« The Trial of Teaching Law | Main | Alta is (still) for skiers »

Thursday, April 21, 2016

The (still) irrepressible myth of Klein

SCOTUS on Wednesday decided Bank Markazi v. Peterson, rejecting, 6-2, a challenge to a federal statute under the separation of powers principles of U.S. v. Klein. My broadest takeaway from the case is that it makes clearer what probably was true before--short of the proverbial statute explicitly providing "In Smith v. Jones, Smith wins," nothing Congress would realistically enact (and the President sign) can ever violate Klein's prohibition on Congress deciding a case.

Justice Ginsburg wrote for Justice Kennedy, Thomas, Breyer, Alito, and Kagan. She hit a few key points.

   1) She appeared to limit Klein's meaning to the idea that Congress cannot dictate constitutional meaning to the Court (what Larry Sager has called the prohibition on compelling the Court to speak "constitutional untruths"). Klein's additional statement that Congress also cannot dictate rules of decision in pending cases--from which SCOTUS, lower courts, and commentators had derived the "no dictating outcomes" principle--cannot be taken at face value. Instead, Ginsburg looked to the various non-Klein limitations on retroactive legislation and insisted that, outside of those limits, the Court had twice affirmed that "Congress may indeed direct courts to apply newly enacted, outcome-altering legislation in pending civil cases." At a minimum, this marks a change of course, since "no dictating outcomes" had become Klein's central point in sub-constitutional cases.

   2) Ginsburg rejected the Bank's two main, related arguments that the statute was unprecedented in applying to only one case and in not leaving anything for judicial resolution, since the factual questions to be resolved (whether the asset was in the United States, was blocked, and was equal in value to a financial asset of Iran) were foregone conclusions. As to the second, she rejected the argument that the facts were foregone conclusions, requiring "plenty" of particular judicial determinations. And, in any event, that facts are undisputed does not mean a court is not applying new law to those facts. As to the first argument, Ginsburg insisted that § 8772 is not limited to only one case; while the enforcement proceedings were consolidated for administrative purposes, they reflected efforts to execute on 16 different judgments involving more than 1000 victims. Moreover, she rejected that idea that there is something inherently wrong with particularized legislation. While legislation often is of general applicability, bills governing one or a small number of subjects are permissible and common (citing, inter alia, Wheeling Bridge, a case upholding a statute designating a single particular bridge as a post road, a case Klein reaffirmed and distinguished).

   3) Finally, Ginsburg emphasized the statute's national-security context as an additional reason for deference to the political branches. Since Congress and the President creating foreign sovereign immunity, they also have broader power to create exceptions. This struck me more as a cherry-on-top argument good for this case. I expect the next Klein case, arising in a purely domestic context, to deemphasize that piece.

The Chief dissented, joined by Justice Sotomayor (which may be the most distinctive feature of the case), insisting that "there has never been anything" like this statute. No previous statute had singled out only a single pending case or a single defendant in this way. No statute had turned on such basic, already-undisputed facts.

To some extent, the divide in the Court turned on how they view several hypotheticals. The first is the "Smith wins" statute, which the Court had previously insisted (and the plaintiffs conceded at oral argument) would be invalid. The Court split over just how close § 8772 came to this paradigm. Roberts insisted they were the same, since creating a factual fait accomplii is no different that declaring a winner. Ginsburg, again deemphasizing this part of Klein, argued that such a law would be irrational, thereby violating Equal Protection. In any event, such a law would not be establishing a new legal standard, only compelling a result under old law. But Roberts had an interesting response: Such a statute would create new substantive law--old law did not necessarily determine that Smith wins, the new law does. Congress only can act by "changing the law" and anything Congress does (at least in exercising its power to enact statutes) is changing the law. It is necessary to take the next step of asking whether that new law that Congress enacted constitutes an invalid judicial act, something the majority fails to do.

The dissent offered a second hypothetical--a law declaring that a letter from a neighbor is conclusive proof of property boundaries, applicable only to one pending property case. But Ginsburg insisted this was the wrong analogy; the right analogy is a law clarifying which of two inconsistent maps should be used to establish the property boundary in the case. Notably, the statute declared invalid in Klein was problematic, in part, because Congress was dictating the effect to give a particular form of proof in the case.

A third Roberts hypothetical responded to the majority's position (used by many lower courts) that, as long as the result depends on some legal and factual determinations from the court, the law does not dictate the outcome. Imagine that the new law provided that Smith wins so long as the court finds that Jones was properly served and Smith's claim was within the statute of limitations, both of which are undisputed when the new law is enacted.* The majority's response, I suppose, is that those factual determinations do not go to the substantive merits of the claim being brought, while § 8772's factual determinations (whether the judgment debtor owns some enforceable assets) go to the heart of an action to execute a judgment.

[*] Then, just because, Roberts quoted Porgy and Bess.

Roberts closed by criticizing the opinion for offering a blueprint for how Congress can pick winners and losers in particular pending (or even threatened) cases going forward. In reality, it was clear before today that Klein would not have offered much resistance to most such efforts. Bank Markazi puts an exclamation point on that, particularly in arguably reading the "no dictating outcomes" principle out of Klein.

At the same time, Roberts did not offer a line between legislative and judicial conduct, "readily conced[ing], without embarrassment"** the difficulty in drawing such a line. Moreover, subject to due process retroactivity limits, Congress must be free to change the law in statutory cases, even where that alters who prevails in the case. After all, every law benefits one side or the other and Congress drafts the law to benefit the side Congress wishes to benefit. So even if Roberts is correct that § 8772 oversteps, he does not leave a sense of what Congress can, or should be able, to do.

[**] What might we craw from the "without embarrassment" language? And how might it relate to judges calling balls and strikes? Is Roberts acknowledging--and telling the public and the other branches--that constitutional decisionmaking is not so simple as he (and they) often make it out to be?

 

Posted by Howard Wasserman on April 21, 2016 at 12:43 AM in Constitutional thoughts, Howard Wasserman, Law and Politics | Permalink

Comments

I'm pretty sure the no-dictating-outcomes principle survives. The Court says in footnote 17 (so many footnotes in this opinion - is this typical for Ginsburg?) that a statute is invalid if it directs courts on how preexisting law applies to particular facts, instead of making some new legal standard, and says again at page 18 that the Smith v. Jones hypotheticals would violate Article III's vesting clause because they would "compel[] findings or results under old law." So, the distinction is between laws that say how existing law applies to facts and new law, but laws that dictate some particular outcome without providing a new legal standard are said to fall on the former side of the distinction.

Now, like Roberts, I don't see how a law that says Smith should win in Smith v. Jones isn't new law. Suppose Smith sues Jones under Statute X; B has a jurisdictional defense, a statute-of-limitations defense, a preclusion defense, and a failure-to-state-a-claim defense. If Congress said, for example, "Judgment Y is preclusive on Issue X in Smith v. Jones," or, "in Smith v. Jones, Jones didn't violate Statute X," I would call that applying existing law to circumstances. (Of course, Congress could draft around this by saying something more like, "in Smith v. Jones, consent judgments between the parties shall be given issue-preclusive effect," or, "it shall be legal for Jones to do Y notwithstanding any contrary provision of Statute X.") If Congress just says that Jones wins, though, how has Congress said how existing law applies to Smith v. Jones? Jones has four defenses under existing law, and Congress hasn't said that as applied to the facts, Jones wins on any of them or all of them. Rather, it seems to me, it's created a completely new rule that Jones wins under this statute if he's sued by Smith, almost as if Jones has an immunity from suit by Smith under the statute.

Further, I'm not sure if there's necessarily any problem with a statute like that. Congress could have a perfectly good reason for wanting Jones to win that has nothing to do with a policy judgment about liability, timeliness, or any other substantive defense Jones has. Suppose, for instance, that Hillary Clinton were indicted for having classified email on her home server. A very different Congress from the one we have thinks that this prosecution is silly and would effectively deprive the nation of what this Congress views as our best presidential candidate; however, Congress doesn't want to pass a law, even limited to her case, making what she did legal, as it believes that what she did is and should be illegal. So it passes a law simply instructing the district court to dismiss the indictment. I don't see the problem.

Posted by: Asher Steinberg | Apr 21, 2016 1:32:42 AM

Post a comment