After a four-week holiday recess, the Supreme Court returns to the bench on Monday to begin two weeks of hearings. Two cases to be heard tomorrow will deal with fundamental legal issues with deep roots in history: privacy protection for the advice given by lawyers, and regulating the affairs of the states’ militia – now, the National Guard.
The Court will broadcast “live” the audio (no video) of the hearings on its homepage, supremecourt.gov To listen, click on “Live Audio” and follow the prompt when the courtroom scene appears lower on the page. The audio also will be available, under the title of each case, on C-Span TV at this link: cspan.org/supremecourt
First hearing Monday: In re Grand Jury The hearing, scheduled for one hour, begins at 10 a.m.
Background: The first thing to note about this case is that we do not know exactly who is involved. It is a dispute unfolding in one of the most private places in government: a federal grand jury, conducting a criminal investigation. Typically, such grand juries operate in secret – at least until they decide to charge someone with a federal crime.
We do know at least that a law firm is involved, but not its name; its offices probably are in California, but we don’t know that for sure. We also know that it specializes in tax law, including the law that applies to the tax consequences when an individual or company leaves the U.S. to locate abroad or sends money to an entity abroad (the law calls that “expatriation”). That is a very complex branch of tax law, so it was probably wise for the person or company (identified in the case only as “Client”) to seek legal advice.
It is a long-standing tradition in the legal world, dating back actually to Roman times, that what a lawyer says to a client in the form of legal advice is “privileged” – that is, its disclosure to others cannot be compelled. Like other “privileges” (such as those protecting communications between spouses, doctors and patients, religious counselors and believers), it is designed to protect the intimacy of such conversations or advice. In a highly complex society, with many intrusions into private relationships, some assurance of secrecy is highly valued.
From time to time, the Supreme Court is called upon to clarify just when such a “privilege” applies. This case involves the basic question of how courts are to decide when what a lawyer says to a client will be kept secret, within the specialized field of tax law.
It is generally assumed that, if a lawyer counsels a client on what taxes they owe or how to avoid taxes, that is considered legal advice and is protected as private. But it is also a general assumption that advice about how to prepare a tax return is not legal advice; non-lawyer accountants do that all the time.
This case involves a variation on those generalities. The lawyers here did advise the client about the legal duty to pay a federal “exit tax” on expatriation of income or assets (and the grand jury did not demand information about that), but they also advised the client on how to report some income items on the return and whether to seek reduction of a tax penalty (information which the grand jury did seek as part of its inquiry into whether the client broke the tax law).
The lower courts are split on the legal test that courts are to apply in that factual scenario. Some apply a “primary purpose” test on why the advice was given, which is fairly simple but restricted, while others concede that there might be multiple purposes, requiring a balancing test of factors on why the advice was offered.
The question before the Court: How far does the privacy protection for legal advice given by lawyers to their clients extend, when the communication goes outside strict legal counseling?
Significance: Every American taxpayer knows well that the tax code can be maddeningly complex. But they also know that they have a right to dependable information about when they owe a tax, and a right to be assured that the tax laws will be enforced uniformly. It should not depend upon where they live in the country, and thus what court will interpret their tax obligations, when that undermines equality and uniformity.
The problem that this case well illustrates is that the tax collector does have a duty to find out financial and other tax-related matters that can be very revealing about how one lives one’s personal or business life, and most people probably want that to remain private, even when they are not trying to cover up a tax crime. When a taxpayer seeks professional advice about the taxpayer’s legal obligations, that raises the risk that the tax collector will be brought in on the advice. This case seeks to clarify the scope of that risk.
Second hearing Monday: Ohio Adjutant General’s Department v. Federal Labor Relations Authority Scheduled for one hour, this hearing will begin after the tax case hearing has ended.
Background: It has always been easy for Americans to romanticize about the militia, citizen-soldiers prepared – on a moment’s notice – to grab their muskets and go off to defend community and nation. The colonists sent their “minutemen” to serve as foot soldiers under General George Washington in the Revolutionary War, retaining in their names their local origins.
When it came time for the new nation to write its Constitution, the founders – many of whom worried over the potential threat to liberty of having a national army during peacetime – chose to leave the state militias intact and provided that they would be subject to being summoned to active duty by the federal government; they return to the states when no longer in federal service. Congress regulates their weaponry and disciplinary rules, but the states appoint the officers and arrange for training. The Second Amendment, added in the Bill of Rights in 1791, assures that a “well-regulated militia” will have access to the weapons it needs.
Today, this hybrid, federal-state form of part-time military-style service is known as the National Guard, but the states remain jealous sponsors of their Guard units, and regularly call them to duty to deal with natural disasters and, if necessary, to help keep the peace.
Although the members of the Guard usually have other jobs and do their military training only one weekend a month plus two weeks in the summer, the Guard units do have technicians doing full-time military duties, although technically they remain civilians. They do such things as maintain the weaponry, service military vehicles or do clerical work. This group of Guard employees is at the center of the case coming up Monday in the Supreme Court. It is a case about those workers’ job benefits, including the right to join a union.
For 45 years, the Ohio National Guard had a labor contract with the union representing its technicians: Local 3970 of the American Federation of Government Employees. (Under the federal Civil Service Reform Act, passed in 1978, civilian employees for federal agencies have a right to join labor unions, which bargain to protect their members’ job benefits. The law is enforced by an independent agency, the Federal Labor Relations Authority.)
As that contract in Ohio was about to expire in 2014, and after the two sides negotiated over a new contract, the Ohio Guard’s leadership switched position and told the union that it would not continue its deal with the union, contending that the 1978 law does not apply to the Guard’s technicians in the state. The Authority, however, ruled that the technicians had a continuing right to belong to the union and to receive job benefits, and that the Authority had power to order leaders of the Ohio Guard to respect those rights. A federal appeals court upheld that decision.
A somewhat curious aspect of this case is that the Supreme Court agreed to hear the Ohio Guard’s challenge to the law even though there is no split among lower courts that the technicians are covered by the law and have job rights under it. The far more common practice is for the Justices to step in when lower courts divide over an important legal question. It thus is apparent that at least some of the Justices view the 1978 law as a risk to the balance between federal and state governments in regulating the job practices of agencies with dual federal and state identities.
The Ohio Guard leaders had raised two questions in the Supreme Court: first, does the 1978 law apply only to the labor rights of workers directly employed by federal agencies, and thus not to National Guard workers, and, second, if not so limited, is the law an unconstitutional use of Congress’s limited powers under the Militia Clauses? The Justices, however, voted to consider only the first.
The question before the Court: Does the 1978 law apply only to employees who are actually doing work directly for a federal agency, and thus does not reach civilian employees of state National Guard units?
Significance: Because the lower courts have been in agreement that the 1978 law does apply to National Guard technicians, and because the Court opted not to answer the constitutional question, one might be tempted to conclude that it took the case simply to interpret the 1978 law narrowly, confining it to workers of federal agencies, as such. If it does that, the constitutional question would not arise at all.
But it may be that it was being cautious, not wanting to confront the constitutional question if it did not have to. If it does uphold the broader view of the law’s scope, it may opt to send the case back to a lower court to be the first to deal with the constitutional implications. It seems possible that there were insufficient votes among the Justices, at this point, to grant review beyond the scope of the 1978 law.
It does not seem that, however widely the Court rules, the final outcome would go much beyond the specifics of this case – that is, National Guard technicians and their federal legal rights within the explicit text of the power given to Congress by the Militia Clauses in the Constitution.
It is true that, for more than a half-century, the Supreme Court has been struggling to sort out how much authority Congress has to regulate the on-the-job practices of state and local government agencies. The National Guard case does not seem likely to add much clarity to that debate, since that controversy revolves around Congress’s power under a different part of the Constitution, regulating job practices that affect interstate commerce.
On Tuesday, the Court will hear a single case, another labor law dispute. This one involves the power of states to allow companies to sue labor unions for destroying company property during a workers’ strike.
