The late-term drama officially began with last week’s flurry of opinions and dissents. That pace continues this week. The Supreme Court handed down opinions in five cases, with a sixth case set aside.
Let’s begin with that sixth case. In a divided, unsigned per curiam declaration, SCOTUS affirms by default the lower court ruling in Washington v. US. Justice Kennedy recused himself from the decision, hence the stasis here. As with City of Hays, KS v. Vogt, this case will remain up on the FantasySCOTUS page, but will not be counted in our analysis.
Now, on to the rest.
This case revisits the tolling of statutes of limitations in class actions. It may call to mind previous cases on the same issue, though this one has a few unique twists. Several plaintiffs had previously filed class action cases against China Agritech, under the Private Securities Litigation Reform Act (PSLRA). Both class actions were filed in a timely manner. In both of these instances, though, the District Court denied class certification. Ultimately, plaintiffs settled their individual claims with China Agritech and dismissed their suits.
Respondent Resh filed a new class action against China Agritech, a year and a half after the statute of limitations ran out. Other class members moved to join the class action, but the District Court once again denied class certification. This time, they denied the suit due to untimeliness. The District Court justified this position by pointing out that a denial of class certification does not reset the clock (“toll”) on the statute of limitations for any new class actions. The two prior dismissals only reset the clock for any individual suits that might result. The Ninth Circuit reversed this ruling, though, extending the precedent set by American Pipe Construction Co. v. Utah.
SCOTUS unanimously reverses the Ninth Circuit, reaffirming the District Court’s original position. Under American Pipe, “a putative member of an uncertified class may wait until after the court rules on the certification motion to file an individual claim or move to intervene in the [existing] suit.” This is not what happened in Resh’s case, though. Rather than file an individual suit, Resh sought to litigate a new class action, something neither the current laws, nor American Pipe, allow. Resh and the other respondents wished to file a new class action entirely, and after the statute of limitations had expired.
Ginsburg writes for the whole Court. She points out that if Resh’s suit were allowed to extend the American Pipe rule for class action tolling, it could be tantamount to an indefinite extension of statutes of limitations. Theoretically, Ginsburg writes, one could keep filing class action suits to reset the clock, and even if a suit were denied, the clock reset effectively nullifies a statute of limitations. “Endless tolling of a statute of limitations is not a result envisioned by American Pipe.”
Furthermore, Ginsburg rebuffs Resh’s proposed reliance on the Federal Rules of Civil Procedure. There is no rule that can save Resh’s filing from untimeliness. The Court is similarly unpersuaded by amicus briefs arguing that to not extend American Pipe would sow chaos and clutter in class action litigation writ large.
Sotomayor concurs with the judgment, but only insofar as it relates to claims brought under the PSLRA. In her view, the differences between the PSLRA and the relevant Federal Rule of Civil Procedure make the Court’s ruling only operable under the PSLRA. She proposes a new rule for class action tolling outside the PSLRA context. This rule would distinguish between class action claims denied for suitability reasons, and those denied due to a lead plaintiff’s deficiency, or some other “nonsubstantive” defect.
Petitioners filed a class action suit against Chinese exporters of Vitamin C, alleging price fixing that violated the Sherman Act. The respondent companies, based in China, countered that the price fixing scheme was mandated by their government. This assertion was backed by an official statement from the Chinese Ministry of Commerce on the meaning and interpretation of Chinese domestic law. The District Court in the original case considered this evidence, but did not conclude that the Chinese companies were required to engage in price fixing. They based this decision, in part, on a lack of conclusive evidence.
The Second Circuit reversed the District Court ruling. They believed the District Court erred by denying the Chinese companies’ motion to dismiss the suit. They held that the Ministry of Commerce’s account of Chinese law – and the legality of price fixing – was “reasonable”.
SCOTUS vacates the Second Circuit and remands the case. Although the unanimous Court does not disagree that the Chinese law pertaining to this case may be “reasonable”, they hold that the Court of Appeals overreached by basing its conclusion on the Ministry’s statement, rather than merely considering that statement as part of a wider body of evidence. The Court of Appeals held, relying heavily on the Ministry of Commerce’s statement, that “Chinese law required [the Chinese sellers] to engage in activities in China that constituted antitrust violations here in the United States.”
SCOTUS would not go that far. Essentially, there is a difference between giving “respectful consideration to a foreign government’s submission,” and being bound by those statements. The Second Circuit fell on the wrong side of that difference. In addition, the Second Circuit ignored “other relevant materials” in other precedents, and in the facts of this particular case.
Sveen married Melin, and took out a life insurance policy with Melin as his beneficiary. Sveen and Melin later divorced. Some years later, Sveen died. At some point after the establishment of the original life insurance policy, Minnesota enacted a law automatically nullifying the beneficiary claims of divorced spouses unless otherwise stated. Under this law, Sveen and Melin’s divorce thus nullified Melin’s claim to beneficiary status under Sveen’s life insurance policy. Sveen’s children from a previous marriage became the beneficiaries.
But the law in question did not exist when Sveen took out his policy. And since Sveen never formally revoked Melin’s beneficiary status, even after their divorce, Melin argued that her beneficiary status was unlawfully revoked. Nevertheless, the District Court ruled in favor of Sveen’s children. When the Eighth Circuit reversed the District Court, however, they did so in the belief that retroactively applying the Minnesota law violated the Constitution’s Contracts Clause.
SCOTUS invokes a previously used two-step test for determining if a State law violates the Contracts Clause. First, a party must show that the State law substantially impaired a contractual relationship. If such impairment exists, a State must show that the law was written in an appropriate and reasonable way to advance “a significant and legitimate public purpose.”
In an 8-1 ruling, SCOTUS holds that the Minnesota law fails to show impairment, thus obviating the need to press further into the second step. Kagan, writing for the majority, lays out a common sense explanation of their holding. It is reasonable to assume that, after a divorce, an individual’s beneficiary designation would transfer from their now ex-spouse to other more appropriate beneficiaries. In this case, Sveen’s children. Melin’s arguments fail mainly because someone in Sveen’s position had plenty of time to “reverse the effect of the Minnesota statute with the stroke of a pen.” Nothing about the automatic transfers of beneficiary rights from an ex-spouse to the survivor’s children undermines or extinguishes the decedent’s contractual rights. In addition, several other States have similar laws – allowing the same kind of retroactive application challenged here – on the books. All such laws reflect a long-held common law understanding of these same ideas.
Gorsuch writes a solo dissent. He argues first that Minnesota’s legislature could have put other mechanisms in place to ensure that policyholders are informed of what may happen to their insurance policies after divorce. He also rejects the Court’s seemingly incompatible holding that people are sometimes inattentive to the details of their insurance policies, but also aware enough to know what might happen if they don’t take certain steps.
Finally, Gorsuch offers that Minnesota’s law is not necessarily unconstitutional in general application. But the law (and other laws like it) should not be applied retroactively. The Contracts Clause prevents retroactive application of laws like this, to ensure that people have fair warning of the effects of such laws. Gorsuch here seems to echo the refrain from earlier this term: “Vague laws invite arbitrary power.” In this case, however, no other Justice agrees that this particular Minnesota law is vague in any substantive way.
In another Minnesota case, petitioners argued against a State ban on wearing political apparel at polling places. In the lower courts, petitioners’ First Amendment claims did not succeed. Before SCOTUS, petitioners presented their First Amendment claim challenging Minnesota’s ban.
SCOTUS rules in favor of the petitioners. The Justices hold that Minnesota’s law does serve a permissible objective – keeping the polling place free from political messaging that could influence voters. However, SCOTUS rules against the State, and for the petitioners, because of the wording and application of that rule. The phrase “political apparel” is an overly broad catch-all. In its attempt to establish what is and what is not political messaging, Minnesota creates a confusing rule that leaves too much to the discretion – and potential biases – of election judges.
Roberts writes for the 7-2 majority here. “It is “self-evident” that an indeterminate prohibition carries with it “[t]he opportunity for abuse, especially where [it] has received a virtually open-ended interpretation.” In addition, many other States have similar laws on the books, but their versions of those laws have much clearer and consistent language setting the boundary between acceptable and unacceptable apparel. A law that cannot clearly define what is and is not permissible simply cannot survive scrutiny on First Amendment grounds.
Sotomayor, with Breyer (Dissenting)
Sotomayor would have preferred to certify this case to the Minnesota Supreme Court. A more definitive interpretation is needed for what “political apparel” the Minnesota law bans. This should fall to the State’s highest court, though, not to a federal court. It is “fairly possible” that Minnesota’s courts could find an interpretation of the statute that is constitutional.
This case concerns the National Voter Registration Act (NVRA), and its procedures for removing a voter from voting rolls. An Ohio law uses several pieces of data to determine which registered voters can be removed from voter rolls, and exactly when their removal occurs. Ohio’s law, and other laws like it, don’t just have to conform to the standards of the NVRA, though. A second federal law, the Help America Vote Act (HAVA), adds some clarifying language to how States can and cannot curate their voter rolls.
The Ohio system uses a few different criteria to determine who to remove from a voter roll. First, they use the USPS’s national change-of-address system to create a list of people who have moved and who thus would need to confirm their new addresses for voter records. Then, the State identifies people who haven’t engaged in voter activity for two consecutive years. (“Voter activity” encompasses voting in any primary or election, signing petitions, updating a voting address, and filing a voter registration form.) Those people are sent notices. Only if a voter fails to respond to those notices, and engages in no voter activity for an additional four years, are they then removed from the rolls.
HAVA explains how the failure to vote can set a process in motion to trigger removal of a voter. Explicit in that law, is that no voter “may be removed solely by reason of a failure to vote.”
SCOTUS split 5-4 in this case. Alito writes for the majority that the use of the word solely tells us everything we need to know. A failure to vote is only the first step in a process that takes over four years, and that cannot take less than four years, because another major criterion is the lack of voter activity for two complete two-year election cycles. In this way, HAVA clarifies a previously ambiguous aspect of the NVRA, and both laws combine to provide a system wherein Ohio’s voter registration practices can lawfully exist.
Thomas writes separately to draw further attention to how the respondents’ argument in this case could amount to unconstitutional interference with States’ enforcement of voter qualifications.
Breyer, with Ginsburg, Sotomayor, and Kagan (Dissenting)
Breyer engages in a historical analysis of the kinds of State- and Federal-level laws that have disenfranchised voters over time. The danger with Ohio’s law is that it promotes these same kinds of potentially discriminatory outcomes. Ohio’s law “erects needless hurdles to voting of the kind Congress sought to eliminate by enacting the Registration Act.” It is simply too difficult to determine if a voter should be purged by basing the decision on the USPS mailers. Plenty of people receive mailers that they disregard. Using the return of such cards to determine who is slated for removal from voter rolls – as the majority suggests – is not statutorily significant.
Sotomayor writes briefly to reiterate how Ohio’s intepretation of the NVRA, and the majority’s ruling, contributes to disenfranchisement of minority and low-income individuals.
The FantasySCOTUS Crowd
The Crowd had little trouble this week. In China Agritech, the Court seemed to mainly be cleaning up lingering questions about the extent of the also-unanimous original ruling in American Pipe. And in the Minnesota political apparel case, the Crowd had a premonition about which two Justices might break away from the pack:
Elsewhere, the Crowd members were least confident about Gorsuch’s position in Sveen, yet somewhat vindicated by his lone dissent there. As for the voting rights case in Ohio, this one split the Court along their predictable fault lines:
The ruling in Hebei was the only serious curveball this week. At first glance, it did look like the Court might have been on its way to affirming. Even the syllabus for the case characterizes a certain subtlety from which the Crowd’s inaccuracy likely came:
“A federal court determining foreign law … should accord respectful consideration to a foreign government’s submission.”
So far so good. That phrase supports the position of the Supreme Court – and indeed the entire justice system, generally – of not interfering with the complicated mechanisms of international law. This sentiment may in fact be what the bulk of the Crowd had in mind when they chose “affirm”. However:
“[B]ut the court is not bound to accord conclusive effect to the foreign government’s statements.”
A subtle shift, but ultimately a dispositive one:
Nevertheless, it was a good week for the FantasySCOTUS Crowd, going 4 for 5 with a high Justice Accuracy Rate. In addition, the more slippery and harder-to-track near misses in this week’s cases out of Minnesota were small. And this was a productive week for the Supreme Court on the whole. The month of June usually sees about six opinions per week, and we’ve gotten there despite a slow start to the season. Most crucially to our FantasySCOTUS Crowd is that the accuracy this term has been stellar, no doubt owing to the experience that many of our returning Crowd members bring:
The Crowd is still on pace to outdo all previous years for which we have data. That’s great news for anyone interested in crowd-sourcing, and the wider implications of the work done here at FantasySCOTUS. Be sure to follow us @LexPredict and @MarshallPlus. And you can always join up with the Crowd for free at the main FantasySCOTUS site. We’ll see you next week.