By: Nicholas Fortuna, November 28, 2023

The Supreme Court issued an ethics code on November 13 to stem criticism after a series of revelations about expensive gifts, luxury travel, payment of private school tuition, and a real property transaction benefiting some of the Justices. The code does not specify how the rules will be enforced or by whom.

For years there has been a push to impose an ethical code on Supreme Court Justices. It came to a head in April, when ProPublica, an independent, non-profit newsroom that produces investigative journalism in the public interest, chronicled years of private jet and yacht excursions paid by a high-profile Republican donor, Harlan Crow, for Justice Clarence Thomas. We learned that private school tuition for Justice Thomas’s grand nephew was paid for by Crow. He also purchased Justice Thomas’s mother’s house to facilitate his mother’s continued use of it.

After ProPublica’s revelations, Politico reported that Justice Neil Gorsuch did not identify the purchaser who bought a 40-acre plot of land co-owned by the Justice. The purchaser turned out to be a member of the law firm, Greenberg Traurig, that has had numerous cases before the court.

In June, ProPublica revealed that a luxury fishing expedition in Alaska for Justice Samuel Alito was paid for by Republican donors.

In July, The Associated Press uncovered that Justice Sonia Sotomayor allegedly used court staff to schedule speaking engagements related to her literary work to pitch sales of the Justice’s books.

It seems that the Supreme Court Justices confused the nomenclature “Supreme” to mean they are above it all, and they should not be bound by ethics, instead of what it is – the pragmatic end to legal proceedings. The Supreme Court is nothing more than the final stop in litigation. Once the case is decided by the Supreme Court, it is over. Nothing about the Supreme Court’s position as the last word on a case or controversy suggests that its decisions are of a particular quality or that the members of the Court are competent to fulfill the role they occupy. The arrogance of the Justices believing that they have supreme legal minds led to the situation we find ourselves in – Justices of the Supreme Court acting as if the rules should not apply to them.

The Justices’ comments prefacing the code make it clear that they think their actions should not be questioned. In fact, they state that the reason they are issuing this toothless code is because the perception is that the Justices of the Court “regard themselves as unrestricted by ethical rules.” Is it the public’s misunderstanding or the Justices sense that the rules don’t apply to them that explains accepting gifts, money for private school tuition, luxury travel, etc. from people with business or interests before the Court?

What the Justices did with the issuance of their “code of ethics” is an old trick practiced by industries that are trying to thwart governmental regulation: make a show that the industry will police themselves to convince government regulators that there is no need for regulation. Except in this case, there is no attempt by the Court to police the behavior of individual Justices. Cynically, the Justices issued a series of fuzzy rules that each Justice should consider. There is no enforcement mechanism or oversight. Nothing meaningful was enacted to curb the kinds of abuses recently reported. If someone with business before the court wants to buy a relative of a Justice a house, it seems that is okay.

The code does not place specific restrictions on gifts, travel, or real estate deals. It cautions justices that they should not, leaving open that they may, take part in activities that “detract from the dignity of the justice’s office,” “interfere with performance of the justice’s official duties,” “reflect adversely on the justice’s impartiality.” In other words, feel free to continue as before.

What is needed is real reform, an ethics code that will control the Justices’ behavior. Simply, bind the Justices to the code of ethics all lower court judges must follow. In addition, implement an approach to governing the Court that disabuses the Justices of their belief in their own supremacy, such as term limits, replacing Justices with conflicts on a particular case with a judge from the Court of Appeals, limiting the Court to an even number of Justices to encourage incremental decision making, and dividing the court evenly between liberal and conservative lawyers. Without real change, the Court will continue to see its reputation, legitimacy, and place within our Constitutional system eroded.

By: Paula Lopez, November 16, 2023

A California federal court in the case Lee Evans, et al  v. Cardlytics, Inc., et al (Docket No. 23-cv-00606) ruled that Cardlytics, Inc., a company incorporated in Delaware with a headquarters in Atlanta, could not establish the existence of diversity jurisdiction in support of removal of an employment action from California state court to federal court.

Two former employees of Cardlytics filed an action asserting claims for, inter alia, breach of contract, breach of implied covenant of good faith and fair dealing, wrongful termination, and retaliation. After Defendants removed the case to federal court under 28 U.S.C § 1332, claiming diversity jurisdiction, Plaintiffs filed a motion to remand the case back to state court.

Removal of an action to federal court based on diversity jurisdiction requires “complete diversity,” which necessitates a showing that each defendant and plaintiff is a citizen of a different state. The party seeking removal bears the burden of establishing that removal is proper. For diversity purposes, a corporation is considered a citizen of the state where it is incorporated and where it maintains its headquarters (a/k/a its principal place of business). In removing the case to federal court, Defendants had taken the position that because Cardlytics’ headquarters is located in Atlanta, Georgia, there is complete diversity with Plaintiffs, who reside in California. Plaintiffs, however, took the position that because the majority of Cardlytics’ leadership team works remotely from California, its principal place of business is located in California, not Georgia.

The court’s analysis in Cardlytics relied heavily on the Supreme Court’s holding in Hertz Corp. v. Friend, 559 U.S. 77 (2010), which identified a corporation’s principal place of business as its “nerve center,” which is the location where the “direction, control, and coordination” of the corporation’s business activities occurs. In applying the Supreme Court’s analysis in Hertz to determine where Cardlytics’ “nerve center” is located, the court focused on the location of Cardlytics’ leadership team, consisting of seven corporate officers. Central to the court’s decision was the fact that of the seven officers, only two reside in Atlanta, while four of the officers reside in California, with two of the four being the CEO and COO of the company.

The court determined that the CEO and COO are the two officers with primary decision-making authority over the corporation’s business affairs. Though the court did not go so far as to rule that California is the location of the corporation’s “nerve center”, it did find that Cardlytics failed to meet its burden to show that removal is proper where the decision-making authority of the officers residing in California is greater than the decision-making authority of those located in Atlanta, and remanded the case back to state court.

Cardlytics provides an example of when an employees’ work location can be pivotal in determining the location from where a business is deemed to operate.  The location from where a company’s employees work can significantly impact the legal rights and obligations of the corporation.  The court’s analysis in Cardlytics highlights the effect that remote work and the fluidity that permeates today’s corporate framework can have on established legal principles.

 

Contributed by Megan Muoio, July 30, 2020

The Supreme Court’s October 2019 term came to an end on July 9, 2020. During this momentous term, the Court seated hotly contested Associate Justice Brett Kavanaugh, Chief Justice John Roberts oversaw the impeachment trial of President Donald J. Trump, and the Court issued decisions in many consequential cases. The July 9th decision day was the latest ending of a Supreme Court term since 1988. The Supreme Court issued opinions in three closely watched cases which were argued virtually in May 2020 due to the COVID-19 pandemic.

Trump v. Vance involved Trump’s challenge to a subpoena duces tecum issued by Manhattan District Attorney Cyrus Vance seeking Trump’s financial records. The United States District Court for the Southern District and the Second Circuit Court of Appeals both rejected the President’s request to block the subpoena. On appeal to the Supreme Court, Trump argued that a sitting President is categorically immune to a criminal grand jury subpoena or, alternatively, that a higher standard should apply in his circumstance. By a majority of 7-2, the Supreme Court disagreed. The majority opinion, written by Chief Justice John Roberts, rejected Trump’s argument that the President is too busy to respond to state criminal subpoenas. The majority also did not credit Trump’s argument that permitting the enforcement of the subpoena by Vance would subject the Office of the President to harassment from district attorneys around the country. The Court sent the matter back to the District Court, where Trump will be able to raise challenges to the breadth and scope of the subpoena. On July 17, 2020, Vance successfully petitioned the Supreme Court for its order to go into effect immediately so that the subpoena could be resolved quickly. Although the matter may be resolved prior to the 2020 Presidential election, it is unlikely that any documents produced will be made public before November.

In a second case involving the President, the Court issued another 7-2 opinion in Trump v. Mazars, which involved subpoenas issued by committees in the U.S. House of Representatives on Trump’s personal accountant. The Mazars case came to the Supreme Court on appeal from the U.S. Court of Appeals for the District of Columbia and was consolidated with another Congressional subpoena case on appeal from the Second Circuit, Trump v. Deutsche Bank. Chief Justice John Roberts again wrote for the majority, holding that a sitting President is not entitled to a higher standard of review when his personal records are sought by Congressional subpoena, as Trump had argued. Instead, the Court held that the review of a Congressional subpoena should include “a careful analysis that takes adequate account of the separation of powers principles at stake, including both the significant legislative interests of Congress and the ‘unique position’ of the President.” In performing this analysis, the reviewing court should consider whether the information could be sought elsewhere, whether the subpoena is as limited in scope as possible, whether Congress can demonstrate that the subpoena advances a legitimate legislative purpose, and what burden the subpoena places on the Office of the President. The Court then sent the matter back to the lower courts for consideration of those factors, which is unlikely to be completed before the Presidential election in November.

And finally, in McGirt v. Oklahoma, the Court held that a large portion of northeastern Oklahoma remains a reservation for the Muscogee (Creek) Nation, thereby depriving the State of Oklahoma of jurisdiction over crimes committed there by Native Americans. James McGirt, a member of the Seminole Nation of Oklahoma, was tried and convicted in Oklahoma State Court for sexual offenses committed on the reservation. McGirt appealed his conviction, arguing that the federal government had not disestablished the reservation and, therefore, Oklahoma did not have jurisdiction over his crimes. The majority opinion, penned by Associate Justice Neil Gorsuch and joined by the four liberal Justices, rejected the State of Oklahoma’s arguments that the reservation was disestablished by a variety of non-specific federal laws or Oklahoma’s practice of allotment. The Court also rejected Oklahoma’s argument that the history and demographics of Oklahoma demonstrated the disestablishment of the reservation, deeming that argument “substituting stories for statutes” and preferencing the “rule of the strong” over the rule of law. Instead, the Court held that only Congress holds the power to disestablish a Native American reservation and that “[b]ecause Congress has not said otherwise, we hold the government to its word.” Finally, the Court rejected Oklahoma’s claim that such a decision would destabilize the criminal justice system in Oklahoma and subject Oklahoma to numerous appeals on behalf of Native American defendants tried in state court for crimes committed on tribal lands.

The Court will be recessed until the first Monday in October for the start of the October 2020 term. At that time, they will hear arguments in a number of highly-anticipated cases, including: continued challenges to the Affordable Care Act; a First Amendment challenge to the City of Philadelphia’s requirement that foster care agencies not discriminate on the basis of sexual orientation; and a criminal case seeking to further refine what a “seizure” is for purposes of the Fourth Amendment’s prohibition against unreasonable searches and seizures.

Contributed by Megan Muoio, July 14, 2020

On July, 8, 2020, the Supreme Court of the United States handed down a 7-2 decision in Little Sisters of the Poor v. Pennsylvania, a case involving whether private employers with religious or moral objections could be required to provide birth control coverage under the Affordable Care Act (ACA). This case was consolidated with Trump v. Pennsylvania because they both addressed the same issue.

Enacted by Congress in 2010, the ACA required that health plans provide coverage for “additional preventive care and screenings” for women and authorized the Health Resources and Services Administration (HRSA), a division of the Department of Health and Human Services, to issue guidelines to implement that provision. The resulting guidelines required employers to provide FDA-approved birth control at no cost to women covered by their plan. In 2013, the HRSA promulgated subsequent guidelines that exempted houses of worship and provided an opt-out process for religious nonprofits. (Thereafter, in 2014, the Court applied the Religious Freedom Restoration Act (RFRA) to invalidate the birth control mandate as applied to a corporation owned by a religious family in Hobby Lobby v. Burwell.)

In 2017, the Trump administration expanded the ACA’s exemption from the birth control mandate to include private employers with religious or moral objections. In response, the Commonwealth of Pennsylvania asked the United States District Court for the Eastern District of Pennsylvania to block the implementation of the exemption nationwide based on the provisions of the ACA and the Administrative Procedure Act (APA). They were granted a temporary injunction, which was upheld by the Third Circuit Court of Appeals.

The Supreme Court reversed the Third Circuit in a 7-2 decision authored by Associate Justice Clarence Thomas. The majority held first that, in granting HHS the authority to promulgate rules to provide coverage for “additional preventive care and screenings,” the ACA gave HRSA broad discretion, including the discretion to create exemptions. Justice Thomas noted that, had Congress wished to specifically provide for birth control coverage, it could have done so. Because the ACA gave the HRSA authority to permit exemptions to the birth control mandate, the majority declined to address whether the RFRA required such an exemption. The majority also held that the agency complied with the APA in promulgating the exception.

In a number of concurring opinions, the Justices demonstrated their ideological divide. The concurring opinion filed by Associate Justices Samuel Alito and Neil Gorsuch agreed with the conclusion of the majority but would have held that the RFRA also required the exemption from the birth control mandate. In contrast, the concurring opinion filed by Associate Justices Elena Kagan and Stephen Breyer in which they agreed with the majority based the language of the ACA but reasoned that, on remand to the District Court, it was likely that the exemption would be found to be arbitrary and capricious in violation of the APA.

In another decision handed down the same day, Our Lady of Guadalupe School v. Morrissey-Berru, a 7-2 majority of the Court held that lay teachers who provide religious instruction as part of their “core function” at Catholic elementary schools are barred from suing their employers for employment discrimination. The majority decision was written by Associate Justice Samuel Alito.

The case involves the “ministerial exception,” a doctrine which grew out of the right of religious institutions to select clerical leaders without government interference. In 2012, the Supreme Court in Hosanna-Tabor Lutheran Church and School v. EEOC held that a Lutheran church and school could not be sued by an employee who was a minister and engaged in religious instruction in the course of her employment.

In Morrisey-Berru, the Court took up the issue of two lay teachers who engaged in both secular and religious instruction. The first plaintiff was a teacher who sued her Catholic elementary school employer for terminating her on the basis of age. The second plaintiff, also a Catholic elementary school teacher, sued her employer because she alleged that she was terminated because she had breast cancer. Both cases were thrown out at the federal district court level due to the application of the ministerial exception and appealed to the Ninth Circuit Court of Appeals, and then to the Supreme Court.

In the majority opinion, Justice Alito rejected a rigid test for whether the teachers were ministerial employees. He reasoned that, although the teachers were not designated as ministers and had less religious training than teachers in previous cases, their core function was teaching religion. Associate Justices Clarence Thomas and Neil Gorsuch filed a concurring opinion, agreeing with the conclusion on the basis that the Court should defer to any ministerial label placed on an employee by a religious organization. The dissenting justices, Associate Justices Ruth Bader Ginsburg and Sonya Sotomayor, disagreed with the conclusion on the basis that the teachers were primarily secular teachers, lacked religious training, and “were not even required to be Catholic,” therefore did not fall under the ministerial exception.

Contributed by Megan Muoio, June 23, 2020

On Monday, June 15, 2020, the Supreme Court of the United States, in a 6-3 decision, handed down one of the most significant employment discrimination cases in recent history, holding that Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment on the basis of sex extends Title VII protection to gay and transgender employees. The decision was made in the case Bostock v. Clayton County, Georgia, an appeal from a decision of the U.S. Court of Appeals for the Eleventh Circuit.

Gerald Bostock was a child-welfare-services coordinator for Clayton County, Georgia who had been terminated for conduct “unbecoming” of a county employee after he began participating in a gay recreational softball league. The Eleventh Circuit found that Title VII did not bar Bostock’s termination because of his sexual orientation. On appeal to the Supreme Court, Bostock was consolidated with two other Title VII cases – Altitude Express, Inc. et al. v. Zarda et. al. on appeal from the U.S. Court of Appeals for the Second Circuit, and R.G. & G.R. Harris Funeral Homes Inc. v. Equal Opportunity Employment Commission et al. on appeal from the U.S. Court of Appeals for the Sixth Circuit. In Zarda, the Second Circuit found that Altitude Express, a skydiving company, had violated Title VII when it had terminated employee Donald Zarda after he mentioned to a client that he was gay. In Harris, the Sixth Circuit permitted the EEOC to proceed with a Title VII claim by Aimee Stephens, a trans woman, who had been terminated by her employer on the basis of her gender identity.

In the majority opinion, Justice Neil Gorsuch wrote that Title VII’s prohibition against discrimination “on the basis of sex” necessarily precluded discrimination against gay and transgender individuals. In each of the cases before the Court, the employee was terminated “for traits or actions it would not have questioned in members of a different sex.” Stated another way, Justice Gorsuch reasoned that if an employer terminates a male employee because he is attracted to men but would not have terminated a female employee who was attracted to men, the employer has made a determination on the basis of the male employee’s sex in violation of Title VII.

Justice Gorsuch, along with the five Justices who concurred with the majority opinion, disregarded employers’ arguments that the legislative intent of Congress in passing Title VII was not to address discrimination against the LGBTQ community. Because the plain language of Title VII was unambiguous, there was no need to address the historical basis for the enactment of Title VII or dissect its legislative history. He concluded that, despite the fact that few people in 1964 may have expected Title VII to apply to discrimination on the basis of sexual orientation or gender identity, “we should not dare to admit that it follows ineluctably from the statutory text.”

Finally, Justice Gorsuch dismissed the concerns raised by the dissenting Justices of the Supreme Court – Justice Samuel Alito, Justice Clarence Thomas, and Justice Brett Kavanaugh – that the Court’s ruling would open a pandora’s box of related employment issues, such as work dress codes or employee bathrooms, and implicate similar provisions in other federal statutes, because those issues were not before the Court. He likewise disregarded arguments about employers’ contentions that the ruling would infringe on the free exercise of their religious beliefs, pointing out that none of the employers in the three cases before the Court raised claims based on U.S. Constitution’s First Amendment free exercise of religion clause or Religious Freedom Restoration Act. The Court’s unwillingness to engage on these issues sets up future clashes before the Court, as it will inevitably address religious employers’ claims in future cases.

For employers in New York, who are currently barred from making employment decisions based on employees’ sexual orientation or gender identity due to the New York Human Rights Law, the application of Title VII to LGBTQ employees will not require a change in any employment policies. However, for those employers in the 22 states that did not provide full employment protection to LGBTQ employees, they will be required to immediately revise their employment practices to comply with the Supreme Court’s ruling.

Also last week at the Supreme Court, President Donald Trump’s attempt to end the Deferred Action for Childhood Arrivals (DACA) program was thwarted in Department of Homeland Security v. Regents of the University of California. In a 5-4 decision written by Chief Justice John Roberts, the Court held that the Department of Homeland Security failed to comply with the Administrative Procedure Act when it attempted to end the DACA program in 2017. The federal government will have another opportunity to end the program, although it is unlikely that any such action will be successfully carried about before the election in November.

In the conclusion of a busy week at the Court, the Justices declined to grant petitions for certiorari in two hot-button areas. First, the Court declined to take up any of the three cases involving police officer’s qualified immunity against civil suits. In light of the ongoing protests related to the killing of George Floyd, those interested in limiting police officer immunity were hopeful that the Court would reexamine its precedent in Pearson v. Callaghan. However, the Court, hesitant to wade into any ongoing controversy, denied all three petitions.Second, the Court declined to take up any of the ten petitions involving the Second Amendment right to bear arms. Each of the petitions involved state law that limited gun rights and, in light of the denials, each law will remain on the books.