Supreme Court Update: Cooper v. Harris (15-1262), TC Heartland LLC v. Kraft Food Brands Grp. (16-341) and Water Splash, Inc. v. Menon (16-254)

May 29, 2017 Supreme Court Update

Greetings, Court Fans!

We're back with summaries of the three decisions handed down this past week, beginning with a major ruling on racial gerrymandering. Cooper v. Harris (15-1262) is one of two significant redistricting cases that were argued on the same day in December, which together make it much easier for plaintiffs to make out a case of unconstitutional racial gerrymandering. In the first, Bethune-Hill v. State Bd. of Elections, the Court held that plaintiffs alleging an unconstitutional racial gerrymander need not show an "actual conflict" between a State's enacted redistricting plan and traditional redistricting criteria. In Cooper, the Court held, among other things, that where challengers are claiming that a State's motivation in redistricting was based on race, and not partisan politics, they need not produce an alternative redistricting map that would accomplish the legislature's claimed partisan aims in a race-neutral manner.

To understand the impact of these decisions, a bit of background is necessary. Under the Constitution, States have the primary responsibility for mapping congressional districts for federal elections, but that power must of course be exercised in conformity with the Fourteenth Amendment's Equal Protection clause. As a result, States are permitted to draw congressional districts with partisan political aims in mind (by, for example, packing Democrats into one district so as to dilute their vote in surrounding districts), but may not separate voters into different districts on the basis of race, unless doing so is narrowly tailored to serve a compelling state interest. A plaintiff challenging a redistricting plan under the Fourteenth Amendment must show that "race was the predominant factor motivating the legislature's decision to place a significant number of voters within or without a particular district." If so, then the burden shifts to the State to show that its use of race-based sorting satisfies strict scrutiny. In this respect, it has long been assumed that compliance with the Voting Rights Act is a compelling interest, provided the State has "good reasons" for concluding that the VRA required its action.

Cooper concerned two North Carolina congressional districts—District 1 and District 12—that, in the words of Justice Kagan, "have quite the history before this court." In a series of cases stemming from redistricting following the 1990 census, the Court struck down plans for District 1 (Shaw I) and District 12 (Shaw I & Shaw II) because they were based predominantly on race. But in two later decisions (Cromartie I & Cromartie II), the Court held that a new map of District 12 did not trigger strict scrutiny because it was based on partisan considerations—namely the desire to create a "safe" Democratic district—not racial considerations. After the 2010 census, the State again redrew its congressional map and again altered the shape of Districts 1 and 12. In District 1, the State had to add about 100,000 new people to keep up with population shifts. It did so by drawing from heavily Black areas of Durham, believing that it needed to create a majority Black district in order not to violate the Voting Rights Act. In District 12, there was no need to add population, but the State nevertheless reconfigured it so that it gained 35,000 African Americans of voting age and lost 50,000 whites of voting age, thus making District 12 a majority Black district, as well. Voters in both districts challenged the plan, alleging that the State sought to "pack" Black voters into Districts 1 and 12 so as to dilute their impact in surrounding districts. The three-judge District Court agreed, and struck down both districts as unconstitutional racial gerrymanders.

The Supreme Court unanimously affirmed with respect to District 1, but split 5-3 over District 12. Writing for the Court, Justice Kagan first batted aside the State's argument that a separate unsuccessful lawsuit brought by the NAACP challenging the districts in state court should have preclusive effect in the federal action. Though the districts and the defendant (the State) were the same, the two cases involved different plaintiffs, and "one person's lawsuit generally does not bar another's, no matter how similar they are in substance." The Court similarly rejected the State's argument that the federal courts should have exercised an even more restrained review of the districts' constitutionality in light of the state court ruling upholding them.

Turning to the merits, Justice Kagan noted that there was essentially no dispute that race predominated in the drawing of District 1. That's because the State believed it had to ensure that African Americans made up no less than a majority of District's the voting-age population to avoid vote dilution in violation of Section 2 of the VRA. The real question, therefore, was whether the State's belief that it had to pack Black voters into District 1 in order to comply with the VRA satisfied strict scrutiny—in other words, whether it had "good reasons" for concluding that the VRA required it to draw the district with race in mind. It didn't, the Court held, because Section 2 only prohibits vote dilution where minority voters are unable to elect their candidates of choice due to "bloc voting" by whites. In District 1, the "electoral history provided no evidence that at §2 plaintiff could demonstrate . . . effective white bloc-voting." "In the lingo of voting law," Justice Kagan wrote, "District 1 functioned, election year in and election year out, as a ‘cross-over' district, in which members of the majority help a ‘large enough' minority to elect its candidate of choice." For that reason, there was no reason to think the State would be liable under Section 2 of the VRA if it did not pack in extra Black voters, and therefore no compelling interest in drawing the map with race in mind.

While the Court was unanimous in striking down District 1, District 12 proved far more divisive. Here, the key question was whether race or politics was the predominant consideration in drawing the district. Justice Kagan conceded that it can be extremely difficult for a district court to determine whether race or politics played a predominant role in a particular redistricting, since "racial identification is highly correlated with political affiliation." However, once a district court has made a factual determination on racial predominance, the Supreme Court's "job is different—and generally easier." The Court reviews findings of racial predominance only for clear error. Applying that standard here, the Court upheld the District Court's finding of racial predominance respecting District 12.

Significantly, it did so even though the plaintiffs did not proffer an alternative design for District 12 as evidence of racial intent. This despite the fact that in Cromartie II, a case concerning the same congressional district, the Court had stated that "in a case . . . where majority-minority districts . . . are at issue and where racial identification correlates highly with political affiliation, the party attacking the legislatively drawn boundaries must show at the least that the legislature could have achieved its legitimate political objective in alternative ways that are comparably consistent with traditional districting principles." Though the State (and the dissent) believed that the passage settled the matter, the majority read Cromartie II as holding only that an alternative map is highly persuasive evidence of a racial intent, but not a prerequisite to such a finding. The majority allowed that in cases like Cromartie II, where the other evidence of a racial gerrymander was weak, it may be that as a practical matter an alternative map is required. But in this case, there was plenty of additional evidence to support the District Court's finding that race predominated, even in the absence of an alternative map. Accordingly, applying the clear-error standard, the Court upheld the District Court's conclusions striking down both District 1 and District 12 as unconstitutional racial gerrymanders.

Justice Alito penned a strident dissent, joined by the Chief and Justice Kennedy. Though he agreed with the majority that District 1 was an unconstitutional gerrymander, he believed the evidence showed that race did not predominate in District 12 and took the majority to task for scuttling the requirement in Cromartie II that plaintiffs produce an alternative map to prove that race and not politics motivated the line drawing in districts where racial identification correlates highly with political affiliation. "A precedent of this Court should not be treated like a disposable household item—say, a paper plate or napkin—to be used once and then tossed in the trash." Underlying Justice Alito's dissent was a sense of exasperation that the more liberal justices created the alternative-map requirement to uphold District 12 when it was drawn to benefit Democrats, but dispensed with the requirement when District 12 was redrawn to benefit Republicans. But Alito also defended the requirement on its own terms, noting that a charge of racial gerrymandering "is a grave accusation to level against a state legislature." In addition, federal-court review of redistricting legislation is a serious intrusion on a State's constitutionally assigned duty to draw congressional districts. And if federal courts are not vigilant, they can easily be "transformed into weapons of political warfare" for the "losers in the redistricting process to seek to obtain in court what they could not achieve in the political arena." For these reasons, Cromartie II was "justified in crafting an evidentiary rule to present false positives." And in the absence of the kind of evidence Cromartie II required, Justice Alito believed that the District Court clearly erred in finding that race, and not politics predominated over the drawing of District 12.

At this point, regular readers may expect a short paragraph on a separate dissent from Justice Thomas advancing a more arcane rationale for reversing the District Court. But in fact Justice Thomas provided the fifth vote for the majority (with Gorsuch on the sidelines). Unlike Justices Ginsburg, Breyer, and Kennedy, who were also on the court when Cromartie II was decided, Justice Thomas voted consistently in both cases (joining the majority here and the dissent there). In a separate concurrence, he wrote that the Court erred in Cromartie II by misapplying the deferential standard for reviewing district-court fact findings. Because Justice Kagan's opinion did not repeat that error, it "represents a welcome course correction to this Court's application of the clear-error standard."

Together, Cooper and Bethune-Hill (which concerned racial gerrymandering in Virginia) appear designed to make it easier to challenge a redistricting plan under the Fourteenth Amendment. Plaintiffs need not show an "actual conflict" between a State's plan and traditional redistricting criteria (Bethune-Hill) and they need not produce an alternative map when a State claims a gerrymandered district was motivated by politics instead of race (Cooper). Moreover, States may not be cavalier in claiming that race-based redistricting is required by the VRA. What remains to be seen is whether this permissive attitude toward racial-gerrymandering challenges will persist after the next census and round of redistricting...

The Court issued another significant ruling this week—albeit in an entirely different context—in TC Heartland LLC v. Kraft Food Brands Grp. (No. 16-341), reversing a longstanding (and plaintiff-friendly) Federal Circuit rule that had allowed patent holders to file an infringement suit in any district where a defendant makes sales.

The Patent Venue Statute, 28 U.S.C. §1400(b), provides that "[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." The Supreme Court long ago decided, in a case called Fourco Glass v. Transmirra Products (1957), that a corporate patent defendant "resides" only in its State of incorporation, and rejected the argument that §1400(b) incorporates the broader definition of corporate "residence" contained in the general venue statute, 28 U.S.C. §1391(c). However, after Congress amended the general venue statute in 1988, the Federal Circuit concluded that its provisions now applied to §1400(b), as well. As a result, for the last 25+ years, patent holders have been able to bring infringement suits in any judicial district having personal jurisdiction over the defendant, effectively meaning any district in which the defendant makes sales. That has led to rather blatant forum shopping in patent suits. Indeed, according to one amicus brief, fully 25% of patent cases nationwide over the last three years have been assigned to a single judge in Marshall, Texas, a seat of the Eastern District of Texas that is regarded as being particularly plaintiff-friendly.

Well, that's all over now. In a unanimous decision authored by Justice Thomas, the Court reaffirmed Fourco and held that subsequent amendments to the general venue statute do not change the meaning of §1400(b). Therefore, "a domestic corporation ‘resides' only in its State of incorporation for purposes of the patent venue statute." As Justice Thomas noted, Fourco definitively and unambiguously held that the word "reside" in §1400(b), refers only to the State of incorporation. Because Congress has not amended §1400(b) since Fourco, the question is whether Congress intended to change §1400(b)'s meaning when it amended §1391(c). "When Congress intends to effect a change of that kind, it ordinarily provides a relatively clear indication of its intent in the text of the amended provision." But there is no such indication in §1391(c). To be sure, §1391(c) purports to apply "[f]or all venue purposes" (and not "all venue purposes except for patent venue"). But that was true before Fourco was decided, as well (and the plaintiffs in Fourco advanced that argument). Nothing has changed in the interim that would lead the Court to believe that Congress intended to supersede Fourco.

TC Heartland is a straight-forward, unanimous decision (unlike Cooper, which weighed in at 70+ pages). But the simplicity of the Court's reasoning should not belie the substantial impact of the decision. As a result of the decision, the available venues for patent infringement cases have been reduced from virtually every district (at least in cases against defendants with nationwide commercial contacts), to just two: the State of incorporation, or the district in which the defendant committed acts of infringement and has a regular and established place of business. That means those of you who invest in courtside food carts should shift your portfolio from Marshall, Texas, to Wilmington, Delaware, where we can expect a significant increase in patent filings (in an already popular district). For more on the impacts of the TC Heartland decision, check out this analysis from our IP team.

Finally, for those of you (far from rainy New Haven) who may have spent part of the long weekend watching your kids scream with delight in a "splash park" (or "sprayground"), you should know that there is fierce competition among the manufacturers of these aquatic playground systems, at least when it comes to the services of Canadian employee Tara Menon. So fierce that a small employment dispute made it all the way to the Supreme Court in Water Splash, Inc. v. Menon (16-254), a case that also just happened to resolve a circuit split over an issue of great significance in international litigation: whether the Hague Service Convention prohibits service by mail.

Plaintiff/Petitioner Water Splash is a Texas-based producer of aquatic playground systems. Defendant/Respondent Menon was a Water Splash employee based in Canada. In 2013, Water Splash sued Menon in Texas state court, alleging that she'd begun working for a competitor while still employed by Water Splash. Because Menon resided in Canada, Water Splash sought and obtained permission to effect service of by mail. After Menon declined to answer or otherwise entered an appearance, the Texas court issued a default judgment in favor of Water Splash. What began as a ho-hum employment dispute made a splash on appeal, when Menon argued (and the Texas Court of Appeals agreed) that the Hague Service Convention, an international treaty designed to promote efficient service of process, prohibits service by mail. The Convention specifies certain approved methods of services and preempts inconsistent methods of service. The Court of Appeals reasoned that service by mail was not specifically approved and therefore must be preempted. In so holding, the state court took sides in a broader split among state and federal courts as to whether the Convention permits service through postal channels. The Supreme Court granted cert to resolve that conflict.

In a unanimous opinion authored by Justice Alito, the Court held that the Convention does not prohibit service by mail. Though the "primary innovation" in the Convention was to require states to establish a central authority to receive requests for service of documents from other countries and then serve the documents according to local rules, Article 10(a) specifically provides that (so long as a signatory does not object), the Convention "shall not interfere with the freedom to send judicial documents, by postal channels, directly to persons abroad." According to Justice Alito, the key word in Article 10(a)—"send"—is "a broad term, and there is no apparent reason why it would exclude the transmission of documents for the purpose of service." After all, the Convention is expressly limited to the service of documents, so it would be "quite strange" if Article 10(a) concerned something other than the service of documents. At the end of the day, the Court concluded that the Convention was, at most, ambiguous as to whether it permits service by mail, and that ambiguity should be resolved in Water Splash's favor given the purpose of the Convention to facilitate international service of process. The Court also noted that many other members of the treaty, including Canada, have taken the view that it permits service by mail.

So good news for Water Splash and anyone else who wants to sue the notorious Canadian, Tara Memon, in a U.S. court. But potential litigants should note that the Court held only that the Convention does not prohibit service of process by mail. Service by mail is only permitted if (1) the receiving state has not objected to service by mail; and (2) service by mail is authorized under otherwise-applicable law. The Court vacated and remanded to allow the Texas courts to consider whether Texas law authorizes the methods of service used by Water Splash.

That gets us caught up to speed for now, but we're expecting more decisions tomorrow, so stay tuned!