United States v. Navajo Nation, Shinseki v. Sanders, Ministry of Defense & Support for the Armed Forces of the Islamic Republic of Iran v. Elahi, Arizona v. Gant, Corley v. United States and order list

April 28, 2009 Supreme Court Update

Greetings, Court fans!

This is going to be a lengthy update, with numerous (non-earth shattering, but nonetheless interesting) decisions to report as well as several cert grants. Perhaps because many of these cases where not in traditionally controversial areas, they sparked some interesting splits among the Justices.

The only unified decision came in United States v. Navajo Nation (07-1410), in which the Court rejected, once and for all, the Navajo Nation's claims for damages against the federal government arising from the Secretary of the Interior's approval of amendments to a coal lease executed by the Tribe. The original lease between the Tribe and the predecessor to Peabody Coal Company ("Peabody") allowed Peabody to mine land belonging to the Tribe in exchange for certain royalty payments for 10 years "or so long thereafter as the substances produced are being mined . . . in paying quantities." Because the Tribe's land was rich in coal deposits, the lease has never terminated as Peabody continues to extract "paying quantities" of coal. Under the lease, royalty rates initially were set at 37.5 cents per ton of coal (what a bargain!), but the rates were subject to "reasonable adjustment" by the Secretary after 20 years and again every 10 years thereafter. This dispute arose out of the first adjustment of the royalty rate in 1984. The Tribe asked the Secretary to raise the royalty rate, and the Secretary agreed – increasing it to 20 of gross proceeds. But Peabody filed an administrative appeal of the Secretary's decision, and while that appeal was pending, Peabody and the Tribe agreed to a rate of 12.5 of gross proceeds. Based on this agreement, the Secretary approved amendments to the lease – and the Tribe has been suing the Secretary ever since. Among other things, the Tribe contends that the Secretary breached its fiduciary duties toward the Tribe by improperly delaying action on Peabody's appeal in order to pressure the destitute Tribe into settling with Peabody.

Since the United States generally is immune from suit, the Tribe relied on the Indian Tucker Act, which abrogates the United States' sovereign immunity with respect to claims by a tribe "arising under the Constitution, laws or treaties of the United States . . . [or] which otherwise would be cognizable in the Court of Federal Claims if the claimant were not an Indian tribe. . . ." 28 U.S.C. § 1505. The last clause refers to the ordinary Tucker Act, which waives immunity with respect to any claim "founded upon the Constitution, or any Act of Congress or . . . upon any express or implied contract with the United States, or for . . . damages in cases not sounding in tort." 28 U.S.C. § 1491(a)(1). Neither Act creates a cause of action – they simply waive immunity where a cause of action already exists. Thus, before the Tribe could invoke the Indian Tucker Act, it had to identify a substantive source of law that established specific duties that the Secretary allegedly breached and demonstrate that the relevant law mandated compensation for damages caused by the breach. The Tribe first claimed that the Indian Mineral Leasing Act of 1938 ("IMLA") and the Indian Mineral Development Act of 1982 ("IMDA") provided the substantive basis for the Tribe's claim – but the Court shot that argument down six years ago in United States v. Navajo Nation (2003) ("Navajo I"), finding that neither law created a duty "enforceable in an action for damages." On remand, the Tribe pointed to a "network" of other laws and regulations that it contended provided a basis for its claims – in particular, two sections of the Navajo-Hopi Rehabilitation Act of 1950, 25 U.S.C. §§ 635(a), 638 and one section of the Surface Mining Control and Rehabilitation Act of 1977, 30 U.S.C. § 1300(e). The Federal Circuit agreed with the Tribe, finding that these laws as well as common law trust duties arising from the Government's comprehensive regulation of tribal coal, provided a basis for a damages claim by the Tribe. The Court unanimously reversed, in an opinion by Justice Scalia. The Court found that the first section of the Navajo-Hope Rehabilitation Act relied upon by the Tribe (section 635(a)) was inapplicable because the lease in question was issued under IMLA, not that Act. (This was so because only IMLA authorized a lease of the duration provided here.) The second section was also irrelevant because it didn't relate to coal leases. Finally, the Surface Mining Control and Rehabilitation Act was "categorically inapplicable," because the lease at issue was entered some 13 years before its enactment. The Court then rejected any suggestion that common law fiduciary duties could create a cause of action for damages against the Government because the Indian Tucker Act only authorized claims based on the Constitution, statutes, treaties, or Executive Orders. And so the Tribe's 15 year quest for compensation, should, as the Court put it, "now be regarded as closed."

The Court's 6-3 decision in Shinseki v. Sanders (07-1209) addressed both a timely topic, disability benefit claims submitted to the Department of Veterans Affairs ("VA"), and a timeless issue, "harmless error" review. The Veterans Claims Assistance Act of 2000 and its implementing regulations require the VA to help a veteran develop his or her benefits claim. As part of this assistance, the VA must give notice to a veteran of (1) the evidence that is necessary to substantiate the claim, (2) what portions of the information the VA will obtain for the veteran, and (3) what portions the veteran must obtain. Where a claimant contended that the VA's notice was inadequate, the Veterans Court (an administrative court sitting at the top of the disability benefit claim review process) generally placed the burden on the veteran to prove harm caused by an error in notice. However, the Veterans Court presumed that violations of the first type of notice – failure to tell the veteran what evidence was necessary to substantiate a claim – have the "natural effect" of harming the veteran. The Court of Appeals for the Federal Circuit, which hears appeals from the Veterans Court, applied a different harmless error framework, presuming that any deficiencies in the VA's notice letter were harmful, unless the VA could prove that the error did not affect the "essential fairness of the adjudication" because (1) the notice defect was cured by the claimant's actual knowledge or (2) the benefit could not have been awarded as a matter of law.

Justice Breyer, writing for the majority, concluded that the Federal Circuit's framework for reviewing harmless error conflicted with established law. The Veterans Court is required by statute to "take due account of the rule of prejudicial error." Based on identical language in the Administrative Procedures Act, and the legislative history of the Veterans Court statute, the majority concluded that the Veterans Court should apply the same kind of harmless error analysis that courts apply in civil cases. (Interestingly, Scalia and Thomas fully joined the majority opinion, even though it did, albeit briefly, refer to legislative history.) The Court criticized the Federal Circuit's framework as complex, rigid, and mandatory -- and thus contrary to the longstanding trend in harmless error review to eschew presumptions of error divorced from all the facts and circumstances of the case. Thus, the burden of establishing that a notice error was harmful now lies with the veteran claimant and the reviewing court's decision should be based on the facts of the particular case at hand. The majority offered no opinion on the lawfulness of the Veterans Court's generalization of the "natural effects" of certain kinds of notice errors, other than to note that the Veterans Court, with its considerable experience with these cases, was better suited than the Federal Circuit to make such a non-binding generalization (and such rules of thumb were not necessarily inappropriate). Justice Souter, joined by Justices Stevens and Ginsburg, dissented, to make essentially one point: Congress placed a "thumb on the scale" in the favor of the veteran in the course of administrative and judicial review of VA decisions, so any interpretive doubt about the harmless error standard should be resolved in the veteran's favor. The majority agreed that Congress intended to tilt the scales towards veterans, but thought this pro-veteran bent could be part of the general facts and circumstances informing the traditional harmless error analysis, instead of a justification for adopting a different harmless error framework altogether.

Next up, in Ministry of Defense & Support for the Armed Forces of the Islamic Republic of Iran v. Elahi (07-615), the Court considered whether the holder of a default judgment against Iran could attach a judgment owed to Iran by a U.S. company. (If you think this case might establish some rule of general applicability, it will not. So feel free to skip this one unless you're an international law junky.) The facts: In 2000, Elahi sued Iran for allegedly participating in the assassination of his brother and obtained a $312 million default judgment. Looking to collect, Elahi attempted to attach a $2.8 million judgment that Iran had obtained against an American company, Cubic Defense Systems, claiming that the Terrorism Risk Insurance Act of 2002 ("TRIA") provided an exception to the Foreign Sovereign Immunities Act, which would otherwise provide sovereign immunity to Iran. The Cubic judgment in turn had a complicated political history: in 1977, Cubic entered into a contract with Iran to provide it with an air combat training system. Iran paid some of the money required by the contract, but before Cubic could deliver on its end of the bargain, the Iranian Revolution broke out, and President Carter blocked by executive order all of Iran's property and property interests in the U.S. About a year later, that block was lifted when Iran and the United States signed the "Algiers Accords." Still, the United States did not issue an export license for the military equipment under the Cubic contract, and Iran filed two claims with an international tribunal set up pursuant to the Algiers Accords, seeking damages or issuance of the export license from the United States. When one of those claims was dismissed, Iran initiated arbitration with Cubic for breach of contract. In the meantime, Cubic, with Iran's approval, sold the training system to Canada. Nevertheless, the arbitrators found that Cubic owed Iran $2.8 million. When Cubic refused to pay, Iran successfully sued to have the arbitration award confirmed and final judgment was entered in 1999.
Though Iran did not bother to defend itself in the direct lawsuit brought by Elahi over the murder of his brother, it did enter a sovereign immunity defense against the attachment of the Cubic judgment. The district court initially denied immunity, and the Ninth Circuit affirmed, based on 28 U.S.C. § 1610(b)'s exception to sovereign immunity, which allows a creditor to seek property to satisfy a terrorism-related judgment against an "agency or instrumentality of a foreign state." But the Supreme Court reversed in a per curiam opinion pointing out that only an "agency or instrumentality of a foreign state" – not the foreign state itself – is subject to suit under that exception. On remand, the Ninth Circuit found that the Ministry of Defense was, in effect, the Iranian state and thus section 1610(b) wasn't applicable; but the Ninth Circuit found another exception to immunity, this time in TRIA, which allowed the attachment of a "blocked asset" of a responsible terrorist state. Although most assets of Iran had been unblocked by the Algiers Accords, the Ninth Circuit concluded that military goods such as the Cubic training system were excluded.
Justice Breyer authored the Court's opinion, finding that the Cubic training system was not a "blocked asset" for TRIA's purposes. First off, the "asset" in question was not the system, but the Cubic judgment. Second, even if the system was the asset, it was now in Canada, and the executive order only blocked property "subject to the jurisdiction of the United States." But the Court faced another wrinkle: in between the Ninth Circuit's decision and its own, President Bush had designated components of Iran's Ministry of Defense as entities subject to a new executive order blocking assets of proliferators of weapons of mass destruction. Rather than remanding again to determine whether this new order blocked the asset in question, the Court decided the case on another basis: that Elahi had, pursuant to section 2002 of the Victims of Trafficking and Violence Protection Act of 2000 ("VPA"), as amended by section 201(c) of TRIA, waived his right to attach the Cubic judgment by accepting $2.3 million in partial compensation from the Government, in exchange for relinquishing "rights to execute against or attach property that is at issue in claims against the United States before an international tribunal." The question facing the Court was: just what does "at issue" mean in TRIA? The Court took a broad view. Since the United States was still embroiled in one of Iran's claims before the international tribunal, and since the United States had argued for a setoff of the $2.8 million Cubic judgment in the event that it was deemed to owe Iran anything, the judgment was "at issue," in the sense of "under dispute" or "in question." To back up this broad interpretation, the Court explained that in enacting TRIA, Congress had "a more complicated set or purposes in mind" than merely enabling victims of terrorism to collect on judgments won against terrorist parties (though it cited no legislative history to support this assertion). This set of purposes included the "right of subrogation" obtained by paying partial compensation to the victim, allowing the United States to protect property it might use to satisfy its own potential liability to Iran. The Court rejected Elahi's cries of unfairness as well: Elahi had the choice of accepting the bird in hand of compensation, and relinquishing the attachment of the judgment; or going for the two birds in the bush by continuing his legal fight with Iran in order to obtain assets from it to satisfy the larger judgment. Having chosen the sure compensation, there was nothing unfair in holding Elahi to his end of the bargain.
Justice Kennedy, joined by Justices Souter and Ginsberg, concurred that the Cubic judgment was not a "blocked asset," but dissented as to the rest of the Opinion. The dissent took issue with the Court's broad reading of the words "at issue" in TRIA's statutory language, noting that the Tribunal lacked jurisdiction over one of the parties to the Cubic judgment (i.e., Cubic), and lacked the authority to modify or alter the judgment it in any way. Nor was the Cubic judgment part of the Iran's claims in the pending case before the Tribunal: "at issue" there was the Cubic System, long since sold to Canada. The sole way in which the judgment factored into the claim before the Tribunal was as a possible credit that it might extend to the United States, in the event the United States was found liable to Iran. To read "at issue" so broadly was fundamentally at odds with the real legislative purpose of the VPA and the TRIA, which was not a "revenue-saving purpose," but rather to compensate victims of terrorism, and to hold state sponsors of terrorism accountable. The dissent also took issue with the majority's analysis of the fairness issue, finding injustice in the Court's interpretation, which "put[] an end to Elahi's decade-long quest to hold Iran accountable for murdering his brother," and, in practical terms, took away the $2.8 million judgment he had already attached, for having accepted half a million dollars less in government compensation.
The Court's decision in Nken v. Holder (08-681) addressed an important immigration law issue – the standard to be applied by courts in determining whether to stay an order of removal pending appeal. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ("IIRIRA") was designed to expedite the removal of aliens from the United States. Prior to IIRIRA, aliens who left the U.S. no longer had the ability to challenge their removal orders. Accordingly, the law had provided for an automatic stay of deportation (in most instances) while a petition for review of a removal order was pending. IIRIRA essentially flipped things: allowing an alien to challenge a removal order even after deportation and providing that a stay of removal would not be automatic. In another section of IIRIRA, 8 U.S.C. § 1252(f)(2), Congress provided that "no court shall enjoin the removal of any alien pursuant to a final order unless the aliens shows by clear and convincing evidence that the entry or execution of such order is prohibited as a matter of law." The question for the Court was whether the restrictive standard set forth in section 1252(f)(2) now governed the standard for a stay of removal pending appeal or whether traditional factors relevant to the granting of a stay governed.

Chief Justice Roberts authored the Court's opinion, joined by Justices Stevens, Scalia, Kennedy, Souter, Ginsburg and Breyer, holding that section 1252(f)(2) did not displace the traditional test for a stay. The Court's opening sentence revealed where it was heading: "It takes time to decide a case on appeal." Without the power to stay removal, a court's decision "may come to late for the party seeking review." That is why the power to stay typically is considered an inherent power of the court. And section 1252(f)(2) didn't alter that power. Section 1252(f)(2) refers only to injunctions and the two are not (in ordinary parlance) equivalent. Stays operate upon the judicial proceeding itself, "temporarily divesting an order of enforceability," while injunctions "tell[] someone else what to do or not to do." While the Court acknowledged that a stay might technically be referred to as a type of injunction, that is not how it is generally known. (As the Chief put it, "The sun may be a star, but "starry sky" does not refer to a bright summer day.") The Court's textual interpretation was buttressed by IIRIRA's structure, which provided that stays would not be automatic in a section labeled "Stay of order." Had Congress sought to change the standard for granting discretionary stays, it presumably would have done so in that section – not section 1252(f)(2), which is titled "Limit on injunctive relief." Although the Court conceded that its interpretation would make the "exact role of subsection (f)(2) . . . not easy to explain," it found that the section was not entirely superfluous because a stay and injunction were not synonymous and it was therefore possible that section 1252(f)(2) could still do some work (albeit not much). Finally, the Court noted that interpreting section 1252(f)(2) to apply to stays would undercut the "historic office" of the stay, because it would require courts in effect to decide the merits on an expedited basis under a higher standard of proof than would ultimately be required just to maintain the status quo – an unworkable approach. The Court then set out the factors to be considered by courts when deciding whether to grant a stay: (1) whether the applicant has made a "strong showing" of likely success on the merits; (2) whether the applicant will be irreparably injured absent a stay (and the fact of removal does not categorically establish irreparable injury); (3) whether a stay would substantially injure other parties' interests; and (4) where the public interest lies. (The dissent was quick to point out that these factors are essentially identical as those required for – you guessed it – a temporary injunction!) The Court was careful to emphasize that the public interest in expeditious removal of aliens was substantial and could be heightened if an alien was dangerous. Justice Kennedy, joined by Scalia, concurred separately to emphasize that stays should be granted rarely (not in the "ordinary case") and that there must be a particularized showing of irreparable harm beyond mere removal to justify a stay.

Justice Alito authored the dissent, in which Justice Thomas joined. They argued that stays are just a form of injunction and that is particularly obvious here because a final removal order is "self-executing" without further judicial involvement. Therefore, a court order staying removal effectively enjoins the executive from taking action it is otherwise authorized to take. The dissenters believed their interpretation was more consistent with Congress's purpose in enacting IIRIRA of "protecting the Executive's discretion from the courts." Finally, the dissent claimed that the majority's interpretation would render section 1252(f)(2) superfluous (a point the majority could not persuasively dispute).

The Court's most controversial and significant decisions came in criminal cases. In Arizona v. Gant (07-542), a divided Court held that vehicular searches conducted under the search-incident-to-arrest exception to the Fourth Amendment's warrant requirement can only be performed when "the arrestee is within reaching distance of the passenger compartment at the time of the search," (which the Court opines should happen rarely) or when "it is reasonable to believe the vehicle contains evidence of the offense of arrest." Gant significantly retreated from the Court's decision in New York v. Belton (1981), which generally had been interpreted to allow police to search the entire passenger compartment of a car any time a passenger was arrested, regardless of whether there was any possibility that the arrestee could access the passenger compartment to obtain a weapon or to hide evidence. That is just what happened to Gant. He was arrested for driving with a suspended license, handcuffed, and locked in the back of a patrol car. After Gant was secured, two officers searched his car and found cocaine in a jacket on the backseat. Gant was found guilty on drug charges, but on appeal, the Arizona Supreme Court found the search unreasonable, concluding that, while Belton addressed the permissible scope of a vehicular search incident to arrest, it did not determine whether such a search was authorized at all – and here, it wasn't. The majority, led by Justice Stevens (who was joined by the unlikely combination of Justices Ginsburg, Souter, Thomas, and Scalia) agreed, reasoning that the search-incident-to-arrest exception has two underlying justifications: (1) protecting arresting officers, and (2) preserving evidence of the offense of arrest that the arrestee might try to conceal or destroy. Both interests were implicated in Belton, where one officer arrested four vehicle occupants, had not handcuffed them or locked them in his patrol car at the time of the search, and had probable cause to believe that the arrestees had committed a drug offense. In Gant's case, neither rationale supported the search and it was therefore unlawful.

Justice Scalia was the swing vote this time (a novelty for him). While he joined the majority to avoid a 4-1-4 decision, he concurred separately because he believed that Belton was "badly reasoned" and should be abandoned (rather than just artificially narrowed). If he had his way, he would authorize vehicle searches incident to arrest only when conducted to obtain evidence of the offense of arrest, or of other offenses if supported by probable cause. Allowing any vehicle searches based on officer safety concerns, as the majority did, only invites officers to engage in unsafe conduct (i.e., delaying securing the victim in order to obtain evidence). Justice Alito authored the primary dissent, in which the Chief and Justice Kennedy joined in full, and Justice Breyer joined in part. The dissenters did not buy Steven's attempt to narrow the scope of the holding in Belton based on the unique facts of that case. Belton clearly allowed a search of the entire passenger compartment of a vehicle, regardless of whether the arrestee was able to access the compartment at the time of the search or not. Belton was thus controlling and the majority presented no justification to depart from the decades old ruling. Justice Breyer wrote separately to indicate that he might well have gone another way had he been writing on a clean slate, but he was not, and was therefore compelled by principles of stare decisis to join the dissent. (To which the majority countered that the "doctrine of stare decisis does not require us to approve routine constitutional violations." Touché.)
Finally, in Corley v. United States (07-10441), the Court (again split 5-4, this time along pretty traditional lines) held that 18 U.S.C. § 3501(c) limited, but did not discard, the rule established in McNabb v. United States (1943) and Mallory v. United States (1957) (referred to as the "McNabb-Mallory rule"), under which an arrested person's confession is inadmissible if given after an unreasonable delay in bringing him before a judge – even if the confession would otherwise be considered voluntary. Federal Rule of Criminal Procedure 5(a) requires that an arrestee be presented to a magistrate judge without unnecessary delay. That section does not indicate the penalty for its violation, but, under its supervisory authority, the Court had concluded that any confession gained during an unreasonable delay should be excluded. In 1968, Congress enacted legislation in an attempt (that would later turn out to be in vain) to overturn Miranda v. Arizona (1966). Specifically, Congress provided that "a confession . . . shall be admissible in evidence if it is voluntarily given." 18 U.S.C. § 3501(a). Subsection (b) lists considerations for courts to address in assessing voluntariness. Subsection (c), however, focused on the McNabb-Mallory rule, providing that a confession "shall not be inadmissible solely because of delay in bringing such person before a magistrate judge . . . if such confession is found by the trial judge to have been made voluntarily . . . and if such confession was made . . . within six hours [of arrest]." The six hour limit could be extended if further delay was reasonable "considering the means of transportation and the distance to be traveled to the nearest available magistrate." Petitioner Corley was held for 9.5 hours before he began his oral confession and many more hours before he completed his written confession. He was not presented to a magistrate for 29.5 hours, notwithstanding that a magistrate was available in the building where he was held for part of that time. Corley was convicted based on his confession and the Third Circuit affirmed, concluding that section 3501 entirely abrogated the McNabb-Mallory rule and thus Corley's confession was properly admitted.
Justice Souter penned the majority opinion, in which Justices Stevens, Kennedy, Ginsburg and Breyer joined. While section 3501(a)'s language, if read literally, could sweep away all other basis for excluding a voluntary confession (including McNabb-Mallory's presentment requirement as well as other evidentiary bars, such as hearsay), such a reading is not supported. The legislative history clearly indicates that Congress intended sections (a) and (b) to deal with Miranda and only section (c) to apply to McNabb-Mallory. And reading section (a) more broadly would render section (c) meaningless in violation of "one of the most basic interpretive cannons", the superfluousness cannon (which apparently is really important in some case – like this one – and not so important in other cases, like Nken). Thus, the best reading of section (c) is that it simply creates an exception to McNabb-Mallory where presentment occurs within six hours of arrest. The dissent, led by Justice Alito, vehemently disagreed. The plain language of section (a) requires that voluntary confessions be admitted into evidence, even if presentment is delayed. While this interpretation admittedly creates some problems with how to interpret section (c), the dissent would do a little creative interpreting (a/k/a rewriting) of that section, so that it would merely provide that confessions shall not be considered involuntary if they are made within six hours and are otherwise voluntary. To the majority's point that Congress "did not write the statute that way," the dissent parried back that Congress "really did not write the statute" the way the majority interpreted it.
The Court also granted cert in the following cases:
Perdue v. Kenney (08-970), which asks whether "a reasonable attorney's fee award under a federal fee-shifting statute can ever be enhanced based solely on the quality of performance and results obtained when these factors already are included in the lodestar calculation?"
United States v. Stevens (08-769), where the Court will consider whether 18 U.S.C. § 48, which "prohibits the knowing creation, sale, or possession of a depiction of a live animal being intentionally maimed, mutilated, tortured, wounded, or killed, with the intention of placing that depiction in interstate or foreign commerce for commercial gain, where the conduct depicted is illegal under Federal law or the law of the State in which the creation, sale or possession takes place, and the depiction lacks serious religious, political, scientific, educational, journalistic, historical, or artistic value" is invalid under the Free Speech Clause of the First Amendment.
Pottawattamie County v. McGhee (08-4065), which presents the following question for review: "Whether a prosecutor may be subjected to a civil trial and potential damages for a wrongful conviction and incarceration where the prosecutor allegedly (1) violated a criminal defendant's ‘substantive due process' rights by procuring false testimony during the criminal investigation, and then (2) introduced that same testimony against criminal defendant at trial."
Bloate v. United States (08-728), where the Court will address the Speedy Trial Act, 18 U.S.C. § 3161 et seq., which requires that a criminal defendant be tried within 70 days of indictment or the defendant's first appearance in court, whichever is later. In calculating the 70-day period, 18 U.S.C. § 3161(h)(1) automatically excludes "delay resulting from other proceedings concerning the defendant, including but not limited to * * * (D) delay resulting from any pretrial motion, from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion." The question presented is "[w]hether time granted to prepare pretrial motions is excludable under § 3161(h)(1)."

If you made it this far, you will be one of few! We'll be back in your inbox soon with the Court's decisions from this week.
Kim
From the Appellate Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400