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Justice Stevens | 1,993 | 16 | dissenting | Smith v. United States | https://www.courtlistener.com/opinion/112827/smith-v-united-states/ | suggest that a venue gap should be avoided by adopting a narrow construction of either a jurisdictional grant or the scope of a federal cause of action. Yet that is the Court's perverse solution to the narrow venue gap in the FTCA. Because a hypothetical handful of nonresident aliens may have no forum in which to seek relief for torts committed by federal agents in outer space or in Antarctica, the Court decides that the scope of the remedy itself should be narrowly construed. This anomalous conclusion surely derives no support whatsoever from the basic decision to include aliens as well as citizens within the protection of the statute, particularly since the overwhelming majority of aliens who may have occasion to invoke the FTCA are surely residents. As Judge Fletcher accurately observed in her dissenting opinion in the Court of Appeals: "Those who have no problem with venue should not be foreclosed from bringing suit simply because others cannot, particularly with respect to a statute such as the FTCA the primary purpose of which, as we have seen, was to expand the jurisdiction of the federal courts." 953 F.2d 111, *215 At most, the imperfections in the statute indicate that in 194 the 79th Congress did not specifically consider the likelihood of negligence actions arising in outer space or in a sovereignless territory such as Antarctica. In view of the fact that it did authorize actions against the United States arising out of negligence on the high seas, see I am bewildered by the Court's speculation that if it had expressly considered the equally dangerous area at issue in this case, it would have distinguished between the two. Ante, at 204-205. The claim asserted in this case is entirely consistent with the central purpose of the entire Act. Indeed, given that the choice is between imposing individual liability on federal agents for torts committed in the course of their employment, on the one hand, or holding their employer responsible, on the other hand, the amendment to the FTCA adopted by Congress in 1988 sheds more light on the issue presented in this case than the Court's unfounded speculation about congressional intent. The congressional findings explaining the decision to immunize federal employees from personal liability for negligence in the performance of their duties indicate that Congress recognizes both the practical value and the justice of a generous interpretation of the FTCA.[15] Moreover, those findings are thoroughly *21 consistent with the interpretative approach of the unusually distinguished panel of Circuit Judges who, shortly after the FTCA was passed, wrote: "When after many |
Justice Stevens | 1,993 | 16 | dissenting | Smith v. United States | https://www.courtlistener.com/opinion/112827/smith-v-united-states/ | shortly after the FTCA was passed, wrote: "When after many years of discussion and debate Congress has at length established a general policy of governmental generosity toward tort claimants, it would seem that that policy should not be set aside or hampered by a niggardly construction based on formal rules made obsolete by the very purpose of the Act itself. Particularly should this be true as to the broad terms of coverage employed in the basic grant of liability itself."[1] The wisdom that prompted the Court's grant of certiorari is not reflected in its interpretation of the 194 Act. Rather, it reflects a vision that would exclude electronic eavesdropping from the coverage of the Fourth Amendment and satellites from the coverage of the Commerce Clause. The international community includes sovereignless places but no *217 places where there is no rule of law. Majestic legislation like the Federal Tort Claims Act should be read with the vision of the judge, enlightened by an interest in justice, not through the opaque green eyeshade of the cloistered bookkeeper. As President Lincoln observed in his first State of the Union Message: "It is as much the duty of Government to render prompt justice against itself, in favor of citizens, as it is to administer the same between private individuals."[17] I respectfully dissent. |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | This case concerns the extent to which educators may exercise editorial control over the contents of a high school newspaper produced as part of the school's journalism curriculum. I Petitioners are the Hazelwood School District in St. Louis County, Missouri; various school officials; Robert Eugene Reynolds, the principal of Hazelwood East High School; and Howard Emerson, a teacher in the school district. Respondents are three former Hazelwood East students who were staff members of Spectrum, the school newspaper. They contend that school officials violated their First Amendment rights by deleting two pages of articles from the May 13, 1983, issue of Spectrum. Spectrum was written and edited by the Journalism II class at Hazelwood East. The newspaper was published every three weeks or so during the 1982-1983 school year. More than 4,500 copies of the newspaper were distributed during that year to students, school personnel, and members of the The Board of Education allocated funds from its annual budget for the printing of Spectrum. These funds were supplemented by proceeds from sales of the newspaper. The printing expenses during the 1982-1983 school year totaled $4,668.50; revenue from sales was $1,166.84. The other costs associated with the newspaper such as supplies, textbooks, *263 and a portion of the journalism teacher's salary were borne entirely by the Board. The Journalism II course was taught by Robert Stergos for most of the 1982-1983 academic year. Stergos left Hazelwood East to take a job in private industry on April 29, 1983, when the May 13 edition of Spectrum was nearing completion, and petitioner Emerson took his place as newspaper adviser for the remaining weeks of the term. The practice at Hazelwood East during the spring 1983 semester was for the journalism teacher to submit page proofs of each Spectrum issue to Principal Reynolds for his review prior to publication. On May 10, Emerson delivered the proofs of the May 13 edition to Reynolds, who objected to two of the articles scheduled to appear in that edition. One of the stories described three Hazelwood East students' experiences with pregnancy; the other discussed the impact of divorce on students at the school. Reynolds was concerned that, although the pregnancy story used false names "to keep the identity of these girls a secret," the pregnant students still might be identifiable from the text. He also believed that the article's references to sexual activity and birth control were inappropriate for some of the younger students at the school. In addition, Reynolds was concerned that a student identified by name in the divorce story had complained that |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | identified by name in the divorce story had complained that her father "wasn't spending enough time with my mom, my sister and I" prior to the divorce, "was always out of town on business or out late playing cards with the guys," and "always argued about everything" with her mother. App. to Pet. for Cert. 38. Reynolds believed that the student's parents should have been given an opportunity to respond to these remarks or to consent to their publication. He was unaware that Emerson had deleted the student's name from the final version of the article. Reynolds believed that there was no time to make the necessary changes in the stories before the scheduled press run *264 and that the newspaper would not appear before the end of the school year if printing were delayed to any significant extent. He concluded that his only options under the circumstances were to publish a four-page newspaper instead of the planned six-page newspaper, eliminating the two pages on which the offending stories appeared, or to publish no newspaper at all. Accordingly, he directed Emerson to withhold from publication the two pages containing the stories on pregnancy and divorce.[1] He informed his superiors of the decision, and they concurred. Respondents subsequently commenced this action in the United States District Court for the Eastern District of Missouri seeking a declaration that their First Amendment rights had been violated, injunctive relief, and monetary damages. After a bench trial, the District Court denied an injunction, holding that no First Amendment violation had occurred. The District Court concluded that school officials may impose restraints on students' speech in activities that are " `an integral part of the school's educational function' " including the publication of a school-sponsored newspaper by a journalism class so long as their decision has " `a substantial and reasonable basis.' " ). The court found that Principal Reynolds' concern that the pregnant student's anonymity would be lost and their privacy invaded was "legitimate and reasonable," given "the small number of pregnant students at Hazelwood East and several identifying characteristics that were disclosed in the article." 607 F. Supp., The court held that Reynolds' action was also justified "to avoid the impression that [the school] endorses *265 the sexual norms of the subjects" and to shield younger students from exposure to unsuitable material. The deletion of the article on divorce was seen by the court as a reasonable response to the invasion of privacy concerns raised by the named student's remarks. Because the article did not indicate that the student's parents had been |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | article did not indicate that the student's parents had been offered an opportunity to respond to her allegations, said the court, there was cause for "serious doubt that the article complied with the rules of fairness which are standard in the field of journalism and which were covered in the textbook used in the Journalism II class." Furthermore, the court concluded that Reynolds was justified in deleting two full pages of the newspaper, instead of deleting only the pregnancy and divorce stories or requiring that those stories be modified to address his concerns, based on his "reasonable belief that he had to make an immediate decision and that there was no time to make modifications to the articles in question." The Court of Appeals for the Eighth Circuit reversed. The court held at the outset that Spectrum was not only "a part of the school adopted curriculum," but also a public forum, because the newspaper was "intended to be and operated as a conduit for student viewpoint." The court then concluded that Spectrum's status as a public forum precluded school officials from censoring its contents except when " `necessary to avoid material and substantial interference with school work or discipline or the rights of others.' " ). The Court of Appeals found "no evidence in the record that the principal could have reasonably forecast that the censored articles or any materials in the censored articles would have materially disrupted classwork or given rise to substantial disorder in the school." School officials were entitled to censor the articles on the ground that *266 they invaded the rights of others, according to the court, only if publication of the articles could have resulted in tort liability to the school. The court concluded that no tort action for libel or invasion of privacy could have been maintained against the school by the subjects of the two articles or by their families. Accordingly, the court held that school officials had violated respondents' First Amendment rights by deleting the two pages of the newspaper. We granted certiorari, and we now reverse. II Students in the public schools do not "shed their constitutional rights to freedom of speech or expression at the schoolhouse gate." They cannot be punished merely for expressing their personal views on the school premises whether "in the cafeteria, or on the playing field, or on the campus during the authorized hours," -513 unless school authorities have reason to believe that such expression will "substantially interfere with the work of the school or impinge upon the rights of other students." We |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | school or impinge upon the rights of other students." We have nonetheless recognized that the First Amendment rights of students in the public schools "are not automatically coextensive with the rights of adults in other settings," Bethel School District No. and must be "applied in light of the special characteristics of the school environment." ; cf. New A school need not tolerate student speech that is inconsistent with its "basic educational mission," even though the government could not censor similar speech outside the school. Accordingly, we held in that a student could be disciplined for having delivered a speech that was "sexually explicit" but not legally obscene at an official school assembly, because the school was entitled to "disassociate itself" from the speech in a manner *267 that would demonstrate to others that such vulgarity is "wholly inconsistent with the `fundamental values' of public school education." 8 U.S., -686. We thus recognized that "[t]he determination of what manner of speech in the classroom or in school assembly is inappropriate properly rests with the school board," rather than with the federal courts. It is in this context that respondents' First Amendment claims must be considered. A We deal first with the question whether Spectrum may appropriately be characterized as a forum for public expression. The public schools do not possess all of the attributes of streets, parks, and other traditional public forums that "time out of mind, have been used for purposes of assembly, communicating thoughts between citizens, and discussing public questions." Cf. Hence, school facilities may be deemed to be public forums only if school authorities have "by policy or by practice" opened those facilities "for indiscriminate use by the general public," Perry Education or by some segment of the public, such as student organizations. n. 7 (citing ). If the facilities have instead been reserved for other intended purposes, "communicative or otherwise," then no public forum has been created, and school officials may impose reasonable restrictions on the speech of students, teachers, and other members of the school 460 U.S., n. 7. "The government does not create a public forum by inaction or by permitting limited discourse, but only by intentionally opening a nontraditional forum for public discourse." 3 U.S. 788, *268 The policy of school officials toward Spectrum was reflected in Hazelwood School Board Policy 348.51 and the Hazelwood East Curriculum Guide. Board Policy 348.51 provided that "[s]chool sponsored publications are developed within the adopted curriculum and its educational implications in regular classroom activities." App. 22. The Hazelwood East Curriculum Guide described the Journalism II course as a |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | East Curriculum Guide described the Journalism II course as a "laboratory situation in which the students publish the school newspaper applying skills they have learned in Journalism I." The lessons that were to be learned from the Journalism II course, according to the Curriculum Guide, included development of journalistic skills under deadline pressure, "the legal, moral, and ethical restrictions imposed upon journalists within the school community," and "responsibility and acceptance of criticism for articles of opinion." Journalism II was taught by a faculty member during regular class hours. Students received grades and academic credit for their performance in the course. School officials did not deviate in practice from their policy that production of Spectrum was to be part of the educational curriculum and a "regular classroom activit[y]." The District Court found that Robert Stergos, the journalism teacher during most of the 1982-1983 school year, "both had the authority to exercise and in fact exercised a great deal of control over Spectrum." For example, Stergos selected the editors of the newspaper, scheduled publication dates, decided the number of pages for each issue, assigned story ideas to class members, advised students on the development of their stories, reviewed the use of quotations, edited stories, selected and edited the letters to the editor, and dealt with the printing company. Many of these decisions were made without consultation with the Journalism II students. The District Court thus found it "clear that Mr. Stergos was the final authority with respect to almost every aspect of the production and publication of Spectrum, including its content." Moreover, after *269 each Spectrum issue had been finally approved by Stergos or his successor, the issue still had to be reviewed by Principal Reynolds prior to publication. Respondents' assertion that they had believed that they could publish "practically anything" in Spectrum was therefore dismissed by the District Court as simply "not credible." These factual findings are amply supported by the record, and were not rejected as clearly erroneous by the Court of Appeals. The evidence relied upon by the Court of Appeals in finding Spectrum to be a public forum, see 795 F.2d, -1373, is equivocal at best. For example, Board Policy 348.51, which stated in part that "[s]chool sponsored student publications will not restrict free expression or diverse viewpoints within the rules of responsible journalism," also stated that such publications were "developed within the adopted curriculum and its educational implications." App. 22. One might reasonably infer from the full text of Policy 348.51 that school officials retained ultimate control over what constituted "responsible journalism" in a school-sponsored newspaper. Although |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | over what constituted "responsible journalism" in a school-sponsored newspaper. Although the Statement of Policy published in the September 14, 1982, issue of Spectrum declared that "Spectrum, as a student-press publication, accepts all rights implied by the First Amendment," this statement, understood in the context of the paper's role in the school's curriculum, suggests at most that the administration will not interfere with the students' exercise of those First Amendment rights that attend the publication of a school-sponsored newspaper. It does not reflect an intent to expand those rights by converting a curricular newspaper into a public forum.[2] Finally, *270 that students were permitted to exercise some authority over the contents of Spectrum was fully consistent with the Curriculum Guide objective of teaching the Journalism II students "leadership responsibilities as issue and page editors." App. 11. A decision to teach leadership skills in the context of a classroom activity hardly implies a decision to relinquish school control over that activity. In sum, the evidence relied upon by the Court of Appeals fails to demonstrate the "clear intent to create a public forum," Cornelius, 3 U. S., at that existed in cases in which we found public forums to have been created. See at -803 ; Southeastern Promotions, ). School officials did not evince either "by policy or by practice," Perry Education 460 U. S., at any intent to open the pages of Spectrum to "indiscriminate use," ib by its student reporters and editors, or by the student body generally. Instead, they "reserve[d] the forum for its intended purpos[e]," as a supervised learning experience for journalism students. Accordingly, school officials were entitled to regulate the contents of Spectrum in any reasonable manner. It is this standard, rather than our decision in that governs this case. B The question whether the First Amendment requires a school to tolerate particular student speech the question that we addressed in is different from the question whether the First Amendment requires a school affirmatively *271 to promote particular student speech. The former question addresses educators' ability to silence a student's personal expression that happens to occur on the school premises. The latter question concerns educators' authority over school-sponsored publications, theatrical productions, and other expressive activities that students, parents, and members of the public might reasonably perceive to bear the imprimatur of the school. These activities may fairly be characterized as part of the school curriculum, whether or not they occur in a traditional classroom setting, so long as they are supervised by faculty members and designed to impart particular knowledge or skills to student participants |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | designed to impart particular knowledge or skills to student participants and audiences.[3] Educators are entitled to exercise greater control over this second form of student expression to assure that participants learn whatever lessons the activity is designed to teach, that readers or listeners are not exposed to material that may be inappropriate for their level of maturity, and that the views of the individual speaker are not erroneously attributed to the school. Hence, a school may in its capacity as publisher of a school newspaper or producer of a school play "disassociate itself," 8 U. S., not only from speech that would "substantially interfere with [its] work or impinge upon the rights of other students," 393 U. S., but also from speech that is, for example, ungrammatical, poorly written, inadequately researched, biased or prejudiced, vulgar or profane, or unsuitable for immature audiences.[4] A school must be able to set high standards for *272 the student speech that is disseminated under its auspices standards that may be higher than those demanded by some newspaper publishers or theatrical producers in the "real" world and may refuse to disseminate student speech that does not meet those standards. In addition, a school must be able to take into account the emotional maturity of the intended audience in determining whether to disseminate student speech on potentially sensitive topics, which might range from the existence of Santa Claus in an elementary school setting to the particulars of teenage sexual activity in a high school setting. A school must also retain the authority to refuse to sponsor student speech that might reasonably be perceived to advocate drug or alcohol use, irresponsible sex, or conduct otherwise inconsistent with "the shared values of a civilized social order," or to associate the school with any position other than neutrality on matters of political controversy. Otherwise, the schools would be unduly constrained from fulfilling their role as "a principal instrument in awakening the child to cultural values, in preparing him for later professional training, and in helping him to adjust normally to his environment." 3 U.S. 483, Accordingly, we conclude that the standard articulated in for determining when a school may punish student expression need not also be the standard for determining when a school may refuse to lend its name and resources to the dissemination *273 of student expression.[5] Instead, we hold that educators do not offend the First Amendment by exercising editorial control over the style and content of student speech in school-sponsored expressive activities so long as their actions are reasonably related to legitimate pedagogical concerns.[6] |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | as their actions are reasonably related to legitimate pedagogical concerns.[6] This standard is consistent with our oft-expressed view that the education of the Nation's youth is primarily the responsibility of parents, teachers, and state and local school officials, and not of federal judges. See, e. g., Board of Education of Hendrick Hudson Central School ; ; It is only when the decision to censor a school-sponsored publication, theatrical production, or other vehicle of student expression has no valid educational purpose that the First Amendment is so "directly and sharply implicate[d]," ib as to require judicial intervention to protect students' constitutional rights.[7] *274 III We also conclude that Principal Reynolds acted reasonably in requiring the deletion from the May 13 issue of Spectrum of the pregnancy article, the divorce article, and the remaining articles that were to appear on the same pages of the newspaper. The initial paragraph of the pregnancy article declared that "[a]ll names have been changed to keep the identity of these girls a secret." The principal concluded that the students' anonymity was not adequately protected, however, given the other identifying information in the article and the small number of pregnant students at the school. Indeed, a teacher at the school credibly testified that she could positively identify at least one of the girls and possibly all three. It is likely that many students at Hazelwood East would have been at least as successful in identifying the girls. Reynolds therefore could reasonably have feared that the article violated whatever pledge of anonymity had been given to the pregnant students. In addition, he could reasonably have been concerned that the article was not sufficiently sensitive to the privacy interests of the students' boyfriends and parents, who were discussed in the article but who were given no opportunity to consent to its publication or to offer a response. The article did not contain graphic accounts of sexual activity. The girls did comment in the article, however, concerning their sexual histories and their use or nonuse of birth control. It was not unreasonable for the principal to have concluded that such frank talk was inappropriate in a school-sponsored publication distributed to 14-year-old freshmen *275 and presumably taken home to be read by students' even younger brothers and sisters. The student who was quoted by name in the version of the divorce article seen by Principal Reynolds made comments sharply critical of her father. The principal could reasonably have concluded that an individual publicly identified as an inattentive parent indeed, as one who chose "playing cards with the guys" over home |
Justice White | 1,988 | 6 | majority | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | one who chose "playing cards with the guys" over home and family was entitled to an opportunity to defend himself as a matter of journalistic fairness. These concerns were shared by both of Spectrum's faculty advisers for the 1982-1983 school year, who testified that they would not have allowed the article to be printed without deletion of the student's name.[8] Principal Reynolds testified credibly at trial that, at the time that he reviewed the proofs of the May 13 issue during an extended telephone conversation with Emerson, he believed that there was no time to make any changes in the articles, and that the newspaper had to be printed immediately or not at all. It is true that Reynolds did not verify whether the necessary modifications could still have been made in the articles, and that Emerson did not volunteer the information that printing could be delayed until the changes were made. We nonetheless agree with the District Court that the decision to excise the two pages containing the problematic articles was reasonable given the particular circumstances of this case. These circumstances included the very recent *276 replacement of Stergos by Emerson, who may not have been entirely familiar with Spectrum editorial and production procedures, and the pressure felt by Reynolds to make an immediate decision so that students would not be deprived of the newspaper altogether. In sum, we cannot reject as unreasonable Principal Reynolds' conclusion that neither the pregnancy article nor the divorce article was suitable for publication in Spectrum. Reynolds could reasonably have concluded that the students who had written and edited these articles had not sufficiently mastered those portions of the Journalism II curriculum that pertained to the treatment of controversial issues and personal attacks, the need to protect the privacy of individuals whose most intimate concerns are to be revealed in the newspaper, and "the legal, moral, and ethical restrictions imposed upon journalists within [a] school community" that includes adolescent subjects and readers. Finally, we conclude that the principal's decision to delete two pages of Spectrum, rather than to delete only the offending articles or to require that they be modified, was reasonable under the circumstances as he understood them. Accordingly, no violation of First Amendment rights occurred.[9] The judgment of the Court of Appeals for the Eighth Circuit is therefore Reversed. |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | This case presents the question whether Congress granted the Federal Savings and Loan Insurance Corporation (FSLIC), as receiver, the exclusive authority to adjudicate the state law claims asserted against a failed savings and loan association. We hold that Congress did not grant FSLIC such power and that the creditors of a failed savings and loan association are entitled to de novo consideration of their claims in court. We also hold that creditors are not required to exhaust FSLIC's current administrative claims procedure before filing suit because the lack of a clear time limit on FSLIC's consideration of claims renders the administrative procedure inadequate. * I From 1983 to Coit Independence Joint Venture (Coit), a real estate concern, borrowed money from FirstSouth, F. A., a federal savings and loan association. Subsequent disagreements led Coit to file suit against FirstSouth in October in the 95th Judicial District Court of Dallas County, Texas. In its state court complaint, Coit alleged that it had received two loans of $20 million and $30 million to purchase two parcels of undeveloped land. Coit alleged that FirstSouth had required it to pay a "profit participation" interest in any profits derived from sale of the property as a condition of receiving the loans. Coit asserted that this "profit participation" fee was interest that, when added to the regular accrued interest rate, made the loans usurious under Texas law. Complaint ¶¶ 4-13, App. 17-22. Coit also alleged that FirstSouth orally agreed to allow Coit to draw down funds to improve the property purchased with the $30 million loan, and to carry the loan, by executing any necessary renewal notes, for at least five years unless the property was sold earlier. Coit charged that FirstSouth violated this agreement in August by refusing to renew the notes and threatening to foreclose on the property. Coit sought damages from FirstSouth for usury. Alternatively, Coit sought a declaratory judgment that FirstSouth was Coit's partner by virtue of its profit sharing interest in the joint venture and that FirstSouth had breached its fiduciary duty and its implied duty of good faith and fair dealing. Complaint ¶¶ 11-16, App. 21-23. Coit also sought a declaration that any outstanding note was unenforceable. On December 4, two months after Coit filed suit in state court, the Federal Home Loan Bank Board (Bank Board) determined that FirstSouth was insolvent and appointed FSLIC as receiver. Substituting itself for FirstSouth in Coit's state suit, FSLIC removed the case to federal court. In February the District Court dismissed the suit for lack of subject matter jurisdiction, relying on North *566 Mississippi |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | lack of subject matter jurisdiction, relying on North *566 Mississippi Savings & Loan cert. denied, In Hudspeth, the Court of Appeals for the Fifth Circuit held that FSLIC has exclusive jurisdiction to adjudicate claims against the assets of an insolvent savings and loan association placed in a FSLIC receivership, subject first to review by the Bank Board and then to judicial review under the Administrative Procedure The Hudspeth court relied on two statutory provisions in reaching this conclusion. First, 12 U.S. C. 1464(d)(6)(C) states that "[e]xcept as otherwise provided in this subsection, no court may except at the instance of the Board, restrain or affect the exercise of powers or functions of a conservator or receiver." Second, 12 U.S. C. 1729(d) provides that "[i]n connection with the liquidation of insured institutions, [FSLIC] shall have power to settle, compromise, or release claims in favor of or against the insured institutions, and to do all other things that may be necessary in connection therewith, subject only to the regulation of the Federal Home Loan Bank Board." The Hudspeth court reasoned that Congress, by these provisions, intended that FSLIC should be able to act quickly in liquidating failed institutions and "not be interfered with by other judicial or regulatory authorities." The Fifth Circuit rejected Hudspeth's argument that adjudication of claims against a debtor, as opposed to allocation of assets to satisfy those claims, is not a receivership function, and thus that judicial resolution of claims would not "restrain or affect" FSLIC's powers as receiver. The court reasoned that judicial "resolution of even the facial merits of claims would delay the receivership function of distribution of assets" and that "such a delay is a `restraint' within the scope of the statute." The court found further support for its reading of the statute in the Board's regulations giving FSLIC the power to disallow claims not "proved to its satisfaction," 12 CFR 549.4, 569a.8 *567 which the court took to mean the power to adjudicate 756 F.2d, and n. 5. Since Hudspeth was decided, FSLIC has successfully urged state and federal courts to dismiss a broad variety of claims for lack of subject matter jurisdiction. Those creditor claims have included contract and tort claims, see, e. g., Resna Associates, alleged antitrust violations, Red Fox Industries, and even racketeering claims, In the instant case, Coit appealed the District Court's dismissal of its case for lack of subject matter jurisdiction to the Fifth Circuit. That court acknowledged that since Hudspeth was decided two other courts had held that Congress did not intend FSLIC to enjoy exclusive jurisdiction over |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | Congress did not intend FSLIC to enjoy exclusive jurisdiction over creditors' state law claims against savings and loan associations under FSLIC receivership. Morrison-Knudsen cert. dism'd sub nom. ; Glen Ridge I Condominiums, writ of error denied, cert. pending, No. 88-659. However, the Fifth Circuit held that it was bound by Hudspeth and affirmed the District Court's dismissal of Coit's suit. The court also concluded that Coit's constitutional challenges to exclusive FSLIC jurisdiction were not ripe for review. Coit Independence Joint On September 28, the deadline established by FSLIC for the filing of creditor claims against FirstSouth, Coit filed its proof of claim with FSLIC for approximately $113 million. Six months later, FSLIC notified Coit that its claim had been "retained for further review." There has been no further action on Coit's claim. *568 We granted certiorari to resolve the conflict in the lower courts over whether FSLIC has exclusive authority to adjudicate the validity of creditors' state law claims against failed savings and loan associations under a FSLIC receivership. We now reverse. II Resolution of this case requires us to interpret statutory provisions governing FSLIC and the Bank Board that were enacted over a span of 50 years. Moreover, those provisions are embedded in a complex statutory framework. Prior to the Great Depression of the 0's, savings and loan associations were chartered and regulated by the States alone. However, in the face of heavy withdrawals from savings accounts, mortgage loan defaults, and limited funds for home mortgages during the depression, Congress passed the Federal Home Loan Bank Act, now codified, as amended, 12 U.S. C. 1421 et seq. That Act provided for the creation of up to 12 federal home loan banks throughout the country whose function was to loan money to savings and loan associations and to certain other mortgage lenders. 12 U.S. C. 1423. The Act also created the Federal Home Loan Bank Board to oversee the 12 home loan banks and to raise funds for them by selling bonds. 12 U.S. C. 1437. See T. Marvell, The Federal Home Loan Bank Board 20 One year later, Congress enacted the Home Owners' Loan Act of 3 (HOLA), which empowered the Bank Board to organize, regulate, and charter federal savings and loan associations. as amended, 12 U.S. C. 1461 et seq. The HOLA also gave the Bank Board the power to prescribe rules and regulations for the "reorganization, consolidation, merger, or liquidation of such associations, including the power to appoint a conservator or a receiver to take charge of the affairs of any such association." HOLA, 5(d), now codified, |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | the affairs of any such association." HOLA, 5(d), now codified, as amended, 12 U.S. C. 1464(d)(11). *569 In 4, Congress established FSLIC to insure the accounts of all federal savings and loan associations and certain state-chartered associations. National Housing Act (NHA), 402(a), as amended, 12 U.S. C. 1725(a). If an insured institution was in default, FSLIC was required by the NHA to either pay depositors the insured amount of their account or to transfer the insured account to an insured institution not in default. NHA, 405(b), as amended, 12 U.S. C. 1728(b). If a federal savings and loan association was in default, FSLIC was to be appointed conservator or receiver and was authorized "(1) to take over the assets of and operate such association, (2) to take such action as may be necessary to put it in sound and solvent condition, (3) to merge it with another insured institution, (4) to organize a new Federal savings and loan association to take over its assets, or (5) to proceed to liquidate its assets in an orderly manner, whichever shall appear to be to the best interests of the insured members of the association in default; and in any event [FSLIC] shall pay the insurance as provided in section 405 and all valid credit obligations of such association." NHA, 406(b), now codified, as amended, 12 U.S. C. 1729(b)(1). FSLIC could also accept appointment as receiver of a state-chartered insured institution, assuming the same powers and duties as those with respect to a federal institution. NHA, 406(c), as amended, 12 U.S. C. 1729(c)(1)(A). In the event that FSLIC liquidated a failed savings and loan, the NHA provided: "[FSLIC] shall have power to carry on the business of and to collect all obligations to the insured institutions, to settle, compromise, or release claims in favor of or against the insured institutions, and to do all other things that may be necessary in connection therewith, subject only to the regulation of the court or other public *570 authority having jurisdiction over the matter." NHA, 406(d), now codified, as amended, 12 U.S. C. 1729(d). In the Housing Act of 1954, Congress amended both the NHA and the HOLA. The Housing Act amended 5(d) of the HOLA by setting forth specific grounds for the Bank Board's appointment of a conservator or receiver for a federal savings and loan association, such as insolvency, violation of law or regulation, concealment of books or records, and unsound operation. Housing Act of 1954, 503, -636, as amended, 12 U.S. C. 1464(d)(6)(A). The Housing Act required formal administrative hearings, subject to judicial |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | The Housing Act required formal administrative hearings, subject to judicial review under the Administrative Procedure Act, before a conservator or receiver could be appointed. 503, The first major amendments to the 4 NHA were made in the Financial Institutions Supervisory Act of 1966 (FISA), Stat. 1028, 1036, now codified, as amended, 12 U.S. C. 1464, 1730 (1982 and Supp. V). This Act gave the Bank Board a more flexible array of enforcement powers, short of placing thrifts in receivership or terminating their insurance, to prevent insured institutions from violating laws or regulations or engaging in unsafe and unsound practices. The FISA also gave the Bank Board authority, with respect to federal savings and loan associations, to appoint a conservator or receiver ex parte and without notice if certain grounds existed, including insolvency, substantial dissipation of assets due to violations of law or unsafe or unsound practices, willful violation of a cease-and-desist order, or concealment of books, papers, records, or assets. FISA, -1033, 12 U.S. C. 1464(d)(6)(A). If the Bank Board appointed a conservator or receiver, the savings and loan association could, within 30 days, bring an action in United States district court "for an order requiring the Board to remove such conservator or receiver." *571 It is in this context that the following language, relied on by the Fifth Circuit in Hudspeth, first appeared: "Except as otherwise provided in this subsection, no court may take any action for or toward the removal of any conservator or receiver, or, except at the instance of the Board, restrain or affect the exercise of powers or functions of a conservator or receiver." FISA, 12 U.S. C. 1464(d)(6)(C). The FISA also added greater scope to the Bank Board's power to make rules and regulations, including rules and regulations governing the liquidation of failed savings and loan associations and the conduct of receiverships. FISA, 12 U.S. C. 1464(d)(11). Subsequent statutes have extended the Bank Board's power to appoint FSLIC as receiver of insolvent state-chartered thrifts. See Bank Protection Act of 1968, Pub. L. 90-389, 6, -296, as amended, 12 U.S. C. 1729(c)(2), 1729(c)(3); Garn-St Germain Depository Institutions Act of 1982, Pub. L. 97-320, 122(d), 12 U.S. C. 1729(c)(1)(B); Competitive Equality Banking Act of Pub. L. 100-86, 509(a), note following 12 U.S. C. 1464 (1982 ed., Supp. V). Once FSLIC is appointed receiver of an insolvent savings and loan association, FSLIC steps into the shoes of the association and takes control of its assets. If FSLIC liquidates the association, it must promptly reimburse insured depositors out of its insurance fund. 12 U.S. C. 1728(b). If FSLIC |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | of its insurance fund. 12 U.S. C. 1728(b). If FSLIC is not satisfied regarding the validity of a depositor's claim, "it may require the final determination of a court of competent jurisdiction before paying such claim." FSLIC then satisfies the claims of uninsured creditors to the extent that the association's assets permit it to do so. Because FSLIC is subrogated to the rights of the insured depositors whom it has reimbursed, FSLIC is normally the single largest claimant against the assets of a failed savings and *572 loan association and generally recoups a substantial portion of its insurance payouts from those assets. See Morrison-Knudsen Co., 811 F. 2d, at 1215-1216; III Coit argues that Hudspeth incorrectly held that Congress granted FSLIC adjudicatory power over creditors' claims against failed savings and loan associations under FSLIC receivership, subject only to limited judicial review in the courts under the Administrative Procedure Act, 5 U.S. C. 551 et seq. Although FSLIC argued below, invoking Hudspeth, that the District Court lacked subject matter jurisdiction over Coit's claims, the Solicitor General does not endorse that position. See Brief for Respondent 16, 17, 20, and n. 13, 39-40. Respondent concedes both that "the power conferred by HOLA and the NHA should not be characterized as a power of `adjudication,' " and that the District Court had subject matter jurisdiction over Coit's claim.[1] at 16-17, 39. Respondent also acknowledged at oral argument that a creditor suing in court is entitled to a "de novo determination" of its claim. Tr. of Oral Arg. 36. We agree. The statutes governing FSLIC and the Bank Board do not grant FSLIC adjudicatory power over creditors' claims against insolvent savings and loan associations under FSLIC receivership, nor do they divest the courts of jurisdiction to consider those claims de novo. A Congress granted FSLIC various powers in its capacity as receiver, but they do not include the power to adjudicate creditors' Section 406 of the NHA conferred upon *573 FSLIC the traditional powers of a receiver "to settle, compromise, or release claims in favor of or against the insured institutio[n]," 12 U.S. C. 1729(d), and to "pay all valid credit obligations of the association," 1729(b)(1)(B). Those essential functions of FSLIC as receiver have not changed since the enactment of the NHA in 4. The plain language of 1729(b) and 1729(d) cannot be read to confer upon FSLIC the power to adjudicate disputes with the force of law. The power to "settle, compromise, or release" claims both is distinguishable from the power to adjudicate and is to some extent inconsistent with it. As the |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | and is to some extent inconsistent with it. As the Ninth Circuit reasoned in Morrison-Knudsen Co., 811 F. 2d, at 1219: "Settlement and compromise strongly suggest the presence of the power of the other party to take the dispute to court. Settlement and compromise are to avoid that result. A body with the power to say `yes' or `no' with the force of law has much less need to settle or to compromise." Similarly, the directive that FSLIC as receiver "shall pay all valid credit obligations of the association" cannot be read to confer upon FSLIC the power to adjudicate claims against an insolvent savings and loan association subject only to review under the Administrative Procedure This provision simply empowers FSLIC, much like an ordinary insurance company, to pay those claims proved to its satisfaction. It does not give FSLIC the power to adjudicate claims with the force of law; nor does it preclude claimants from resorting to the courts for a determination of the validity of their Moreover, 1729(b) and 1729(d) do not exist in isolation, but are embedded within a complex statutory framework. ). The *574 statutory framework in which 1729 appears indicates clearly that when Congress meant to confer adjudicatory authority on FSLIC it did so explicitly and set forth the relevant procedures in considerable detail. For example, in its role as supervisor of ongoing thrift institutions, FSLIC together with the Bank Board is empowered to adjudicate violations of federal law, to issue cease-and-desist orders, to remove officers and directors, and to impose civil sanctions. See 12 U.S. C. 1464(d), 1730. The statutory provisions that confer this authority set forth with precision the agency procedures to be followed and the remedies available, with explicit reference to judicial review under the Administrative Procedure See 12 U.S. C. 1464(d)(7)(A), 1730(j)(2). It is thus reasonable to infer that if Congress intended to confer adjudicatory authority upon FSLIC in its receivership capacity, it would have enacted similar provisions governing procedural and substantive rights and providing for judicial review. B The Hudspeth decision rested primarily on 12 U.S. C. 1464(d)(6)(C). That provision, introduced in 1966 as 101 of the FISA, states that "[e]xcept as otherwise provided in this subsection, no court may take any action for or toward the removal of any conservator or receiver, or, except at the instance of the Board, restrain or affect the exercise of powers or functions of a conservator or receiver." (Emphasis added.) The Hudspeth court reasoned that judicial "resolution of even the facial merits of claims would delay the receivership function of distribution of assets" |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | claims would delay the receivership function of distribution of assets" and that "such a delay is a `restraint' within the scope of the statute." 756 F.2d, We disagree. First, this language does not add adjudication of creditor claims to FSLIC's receivership powers. It simply prohibits courts from restraining or affecting FSLIC's exercise of those receivership "powers and functions" that have been granted by other statutory sources. As discussed above, *575 none of the statutes governing FSLIC and the Bank Board confer upon FSLIC the power to adjudicate claims against an insolvent savings and loan over which FSLIC has been appointed receiver. Second, when the statutory context in which the provision appears is examined, it is clear that it does not have the meaning that Hudspeth attributed to it. Section 1464(d) (6)(A) sets forth the specific grounds for appointment of a receiver by the Bank Board and expressly authorizes associations placed in receivership to bring suit within 30 days in United States district court to challenge the receiver's appointment. Following the provision for a court challenge to remove the receiver comes the statutory language prohibiting courts, "[e]xcept as otherwise provided in this subsection," from taking any action to remove the receiver or to "restrain or affect" the exercise of the receiver's "powers or functions." When read in its statutory context, this provision prohibits untimely challenges to the receiver's appointment or collateral attacks attempting to restrain the receiver from carrying out its basic functions. It does not divest state and federal courts of subject matter jurisdiction to determine the validity of claims against institutions under a FSLIC receivership. See -260; Baxter, Life in the Administrative Track: Administrative Adjudication of Claims Against Savings Institution Receiverships, 1988 Duke L. J. 422, 484-485. That the "restrain or affect" language should not be read to preclude de novo court adjudication of the validity of creditors' claims against savings and loans in receivership is reinforced by the fact that at the time of the statute's enactment it was well established at common law that suits establishing the existence or amount of a claim against an insolvent debtor did not interfere with or restrain the receiver's possession of the insolvent's assets or its exclusive control over the distribution of assets to satisfy Morris v. Jones, 329 U. S. *576 545, 549 (7); As this Court discussed in Morris: "No one can obtain part of the assets or enforce a right to specific property in the possession of the liquidation court except upon application to it. But proof and allowance of claims are matters distinct from distribution. `The latter |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | allowance of claims are matters distinct from distribution. `The latter function, which is spoken of as the liquidation of a claim, is strictly a proceeding in personam.' The establishment of the existence and amount of a claim against the debtor in no way disturbs the possession of the liquidation court, in no way affects title to the property, and does not necessarily involve a determination of what priority the claim should have." Moreover, suits to establish the validity and amount of a claim against an insolvent national bank under a statutory receivership were not seen as interfering with the powers or functions of the receiver. See Bank of Looking to the practical effects of court adjudication on the receivership process, the Hudspeth court erroneously assumed that such adjudication would "restrain" FSLIC's exercise of its receivership powers by delaying its prompt liquidation of failed savings and loans. As this Court held in a receiver's distribution of assets need not be postponed pending the resolution of disputed claims in other courts: "The power to fix the time for distribution may include the power to decline to postpone distribution awaiting disposition of litigation in another court over a contested claim." 279 U.S., at See also 3 R. Clark, Law and Practice of Receivers 649(c) (3d ed. 1959). Indeed, the Bank Board's own regulations provide for interim distributions. See 12 CFR 549.4(d) *577 Finally, even if court adjudication of creditor claims delayed the distribution of assets and thereby constituted a "restraint" on FSLIC's receivership functions, Hudspeth provides no explanation for why the delay resulting from judicial review of FSLIC's administrative claims procedure would constitute any less of a "restraint." In sum, judicial resolution of Coit's state law claims against FSLIC as receiver for FirstSouth simply would not "restrain or affect" FSLIC's exercise of its receivership functions within the meaning of 1464(d)(6)(C). C Several provisions of the NHA indicate that Congress clearly envisaged that the courts would have jurisdiction over suits by creditors against FSLIC as receiver. When it established FSLIC in 4, Congress provided that FSLIC could "sue and be sued, complain and defend, in any court of law or equity, State or Federal." NHA, 402(c)(4), now codified, as amended, 12 U.S. C. 1725(c)(4). Moreover, in the Housing Act of 1954, Congress amended the NHA to establish a statute of limitations for actions against FSLIC to enforce deposit insurance claims, which were the most common type of claim in any thrift liquidation at the time. Housing Act of 1954, 501(2), 12 U.S. C. 1728(c). Most significantly, in 1966, in the very statute that contained |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | Most significantly, in 1966, in the very statute that contained the "restrain or affect" language of 12 U.S. C. 1464(d)(6)(C), Congress provided an explicit grant of subject matter jurisdiction to the courts that clearly envisaged suits by creditors against FSLIC as receiver: "Notwithstanding any other provision of law, (B) any civil action, suit, or proceeding to which [FSLIC] shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy; and (C) [FSLIC] may, without bond or security, remove any such action, *578 suit, or proceeding from a State court to the United States district court: Provided, That any action, suit, or proceeding to which [FSLIC] is a party in its capacity as conservator, receiver, or other legal custodian of an insured State-chartered institution and which involves only the rights or obligations of investors, creditors, stockholders, and such institution under State law shall not be deemed to arise under the laws of the United States." FISA, 12 U.S. C. 1730(k)(1) (emphasis added). The proviso clause sets out the types of suits Congress expected FSLIC to defend against in state courts, including suits by creditors against FSLIC as receiver for state-chartered savings and loan associations. Moreover, there is no indication that Congress intended to treat state-chartered and federally chartered associations differently in this respect. See, e. g., 12 U.S. C. 1729(c)(1)(A) (granting FSLIC the "same powers and duties" as receiver for defaulted state institutions as it has with respect to federal savings and loan associations). In sum, we conclude that Congress clearly envisaged that the courts would have subject matter jurisdiction over creditor suits against FSLIC. Because we conclude that FSLIC has not been granted adjudicatory authority by Congress and that Coit is entitled to de novo consideration of its state law claims in court, we need not reach Coit's claim that adjudication by FSLIC subject only to judicial review under the Administrative Procedure Act would violate Article III of the Constitution under Northern Construction Similarly, we need not reach Coit's due process and Seventh Amendment challenges to adjudication by FSLIC of its state law We note, however, that the usury and breach of fiduciary duty claims raised by Coit, like the contract disputes in Morrison-Knudsen Co., 811 F. 2d, at 1221, involve "private rights" which are at the *579 "core" of "matters normally reserved to Article III courts." Commodity Futures Trading ; Northern The court below adopted an interpretation of the statutes governing FSLIC and the Bank Board |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | interpretation of the statutes governing FSLIC and the Bank Board that raises serious constitutional difficulties. In our view, those statutes can and should be read to avoid these difficulties. ; IV Although FSLIC argued below that the District Court lacked subject matter jurisdiction over Coit's state law claims, respondent now defends the Fifth Circuit's judgment on the narrower ground that "the Bank Board and FSLIC plainly do have power to require claimants first to present their claims to FSLIC, and exhaust the administrative process leading to allowance, settlement, or disallowance" before suing on the claims in court. Brief for Respondent 20, and n. 13. Coit does not challenge the Bank Board's authority to establish a voluntary claims procedure. Coit contends, however, that the statutory provisions relied on by FSLIC do not demonstrate a congressional intent to require exhaustion of administrative remedies by claimants before they can file suit in court. Reply Brief for Petitioner 3. A Our past cases have recognized that exhaustion of administrative remedies is required where Congress imposes an exhaustion requirement by statute. ; Where a statutory requirement of exhaustion is not explicit, "courts are guided by congressional intent in determining whether application of the doctrine would be consistent with the statutory scheme." Moreover, "a court should not defer the exercise of jurisdiction under a federal statute unless it is consistent with that intent." at 501-. Congress gave the Bank Board a broad statutory mandate to reorganize or liquidate an insolvent federal savings and loan, using FSLIC as receiver for that purpose. 12 U.S. C. 1464(d)(6). As we have discussed above, Congress also expressly granted FSLIC as receiver the responsibility to "pay all valid credit obligations of the association," 1729(b)(1)(B), to "liquidate its assets in an orderly manner," 1729(b)(1) (A)(v), and to "settle, compromise, or release claims in favor of or against the insured institutions, and to do all other things that may be necessary in connection therewith," 1729(d). Moreover, Congress gave the Bank Board the broad "power to make rules and regulations for the reorganization, consolidation, liquidation, and dissolution of associations, and for the conduct of conservatorships and receiverships." 1464(d)(11). Over 45 years ago, the Bank Board concluded that an administrative claims procedure was necessary in order for FSLIC to carry out its statutory responsibility to pay valid claims and to settle or disallow claims while liquidating the assets of a failed savings and loan association in an orderly manner. Thus, in 1, acting pursuant to its broad rulemaking authority under 5(d) of the HOLA, the Bank Board established a claims procedure that remained in effect, |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | Bank Board established a claims procedure that remained in effect, largely unaltered, until when FSLIC's post-Hudspeth interim procedures became operative. 4415 (1). At the time of the Hudspeth decision, the Bank Board's regulations provided that once FSLIC became receiver it would publish a notice to the association's creditors to present their claims by a specified date. 12 CFR 549.4(a) Claims filed after that date would be "disallowed, except as the Board may approve them for whole or part payment from the association's assets remaining undistributed *581 at the time of approval." The regulations further provided that FSLIC "shall allow any claim seasonably received and proved to its satisfaction," 549.4(b), and that FSLIC "may wholly or partly disallow any creditor claim not so proved, and shall notify the claimant of the disallowance and the reason therefor," After the date for presenting claims to FSLIC had expired, the regulations required FSLIC to file with the Bank Board "a complete list of claims presented, indicating the character of each claim and whether allowed by the receiver." 549.4(c). Creditor claims allowed by FSLIC or approved by the Bank Board would then be "paid by the receiver, from time to time, to the extent funds are available, in such manner and amounts as the Board may direct." 549.5(d). Following the Hudspeth decision, the Bank Board established a dramatically different and more elaborate set of "interim procedures" governing creditor These interim procedures have been used by FSLIC since July 1,[2] Under these procedures, FSLIC as receiver first notifies all potential claimants of their right to present a claim by a specified date, which is not less than 90 days from the date of the notice. (to be codified at 575.4). Properly filed claims are then assigned to an agent of FSLIC's Special Representative for an initial determination whether to allow or disallow the claim. -43855 (to be codified at 575.9(d), 575.10). The Special Representative must notify each claimant within six months after receipt of a properly filed proof of claim (or six months after the end of the 90-day notice period, whichever is *582 later) whether the claim will be allowed in full or in part, disallowed, or retained for further review. (to be codified at 575.11). If the claim is retained by FSLIC for further review, there is no time limit set for its disposition. In reviewing a claim, the agent may require the claimant to submit additional documentation, answer written questions, provide a sworn statement, and submit a memorandum addressing legal issues. (to be codified at 575.13). The Special Representative compiles a "Receiver's record" |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | codified at 575.13). The Special Representative compiles a "Receiver's record" and ultimately prepares a "proposed determination of claim in the form of proposed findings of fact and conclusions of law." (to be codified at 575.13(l)). If the claimant does not object to a proposed finding of fact or conclusion of law in a request for reconsideration, those facts or conclusions will be "conclusively established against the Claimant." (to be codified at 575.13(o)(2)). After considering the Receiver's record, FSLIC then issues a decision on the claim in the form of findings of fact and conclusions of law. (to be codified at 575.13(o)(6)). If a claim is ultimately disallowed by FSLIC in whole or in part, the Special Representative notifies the claimant of its right to Bank Board review of the determination. (to be codified at 575.13(n), 575.13(p)). Claimants then have 60 days to file a written request for Bank Board review. (to be codified at 576.3(a)). The Bank Board conducts a preliminary review to determine if more information is needed, which will be completed in most cases within 60 days. (to be codified at 576.4(b)). Generally the Bank Board will issue a decision within six months from the date the record is closed. (to be codified at 576.7). Thus, even assuming that FSLIC itself rules within 180 days, the entire process for a claimant whose claim is not allowed in full could take well over a year from the time the claim is first filed with FSLIC until the Bank Board completes its final review. Because the regulations put no time limit on FSLIC's *583 consideration of claims retained for "further review," the length of time could be far longer and even indefinite. Under these procedures, the Bank Board may make its own findings of fact and conclusions of law based upon the Administrative Record. (to be codified at 576.5(e)). The procedures further provide that "[j]udicial review of the disallowance in whole or in part of a claim against the assets of the FSLIC as receiver is available only after exhaustion of these procedures and review and final agency action by the Board." (to be codified at 575.1(a)). B Respondent argues that just as the Bank Board has the authority under 5(d)(11) of HOLA to establish an administrative claims procedure, it also has the authority to require claimants to exhaust that procedure before going to court. Respondent contends that FSLIC will be unable to fulfill its statutory responsibility to liquidate failed savings and loan associations "in an orderly manner" or to make rational judgments about which claims to pay, settle, or |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | make rational judgments about which claims to pay, settle, or contest, unless it has an initial opportunity to consider the entire array of claims against an insolvent estate in a centralized claims process before claimants proceed to court. Brief for Respondent 25-30. Although the language of the statutes governing FSLIC and the Bank Board does not explicitly mandate exhaustion of administrative remedies as a precondition for filing suit, the NHA does require that FSLIC liquidate the assets of a failed savings and loan "in an orderly manner," 12 U.S. C. 1729(b)(1)(A)(v), "pay all valid credit obligations," 1729(b)(1)(B), and "settle, compromise, or release claims in favor of or against the insured institutio[n], and to do all other things that may be necessary in connection therewith," 1729(d). Moreover, there can be no doubt that the Bank Board's broad authority under 5(d)(11) of the HOLA to establish rules for the conduct of receiverships empowers *584 the Board to respond to changing circumstances and present needs, within statutory constraints. 1464(d)(11). In the present savings and loan crisis, with hundreds of savings and loan associations in receivership,[3] and with creditors of far greater number and variety than the small depositors who once were a failed thrift's main creditors, the Bank Board could reasonably conclude that FSLIC could not possibly fulfill its statutory responsibility to liquidate "in an orderly manner" unless FSLIC had notice of all claims against an insolvent savings and loan association and an initial opportunity to consider them in a centralized claims process. If the Bank Board's regulations only required claimants to give FSLIC notice of their claims and then to wait for a reasonable period of time before filing suit while FSLIC decided whether to pay, settle, or disallow the claim, we have no doubt that such regulations would be a reasonable exercise of the Bank Board's broad rulemaking power under 5(d)(11) of the HOLA and would be entirely consistent with Congress' clear intent that FSLIC liquidate failed savings and loan associations "in an orderly manner." The traditional reasons for judicial application of the exhaustion doctrine, even "in cases where the statutory requirement of exclusivity is not so explicit," support the conclusion that the Bank Board could require that FSLIC be given notice of creditors' claims and a reasonable period of time to decide, in the first instance, whether to pay, settle, or contest those claims in court. The Bank Board reasonably could decide that FSLIC simply cannot perform its statutory function as receiver and liquidator of failed savings and loan associations unless it is notified of the entire array of claims |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | unless it is notified of the entire array of claims against the assets of a failed association and has a reasonable period of time to make rational and consistent judgments regarding which claims to allow or contest, based on its expertise and knowledge of the total situation. *585 Only then could FSLIC liquidate the association's assets "in an orderly manner," and settle many claims without resort to costly litigation the expense of which is ultimately borne by the common pool of assets out of which all valid claims are paid. In cases where suit has already been filed against a savings and loan association before FSLIC is appointed receiver, FSLIC will receive notice of those claims when it steps into the shoes of the failed savings and loan and takes control of its assets. Trial courts can then determine, in their discretion, whether to stay the proceedings for a limited time, based on such factors as the stage of the litigation and FSLIC's need to assess the possibility of settling the See (6); ; Marshall v. Hartford Fire Ins. Co., 78 F. R. D. 97, 107 (Conn. 1978). In our view, it is incorrect to characterize our exhaustion analysis in this Part as a ruling that the enabling legislation of FSLIC and the Bank Board "pre-empts" state law. See post, at 588-589 (SCALIA, J., concurring in part and concurring in judgment). Our discussion in Part IV does not purport to be predicated on any finding that federal law occupies the field to the exclusion of a substantive body of state law or regulations, or that the enforcement of state law would conflict with federal substantive policies. Indeed, we hold explicitly in Part III that Coit is entitled to de novo consideration of its state law claims in court, and that FSLIC has no statutory authority to divest the courts of subject matter jurisdiction over those See Moreover, the minimal delay entailed in a notice and reasonable time requirement is unlikely to "extinguish" state causes of action in the usual case. On the facts before us today, we need not address a case such as that posited by JUSTICE SCALIA, in which a state statute of limitations may expire during a reasonable waiting period established by FSLIC. *586 C The Bank Board's present regulations, however, exceed its statutory authority in two respects. First, the regulations purport to confer adjudicatory authority on FSLIC and on the Bank Board to make binding findings of fact and conclusions of law, subject only to "judicial review" presumably under the Administrative Procedure Act as opposed |
Justice O'Connor | 1,989 | 14 | majority | Coit Independence Joint Venture v. FSLIC | https://www.courtlistener.com/opinion/112217/coit-independence-joint-venture-v-fslic/ | "judicial review" presumably under the Administrative Procedure Act as opposed to de novo judicial determination. See, e. g., 43856, 43858 (to be codified at 12 CFR 575.1, 575.13(o)(6), 576.5(e)). FSLIC does not have such authority for the reasons discussed above in Part III. Second, the regulations do not place a clear and reasonable time limit on FSLIC's consideration of whether to pay, settle, or disallow Under the current regulations, FSLIC must allow, disallow, or retain a claim "for further review" within six months after the filing of the claim or after the end of the 90-day notice period, but no time limit is established for FSLIC's consideration of those claims retained for further review. Thus, as Coit so aptly puts it: "These procedures give FSLIC virtually unlimited discretion to bury large claims like Coit's in the administrative process, and to stay judicial proceedings for an unconscionably long period of time given FSLIC's purportedly limited objectives of centralizing the claims process and deciding whether claims should be paid or not." Reply Brief for Petitioner 18. Indeed, Coit first filed its claim for approximately $113 million with FSLIC on September 28, Six months later, on March 18, 1988, Coit was notified that its claim was being retained for "further review." As of the date of oral argument, Coit's claim had been pending before FSLIC for over 13 months, and FSLIC had yet to make its initial determination. Since the Bank Board itself can take six months to dispose of any appeal, Coit's claim has essentially been relegated to a "black hole" from which it may not emerge before the statute of limitations on Coit's state law claims has run. *587 Administrative remedies that are inadequate need not be exhausted. ; The lack of a reasonable time limit in the current administrative claims procedure renders it inadequate for several reasons. First, it allows FSLIC to delay the administrative processing of claims indefinitely, denying a litigant its day in court, while the statute of limitations runs. Second, it may enable FSLIC to coerce claimants to enter into unfair settlements by virtue of the fact that the receiver's assets may be depleted by interim distributions to other claimants by the time a claimant finally has access to the courts. These concerns are only exacerbated by the fact that FSLIC itself is often the main creditor against the assets of a failed savings and loan association, and thus may well have an incentive to delay decision on large claims against an insolvent's assets such as the claim filed by Coit. Because the Bank Board's regulations do |
Justice Burger | 1,980 | 12 | dissenting | Carlson v. Green | https://www.courtlistener.com/opinion/110245/carlson-v-green/ | Although I would be prepared to join an opinion giving effect to which I thought wrongly decidedI cannot join today's unwarranted expansion of that decision. The Federal Tort Claims Act provides an adequate remedy for prisoners' claims of medical mistreatment. For me, that is the end of the matter. Under the test enunciated by the Court the adequacy of the Tort Claims Act remedy is an irrelevancy. The sole inquiry called for by the Court's new test is whether "Congress has provided an alternative remedy which it explicitly declared to be a substitute for recovery directly under the Constitution." Ante, at 18-19 (first emphasis added).[1] That test would seem to permit a person whose constitutional rights have been violated by a state officer to bring suit under Bivens even though Congress in 42 U.S. C. 1983 has already fashioned an equally effective remedy. Cf. After all, there is no "explicit congressional declaration," ante, at 19, that 1983 was meant to pre-empt a Bivens remedy. Taken to its logical conclusion, the Court's test, coupled with its holding on survivorship, ante, at 23, and n. 11, suggests that the plaintiff in might have *31 escaped the impact of that decision by filing a separate Bivens-type claim. And the Court's test throws into doubt the decision in where we held that 717 of the Civil Rights Act of 1964 provides the exclusive remedy for claims of discrimination in federal employment. In enacting 717 Congress did not say the magic words which the Court now seems to require.[2] Until today, I had thought that Bivens was limited to those circumstances in which a civil rights plaintiff had no other effective remedy. See ; Now it would seem that implication of a Bivens-type remedy is permissible even though a victim of unlawful official action may be fully recompensed under an existing statutory scheme. I have difficulty believing that the Court has thought through, and intends the natural consequences of, this novel test; I cannot escape the conclusion that in future cases the Court will be obliged to retreat from the language of today's decision.[3] MR. |
Justice Rehnquist | 1,984 | 19 | majority | Keeton v. Hustler Magazine, Inc. | https://www.courtlistener.com/opinion/111116/keeton-v-hustler-magazine-inc/ | Petitioner Kathy Keeton sued respondent Hustler Magazine, Inc., and other defendants in the United States District Court for the District of New Hampshire, alleging jurisdiction over her libel complaint by reason of diversity of citizenship. The District Court dismissed her suit because it believed that the Due Process Clause of the Fourteenth Amendment to the United States Constitution forbade the application of New Hampshire's long-arm statute in order to acquire personal jurisdiction over respondent. The Court of Appeals for the First Circuit affirmed, summarizing its concerns with the statement that "the New Hampshire tail is too small to wag so large an out-of-state dog." We granted certiorari, and we now reverse. Petitioner Keeton is a resident of New York. Her only connection with New Hampshire is the circulation there of copies of a magazine that she assists in producing. The magazine bears petitioner's name in several places crediting her with editorial and other work. Respondent Hustler Magazine, Inc., is an Ohio corporation, with its principal place of business in California. Respondent's contacts with New Hampshire consist of the sale of some 10,000 to 15,000 copies of Hustler Magazine in that State each month. See App. 81a-86a. Petitioner claims to have been libeled in five separate issues of respondent's magazine published between September 1975 and May 1976.1] *773 The Court of Appeals, in its opinion affirming the District Court's dismissal of petitioner's complaint, held that petitioner's lack of contacts with New Hampshire rendered the State's interest in redressing the tort of libel to petitioner too attenuated for an assertion of personal jurisdiction over respondent. The Court of Appeals observed that the "single publication rule" ordinarily applicable in multistate libel cases would require it to award petitioner "damages caused in all states" should she prevail in her suit, even though the bulk of petitioner's alleged injuries had been sustained outside New2] The court also stressed New Hampshire's unusually long (6-year) limitations period for libel actions. New Hampshire was the only State where petitioner's suit would not have been time-barred when it was filed. Under these circumstances, the Court of Appeals concluded that it would be "unfair" to assert jurisdiction over respondent. New Hampshire has a minimal interest in applying its unusual statute of limitations to, and awarding damages for, injuries to a nonresident occurring outside the State, particularly since petitioner suffered such a small proportion of her total claimed injury within the State. We conclude that the Court of Appeals erred when it affirmed the dismissal of petitioner's suit for lack of personal jurisdiction. Respondent's regular circulation of magazines in the forum |
Justice Rehnquist | 1,984 | 19 | majority | Keeton v. Hustler Magazine, Inc. | https://www.courtlistener.com/opinion/111116/keeton-v-hustler-magazine-inc/ | personal jurisdiction. Respondent's regular circulation of magazines in the forum State is sufficient to support an assertion of jurisdiction *774 in a libel action based on the contents of the magazine. This is so even if New Hampshire courts, and thus the District Court under Klaxon would apply the so-called "single publication rule" to enable petitioner to recover in the New Hampshire action her damages from "publications" of the alleged libel throughout the United States.3] The District Court found that "t]he general course of conduct in circulating magazines throughout the state was purposefully directed at New Hampshire, and inevitably affected persons in the state." App. to Pet. for Cert. 5a. Such regular monthly sales of thousands of magazines cannot by any stretch of the imagination be characterized as random, isolated, or fortuitous. It is, therefore, unquestionable that New Hampshire jurisdiction over a complaint based on those contacts would ordinarily satisfy the requirement of the Due Process Clause that a State's assertion of personal jurisdiction over a nonresident defendant be predicated on "minimum contacts" between the defendant and the State. See World-Wide Volkswagen ; International Shoe And, as the Court of Appeals acknowledged, New Hampshire has adopted a "long-arm" statute authorizing service of process on nonresident corporations whenever permitted by the Due Process4] Thus, all the requisites for personal jurisdiction *775 over Hustler Magazine, Inc., in New Hampshire are present. We think that the three concerns advanced by the Court of Appeals, whether considered singly or together, are not sufficiently weighty to merit a different result. The "single publication rule," New Hampshire's unusually long statute of limitations, and plaintiff's lack of contacts with the forum State do not defeat jurisdiction otherwise proper under both New Hampshire law and the Due Process In judging minimum contacts, a court properly focuses on "the relationship among the defendant, the forum, and the litigation." See also Thus, it is certainly relevant to the jurisdictional inquiry that petitioner is seeking to recover damages suffered in all States in this one suit. The contacts between respondent and the forum must be judged in the light of that claim, rather than a claim only for damages sustained in New That is, the contacts between respondent and New Hampshire must be such that it is "fair" to compel respondent to defend a multistate lawsuit in New Hampshire seeking nationwide damages for all copies of the five issues in question, even though only a small portion of those copies were distributed in New The Court of Appeals expressed the view that New Hampshire's "interest" in asserting jurisdiction over plaintiff's multistate |
Justice Rehnquist | 1,984 | 19 | majority | Keeton v. Hustler Magazine, Inc. | https://www.courtlistener.com/opinion/111116/keeton-v-hustler-magazine-inc/ | that New Hampshire's "interest" in asserting jurisdiction over plaintiff's multistate claim was minimal. We agree that the "fairness" of *776 haling respondent into a New Hampshire court depends to some extent on whether respondent's activities relating to New Hampshire are such as to give that State a legitimate interest in holding respondent answerable on a claim related to those activities. See World-Wide Volkswagen ; But insofar as the State's "interest" in adjudicating the dispute is a part of the Fourteenth Amendment due process equation, as a surrogate for some of the factors already mentioned, see Insurance Corp. of we think the interest is sufficient. The Court of Appeals acknowledged that petitioner was suing, at least in part, for damages suffered in New And it is beyond dispute that New Hampshire has a significant interest in redressing injuries that actually occur within the State. " `A state has an especial interest in exercising judicial jurisdiction over those who commit torts within its territory. This is because torts involve wrongful conduct which a state seeks to deter, and against which it attempts to afford protection, by providing that a tortfeasor shall be liable for damages which are the proximate result of his tort.' " This interest extends to libel actions brought by nonresidents. False statements of fact harm both the subject of the falsehood and the readers of the statement. New Hampshire may rightly employ its libel laws to discourage the deception of its citizens. There is "no constitutional value in false statements of fact." New Hampshire may also extend its concern to the injury that in-state libel causes within New Hampshire to a nonresident. *777 The tort of libel is generally held to occur wherever the offending material is circulated. Restatement (Second) of Torts 577A, Comment a The reputation of the libel victim may suffer harm even in a State in which he has hitherto been anonymous.5] The communication of the libel may create a negative reputation among the residents of a jurisdiction where the plaintiff's previous reputation was, however small, at least unblemished. New Hampshire has clearly expressed its interest in protecting such persons from libel, as well as in safeguarding its populace from falsehoods. Its criminal defamation statute bears no restriction to libels of which residents are the victim.6] Moreover, in 1971 New Hampshire specifically deleted from its long-arm statute the requirement that a tort be committed "against a resident of New "7] New Hampshire also has a substantial interest in cooperating with other States, through the "single publication rule," to provide a forum for efficiently litigating all issues |
Justice Rehnquist | 1,984 | 19 | majority | Keeton v. Hustler Magazine, Inc. | https://www.courtlistener.com/opinion/111116/keeton-v-hustler-magazine-inc/ | rule," to provide a forum for efficiently litigating all issues and damages claims arising out of a libel in a unitary proceeding.8] This rule reduces the potential serious drain of libel cases on judicial resources. It also serves to protect defendants from harassment resulting from multiple suits. Restatement (Second) of Torts 577A, Comment f In sum, the combination of New Hampshire's interest in redressing injuries that occur within the State and its interest in cooperating *778 with other States in the application of the "single publication rule" demonstrates the propriety of requiring respondent to answer to a multistate libel action in New 9] The Court of Appeals also thought that there was an element of due process "unfairness" arising from the fact that the statutes of limitations in every jurisdiction except New Hampshire had run on the plaintiff's claim in this case.10] Strictly speaking, however, any potential unfairness in applying New Hampshire's statute of limitations to all aspects of this nationwide suit has nothing to do with the jurisdiction of the court to adjudicate the claims. "The issue is personal jurisdiction, not choice of law." The question of the applicability of New Hampshire's statute of limitations to claims for out-of-state damages presents itself in the course of litigation only after jurisdiction over respondent is established, and we do not think that such choice-of-law concerns should complicate or distort the jurisdictional inquiry. *779 The chance duration of statutes of limitations in nonforum jurisdictions has nothing to do with the contacts among respondent, New Hampshire, and this multistate libel action. Whether Ohio's limitations period is six months or six years does not alter the jurisdictional calculus in New Petitioner's successful search for a State with a lengthy statute of limitations is no different from the litigation strategy of countless plaintiffs who seek a forum with favorable substantive or procedural rules or sympathetic local populations. Certainly Hustler Magazine, Inc., which chose to enter the New Hampshire market, can be charged with knowledge of its laws and no doubt would have claimed the benefit of them if it had a complaint against a subscriber, distributor, or other commercial partner. Finally, implicit in the Court of Appeals' analysis of New Hampshire's interest is an emphasis on the extremely limited contacts of the plaintiff with New But we have not to date required a plaintiff to have "minimum contacts" with the forum State before permitting that State to assert personal jurisdiction over a nonresident defendant. On the contrary, we have upheld the assertion of jurisdiction where such contacts were entirely lacking. In none of the parties |
Justice Rehnquist | 1,984 | 19 | majority | Keeton v. Hustler Magazine, Inc. | https://www.courtlistener.com/opinion/111116/keeton-v-hustler-magazine-inc/ | such contacts were entirely lacking. In none of the parties was a resident of the forum State; indeed, neither the plaintiff nor the subject matter of his action had any relation to that State. Jurisdiction was based solely on the fact that the defendant corporation had been carrying on in the forum "a continuous and systematic, but limited, part of its general business." In the instant case, respondent's activities in the forum may not be so substantial as to support jurisdiction over a cause of action unrelated to those activities.11] But *780 respondent is carrying on a "part of its general business" in New Hampshire, and that is sufficient to support jurisdiction when the cause of action arises out of the very activity being conducted, in part, in New The plaintiff's residence is not, of course, completely irrelevant to the jurisdictional inquiry. As noted, that inquiry focuses on the relations among the defendant, the forum, and the litigation. Plaintiff's residence may well play an important role in determining the propriety of entertaining a suit against the defendant in the forum. That is, plaintiff's residence in the forum may, because of defendant's relationship with the plaintiff, enhance defendant's contacts with the forum. Plaintiff's residence may be the focus of the activities of the defendant out of which the suit arises. See Calder v. Jones, post, at 788-789; But plaintiff's residence in the forum State is not a separate requirement, and lack of residence will not defeat jurisdiction established on the basis of defendant's contacts. It is undoubtedly true that the bulk of the harm done to petitioner occurred outside New But that will be true in almost every libel action brought somewhere other than the plaintiff's domicile. There is no justification for restricting libel actions to the plaintiff's home forum.12] The victim of a libel, like the victim of any other tort, may choose to bring suit in any forum with which the defendant has "certain minimum contacts such that the maintenance of the suit does not offend `traditional notions of fair play and substantial *781 justice.' ]." International Shoe Where, as in this case, respondent Hustler Magazine, Inc., has continuously and deliberately exploited the New Hampshire market, it must reasonably anticipate being haled into court there in a libel action based on the contents of its magazine. World-Wide Volkswagen 444 U. S., at And, since respondent can be charged with knowledge of the "single publication rule," it must anticipate that such a suit will seek nationwide damages. Respondent produces a national publication aimed at a nationwide audience. There is no |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | Congress enacted the Privacy Act of 1974 for the stated purpose of safeguarding individual privacy against Gov- ernment invasion. To that end, the Act provides a civil remedy entitling individuals adversely affected by certain agency misconduct to recover “actual damages” sustained as a result of the unlawful action. Today the Court holds that “actual damages” is limited to pecuniary loss. Consequently, individuals can no longer recover what our precedents and common sense under- stand to be the primary, and often only, damages sus- tained as a result of an invasion of privacy, namely mental or emotional distress. That result is at odds with the text, structure, and drafting history of the Act. And it cripples the Act’s core purpose of redressing and deterring viola- tions of privacy interests. I respectfully dissent. I The majority concludes that “actual damages” in the civil-remedies provision of the Privacy Act allows recovery for pecuniary loss alone. But it concedes that its interpre- tation is not compelled by the plain text of the statute or otherwise required by any other traditional tool of statu- 2 FAA v. COOPER SOTOMAYOR, J., dissenting tory interpretation. And it candidly acknowledges that a contrary reading is not “inconceivable.” Ante, at 14. Yet be- cause it considers its reading of “actual damages” to be “plausible,” the majority contends that the canon of sover- eign immunity requires adoption of an interpretation most favorable to the Government. The canon simply cannot bear the weight the majority ascribes it. “The sovereign immunity canon is just that—a canon of construction. It is a tool for interpreting the law, and we have never held that it displaces the other tra- ditional tools of statutory construction.” Richlin Security Service (opinion of ALITO, J.). Here, traditional tools of statutory construc- tion—the statute’s text, structure, drafting history, and purpose—provide a clear answer: The term “actual dam- ages” permits recovery for all injuries established by competent evidence in the record, whether pecuniary or nonpecuniary, and so encompasses damages for mental and emotional distress. There is no need to seek refuge in a canon of construction, see at –90 (declining to rely on canon as there is “no ambiguity left for us to con- strue” after application of “traditional tools of statutory interpretation and considerations of stare decisis”), much less one that has been used so haphazardly in the Court’s history, see United States v. Nordic Village, Inc., 03 U.S. 30, 42 (Stevens, J., dissenting) (canon is “nothing but a judge-made rule that is sometimes favored and sometimes disfavored”) (collecting cases). It bears emphasis that we have said repeatedly that, |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | cases). It bears emphasis that we have said repeatedly that, while “we should not take it upon ourselves to extend the waiver [of sovereign immunity] beyond that which Congress intended,” “[n]either should we assume the authority to narrow the waiver that Congress intended.” United (emphasis added). See also, e.g., Block v. Neal, 460 U.S. 289, 298 (1983) (“The exemption of the sovereign from suit Cite as: 66 U. S. (2012) 3 SOTOMAYOR, J., dissenting involves hardship enough where consent has been with- held. We are not to add to its rigor by refinement of con- struction where consent has been announced” (internal quotation marks omitted)). In the Privacy Act, Congress expressly authorized recovery of “actual damages” for certain intentional or willful agency misconduct. The Court should not “as a self-constituted guardian of the Treasury import immunity back into a statute designed to limit it.” Indian Towing 69 (19). II A “In a statutory construction case, the beginning point must be the language of the statute, and when a statute speaks with clarity to an issue judicial inquiry into the statute’s meaning, in all but the most extraordinary cir- cumstance, is finished.” Estate of The language of the civil-remedies provision of the Privacy Act is clear. At the time Congress drafted the Act, Black’s Law Dic- tionary defined “actual damages” as “[r]eal, substantial and just damages, or the amount awarded to a complain- ant in compensation for his actual and real loss or in- jury” and as “[s]ynonymous with ‘compensatory damages.’ ” Black’s Law Dictionary 467 (rev. 4th ed. 1968) (hereinafter Black’s). The majority claims this is a “general” and “no- tably circular” definition, ante, at 7, but it is unclear why. The definition is plain enough: “Actual damages” compen- sate for actual injury, and thus the term is synonymous with compensatory damages. See Black’s 467 (defining “compensatory damages” as damages that “will compen- sate the injured party for the injury sustained, and noth- ing more; such as will simply make good or replace the 4 FAA v. COOPER SOTOMAYOR, J., dissenting loss caused by the wrong or injury”).1 There is nothing circular about that definition.2 It is the definition this Court adopted more than a century ago when we recog- nized that “[c]ompensatory damages and actual damages mean the same thing; that is, that the damages shall be the result of the injury alleged and proved, and that the amount awarded shall be precisely commensurate with the injury suffered.” (1876). It is the definition embraced in current legal dictionaries. See Black’s 44 (9th ed. 2009) (defining “actual damages” as “[a]n |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | Black’s 44 (9th ed. 2009) (defining “actual damages” as “[a]n amount awarded to a complain- ant to compensate for a proven injury or loss; damages that repay actual losses.—Also termed compensatory damages; tangible damages; real damages” (italics omit- ted)). And it is the definition that accords with the plain and ordinary meaning of the term. See Webster’s Third New International Dictionary 22, 71 (2002) (defining “actual” as “existing in fact or reality” and “damages” as “compensation or satisfaction imposed by law for a wrong or injury caused by a violation of a legal right”). Thus, both as a term of art and in its plain meaning, “actual damages” connotes compensation for proven injuries or —————— 1 Black’s Law Dictionary also defined “actual damages” as synony- mous with “general damages.” Black’s 467. While “general damages” has a specialized meaning of presumed damages in libel and slander cases, see n. 4, infra, it more generally can mean damages that “did in fact result from the wrong, directly and proximately.” Black’s 468. 2 The majority declares the definition circular because “defining ‘ac- tual’ damages by reference to ‘actual’ injury is hardly helpful when our task is to determine what Congress meant by ‘actual.’ ” Ante, at 9, n. 4. “Actual injury,” however, is far from an unhelpful reference. This Court already has recognized in the defamation context that “actual injury is not limited to out-of-pocket loss.” That accords with the definitions of the terms. See Black’s 3, 924 (defining “actual” as “[r]eal; substantial; existing presently in act, having a valid objective existence as opposed to that which is merely theoretical or possible,” and “injury” as “[a]ny wrong or damage done to another”). Cite as: 66 U. S. (2012) SOTOMAYOR, J., dissenting losses. Nothing in the use of that phrase indicates proven injuries need be pecuniary in nature. The majority discards all this on the asserted ground that “the precise meaning of the term ‘changes with the specific statute in which it is found.’ ” Ante, at 7 ). Context, of course, is relevant to statutory interpretation; it may provide clues that Congress did not employ a word or phrase in its ordinary meaning. That well-established interpretive rule cannot, however, render irrelevant—as the majority would have it—the ordinary meaning of “actual damages.” Moreover, the authority the majority cites for its claim that “actual damages” has no fixed meaning undermines— rather than supports—its holding. Each cited authority involves either a statute in which Congress expressly directed that compensation be measured in strictly eco- nomic terms, or else a statute (e.g., the Copyright Act of 1909) |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | or else a statute (e.g., the Copyright Act of 1909) in which economic loss is the natural and probable consequence of a violation of the defined legal interest.3 Neither factor is present here. Notably absent from the Privacy Act is any provision so much as hinting that “ac- tual damages” should be limited to economic loss. And while “ ‘ “hurt feelings” over the nature of the [copyright] infringement’ ” may “have no place in the actual damages calculus” under the Copyright Act of 1909, ante, (quot- ing in parenthetical 917 (CA9 2002)), the majority provides no basis for concluding that “hurt feelings” are equally invalid in an Act con- cerned with safeguarding individual privacy. Thus, while context is no doubt relevant, the majority’s cited authority does little to help its cause in the stated context of this statute. —————— 3 See 28 U.S. C. 17 U.S. C. 18 U.S. C. (2006 ed., Supp. IV); 17 U.S. C. (1970 ed.); 1 U.S. C. (2006 ed., Supp. IV). 6 FAA v. COOPER SOTOMAYOR, J., dissenting B Indeed, the relevant statutory context—the substantive provisions whose breach may trigger suit under the civil- remedies provision—only reinforces the ordinary meaning of “actual damages.” Congress established substantive duties in the Act that are expressly designed to prevent agency conduct result- ing in intangible harms to the individual. The Act re- quires agencies to “establish appropriate administrative, technical, and physical safeguards” to ensure against security breaches that could result in “substantial harm, embarrassment, inconvenience, or unfairness to any indi- vidual.” U.S. C. It also requires agencies to “maintain all records” used in making a determination about an individual in a manner that is “reasonably neces- sary to assure fairness to the individual in the determina- tion.” Thus an agency violates the terms of the Act if it fails, e.g., to maintain safeguards protecting against “embarrassment”; there is no additional require- ment that the pocketbook be implicated. An agency’s intentional or willful violation of those duties triggers liability for “actual damages” under in the event of an adverse impact. (g)(4). Adopting a reading of “actual damages” that permits recovery for pecuniary loss alone creates a disconnect between the Act’s substantive and remedial provisions. It allows a swath of Government violations to go unreme- died: A federal agency could intentionally or willfully forgo establishing safeguards to protect against embarrassment and no successful private action could be taken against it for the harm Congress identified. Only an interpretation of “actual damages” that permits recovery for nonpecuni- ary harms harmonizes the Act’s substantive and remedial provisions. 341 Cite as: 66 |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | the Act’s substantive and remedial provisions. 341 Cite as: 66 U. S. (2012) 7 SOTOMAYOR, J., dissenting (1997) (statutory interpretation must consider “the broader context of the statute as a whole”).4 The majority draws a different conclusion from the sub- stantive provisions of the Privacy Act. It (correctly) in- fers from them that the Act “serves interests similar to those protected by defamation and privacy torts.” Ante, at 9. It then points to our observation in v. Chao, 40 U.S. 614, 62 (2004), that the Act’s civil-remedies provi- sion “parallels” the remedial scheme for the common-law torts of defamation per quod, which permitted recovery of “general damages” (i.e., presumed damages) only if a plaintiff first establishes “special damages” (i.e., monetary loss). Ante, at 10. That “parallel,” the majority con- cludes, “suggests the possibility that Congress intended the term ‘actual damages’ in the Act to mean special dam- ages.” Ante, at 11. The majority reads too much into At issue in that —————— 4 It bears noting that the Privacy Act does not authorize injunctive relief when a suit is maintained under U.S. C. and (D). Rather, injunctive relief is available under the Act only for a limited category of suits: suits to amend a record and suits for access to a record. See (g)(3). Thus an individual who, like peti- tioner, brings suit under subparagraph (g)(1)(C) or (D) for an inten- tional or willful violation of the Act will be without a remedy under the majority’s reading of “actual damages.” As the majority notes, “general damages” at common law refers to damages “presumed” to accrue from the violation of the legally pro- tected right. No proof of actual injury was required. See D. Dobbs, Law of Remedies p. 13 (1973) (hereinafter Dobbs); 40 U.S., at 621. “Special damages,” in contrast, “meant monetary loss.” Dobbs at 12; Common-law defamation actions falling within the rubric of defamation per se allowed successful plaintiffs to recover “general damages.” See Dobbs at 13; 40 U.S., at 621. This stood in contrast to actions sounding in defamation per quod, which permitted recovery only if the plaintiff established “special damages.” See Dobbs, at 12; Even in defamation per quod cases, a plaintiff could recover nonpecuniary injuries upon establishing some pecuniary loss. See Dobbs at 21; See also ante, at 10. 8 FAA v. COOPER SOTOMAYOR, J., dissenting case was the question whether the Act’s civil-suit provi- sion authorized recovery of a guaranteed minimum award of $1,000 absent proof of some “actual damages.” The Court answered in the negative, and in the course of doing so replied to |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | negative, and in the course of doing so replied to petitioner’s argument that there was “some- thing peculiar in offering some guaranteed damages only to those plaintiffs who can demonstrate actual dam- ages.” Although the Court cited the Act’s parallels to defamation per quod actions in noting that nothing was “peculiar” about the Act’s remedial scheme, did not take the further step of deciding that “actual damages” means economic loss alone. Indeed, it expressly reserved that question. The majority, moreover, is wrong to conclude that the Act’s parallels with defamation per quod actions suggest Congress intended “actual damages” to mean “special damages.” Quite the opposite. The fact that Congress “would probably have known about” defamation per quod actions, makes it all the more significant that Congress did not write “special damages” in the civil- remedies provision. This Court is typically not in the business of substituting words we think Congress in- tended to use for words Congress in fact used. Yet that is precisely what the majority does when it rewrites “actual damages” to mean “special damages.”6 In sum, the statu- tory context, and in particular the Act’s substantive provi- sions, confirms the ordinary meaning of “actual damages.” Although the Act shares parallels with common-law defa- mation torts, such analogies do not warrant a reading of —————— 6 The majority cites a collection of lower court opinions that have used “actual damages” in place of “special damages” to note that Congress would not have been alone in using the former term to refer to the latter. Ante, at 11–12. But that a handful of lower courts on occasion have been imprecise in their terminology provides no basis to assume the Legislature has been equally careless in the text of a statute. Cite as: 66 U. S. (2012) 9 SOTOMAYOR, J., dissenting the phrase that is at odds with the statute’s plain text.7 C An uncodified provision of the Act, tied to the Act’s drafting history, also reinforces the ordinary meaning of “actual damages.” As the majority notes, prior to reconcil- iation, the Senate and House bills contained civil-remedies provisions that were different in a critical respect: The Senate bill allowed for the recovery of “actual and general damages,” whereas the House bill allowed for the recovery of “actual damages” alone.8 In the reconciliation process, the provision for “general damages” was dropped and an uncodified section of the Act was amended to require the newly established Privacy Protection Study Commission to consider, among its other jobs, “whether the Federal Gov- ernment should be liable for general damages incurred by an individual |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | should be liable for general damages incurred by an individual as the result of a willful or intentional vio- lation of the provisions of sections 2a(g)(1)(C) or (D).” ; see also 40 U.S., at 622. As the Court explained in “[t]he deletion of ‘general damages’ from the bill is fairly seen as a deliberate elimination of any possibility of imputing harm and awarding presumed damages.” ; see also at —————— 7 There is yet another flaw in the majority’s reasoning. At common law a plaintiff who successfully established “special damages” in an action for defamation per quod could proceed to recover damages for emotional and mental distress. See ante, at 10; n. If “Con- gress intended the term ‘actual damages’ in the Act to mean special damages,” ante, at 11, then an individual who successfully establishes some pecuniary loss from a violation of the Act—presumably as trivial as the cost of a bottle of Tylenol—should be permitted to recover for emotional and mental distress. The majority, of course, does not accept that result, and its piecemeal embrace of the common law undermines its assertion that Congress intended “special damages” in place of “actual damages.” 8 See S. 3418, 93d Cong., 2d Sess., ; H. R. 16373, 93d Cong., 2d Sess., 10 FAA v. COOPER SOTOMAYOR, J., dissenting 622, n. (“Congress explicitly rejected the proposal to make presumed damages available for Privacy Act viola- tions”). The elimination of presumed damages from the bill can only reasonably imply that what Congress left behind—“actual damages”—comprised damages that are not presumed, i.e., damages proven by competent evidence in the record. See v. Robert Welch, Inc., 418 U.S. 323, 349– (distinguishing in defamation context between presumed damages and damages for actual inju- ries sustained by competent evidence in the record, which include “impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering”); 43 U.S. 247, 262–264 (1978) (distinguishing between presumed damages and proven damages for mental and emotional distress). Rather than view the deletion of general damages (pre- sumed damages) as leaving the converse (proven dam- ages), the majority supposes that the deletion leaves only a subset of proven damages—those of an economic nature, i.e., “special damages.” Once again, however, the major- ity’s insistence that “Congress intended ‘actual damages’ in the Privacy Act to mean special damages for proven pecu- niary loss,” ante, at 13, finds no basis in the statutory text, see And its response to the conclusion that Congress retained recovery for proven damages when it eliminated presumed damages is singularly unsatisfying. The majority declares such a conclusion |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | damages is singularly unsatisfying. The majority declares such a conclusion “flawed” because “general damages” “includes compensation for proven injuries as well,” so that “what distinguishes [general] damages, whether proved or not, from the only other category of compensatory damages available in the rele- vant common-law suits is the type of harm” the term encompasses—which the majority takes to be emotional harm alone. Ante, at 1–16. That assertion is defective on two scores. First, a plaintiff ’s ability to present proof of injury in a defamation per se action (and to recover for Cite as: 66 U. S. (2012) 11 SOTOMAYOR, J., dissenting such proven injury) does not alter the definition of “gen- eral damages,” which we already explained in means “presumed damages.” 40 U.S., at 621; see also at 623; n. Second, “general damages” is not limited to a “type” of harm. The majority’s contrary assertion that the term permits recovery only for emotional “types” of harm overlooks the fact that “general damages are partly based on the belief that the plaintiff will suffer unprovable pecuniary losses.” Dobbs at 14 (emphasis added). It thus was established at common law that in a defamation per se action, “the plaintiff is usually free to prove what- ever actual pecuniary loss he can,” and “the jury may be permitted to view the actual pecuniary loss proven as the tip of the iceberg, assume that there is still more un- proven, and award damage accordingly.” At its core, the majority opinion relies on the following syllogism: The common law employed two terms of art in defamation actions. Because Congress excluded recovery for “general damages,” it must have meant to retain recov- ery only for “special damages.” That syllogism, of course, ignores that there is another category of damages. It is the very category Congress used in the text of the Privacy Act: “Actual damages.” However much Congress may have drawn “parallels,” ante, at 10, between the Act and the common-law tort of defamation, the fact remains that Congress expressly choose not to use the words “special damages.”9 D I turn finally to the statute’s purpose, for “[a]s in all cases of statutory interpretation, our task is to interpret —————— 9 The majority cites the conclusions of the Privacy Protection Study Commission in support of its interpretation of “actual damages.” The majority rightfully does not claim this piece of postenactment, extratex- tual material is due any deference; nor do I find its unelaborated conclusions persuasive. 12 FAA v. COOPER SOTOMAYOR, J., dissenting the words of th[e] statut[e] in light of the purposes Con- gress sought |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | th[e] statut[e] in light of the purposes Con- gress sought to serve.” ; see also 46 U.S. 481, (“Inter- pretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authori- ties that inform the analysis”). The purposes of the Priv- acy Act could not be more explicit, and they are consistent with interpreting “actual damages” according to its ordi- nary meaning. “The historical context of the Act is important to an understanding of its remedial purposes. In 1974, Con- gress was concerned with curbing the illegal surveillance and investigation of individuals by federal agencies that had been exposed during the Watergate scandal.” Dept. of Justice, Office of Privacy and Civil Liberties, Overview of the Privacy Act 4 In particular, Congress recog- nized that “the increasing use of computers and sophisti- cated information technology has greatly magnified the harm to individual privacy that can occur from any collection, maintenance, use, or dissemination of personal information.” Identifying the right to privacy as “a personal and fundamental right,” Congress found it “necessary and proper” to enact the Privacy Act “in order to protect the privacy of individuals identified in information systems maintained by Federal agencies.” Congress explained that the “purpose of this Act is to provide certain safeguards for an individual against an invasion of personal privacy by requiring Federal agen- cies, except as otherwise provided by law, to,” inter alia, “be subject to civil suit for any damages which occur as a result of willful or intentional action which violates any individual’s rights under this Act.” (empha- sis added). That statement is an explicit reference to suits Cite as: 66 U. S. (2012) 13 SOTOMAYOR, J., dissenting brought under ; no other provision speaks to a civil suit based on “willful or intentional” agency miscon- duct. It signals unmistakably congressional recognition that the civil-remedies provision is integral to realizing the Act’s purposes. Reading “actual damages” to permit recovery for any injury established by competent evidence in the record— pecuniary or not—best effectuates the statute’s basic purpose. Although some privacy invasions no doubt result in economic loss, we have recognized time and again that the primary form of injuries is nonpecuniary, and includes mental distress and personal humiliation. See Time, Inc. v. Hill, 38 U.S. 374, 38, n. 9 (“In the ‘right of privacy’ cases the primary damage is the mental dis- tress”); see also 418 U.S., at (“[A]ctual injury” in defamatory falsehood cases “is not limited to out-of- pocket loss. Indeed, the more customary types of |
Justice Sotomayor | 2,012 | 24 | dissenting | FAA v. Cooper | https://www.courtlistener.com/opinion/626208/faa-v-cooper/ | to out-of- pocket loss. Indeed, the more customary types of actual harm inflicted by defamatory falsehood include impair- ment of reputation and standing in the community, per- sonal humiliation, and mental anguish and suffering”). Accord, 2 Dobbs at 29 (2d ed. 1993) (privacy is a dignitary interest, and “in a great many of the cases” in which the interest is invaded “the only harm is the affront to the plaintiff ’s dignity as a human being, the damage to his self-image, and the resulting mental distress”). That accords with common sense. In interpreting the civil-remedies provision, we must not forget Congress enacted the Privacy Act to protect pri- vacy. The majority’s reading of “actual damages” renders the remedial provision impotent in the face of concededly unlawful agency action whenever the injury is solely nonpecuniary. That result is patently at odds with Con- gress’ stated purpose. The majority, however, does not grapple with the ramifications of its opinion. It acknowl- edges the suggestion that its holding leads to absurd results as it allows individuals suffering relatively minor 14 FAA v. COOPER SOTOMAYOR, J., dissenting pecuniary losses to recover $1,000 while others suffering severe mental anguish to recover nothing. But it con- cludes that “there is nothing absurd about a scheme that limits the Government’s Privacy Act liability to harm that can be substantiated by proof of tangible economic loss.” Ante, at 18. Perhaps; it is certainly within Congress’ prerogative to enact the statute the majority envisions, namely one that seeks to safeguard against invasions of privacy without remedying the primary harm that results from invasions of privacy. The problem for the majority is that one looks in vain for any indication in the text of the statute before us that Congress intended such a result. Nowhere in the Privacy Act does Congress so much as hint that it views a $ hit to the pocketbook as more worthy of remedy than debilitating mental distress, and the major- ity’s contrary assumption discounts the gravity of emo- tional harm caused by an invasion of the personal integ- rity that privacy protects. * * * After today, no matter how debilitating and substantial the resulting mental anguish, an individual harmed by a federal agency’s intentional or willful violation of the Privacy Act will be left without a remedy unless he or she is able to prove pecuniary harm. That is not the result Congress intended when it enacted an Act with the ex- press purpose of safeguarding individual privacy against Government invasion. And it is not a result remotely suggested by anything in the |
per_curiam | 1,985 | 200 | per_curiam | Honig v. Students of Cal. School for Blind | https://www.courtlistener.com/opinion/111407/honig-v-students-of-cal-school-for-blind/ | Respondents, students of the California School for the Blind, brought this lawsuit in Federal District Court against petitioner state officials, claiming among other things that the school's physical plant did not meet applicable seismic safety standards. Their complaint alleged rights of action under the Education for All Handicapped Children Act of 1975, 20 U.S. C. 1232, 1401, 1405, 1406, 1411-1420, 1453, and 504 of the Rehabilitation Act of 1973, as amended, 29 U.S. C. 794. After a lengthy *149 trial the District Court issued a "preliminary injunction" requiring the State to conduct additional tests of school grounds to aid in assessment of the school's seismic safety. Petitioners appealed to the United States Court of Appeals for the Ninth Circuit pursuant to 28 U.S. C. 1292(a)(1). That court affirmed the issuance of the preliminary injunction on the ground that the lower court had not abused its discretion. The court expressly noted that it was not finally deciding the merits of the action, but only was assessing the District Court's reasoning to determine whether it had appropriately applied the traditional calculus for granting or denying preliminary injunctions. Petitioners have petitioned this Court for a writ of certiorari to review the judgment of the Ninth Circuit, but in the meantime the tests ordered by the District Court's preliminary injunction have been completed. We therefore are confronted with a situation nearly identical to that addressed in University of in which the petitioners had completely complied with the terms of a preliminary injunction by the time the case reached this Court. In Camenisch we concluded that "the question whether a preliminary injunction should have been issued here is moot, because the terms of the injunction have been fully and irrevocably carried out." Because only that aspect of the lawsuit was moot, however, we merely vacated the judgment of the Court of Appeals, and remanded the case for further proceedings. Here, as in Camenisch, the only question of law actually ruled on by the Court of Appeals was whether the District Court abused its discretion in applying the complicated calculus for determining whether the preliminary injunction should have issued, an issue now moot. No order of this Court could affect the parties' rights with respect to the injunction we are called upon to review. Other claims for relief, however, still remain to be resolved by the District Court. We accordingly *150 grant the petition for writ of certiorari, and vacate the judgment of the Court of Appeals, with instructions to remand the case to the District Court for further proceedings consistent with this opinion. JUSTICE POWELL |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | Appellee Republican Party of the State of Connecticut (Party) in 1984 adopted a Party rule which permits independent voters registered voters not affiliated with any political party to vote in Republican primaries for federal and statewide offices. Appellant Julia Tashjian, the Secretary of the State of Connecticut, is charged with the administration of the State's election statutes, which include a provision requiring voters in any party primary to be registered members *211 of that party.[1] Appellees, who in addition to the Party include the Party's federal officeholders and the Party's state chairman, challenged this eligibility provision on the ground that it deprives the Party of its First Amendment right to enter into political association with individuals of its own choosing. The District Court granted summary judgment in favor of appellees. The Court of Appeals affirmed. We noted probable jurisdiction, and now affirm. I In 1955, Connecticut adopted its present primary election system. For major parties,[2] the process of candidate selection for federal and statewide offices requires a statewide convention of party delegates; district conventions are held to select candidates for seats in the state legislature. The party convention may certify as the party-endorsed candidate any person receiving more than 20% of the votes cast in a roll-call vote at the convention. Any candidate not endorsed by the party who received 20% of the vote may challenge the party-endorsed candidate in a primary election, in which the candidate receiving the plurality of votes becomes the party's nominee. 9-400, 9-444 Candidates selected by the major parties, whether through convention or primary, are automatically accorded a place on the ballot at the general election. *212 9-39. The costs of primary elections are paid out of public funds. See, e. g., 9-441. The statute challenged in these proceedings, 9-431, has remained substantially unchanged since the adoption of the State's primary system. In 196, the statute's constitutionality was upheld by a three-judge District Court against a challenge by an independent voter who sought a declaration of his right to vote in the Republican primary. (Conn.), summarily aff'd, In that action, the Party opposed the plaintiff's efforts to participate in the Party primary. Subsequent to the decision in Nader, however, the Party changed its views with respect to participation by independent voters in Party primaries. Motivated in part by the demographic importance of independent voters in Connecticut politics,[3] in September 1983 the Party's Central Committee recommended calling a state convention to consider altering the Party's rules to allow independents to vote in Party primaries. In January 1984 the state convention adopted the Party rule |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | In January 1984 the state convention adopted the Party rule now at issue, which provides: "Any elector enrolled as a member of the Republican Party and any elector not enrolled as a member of a party shall be eligible to vote in primaries for nomination of candidates for the offices of United States Senator, United States Representative, Governor, Lieutenant Governor, Secretary of the State, Attorney General, Comptroller and Treasurer." App. 20. During the 1984 session, the Republican leadership in the state legislature, in response to the conflict between the newly enacted Party rule and 9-431, proposed to amend the statute to allow independents to vote in primaries when permitted by Party rules. The proposed legislation was defeated, *213 substantially along party lines, in both houses of the legislature, which at that time were controlled by the Party.[4] The Party and the individual appellees then commenced this action in the District Court, seeking a declaration that 9-431 infringes appellees' right to freedom of association for the advancement of common political objectives guaranteed by the First and Fourteenth Amendments, and injunctive relief against its further enforcement. After discovery, the parties submitted extensive stipulations of fact to the District Court, which granted summary judgment for appellees. The District Court concluded that "[a]ny effort by the state to substitute its judgment for that of the party on the question of who is and is not sufficiently allied in interest with the party to warrant inclusion in its candidate selection process substantially impinges on First Amendment rights." Rejecting the state interests proffered by appellant to justify the statute, the District Court held that "as applied to the Republican Party rule permitting unaffiliated voters to participate in certain Republican Party primaries, the statute abridges the right of association guaranteed by the First Amendment." The Court of Appeals affirmed, holding that 9-431 "substantially interferes with the Republican Party's first amendment right to define its associational boundaries, determine the content of its message, and engage in effective political association." II We begin from the recognition that "[c]onstitutional challenges to specific provisions of a State's election laws cannot be resolved by any `litmus-paper test' that will separate valid from invalid restrictions." "Instead, a court must first consider the character and magnitude of the asserted injury to the rights protected by the First and Fourteenth Amendments that the plaintiff seeks to vindicate. It then must identify and evaluate the precise interests put forward by the State as justifications for the burden imposed by its rule. In passing judgment, the Court must not only determine the legitimacy and strength of each |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | must not only determine the legitimacy and strength of each of those interests, it also must consider the extent to which those interests make it necessary to burden the plaintiff's rights." U.S., at The nature of appellees' First Amendment interest is evident. "It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the `liberty' assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech." ; see ; The freedom of association protected by the First and Fourteenth Amendments includes partisan political organization. ; "The right to associate with the political party of one's choice is an integral part of this basic constitutional freedom." The Party here contends that 9-431 impermissibly burdens the right of its members to determine for themselves with whom they will associate, and whose support they will seek, in their quest for political success. The Party's attempt to broaden the base of public participation in and support for its activities is conduct undeniably central to the exercise of the right of association. As we have said, the freedom to join together in furtherance of common political beliefs "necessarily presupposes the freedom to identify the people who constitute the association." Party of *2 United A major state political party necessarily includes individuals playing a broad spectrum of roles in the organization's activities. Some of the Party's members devote substantial portions of their lives to furthering its political and organizational goals, others provide substantial financial support, while still others limit their participation to casting their votes for some or all of the Party's candidates. Considered from the standpoint of the Party itself, the act of formal enrollment or public affiliation with the Party is merely one element in the continuum of participation in Party affairs, and need not be in any sense the most important.[5] Were the State to restrict by statute financial support of the Party's candidates to Party members, or to provide that only Party members might be selected as the Party's chosen nominees for public office, such a prohibition of potential association with nonmembers would clearly infringe upon the rights of the Party's members under the First Amendment to organize with like-minded citizens in support of common political goals. As we have said, " `[a]ny interference with the freedom of a party is simultaneously an interference with the freedom of its adherents.' " Party, at (quoting (19)).[6] The statute here places limits upon the group of *216 registered voters whom the Party may invite to participate in the "basic |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | whom the Party may invite to participate in the "basic function" of selecting the Party's candidates. The State thus limits the Party's associational opportunities at the crucial juncture at which the appeal to common principles may be translated into concerted action, and hence to political power in the community.[] *21 It is, of course, fundamental to appellant's defense of the State's statute that this impingement upon the associational rights of the Party and its members occurs at the ballot box, for the Constitution grants to the States a broad power to prescribe the "Times, Places and Manner of holding Elections for Senators and Representatives," Art. I, 4, cl. 1, which power is matched by state control over the election process for state offices. But this authority does not extinguish the State's responsibility to observe the limits established by the First Amendment rights of the State's citizens. The power to regulate the time, place, and manner of elections does not justify, without more, the abridgment of fundamental rights, such as the right to vote, see or, as here, the freedom of political association. We turn then to an examination of the interests which appellant asserts to justify the burden cast by the statute upon the associational rights of the Party and its members. III Appellant contends that 9-431 is a narrowly tailored regulation which advances the State's compelling interests by ensuring the administrability of the primary system, preventing raiding, avoiding voter confusion, and protecting the responsibility of party government. A Although it was not presented to the Court of Appeals as a basis for the defense of the statute, appellant argues here that the administrative burden imposed by the Party rule is a sufficient ground on which to uphold the constitutionality of *218 9-431.[8] Appellant contends that the Party's rule would require the purchase of additional voting machines, the training of additional poll workers, and potentially the printing of additional ballot materials specifically intended for independents voting in the Republican primary. In essence, appellant claims that the administration of the system contemplated by the Party rule would simply cost the State too much. Even assuming the factual accuracy of these contentions, which have not been subjected to any scrutiny by the District Court, the possibility of future increases in the cost of administering the election system is not a sufficient basis here for infringing appellees' First Amendment rights. Costs of administration would likewise increase if a third major party should come into existence in Connecticut, thus requiring the State to fund a third major-party primary. Additional voting machines, poll workers, and |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | a third major-party primary. Additional voting machines, poll workers, and ballot materials would all be necessary under these circumstances as well. But the State could not forever protect the two existing major parties from competition solely on the ground that two major parties are all the public can afford. Cf. ; While the State is of course entitled to take administrative and financial considerations into account in choosing whether or not to have a primary system at all, it can no more restrain the Republican Party's freedom of association for reasons of its own administrative convenience than it could on the same ground limit the ballot access of a new major party. *219 B Appellant argues that 9-431 is justified as a measure to prevent raiding, a practice "whereby voters in sympathy with one party designate themselves as voters of another party so as to influence or determine the results of the other party's primary." While we have recognized that "a State may have a legitimate interest in seeking to curtail `raiding,' since that practice may affect the integrity of the electoral process," -60; that interest is not implicated here.[9] The statute as applied to the Party's rule prevents independents, who otherwise cannot vote in any primary, from participating in the Republican primary. Yet a raid on the Republican Party primary by independent voters, a curious concept only distantly related to the type of raiding discussed in Kusper and Rosario, is not impeded by 9-431; the independent raiders need only register as Republicans and vote in the primary. Indeed, under Conn. Gen. Stat. 9-56 which permits an independent to affiliate with the Party as late as noon on the business day preceding the primary, see n. the State's election statutes actually assist a "raid" by independents, which could be organized and implemented at the 11th hour. The State's asserted interest in the prevention of raiding provides no justification for the statute challenged here. *220 C Appellant's next argument in support of 9-431 is that the closed primary system avoids voter confusion. Appellant contends that "[t]he legislature could properly find that it would be difficult for the general public to understand what a candidate stood for who was nominated in part by an unknown amorphous body outside the party, while nevertheless using the party name." Brief for Appellant 59. Appellees respond that the State is attempting to act as the ideological guarantor of the Republican Party's candidates, ensuring that voters are not misled by a "Republican" candidate who professes something other than what the State regards as true Republican principles. Brief |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | than what the State regards as true Republican principles. Brief for Appellees 28. As we have said, "[t]here can be no question about the legitimacy of the State's interest in fostering informed and educated expressions of the popular will in a general election." U. S., at 96. To the extent that party labels provide a shorthand designation of the views of party candidates on matters of public concern, the identification of candidates with particular parties plays a role in the process by which voters inform themselves for the exercise of the franchise. Appellant's argument depends upon the belief that voters can be "misled" by party labels. But "[o]ur cases reflect a greater faith in the ability of individual voters to inform themselves about campaign issues." at 9. Moreover, appellant's concern that candidates selected under the Party rule will be the nominees of an "amorphous" group using the Party's name is inconsistent with the facts. The Party is not proposing that independents be allowed to choose the Party's nominee without Party participation; on the contrary, to be listed on the Party's primary ballot continues to require, under a statute not challenged here, that the primary candidate have obtained at least 20% of the vote at a Party convention, which only Party *221 members may attend. Conn. Gen. Stat. 9-400 If no such candidate seeks to challenge the convention's nominee in a primary, then no primary is held, and the convention nominee becomes the Party's nominee in the general election without any intervention by independent voters.[10] Even assuming, however, that putative candidates defeated at the Party convention will have an increased incentive under the Party's rule to make primary challenges, hoping to attract more substantial support from independents than from Party delegates, the requirement that such challengers garner substantial minority support at the convention greatly attenuates the State's concern that the ultimate nominee will be wedded to the Party in nothing more than a marriage of convenience. In arguing that the Party rule interferes with educated decisions by voters, appellant also disregards the substantial benefit which the Party rule provides to the Party and its members in seeking to choose successful candidates. Given the numerical strength of independent voters in the State, one of the questions most likely to occur to Connecticut Republicans in selecting candidates for public office is how can the Party most effectively appeal to the independent voter? By inviting independents to assist in the choice at the polls between primary candidates selected at the Party convention, the Party rule is intended to produce the candidate and platform most |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | rule is intended to produce the candidate and platform most likely to achieve that goal. The state statute is said to decrease voter confusion, yet it deprives the Party and its members of the opportunity to inform themselves as to the level of support for the Party's candidates among a critical group of electors. "A State's claim that it is enhancing the ability of its citizenry to make wise decisions by restricting the flow of information to them must be viewed with some skepticism." at 98. The State's legitimate interests in preventing voter confusion *222 and providing for educated and responsible voter decisions in no respect "make it necessary to burden the [Party's] rights." U.S., at D Finally, appellant contends that 9-431 furthers the State's compelling interest in protecting the integrity of the two-party system and the responsibility of party government. Appellant argues vigorously and at length that the closed primary system chosen by the state legislature promotes responsiveness by elected officials and strengthens the effectiveness of the political parties. The relative merits of closed and open primaries have been the subject of substantial debate since the beginning of this century, and no consensus has as yet emerged.[11] Appellant *223 invokes a long and distinguished line of political scientists and public officials who have been supporters of the closed primary. But our role is not to decide whether the state legislature was acting wisely in enacting the closed primary system in 1955, or whether the Republican Party makes a mistake in seeking to depart from the practice of the past 30 years.[12] We have previously recognized the danger that "splintered parties and unrestrained factionalism may do significant damage to the fabric of government." 4 U. S., at 36. We upheld a California statute which denied access to the ballot to any independent candidate who had voted in a party primary or been registered as a member of a political party within one year prior to the immediately preceding primary election. We said: "[T]he one-year disaffiliation provision furthers the State's interest in the stability of its political system. We also consider that interest as not only permissible, but compelling and as outweighing the interest the candidate and his supporters may have in making a late *224 rather than an early decision to seek independent ballot status." The statute in Storer was designed to protect the parties and the party system against the disorganizing effect of independent candidacies launched by unsuccessful putative party nominees. This protection, like that accorded to parties threatened by raiding in is undertaken to prevent the disruption of |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | by raiding in is undertaken to prevent the disruption of the political parties from without, and not, as in this case, to prevent the parties from taking internal steps affecting their own process for the selection of candidates. The forms of regulation upheld in Storer and Rosario imposed certain burdens upon the protected First and Fourteenth Amendment interests of some individuals, both voters and potential candidates, in order to protect the interests of others. In the present case, the state statute is defended on the ground that it protects the integrity of the Party against the Party itself. Under these circumstances, the views of the State, which to some extent represent the views of the one political party transiently enjoying majority power, as to the optimum methods for preserving party integrity lose much of their force. The State argues that its statute is well designed to save the Republican Party from undertaking a course of conduct destructive of its own interests. But on this point "even if the State were correct, a State, or a court, may not constitutionally substitute its own judgment for that of the Party." Party of United -124 The Party's determination of the boundaries of its own association, and of the structure which best allows it to pursue its political goals, is protected by the Constitution. "And as is true of all expressions of First Amendment freedoms, the courts may not interfere on the ground that they view a particular expression as unwise or irrational."[13] *225 We conclude that the State's enforcement, under these circumstances, of its closed primary system burdens the First Amendment rights of the Party. The interests which the appellant adduces in support of the statute are insubstantial, and accordingly the statute, as applied to the Party in this case, is unconstitutional. IV Appellant argues here, as in the courts below, that implementation of the Party rule would violate the Qualifications Clause of the Constitution, Art. I, 2, cl. 1, and the Seventeenth Amendment because it would establish qualifications for voting in congressional elections which differ from the voting qualifications in elections for the more numerous house of the state legislature.[14] The Party rule as adopted permits independent voters to vote in Party primaries for the offices of United States Senator and Member of the House of Representatives, and for statewide offices, but is silent as regards *226 primaries held to contest nominations for seats in the state legislature. See Appellant contends that the Qualifications Clause and the Seventeenth Amendment require an absolute symmetry of qualifications to vote in elections for Congress and |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | symmetry of qualifications to vote in elections for Congress and the lower house of the state legislature, and that the Party rule, if implemented according to its terms, would require lesser qualifications for voting in Party primaries for federal office than for state legislative office. The Court of Appeals rejected appellant's argument, holding that the Qualifications Clause and the parallel provision of the Seventeenth Amendment do not apply to primary 0 F.2d, at 24. The concurring opinion took a different view, reaching the conclusion that these provisions require only that "anyone who is permitted to vote for the most numerous branch of the state legislature has to be permitted to vote" in federal legislative We agree. We recognize that the Federal Convention, in adopting the Qualifications Clause of Article I, 2, was not contemplating the effects of that provision upon the modern system of party primaries. As we have said: "We may assume that the framers of the Constitution in adopting that section, did not have specifically in mind the selection and elimination of candidates for Congress by the direct primary any more than they contemplated the application of the commerce clause to interstate telephone, telegraph and wireless communication, which are concededly within it. But in determining whether a provision of the Constitution applies to a new subject matter, it is of little significance that it is one with which the framers were not familiar. For in setting up an enduring framework of government they undertook to carry out for the indefinite future and in all the vicissitudes of the changing affairs of men, those fundamental purposes which the instrument itself discloses." United 3-316 *22 The fundamental purpose underlying Article I, 2, cl. 1, that "[t]he House of Representatives shall be composed of Members chosen by the People of the several States," like the parallel provision of the Seventeenth Amendment, applies to the entire process by which federal legislators are chosen. "Where the state law has made the primary an integral part of the procedure of choice, or where in fact the primary effectively controls the choice," the requirements of Article I, 2, cl. 1, and the Seventeenth Amendment apply to primaries as well as to general United ; see The constitutional goal of assuring that the Members of Congress are chosen by the people can only be secured if that principle is applicable to every stage in the selection process. If primaries were not subject to the requirements of the Qualifications Clauses contained in Article I, 2 and the Seventeenth Amendment, the fundamental principle of free electoral choice would |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | Seventeenth Amendment, the fundamental principle of free electoral choice would be subject to the sort of erosion these prior decisions were intended to prevent. Accordingly, we hold that the Qualifications Clauses of Article I, 2, and the Seventeenth Amendment are applicable to primary elections in precisely the same fashion that they apply to general congressional Our task is then to discover whether, as appellant contends, those provisions require that voter qualifications, such as party membership, in primaries for federal office must be absolutely symmetrical with those pertaining to primaries for state legislative office. Our inquiry begins with an examination of the Framers' purpose in enacting the first Qualifications Clause. It is clear that the Clause was intended to avoid the consequences of declaring a single standard for exercise of the franchise in federal The state governments represented at the Convention had established varying voter qualifications, and substantial concern was expressed by delegates as to the likely effects of a federal voting qualification which disenfranchised voters eligible to vote in the States. James *228 Wilson argued that "[i]t would be very hard and disagreeable for the same persons, at the same time, to vote for representatives in the State Legislature, and to be excluded from a vote for those in the National Legislature." J. Madison, Journal of the Federal Convention 46 (E. Scott ed. 1893) (hereinafter Madison's Journal). Oliver Ellsworth predicted that "[t]he people will not readily subscribe to a National Constitution, if it should subject them to be disfranchised." Benjamin Franklin argued, in the same vein, that "[t]he sons of a substantial farmer, not being themselves freeholders, would not be pleased at being disfranchised, and there are a great many persons of that description." at 41. James Madison later defended the resulting provision on similar grounds: "To have reduced the different qualifications in the different States, to one uniform rule, would probably have been as dissatisfactory to some of the States, as it would have been difficult to the Convention. The provision made by the Convention appears therefore, to be the best that lay within their option. It must be satisfactory to every State; because it is conformable to the standard already established, or which may be established by the State itself." The Federalist No. 52, p. 354 (J. Cooke ed. 1961). In adopting the language of Article I, 2, cl. 1, the Convention rejected the suggestion that a property qualification was necessary to restrict the availability of the federal franchise. See Madison's Journal 468-43; 2 M. Farrand, The Records of the Federal Convention of 18, pp. 200-216 (1966). Far |
Justice Marshall | 1,986 | 15 | majority | Tashjian v. Republican Party of Conn. | https://www.courtlistener.com/opinion/111781/tashjian-v-republican-party-of-conn/ | of the Federal Convention of 18, pp. 200-216 (1966). Far from being a device to limit the federal suffrage, the Qualifications Clause was intended by the Framers to prevent the mischief which would arise if state voters found themselves disqualified from participation in federal The achievement of this goal does not require that qualifications for exercise of the federal franchise be at all *229 times precisely equivalent to the prevailing qualifications for the exercise of the franchise in a given State. The fundamental purpose of the Qualifications Clauses contained in Article I, 2, and the Seventeenth Amendment is satisfied if all those qualified to participate in the selection of members of the more numerous branch of the state legislature are also qualified to participate in the election of Senators and Members of the House of Representatives. Our conclusion that these provisions do not require a perfect symmetry of voter qualifications in state and federal legislative elections takes additional support from the fact that we have not previously required such absolute symmetry when the federal franchise has been expanded. In (190), five Justices agreed that the Voting Rights Act Amendments of 190 could constitutionally establish a minimum age of 18 for voters in federal elections, while a majority of the Court also concluded that Congress was without power to set such a minimum age in state and local See at 11-118 Appellant's reading of the Qualifications Clause, which would require identical voter qualifications in state and federal legislative elections, is plainly inconsistent with these holdings. We hold that the implementation of the Party rule does not violate the Qualifications Clause or the Seventeenth Amendment because it does not disenfranchise any voter in a federal election who is qualified to vote in a primary or general election for the more numerous house of the state legislature. V We conclude that 9-431 impermissibly burdens the rights of the Party and its members protected by the First and Fourteenth Amendments. The interests asserted by appellant in defense of the statute are insubstantial. The judgment of the Court of Appeals is Affirmed. |
Justice Stewart | 1,973 | 18 | second_dissenting | United States v. Chicago, B. & QR Co. | https://www.courtlistener.com/opinion/108806/united-states-v-chicago-b-qr-co/ | This case involves the depreciation of certain railroad facilities constructed with public funds prior to June 22, 1954. The precise question before the Court is whether those facilities constituted "contributions to capital" within the meaning of 113 (a) (8) (B) of the Internal Revenue Code of 1939. Beginning in the early 1930's, various state governments entered into agreements with the respondent railroad for the construction of highway overpasses and underpasses at highway-railroad intersections, and construction of grade-crossing protection equipment such as *418 flashing-light signals and automatic gates. The agreements generally provided that the States would pay 50% or more of the total cost, and subsequently Congress authorized the Federal Government to assume the State's share of the construction costs. See National Industrial Recovery Act 204 (a), Under the Federal-Aid Highway Act of 1944, 5, the Federal Government reimbursed the States for the entire cost of the highway-railroad crossing projects, subject to payment by the railroads for up to 10% of the cost of the project if the railroads were benefited by the facilities. The respondent filed suit in the Court of Claims seeking a refund on its 1955 income taxes, claiming that the of Internal Revenue had erred by refusing to allow a depreciation deduction for these publicly contributed facilities. The respondent asserted that these facilities were "depreciable property" held throughout 1955 "for use in its trade or business," and that they were acquired prior to June 22, 1954, as "contributions to capital." The respondent's claim was an uncomplicated one. Section 167 of the Internal Revenue Code of 1954, 26 U.S. C. 167, applicable to the respondent's 1955 income tax return, allowed as a depreciation deduction "a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)(1) of property used in the trade or business" Section 1052 (c) of the 1954 Code, 26 U.S. C. 1052 (c), provided for using the basis rules of the 1939 Code for certain property that was acquired in transactions to which the 1939 Code applied, including "contributions to capital."[1] The *419 respondent contended that the publicly contributed facilities were "contributions to capital," and that under 113 (a) (8) (B) of the 1939 Code, it could carry over the transferor's basis; in short, it claimed that its basis for the highway-safety facilities was the cost of the facilities to the governments that had financed them.[2] The Court of Claims agreed with the respondent that these facilities were exhaustible assets properly depreciable to the full extent of their value. The depreciable nature of the facilities was undisputed, since the Government conceded that |
Justice Stewart | 1,973 | 18 | second_dissenting | United States v. Chicago, B. & QR Co. | https://www.courtlistener.com/opinion/108806/united-states-v-chicago-b-qr-co/ | of the facilities was undisputed, since the Government conceded that "the facilities are of a character normally subject to allowance for depreciation and that to the extent they were paid for by [the respondent], appropriate depreciation deductions are proper." The court concluded that the facilities were "contributions to capital" under 113 (a) (8) (B) of the 1939 Code and that the Government's cost basis in the facilities was, therefore, available to the respondent.[3] "The facilities were constructed primarily for the benefit of the public to improve safety and to expedite motor-vehicle traffic flow. The record shows, however, that *420 [the respondent] received economic benefits from the facilities, e. g., probable lower accident rates, reduced expenses of operating crossing equipment and, where permitted, higher train speed limits. [The respondent] also received intangible benefits, e. g., goodwill from the community-at-large, which was to [the respondent's] long-term economic advantage."[4] The court thus concluded "that the facilities enlarged [the respondent's] working capital and were used by [the respondent] in its business; and though they may not produce income to the same extent as other railroad property, such as track or freight cars, [the respondent] derived economic benefits from them." at I think the Court of Claims was entirely right in holding that these publicly contributed facilities constituted contributions to capital within the meaning of 113 (a) (8) (B) of the 1939 Code.[5] The facilities at issue fall within the plain language of a "contribution to capital." As the Court noted, they were "contributed" to the respondent in the sense that the railroad now owns them. *421 And they are now part of the "capital" of the railroad as that term is generally used in business and accounting practice, part of the permanent investment in the business. See Brown 589 and n. 11; Texas & Pacific R. ; ; H. Guthmann & H. Dougall, Corporate Financial Policy 136-138 (4th ed.); R. Marple, Capital Surplus and Corporate Net Worth 136-137; 1 J. Mertens, Law of Federal Income Taxation 5.06 n. 47 (J. Malone rev. ed.); Harvey, Some Indicia of Capital Transfers Under the Federal Income Tax Laws,[6] The only two prior decisions of this Court that bear directly on the question before usDetroit Edison and Brown supraconfirm that these publicly contributed facilities are contributions to the respondent's capital. In Detroit Edison prospective customers of an electric company were required to pay for the construction of additional facilities in order *422 to receive the company's services. The Court rejected the contention that those payments were contributions to capital: "[I]t overtaxes imagination to regard the farmers and other |
Justice Stewart | 1,973 | 18 | second_dissenting | United States v. Chicago, B. & QR Co. | https://www.courtlistener.com/opinion/108806/united-states-v-chicago-b-qr-co/ | capital: "[I]t overtaxes imagination to regard the farmers and other customers who furnished these funds as makers either of donations or contributions to the Company The payments were to the customer the price of the service." In Brown various community groups contributed cash and property to the taxpayer corporation to induce it to locate in or expand its operations in the respective communities. The Court held these assets to be "contributions to capital" within the meaning of 113 (a) (8) (B), stressing the fact that they were in a very practical sense an addition to the corporation's capital: " `[T]he assets received are being used by the taxpayer in the operation of its business. They will in time wear out, and if [the taxpayer] is to continue in business, the physical plant must eventually be replaced. Looking as they do toward business continuity, the Internal Revenue Code's depreciation provisions and especially those which provide for a substituted rather than a cost basiswould seem to envision allowance of a depreciation deduction in situations like this.' " (quoting v. McKay Products Corp., ). The Court explained Detroit Edison as a case of payments for services rather than contributions to capital. By contrast, in Brown "[t]he contributions to [the taxpayer] were provided by citizens of the respective communities who neither sought nor could have anticipated any direct service or recompense whatever, their only expectation being that such contributions might prove advantageous to the community at large."[7] *423 It seems plain to me that the present case is controlled by Brown As in that case, these publicly contributed facilities were in no sense direct payments for services. The State and Federal Governments did not purchase any services in connection with construction of the facilities. Rather, to achieve the public goal of transportation safety they transferred assets to the railroad which increased its working capital. In short, these assets fell within the practical, working definition of "contributions to capital" that was recognized by the Court in Brown and they did not fall within the narrow exception of payments for services that the Court found significant in Detroit Edison. The Government urges us to read Brown as holding that, in order to establish a "contribution to capital," a taxpayer must prove that the transferor of the asset had a definite purpose to enlarge the taxpayer's working capital. But that case did not turn on the presence of any such specific purpose. The purpose of the community contributions in Brown was to induce the taxpayer to locate or expand its operations in the local area, and this |
Justice Stewart | 1,973 | 18 | second_dissenting | United States v. Chicago, B. & QR Co. | https://www.courtlistener.com/opinion/108806/united-states-v-chicago-b-qr-co/ | or expand its operations in the local area, and this purpose was accomplished by contributing assets; there was no gratuitous attempt to enlarge the taxpayer's capital. The Court noted, in passing, the existence of a purpose to enlarge the taxpayer's working capital only in order to underline the fact that the community groups there were not customers paying compensation for services rendered. And, as in Brown the State and Federal Governments here attempted to accomplish a general public goal by contributing facilities to the taxpayer. As in Brown they were not paying for services. *424 The Court today, however, does not appear to decide this case on the presence or absence of any specific motive, intent, or purpose. Rather, the Court constructs a series of guidelines that must be met before there can be a "contribution to capital." These guidelines seem to be based upon the value of the assets to the transferee. For the Court relies primarily on the fact that the publicly financed facilities were "peripheral" to the railroad's business and did not materially contribute to the production of further income, and concludes that they were not therefore contributions to the railroad's capital. But the Court cites nothing in the statute, the regulations, or our prior cases to warrant this strange definition of "capital" when that term is used in the phrase "contribution to capital." Brown made clear that "capital" was to be defined "as that term has commonly been understood in both business and accounting practice" The facilities in the present case meet that test. They are certainly part of the respondent's capital under any traditional understanding of that term; they are assets permanently invested in the railroad's business. See Indeed, many of these facilities are essential to the railroad's continued operationa railroad bridge, for example, is an obvious physical necessity if the railroad is to operate. All of the facilities enlarged the railroad's working capital, were used in its business, and yielded tangible and intangible economic benefits to the railroad. And the Court even appears to acknowledge that these assets are "capital" in the normal sense of that term, since it concedes that the portion of the facilities constructed by the railroad with its own funds is depreciable.[8] I do not understand why *425 that portion of the same assets that was contributed to the railroad is not also part of the railroad's capital. I would maintain the straightforward approach taken by Brown and Detroit Edisonnonshareholder additions to capital are "contributions to capital" unless they are direct payments for services rendered. The Government argues that to |
Justice Stewart | 1,973 | 18 | second_dissenting | United States v. Chicago, B. & QR Co. | https://www.courtlistener.com/opinion/108806/united-states-v-chicago-b-qr-co/ | direct payments for services rendered. The Government argues that to allow the railroad to claim a depreciation deduction on these facilities as "contributions to capital" would lead to the "anomalous" result that although the railroad had incurred no expense with respect to the publicly financed facilities, it could nevertheless recoup their cost. But if this is an anomaly, it is the same anomaly that existed in Brown The taxpayer there had not paid for the property contributed by the community groups, yet it was able to claim a full depreciation deduction on it. In short, this so-called anomaly is the ineluctable result of 113 (a) (8) (B) which allowed a carryover basis for nonshareholder contributions to capital. It was Congress that had created the anomaly, and it was for Congress to correct it. In enacting 362 (c) of the 1954 Code,[9]*426 Congress did precisely that. It eliminated any depreciation deduction for nonshareholder contributions to capital by providing a zero basis for such transfers, but it did so only for property acquired on or after June 22, 1954. In sum, Congress in 1954 rewrote the tax law so as to overrule Brown and prohibit depreciation to be taken on contributions to capital made by nonshareholders on or after June 22, 1954.[10] As it now turns out, Congress could have saved itself the trouble. For today the Court rewrites the law and prohibits depreciation to be taken on such assets the railroad has owned since the 1930's. I would follow the law as Congress wrote it and affirm the judgment of the Court of Claims. |
Justice Stevens | 1,992 | 16 | dissenting | Rufo v. Inmates of Suffolk County Jail | https://www.courtlistener.com/opinion/112679/rufo-v-inmates-of-suffolk-county-jail/ | Today the Court endorses the standard for modification of consent decrees articulated by Judge Friendly in New York State Assn. for Retarded Children, (CA2), cert. denied, I agree with that endorsement, but under that standard I believe the findings of the District Court in this action require affirmance of its order refusing to modify this consent decree.[1] I When a district court determines, after a contested trial, that a state institution is guilty of a serious and persistent violation of the Federal Constitution, it typically fashions a remedy that is more intrusive than a simple order directing the defendants to cease and desist from their illegal conduct. See A district court has a duty to command a remedy that is effective, and it enjoys the broad equitable authority necessary to fulfill this obligation. See ; ; see also *400 II In June 1973, after finding that petitioners' incarceration of pretrial detainees in the Charles Street Jail violated constitutional standards, the District Court appropriately entered an injunction that went "beyond a simple proscription against the precise conduct previously pursued." National Society of Professional It required petitioners to discontinue (1) the practice of double celling pretrial detainees after November 30, 1973, and (2) the use of the Charles Street Jail for pretrial detention after June 30, 1976. Inmates of Suffolk County Petitioners did not appeal from that injunction. When they found it difficult to comply with the double-celling prohibition, however, they asked the District Court to postpone enforcement of that requirement. The court refused and ordered petitioners to transfer inmates to other institutions. The Court of Appeals affirmed. Inmates of Suffolk County (CA1), cert. denied, When petitioners found that they could not comply with the second part of the 1973 injunction, the District Court postponed the closing of the Charles Street Jail, but set another firm date for compliance. While petitioners' appeal from that order was pending, the parties entered into the negotiations that produced the 1979 consent decree. After the Court of Appeals affirmed the District Court's order and set yet another firm date for the closing of the Charles Street Jail, Inmates of Suffolk County the parties reached agreement on a plan that was entered by the District Court as a consent decree, Inmates of Suffolk County Civ. Action No. 71-162G App. to Pet. for Cert. in No. 90-954, p. 15a. The facility described in the 1979 decree was never constructed. Even before the plan was completed, petitioners recognized that a larger jail was required. In June 1984, *401 the sheriff filed a motion in the District Court for an |
Justice Stevens | 1,992 | 16 | dissenting | Rufo v. Inmates of Suffolk County Jail | https://www.courtlistener.com/opinion/112679/rufo-v-inmates-of-suffolk-county-jail/ | sheriff filed a motion in the District Court for an order permitting double celling in the Charles Street Jail. The motion was denied. The parties then negotiated an agreement providing for a larger new jail and for a modification of the 1979 decree. After they reached agreement, respondents presented a motion to modify, which the District Court granted on April 11, 1985. The court found that modifications were "necessary to meet the unanticipated increase in jail population and the delay in completing the jail as originally contemplated." App. 110. The District Court then ordered that nothing in the 1979 decree should prevent petitioners "from increasing the capacity of the new facility if the following conditions are satisfied: "(a) single-cell occupancy is maintained under the design for the facility; "(b) under the standards and specifications of the Architectural Program, as modified, the relative proportion of cell space to support services will remain the same as it was in the Architectural Program" at 110-111. There was no appeal from that modification order. Indeed, although the Boston City Council objected to the modification, it appears to have been the product of an agreement between respondents and petitioners. In 1990, 19 years after respondents filed suit, the new jail was completed in substantial compliance with the terms of the consent decree, as modified in 1985. III It is the terms of the 1979 consent decree, as modified and reaffirmed in 1985, that petitioners now seek to modify. The 1979 decree was negotiated against a background in which certain important propositions had already been settled. First, the litigation had established the existence of a serious *402 constitutional violation. Second, for a period of almost five years after the entry of the 1973 injunctionwhich was unquestionably valid and which petitioners had waived any right to challengepetitioners were still violating the Constitution as well as the injunction. See Inmates of Suffolk County 573 F. 2d, at 99. Third, although respondents had already prevailed, they were willing to agree to another postponement of the closing of the Charles Street Jail if petitioners submitted, and the court approved, an adequate plan for a new facility. Obviously any plan would have to satisfy constitutional standards. It was equally obvious that a number of features of the plan, such as the site of the new facility or its particular architectural design, would not be constitutionally mandated. In order to discharge their duty to provide an adequate facility, and also to avoid the risk of stern sanctions for years of noncompliance with an outstanding court order, it would be entirely appropriate for |
Justice Stevens | 1,992 | 16 | dissenting | Rufo v. Inmates of Suffolk County Jail | https://www.courtlistener.com/opinion/112679/rufo-v-inmates-of-suffolk-county-jail/ | an outstanding court order, it would be entirely appropriate for petitioners to propose a remedy that exceeded the bare minimum mandated by the Constitution. Indeed, terms such as "minimum" or "floor" are not particularly helpful in this context. The remedy is constrained by the requirement that it not perpetuate a constitutional violation, and in this sense the Constitution does provide a "floor." Beyond that constraint, however, the remedy's attempt to give expression to the underlying constitutional value does not lend itself to quantitative evaluation. In view of the complexity of the institutions involved and the necessity of affording effective relief, the remedial decree will often contain many, highly detailed commands. It might well be that the failure to fulfill any one of these specific requirements would not have constituted an independent constitutional violation, nor would the absence of any one element render the decree necessarily ineffective. The duty of the District Court is not to formulate the decree with the fewest provisions, but to consider the various interests involved and, in the sound exercise of its discretion, to *403 fashion the remedy that it believes to be best.[2] Similarly, a consent decree reflects the parties' understanding of the best remedy, and, subject to judicial approval, the parties to a consent decree enjoy at least as broad discretion as the District Court in formulating the remedial decree. Cf. From respondents' point of view, even though they had won their case, they might reasonably be prepared to surrender some of the relief to which they were unquestionably entitledsuch as enforcing the deadline on closing the Charles Street Jailin exchange for other benefits to be included in an appropriate remedy, even if each such benefit might not be constitutionally required. For example, an agreement on an exercise facility, a library, or an adequate place for worship might be approved by the court in a consent decree, even if each individual feature were not essential to the termination of the constitutional violation. In *404 fact, in this action it is apparent that the two overriding purposes that informed both the District Court's interim remedy and respondents' negotiations were the prohibition against double celling and the closing of the old jail. The plan that was ultimately accepted, as well as the terms of the consent decree entered in 1979, were designed to serve these two purposes. The consent decree incorporated all the details of the agreed upon architectural program. A recital in the decree refers to the program as "both constitutionally adequate and constitutionally required."[3] That recital, of course, does not indicate that either the |
Justice Stevens | 1,992 | 16 | dissenting | Rufo v. Inmates of Suffolk County Jail | https://www.courtlistener.com/opinion/112679/rufo-v-inmates-of-suffolk-county-jail/ | That recital, of course, does not indicate that either the court or the parties thought that every detail of the settlementor, indeed, any of its specific provisionswas "constitutionally required." An adequate remedy was constitutionally required, and the parties and the court were satisfied that this program was constitutionally adequate. But that is not a basis for assuming that the parties believed that any provision of the decree, including the prohibition against double celling, was constitutionally required.[4] *405 IV The motion to modify that ultimately led to our grant of certiorari was filed on July 17, 1989. As I view these cases, the proponents of that motion had the burden of demonstrating that changed conditions between 1985 and 1989 justified a further modification of the consent decree. The changes that occurred between 1979 and 1985 were already reflected in the 1985 modification. Since petitioners acquiesced in that modification, they cannot now be heard to argue that pre-1985 developmentseither in the law or in the facts provide a basis for modifying the 1985 order. It is that order that defined petitioners' obligation to construct and to operate an adequate facility. Petitioners' reliance on as constituting a relevant change in the law is plainly misplaced. That case was pending in this Court when the consent decree was entered in 1979. It was the authority on which the sheriff relied when he sought permission to double cell in 1984, and, of course, it was well known to all parties when the decree was modified in 1985. It does not qualify as a changed circumstance.[5] *406 The increase in the average number of pretrial detainees is, of course, a change of fact. Because the size of that increase had not been anticipated in 1979, it was appropriate to modify the decree in 1985.[6] But in 1985, the steady progression in the detainee population surely made it foreseeable that this growth would continue. The District Court's finding that "the overcrowding problem faced by the Sheriff is neither new nor unforeseen," Inmates of Suffolk County is amply supported by the record. Even if the continuing increase in inmate population had not actually been foreseen, it was reasonably foreseeable. Mere foreseeability in the sense that it was an event that "could conceivably arise" during the life of the consent decree, see ante, at 385, should not, of course, disqualify an unanticipated development from justifying a modification. But the parties should be charged with notice of those events that reasonably prudent litigants would contemplate when negotiating a settlement. Given the realities of today's society, it is not surprising that |
Justice Stevens | 1,992 | 16 | dissenting | Rufo v. Inmates of Suffolk County Jail | https://www.courtlistener.com/opinion/112679/rufo-v-inmates-of-suffolk-county-jail/ | the realities of today's society, it is not surprising that the District Court found a continued *407 growth in inmate population to be within petitioners' contemplation. Other important concerns counsel against modification of this consent decree. Petitioners' history of noncompliance after the 1973 injunction provides an added reason for insisting that they honor their most recent commitments. Petitioners' current claims of fiscal limitation are hardly new. These pleas reflect a continuation of petitioners' previous reluctance to budget funds adequate to avoid the initial constitutional violation or to avoid prolonged noncompliance with the terms of the original decree. The continued claims of financial constraint should not provide support for petitioners' modification requests.[7] The strong public interest in protecting the finality of court decrees always counsels against modifications. Cf. ; In the context of a consent decree, this interest is reinforced by the policy favoring the settlement of protracted litigation. To the extent that litigants are allowed to avoid their solemn commitments, the motivation for particular settlements will be compromised, and the reliability of the entire process will suffer. *408 It is particularly important to apply a strict standard when considering modification requests that undermine the central purpose of a consent decree. In his opinion in New York State Assn. for Retarded Children, Judge Friendly analyzed the requested modifications in the light of the central purpose "of transferring the population of Willowbrook, whose squalid living conditions this court has already recited, to facilities of more human dimension as quickly as possible." The changes that were approved were found to be consistent with that central purpose. In this action, the entire history of the litigation demonstrates that the prohibition against double celling was a central purpose of the relief ordered by the District Court in 1973, of the bargain negotiated in 1979 and embodied in the original consent decree, and of the order entered in 1985 that petitioners now seek to modify. Moreover, as the District Court found, during the history of the litigation, petitioners have been able to resort to various measures such as "transfers to state prisons, bail reviews by the Superior Court, and a pretrial controlled release program" to respond to the overcrowding problem. The fact that double celling affords petitioners the easiest and least expensive method of responding to a reasonably foreseeable problem is not an adequate justification for compromising a central purpose of the decree. In this regard, the Court misses the point in its observation that "[i]f modification of one term of a consent decree defeats the purpose of the decree, obviously modification would be all but |
Justice Stevens | 1,992 | 16 | dissenting | Rufo v. Inmates of Suffolk County Jail | https://www.courtlistener.com/opinion/112679/rufo-v-inmates-of-suffolk-county-jail/ | purpose of the decree, obviously modification would be all but impossible." Ante, at 387. It is certainly true that modification of a consent decree would be impossible if the modification of any one term were deemed to defeat the purpose of the decree. However, to recognize that some terms are so critical that their modification would thwart the central purpose of the decree does not render the decree immutable, but rather assures that a modification will frustrate *409 neither the legitimate expectations of the parties nor the core remedial goals of the decree. After a judicial finding of constitutional violation, petitioners were ordered in 1973 to place pretrial detainees in single cells. In return for certain benefits, petitioners committed themselves in 1979 to continued compliance with the singlecelling requirement. They reaffirmed this promise in 1985. It was clearly not an abuse of discretion for the District Court to require petitioners to honor this commitment. I would affirm the judgment of the Court of Appeals. |
Justice Powell | 1,973 | 17 | dissenting | Mourning v. Family Publications Service, Inc. | https://www.courtlistener.com/opinion/108766/mourning-v-family-publications-service-inc/ | I would affirm the judgment of the Court of Appeals on the ground that there was no extension of consumer credit within the meaning of the Truth in Lending Act.[1] The majority takes the position that the credit issue is a question of fact properly resolved against respondent on petitioner's motion for summary judgment below. I cannot agree. In my view, the undisputed facts establish as a matter of law that the transaction between petitioner *384 and respondent did not involve an extension of consumer credit. For the same reason, while I am in agreement with much of MR. JUSTICE DOUGLAS' dissenting opinion, I see no reason to remand the case for the taking of evidence. I Clearly the Act applies only to transactions involving the extension of credit. The congressional declaration of purpose is explicit: "The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit." 15 U.S. C. 1601. The phrase "extension of consumer credit" is not defined in the Act. Nor does the Act's definition of "credit" provide any enlightenment.[2] However, a transaction is commonly understood to involve credit when one party receives value in exchange for his unconditional promise to pay the other party for such value in the future. The mere fact that a party obligates himself in a contract to pay for goods or services in installments over a period of time does not render the contract a credit transaction: "A transaction may be an instalment contract without being a credit transaction at all. Both parties may agree to perform in instalments without promising *385 to render any performance in advance of full payment of the price of each instalment so rendered." 3A A. Corbin, Contracts 687, p. 246 (1960). The transaction before the Court may well have been a credit transaction, but it was not respondent that extended the credit. Petitioner obligated herself to pay in advance for the magazines she was to receive. The contract required petitioner to pay equal installments over a 30-month period, but respondent was obligated only to provide magazines over 60 months. In effect, petitioner paid every month for two months' worth of magazines. Until the last magazine had been delivered, petitioner would have paid for more magazines than she received. Thus, the contract called for the extension of credit by petitioner to respondent. For this reason it was not an "extension of consumer credit" within the meaning of the Act. See 15 |
Justice Powell | 1,973 | 17 | dissenting | Mourning v. Family Publications Service, Inc. | https://www.courtlistener.com/opinion/108766/mourning-v-family-publications-service-inc/ | consumer credit" within the meaning of the Act. See 15 U.S. C. 1602 (h). The Federal Reserve Board, upon whose authority to interpret the Act the majority so heavily relies in sustaining Regulation Z, has indicated that a necessary element in a consumer credit transaction is the consumer's obligation to pay after he has received the bargained-for goods or services. In a published Opinion Letter dealing with the practice of assessing obstetrical services in periodic installments, the Board stated that "[a]s long as there are no finance charges assessed, and at no point do the charges for the services rendered exceed the payments to the extent that it would require more than 4 of the periodic instalments to repay the obligation, then the plan would not fall within the provisions of Regulation Z."[3] (Emphasis supplied.) This statement implicitly recognizes that credit is extended only when the *386 value of goods or services provided exceeds the payments made.[4] II Implicit in the positions both of MR. JUSTICE DOUGLAS and of the majority is the assumption that, even admitting petitioner was to pay for each magazine before receiving it, under some factual circumstances respondent *387 might nevertheless have extended credit.[5] Thus, MR. JUSTICE DOUGLAS states that "if respondent advanced all or part of the subscription price to the publishers, respondent would be advancing `credit' for the benefit of the customer." The majority is less clear on this point, stating only that "[i]n some cases in which a consumer pays in installments for a magazine subscription, credit may not have been extended to the consumer." Ante, at 362 n. 16. The implication, however, is that in some such transactions, though the consumer pays for the magazines in advance, he may be the recipient of credit. I am unable to agree that under any set of circumstances, given the undisputed fact that petitioner agreed to pay in advance for each magazine, respondent might have extended credit. Petitioner did not obtain a loan from respondent which she would be unconditionally obligated to repay. She entered into a contract imposing continuing, mutually dependent obligations on both parties.[6]*388 Whether respondent advanced any part of the subscription price to magazine publishers is quite immaterial to a determination of the legal effect of the only transaction involved in this case: whether there was extension of consumer credit by respondent to petitioner. The only contract at issue is that between the parties; how and upon what terms respondent may have arranged to obtain the magazines for delivery to petitioner in fulfillment of its contractual obligations is of no concern to |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | The issue here is whether a suit against an employer by employees asserting breach of a collective-bargaining contract was properly dismissed where the accompanying complaint against the union for breach of duty of fair representation has withstood the union's motion for summary judgment and remains to be tried. I Petitioners,[1] who were formerly employed as truck drivers by respondent Anchor Motor Freight, Inc. (Anchor), were discharged on June 5, The applicable collective-bargaining contract forbade discharges without just cause. The company charged dishonesty. The practice at Anchor was to reimburse drivers for money spent for lodging while the drivers were on the road overnight. Anchor's assertion was that petitioners had sought reimbursement for motel expenses in excess of the actual charges sustained by them. At a meeting between the company and the union, Local 377, International Brotherhood of Teamsters (Union), which was also attended by petitioners, Anchor presented motel receipts previously submitted by petitioners which were in excess of the charges shown on the motel's registration cards; a notarized statement of the motel clerk asserting *557 the accuracy of the registration cards; and an affidavit of the motel owner affirming that the registration cards were accurate and that inflated receipts had been furnished petitioners. The Union claimed petitioners were innocent and opposed the discharges. It was then agreed that the matter would be presented to the joint arbitration committee for the area, to which the collective-bargaining contract permitted either party to submit an unresolved grievance.[2] Pending this hearing, petitioners were reinstated. Their suggestion that the motel be investigated was answered by the Union representatives' assurances that "there was nothing to worry about" and that they need not hire their own attorney. A hearing before the joint area committee was held on July 26, Anchor presented its case. Both the Union and petitioners were afforded an opportunity to present their case and to be heard. Petitioners denied their dishonesty, but neither they nor the Union presented any other evidence contradicting the documents presented by the company. The committee sustained *558 the discharges. Petitioners then retained an attorney and sought rehearing based on a statement by the motel owner that he had no personal knowledge of the events, but that the discrepancy between the receipts and the registration cards could have been attributable to the motel clerk's recording on the cards less than was actually paid and retaining for himself the difference between the amount receipted and the amount recorded. The committee, after hearing, unanimously denied rehearing "because there was no new evidence presented which would justify a reopening of this case." App. |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | presented which would justify a reopening of this case." App. 212. There were later indications that the motel clerk was in fact the culprit; and the present suit was filed in June 1969, against Anchor, the Union, and its International. The complaint alleged that the charges of dishonesty made against petitioners by Anchor were false, that there was no just cause for discharge, and that the discharges had been in breach of contract. It was also asserted that the falsity of the charges could have been discovered with a minimum of investigation, that the Union had made no effort to ascertain the truth of the charges, and that the Union had violated its duty of fair representation by arbitrarily and in bad faith depriving petitioners of their employment and permitting their discharge without sufficient proof. The Union denied the charges and relied on the decision of the joint area committee. Anchor asserted that petitioners had been properly discharged for just cause. It also defended on the ground that petitioners, diligently and in good faith represented by the Union, had unsuccessfully resorted to the grievance and arbitration machinery provided by the contract and that the adverse decision of the joint arbitration committee was binding upon the Union and petitioners under the contractual provision declaring that "[a] decision by a majority of a *559 Panel of any of the Committees shall be final and binding on all parties, including the employee and/or employees affected."[3] Discovery followed, including a deposition of the motel clerk revealing that he had falsified the records and that it was he who had pocketed the difference between the sums shown on the receipts and the registration cards. Motions for summary judgment filed by Anchor and the Unions were granted by the District Court on the ground that the decision of the arbitration committee was final and binding on the employees and "for failure to show facts comprising bad faith, arbitrariness or perfunctoriness on the part of the Unions." 72 CCH Lab. Cas. ¶ 13,987, p. 28,131 (ND Ohio 1973). Although indicating that the acts of the Union "may not meet professional standards of competency, and while it might have been advisable for the Union to further investigate the charges" the District Court concluded that the facts demonstrated at most bad judgment on the part of the Union, which was insufficient to prove a breach of duty or make out a prima facie case against it. After reviewing the allegations and the record before it, the Court of Appeals concluded that there were sufficient facts from which bad faith |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | concluded that there were sufficient facts from which bad faith or arbitrary conduct on the part of the local Union could be inferred by the trier of fact and that petitioners should have been afforded an opportunity to prove their charges.[4] To *560 this extent the judgment of the District Court was reversed. The Court of Appeals affirmed the judgment in favor of Anchor and the International. Saying that petitioners wanted to relitigate their discharges because of the recantation of the motel clerk, the Court of Appeals, quoting from its prior opinion in[5] concluded that the finality provision of collective-bargaining contracts must be observed because there was "[n]o evidence of any misconduct on the part of the employer." and wholly insufficient evidence of any conspiracy between the Union and 1158.[6] *561 It is this judgment of the Court of Appeals with respect to Anchor that is now before us on our limited grant of the employees' petition for writ of certiorari.[7] We reverse that judgment. II Section 301 of the Labor Management Relations Act, 1947, 29 U.S. C. 185, provides for suits in the district courts for violation of collective-bargaining contracts between labor organizations and employers without regard to the amount in controversy.[8] This provision reflects the interest of Congress in promoting "a higher degree of responsibility upon the parties to such agreements" S. Rep. No. 105, 80th Cong., 1st Sess., *562 17 (1947). The strong policy favoring judicial enforcement of collective-bargaining contracts was sufficiently powerful to sustain the jurisdiction of the district courts over enforcement suits even though the conduct involved was arguably or would amount to an unfair labor practice within the jurisdiction of the National Labor Relations Board. ; ; ; Charles Dowd Box Section 301 contemplates suits by and against individual employees as well as between unions and employers; and contrary to earlier indications 301 suits encompass those seeking to vindicate "uniquely personal" rights of employees such as wages, hours, overtime pay, and wrongful discharge. Petitioners' present suit against the employer was for wrongful discharge and is the kind of case Congress provided for in 301. Collective-bargaining contracts, however, generally contain procedures for the settlement of disputes through mutual discussion and arbitration. These provisions are among those which are to be enforced under 301. Furthermore, Congress has specified in 203 (d), 29 U.S. C. 173 (d), that "[f]inal adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes." This congressional policy "can be effectuated only if the means chosen by the parties for settlement of |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | if the means chosen by the parties for settlement of their differences under a collective bargaining agreement is given full play." Courts are not to usurp those functions which collective-bargaining contracts have properly "entrusted to the arbitration *563 tribunal." They should not undertake to review the merits of arbitration awards but should defer to the tribunal chosen by the parties finally to settle their disputes. Otherwise "plenary review by a court of the merits would make meaningless the provisions that the arbitrator's decision is final, for in reality it would almost never be final." Pursuant to this policy, we later held that an employee could not sidestep the grievance machinery provided in the contract and that unless he attempted to utilize the contractual procedures for settling his dispute with his employer, his independent suit against the employer in the District Court would be dismissed. Republic Steel Maddox nevertheless distinguished the situation where "the union refuses to press or only perfunctorily presses the individual's claim See ; Labor" The reservation in Maddox was well advised. The federal labor laws, in seeking to strengthen the bargaining position of the average worker in an industrial economy, provided for the selection of collective-bargaining agents with wide authority to negotiate and conclude collective-bargaining agreements on behalf of all employees in appropriate units, as well as to be the employee's agent in the enforcement and administration of the contract. Wages, hours, working conditions, seniority, and job security therefore became the business of certified or recognized bargaining agents, as did the contractual procedures for the processing and settling of grievances, including those with respect to discharge. Necessarily "[a] wide range of reasonableness must be allowed a statutory bargaining representative in serving *564 the unit it represents" Ford Motor The union's broad authority in negotiating and administering effective agreements is "undoubted," but it is not without limits. Because "[t]he collective bargaining system as encouraged by Congress and administered by the NLRB of necessity subordinates the interests of an individual employee to the collective interests of all employees in a bargaining unit," the controlling statutes have long been interpreted as imposing upon the bargaining agent a responsibility equal in scope to its authority, "the responsibility and duty of fair representation." at The union as the statutory representative of the employees is "subject always to complete good faith and honesty of purpose in the exercise of its discretion." Ford Motor at Since with respect to the railroad industry, and Ford Motor and with respect to those industries reached by the National Labor Relations Act, the duty of fair representation has |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | National Labor Relations Act, the duty of fair representation has served as a "bulwark to prevent arbitrary union conduct against individuals stripped of traditional forms of redress by the provisions of federal labor law." at Claims of union breach of duty may arise during the life of a contract when individual employees claim wrongful discharge or other improper treatment at the hands of the employer. Contractual remedies, at least in their final stages controlled by union and employer, are normally provided; yet the union may refuse to utilize them or, if it does, assertedly may do so discriminatorily or in bad faith. "The problem then is to determine under *565 what circumstances the individual employee may obtain judicial review of his breach-of-contract claim despite his failure to secure relief through the contractual remedial procedures." involved a seniority dispute between the employees of two transportation companies whose operating authorities had been combined. The employees accorded lesser seniority were being laid off. Their grievances were presented to the company and taken by the union to the joint arbitration committee pursuant to contractual provisions very similar to those now before us. The decision was adverse. The employees then brought suit in the state court against the company, the union, and the favored employees, asserting breach of contract by the company and breach of its duty of fair representation by the union. They sought damages and an injunction to prevent implementation of the decision of the joint arbitration committee. The union was charged with dishonest and bad-faith representation of the employees before the joint committee. The unions and the defendant employees asserted the finality of the joint committee's decision, if not as a final resolution of a dispute in the administration of a contract, as a bargained-for accommodation between the two parties. The state courts issued the injunction. Respondents argued here that "the decision of the Committee was obtained by dishonest union conduct in breach of its duty of fair representation and that a decision so obtained cannot be relied upon as a valid excuse for [their] discharge under the contract." 375 U.S., at We reversed the judgment of the state court but only after independently determining that the union's conduct was not a breach of its statutory duties and that the joint committee's decision was not infirm for that reason. Our conclusion was that the disfavored employees had not * proved their case: "Neither the parties nor the Joint Committee exceeded their power under the contract and there was no fraud or breach of duty by the exclusive bargaining agent. The decision of |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | of duty by the exclusive bargaining agent. The decision of the committee, reached after proceedings adequate under the agreement, is final and binding upon the parties, just as the contract says it is." In the discharged employee sued the union alleging breach of its duty of fair representation in that it had refused in bad faith to take the employee's grievance to arbitration as it could have under the contract. In the course of rejecting the claim that the alleged conduct was arguably an unfair practice within the exclusive jurisdiction of the Labor Board, we ruled that "the wrongfully discharged employee may bring an action against his employer in the face of a defense based upon the failure to exhaust contractual remedies, provided the employee can prove that the union as bargaining agent breached its duty of fair representation in its handling of the employee's grievance." This was true even though "the employer in such a situation may have done nothing to prevent exhaustion of the exclusive contractual remedies." for "the employer has committed a wrongful discharge in breach of that agreement, a breach which could be remedied through the grievance process were it not for the union's breach of its statutory duty of fair representation" We could not "believe that Congress, in conferring upon employers and unions the power to establish exclusive grievance procedures, intended to confer upon unions such unlimited discretion to deprive injured employees of all remedies for breach of contract." Nor did we "think that Congress intended to shield employers from the natural consequences of their breaches of bargaining *567 agreements by wrongful union conduct in the enforcement of such agreements." At the same time "we conclude[d] that a union does not breach its duty of fair representation merely because it settled the grievance short of arbitration." "If the individual employee could compel arbitration of his grievance regardless of its merit," that is, compel both employers and unions to make full use of the contractual provisions for settling disputes by arbitration, "the settlement machinery provided by the contract would be substantially undermined," for curtailing the "power to settle the majority of grievances short of the costlier and more time-consuming steps" might deter the parties to collective-bargaining agreements from making "provi[sion] for detailed grievance and arbitration procedures of the kind encouraged by L. M. R. A. 203 (d)." We also expressly indicated that suit against the employer and suit against the union could be joined in one action. III Even though under Vaca the employer may not insist on exhaustion of grievance procedures when the union has |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | insist on exhaustion of grievance procedures when the union has breached its representation duty, it is urged that when the procedures have been followed and a decision favorable to the employer announced, the employer must be protected from relitigation by the express contractual provision declaring a decision to be final and binding. We disagree. The union's breach of duty relieves the employee of an express or implied requirement that disputes be settled through contractual grievance procedures; if it seriously undermines the integrity of the arbitral process the union's breach also removes the bar of the finality provisions of the contract. It is true that Vaca dealt with a refusal by the union *568 to process a grievance. It is also true that where the union actually utilizes the grievance and arbitration procedures on behalf of the employee, the focus is no longer on the reasons for the union's failure to act but on whether, contrary to the arbitrator's decision, the employer breached the contract and whether there is substantial reason to believe that a union breach of duty contributed to the erroneous outcome of the contractual proceedings. But the judicial remedy in was sought after the adverse decision of the joint arbitration committee. Our conclusion in that case was not that the committee's decision was unreviewable. On the contrary, we proceeded on the basis that it was reviewable and vulnerable if tainted by breach of duty on the part of the union, even though the employer had not conspired with the union. The joint committee's decision was held binding on the complaining employees only after we determined that the union had not been guilty of malfeasance and that its conduct was within the range of acceptable performance by a collective-bargaining agent, a wholly unnecessary determination if the union's conduct was irrelevant to the finality of the arbitral process.[9] In Vaca "we accept[ed] the proposition that a union *569 may not arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion," and our ruling that the union had not breached its duty of fair representation in not pressing the employee's case to the last step of the grievance process stemmed from our evaluation of the manner in which the union had handled the grievance in its earlier stages. Although "the Union might well have breached its duty had it ignored [the employee's] complaint or had it processed the grievance in a perfunctory manner," "the Union conclude[d] both that arbitration would be fruitless and that the grievance should be dismissed" only after it had "processed the grievance into the fourth |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | only after it had "processed the grievance into the fourth step, attempted to gather sufficient evidence to prove [the employee's] case, attempted to secure for [him] less vigorous work at the plant, and joined in the employer's efforts to have [him] rehabilitated." Anchor would have it that petitioners are foreclosed from judicial relief unless some blameworthy conduct on its part disentitles it to rely on the finality rule. But it was Anchor that originated the discharges for dishonesty. If those charges were in error, Anchor has surely played its part in precipitating this dispute. Of course, both courts below held there were no facts suggesting that Anchor either knowingly or negligently relied on false evidence. As far as the record reveals it also prevailed before the joint committee after presenting its case in accordance with what were ostensibly wholly fair procedures. Nevertheless there remains the question whether the contractual protection against relitigating an arbitral decision binds employees who assert that the process has fundamentally malfunctioned by reason of the bad-faith performance of the union, their statutorily imposed collective-bargaining agent. *570 Under the rule announced by the Court of Appeals, unless the employer is implicated in the Union's malfeasance or has otherwise caused the arbitral process to err, petitioners would have no remedy against Anchor even though they are successful in proving the Union's bad faith, the falsity of the charges against them, and the breach of contract by Anchor by discharging without cause. This rule would apparently govern even in circumstances where it is shown that a union has manufactured the evidence and knows from the start that it is false; or even if, unbeknownst to the employer, the union has corrupted the arbitrator to the detriment of disfavored union members. As is the case where there has been a failure to exhaust, however, we cannot believe that Congress intended to foreclose the employee from his 301 remedy otherwise available against the employer if the contractual processes have been seriously flawed by the union's breach of its duty to represent employees honestly and in good faith and without invidious discrimination or arbitrary conduct. It is urged that the reversal of the Court of Appeals will undermine not only the finality rule but the entire collective-bargaining process. Employers, it is said, will be far less willing to give up their untrammeled right to discharge without cause and to agree to private settlement procedures. But the burden on employees will remain a substantial one, far too heavy in the opinion of some.[10] To prevail against either the company or the Union, petitioners |
Justice White | 1,976 | 6 | majority | Hines v. Anchor Motor Freight, Inc. | https://www.courtlistener.com/opinion/109392/hines-v-anchor-motor-freight-inc/ | To prevail against either the company or the Union, petitioners must not only show that their discharge was contrary to the contract but must also carry the burden of demonstrating breach of duty by the *571 Union. As the District Court indicated, this involves more than demonstrating mere errors in judgment. Petitioners are not entitled to relitigate their discharge merely because they offer newly discovered evidence that the charges against them were false and that in fact they were fired without cause. The grievance processes cannot be expected to be error-free. The finality provision has sufficient force to surmount occasional instances of mistake. But it is quite another matter to suggest that erroneous arbitration decisions must stand even though the employee's representation by the union has been dishonest, in bad faith, or discriminatory; for in that event error and injustice of the grossest sort would multiply. The contractual system would then cease to qualify as an adequate mechanism to secure individual redress for damaging failure of the employer to abide by the contract. Congress has put its blessing on private dispute settlement arrangements provided in collective agreements, but it was anticipated, we are sure, that the contractual machinery would operate within some minimum levels of integrity. In our view, enforcement of the finality provision where the arbitrator has erred is conditioned upon the union's having satisfied its statutory duty fairly to represent the employee in connection with the arbitration proceedings. Wrongfully discharged employees would be left without jobs and without a fair opportunity to secure an adequate remedy. Except for this case the Courts of Appeals have arrived at similar conclusions.[11] As the Court of Appeals for the *572 Ninth Circuit put it in : "To us, it makes little difference whether the union subverts the arbitration process by refusing to proceed as in Vaca or follows the arbitration trial to the end, but in so doing subverts the arbitration process by failing to fairly represent the employee. In neither case, does the employee receive fair representation." Petitioners, if they prove an erroneous discharge and the Union's breach of duty tainting the decision of the joint committee, are entitled to an appropriate remedy against the employer as well as the Union. It was error to affirm the District Court's final dismissal of petitioners' action against To this extent the judgment of the Court of Appeals is reversed. So ordered. MR. JUSTICE STEVENS took no part in the consideration or decision of this case. MR. |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | The Government urges us in this case to uphold a direct prohibition on political speech. It asks us to embrace a theory of the First Amendment that would allow censorship not only of television and radio broadcasts, but of pamphlets, posters, the Internet, and virtually any other medium that corporations and unions might find useful in expressing their views on matters of public concern. Its theory, if accepted, would empower the Government to prohibit newspapers from running editorials or opinion pieces supporting or opposing candidates for office, so long as the newspapers were owned by corporationsas the major ones are. First Amendment rights could be confined to individuals, subverting the vibrant public discourse that is at the foundation of our democracy. The Court properly rejects that theory, and I join its opinion in full. The First Amendment protects more than just the individual on a soapbox and the lonely pamphleteer. I write separately to address the important principles of judicial restraint and stare decisis implicated in this case. I Judging the constitutionality of an Act of Congress is "the gravest and most delicate duty that this Court is called upon to *918 perform." Because the stakes are so high, our standard practice is to refrain from addressing constitutional questions except when necessary to rule on particular claims before us. See This policy underlies both our willingness to construe ambiguous statutes to avoid constitutional problems and our practice "`never to formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied.'" United The majority and dissent are united in expressing allegiance to these principles. Ante, at 892; post, at 936-937 But I cannot agree with my dissenting colleagues on how these principles apply in this case. The majority's step-by-step analysis accords with our standard practice of avoiding broad constitutional questions except when necessary to decide the case before us. The majority begins by addressing and quite properly rejectingCitizens United's statutory claim that 2 U.S.C. 441b does not actually cover its production and distribution of Hillary: The Movie (hereinafter Hillary). If there were a valid basis for deciding this statutory claim in Citizens United's favor (and thereby avoiding constitutional adjudication), it would be proper to do so. Indeed, that is precisely the approach the Court took just last Term in Northwest Municipal Util. Dist. No. when eight Members of the Court agreed to decide the case on statutory grounds instead of reaching the appellant's broader argument that the Voting Rights Act is unconstitutional. It is only because the majority rejects Citizens United's |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | unconstitutional. It is only because the majority rejects Citizens United's statutory claim that it proceeds to consider the group's various constitutional arguments, beginning with its narrowest claim (that Hillary is not the functional equivalent of express advocacy) and proceeding to its broadest claim should be overruled). This is the same order of operations followed by the controlling opinion in Federal Election There the appellant was able to prevail on its narrowest constitutional argument because its broadcast ads did not qualify as the functional equivalent of express advocacy; there was thus no need to go on to address the broader claim that should be overruled. ; (ALITO, J., concurring). This case is differentnot, as the dissent suggests, because the approach taken in has been deemed a "failure," post, at 935, but because, in the absence of any valid narrower ground of decision, there is no way to avoid Citizens United's broader constitutional argument. The dissent advocates an approach to addressing Citizens United's claims that I find quite perplexing. It presumably agrees with the majority that Citizens United's narrower statutory and constitutional arguments lack meritotherwise its conclusion that the group should lose this case would make no sense. Despite agreeing *919 that these narrower arguments fail, however, the dissent argues that the majority should nonetheless latch on to one of them in order to avoid reaching the broader constitutional question of whether remains good law. It even suggests that the Court's failure to adopt one of these concededly meritless arguments is a sign that the majority is not "serious about judicial restraint." Post, at 938. This approach is based on a false premise: that our practice of avoiding unnecessary (and unnecessarily broad) constitutional holdings somehow trumps our obligation faithfully to interpret the law. It should go without saying, however, that we cannot embrace a narrow ground of decision simply because it is narrow; it must also be right. Thus while it is true that "[i]f it is not necessary to decide more, it is necessary not to decide more," post, at 937 (internal quotation marks omitted), sometimes it is necessary to decide more. There is a difference between judicial restraint and judicial abdication. When constitutional questions are "indispensably necessary" to resolving the case at hand, "the court must meet and decide them." Ex parte Randolph, (No. 11, 558) (CC Va. 1833) (Marshall, C.J.). Because it is necessary to reach Citizens United's broader argument that should be overruled, the debate over whether to consider this claim on an asapplied or facial basis strikes me as largely beside the point. Citizens United has standingit |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | me as largely beside the point. Citizens United has standingit is being injured by the Government's enforcement of the Act. Citizens United has a constitutional claimthe Act violates the First Amendment, because it prohibits political speech. The Government has a defensethe Act may be enforced, consistent with the First Amendment, against corporations. Whether the claim or the defense prevails is the question before us. Given the nature of that claim and defense, it makes no difference of any substance whether this case is resolved by invalidating the statute on its face or only as applied to Citizens United. Even if considered in as-applied terms, a holding in this case that the Act may not be applied to Citizens Unitedbecause corporations as well as individuals enjoy the pertinent First Amendment rightswould mean that any other corporation raising the same challenge would also win. Likewise, a conclusion that the Act may be applied to Citizens Unitedbecause it is constitutional to prohibit corporate political speechwould similarly govern future cases. Regardless whether we label Citizens United's claim a "facial" or "as-applied" challenge, the consequences of the Court's decision are the same.[1] II The text and purpose of the First Amendment point in the same direction: Congress may not prohibit political speech, even if the speaker is a corporation or union. What makes this case difficult is the need to confront our prior decision in This is the first case in which we have been asked to overrule and thus it is also the first in which we have had reason to consider how much weight to give stare decisis in assessing its continued validity. The dissent erroneously declares *920 that the Court "reaffirmed" 's holding in subsequent casesnamely, Federal Election 5 U.S. 146, ; ; and Post, at 956-957. Not so. Not a single party in any of those cases asked us to overrule and as the dissent points out, post, at 931-932, the Court generally does not consider constitutional arguments that have not properly been raised. 's validity was therefore not directly at issue in the cases the dissent cites. The Court's unwillingness to overturn in those cases cannot be understood as a reaffirmation of that decision. A Fidelity to precedentthe policy of stare decisisis vital to the proper exercise of the judicial function. "Stare decisis is the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process." For these reasons, we have long recognized that departures from precedent are inappropriate in |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | have long recognized that departures from precedent are inappropriate in the absence of a "special justification." 2, At the same time, stare decisis is neither an "inexorable command," 5 U.S. 558, nor "a mechanical formula of adherence to the latest decision," especially in constitutional cases, see United 98 S. Ct. 87, If it were, segregation would be legal, minimum wage laws would be unconstitutional, and the Government could wiretap ordinary criminal suspects without first obtaining warrants. See overruled by ; 43 S. Ct. 4, overruled by West Coast Hotel ; overruled by As the dissent properly notes, none of us has viewed stare decisis in such absolute terms. Post, at 938-9; see also, e.g., ). Stare decisis is instead a "principle of policy." at When considering whether to reexamine a prior erroneous holding, we must balance the importance of having constitutional questions decided against the importance of having them decided right. As Justice Jackson explained, this requires a "sober appraisal of the disadvantages of the innovation as well as those of the questioned case, a weighing of practical effects of one against the other." Jackson, Decisional Law and Stare Decisis, 30 A.B.A.J. 334 (1944). In conducting this balancing, we must keep in mind that stare decisis is not an end in itself. It is instead "the means by which we ensure that the law will not merely change erratically, but will develop in a principled and intelligible fashion." *9 474 U.S. Its greatest purpose is to serve a constitutional idealthe rule of law. It follows that in the unusual circumstance when fidelity to any particular precedent does more to damage this constitutional ideal than to advance it, we must be more willing to depart from that precedent. Thus, for example, if the precedent under consideration itself departed from the Court's jurisprudence, returning to the "`intrinsically sounder' doctrine established in prior cases" may "better serv[e] the values of stare decisis than would following [the] more recently decided case inconsistent with the decisions that came before it." Adarand Constructors, ; see also at ; Abrogating the errant precedent, rather than reaffirming or extending it, might better preserve the law's coherence and curtail the precedent's disruptive effects. Likewise, if adherence to a precedent actually impedes the stable and orderly adjudication of future cases, its stare decisis effect is also diminished. This can happen in a number of circumstances, such as when the precedent's validity is so hotly contested that it cannot reliably function as a basis for decision in future cases, when its rationale threatens to upend our settled jurisprudence in related areas |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | rationale threatens to upend our settled jurisprudence in related areas of law, and when the precedent's underlying reasoning has become so discredited that the Court cannot keep the precedent alive without jury-rigging new and different justifications to shore up the original mistake. See, e.g., ; B These considerations weigh against retaining our decision in First, as the majority explains, that decision was an "aberration" insofar as it departed from the robust protections we had granted political speech in our earlier cases. Ante, at 907; see also First Nat. Bank of undermined the careful line that drew to distinguish limits on contributions to candidates from limits on independent expenditures on speech. rejected the asserted government interest in regulating independent expenditures, concluding that "restrict[ing] the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment." -49, ; see also however, allowed the Government to prohibit these same expenditures out of concern for "the corrosive and distorting effects of immense aggregations of wealth" in the marketplace of 110 S. Ct. 11. 's reasoning wasand remainsinconsistent with 's explicit repudiation of any government interest in "equalizing the relative ability of individuals and groups to influence the outcome of elections." -49, was also inconsistent with 's clear rejection of the idea that "speech that otherwise would be within the protection of the First Amendment loses that *922 protection simply because its source is a corporation." The dissent correctly points out that involved a referendum rather than a candidate election, and that itself noted this factual distinction, ; post, at 958. But this distinction does not explain why corporations may be subject to prohibitions on speech in candidate elections when individuals may not. Second, the validity of 's rationaleitself adopted over two "spirited dissents," has proved to be the consistent subject of dispute among Members of this Court ever since. See, e.g., (SCALIA, J., joined by KENNEDY and THOMAS, JJ., concurring in part and concurring in judgment); 264, 286, (opinions of SCALIA, THOMAS, and KENNEDY, JJ.); 5 U.S., at 163, 164, (opinions of KENNEDY and THOMAS, JJ.). The simple fact that one of our decisions remains controversial is, of course, insufficient to justify overruling it. But it does undermine the precedent's ability to contribute to the stable and orderly development of the law. In such circumstances, it is entirely appropriate for the Courtwhich in this case is squarely asked to reconsider 's validity for the first timeto address the matter with a greater willingness to consider new approaches capable of restoring our doctrine |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | willingness to consider new approaches capable of restoring our doctrine to sounder footing. Third, the decision is uniquely destabilizing because it threatens to subvert our Court's decisions even outside the particular context of corporate express advocacy. The First Amendment theory underlying 's holding is extraordinarily broad. 's logic would authorize government prohibition of political speech by a category of speakers in the name of equalitya point that most scholars acknowledge (and many celebrate), but that the dissent denies. Compare, e.g., Garrett, New Voices in Politics: Justice Marshall's Jurisprudence on Law and Politics, 52 Howard L.J. 655, 669 ( "has been understood by most commentators to be an opinion driven by equality considerations, albeit disguised in the language of `political corruption'") with post, at 970 ('s rationale "is manifestly not just an `equalizing' ideal in disguise").[2] It should not be surprising, then, that Members of the Court have relied on 's expansive logic to justify greater incursions on the First Amendment, even outside the original context of corporate advocacy on behalf of candidates running for office. See, e.g., (relying on and other cases to justify restrictions on campaign spending by individual candidates, explaining that "there is no reason that their logicspecifically, their concerns about the corrosive and distorting effects of wealth on our political processis not *923 equally applicable in the context of individual wealth"); (extending beyond its original context to cover not only the "functional equivalent" of express advocacy by corporations, but also electioneering speech conducted by labor unions). The dissent in this case succumbs to the same temptation, suggesting that justifies prohibiting corporate speech because such speech might unduly influence "the market for legislation." Post, at 975. The dissent reads to permit restrictions on corporate speech based on nothing more than the fact that the corporate form may help individuals coordinate and present their views more effectively. Post, at 975. A speaker's ability to persuade, however, provides no basis for government regulation of free and open public debate on what the laws should be. If taken seriously, 's logic would apply most directly to newspapers and other media corporations. They have a more profound impact on public discourse than most other speakers. These corporate entities are, for the time being, not subject to 441b's otherwise generally applicable prohibitions on corporate political speech. But this is simply a matter of legislative grace. The fact that the law currently grants a favored position to media corporations is no reason to overlook the danger inherent in accepting a theory that would allow government restrictions on their political speech. See generally (THOMAS, J., |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | government restrictions on their political speech. See generally (THOMAS, J., concurring in part, concurring in judgment in part, and dissenting in part). These readings of do no more than carry that decision's reasoning to its logical endpoint. In doing so, they highlight the threat poses to First Amendment rights generally, even outside its specific factual context of corporate express advocacy. Because is so difficult to confine to its factsand because its logic threatens to undermine our First Amendment jurisprudence and the nature of public discourse more broadlythe costs of giving it stare decisis effect are unusually high. Finally and most importantly, the Government's own effort to defend or, more accurately, to defend something that is not quite underscores its weakness as a precedent of the Court. The Government concedes that "is not the most lucid opinion," yet asks us to reaffirm its holding. Tr. of Oral Arg. 62 But while invoking stare decisis to support this position, the Government never once even mentions the compelling interest that relied upon in the first place: the need to diminish "the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political " 110 S. Ct. 11. Instead of endorsing on its own terms, the Government urges us to reaffirm 's specific holding on the basis of two new and potentially expansive intereststhe need to prevent actual or apparent quid pro quo corruption, and the need to protect corporate shareholders. See Supp. Brief for Appellee 8-10, 12-13. Those interests may or may not support the result in but they were plainly not part of the reasoning on which relied. To its credit, the Government forthrightly concedes that did not embrace either of the new rationales it now urges upon us. See, e.g., Supp. Brief for Appellee 11 ("The Court did not decide in whether the compelling interest in preventing actual or apparent corruption provides a constitutionally sufficient justification *924 for prohibiting the use of corporate treasury funds for independent electioneering"); Tr. of Oral Arg. 45 (" did not articulate what we believe to be the strongest compelling interest"); ; To be clear: The Court in nowhere relied upon the only arguments the Government now raises to support that decision. In fact, the only opinion in endorsing the Government's argument based on the threat of quid pro quo corruption was Justice STEVENS's 110 S. Ct. 11. The Court itself did not do so, despite the fact that the concurrence highlighted |
Justice Roberts | 2,010 | 0 | concurring | Citizens United v. Federal Election Com'n | https://www.courtlistener.com/opinion/1741/citizens-united-v-federal-election-comn/ | not do so, despite the fact that the concurrence highlighted the argument. Moreover, the Court's only discussion of shareholder protection in appeared in a section of the opinion that sought merely to distinguish 's facts from those of Federal Election 93 L. Ed. 2d 5 110 S. Ct. 11. Nowhere did suggest that the goal of protecting shareholders is itself a compelling interest authorizing restrictions on First Amendment rights. To the extent that the Government's case for reaffirming depends on radically reconceptualizing its reasoning, that argument is at odds with itself. Stare decisis is a doctrine of preservation, not transformation. It counsels deference to past mistakes, but provides no justification for making new ones. There is therefore no basis for the Court to give precedential sway to reasoning that it has never accepted, simply because that reasoning happens to support a conclusion reached on different grounds that have since been abandoned or discredited. Doing so would undermine the rule-of-law values that justify stare decisis in the first place. It would effectively license the Court to invent and adopt new principles of constitutional law solely for the purpose of rationalizing its past errors, without a proper analysis of whether those principles have merit on their own. This approach would allow the Court's past missteps to spawn future mistakes, undercutting the very rule-of-law values that stare decisis is designed to protect. None of this is to say that the Government is barred from making new arguments to support the outcome in On the contrary, it is free to do so. And of course the Court is free to accept them. But the Government's new arguments must stand or fall on their own; they are not entitled to receive the special deference we accord to precedent. They are, as grounds to support literally unprecedented. Moreover, to the extent the Government relies on new arguments and declines to defend on its own termswe may reasonably infer that it lacks confidence in that decision's original justification. Because continued adherence to threatens to subvert the "principled and intelligible" development of our First Amendment jurisprudence, 474 U.S., at I support the Court's determination to overrule that decision. * * * We have had two rounds of briefing in this case, two oral arguments, and 54 amicus *925 briefs to help us carry out our obligation to decide the necessary constitutional questions according to law. We have also had the benefit of a comprehensive dissent that has helped ensure that the Court has considered all the relevant issues. This careful consideration convinces me that Congress violates the First |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | In v. Marsh, 56 U. S. (2011), this Court held that even though bankruptcy courts are statutorily authorized to enter final judgment on a class of bankruptcy- related claims, Article of the Constitution prohibits bankruptcy courts from finy adjudicating certain of those claims. did not, however, decide how bank- ruptcy or district courts should proceed when a “ claim” is identified. We hold today that when, under ’s reasoning, the Constitution does not permit a bankruptcy court to enter final judgment on a bankruptcy- related claim, the relevant statute nevertheless permits a bankruptcy court to issue proposed findings of fact and conclusions of law to be reviewed de novo by the district court. Because the District Court in this case conducted the de novo review that petitioner demands, we affirm the judgment of the Court of Appeals upholding the District Court’s decision. 2 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON Opinion of the Court I Nicolas Paleveda and his wife owned and operated two companies—Aegis Retirement Income Services, Inc. (ARIS), and Bellingham Insurance Agency, Inc. (BIA). By early 2006, BIA had become insolvent, and on January 31, 2006, the company ceased operation. The next day, Paleveda used BIA funds to incorporate Executive Bene- fits Insurance Agency, Inc. (EBIA), petitioner in this case. Paleveda and others initiated a scheme to transfer assets from BIA to EBIA. The assets were deposited into an account held jointly by ARIS and EBIA and ultimately credited to EBIA at the end of the year. On June 1, 2006, BIA filed a voluntary Chapter 7 bank- ruptcy petition in the United States Bankruptcy Court for the Western District of Washington. Peter Arkison, the bankruptcy trustee and respondent in this case, filed a complaint in the same Bankruptcy Court against EBIA and others. As relevant here, the complaint eged that Paleveda used various methods to fraudulently convey BIA assets to EBIA.1 EBIA filed an answer and denied many of the trustee’s egations. After some disagreement as to whether the trustee’s claims should continue in the Bankruptcy Court or instead proceed before a jury in Federal District Court, the trustee filed a motion for summary judgment against EBIA in the Bankruptcy Court. The Bankruptcy Court granted sum- mary judgment for the trustee on claims, including the fraudulent conveyance claims. EBIA then appealed that determination to the District Court. The District Court conducted de novo review, affirmed the Bankruptcy Court’s decision, and entered judgment for the trustee. EBIA appealed to the United States Court of Appeals for the Ninth Circuit. After EBIA filed its opening brief, this —————— 1 The |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | After EBIA filed its opening brief, this —————— 1 The trustee asserted claims of fraudulent conveyance under 11 U.S. C. and under state law, Wash. Rev. Code, ch. 19.0 (2012). Cite as: 573 U. S. (201) 3 Opinion of the Court Court decided In we held that Article of the Constitution did not permit a bankruptcy court to enter final judgment on a counterclaim for tortious interference, at even though final adjudication of that claim by the Bankruptcy Court was authorized by statute, see Part II–B, infra.2 In light of EBIA moved to dismiss its appeal in the Ninth Circuit for lack of jurisdiction, contending that Article did not permit Congress to vest authority in a bankruptcy court to finy decide the trustee’s fraudulent conveyance claims. The Ninth Circuit rejected EBIA’s motion and affirmed the District Court. In re Bellingham Ins. Agency, Inc., 702 F.3d 5 (2012). As relevant here, the court held that and Granfinanciera, S. A. v. Nordberg, 92 U.S. 33 (1989),3 taken together, lead to the conclusion that Article does not permit a bankruptcy court to enter final judgment on a fraudulent conveyance claim against a noncreditor unless the parties consent. 702 F.3d, at 565. The Ninth Circuit concluded that EBIA had impliedly consented to the Bankruptcy Court’s jurisdic- tion, and that the Bankruptcy Court’s adjudication of the fraudulent conveyance claim was therefore permissible. The Court of Appeals also observed that the Bankruptcy Court’s judgment could instead be treated as proposed findings of fact and conclusions of law, subject to de novo review by the District Court. at 565–566. We granted certiorari, 570 U. S. —————— 2 As we explain below, see Part II–B, infra, the statutory scheme at issue both in and in this case grants bankruptcy courts the authority to “hear and determine” and “enter appropriate orders and judgments” in “core” proceedings. 28 U.S. C. The statute lists counterclaims like the one brought in as “core” claims. 3 Granfinanciera held that a fraudulent conveyance claim under Title 11 is not a matter of “public right” for purposes of Article 92 U.S., at 55, and that the defendant to such a claim is entitled to a jury trial under the Seventh Amendment, EXECUTIVE BENEFITS INS. AGENCY v. ARKISON Opinion of the Court II In we held that Article prohibits Congress from vesting a bankruptcy court with the authority to finy adjudicate certain claims. 56 U. S., at But we did not address how courts should proceed when they encounter one of these “ claims”—a claim designated for final adjudication in the bankruptcy court as a statu- |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | for final adjudication in the bankruptcy court as a statu- tory matter, but prohibited from proceeding in that way as a constitutional matter. As we explain in greater detail below, when a bankruptcy court is presented with such a claim, the proper course is to issue proposed findings of fact and conclusions of law. The district court will then review the claim de novo and enter judgment. This approach accords with the bank- ruptcy statute and does not implicate the constitutional defect identified by A We begin with an overview of modern bankruptcy legis- lation. Prior to 1978, federal district courts could refer matters within the traditional “summary jurisdiction” of bankruptcy courts to specialized bankruptcy referees.5 See Northern Constr. Summary jurisdiction covered claims involving “property in the actual or constructive possession of the [bankruptcy] court,” ib i.e., claims regarding the apportionment of —————— Because we conclude that EBIA received the de novo review and entry of judgment to which it claims constitutional entitlement, see Part IV–B, infra, this case does not require us to address whether EBIA in fact consented to the Bankruptcy Court’s adjudication of a claim and whether Article permits a bankruptcy court, with the consent of the parties, to enter final judgment on a claim. We reserve that question for another day. 5 Bankruptcy referees were designated “judges” in 1973. See North- ern Constr. n. 2 Cite as: 573 U. S. (201) 5 Opinion of the Court the existing bankruptcy estate among creditors. See Brubaker, A “Summary” Statutory and Constitutional Theory of Bankruptcy Judges’ Core Jurisdiction After v. Marsh, 86 Am. Bankr. L. J. 121, 12 (2012). Proceedings to augment the bankruptcy estate, on the other hand, implicated the district court’s plenary jurisdic- tion and were not referred to the bankruptcy courts absent both parties’ consent. See ; see also Brubaker, In 1978, Congress enacted sweeping changes to the federal bankruptcy laws. See The Bank- ruptcy Reform Act eliminated the historical distinction between “ ‘summary’ ” jurisdiction belonging to bankruptcy courts and “ ‘plenary’ ” jurisdiction belonging to either a district court or an appropriate state court. Northern ; see also 1 W. Norton & W. Norton Bankruptcy Law and Practice p. – Instead, the 1978 Act mandated that bankruptcy judges “sh exercise” jurisdiction over “ civil proceedings arising under title 11 or arising in or related to cases under title 11.” 28 U.S. C. (1976 ed., Supp. IV). Under the 1978 Act, bankruptcy judges were “vested with of the ‘powers of a court of equity, law, and admiralty,’ ” with only a few limited ex- ceptions. |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | and admiralty,’ ” with only a few limited ex- ceptions. Northern (plurality opinion) (quoting Notwithstanding their expanded jurisdiction and authority, these bankruptcy judges were not afforded the protections of Article —namely, life tenure and a salary that may not be diminished. at In Northern this Court addressed whether bankruptcy judges under the 1978 Act could “constitution- y be vested with jurisdiction to decide [a] state-law contract claim” against an entity not otherwise a party to the proceeding. at 87, n. 0. The Court concluded 6 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON Opinion of the Court that assignment of that claim for resolution by the bank- ruptcy judge “violates Art. of the Constitution.” at 52, 87 ; see (Rehnquist, J., concurring in judgment). The Court distinguished be- tween cases involving so-ced “public rights,” which may be removed from the jurisdiction of Article courts, and cases involving “private rights,” which may not. See at 69–71 ; (Rehnquist, J., concur- ring in judgment). Specificy, the plurality noted that “the restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power, must be distin- guished from the adjudication of state-created private rights,” which belong in an Article court. at 71–72, and n. 26. B Against that historical backdrop, Congress enacted the Bankruptcy Amendments and Federal Judgeship Act of 198—the Act at issue in this case. See 28 U.S. C. et seq. Under the 198 Act, federal district courts have “original and exclusive jurisdiction of cases under title 11,” and may refer to bankruptcy judges any “proceedings arising under title 11 or arising in or related to a case under title 11,” Bankruptcy judges serve 1-year terms subject to removal for cause, (e), and their salaries are set by Congress, §1(a). The 198 Act largely restored the bifurcated jurisdic- tional scheme that existed prior to the 1978 Act. The 198 Act implements that bifurcated scheme by dividing matters that may be referred to the bankruptcy court into two categories: “core” and “non-core” proceedings. See genery It is the bankruptcy court’s responsibility —————— 6 In addition, district courts may also withdraw such matters from the bankruptcy courts for “cause shown.” 7 In using the term “core,” Congress tracked the Northern Cite as: 573 U. S. (201) 7 Opinion of the Court to determine whether each claim before it is core or non- core. cf. Fed. Rule Bkrtcy. Proc. 7012. For core proceedings, the statute contains a nonexhaustive list of examples, including—as relevant here—“proceedings to determine, avoid, or recover fraudulent conveyances.” The statute authorizes bankruptcy judges to “hear and determine” such claims and “enter |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | bankruptcy judges to “hear and determine” such claims and “enter appropri- ate orders and judgments” on them. A final judgment entered in a core proceeding is appealable to the district court, which reviews the judgment under traditional appellate standards, Rule 8013. As for “non-core” proceedings—i.e., proceedings that are “not core” but are “otherwise related to a case under title 11”—the statute authorizes a bankruptcy court to “hear [the] proceeding,” and then “submit proposed find- ings of fact and conclusions of law to the district court.” The district court must then review those proposed findings and conclusions de novo and enter any final orders or judgments. There is one statutory exception to this rule: If parties “consent,” the statute permits the bankruptcy judge “to hear and determine and to enter appropriate orders and judgments” as if the pro- ceeding were core. Put simply: If a matter is core, the statute empowers the bankruptcy judge to enter final judgment on the claim, subject to appellate review by the district court. If a mat- ter is non-core, and the parties have not consented to final adjudication by the bankruptcy court, the bankruptcy judge must propose findings of fact and conclusions of law. Then, the district court must review the proceeding de novo and enter final judgment. —————— plurality’s use of the same term as a description of those claims that fell within the scope of the historical bankruptcy court’s power. See 58 U.S., at 71 (“[T]he restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power, must be distinguished from the adjudication of state-created private rights” (emphasis added)). 8 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON Opinion of the Court C v. Marsh, 56 U. S. confronted an underly- ing conflict between the 198 Act and the requirements of Article In particular, considered a constitutional chenge to the statutory designation of a particular claim as “core.” The bankrupt in that case had filed a common- law counterclaim for tortious interference against a credi- tor to the estate. at Section 157(b)(2)(C), as added by the 198 Act, lists “counterclaims by the estate against persons filing claims against the estate” as a core proceeding, thereby authorizing the bankruptcy court to adjudicate the claim to final judgment. See this page. The respondent in objected that Congress had violated Article by vesting the power to adjudicate the tortious interference counterclaim in bankruptcy court. 56 U. S., at We agreed. at In that circumstance, we held, Congress had improperly vested the Bankruptcy Court with the “ ‘ judicial Power of the United States,’ ” just |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | “ ‘ judicial Power of the United States,’ ” just as in Northern 56 U. S., at (slip op., at 21, 38). Because “[n]o ‘public right’ exception excuse[d] the failure to comply with Article” we concluded that Congress could not confer on the Bankruptcy Court the authority to finy decide the claim. at (slip op., at 21). made clear that some claims labeled by Congress as “core” may not be adjudicated by a bankruptcy court in the manner designated by did not, how- ever, address how the bankruptcy court should proceed under those circumstances. We turn to that question now. The Ninth Circuit held that the fraudulent conveyance claims at issue here are claims—that is, proceedings that are defined as “core” under but may not, as a constitutional matter, be adjudicated as such (at least in Cite as: 573 U. S. (201) 9 Opinion of the Court the absence of consent, see n. See 702 F.3d, at 562. Neither party contests that conclusion. The lower courts, including the Ninth Circuit in this case, have described claims as creating a statutory “gap.” See, By definition, a claim may not be adjudicated to final judgment by the bankruptcy court, as in a typical core proceeding. But the alternative procedure, whereby the bankruptcy court submits proposed findings of fact and conclusions of law, applies only to non-core claims. See Because does not explicitly authorize bankruptcy judges to submit proposed findings of fact and conclusions of law in a core proceeding, the argument goes, created a “gap” in the bankruptcy statute. See That gap purportedly renders the bankruptcy court power- less to act on claims, see Brief for Petitioner 6–8, thus requiring the district court to hear claims in the first instance. We disagree. The statute permits claims to pro- ceed as non-core within the meaning of In partic- ular, the statute contains a severability provision that accounts for decisions, like that invalidate certain applications of the statute: “If any provision of this Act or the application thereof to any person or circumstance is held invalid, the re- mainder of this Act, or the application of that provi- sion to persons or circumstances other than those as to which it is held invalid, is not affected thereby.” 98 Stat. 3, note following 28 U.S. C. The plain text of this severability provision closes the so-ced “gap” created by claims. When a court identifies a claim as a claim, it has necessarily “held invalid” the “application” of —i.e., the “core” label and its attendant procedures—to the litigant’s claim. Note following In that circumstance, the statute |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | the litigant’s claim. Note following In that circumstance, the statute 10 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON Opinion of the Court instructs that “the remainder of th[e] Act is not affected thereby.” That remainder includes which governs non-core proceedings. With the “core” category no longer available for the claim at issue, we look to to determine whether the claim may be adjudi- cated as a non-core claim—specificy, whether it is “not a core proceeding” but is “otherwise related to a case under title 11.” If the claim satisfies the criteria of the bankruptcy court simply treats the claims as non-core: The bankruptcy court should hear the proceeding and submit proposed findings of fact and conclusions of law to the district court for de novo review and entry of judgment. The conclusion that the remainder of the statute may continue to apply to claims accords with our general approach to severability. We ordinarily give effect to the valid portion of a partiy unconstitutional statute so long as it “remains ‘ “fully operative as a law,” ’ ” Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 77, 509 (2010) ), and so long as it is not “ ‘evi- dent’ ” from the statutory text and context that Congress would have preferred no statute at (quoting Alaska Airlines, 80 U.S. 678, 68 (1987)). Neither of those concerns applies here. Thus, may be applied natury to claims. And, EBIA has identified “nothing in the statute’s text or his- torical context” that makes it “evident” that Congress would prefer to suspend claims in limbo. 561 U.S., at 509.8 —————— 8 To the contrary, we noted in that removal of claims from core bankruptcy jurisdiction does not “meaningfully chang[e] the division of labor in the current statute.” 56 U. S., at (slip op., at 37). Accept- ing EBIA’s contention that district courts are required to hear claims in the first instance, see Brief for Petitioner 6–8, would dramaticy alter the division of responsibility set by Congress. Cite as: 573 U. S. (201) 11 Opinion of the Court IV A Now we must determine whether the procedures set forth in apply to the fraudulent conveyance claims at issue in this case. The Court of Appeals held, and we assume without deciding, that the fraudulent conveyance claims in this case are claims. See Part For purposes of this opinion, the “application” of both the “core” label and the procedures of to the trustee’s claims has therefore been “held invalid.” Note following Accordingly, we must decide whether the fraudulent conveyance claims brought by the trustee |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | decide whether the fraudulent conveyance claims brought by the trustee are within the scope of —that is, “not core” proceedings but “otherwise related to a case under title 11.” We hold that this language encompasses the trustee’s claims of fraudulent conveyance. First, the fraudulent conveyance claims in this case are “not core.” The Ninth Circuit held—and no party disputes—that Article does not permit these claims to be treated as “core.” See Part Second, the fraudulent conveyance claims are self-evidently “related to a case under title 11.” At bottom, a fraudulent conveyance claim asserts that property that should have been part of the bankruptcy estate and therefore available for distribu- tion to creditors pursuant to Title 11 was improperly removed. That sort of claim is “related to a case under title 11” under any plausible construction of the statutory text, and no party contends otherwise. See, Celotex 51 U.S. 300, (“Proceedings ‘related to’ the bankruptcy include suits between third parties which have an effect on the bank- ruptcy estate”). Accordingly, because these claims fit comfortably within the category of claims governed by the Bankruptcy Court would have been permit- ted to follow the procedures required by that provision, i.e., to submit proposed findings of fact and conclusions of 12 EXECUTIVE BENEFITS INS. AGENCY v. ARKISON Opinion of the Court law to the District Court to be reviewed de novo. B Although this case did not proceed in precisely that fashion, we affirm nonetheless. A brief procedural history of the case helps explain why. As noted, permits a bankruptcy court to adjudicate a claim to final judgment in two circumstances—in core proceedings, see and in non-core proceedings “with the consent of the parties,” In this case, the Bankruptcy Court entered judgment in favor of the bankruptcy trustee without specifying in its order whether it was acting pursuant to (core) or (2) (non-core with consent). EBIA immediately appealed to the District Court, see but it did not argue that the Bankruptcy Court lacked constitutional authority to grant summary judgment. As a result, the District Court did not analyze whether there was a problem and did not, as some district courts have done, relabel the bankruptcy order as mere proposed findings of fact and conclusions of law. See, In re Parco Merged Media Corp., 89 B.R. 323, (collecting cases). The District Court did, however, review de novo the Bankruptcy Court’s grant of summary judgment for the trustee—a legal question—and issued a reasoned opinion affirming the Bankruptcy Court. The District Court then separately entered judgment in favor of the trustee. See 28 U.S. C. §133(b) |
Justice Thomas | 2,014 | 1 | majority | Executive Benefits Ins. Agency v. Arkison | https://www.courtlistener.com/opinion/2677565/executive-benefits-ins-agency-v-arkison/ | in favor of the trustee. See 28 U.S. C. §133(b) (“[T]he district courts sh have original but not exclusive jurisdiction of civil proceedings related to cases under title 11”). EBIA now objects on constitutional grounds to the Bankruptcy Court’s disposition of the fraudulent convey- ance claims. EBIA contends that it was constitutiony entitled to review of its fraudulent conveyance claims by an Article court regardless of whether the parties consented to adjudication by a bankruptcy court. Brief for Cite as: 573 U. S. (201) 13 Opinion of the Court Petitioner 25–27. In an alternative argument, EBIA asserts that even if the Constitution permitted the Bank- ruptcy Court to adjudicate its claim with the consent of the parties, it did not in fact consent. In light of the procedural posture of this case, however, we need not decide whether EBIA’s contentions are correct on either score. At bottom, EBIA argues that it was enti- tled to have an Article court review de novo and enter judgment on the fraudulent conveyance claims asserted by the trustee. In effect, EBIA received exactly that. The District Court conducted de novo review of the summary judgment claims, concluding in a written opinion that there were no disputed issues of material fact and that the trustee was entitled to judgment as a matter of law. In accordance with its statutory authority over matters related to the bankruptcy, see §133(b), the District Court then separately entered judgment in favor of the trustee. EBIA thus received the same review from the District Court that it would have received if the Bankruptcy Court had treated the fraudulent conveyance claims as non-core proceedings under In short, even if EBIA is correct that the Bankruptcy Court’s entry of judgment was invalid, the District Court’s de novo review and entry of its own valid final judgment cured any error. Cf. Carter v. Kubler, 320 U.S. 23, 28 (193) (bankruptcy commis- sioner’s error was cured after the District Court “made an independent and complete review of the conflicting evidence”). Accordingly, we affirm the judgment of the Court of Appeals. It is so ordered |
Justice Brennan | 1,975 | 13 | dissenting | Reid v. INS | https://www.courtlistener.com/opinion/109217/reid-v-ins/ | In respondent evaded quota restrictions by falsely claiming to be a skilled mechanic. Once in this country, he became the parent of a United States citizen. We found 's deportation barred by 241 (f) of the Immigration and Nationality Act, as added, 8 U.S. C. 1251 (f). In the instant case, petitioners evaded quota restrictions by falsely claiming United *632 States citizenship. After settling here, they too became parents of United States citizens. Yet the Court today finds that 241 (f) is no bar to their deportation. Because I find no material difference between the instant case and I dissent. Section 241 (f) of the Immigration and Nationality Act provides: "The provisions of this section relating to the deportation of aliens within the United States on the ground that they were excludable at the time of entry as aliens who have sought to procure, or have procured visas or other documentation, or entry into the United States by fraud or misrepresentation shall not apply to an alien otherwise admissible at the time of entry who is the spouse, parent, or a child of a United States citizen or of an alien lawfully admitted for permanent residence." In after a full review of the statute and its legislative history, the Court concluded that 241 (f) was intended "not to require that aliens who are close relatives of United States citizens have complied with quota restrictions to escape deportation for their fraud" This conclusion was necessary "to give meaning to the statute in the light of its humanitarian purpose of preventing the breaking up of families composed in part at least of American citizens." Thus governs the instant case. The Court, however, distinguishes on the ground that there deportation proceedings were based on 211 (a) (4) of the Act, 8 U.S. C. 1181 (a) (4) (1964 ed.), which dealt with quota requirements, whereas here deportation is based on 241 (a) (2), which deals with inspection requirements. This distinction is grounded on the argument *633 that 241 (f) tracks 212 (a) (19), 8 U.S. C. 1182 (a) (19), which deals with excludable aliens, and was such an alien. But petitioners in the instant case were also excludable under 212 (a) (19), since they sought "to enter the United States, by fraud." Indeed the Court's entire approach was explicitly rejected in itself: "At the outset it should be noted that even the Government agrees that 241 (f) cannot be applied with strict literalness. Literally, 241 (f) applies only when the alien is charged with entering in violation of 212 (a) (19) of the statute, |
Justice Brennan | 1,975 | 13 | dissenting | Reid v. INS | https://www.courtlistener.com/opinion/109217/reid-v-ins/ | entering in violation of 212 (a) (19) of the statute, which excludes from entry `[a]ny alien who has procured a visa or other documentation by fraud, or by willfully misrepresenting a material fact.' Under this interpretation, an alien who entered by fraud could be deported for having entered with a defective visa or for other documentary irregularities even if he would have been admissible if he had not committed the fraud. The Government concedes that such an interpretation would be inconsistent with the manifest purpose of the section, and the administrative authorities have consistently held that 241 (f) waives any deportation charge that results directly from the misrepresentation regardless of the section of the statute under which the charge was brought, provided that the alien was `otherwise admissible at the time of entry.' " Even if statutory language is unclear any doubt should be resolved in favor of the alien since "deportation is a drastic measure and at times the equivalent of banishment or exile." Fong Haw See also ; Today the Court strains to construe statutory language against the alien. The INS contends that if petitioners were to succeed in this case, "the sky would fall in on the Immigration and Naturalization Service."[1] Apart from the lack of credible support for this dire prediction,[2] if the *635 Immigration and Nationality Act is indeed unworkable, the remedy is for Congress to amend it, not for this Court to distort its language and the cases construing it. |
Justice Stevens | 1,986 | 16 | second_dissenting | Thomas v. Arn | https://www.courtlistener.com/opinion/111545/thomas-v-arn/ | The waiver rule adopted by the United States Court of Appeals for the Sixth Circuit is neither required nor prohibited by the Federal Magistrates Act. As a product of that court's supervisory power, it need not conform to the practice followed in other circuits. Hence, despite the appearance of a conflict among the circuits, the interest in uniform interpretation of federal law is not implicated and this Court might have been well advised simply to deny the petition for certiorari. Since the Court has elected to review the application of the Sixth Circuit's rule, however, I believe it should modify it in one respect. As the Court demonstrates, in most cases it is surely permissible to treat the failure to file timely objections to a magistrate's report as a waiver of the right to review, not only in the district court, but in the court of appeals as well. But our precedents often recognize an exception to waiver rules namely, when a reviewing court decides the merits of an issue even though a procedural default relieved it of the duty to do so. See, e. g., Oklahoma ; On It is for this reason that we may disregard a procedural default in a state trial court if a state appellate court addresses the federal issue. E. g., Ulster County ; In such cases, the reasons for relying on the procedural default as a bar to further review are generally, if not always, outweighed by the interest in having the merits of the issue correctly resolved. A similar exception should be recognized in this case. When the district court elects to exercise its power to review a magistrate's report de novo and renders an opinion resolving an issue on the merits, there is no danger of "sandbagging" the district judge. See ante, at 148. Moreover, if the district judge has concluded that there is enough merit in a claim to warrant careful consideration and explanation despite the litigant's failure to object before the magistrate, the interest in minimizing the risk of error should prevail over the interest in requiring strict compliance with procedural rules. Because the District Court decided the merits of petitioner's claim in this case, I would hold that she has a right to review in the Court of Appeals. To that admittedly limited extent, I respectfully dissent. |
Justice White | 1,980 | 6 | dissenting | United States v. Mitchell | https://www.courtlistener.com/opinion/110233/united-states-v-mitchell/ | In United we held that a statute creates a substantive right enforceable against the United in money damages only if it "`can fairly be *547 interpreted as mandating compensation by the Federal Government for the damage sustained.'" quoting Eastport S. S. The Court today holds that bars a damages suit against the Government by Indian allottees, their Tribe, and their association for breach of fiduciary duties in the management of timber lands allotted under the General Allotment Act of 1887 (Act), as amended, 5 U.S. C. 331 et seq. Because I believe that the Act can fairly be interpreted as mandating compensation, I dissent. The Act could hardly be more explicit as to the status of allotted lands. They are to be held by the United "in trust for the sole use and benefit of the Indian," 5 of the Act, as amended, 5 U.S. C. 348 (emphasis added). The United has here unmistakably assumed the obligation to act as trustee of these lands with the Indian allottees as beneficiaries. The Court holds, however, that the "trust" established by 5 is not a trust as that term is commonly understood, and that Congress had no intention of imposing full fiduciary obligations on the United Congress' purposes, it is said, were narrower: to impose a restraint on alienation by Indian allottees while ensuring immunity from state taxation during the period of the restraint. I do not find this argument convincing. The language of the Act, which is the starting point for all statutory interpretation, Group Life & Health Ins. ; explicitly creates a "trust." This language would surely be a sufficient manifestation of intent to create a trust if the settlor were other than the United See Restatement (Second) of Trusts 3, 4 (1959) (hereinafter Restatement); G. Bogert, The Law of Trusts and Trustees 45 (hereinafter Bogert); 1 A. Scott, The Law of Trusts 3 (hereinafter Scott). The structure *548 created by the Act has all the necessary elements of a common-law trusta trustee (the United ), a beneficiary (the Indian allottees), and a trust corpus (the designated allotment lands). See Restatement Comment h, p. 10. The United has capacity to take and hold property in trust. 95; Scott 95 (discussing the Act). And an essential distinguishing feature of any trust, at common law, was that it entailed a "fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person." Restatement (emphasis added). See 1 Scott5. Hence, if we are |
Justice White | 1,980 | 6 | dissenting | United States v. Mitchell | https://www.courtlistener.com/opinion/110233/united-states-v-mitchell/ | Restatement (emphasis added). See 1 Scott5. Hence, if we are to give the words of the statute their ordinary meaning, as we commonly do when the law does not define a statutory phrase precisely, Group Life & Health Ins. we should find that the trust established by the Act imposes fiduciary obligations on the United as trustee. The legislative history of the Act does not convince me that any narrower reading is required. This statute was enacted against the backdrop of a relationship between the United and the Indian tribes that had long been considered to "resembl[e] that of a ward to his guardian." Cherokee ; see also 4 U.S. 535, ; United ; ; United 64 U.S. 446, (194); United 38 When Congress established a "trust" for the Indian allottees it is not sensible to assume an intent to depart from these well-known fiduciary principles. Rather, as we noted in 41 U.S. 481, the policy of the Act was to "continue the reservation system and the trust status of Indian lands." (Emphasis added.) *549 The Court acknowledges that the Act did create a trust relationship between the United and the allottee. Ante, at 54. It holds, however, that the fiduciary obligations imposed on the United as trustee are very narrow and do not extend to the proper management of Indian timber lands. The lands covered by the Act were mostly agricultural or grazing lands, as to which it was expected that the Indian himself would reside on and manage the allotments. Not until United was it established that forested lands such as those of the Quinault Reservation were subject to allotment under the Act. Hence, it is said, if the Government has fiduciary duties they are solely to ensure nonalienation and immunity from state taxation. This argument takes too narrow a view of the fiduciary duty established by the Act and of the subsequent statutory and administrative developments which clarified and fleshed out that duty. The timberlands of the Quinault Reservation cannot, as a practical matter, be managed by the Indian allottees. In such a case, where management functions must necessarily be performed by the Government, it seems most consistent with the scheme of the Act that the United was to assume fiduciary obligations in the performance of its management functions. Subsequent Congresses have implicitly acknowledged the existence of such obligations. See 5 U.S. C. 466 (instructing the Secretary of the Interior to manage Indian forests on a sustained-yield basis); 33-35 (authorizing the Secretary to grant rights-of-way over Indian trust lands upon payment of just compensation); a (authorizing the |
Justice White | 1,980 | 6 | dissenting | United States v. Mitchell | https://www.courtlistener.com/opinion/110233/united-states-v-mitchell/ | trust lands upon payment of just compensation); a (authorizing the Secretary to manage tribal funds held in trust). The Secretary has promulgated detailed regulations governing the exercise of his powers under these statutes. While I do not say that the Government's fiduciary responsibility necessarily conforms to the exact terms of these statutes and regulations, their existence at least points to the inference that as a matter of statute and administrative practice *550 the Government has accepted some obligations in the management of allotted timberlands. The remaining question is whether the Government has consented to liability in damages for the breach of these obligations. Such liability, in my view, follows naturally from the existence of a trust and of fiduciary duties. It is hornbook law that the trustee is accountable in damages for breaches of trust. See Restatement 05-1; Bogert 86; 3 Scott 05. Moreover, it would interfere with, if not defeat, the purposes of the Act if the allottees were to be remitted to a suit for prospective, equitable relief in the protection of their rights. Absent a retrospective damages remedy, there would be little to deter federal officials from violating their trust duties, at least until the allottees managed to obtain a judicial decree against future breaches of trust. Finally, it is noteworthy that the Department of the Interior, which as the agency charged with administering the Act is entitled to considerable deference in its interpretation of the statute, e. g., Zenith Radio ; apparently disagrees with the position taken by the Solicitor General in this litigation and believes that a money damages remedy should be permitted. See Letter from Departmental Solicitor Krulitz to Assistant Attorney General Moorman, Nov. 1, 1978, reprinted in App. to Brief for Respondents 1a-1a. In sum, I would find that the Act creates a bona fide trust, imposes fiduciary obligations on the United as trustee in the management of allotted timberlands, and provides a damages remedy against the United for breach of these obligations. The Act "`can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.'" United 44 U. S., quoting Eastport S. S. 8 Ct. Cl., at 37 F.d, at In my view, therefore, the *551 Court of Claims had jurisdiction over this action as one founded on an "Act of Congress," 8 U.S. C. 1491, and as one brought by an identifiable group of Indians and "otherwise. cognizable in the Court of Claims," 8 U.S. C. 1505. Accordingly, I respectfully dissent. |
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