Ezekiel Elliott: Postponing the Inevitable?

Written By Michael Varrige

 

Background

In mid-August, the NFL suspended Dallas Cowboys Running Back Ezekiel Elliott for an alleged July 2016 domestic assault. Despite Elliott’s continued denial of the allegations made by the alleged former girlfriend, Elliott and the NFL have been engaged in a legal battle since his appeal to the NFL arbitrator. The appeal to the arbitrator, which was the first step in appealing his suspension under the NFL Collective Bargaining Agreement (“CBA”), was denied. Elliott then filed suit in the United States District Court for the Eastern District of Texas, asking for a preliminary injunction and alleging a fundamentally unfair suspension appeal hearing. The court granted his preliminary injunction, the NFL appealed, and now the parties await a ruling from the Fifth Circuit.

Discussion

Elliott was a rookie sensation during the 2016 NFL season, bringing an energy to “America’s Team” that had previously been lacking. The Cowboys finished 13-3, won the NFC East, and advanced to the playoffs, eventually losing in the divisional round to the Green Bay Packers.

Before all of the hype surrounding the rookie, however, Elliott was accused of assaulting his alleged former girlfriend in Columbus, Ohio, just a few months before the season started. While prosecutors declined to prosecute the case because of conflicting evidence, that did not stop the NFL from pursuing a year-long investigation, culminating in a six-game suspension penalty.
The NFL’s Personal Conduct Policy provides that Roger Goodell, as NFL Commissioner, may suspend players without a criminal charge, arrest, or conviction, but may only do so “when credible evidence establishes that the player engaged in conduct prohibited by the policy.” Upon a review of the record, an interview with Elliott, and the investigation report, Goodell decided to suspend Elliott for six games.

Arbitration

Pursuant to the CBA, an agreement to which both the NFL and the NFL Players Association (“NFLPA”) are parties, Elliott appealed this suspension to the arbitrator, who had to decide whether Goodell’s decision was arbitrary and capricious.

Within Elliott’s appeal to the arbitrator were requests to have his accuser available for cross-examination, to have the NFL investigator’s notes made available to him, and to have the NFL investigator testify at the hearing. Only the third request was granted, and with credibility of the parties and evidence playing a central role in the dispute, Elliott and the NFLPA questioned the arbitrator’s denials. In addition, the hearing revealed that the NFL investigator, like the Ohio prosecutor, recommended no sanctions against Elliott, due to credibility issues and conflicting evidence. Arbitration ended on August 31, 2017, and the NFLPA brought suit in the Eastern District of Texas the following day.

U.S. District Court for the Eastern District of Texas

Under Rule 65 of the Federal Rules of Civil Procedure, “[e]very order granting an injunction and every restraining order must: (a) state the reasons why it issued; (b) state its terms specifically; and describe in reasonable detail . . . the act or acts restrained or required.” Furthermore, “a plaintiff seeking a temporary restraining order must show: (1) a substantial likelihood of success on the merits; (2) a substantial threat that plaintiff will suffer irreparable harm if the injunction is not granted; (3) the threatened injury outweighs any damage that the injunction might cause the defendant; and (4) the injunction will not disserve the public interest.”

Elliott appealed to the District Court for a preliminary injunction to allow him to keep playing until his lawsuit against the League was completed and a final decision was returned. In his argument, Elliott asserted that he had a substantial likelihood of success on the merits because of the denial of access to the NFL investigator’s notes, the lack of opportunity to cross-examine his accuser, and the inability to question Goodell about his decision-making process, amongst other things. Traditionally, these types of decisions are left to the discretion of the arbitrator; therefore, if a court is asked to review these decisions, the question is “whether the arbitration proceedings were fundamentally unfair.” Here, the Court found such unfairness and misconduct that it stated, “The circumstances of this case are unmatched by any case this Court has seen.”

As to the second element, the Court held that Elliott would be irreparably damaged by the suspension, on the basis that six games is a significant part of the NFL’s sixteen-game season. Such a suspension, according to the Court, would deny Elliott the chance to achieve statistical honors, due to the limited window that professional athletes have the opportunity to play.

For the third element, the NFL argued that it would suffer procedural harm if Elliott’s injunction were to be granted because “the NFLPA and NFL have an agreed-upon internal procedure that will be eviscerated by an injunction in this case.” The Court did not find this argument persuasive, as they held that this did not shift the balance of hardships, nor did it impact the public interest factors required in a preliminary injunction ruling.

Consequently, the District Court granted the preliminary injunction, and Elliott played in Week 2 of the NFL season (when, in the alternate, his suspension would have gone into effect). The District Court also denied the NFL’s motion for an emergency stay of the injunction.

U.S. Court of Appeals for the Fifth Circuit

The NFL has since appealed the case to the Fifth Circuit Court of Appeals, asking for an emergency stay of the preliminary injunction. The stay would allow the suspension to go into effect during either Week 3 or Week 4 of the NFL season.

In its appeal, the NFL asserts three main arguments: (1) the NFLPA did not allow for the arbitration to finish before it filed suit; (2) the CBA’s requirements for an appeal hearing were satisfied by the NFL’s process; and (3) the lawsuit is a misuse of the court system and could allow every player the NFL suspends to file suit before their arbitration has ended.

One of the CBA provisions states that arbitration is the “exclusive and final remedy,” which means that the NFLPA and the players cannot go to the courts until the arbitration has concluded. The NFLPA filed suit the day after the close of arbitration, and the preliminary hearing occurred on the same day that the decision was handed down. This argument was addressed by the District Court when it cited an exception to this rule recognized by both the Fifth Circuit and the Supreme Court, namely, that exhaustion is not required if the employer’s conduct amounts to a repudiation of the remedial procedures specified in the contract. The District Court used the denial of evidence to support the claim that the NFL and Commissioner Goodell’s conduct fell under this exception.

As to the second argument, the NFL argues that Elliott had all relevant evidence in the form of affidavits, testimony from the NFL investigator on the case, and the reports that Goodell used to make his decision. Consequently, the NFL argues that a player need only be represented by counsel, permitted the opportunity to provide relevant evidence, and provided a promptly-issued decision, all of which the NFL alleges occurred. This argument may fail, however, if the Fifth Circuit focuses on what some would call the procedural short falls of the arbitration hearing, perhaps most notably the denied request to cross-examine Elliott’s accuser and the denied request to have Goodell testify.

The third argument asserted is that, while the NFL itself may not suffer more irreparable harm than Elliott could personally, a victory for Elliot would encourage all suspended players to sue in their preferred locations and perhaps postpone their suspensions. This could be used in a strategic way to allow players to serve their suspensions at a more advantageous time during their seasons and, additionally, it could undermine the CBA’s process and the private settlement of labor disputes. The NFL further argues that the public has an interest in preventing domestic violence and allowing the Commissioner to attempt to deter this behavior.

The NFL requested that relief be granted by September 26th, but there is no mandate that that Fifth Circuit abide by the NFL’s request, and there is also no guarantee that the Fifth Circuit will rule in favor the NFL. It will be interesting for NFL fans and players, as well as labor and contract law enthusiasts, to see how this litigation is settled. Nevertheless, one thing is for sure: we have not heard the last from Ezekiel Elliott, the NFLPA, the NFL, or the courts on this issue.

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Sources Cited

Judge Denies NFL’s Emergency Stay Request in Ezekiel Elliott Case, ESPN, (Sept. 18, 2017).

Michael McCann, Ezekiel Elliott’s Legal Saga is Just Getting Started, Sports Illustrated, (Sept. 6, 2017).

NFL Players Ass’n v. NFL, 2017 U.S. Dist. LEXIS 146027 (E.D. Tex. 2017).

Schuyler Dixon, Judge Blocks Ezekiel Elliott’s 6-Game Suspension Over Domestic Violence Case, Chicago Tribune (Sept. 8, 2017).

Schulyer Dixon, NFL Trying to Speed Appeal over Blocked Ezekiel Elliott Suspension, The Denver Post, (Sept. 14, 2017).

Will Brinson, The NFL Wants an Ezekiel Elliott Ruling by Sept. 26 and has a Good Argument, CBS SPORTS (Sept. 15, 2017).

Rescinding DACA: What that means and what comes next

Written By Katie M. Becker

“A principal feature of the removal system is the broad discretion exercised by immigration officials. Federal officials, as an initial matter, must decide whether it makes sense to pursue removal at all.” Arizona v. United States, 132 S.Ct. 2492, 2499 (2012).

 

Background

On Tuesday, September 5, 2017, Attorney General Jefferson Sessions publically announced the rescission of the Deferred Action for Childhood Arrivals (“DACA”) program. In his public remarks, Attorney General Sessions described the DACA program as “an unconstitutional exercise of authority by the Executive Branch.” He analogized the fate of DACA with that of its extension program, Deferred Action for Parents of Americans and Lawful Permanent Residents (“DAPA”), which was nationally enjoined in the Fifth Circuit’s 2015 decision, Texas v. U.S., 809 F.3d 134. The nationwide injunction was effectively affirmed in 2016 by the Supreme Court of the United States in a one-sentence decision, after a 4-4 split vote.

In addition, President Donald J. Trump also issued a statement stressing his administration’s views that DACA is inherently unconstitutional. He noted that “officials from [ten] state[s] are suing over the program,” pressuring the Administration “to make a decision regarding [the program’s] legality.” President Trump remarked that he had been assured by the “Attorney General of the United States, the Attorneys General of many states, and virtually all other top legal experts” that “the program is unlawful and unconstitutional and cannot be successfully defended in court.” His remarks were largely informed by the outcome of the 2016 Supreme Court decision.

Following Attorney General Sessions’ and President Trump’s statements, the Acting Secretary of the Department of Homeland Security (“DHS”), Elaine Duke, issued a memo to the Department formally rescinding the June 15, 2012 Obama Administration memo that established DACA.

Deferred Action for Childhood Arrivals (DACA)

On June 15, 2012, under the Obama Administration, DHS Secretary Janet Napolitano issued a memo directing the agency to defer the initiation of removal proceedings against individuals who satisfied five criteria: (1) the individual came to the United States under the age of sixteen; (2) the individual continuously resided in the United States for at least five years prior to June 15, 2012; (3) the individual was currently enrolled in school, graduated from high school, obtained a GED certificate, or received an honorable discharge from the Armed Forces or U.S. Coast Guard; (4) the individual had not been convicted of a felony, a significant misdemeanor, or multiple misdemeanor offenses, and did not pose a threat to national security; and (5) the individual was, at the time of filing, no older than 30-years-old. Individuals who satisfied all five criteria, and passed a background check, were deemed eligible for deferred action.

Deferred action is an exercise of prosecutorial discretion, where DHS impliedly confers temporary lawful status upon eligible applicants while the agency foregoes initiating removal proceedings against them. The exercise of prosecutorial discretion is a hallmark of the American immigration system. This ability is limited to federal agency officials, and statutory restrictions protect the exercise from judicial review. Generally, this excludes the jurisdiction of courts to review an agency’s exercise of prosecutorial discretion.

Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA)

On November 20, 2014, under the Obama Administration, DHS Secretary Jeh Johnson issued a memo announcing the expansion of the DACA program. The memo modified DACA to increase the scope of the program’s existing protected class. It also extended deferred action eligibility to a new class: the parents of children who were United States citizens or lawful permanent residents. The expansion “supplement[ed] and amend[ed]” the Napolitano memo. Like DACA, it was framed around the agency’s exercise of prosecutorial discretion.

Johnson’s memo expanded the scope of the existing DACA class in three ways: (1) it removed the 30-year-old applicant age cap; (2) it extended the renewal process to cover three years, as opposed to two years; and (3) it pushed back the arrived-in-the-United-States date from June 15, 2007, to January 1, 2010.

Significantly, DAPA also expanded deferred action eligibility to the parents of children who were United States citizens or lawful permanent residents. Individuals eligible for membership in the new class were required to satisfy six criteria: (1) the individual had to have a child who was a U.S. citizen or lawful permanent resident, as of November 20, 2014; (2) the individuals had to reside in the United States prior to January 1, 2010; (3) the individual had to be physically present in the United States, as of November 20, 2014; (4) the individual could not have lawful status; (5) the individual could not otherwise be considered a DHS enforcement priority; and (6) the individual’s application could not present any factors that would make deferred action inappropriate.

DAPA Litigation

District Court for the Southern District of Texas (2015)

In 2015, Texas, and 26 other states and state officials, filed suit in the U.S. District Court for the Southern District of Texas, against the United States and the DHS, to nationally enjoin the implementation of DAPA. The court was confronted with three issues: (1) whether Plaintiffs had sufficient standing to maintain a suit in federal court; (2) whether the DHS had the power to initiate the DAPA program; and (3) whether the program itself was constitutional.

In its pleadings, Plaintiffs argued that DAPA violated the “Take Care” Clause of the Constitution, as well as the Administrative Procedure Act (“APA”). The Government argued that acts of prosecutorial discretion were not subject to the APA and that DAPA’s criteria were “merely general guidance,” entitled to exemption from APA rulemaking procedures.

The court rejected the Government’s argument and found that judicial review was available under the APA, categorizing DHS’ actions, not as a failure to initiate removal proceedings (which would be precluded from judicial review), but as the conveyance of temporary legal status on the individuals to whom it granted deferred action. Ultimately, the court found that DAPA was subject to APA rulemaking procedures, and Plaintiffs “clearly prove[d] a likelihood of success on the merits” of their claim for the purposes of granting a temporary injunction

United States Court of Appeals for the Fifth Circuit (2015)

In 2015, the Government appealed, moving for a stay of the lower court’s decision. The Fifth Circuit affirmed the judgment. Significantly, the Fifth Circuit rejected the Government’s argument that the District Court’s injunction was limited only to Texas and the 26 other states that made up the Plaintiffs’ class, confirming the nationwide injunction on the program.

Supreme Court of the United States (2016)

In a per curiam opinion, the Supreme Court affirmed the ruling of the Fifth Circuit, with a 4-4 split vote. The opinion is a single sentence, and it serves as binding authority only within the Fifth Circuit.

DACA’s Future

Congressional Action

Congress has been unsuccessful, thus far, in offering comprehensive immigration reform. The Trump Administration continues to renew its stance on the issue, thereby forcing Congress’ hand and creating a somewhat impending political struggle that The Hill has already termed a “legislative arms race.”

Rep. Mike Coffman (R-Co.) initially introduced a “discharge petition” to force a vote on a bill which would have extended DACA permits and forced Republicans to immediately take up the issue. He later withdrew the petition after House Speaker Paul Ryan clarified the view on what would constitute “acceptable” DACA legislation.

In a show of bipartisanship, it is reported that Congressional leaders met on Wednesday, September 13, 2017, to discuss legislative options for DACA. Minority Leader Nancy Pelosi, House Speaker Ryan, Chairs of the Congressional Black, Hispanic and Asian Pacific Caucuses, the House Majority Leader and the Minority Whip were in attendance. Congress will have to overcome internal differences between their Congressional representatives in order to secure votes for a bipartisan piece of legislation.

Action in the Courts

The rescission of DACA spurred significant filings within District Courts across the country. In the Eastern District of New York, the democratic attorney generals of fifteen states and the District of Columbia jointly filed suit against the Trump Administration. The suit alleged that the Trump Administration had discriminatory motive in rescinding DACA, pointing to prejudicial statements made by the President during his presidential campaign.

A few days after that suit was filed, four more states jointly filed a separate suit. Spearheaded by California Attorney General Xavier Becerra, the suit challenged the rescission, calling it a violation of Due Process. The Department of Justice has responded to both suits, reasserting its prior arguments that DACA is unconstitutional.

A third suit was filed by former DHS Secretary Napolitano and the University of California school system.

With a fully staffed Supreme Court, and an issue ripe for review, the country will soon see if the Trump Administration’s rescission of DACA will stand, as well as whether the Fifth Circuit’s decision in U.S. v. Texas is an accurate predictor of the constitutionality of the program.

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Sources Cited

Memorandum from Janet Napolitano, Secretary of the Department of Homeland Security, to David V. Aguilar, Acting Commissioner, U.S. Customs and Border Protection, et al., Exercising Prosecutorial Discretion with Respect to Individuals Who Came to the United States as Children (June 15, 2012).

Memorandum from Jeh Johnson, Secretary of the Department of Homeland Security, to Leon Rodriguez, Director, U.S. Citizenship and Immigration Services, et al., Exercising Prosecutorial Discretion with Respect to Individuals Who Came to the United States as Children and with Respect to Certain Individuals Who Are the Parents of U.S. Citizens or Permanent Residents (Nov. 20, 2014).

Memorandum from John F. Kelly, Secretary of the Department of Homeland Security to Kevin K. McAlcenan, Acting Commissioner, U.S. Customs and Border Protection, et al., Rescission of November 20, 2014 Memorandum Providing for Deferred Action for Parents of Americans and Lawful Permanent Residents (“DAPA”) (June 15, 2017).

Jefferson Sessions, Att’y General of the U.S., Att’y General Sessions Delivers Remarks on DACA (Sept. 5, 2017).

Donald Trump, President of the U.S., Statement from President Donald J. Trump (Sept. 5, 2017).

Memorandum from Elaine C. Duke, Acting Secretary of the Department of Homeland Security to James W. McCament, Acting Director, U.S. Citizenship and Immigration Services, et al., Rescission of the June 15, 2012 Memorandum Entitled “Exercising Prosecutorial Discretion with Respect to Individuals Who Came to the United States as Children” (Sept. 5, 2017).

Arizona v. United States, 132 S.Ct. 2492 (2012).

Crane v. Johnson, 783 F.3d 244 (5th Cir. 2015).

Arpaio v. Obama, 797 F.3d 11 (D.C. Cir. 2015).

Holman v. Obama, 2016 WL 845310 (D. Nev. 2016).

Texas v. United States, 86 F. Supp. 3d 591 (S.D. Tex. 2015).

Texas v. United States, 809 F.3d 134 (5th Cir. 2015).

U.S. v. Texas, 136 U.S. 2271 (2016).

Immigration and Nationality Act §242(g), codified at 8 U.S.C.A §1252(g) (2012).

Kurtis A. Kemper, Department of Homeland Security’s Program of Deferred Action for Childhood Arrivals (DACA), 17 A.L.R. Fed. 3d Art. 3 (2016).

Administrative Procedures Act §553, 5 U.S.C.A. §553 (2012).

Heather Caygle, House leaders to meet on future of Dreamers, Politico (Sept. 12, 2017, 8:41 PM).

Jordain Carney, Immigration arms race begins on Capitol Hill, The Hill (Sept. 12, 2017).

Yamiche Alcindor, Action to Protect Young Immigrants Already Stumbles in Congress, The New York Times (Sept. 12, 2017).

Sarah Binder, This is why Congress will have a hard time legalizing DACA, The Washington Post (Sep. 7, 2017).

Madeline Conway, 15 states and D.C. team up to challenge Trump on Dreamers, Politico (Sept. 6, 2017).

David Siders, California files suit against Trump on DACA, Politico (Sept. 11, 2017).

Michael D. Shear, Napolitano Sues Trump to Save DACA Program She Helped Create, The New York Times (Sept. 8, 2017).

Christina Marcos, Some GOP lawmakers are battling Trump and their party on DACA, The Hill (Sept. 1, 2017).

Harry Enten and Perry Bacon, Jr., Trump’s Hardline Immigration Stance Got Him To The White House, FiveThirtyEight (Sept. 12, 2017).

Mica Rosenberg, States file lawsuit challenging Trump decision on Dreamers, Reuters (Sept. 6, 2017).

Bill Nye Sues Disney Alleging Millions in Profits Distribution Withheld

Photo via Netflix USA
Written By Selin Demir

 

Background

Last Thursday, attorneys for Bill Nye filed a lawsuit in the Los Angeles Superior Court alleging Walt Disney Company (“Disney”) and its subsidiary, Buena Vista Television (“Buena Vista”), deprived Nye and other owners of “Bill Nye the Science Guy” of approximately $28 million in distribution profits.

Discussion

“Bill Nye the Science Guy,” starring Nye, originally aired for five seasons from 1992 to 1997. The show was successful, earning 19 Emmy Awards and a Television Critics Association award. Today, nearly 25 years after its first broadcast, the show airs in limited syndication and is sold to educators across the country as an academic aid with supporting lesson plans.

According to the lawsuit, in March of 1993, Buena Vista entered into an agreement with the owners of the show, including Nye himself, to market and distribute it. Under the agreement, the owners are collectively entitled to half of the net profit derived from the distribution of the show, with Nye being entitled to 33% of that half (or 16.5% of the total net profit).

In April of 2008, Buena Vista sent Nye a statement for the previous year, along with a payment of $585,123. Just three months later, however, Buena Vista sent Nye a letter retracting the April statement due to an “accounting error.” The letter also stated that Nye owed $496,111 back to Buena Vista and that he would not receive further royalty payments until it was done.

In the complaint, Nye alleges that his attempts to negotiate with Buena Vista and Disney over the statements lasted four years before he was “left with no choice but to hire a professional auditor to examine Buena Vista’s records.” When the hired auditor made attempts to conduct the audit, Nye alleges that Disney found ways to stall the investigation until May of 2016.

When the audit commenced, Nye alleges that Disney and Buena Vista both failed to produce essential documents, claimed to be “outside of the scope of the audit,” and was denied access to any information related to revenue that Disney or Buena Vista received for any exploitation of the show, among other things.

Despite this limited access, the auditor provided Nye with preliminary findings that identified underreported royalty payments owed to Nye that total approximately $9,350,565. Nye concluded that, because Disney is such a large company with a “well-staffed and well-trained accounting department,” it was aware of its wrongdoing and willfully deceived the owners of the show in an effort to deprive them of their earned share of profits from the series. The complaint further alleges that Disney continued its wrongdoing by withholding documents and other essential information to prevent the auditor from being able to fully assess the damage caused by Disney and Buena Vista.

Nye is seeking, among other remedies, a court order compelling Disney and Buena Vista to account for all of the money Nye is owed, plus a disgorgement of all profits that are in receipt of the alleged fraud, plus compensatory and punitive damages, and attorney’s fees.

While Disney has not made an official comment, a representative for Buena Vista sent a statement to The Hollywood Reporter stating: “This lawsuit is a publicity ploy and we look forward to vigorously defending it.”

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Sources Cited

Ashley Cullins, Bill Nye Says Disney Shorted Him Millions in New Fraud Lawsuit, The Hollywood Reporter (Aug. 24, 2017, 7:29 PM).

Complaint and Demand for Jury Trial, Nye v. Walt Disney Co., No. BC-673736 (Super. Ct. Cal. Aug. 24, 2017).

Feature photo courtesy of Netflix USA.

Received or Not? That is the question.

Written by Grace Ha Eun Hwang

 

Abstract: The Third Circuit Court of Appeals held that in order for goods to be considered “received” under section 503(b)(9) of the Bankruptcy Code, goods must be delivered into the physical possession of the debtor or its agents within 20 days before the debtor files for bankruptcy.

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On July 10, 2017, the Third Circuit clarified what would happen if a creditor sold goods to a debtor soon before the debtor files a Chapter 11 bankruptcy.

Traditionally, under 11 U.S.C. § 503(b)(9), creditors may recover the value of the good that they sold to the debtor if the good was received by the debtor within 20 days before the bankruptcy petition was filed. But what exactly does “received” mean? In re World Imports answered this question.

In In re World Imports, appellants Haining Wanshen Sofa Company (“Haining”) and Fujian Zhangzhou Foreign Trade Company (“Fujian”) were Chinese companies that sold and shipped furniture to World Imports, a furniture retailer in the United States. Goods were typically shipped from China to the United States “free on board.”

Both the Creditors (Haining and Fujian) and Debtor (World Imports) agreed to the following facts:

Haining’s shipment of goods to World Imports left China on May 26, 2013

Fujian’s three separate shipments of goods to World Imports left China on May 17, May 31, and June 7 of 2013

World Imports took physical possession of Haining’s shipment in the United States on June 21, 2013

World Imports accepted all three of Fujian’s shipments in the United States within 20 days of July 3, 2013, the day on which World Imports filed its Chapter 11 petition

After gaining wind of World Import’s bankruptcy filing, both Haining and Fujian filed Motions for Allowance and Payment of Administrative Expense Claims (“the Motion”) pursuant to 11 U.S.C. § 503(b)(9). Under this administrative claim, if successful, creditors are able to reclaim payments in full value of the goods received by the debtor.

Both creditors claimed that they were entitled to relief under § 503(b)(9) because the goods were sold in the ordinary course of business to the debtor and were received by the debtor within 20 days before the debtor filed for bankruptcy. The Bankruptcy Court hearing the original motion disagreed. The Bankruptcy Court denied the Appellants’ motions after concluding that the goods were “constructively received” when they were shipped from China. The Bankruptcy Court relied on the definition of “received” under the Contracts for the International Sale of Goods (CISG) which allowed receipt by delivery to a common carrier.  The District Court affirmed the Bankruptcy Court’s ruling and the Appellants appealed to the Third Circuit.

The Third Circuit reversed the lower courts’ rulings. The Third Circuit looked to the ordinary meaning and the statutory context and found that the term “received” required physical possession.

When looking at the ordinary meaning of the term, the Court found that the Black’s Law Dictionary and the Oxford English Dictionary both interpreted the term “received” to require some type of physical possession. The Court also found that the UCC defined “receipt” of goods as taking some sort of physical possession of them. The Court then concluded that Congress could not have meant to deviate from all these well-known definitions when it adopted 11 U.S.C. § 503(b)(9).

Next, the Court looked to the statutory context surrounding 11 U.S.C. § 503(b)(9). The Court noted that because § 503(b)(9) was enacted to provide exemptions to the rules provided in § 546(c), the interpretation of the term “received” must be consistent between the two sections. The Court then looked to the ruling in In re Marin Motor Oil, 740 F.2d 220 (3d Cir. 1984) which interpreted § 546(c). In re Marin Motor Oil held that the term “received” meant the same as defined in the UCC, namely that taking physical possession is required for goods to be considered “received.” Since § 503(b)(9) has an interrelationship with § 546(c), the Third Circuit concluded that it would be greatly deviating from well-established authority if it did not also follow the UCC’s definition. The Court was also quick to note that even if the risk transfers upon shipment of goods, common carriers are not agents and thus goods are not received even when risk is transferred.

Because World Imports received their goods through a common carrier outside of the 20-day period but actually physically received possession of the goods within the 20-day period before filing for bankruptcy, both Haining and Fujian qualified for relief.

This ruling not only clarified the meaning of the term “received” but also illustrated the weighty consequences of choosing the method of acceptance for shipped goods.

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Source Cited

Haining Wansheng Sofa Co., Ltd. V. World Imports Ltd. (In re World Imports, Ltd. Et al.), No. 16-1357, 2017 WL 2925429 (3d Cir. Mar. 8, 2017).

District Court: EPIC Cannot Compel President Trump’s Tax Returns

Written By Sam Cohen

Abstract

On August 18, 2017, District Judge James E. Boasberg, of the U.S. District Court for the District of Columbia, dismissed Electronic Privacy Information Center’s (“EPIC”) complaint, which requested that President Donald J. Trump disclose his tax returns.

Background

On February 16, 2017, EPIC requested all of Donald J. Trump’s individual income tax returns dating back to 2010, in addition to filing a Freedom of Information Act (“FOIA”) request that he disclose any financial relationships with the Russian government or Russian businesses. The requests were denied because they failed to comply with the published rules and were deemed incomplete requests that the IRS could not process.

After the denial, EPIC filed another request, this time claiming a right to the documents under § 6103(k)(3) of the IRS code. This request was also denied, and the following lawsuit was filed in response.

Discussion

FOIA requests have two requirements: (1) that a request reasonably describes the records sought, and (2) that a request follows the agency’s published rules of stating the time, place, fees (if any), and procedures to be followed. The published rules of the IRS on FOIA procedures can be found in Treasury Regulation § 601.702.

In order for a FOIA application to be considered complete, the subject of the request must give consent. Without consent, the application is incomplete. In EPIC’s case, the requests were filed without the consent of President Trump; therefore, the IRS had no choice but to close the request file without granting the application. The court confirmed that such IRS regulations are reasonable and should be upheld.

EPIC’s second FOIA request was premised on § 6103 of the IRS code, which allows the IRS to disclose records, in limited circumstances, without the consent of the subject. The specific subsection upon which EPIC based its claim was § 6013(k)(3), which can be used to disclose tax returns to correct misstatements of fact. The misstatements alleged by EPIC were tweets by President Trump. Two particular tweets provided such a basis:

“For the record, I have ZERO investments in Russia.” July 26, 2016 at 5:50 p.m. EST.

“Russia has never tried to use leverage over me. I HAVE NOTHING TO DO WITH RUSSIA – NO DEALS, NO LOANS, NO NOTHING!” Jan. 11, 2017 at 6:31 a.m. EST.

For the purposes of the motion to dismiss, the Court had to accept that these tweets were misstatements that could sufficiently trigger § 6013(k)(3), as the Government’s argument against the assertion was a single sentence without citation.

The Court subsequently found that the exceptions under § 6013(k)(3) may not be get around the consent requirement of the IRS regulations; however, for the sake of argument, the Court accepted that consent was not needed. Instead, the Court found that this exception could not be used at all. This is because, before the IRS has to disclose any information under this exception, a party must obtain the approval of the Joint Committee on Taxation. EPIC did not do so. Further, the Court noted that this provision had never successfully been used to compel the disclosure of IRS records, since the Joint Committee on Taxation has never exercised this authority with regard to any other parties.

Beyond this argument, EPIC also alleged two violations of the Administrative Procedure Act. Both were rejected by the Court. Because, the Court decided that there was no way for the judicial system to grant the relief sought by EPIC, the complaint was dismissed.

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Sources Cited

Elec. Privacy Info. Ctr. v. IRS, 2017 U.S. Dist. LEXIS 131911 (D.C. Cir. 2017).

Shayna Posses, Trump or Congress Must OK Tax Return Release, Judge Says, Law360 (Aug. 18, 2017).

 

Case Study: Roy Cockrum, et al. v. Donald J. Trump for President, Inc. and Roger Stone

Written By Nicole Macris

 

BACKGROUND

During the 2016 Presidential Election, an unidentified hacker broke into the Democratic National Convention’s database and stole more than one 100 accounts of donors, staffers, and supporters alike. WikiLeaks later received that information, making it public via its website on July 25, 2016. The hack left of individuals vulnerable and exposed. Three of the affected individuals–Roy Cockrum, Scott Comer, and Eric Schoenberg–have now brought suit to recover for their invasion of privacy.

DISCUSSION

The plaintiffs–two donors and one former DNC staffer– allege that the WikiLeaks disclosures have chilled participation in vital parts of the democratic process, campaign financing, and advocacy. Private identifying information–including social security numbers, dates of birth, addresses, and phone numbers–were made public, and they allege that this now subjects them to a potential lifetime of identity theft and subsequent credit complications.

Moreover, Cockrum’s donations to specific candidates running for public office, state Democratic parties, and the DNC were publicized, which, the Complaint alleges, resulted in a chilling effect with respect to future political contributions. Comer’s emails, discussing his conflicts with colleagues, health issues, and details of his sexual orientation, were also published. The dissemination of their private information and emails, the plaintiffs further allege, resulted in intimidation and fear of using normal technological means of communication for advocacy and financial purposes.

Consequently, on July 12, 2017, the plaintiffs filed suit in the U.S. District Court for the District of Columbia. The allegations set forth in the Complaint assert that the defendants violated the plaintiffs’ privacy rights by disseminating private information about them, in a conspiracy with Russian agents, by way of WikiLeaks, DCLeaks, and Guccifer 2.0, all in violation of 42 U.S.C. § 1985(3). Named as defendants are Donald J. Trump for President, Inc. and Roger Stone, an advisor to the 2016 Trump Campaign.

The Complaint further alleges that the defendants are liable for the public disclosure of private facts, pursuant to D.C. law. In order to prevail on this claim, the plaintiffs must prove “(1) publicity, (2) absent waiver or privilege, (3) given to private facts, (4) in which the public has no legitimate concern (5) and which would be highly offensive to a reasonable person of ordinary sensibilities[.]”

Case law dictates that the dissemination of personal information, such as Social Security numbers and identification information, falls within the “highly offensive” category of private information that should not be made public without waiver. The crux, however, is determining whether disseminating the private information falls within one of the three exceptions, namely, whether it is (1) “crucial to the vitality of democracy,” (2) of public concern regarding current events, public affairs, or (3) information that could protect others or is already of public record. The plaintiffs claim that the information published fails to fall within one of the aforementioned exceptions.

Nevertheless, one crucial question remains: are the defendants culpable for disseminating the plaintiffs’ information and emails? This is where the conspiracy claim comes into play; for without a connection to the third parties, the defendants may not be liable for the published information. Thus, 42 U.S.C. § 1985(3) applies in order to establish the causation of the alleged injuries. The plaintiffs specifically rely on the harm caused by intimidation and injury resulting from supporting one candidate over another, as set forth in the statute:

. . . conspir[acy] to prevent by force, intimidation, or threat, any citizen who is lawfully entitled to vote, from giving his support or advocacy in a legal manner, toward or in favor of the election of any lawfully qualified person as an elector for President or Vice President, or as a Member of Congress of the United States; or to injure any citizen in person or property on account of such support or advocacy . . . .

Despite all of this, the Complaint turns on the connection between the defendants and third parties for the purposes of holding the defendants culpable for the entirety of the lawsuit. Without a finding of the alleged conspiracy, the entire cause of action could fail. Thus, this action depends on plaintiffs establishing their burden of proof with regard to the defendants’ alleged conspired with Russian agents, Gufficer 2.0, DCLeaks, and WikiLeaks.

Several points set forth in the complaint either state or add to the assertion that there was a connection between Trump for President, Inc., Roger Stone, and the aforementioned third parties. While many of the factual allegations set forth in the Complaint have been extensively covered and discussed in the media, the Complaint works to bridge the gap and form the conspiracy relationship by way of logical assertions.

• Paragraphs 9–10, 178, 180: United States government reports conclude that Russia is the culprit of the DNC hacking, and the defendants, thereafter, reaped the benefits;

• Paragraph 11: Trump for President campaign officials had/have ties to Russia, and use these ties to use the information hacked by Russia to their benefit;

• Paragraph 13: The campaign officials entered into agreements with Russia;

• Paragraphs 142–155: Defendants called attention to the hacked, and subsequently published, emails and information, and did so prior to the actual publication by WikiLeaks; and

• Paragraph 182: Defendants (1) denied Russia’s involvement, (2) undermined accountability efforts, and (3) concealed Russian contacts in order to further conceal involvement in the alleged conspiracy.

While this case is in its infancy, it is possible that the discovery, motions, and potential trial may lead to political and constitutional issues overwhelmingly more controversial than the DNC hack or alleged injuries at issue here.

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Sources Cited

Andy Wright, DNC Hack Victims Sue Trump Campaign and Roger Stone, Just Security (July 12, 2017).

Budik v. Howard Univ. Hosp., 986 F. Supp.2d 1 (D.D.C. 2013).

Cockrum, et al. v. Donald J. Trump for President and Stone, Complaint, Case No. 1:17-cv-01370, Dkt. No. 1 (July 12, 2017).

Eric Lichtblau and Eric Schmitt, Hack of Democrats’ Accounts Was Wider Than Believed, Officials Say, N.Y. Times, (Aug. 10, 2016).

Foretich v. Lifetime Cable, 777 F. Supp. 47 (D.D.C. 1991).

Grunseth V. Marriot Corp., 872 F. Supp. 1069 (D.D.C. 1995).

Susan Hennessey and Helen Klein Murillo, Is It A Crime?: Russian Election Meddling and Accomplice Liability Under the Computer Fraud and Abuse Act, Lawfare (July 13, 2017).

Wolf v. Regardie, 553 A.2d 1213, 1220 (D.C. 1989).

SDNY Dismisses Challenge to New York’s Zero Emission Credit Nuclear Subsidy Program

Written By Conor Tallet

On July 25, 2017, District Judge Valerie Caproni, of the U.S. District Court for the Southern District of New York, dismissed a challenge to New York’s Zero Emission Credit (“ZEC”) subsidy program.

Background

The program originated from Governor Andrew Cuomo’s Clean Energy Standard, which established a policy goal of achieving 50% of electrical generation from renewable sources by the year 2030. It also sets forth a goal of a 40% reduction in carbon emissions by 2030.

Due to low gas prices leading to lower power pricing, nuclear plants have been threatening to shut down because they are operating at a loss. The plan, then, is to have taxpayers subsidize the nuclear power plants over the next twelve years in order to ensure that they continue to operate, thus permitting New York to “reap[] the value of the virtually emissions-free power.” It’s estimated to cost New York electric ratepayers approximately $7.6 billion over the next twelve years.

Discussion

A key component in achieving a reduction in carbon emissions is to preserve the zero-carbon attributes of nuclear generation facilities in New York. Consequently, the Clean Energy Standard promulgated a nuclear subsidy targeted at uneconomic nuclear power plants in the New York wholesale electricity market.

The subsidy involves the payment of approximately $17.48 per megawatt hour sold from the nuclear generation facilities into the wholesale market. This causes the wholesale electricity market to work as an auction, by matching up the demand for electricity with the cheapest bids for electricity from generators.  Thus, the subsidy helps nuclear plants to continue operating.

Soon after the subsidy was passed by the New York Public Service Commission, a number of wholesale electricity generators filed suit. In Coalition for Competitive Electricity v. Zibelman, the plaintiffs argued that New York’s program intrudes on the Federal Energy Regulatory Commission’s (“FERC”) exclusive jurisdiction over the wholesale energy market vested in it by the Federal Power Act.

Where the direct sale of electricity from an individual’s local utility, to a consumer, is regulated by the individual states, any “sale for resale” of electricity is regulated by FERC. Because the ZEC subsidy works to allow nuclear plants to submit artificially low bids in the wholesale auction (when they otherwise would be uncompetitive in the wholesale market), the plaintiffs argued that the Federal Power Act should preempt the ZEC state subsidy.

A key case for the plaintiffs has been Hughes v. Talen Energy Marketing, LLC. In Hughes, the Supreme Court struck down a Maryland subsidy aimed at preserving in-state generation by paying a generator a subsidy of the difference between a bilateral contract price and the actual price the generator’s electricity cleared the wholesale market. In a narrow holding, Justice Ginsburg articulated that “[s]o long as a state does not condition payment of funds on capacity clearing auction, the State’s program would not suffer from the fatal defect that renders Maryland’s program unacceptable.” Accordingly, so long as the payment of a subsidy is not contingent, or “tethered,” on the electricity clearing the wholesale auction, it escapes the grasp of the Supreme Court’s rule and is a permissible state regulation.

The Southern District of New York determined that the ZEC program is not tethered as in Hughes. Specifically, the court stated that, contrary to the plaintiffs’ argument, New York does not require nuclear generators to sell their power into the wholesale market to receive the subsidy; rather, it is a business decision on the generators’ part. Since New York is not requiring the qualifying nuclear plants to actually sell their power into the wholesale market, the ZEC program lacks the “tether,” as was fatal in Hughes. In addition, the court determined that ZECs merely incorporate environmental attributes that are “unbundled” from the wholesale electric rate, and therefore, fall squarely within a state’s jurisdiction to incentivize clean energy outside the confines of FERC’s wholesale jurisdiction.

New York’s ZEC program has been copied in the State of Illinois, who also recently threw out a challenge to its ZEC subsidy and will likely continue to proliferate to states seeking to preserve environmental attributes of expensive forms of electrical generation.

This case has been appealed to the Second Circuit and will likely be appealed all the way up to the Supreme Court.

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Sources Cited

Andy Anderson, New York Electricity Supply Costs to Increase in 2017 – PSC Approves Clean Energy Standard, Subsidizes Upstate Nuclear Power, EnergyWatch (Aug. 1, 2017).

Coalition for Competitive Electricity v. Zibelman, 16-CV-8164 (S.D.N.Y. 2017).

Hughes v. Talen Energy Marketing, LLC, 136 S.Ct. 1288 (2016).

Tim Knauss, How Will Subsidies for Upstate NY Nuclear Plants Affect Your Electricity Bill?, Syracuse.com (Mar. 3, 2017).

Is Banning Transgender Individuals from the Military Unconstitutional?

“After consultation with my [g]enerals and military experts, please be advised that the United States Government will not accept or allow [t]ransgender individuals to serve in any capacity in the U.S. Military. Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender [individuals] in the military would entail. Thank you[.]” @realDonaldTrump

A little over a year ago, on June 30, 2016, Defense Secretary Ashton B. Carter announced that transgender individuals could serve openly in the armed forces. He also said “the Pentagon would cover the medical costs of those in uniform who wished to undergo gender transition, and that [the Pentagon] would begin a yearlong training program for service members on the changes.”

Yesterday, President Donald J. Trump announced through a series of tweets that the United States will be prohibiting transgender individuals from serving in the military.

According to the December 2016 Department of Defense report, there are nearly 1.3 million active-duty military members. Of that, it is estimated that somewhere between 1,320 and 15,000 of those active-duty members are transgender.

Some supporters of this policy, like U.S. Representative Vicky Hartzler, say their concerns stem from the manner in which tax dollars are spent. “I had an intern that was denied the ability to go into the military because she had a bunion on her foot, and the argument was that this may cost the military, and she might have to have surgery,” Hartzler said. “[W]hy would we allow individuals to come in, although they’re very patriotic and we appreciate their desire to serve, but who have medical problems that could be very costly? We shouldn’t make an exception in this case.”

In contrast, some opponents of this policy, such as OutServe-SLDN (a legal services organization that advocates for LGBT active-duty personnel), say this policy is discriminatory. “The readiness, effectiveness, and lethality of the Armed Services comes from the commitment of our troops,” the organization said in a statement, “not the vagaries and bigotry of exclusionary policies.”

Despite President Trump’s tweets courting both praise and criticism, however, the tweeted policy does raise some constitutional questions.

To date, “neither the Supreme Court nor the Second Circuit has held that transgender plaintiffs are members of a protected or suspect class whose equal protection claims are entitled to heightened scrutiny.” For this reason, an Equal Protection analysis of the tweeted policy must be conducted through the lens of rational basis review.

In making this assessment, a court looks at whether the purposes of the tweeted policy are rationally related to some legitimate government interest. Because President Trump’s two stated reasons for the ban are “disruption” and “tremendous medical costs,” the courts could find these reasons to be rationally related to a legitimate government interest, thereby upholding the policy.

In contrast, the bare desire to harm a particular group of people does not constitute a legitimate government interest. If the tweets are read to mean that transgender service members “erode the fighting capability” of their combat units simply because they are transgender, the courts could deem this policy as one born of animus and strike it down as unconstitutional.

This morning, General Joseph Dunford, chairman of the Joint Chiefs of Staff, stated in a letter to military service chiefs that “the policy on who is allowed to serve will not change until the White House sends the Defense Department a rules change and the secretary of defense issues new guidelines.”

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Sources Cited

White v. City of N.Y., 206 F. Supp. 3d 920, 933 (S.D.N.Y. 2016).

http://www.cnn.com/2017/07/26/politics/transgender-military-ban-vicky-hartzler-cnntv/

https://www.nytimes.com/2017/07/27/us/politics/transgender-military-trump-ban.html

https://www.outserve-sldn.org/news/356531/OutServe-SLDN-condemns-President-Trumps-statement-on-transgender-service-members.htm

http://www.sfchronicle.com/nation/article/Military-transgender-ban-would-be-tough-to-11438814.php

http://www.politico.com/magazine/story/2017/07/26/why-trumps-ban-on-transgender-servicepeople-is-flatly-unconstitutional-215423

https://www.dmdc.osd.mil/appj/dwp/dwp_reports.jsp

https://www.nytimes.com/2016/07/01/us/transgender-military.html

https://www.nytimes.com/2017/07/26/us/politics/trans-military-trump-timeline.html

Common Sense, Close Family, and Bona Fide Relationships: Hawaii Judge Expands Classes Exempt from Travel Ban

Photo via The Guardian

Written By Ian Ludd

 

ABSTRACT

Hawaii U.S. District Judge Derrick Watson ruled last Thursday that the government definition of “close family member” with respect to the Trump Administration’s Travel Ban exemption defies common sense, expanding the exemption to include grandparents, other family members, and refugees with formal assurances from a resettlement agency.

DISCUSSION

For the purposes of an exemption in the Trump Administration’s Revision Travel Ban (“EO-2”), Hawaii Judge Derrick Watson ruled that a grandparent is a “close family member,” despite the assertions to the contrary by the Government.

The Supreme Court, on June 26, in a per curiam opinion, specified that the stay on enforcement of EO-2 will remain in place for all who have a “credible claim of a bona fide relationship with a person or entity in the United States.” For a bona fide relationship with a “person” to be found, a close familial relationship is required. A relationship with an “entity” requires a formal, documented relationship formed “in the ordinary course, rather than for the purpose of evading EO-2.”

The Trump Administration, in issuing guidance to its agencies on the application and enforcement of EO-2, defined “close familial relationship” narrowly, excluding from its definition, grandparents, grandchildren, aunts, and uncles, amongst other family members. The Hawaii District Court found this definition to be the “antithesis of common sense,” contrary to the Supreme Court’s per curiam decision and other precedent.

The Government’s asserted definition of close family stemmed from a provision of the Immigration and Nationality Act (“INA”), applicable to family-based immigration visas. Nevertheless, the District Court found the use of this definition to be “cherry-picking,” ignoring other relevant immigration statutes that defined close family in a much broader sense.

The Hawaii District Court cited several Supreme Court cases evincing a preference for broad definitions of “close family.” The District Court pointed to the Supreme Court’s focus on a relationship nexus, reasoning that if the Supreme Court had intended to issue an exception only to “immediate family members,” it would have explicitly done so. Furthermore, the District Court reasoned that the definition used by the Government is inherently flawed, as it excludes “mothers-in-law,” despite the Supreme Court explicitly holding that EO-2 may not be enforced against a plaintiff’s mother-in-law and those “similarly situated.”

The District Court also found that refugees covered by a formal assurance between the Government and a United States refugee resettlement agency may not be excluded by EO-2. The Government argued that any contract in such an arrangement exists only between the State Department and the resettlement agency, not the refugee. The District Court found this argument unconvincing.

“Nothing in the Supreme Court’s decision requires a refugee to enter into a contract with a United States entity in order to demonstrate the type of formal relationship necessary to avoid the effects of EO-2. An assurance from a United States refugee resettlement agency, in fact, meets each of the Supreme Court’s touchstones: it is formal, it is a documented contract, it is binding, it triggers responsibilities and obligations, including compensation, it is issued specific to an individual refugee only when that refugee has been approved for entry by the Department of Homeland Security, and it is issued in the ordinary course, and historically has been for decades. Bona fide does not get any more bona fide than that.”

The Trump Administration, bypassing the Ninth Circuit, asked the Supreme Court directly to clarify its per curiam ruling and to block the ruling by the Hawaii District Court. On July 19, 2017, the Supreme Court denied the Government’s motion for clarification in a brief unsigned order. The Court further stated that “[t]he District Court order modifying the preliminary injunction with respect to refugees covered by a formal assurance is stayed pending resolution of the Government’s appeal to the Court of Appeals for the Ninth Circuit.”

The Supreme Court is set to definitively rule on the Revised Travel Ban this October.

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Sources Cited

Trump v. Int’l Refugee Assistance Project, Nos. 16-1436 (16A1190) and 16-1540 (16A1191), slip op. (U.S. June 26, 2017).

Hawaii, et al. v. Trump, et al., Civil No. 17-00050 DKW-KSC (D. Haw. July 13, 2017) (order granting in part and denying in part plaintiffs’ motion to enforce, or in the alternative, to modify preliminary injunction).

Barbara Campbell, et al., U.S. Challenges Hawaii Judge’s Expansion of Relatives Exempt From Travel Ban, NPR (July 14, 2017).

Joel Rose & Bill Chappell, Supreme Court Revives Parts Of Trump’s Travel Ban As It Agrees To Hear Case, NPR (June 26, 2017).

Julia Edwards Ainsley, et al., Supreme Court gives Hawaii until Tuesday to answer Trump travel ban motion, REUTERS (July 15, 2017).

Adam Liptak, Trump Refugee Restrictions Allowed for Now; Ban on Grandparents Is Rejected, N.Y. Times (July 19, 2017).

Supreme Court Finds Arkansas Statute Unconstitutional; Holds Both Same-Sex Parents’ Names Should Be On Child’s Birth Certificate

Photo via Arkansas Online

Written by Joseph Railey

ABSTRACT

In a brief per curium opinion, the Supreme Court found Arkansas’ birth certificate statute to be unconstitutional because it treated same-sex couples differently. The Court stated that the statute “denied married same-sex couples access to the ‘constellation of benefits that the stat[e] ha[s] linked to marriage.’”

DISCUSSION

The case began when two, married, same-sex couples in Arkansas decided to have a child through artificial insemination. Upon the birth of the children, each of the couples wrote in two mothers’ names on the birth certificate paperwork. However, when the couples received the birth certificates back, the State had listed only the mother who carried and gave birth to the child.

At the time, Arkansas’ birth certificate statute provided that “the mother is deemed to be the woman who gives birth to the child” and that, “[i]f the mother was married at the time of either conception or birth, . . . the name of [her] husband shall be entered on the certificate as the father of the child.” One exception to this rule is when the child is born via artificial insemination, where Arkansas allows for only the mother’s name to be listed, unless the father consents to his name being listed as well.

The trial court held that the statute conflicted with Obergefell v. Hodges, 135 S. Ct. 2071 (2015), as it “categorically prohibited every same-sex married couple . . . from enjoying the same spousal benefits which are available to every opposite-sex married couple.” The Arkansas Supreme Court, however, disagreed and held that the statute focused on the relationship between the biological mother, father, and child rather than on the “marital relationship of husband and wife.” As such, it held that the statute did not conflict with Obergefell and was, therefore, constitutional. Thereafter, the United States Supreme Court granted certiorari and reversed the Arkansas Supreme Court’s decision, remanding the case.

In its opinion, the United States Supreme Court noted the disparate treatment.

As already explained, when a married woman in Arkansas conceives a child by means of artificial insemination, the State will—indeed, must—list the name of her male spouse on the child’s birth certificate. And yet state law, as interpreted by the court below, allows Arkansas officials in those very same circumstances to omit a married woman’s female spouse from her child’s birth certificate. As a result, same-sex parents in Arkansas lack the same right as opposite-sex parents to be listed on a child’s birth certificate, a document often used for important transactions like making medical decisions for a child or enrolling a child in school.

In Obergefell, the Court specifically addressed this issue. Where some of the petitioners in Obergefell sued to be listed as parents on their child’s birth certificates, the Obergefell Court expressly identified birth certificates as part of the “terms and conditions” of marriage.

Justices Gorsuch, Thomas, and Alito dissented, noting that summary reversal should not have been applied in this case and that the state’s arguments for only listing biological parents on a birth certificate were permissible. The justices also opined that, as the petitioners only sought relief under the state’s birth certificate registration statute (§ 20-18-401), and not the statute relating to artificial insemination (§ 90-10-201), the Court impermissibly applied that provision.

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Sources Cited

Pavan v. Smith, 198 L.Ed.2d 636 (2017).

Obergefell v. Hodges, 135 S. Ct. 2584 (2015).

Ark.  Code Ann. § 20-18-401 (West 2017).

Ark. Code Ann. § 9-10-201(a) (West 2017).