The question of whether the individual mandate is a valid exercise of Congress’s taxing power should not come as a surprise to readers of this blog.  We’ve been following the taxing power argument for over a year, and we specifically highlighted the possibility that the Supreme Court ultimately would uphold Congress’s authority to enact the individual mandate under its plenary taxing power (as opposed to the commerce power, which is an argument that did not find support with the majority of the justices).  While a majority of legal experts were expecting the Supreme Court to invalidate the individual mandate today, we cautioned against making predictions based on oral arguments, and we were right. 

Interesting, while the Supreme Court held that the individual mandate was a tax for constitutional purposes, it also held that it was not a tax for purposes of the Anti-Injunction Act, which would have barred plaintiffs’ challenge.   The Court’s conclusion relating to the Anti-Injunction Act is the same conclusion reached by the Sixth Circuit a year ago (on June 29, 2011) when it became the first Circuit Court in the country to uphold the health care statute’s constitutionality.  See Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388).  But it’s also where much of the Supreme Court’s agreement with the Sixth Circuit ended.  Chief Justice Roberts flatly rejected the Sixth Circuit’s central reasoning in Thomas More that the individual mandate could be upheld under Congress’s commerce power.  In doing so, the Chief Justice accepted the “activity” vs. “inactivity” distinction previously rejected by the Sixth Circuit under which the plaintiffs argued that Congress could not stretch its commerce clause authority to regulate intrastate inactivity or, in effect, mere “existence” within the borders of the United States.  Chief Justice Roberts also disagreed with the view expressed by Judge Sutton in his concurring opinion in Thomas More that the individual mandate could not be sustained under Congress’s taxing power.

But if there is one important point of agreement between Chief Justice Roberts and Judge Sutton, it is that the policy merits of the individual mandate should be resolved by the people’s elected representatives, not by a judiciary acting as a super-legislature.  And so the debate over the individual mandate will rage on in the political sphere.  Meanwhile, generations of constitutional law students will debate and analyze today’s Supreme Court’s decision spanning 193 pages.  It’s an exciting time to be a constitutional law scholar.

Next week, the U.S. Supreme Court is expected to rule on the constitutionality of the individual mandate in a landmark ruling that not only will have immediate political ramifications, but also could have long-term structural consequences for congressional authority and the reach of the federal government’s power under the Commerce Clause.  Interestingly, a recent insider survey of nearly 60 legal experts found that most of them expect the Supreme Court to strike down the individual mandate.  Their views were shaped in large part by the oral arguments before the Court back in March (although query whether oral arguments are a reliable predictor of a court’s decision). 

So how do you think the Supreme Court will rule?  And will it be a 5-4 decision, as many are predicting? 

No matter how the Supreme Court rules, it is certain to draw upon the differing views in the three opinions from the Sixth Circuit’s Thomas More case.  We’ll be covering the Supreme Court’s decision and offer an in-depth analysis.

The Seventh Circuit held that such time is not compensable, because by excluding compensation for changing clothes, the parties to the collective bargaining agreement recognized that changing clothes is not a principal activity from which the compensation clock should start running.  The Sixth Circuit, in contrast, had concluded that changing time, even where not compensable, was a "principal activity," where required by the employer.   Franklin v. Kellogg Company, 619 F.3d 604 (6th Cir. 2010) (PDF).  The Seventh Circuit expressed its criticism of the Sixth Circuit's opinion as "offering only a conclusion, not reasons."  Judge Posner also rejected the Department of Labor's amicus position, noting that the Department's position had oscillated throughout each of the last three presidencies and that it would be a travesty if a plaintiffs' winning was dependent upon who was President at the time of the suit.

This issue is shaping up as one that may soon appear on our en banc watch.  We will keep you posted. 

According to the Supreme Court, the defendant was required to “show that but for the ineffective advice of counsel there is a reasonable probability that the plea offer would have been presented to the court . . . that the court would have accepted its terms, and that the conviction or sentence, or both, under the offer’s terms would have been less severe than under the judgment and sentence that in fact were imposed.”  While the Supreme Court agreed that the defendant received ineffective assistance of counsel, it disagreed with the District Court and the Sixth Circuit on the appropriate remedy.  The District Court had ordered specific performance of the plea agreement, which was affirmed by the Sixth Circuit.  The Supreme Court found that the correct remedy was to order the state to reoffer the plea deal.  If the deal is accepted, the trial court can determine whether to vacate the convictions and resentence, to vacate only some convictions and resentence, or to leave the convicted and sentence undisturbed. 

The Supreme Court’s decision is significant for holding that criminal defendants have the right to effective assistance of counsel during plea bargaining, even when it results in them turning down a plea and being convicted in a fair trial.

But in a majority opinion by Chief John Roberts, the Supreme Court reversed and noted that the issue was not one that could be "resolved with a stopwatch." Instead, the Court looked to several factors. The plaintiff received her "call" after "a significant degree of religious training followed by a formal process of commissioning." She "held herself out as a minister," and claimed "a special housing allowance on her taxes that was available only to employees earning their compensation 'in the exercise of the ministry.'" Her job gave her "a role in conveying the Church's message and carrying out its mission." She was fired, the school said, for violating religious doctrine by pursuing litigation rather than trying to resolve her dispute within the church. "Given all the circumstances of her employment,"  the plaintiff fell within the ministerial exception.  However, the Supreme Court gave only limited guidance about how courts should decide who counts as a minister, saying it was "reluctant to adopt a rigid formula." 

The Supreme Court ultimately found the balance in favor of the church’s protected ability to make its own decisions.  The Court's ruling will undoubtedly have significant consequences for countless people employed by religious groups to perform religious work. "The interest of society in the enforcement of employment discrimination statutes is undoubtedly important. But so too is the interest of religious groups in choosing who will preach their beliefs, teach their faith, and carry out their mission," Roberts wrote. "The First Amendment has struck the balance for us," Roberts continued. "The church must be free to choose those who will guide it on its way."

About two hours ago, the government filed its cert petition asking the U.S. Supreme Court to reverse the Eleventh Circuit’s ruling that the individual mandate exceeds Congress’s Commerce Clause power.  Here is the government’s 34 page petition, which is docketed as 11-398. 

As we reported back in August, a divided Eleventh Circuit held that the individual mandate is unconstitutional because it “exceeds Congress’s enumerated commerce power and is unconstitutional.”  See Opinion, State of Florida, et al. v. United States Department of Health and Human Services, et al. (Eleventh Circuit, Case No. 11-11021).  In today’s cert petition, the government argues that the Eleventh Circuit’s decision “is fundamentally flawed and denies Congress the broad deference it is due in enacting laws to address the Nation’s most pressing economic problems and set tax policy.”  The government specifically highlights how the Eleventh Circuit’s decision directly conflicts with the Sixth Circuit’s June 29, 2011 decision upholding the constitutionality of the individual mandate under the Commerce Clause.  See Opinion, Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388). 

Also interesting is the fact that the government has asked the Supreme Court to consider whether lawsuits challenging the individual mandate are barred by the Anti-Injunction Act (which the government previously has argued does not act as a bar).  As we previously reported, the Fourth Circuit earlier this month concluded that the individual mandate is a tax, and thus the plaintiffs could not challenge the mandate until it goes into effect in 2014: “Because this suit constitutes a pre-enforcement action seeking to restrain the assessment of a tax, the Anti-Injunction Act strips us of jurisdiction.”  See Opinion, Liberty University, Inc. v. Geithner (Fourth Circuit, Case No. 10-2347) (PDF). 

In addition to the government’s cert petition, the plaintiffs in this 26-state constitutional challenge to the health care statute also filed a cert petition earlier today.  Likewise, the National Federation of Independent Business, a party to the same lawsuit, has filed a cert petition.  You may be asking: Why are the plaintiffs filing cert petitions if their constitutional argument prevailed at the Eleventh Circuit?  One of the reasons is because of severability.  While the Eleventh Circuit majority ruled that the individual mandate is unconstitutional, it did not follow the lead of Florida District Judge Roger Vinson in setting aside the entire statute.  As we previously reported, Judge Vinson not only ruled back on January 31 that the individual mandate is unconstitutional, he also ruled that the entire law must be invalidated.  See State of Florida, et al.  v. United States Department of Health and Human Services, et al., Case No. 3:10-cv-91 (N.D. Fla.).  As Judge Vinson stated in his opinion, “Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.  This has been a difficult decision to reach, and I am aware that it will have indeterminable implications.”

From a broader perspective, the continued uncertainty over the constitutionality of the health care statute (as evidenced by the conflicting Circuit Court opinions from the last several months) is bad for business and bad for the nation as a whole.  Thus, it is perhaps not surprising that we are presented with the unique situation where the federal government, the states, and business groups all want the Supreme Court to step in immediately and resolve the contentious legal fight.  Given today’s filings, the odds of U.S. Supreme Court review have just gone up dramatically.  To be continued for sure…

As we have reported extensively (and previously predicted), the Sixth Circuit on June 29, 2011 became the first Circuit Court in the country to rule on the health care statute’s constitutionality when it issued a decision just 28 days after oral argument.  The divided Sixth Circuit panel included Sixth Circuit Judges Boyce F. Martin, Jr. and Jeffrey S. Sutton, and United States District Judge James L. Graham (Southern District of Ohio), sitting by designation.  All three judges issued separate opinions, and only Circuit Judges Martin and Sutton agreed that the individual mandate was a constitutional exercise of Congress’s Commerce Clause power. 

In their cert petition, the plaintiffs argue that U.S. Supreme Court review of the Sixth Circuit’s June 29 decision “is necessary to establish a meaningful limitation on congressional power under the Commerce Clause.”  The plaintiffs argue if the individual mandate falls within the commerce power, then “the federal government will have the absolute and unfettered power to create complex regulatory schemes to fix every perceived problem imaginable and to do so by ordering private citizens to engage in affirmative acts, under penalty of law, such as eating certain foods, taking vitamins, losing weight, joining health clubs, buying a GMC truck, or purchasing an AIG insurance policy, among others.”  The plaintiffs argue that “Congress will be incentivized to create intrusive regulatory schemes as constitutional cover for the naked power grabs, thereby turning the Constitution on its head.”

To enhance their chances of obtaining Supreme Court review (which already are higher than in a typical case), the plaintiffs point out that while Judge Sutton and Judge Graham disagreed on the constitutionality of the individual mandate, they both agreed about the need for the Supreme Court to address the limits of congressional power in the context of this case of national importance.  Indeed, Judge Sutton effectively challenged the Supreme Court to review the Sixth Circuit’s decision.

Now that the Sixth Circuit case has made it to the High Court, the question is whether the justices are ready to address one of the most important constitutional questions facing the country or whether instead the Court will wait for one of the other Circuit Court decisions (since health care challenge appeals remain pending in the Fourth, Eleventh, and D.C. Circuits).  Will the Supreme Court take on Judge Sutton’s challenge and address the limits of congressional power?  Will the Supreme Court influence Presidential politics by rendering a decision before the 2012 elections?  Keep following our blog, and you’ll know the latest.

In a concurrence, Justice Scalia agreed with the result but noted that he was beginning to doubt the premise of Auer.  He argued that the principle of separation of powers should prevent the Court from defering to an agency’s interpretation of its own law.

For more analysis on this issue in Talk America, see our previous coverage of this case here and here.

The affirmance in Tinklenberg both ends the Sixth Circuit’s 0-14 “losing streak” before the Supreme Court (discussed here and here), and shows that such simplified win/loss statistics are often misleading.

In the order denying the petition for rehearing en banc before the Sixth Circuit, as previously reported here, Judge Sutton stated the reasons that he thought the panel of the Sixth Circuit decided this case incorrectly, but concluded that this was not a case appropriate for en banc review:   “Sometimes there is nothing wrong with letting the United States Supreme Court decide whether a decision is correct and, if not, whether it is worthy of correction.”  Apparently, the Supreme Court agreed.

Virginia had filed a petition on February 8, 2011 asking the U.S. Supreme Court to hear its case before the Fourth Circuit rules.  See Petition for a Writ of Certiorari Before Judgment in Commonwealth of Virginia v. Sebelius (U.S. Supreme Court, Case No. 10-1014).  It is very rare, however, for the Supreme Court to address legal claims before they are addressed by the Circuit Courts.  Oral arguments already are scheduled in three Circuit Courts during the next month-and-a-half.

The Fourth Circuit will hear oral arguments on May 10, 2011 in the appeal from Virginia District Court Judge Henry Hudson’s December 13, 2010 decision declaring the individual mandate under the health care statute to be unconstitutional.  See Oral Argument Notification, Commonwealth of Virginia, et al. v. Sebelius (Fourth Circuit, Case No. 11-1057).

The Eleventh Circuit will hear oral arguments on June 8, 2011 in the appeal from Florida District Judge Roger Vinson’s January 31, 2011 ruling that that the individual mandate under the health care statute is unconstitutional.  See Oral Argument Order, State of Florida, et al. v. United States Department of Health and Human Services, et al. (Eleventh Circuit, Case No. 11-11021).

And finally, as we reported earlier this month, the Sixth Circuit has scheduled oral arguments for Wednesday, June 1, 2011 at 1:30 p.m. in the appeal from the October 7, 2010 decision by Judge George Steeh of the U.S. District Court for the Eastern District of Michigan upholding the individual mandate under the health care statute.  See Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388).

As we have been saying for months, the Sixth Circuit remains in a position to become one of the first—if not the first—appellate courts in the country to rule on the constitutionality of the health care statute. 

In what could be the end of the Sixth Circuit’s 0-15 "losing streak" before the United States Supreme Court (reported previously here), the Supreme Court recently granted certiorari in the case of EEOC, et al, v. Hosanna-Tabor Evangelical Lutheran Church and School.pdf to review the Sixth Circuit’s determination that the termination of a parochial school teacher was subject to a claim of discrimination under the Americans with Disabilities Act of 1990, 42 U.S.C. §12117(a) ("ADA").

The Sixth Circuit vacated the district court’s grant of summary judgment in favor of the school, holding that the “ministerial exception” to the ADA, which allows religious entities to give “preference in employment to individuals of a particular religion” and to “require that all applicants and employees conform to the religious tenants of such organization,” was not applicable where, as here, the teacher’s primary duties were secular.  In so holding, the Sixth Circuit, according to Petitioner's Writ.pdf, has deepened the split as to whether the “primary duties” test is the appropriate test to apply, with the Sixth Circuit joining the Third, Fourth and D.C. Circuits in applying the “primary duties” test and the Second, Fifth, Seventh and Ninth Circuits rejecting it. 

Realcomp had a membership of 14,000 residential real estate brokers, and, as a service to its members, operated a database of property listings known as a multiple listing service ("MLS"). Because MLSs such as that of Realcomp enable consumers to self-supply certain real estate brokerage services, they exert pressure on the traditional real estate model, in which brokers represent buyers and sellers alike in a system of flat fees and commissions. Broker services are commonly governed by exclusive right to sell ("ERTS") or exclusive agency ("EA") agreements, with the former providing a wider scope of services to the customer and the latter providing fewer services but at a discounted price. The FTC filed a complaint against Realcomp, alleging that its website policy was anticompetitive under Section 5 of the FTC Act, 15 U.S.C. § 45, because Realcomp prohibited information about EA and other nontraditional listings on its MLS from being distributed to public real-estate advertising websites.  In addition, Realcomp excluded EA and other nontraditional listings from the default search setting on the MLS; in order to find an EA listing, a broker would have to undertake a more specific search on the database.  Finally, Realcomp required that, in order for a listing to be labeled ERTS, a broker would have to provide full-service brokerage services in connection with the listing.  In a lengthy ruling [PDF] an administrative law judge for the FTC dismissed the complaint, finding that, while Realcomp's website policy was likely anticompetitive, the FTC failed to show any significant anticompetitive effects.  The FTC unanimously reversed [PDF], finding under its "quick-look approach" that Realcomp's policies were inherently suspect and presumptively unlawful and, alternatively under more searching analysis, that Realcomp's market power combined with the anticompetitive nature of its website policy to render its website policies unreasonable.  The FTC entered a cease and desist order, and Realcomp appealed to the Sixth Circuit.

Writing for a unanimous panel that included Judges Siler and Griffin, Judge Moore affirmed the FTC's ruling. Employing a substantial-evidence standard of review, the Court did not reach the FTC's "quick-look" analysis, but instead affirmed the commission's more searching, rule-of-reason analysis.  The Court agreed with the FTC that Realcomp possessed substantial market power and also that, by "limit[ing] access to internet marketing and impos[ing] additional costs on the marketing of discount listings," Realcomp's website policy had an anticompetitive nature.  Because both showings had been made, Realcomp's policy demonstrated "the potential for genuine adverse effects on competition" and, thus, could properly be found to violate Section 5.  The Court also found that, alternatively, Section 5 was violated because the FTC demonstrated "actual detrimental effects" of Realcomp's policies.  Specifically, the Court credited FTC evidence showing that the share of EA listings in Realcomp's MLS declined by 50% after initiation of Realcomp's website policies, thereby showing "substantial consumer harm."  Finally, the Court found that Realcomp had not shown any "countervailing procompetitive virtue" of its website policies, rejecting claims that the policies were designed to solve free-rider or bidding-disadvantage problems.  On these bases, the Court affirmed the FTC ruling.

With so many information-based services currently provided over the Internet, the ruling in Realcomp II provides businesses reason for caution when developing and implementing policies governing access to such information.

As previously reported here, the Sixth Circuit answered no, holding, in contravention of the FCC’s own interpretation, that the incumbent telephone companies could charge the higher market rates to smaller competitors in light of the cheaper cost to build such facilities, the wide availability of entrance facilities from alternative providers, and their greater revenue potential.  In short, the Court held that “there is nothing monopolistic about entrance facilities,” unlike telecommunications equipment subject to regulated pricing.  Judge Sutton dissented from the majority opinion, which was written by Chief Judge Batchelder and joined by Judge Gilman, on the basis that the FCC's interpretation of its own regulations is reasonable and should be upheld.

Both parties requested Supreme Court review of the Sixth Circuit's decision to resolve the split in decisions from the Sixth Circuit (PDF) and the Seventh (PDF), Eighth (PDF) and Ninth Circuits (PDF). The eight amicus briefs filed are split evenly with the United States, the California Public Utilities Commission, Sprint Nextel, and Comptel, in favor of Petitioner's position that access should be provided at cost and Centurylink, Qwest Communications International, and Windstream; Verizon; United States Telecom Association and Network Engineers; and Administrative Law Professors from Harvard Law and Florida State University College of Law in favor of Respondent's position to uphold the Sixth Circuit decision favoring market rates.

 The FLSA contains an anti-retaliation provision which provides that an employer may not “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the Act], or has testified or is about to testify in such proceeding, or has served or is about to serve on an industry committee.”  Id. at 215(a)(3) (emphasis added).  The Sixth Circuit previously assumed without discussion that the statutory phrase “filed any complaint” includes oral as well as written complaints within its scope.  See Moore v. Freeman (PDF), 355 F.3d 558, 562-63 (6th Cir. 2004).  The Sixth Circuit’s interpretation has been followed by the Fifth, Eighth, Ninth, and Eleventh Circuits.  By contrast, the Second, Fourth, and Seventh Circuits have held that unwritten complaints are not protected. 

In Kasten v Saint-Gobain Performance Plastics Corp. (PDF), No. 09–834 (U.S. Sup. Ct. Mar. 22, 2011), the Supreme Court in an appeal from the Seventh Circuit resolved the Circuit split by siding with the Sixth Circuit’s view and holding that an oral complaint of a violation of the FLSA is protected conduct under the Act’s anti-retaliation provision.  In a majority opinion written by Justice Breyer (who was joined by Justices Roberts, Kennedy, Ginsburg, Alito, and Sotomayor), the Court recognized that a narrow interpretation of the phrase “filed any complaint” would undermine the FLSA’s basic objectives, which includes prohibiting “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.”  29 U. S. C. § 202(a). 

At the same time, the Court in Kasten declined to resolve another Circuit split under the FLSA involving the question of whether the phrase “filed any complaint” encompasses internal complaints made to private employers or instead only protects complaints made with the government.  The Sixth Circuit, along with the First, Third, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits, has held that internal complaints made to an employer are protected.  The Second and Fourth Circuits, by contrast, have rejected that view.  The Supreme Court did not address this issue on the grounds that it was not raised in the certiorari briefs and its resolution was not necessary to address the oral/written question at issue.

Stay tuned for whether the Supreme Court accepts this Petition of the Day.