Supreme Court Update: Carpenter v. United States (16-402), Pereira v. Sessions (17-459), WesternGeco, LLC v. ION Geophysical Corp. (16-1011)
Greetings, Court Fans!
Today was the last scheduled date of OT18, but The Nine still have more work to do. The Court handed down two big decisions today—Abbot v. Perez (No. 17-586), upholding all but one challenged TX congressional district against a racial-gerrymandering challenge; and Ohio v. American Express (No. 16-1454), holding that Amex's antisteering provisions (which prohibit merchants from "steering" customers to use other credit cards with lower merchant fees) do not violate federal antitrust law—but four decisions remain, including two of the most controversial of the term, Janus v. AFSCME (No. 16-1466), on public-sector unions and Trump v. Hawaii (No. 17-965), on the so-called Travel Ban. We've got some work to do, catching up on last week's decisions. Read on below for summaries of Carpenter v. United States (No. 16-402), WesternGeco LLC v. ION Geophysical Corp. (No. 16-1011), and Pereira v. Sessions (No. 17-459). And—if you make it all the way to the bottom—news of seven new cert grants for OT18.
We've complained a few times this term about the Court punting on big issues, but we've got to give credit where it's due: In Carpenter v. United States (No. 16-402), The Nine went for it. In a decision that shook up Fourth Amendment jurisprudence, a 5-4 majority determined that the Government had conducted an unlawful search when it accessed historical cell phone records that comprehensively chronicled Timothy Carpenter's past movements. In so doing, the Court at least blurred the previous bright line of the third-party doctrine, which provided that one cannot have a reasonable expectation of privacy in information turned over to third parties. More concretely, the decision held that, going forward, the Government will generally need to obtain a warrant to obtain cell-site location information (CSLI), which is the time-stamped record of every time a user's cell phone connects with a cell tower (to send a text or email, make a call, or connect to the Internet). The volume of CSLI on any given user is staggering—in Mr. Carpenter's case the Government introduced 12,898 location points cataloging Carpenter's movements over 127 days (an average of 101 location points per day)—and, as Mr. Carpenter's case illustrated, CSLI can be a very useful tool for law enforcement. However, the actual precision of CSLI in tracking location was interpreted differently by the majority and the dissenters, with the majority categorizing it as "rapidly approaching GPS level precision" and the dissenters noting that CSLI's limitations made it "imprecise." Ultimately, the majority concluded that the ability of CSLI to pinpoint a person's location over long periods of time constituted a search requiring a warrant because one has an expectation of privacy in the detailed accountings of his movements. The Chief Justice, who penned an opinion joined by the Court's more liberal Justices, cited Justice Brandeis to explain that "the Court is obligated—as subtler and more far reaching means of invading privacy have become available to the Government—to ensure that progress of science does not erode Fourth Amendment protections."
The case began back when Timothy Carpenter lost his pretrial motion to suppress CSLI evidence that placed him in the vicinity of a series of armed robberies in Ohio and Michigan. The CSLI evidence was ultimately relied on in the Government's closing argument, Carpenter was convicted, and he was sentenced to over 100 years in prison. He appealed the denial of his motion to suppress, but the Sixth Circuit affirmed, relying on the so-called third-party doctrine of United States v. Miller (1976) and Smith v. Maryland (1979). When the Supreme Court granted cert last year, the case became one of the most anticipated Fourth Amendment decisions in years—both because it concerned a hugely important law-enforcement tool, and because it required the Court to reevaluate the third-party doctrine as applied in the digital age (or "Cyber Age," as Justice Kennedy likes to say). The third-party doctrine stems from the notion that an individual has a reduced expectation of privacy in information knowingly shared with another. In Miller and Smith, for example, the Court held that there was no reasonable expectation of privacy in financial records held by a bank or in records of dialed telephone numbers conveyed to a telephone company. The Government argued that the third-party doctrine should cover Carpenter's CSLI, as well because cell-site records, like the records in Miller and Smith, are "business records," created and maintained by wireless carriers. But the Supreme Court disagreed.
Writing for the majority, the Chief Justice placed the third-party doctrine on hold and dialed up a different line of cases—including State v. Knotts (1983) and State v. Jones (2012)—dealing with a person's expectation of privacy in his physical location and movements. The issue of CSLI, the Chief maintained, was at the intersection of the third-party doctrine and privacy-of-movement lines of cases. But, given the unique nature of cell-site records, he concluded that the third-party doctrine should not be extended to cover them. Collecting CSLI requires no foresight or effort and, because most providers retain CSLI for every user for five years, the Government instantly can retrace the last five years of movements of anyone who carries a cellphone. (The majority twice emphasized that CSLI's newfound tracking capacity "runs against everyone," not just crooks.) That contravenes the longstanding principle that individuals have a reasonable expectation of privacy in the whole of their physical movements. Given that most Americans are always within a few feet of their phones, the Chief analogized the cell phone to an ankle monitor that can achieve near perfect surveillance and provide "a detailed chronicle of a person's physical presence compiled every day, every moment, over several years." For that reason, cell-site records are materially different from the bank records of Miller or the phone numbers of Smith. Cell phone users do not "assume the risk" of giving a detailed accounting of their physical whereabouts for the last five years simply by carrying a phone, when the only alternative would be to disconnect from the network entirely.
Despite announcing a broadly protective Fourth Amendment rule, the Chief emphasized that the Court's holding was narrow. The Court declined to extend the third-party doctrine to CSLI, but it did not "disturb the application of Smith and Miller or call into question conventional surveillance techniques and tools, such as security cameras." "The Government will still be able to use subpoenas to acquire records in the overwhelming majority of investigations," because it is only the "rare case where the suspect has a legitimate privacy interest in records held by a third party." But "[i]n light of the deeply revealing nature of CSLI, its depth, breadth, and comprehensive reach, and the inescapable and automatic nature of its collection, the fact that such information is gathered by a third party does not make it any less deserving of Fourth Amendment protection." Because the Government obtained Mr. Carpenter's CSLI without a warrant, his motion to suppress should have been granted.
Narrow or not, the Court's decision was controversial enough to provoke four separate dissents. Leading the charge was Justice Kennedy, joined by Thomas and Alito. Kennedy's primary opposition was based on the belief that the majority's "new rule" eschews the property-based concepts that long provided the analytical framework for Fourth Amendment cases. Even Katz v. United States (1967), which looked beyond arcane property distinctions to hold that the petitioner had a reasonable expectation of privacy in a phone booth, relied on property-based concepts because the petitioner held a temporary interest in the phone booth when he closed the door behind him and paid the toll to place a call. Miller and Smith, the dissenters agreed, provide an important limitation on Katz: "the absence of property law analogues can be dispositive of privacy expectations." Additionally, Justice Kennedy was critical of the majority's reliance on Knotts and Jones, which he believed undermine the majority's position. Knotts held that "a person travelling in an automobile on public thoroughfares has no reasonable expectation of privacy in his movements from one place to another." Jones held that the Government "physically occupied private property [of the defendant] for purposes of obtaining information" when it placed a GPS on his car, thus clearing Justice Kennedy's property-law threshold. Furthermore, Justice Kennedy argued that the majority had it all wrong with regard to the importance of the information sought—far more private information can be found in the bank records of Miller than in the imprecise general location of an individual through CSLI. Finally, Kennedy lamented that, despite the majority's classification of the holding as a narrow one, "the Court's new uncharted course will inhibit law enforcement and keep defendants and judges guessing for years to come."
Justice Alito, joined by Justice Thomas, was even more critical of the majority opinion. He wrote that two pillars of Fourth Amendment jurisprudence had been fractured by the holding. The first pillar distinguished between a physical search and an order to produce documents. The Fourth Amendment, and the subsequent probable cause requirement, was never intended to apply to the compulsory production of documents. In fact, Alito argued, the current precedent of Oklahoma Press Publishing Co. v. Walling (1946) reveals that probable cause for subpoenaed documents is not required if the investigation is authorized by Congress, and in this case, the Stored Communications Act provided such authorization. The second fractured pillar is the inability of one to object to the search of a third party's property. The majority trivialized the "third-party doctrine" by treating it like just one of several lines of relevant authority; in fact, it is not a "doctrine" so much as a straight-forward application of the Fourth Amendment, protects the privacy of individuals in "their persons, houses, papers, and effects." Alito warned that the Court's fracturing of these two pillars would result in either in the complete dissolution of property-based considerations in Fourth Amendment law or in a "crazy quilt of the Fourth Amendment," as the Court is forced to explain the limitations and qualifications of the decision. Justice Alito ended his dissent ominously, warning that the Fourth Amendment only restricts Government conduct, yet "some of the greatest threats to individual privacy may come from powerful private companies that collect and sometimes misuse vast quantities of data about the lives of ordinary Americans."
Justice Thomas rounded out the group of true dissenters, writing alone to articulate his view that Katz's reasonable-expectation-of-privacy test "is a failed experiment" that distorts Fourth Amendment jurisprudence. The organizing constitutional idea at the time of Justice Harlan's precedent-setting concurrence in Katz, Justice Thomas opines, was privacy. However, the organizing constitutional idea of the founding era was property. If you've read this far, we probably don't need to tell you which idea Justice Thomas prefers.
Finally, Justice Gorsuch also "dissented," but in many ways his opinion reads more like a concurrence in the judgment. Indeed, he expressly "agreed with" the majority's "implicit but unmistakable conclusion that the rationale of Smith and Miller is wrong." But he disagreed with the Court's decision "to keep Smith and Miller on life support and supplement them with a new and multilayered inquiry that seems to be only Katz-squared." Like the other dissenters, Gorsuch believes that Katz's reasonable-expectation-of privacy approach is constitutionally unmoored and difficult to apply in a principled manner. And like the other dissenters, Gorsuch would prefer to return to "a more traditional Fourth Amendment approach" that focused on the existence of a property interest in the information sought by the Government. However, he enumerated several reasons why a property-based approach would not unduly limit the Fourth Amendment's protections. For example, an individual can have a property interest even if he shares his property with a third party and there is no requirement of exclusive ownership or control of property in order to have a Fourth Amendment-protected interest in it. Indeed, with respect to the issue at hand, Justice Gorsuch opined that it is "entirely possible a persons' cell-site data could qualify as his papers or effects under existing law," giving him a protected property interest. However, because Carpenter eschewed the property-based approach and argued only that he had Katz-based reasonable expectation of privacy in the CSLI, Gorsuch could not "help but conclude—reluctantly—that Mr. Carpenter forfeited perhaps his most promising line of argument."
So in the end, while there were only five votes to hold that Carpenter (and everyone else with a cell phone) has a reasonable expectation of privacy in cell-site records, there may yet be a sixth Justice who would agree that CSLI—and perhaps other modern-day "papers and effects" are protected by the Fourth Amendment . . . as long as their lawyers don't forfeit property-based arguments.
Moving on, in Pereira v. Sessions (No. 17-459), the Court addressed a somewhat arcane issue of immigration law, but in the process provided a glimpse at the Justices' current views on statutory interpretation and the Chevron doctrine, which has been limited (or often ignored) in several decisions over the past few terms. Chevron, of course, provides that federal courts will accept an agency's reasonable interpretation of an ambiguous statute even if the court might have interpreted the statute differently in the first instance. Pereira involved the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), which gives the Attorney General discretion to "cancel" removal of a nonpermanent resident subject to deportation if the person has been in the U.S. continuously for at least 10 years, but contains a "stop-time rule" in 8 U.S.C. § 1229b(b) that stops the counting toward the 10 years once the Government serves the noncitizen with "a notice to appear under section 1229(a) of this title." Section 1229(a)(1) states how written notice of a removal proceeding is given, specifying several items for the notice such as the nature of the proceedings, the alleged unlawful acts or conduct, and (most relevant to this case) "the time and place at with the [removal] proceedings will be held." Despite this "time and place" requirement, the Department of Homeland Security (DHS) has for years served notices to appear without the date, time, or place of removal proceedings, stating that they are "to be determined." The Board of Immigration Appeals (BIA), meanwhile, has interpreted the statutory phrase "notice to appear under section 1229(a)" as invoking the stop-time rule with a notice to appear that omits substantive information.
Petitioner Wescley Fonseca Pereira, a Brazilian citizen, overstayed his visitor visa in 2000 at the age of 19, but proceeded to get married and have U.S. citizen children and work as a handyman for over a decade. In 2006, Pereira was arrested for operating under the influence and was served with a document entitled "notice to appear." The notice did not, however, specify the date and time of his initial removal hearing. Over a year later, the Immigration Court mailed a more specific notice, but it was sent to the wrong address and returned undeliverable. As a result, Pereira failed to appear and was ordered removed in absentia. In 2013, Pereira was arrested again, this time for driving without his headlights on. After demonstrating that he'd never received the 2007 notice, Pereira applied for cancellation of removal, arguing that he'd been continuously present in the United States for more than 10 years and that the stop-time rule was not triggered by the initial 2006 notice because the document lacked the information about the time and date of his removal hearing required by § 1229(a). The BIA refused to let Pereira apply for cancellation, and the First Circuit, applying Chevron, upheld the BIA's ruling that the 2006 notice stopped the running of Pereira's continuous physical presence in the U.S.
In an 8-1 ruling, the Supreme Court reversed, holding that Chevron did not apply because the stop-time statute unambiguously required a notice to appear to include a date and time. Justice Sotomayor wrote for the Court, joined by everyone but Alito. She read the plain language of the stop-time rule's reference to a notice to appear "under section 1229(a)" to incorporate § 1229(a)(1)'s listing of time and place as a required feature of the notice in order to stop the counting of continuous physical presence. Much of the opinion consisted of rebutting, point by point, the efforts of the Government (and Justice Alito) to show that there was enough ambiguity in the statute to trigger Chevron. Those efforts included arguing that the stop-time rule's reference in § 1229b(b) to a notice "under" § 1229(a) did not unambiguously require every feature listed for a notice in § 1229(a)(1), that the main purpose of the notice to appear was as a charging document listing the offense so the time and place were not essential for purposes of the stop-time rule, and that requiring a date in the notice is absurd because the statute allows it to be changed anyway and Pereira's position would encourage inserting fake dates because DHS does not have the technical ability to know when an Immigration Court (part of the Department of Justice) has an open date on its calendar (among several other arguments). Justice Sotomayor parried each of these arguments, insisting that a notice to appear must, at a minimum, include a date and time even if that date and time could later be changed. Although the Government argued that including a specific date and time in an initial notice to appear was impractical, Justice Sotomayor insisted that DHS and DOJ should use modern technology to coordinate their actions and provide realistic dates. (Alito responded that the Court was "crossing its fingers and hoping for the best.")
While Justice Sotomayor's majority opinion took a narrow view of when a statute is ambiguous enough to warrant Chevron deference, Justice Kennedy's concurrence probably had Chevron antagonists more excited. He joined the majority opinion "in full" but wrote separately to criticize how the courts of appeals have applied Chevron to agree too easily with an agency's view that a statute is ambiguous in addition to the agency view of what the statute means. This, Kennedy maintained, is "an abdication of the Judiciary's proper role in interpreting federal statutes." He stated that the Court should, in an appropriate case, revisit Chevron to ensure that the rules for interpreting statutes are in "accord with constitutional separation-of-powers principles and the function and province of the Judiciary." Sounds like an OT18 or '19 blockbuster in the works!
Sticking up for Chevron generally, and the BIA in particular, was Justice Alito. He penned a solo dissent arguing that, in fact, the statutes concerning notice and the stop-time rule are ambiguous and he defended the notion that the agency with most experience in these matters should be given deference in how it resolved the ambiguity. Though he recognized that, in recent years, several members of the Court have questioned Chevron's foundations (citing concurring opinions in other cases by Justices Kennedy, Thomas, and Gorsuch), he maintained that "unless the Court has overruled Chevron in a secret decision that has somehow escaped my attention, it remains good law." And because the statutory language at issue here was ambiguous, the Court should follow Chevron and accept the BIA's interpretation.
Finally, in WesternGeco, LLC v. ION Geophysical Corp. (No. 16-1011), the Court addressed the question whether a U.S. patent holder can recover damages for a defendant's conduct abroad based on extraterritorial application of the U.S. patent statutes. Or at least that's what most people expected the Court to address following briefing and oral argument. But writing for a majority of seven, Justice Thomas found it unnecessary to even get to the question of when U.S. patent statutes could apply to conduct abroad, because, he concluded, the defendant's infringing conduct (as defined by U.S. patent law) occurred in the United States.
WesternGeco owns four patents relating to a system for surveying the ocean floor. ION Geophysical developed a competing system, but to avoid infringing WesternGeco's patents, it manufactured the components for its system in the U.S. and then shipped them abroad for assembly. WesternGeco sued for patent infringement, and a jury found ION liable for $93.4 million in WesternGeco's lost profits. ION moved to set aside these damages, arguing that WesternGeco could not recover lost profits on foreign sales, because the U.S. patent statute cannot apply extraterritorially to ION's conduct abroad. The district court disagreed, but on appeal, the Federal Circuit (not one generally known for its solicitude toward patent infringers) vacated the damages award, concluding that the patent act did not allow patent owners to recover for lost foreign sales. The Supreme Court granted certiorari.
Before the Supreme Court, the parties' briefs and arguments focused (as had the lower courts) on the question of whether the patent act could apply extraterritorially to allow recovery of foreign profits. As the Court has discussed in numerous opinions in the last few years, it's a general rule of statutory interpretation that federal statutes should be presumed to apply only within the territorial jurisdiction of the United States. But that presumption can be rebutted by clear evidence that Congress intended the statute to apply abroad. Thus, the parties debated whether this presumption should apply at all in this context and, if so, whether the presumption had been rebutted.
Justice Thomas's majority opinion ducked these questions, however, instead deciding the case based on another aspect of the extraterritoriality doctrine: Whether the case involves an extraterritorial (as opposed to domestic) application of the statute. That issue turns on the statute's "focus": Is it seeking to regulate conduct in the United States or protect interests here? Or is the relevant conduct something occurring abroad? While this can often be a difficult, almost metaphysical, question, Justice Thomas found it relatively easy in this case given how the Patent Act defines "infringement." Specifically, one of the acts defined to constitute "infringement" of a U.S. patent is supplying certain components of a patented combination from the U.S. with the intent that they be combined outside the U.S. in a way that would have infringed the patent if the combination had occurred in the U.S. Thus, the conduct regulated by the Patent Act—its focus—was supplying components from the United States, exactly what it was that ION was found liable for doing. And the damages that flowed from that conduct included the sales ION was able to make in foreign countries due to its infringement. Thus, as noted in a footnote, the question of whether these foreign profits could be recovered was not a question of extraterritoriality only one of causation.
Justice Gorsuch, joined by Justice Breyer, dissented. They also found it somewhat unnecessary to address the presumption against extraterritoriality, because the basic structure of patent law prohibits awarding patent holders damages for lost sales abroad. After all, U.S. patents are territorial: They only give the patent holder a monopoly on the patented invention in the United States. While the dissenters agreed that ION's conduct of exporting components for combination abroad amounted to infringement under the statute, the only damages that flowed from that infringement were the lost royalties WesternGeco would have been able to charge ION for making and exporting the components from the U.S. (a measure of damages the jury also awarded and that ION did not challenge). But when it came to lost profits, WesternGeco was really complaining that ION's conduct deprived it of sales it would have made in foreign countries. A U.S. patent could not give WesternGeco any right to make those sales, so the loss of them cannot be damages awardable under the patent statute.
That does it for this batch of opinion summaries. We'll be back with more tomorrow. But in the meantime, here's a look at some more questions the Court will be grappling with next term, courtesy of today's Order List:
Republic of Sudan v. Harrison (No. 16-1094) asks whether plaintiffs suing a foreign state under the Foreign Sovereign Immunities Act may serve the foreign state by mail addressed and dispatched to the head of the foreign state's ministry of foreign affairs "via" or in "care of" the foreign state's diplomatic mission in the United States, despite U.S. obligations under the Vienna Convention to preserve mission inviolability;
Washington State Dep't of Licensing v. Cougar Den (No. 16-1498) asks whether the Yakama Treaty of 1855 creates a right for tribal members to avoid state taxes on off-reservation commercial activities that make use of public highways;
Dawson v. Steager (No. 17-419) asks whether the doctrine of intergovernmental tax immunity prohibits West Virginia from exempting the retirement benefits of certain former state law-enforcement officers from state taxation without providing the same exemption for the retirement benefits of former employees of the United States Marshals Service;
Nutraceutical Cor. v. Lambert (No. 17-1094) asks whether equitable exceptions apply to mandatory claim processing rules like Fed. R. Civ. P. 26(f) and can excuse a party's failure to timely file a petition for permission to appeal an order granting or denying class-action certification under that rule;
Biestek v. Berryhill (No. 17-1184) asks whether a vocational expert's testimony can constitute substantial evidence of "other word" available to an applicant for social security benefits on the basis of a disability, when the expert fails to provide the underlying data on which his or her testimony is premised;
Helsinn Healthcare v. Teva Pharmaceuticals USA (No. 17-1229) asks whether, under the Leahy Smith America Invents Act, an inventor's sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for the purpose of determining the patentability of the invention; and
Henry Schein Inc. v. Archer and White Sales (No. 17-1271) asks whether the Federal Arbitration Act permits a court to decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes the claim of arbitrability is "wholly groundless."