Supreme Court Update: Dart Cherokee Basin Operating Co. v. Owens (13-719) and Heien v. North Carolina (13-604)

December 23, 2014 Supreme Court Update

Greetings, Court fans!

Long before he became Chief, John Roberts quipped that "[o]nly Supreme Court justices and schoolchildren are expected to and do take the entire summer off." Right now, the Justices are in the midst of a multi-week Christmas vacation that would make most school children green with envy. But we're not complaining, as we've got some catching up to do. Last week, the Court issued two new decisions: Dart Cherokee Basin Operating Co. v. Owens (13-719), on the pleading standard for removal jurisdiction under the Class Action Fairness Act, and Heien v. North Carolina (13-604), on whether a "reasonable mistake of law" can give rise to reasonable suspicion under the Fourth Amendment. The Court also issued a "supplemental decree" in United States v. California (Orig. 5), clarifying the boundary line between the submerged lands of the California and those of the United States. If you want to read 110 pages of map coordinates, this is your chance!

Dart Cherokee Basin Operating Co. v. Owens (13-719) split the court 5-4 – not on the merits, but on whether the Court should have considered the case at all. Before we get to that, first some background: Owens filed a class action against Dart in Kansas state court claiming that Dart had underpaid oil and gas royalties. Dart attempted to remove the case to federal court under the Class Action Fairness Act ("CAFA"), which provides federal jurisdiction (subject to some exceptions) over class actions where there are at least 100 class members, the parties are minimally diverse, and there is at least $5 million in controversy. Dart's notice of removal alleged that there was at least $8.2 million in dispute. Owens argued that Dart's removal notice was defective because it didn't contain evidence establishing that the amount in controversy exceeded $5 million. In response, Dart submitted a detailed affidavit supporting an amount in controversy in excess of $11 million. The district court, however, found that Dart's submission came too late. Interpreting Tenth Circuit precedent, the district court concluded that Dart needed to provide evidence in the removal notice itself and that Dart's subsequent filing could not cure this defect.

While remand orders are generally unreviewable, a court of appeals "may accept an appeal from an order of a district court granting or denying a motion to remand" where a case involves CAFA jurisdiction. Dart filed a petition for permission to appeal under this provision, but the Tenth Circuit denied review "upon careful consideration of the parties' submissions" and "applicable law." The Supreme Court granted cert to review the issue of whether a removing defendant is required to provide evidence in the notice of removal in order to establish CAFA jurisdiction. Neither party raised any issue about the Court's ability to hear the case, but an amicus did – arguing that because a petition for permission to appeal the remand order is permissive, the Court had no jurisdiction to consider the denial of that petition.

Justice Ginsburg led the majority, joined by the odd combination of the Chief, Breyer, Alito and Sotomayor. As Ginsburg explained, the answer to the question presented was simple. The removal statute requires that the notice of removal provide a "short and plain statement of the grounds for removal." This is the same standard set out in Rule 8(a), and the same standard that applies to plaintiffs who elect to file a complaint in federal court. It requires nothing more than a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. The party invoking jurisdiction may rely on an allegation unless and until the opposing party or the district court questions the amount in controversy. Here, Dart plausibly pled that more than $5 million was in controversy. Once that amount was challenged by Owens, the district court could properly consider evidence from both sides and make a ruling by a preponderance of the evidence as to whether the amount in controversy was established. End of analysis… on that issue.

Turning to the amicus's argument that the Court lacked jurisdiction, the Court concluded that the case was properly before the Tenth Circuit as a result of Dart's petition to appeal and the Court was entitled to review the Tenth Circuit's decision denial of the petition. While Dart did not present the issue through the lens of the Tenth Circuit's abuse of discretion in denying the petition to appeal, Owens waived that defect as it raised no argument regarding the propriety of the question presented. The Court then concluded that the Tenth Circuit did abuse its discretion because this issue was one that was likely to forever evade judicial review if not addressed now (since diligent counsel would henceforth include such evidence even if it was not required under a correct interpretation of the law) and because it appeared that the Tenth Circuit based its denial on an incorrect belief that the district court was right on the law.

The dissenters, led by Justice Scalia, didn't express any disagreement on the proper pleading standard in CAFA removal cases. They, however, felt that the amicus was right and that the case should have been dismissed as improvidently granted. The Tenth Circuit might have denied the petition for permission to appeal on many grounds – not enough time, not the right case etc. Dart did not seek certiorari on the issue of whether the Tenth Circuit abused its discretion in denying the petition. Instead, Dart attempted to seek review of the underlying district court decision, but it was the Tenth Circuit's decision that is the subject of the Court's review. Since Dart didn't seek cert on the correct issue and couldn't show an abuse of discretion in any event, the case should have been dismissed as improvidently granted. Justice Thomas dissented separately because he believed the Court had no jurisdiction at all to review the case, even if the question presented had argued abuse of discretion.

We turn now from removal to "reasonable suspicion." It is well established that the "reasonable suspicion" needed for a police officer to lawfully effectuate a vehicle stop under the Fourth Amendment may be based upon a reasonable mistake of fact. See, e.g., Illinois v. Rodriguez (1990). In Heien v. North Carolina, the Court considered whether reasonable suspicion may similarly rest upon a reasonable mistake of law. Somehow this question has not reached the Court before—most likely because the Supreme Court and most states have already determined that a reasonable police error can be considered when determining the remedy for a Fourth Amendment violation—i.e., whether to apply the exclusionary rule. Not so North Carolina, however, and that's where Maynor Javier Vasquez was driving on the morning of April 29, 2009, with only one working break light. The officer who pulled him over was probably more suspicious about Vasquez's nervous behavior and the fact that his passenger, Nicholas Brady Heien, remained lying across the back seat for the entire traffic stop; but the faulty break light provided the reasonable suspicion needed to stop the vehicle and get consent to a search, which yielded a small amount of cocaine. Heien pleaded guilty to attempted trafficking in cocaine, but the North Carolina Court of Appeals reversed, holding that, as it turns out, driving with only one working brake light is not actually a violation of North Carolina law: the statute requires vehicles to be "equipped with a stop lamp," and one is good enough. Therefore, there was no reasonable justification for the stop, and (because North Carolina does not recognize a good-faith exception to the exclusionary rule) the evidence seized had to be suppressed. Heien's victory was short lived, however, as the North Carolina Supreme Court held that, even assuming the law permitted one faulty brake light, the officer's contrary view was reasonable given the language of the statute, therefore, the overall stop was also reasonable under the Fourth Amendment and there was no violation in the first place.

The U.S. Supreme Court affirmed North Carolina's. Writing for eight Justices, the Chief observed that a search or seizure can be reasonable without being perfect, and reasonable men can make mistakes of law, just as they make mistakes of fact. "Reasonable suspicion arises from the combination of an officer's understanding of the facts and his understanding of the relevant law. The officer may be reasonably mistaken on either ground." To support this conclusion, the Chief invoked cases dating back centuries dealing with probable cause in the customs context. There, as Chief Justice Marshall remarked, "[a] doubt as to the true construction of the law is as reasonable a cause for seizure as a doubt respecting the fact." More recently, in Michigan v. DeFillippo (1979), the Court had held that, where an officer reasonably suspected that a defendant had violated a law that was later ruled unconstitutional, the evidence obtained during the stop need not be suppressed. The majority drew a connection to this case, where an officer reasonably, but mistakenly, suspected that a defendant violated a law capable of multiple meanings. DeFillippo and other cases dealt with the exclusionary rule—that is, they assumed a Fourth Amendment violation but held that, given the officer's good faith and the reasonableness of his mistake, exclusion was not an appropriate remedy. But the majority saw no reason to treat the antecedent question (whether there was a Fourth Amendment violation to begin with) any differently. As long as the mistake—whether of fact or of law—is reasonable, it will not invalidate the reasonable suspicion needed to effectuate a valid stop. Applying this test, the majority had no trouble finding that the NC officer's mistake about whether state law required one or two operating brake lights was a reasonable one. In fact, judging by the Court's brief discussion of the NC statute, it is apparent that it believed it was the NC Court of Appeals who made the mistake of law, not the officer.

This all seems, well, reasonable. But how are we supposed to know whether an officer's legal error is reasonable or not? Justice Kagan, joined by Justice Ginsburg, drafted a concurring opinion attempting to narrow the Court's new rule to those situations where "the law at issue is so doubtful in construction that a reasonable judge could agree with the officer's view."

This wasn't enough to secure the vote of Justice Sotomayor, who issued a solo dissent arguing that "determining whether a search or seizure is reasonable requires evaluating an officers' understanding of the facts against the actual state of the law," not the officer's understanding, or misunderstanding of the law, even if reasonable. Justice Sotomayor lamented that the Court's decision "means further eroding the Fourth Amendment's protection of civil liberties in a context where that protection has already been worn down." Moreover, the majority's rule would deter lower courts from actually deciding close issues of law, when they can simply hold that the officer's view, whatever its merits, was reasonable. (As regular readers know, four of the Court's favorite words, especially so far this term, are "we need not decide . . . .") Finally, Justice Sotomayor didn't see any pressing need to carve out an exception to the Fourth Amendment's reasonableness requirement for mistakes of law, when the federal courts and most states already allow the officer's good faith to be taken into consideration in considering the remedy for an illegal search or seizure (i.e. whether the evidence should be suppressed). On the whole, Justice Sotomayor concluded that "the more administrable approach—and the one more consistent with our precedents and principles—would be to hold that an officer's mistake of law, no matter how reasonable, cannot support the individualized suspicion necessary to justify as seizure under the Fourth Amendment."

There have been no new cert grants since our last Update, but the Court did call for the views of the SG in one case, Gobeille v. Liberty Mutual Insurance Co. (14-181), which asks whether the Employee Retirement Income Security Act of 1974 (ERISA) preempts Vermont's health care database law as applied to the third-party administrator for a self-funded ERISA plan.

We hope you all enjoy some rest and relaxation over the next couple weeks!

Kim & Tadhg