Legal Docket: Native American territory

NICK EICHER, HOST: It’s Monday morning, and a new work week for The World and Everything in It. Today is the 14th of January, 2019. Good morning to you. I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. Well, the final tally is in for our end-of-year giving drive. And although we’d set a goal of 10,000, we did pull up a little short.

Now, you did hit more than 61 percent of the participation goal we’d set. And several hundred of you contributed into January and those gifts continue to come in, and we’re so grateful.

EICHER: You may remember, we stressed a participation goal and not a dollar goal. We emphasized a gift of any amount and we were trusting God that He would supply our needs.

And here’s what I want you to know, to take away from this drive: God met our needs in December in the 6,100 gifts you gave! We are essentially ON TRACK to hit budget.

We have plans to grow, and that’s going to have to await more resources to do that. But we’re essentially on budget, and I don’t want to understate the importance of that.

REICHARD: We did add resources to strengthen this program and our other efforts at WORLD this year—and the year-end drive did yield some impressive increases year-over-year. Your WORLD Mover participation increased 15.7 percent this year. That’s a solid increase. In dollars, you gave 12.3 percent more this year than last.

EICHER: We owe you a debt of gratitude, and our pledge to keep working hard to deliver this program to you every single day. So thanks very much!

REICHARD: Yes, so, so thankful.

Well, I’ve got a full load on the Legal Docket today and need to report on a couple of Supreme Court rulings. Both of these were unanimous rulings.

First, arbitration. The question was when two parties sign an arbitration agreement, and there’s a dispute as to whether something is subject to arbitration in the first place, who decides? The arbitrator or a judge?

Under applicable law, if parties agreed to let an arbitrator decide that threshold question, then the arbitrator can decide it. No need for a court to step in. Doesn’t matter whether one party believes the request to arbitrate is groundless.

EICHER: The second ruling makes clear that lawyer fees in court for social security cases are capped at 25 percent. That cap does not apply to work a lawyer does before the Social Security Administration.

OK, Mary. You warned us over the holidays that you were going to fly through some cases to catch up with December arguments. And I see here in the docket you weren’t kidding around. Four arguments today?

REICHARD: Ambitious, I know. Here goes:

Case one (Carpenter v Murphy): the rights of Native Americans.

Now, this is a recurring theme at the Supreme Court from previous years—and this year. This term alone the court has taken on questions of tax burdens on tribes and hunting rights.

This third dispute started in 1999 with a brutal murder on a dirt road in McIntosh County, Oklahoma. Patrick Murphy killed his girlfriend’s former lover in a drunken and jealous rage. The state court sentenced Murphy to death for killing the man. But the key to remember is this is a state court sentence. That part’s important.

EICHER: Yes, important because Murphy argues his case should have been tried in federal court. A law passed in 1885 called the Major Crimes Act says murder prosecutions by Native Americans in “Indian country” have to be prosecuted in the federal courts.

Both Murphy and his victim were members of the Muskogee Creek Nation. The murder took place within the boundaries of the reservation laid out under a treaty back in 1866.

REICHARD: But what exactly is “Indian country” in this day and age?

Congress passed no law explicitly to abolish the Creek reservation in Oklahoma.

Or, in legal terms, “disestablish” it.

But the state argued that’s not necessary. Evidence shows it has been disestablished.

Justice Sonia Sotomayor pushed back. Have a listen to the exchange between Justice Sotomayor and the state’s lawyer Lisa Blatt.

SOTOMAYOR: Exactly when did it do this? What’s the exact date?

BLATT: I mean, our position is it was done by statehood. Our position is more fundamentally that we don’t have to give you a state, a date—

SOTOMAYOR: But at statehood, the tribe was still in existence.  Shortly thereafter, Congress says it’s not going to disemember it. And tribal members still owned property. They were getting property, and it was only after that that the government began to — it wasn’t even that it took the land away from the Indians; that through trickery and deceit, they were permitted to sell off their lands, but I’m trying to figure out exactly when.

BLATT: Sure. So again we don’t have to give you a date. Rome did not fall in a day. We know it fell by 476, but it was sacked several times before that.

Or, as the Native American news source Indian Country Today termed it: “bureaucratic genocide, bit by bit.”

Here’s a bit of history. In the first half of the 19th Century, the federal government forced the Creek, Choctaw, Chickasaw, Cherokee, and Seminole tribes, among others, to move to Oklahoma. They had to leave what’s now mostly Georgia and Alabama. Thousands died from exposure, disease, and starvation in that series of forced migrations. These migrations we know as The Trail of Tears.

Today, the Muscogee Creek Nation is headquartered in Okmulgee, Oklahoma. More than 86,000 people are citizens.

The Tenth Circuit appeals court reaffirmed the nation’s status as a reservation in 2017. Unless the Supreme Court overturns it, this means the Creek Nation retains jurisdiction over tribal citizens.

And now back to the case: That means Patrick Murphy gets a new trial. Remember, he’s on death row.

This is consequential.

Murphy’s lawyer countered the state’s warning that thousands of criminals will demand new trials and other sky-will-fall scenarios, should the High Court affirm the reservation exists.

Two tools of the law are in conflict here: law and history.

Justice Brett Kavanaugh was well aware of that as he questioned Murphy’s lawyer Ian Gershengorn.

KAVANAUGH: The historical practice for a century has been against you. And stability is a critical value in judicial decision-making, and we would be departing from that and creating a great deal of turmoil. And so why shouldn’t the historical practice, the contemporaneous understanding, the 100 years, all the practical implications say leave well enough alone here?

A bit later, Gershengorn answered him: look to the words of Congress.

GERSHENGORN: It was land set aside for the use and residents of the tribe.  Congress repeatedly referred to it as a reservation. It’s noted in our brief.  In the 1866 treaty, the Creek reservation. In the 1866 Cherokee treaty, the Creek reservation. In the 1873 statute, authorizes the secretary to negotiate a cession of the Creek reservation. Congress chose precisely the words that don’t disestablish when it acted.

The Department of Justice sided with Oklahoma in this case. Both emphasize that ruling in favor of Murphy jeopardizes the state’s authority over half the state.

If the High Court upholds the court below, it isn’t as though half of Oklahoma goes away. It’ll mean members of the tribe will have tribal courts and federal courts handling cases, and perhaps other tweaks to the overall governance of the tribe and the state.

OK, how’m I doing on time? That one needed lots of background.

The rest of these, I’ll sprint.

Case two: Lorenzo v. Securities and Exchange Commission. This one’s a fraud case. The question is whether an investment banker who knowingly emailed misrepresentations to investors is guilty of all parts of a certain SEC rule.

Francis Lorenzo didn’t create the fraudulent statements, and his boss directed him to send them—and he did. But does that make him guilty of being part of a fraudulent scheme?

Now listen for this: Lorenzo’s lawyer is going to run into a bit of a buzzsaw. And it’s not complicated to figure out why: When a guy is a crook as far as other parts of a law, it’s really tough to get a lot of sympathy when that same guy tries splitting hairs. You’ll hear an exchange beginning with Justice Elena Kagan and Lorenzo’s lawyer Robert Heim.

KAGAN: He fit within that language. He engaged in an act that operated as a fraud.

HEIM: Well, Justice Kagan, our view is that you can’t take that language in a vacuum. You have to consider in the context of the statutory framework that Congress has put into place for it.

Very lawyerly.

But Justice Stephen Breyer, as he so often does, calls attention to the backdrop.

BREYER: I thought he sent his email around to people and said this company, which he knew was worthless from their filing, has $10 million in assets, which he knew wasn’t true, and also had $43 million other to back it up, which he knew wasn’t true.

And his defense was, well, ‘I only sent it because my boss told me …’ And so, fine, then he’s not the maker.  But it seems pretty bad … . Maybe he didn’t make the statement, but he was sure a big deal participant.

HEIM: Yes, Justice Breyer. And—and to be clear, Mr. Lorenzo acknowledged in the record at the trial that he made a mistake.

A “mistake?” Isn’t that when you inadvertently write down “3” when you heard “4?” I think Heim makes a mistake here and I don’t think that’s going to convince at least five justices to hand Lorenzo a win.

But I’ve been wrong before!

Case three: Taxes, government employees, and fair treatment.

James Dawson mostly worked as a U.S. Marshal. His state of West Virginia exempts certain state and local employees such as firefighters from paying state taxes on their retirement income. But the state does tax Dawson’s federal U.S. marshal retirement. He says that’s not fair.

Crucially, he says West Virginia is violating federal law. Listen here as his lawyer, Lawrence Rosenberg, cites the Chief Justice from 1819 John Marshall for another reason:

ROSENBERG: In McCulloch v. Maryland, the court said that, in general, we don’t want to be micromanaging all the details of state taxation.

SCOTUSblog pointed out that case is far better known for something else: the line, “the power to tax is the power to destroy.”

This idea seemed to resonate with the justices. Pity West Virginia state solicitor general Lindsay See. She faced a bench of resolute-looking faces. Have a listen to Justice Breyer.

BREYER: But what you say is, let’s look at the state plan here and let’s look at the federal plan. So you’re saying they’re the same people. They do the same thing. Is there discrimination? And you just seem to me to say:  No, but the other side says, hey, they get a tax break and we don’t. Now that sounds like discrimination. I mean, it may be justified, or whatever it is. But the question is, is there discrimination? How do you explain that?

West Virginia’s lawyer tried to get the justices to look beyond who signs the check and instead parse job duties.

If Dawson wins, which I think he will, I think you can expect claims galore from other retired federal employees in West Virginia.

Case four, final case: If you sue an employer for lost wages and you win, should the employer also pay employment taxes on the award?

Michael Loos worked for BNSF Railway until 2012, when his boss fired him, citing absenteeism. Well, Loos suffered an injury on the job and that’s what kept him at home. Loos sued and a jury awarded him $30,000 in lost wages and $11,000 for medical expenses.

The company wants to offset that $30,000 in lost wages by the amount Loos would owe in taxes.

Listen to this exchange, starting with Justice Neil Gorsuch followed by an unusually blunt lawyer for the company, Lisa Blatt. (You heard her earlier in the Native American case.)

GORSUCH: I think of it as the compensation that an -­ an employer voluntarily gives the employee.  So not just the hourly wage, but the sick time, the vacation time might be included as part of the package,  for the services when you are present, I include that payment. I think of a judgment of a court for negligence get — awarded involuntarily against the employer’s consent as something very different.  What’s wrong with that?

BLATT: Okay.  I don’t want to call it simplistic, but I do think it’s wrong.

GORSUCH: Go ahead.

BLATT: Okay.  Here’s why.  I mean, there’s absolutely nothing in the statute that makes anything that you said relevant. It just has to be a payment for services rendered.

The Railway points to risk that its retirement system might fail if the court rules against it.

The lawyer for Loos hinted at a nefarious motive on the part of the company: the railway wants to save some money with labels here. If injured workers settle out of court, the settlement money can be called “pain and suffering” money and not “lost wages” money. And then the company could avoid paying employment taxes.

I didn’t hear any clear majority leaning either direction on this one.

And that’s this week’s really fast Legal Docket!

(AP Photo/Alex Brandon) People wait in line to hear arguments before the Supreme Court, Tuesday, Jan. 8, 2019, in Washington. 

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