Court denies tobacco case; no action on Hamdan
The Supreme Court on Monday refused to hear the federal government’s appeal seeking to salvage its opportunity to force the tobacco industy to surrender $280 billion in profits. In a separate development, the Court once again took no action on a test case challenging the constitutionality of the military tribunals set up to try war crimes charges against terrorist suspects. The next opportunity for it to act on the case of Hamdan v. Rumsfeld (05-184) may not come until Oct. 31.
Here’s today’s Order List.
The Court on Monday granted one case, a significant sequel to its series of rulings on the roles of judges and juries in criminal sentencing. It accepted for review the issue of whether a violation of the jury’s role in sentencing can ever be excused as “harmless error.” The case is Washington v. Recuenco (docket 05-83).
In a two-page, unsigned opinion, the Court ruled that states must be given a chance to develop their own ways of deciding whether a convicted murderer is mentally retarded, and thus cannot be executed. It overturned a Ninth Circuit decision that ordered the state of Arizona to let a jury decide the retardation issue. “Arizona had not even had a chance to apply its chosen procedures when the Ninth Circuit preemptively imposed its jury trial condition,” the Court said. There were no recorded dissents in Schriro v. Smith (04-1475).
Among the other orders the Court issued, it significantly narrowed the scope of its review of a case on legal immunity for local governments. A week ago, the Court had agreed to hear the case of Zurich Insurance Co., et al., v. Chatham County, Ga. (docket 04-1618). At that time, the petition had posed seven, lengthy questions. All of the questions dealt in various ways with whether a county had “sovereign immunity” to a lawsuit because it had operated a drawbridge over a waterway, and an accident had occurred when the drawbridge lowered prematurely. On Monday, the Court said it was limiting its grant to this question: “Whether an entity that does not qualify as an ‘arm of the State’ for Eleventh Amendment purposes can nonetheless assert sovereign immunity as a defense to an admiralty suit?”
The Court’s refusal to hear the Justice Department appeal in U.S. v. Philip Morris USA, Inc., et al. (05-92) takes off the table in the government’s mammoth lawsuit against the industry the most significant punishment that could be imposed if the tobacco companies are found to have violated federal anti-racketeering law (RICO). The Court gave no explanation for its denial of review; there were no recorded dissents.
The trial on the RICO claim is going forward in U.S. District Court in Washington, D.C., before Judge Gladys Kessler. She has not yet ruled on the government claim that the industry violated RICO by decades of deceiving the public about the hazards of smoking. Post-trial briefing on the liability and remedies issues has now been completed, and the Supreme Court’s order on Monday will allow Kessler to move toward concluding the case — pending in her Court since September 1999.
If there is a RICO violation, the government had contended, the industry should be required to forfeit the “ill-gotten gains” from its deceptive tactics. The D.C. Circuit, however, ruled 2-1 last February that RICO only allows “forward-looking” remedies, and “disgorgement” of profits would be a “backward-looking” remedy.
After the Circuit Court ruled, Judge Kessler said that decision was a significant blow to the government’s case. The Justice Department, in a move that has led to an internal investigation within the Department, has pared down the alternative remedies it is seeking, if a RICO violation is found.
The Supreme Court’s denial of review came in a brief order, with no indication that any Justice had been recused. When Chief Justice John G. Roberts, Jr., was on the D.C. Circuit, he had disqualified himself from taking part when the full Circuit Court denied en banc review of the panel ruling against the disgorgement remedy. He appears to have taken part in the Supreme Court order Monday; there was no indication to the contrary, and there would have been under normal practice. (Update: Although the Chief Justice’s wife, Jane Sullivan Roberts, is a partner at the law firm of Pillsbury Winthrop Shaw Pittman, and that firm was involved in the case in the courts below, the Supreme Court’s Public Information Office said, when asked, that Mrs. Roberts is a salaried partner at the firm. The Justices’ recusal policy thus would not have been an issue in the tobacco case at the Court, it appears.)
The Court’s continuing inactivity — at least in public — on the war crimes proceedings has not been explained. There had been lingering procedural questions in the D.C. Circuit, but those were resolved last week; still, no action was forthcoming from the Court agaIn on Monday. The Chief Justice is not expected to take part when the Court does react to the appeal. He had told the Senate Judiciary Committee when he was being considered for the Court that he would not take part in cases on which he had sat as a Circuit Court judge. He was on the D.C. Circuit panel that upheld the war crimes tribunals last July 15.
(Thanks to Howard Bashman of How Appealing blog for linking to us for Monday’s posts.)
“The Court’s continuing inactivity — at least in public — on the war crimes proceedings has not been explained.”
The Supreme Court’s refusal to take a case before final judgment is the norm and requires no explanation. The SG’s brief in opposition makes this argument:
“The decision of the court of appeals is interlocutory. It simply reversed the district court’s erroneous decision to enjoin ongoing military commission proceedings a month before the scheduled trial date. Petitioner’s trial before a military commission has not yet begun. The military commission may acquit petitioner or may resolve some or all of petitioner’s claims in his favor, and some may not even arise (e.g., if classified materials are not presented at trial). In the event petitioner is convicted, an actual trial would create a record that would facilitate any review by this Court. Moreover, the decision of the court of appeals on the merits is correct and does not conflict with any decision of this Court or any other court of appeals. Thus, further review at this time is unwarranted.”
Of course, one could make an argument that the technically separate habeas proceeding in the Article III court is completed. However, the Court has a long history, going back to the Aaron Burr conspiracy, of treating these petitions as appellate in reality, even though technically a habeas petition is a new, separate case.
Comment by Kent Scheidegger — October 17, 2005 @ 2:04 pm
While it is enough to deny cert that the case is interlocutory, it is interesting that in the tobacco case the SG itself sought cert to review an interlocutory appeal.
Can anyone here speculate as to the basis on which the Chief Justice would not recuse on the tobacco cert petition, when he had recused on the petition for en banc rehearing in the DC Circuit a few months ago on the same case and issue?
Comment by Bucky20816 — October 17, 2005 @ 5:35 pm
The Supreme Court rightly rejected the Justice Department’s attempt to revive its demand that the tobacco industry pay the Government $280 billion under the Racketeer-Influenced and Corrupt Organizations Act (RICO).
The Government argued that a statutory provision permitting the Government “to prevent and restrain violations” of RICO allowed it to seek money for past violations, even though that same money could be sought by individual citizens, who can obtain treble damages for any violations. The D.C. Circuit Court of Appeals disagreed, holding that the Government’s power to “prevent and restrain” only includes forward-looking remedies against future misconduct, not compensation for past violations, such as “disgorgement.”
The Supreme Court’s decision is a welcome rebuke to overreaching by the Justice Department and regulation through litigation. In 1999, the Justice Department sued the tobacco industry for $280 billion, alleging it committed wire and mail fraud by downplaying the danger of cigarettes and denying it marketed them to young people. How did it come up with such a mind-boggling figure?
The $280 billion is based on all cigarette sales to so-called “youth-addicted” smokers between 1971 and 2000. Anybody who legally smoked between the ages of 18 and 21 in that period is deemed a “youth-addicted” smoker, even though it’s perfectly legal in most states to smoke at age 18. The Government says that people in that age group are a “protected class” who cannot think for themselves about whether to smoke (although the law considers them old enough to make other important decisions, like whether to fight in Iraq).
The tobacco industry doesn’t have $280 billion, but trial judge Gladys Kessler said the Government could seek it anyway, since that much money may have passed through the industry over the years and forcing them to cough it up might discourage wrongdoing in the future.
The Government wanted the tobacco companies to pay it billions it already received. It admits the $280 billion it demands includes tens of billions of dollars in taxes that smokers paid not to the tobacco companies but to the government, as well as more than $200 billion in interest. So much of the money the Government demands never even passed through the hands of the tobacco companies, but rather into its own pocket. The Government wants to have its cake and eat it, too.
The Government claims the $280 billion as “disgorgement” of ill-gotten gains — that is, money from smokers who smoked because they were deceived about the dangers of smoking. But ever since 1965 — years before the Government seeks to recover for the tobacco companies’ alleged fraud — tobacco packs have contained warning labels that smoking is hazardous to your health. That’s why smokers themselves generally admit that they know smoking is hazardous to their health. They’re not deceived.
And the Government’s own paid expert, Dr. Fisher, who computed the $280 billion figure, testified that he was ordered not to consider what portion — if any — of that $280 billion demanded came from legal, as opposed to fraudulent, cigarette sales. And he said himself it was “preposterous” to assume that smokers all smoked because they were deceived about the dangers of smoking.
The RICO statutory provision the Government is suing under doesn’t say anything about “disgorgement,” much less $280 billion. It just says that a court can issue an order when that’s necessary to “restrain and prevent” future violations by a defendant. It doesn’t say anything about orders to deter the same behavior by other entities in the future.
The trial judge, however, said that narrow language included orders that deter others from misconduct, even if the defendant itself lacks the will or resources to commit future violations. She reasoned that the definition of “deter” includes “restrain” and “prevent,” so “restrain and prevent” must also mean “deter.” That’s like saying that since Socrates is a man, all men are Socrates.
The Government’s claim that it can seek disgorgement in a civil action under RICO is arguably hard to square with the fact than another section of RICO, which the Government did not sue under, permits the government to seek disgorgement upon a finding of a criminal violation – which requires a much higher burden of proof. Allowing the Government to seek disgorgement in a mere civil action both renders that provision partially redundant, and arguably circumvents Congress’s intent to protect businesses from disgorgement except in cases of clear-cut criminal wrongdoing.
Judge Kessler, the trial judge who allowed the Government to make this staggeringly large $280 billion demand, has frequently been reversed on appeal in past cases. She was reversed unanimously by the D.C. Circuit in 2001 when she held that tobacco companies can be sued by insurers for health care costs they incur in treating smokers. She allowed the lawsuit to proceed regardless of the fact that smokers knew the risks of smoking and insurers voluntarily insured smokers against health risks. That case — just like this case — involved RICO and fraud claims. It also involved similarly defective economic models purporting to measure the costs of smoking.
And she was reversed unanimously by the D.C. Circuit in 2002 when she waded into partisan politics to hold that when a civil rights commissioner steps down a moment before her term ends, an outgoing president can appoint a replacement to serve for a full eight years, leaving his successor unable to pick any replacement for that seat. In that case, she allowed Mary Frances Berry, the liberal Chairwoman of the U.S. Commission on Civil Rights, to block President Bush’s appointee, Peter Kirsanow, from sitting on the left-wing Commission.
Yet the Bush administration, which champions tort reform in every other context, seemed happy to embrace Judge Kessler’s eccentric interpretation of RICO. The $280 billion the Justice Department is seeking dwarfs the damages awarded annually by all of the nation’s courts put together.
The taxpayers have already incurred over a hundred million dollars in wasted legal bills bringing this case. For taxpayers and businesses alike, it is a good thing that the Justice Department’s lawsuit has been cut down to size.
Comment by Hans Bader — October 17, 2005 @ 5:36 pm
My previous comment was based on a misreading of Lyle’s post. I thought he was saying there was no public explanation for the Court’s refusal to take military tribunal cases pretrial, but on closer reading he is actually saying there is no public explanation for the repeated relisting of Hamdan.
Of course, it is also normal for the reasons for relisting to remain a mystery.
Comment by Kent Scheidegger — October 17, 2005 @ 5:51 pm
Re Hamdan:
What if there are 4 votes for cert, including O’Connor’s, 4 against, Roberts not participating. Perhaps they have agreed that O’Connor will not be the 4th to grant cert. Or perhaps one of the 4 against is saying he’s writing a dissent from the grant, delaying things until O’Connor’s successor is on the court.
Comment by r.friedman — October 17, 2005 @ 9:03 pm
Though Kent clarified his reading of Lyle’s comment, his assertion that Hamdan is fundamentally interlocutory in nature still strikes me as wrong.
As Hamdan’s brief noted, habeas petitions are quite unlike other fragmentary or branch proceedings. Under Bryant (278 U.S. 63, 70-71) and Rescue Army (331 U.S. 549, 566-67) they are considered final judgments subject to review by the Court even when the underlying prosecution is still pending. Indeed, if anything, this is the rule one would draw from Ex Parte Bollman (the Burr conspiracy case Kent cites).
The Supreme Court’s rejection of Kent’s position in granting Solario, and Tom’s recent post concerning the frequency with which interlocutory review has been granted in recent cases (http://www.scotusblog.com/movabletype/archives/2005/09/interlocutory_c.html), would appear to confirm this reading.
Comment by Ariel Lavinbuk — October 17, 2005 @ 11:26 pm
off topic, but today’s Diane Rehm on NPR;
10:00 Oregon v. Gonzales
Diane and her guests talk about the federal government’s challenge to Oregon’s assisted suicide law at the Supreme Court. They’ll discuss what the case could mean for enforcement of federal drug laws, for states’ rights, and for all Americans’ end-of-life decisions.
Comment by Stella — October 18, 2005 @ 9:57 am
To clarify my earlier comment in response to Ariel’s comment, I do not question that a denial of habeas relief would be considered a final judgment in a case where that was a jurisdictional requirement. For example, if a state court denied pretrial habeas relief, the Court would have jurisdiction to review that judgment.
In cases from federal courts, finality is a prudential rather than jurisdictional consideration. The SG’s opposition, quoted in my original comment, argues that the Court would have a more concrete case to work from and that some of the issues may drop out if it waits for the military tribunal to rule. In terms of these prudential considerations, it makes no difference whether the issue arises in a pretrial motion or a technically separate proceeding. Although the Court does grant certiorari before judgment on occasion, lack of finality still weighs against a grant.
Comment by Kent Scheidegger — October 18, 2005 @ 1:54 pm