Arguments: Week of April 16, 2018 – Part II

The Supreme Court will hear oral argument in six cases this coming week, two each on Monday, Tuesday, and Wednesday. On Tuesday, it will hear argument in a bankruptcy case, and on Wednesday it hears about Indian tribal fishing rights and criminal sentencing. We reported on Monday’s cases and the other Tuesday argument in an earlier post.

Tuesday’s bankruptcy case is Lamar, Archer & Cofrin, LLP v. Appling, a case regarding the interpretation of “statement respecting the debtor’s…financial condition” under section 523(a)(2)(B) of the United States Bankruptcy Code. The Code prohibits the discharge of “any debt…for money, property, [or] services… to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s financial condition.” Appling hired Lamar, Archer & Cofrin to represent him in a lawsuit against the former owners of his business, and promised to pay them with his expected large tax refund. His refund turned out to be much smaller than he said it would be, and he put the money into his business instead of paying Lamar. When Appling filed for bankruptcy, the bankruptcy court ruled that Appling’s debt to Lamar was not dischargeable because Lamar had relied on Appling’s false statements about his tax refund. The Eleventh Circuit reversed. The Supreme Court will have to resolve a circuit split as to whether an oral statement about a single asset (like the tax refund) qualifies as a statement “respecting the debtor’s financial condition.” If so, then debts obtained in reliance of such a false statement would be dischargeable in a bankruptcy proceeding, and creditors would be unable to collect them. Christopher R. Thompson, writing for Lexology explains the possible ramifications of the Court’s decision. Hughes, Hubbard & Reed’s article and Bloomberg have more commentary.

On Wednesday, the Court will hear arguments in Washington v. United States, which addresses the scope of fishing rights guaranteed by treaties between Indian tribes in the Pacific Northwest and the federal government. The “Stevens Treaties” are series of agreements made in 1854 and 1855 between the federal government and Indian tribes in what are now the states of Idaho, Montana, Oregon, and Washington. The Indian tribes relinquished most of their territory but retained in perpetuity “the right of taking fish, at all usual and accustomed grounds and stations. . . in common with all citizens of the Territory.” In 1970, the United States, as a trustee for Pacific Northwest Tribes, and the Tribes themselves, sued the state of Washington in the U.S. District Court for the Western District of Washington for declaratory and injunctive relief based on the so-called “fishing clause.” As a result of that initial litigation, the Supreme Court, in Washington v. Fishing Vessel Association (“Fishing Vessel”), held that the treaties guaranteed the Tribes not just an “equal opportunity” to fish, but “so much as, but no more than, is necessary to provide the Indians with a livelihood.” (Justice Kennedy sat on this case when he was a judge on the Ninth Circuit. As a result, he is recused from the current litigation and only eight justices will consider it.)

In 2001, the Tribes, joined by the United States, filed a Request for Determination in 2001, seeking “to enforce a duty upon the State of Washington to refrain from constructing and maintaining culverts under State roads that degrade fish habitat.” The Tribes argue that the State of Washington violated the treaties by constructing culverts that prevent salmon from accessing tribal fishing grounds, degrading fisheries and interfering with the Tribes’ “right of taking fish.” The district court found for the Tribes, entering an injunction ordering the state to correct culverts, and the Ninth Circuit affirmed, reiterating that the treaties guaranteed that “the number of fish would always be sufficient to provide a ‘moderate living’ to the Tribes.”

The petitioner, the state of Washington, argues that the treaties guarantee the right to access to traditional fishing places and a “fair share of available fish”, citing Fishing Vessel, but that the treaties do not guarantee the Tribes a standard of living from fishing. Additionally, Washington also asserts that the district court erred in dismissing the equitable defense against the federal government: Washington alleges that the culverts were designed and constructed in accordance with federal regulation. Finally, the state argues that the injunctive relief ordered by the district court violates principles of federalism and comity, because the respondents failed to demonstrate that the culvert replacement would impact tribal fisheries or harvests. Scott Bomboy of the American Constitution Center discusses the case and its history in his article, Supreme Court to tackle salmon case without Justice Kennedy, and University of Montana law professor Monte Mills discusses its history and implications here.

Finally, on Wednesday the Court will hear arguments in Lagos v. United States, which presents the question of whether, under the Mandatory Victims Restitution Act (MVRA), a criminal defendant can be ordered to pay costs to the victim that were “neither required nor requested” by the government, including costs incurred for the victim’s own purposes and which no official government action prompted. More specifically, the case involves the MVRA’s requirement that courts must order the defendant to “reimburse the victim for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.” 18 U.S.C. 3663A(b)(4). The Fifth Circuit, along with other courts of appeals, held that this provision covers the costs of internal investigations and private expenses that were “neither required nor requested” by the government, but the D.C. Circuit has disagreed. Lexology discusses the case and the frequency with which the MVRA is a “hotly contested” issue during sentencing proceedings.

ISCOTUS Fellows Bridget Flynn, Elisabeth Hieber, and Matthew Webber, all Chicago-Kent Class of 2019, contributed to this post, which was edited by ISCOTUS Editorial Coordinator Anna Jirschele, Chicago-Kent Class of 2018, and overseen by ISCOTUS Co-Director and Chicago-Kent faculty member Carolyn Shapiro.

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