Supreme Court Update: Artis v. District of Columbia (16-460), National Association of Manufacturers v. Department of Defense (16-299), District of Columbia v. Wesby (15-1485)

January 30, 2018 Supreme Court Update

Greetings, Court Fans!

With apologies for the delay, we're back with summaries of the three decisions handed down last week. (What's another few days when you've already waited a historic amount of time for the second opinion of the year?)

Let's start with the first 5-4 decision of a term that will likely feature a bunch of them. In Artis v. District of Columbia (No. 16-460), The Nine were divided not over gay rights or partisan gerrymandering, but the meaning of the word "toll." As you're no doubt aware, federal courts can exercise jurisdiction over state-law claims that tag along with federal claims. But typically, if the court dismisses the federal claims it will decline to retain jurisdiction over the state-law claims, which can then be refiled in state court. Artis concerned a provision of the supplemental-jurisdiction statute, 28 U.S.C. § 1367(d), that addresses how state statutes of limitations will be tolled while state-law claims are pending in federal court: "The period of limitations for any [state-law] claim asserted under [a federal court's supplemental jurisdiction] shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period."

Stephanie Artis filed a federal lawsuit against her employer, the District of Columbia, alleging violations of both Title VII and various provisions of D.C. law. The suit was filed in December 2011 and dismissed on June 27, 2014, when the district court granted summary judgment to the District on Artis's Title VII claim and declined to exercise supplemental jurisdiction over her state claims. By that time, more than three years had passed since her state district-law claims had accrued, so absent § 1367(d), her claims would be time-barred. But when she refiled the claims in D.C. superior court 59 days later, the court dismissed them anyway. It rejected Artis's argument that the clock stopped ticking while her claims were pending in federal court and held instead that, because the state limitations period had expired during that time, she had only the additional 30 days' grace period in which to refile. The D.C. Court of Appeals affirmed.

The Supreme Court reversed, 5-4. Writing for the majority, which consisted of the more liberal Justices and the Chief, Justice Ginsburg pointed to the common understanding of the concept of tolling in the Court's precedents, which connotes a "suspension" or "pause" in the running of a limitations clock. Tolling the limitations period for an additional 30 days after dismissal, Justice Ginsburg reasoned, does not indicate a grace-period design. Rather, it simply "accounts for cases in which a federal action is commenced close to the expiration date of the relevant state statute of limitations." The majority rejected the District's argument that "toll" means "remove or take away" when used together with "period of limitations." Because the statute certainly does not "remove" the "period of limitations" itself, the District's position required a strained reading of "period of limitations" to mean "the effect of the period of limitations as a time bar." Further, the District's reading would permit a plaintiff to refile in state court even if her state limitations period had lapsed before she filed her federal case, unless "tolled" took on the strange meaning "removed, unless the period of limitations expired before the claim was filed in federal court." The legislative history on which the D.C. courts relied did not sway the Court. Although the House Report cited an ALI study that recommended a grace-period wording, the citation was in reference to a different statute. And, in any event, Congress did not adopt the ALI's wording in § 1367(d). Justice Ginsburg also rejected the argument that a stop-the-clock interpretation should be avoided because it would violate the Necessary and Proper Clause. Although the Court had previously upheld § 1367(d) against a broader challenge under that Clause, the District contended that a grace period suffices to serve Congress's legitimate goals, and a stop-the-clock statute would unnecessarily interfere further in state justice systems. This did not persuade the majority, which held that both grace periods and stop-the-clock provisions are "off-the-shelf means of accounting for the fact that a claim was timely pressed in another forum," and Congress should have flexibility to employ either. The majority also doubted that a stop-the-clock provision actually is more disruptive of state courts.

In dissent, Justice Gorsuch, joined by Justices Kennedy, Thomas, and Alito, concluded that common law and the Court's precedents recognized grace periods and clock-stopping as two applications of "tolling." Clock-stopping generally applied when a plaintiff was prevented from filing by, for example, the defendant's concealment of the injury. A grace period applied when a plaintiff filed in the wrong court and needed to "journey" to another court to refile. Congress enacted § 1367(d)'s reference to "State law . . . tolling period[s]" against the backdrop of the "journey's account" periods (i.e., grace periods) traditionally provided by state law. And "toll" should have a consistent meaning throughout § 1367(d). Moreover, if the federal "tolling period" is the case's pendency in federal court, and state grace periods apply only if they are longer than the federal "tolling period," absurd outcomes are possible. A plaintiff who filed in federal court with one day left on the clock, and whose case was in federal court for more than a year, would have a federal "tolling period" of over a year. If the state grace period were six months, the federal "tolling period" would be longer, and the plaintiff would receive only 31 days to refile, not six months. It would require completely rewriting the phrase "tolling period" in order to avoid these absurd results of the majority's interpretation of "tolling." The dissenters also found the majority's interpretation at odds with the Necessary and Proper Clause. In their view, a stop-the-clock provision is unnecessary to serve federal interests and, more so than a grace period, is an intrusion into matters within the province of the states. Underscoring the point, Justice Gorsuch lamented that perhaps "we've wandered so far from the idea of a federal government of limited and enumerated powers that we've begun to lose sight of what it looked like."

The Court's dizzying statutory-interpretation back-and-forth (including points beyond what we could reasonably summarize here) laid bare the many problems with the wording of § 1367(d). It seems neither the stop-the-clock rule nor the grace-period rule can be implemented reasonably in every factual scenario without some pretty serious bending of the statute's text. While the majority addressed the central linguistic tension, we might see more § 1367(d) debates down the road if lower courts face the sorts of strange, but plausible, situations described in the Justices' hypotheticals. It will also be interesting to see whether Artis foreshadows a reinvigoration of the Necessary and Proper Clause or federalism generally following the addition of Justice Gorsuch.

Next up, the ominously captioned National Association of Manufacturers v. Department of Defense, (No. 16-299). Though it sounds like a showdown between two heavyweights of the military-industrial complex, the case actually involved the relatively arcane question of where challenges to an Environmental Protection Agency rule must be filed. The mnemonic answer? SCOTUS disagreed with POTUS and held that WOTUS must be challenged in a DCOTUS, not a COAOTUS.

For those who need a bit more explanation, here goes. Many provisions of the Clean Water Act ("CWA") prohibit various activities that affect "navigable waters." "Navigable waters," in turn, are defined as "the waters of the United States, including the territorial seas." Because that's not much of an improvement in clarity, in 2015 the EPA issued the Waters of the United States Rule (common called the "WOTUS Rule"), which was intended to define the "waters of the United States" more precisely (and hence define "navigable waters" and the jurisdictional reach of the CWA more generally). Lots of parties, including the National Association of Manufacturers ("NAM"), brought challenges to the WOTUS Rule in federal district courts around the country under the Administrative Procedure Act (cases that were not consolidated).

But there was a problem: A provision of the CWA, 33 U.S.C. § 1369(b)(1), enumerates seven categories of EPA actions that can only be challenged by going directly to the federal courts of appeals. Some of the WOTUS Rule's challengers were concerned that the Rule might fall within one or more of these categories, so they brought challenges to the Rule directly in various courts of appeal, all of which were consolidated in the Sixth Circuit. NAM deliberately did not do so, however. Instead, it intervened in the Sixth Circuit and moved to dismiss the case for lack of jurisdiction, arguing that challenges to the WOTUS Rule challenges must be filed in district courts. The Government opposed the motion to dismiss, arguing two of Section 1369(b)(1)'s exceptions applied, and the Sixth Circuit agreed. The Supreme Court granted cert on this jurisdictional question, and reversed.

Writing for a unanimous Court, Justice Sotomayor concluded that none of the Section 1369(b)(1) exceptions to review in the district courts applied. Hence federal district courts, not the courts of appeals, were the appropriate forum to decide initial challenges to the WOTUS Rule. We could discuss the details of why the two statutory exceptions the government relied on were found not to cover the WOTUS Rule, but to be honest, it's a bit tedious. In brief: The Government asserted that exceptions (E) and (F), each of which gives the courts of appeals jurisdiction over challenges to (essentially) a type of permit issued by the EPA or Army Corps of Engineers, applied. The Government acknowledged that the WOTUS Rule wasn't literally one of these permits, but it urged the Court to adopt a functional approach to (E) and (F): Because the WOTUS Rule ultimately defined the scope of the CWA, and hence the scope of activities subject to these permitting requirements, it was in some sense functionally equivalent to a permit. The Court disagreed. Reading in context, the two exceptions were narrow and limited to specific agency action. What's more, the Government's more expansive approach would make many of Section 1369(b)(1)'s seven exceptions extra redundant surplusage. Finally, the Court rejected various policy arguments offered by the Government in favor of review directly in the courts of appeals (such as greater uniformity and a more-streamlined process of review), opining that if Congress wanted EPA decisions reviewed in that manner, it should've said so (as Congress did say in other environmental statutes, like the Clean Air Act).

Thus, the various challenges to the WOTUS Rule in district courts around the country may resume. Whether they can advance to the appellate courts is another matter. Shortly after taking office, the Trump Administration issued an executive order directing the EPA to eliminate the WOTUS Rule and revert to the pre-2015 standard. Because that process has yet to play out, the Court noted that its decision was not moot. But by the time the challenges make their way through the district courts, there may no longer be a WOTUS Rule to be challenged.

Finally, in District of Columbia v. Wesby (No. 15-1485), the denizens of One First Street, N.E., went hyperlocal with an analysis of whether D.C. police officers had probable cause to arrest a (vacant) houseful of partiers for trespass. The case arose out of a raucous party in Northeast D.C., not so very far from the staid steps of the Supreme Court. A neighbor called the police to report that the party was raging in a house that had been vacant for several months. When the officers arrived, they found that the house was mostly unfurnished (with the exception of some folding chairs, blinds, a mattress upstairs, toiletries, and a fully stocked fridge) and in "disarray." The officers found a "makeshift strip club" in the living room and "more debauchery upstairs," where a naked woman and several men were in the bedroom surrounded by open condom wrappers. Sensing some illegality afoot, the officers rounded up the roisterers—21 in all—and interviewed them. Though there were inconsistencies in their responses, several of the bacchanalians said they were there for a bachelor party (though they couldn't identify the bachelor), while two of the women "working the party" said that a woman named "Peaches" (aka "Tasty") was renting the house and had given them permission to be there. Tracked down by phone, Peaches at first confirmed that she was renting the house and had given the partiers permission to be there, but later admitted that she herself didn't have permission to use the house. That led the officers to contact the actual owner, who told them that, while he'd been trying to negotiate a lease with Peaches, they hadn't reached an agreement and he hadn't given Peaches or anyone else permission to be there. With that, the officers arrested the revelers (all 21 of them) for unlawful entry and transported them to the station for booking. When they arrived, however, a lieutenant decided to charge the debauchers with disorderly conduct, instead. Those charges were later dropped.

Sixteen of the cleared carousers sued the officers for false arrest, alleging principally that the cops lacked probable cause to believe that they knew or should have known they were in the house against the owner's will. The District Court granted the merrymakers' motion for summary judgment, concluding that the officers lacked probable cause and were not entitled to qualified immunity. The case proceeded to a trial on damages, which yielded an award of nearly $1 million(!), including attorneys' fees. The D.C. Circuit affirmed, but those NIMBY party-poopers at One First Street reversed.

Writing for a mostly unanimous Court, Justice Thomas first concluded that the officers had probable cause to arrest the partygoers for unlawful entry. A host of distasteful factors allowed the officers to draw some common-sense conclusions about human behavior, Justice Thomas wrote. "Most homeowners do not live in near-barren houses. And most homeowners do not invite people over to use their living room as a strip club, to have sex in their bedroom, to smoke marijuana inside, and to leave their floors filthy." And even though the women "working" the party maintained that Peaches had given them permission to strip, have sex, smoke pot, and sully her floor, there was reason to disbelieve that Peaches had any authority to extend that invitation, especially given her own evasive answers to their questions. In concluding otherwise, Thomas opined, the D.C. Circuit had erred by viewing each of the various factors at issue in isolation, rather than looking at the "whole picture." Accordingly, the Court reversed the D.C. Circuit ruling and held that the officers were entitled to summary judgment on the false-arrest claims.

But the Court didn't stop there. Justice Thomas proceeded to address whether the officers were also entitled to qualified immunity, concluding that given the particular circumstances of the case—where "officers found a group of people in a house that the neighbors had identified as vacant, that appeared to be vacant, and that the partygoers were treating as vacant"—it was reasonable for them to conclude that they had probable cause to arrest. The D.C. Circuit erred by insisting that a suspect's subjective belief that he is welcome on the property ("Peaches invited us!") vitiates probable cause to arrest for unlawful entry. After taking a tour through District of Columbia case law, Justice Thomas concluded that this was far from clearly established, as would be required to avoid qualified immunity.

Seven Justices joined Thomas's opinion in full, but Justices Sotomayor and Ginsburg concurred only in part. Writing alone, Justice Sotomayor agreed that the judgment should be reversed on qualified-immunity grounds, but criticized the majority for reaching the substantive probable-cause question. Had it abstained, the partygoers' state district-law claims of false arrest and negligent supervision might have survived and Sotomayor felt those claims were better addressed by the lower courts. (And, thanks to Artis, the plaintiffs would had have plenty of time to refile those claims in D.C. Superior Court!)

Justice Ginsburg also wrote separately, and blew a solo dog whistle for lawyers and academics who feel the Court's probable-cause jurisprudence has gone astray. In Ginsburg's view, it should matter that the partiers were arrested for unlawful entry based on a Sergeant's erroneous view that the only relevant factor was whether the true owner had given the partiers permission to be there. But, in light of the Court's probable-cause precedent (particularly cases like Whren v. United States (1996) and Devenpeck v. Alford (2004)), it doesn't matter what reason the officers gave for the arrests, as long as there was probable cause, as an objective matter, to believe that some crime occurred. This jurisprudence, Ginsburg fretted, "sets the balance too heavily in favor of police unaccountability to the detriment of Fourth Amendment protection." While she agreed that the officers were entitled to qualified immunity, she "would leave open, for reexamination in a future case, whether a police officers' reason for acting, in at least some circumstances, should factor into the Fourth Amendment inquiry." Sharpen those pencils, future amici!

That does it for now. There are still a whole lot of opinions outstanding, but The Nine are off the bench until mid-February, so we'll give your inboxes a rest for a couple of weeks.