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Solicitor General files invitation briefs — Part 2 (UPDATED June 13, 2014)

(Note:  This post has been updated to clarify why Justice Kagan is recused from O’Neill v. Al Rajhi Bank.  We are grateful to the reader who flagged this for us.)

A few weeks ago, I reported on six cases in which the Solicitor General has recently filed briefs expressing the views of the United States.  The Justices have not yet considered five of them, but on Monday the Court denied review in the sixth:  an ERISA case, Thurber v. Aetna Life Insurance Company, in which the government had recommended that cert. be denied.

When the Justices met today to consider new petitions for review, none of the cases before them involved invitation briefs filed by the Solicitor General.  However, the June 19 and June 26 Conferences (and in particular the June 26 Conference) are likely to be chock-full of cases involving CVSGs – eleven altogether.  In this post, I will discuss six not addressed by my last post.

The Solicitor General recommended that cert. be granted in only one of these eleven cases, B&B Hardware, Inc. v. Hargis Industries, Inc., which is addressed by my prior post.  In all six of the cases covered in this post, the government has recommended denials.  Some of those recommendations, however, are what we sometimes call a “soft deny”:  the Solicitor General acknowledges that the case meets one or more of the criteria that the Court usually looks for in deciding whether to grant cert. (such as a division among the lower courts or an erroneous lower court decision), but he nonetheless argues that Supreme Court review is not warranted.

The petitioners in O’Neill v. Al Rajhi Bank are victims of the September 11, 2001 attacks.  The respondents in the case, who were the defendants below, are individuals and organizations that allegedly provided support for Osama bin Laden and al-Qaeda in the years leading up to the September 11 attacks.  The victims filed suit in the United States under the Anti-Terrorism Act (ATA), which provides a cause of action for U.S. citizens “injured . . . by reason of an act of international terrorism.”  As relevant to this case, the Second Circuit affirmed a decision by the district court dismissing the claims against the respondents on two grounds, which are the basis for the questions presented by the petition.  First, it held that the ATA does not provide for secondary “aiding and abetting” liability; instead, the supporters of terrorism must be the proximate cause of a particular terrorist attack.  Second, it held that U.S. courts can exercise personal jurisdiction over the supporters of terrorism only if the plaintiff can show that the defendant expressly intended that its support would harm the United States.

In urging the Court to deny review, the government argued first that – despite the victims’ argument to the contrary – the Second Circuit’s decision regarding the availability of secondary liability under the ATA does not actually conflict with a decision by the Seventh Circuit.  But in any event, it contended, the victims’ case would be a “poor vehicle” to consider that question, “because there is significant question whether petitioners’ allegations would be sufficient to state claims under an aiding-and-abetting theory” that the plaintiffs advocated.  And review is also not warranted on the personal jurisdiction question, the government continued, because the Second Circuit “applied settled standards” in reaching its conclusions.

The case is likely to be before the Justices at their June 26 Conference.  Justice Elena Kagan is recused from the case; in 2009, when she was the Solicitor General of the United States, the United States filed an invitation brief in connection with an earlier petition by the same plaintiffs, seeking review of a decision by the Second Circuit dismissing other defendants under the Foreign Sovereign Immunities Act or for lack of personal jurisdiction.

The government’s recommendation in Bank of America v. Rose is a straightforward one:  certiorari should be denied.  This case involves preemption (or the lack thereof) by the Truth in Savings Act, a 1991 law intended to promote full disclosure of interest rates and fees for savings accounts.  The TISA originally included a private right of action, which Congress repealed in 1996; it also includes a “savings clause” that allows states to impose their own disclosure requirements.  In 1994, the Federal Reserve Board interpreted the savings clause as providing only for “very narrow” preemption of state law.

The respondents in this case, who are California residents with savings accounts, filed this lawsuit as a class action under California unfair competition law, alleging that Bank of America had increased their fees without disclosing them as TISA requires.  Both the state trial court and the state intermediate appellate court held that the suit was barred because Congress had repealed the private right of action under TISA, but the California Supreme Court reversed, holding that Congress had not barred state-law suits based on a violation of TISA.

The bank sought review of that decision, but the federal government urged the Court to deny cert. on the ground that the decision below is correct, the California Supreme Court’s decision does not conflict with either any court of appeals decision or any Supreme Court decision, and the decision below is interlocutory.  The case is expected to be on the Justices’ June 26 Conference.

The next case involves the 4-R Act – the Railroad Revitalization and Regulatory Reform Act – which Congress adopted in 1976 to combat the decline of the railroad industry in the U.S.  One provision of the 4-R Act, carving out an exception to the Tax Injunction Act, gives federal courts authority to enjoin various forms of state taxes, including enjoining under its “catch-all” provision (at issue in this case) “another tax that discriminates against a rail carrier.”

Three years ago, in CSX Transportation v. Alabama Department of Revenue, the Court held that CSX could challenge an Alabama sales-and-use tax that the state imposes on railroads, but not on their transportation competitors, for the use of diesel fuel.  That decision explicitly did not address, however, whether the tax does in fact discriminate against railroads by providing the exemption for interstate motor and water carriers, nor did it address exactly how the lower courts should make that determination.

On remand, the district court held that the Alabama tax was not discriminatory.  But the Eleventh Circuit reversed.  Comparing (consistent with a stipulation by the railroad and the state) the taxation of the railroad with those of its direct competitors, the court of appeals agreed with the railroad that the tax was discriminatory because the railroad’s competitors do not pay it.  In making that determination, the lower court focused on the sales-and-use tax only, without examining the state’s broader tax structure.

The state filed a petition for certiorari seeking review of the Eleventh Circuit’s holding that the tax was discriminatory.  In its brief in Alabama Department of Revenue v. CSX Transportation, the government’s recommendations were a mixed bag.  The government deemed it a “close question” whether the questions presented by the case warrant Supreme Court review:  it acknowledged, for example, “some tension” among the lower courts on the comparison-class question, and although it asserted that there is no “square conflict” on the question whether courts should look at the bigger tax scheme picture, it said that the lower courts which have reached the question have gotten it wrong.  It added both that the significance of the issues presented by the case is unclear and that the case is not a suitable vehicle to consider those issues.

The government also agreed with the Eleventh Circuit that the railroad’s direct competitors are the proper comparison class, but it contended that the lower court “erred . . . in finding the challenged discriminatory without considering alternative and comparable taxes that could have justified the disparate treatment” and suggested that, if the Court were to grant cert. notwithstanding its recommendation to deny, the Court should consider this issue as well.
We expect the Justices to consider the case at their Conference on June 26.

The Federal Power Act gives the Federal Energy Regulatory Commission (FERC) jurisdiction over rates for the transmission and wholesale sales of electricity, while states retain jurisdiction over retail sales of electricity.  To reconcile these two different sources of regulation, the Supreme Court established the “filed-rate doctrine” – which means, in effect, that when they set retail rates, state public utility commissions (PUCs) must allow utilities to recover the costs that they incurred in paying a FERC-approved rate to buy the electricity at wholesale or transmit it across state lines.  There is an exception to this general rule, though, which lets the state PUC determine (as long it does not duplicate or conflict with a finding by FERC) whether the decision to buy power from a particular source is prudent.

Missouri v. Missouri Public Service Commission arose when a public utility that sells electricity to customers in Missouri asked the Missouri Public Service Commission for permission to increase its rates so that (among other things) it could recover the costs of obtaining power from its facility in Mississippi.  Although FERC had approved the rates for transmitting the power from Mississippi to Missouri, MPSC concluded that it was not “just and reasonable to require ratepayers” to pay for the additional costs to transmit power from Mississippi.   The utility challenged that decision unsuccessfully in state court and eventually sought Supreme Court review.

In its petition for certiorari, the utility contended that, once a state PUC has agreed that an interstate purchase of power is generally prudent, it cannot “single out a specific federally-approved portion of those costs and bar that cost from retail rates.”  In its brief, the federal government agreed with the utility on this point, but it nonetheless contended that the Court should not grant review, for two reasons.  First, it argued, it isn’t clear whether the MPSC order at issue in this case actually found that the Mississippi facility was a prudent option.  Second, it suggested, this case is not a good vehicle to consider the question presented by the petition because in 2013 the MPSC issued an order that supersedes the order at issue in this case, thereby creating a “serious mootness question.”

The case is likely to be considered at the June 26 Conference.

FERC is at the center of another case in which the Court asked the Solicitor General to file a brief expressing the views of the United States:  Oneok, Inc. v. Learjet, Inc.  The respondents in the case, Learjet and others, are users of natural gas.  Starting in 2005, they filed lawsuits in state and federal courts in which they alleged that the petitioners, who are traders in natural gas, violated state antitrust laws by manipulating privately published price indices for natural gas, thereby increasing (among others) retail prices for natural gas.  The traders countered that Learjet’s claims were preempted by the Natural Gas Act (NGA), which gives FERC exclusive authority to regulate practices affecting wholesale rates for natural gas, because the price manipulation at issue directly affected wholesale rates as well.  The district court agreed with the traders, but the Ninth Circuit reversed.  It held that although the NGA authorizes FERC to regulate practices affecting wholesale rates, it does not bar state antitrust claims, like the ones at issue here, that “aris[e] out of price manipulation associated with transactions falling outside of FERC’s jurisdiction.”  The traders filed a petition for certiorari seeking review of that holding.

In its brief, the federal government agreed with the traders that the decision below got the law wrong:  according to the government, FERC does indeed have exclusive authority to regulate the conduct at issue in this case – the traders’ manipulation of the private price indices – because that manipulation affected wholesale rates for natural gas.   However, the government still recommended that cert. be denied in the case because there is no “conflict with any state supreme court decision” and because “significant changes to the regulatory environment make it highly unlikely that the factual scenario giving rise to [Learjet’s] claims will recur.”

Justice Samuel Alito is recused from the case, which is likely to be considered at the Court’s June 26 Conference.  The law firm of Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, served as counsel on an amicus brief in support of the petitioners in this case; however, I am not affiliated with the firm.

You would be forgiven for confusing Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter with KBR Inc. v. Metzgar and Kellogg Brown & Root Services, Inc. v. Harris:  all three cases involve petitioners with the same or similar names, and they all arise out of the companies’ activities in Iraq and/or Afghanistan.  But the similarities end there.  Metzgar and Harris were before the Justices for the first time at their Conference today and ask the Court to weigh in on the viability of state tort claims against them for their activities on foreign battlefields.

By contrast, the Justices have already considered Carter once before, asking the Solicitor General to weigh in on issues related to the False Claims Act (FCA) and the statute of limitations.  Under the FCA, a private individual can bring a lawsuit alleging fraud against the government and, if he succeeds, share in the damages.  Under a section of the FCA known as the “first to file” provision, once someone has filed a lawsuit, only the government can intervene in a case or bring a related lawsuit arising out of the same facts.  The FCA also establishes a statute of limitations, requiring lawsuits to be filed within six years of the fraud or three years of when a government should have known of the fraud.

In 2006, Benjamin Carter filed a lawsuit under the FCA against KBR, alleging that while he was working in Iraq in 2005 the company had fraudulently billed the federal government for work there.  The district court dismissed that lawsuit and a subsequent one pursuant to the first-to-file rule, and he filed the lawsuit at issue in this case in 2006.  The district court again dismissed the lawsuit.  It held that the suit was barred by the first-to-file rule because another lawsuit had been filed before it, even if that other suit had subsequently been dismissed on procedural grounds.  The district court also concluded that most of Carter’s claims were barred by the statute of limitations.

The Fourth Circuit reversed.  It held that the Wartime Suspension of Limitations Act (WSLA) – which, as the name suggests, suspends the statute of limitations for claims of fraud against the United States when the country is at war – saved Carter’s claims from being time-barred.  In so holding, the lower court rejected arguments that the WSLA does not apply either to civil actions or to cases brought by the United States.  The court of appeals also held that the first-to-file rule did not bar Carter’s lawsuit once the related suits had been dismissed.  KBR filed a petition seeking review of those holdings.

In its invitation brief, the government urged the Court to deny review.  It agreed with the lower court and Carter that the WSLA applies to civil claims under the FCA, regardless of who brings them, and it told the Court that there is no division among the courts of appeals on this question.  It acknowledged a “narrow” disagreement among the courts of appeals on whether the first-to-file provision would bar suits like Carter’s, but it suggested that review is nonetheless not warranted both because the Fourth Circuit’s decision is correct and because the circuit split “soon may be resolved” with the Supreme Court having to step in.

The case is likely to be considered at the Justices’ June 26 Conference.

Recommended Citation: Amy Howe, Solicitor General files invitation briefs — Part 2 (UPDATED June 13, 2014), SCOTUSblog (Jun. 12, 2014, 7:19 PM),