucky (08-651)

April 6, 2010 Supreme Court Update

Greetings, Court fans!

The big news last weekend was Justice Stevens' admission that he would definitely retire from the Court during President Obama's first term in office. While he didn't say when, he did tell the New York Times that "[t]he president and the Senate need plenty of time to fill a vacancy" – indicating that his announcement is likely to come sooner rather than later.

This Update will cover the two remaining decisions from last week: Shady Grove Orthopedic Associates., P.A. v. Allstate Insurance Co. (08-1008), where the Court found that federal courts could hear class actions asserting statutory interest claims created by New York law notwithstanding New York law forbidding such claims to be tried as class actions; and Padilla v. Kentucky (08-651), holding that a criminal defense attorney's failure to inform a client that a guilty plea can carry adverse immigration consequences may be grounds for an ineffective assistance of counsel claim.

Under New York Civil Practice Law § 901(b), "an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action." The issue for the Court in Shady Grove Orthopedic Assocs. PA. v. Allstate Insurance Co., was whether Federal Rule of Civil Procedure 23 ("Rule 23") trumped this provision, opening the federal court's doors to class actions asserting New York statutory interest claims that would not be permitted in New York state courts. Five Justices of the Court found that it did. Justice Scalia, joined by the Chief, Stevens, Thomas, and Sotoymayor found that there was a direct and unavoidable conflict between Rule 23 and § 901(b) because both rules answered the same question differently. Rule 23 provides that a class action "may be maintained" if its criteria are met and § 901(b) provides that the same class action "may not be maintained" if it seeks statutory penalties. Because "Rule 23 unambiguously authorizes any plaintiff, in any federal civil proceeding, to maintain a class action if the Rule's prerequisites are met," Rule 23 governs, unless the Rule exceeded its statutory authority under the Rules Enabling Act, 28 U.S.C. § 2072, which authorized the Court to promulgate rules of procedure for federal courts, provided that those rules "shall not abridge, enlarge, or modify any substantive right."

Scalia (now not joined by Stevens, and so representing only a plurality of the Court), next explained that the analysis of whether a particular Federal Rule exceeds the authorization of the Rules Enabling Act focuses on the nature of the Federal Rule itself, rather than the nature of the state law it supplants, relying heavily on the Court's 1941 decision in Sibbach v. Wilson. Under this approach, if a Federal Rule arguably regulates procedure, it survives. Rule 23, which governs only the "manner and means" by which litigants' rights are enforced, passed that test. Justice Stevens parted ways with the plurality on this issue. In his view, the plain language of the Rules Enabling Act states that Federal Rules "shall not abridge, enlarge or modify any substantive right." Therefore, if there is a conflict between a Federal Rule and a state law that is "substantive," the Federal Rule cannot apply. Scalia (joined now only by the Chief and Thomas) admitted that there was "something to" Stevens' textual argument, but argued that stare decisis and pragmatic concerns were paramount as Stevens approach would replace "a single hard question of whether a Federal Rule regulates substance or procedure [with] hundreds of hard questions, forcing federal courts to assess the substantive or procedural character of countless state rules. . . ." (Interesting role reversal . . . Stevens arguing plain meaning and Scalia relying on stare decisis!) Stevens would also conclude that a state procedural rule that is "so bound up with the state-created right or remedy that it defines the scope of that substantive right or remedy" also must be given effect in federal courts. § 901(b), which facially applies even to claims based on federal or other state law, looked more like a policy judgment about which lawsuits should proceed in a class form in New York courts, rather than a rule aimed at defining the scope of any right or remedy. Therefore, it did not pass Stevens' unique test.

The dissenters, led by Justice Ginsburg, would find no conflict between Rule 23 and § 901(b). In their view, § 901(b) was really intended as a restriction on the availability of statutory damages. There was no reason to read Rule 23, which is focused on the requirements for certification, so broadly as to supplant this limitation on remedy, particularly in light of Erie's mandate that federal courts apply state substantive law and federal procedural law. In the end, Shady Grove will undoubtedly result in numerous state laws aimed at limiting class actions being found inapplicable in federal courts. However, given the nature of the Court's fractured opinion, there is significant room for states to attempt to craft limitations that are framed as restrictions on remedies rather than on the class action device itself.

Next, in Padilla v. Kentucky, the Court split 5-2-2 on whether an attorney's erroneous advice, or lack of advice, on the potential immigration consequences of a guilty plea for a noncitizen defendant could constitute ineffective assistance of counsel. The majority, led by Justice Stevens, held that it could. Here, Padilla had been a lawful permanent resident for over forty years. He was charged with transporting a large amount of narcotics, and pled guilty after his lawyer erroneously told him that he "did not have to worry" about deportation because he had been in the country so long. In postconviction proceedings, Padilla argued that he would not have pled guilty if he had not received this bad advice. The Kentucky Supreme Court denied relief, on the ground that the Sixth Amendment right to counsel did not extend to advice about "collateral" consequences such as immigration status. The Court reversed. Setting aside the question of whether the Sixth Amendment should extend to advice about "collateral" versus "direct" matters, the Court found that the penalty of deportation had been so "enmeshed" with criminal convictions for nearly a century that advice regarding deportation could be within the ambit of the Sixth Amendment right to counsel. The Court acknowledged that immigration law was complex, and that in some cases, a defense attorney's duty would be limited to alerting the client that pending charges could carry a risk of adverse immigration consequences. "But," the Court held, "when the deportation consequence is truly clear, as it was in this case, the duty to give correct advice is equally clear." The Court rejected the SG's suggestion to limit its holding to cases where counsel gave incorrect advice, because it did not want to give attorneys an incentive to remain silent, and thereby deny vulnerable clients advice.

Justice Alito, joined by the Chief Justice, concurred in the judgment. They agreed with the majority that giving incorrect immigration advice, as Padilla's lawyer did here, could constitute ineffective assistance of counsel. They disagreed, however, that criminal defense attorneys should have an affirmative obligation to provide specific immigration advice. In their view, immigration law is so complex that it is not reasonable to expect non-specialists to say anything other than that a conviction may have adverse immigration consequences and that the client should consult an immigration attorney. Justice Alito and the Chief feared that the Court's decision would lead to much confusion and needless litigation over whether a particular situation was sufficiently "succinct and straightforward" so as to render non-advice ineffective assistance of counsel. Justice Scalia, joined by Justice Thomas, dissented. They would not extend the Sixth Amendment to cover any advice beyond matters germane to the criminal prosecution at hand, i.e., the chance of conviction, and the potential sentence. The concurring and dissenting Justices all believed that the Court's constitutional ruling would thwart the development of preferable statutory protections, such as requiring trial judges to inform non-citizen defendants on the record that a guilty plea may carry adverse immigration consequences, or giving judges greater discretion in permitting such defendants to withdraw guilty pleas.

The Court has not issued any new decisions yet this week, but I will let you know when it does.


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