Vaden v. Discover Bank (07-773), Bartlett v. Strickland (07-689), Kansas V. Colorado (105, Orig.), Vermont v. Brillon (08-88) and order list

March 16, 2009 Supreme Court Update

Greetings, Court fans!
The Court issued four more decisions last week before going on recess. The decision with the most practical significance for most of us civil litigators came in Vaden v. Discover Bank (07-773), where the Court tackled a circuit split over how federal courts should determine whether they have federal question jurisdiction over petitions to compel arbitration, announcing a rule that the dissent insisted will "sharply restrict[] the ability of federal courts to enforce agreements to arbitrate." The Federal Arbitration Act ("FAA") does not itself confer federal jurisdiction over arbitration petitions. Instead, Section 4 of the FAA provides that a district court may entertain a petition to compel arbitration only if it would have jurisdiction "save for the [arbitration] agreement" over "a suit arising out of the controversy between the parties." Lower courts were split on how to define the relevant "controversy between the parties," with some circuits looking only to the dispute presented on the face of the arbitration petition (i.e., typically a contract dispute about whether the parties had agreed to arbitrate), and others "looking through" the arbitration petition to the underlying substantive dispute between the parties. Here, Discover Bank sued Vaden in Maryland state court to recover past due credit card charges and Vaden counterclaimed, alleging that Discover Bank's fees violated state law. Discover Bank then petitioned the Maryland federal district court to compel arbitration of Vaden's counterclaims which, though nominally sounding in state law, were completely preempted by the Federal Deposit Insurance Act ("FDIA") and therefore "arose under" federal law. The district court "looked through" the petition to the underlying dispute and determined it had federal question jurisdiction based on Vaden's counterclaims; the Fourth Circuit affirmed. Splitting 5-4, the Court reversed.
Justice Ginsburg authored the majority opinion, joined by the unlikely grouping of Scalia, Kennedy, Souter and Thomas. The majority agreed that courts should determine jurisdiction by "looking through" the petition to compel arbitration to the underlying dispute since the FAA requires courts to determine if they would have jurisdiction "save for the [arbitration] agreement." But in determining whether the underlying "controversy between the parties" provides federal question jurisdiction, the majority applied the well-pleaded complaint rule, under which state court litigation can be removed to federal court only if the complaint – as distinct from any defenses or counterclaims – arises under federal law. Since Discover Bank's complaint sounded in state law, it could not obtain federal jurisdiction over its arbitration petition based on Vaden's counterclaims. The dissenters, led by the Chief, agreed with the "look through" approach, but vehemently disagreed with applying the well-pleaded complaint rule. Instead, they would "look through" to "the controversy the Section 4 petitioner seeks to arbitrate – as set forth in the Section 4 petition – and assess whether a federal court would have jurisdiction over . . . a suit arising out of that controversy." Here, Discover Bank only sought to compel arbitration of Vaden's counterclaims, which were preempted by the FDIA, and thus, arose under, federal law – so the dissenters would have found federal question jurisdiction satisfied. The dissent criticized the majority's rule because it would make the availability of a federal forum for enforcing arbitration agreements dependent on the "happenstance" of who sues first and where. For example, if Discover Bank had filed a Section 4 petition to compel arbitration of Vaden's potential FDIA claims before any litigation was instituted, the court's perception of the controversy would have been limited to the FDIA claims described in the arbitration petition. Likewise, if Vaden had sued first, the federal court also would have had jurisdiction to compel arbitration. Yet, under the majority's rule, because Discover happened to sue Vaden on state-law debt-collection claims first, the federal court lost jurisdiction over the petition to arbitrate the FDIA claims.
A quick practice pointer for those who file state-court petitions to compel arbitration under the FAA: In footnote 20, the Court reaffirmed that Section 2 of the FAA (which essentially says that arbitration agreements are valid and enforceable) is binding on state courts, but declined to determine whether Sections 3 and 4 of the FAA, which respectively allow courts to stay litigation in favor or arbitration and to compel arbitration, are binding on state courts. The Court noted, however, that regardless of the direct availability of Sections 3 and 4 in state court, Section 2 effectively mandates that state courts provide the same relief.
The next case, Bartlett v. Strickland (07-689), required the Court to determine whether Section 2 of the Voting Rights Act of 1965 ("VRA"), as amended, 42 U.S.C. § 1973, requires state officials to create so-called "crossover districts," i.e., election districts that would allow racial minorities that constitute less than 50 of the citizen voting-age population to join forces with crossover majority voters to elect the minority group's preferred candidate. The question splintered the Court, resulting in 5 opinions. Justice Kennedy wrote a plurality opinion, in which the Chief and Justice Alito joined, holding that while Section 2 could require the creation or preservation of majority-minority districts (i.e., districts where a minority group composes greater than 50 of the citizen voting-age population) in order to prevent minority vote dilution, it did not require the creation or preservation of crossover districts. Justice Thomas, joined by Scalia, concurred in the judgment only, as they did not believe any vote dilution claims were authorized by Section 2. Finally, Justice Souter dissented, along with Justices Stevens, Ginsburg, and Breyer. Justices Ginsburg and Breyer also issued separate dissents.
The facts: North Carolina's Constitution requires that the General Assembly keep counties whole when creating voting districts (the "whole county" provision). However, in 1991, in order to comply with the VRA, the General Assembly split four counties to create District 18, a geographically compact district that had an African-American majority of voting-age citizens. By 2003, the population of voting age African Americans had fallen and the General Assembly could no longer create a compact majority-minority district. In its redistricting plan, however, rather than keeping all of the counties "whole," the General Assembly split Pender County and another county to form the new District 18, in which the percentage of African American voting-age citizens was 39.96. When Pender County sued, arguing that the plan was invalid under North Carolina's "whole county" provision, the State officials who crafted the redistricting plan argued that it was required by Section 2 of VRA because District 18 was effectively a minority-controlled district even though African Americans did not make up a numerical majority since they could elect the candidate of their choice with assistance from crossover majority voters. The trial court sustained the boundaries of District 18, but the Supreme Court of North Carolina reversed, concluding that the VRA did not mandate dividing the counties because a minority group must constitute a "numerical majority" before Section 2 requires the creation of a legislative district to prevent dilution of the minority group's votes.
The plurality agreed. Under Thornburg v. Gingles (1986), a plaintiff bringing a vote dilution claim under Section 2 must first establish three threshold requirements: (1) The minority group is "sufficiently large and geographically compact to constitute a majority in a single-member district;" (2) the minority group is "politically cohesive," and (3) the majority usually votes "sufficiently as a bloc to enable it . . . to defeat the minority's preferred candidate." The question presented here was whether a crossover district could meet the first Gingles requirement. Prior cases had established that majority-minority districts clearly satisfy the first Gingles requirement and that districts where minorities merely possess the power to "influence" the election, but not elect the candidate of their choice, do not. Crossover districts, in which minority voters have sufficient power to elect the candidate of their choice with assistance from crossover majority voters, had never been addressed by the Court. Justice Kennedy began by noting that the VRA's mandate is to prevent vote dilution, not to grant "special protection to a minority group's right to form political coalitions." Recognizing crossover districts as a baseline under Gingles would impermissibly serve to maximize minority voting power, not prevent vote dilution. Recognizing crossover districts, which, by definition, presuppose that majority voters do not vote as a bloc, would also undermine the third Gingles requirement. In addition, identifying a potential district as a crossover district "would place courts in the untenable position of predicting many political variables and tying them to race-based assumptions," questions that even "experienced polling analysts and political experts could not assess with certainty, particularly over the long term." And using racial classifications, even for remedial purposes, could risk further dividing the voting population into competing racial factions, raising serious constitutional concerns. While the plurality concluded that Section 2 did not require states to create crossover districts (at least in the absence of any alleged discrimination), they stressed that legislatures are free to create them voluntarily, so long as doing so would not otherwise violate federal or state law. Justices Thomas and Scalia concurred in the judgment only, concluding that the text of Section 2 does not authorize a vote dilution claim at all and that the Gingles framework has produced a "disastrous misadventure in judicial policymaking."
The main dissent, authored by Justice Souter, argued that, as a functional matter, minority voters are frequently able to elect their preferred candidates when minority voters comprise less than 50 of the voting-age population; thus a crossover district is consistent with Section 2's purpose. In addition, a crossover district would not confound the bloc voting requirement under Gingles because a relatively small percentage of majority voters would be required to cross over in order to elect the minority's preferred candidate. The dissent also warned that refusing to recognize crossover districts will cause states to create more majority-minority districts by eliminating crossover districts, thus leading to more, not less, race-motivated decisionmaking. Justice Ginsburg issued a separate dissent, inviting Congress to step in and clarify the scope of Section 2, and Justice Breyer (who likes math more than most of the Justices) wrote separately to argue that if a numerical benchmark is really necessary, the Court should adopt a 2:1 ratio rule (i.e., that the percentage of minority voters in the district must be at least twice the percentage of needed crossover voters), rather than the majority-minority rule adopted by the plurality.
Next up, we come to Kansas v. Colorado (105, Orig.), which – unless you frequently handle original jurisdiction cases before the Court – you can almost certainly skip. The question presented was whether expert witness fees in original jurisdiction cases are limited to the $40 per day provided in 28 U.S.C. § 1821(b), which sets the witness attendance fee for a proceeding in "any court of the United States." After Kansas prevailed in a claim against Colorado for violating the Arkansas River Compact, it sought recovery of more than $9M in expert fees, arguing that Section 1821(b) did not apply because the Court is free to establish expert fees as part of its constitutional authority to regulate procedure in original jurisdiction cases. The Court ducked the issue, concluding that even if Section 1821(b) did not apply, $40 per day was an appropriate recovery because it was consistent with the American rule that litigants normally bear their own fees and it was better policy to have a uniform expert fee that applied in all courts. The Chief and Justice Souter concurred separately to state their view that Section 1821(b) does not apply in original jurisdiction cases, and that the Court has the constitutional authority to determine the availability and amount of expert witness fees – but they agreed with the conclusion that $40 per day was appropriate.
Finally, in Vermont v. Brillon (08-88), the Court addressed the "amorphous" Sixth Amendment right to a speedy trial in a case in which the defendant, Brillon, was represented by six (!) different public defenders over the three year period from arrest to trial. Brillon fired the first one on the eve of trial, and threatened the life of the third; the others withdrew based primarily on "contract difficulties" with the state agency that provided public defenders. Eventually, Brillon was found guilty and sentenced to 12-20 years. The trial court rejected Brillon's Sixth Amendment "speedy trial" claim, finding that he was largely responsible for the delays, but the Vermont Supreme Court reversed, concluding that the delays of state-appointed defense counsel should be attributed to the State. The Court reversed right back, in an opinion by Justice Ginsburg. Rejecting the conclusion that public defenders are state actors, whose delays are ipso facto attributable to the State, the Court held that public defenders, like private defenders, are agents of the defendant. Between Brillon's own actions (i.e., firing and threatening his counsel) and those of his various agents, the three year delay was primarily attributable to Brillon. Thus, Brillon's Sixth Amendment "speedy trial" right was not violated. The Court's ruling that public defender delays are attributable to the defendant was not absolute however: in the event that delays result from systemic or institutional breakdowns of the public defender system, there could be a basis for a Sixth Amendment claim.
Justice Breyer, joined by Justice Stevens, dissented. They would dismiss cert as improvidently granted since, in their view, the Vermont Supreme Court did not premise its finding of a Sixth Amendment violation on delays caused by Brillon's public defendants. Rather, the assigned defenders were so absent (due to contract problems between them and the State) that it was as if Brillon had no assigned counsel for much of the three years. And part of the delay may also have been attributable to the judge's own unavailability. Given this, the dissenters would affirm.
Turning to orders, the Court granted cert in Jones v. Harris Assoc. L.P. (08-586), which asks: Is a shareholder's claim that a mutual fund investment adviser charged an excessive fee cognizable under Section 36(b) of the Investment Company Act if the shareholder is not able to show that the adviser misled the fund's board of directors who approved the fee?
There was a notable denial of cert in Thompson v. McNeil (08-769), in which the defendant contended that execution after 32 years of incarceration amounted to cruel and unusual punishment. The denial prompted several Justices to put pen to paper. Justice Breyer dissented from the denial, arguing that the issue merited the Court's attention. Justice Stevens also wrote "a statement respecting the denial," in which he argued that the Court should reconsider the constitutionality of the death penalty altogether. He noted that over 30 of the death sentences from 1973 to 2000 were overturned and 129 inmates were exonerated, often more than a decade after sentencing. While some contend that delays in the capital system are caused by the Court's insistence on too much process – such process is obviously necessary given the staggering error rate. Given that significant delays are inevitable and executing an individual after decades of confinement in severe conditions is cruel, there is a real need to reexamine the death penalty. Finally, Justice Thomas wrote a concurrence in the denial of cert, arguing that a criminal defendant cannot make a mockery of the system by extending his sentence almost indefinitely through the use of the criminal justice system, and then complaining that the delay makes his execution improper.
In addition, the Court asked the SG to weigh in on the scope of the Fair Credit Reporting Act's limitation on the ability of states to regulate the sharing of consumers' private information among affiliated financial institutions in American Bankers Association v. Brown (08-70).
Finally, the Court granted the Government's request to transfer Al-Marri, an alleged "enemy combatant," from military custody to civilian custody for criminal prosecution, thus mooting the case in Al-Marri v. Spagone (08-368), where the Court would have addressed the legality of indefinitely detaining, without charge, a lawful resident of the United States who has been labeled an enemy combatant. As you might recall, the Government successfully avoided review of similar issues in the Padilla case – when it moved Padilla from military to civilian custody just before the Court was widely expected to grant cert a second time. This time, however, the Court vacated the Fourth Circuit's decision, removing the precedent from the books in light of the Court's inability to review it.
If you got this far, congrats! You deserve a break – and will get one until the Court comes back from recess next week. Until then, thanks for reading.
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