On April 23, the Court heard oral arguments in Lucia v. Securities and Exchange Commission, a case about whether Securities and Exchange Commission (“SEC”) administrative law judges (“ALJs”) are “Officers of the United States” within the meaning of the Appointments Clause of the Constitution or merely employees of the SEC.  Alison Frankel of Reuters explains that in its Supreme Court brief, the Justice Department acknowledged that SEC ALJs are subject to the Appointments Clause. As Greg Stohr of Bloomberg explains, if the court agrees, there is a possibility that ALJs in a variety of agencies “could be fired for issuing rulings that clash with administration priorities.”

At argument, the justices did not appear to agree as to whether that would be a positive or negative development.  During the argument Chief Justice John Roberts stated this case could bring “political accountability” to federal judges, and in contrast Justice Stephen Breyer said the case could mean “goodbye to the independence” of ALJs. Robert Barnes of The Washington Post noted that Justice Elena Kagan likewise appeared worried about political pressure on ALJs, something they are shielded from as the law stands currently.

David G. Savage of The LA Times reports that some legal experts contend that a decision in favor of Lucia could also open the door for the President to be able to remove other executive officers, such as special counsel Robert Mueller. However, the tenor of the argument did not suggest that the justices have an interest in ruling that broadly. Check out The Wall Street Journal and U.S. News for more commentary on the arguments in this case.

On April 24, the Court heard arguments in Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd. The issue in this case is whether U.S. courts should defer to foreign government’s interpretation of their own law, or if U.S. courts can exercise their own interpretation of the foreign law. Greg Stohr of Bloomberg reports that the Trump administration is partially backing Animal Science Products, who sued Hebei alleging they violated U.S. antitrust law by price fixing Vitamin C imports. China’s Ministry of Commerce had their day in the courtroom as they were granted argument time “unprecedently” by the Court. China’s lawyer, Carter Phillips argued that Hebei was just following Chinese law that required them to fix prices. Regarding the argument that U.S. courts should defer to foreign government’s interpretation of their law, Justice Elena Kagan asked, “How can you say that the only thing that shows respect to foreign governments is to do something that we don’t know that any other foreign nation does?”   that Justice Neil Gorsuch appeared to take an opposing stance and questioned why we should not defer to an administrative agency of a foreign sovereign, such as how “Chevron deference” allows courts to defer to interpretations of U.S. administrative agencies. Check out Reuters and Wall Street Journal  for more information on the arguments.

On April 23, the Court also heard oral arguments in Pereira v. Sessions. This is a statutory interpretation case about cancellation of removal (deportation) under 8 U.S.C. §1229b. At issue is whether a “notice to appear” issued by the government must meet certain criteria, as laid out in §1229(a), such as a court date and time. The oral argument transcript can be found here, and the recording can be found at Oyez. And in another case that week, Chavez-Meza v. United States, involving a sentencing issue, “[e]mbattled Deputy Attorney General Rosenstein“, argued on behalf of the government, as he participated in the tradition of a high-ranking Department of Justice Official arguing a case in front of the Court.

ISCOTUS Fellows Matthew Webber, Chicago-Kent Class of 2019, and Eva Dickey and Michael Halpin, both Class of 2020, 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.

Native American fishing rights are at issue in Washington v. United States, argued in April 18, and covered by ISCOTUS now here. In the “Stevens Treaties,” a series of agreements made in the 1850s between the federal government and Indian Tribes in what are now the states of Idaho, Montana, Oregon, and Washington, the 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 this case, the Tribes, joined by the United States, are 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 culverts violate the treaties because they prevent salmon from accessing tribal fishing grounds, thus degrading fisheries and interfering with the Tribes’ “right of taking fish.” The district court found for the Tribes, which 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 while treaties do guarantee the Tribes the right to access fishing grounds, they do not guarantee the Tribes a standard of living of living from fishing.

At argument, the Court focused primarily on the appropriate standard to determine when the state violates the treaties. Noah Purcell, the Solicitor General of Washington, argued that a barrier would violate the treaties only if it causes “a large decline in a particular river and that it’s not justified by substantial compelling interests.” When Justices Alito and Kagan pressed Mr. Purcell to clarify this standard, he explained that “a decline of half the salmon would certainly easily qualify” but a decline between 1 and 5 percent would not qualify. Justice Gorsuch also pressed Mr. Purcell on his assertion that barriers would not violate the treaty if justified by a substantial compelling interest. “I don’t see anything in the treaty…that says: Ah, and your rights to those usual and customary grounds and stations is limited by, and may be completely eliminated, if necessary, to meet other domestic interests that a municipality might have, which is, I think, the position you’re taking…before this Court.”

Allon Kedem argued on behalf of the United States, and William M. Jay, argued on behalf of the Tribes. Both were also asked to clarify the appropriate standard of salmon degradation that would constitute a treaty violation. Mr. Kedem did not provide a specific number, but stated that “substantial degradation” is “harm that is both durable and appreciable, meaning the type of thing that shows up year after year, despite normal fluctuations.” Mr. Jay said that substantial degradation does not mean “a hard and fast number” but is “something that you would determine, factually, in the context of one fish species versus another.”

Reviewing the arguments for SCOTUSblog, Miriam Seifter writes that while the Court “is unlikely to devote its opinion to correcting factual findings”, it “does seem poised to announce some standard for violations of the treaties.”

Also on Wednesday, April 18, the Court heard 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. 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, and 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.

Daniel Geyser, a Dallas attorney, argued on behalf of the defendant, the former owner and CEO of a holding company that owned USA Dry Van Logistics LLC, a trucking company. Lagos induced GE Capital to loan his company tens of millions of dollars by modifying Dry Van’s records, leading GE Capital to incur almost $5 million in debt.

Geyser argued that the MVRA’s language “does not include the cost of hiring four law firms, a consulting firm and forensic experts for a private investigation in bankruptcy litigation.” Unlike other restitution provisions, the MVRA does not provide make whole relief, he argued. Geyser further argued that GE Capital incurred expenses before the government’s investigation, and therefore they did not qualify as expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.

Michael Huston, Assistant to the Solicitor General, argued on behalf of the United States, taking the position that the statute is not limited to participation in the government’s investigation. Several justices appeared to disagree, however. Chief Justice John Roberts, for example, stated that the statute refers to only one investigation and that must be the government’s. And Justice Breyer told Huston that he has “a big problem” with the statute’s language because it does not clarify whether a victim should receive restitution for costs incurred during a company’s investigation before a police investigation begins.

On Tuesday, April 17, the Supreme Court heard arguments in Lamar, Archer & Cofrin, LLP v. Appling, in which the Court will decide if an oral statement regarding a single asset is a statement “respecting the debtor’s financial condition,” as described in the United States Bankruptcy Code. Danielle D’Onfro of SCOTUSblog reports that the justices asked few questions of the parties in this case, but when they did, they primarily focused on what types of statements, such as “I’m above water,” “I own a genuine Vermeer,” and “I have a bank account with a billion dollars in it,” can be considered actual statements about one’s “financial condition.” D’Onfro believes the ruling will not “clarify much beyond a few words in Section 523,” and the case “may be in the running for the narrowest decision of the term.” To read more about the case, check out the Jurist’s article, here.

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.

April saw several significant oral arguments, including a case that could change the rules for state taxation of internet commerce, South Dakota v. Wayfair, previewed here. In Wayfair, the state of South Dakota, with the support of forty-one other states, is asking the Court to overrule a 1992 case, Quill Corp. v. North Dakota. Quill held that the commerce clause prohibits state governments from taxing out-of-state retailers that do not have a physical presence in the state on the sale of goods.

South Dakota Attorney General, Marty J. Jackley, argued  first that under Quill, states are losing “massive sales tax revenues” needed for “education, health care, and infrastructure.” Second, he argued that the holding it hurts smaller retailers with brick-and-mortar stores who are trying to compete against the larger, national retailers with an online presence.

Justice Sotomayor asked Jackley “[h]ow much contact is enough to justify placing this obligation on an out-of-town seller?” She was also concerned about logistics, asking what would happen if a company lost track of how much it had sold in a particular state. Chief Justice Roberts pointed out that some of the larger e-commerce companies are expanding to the point that they have a physical presence in most, if not, all 50 states, arguably rendering a reversal of Quill irrelevant. Jackley responded by stating that although a few companies—principally Amazon—are expanding their physical presence, states are expected to miss out on some $100 billion in lost revenue over the next decade. Justice Kennedy, no fan of Quill, stated that “this court has made a statement of constitutional law that … has now, especially in light of the cyber age, proven incorrect.”

Arguing against a reversal of Quill, George Isaacson, representing Wayfair argued that Congress should identify the parameters of taxation across state lines. For example, he argued, “[Congress] can require standard uniform definitions of products so that food and sportswear and clothing doesn’t mean one thing in one jurisdiction ad another elsewhere. “ Similarly, Chavie Lieber of Racked.com highlights a similar argument made by those opposed to the Supreme Court overruling Quill. Such a reversal of  via the Supreme Court would “open a can of worms” as local state tax regimes restructure how they levy those new taxes. Alan Horowitz of Appellate Tax reviewed the oral argument in detail, concluding that signs pointed towards a closely divided court likely to uphold its prior precedent.

In another tax related-case, Wisconsin Central Ltd. v. United States, the issue revolved around whether stock transferred by a railroad company to an employee is taxable compensation under the Railroad Retirement Tax Act. Elizabeth Lowman of Jurist writes that during the argument Wisconsin Central argued that stock is not money as defined as a “generally accepted medium of exchange.” The government on the other hand argued that more than just cash money falls under the purview of the statute and cited other non-cash examples that are taxed for support. Daniel Hemel of SCOTUSblog similarly noted that the main focus of the justices was what is considered “money,” and what is not.

And in WesternGeco LLC v. ION Geophysical Corp., argued the same day as Wisconsin Central, the Court considered whether a domestic patent holder can be awarded foreign lost-profit damages, or if the presumption against extraterritoriality bars such recovery. In this case, the Respondent produced components parts of a patented item that, if put together in the United States, would constitute patent infringement. Instead, however, Respondent shipped the components to foreign parties to be combined and then used outside of the United States.

Petitioner argued that the presumption against extraterritoriality should not apply because the loss of foreign profits is a direct and foreseeable result of a domestic act of infringement. Justice Breyer had questions for Petitioner primarily aimed at the idea of comity – whether or not allowing foreign lost-profits damages in this case could have the effect of foreign corporations going after components manufacturers in the United States for violating foreign patents.

Addressing Justice Breyer’s concerns, the Assistant to the Solicitor General, arguing for the United States in support of the Petitioner, noted that the comity issue should not be very concerning given that similar damages are already awarded in tort, contracts, and copyright law. The United States also argued that once the infringement is established, if the patentee is able to show that such infringement is the proximate cause of the patentee’s lost profits, the patentee should be allowed to recover full compensatory damages.

Respondent argued that the presumption against extraterritoriality should bar the Petitioner from being awarded foreign lost-profit damages, because the harm (downstream loss of foreign profits once the patented device is used abroad) is too far removed from the domestic act of infringement for these damages to appropriately be awarded. Many of the Justices’ questions for the Respondent were based around the idea that applying the presumption against extraterritoriality here would prevent the patentee from being fully compensated for the patent infringement.

Check out a quick overview of the background of the case and oral arguments from Reuters. And write up of the oral arguments from patent law blog Patently-O can be found here.

ISCOTUS Fellows Matthew Webber, Chicago-Kent Class of 2019, and Eva Dickey and Michael Halpin, both Chicago-Kent Class of 2020, 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.