On March 22, 2017, the Supreme Court decided Czyzewski v. Jevic Holding Corporation. Jevic Transportation, Inc., a trucking company headquartered in New Jersey, was purchased by a subsidiary of Sun Capital Partners in 2006. In 2008 Jevic filed for bankruptcy under Chapter 11 of the Bankruptcy Code, at which that point it owed about $73 million to various creditors. Jevic’s former truck drivers then sued it for violating federal and state Worker Adjustment and Retraining Notification Acts, by failing to provide the requisite 60 days’ notice before a layoff. Separately, unsecured creditors filed a fraudulent conveyance action. In March 2012, representatives of all the major parties met to negotiate a settlement of the fraudulent conveyance suit. The representatives--except for the drivers’ representative--agreed to a settlement that would provide for payment of legal and administrative fees, a schedule for the payment of various creditors (though not the drivers), and ultimately a “structured dismissal” of the Chapter 11 bankruptcy.
The drivers and US Trustee objected, arguing that the settlement would improperly distribute estate property to creditors with lower priority than the drivers, in violation of the Bankruptcy Code. The Bankruptcy Court rejected these objections and approved the proposed settlement. The U.S. District Court and then the U.S. Court of Appeals for the Third Circuit affirmed, holding that the Bankruptcy Court had not abused its discretion in approving a structured dismissal that did not adhere strictly to the Bankruptcy Code’s priority scheme.
By a vote of 6-2, the U.S. Supreme Court reversed the judgment of the Third Circuit and remanded the case. In an opinion by Justice Breyer, the Court held that (1) the drivers have Article III standing to bring the present litigation; and (2) bankruptcy courts may not approve structured dismissals of Chapter 11 bankruptcy cases that provide for asset distributions which do not follow ordinary priority rules established by the Bankruptcy Code without the consent of affected creditors. Justice Breyer’s majority opinion was joined by the Chief Justice and Justices Kennedy, Ginsburg, Sotomayor, and Kagan. Justice Thomas filed a dissenting opinion, in which Justice Alito joined.
To discuss the case, we have Thomas Plank, who is the Joel A. Katz Distinguished Professor of Law at the University of Tennessee College of Law.
On May 1, 2017, the Supreme Court decided Bank of America Corp. v. City of Miami, which was consolidated with Wells Fargo & Co. v. City of Miami. In this case, the city of Miami sued Bank of America Corporation and similar defendants under the Fair Housing Act (FHA), arguing that the banks engaged in predatory lending practices that targeted minorities for higher-risk loans, which resulted in high rates of default and caused financial harm to the city. Miami also alleged that the banks unjustly enriched themselves by taking advantage of benefits conferred by the city, thus denying the city expected property and tax revenues.
The district court dismissed the FHA claims and held that Miami did not fall within the “zone of interests” the statute was meant to protect and therefore lacked standing under the statute. The court also held that Miami had not adequately shown that the banks’ conduct was the proximate cause of the harms the city claimed to have suffered. The U.S. Court of Appeals for the Eleventh Circuit reversed, holding that FHA standing extends as broadly as Article III of the Constitution permits, that Miami had established Article III standing here, and that it had sufficiently alleged proximate causation.
By a vote of 5-3, the Supreme Court vacated the judgment of the Eleventh Circuit and remanded the case. In an opinion by Justice Breyer, the Court held that (1) the city of Miami was an "aggrieved person" authorized to bring suit under the Fair Housing Act; and (2) the Eleventh Circuit erred in concluding that the city's complaints met the FHA's proximate-cause requirement based solely on the finding that the city's alleged financial injuries were a foreseeable results of the banks' misconduct; proximate cause under the FHA requires “some direct relation between the injury asserted and the injurious conduct alleged”; the lower courts should define, in the first instance, the contours of proximate cause under the FHA and decide on remand how that standard applies to the city's claims for lost property-tax revenue and increased municipal expenses. Justice Breyer’s majority opinion was joined by the Chief Justice and Justices Ginsburg, Sotomayor, and Kagan. Justice Thomas filed an opinion concurring in part and dissenting in part, in which Justices Kennedy and Alito joined. Justice Gorsuch took no part in the consideration or decision of the cases.
To discuss the case, we have Thaya Brook Knight, who is associate director of financial regulation studies at the Cato Institute.
On April 19, 2017, the Supreme Court heard oral argument in Weaver v. Massachusetts. Kentel Myrone Weaver was convicted of first degree murder for the 2003 shooting of Germaine Rucker. In 2011, Weaver filed a motion for a new trial, claiming that he was denied effective assistance of counsel. A court officer had closed the court to Weaver’s family and other members of the public during jury selection because of overcrowding. Weaver claimed that this closure violated his Sixth Amendment right to a public trial, and his counsel had failed to object to the closure. The Supreme Judicial Court of Massachusetts affirmed Weaver’s conviction on direct appeal and declined to grant relief on his Sixth Amendment claim.
The question before the Supreme Court is whether a defendant asserting ineffective assistance that results in a structural error must, in addition to demonstrating deficient performance, show that he was prejudiced by counsel's ineffectiveness, as held by four circuits and five state courts of last resort; or whether prejudice is presumed in such cases, as held by four other circuits and two state high courts.
To discuss the case, we have Peter M. Thomson, who is Special Counsel at Stone Pigman Walther Wittmann LLC.
On March 29, 2017, the Supreme Court heard oral argument in Turner v. United States, which was consolidated with Overton v. United States. In 1984, the body of Catherine Fuller was discovered in an alley after she had been beaten and raped. Sufficient physical evidence to identify the perpetrators was not recovered, and the medical examiner could not determine the number of attackers involved. Thirteen teenagers were initially indicted for being involved in a group effort to originally rob and subsequently assault and kill her. Two of them, Harry Bennett and Calvin Alston, pled guilty and agreed to testify, but the details in their accounts differed. Turner and nine other defendants were found guilty by a jury, and their convictions were affirmed on direct appeal. Nearly 25 years later, Turner and several of the other original defendants moved to have their sentences vacated, claiming that they had not received fair trials because the government had withheld exculpatory evidence in violation of Brady v. Maryland. They also argued that newly discovered evidence, including the recantations of Bennett and Alston, established that they were actually innocent of the crime. The trial court denied the motion, and the District of Columbia Court of Appeals affirmed. The Court held that the defendants had not shown a reasonable probability that the outcome of their trials would have been different with the new evidence.
The question now before the Supreme Court is whether the petitioners' convictions must be set aside under Brady v. Maryland.
To discuss the case, we have Brian Lichter, who is Associate at Latham & Watkins.
On April 17, 2017, the Supreme Court heard oral argument in California Public Employees’ Retirement System v. ANZ Securities. Between July 2007 and January 2008, Lehman Brothers raised over $31 billion through debt offerings. California Public Employees’ Retirement System (CalPERS), the largest pension fund in the country, purchased millions of dollars of these securities. CalPERS sued Lehman Brothers in 2011, and their case was merged with another retirement fund’s putative class action suit against Lehman Brothers and transferred to a New York district court. Later that year, the other parties settled, but CalPERS decided to pursue its own claims individually. The district court dismissed for untimely filing, and the U.S. Court of Appeals for the Second Circuit affirmed.
The questions now before the Supreme Court is whether the filing of a putative class action serves, under the American Pipe & Construction Co. v. Utah rule, to satisfy the three-year time limitation in Section 13 of the Securities Act with respect to the claims of putative class members
To discuss the case, we have Paul Stancil, who is Professor of Law at Brigham Young University.