The Calm Before the Storm: Weekly Brief for June 22

This week was relatively quiet, especially as the Court nears the end of its term. The Justices decided just two cases: Liu v. SEC (an arcane securities law case) and DHS v. Thuraissigiam (challenging asylum denials in court). They didn’t grant any new cases. Court-watchers enjoyed a brief lull after the tumultuous Title VII and DACA decisions last week, but that lull won’t last long. We’re the unguarded tree in the photo above, facing an impending deluge of 13 major decisions to be handed down over the next few weeks. So as we await the Court’s decisions in matters concerning abortion, Trump’s tax returns, religious liberty, Obamacare, free speech, and the Electoral College (among others), there’s just one thing to say: I hope you enjoyed the calm before the storm.


Statistics

This Week:
Decisions: 2
Cert Grants: 0
Opinions Relating to Orders: 2

O.T. 2019:
Cases Decided: 49
Cases Remaining: 13*
Weeks Left in Term: 1**

* This number does not include cases that were granted and had been set for oral argument in March or April, but were postponed due to COVID-19 and were not rescheduled for the May virtual argument sitting.

** This number reflects the date at which the Supreme Court’s term usually ends (the last week of June). However, O.T. 2019 may end later due to measures the Court took in response to COVID-19.

Monday

Orders:

The Court issued orders first thing Monday morning. It didn’t grant any new cases. One cert denial sparked a dissent from Justice Thomas. The Court turned down Kansas v. Boettger, in which the Kansas Supreme Court set aside two of Mr. Boettger’s criminal convictions. Boettger was twice convicted of “[c]ommit[ting] violence . . . in reckless disregard of the risk of causing . . . fear.” He challenged his convictions, arguing that the Free Speech Clause of the First Amendment protects reckless threats. The Kansas Supreme Court agreed, and the Justices turned down Kansas’ request to reconsider that ruling.

Thomas was the lone member of the Court who voted to review the decision. To him, it’s likely the First Amendment does not protect speech that amounts to reckless threats. In Elonis v. United States (2015), Thomas dissented, concluding that the First Amendment does not protect threats a person makes even without the intention to intimidate. “It appears to follow,” he wrote here, “that threats of violence made in reckless disregard of causing fear may be prohibited.” Thomas also points out that lower courts have divided on this question. Connecticut and Georgia have statutes similar to Kansas’, but their state supreme courts have rejected First Amendment challenges like Boettger’s. For these reasons, Thomas would have heard Boettger’s case.


Opinion:

After the orders list, the Court decided one case:

Liu v. Securities and Exchange Commission
The Securities and Exchange Commission (SEC) is tasked with investigating all potential violations of federal securities laws. In this case, Charles Liu and Xin Wang solicited just shy of $27 million in foreign investment for the construction of a cancer treatment center. But the investors would later realize their funds had gone to a cattle rustler. An SEC investigation found that Liu and Wang diverted $20 million to marketing expenses and salaries, and most of the remaining $7 million to the couple’s personal bank accounts and a company under Wang’s control. Only a small fraction of the $27 million actually went toward the construction of the (sham) cancer treatment center.

The SEC filed suit. A federal district court ruled for it, ordering “disgorgement” of nearly all $27 million. (“Disgorgement” is simply the repaying of illicitly-gained or -used funds.) Liu and Wang appealed, arguing that “disgorgement” is inherently a type of punitive relief under Kokesh v. SEC (2017) and that the SEC is only allowed to seek equitable relief. The SEC countered that a disgorgement award is indeed a form of equitable relief under 15 U.S.C. §78u(d)(5).

Justice Sotomayor, for an 8:1 majority, straddles the fence. She holds that disgorgement counts as equitable relief under §78u(d)(5) as long as it “does not exceed a wrongdoer’s net profits and is awarded for victims.” Everyone but Justice Thomas agreed.

“Equitable relief” is a form of compensatory remedy by which a defendant makes up for the wrong he caused the victims. It dates back to the early common law and English courts of equity. “Punitive relief,” however, is a more severe form of remedy, usually handed down on top of an “equitable” remedy. Think of it like compensatory vs. punitive damages.

To determine whether disgorgement counts as equitable relief under §78u(d)(5), Sotomayor looks to see whether disgorgement “falls into ‘those categories of relief that were typically available in [courts of] equity'” (quoting Mertens v. Hewitt Associates (1993)). She thinks it does.

First, “[e]quity courts have routinely deprived wrongdoers of their net profits from unlawful activity,” Sotomayor says. Though this principle has gone by different names in early works on equity jurisprudence, one thing is clear: “[I]t would be inequitable that [a wrongdoer] should make a profit out of his own wrong” (Root v. Railway Co. (1882)).

Now, what has been the typical scope of an equitable remedy? That which is equal—and no greater than—the wrong done. As the Court held in Tilghman v. Proctor (1888), a wrongdoer should not be ordered to “pay more than a fair compensation to the person wronged” under equitable relief. Sotomayor goes on to cite seven cases since 1946 that reaffirmed the conclusion that disgorgement counts as equitable relief insofar as it does not exceed the amount of ill-gotten gains. Five cases decided between 1854 and 1882 agreed. “By incorporating these longstanding equitable principles into §78u(d)(5),” Sotomayor concludes, “Congress prohibited the SEC from seeking an equitable remedy in excess of a defendant’s net profits from wrongdoing” (emphasis added).

She then takes up Liu and Wang’s Kokesh argument (that disgorgement is principally a kind of punitive relief). Kokesh “expressly declined” to answer that question, Sotomayor points out. In a footnote, Kokesh explained that “[n]othing in this opinion should be interpreted as an opinion on whether courts possess authority to order disgorgement in SEC enforcement proceedings or on whether courts have properly applied disgorgement principles in this context.” (Though it is missing the period at the end.) Moreover, Kokesh dealt with a different securities statute than the one at issue here. This case deals with 15 U.S.C. §78u(d)(5), asking whether disgorgement counts as “equitable relief” under that statute. Kokesh dealt with 28 U.S.C. §2462, asking whether disgorgement is subject to the limitations period in that statute. Two different statues, two different questions, so two different cases. Kokesh has “no bearing” on this case, Sotomayor declares.

Thus, Sotomayor concludes that the SEC may seek disgorgement as a form of equitable relief under 15 U.S.C. §78u(d)(5) as long as it does not exceed the defendant’s net profits. What does this mean for Liu and Wang’s case? Sotomayor sent it back to the Ninth Circuit for it to determine whether the SEC’s disgorgement award conforms to this principle.

Justice Thomas was the lone dissenter. In short, Thomas thinks disgorgement can “never” be a form of equitable relief under §78u(d)(5) because disgorgement is “not a traditional equitable remedy.”

Disgorgement is a “creation of the 20th Century,” Thomas explains. In fact, the word “disgorgement” never appeared in any legal case—state or federal—until 1923. So if the Court defines “equitable relief” based on remedies available in the English Court of Chancery around the time of the nation’s founding, it would follow that disgorgement is not a form of equitable relief.

Now, one might object that while the term “disgorgement” was never used at common law, perhaps courts of equity used the principle of disgorgement as a form of equitable relief. After all, this appears to be Sotomayor’s line of reasoning. But Thomas doesn’t appear to address this distinction. Rather, the crux of Thomas’ argument seems to be that “disgorgement” has no fixed legal definition. In fact, it seems to be a true verb (“to disgorge”) that, over the course of the 20th Century, courts have morphed into a term-of-art noun. It “threatens great mischief” to say such a protean word counts as equitable relief, asserts Thomas. For these reasons, Thomas dissents.

Tuesday–Wednesday

The Court held no proceedings on Tuesday and Wednesday.

Thursday

Opinion:

The Court decided one more case Thursday morning:

Department of Homeland Security v. Thuraissigiam
The Court rejected an as-applied challenge to a provision of federal immigration law, which limits the authority of federal appellate courts to entertain a noncitizens’ habeas corpus challenge to an order denying asylum. Some context is necessary before getting to the Court’s decision (unless you’re familiar with the current process for habeas challenges to asylum denials under federal immigration law).

Under current immigration law, noncitizens who enter the country illegally can be deported (or “removed”). Some of those noncitizens are eligible for “expedited” removal proceedings. However, all noncitizens—even those eligible for expedited removal—have the right to apply for asylum in the U.S. First, the noncitizen must make a preliminary showing to an asylum officer that he has a “credible fear of persecution” if he is returned to his home country. That is, the noncitizen must demonstrate that there is “a significant possibility . . . that [he] could establish eligibility for asylum” (8 U.S.C. §1225(b)(1)(B)(v)). The noncitizen does not have to prove that he is in fact eligible for asylum, only that he is likely to be eligible. If the asylum officer determines the noncitizen has failed to meet his burden of proof, a supervisor reviews the determination (8 CFR §208.30(e)(8)). If the supervisor affirms, the noncitizen can appeal to an immigration judge for de novo review (8 U.S.C. §1225(b)(1)(B)(iii)(III)).

After all of that, the noncitizen has the right to file a writ of habeas corpus (a petition challenging the legality of the noncitizen’s detention). However, Congress has limited the scope of that right in the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). A provision of IIRIRA (8 U.S.C. §§ 1252(e)(2)) outlines the three habeas matters that a federal court may review:

  1. Whether the noncitizen is in fact a noncitizen;
  2. “Whether the [noncitizen] was ordered removed”; and
  3. “Whether the [noncitizen] has already been granted entry [into the U.S.] as a lawful permanent resident, refugee, or asylee.”

Per the statute, these are the only matters a federal court may review in a habeas petition. Neighboring provisions reinforce this limited scope. Courts cannot “review [] whether the [noncitizen] is . . . entitled to any relief from removal” (§1252(e)(5)). And, irrespective of any other federal habeas provision, courts cannot review any other “individual determination” or “claim arising from or relating to the implementation or operation of an order of [expedited] removal” (§1252(a)(2)(A)(i)). This includes an asylum officer or immigration judge’s “determination” that a noncitizen failed to demonstrate a likelihood of eligibility for asylum (§1252(a)(2)(A)(iii)).

Assuming you’ve made it this far, let’s turn to the facts of this case. Vijayakumar Thuraissigiam, a Sri Lankan national, crossed the U.S.’ southern border and made it 25 yards before he was detained by immigration officials. He was placed into expedited removal proceedings, and he applied for asylum. The asylum officer determined Thuraissigiam failed to demonstrate a credible fear of persecution. The officer’s supervisor agreed, and an immigration judge affirmed on de novo review.

Thuraissigiam then applied for habeas relief under §1252. But he did not petition based on one of the three matters provided for above. Nor did his application ask for him to be removed from custody (the point of a habeas application). Instead, he alleged procedural errors in the asylum review process and requested a second opportunity to apply for asylum. A federal district court dismissed his petition, holding that it had no jurisdiction to review it under §1252. Thuraissigiam appealed to the Ninth Circuit, arguing that §1252 violates the Constitution’s Suspension Clause (Art. I §9, cl.2), which states that “[t]he privilege of the writ of habeas corpus shall not be suspended, unless when in cases of rebellion or invasion the public safety may require it.” Interestingly, the Ninth Circuit agreed.

But Justice Alito, writing for the Court’s majority, overturned the Ninth Circuit’s decision. First, he holds for a 7:2 majority that §1252 does not violate Thuraissigiam’s Suspension Clause rights. (Chief Justice Roberts and Justices Thomas, Ginsburg, Breyer, Gorsuch, and Kavanaugh agree.) He then holds for a 5:4 majority that §1252 does not violate the Due Process Clause of the Constitution. (Justices Ginsburg and Breyer did not agree here.)

Alito begins with Thuraissigiam’s Suspension Clause argument. As the Court noted in INS v. St. Cyr (2001), the Clause “protects the writ as it existed in 1789,” the time of the Constitution’s ratification. Oddly, Thuraissigiam doesn’t seek to look beyond St. Cyr‘s scope even though it “dooms” his case, Alito writes. The writ “simply provided a means of contesting the lawfulness of restraint and securing release,” he explains, citing the English common law jurist William Blackstone and the early Supreme Court Justice Joseph Story. Habeas corpus “is the appropriate remedy to ascertain . . . whether any person is rightfully in confinement or not” (quoting Story’s Commentaries on the Constitution (1833)). In other words, if a person who enters the U.S. and is detained by immigration officials is actually a U.S. citizen or a lawful permanent resident, the writ applies with full force. But Thuraissigiam isn’t such a person. Nor is he arguing that his immigration detention is unlawful (it clearly is under current immigration law). And, to Alito, he failed to prove that the writ’s breadth extended to claims to remain in the country or to contest removal from a country. “Such relief might fit an injunction or writ of mandamus,” Alito notes (emphasis added), but not habeas corpus. Thuraissigiam’s caselaw arguments are similarly unpersuasive.

Alito then turns to Thuraissigiam’s Due Process argument, which he rejects. Here Alito loses two Justices (Ginsburg and Breyer), though he still retains a five-Justice majority.

Thuraissigiam argues that, even though he is not a U.S. citizen, he has a due process right to have his preliminary asylum claim reviewed in federal court. Alito disagrees. The Court has long held that due process is met regardless of the procedure Congress creates for immigration adjudication. In Nishimura Ekiu v. United States (1892), the Court held that “the decisions of executive or administrative officers, acting within powers expressly conferred by Congress, are due process of law” when it comes to “foreigners who have never been naturalized, nor acquired any domicil or residence within the United States, nor even been admitted into the country pursuant to law.” Knauff v. Shaughnessy (1950) agreed: “Whatever the procedure authorized by Congress is, it is due process as far as an alien denied entry is concerned.” So too did Landon v. Placensia (1982): “This Court has long held that an alien seeking initial admission to the United States requests a privilege and has no constitutional rights regarding his application, for the power to admit or exclude aliens is a sovereign prerogative.”

Stepping back for a moment, it seems Alito is saying that noncitizens have very limited Constitutional due process rights. He writes:

[A] [noncitizen] in [Thuraissigiam’s] position has only those rights regarding admission that Congress has provided by statute. In [his] case, Congress provided the right to a ‘determin[ation]’ whether he had ‘a significant possibility’ of ‘establish[ing] eligibility for asylum,’ and he was given that right [under] §§1225(b)(1)(B)(ii), (v). Because the Due Process Clause provides nothing more, it does not require review of that determination or how it was made. As applied here, therefore, §1252(e)(2) does not violate due process.

In other words, whatever Congress says goes for noncitizens. Congress could easily violate U.S. citizens’ due process rights if it created a farcical adjudicative system for, say, tort claims. But if Congress ever created such a process for judicial matters relating to immigrants, Alito says it comports with due process by definition. (I’m not saying Congress’ current asylum review process is farcical. All I’m saying is that even if Congress were to change the current process to one that is farcical, Alito seems to say the process would still uphold the due process rights of immigrants ipso facto.)

Anyway, Thuraissigiam advances one (admittedly clever) counterargument. He should be afforded greater due process protections because he made it 25 yards into U.S. territory, as opposed to being apprehended directly at the border. Alito waves it off. The problem with Thuraissigiam’s argument is that it equivocates on what it means to “enter” the U.S. Just because a noncitizen ventures onto U.S. territory does not mean the noncitizen has legally “entered” the United States. The noncitizen may have physically entered the U.S., but legally the noncitizen is treated as an “applicant for admission” (in other words, the noncitizen is in the U.S. illegally). Such a noncitizen has not yet “effected an entry,” Alito says (quoting Zadvydas v. Davis (2001)). To do that, the noncitizen must make it through the immigration courts (or customs offices) and be admitted into the United States.

For these reasons, Alito concludes that neither the Suspension Clause nor the Due Process Clauses, as applied to Thuraissigiam, invalidate Congress’ current process for reviewing habeas challenges to preliminary asylum denials under §1252(e)(2).

Justice Thomas penned a short concurrence. He agrees with Alito’s opinion; he simply wants to explain his own view of the Suspension Clause as the Framers understood it. In short, they understood a suspension of the writ to be a “statute granting the executive the power to detain without bail or trial based on mere suspicion of a crime or dangerousness,” he writes. Since Thomas thinks the IIRIRA is not such a statute, it would not even qualify as a “suspension” of the writ of habeas corpus. Notably, Thomas writes in a footnote that he “express[es] no view on the question whether [Thuraissigiam] is even entitled to the privilege of the writ as an unadmitted [noncitizen].”

Justice Breyer, joined by Justice Ginsburg, filed an opinion concurring in the majority’s judgment. Breyer agrees that §1252(e)(2) does not violate the Suspension Clause as applied to Thuraissigiam. But he would go “no further.” He would not have made “sweeping” statements about the scope of the Suspension Clause as applied to all noncitizens (as Alito sometimes does). Moreover, he would not have touched the Due Process Clause challenge, which Breyer claims “is not directly at issue here.” (Note: The dissent echoes this point. This is a bit confusing; the Ninth Circuit discussed this question, and even though Thuraissigiam did not list it as a “question presented” before the Supreme Court, his briefs devote nearly ten pages to arguing that §1252(e)(2) violates the Due Process Clause.)

Justice Sotomayor (joined by Justice Kagan) wrote a fiery 40-page dissent. Sotomayor would hold that §1252(e)(2) does violate Thuraissigiam’s Suspension Clause rights. In short, she lends far more credence to the contrary post-1789 caselaw that Alito finds inapposite, and she faults the Court for taking up the Due Process issue and answering that question in such sweeping terms.


Conference:

Thursday afternoon, the Court conducted its weekly, private (tele-)conference. The Justices reviewed the petitions on their docket and debated whether to grant review for any of them. Out of an abundance of caution, only Chief Justice Roberts was actually present in the Supreme Court building; the other eight Justices took part in the conference over the phone. We can expect news from this conference in the Court’s orders list next Monday. Some high profile cases the Justices are considering include:

  • Box v. Planned Parenthood of Indiana & Kentucky, Inc. This case challenges an Indiana state abortion law that requires women who seek an abortion to, among other things, undergo a fetal ultrasound eighteen hours before the abortion is performed. The question presented is whether such an ultrasound requirement violates a woman’s Fourteenth Amendment rights.
  • Arlene’s FlowersInc. v. Washington. This case is a mirror-image to that of Masterpiece CakeshopLtd. v. Colorado, on whose merits the Court punted in 2018. The questions before the Court are (1) whether a state violates a floral designer’s Free Exercise and Free Speech rights by forcing her to create custom floral arrangements celebrating same-sex weddings or by acting based on hostility toward her religious beliefs; and (2) whether the Free Exercise Clause’s prohibition on religious hostility applies to the executive branch.
  • Department of Justice v. House Committee on the Judiciary. This case concerns Special Counsel Robert S. Mueller III’s investigation into Russian interference in the 2016 election. The U.S. House of Representatives subpoenaed sealed grand jury materials from the Mueller investigation during the course of President Trump’s impeachment trial. Trump challenged its power to do so. The question for the Court is whether an impeachment trial qualifies as a “judicial proceeding” under the Federal Rules of Criminal Procedure (Rule 6(e)(3)(E)(i)).
  • Hunt v. Board of Regents of the University of New Mexico. This is a First Amendment case which asks whether university disciplinary action for off-campus, political speech violates the Free Speech Clause of the First Amendment.
  • McKesson v. Doe. This is a First Amendment case stemming from a Louisiana protest in which some protesters resorted to violence. The question presented is whether the First Amendment bars a state from suing the leader of the protest for criminal negligence where the leader did not necessarily promote or instigate the violence.
  • Reisman v. Associated Faculties of the University of Maine. This case mixes labor unions with the Free Speech Clause of the First Amendment. The question presented is whether it violates the First Amendment to designate a labor union to represent and speak on behalf of public-sector employees who object to its advocacy.
  • Collins v. Mnuchin. This case concerns a constitutional challenge to the structure of the Federal Housing Finance Agency (FHFA), a mirror-image case to that of Seila Law v. CFPB, the challenge to the structure of the Consumer Financial Protection Bureau. The questions presented in Collins are (1) whether the structure of the FHFA violates the separation of powers, and if so (2) whether the actions of the FHFA must be annulled and the statute creating its structure struck down.
Friday

Friday evening, the Court issued a miscellaneous order in Texas Democratic Party v. Abbott. The case concerns COVID-19 and Democratic initiatives for absentee balloting in the November presidential election. Current state law in Texas gives those aged 65 and older an automatic right to vote by mail-in ballot. Concerned by the ongoing coronavirus pandemic, the Texas Democratic Party sought to extend that right to all Texas voters regardless of age. I presume that, rather than trying to amend the law through the legislative process (Republicans control the Texas state legislature), the Party tried its luck in federal court. It argued that this provision of the Texas election code violates the Twenty-Sixth Amendment.

Interestingly, a federal district court agreed. It issued a preliminary injunction against the law, declaring that “[a]ny eligible Texas voter who seeks to vote by mail in order to avoid transmission of COVID-19 can apply for, receive, and cast an absentee ballot in upcoming elections during the pendency of pandemic circumstances.” Texas appealed, and the Fifth Circuit Court of Appeals stayed (“put on hold”) the preliminary injunction while the case plays out in the Fifth Circuit. The Texas Democratic Party asked the Supreme Court to lift the stay, but the Court turned it down.

No Justices dissented, though Justice Sotomayor issued a brief statement. She effectively elbows the Fifth Circuit, urging it to decide this case on the merits “well in advance” of the November election. But she agrees that this isn’t the time for the Court to address the petition’s “novel questions . . . in the context of an emergency application to vacate a stay of an injunction.” So, the case remains pending in the Fifth Circuit.

The Week Ahead

It’s shaping up to be an exciting end to the term. On Monday, the Court will release an orders list at 9:30am EDT and opinions at 10:00am. More opinions will follow on Tuesday at 10:00am. The Court will hold its next scheduled conference on Wednesday, and it will release more orders on Thursday. Friday is a federal holiday.

With 13 cases still to be decided, don’t bank on the Court releasing all of them next week. Ordinarily the Court decides all cases by July 1; the last time it went into the month of July was 1996. And yes, the Court may schedule more opinion days later next week. But I’m willing to bet we’ll repeat 1996. The ten cases just argued in May include some of the most high-profile and complex legal questions the Court will decide this year, and I doubt the Justices will want to issue half-baked opinions simply for sake of tradition. Plus, 13 decisions (all in big cases) in one week would be astounding. So, my guess is that the Court will decide the three older cases next week: Espinoza v. Montana Dep’t of Revenue (Establishment Clause); Seila Law v. Consumer Financial Protection Bureau (Constitutional challenge to the CFPB’s structure); and June Medical Services v. Russo (abortion). It may also decide a few of the lower-profile cases argued in May. Potential candidates include USPTO v. Booking.com B.V.USAID v. Alliance for Open Society Int’l, and Barr v. American Association of Political Consultants.


Photo Credits: UCSB Undergraduate Institute

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