Supreme Court Update: Kawashima v. Holder (10-577), Marmet Health Care Center, Inc. v. Brown (11-394), Wetzel v. Lambert (11-38) and Order List

February 23, 2012 Supreme Court Update

Greetings, Court fans!

After a long hiatus, the Court has returned and inundated us with seven decisions released yesterday and today, as well as an order list. Today's Update will cover Kawashima v. Holder (10-577), addressing whether certain federal tax crimes are deportable offenses under the Immigration and Nationality Act; Marmet Health Care Center, Inc. v. Brown (11-394), holding that states cannot find arbitration agreements in nursing home contracts categorically unenforceable in personal injury and wrongful death cases; and Wetzel v. Lambert (11-38), involving a Brady challenge to a decades-old conviction.

Justice Thomas, writing for a majority that included the Chief, Scalia, Kennedy, Alito, and Sotomayor, penned the Court's opinion in Kawashima v. Holder (10-577), which held that resident aliens convicted of certain federal tax crimes have committed aggravated felonies under the Immigration and Nationality Act and therefore are subject to deportation. Akio Kawashima, a Japanese citizen who has been a lawful permanent resident of the United States since 1984, pleaded guilty in 1997 to filing a false tax return in violation of 27 U.S.C. § 7206(1). His wife, Fusako, also a Japanese citizen and lawful permanent resident, pleaded guilty to aiding and assisting in the preparation of a false tax return in violation of 26 U.S.C. § 7206(2). The Immigration and Naturalization Service (now the Bureau of Immigration and Customs Enforcement, or ICE), determined that the Kawashimas had been convicted of "aggravated felonies" and thus were deportable under 8 U.S.C. § 1227(a)(2)(A)(iii). Specifically, the INS found that the Kawashimas' offenses were aggravated felonies under 8 U.S.C. § 1101(a)(43)(M), which classifies as an aggravated felony an offense that either "(i) involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or (ii) is described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000." The Kawashimas argued that their crimes were not aggravated felonies because they did not "involv[e] fraud or deceit" and because tax crimes are not included within § 1101(a)(43)(M)(i); the Immigration Judge, the Board of Immigration Appeals, and, ultimately, the Ninth Circuit all disagreed, finding that the Kawashimas had committed deportable offenses.

The Supreme Court affirmed. The Court first rejected the Kawashimas' claim that their crimes were not aggravated felonies because neither "fraud" nor "deceit" were elements of their statutes of conviction. Although the words fraud and deceit do not appear in the statutes, the Court observed that § 1101(a)(43)(M)(i) reaches crimes that "involve[] fraud or deceit," meaning "offenses with elements that necessarily entail fraudulent or deceitful conduct." The Court concluded that Mr. Kawashima's knowing and willful filing of a materially false tax return involved "deceit," as did Mrs. Kawashima's knowing and willful provision of assistance to her husband. Next, the Court rejected the Kawashimas' claim that Congress intended to exclude tax crimes from the reach of § 1101(a)(43)(M)(i) when it specifically addressed tax evasion in § 1101(a)(43)(M)(ii). The Kawashimas pointed out that (i) addresses "loss to the victim" while (ii) addresses "revenue loss to the Government," and suggested that (i) could not therefore encompasses tax crimes that cause losses to the Government. The Court disagreed, explaining that (i) uses broad language to cover a large class of offenses involving fraud or deceit while (ii) is simply narrower, reaching a single type of offense that might not involve fraud or deceit and that can only have a Government victim. By limiting the reach of (ii), Congress did not demonstrate its intent to similarly limit (i). The Court also rejected the Kawashimas' claim that reading (i) to apply to tax crimes impermissibly renders (ii) superfluous. The Court reasoned that Congress merely included tax evasion in (ii) to ensure that it was a deportable offense.

Justice Ginsburg, joined by Justices Breyer and Kagan, dissented. In their view, the majority's reading of § 1101(a)(43)(M)(i) to encompass tax crimes renders § 1101(a)(43)(M)(ii) superfluous. In the dissent's view, the "discrete inclusion of tax evasion would add nothing, for tax evasion is itself an offense that, in all actual instances of which the Government is aware, ‘involves fraud or deceit,'" and therefore would qualify as an aggravated felony under (i). The dissenters rejected the majority's suggestion that tax evasion can occur without fraud or deceit, and noted that the Government had been unable to cite any instances of tax evasion in which fraud or deceit were not present. In the dissent's view, the better reading of § 1101(a)(43)(M) is that Congress drafted (i) "to address fraudulent schemes against private victims," and (ii) so that tax evasion, "the ‘capstone' tax offense against the Government[,] also qualified as an aggravated felony." The dissent was particularly disturbed by its observation that the Court's opinion made many federal, state, and local tax offenses – including many misdemeanors – aggravated felonies that will subject aliens to deportation.

Marmet Health Care Center, Inc. v. Brown (11-394), involved the enforceability of an arbitration clause in a nursing home admission agreement. The Supreme Court of West Virginia had found, as a matter of West Virginia public policy, that arbitration clauses entered into before an event of negligence occurred could not be enforced to compel arbitration of disputes concerning later negligence resulting in personal injuries or death. In a four and a half page per curiam decision, the Court (without dissent) reversed, holding that the FAA preempted this categorical state rule precluding arbitration of nursing home negligence disputes. (If you hadn't noticed, this Court really, really likes arbitration.) With respect to the state court's alternative holding that the agreement was unconscionable under state law because of its specific provisions, the Court stated that it was unable to tell how much of this holding was "influenced by the invalid, categorical rule" against predispute arbitration agreements in nursing home contracts. Accordingly, that issue remains alive on remand.

Finally, Wetzel v. Lambert (11-38), another per curiam decision, brought to the surface a continuing dialogue between the Justices over when not to grant cert. James Lambert was convicted of the 1984 murder of two people while robbing a lounge. The primary witness against him was Bernard Jackson, a serial robber, who admitted he was involved in the robbery (to avoid the death sentence) and claimed that Lambert and another individual, Reese, were his accomplices. 20 years later, Lambert sought post-conviction relief based on the fact that the prosecution had failed to turn over a police activity sheet reflecting that a photo array containing a photo of a man named Lawrence Woodlock had been shown to two witnesses of the lounge robbery and which contained a note stating "Mr. Woodlock is named as co-defendant" by Jackson. Lambert claimed the prosecution's failure to turn over the document violated his Brady rights, arguing that the document suggested that someone other than he and Reese were involved in the robbery and that it undercut Jackson's credibility because it suggested that Jackson identified this Woodlock fellow before he identified Lambert.

The Pennsylvania Supreme Court rejected Lambert's Brady claim, finding that the disputed document was not material since it was speculative to assume that the document meant someone else was involved in the crime. It may have been a reference to another robbery. Further, it wouldn't have materially furthered the impeachment of Jackson because he was already extensively impeached. The district court, on habeas review, also rejected Lambert's claim, finding that the state court's determinations that the document was not "exculpatory or impeaching" were reasonable because the notations were ambiguous. The Third Circuit reversed, holding that it was "patently unreasonable" for the Pennsylvania Supreme Court to presume that the additional impeaching evidence (which would open a whole new area of impeachment) would be immaterial, particularly where Jackson was really the whole case against Lambert. The Court did not disagree with the Third Circuit's conclusion in this regard, but faulted it for failing to consider whether the evidence was truly exculpatory or just ambiguous. The Third Circuit will get to do just that on remand. Justice Breyer, joined by Ginsburg and Kagan, dissented. In their view, the document was not ambiguous and the state court did not rely on ambiguity in any event, but on materiality. The dissenters would not have granted cert in this fact bound case involving well established legal principles.

Late last week, in American Tradition Partnership, Inc. v. Bullock (11A762), the Court granted a stay of a Montana Supreme Court decision upholding a ban on corporate campaign expenditures, pending a petition for certiorari. Justice Ginsburg, joined by Breyer, issued this intriguing statement respecting the grant of the application: "Montana's experience, and experience elsewhere since this Court's decision in Citizens United v. Federal Election Comm'n, 558 U. S. ___ (2010), make it exceedingly difficult to maintain that independent expenditures by corporations ‘do not give rise to corruption or the appearance of corruption.' . . . A petition for certiorari will give the Court an opportunity to consider whether, in light of the huge sums currently deployed to buy candidates' allegiance, Citizens United should continue to hold sway." Them's fightin' words!

The Court also granted cert in two cases:

Fisher v. Univ. of Texas at Austin (11-345), potentially another blockbuster, asks whether the Court's decisions interpreting the Equal Protection Clause of the Fourteenth Amendment, including Grutter v. Bollinger (2003) "permit the University of Texas at Austin's use of race in undergraduate admissions decisions."

Lozman v. Riviera Beach, Florida (11-626) asks whether a "floating structure that is indefinitely moored, receives power and other utilities from shore and is not intended to be used in maritime transportation or commerce constitutes a ‘vessel' under 1 U.S.C. § 3, thus triggering federal maritime jurisdiction."

Finally, the Court sought the SG's views on two other petitions:

Rubin v. Iran (11-431), would ask whether Section 1609 of the Foreign Sovereign Immunities Act of 1976 "permits discovery in aid of execution only with respect to specific property identified by the plaintiff as potentially subject to attachment."

Vance v. Ball State University (11-556), would ask whether the "supervisor liability rule" under Title VII – that an employer is vicariously liable for severe or pervasive workplace harassment by the victim's supervisor – "(i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim's daily work, or . . . (ii) is limited to those harassers who have the power to ‘hire, fire, demote, promote, transfer, or discipline' their victim."

We'll be back soon to bring you the additional decisions!

Kim & Jenny

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