AST YEAR the
U.S. Supreme
Court tackled
such socially
divisive topics
as affi mative
action in school
admissions
and homosexual
conduct in the pri-
vacy of the home.
The Court’s docket
this year,
reflected in the 50 or so
cases that the
Court has thus far
accepted for
hearing, will likely gen-
erate fewer
headlines and less contro-
versy than last
year.
This year’s
docket concerns more
esoteric and
arcane applications of
the law. For
example, in Virginia v.
Maryland, the
Court will reach back
to Eighteenth and
Nineteenth
Century statutes
to determine if
Virginia has a
right to build in the
Potomac River,
and thereby draw
water away from
Maryland.
Elsewhere, in
Till v. SCS Credit
Corporation,
the Court will decide
the appropriate
discount rate to use
for deferred
payments to an underse-
cured
creditor.
The Till case
will
require the Court
to answer the eso-
teric question of
what is the appro-
priate discount
rate to calculate the
present value of
property held by a
debtor under the
Chapter 13 bank-
ruptcy cramdown
provision found at
11 U.S.C. §§
1325(a)(5)(B)(ii).
But even
esoteric cases can have
practical
consequences. The decision
in Till will
establish a formula (based
on economic
principles contained in
the briefs) that
bankruptcy courts all
across the
country will employ to set
the interest rate
on outstanding debt,
where debtors
keep property--- such
as
automobiles---that they purchased
through
financing.
Each term the
High Court hears
cases of general
interest to compa-
nies, government
agencies, and pri-
vate parties. The
business law cases
coming before the
Supreme Court
this fall range
from a case involving
competition for
local Internet serv-
ice––pitting
municipal utilities against
the state and
large telecommunica-
tions firms––to a
case involving limi-
tations on
employers’ ability to refuse
to hire
rehabilitated job applicants
because of their
prior substance
abuse of drugs or
alcohol.
The Court has at
least one con-
sumer rights case
this fall. The case
concerns how
credit card companies
and card-issuing
banks disclose to cus-
tomers the fees
they are being
assessed for
exceeding their cards'
credit limits.
The Federal Reserve
Board had
previously held that those
fees should be
displayed as a separate
charge on the
monthly bill, but a fed-
eral appeals
court ruled that the fees
should be shown
as part of the
finance
charge.
Consumers
would
probably be more
interested in limits
on the amount
that banks and credit
card companies
can charge for fees,
rather than
under what category the
fees appear on
their bills.
Employment
Law. In General
Dynamics v.
Cline and Raytheon v.
Hernandez,
the court will hear two
employment
discrimination cases
with potentially
broad impact on
labor unions,
benefits with seniority
systems, and
employers that currently
offer
preferential treatment to older
employees.
The General
Dynamics
case poses the
question of whether
employers can
offer a retirement plan
that grants full
health benefits only to
those who retire
after age 50, or does
the Age
Discrimination in
Employment Act
(ADEA) require com-
panies to offer
the same retirement
option to every
employee over the
age of 40. “If
the employer has to
extend
retirement health benefits to
everyone age 40
or older or to
nobody, he’ll
extend it to nobody,” pre-
dicts Donald
Verrill, a lawyer in the
Washington,
D.C., office of Jenner &
Block. Superior
benefits for older or
more senior
employees are fairly com-
mon with many
companies across the
nation.
Most employers
probably
could not afford
to offer the same
enhanced
benefits to every employee
over age 40. The
Bush Administration
is backing the
side of Dennis Cline
and 175 of his
fellow workers aged 40
- 49, and will
argue that the ADEA pre-
vents
discrimination against any
employee over
age 40—even if the
discrimination
benefits a class of
older
employees.
The Raytheon
case tests the limits
of the Americans
with Disabilities Act
(ADA) as
applying to employees who
were fired for
using illegal drugs or
consuming
alcohol on the job but
who then
completed rehabilitation
programs.
If reformed
substance
abusers are
covered by the ADA, then
employers will
be prohibited from
refusing to hire
these applicants
based solely on
their past drug use.
The U.S. Court
of Appeals for the
Ninth Circuit
held in favor of the
employee-applicants.
Governments.
The most closely
watched case
this term, McConnell v.
FEC,
pertains to the constitutionality
of the
McCain-Feingold Bipartisan
Campaign Reform
Act of 2002, which
seeks to limit
the sources and dollar
amounts of
political campaign contri-
butions.
Of course,
bipartisan is
somewhat of a
misnomer for the Act,
because
McCain-Feingold passed
Congress with
tepid Republican sup-
port and very
strong support from
Democratic
legislators.
In an unusual
move, the Court
briefly
reconvened for one day last
September----one
month before the
traditional
opening of its new term----
to hear four
hours of oral arguments
concerning the
Act. Ironically, the last
time the court
met in special session
in September was
in 1976, when the
Court ruled on
the federal campaign
finance law of
that time. See Buckley
v.Valeo,
424 U.S. 1 (1976).
In a brief
asking the Court to find
McCain-Feingold
unconstitutional, the
American Civil
Liberties Union
(ACLU) warned
against "a seismic shift
in American
politics" if the Act were
upheld. The
American public would
have to decide
if that seismic shift was
a positive or
negative change in our
political
campaigns, but the ACLU
implied it would
be negative.
Similarly, a
brief filed on behalf of busi-
ness interests
argues "[a]ll Americans,
including
American voters and govern-
ment officials,
have a vital interest in
hearing what
corporations have to say
on the key
issues of the day." The busi-
ness groups went
on to say McCain-
Feingold would
put "broad and vague
new restrictions
on the ability of cor-
porations (and
labor unions) to speak,
associate, and
petition the govern-
ment." Most
legal commentators
expect the Court
to hand down its
decision by the
end of 2003.
Another
politically charged case
on the Court’s
docket this term con-
cerns unabashed
gerrymandering to
produce a
greater number of
Republican
representatives in
Congress. For
the past two years, the
Republican party
has adopted a strat-
egy of
accelerating redistricting bat-
tles in order to
maximize partisan
advantage. The
case,Vieth v. Jubelirer,
is an appeal by
Pennsylvania
Democrats of the
2002 redistricting
plan in
Pennsylvania. Democrats now
hold only seven
out of the state’s nine-
teen
congressional districts,
yet
Democrats
account for about half of
Pennsylvania’s
voters. The Democrats
are invoking a
1986 Supreme Court
precedent that
held that a partisan
gerrymander so
severe as to thwart
majority will
violates the equal pro-
tection clause
of the 14th
Amendment, yet
the Court set a very
high standard to
prove these allega-
tions.
By establishing
a very high stan-
dard of proof,
the Court tried to limit
the number of
cases that would be
brought any time
one party felt slight-
ed by a majority
party’s redistricting
plan. The
federal district court in this
case held that
standard meant courts
should intervene
only if one party
was "completely
shut out of the polit-
ical process."
According to Steven
Shapiro, legal
director of the American
Civil Liberties
Union, Republicans and
Democrats "are
equally guilty" of
brazen and
partisan gerrymandering,
depending on
which party controls a
legislature.
Should the
Supreme
Court side with
the Democrats,
University of
Pennsylvania law profes-
sor Nate Persily
warned that the deci-
sion could “open
the floodgate” to lit-
igation on
redistricting plans all
across the
nation.
Vieth will force
the Court to reen-
ter, for the
first time since 1986, the
increasingly
bitter and partisan
process of
establishing boundaries for
congressional
districts. Bitter partisan
revolts against
redistricting plans
erupted in Texas
and Colorado earlier
this
year.
Another case
involving state and
local
governments concerns whether
the state of
Tennessee violated the
ADA by failing
to provide handi-
capped access to
all of its state court
buildings.
A separate
dispute over
state benefits
focuses on whether the
court will
continue to protect states,
T H E T E N N E
S S E E L A W T I M E S .
Monday November
24, 2003