The High Court Rules No Redress in Nevada Courts for Wrong-Doing in Georgia That "Affects" Persons in Nevada

Today the United States Supreme Court reversed a ruling of the Ninth Circuit.  In Walden v. Fiore, the Court held that “a court in Nevada may [not] exercise personal jurisdiction over a defendant on the basis that he knew his allegedly tortious conduct in Georgia would delay the return of funds to plaintiffs with
connections in Nevada.”  The Court reasoned that “a plaintiff cannot be the only link between the defendant and the forum.”  The Ninth Circuit held that personal jurisdiction in Nevada was proper because the defendant's allegedly tortious actions in Atlanta, Georgia affected persons with a “significant connection” to Nevada.
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The Oklahoma Supreme Court Should Have Read This Blog

Apparently irritated at the Oklahoma Supreme Court, the United States Supreme Court today summarily reversed the Oklahoma Supreme Court decision incorrectly ruling that an arbitrator, rather than the court, must decide whether an arbitration clause in an employment contract was valid.  See this blog's report of the United States Supreme Court's prior decision on this issue here. 

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Obamacare Mostly Constitutional, Says Divided Supreme Court

The much anticipated decision is in.  A divided court upheld the Affordable Care Act, dubbed "Obamacare."
The Supreme Court held that under the Act, Congress did not intend the penalty assessed if individuals did not obtain health insurance to be a tax, but that Congress's intentions were not controlling on the Court as to whether the penalty was actually a tax.  Thus, by ruling that the penalty was not intended to be a tax, the Court held that the Anti-Injunction Act is not implicated.  What this means, is that the Court did not dismiss this case and tell appellants to wait until they have actually paid the penalty before coming back to the Supreme Court and asking for a refund. Rather than having to wait until 2014 to decide the constitutionality of the individual mandate/penalty, the Court chose to dispense with the challenge to the ACA now.
The Court next held that Congress could not impose the individual mandate under the Commerce Clause.  But, the Court held, the Act can be upheld as arising under Congress's taxing authority.  In rejecting the Commerce Clause as authority for the individual mandate, the Court explained that the ACA did not regulate commerce so much as it required individuals to engage in it. So a mandate to purchase broccolli is not the next move for Congress.  This is the slippery slope where the Supreme Court drew its line.  The individual mandate to purchase health insurance is nevertheless constitutional.  In upholding the mandate, the Court explained that the tax was not so large that there is no choice but to purchase health insurance, and that not purchasing insurance has no legal consequences beyond payment of the tax.
The Court struck down the penatly assessed to States that choose not to participate in the expansion of Medicaide as being an unconstiutional use of Congress's spending power.  This the Court ruled however, does not invalidate the remaining provisions of the ACA.

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Arizona's Immigration Law Is Mostly Unconstitutional, Says US Supreme Court

The United States Supreme Court handed down its long anticiated ruling in Arizona v. Untied States, putting at issue Arizona's controversial immigration law, SB 1070, passed in 2010.  The Ninth Circuit struck down the law in its entirety, and Arizona appealed to the US Supreme Court. Today, the US Supreme Court struck down three of four provisions as violating the Supremacy Clause of the US Constitution.
The Arizona law sought to criminalize the failure to comply with federal registration requirements for illegal alieans, and seeking employment or engaging in work in Arizona while being an illegal alien. SB 1070 also gave authority to Arizona law enforcement to arrest without a warrant anyone who the officer had probable cause to believe is an illegal alien, and to stop, detain or arrest to determine a person's immigration status.
The Supremacy Clause of the Constitution has been interpreted to provide that in areas where the federal government intends that its laws occupy the entire subject matter of that law, no state can enact laws that attempt to address that subject matter.  It has long been held that the federal government occupies the entire subject matter of immigration and that states cannot regulate this subject matter.  In striking down the criminal elements and the authority to arrest without a warrant granted by SB 1070, the US Supreme Court pointed out that the federal government has established that illegal alien status is a civil, not criminal matter, and that the federal government has the sole discretion to make such policy decisions regarding immigration and its enforcement.  The Court stated, "Unauthorized workers trying to support their families, for example, likely pose less danger than alien smugglers or aliens who commit a serious crime."  The Court went on to state that the federal government has the power to consider equities in forming policies regarding enforcement of the federal immigration laws.
This particular point gets to the heart of the matter.  Arixona's SB 1070 sought to make criminals of immigrants, who may be hard working, otherwise law abiding residents.  This is not Arizona's call. This is the federal government's call.  The scare tactics employed by Arizona law makers that illegal aliens are all rampant, violent criminals, casts a net that ensnares workers trying to make a living and who make a positiove contribution to society.  Enacting laws based on fear and ignorance harken back to some of the darker moments in human history, and should have no part in this country's democratic society.  Additionally, the Supremacy Clause prevents the 50 states from enacting 50 different sets of immigration laws, as the federal government already has a body of law in place. 
The Court upheld the provision of SB 1070 that authorizes Arizona law enforcement to "make a 'reasonable attempt . . . to determine the immigration status' of any person they stop, detain, or arrest . . ."  The Court emphasized that SB 1070 provided that the "stop and check" provision could not be the result of racial profiling and that communication between federal and state authorities was inherent and imperative. 
Despite holding the challenge to the stop and check provision of SB 1070 as being premature because Arizona courts did not have an opportunity to interpret how it will be enforced, the Court specifically left open future challenges to the stop and check provision based on Arizona's enforcement and interpretation of its law.



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Would You Like Broccoli With That Health Insurance Plan? The Supremes Discuss The Slippery Slope Of ObamaCare

Broccoli, cell phones and burial services, oh my! What will the government force us to buy next? The parade of horribles was the topic du jour at Tuesday's oral argument before the US Supreme Court on the constitutionality of the individual mandate contained in the Affordable Care Act. The Supremes expressed concern over the slippery slope potentially created by the ACA and where the line should be drawn. At issue is whether the individual mandate of the ACA is authorized by the United States Constitution art. 1 sec. 8 clause 3, the Commerce Clause, which gives Congress the power to regulate interstate commerce. The Supreme Court has, over the past 190 years, interpreted the Commerce Clause to allow congress to regulate all sorts of industries, from ship navigation, to the Chicago meat industry, to wheat production for personal use.


Justice Scalia, notorious for his conservative legal opinions, asked the first question of Solicitor General Donald Verrilli, setting the tone for the day. Scalia queried, perhaps disingenuously, why couldn't the federal government just directly address the problems of individual access to health care rather than the individual mandate to purchase health insurance. The answer of course, is that the present Congress will not create a public health care option. Appropriately, Mr. Verrilli did not give this answer, but offered instead that the ACA is in fact addressing the problem directly.


The Justices' questions centered around the concern that if Congress can require individuals to purchase health care, why can't Congress require the purchase of a cell phone, of broccoli, of health club memberships or of funeral services? Verrilli;s answer to these questions pointed out the health care market is different because (a) it is the only market where you can show up without the means to pay and you will still be provided the service at the expense of those who do pay; (b) everyone will eventually need health care and thus everyone is a market participant; (c) the ACA seeks to regulate the health care industry, not the insurance industry, and requires the method of payment for health care be through health insurance; (d) the ACA uses the most efficient method that allows consumer choice among insurance policies; and (e) the ACA does not provide any enforcement powers--if insurance is not purchased, the penalty is not anymore than what one would have paid for the insurance.


The respondents arguing to strike the mandate did not have any easier a time with the Justices. Attorney Paul Clemente, arguing for the respondent 26 states, argued the ACA forces individuals to purchase a product. Clemente argued that defining the market as those who access health care was improper, and that the market being regulated was those that purchased insurance. Clemente suggested it would be constitutional for the ACA instead to only require that insurance be purchased at the point of sale; i.e. only when one gets sick and shows up to the Emergency Room. The Justices focused their questions to Clemente on issues regarding the definition of the market being regualted (insurance versus health care), the fact that uninsured patients already shift the cost of their health care to paying patients, and what difference does it make if the ACA requires the purchase of insurance prior to getting sick or at the time of receiving health care services.


Justice Breyer proposed a hypothetical situation several times to the respondent attorneys, asking, what if "a disease is sweeping the United States, and 40 million people are susceptible, of whom 10 million will die; can't the federal Government say all 40 million get inoculated?" Mr. Clemente avoided answering, which perhaps accounts for Justice Breyer's attempt three more times to get an answer. Justice Breyer then changed the hypothetical to whether the EPA could require all automobiles have anti pollution equipment if it turned out 60% of them caused pollution. Attorney Carvin conceded the commerce clause authorized Congress to enact such a law but pointed out only those who bought automobiles would be required to do so.


The problem with the respondents' argument is they attempt to limit the individuals affected in the market being regulated by the ACA to those purchasing insurance, leading to their protest that Congress is requiring an affirmative purchase of a product that would not otherwise be purchased. To hear the respondents say it, the 40 million uninsured are uninsured by choice, rather than because they cannot afford the premiums, and thus should not be forced to purchase an unwanted product. Justice Ginsberg's comparison of the ACA to the social security system is well taken, albiet, social security is funded by a tax, making it a different animal. The truth is, as many of the Justices pointed out, every person from the time they are born will at some point need to use health care. That is the industry that the ACA targets. The ACA mandates that health care is paid for by insurance, which the respondents concede is a proper Congressional power under the commerce clause. As Justice Kennedy pointed out, "the young [healthy] person is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that s not true in other industries." Thus their participation directly affects the price others will pay not just for insurance, but for health care. Health care costs go up because hospitals are required by federal law to treat those who cannot pay for their services, thus shifting the costs to everyone else. The respondents' solution that those who "choose" not to purchase insurance can be required to purchase it at the time they do need health cares serices, is not only unreasonable and naive, but implausible.

As Mr. Vermilli pointed out, 40 million Americans can not obtain health care insurance because of the cost of the premiums. If a point of sale requirement were placed on these individuals as argued by the respondents, the cost of insurance would essentially be the cost of the health service. Actuarially, the premium you pay is based on some calculus of the chance you will get sick and how much the health care you might need could cost. If someone shows up at the Emergency Room and endeavors to purchase insurance then and there, the chance that you will get sick is 100% because you are currently sick, and the cost is more or less calculable. So, the premium, from an actuarial point of view and the point of view of the insurance company should be the cost of the treatment you are seeking. Which brings us back to the uninsured showing up to the Emergency Room with no means of paying The cost would still be shifted to others with insurance.

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Obama Care Oral Arguments Underway

On Monday, March 26, 2012, oral arguments in front of the United States Supreme Court got underway to hear the legal challenge to the Affordable Care Act enacted by Congress and signed into law by President Obama on March 23, 2010.


The Supreme Court scheduled an unprecedented six hours over three days for oral argument this week after granting certiorari. At issue is the Act's individual mandate to purchase health insurance or pay a tax penalty. two federal appellate courts have upheld the mandate, one declared it unconstitutional and one appellate court declined to decide the issue under the Anti-Injunciton Act, ruling the issue could not be decided until tax payers are actually harmed by having to pay the tax/penalty in 2015.


Monday's oral argument focused mainly on whether the Anti-Injunction Act prohibited the present challenge, and whether the requirement that a tax payer who fails to purchase health insurance is assessed a tax or a penalty, which would dictate whether the AIA applies. There was discussion between the Justices and amicus curiae court appointed counsel Robert A. Long whether the Anti-Injunction Act is jurisdictional, thus robbing the courts of the ability to hear the issue, or directed at the Solicitor General, thus prohibiting the litigants from filing suit.


Nomenclature was an issue regarding whether the assessment is actually a tax or a penalty. Right out of the box, Justice Alito quipped to the Solicitor General for the Department of Justice Donald B. Verrilli, "General Verrilli, today you are arging that the penalty is not a tax. Tomorrow You are going to be back and you will be arguing that the penalty is a tax." When Chief Justice Roberts referred to the assessment as a penalty, attorney for challengers to the Act, Gregory G. Katsas, corrected "taxes, Mr. Chief Justice."


The attorneys were peppered with questions mainly from Ginsberg, Scalia, Sotomayor, Breyer, Roberts and Kegan, with a few questions from Alito and Kennedy. Thomas remained characteristically silent during argument.


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Federal Court, Rather Than Arbitrator, Had Authority to Rule on Enforceability of Arbitration Clause In Employment Agreement

Last week the United States Supreme Court decided a case originating out of Nevada,

Rent-A-Center, West, Inc. v. Jackson, 561 U.S. ___ (2010).  An employee of Rent-A-

Center filed an employment discrimination suit in federal court, and the employer filed a

motion to compel arbitration.  On Certiorari from the Ninth Circuit, the Supreme Court ruled

that under the Federal Arbitration Act, codified in Title 9 of the United States Code (FAA),

the courts could decide the enforceability of an arbitration clause in an employment agreement 

that stated the arbitrator must decide the enforceability of the agreement as a whole,  

whereas only the arbitrator could decide whether the employment agreement as a whole

was enforceable.

In opposing the motion to compel arbitration, Jackson argued the arbitration clause was unconscionable under Nevada law.  The federal trial court dismissed, stating the arbtration clause prevented it from deciding Jackson's unconscionable argument. Jackson appealed to the Ninth Circuit, which reversed, stating the courts decide the threshold question of whether the agreement was enforceable, affirmed the trial court's finding against Jackson on part of his unconscionable argument, and remanding for the trail court to decide the remainder of Jackson's unconscionable argument.

Justice Scalia delivered the opinion, and pointed out that Jackson's challenge was not to the validity of the agreement but to his manifestation of intent to the arbitration clause based on his unconscionability agrument.  Additionally, Jackson's briefs argued the entire agreement was invalid.  Based on those observations, Scalia concluded that Jackson's challenge was to the validity of the agreement as a whole versus the validity of the arbitration clause, and reversed the Ninth Circuit's decision.

Relying on First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), Justice Stevens dissented, reasoning that the arbitration clause at issue did not "clearly and unmistakeably" evince Jackson's assent to arbitration because of his unconscionability argument.  Stevens characterized Scalia's opinion as a "'fantastic' and likely erroneous decision" because it went beyond what the parties asked the Court to decide.  Stevens also asserted that the majority opinion expanded the holding in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), where the challenge was to the validity of the agreement due to fraud in the inducement, and not to the embedded arbitration clause.  Thus, Stevens would have affirmed the Ninth Circuit's decision.

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My Afternoon With Erwin....Chemerinsky, That Is.

During my last minute marathon in December to get all my Continuing Legal Education credits before the year's end, I had the pleasure of landing in a CLE lecture given by Erwin Chemerinsky at the Boyd School of Law. Chemerinsky, is of course a reknowned law school Professor of constitutional law, and is the founding Dean of the University of California at Irvin School of Law. Chemerinsky's unique vocal cadence and his particular brand of humor always makes dry legal subjects sound more interesting. Of course, Chemerinsky's area of law is far from dry; who isn't interested in the nuances of the sexy parts of constitutional law? The CLE did not disappoint as Chemerinsky recapped the most interesting and significant U.S. Supreme Court decisions for 2009. Here are summaries of three of the Supreme Court decisions he discussed that have particular relevance to Nevada.

A Complaint Can No Longer Rely on the Notice Pleading Standard to Avoid Dismissal.
Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). Despite being less than one year old, Ashcroft is on the verge of being the most cited case in history, according to Chemerinsky. The reason it is so important is that the circuit courts are treating Ashcroft as a new standard in pleading requirements. Notice pleading is no longer sufficient to avoid dismissal. The plaintiff must allege facts that make his claim "plausible," not just a recital of the elements, and the reviewing court may draw on common sense and its experience within the context of the allegations to determining plausibility.

Litigants May Not Contribute to the Presiding Judge's Election Campaign.
Caperton v. A.T. Massey Coal Co., 129 S. Ct. 2252 (2009). Where a judge receives substantial campaign contributions from a litigant, and does not recuse herself, due process is violated. Being that Nevada elects its judges, this ruling has the potential to put a monkey wrench in the Nevada Judiciary. As was reported in depth by the Los Angeles Times back in 2005, Nevada is still a relatively small business and legal community, and it is not unheard of for litigants to contribute to a judge's campaign, even to the judge before which they are appearing. Caperton may change that practice. Even better, Nevada may finally adopt another system for choosing judges.

Certiorari Granted To Decide If Second Amendment Applies to State Governments.
McDonald v. City of Chicago, 129 S. Ct. ___ (2009). According to Chemerinsky, between the years 1791 - 2008, not one law was ever invalidated as violating the Second Amendment. Last year the Supreme Court invalidated a gun control law in Washington DC as barred by the Second Amendment. Now the Court will decide if the Second Amendment applies to state and local government.

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U.S. Supreme Court Grants Certiorari to Hear Appeal of Enron CEO's Convictions

On October 13, 2009, the United States Supreme Court granted Certiorari to hear former Enron CEO Jeffrey K. Skilliings' appeal from his conviction of 19 criminal charges stemming from his role in the 2001 collapse of the Fortune 500 company Enron.  Skilling was convicted in 2006 and sentenced to 24 years 4 months in federal prison.

Despite Skilling's repeated requests for a change of venue, a Houston jury convicted Skilling in 2006 of insider trading, conspiracy, five counts of making false statements to auditors and twelve counts of securities fraud.  Skilling's appeal to the Fifth Circuit was denied. Skilling appealed to the Supreme Court and, according to NPR news reports, is claiming that the lower court erred by not granting a change of venue amidst the wide publicity his trial received in Houston, where Enron was located.

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