Supreme Court Update: Sprint Communications v. Jacobs (12-815), Kansas v. Cheever (12-609), Heimshoff v. Hartford Life & Accident Ins. (12-729), and UNITED HERE Local 355 v. Mulhall (12-99)

December 18, 2013 Supreme Court Update

Greetings, Court fans!

Another week, another batch of unanimous decisions. Three, to be precise: Sprint Communications v. Jacobs (12-815), defining (some might say confining) the scope of the Younger abstention doctrine; Kansas v. Cheever (12-609), holding that a prosecutor's reliance on a psychiatric expert who has examined the defendant does not violate the accused's right against self-incrimination; and Heimshoff v. Hartford Life & Accident Ins. (12-729), concluding that a limitation period in an ERISA plan is enforceable unless it is "unreasonably short" or contrary to a governing statute. The Court also issued a per curiam decision dismissing cert as improvidently granted in UNITED HERE Local 355 v. Mulhall (12-99). We'll also catch you up on a handful of notable opinions related to orders.

In a ruling that will excite civ pro professors and federal jurisdiction aficionados (and perhaps put the rest of you to sleep), the court took up the doctrine of Younger v. Harris in Sprint Communications v. Jacobs (12-815). At issue was whether a local Iowa telecommunications carrier could impose intrastate access charges on Sprint for Voice Over Internet Protocol (VoIP) telephone calls transmitted via the Internet. After paying the charges for some time, Sprint concluded that federal law preempted intrastate regulation of VoIP traffic. Following some procedural back and forth, the Iowa Utilities Board (IUB) determined that it had jurisdiction to consider the issue and found that the intrastate fees applied to VoIP calls. Sprint brought two suits to challenge the IUB ruling: a federal suit against the members of the IUB seeking a declaration that federal law preempted the Board's decision, and a petition for review of the IUB's order in Iowa state court, which Sprint contended it had to file to exhaust state remedies. The state case made the same preemption argument raised in the federal complaint and also asserted state law and due process claims. The IUB, citing Younger, asked the federal court to abstain in light of the state proceeding. The district court granted the motion, finding that the IUB's decision and the pending state court review were a single "uninterruptible process" and implicated important state interests. The Eighth Circuit affirmed, holding that Younger abstention is appropriate whenever "an ongoing state judicial proceeding . . . implicates important state interests, and . . . the state proceedings provide adequate opportunity to raise [federal] challenges."

The Court reversed in a unanimous decision authored by Justice Ginsburg. The Court took as its starting point longstanding precedent cautioning that federal courts have "no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given," and instructing that, where jurisdiction exists, a federal court has a "virtually unflagging" obligation to hear the case. Younger carved out an exception requiring federal courts to abstain from enjoining a state court criminal prosecution. Since then, the Court has extended the Younger abstention doctrine to two categories of non-criminal cases: certain civil enforcement proceedings that are "akin to a criminal prosecution" in "important respects" (attorney disciplinary proceedings, for example), and other civil proceedings involving orders that are "uniquely in furtherance of the state courts' ability to perform their judicial functions." In Sprint, the Court closed the door on any further expansion: "We have not applied Younger outside these three ‘exceptional' categories, and today hold . . . that they define Younger's scope." The Eighth Circuit over-read and accorded "extraordinary breadth" to a prior Supreme Court decision to reach its conclusion that abstention is appropriate where a parallel state court proceeding implicates important state interests and affords adequate opportunity to raise federal challenges. These, the Court explained, were additional considerations relevant only where a quasi-criminal state court proceeding is at issue. The Eighth Circuit's ruling would have extended Younger to nearly all parallel state and federal proceedings, a result "irreconcilable with our dominant instruction that, even in the presence of parallel state proceedings, abstention from the exercise of federal jurisdiction is the ‘exception, not the rule.'" Because the IUB state court proceeding fit none of the Younger categories, abstention was impermissible.

The Court also gave a shout out to the ERISA mavens out there in Heimeshoff v. Hartford Life & Accident Ins. Co. (12-729), which considered the enforceability of contractual limitations periods in ERISA plans. An employee benefit plan participant may sue for benefits under § 502(a)(1)(B) of ERISA but must exhaust the plan's administrative remedies first. Because § 502(a)(1)(B) doesn't establish a statute of limitations, ERISA plans often provide them contractually. Petitioner Heimeshoff was a beneficiary of an ERISA disability benefits plan administered by Hartford Life & Accident Insurance Co. In August 2005, after becoming ill, Heimeshoff filed a claim. More than two years later, following extensive back-and-forth in which Heimeshoff submitted evidence and The Hartford's own retained physicians reviewed her claims, The Hartford issued a final denial of benefits in November 2007. In November 2010, just short of three years later, Heimeshoff filed suit in federal district court under § 502(a)(1)(B). The Hartford moved to dismiss, citing plan language stating that "[l]egal action cannot be taken against The Hartford . . . [more than] 3 years after the time written proof of loss is required to be furnished according to the terms of the policy." (Proof of loss is generally due near the beginning of an internal claims process; at the latest, in this case, even Heimeshoff admitted it would have been due by September 2007 based on an extension to submit evidence granted by The Hartford.) The district court granted the motion, citing a Connecticut law allowing an ERISA plan to specify a limitations period expiring "[not] less than one year from the time when the loss insured against occurs." The Second Circuit affirmed, holding that it did not offend ERISA that a limitations period could begin to run before a beneficiary could exhaust plan remedies and file suit under § 502(a)(1)(B).

In a unanimous opinion penned by Justice Thomas, the Court affirmed, resolving a circuit split. Although statutory limitations periods typically begin to run when causes of actions formally accrue and a plaintiff is permitted to file suit, such default rules may generally be modified by contract. Permitting modification of a limitations period in an ERISA plan is particularly appropriate, the Court reasoned, because the plan is "the linchpin" of the ERISA scheme. Based on that premise, the Court has enforced plan terms as written in § 502(a)(1)(B) claims in the past, and did so again here. Specifically, the Court held that a plan's limitations period must be upheld unless it is "unreasonably short" or a controlling statute bars the limitations provision – even if it begins to run before a party is entitled to bring suit. In Heimeshoff's case, the three year period was not "unreasonably short;" even though the administrative review process in her case was unusually long, she still had approximately one year left to file suit after The Hartford denied her claim. Nor was the limitations period contrary to ERISA itself, despite the claims of Heimeshoff and the government to the contrary. Tallying various periods permitted in the relevant regulations, the Court determined that the regulations contemplate a review process that typically will last approximately a year. The Court rejected arguments that, if contractual limitations periods were enforced, plan participants would rush through the internal review process in order to preserve extra time for filing suit; that plan administrators may attempt to prevent judicial review by delaying the resolution of claims (the Court noted that regulations would provide for immediate judicial review under such circumstances); that limitations periods should be tolled as a matter of course during internal review; and that courts must consider whether state law would toll a limitations period. The Court also found evidence that the common 3-year limitations period harmed diligent participants "far too insubstantial to set aside the plain terms of the contract."

Finally, in Kansas v. Cheever (12-609), the Court, this time led by Justice Sotomayor, found that a state does not violate the Fifth Amendment's prohibition against self-incrimination by introducing evidence of a court-ordered psychiatric examination where a defendant puts his mental status at issue. Cheever shot and killed one sheriff and shot at several others when they attempted to arrest him. He had an extensive history of methamphetamine use and was cooking and smoking meth on the day of the murder. Kansas initially charged Cheever with capital murder in state court, but after Kansas's death penalty statute was held unconstitutional, the state voluntarily dismissed its case so that federal authorities could pursue Cheever in federal court where the death penalty was available. The district court ordered a psychiatric examination in response to Cheever's notice that he intended to "introduce expert evidence relating to his intoxication by methamphetamine" which he claimed negated his ability to "form specific intent." After some additional proceedings, not relevant here, the federal case was dismissed and a second state prosecution began – not surprisingly, this happened after this Court found Kansas's death penalty constitutional. At trial, Cheever presented a voluntary intoxication defense, arguing that his methamphetamine use rendered him incapable of premeditation, because his long-term use had damaged his brain and his acute intoxication the day of the shooting "very much influenced" his actions. The State used the psychiatric examination ordered by the district court in rebuttal. The jury convicted Cheever and voted to impose a death sentence. The Kansas Supreme Court reversed, however, concluding that the State had violated Cheever's Fifth Amendment rights when it introduced testimony based on the court-ordered psychiatric examination because Cheever did not "initiate the examination" or claim that he had a "mental disease or defect."

The Court unanimously reversed, explaining that the Kansas Supreme Court had read the Court's prior decision in Buchanan v. Kentucky (1987) too narrowly, to apply only where a defendant claimed mental disease or defect. Not so; Buchanan permitted use of a court-ordered psychiatric examination any time the defendant put his "mental status" at issue. Here, Cheever did so by claiming that his methamphetamine use made it impossible for him to have the requisite mental state to commit the offense. The "State permissibly followed where the defense led." Any other holding would "undermine the adversarial process."

The Court also dismissed the writ of cert as improvidently granted ("DIG'd" for short) in UNITE HERE Local 355 v. Mulhall (12-99), a case that was getting big attention from employers and unions – and all the rest of us Court fans. The case would have determined whether an employer and union can enter into an agreement (often called a union neutrality agreement) under which the employer promises to (1) maintain neutrality toward the union campaign; (2) provide the union with access to nonpublic areas of the employer; and (3) provide the union a list of employees' names and contact information, or whether such an agreement violates Section 302(a) of the Labor Management Relations Act ("LMRA"). Section 302(a) makes it a crime for an employer to "pay, lend, or deliver, or agree to pay, lend or deliver, any money or other thing of value. . . " to a labor union that represents or seeks to represent its employees. Section 302(b) likewise makes it a crime for a person to request or demand or agree to receive those things prohibited by section (a). Departing from the rulings of other circuits, which found that union neutrality agreements were not "things of value" within the scope of the LMRA, the Eleventh Circuit held that they were and that Section 302(a) is violated if the employer enters into the agreement with the intent of "corrupting" the union, and that Section 302(b) is violated if the union intends to "extort" the benefit from the employer. After briefing and argument, the Court DIG'd the case, apparently due to questions of mootness (the agreement at issue expired in 2011) and standing of the sole private plaintiff. Justice Breyer, joined by Justices Sotoymayor and Kagan, dissented. In their view, the question was sufficiently important that the Court should have ordered briefing on the jurisdictional issues before dismissing. The dissenters also would have sought further briefing on whether Section 302 provides a private right of action at all. Absent that, the Court at minimum should have vacated the Eleventh Circuit decision rather than leaving that precedent intact.

Justices also felt compelled to write opinions relating to orders in several other cases:

Planned Parenthood v. Abbott (13A452), involved an application by plaintiffs to vacate a stay of an injunction. The injunction would have halted the enforcement of a Texas law requiring physicians performing abortions to have admitting privileges at a hospital within 30 miles. After a bench trial in the district court, the court found the admitting privileges requirement unconstitutional because it was without a rational basis and placed a substantial obstacle in the path of a woman seeking an abortion. The court permanently enjoined its enforcement. The State appealed, and asked the Fifth Circuit to stay the district court's injunction pending appeal. The Fifth Circuit granted the stay, which had the effect of permitting the law to go into immediate effect. As a result, many abortion clinics were forced to close. Applicants asked the Court to vacate the stay. The Court denied the request, prompting the four "liberal" Justices to dissent. In their view, the balance of hardships tipped decidedly in favor of enjoining the law pending appeal, particularly where the law would upset the long-standing status quo and possibly result in the permanent closure of many abortion clinics. Justice Scalia wrote an opinion concurring in the denial of the stay, joined by Justices Thomas and Alito. While they agreed that "reasonable minds can perhaps disagree about whether the Court of Appeals should have granted a stay in this case," (though they certainly didn't seem to), the applicants could not meet "their heavy burden of showing that doing so was a clear violation of accepted legal standards – which do not include a special ‘status quo' standard for laws affecting abortion."

Martin v. Blessing (13-169) dealt with the highly unusual practice of one district court judge (Judge Baer of the Southern District of New York), who apparently routinely considers the race and gender of class counsel in determining the adequacy of counsel under Rule 23(g)(1)(B). While Justice Alito agreed that denial of cert was warranted given the "singular" nature of the policy at issue, he wrote to make clear that the denial of cert did not express any opinion blessing this practice, which Justice Alito clearly believed was both unconstitutional and invalid under Rule 23.

Woodward v. Alabama (13-5380) would have addressed the validity of Alabama law which permits a judge to override a jury's advisory sentence of life in prison and instead to order a sentence of death. Justice Sotomayor, joined in part by Justice Breyer, dissented from the denial. Alabama is virtually alone in this practice and routinely overrides even unanimous jury recommendations of life sentences. This practice appears politically motivated to the dissenters and raises "deep" concerns under both the Sixth and Eighth Amendments. Thus, the dissenters believed it was time to revisit the constitutionality of this practice.

Rapelje v. McClellan (12-1480) asked the Court to determine whether the Sixth Circuit erred in holding an evidentiary hearing on McClellan's habeas petition based on ineffective assistance of counsel. A federal evidentiary hearing is permissible only if the claim was not adjudicated on the merits in state court. If it was, the federal court is limited to the record developed in state court. Prior Court precedent has held that where a state court summarily rejects an appeal without stating its reasoning, the state court is presumed to have ruled on the merits, but that presumption is rebuttable. In contrast, where the state court indicates that its ruling is on the merits, no further probing is permitted. Here, while the Michigan trial court had found McClellan's claim procedurally defaulted, the Michigan Court of Appeals denied McClellan's application "for lack of merit in the grounds presented." The Sixth Circuit found that the Michigan Court of Appeals' decision was subject to the rebuttable presumption analysis and that the district court appropriately held an evidentiary hearing. The Court denied cert, but Justice Alito, joined by Justice Scalia, dissented. In their view, the Sixth Circuit was bound by the Michigan Court of Appeals' statement that its decision was on the merits, and thus the trial court should have limited its review to the state court record. Because this issue was "likely to interfere with the proper handling of a significant number of federal habeas petitions filed by Michigan prisoners," they would have granted cert to correct the error (at least as perceived by them).

We'll be back with whatever the Court sends us next. Meanwhile, happy holidays!

Kim, Jenny & Julie