Supreme Court Update: Kerry v. Din (13-1402), Mata v. Lynch (14-185) and Baker Botts v. ASARCO (14-103)

June 17, 2015 Supreme Court Update

Greetings, Court fans!

The Court took care of some additional throat-clearing on Monday, handing down three decisions: Kerry v. Din (13-1402), holding that no additional process was due a U.S. citizen whose husband's visa application was denied; Mata v. Lynch (14-185), holding that circuit courts have jurisdiction to review decisions of the Board of Immigration Appeals denying motions to reopen as untimely filed; and Baker Botts v. ASARCO (14-103), holding that the Bankruptcy Code does not authorize the payment of fees to bankruptcy professionals for the time they spend defending their fee applications.

But first, a blast from the past: a while back, the Court held in EEOC v. Abercrombie & Fitch Stores (14-86) that a job applicant may prevail in a disparate-treatment claim under Title VII if she shows that her need for a religious accommodation was a motivating factor in the employer's decision, even if she never expressly informed the employer of her need for an accommodation. Hope none of you have been denying religious accommodations while you waited for us to summarize this case!

Samantha Elauf is a practicing Muslim who wears a headscarf, consistent with her understanding of her religion's requirements. In 2008, she applied for a job at an Abercrombie and was interviewed by an assistant manager, who determined that Elauf was qualified to be hired, but that her headscarf might violate the store's "Look Policy," which prohibits "caps." When the assistant manager inquired with a district manager about whether the headscarf would violate the Look Policy, she noted that she believed Elauf wore the headscarf because of her faith. The district manager confirmed that the headscarf, along with all other headwear, religious or otherwise, would violate the Look Policy's ban on caps and instructed the assistant manager not to hire Elauf. The EEOC then sued Abercrombie on Elauf's behalf, claiming that its refusal to hire her violated Title VII. The District Court ruled in the EEOC's favor, but the Tenth Circuit reversed, concluding that an employer cannot be liable under Title VII for failing to accommodate a religious practice unless and until the applicant provides the employer with actual knowledge of her need for an accommodation.

The Supreme Court reversed, 8-1, through an opinion by Justice Scalia. The Court rejected Abercrombie's argument that an applicant cannot show disparate treatment without first showing that the employer has "actual knowledge" of the applicant's need for an accommodation. "Instead, an applicant need only show that his need for an accommodation was a motivating factor in the employer's decision." Title VII forbids an employer to fail to hire an applicant "because of" the applicant's religion. In the Title VII context, this means that religion was a motivating factor in the decision not to hire. Accordingly, it is "motives," not "knowledge," that matter, and there is a difference between the two. "An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed." Here, even though Elauf had not expressly stated that a religious accommodation was required, the district manager instructed that she not be hired because the headscarf violated the company's Look Policy. Though a specific request for an accommodation may make it easier to infer motive, it is not a necessary condition of liability.

Justice Alito filed an opinion concurring in the judgment only. He agreed that Title VII imposes no notice requirement, but felt it must have a knowledge requirement. Therefore, Alito would hold that "an employer cannot be held liable for taking an adverse action because of an employee's religious practice unless the employer knows that the employee engages in the practice for a religious reason." In this case, Alito felt that there was sufficient evidence that Abercrombie did in fact know that Elauf wore the headscarf for religious reasons, but he cautioned that the majority's holding could subject an employer to liability even when that isn't the case. (He failed to articulate, however, how exactly an employer can make an adverse employment decision because of a religious practice, without knowing that the practice is religious.)

The former chair of the EEOC, Justice Thomas, dissented. In his view, a disparate-treatment claim under Title VII (unlike a disparate-impact claim) requires proof of discriminatory intent, and the mere application of a neutral policy (like the Look Policy) does not amount to discriminatory intent. All Abercrombie did in this case was to refuse to create an exception to its neutral Look Policy for Elauf's religious practice of wearing a headscarf. In so doing, it did not treat her religious practice differently than similar secular practices (like wearing a cap to cover a bald spot) and therefore did not act with discriminatory intent. While the policy may have a disparate impact on the religious practice of headscarf-wearing, that is not the claim the EEOC brought in this case. The majority opinion's expansion of disparate-treatment law, Thomas warned, could have the effect of punishing employers who in fact have no discriminatory motive.

On to this week's decisions. Those anxiously awaiting the Court's pronouncement in the gay marriage cases may find plenty to mull over in Kerry v. Din (13-402), which concerned, in part, the liberty interest spouses have in living together in matrimony.

Fauzia Din, a U.S. Citizen and resident, petitioned to have her husband, Kanishka Berashk, a former civil servant in the Taliban regime, classified as an "immediate relative," so that his visa application would be given priority status. Though Din's petition was approved, Berashk's visa application was ultimately denied. A consular officer informed Berashk that he was inadmissible under a provision of the INA that excludes aliens who have engaged in "[t]errorist activities," but provided no further explanation for the decision. Din (not Berashk) then filed a federal lawsuit in California seeking judicial review of her husband's visa denial. The District Court dismissed her complaint, but the Ninth Circuit reversed, holding that Din had a protected liberty interest in her marriage, which entitled her to review of the denial of Berashk's visa application.

The Supreme Court reversed, in a deeply fractured 3-2-4 decision with uncertain precedential value. Writing for a plurality of three (joined by the Chief and Thomas), Justice Scalia maintained that Din could not claim that the denial of Berashk's visa application deprived her of a protected liberty interest under the Due Process clause. Though Din claimed a right to live in the United States with her spouse, Scalia tersely responded that "[t]here is no such constitutional right." Referring to Justice Breyer's dissenting opinion, Scalia remarked that the "‘deprivation of [Din's] freedom to live together with her spouse in America' . . . is, in any world other than the artificial world of ever-expanding constitutional rights, nothing more than a deprivation of her spouse's freedom to immigrate into America." Because Din had no protected liberty interest in the adjudication of her husband's visa application, "there is no process due to her under the Constitution." Therefore, even the terse explanation provided for the denial of Berashk's application was more than enough.

Justice Kennedy, joined by Alito, concurred in the judgment only. In their view, there was no need to decide whether Din had a protected liberty interest in residing in the U.S. with her husband because, "even assuming she does, the notice she received regarding her husband's visa denial satisfied due process." The Court relied primarily on Kleindienst v. Mandel (1972), a case where U.S. citizen college professors asserted a First Amendment right to hear a revolutionary Marxist speak at a conference, despite his having been denied a temporary nonimmigrant visa to enter the country. The Court in that case declined to weigh the professor's First Amendment interests against the Government's interest in keeping communist propagandists out of the country, instead holding that the Government had provided adequate grounds for denying the speaker's visa. So, too, in this case, rather than decide whether Din had a protected liberty interest, Kennedy would have simply found that the stated rationale for denying Berashk's visa satisfied due process.

Justice Breyer wrote for the dissenters, who believed that Din possessed a protected liberty interest—namely "her freedom to live together with her husband in the United States." They stressed that she sought only procedural, and not substantive, protection of this freedom and opined that she was denied due process when the government denied her husband's visa application without sufficient justification. The mere citation to the INA's "terrorist activity" provision was inadequate because Din and Berashk were not provided with any factual basis that they could challenge.

Given the 3-2-4 split, the only binding result of this case is that the Ninth Circuit is reversed: Whether because she has not protected liberty interest in the first place, or because she got all the process that she was due, Din's lawsuit was properly dismissed. Of course, that difference in rationale is precisely what gay-marriage tea-leaf readers are most interested in, and the fact that Roberts joined Scalia's dismissive opinion, while Kennedy refused, will provide grist for another week or so of gay-marriage prognosticating.

In a less divisive immigration decision, the Court in Mata v. Lynch (14-185) vacated the Fifth Circuit's decision that it lacked jurisdiction to review the denial of an alien's untimely motion to reopen his removal proceedings. An alien ordered removed from the United States has a statutory right to file one motion to reopen removal proceedings, which must be filed within ninety-days of the final order of removal. More than one-hundred days after Mata was ordered removed, he filed a motion to reopen proceedings, arguing that his previous lawyer's ineffective assistance excused the late filing. The Board of Immigration Appeals ("BIA") agreed that ineffective assistance could equitably toll the deadline, but concluded that Mata was not entitled to equitable tolling because he could not show prejudice from the attorney's deficient performance. It also declined to exercise the discretion it had under its own regulations to reopen proceedings sua sponte. When Mata petitioned the Fifth Circuit to review the BIA's denial of his motion, the court dismissed the appeal for lack of jurisdiction: Prior circuit precedent held that an alien's request for equitable tolling of the ninety-day deadline must be construed as a motion to reopen removal proceedings sua sponte. And circuit precedent further held that the court lacked jurisdiction to consider such a request. Notably, the government agreed with Mata that the Fifth Circuit's jurisdictional analysis was incorrect, so the Supreme Court appointed amicus counsel to argue the Fifth Circuit's position.

Perhaps not surprisingly given the parties' agreement, the Court reversed and remanded in an opinion written by Justice Kagan. In Kucana v. Holder (2010), the Court held that circuit courts have jurisdiction when an alien appeals the BIA's denial of a motion to reopen removal proceedings. The Court saw no reason why that jurisdiction should disappear when the BIA denies the motion to reopen because it is untimely. Instead, the circuit courts have jurisdiction to consider the merits of the BIA's decision that equitable tolling is unavailable. The appointed amicus tried to support the Fifth Circuit's approach by arguing that the INA does not give the BIA the power to equitably toll the ninety-day deadline (a question the Supreme Court has never decided). If so, Mata had no relief under the INA, so the Fifth Circuit could have validly recharacterized his motion as one to reopen the proceedings sua sponte. The Court rejected this analysis, concluding that even if the amicus's reading of the INA was correct, the right approach was for the circuit court to assume jurisdiction and then hold that relief was unavailable based on the INA. The Court therefore remanded to the Court of Appeals to consider the merits of Mata's equitable tolling argument.

Justice Thomas wrote a short dissent, though one perhaps better described as a concurrence. He observed the important distinction between construing an ambiguous pleading and recharacterizing an unambiguous pleading's request for relief when the requested relief is unavailable. Had the Fifth Circuit found Mata's motion to the BIA ambiguous and construed it as only seeking to reopen the proceedings sua sponte, its dismissal for lack of jurisdiction may have been correct. But because the Fifth Circuit's opinion applied the categorical rule that an untimely motion to reopen must always be construed as a motion to reopen the proceedings sua sponte, he would vacate and remand. Since the majority's reversal went beyond this, he dissented.

Finally, in Baker Botts L.L.P. v. ASARCO LLC (14-103), the Court addressed a relatively straightforward issue, although one of great interest to bankruptcy practitioners: whether bankruptcy courts may award fees to bankruptcy professionals for time spent in defending their fee applications. The majority ruled that such fees were not allowed. Baker Botts and a second law firm apparently served ASARCO well when the company filed for Chapter 11 bankruptcy in 2005. The firms helped to get ASACRO back on its feet after four years of litigation, including winning a multi-billion dollar judgment against ASARCO's parent company. When the law firms filed their fee applications, however, ASARCO—now controlled by its parent company again—challenged the requested amounts. The challenge led to extensive discovery and a 6-day trial on fees, after which the Bankruptcy Court rejected ASARCO's objections, awarded the law firms $120 million, plus a $4.1 million enhancement for exceptional performance and another $5 million for the time they spent defending their fee applications. The District Court upheld the Bankruptcy Court's decision to compensate the firms for defending their fee applications, but the Fifth Circuit reversed.

The Court, led by Justice Thomas, agreed with the Fifth Circuit that the Bankruptcy Code did not authorize compensation for fee-application defense. Thomas was joined by the Chief, Scalia, Kennedy, and Alito in full, and Sotomayor nearly in full. Section 330(a)(1) of the Bankruptcy Code provides that a bankruptcy court "may award . . . reasonable compensation for actual, necessary services rendered by" the attorneys, accountants, and professionals hired to assist bankruptcy trustees. The Court's analysis began with, and did not stray far from, the so-called American Rule: that each side must pay its own attorney's fees absent explicit statutory authority to the contrary. While § 330(a)(1) authorizes bankruptcy courts to award fees for the "actual, necessary services rendered" to the bankruptcy estate, nothing in the language of the statute explicitly authorizes shifting the cost of litigating fee disputes. The Court rejected the argument advanced by the Government as amicus that compensation for services to the estate should include fee application defense because the compensation for the underlying services would otherwise be diluted. The Court found no support for this argument in the text and was unpersuaded by the government's policy concern that talented attorneys would be discouraged from taking on bankruptcy work. Since most attorneys are not entitled to fees for fee-defense litigation under the American Rule, bankruptcy attorneys are no worse off.

In an interesting role reversal with Justice Thomas, Justice Sotomayor wrote a one paragraph concurrence to say that the text of the statute was so clear that there was no need to address policy considerations in this case.

Justice Breyer, joined by Ginsburg and Kagan, dissented. Breyer noted that § 330(a)(3) of the Bankruptcy Code gives courts broad discretion to determine reasonable compensation for services rendered, "taking into account all relevant factors." Breyer agreed with the Government that work on defending a fee application may be a relevant factor where the net to the attorney or other professional is no longer reasonable compensation for the underlying work. Not every bankruptcy case results in fees of $124 million.

The Court will be back with more decisions tomorrow. Until then . . . .