The Law School Magazine  ·  Winter 2014 : Features

Moritz professors preview Supreme Court term

By - Winter 2014
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“The last term was a blockbuster term. It is a very exciting time to be a lawyer. This term promises some of the same excitement,” Dean Alan C. Michaels said. Several professors at The Ohio State University Moritz College of Law sat down to preview cases in their areas of expertise.

McCutcheon v. Federal Election Commission

Four years ago, the Supreme Court opened the floodgates to corporate political spending with its decision in Citizens United. In that case, the court held unconstitutional a federal law prohibiting campaign expenditures from corporate treasuries. Since then, the nation’s seen the rise of SuperPACs and other organizations allowed to make unlimited campaign expenditures, often without disclosure of where their money is coming from.

In McCutcheon, the court will consider the aggregate contribution limits to candidates, parties, and PACs. Under federal laws enacted in 1974 and revised in 2002, there are limits on the amount an individual may contribute in each federal election cycle to different types of entities. In 2013-14, an individual may contribute up to $2,600 to a single federal candidate; $32,400 per year can be donated to any political committee set up by a national political party; $10,000 per year can be donated to any political committee set up by a state or local political party; and $5,000 per year can go to any other political committee — including non-party PACs.

The total, or aggregate, amount that any one individual can donate for the two years of the current cycle is $123,200. Of that total, $48,600 can be donated to federal candidates, and $74,600 can go to PACs and parties. 

“Campaign finance law has received unprecedented attention in the last few years, especially since Citizens United was decided in January 2010,” said Daniel P. Tokaji, the Robert M. Duncan/Jones Day Professor of Law and senior fellow at Election Law@Moritz. “Right now, contributions can be regulated, but independent expenditures can’t be. The basis for this distinction is the Supreme Court’s view that contributions are more likely to lead to corruption than expenditures, and that spending limits can’t be justified by the interest in promoting equality. The ultimate result is a greater proportion of political money coming from outside groups, as opposed to candidates and parties.”

In the last election cycle, 2011-12, the aggregate limits on contributions to candidates and parties prevented plaintiff Shaun McCutcheon from going forward with a plan to contribute to 28 different federal candidates (all within the base limit individually), and from donating to the Republican National Committee and its committees helping GOP candidates for Senate and House seats.

“The question in McCutcheon is whether aggregate limits can be justified as a means to prevent corruption,” said Tokaji. “Past decisions have allowed contribution limits that are closely drawn to prevent corruption, but the Roberts court has defined corruption very narrowly, as a quid pro quo – a contribution made in exchange for a political favor. And Citizens United took equality off the table, as a rationale that can ever justify spending limits. ”

The court upheld the contribution limits in 1976 when it decided Buckley v. Valeo. The defendant, the Federal Election Commission, urged the court to dispose of McCutcheon without briefing and oral argument, contending the decision in Buckley settled the constitutionality of aggregate limits on donations and arguing that nothing has changed in campaign finance law or later decisions to alter the previously decided case. The court rejected that argument, and the case was argued in October.

“Even though our democracy is premised on the idea that rich and poor alike should all have an equal voice, equality has become the Voldemort of campaign finance law,” said Tokaji. “It is the idea that must not be named, if any regulation is to survive constitutional scrutiny. The result is that, as long as the current Supreme Court sits, we are likely to see the brick-by-brick dismantling of our campaign finance laws. The question is how big a brick McCutcheon will be.”

Daimler AG v. Bauman

This case is one of general personal jurisdiction. In it, the court will address not only whether general jurisdiction lies over a corporation that does substantial business in a state but is neither incorporated nor has its principal place of business there, but also whether the contacts of a corporate subsidiary can be attributed to  a foreign parent corporation for purposes of this analysis.

“If you care about your clients, you care about this case,” said Arthur F. Greenbaum, the James W. Shocknessy Professor of Law. “This case will have the most impact of any case this term on clients and law practice. These issues are hard and very hotly contested.”

In 1976, the president of Argentina was overthrown, resulting in the Dirty War, when the military declared war on political dissidents. Daimler operated a facility in Argentina, and the company often identified political enemies of the new government. These enemies were often beaten, murdered, or just disappeared. A subsidiary of Daimler operates in California and distributes Mercedes Benz cars throughout the state. The survivors and their families are attempting to sue Daimler in California courts. The U.S. Court of Appeals for the Ninth Circuit allowed the lawsuit to go forward by attributing the contacts of the subsidiary to the parent.

“In the personal jurisdiction area, the Supreme Court has emphasized the idea that defendants should be able to plan around where they will be subject to lawsuits,” Greenbaum said. “But, should a company be able to avoid jurisdiction by manipulating its corporate structure, here by outsourcing its distribution chain to a subsidiary corporation tightly under its control, rather than having the parent distribute the product directly in the forum?”

Walden v. Fiore

Walden is a case of personal jurisdiction in federal courts that many think could have large implications.

The case involves two professional gamblers who hit it big in Puerto Rico and were on their way home to Nevada, via a layover in Atlanta. A local officer, who was a deputized Drug Enforcement Agent, noticed their loot and confiscated the $97,000 in cash, filing a false affidavit in the process. The gamblers left for home without their winnings, which were finally returned after much delay. The gamblers are now suing the federal agent for an intentional tort and want to bring the case in Nevada, not Georgia.

“There has been a lot of overreaction to the Ninth Circuit’s opinion in this case,” Greenbaum said. “The sky is not falling, despite the protestations of the U.S. government, the Chamber of Commerce, and others in their briefs that the Ninth Circuit is opening up a floodgate of litigation against law enforcement officials, among others, who act in one state knowing that the acts will have an impact in the other. That is not what the Ninth Circuit test does. The case provides a vehicle for the court to clarify the test it set forth in Calder for when actions taken in one state are expressly aimed at another warranting jurisdiction in the target state.”

Schuette v. Coalition to Defend Affirmative Action

Last year, at the end of the term, the court decided the affirmative action in higher education admissions case, Fisher v. Texas. Schuette is also an affirmative action case involving higher education admissions, this time involving the state of Michigan.

“This is not Fisher 2.0,” Professor Christopher J. Walker said. “This case involves a very narrow, not often-used, principle of constitutional law – the political restructuring doctrine.”

In 2003, the court upheld the University of Michigan’s use of race as a factor in law school admissions. In response, Michigan voters in 2006 passed Proposal 2, a ballot initiative that banned the use of race as a factor in higher education admissions and other areas. A similar proposition passed in California in the mid-1990s.

“This case is not another challenge to the constitutionality of the use of affirmative action,” Walker said. “That is not the question. The question is whether a state can change the process for which it makes such decisions in a way that negatively or positively affects race.”

In the past, the board of regents at various Michigan universities made decisions relating to affirmative action. If citizens did not like the decisions made by the regents, they could vote them out.

“By passing the amendment that bans affirmative action, the decisions are no longer being made at the board level but would require another constitutional amendment,” Walker said.

The U.S. Court of Appeals for the Sixth Circuit, sitting en banc, found the process a violation of the 14th Amendment. The majority concluded the question was “the constitutionality of a state amendment that alters the process by which supporters of permissible race-conscious admissions policies may seek to enact those policies.”  

This is a case about the political process, and about whether racial minorities can be denied the power to try to persuade college officials to adopt programs that would benefit those minorities and were found constitutional, the Sixth Circuit noted. The majority concluded that Proposal 2 made it harder for minorities to get state government even to consider adopting race-conscious programs, thus making the political process itself unequal. 

Environmental Protection Agency v. EME Homer City Generation

For more than 40 years, the Environmental Protection Agency has attempted to regulate air pollution as it drifts from one state to another.

“The Clean Air Act is a bit of a beast,” Professor Cinnamon Carlarne said. “This case implicates complex questions of environmental law and administrative law.”

The Clean Air Act requires states to create State Implementation Plans (SIPS) that detail not only how the state will bring its own air quality into compliance with federal standards but also, pursuant to the “Good Neighbor Provisions of the Statute,” how it will prevent pollution that “contribute[s] significantly” to air quality problems in downwind states. If a state fails to submit a SIP or if the EPA rejects it, the EPA is required to put in place a Federal Implementation Plan (FIP) to ensure compliance with the relevant standard until the time that the state submits a new or revised SIP. Over the years, the EPA has crafted multiple regulatory regimes to ensure compliance with the good neighbor provisions of the statute and, thus, curb cross-state air pollution.

Following a series of early but limited efforts, the EPA made its first real stab at developing a regulatory regime for cross-state air pollution. This effort, the 2005 Clean Air Act Interstate Rule (CAIR), was challenged and ultimately rejected by the D.C. Circuit (although the rule was left in place while the EPA developed a replacement rule). The D.C. Circuit struck down CAIR in 2008, in large part because the EPA had proposed an interstate trading program that failed to ensure that each upwind state controlled its own “significant contribution” to downwind pollution. 

After the D.C. Circuit rejected CAIR, the EPA went back to the drawing board and developed the rule at issue in EPA v. EME Homer City Generation L.P. (consolidated with American Lung Association v. EME Homer City Generation L.P.), the Cross State Air Pollution Rule, more commonly known as the Transport Rule. In key part, the Transport Rule identifies 28 upwind states that emit excessive quantities of certain pollutants, develops a market-based strategy for reducing emissions based on modeling of each state’s contributions and taking into account economic efficiency, and, then based on prior findings that the states had failed to adopt adequate SIPs to control relevant pollutants, establishes federal implementation plans to do so.

“The EPA took the D.C. Circuit’s critique of CAIR and used it to craft the new Transport Rule and, thus, they thought they had a viable rule,” Carlarne said. “But, they were overturned yet again by the D.C. Circuit.”

The Supreme Court is now set to review the D.C. Circuit’s rejection of the Transport Rule. The EPA argues the D.C. Circuit exceeded its jurisdiction and erred on the merits of the case. The outcome of this case is critical not only to the future of the Transport Rule and, thus, EPA’s efforts to address cross-state air pollution, but also to future efforts on the part of the EPA to use market-based mechanisms as central components in complex regulatory regimes.

National Labor Relations Board v. Noel Canning

The court also will take up a question of presidential power this term when it addresses recess appointments.

For several years, the National Labor Relations Board had not operated at full strength because its appointees were stuck in the approval process. The board, which is comprised of five members, operated with just three from March 2010 through December 2011. At that point, the board dropped to two members, which meant it lacked a quorum and was essentially unable to decide cases. President Obama appointed three new members during a U.S. Senate recess.

Under the Recess Appointments Clause, the president may “fill up all vacancies that may happen during the recess of the Senate.” Recess appointees serve until the end of the next session of the Senate, unless they receive Senate confirmation in the interim.

“There are really two questions here: What is a ‘recess?’ What is a vacancy that ‘happens during a recess?’ ” said Peter M. Shane, the Jacob E. Davis and Jacob E. Davis II Chair in Law. “The court could really decide this six different ways.”

The U.S. Court of Appeals for the District of Columbia held the appointments unconstitutional. Its decision concluded that only a vacancy that first occurs during a recess could be filled with a recess appointment.

“Since the 1820s the executive branch has held the position that the vacancy did not have to occur first during a recess,” Shane said. “The D.C. Circuit did not have to go as far as they did in its opinion. Even conservative scholars do not think it is right.”

The more debated point over the years has surrounded the question of when the Senate is in recess. In recent years, senators sometimes have gone to great lengths to avoid being in recess and susceptible to recess appointments. In the case of the NLRB, the refusal of the House of Representatives to consent to a prolonged adjournment of the Senate had led the Senate, at the start of the second session of the 112th Congress, to meet pro forma every third day. The NLRB appointments were made on a day they were not meeting.  

The Supreme Court will confront two questions: Does a period of adjournment that occurs during a session of the Senate count as a “recess,” permitting a recess appointment, or was President Obama entitled to make recess appointments only during the period of adjournment between the first and second Senate sessions of the 112th Congress? Second, if the president is entitled to make recess appointments during periods of adjournment in the midst of a Senate session, is a three-day period of adjournment long enough to count as a “recess?”

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