SCOTUS News, April 21st, 2017

Four opinions released this week. We are back at nine Justices. FantasySCOTUS is kicking into high gear as we reach the end of the argument season. Here we go.

Coventry Health Care of Missouri v. Nevils

Coventry and Nevils had an agreement under the FEHBA. After a car accident, Coventry paid Nevils’ medical expenses under this agreement. Nevils then successfully sued the driver who caused the accident. Coventry initiated a lien on the expenses they had already paid for Nevils’ medical care. Nevils paid back these expenses from his settlement with the driver.

Nevils then sued Coventry in Missouri state court. He asserted that Missouri state law bars reimbursements of the kind Coventry levied. The trial court and appeals court both sided with Coventry. They reasoned that the FEHBA agreement between Nevils and Coventry allowed for the reimbursement. The Missouri Supreme Court overruled. They held that a federal act can only supersede state law when there is clear congressional purpose. SCOTUS remanded this case once already, in light of new federal rules established after the original ruling. This time they gave the case their full review.

The Supremacy Clause supersedes any State law that bars subrogation and reimbursement. Despite this, and despite the new clarification from the federal rules update, the Missouri Supreme Court maintained its original ruling on remand. The Supreme Court reversed and remanded. Ginsburg, writing for a unanimous Court, asserts that congressional intent and language is clear. In addition, several other federal acts with nearly identical wording have the same pre-emptive effects as the FEHBA.

Thomas concurred with the judgment. But he takes issue with the possibility that the FEHBA could unlawfully delegate interpretive power to the Executive rather than Congress.

Goodyear Tire v. Haeger

The Haeger family were injured in a mobile home accident. They placed the blame on faulty Goodyear tires. During litigation with Goodyear, the Haegers requested testing data for their faulty tires. Goodyear provided this data, and eventually they settled with the Haegers. The Haegers later discovered that Goodyear withheld some of their testing data. They filed suit, and the district court awarded the Haegers $2.7 million. This figure was meant to cover all of the legal fees incurred after the moment in the original case when Goodyear began withholding information.

This is in contrast to usual procedure, though. Fee awards for misconduct are supposed to be limited to fees incurred as a direct result of the misconduct. The district court held, however, that a fee award can have a temporal component. Plaintiff can recover any fees incurred from the moment in a trial when the misconduct began. In this way, the district court argued, there does not need to be a direct causal link between expenses and sanctionable conduct. The Ninth Circuit upheld this decision, and the fees the district court awarded. Other Circuits have differing views on this, including a dissenting judge from the Ninth Circuit panel.

The Supreme Court granted review, and reversed and remanded. Fee awards due to misconduct must be compensatory, not punitive, in cases like these. Fees specifically cover acts of bad faith, and nothing further. This does establish the very causal link the district court declared unnecessary. SCOTUS rules that the $2.7 million figure cannot be matched with the direct effects of Goodyear’s bad faith. Thus, the district court and the Ninth both used an incorrect legal standard. The Haegers did not show that Goodyear’s non-disclosure of testing data would have had such a large effect on the litigation, or on the original settlement amount.

Manrique v. United States

This case concerns appeals of deferred restitution. A district court sentenced Manrique to a prison term, but deferred setting the amount of a mandatory restitution. Manrique appealed this first judgment. Later, the district court amended their judgment after they set the restitution amount. Manrique did not appeal this second judgment. Instead, he challenged the restitution amount to the Eleventh Circuit. The Eleventh Circuit denied this challenge, because Manrique did not follow procedure and file an appeal of the second judgment.

This case went to the Supreme Court next, and SCOTUS upheld the lower court ruling. First and foremost, they declare that Manrique waited too long to file an appeal related to the second judgment. Additionally, he did not appeal the second judgment, but instead chose to challenge only the amount of restitution ordered. For these reasons, SCOTUS rules that Manrique did not follow proper procedure in filing an appeal of the second judgment. One judgment is discrete and separate from a second judgment, even in the same case. An appeal cannot “spring forward” into further appeals of different judgments, even if they concern the same case.

Ginsburg dissented, joined by Sotomayor. In this dissent, the Justices point out that a court is required to advise a defendant of their right to appeal a sentence. They point out that the court did not so advise Manrique after the amended judgment was handed down. In addition, a clerk in the district court made an error. When they received Manrique’s first appeal request, they transferred it to the court of appeals directly. In this way, they treated this transfer of the appeal as “tantamount to…a second appeal notice”.

Nelson v. Colorado

Nelson, and its sister case Madden v. Colorado, both concern defendants’ rights after vacated convictions. A Colorado state law, known as the “Exoneration Act”, allows the State to retain penalties paid unless and until a separate complaint is filed. The Colorado Court of Appeals concluded, however, that Nelson and Madden were entitled to the money they had paid as part of their convictions, the terms of the Act notwithstanding in this case.

The Colorado Supreme Court reversed, citing the “Exoneration Act” again. They claimed that defendants must file claims under the Act to recoup losses from restitution after a vacated conviction. One Colorado Supreme Court justice dissented, however. This dissenter noted that a defendant with a vacated conviction is presumed innocent and should not be deprived of their money.

SCOTUS reversed the Colorado Supreme Court decision. They stress that the mechanisms of Colorado’s Exoneration Act do not adhere to the language of the Due Process Clause. A convicted defendant is presumed innocent once their conviction is invalidated. This means they are entitled to whatever property they were deprived of by the State. The mechanism of Colorado’s Exoneration Act creates an unacceptable risk of erroneous deprivation of a defendant’s property.

Alito concurred with the judgment, but he arrived at the same conclusion by a diferent road. Thomas, meanwhile, dissented due to ambiguity over whether Nelson and Madden’s claims had sufficient merit under the Due Process Clause.

The Crowd and the Algorithm

The FantasySCOTUS Crowd and the {Marshall}+ Algorithm both had a pretty easy time with Nelson. The Crowd and the Algorithm got Manrique right, but struggled with the spread. This is common with narrow-issue cases, and even the dissenters arrived at their decision due in part to the mitigating factor of the clerical error.


Manrique v. United States

But oh, there was drama this week. FantasySCOTUS predicted a hard affirm of the Ninth Circuit’s ruling in Goodyear. This is probably because the Court limited its decision to the first question, concerning extent of attorney misconduct. They demurred on the second question, whether a client is culpable for an attorney’s bad faith when a court awards fees.

goodyear v. haeger

Goodyear v. Haeger

Meanwhile, {Marshall}+ got the shakes on the Coventry decision. A core constitutional issue – the Supremacy Clause – lay at the heart of this case. That cuts through the sometimes sharp divide between the Court’s conservative members and liberal members. SCOTUS attacked Coventry on the merits of a State challenging a clear federal rule.

coventry v. nevils

Coventry v. Nevils

It is often difficult for both man and machine to account for a little reasonable variance in the 8-member Court’s rulings. With Gorsuch on hand for the last dozen or so cases of the 2016 term, slightly more accurate predictions may avail themselves on the tail end of this year’s session. For now, expect a few more outliers.