The Court will hear the following five cases in October Term 2003:

1. United States v. Banks (02-473): The Ninth Circuit held that law enforcement violated the Fourth Amendment when they forcibly entered an apartment to execute a search warrant 15-20 seconds after they knocked on the door. The Court will review that holding. (Sounds like an error correction case to me. My bet would be on a reversal.)

2. Alaska Dept. of Environmental Conservation v. EPA (02-658): This case will address the scope of the EPA’s authority under the Clean Air Act. The Question Presented: Did the Ninth Circuit err in upholding EPA’s assertion of authority to second-guess permitting decision made by Alaska — which had been delegated permitting authority under the Clean Air Act — in conflict with decisions of the Supreme Court and other federal courts of appeals establishing division of federal-state jurisdiction under the Act?

3. Raytheon Co. v. Hernandez (02-749): This is an ADA case raising the following question presented: Does the Americans with Disabilities Act confer preferential rehire rights on employees lawfully terminated for misconduct, such as illegal drug use?

4. Barnhart v. Thomas (02-763): This case will test the meaning of the word “disabled” in the Social Security Act. In the petition filed by the government, the question presented is as follows: May the commissioner of social security determine that a claimant is not “disabled” within the meaning of the Social Security Act because the claimant remains physically and mentally able to do her previous work, without considering whether that particular job exists in significant numbers in the national economy?

5. Groh v. Ramirez (02-811): In this case, law enforcement obtained a search warrant based in part on an affidavit describing the objects to be seized, although the warrant itself did not list the objects. The Ninth Circuit held that this violated the particularity requirement of the Fourth Amendment, and that the officers who executed the defective warrant were not subject to qualified immunity for their conduct in executing the warrant.

In a side note, the Court also asked the Solicitor General to provide the views of the United States in Sacramento v. Barden (02-815). This case asks whether the maintenance of city sidewalks constitutes a program, activity or service of a public entity such that the maintenance is subject to the accessibility requirements of the Rehabilitation Act and the ADA.

Orders:

The Court issued two orders of significance in pending case:

First, in Department of the Treasury v. Chicago (02-322), originally set for argument for today, the Court vacated the judgment below and remanded the case to the Seventh Circuit to consider the impact of a recently-enacted law. This was a FOIA case. The City of Chicago had requested certain ATF records on gun sales and transactions, but ATF withheld most of the helpful data claiming that it qualified for an exemption from disclosure under FOIA. The Seventh Circuit disagreed with the ATF and ordered the agency to release the data. The Court was to consider this holding, but then Congress intervened. In a massive appropriations bill, Congress included language designed to foreclose disclosure of the data for everyone. Thus, one week before argument, the Court remanded this case to allow the Seventh Circuit to consider the impact of this new law in the first instance.

Second, on Friday February 28, the Court directed the parties in Sell v. United States (02-5664) to be prepared to discuss the jurisdiction of the Court and the Court of Appeals at argument (which was held yesterday), and to submit supplemental briefs on the topic by this coming Friday (March 7). (In other words, this is not a good week for the lawyers involved. They found out on Friday that they must be prepared to discuss a new issue before the Court on Monday, and must submit a brief on the topic by this Friday.) This case is about whether the government can forcibly medicate a criminal defendant to stand trial for non-violent offenses. The Court is evidently worried about whether there is a “final decision” for review.

Opinions:

The Court issued five opinions today, including the first opinion issued from the January sitting. Of the five, Ginsburg and Stevens both issued 2 majorities, thus significantly reducing their workload as they move into the heavy spring months.

I’ll begin today with one of Ginsburg’s majorities (an opinion for a unanimous Court), and the first opinion from the January sitting, Clay v. United States (01-1500). This case answers a narrow question: When a federal defendant does not petition for a writ of certiorari to the Supreme Court, when does his conviction “become final” and thus begin the running of the one-year statute of limitations for the filing of a habeas petition under 28 USC 2255? Some appellate courts had held that a conviction becomes final when the appellate court issues its mandate (usu. 21 days after it issues its decision), while others had held that a conviction becomes final when the time for filing a petition for writ of certiorari expires (usu. 90 days after the appellate court decision, or 69 days after the issuance of the mandate). Today, the Court resolved that conflict, holding that a conviction becomes final when the time for filing a cert petition expires. The Court held that in the postconviction relief context, finality has always been understood as attaching when the Supreme Court affirms a conviction on the merits on direct review, or denies a petition for writ of certiorari, or when the time for filing a cert petition expires. Because the Court presumes that Congress expects its statutes to be read in conformity with the Court’s precedents, this long-standing interpretation of finality determines the meaning of finality in Section 2255.

Two points of note about this opinion. First, the government (respondent here), agreed with the defendant about the proper interpretation of the statute, and thus the Court appointed an amicus to brief the other side of the case (in defense of the decision below). Second, the core of the Court’s opinion addresses the application of the maxim that if Congress includes language in one section of a statute, but excludes it from another, it is generally presumed that Congress acted intentionally in the disparate inclusion or exclusion. In this case, amicus argued that this maxim applied because the parallel provision in the statute governing post-conviction relief for state prisoners explicitly defined finality as attaching upon the expiration of the time for filing a cert petition. Thus, according to amicus, Congress must have intended the federal habeas statute — which does not define finality — to mean something different. The Court rejected that argument by holding (in reliance on a prior case that applied the maxim) that an unqualified term (finality) calls for a reading no less broad than a qualified, specifically defined term. In addition, the Court identified a plausible reason why Congress might have specifically defined the term for state habeas petitioners, while declining to do so for federal habeas petitioners.

Next, in a $419 million loss for Boeing, the Court sided with the IRS in Boeing Co. v. United States (01-1209). (This is a complicated tax case, so I’ll do my best to simplify. The tax lawyers among you should read the full opinion. If I make any mistakes, please let me know!) Beginning in 1971, Congress created tax incentives to encourage domestic manufacturers to increase their exports. The relevant statutes provide special tax treatment for export sales made by certain specially structured subsidiaries of American manufacturers, thus encouraging manufacturers to assign all of their export sale profits to the subsidiary. To avoid providing too much of an advantage, however, Congress imposed limits on the ability to assign such profits. The limit relevant here provided that the subsidiary’s taxable income could be only a little over one-half of the parties’ “combined taxable income” (CTI).

The precise question at issue here deals with the treatment and allocation of certain R&D costs. In a nutshell, IRS regulations defined allocable R&D as all R&D related to any product in the same “Standard Industrial Classification” (SIC) category (a somewhat large classification encompassing several products). Boeing, by contrast, divided its operations by product line (e.g., 737, 747, 757, etc.), and allocated R&D expenses solely by product line (i.e., 737 expenses allocated to 737 product line only), even if the other product line was in the same SIC category. Thus, for example, the R&D costs for development of the 737 had no effect on the calculation of the CTI produced by export sales of any other models. Under the IRS regulations, however, R&D for the 737 line should have been allocated for purposes of calculating CTI for all product models within the same SIC category. (The opinion doesn’t say, but I’m assuming that all of Boeing’s product lines would fall within the same SIC category.) Based on its regulation, the IRS reallocated Boeing’s R&D, and Boeing paid the resulting $419 million tax deficiency. Boeing sued to challenge the regulation.

Ok, enough on the facts. Stevens (for all but Thomas and Scalia) upheld the regulation. The Court noted that the statute does not define the term “CTI,” but that the Secretary has the specific authority to prescribe regulations for computing CTI, and the more general authority to prescribe all regulations necessary for the enforcement of the Internal Revenue Code. These regulations, according to the Court, are entitled to deference. The balance of the opinion essentially defers to the Secretary’s regulation. Stevens identified statutory limits on the Secretary’s interpretive authority, but found that the Secretary’s regulation fell within those limits. While Boeing might have a plausible reading of the statute, the Secretary’s interpretation was not arbitrary. In other words, Boeing’s textual arguments were insufficient to overcome the deference owed to the Secretary’s interpretation. The Court went on to reject Boeing’s arguments based on related regulations, and on the legislative history.

Thomas (joined by Scalia) dissented, beginning with the proposition that “[b]efore placing its hand in the taxpayer’s pocket, the Government must place its finger on the law authorizing its action.” Thomas disagreed with the majority’s interpretation, and indeed noted that when the regulations were first issued, the IRS appeared to agree with Boeing’s interpretation of the statute. In the end, Thomas believed that Boeing’s tax treatment was fully consistent with the statute and should have been upheld.

If you’re still reading after all this tax fun, here’s a listing of the other opinions that will be summarized later this week:

Moseley v. V Secret Catalogue, Inc. (01-1015)

United States v. Navajo Nation (01-1375)

United States v. White Mountain Apache Tribe (01-1067)

Washington State Dept. of Social & Health Services v. Guardianship Estate of Keffeler (01-1420)

Miller-El v. Cockrell (01-7662)

Scheidler v. NOW (01-1118)