The Supreme Court is the place to get answers to some historic legal questions. But, occasionally, the Court uses its ultimate authority just to settle some very basic, nuts-and-bolts legal questions. That’s what it will be doing at two hearings on Tuesday, exploring who has a right to sue to enforce rights.
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 Tuesday: Mallory v. Norfolk Southern Railway Co. The hearing is scheduled for 70 minutes and will start at 10 a.m.
Background: Three quarters of a century ago, America’s economy was smaller and simpler than it is now. Business firms – even the largest of them — were not as big, most of them didn’t do business very widely, few did business overseas, and none of them, of course, was linked by a global communications network like today’s Internet. And that’s why some of today’s Justices have been wondering whether the Court should continue to follow a precedent it set in 1945 – a precedent that determines where a business company can be sued if it causes somebody harm.
That seems narrow and technical, to be sure. But it also involves the U.S. Constitution, and its promise of “fair play” – that is, a guarantee of fair legal procedures under the Fourteenth Amendment’s “Due Process Clause.” Like all constitutional rights, this right of due process can be given up (“waived”) by consent; that’s a key issue in this case.
In the 1945 ruling in International Shoe Co. v. Washington, the Court decided that the Missouri-based company had enough economic contacts with the state of Washington to be sued there to compel it to pay a tax to finance compensation for unemployed workers.
The Court said that “due process” required a state to assure “fair play and substantial justice” to businesses when they do something that may draw a lawsuit. If the company is headquartered there (that is its “home”), that’s enough to make it subject to lawsuits there – no matter in what state the harm had been done.
But, for all other companies, the Court said, they can only be sued in a state if they have taken advantage of the opportunity to do some business there. For that second category, the firms can only be sued for actions linked to their in-state activity.
The Court has agreed to take up that issue again, in an appeal filed by Robert Mallory, a Virginian who worked for 17 years for the Norfolk Southern Railway. He sued the company, claiming that its operations exposed him to asbestos and other toxic substances, causing colon cancer, which was diagnosed 11 years after he left the company.
He chose to sue in Pennsylvania state courts, but he was claiming damages for harms that he said were done to him in the two states where he had worked, Virginia and Ohio. His lawyers apparently thought a lawsuit would be in a favorable forum in Pennsylvania, because that state has a law that requires any out-of-state company that registers to do business in the state to give its consent to being sued for harms done anywhere else.
The railroad is headquartered in Virginia, but it operates some 2,278 miles of track in Pennsylvania, has 11 rail yards there, and operates three locomotive repair shops in that state.
Norfolk Southern has registered to carry on those operations in Pennsylvania, but it contended that, by doing so, it did not give its consent to being sued there. It would violate the company’s due process rights to imply consent, it argued.
The railroad won in state courts, which declared that Norfolk Southern could not constitutionally be treated as if it had consented, merely by registering. (If Mallory’s lawsuit has been based on what the railroad does in Pennsylvania, then it could not claim the harms done in Virginia and Ohio.)
Mallory’s lawyers appealed to the Supreme Court, noting that the consent issue has been decided in conflicting ways by a dozen state supreme courts and by all of the federal appeals courts. The Court agreed to sort out that conflict.
The question before the Court: Is it unconstitutional for a state to require a corporation that registers to do business in the state (but is not headquartered there) to give its consent to being sued in that state’s courts?
Significance: Underneath the technical details and the complex facts, this case poses a basic question under the concept of “due process”: what is a fair way to judge when a company – or an individual – has consented to giving up a constitutional right? Wouldn’t it be fairer if there was a specific, intentional forfeiture of that right, knowing the consequences, rather than depending on some ambiguous act?
Corporations, of course, can be giant entities, with massive treasuries, and maybe it might seem fair to let them be hauled into court wherever it is convenient for the person or competitor they have harmed. The problem with that, though, is that constitutional law is not made for one type of entity or person: being sued is, at a minimum, inconvenient for anybody, so it seems that a given state should have to have a quite persuasive reason for making a non-resident company or individual answer to that state’s courts.
There is also the background question of whether states should be discouraged from getting into a rivalry over whose courts should be judging the conduct of businesses that operate in a variety of states, each seeking to protect its own sovereign interests.
The Biden Administration’s Justice Department has joined in the case to support the railroad, arguing that merely registering to do business in a state is not enough, by itself, to allow lawsuits against it there.
The Court, in a long string of decisions since the International Shoe decision in 1945, has been trying to stay more or less true to that decision, but has found it increasingly difficult to do so, given today’s much different commerce and industry.
Last year, Justices Neil Gorsuch and Clarence Thomas suggested, in one of those prior cases, that it might be time to think more creatively about this whole question. They wrote at that time: “Hopefully, future litigants and lower courts will help us face these tangles and sort out a responsible way to address the challenges posed by our changing economy in light of the Constitution’s text and the lessons of history.”
Maybe the Court has found that opportunity in Robert Mallory’s case.
Second hearing Tuesday: Health and Hospital Corporation of Marion County v. Talevski Scheduled for 65 minutes, this hearing will begin when the one in the railroad worker’s case has ended.
Background: One of the most effective ways that Congress can make things happen in America is to put up the federal dollars and then tie strings to how they are spent, illustrating the old adage that “money talks.” Sometimes, as in this case, the spending power is used to create programs that benefit individuals, by creating rights to the benefits provided.
This case turns on a seemingly simple question: how do such rights get enforced? Congress, of course, can provide for a cut off of federal funds or for assessing financial penalties if the rights it created are violated. But another way is to allow those whose rights are at stake to sue on their own to challenge violations. Congress does have the authority to expressly give individuals a right to sue to enforce federal laws, but when it has not done that, the courts have often “implied” such a right, using a formula devised by the Supreme Court in 1975.
From the very founding of the national government in the late 18th Century, right up to today and this case, Americans have vigorously debated just how much power Congress has to approve spending and put conditions on the use of the money.
In fact, what has always been known as the Constitution’s “Spending Clause” in Article I does not even mention the word “spending.” The Clause is among the vaguest in the Constitution. It says that “Congress shall have power to lay and collect taxes…and to provide for the common defense and the general welfare of the United States.”
This case involves a law passed by Congress in 1987, authorizing spending under the Medicaid law (a form of insurance for medical treatment of the poor). The law, based upon Congress’s Spending Clause power, was designed to improve the quality of treatment in nursing homes, and made it a condition for access to the funds that a facility meet minimum standards of care.
This case involves a nursing home in Indiana, Valparaiso Care and Rehabilitation. It is run by the government of Marion County, under contract with a private firm, American Senior Communities. All of those involved with the facility were sued in federal court by an Indiana woman, Ivanka Talevski, on behalf of her husband, Gorgi Talevski. (He has since died, but the lawsuit carries on to benefit his widow; she continues to seek money damages from the nursing home and its operators.)
The lawsuit was based on the 1987 law’s “Residents’ Bill of Rights.” She contended that, while her husband was at the nursing home, his dementia worsened. She claimed that the nursing home had violated his rights by using powerful and dangerous mind-control drugs to restrain him and by violating his right not to be transferred out of that facility.
The nursing home defended its actions, saying that he had been violent and had sexually assaulted female staff members; he was transferred to an all-male facility.
Because the Valparaiso home was run by a local government, the lawsuit was based on an 1871 civil rights laws that permits federal court challenges to violations of the Constitution or of any federal law by state or local government officials or agencies.
A federal trial judge rejected the lawsuit, concluding that the 1987 law did not allow enforcement by private individuals. A federal appeals court disagreed, ruling that the Talevski case could proceed. The nursing home and those involved in its operations took the case to the Supreme Court, making a sweeping claim that urged the Justices to overrule all of its prior decisions that permitted private lawsuits to enforce federal laws passed under the Spending Clause. The main argument is that authorizing lawsuits is a legislative function, and allowing courts to do it violates the basic principle of separation of the powers of the federal government.
The Biden Administration’s Justice Department joined in the case, and will be arguing a middle position. It urged the Court not to set aside those prior rulings and argued that the 1987 law did create rights for Medicaid patients. But it argued that Congress intended those rights to be enforced by the federal government, not by private individuals.
The questions before the Court: Will the Supreme Court bar private individuals from using lawsuits to enforce any rights created by federal laws passed under Congress’s Spending Clause powers? If such lawsuits are sometimes allowed, is this lawsuit under a nursing home regulation law barred?
Significance: As the number of conservative Justices named to the Court has risen in the past four decades, criticism has grown of the doctrine that courts have the authority to give private individuals the option of enforcing rights created by Congress under the Constitution’s Spending Clause.
For example, in one of the Court’s more important precedents on this issue, in 1979, then-Justice William H. Rehnquist – one of the most conservative – urged his colleagues to be “extremely reluctant” to authorize such lawsuits unless Congress had explicitly cleared the way for that.
In fact, the last time that the Court did create a right for a private entity to sue was 32 years ago, in an earlier Medicaid case (Wilder v. Virginia Hospital Assocation), involving a dispute over reimbursement of treatment costs.
The deep skepticism of that remedy for violated rights is clearly shared by the Court’s current majority of six conservative Justices, and they may have chosen this nursing-home case as an attractive opportunity to curtail such enforcement or, if they would be really bold, to end it altogether. The Justice Department may well have sensed that in coming to the defense of the prior precedents.
If such lawsuits were to be forbidden from here on, the rights that Congress creates would still be subject to enforcement by federal agencies, but they might not have the resources to pursue an unlimited number of cases. Advocates for those who gain rights under such laws have an incentive to sue, but they could be sidelined entirely if the federal courthouse doors were now to be closed to them.
On Wednesday, the Court will hold a single hearing, in one of the most important cases in history for American Indians and their tribes. It tests whether it was unconstitutional for Congress to have passed a 1978 law to keep Indian children from being taken away from their families.
