The Supreme Court returned to the national spotlight Monday, launching its fall session with a pair of closely watched oral arguments that could foreshadow a term as important as the last one.
The courtroom was full as the justices convened, in part because of the importance of the oral arguments scheduled for the session – but also, perhaps, because it gave the public its first glimpse of the entire court after a summer of reports and rumors about strife between the justices triggered by the landmark decision in the Affordable Care Act cases.
The Court heard two oral arguments (reported on elsewhere in the newsletter) and issued an 88-page orders list, acting on hundreds of cases that piled up during the recess. Some of the cases acted on:
The justices apparently have some unfinished business from last term’s blockbuster healthcare decision. The Court on Monday directed the government to respond to a petition for rehearing filed by Liberty University, the Jerry Falwell-founded institution in Virginia.
Liberty University was one of four main challengers to the healthcare law last term. However, Liberty University v. Geithner was the only case in which a lower federal appellate court — the U.S. Court of Appeals for the 4th Circuit — held that the Anti-Injunction Act (AIA), barring pre-enforcement tax challenges, applied to block the challenge from going forward. The Supreme Court ruled that the AIA does not apply in its final decision in NFIB v. Sebelius.
“When the Supreme Court ruled that the AIA does not apply, that was a ruling in our favor,” said Mathew Staver of Liberty Counsel, who represented Liberty University in the high court. In a petition for rehearing, Staver asked the justices to grant the petition and vacate the 4th Circuit’s ruling so that the case can go forward on issues that the Supreme Court did not decide.
Liberty University wants to pursue two claims against the healthcare law: challenges to the law’s employer mandate to provide employee health insurance under the commerce, necessary and proper, tax and spending clauses, and challenges to the individual and employer mandates under the equal protection and First Amendment religion clauses.
“I’m very pleased with the Court’s decision to direct the government to respond to our rehearing petition,” said Staver. “I think it’s a good sign for our case. I don’t see that there is any legitimate reason to oppose the petition because otherwise you have the oddity of this happening: the 4th Circuit saying the AIA applies and is not overturned or vacated, and you have the Supreme Court saying it doesn’t apply. Those two decisions are in conflict.”
A national push urging the U.S. Supreme Court to review allegations of excessive punishment and judicial misconduct in the prosecution of an Iowa businessman failed Monday when the high court declined to hear the case.
Lawyers for businessman Sholom Rubashkin, who is serving a 27-year term for bank fraud, argued in the appeal that the prison sentence was unreasonable and that the trial judge should have recused based on her association with prosecutors and agents in the pre-enforcement stages.
The Supreme Court on Monday refused without comment to take up the dispute. Justice Elena Kagan recused. The high court’s decision was a win for the U.S. Justice Department, which came under attack after initially recommending Rubashkin serve life imprisonment for his role in a multimillion-dollar fraud scheme.
Rubashkin’s lawyers, including Bancroft partner Paul Clement, lead counsel in the Supreme Court, and Nathan Lewin, who advocated for Rubashkin in the U.S. Court of Appeals for the Eight Circuit, were not immediately reached for comment Monday afternoon.
Over the past several years, Rubashkin’s case was the centerpiece of a national public relations and legal campaign, garnering significant attention in Jewish American communities and legal circles around the country.
Several organizations supported Rubashkin in the high court fight. A group of former senior DOJ officials and attorneys general, including Edwin Meese III and Dick Thornburgh, represented by Seth Waxman of Wilmer Cutler Pickering Hale and Dorr, filed a brief asking the Supreme Court to examine the issues in the case.
Rubashkin, the former vice president and manager of the meat processing plant Agriprocessors, Inc., manipulated company accounts to increase borrowing power under a revolving loan, prosecutors said. The bank fraud case flowed from a high-profile federal immigration raid in 2008 targeting the Agriprocessors plant in Iowa. A jury in U.S. District Court for the Northern District of Iowa convicted Rubashkin in 2009 on fraud charges.
In the Supreme Court, Rubashkin’s lawyers called the 27-year term an “eye-popping functional life sentence.” The attorneys contend Reade failed to explain on the record her rejection of Rubashkin’s argument for a below-guideline term of incarceration for a first-time, non-violent offender.
The court asked the solicitor general to state the government’s views on petitions filed by law firms hoping to avoid third-party liability in securities fraud litigation. The cases stem from lawsuits targeting the Ponzi scheme run by financier Allen Stanford.
In Chadbourne & Parke v. Troice and Proskauer & Rose v. Troice – as well as a third brought by an insurance company, Willis of Colorado v. Troice – petitioners are asking the high court to overturn a ruling by the U.S. Court of Appeals for the 5th Circuit that said litigation could proceed in state courts against lawyers and insurers under the Securities Litigation Uniform Standards Act (SLUSA).
Even though the law was intended in part to curtail state class actions in securities cases, lower courts have divided over the proper standard for deciding when such litigation could still be allowed.
The court’s action Monday signals that it is interested in the dispute, but it may not be good news for the law firms seeking high court review. The government could side with securities fraud plaintiffs and urge the court to deny review.
Veteran high court advocates are involved in the effort to get the court’s attention on the third-party issue. Former acting SG Walter Dellinger is representing Chadbourne & Parke, while former SG Paul Clement filed the brief for Willis. James Rouhandeh of Davis Polk & Wardwell represents Proskauer Rose.
National Law Journal reporters Marcia Coyle, Michael Scarcella and Tony Mauro contributed to this report.