To: Interested Parties
From: Paul Gordon, Senior Legislative Counsel, People For the American Way
Date: September 25, 2014
Subject: PFAW Foundation’s Supreme Court 2014-2015 Term Preview
The beginning of a new Supreme Court term has become a time to worry, “What’s next?” In the past two terms alone, often in 5-4 decisions, the Roberts Court has severely undermined the Voting Rights Act, continued its assault on the American people’s efforts to limit money in politics, strengthened the hand of employers who discriminate, significantly eroded church-state separation, discovered religious rights for for-profit corporations seeking to deny female employees needed contraception coverage, undercut unions, and found ways to help large corporations bypass laws designed to limit their power over small businesses and ordinary people.
As bad as the Roberts Court has been, there have also been some good decisions in the most recent terms. For instance, the Court struck down the odious Defense of Marriage Act, upheld the EPA's general authority to issue regulations on greenhouse gas emissions from power plants, and unanimously recognized our Fourth Amendment right to privacy concerning our smart phones.
The 2014-2015 Term is set to begin on October 6, the traditional First Monday in October, and the Court will be hearing a number of important cases. At the same time, perhaps half the cases it will hear this term have not been determined or announced, and there is substantial speculation on whether it will hear cases on several high-profile issues, marriage equality most prominent among them. Below is a summary of some of the major cases the Court may hear this term, along with cases already scheduled that we will be following.
CASES THAT THE COURT MIGHT HEAR
If the Court accepts a marriage equality case, it will obviously become the blockbuster case of the term (and perhaps the decade). The Court has already been asked to hear appeals of pro-equality rulings by three circuit courts: From the Tenth Circuit are Herbert v. Kitchen (Utah) and Smith v. Bishop (Oklahoma). From the Fourth Circuit are Rainey v. Bostic, Schaefer v. Bostic, and McQuigg v. Bostic (all Virginia). From the Seventh Circuit are Bogan v. Baskin (Indiana) and Walker v. Wolf (Wisconsin). While states and government officials who lost in the lower courts are filing the appeals, the couples who won the cases are also urging the Court to hear the appeals, so there can finally be a national resolution to the issue.
Should one of the remaining circuit courts uphold a state marriage ban, the resulting split among circuits on such a major constitutional issue would almost guarantee review by the Supreme Court. But if every circuit continues to rule the same way, the Justices might decide to let the issue be resolved there.
Conservatives like Scalia and Thomas, who have in case after case shown their hostility to LGBT equality but may be unsure of how Kennedy would vote, might not be willing to risk a Supreme Court precedent that same-sex couples have a constitutional right to marry. From their perspective, if they can’t change the outcome around the country, why make it worse by adding a jurisprudential nightmare from the nation’s highest court that would taint American law for decades to come?
For Justices likely to recognize the constitutional right to marriage equality, the calculation might be different. They, too, not knowing Kennedy’s position, might not want to risk a 5-4 ruling in the “wrong” direction on a major constitutional and societal issue. But even if they could be certain of being in the majority, they might find advantages to having the Court stay out. Justice Ginsburg, for instance, has suggested publicly that Roe v. Wade went “too far, too fast,” provoking a backlash that could otherwise have been avoided. If the legal question of marriage equality is being decided rightly in all the circuit courts, some Justices might rather leave well enough alone. In fact, Justice Ginsburg told a group of law students in mid-September that without a circuit split, she saw “no urgency” for the Court to take up the issue now, although she added that she expects the Court to take it up “sooner or later.”
Should the Court grant cert on one or more of the appeals, it could answer a number of critically important questions in addition to whether states can prohibit same-sex couples from marrying.
Exactly which constitutional right do the bans violate? While numerous courts have ruled in favor of same-sex couples, they have been anything but unanimous in their reasoning: Some have suggested that the bans violate the Due Process Clause, because the longstanding, fundamental right to marry includes the right to marry someone of the same sex. Other judges indicate that the bans violate the Equal Protection Clause because they deny the right to marry based on the sex of the people seeking to get married. Still others suggest that the bans violate the Equal Protection Clause because they discriminate against gays and lesbians. While the different legal rationales would all have the same immediate result (marriage equality), they could create very different legal precedents and have very different impacts down the line as lower courts consider other types of discrimination, whether aimed at gays and lesbians, at transgender people, or at others.
A Supreme Court ruling might decide what level of scrutiny the Equal Protection Clause requires for laws that discriminate against gay people, an issue not squarely faced in previous cases. Most government classifications are subject to – and easily pass – “rational basis” scrutiny by the courts: The law is constitutional as long as it’s rationally related to some legitimate government interest. (The Court has said that animus against gays and lesbians is not a legitimate purpose, which in the past has let it bypass the question as to whether anti-gay laws warrant more scrutiny from the courts.)
But a few types of laws trigger heightened Equal Protection scrutiny. Sex-based classifications are subject to intermediate scrutiny: They must be substantially related to an important government interest. Race-based classifications are generally subject to strict scrutiny, the highest level: They must be narrowly tailored to achieve a compelling government interest. If the Court rules that laws discriminating against lesbians and gays warrant some level of heightened scrutiny, that would have an enormous impact nationwide on all kinds of laws that discriminate against lesbians and gays, not just marriage bans.
The Court’s discussion of this issue could also shed light on whether eliminating private discrimination against LGBT people is (in the Court’s eyes) a compelling government interest. This could have an enormous impact as courts consider right wing challenges to anti-discrimination laws on the basis of the federal Religious Freedom Restoration Act or state-law analogs.
Opponents of the Affordable Care Act strategically launched lawsuits in four different circuits challenging federal subsidies for millions of Americans buying health insurance on federally-run exchanges. The circuits were apparently selected to maximize the possibility of a circuit split, which in turn would maximize the likelihood of getting the case heard by the Roberts Court, which (they hope) would deliver a crippling blow to Obamacare. Decisions have been reached in two of the circuits, although one has since been vacated.
Section 1311 of the ACA says states should set up insurance exchanges, while Section 1321 of the Act says the federal government can set one up if a state doesn't. Subsidies are available for less well-off people getting health insurance through an exchange, based on the amount the person pays for the insurance s/he is enrolled in through an exchange "established by the state under [section] 1311" of the ACA. The law’s opponents hope to have the Supreme Court rule that Congress intended for subsidies to be unavailable to Americans purchasing insurance through the federally-established exchanges that the law calls for in cases where the state does not step in. In other words, the argument is that Congress intended to undercut the financial viability of the law and thwart its central purpose.
A unanimous panel of the Fourth Circuit rejected this wild claim in King v. Burwell. However, two far right judges on the D.C. Circuit formed a majority in a three-judge panel ruling actually agreeing with the Obama care opponents in Halbig v. Burwell. Dissenting Judge Harry Edwards recognized the lawsuit as a “not-so-veiled attempt to gut the Patient Protection and Affordable Care Act,” noting that “[i]t is inconceivable that Congress intended to give States the power to cause the ACA to crumble.” The full D.C. Circuit subsequently vacated the ruling and will consider the issue en banc, and most observers expect a ruling more like the Fourth Circuit’s.
But even if that happens, there are still lawsuits percolating in Indiana (Seventh Circuit) and Oklahoma (Tenth Circuit), so the hoped-for circuit split may yet occur. If it does, the Roberts Court is almost certain to consider the issue. While the case is transparently political and legally weak, that did not stop the conservative Justices when it came to the Commerce Clause challenge to the individual mandate.
The Roberts Court may hear one or more cases involving religious nonprofits that oppose the ACA’s contraception coverage requirement, in a sequel to Hobby Lobby v. Burwell. In that case, the Roberts Court gave certain for-profit corporations religious liberty rights under the Religious Freedom Restoration Act (RFRA), then completely rewrote the law to give the chain store the right to “exercise” its religion by refusing to comply with the ACA’s contraception coverage requirement.
Under RFRA, a federal law cannot impose a substantial burden on a person’s religious exercise unless it is in furtherance of a compelling governmental interest, and it is the least restrictive means of doing so. In Hobby Lobby, the Roberts Court concluded that the corporation and its owners suffered a “substantial” burden” on their religious exercise because the owners were offended by the contraception coverage requirement, even though it did not restrict or burden what they may believe or do. The majority also concluded that the law was not the least restrictive means of furthering the government’s interest in women’s health, because the Administration offers religious nonprofits an accommodation: They are exempt if they simply sign a form certifying that they are a religious nonprofit that objects to the provision of contraceptive services, and provide a copy of that form to their insurance issuer or third-party administrator, which then has the responsibility to pay for and provide the coverage. (Churches, in contrast, are wholly exempt.) The Roberts Court concluded that the federal government can make this accommodation available to for-profit corporations, meaning the coverage requirement is not the least restrictive means of achieving the ACA’s goal.
But three days later, the Court issued a temporary injunction against enforcing even this accommodation against Wheaton College, a non-profit religious institution that argued that the accommodation substantially burdens its religious freedom. This prompted a furious dissent from the three women Justices. Although the merits of the case are still being argued before a lower federal court, this was an ominous sign of how the Roberts Court will address the legal question when it inevitably reaches the high court.
Another high-profile case (or one similar to it) that may reach the Court involves Little Sisters of the Poor. This religious nonprofit organization, too, has a religious objection to the accommodation that was designed to meet its religious objections, arguing that the form is like a permission slip that would trigger contraception coverage, making the nuns complicit in sin. However, the Little Sisters’ insurer is classified as a “church plan,” which is actually exempt from the ACA requirement. So regardless of whether the Little Sisters signed the form, their employees would still not have the contraception coverage. Nevertheless, last January, while its RFRA suit against the contraception coverage provision was before the Tenth Circuit (where it is still pending), the Supreme Court enjoined the federal government from enforcing the law until a final resolution on the merits.
It seems likely that there will be a request that this issue be considered by the Supreme Court at some point this term, either through one of these cases or one similar to them.
CASES CURRENTLY BEFORE THE COURT
EMPLOYMENT DISCRIMINATION AND WORKERS’ RIGHTS
The Supreme Court is to decide to what extent employers can treat pregnant workers temporarily unable to work differently from other workers temporarily unable to work.
This case involves Peggy Young, a pregnant employee of UPS with temporary medical restrictions on how much she could safely lift. UPS did not make any accommodations for her, such as temporary alternative work. As a result, she spent several months on unpaid leave, during which she lost her medical coverage.
In 1976, the Supreme Court ruled that discriminating against employees who are pregnant was not sex discrimination under Title VII. Congress corrected that interpretation of the law in 1978 with the Pregnancy Discrimination Act (PDA), which has two relevant provisions. First, it specifies that sex discrimination includes discrimination on the basis of pregnancy, childbirth, or related medical conditions.
The second provision explains how to apply that general principle: It says that women affected by pregnancy “shall be treated the same for all employment-related purposes … as other persons not so affected but similar in their ability or inability to work.” This establishes a basis of comparison. So while a typical sex discrimination case looks at how a female plaintiff is treated in comparison to similarly situated men, a PDA case looks at how she is treated in comparison to non-pregnant workers with similar ability (or inability) to work.
UPS’s collective bargaining contract calls for UPS to accommodate temporarily disabled employees if the disability is due to an on-the-job injury, or if they have lost their DOT certification to drive. UPS also accommodates employees who have a permanent impairment under the Americans With Disabilities Act. UPS says its policy is “pregnancy-blind:” They claim they are treating Young the same way they’d treat a non-pregnant employee whose injury doesn’t fit any of the above conditions.
But Young argues that isn’t the proper analysis under the PDA. She points out that UPS would have made an accommodation for someone “similar in their ability or inability to work” to her if they were in one of those three categories. So, she concludes, the plain text of the PDA requires UPS to accommodate her, as well.
The Supreme Court is to decide if employers can deny overtime pay to employees at “customer fulfillment” distribution centers for the time they spend waiting for mandatory security screenings.
This is a class-action lawsuit brought by Jesse Busk and Laurie Castro, two former employees of Integrity Staffing Solutions, which provides workers to work in the warehouses of companies like Amazon.com. At the end of the shift, the company requires every employee to go through a security check before they leave the facility to make sure they aren’t stealing the merchandise. The employees wait as long as 25 minutes to be searched. Busk and Castro claim that they should have been paid overtime for this time under the Fair Labor Standards Act (FLSA), as should all current employees, as well.
FLSA requires overtime pay when a covered employee works more than 40 hours in a workweek. In 1947, Congress helped define what counts as “work” by passing the Portal-to-Portal Act (PPA), which says that FLSA’s overtime requirement doesn’t apply to activities that are “preliminary” or “postliminary” to an employee’s primary job responsibilities. In a 1956 case called Steiner v. Mitchell, the Supreme Court interpreted the PPA as requiring overtime only for tasks that are an “integral and indispensable part of the principal activities for which covered workman are employed.”
Busk and Castro say that any activity required by and beneﬁtting the employer (such as the security searches) are part of the actual job, not “postliminary” to it, so they count as time at work under FLSA and should generate overtime pay. They get support from an amicus brief submitted by the National Employment Lawyers Association, which details how loss-prevention activities have become integrated into the modern retail work routine, making searches like those at issue here part of an employee’s principal activities.
The workers won at the Ninth Circuit, but the court used different reasoning: that the searches are “postliminary” (so the Portal-to-Portal Act applies), but that they are an “integral and indispensable part” of the workers’ principal activities and therefore subject to overtime pay. Integrity (supported by an amicus brief from the Obama Administration) asserts that the searches are “postliminary” to work, are not an “integral and indispensable part” of the employees’ principal activities and, therefore, don’t trigger the overtime requirement.
Part of the company’s argument seems to be a results-based pitch to a corporate-friendly Court: In its certiorari petition urging the Justices to hear its appeal, Integrity Staffing wrote that since the Ninth Circuit ruling, “plaintiffs’ lawyers have brought nationwide class actions against a number of major employers—including Apple, Amazon.com, and CVS—seeking back pay (plus overtime and penalties) for time spent in security screenings.” Notice that it isn’t employees who are suing, but “plaintiffs’ lawyers,” a framing that is red meat for right-wing ideologues. This argument also seems to have less to do with discerning congressional intent and more to do with protecting large corporations.
The Supreme Court is to decide if employers can escape liability for illegal discrimination by arguing that the EEOC failed to make a sufficiently good-faith attempt to reach a settlement with the employer.
Mach Mining has never hired a woman for a mining position. A woman who had been turned down several times for a coal mining job filed a sex discrimination complaint with the Equal Employment Opportunity Commission, a step that Title VII requires before filing a lawsuit. EEOC looked into the allegation, found it had merit, and – again, as required by Title VII – sought to negotiate an end to the alleged sex discrimination “by informal methods of conference, conciliation, and persuasion” before suing. After several months without success, the EEOC notified the company that it felt further efforts would be futile and initiated a lawsuit. Mach Mining says the case should be dismissed on the grounds that the EEOC didn’t make a good-faith conciliation effort. In response, the EEOC says Title VII doesn’t allow such a defense.
While several other circuits have ruled otherwise, the Seventh Circuit in this case concluded that Title VII cannot be interpreted to allow courts to inquire into the adequacy of the EEOC’s conciliation efforts. For one thing, Title VII has no express provision for an affirmative defense based on a defect in the EEOC’s conciliation’s efforts. It also calls for the EEOC to “endeavor” to end the discrimination through “informal methods of conference, conciliation, and persuasion.” If it can’t reach a result “acceptable to the Commission,” it can sue. The Seventh Circuit interpreted this as giving the EEOC great deference.
The court also noted that Title VII makes the process confidential, with penalties for making the information public without the consent of everyone concerned. That could prevent the EEOC from showing the court the evidence that it had sought to conciliate in good faith. It seems unlikely that Congress wrote Title VII to require the EEOC to defend its conciliation efforts in court but made its ability to do so dependent on the permission of the employer being sued. The court also concluded that there would be no meaningful standard of review. For instance, just how hard should the agency pursue an agreement?
A Supreme Court ruling for the employer could give employers a significant tool to stymie legitimate lawsuits against unlawful employment discrimination. As the Seventh Circuit wrote:
Simply put, the conciliation defense tempts employers to turn what was meant to be an informal negotiation into the subject of endless disputes over whether the EEOC did enough before going to court. Such disputes impose significant costs on both sides, as well as on the court, and to what end?
All the employer should legitimately hope to gain is some unspecified quantum of additional efforts at conciliation by the EEOC. The result of such a defense, as we have said in a closely related context, is to “protract and complicate Title VII litigation, and with little or no offsetting benefit.”
The Supreme Court is to address whether a state prison’s prohibiting a Muslim prisoner from growing a half-inch beard violates the federal Religious Land Use and Institutionalized Persons Act.
This case originated with a handwritten request to the Supreme Court from Gregory Holt (aka Abdul Maalik Muhammad), a Muslim prisoner in Arkansas, to hear his case. He states that his religious beliefs require him to have a beard, and he seeks to grow a half-inch beard. The state Department of Corrections prohibits beards generally, but allows quarter-inch beards grown for medical reasons. Muhammad sees his request as a compromise (since his religious beliefs really would have him grow it much longer) that has been accepted in prisons elsewhere.
Since he is in a state prison, Muhammad’s case is governed by a federal law called the Religious Land Use and Institutionalized Persons Act, or RLUIPA. Passed unanimously by Congress in 2000, RLUIPA requires prisons accepting federal funds to give greater religious liberty protections to inmates than is required by the First Amendment’s Free Exercise Clause. Similar to the better-known Religious Freedom Restoration Act (RFRA), which was at issue in Hobby Lobby, RLUIPA is triggered when the government imposes a “substantial burden on the religious exercise” of a person confined to an institution. When that happens, the action can be upheld only if the government can demonstrate that the burden: “(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.”
The state argues that the no-beard policy furthers the compelling government interests in prison safety and security, and that the proposed half-inch accommodation would not be as effective as the no-beard rule in achieving those purposes. For instance, they provide the opinions of penal experts that prisoners could use the beards to hide contraband, and that escaped prisoners could too easily and quickly change their appearance simply by shaving. Muhammad (now represented by counsel) argues that the lower courts, which ruled against him, did not provide the strict scrutiny of the state’s arguments that is required by RLUIPA.
In Hobby Lobby, the Supreme Court significantly rewrote RFRA, watering down the “substantial burden” requirement and applying the religious liberty law to for-profit corporations. Neither factor is relevant to this case, meaning the Court could rule in favor of Muhammad without rewriting the law. But the Roberts Court is known for playing the “long game.” Even if the Court rules unanimously for Muhammad, they may not all agree on the reasoning: The conservatives could write an opinion designed to be cited in future RFRA litigation strengthening the hands of those on the right who would reshape RFRA from a shield against government oppression into a sword.
The Supreme Court is to address whether Alabama engaged in unconstitutional racial gerrymandering when it drew new state House and Senate district lines that channeled large numbers of African Americans into districts that were already majority-minority.
The GOP-controlled Alabama state legislature enacted a redistricting plan that transferred a significant portion of the black population that had previously been in majority-white districts into districts that were already majority-black. In so doing, the legislature was seeking to achieve certain percentages of black voters in the majority-black districts. At issue is whether legislators engaged in an unconstitutional effort to separate voters by race, or whether they followed traditional redistricting criteria in a way that was necessary to comply with the Voting Rights Act.
Due to population shifts, majority-black districts established after the 2000 Census lost population and had to be redrawn after the 2010 Census to bring in new people. In some cases, the population loss was disproportionately white, meaning that a significantly higher percentage of the remaining population was African American than before. In redrawing the lines while keeping the same number of majority-black districts, the legislature made two decisions that led to what some call “bleaching” – drawing lines so that large numbers of African Americans in majority-white districts would be redistricted into supermajority-black districts, and diminishing African Americans’ political influence in much of the state.
First, they chose to reduce the permissible population difference between districts from 10% (the 2000 standard) to 2%. To achieve district populations that close to each other, many more people would have to be drawn into the modified black-majority districts than would otherwise have been necessary. That huge numbers of those people would be blacks removed from majority-white districts was determined by the second decision: Ostensibly to comply with the requirement under Section 5 of the Voting Rights Act (this was before Shelby County) that new lines not lead to a retrogression in the position of racial minorities with respect to their effective exercise of the electoral franchise, the African American percentages in the redrawn majority-minority districts should be at least whatever they had become in 2010.
This reapportionment was upheld by a divided three-judge federal district court. The majority concluded that race was not the predominant factor in drawing the redistricting boundaries, so that they need not be analyzed under strict scrutiny as in the 1993 Shaw v. Reno case. The majority also concluded that even if strict scrutiny applied, the legislative boundaries were narrowly tailored to achieve the compelling purpose of compliance with the preclearance provisions of Section 5 of the Voting Rights Act, which applied at the time. The plaintiffs in this case – the Alabama Legislative Black Caucus and state Democrats – challenge those conclusions, arguing that legislators had misinterpreted Section 5, that race was impermissibly the overriding criterion used by legislators in drawing lines, and that the redistricting plan violated the Fourteenth Amendment.
FREE SPEECH AND SIGN REGULATIONS
The Supreme Court will hear a church’s Free Speech challenge to city rules regulating the size and placement of various types of signs, which affect the signs it puts up to direct people to its church services.
This case was brought by a small church (25-30 adult members) in Arizona that places signs up to invite people to its weekly services and inform them where they are being held. Good News Church and its pastor Clyde Reed are urging the Court to strike down the town of Gilbert’s sign ordinance, which treats some signs (such as directional signs for events, like a fair or, in this case, a church service) differently from others (like political, real estate, or ideological signs). The different types of signs have different rules on how large they can be, and where and when they can be posted. Good News Church argues the law is an unconstitutional content-based infringement of its First Amendment rights. The lower court had upheld it as content-neutral.
Gilbert regulations generally require a permit before posting a sign, with a number of exceptions that can be posted without a permit. These exceptions (each with specific size, number, and placement rules) include construction signs, open house signs, parking signs, building identification signs, garage sale signs, street address signs, and restaurant menu signs. The church devotes much of its focus to three of the exceptions:
The church has signs in the first category to tell people about their weekly church services in the space they rent. The maximum size is smaller than political and ideological signs, fewer can be posted, and they cannot stay up nearly as long. Represented by the far-right Alliance Defending Freedom, Good News Church argues that the city is violating its First Amendment rights by applying different rules to different types of noncommercial signs based on their content. According to the church, any classification based on what a sign says is content-based and therefore subject to the highest level of scrutiny. And if the law’s purpose is, say, to promote traffic safety or aesthetics, then what difference should it make if the sign is for a church service, political candidate, or particular ideology?
A divided panel of the Ninth Amendment disagreed, ruling against the church. It said the distinctions among different types of signs are content-neutral (and thus subject to a somewhat lower level of scrutiny) because Gilbert’s interests in regulating temporary signs are unrelated to the specific content or message of the sign. Each exemption is based on objective criteria related not to the sign’s message, but to the reason for the exemption (such as need for communication about elections, or the need to let event sponsors inform people how to get to the event).
HOLDING FRAUDULENT CORPORATIONS ACCOUNTABLE
The Court is to decide whether the clock stops on a deadline to sue for securities fraud when someone files a class action suit.
This case relates to a key 1974 precedent called American Pipe & Construction Co. v. Utah, where the Supreme Court ruled that the filing of a class action lawsuit stops the clock (“tolls” in legal parlance) on the statute of limitations on filing federal antitrust claims for all potential members of the class, including those who are not actively involved with or even aware of the class action lawsuit. So if a court then doesn’t certify the class for some reason or dismisses its claims, but makes that decision after the statute of limitations has passed, those who would have been included in the class have not lost their opportunity to have their day in court just because they hadn’t made an individual filing in the case.
The current case relates to the financial meltdown of the 2000s and involves federal laws in the Securities Act of 1933 prohibiting sellers of securities from misleading investors. The law has two key time limits: (1) You generally have one year to file a lawsuit, and that can be a year after the untrue or misleading statement is made or discovered. (2) But there is an additional limit, one that restricts just how long after the fact you have to discover the wrongdoing: “In no event shall any such action be brought … more than three years after the security was bona fide offered to the public [or, depending on which section of the law is involved] more than three years after the sale.” The Second Circuit concluded that the American Pipe rule did not apply to this statute.
One of the great benefits of class action litigation is that it protects the rights of people who cannot afford to themselves engage in litigation and may not even realize they have been wronged. It also vastly enhances our society’s ability to hold large corporations responsible when they violate people’s rights. The rule from American Pipe has served that purpose well. But in other contexts, the Roberts Court has significantly undercut the ability of Americans to utilize class actions to protect their rights. If the Court rules that American Pipe doesn’t apply in the securities fraud context, it will be important to see if its reasoning also undercuts American Pipe as a precedent in other contexts.
The Court is to address what investors need to prove to hold companies accountable for material misstatements in investment material.
When responding to a public offering of company shares, investors may rely on a company’s registration statement with the Securities and Exchange Commission. Under Section 11 of the Securities Act of 1933, investors can sue if that statement “contained an untrue statement of a material fact or omitted to state a material fact [that was] necessary to make the statements therein not misleading.” This case asks what investors need to prove if the purportedly “untrue statement” was the company’s opinion that it wasn’t breaking the law.
Omnicare is the nation’s largest provider of pharmaceutical care for the elderly and other residents of long-term care facilities. In Omnicare’s registration statement, it said that “we believe” that its financial relationships with pharmaceutical manufacturers were legal. The investors here claim that some of those deals constituted unlawful kickbacks. The question is whether that allegation is enough to trigger Section 11.
According to Omnicare, for the investors to have a claim under Section 11, they have to allege that Omnicare didn’t believe the statement when it was made. Otherwise, companies could be held liable for statements of opinion that turn out later not to be true. Two circuit courts have taken that view.
But in this case, the Sixth Circuit took a different approach, one that makes it easier for investors to file a Section 11 claim. That court reasoned that Section 11 is a “strict liability” statute where the state of mind of company officials isn’t relevant, so it’s sufficient to allege that the opinion was false, regardless of whether the company knew at the time it was false. That’s the ruling the investors in this case are asking the Supreme Court to uphold.
In an amicus brief, the Obama Administration takes a middle ground, in which the company isn’t held liable only because it expressed an opinion that turned out not to be true. The Administration argues that a statement of opinion is actionable under Section 11 if: (1) the company didn’t believe it at the time (which both parties in this case agree on), or (2) there was no reasonable basis for the opinion at the time, even if it was sincerely held (which Omnicare disagrees with).
Any ruling by the Roberts Court should keep in mind that Congress enacted Section 11 to encourage maximum disclosure by companies making a public offering. After all, people associated with the company know far more about the business than potential investors could ever know, and Section 11 was intended to dissuade corporations from tricking investors.
Just as the Lochner case defined the Supreme Court a century ago as it turned conservative economic policies into constitutional dogma, America finds itself living through the Citizens United era, where the Court again routinely rules in favor of corporate and other powerful interests. By the end of June, we will know if the current term will have been as damaging to Americans’ fundamental rights as recent terms have been.
Attorney General Eric Holder, who today announced his plans to resign, has been a leader in addressing systems of racial discrimination and protecting the fundamental rights of every American to be treated equally under the law and participate in our democracy.
Perhaps it’s not surprising, then, that the Right loves to hate him.
In February of this year, the American Family Association demanded Holder’s impeachment after he had the audacity to treat married same-sex couples like married opposite-sex couples with regard to a host of legal rights and recognitions. Shortly after, both Faith and Freedom Coalition head Ralph Reed and Republican Rep. Tim Huelskamp echoed the call for Holder’s impeachment because of his support for marriage equality. Televangelist Pat Robertson also joined the impeachment parade, alleging that under Holder, “sodomy” was being “elevated above the rights of religious believers.”
Holder’s commitment to redressing racial injustice was no more warmly received by the Right than his work in support of LGBT equality. After Holder spoke out against voter ID laws, which disproportionately harm people of color, Texas Gov. Rick Perry accused him of “purposefully” “incit[ing] racial tension.” Gun Owners of America director Larry Pratt argued that Holder’s open discussion of racial discrimination in the criminal justice system means that he is the real “racist,” asserting last year that Holder wants to “intimidate the rest of the country so that we don’t think about defending ourselves” against “attacks by black mobs on white individuals.” Bryan Fischer of the American Family Association went so far as to say that Holder would never “prosecute someone if the victim is white.” And after Holder visited Ferguson, Missouri last month, David Horowitz outrageously commented that the attorney general was leading a black “lynch mob.”
And those are just a handful of the attacks the Right has leveled against Holder for his work protecting equality under the law.
The fact that the far Right has reacted with so much vitriol to the attorney general’s leadership is a sign not only of how uninterested they are in the civil rights that the Justice Department is meant to protect, but also of how effective Holder’s work has been. The next attorney general should share Holder’s deep commitment to protecting the rights of all Americans – and, by extension, make all the “right” enemies among those hoping to turn back the clock on civil liberties.
In anticipation of this weekend’s annual Values Voter Summit, a multi-day event where GOP elected officials and presidential hopefuls rub elbows with Religious Right leaders, People For the American Way President Michael Keegan joined the leaders of the Southern Poverty Law Center and five other civil rights and LGBT organizations in an open letter calling on Republican National Committee chair Reince Priebus to ask members of his party to disassociate themselves from the summit.
The letter, printed in the Washington Post and The Hill this morning, highlights the repeated and vicious demonization of LGBT people by the groups responsible for the summit, including its host, the Family Research Council:
Its president, Tony Perkins, has repeatedly claimed that pedophilia is a “homosexual problem.” He has called the “It Gets Better” campaign — designed to give LGBT students hope for a better tomorrow — “disgusting” and a “concerted effort” to “recruit” children into the gay “lifestyle.”
… Bryan Fischer of the American Family Association, a summit sponsor, has said the U.S. needs to “be more like Russia,” which enacted a law criminalizing the distribution of LGBT “propaganda.” He also has said, “Homosexuality gave us Adolph Hitler, and homosexuals in the military gave us the Brown Shirts, the Nazi war machine, and six million dead Jews.”
By participating in the summit, Republican Party leaders risk legitimizing this kind of virulent extremism. Given that reality, the letter asks a simple question: where does the GOP stand on gay bashing? Reince Priebus himself has said, “People in this country, no matter straight or gay, deserve dignity and respect.” But will he walk the talk and, as the letter asks, “tell the members of your party to shun groups that demean other people and deny them dignity?”
You can read the full letter here.
Today President Obama signed an executive order protecting LGBT employees of federal contractors from workplace discrimination. In remarks this morning, the president said that our government “will become just a little bit fairer” today.
President Obama pointed out that many Americans go to work every day with the fear that they could lose their job because of who they are. It’s time to “address this injustice for every American,” he said, urging Congress to pass the Employment Non-Discrimination Act (ENDA). While today’s executive order expands protections to millions of LGBT people who work for federal contractors, we still lack a nationwide law to protect LGBT workers across the board. In many states, you can still be fired for being lesbian, gay, bisexual, or transgender.
Following the Obama administration’s announcement that an executive order was in the works, People For the American Way joined nearly 100 other organizations, including many faith groups, in a letter urging the president to reject a call for an additional religious exemption — which ultimately was not included. The letter noted:
Religious freedom is one of our most cherished values, a fundamental and defining feature of our national character. It guarantees us the freedom to hold any belief we choose and the right to act on our religious beliefs within certain limits. It does not, however, provide organizations the right to discriminate using taxpayer dollars. When a religiously affiliated organization makes the decision to request a taxpayer-funded contract with the federal government, it must play by the same rules as every other federal contractor. [emphasis added]
Jonathan Capehart from the Washington Post reports that in the past few weeks, there have been “extraordinary meetings” in the White House among LGBT and religious communities about both the necessity of protecting workers from discrimination and religious liberty. As Capehart writes, “The president’s action today shows the two are not mutually exclusive.”
If you’re having trouble keeping track of the rapidly falling state marriage bans, you’re likely not the only one. In the latest of a dizzying streak of pro-equality decisions, a judge in Colorado struck down the state’s same-sex marriage ban yesterday.
District Court Judge C. Scott Crabtree stayed the ruling, which means that same-sex couples in Colorado cannot yet begin to marry.
In his decision, Judge Crabtree plainly noted that the ban “bears no rational relationship to any conceivable government interest.” He also underscored the discrimination faced by same-sex couples in the absence of marriage equality:
‘The Court holds that the Marriage Bans violate plaintiffs' due process and equal protection guarantees under the Fourteenth Amendments to the U.S. Constitution,’ Crabtree said in his ruling.
‘The existence of civil unions is further evidence of discrimination against same-sex couples and does not ameliorate the discriminatory effect of the Marriage Bans.’
Continuing the unbroken record of marriage equality wins since last year’s Supreme Court ruling against DOMA in the Windsor case, today a federal judge ruled unconstitutional Kentucky’s ban on marriage for same-sex couples.
District Judge John G. Heyburn II wrote:
In America, even sincere and long-held religious beliefs do not trump the constitutional rights of those who happen to have been out-voted.
The judge has stayed the ruling for now, meaning that Kentucky couples can’t immediately begin marrying. But the decision is a significant victory for LGBT families in the Bluegrass State, where activists have fought courageously for equal rights for many years. Congratulations, Kentucky!
In another win for equality, today U.S. District Judge Richard Young struck down Indiana’s ban on marriage for same-sex couples. Because the judge did not stay the ruling, the Indianapolis Star reports that couples can begin getting married right away.
Not a single state marriage ban has been able to withstand a challenge in federal court in the wake of the Supreme Court’s 2013 decision in United States v. Windsor, which struck down part of DOMA.
People For the American Way Action Fund today endorsed a slate of young progressive candidates running for the Michigan State Legislature. The endorsements are part of PFAW Action Fund’s Young Elected Progressives (YEP) program that supports progressive candidates age 35 and younger. The Michigan candidates endorsed today are a diverse mix of progressive leaders who are positioned to make Michigan’s legislature be more inclusive and accountable.
“These candidates are the best and brightest young progressive candidates running for the legislature in Michigan,” said PFAW Political Director Randy Borntrager. “They are people-oriented folks from all walks of life who will fight for social, economic, and environmental justice, and promote equality for all. Their leadership in their communities demonstrates a progressive vision that will benefit all Michiganders.”
People For the American Way Action Fund is proud to endorse the following Michigan YEP candidates for 2014:
• Stephanie Chang – MI House District 6
• Jon Hoadley – MI House District 60
• David Knezek – MI Senate District 5
• Kristy Pagan – MI House District 21
• Rebecca Thompson – MI District 1
• Robert Wittenberg – MI House District 27
People For the American Way Action Fund today announced its endorsements of a slate of young progressive candidates running for the Michigan State Legislature. The endorsees include a diverse mix of 35-and-younger candidates running for the Michigan state House of Representatives and state Senate, representing a new generation of progressive leaders who will put Michigan’s legislature back-on-track towards a common sense, inclusive, accountable public policy agenda for the state’s future. Their leadership represents a progressive vision that will benefit all Michiganders as they fight for social, economic, environmental justice and equality for all.
The endorsements are part of People For the American Way Action Fund’s Young Elected Progressives (YEP) program. YEP evaluates and endorses young progressive candidates age 35-and-younger in their bids for elected office around the U.S. at all levels.
People For the American Way Action Fund is proud to endorse these Michigan YEP candidates for 2014:
Stephanie Chang – MI House District 6
Running for Michigan’s House of Representatives District 6, Stephanie Chang is a Michigander whose dedication to the community has benefited many. Chang has worked around the state advocating for Affirmative Action, serving as a mentor for Detroit Asian Youth Project, and promoting a fair justice system. Chang’s knowledge and breadth of experience in Michigan make her an important leader for the state as she fights for social, economic, and environmental justice. Visit Stephanie’s page for more details.
Jon Hoadley – MI House District 60
Jon Hoadley is the clear choice to represent Michigan’s 60th District in the state House of Representatives. Hoadley, a small business owner and member of several advocacy organizations in Kalamazoo, is deeply ingrained and in tune with the needs of his community, which makes him the ideal representative. He has already worked to better Kalamazoo advocating for full LGBTQ equality, creating strong and sustainable public schools, and protecting the environment. Visit Jon’s page for more details.
David Knezek – MI Senate District 5
David Knezek is running for Michigan state Senate’s 5th District and has proven that he is the ideal candidate for the position. Knezek is a true leader, having been promoted to the rank of Sergeant during his time in the U.S. Marine Corps. At the University of Michigan-Dearborn, he was elected Student Government President, and in his senior year of college he was elected to be a Michigan state representative. Knezek has proven that he will advocate for his community and improve education, public safety, and job opportunities for Michigan citizens. Visit David’s page for more details.
Kristy Pagan – MI House District 21
Born and bred in Michigan, Kristy Pagan is the ideal candidate for the 21st District of Michigan’s state House of Representatives. She has worked in Washington, D.C. as a legislative aide and a national grassroots organizer. Her determination to serve coupled with her knowledge of and dedication to Michigan will serve the state well. Pagan is a true progressive, and has both the resolve and the passion to reform Michigan’s educational system, advocate for women and children, and improve job growth. Visit Kristy's page for more details.
Rebecca Thompson – MI District 1
Rebecca Thompson is running for election to the 1st District of the Michigan state House of Representatives. Thompson was born and raised in Detroit, and overcame experiences with poverty and homelessness to become a leader in the community. She has worked tirelessly to better Detroit for everyone, using her own experiences to positively impact those around her. Thompson is passionate about affordable education, improving safety, protecting women’s rights, and advocating for her community. Visit Rebecca's page for more details.
Robert Wittenberg – MI House District 27
Robert Wittenberg is running to represent District 27 in the Michigan state House of Representatives. After being inspired by his parents’ and brothers’ work, he is determined to follow in their footsteps and serve his community. As a public servant, he advocates for full equality for the LGBTQ community, increased public transportation, and access to healthcare for all. Visit Robert's page for more details.
The White House announced today that President Obama will issue an executive order protecting the employees of federal contractors from workplace discrimination on the basis of sexual orientation and gender identity. According to the White House, it is an action rooted in the principle that “your ability to get ahead should be determined by your hard work, ambition, and goals – not by the circumstances of your birth, your sexual orientation or gender identity.”
Though most Americans don’t realize it, in the majority of states you can still be fired for being lesbian, gay, bisexual, or transgender. But across the board Americans believe that workplace discrimination is wrong, and that employees should be judged on how well they do their job, not on who they are or who they love.
The upcoming executive order, which ThinkProgress characterizes as “the single largest expansion of LGBT workplace protections in our country’s history,” could protect up to 16 million workers — a major step forward for LGBT equality and for basic fairness in the workplace. But even as we celebrate the anticipated expansion of protections, it’s important to remember that our country still needs a federal law like the Employment Non-Discrimination Act (ENDA) to protect LGBT workers across the country — not just those who work for federal contractors — from employment discrimination. In addition to covering more workers, ENDA would not be at risk of being undone by a future president, as the upcoming order may be.
No one should be forced to choose between risking their job and hiding who they are or who they love.
WASHINGTON – Right-wing groups that oppose advances in marriage equality and reproductive justice have increasingly embraced a new tactic to push their agenda: the claim that opposition to them on policy amounts to oppression of their religious beliefs. A new report from People For the American Way exposes how the anti-gay, anti-choice Religious Right uses false and misleading stories to portray itself as a victim of religious persecution and intolerance.
The report, “The Persecution Complex: The Religious Right’s Deceptive Rallying Cry,” illustrates how Religious Right activists and elected officials have attempted to portray the increasing unpopularity of their stances on a number of cultural issues as evidence of oppression of their religious faith and represent themselves as the only holdouts in a society that is turning its back on moral values.
“Religious Right leaders hold themselves up as the victims,” stated People For the American Way’s President Michael B. Keegan. “This is a powerful talking point, even if not true. We need to expose these distortions for what they really are—an attempt to protect the Right’s ability to discriminate and push its policy preferences on the rest of us.”
The report explores a number of myths that have become widespread on the Religious Right, despite having little or no basis in reality:
None of these stories is true.
These unfounded stories feed into a narrative that portrays conservative Christians as the victims of LGBT rights, reproductive justice, religious pluralism and secular government. This narrative, in turn, has fueled the legislative and legal efforts to turn back any progressive advances.
“Using the resonant rhetoric of religious persecution, bolstered by often-bogus stories of purported anti-Christian activities, the Religious Right has attempted to tip the balance away from pluralism and accommodation to a legal system that allows individuals and businesses to broadly exempt themselves from policies they disagree with,” the report states. “Even when that means trampling on the religious rights of others.”
Read the full report here.
Since last Friday’s ruling by Federal Judge Barbara Crabb that Wisconsin’s ban on same-sex marriages is unconstitutional, hundreds of same-sex couples have lined up to get marriage licenses across the Badger State. Immediately after receiving the ruling, clerks in Dane and Milwaukee counties began issuing marriage licenses, and in both areas, facilities stayed open late on Friday and continued issuing licenses on Saturday. Officiants, including judges, ministers, and commissioners, married couples on-site at their respective county courthouses.
Similar to actions in other states where courts have struck down same-sex marriage bans, Wisconsin’s right-leaning GOP Attorney General J.B. Van Hollen filed multiple motions to “preserve the status quo” attempting to stop same-sex marriages from happening.
As of Tuesday afternoon, 48 of the state’s 72 counties were issuing marriage licenses to same-sex couples, despite the ongoing legal battle. Wisconsin’s Vital Records Office is accepting the licenses, but holding them until they receive further guidance from Van Hollen.
For its part, the ACLU filed a proposal of how to implement same-sex marriage in the state. If approved, the plan would force Governor Scott Walker, Attorney General Van Hollen, and county clerks across the state to treat all same-sex and opposite-sex couples equally under the law.
Judge Crabb is set to have another hearing on June 19th.