Legal Docket - When does temporary mean permanent?

MARY REICHARD, HOST: It’s Monday morning and here we are for another week of The World and Everything in It. It’s April 26th, 2021 and we’re glad you’re along with us today! Good morning. I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. It’s time for Legal Docket.

The U.S. Supreme Court handed down three opinions last week.

First, a 6-3 conservative majority decision on minors convicted of capital murder. The decision holds that before imposing on a minor a sentence of life without parole, states have no obligation to make a specific finding of permanent incorrigibility in the offender.

The offender Brett Jones was 15 when he killed his grandfather. Jones challenged his sentence of life without parole because the judge did not make a separate, factual finding that Jones is permanently incorrigible.

Jones wanted a new trial to determine this character issue.

But during oral argument, Justice Samuel Alito—in this exchange with Jones’s lawyer—hinted at the eventual ruling.

ALITO: This is fascinating. You want to take us and you want us to take the courts of this country into very deep theological and psychological waters.

The court declined to wade into those deep waters and found that the sentencing judge considered factors related to incorrigibility.

That was sufficient to meet constitutional standards.

A bitter dissent from the three liberal-leaning justices said the opinion is an abrupt break from precedent and gets the analysis wrong.

REICHARD: Now for the second opinion, this one unanimous. The high court ruled you can dispute the validity of an administrative law judge even after the agency first hears the case.

Here, individuals denied social security disability benefits challenged the way the administrative judge earned his appointment to the bench. The Appointments Clause of Article II of the U.S. Constitution says certain officers must be appointed by the President, a court, or the head of the agency. The judge in this case was not appointed in those ways.

The government argued they’d objected to the judge too late in the process.

Justice Brett Kavanaugh foreshadowed the eventual ruling in March with this question to the government lawyer:

KAVANAUGH: If you were to lose, what’s your preferred approach? [LAUGHTER]

It was a splatter of concurring opinions. Four justices agreed in total, while various combinations of other justices agreed with parts of the opinion’s reasoning but not other parts. Yet all 9 justices agreed in the final judgment and handed victory to the claimants.

EICHER: And our final opinion, also unanimous in a case against the FTC—the Federal Trade Commission—and its power to seek money restitution. It’s a highly technical and specific decision on which part of law the commission must use to recover restitution. The case involves companies that engaged in deceptive practices. FTC cited a law that specifically authorizes injunctions, nothing else.

The court pointed out the FTC can seek money restitution on behalf of consumers under other parts of the law just not what the commission cited.

REICHARD: Well, you’ve heard the three opinions, and now you’ll hear about three oral arguments.

So hang on! We’re gonna move fast!

First, a class-action dispute. It’s about procedure in the appellate courts. Sounds esoteric, yet procedure does matter.

This dispute arose more than two decades ago. That’s when the City of San Antonio (Texas) on behalf of other municipalities sued a bunch of online travel companies. Think Priceline, Orbitz, Hotels.com, others like them.

EICHER: The city sued because these online companies paid taxes only on the wholesale rate they negotiated with the hotels. They didn’t pay taxes on the retail price consumers paid that includes service fees.

Like any government hunting for more money, the city of course seeks to tax the higher dollar amount.

The case bounced around for years until the booking companies finally won. Now the dispute winnows down to who has to pay the whopping $2 million dollar appellate court costs?

REICHARD: The default rule in this country is that each side pays its own legal costs. But appellate cases have different rules.

The question winnowed down even further to whether district courts have the discretion to reduce those appellate cost awards when asked. And also, when does an objection have to be brought up in the first place?

Some justices focused on the text of the rule in question. Justice Neil Gorsuch put it like this to the lawyer for the cities:

GORSUCH: It’s in the rule. You know it’s coming. Or you’re on notice that it’s coming. This is going to be taxable against you, absent the court of appeals saying otherwise. Now maybe you didn’t get the embossed invitation. But the rule’s there. And you had four opportunities by my count to raise it. Why should we be concerned?

But other justices thought it’s unreasonable to ask a party to object to costs before they even know they’re going to lose.

So law and order versus practicalities. Sometimes those things overlap. Either way, this one lacks discrete ideological and philosophical dividing lines, and so, as far as I can tell, this one’s a toss up.

This next case involves a couple from El Salvador who entered the United States unlawfully in the 1990s.

Years later in 2001, devastating earthquakes shook El Salvador. The United States then designated El Salvadorian nationals as qualifying for Temporary Protected Status. TPS, as it’s called, is a program that allows individuals the law defines as aliens to stay in the United States if their countries face war or natural disasters.

These people can avoid deportation for a while and legally hold a job in the meantime.

The couple applied for that program, obtained TPS status, and have maintained it ever since.

Years after that, they applied to adjust their status to lawful permanent residence, so that they could get “green cards.” Those give authorization to permanently live and work in the United States.

But the government denied their applications, because lawful permanent residence is based upon being properly admitted to the United States in the first place.

The government says TPS status doesn’t create a proper admittance.

One lawyer was making a point about TPS when Justice Brett Kavanaugh interrupted him.

HUSTON: But I think that it is the defining characteristic of Temporary Protected Status …

KAVANAUGH: Is that it’s not temporary!

HUSTON: Well …

The couple argues having TPS status should satisfy any “admission” requirement.

Of the 400,000 people with Temporary Protected Status, half have been in the United States for at least 20 years. But as the government’s brief pointed out, it’s understandable that Congress deals more leniently with people who come into the country via the traditional route the law provides.

Several justices wondered why they should intervene here at all. It’s up to Congress to fix immigration law.

As the Wall Street Journal put it, “The dereliction here is on Capitol Hill, since a better immigration policy would include a compromise that lets Mr. Sanchez (the husband) stay in America. (He got his day in court). What he needs is his day in Congress.”

Well, we started with a class action, and we’ll end with it as well.

Here, shareholders filed a class action against Goldman Sachs Group. That’s an investment and financial services company. Shareholders allege that Goldman Sachs misrepresented its ability to fend off conflicts of interest.

In short, shareholders allege securities fraud.

What happened is this: Goldman Sachs allowed a hedge fund to bundle mortgages into bonds, knowing the hedge fund had bet the planned investments would fail. And they did, spectacularly: to the tune of $1 billion dollars. In favor of the hedge fund. That those who’d invested in the mortgages had to pay.

The legal issue at hand is a language problem. The company told investors it would ensure integrity with pretty vague language.

For example: “Our clients’ interests always come first.”

Justice Samuel Alito sounded quite frustrated in this exchange with lawyer for Goldman Sachs, Kannon Shanmugam:

ALITO: You now disclaim in your brief the argument that a statement in itself can be so bland and innocuous and uninformative that there can’t be reliance. That’s what I’m asking about. Do you really want to say that?

SHANMUGAM: Well, I think what we’re saying, Justice Alito, is that the more generic a statement is, the less likely it is to have price impact...

Price impact. Economic terms.

You know, I appreciated Justice Stephen Breyer’s humility here. He shows as he has in the past a willingness to admit when he doesn’t understand something. He asks for help, as he does here, in an exchange with Shanmugam, for Goldman Sachs.

BREYER: Now if I have time, I’d like to know the difference in materiality and price impact. I put it in my mind and get it for a while and then I lose it. So what is it, in your opinion?

SHANMUGAM: I think I can answer that in a sentence because I know time is short. Materiality focuses on what a hypothetical reasonable investor would care about.

Price impact focuses on what actually happened.

BREYER: OK, got it. Thank you.

Gaining understanding before rendering judgment. Nice.

I’m going to do likewise and say, this is a very complicated case I’ll wait to explain more fully after the justices sort it out.

And that’s this week’s Legal Docket.

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