Argument Review: Contract Clause and Tribal Sovereign Immunity

For the first time in a quarter century, the Contract Clause was the central issue in oral arguments at the Supreme Court. In Sveen v. Melin, the issue is whether a Minnesota law nullifying an ex-spouse’s beneficiary status in a life insurance policy violates the Contract Clause, which prohibits states from passing laws “impairing the Obligations of Contract.” In this case, Mark Sveen and Kaye Melin divorced in 2007, but before their divorce, Sveen purchased a life insurance policy and named Melin as the beneficiary. Sveen died in 2011, and Melin would have been the sole beneficiary of the policy but for the Minnesota law.

SCOTUSblog’s Amy Howe reports it is not clear from the arguments how the Justices are leaning. Justice Ruth Bader Ginsburg referenced a policy alternative requiring judges presiding over divorces to ask couples to state if they want their life insurance beneficiaries to remain the same. Justice Alito pushed the notion that Melin’s position—not Sveen’s—would likely have a broader impact on contract law in the state of Minnesota. He noticed that policyholders like Sveen knew when they purchased a policy that beneficiary status revoked upon divorce. Justice Breyer reinforced the possible implications of a policy change by asking would happen to all of the clients and their attorneys who believed, during divorce proceedings, that beneficiary status would terminate for the spouse upon divorce. “’A lot of people,’ he observed, ‘probably were divorced between 2002’ – when the law went into effect – and 2018.”

If the court were to rule in Melin’s favor, James W. Ely Jr. and Nick Sibilla, writing for the Wall Street Journal argue, “[w]ith a reinvigorated Contract Clause, laws that impose rent control, alter franchise agreements, abolish teacher tenure, or modify public employees’ benefits could all be scrutinized for infringing existing contracts.” Read The Wall Street Journal and JDSUPRA for more analysis of this case.

Finally on Wednesday, March 21, the Court heard oral arguments in  Upper Skagit Indian Tribe v. Lundgren. In 2013, Upper Skagit Indian Tribe bought property in Washington. Roughly two years later, the Lundgrens, a couple who owned property adjacent to the Tribe’s land, filed a quiet title action alleging ownership of a strip of the Tribe’s land. They asserted that they had acquired this part of the Tribe’s land through adverse possession before the Tribe had bought the land. The trial court granted summary judgment in favor of the Lundgrens; the Tribe appealed to the Washington Supreme Court, which affirmed the trial court’s holding. The issue before the Court is whether, when Congress has not expressly repealed a tribe’s sovereign immunity and the tribe has not waived its immunity, a court’s exercise of in rem jurisdiction overcomes the tribe’s assertion of sovereign immunity.

The arguments in the case delved into the scope of sovereign immunity where in rem jurisdiction is at stake and how that overlaps with disputes over “immovable property.”  Justice Breyer pointed out that property disputes are fairly common and questioned how those involving a tribe could ever be resolved if there was no way for the tribe to be sued. Similarly, the Lundgrens argued that ruling for the Tribe could have negative consequences, such as undermining a state’s ability to acquire land that they need for public use. The United States, however, as amicus curiae in support of the Upper Skagit tribe, argued that the Court should not start recognizing judicial exceptions to sovereign immunity because Congress has the ability to weigh policy interests on both sides and create exceptions to rules like sovereign immunity themselves. Check out SCOTUSblog and Courthouse News for further reading on this case.

This post was drafted by ISCOTUS Fellows Michael Halpin and Zoe Arthurson-McColl, Chicago-Kent Class of 2020, edited by ISCOTUS Fellow Matthew Webber, Chicago-Kent Class of 2019, and overseen by ISCOTUS Co-Director and Chicago-Kent Faculty Member Carolyn Shapiro.

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