Wednesday, August 20, 2014
Who's Afraid of Assuming Federal Jurisdiction?
In the Supreme Court's much-discussed Hobby Lobby decision (decided at the end of June), the Court addressed whether for-profit corporations should be able to assert claims under the Religious Freedom Restoration Act (RFRA). The majority answered “yes” for a variety of reasons, mostly involving the statute’s text and history. But at one juncture, the majority and dissent also jousted over a pre-RFRA decision called Gallagher v. Crown Kosher Super Market. In the opinion of the Hobby Lobby majority, Gallagher “suggests, if anything, that for-profit corporations possess [free exercise] rights.”
Gallagher is a remarkable decision. In short, a plurality of the Court assumed standing before reaching the merits—contrary to the general rule later established in Steel Co. v. Citizens for a Better Environment. And, almost as remarkably, both the majority and the dissent in Hobby Lobby appear to be in denial about it. Hobby Lobby thus represents an interesting example of the Court’s willingness to engage in doctrinal revisionism. And, on inspection, the Court’s revisionism could have been done better.
Gallagher involved a Free Exercise Clause challenge against Sunday closing laws. The plaintiffs included customers of a kosher market, the kosher market itself, and a rabbi. In addition to addressing the merits, the defendants vigorously disputed whether any of the plaintiffs – either individual or corporate – had standing to sue.The Court splintered. A plurality, led by Chief Justice Warren, found no violation based on another case, Braunfeld v. Brown, decided on the very same day: "Since the decision in that case rejects the contentions presented by these appellees on the merits, we need not decide whether appellees have standing to raise these questions." Meanwhile, the concurring and dissenting justices didn't specifically address the majority's reservation. Because the plurality expressly reserved standing and no other justices complained about it, Gallagher seems like powerful evidence that it was once accepted practice to assume standing on the way toward the merits.
Remarkably, the Hobby Lobby majority and dissent papered over the Gallagher Court's reservation of jurisdiction.
Start with the Hobby Lobby majority’s oddly misleading summary of Gallagher. At the outset, the Hobby Lobby majority observed that the Gallagher defendants “argued that the corporation lacked ‘standing’ to assert a free-exercise claim.” The Hobby Lobby majority then dropped a footnote indicating that the defendants had objected to the corporate plaintiff's standing. Finally, the Hobby Lobby majority noted that the Gallagher plurality had "reserved decision on the question whether the corporation had 'standing' to raise the claim." But the defendants in Gallagher had vigorously argued not just that the corporation lacked standing, but that none of the plaintiffs had standing. And the Gallagher plurality expressly reserved whether “appellees” had standing, without limiting that reservation to the corporate party.
The Hobby Lobby dissent gamely engaged in the same revisionist account, wherein Gallagher assumed only corporate standing. “True,” the Hobby Lobby dissent conceded, “one of the five challengers to the Sunday closing law assailed in Gallagher was a corporation owned by four Orthodox Jews.” However, the “other challengers were human individuals, not artificial, law-created entities, so there was no need to determine whether the corporation could institute the litigation.” The Hobby Lobby dissent offered this line of reasoning specifically to help explain why "the plurality [in Gallagher] stated it could pretermit the question 'whether appellees ha[d] standing.'" Perhaps the Gallagher plurality should have resolved the standing issue by focusing on the non-corporate plaintiffs, as the Hobby Lobby dissent suggested. But that approach doesn’t line up with what was actually argued or reserved in Gallagher.
Fortunately, there's another, better way to harmonize Gallagher with now-settled notions of federal jurisdiction. The key is that the Gallagher plurality adjudicated the merits based on another case issued the very same day. That scenario triggers a kind of exception (recognized in Steel Co.) for cases where there is “a merits issue dispositively resolved in a companion case.” The basic idea is that, if your claim was just rejected on the merits, then there’s no longer a substantial federal question for purposes of federal jurisdiction. So while Gallagher’s use of hypothetical jurisdiction was unusually blatant, it doesn’t contradict the rule against assuming jurisdiction—or, at least, doesn’t contradict it to any greater extent than already allowed by Steel Co. itself.
The above is cross-posted from Re's Judicata.
Bottom line, sounds to me like Gallagher is a thin reed to rely on for the purposes of a corporate standing precedent here.
Posted by: Joe | Aug 21, 2014 2:09:31 PM