Supreme Court Update: Yellen v. Confederated Tribes of the Chehalis Reservation (No. 20-543), Transunion LLC v. Ramirez (No. 20-297), Hollyfrontier Cheyenne Refining v. Renewable Fuels Ass’n (No. 20-472), Mahanoy Area School District v. B.L. (No. 20-255),

Greetings, Court Fans!

Maybe The Nine are aware that President Biden’s SCOTUS-reform commission is meeting next week, or maybe they’re just not the political animals they’ve been made out to be, but the Js finished out the (presumably) penultimate week of OT20 with a trio of decisions revealing notable cross-aisle collaborations:

We’ll try to make more sense of those line-ups in our next missive; for now, we bring you summaries of Wednesday’s cases.

Up first is Mahanoy Area School District v. B.L. (No. 20-255), where the Court squarely addressed for the first time the First Amendment free-speech rights of a public-school student when speaking (or tweeting or snap-chatting or whatever kids do these days) outside of school hours and off the school’s premises. The basic premise that students enjoy some First Amendment protections even on school grounds was established in Tinker v. Des Moines Independent School District (1969). But as subsequent cases have shown, schools, given their custodial or in loco parentis role, have more license to regulate student speech than the government generally has. That raises the question, though, how far does a school’s custodial function (and, with it, the school’s greater ability to regulate speech) extend? As you may recall, in Morse v. Frederick (2007)—the “BONG HiTS 4 JESUS” case—the Court held that a school could punish a student for uttering speech promoting drug use during a school-sponsored activity (the Olympic torch relay) even though it was not on school grounds. Mahanoy takes the question a step further: Can a school regulate student speech that is entirely off campus and off school hours, albeit targeted at a largely school audience and about a school subject? The Court’s answer? Maybe sometimes, but not this time.

This time involved B.L., a public high-school student, who had a trash week at the end of her freshman year when she failed to get her preferred position on a private softball team and didn’t make the varsity cheerleading squad, even though some basic entering freshman did! Feeling salty af, B.L. took out her frustration in the usual way: While at the Cocoa Hut with her bff, she Snapchatted a photo (snapped a chat?) depicting the two of them, middle fingers raised, with the caption “F— school -u– softball –c- cheer —k everything.” (She of course put all four letters together, but we’re afraid to; not so much for fear of offending any of you Karens, but to avoid a copyright suit by the ACLU, which is now selling an F— everything t-shirt.) Because B.L. posted her message in the “story” part of Snapchat, it was only viewable by her “friend group” (a mere 250 people) and only for 24 hours. However, one of those so-called friends took a screen shot and showed the cheer coach. SMDH! The school then suspended B.L. from participating on the JV cheer team for a year. Even though the JV squad is straight lame, B.L. sued and the district court enjoined the suspension and awarded her nominal damages. The Third Circuit affirmed, holding that the school could not regulate speech that occurred off-premises and outside school hours.

The Supreme Court affirmed too, though it disagreed with the Third Circuit’s categorical holding. In an 8-1 ruling authored by Justice Breyer, with only Justice Thomas in dissent, the Court took a middle ground. While public schools do have a special interest in regulating some off-campus student speech, those special interests were not sufficient to overcome B.L.’s interest in free expression here. Justice Breyer identified three features off-campus speech that often (though not always) make it different and less regulable than on-campus speech. First, a school will rarely stand in loco parentis when a student speaks off campus. Second, from the student’s perspective, if the school can regulate on-campus and off-campus speech, then there’s no opportunity to speak freely at all. And finally, schools themselves have an interest in protecting expression when it takes place off campus (and is therefore less disruptive) because public schools are the “nurseries of democracy.” “Taken together,” Justice Breyer concluded, “these three features of much off-campus speech mean that the leeway the First Amendment grants to schools in light of their special characteristics is diminished.”

That standard may not seem like a particularly clear and administrable standard (as even Justice Breyer acknowledged), but at least the majority applied it here, giving some additional insight into the type of off-campus speech that shouldn’t be regulated. B.L.’s speech did not involve features that would place it outside the First Amendment’s ordinary protection. They were not fighting words; and, even though crude, they were not obscene in the legal sense. On the contrary, her statements reflected criticism of the rules of a community of which B.L. forms part——speech that, for an adult, would clearly be protected. She didn’t target particular individuals and intended the speech only for an audience consisting of her private circle of Snapchat friends. The school had no oversight or custodial responsibility for B.L. at the time of her speech, and while there was some brief discussion of the postings during an algebra class at school (anything’s more interesting than the quadratic formula, amiright?), the record did not show any real disruption of school activities. And while there might have been some on the cheer team, there was no evidence of any serious decline in team morale. In short, the school had not shown sufficient special concerns to permit it to punish B.L. for her off-campus speech.

Justice Alito, joined by Justice Gorsuch, penned a lengthy concurrence with a more detailed framework for understanding when speech by students outside of school can be regulated by the school. Alito also emphasized that the Court’s opinion was not addressing college students at a public university, but grade-school students. While in agreement with the Court’s opinion, he delved more deeply and theoretically into the underpinnings of when schools exercise in loco parentis authority over students, because of the consent of parents sending their children to school, and when the government (through the public schools) must relinquish control to the parents outside of school. Justice Alito viewed the framework as deciding when parents have consented to a school’s (i.e., government’s) regulation of the student’s speech outside of school. He agreed that the Court’s opinion struck the right balance in this case when applying his theoretical framework.

Justice Thomas dissented. In his view, the behavior here historically was of the sort a public school could regulate by disciplining the student for disrespectful conduct subverting a school’s authority, regardless of time or location. He found this historical rule, looking at the effect of speech, and not its location, in 19th Century precedent. He also felt the Court gave too little weight to the foreseeable ability of social media to reach people at the school even if posted away from school.

Next up, in Cedar Point Nursery v. Hassid (No. 20-107), the Court killed two progressive birds with one stone. In a 6-3 decision, the Court held that a California regulation permitting labor unions to access the property of agricultural employers in order to solicit support for unionization constitutes a per se physical taking of property in violation of the Fifth Amendment. A win for property rights and a loss for unionization efforts in one fell swoop.

A government taking of private property, requiring payment of just compensation, can be a per se physical taking (when compensation is owed regardless of its scope or burden) or an intangible regulatory taking (when restrictions leave property intact but regulate the owner’s use, requiring the weighing of factors to determine if the burden is effectively a taking). The core question in Cedar Point was which of these two buckets the California regulation fell into. The regulation gives union organizers a “right to take access” to an agricultural employer’s property for up to three hours a day (an hour before and after regular working hours and during the lunch hour), 120 days a year. Two agricultural companies (Cedar Point, a strawberry grower, and Fowler Packing Co., a shipper of table grapes and citrus) sued California’s Agricultural Labor Relations Board to enjoin the regulation on the ground it was an uncompensated taking of an easement across their property. The district court and a divided Ninth Circuit rejected the claims, but the Supreme Court reversed.

Chief Justice Roberts, joined by the five other conservative Justices, held that the regulation’s requirement of “access” is a per se physical taking, no different than the condemnation of property for government use. The regulation is not merely an economic regulation. It is akin to an easement and is a taking even if it isn’t literally an easement. The right to exclude is a fundamental aspect of property ownership, and restricting that right is a physical limitation on ownership amounting to a per se taking. Unlike the lower courts, the Court thought it makes no difference that the invasion of property rights is not permanent and continuous 24/7 or is only for a limited purpose during specific times. The Court distinguished this regulation from ones it previously upheld, protecting the right to hand out leaflets at a shopping center, because the center was open to the public and so the law regulating how the public is treated was not the invasion of a property right.

The Court was not concerned that its decision would invalidate health and safety regulations or other transient intrusions. Isolated entry onto property, if improper, is handled by tort law. Regulated companies are issued permits, which can impose conditions on businesses. Longstanding background restrictions on property are baked into common-law property rights and are not a taking. Property owners, for example, may not engage in a nuisance or, consistent with the Fourth Amendment, may have to provide access to law enforcement officers.

While the Court reinstated the lawsuit, it did not decide on the form of compensation. It is unclear whether the district court will enjoin access under the regulation (the only form of relief requested by the plaintiffs) or allow it but require California to pay for that access.

Justice Kavanaugh concurred, writing separately only to explain how the Court’s decision is consistent with its decades-old decision in NLRB v. Babcock & Wilcox Co. (1956), which upheld the National Labor Relations Act’s requirement that union organizers may enter company property to communicate with employees only when “needed”—for example, if employees live on company property and there is no other reasonable means of communication. The California regulation at issue goes well beyond Babcock, Kavanaugh contended. For one thing, as explained in the majority opinion, Cedar Point’s and Fowler’s employees do not live on company property, so they can be lobbied off the employers’ property.

Justice Breyer dissented, joined by Justices Sotomayor and Kagan. The dissenters saw the regulation quite differently. It physically appropriates nothing. It economically regulates the employer and its property rights. Under the traditional test for economic regulation, it amounts to a taking only if the regulation goes “too far” under a multi-factor test balancing its economic impact with the type of business and its “investment-backed expectations” as well as the character of the governmental action. This type of temporary and limited invasion of property rights is inherent in many forms of economic regulation in modern society without amounting to a taking, let alone a per se physical taking.

Moving on, in Collins v. Yellen (No. 19-422), the Court returned to a topic addressed in many recent decisions: Whether the structure of a recently created administrative agency violates the Constitution and, if so, what to do about it. This time, the agency was the Federal Housing Finance Agency (FHFA), created in the aftermath of the 2008 housing crisis to regulate, and if need be, operate as the conservator for Fannie Mae and Freddie Mac. And the specific issue was whether the FHFA’s structure violates the separation of powers because it is led by a single director, removable by the President only for cause. By a 7-2 vote, the Court concluded that it does. But it also rebuffed the plaintiffs’ chosen form of relief—unwinding some of the FHFA’s most consequential actions—instead remanding to the lower courts to decide whether the plaintiffs were entitled to any relief at all (strongly suggesting in the process that they were not).

Congress created Fannie Mae in 1938 and Freddie Mac in 1970 to support the country’s mortgage system. They are both federally chartered, for-profit companies owned by private shareholders. Their main business is purchasing mortgages, pooling them into mortgage-backed securities, and then selling them to investors. But this line of work was not so profitable around 2008, when the housing bubble burst. Faced with their possible insolvency, Congress enacted the Housing and Economic Recovery Act of 2008. It authorized the Treasury Department to purchase Fannie and Freddie’s stock if it deemed that prudent to protect markets. And it created the FHFA to regulate the companies and, in certain circumstances, step in as their conservator. Under the Recovery Act, the FHFA is led by a single director, appointed by the President and confirmed by the Senate, who serves a 5-year term but can be removed by the President “for cause.” Since 2008, the Agency has had three Senate-confirmed directors and various acting directors.

Just months after it was created, the FHFA’s director decided to step in as conservator for Fannie and Freddie. The next day, Treasury exercised its authority to buy its stock. Under stock purchasing agreements, Treasury provided each company with substantial amounts of capital, in exchange for preferred shares with special rights. Over the ensuing years, the FHFA and Treasury amended these agreements several times, increasing the amount of funds Treasury made available but also changing the formula under which Frannie and Freddie paid dividends to Treasury. When the companies’ financial health improved around 2013, the terms of these agreements proved to be very lucrative for the U.S. government, resulting in them paying billions of dollars in dividends to Treasury.

The size of these payments irked Fannie and Freddie’s shareholders. So they sued the FHFA and its Director on two theories. First, they argued that the FHFA exceeded its statutory authority by amending the purchase agreements. And second, they alleged that because the FHFA is led by a single director removable only for cause, its structure is unconstitutional and all its actions invalid. They asked for various forms of equitable relief, chief among them an injunction directing Treasury to return to Fannie and Freddie a portion of the dividend payments. But the district court dismissed their statutory claim and granted summary judgment to the FHFA on the constitutional one. A heavily divided en banc Fifth Circuit later reversed the dismissal of the statutory claim, held that the agency’s structure was unconstitutional, but concluded that the appropriate remedy was simply to sever the removal restriction from the rest of the Recovery Act, leaving all the Agency’s decisions intact. Given the importance of issues, the Court granted cert.

Justice Alito, writing for a majority that fluctuated between six and nine, began with the shareholders’ statutory claim that the FHFA had exceeded its authority by amending the share agreements in ways that ultimately favored Treasury. Here, all nine members of the Court agreed that the Recovery Act required dismissal. The Act explicitly bars courts from enjoining the agency regarding any action that fell within the scope of its authority as conservator. And the scope of its authority in that area was broad: It was empowered to act in whatever way it concluded was in the best interests of either Fannie and Freddie or the FHFA (and hence the general public the agency serves). Since the complaint’s allegations established that the FHFA’s amendments of the agreements were designed to serve the public interest of ensuring Fannie and Freddie’s continued support of the mortgage market, they were valid exercises of its conservatorship authority and unreviewable.

Justice Alito then turned to the constitutional question regarding the FHFA’s structure. After brushing aside some complicated challenges to the shareholders’ standing to raise this claim, he addressed the merits. Writing for the Court’s six conservatives, Justice Alito quickly held that the Court’s decision in Seila Law LLC v. Consumer Financial Protection Bureau (2020) dictated the result. There, the Court held that Congress could not limit the President’s power to remove the Director of the Consumer Financial Protection Bureau (CFPB) to cases of inefficiency, neglect, or malfeasance. Finding no meaningful difference between the functions and structure of the CFPB and the FHFA, Seila Law established that Congress could also not restrict removal of the FHFA’s director to removal for cause either.

But what about the remedy? The shareholders asked the Court to undo the amendments to the purchase agreements and direct the return to Fannie and Freddie of dividend payments made under those amendments. But a majority of eight (all but Gorsuch) rejected this request for relief for two main reasons. First, most of the relevant amendments were made when the agency was helmed by an acting director, who was not protected by these (unconstitutional) removal provisions. And second, while later related acts were taken by non-acting FHFA directors, all the officers who led the FHFA were appointed in a fully constitutional manner. True, the statute may have wrongly infringed the President’s authority to remove these directors, but that was no reason to regard the actions they took during their time in office as tainted and invalid. This is not to say that the shareholders were entitled to no relief; but because the availability of other remedies had not been adequately considered by the lower courts, the Court remanded to sort those issues out.

A number of Justices then penned separate concurrences and dissents on the constitutional issues. First, Justice Thomas emphasized the difference between Appointments Clause cases and removal cases. When an officer is appointed in a manner that does not comport with the Constitution, the officer lacks constitutional authority to exercise the powers of the office. By contrast, an unconstitutional restriction on the President’s authority to remove the officer does not call into question the validity of all the officer’s acts. For these reasons, he “seriously doubt[ed]” that on remand the shareholders would be able to demonstrate that any relevant action of the FHFA’s director was unlawful. And absent an unlawful act, they were not entitled to any remedy.

Next was Justice Gorsuch’s turn. He agreed with everything the majority said except the remedy. Parting with the majority and Justice Thomas, he believed that there should be no difference between an officer being unconstitutionally insulated from removal and one who is unconstitutionally appointed. In both cases, the officer is exercising governmental power without constitutional authority. He would thus void everything done by any director who was unconstitutionally protected from removal, regardless of whether that removal provision played a causal role in the director’s actions.

Justice Kagan was up next. Writing only for herself, she agreed that Seila Law controlled the outcome. She also agreed that Seila Law was entitled to stare decisis, even though she continued to disagree with it (she had written the dissent in it, after all, and was still of the same mind). Nonetheless, she did not actually join that part of the majority’s opinion, because she didn’t like its description of what Seila Law had held and why. Then, joined by Justices Breyer and Sotomayor, she voiced her complete agreement with the Court’s remedial holding, going a bit beyond it to opine that she thought the lower courts had already decided everything they needed to in order to answer any remedial questions, so the litigation should hopefully come to a quick close.

Finally, it was Justice Sotomayor’s turn. Joined by Justice Breyer, she concluded there were relevant differences between the CFPB and the FHFA, so Seila Law did not decide the validity of the Recovery Act’s restrictions on removal of the latter’s director. Specifically, unlike the CFPB, which exercises significant executive power and regulates private parties, the FHFA exists really just to supervise Fannie and Freddie. She would thus uphold the validity of the Recovery Act’s removal restrictions based on older precedent, dealing with agencies that exercise limited executive authority, which permits Congress to insulate their leaders somewhat from removal.

One more! In the lone criminal case of the week, Lange v. California (No. 20-18), the Court was asked to decide whether the pursuit of a fleeing misdemeanor suspect always qualifies as an “exigent circumstance” that can justify a warrantless entry. The Court unanimously said no, although Justice Kagan’s majority opinion was only joined in full by five other justices (Justice Thomas joined in part; Chief Justice Roberts, along with Justice Alito, only concurred in the judgment). While the majority opinion acknowledged that misdemeanor pursuits would often result in circumstances sufficient to justify a warrantless entry, it declined to adopt a categorical rule.

As usual in Fourth Amendment cases, the underlying facts set the stage: Arthur Lange was minding his own business, driving his car while listening to loud music and honking his horn (having presumably already demonstrated how the wheels and engine on the bus go), when an officer began to tail him. After following Lange for a short while, the officer turned on his overhead lights in an effort to signal Lange to pull over. By this time, however, Lange was only about a hundred feet (a four-seconds drive) from his home. Rather than pull over, Lange pulled into his garage, which was attached to his house. The officer followed Lange inside, questioned him, and saw signs that Lange had been drinking. A field sobriety test and blood test eventually confirmed that Lange was, indeed, hammered. He was charged with a misdemeanor DUI and noise infraction, but moved to suppress all evidence obtained after the officer had entered his garage as the fruits of an impermissible warrantless entry. State prosecutors opposed the motion, arguing that there was a categorical exception to the warrant requirement when an officer was in pursuit of a suspected misdemeanant. They won and had the ruling affirmed on appeal. After the Supreme Court granted cert to resolve a circuit split, the state abandoned its categorical-rule argument and the Court appointed amicus counsel to defend it.

Writing for the Court began, Justice Kagan began her analysis by noting that the Court had generally applied the “exigent circumstances” exception to the warrant requirement on a case-by-case basis reflecting “the nature of emergencies”—some situations might justify immediate entry; some might not. In deciding whether a categorical rule would nonetheless be appropriate in this type of circumstance, Justice Kagan said no, for three principal reasons: First, the entry was into a suspect’s home—a place deserving special consideration under the Fourth Amendment. Second, the fact that a misdemeanor, as opposed to a felony, was believed to have occurred didn’t support a categorical rule. Although some misdemeanors could involve violence or other serious misconduct, many encompassed fairly minor offenses like littering, noise infractions, and even “artificially color[ing] any live chicks [or] rabbits.” (Justice Kagan expressly declined to say whether the pursuit of a fleeing felony suspect warrants a categorical exception.) Third, the fact that the misdemeanor suspect fled didn’t necessarily tip the scales in favor of per se warrantless entry. A suspect can flee, the Court said, “for innocuous reasons and in non-threatening ways.” Here, for instance, Lange’s house (and, perhaps importantly, his bathroom) was just seconds away when the officer flashed his lights, so it wasn’t clear that he was really fleeing from police when he pulled into his garage.

The Chief Justice concurred, joined by Justice Alito. He argued that precedent had already established a general (if not categorical) rule in favor of warrantless entry following a misdemeanant’s flight. He acknowledged, however, that there could be an “unusual case” that deserved an exception to this general rule. Therefore, he would have remanded the case to consider whether Lange’s case was the exception to the rule, particularly as there did not really appear to be a “flight” in the traditional sense. (Justice Kavanaugh wrote his own concurrence arguing that there was little daylight between the Chief’s default rule and the majority’s. When a misdemeanant actually flees from police, there will almost always be exigent circumstances to justify a warrantless entry.) The Chief also focused on the practical difficulties that an officer in the field would face in determining both whether the misconduct at issue was a misdemeanor or a felony, and whether other exigent circumstances aside from flight were present.

Justice Thomas also concurred, joined in part by Justice Kavanaugh. He wrote separately to make two points. First, while he agreed that a categorical rule on the basis of misdemeanant flight was improper, he noted other categorical exceptions recognized in the common law. Second, he argued that even if a Fourth Amendment violation occurred in Lange’s case, the resulting evidence shouldn’t be excluded. This was not a case, he argued, where police engaged in any egregious conduct worthy of deterrence. But it was a case where applying the exclusionary rule would effectively reward Lange for fleeing.

That’s a wrap for this week. There are just five cases remaining, which the Court will presumably get through next week. Until then, have a great weekend!

Tadhg and Dave

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National Law Review, Volumess XI, Number 180