June 27, 2008

Brief summaries of the rulings from the leading cases before the Supreme Court in its just-ended term:
Ruled that Americans have a right to own guns for self-defense and hunting. It was the justices’ first major pronouncement on gun rights in history. The 5-4 ruling struck down the District of Columbia’s 32-year-old ban on handguns as incompatible with gun rights under the Second Amendment. The decision went further than even the Bush administration wanted, but probably leaves most firearms laws intact. Within two days, lawsuit were filed in San Francisco and Chicago challenging similar handgun bans.
The court had not conclusively interpreted the amendment since its ratification in 1791. The amendment reads: “A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.” The basic issue for the justices was whether the amendment protects an individual’s right to own guns no matter what, or whether that right is somehow tied to service in a state militia.
Writing for the majority, Justice Antonin Scalia said an individual right to bear arms is supported by “the historical narrative” both before and after the amendment was adopted. The Constitution does not permit “the absolute prohibition of handguns held and used for self-defense in the home,” Scalia said. The court also struck down Washington’s requirement that firearms be equipped with trigger locks or kept disassembled, but left intact the licensing of guns. Joining Scalia were Chief Justice John Roberts and Justices Samuel Alito, Anthony Kennedy and Clarence Thomas. (District of Columbia v. Heller, 07-290)
Outlawed executions for the nonlethal rape of a child. By a 5-4 vote, the court said a Louisiana law allowing the death penalty to be imposed in cases of child rape violates the Constitution’s ban on cruel and unusual punishment. Four other states — Montana, Oklahoma and South Carolina and Texas — had allowed for the execution of a child rapist. But no state has executed a convict in 44 years for a crime that did not also include a killing.
“The death penalty is not a proportional punishment for the rape of a child,” Kennedy wrote for the court. The decision bans executions for non-lethal crimes, except for federal crimes such as treason and espionage. (Kennedy v. Louisiana, 07-343)
Found that foreign terrorism suspects held at Guantanamo Bay have rights under the Constitution to challenge their detention in U.S. civilian courts. In a 5-4 ruling, the majority also noted that the system the administration put in place to classify suspects as enemy combatants and review those decisions is inadequate.
The court has ruled twice previously that people held at Guantanamo without charges can go into civilian courts to ask that the government justify their continued detention. Each time, the administration and Congress, then controlled by Republicans, changed the law to try to close the courthouse doors to the detainees. The White House maintains that detainees have no rights and contends its classification and review process is a sufficient substitute for civilian court hearings.
“The laws and Constitution are designed to survive, and remain in force, in extraordinary times,” Kennedy wrote in the court’s opinion. In dissent, Roberts criticized his colleagues for striking down what he called “the most generous set of procedural protections ever afforded aliens detained by this country as enemy combatants.” (Boumediene v. Bush, 06-1195, Al-Odah v. U.S., 06-1196)
Ruled 7-2 that federal judges can impose shorter sentences than under federal sentencing guidelines for crimes related to crack cocaine, making those sentences more equal to those for crimes involving powder cocaine. Justices upheld more lenient sentences imposed by judges who rejected federal sentencing guidelines as too harsh. (Kimbrough v. U.S., 06-6330)
Ruled 7-2 to uphold the most common method of capital punishment used across the United States. The justices said the three-drug mix of lethal-injection drugs used by Kentucky and most other states does not constitute cruel and unusual punishment. The ruling cleared the way for a resumption of executions nationwide. (Baze v. Rees, 07-5439)
Said states can require would-be voters to produce photo identification without violating their constitutional rights. The 6-3 ruling validated Republican-inspired voter ID laws. Democrats and civil rights groups had argued that laws requiring voters to produce photo identification in order to cast ballots violate the Constitution. The court disagreed, upholding Indiana’s strict photo ID requirement.
Opponents had argued that the Indiana law could deter poor, elderly and minority voters from casting ballots. Its backers said the photo ID law was needed to deter electoral fraud. The justices agreed that states can take such steps to protect “the integrity and reliability of the electoral process,” as long as they don’t impose “excessively burdensome requirements” on any class of voters.
More than 20 states require some form of identification at the polls. The opinion came a week before Indiana’s presidential primary. (Crawford v. Marion County Election Board, 07-21, Indiana Democratic Party v. Rokita, 07-25)
Ruled 7-2 that the government can criminalize an individual’s promotion of child pornography, whether or not he actually possesses it. Opponents had said the law could apply to mainstream movies like “Titanic,” which depict adolescent sex. And a federal appeals court had struck down the portion of the federal law pertaining to promotion of child pornography. But Scalia, writing for the court, said such concerns are unfounded. He also wrote that First Amendment protections do not apply to “offers to provide or requests to obtain child pornography.” (U.S. v. Williams, 06-694)
Found that President Bush overstepped his authority when he ordered a Texas court to reopen the case of a Mexican on death row for rape and murder. The case mixed presidential power, international relations and the death penalty. Bush was in the unusual position of siding with death row prisoner Jose Ernesto Medellin, a Mexican citizen whom police prevented from consulting with Mexican diplomats, as provided by international treaty.
An international court ruled in 2004 that the convictions of Medellin and 50 other Mexicans on death row around the United States violated the 1963 Vienna Convention, which provides that people arrested abroad should have access to their home country’s consular officials. The International Court of Justice, also known as the world court, said the Mexican prisoners should have new court hearings to determine whether the violation affected their cases.
Bush, who oversaw 152 executions as Texas governor, disagreed with the decision. But he said it must be carried out by state courts because the United States had agreed to abide by the world court’s rulings in such cases. The administration argued that the president’s declaration is reason enough for Texas to grant Medellin a new hearing. Roberts, writing for the 6-3 majority, disagreed. Roberts said the international court decision cannot be forced upon the states. (Medellin v. Texas, 06-984)
Sided, in a 5-3 decision split along conservative-liberal lines, with the administration to make it harder for investors to sue businesses that play secondary roles in schemes by publicly traded corporations to manipulate their stock prices. For investors targeting Wall Street banks in the Enron scandal, the decision casts doubts on their lawsuit seeking monetary damages. (Stoneridge Investment v. Scientific-Atlanta, 06-43)
Sent a message to prosecutors and judges that it will cast a skeptical eye on the exclusion of blacks from juries. The justices, by a 7-2 vote, threw out a death sentence and murder conviction because a Louisiana prosecutor kept blacks off the jury in a trial he called his “O.J. Simpson case.” While the high court has ruled previously that jurors cannot be excused solely because of their race, the practice has continued, often with the approval of judges. The court’s March 19 ruling indicates judges should be less accepting of prosecutors’ explanations.
The justices said state prosecutor Jim Williams improperly excluded blacks from the jury that convicted Allen Snyder of killing his estranged wife’s companion. Snyder was sentenced to death by an all-white jury, and claimed he did not get a fair trial because the prosecutor improperly dismissed prospective black jurors and compared the defendant to O.J. Simpson.
Alito, writing for the majority, said the trial judge should have blocked Williams from barring a black juror. Alito’s opinion made no mention of Simpson. (Snyder v. Louisiana, 06-10119)
Ruled that states can continue to give special tax breaks on bonds that fund hospitals, schools, roads and other services. The justices ruled 7-2 that states can exempt interest on their bonds from taxation, even while taxing residents for interest on bonds from other states. More than 40 states have systems upheld by the court in the ruling in favor of Kentucky. (Department of Revenue of Kentucky v. Davis, 06-666)
Unanimously sided with individual 401(k) retirement account holders, allowing them to sue under the Employee Retirement Income Security Act to recover losses. Justice John Paul Stevens’ opinion affirms participants’ ability to engage plan administrators for breaching their fiduciary duties. (LaRue v. DeWolff, Boberg & Associates Inc; and DeWolff, Boberg & Associates Inc., Employees’ Savings Plan)
Slashed the punitive damages Exxon Mobil must pay victims of the nation’s worst oil spill. The justices cut the $2.5 billion punitive damages award in the 1989 Exxon Valdez disaster to $500 million.
A federal appeals court had already cut in half the $5 billion punitive damages award that a jury decided Exxon Mobil should pay for the spill that dumped 11 million gallons of oil into Prince William Sound and fouled more than 1,200 miles of Alaskan coastline.
Justice David Souter wrote in the 5-3 opinion that punitive damages may not exceed what the company already paid to compensate victims for economic losses. Alito took no part in the case because he owns ExxonMobil stock. (Exxon Shipping Co. v. Baker

The U.S. Supreme Court handed the business sector a mix of wins and losses in the 2007-2008 term ending Friday, but when business did win, it won big.

Just this week, the justices handed out one of the year’s most important business victories in a 5-3 ruling that ordered a $2 billion reduction in punitive damages against Exxon Mobil Corp. (XOM) for the 1989 Exxon Valdez oil spill in Alaska. Although the case dealt with obscure maritime laws, numerous legal experts expect the court’s holding – which limited punitive damages against the oil giant to no more than actual damages – will spill over into state courts, the primary venue for punitive damages against companies.

Two other major victories largely preserved the status quo for corporations. In May, the high court upheld the ability of state and localities to offer tax exemptions on local municipal bonds, a ruling that allowed the massive municipal bond market to remain unchanged. And in January, the justices said federal securities laws limit the ability of defrauded shareholders to sue third parties such as accountants, vendors, lawyer and advisors. The securities ruling, known as Stoneridge, closed the door to a new legal theory that could have allowed more lawsuits after companies reveal securities fraud.

Business also scored wins in its ongoing effort to restrict state-level lawsuits because of pre-emption by parallel federal laws. Meanwhile, the U.S. Chamber of Commerce counted seven cases as losses to business, including five cases that favored workers in employment law-related disputes and two cases that make it easier for companies to be sued.

Exxon Valdez Opinion On Damages May Have Broad Impact
The Exxon Valdez damages case eventually could prove to be one of the biggest business cases in recent years, said Mark Levy, who heads Kilpatrick Stockton LLP’s Supreme Court and appellate practice. “It’s potentially a very significant decision,” Levy said. “Right off the bat, there’s reason to think state courts will pay attention to it and it will be influential on constitutional issues.”

Corporate groups consider reducing punitive damages awards one of their top priorities. Chamber President Tom Donohue earlier this week hailed the Exxon Mobil decision, calling it “good news for companies concerned about reining in excessive punitive damages.”

The Supreme Court since 2003 has issued three rulings that place new restrictions on punitive damages awards. The one-to-one ratio spelled out in the Exxon Mobil case, which for now is limited to maritime laws, eventually could narrow the court’s broader holding that a single-digit ratio of actual damages to punitive damages is the constitutional limit.

Losses Center On Employment Disputes
Although business suffered several losses on employment law, the impact of those losses may be minimal. Miguel Estrada, part of Gibson Dunn & Crutcher’s constitutional law practice, said the employment-law losses “at the end of the day didn’t amount to very much.” Estrada spoke at a Chamber briefing on Supreme Court cases.

Of those decisions, the Supreme Court made it easier for workers to bring age- discrimination and retaliation claims against their employers. The court also in two opinions ruled favorably for workers bringing lawsuits in employment- benefits disputes.

One loss that didn’t receive much attention but could prove significant for business is a case called Bridge v. Phoenix Bond.

In this appeal, the high court made it easier to bring private civil lawsuits under the Racketeer Influenced and Corrupt Organizations Act, a federal law passed to combat organized crime. The RICO laws increasingly have been used to sue corporations with claims that can lead to triple damages awards.

Court Bars State-Level Lawsuits In Pre-Emption Rulings
The Supreme Court heard several cases on whether federal statutes prevent the use of state laws to sue companies. This area of the law, known as pre-emption, is one business counts as important in its bid to limit lawsuits against it.

“Pre-emption is probably the single most important recurring issue on the court’s docket,” Levy said.

This year’s major pre-emption case ruling came in Riegel v. Medtronic (MDT), where the high court ruled 8-1 that federal medical-device regulations prevent patients from bringing state product-liability lawsuits unless a company violated U.S. Food and Drug Administration regulations.

The court heard three additional pre-emption matters, limiting Maine’s attempt to regulate mail order tobacco sales and restricting a state agency’s authority to act on arbitration provisions in a contract. The Supreme Court deadlocked 4-4 on the third matter, a state-level lawsuit involving Pfizer Inc.’s (PFE) Warner- Lambert unit that was at tension with FDA drug oversight.

In recent years, the Supreme Court has devoted more of its docket to business cases, and the 2007-2008 term was no exception. The Chamber said about 40% of the docket dealt with cases important to companies, which is similar to the prior term and up from 31% two years ago.

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