Just as winter snow has been historically late in arriving in some parts of the country, the Supreme Court was historically late in issuing its first signed opinion of the year. On Monday, 112 days after the start of the term, the Court issued its first opinion in an argued case, unanimously deciding in Arellano v. McDonough (No. 21-432) that the statute setting the effective date for a veteran’s disability award is not subject to equitable tolling on the grounds that the veteran’s disability precluded him from applying for benefits sooner. At the same time, the Court dismissed one of the more interesting pending cases of the term, In re Grand Jury (No. 21-1397), which was set to address the scope of attorney-client privilege for communications that include both legal and non-legal advice.
As usual, the Court’s first decision of the term was unanimous and relatively pithy. It concerned whether the doctrine of equitable tolling allows veterans to obtain retroactive disability benefits running from the date of their discharge from the military when their disability prevented them from seeking those benefits earlier.
Petitioner Adolfo Arellano served in the Navy for four years before being honorably discharged in 1981. Three decades later, he applied for disability compensation based on psychiatric disorders that resulted from trauma he suffered in service. The Department of Veterans Affairs (VA) granted Arellano’s application but awarded him disability benefits effective June 2011, the date when it had received his application. In setting this effective date, the VA relied on the default rule of 38 U.S.C. § 5110(a)(1), which states that “[u]nless specifically provided otherwise in this chapter, the effective date of an award . . . shall be fixed in accordance with the facts found, but shall not be earlier than the date of receipt of application therefor.” This default rule, though, is subject to several statutory exceptions, including Section 5110(b)(1), which allows a veteran’s application to be backdated to the date of discharge if it is filed within one year of that date. Arellano could not rely on that provision, because he first applied decades after his discharge, but he argued that that one-year period should be equitably tolled because his disability prevented him from applying until 2011. The VA Board of Veterans’ Appeals and the Court of Appeals for Veterans Claims rejected Arellano’s request for equitable tolling. So did the en banc Federal Circuit, although the court divided equally on whether equitable tolling was unavailable or simply unwarranted on the facts of Arellano’s particular case.
The Supreme Court unanimously affirmed, holding that Section 5110 is not subject to equitable tolling at all. The Court acknowledged the presumption that limitations periods in federal statutes can be equitably tolled but underscored that this presumption is rebutted where “there [is] good reason to believe that Congress did not want the equitable tolling doctrine to apply.” United States v. Brockamp, 519 U. S. 347, 350 (1997). That was the case for Section 5110, Justice Barrett explained, because it specifically provides that the date an application is received determines when disability benefits become effective unless a statutory exception applies. Moreover, while some of Section 5110’s exceptions reflect equitable considerations, the Court noted the absence of any carte blanche provision for equitable tolling. Finally, another provision of Section 5110, one addressing pension benefits, allows for retroactive awards of such benefits if a veteran was unable to apply for them at the onset of a disability, so long as the veteran applies within one year. That one-year limitation would be anomalous if, as Arellano contended, disability provided for unlimited equitable tolling. The Court therefore concluded that, in the context of disability compensation under Section 5110, “Congress did not intend courts to read other unmentioned, open-ended, ‘equitable’ exceptions into the statute that it wrote.”
That takes us to the Court’s other major action of the week in In re Grand Jury, where it dismissed the grant of certiorari as improvidently granted a few weeks after the case was argued. That’s disappointing to many, because the case involved a thorny and recurring question about the scope of attorney-client privilege: If a client comes to a lawyer for both legal and nonlegal advice, is the entire communication privileged or none of it? Most courts say the answer depends on whether the client’s “primary purpose” in consulting the lawyer was to obtain legal advice. But that primary purpose test can be tricky to apply and (some have argued) may not adequately protect attorney-client communications.
Enter an unidentified law firm. A federal grand jury investigating tax fraud subpoenaed it, seeking documents about and communications with an unidentified client to whom the firm had provided both tax and legal advice. The firm withheld some documents based on attorney-client privilege, but the district court and the Ninth Circuit rejected the privilege claim, concluding that the client’s primary purpose for going to the law firm was to obtain tax advice (which isn’t privileged). The Court granted certiorari to review the standard applied by the Ninth Circuit. But the firm’s position on appeal was a bit hard to pin down: It initially argued that so-called dual-purpose advice should be privileged so long as the legal advice was a “significant purpose” for the consultation. But as the briefing developed, it moved to the bolder position that so long as the request for legal advice was “bona fide,” the whole communication should be privileged, even if the legal advice wasn’t the “significant” purpose (let alone the “primary” one).
At oral argument, many Justices were troubled by the amorphous “primary” purpose tests. But they also worried that the law firm’s proposals weren’t much better and would cloak too many communications in secrecy, giving rise to businesses stashing in-house lawyers in a meeting or including them on an email just so they could claim privilege over primarily business discussions. After argument, court watchers had trouble divining which way the Court was leaning, as the issue didn’t appear to break down on ideological lines and the Justices’ questioning gave few clues.
Ultimately, the Court decided this wasn’t the case to resolve these issues, so it dismissed it. That was probably due in large part due to the secret nature of the grand jury proceedings from which the case arose, with very limited public information about the firms and people involved, the underlying conduct being investigated by the grand jury, or the nature of the communications at issue. Due to that secrecy, any opinion would be highly abstract, without much real detail to guide trial judges deciding contested attorney-client privilege issues in future cases. Dismissal thus allows the Court to return to these questions in a future case with a better (or at least more public) record if it wishes.
Tadhg, Dave, Emmett