10/29/2012

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Lisa Soronen

State and Local Legal Center

lsoronen@sso.org

What Does the SLLC Do? Files amicus briefs in the U.S. Supreme Court in cases

affecting state and local governments

Conducts moot courts for attorneys representing state and local governments before the Supreme Court

Is a resource to state and local governments regarding Supreme Court litigation

Who Are SLLC Members? Members—Big 7

State National Conference of State Legislatures Council of State Governments National Governors Association

Local National League of Cities United States Conference of Mayors International City Management Association National Associations of Counties

Associate members International Municipal Lawyers Association Government Finance Officers Association

Overview of the Presentation What cases are most relevant from the perspective of

state legislation?

Cases decided in the Court’s 2011 term

Cases to be decided in the Court’s 2012 term

Interesting cases the Court may accept in the near future

Appointments crystal ball

Affordable Care Act Case Okay it doesn’t have that much to do with state

legislation…but it is just too big to avoid

I will focus mostly on the politics of this case as I am sure you all have read the 187 page decision!

4 issues means endless possibilities BUT only the issues in bold ultimately matter

Tax or penalty via the Anti-Injunction Act?

Individual mandate constitutional?

Act severable?

Medicaid coercive?

Individual Mandate Five Justices concluded the “shared responsibility

payment” is constitutional as a “tax” not a “penalty” for constitutional purposes

Why? Because it is far less than the cost of insurance, it is assessed not based on the state of mind of the violator, and it is collected by the Internal Revenue Services

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Here is the Real Coup…. Five Justices (Roberts and the conservatives)

concluded that the that the individual mandate isn’t constitutional under the Commerce Clause (or the Necessary and Proper Clause) Why doesn’t this matter? 5 votes upheld the individual

mandate as a tax

Why does this matter? It is a victory for federalism

Arguably what Roberts writes is dicta because no one else joins his opinion on the commerce clause; the dissenting conservatives write separately

Why No Commerce Clause, Justice Roberts? “The power to regulate commerce presupposes the existence of

commercial activity to be regulated.” (This case is about inactivity)

“The phrase ‘active in the market’ cannot obscure the fact that most of those regulated by the individual mandate are not currently engaged in any commercial activity involving health care, and that fact is fatal to the Government’s efforts to ‘regulate the uninsured as a class.’” (It does not matter that they healthy will someday buy insurance, they aren’t buying it now).

“[T]he Government’s logic would justify a mandatory purchase to solve almost any problem.” (No limiting principle—if you can force people to buy health insurance you can force them to buy anything--broccoli horrible)

Medicaid Here is the bottom line on Medicaid:

If states want to participate in the Medicaid expansion they can (but they have to follow the rules)

If states don’t want to participate in the Medicaid expansion they don’t have to but they can continue to participate in the unexpanded version of Medicaid

The Votes are In… Seven votes for the Medicaid expansion being

unconstitutionally coercive (Roberts, Breyer, Kagan, Scalia, Kennedy, Thomas, and Alito)

Seven is important because the Supreme Court had never previously found a Spending Clause statute to be coercive

Five votes for striking down cutting off all funds if a state doesn’t participate in the expansion and for allowing states to participate in the expansion if they like (Roberts, Ginsburg, Breyer, Sotomayor, & Kagan)

Why Coercive, Justice Roberts? No legitimate choice here…”it is a gun to the head”

This isn’t South Dakota v. Dole (5 percent of highway funds)

States stand to lose all Medicaid funding which is 20% of the average state budget

The expansion is really a new program

And OBTW, “We have no need to fix a line either. It is enough for today that wherever that line may be, this statute is surely beyond it.”

There is no majority opinion on coercion (Ginsburg and Sotomayor only agree with Roberts on the remedy if the law is coercive which they don’t think it is; the conservatives write separately)

A Good Witch or a Bad Witch? Putting how you feel about the Affordable Care Act

aside there were many victories for federalism

Individual mandate wasn’t upheld on Commerce Clause grounds (no broccoli horrible)

For the first time ever the Court finds a federal statute coercive

Choice is good right? Some states want the Medicaid expansion; others don’t

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Big Questions What was Roberts thinking (to vote with the Court’s left)?

If the decision would have been 5-4 individual mandate unconstitutional this decision would have been seen as political; the Court as an institution looks better if all Justices don’t vote on political party lines

In 75 years no President’s signature piece of legislation has been struck down--Roberts’ position is one of judicial restraint (which is a conservative value)

Did Robert’s switch votes well after oral argument and try to bring Kennedy along?

Your legacy isn’t interesting if you just do what people expect you to

Big Questions I am not done with Roberts yet. Regardless I think

Roberts can sleep at night for three reasons:

Lifetime tenure

If Roberts’ only choice was the Commerce Clause I don’t think he would have pulled the trigger

Roberts knows what you know: if Congress doesn’t like this they can repeal it tomorrow

It is also possible Roberts simply believes everything he wrote

Big Questions The Medicaid holding will be lasting and will reverberate What will the states do about taking the Medicaid money

and what will the implications be? So far: yes, no, maybe What is the future of the coercion doctrine?

When will the federal government have to put the stick away or use a smaller stick?

What current and future federal legislation is vulnerable? How aggressive will states be in challenging federal legislation

as coercive? How comfortable will lower courts be applying the coercion

doctrine? What is the new coercion doctrine exactly? There is no

majority opinion on the subject

Big Questions How will this ruling affect the election? Will an

undecided voter in Ohio, Florida, or Virginia view the ACA more favorably now that is has the Supreme Court’s blessing?

Most of the court watchers were wrong about the outcome in this case. What is to be made of an institution that seems so unpredictable?

Fewer than 50% of Americans have ever supported the law but the data is deceptive; many of them wanted the law to go further. What does this mean?

Big Questions Justices Kagan and Sotomayor might be on the Court for

a long time and they clearly view the Commerce Clause broadly. Will this have future implications?

Does the fact that inactivity cannot be regulated by the Commerce Clause have many (any?) practical implications? (is there a reason none of the examples of possible expanded federal power were serious—broccoli horrible?)

Is the individual mandate being upheld as a “tax” a pyrrhic victory for liberals because no one likes the t-word?

Even if it was, conservatives were denied the big victory they thought might be theirs

State Law Isn’t the Way Out of Citizen’s United… Garnering a lot of interest (but ultimately being a bit anti-

climatic) was American Traditional Partnership v. Bullock

The Montana Supreme Court upheld a state law not allowing corporations to donate to candidates or political committees

According to the Court summarily reversing, “[t]here can be no serious doubt [the holding of Citizen’s United applies to this case]”

Many people want Citizen’s United overturned; the Court didn’t take the bait

State legislatures cannot legislate their states out of Citizen’s United

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Preemption Preemption is something state legislatures want to

avoid The Court has decided numerous preemption cases in

the last few years (5 in the October 2010 term) In the October 2011 term the Court heard three

preemption cases (Arizona immigration, Locomotive Inspection Act, and Federal Meat Inspection Act)

I am not going to say anything about the Locomotive Inspection Act case

Bottom line: I am not sure we learned anything more this term about where the Supreme Court is going with preemption

Arizona v. United States Four provisions of Arizona’s immigration law were

challenged

Three were held to be preempted by federal law

The most controversial provision (“show me your papers”) wasn’t held to be preempted (or held unconstitutional) YET!

Many of your states have adopted laws similar to Arizona’s; you might be wondering if your laws are preempted too

Arizona v. United States Court hold 8-0 that Section 2(B) requires that officers

who conduct a stop, detention, or arrest must try to verify the person’s immigration status if there is reasonable suspicion the person in here unlawfully isn’t clearly preempted before the law has gone into effect

Also, an arrestee’s immigration status must be determined before they are released But the checks are mandatory? “Congress has obligated ICE

to respond to any request made by state officials for verification of a person’s citizenship or immigration status.”

But prolonged detention is possible? “§2 could be read to avoid these concerns”

Arizona v. United States Observations about “show me your papers” as relevant to

your state immigration statute Detaining someone just to determine their immigration

status “raises constitutional concerns” Court doesn’t decide if reasonable suspicion of illegality or

another immigration crimes justifies a prolonged detention How long of detention is too long? How long does it take for

ICE to respond? Justice Kennedy seems to like the idea of doing status checks

of certain arrestees not all arrestees Will “show me your papers” really be able to survive an as

applied equal protection challenge? Will state and local cops even comply with these laws?

Arizona v. United States Court held 6-3 that Section 3 (state crime to not carry

alien registration document) is preempted

Federal law requires aliens to carry proof of registration so Congress has occupied the entire field making even complementary state regulation impermissible

Arizona v. United States Court held 5-3 that Section 5 (state crime for

unauthorized alien to work) is preempted

Congress has regulated the “employment of illegal aliens”

“Congress made a deliberate choice not to impose criminal penalties on aliens who seek, or engage in, unauthorized employment”

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Arizona v. United States Court held 5-3 that Section 6 (warrantless arrests for

removable offenses) is preempted

“Section 6 attempts to provide state officers even greater authority to arrest aliens on the basis of possible removability than Congress has given to trained federal immigration officers.”

Douglas v. Independent Living Center of Southern California SLLC filed a brief in this case

Issue: whether once the CMS approved state statutes reducing state Medicaid payments, Medicaid providers and beneficiaries may still maintain a Supremacy Clause claim asserting that Medicaid preempts the state statutes?

Facts: California reduced Medicaid payments; providers and beneficiaries sued under the Supremacy Clause; after oral argument CMS approved California’s plan

Holding: Who knows? Let the Ninth Circuit decide (5-4)

Douglas v. Independent Living Center of Southern California The majority of the Court seemed skeptical that the

Supremacy Clause provides a cause of action in this case noting that the plaintiffs now may be required to seek review of CMS’s decision under the Administrative Procedure Act instead of against California under the Supremacy Clause

The dissent concluded that the Supremacy Clause provides no private right of action to enforce § (30)(A) of the Medicaid statute as the Supremacy Clause is “not a source of any federal rights”

Douglas v. Independent Living Center of Southern California Real question in this case went unanswered…does the

Supremacy Clause provide a private right of action under Medicaid (and other Spending Clause legislation)?

Don’t worry this question will be asked again

All we know for sure is there are 4 strong NO votes

Douglas v. Independent Living Center of Southern California Might other states want to adopt statutes similar to

California’s reducing state Medicaid payments

Pro: CMS might approve the changes

Con: A Supremacy Clause claim might be alleged

National Meat Association v. Harris Issue: Whether the Federal Meat Inspection Act

(FMIA), which regulates how slaughterhouses treat nonambulatory pigs is preempted by a similar California law

Facts: The FMIA allows inspectors to determine post-mortem whether nonambulatory animals may be consumed by humans; California law disallowed this practice

Holding: FMIA preempts state law

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National Meat Association v. Harris

Rationale: the FMIA has a widely sweeping preemption clause and “at every turn” CA’s law does something different or additional

Overall this case seems to be a routine Ninth Circuit reversal

Kagan (least senior Justice) wrote the opinion

It was unanimous

The social media angle is probably the most interesting aspect of this case—a video of disabled cows being dragged and kicked lead to the largest beef recall in history and the CA law

Astrue v. Capato Issue: whether children conceived after their parent’s

death may receive Social Security survivor benefits only if they qualify to inherit from their deceased parent under state intestacy law?

Facts: Huh? The Capato twins were conceived by IVF after their father died!

Holding: Yes! Look to state intestacy law to see if children conceived posthumously can inherit—if they can they may also collect social security (9-0)

Astrue v. Capato Competing provisions of the Social Security Act were at

issue one describing a “child” as a “child of an [insured] individual” and the other allowing benefits to biological children only if they can inherit under state law

In an opinion written by Justice Ginsburg the Court:

Defers to SSA’s decades old interpretation of the statute

Notes that looking to state law is commonly required in interpreting the SSA

Notes the purpose of the SSA is to provide benefits to those dependant on wage earners; if a child is eligible to inherit under state law he or she was probably dependent

Astrue v. Capato What to do, what to do…state legislatures may decide!

Do they want children conceived posthumously to collect Social Security?

Even if they do, do they want them to be able to inherit? What if they are conceived years after their parents dies?

States granting inheritance rights: California, Colorado, Iowa, Louisiana, and North Dakota

States disallowing inheritance rights: (New York, Georgia, Idaho, Minnesota, South Carolina, and South Dakota)

Miller v. Alabama Issue: whether mandatory life in prison without parole

for those under the age of 18 at the time of their crimes violates the Eighth Amendment

Facts: two 14-year-olds were convicted of murder and sentenced to life in prison without parole per state laws mandating these sentences

Holding: this is cruel and unusual punishment (5-4; Kennedy and the liberals)

Miller v. Alabama Sentences cannot mismatch culpability

Juveniles have diminished culpability and greater prospects for reform so they shouldn’t get the most severe punishments

This case extends Roper (no capital punishment for children) and Graham (no life-in-prison for children who have committed nonhomicide offenses)

For juveniles, life-without-parole is like the death penalty, which requires individualized discretion

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Miller v. Alabama Some of your legislatures now have to eliminate state

statutes mandating life-in-prison for juveniles

Will some of your state legislatures adopt statutes specifying criteria for what factors must be considered when sentencing juveniles who have committed murder?

State legislature’s aren’t required to bar life-without-parole for juveniles—but the Court expects such sentences to be “uncommon”

Perry v. Perez Issue: what are the “appropriate standards” for

redrawing interim redistricting maps

Facts: a Texas federal district court drew its own interim redistricting map basically ignoring the Texas’ legislature’s redistricting map

Court held: Back to the drawing board Texas district court! (per curiam)

Perry v. Perez A little advice from the Supreme Court to the Texas

court…

District court should look to the State’s recently enacted plan when putting together an interim redistricting plan

If there is a Section 2 challenge, still look to the State plan unless where you think a Section 2 challenge is likely to succeed on the merits

If there is a Section 5 challenge, still look to the State plan unless where you think the plan stands a reasonable probability of failing to be pre-cleared

Perry v. Perez Bottom line: Court told the district court to be very

deferential to the state plan in interim planning

If you advise state legislatures in redistricting and if your legislature is covered, encourage your legislature to still do interim redistricting with Section 2 and Section 5 in mind

If a district court finds a Section 2 challenge likely or the failure to gain preclearance likely, others will take note

Tennant v. Jefferson County Commission Issue: does West Virginia’s redistricting plan violate

“one person, one vote”

Facts: West Virginia’s redistricting plan resulted in a population variance of .79%; other plans with (much) less variance were rejected

Holding: West Virginia’s plan is upheld (per curiam)

Tennant v. Jefferson County Commission Valid, neutral state district policies include avoiding

contests between incumbents, avoiding dividing political subdivisions, and a desire to avoid minimizing population shifts between districts

Just because it is technologically possible to have almost no variances does not mean states have to achieve this outcome

States don’t have to attribute a certain numerical proportion attributable to each factor

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Armour v. Indianapolis Issue: whether it violates equal protection to forgive

the debt of sewer upgrade installment payers but not issue a refund to lump sum installment payers

Facts: Indianapolis charged $9K for sewer upgrades; people could pay in a lump sum or over 10, 20, or 30 years; the next year Indianapolis changed how it financed sewers and forgave the debt of installment payers but gave no refund to lump sum payers

Holding: no equal protection violation (6-3)

Armour v. Indianapolis Court’s reasoning

This is a tax case; rational basis applies; in tax cases administrative reasons are enough

So what exactly were these administrative reasons?

Maintaining a system that would collect debt for up to 30 years, for 20-plus construction projects, with monthly payments as low as $25

Adding refunds to forgiveness would only mean further administrative costs—namely processing refunds

Okay to draw the line between past payments and future obligations

Armour v. Indianapolis Why did the Court take this case?

I still have no idea

Allegheny Pittsburg Coal Co. v. Commission of Webster County, 488 U.S. 336 (1989) (tax assessor could not determine property values as of the time of a property’s last sale where a state constitution required equal valuation of property) still dying but not dead

Armour v. Indianapolis Insider scoop: what is the story in the unusual line up

in this case?

The liberals plus Kennedy plus Thomas vote for Indianapolis

Paul Clement (who represented Indianapolis) told me repeatedly he would get Thomas’s vote (and he did)…why?

Kennedy changed his tune from oral argument

Armour v. Indianapolis SLLC filed a brief in this case which the Court quoted

What does this case tell us about state tax legislation?

Probably not a lot that you didn’t already know

If a state legislature is going to treat people differently in tax matters it should say why

Administrative reasons are enough

But watch out for equality requirements in your state constitutions!

Fisher v. University of Texas Isn’t your typical state’s rights/federalism case

The case supposedly isn’t about a state law (but could be?) yet there would be no case without the state law

This case cannot be ignored: it is the most prominent, controversial case of the term (accepted so far!)

Why? Because it involves affirmative action, which is a hot button issue

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Fisher v. University of Texas Timeline of crucial events

1996: the Fifth Circuit held UT couldn’t use race as a factor in law school admissions; minority enrollment dropped immediately

1997: the Texas legislature adopts the Top Ten Percent law

2002: UT study looking at classes with 10-24 students (where discussion would be likely) finds 89% had 0-1 black students, 41% has 0-1 Asian students, and 37% had 0-1 Hispanic students

2004: minority enrollment was 21.4% (without the use of race); UT begins using race as a factor in admissions

Fisher v. University of Texas Everyone agrees race is used in the “right” way

“By the book” individualized consideration of race (“holistic file readers” review an applicant’s essay in light of race—88% of the time these trained professionals give scores within one point of each other)

But race isn’t much of a factor…

In only 12% of seats available to residents (1,216) could race be considered as a factor

And the Fifth Circuit Holds… This affirmative action plan is constitutional Courts should defer to the university’s educational

judgments

No racial balancing, no quota here, okay to look at Texas’s racial make-up, critical mass was the goal

Critical mass isn’t a fixed number

But, but, but! The Top Ten Percent law puts UT’s policy in jeopardy. BUT UT’s policy compliments its failings (“Perversely, this system negatively impacts minority students (who nationally have lower standardized test scores) in the second decile of their classes at competitive high schools).

A Dissenting Judge Makes Some Good Points… Is over 20% of minority students (produced by the Top Ten

Percent law) a critical mass?

Is achieving diversity at the classroom level realistic/a good idea? “Will the University accept this ‘goal’ as carte blanche to add

minorities until a ‘critical mass’ chooses nuclear physics as a major? Will classroom diversity ‘suffer’ in areas like applied math, kinesiology, chemistry, Farsi of hundreds of other subjects if, by chance, few or no students of a certain race are enrolled?”

Use of race has very little impact in this case (maybe a couple hundred students would be affected)

Fisher Wants More, More, More Overrule Grutter please!

Might the Court be receptive?

At least 5 Justices aren’t big fans of affirmative action: Roberts, Alito, Scalia, Kennedy, and Thomas

But PICS v. Seattle School District already provided the Court an opportunity to overrule Grutter

I think this case will come down to the Court’s view of critical mass (and maybe the minor use of race which the Fifth Circuit points out presents a Catch-22)

States’ Rights Angle Texas’s Top Ten Percent law isn’t on the line (but it is

totally driving the facts)

Most likely outcome in this case is keeping the Top Ten Percent law and pitching race-based consideration on top of it

UT is sixth in the nation in producing undergrad degrees for minorities

Might this be a state’s prerogative?

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FTC v. Phoebe Putney Health Systems A little primer on the state-action doctrine

State-action doctrine protects states from liability under federal anti-trust laws

State legislatures may pass along state-action immunity to municipalities or political subdivisions if the state authorizes the challenged action and “has clearly articulated a policy authorizing anti-competitive conduct”

Private actors (as opposed to municipalities or political subdivisions) must be actively supervised

FTC v. Phoebe Putney Health Systems Facts

The Georgia legislature created hospital authorities where cities and counties could own and operate non-profit hospitals

By statute, hospital authorities also could acquire and lease other hospitals

In 1990 a hospital authority leased the Phoebe Putney Memorial Hospital to a nonprofit corporation Phoebe Putney Health Systems (PPHS)

In 2011 the Authority, through PPHS, acquired Palmyra Park Hospital (the only other hospital in the area), and leased it to PPHS

FTC v. Phoebe Putney Health Systems Real question in this case is how clearly did the

Georgia legislature have to be about being okay with anti-competition in the hospital market?

Eleventh Circuit basically says by allowing hospital authorities to acquire and lease other hospitals it was reasonably foreseeable that some of them would acquire and lease all of the hospitals in the area!

Other circuit court precedent seems to disagree with the Eleventh Circuit but PPHS pretty convincingly points out that the state legislatures in the other cases clearly said they were pro-competition

FTC v. Phoebe Putney Health Systems Was this really action by a public actor?

The Authority does the owning and the leasing

If this really was a purchase by a private actor it is hard for me to tell from the facts how strong PPHS’s active supervision argument would be

The lease of Palmyra is the same as the lease to PPHS which makes it seem the Authority is calling the shots

But the money came from PPHS

FTC v. Phoebe Putney Health Systems Has the FTC been waiting for this case? See the

following recommendations from the FTC’s 2003 State Action Task Force

Reaffirm a clear articulation standard tailored to its original purposes and goals

Clarify and rationalize the criteria for identifying the quasi-governmental entities that should be subject to active supervision

FTC v. Phoebe Putney Health Systems Sharpen your pencils…this case is potentially HUGE

for state legislatures

FTC’s point is not difficult to understand: if state legislatures want anti-competition (ever) they have to explicitly say it in statute

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Delia v. E.M.A. Issue: whether a North Carolina statute allowing for

liens of 1/3 the value of a tort recovery is preempted by Medicaid

Facts: per state statute, North Carolina collected 1/3 of an unallocated tort recovery of a Medicaid recipient

The plot thickens: Arkansas DHHS v. Ahlborn, 547 U.S. 268 (2006) holds state may only recover for actual medical expenses

Delia v. E.M.A. North Carolina argues Ahlborn doesn’t apply to

unallocated settlements

Fourth Circuit holds North Carolina’s law is preempted Ahlborn in clear states get medical expenses not a chunk

of a payment that includes other claims

What if settlement manipulation occurs and medical expense component is reduced? State can get approval of the settlement

After Ahlborn most states ditched statutory caps (percent recoveries) (California, Pennsylvania, Oklahoma, Idaho (sort of))

Delia v. E.M.A. North Carolina isn’t the only state that allows percent

recoveries—Florida, Georgia, Hawaii, and Iowa do too

Might other states like to adopt (or readopt) them if the Supreme Court were to allow them?

Possible Grants of Interest Maryland v. King

Whether states can collect DNA when someone is arrested (and not yet convicted)

Maryland Court of Appeals said this violates the Fourth Amendments; other courts have disagreed

Chief Justice, acting on his own, has issued a stay of this the Maryland Court of Appeals decision

Possible Grants of Interest Section 5 of the Voting Rights Act (VRA)

Is Section 5 unconstitutional? (“covered” jurisdictions have to have changes to election procedures pre-cleared by a three-judge panel or DOJ)

D.C. Circuit Court has upheld the law but in 2009 the Supreme Court expressed some doubts about it

While few jurisdictions are covered under Section 5 of the VRA the possibility of dismantling of a piece of major civil rights legislation is huge

Possible Grants of Interest Gay marriage…the Justices can run but they cannot hide!

Seven cases are before the Court

Six involve the Defense of Marriage Act (DOMA)

California’s Proposition 8 bans gay marriage

Legal commentators agree the Court is most likely to take a DOMA case

Don’t have to decide whether all 50 states have to allow gay marriage (simply striking down DOMA doesn’t require any state to allow gay marriage)

First Circuit has struck it down

Major legal issue is at stake

Level of scrutiny for sexual orientation

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Vacancies The two oldest Justices on the left and right are as

follows: Ginsburg (left); Scalia (right)

Things will get really interesting if Romney is elected and gets to replace Ginsburg (or another liberal) or Obama is re-elected gets to replace Scalia (or another conservative)

Either potential president would relish the opportunity to replace Kennedy (who is the “swing” Justice who leans slightly right)

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