Supreme Court Decision Syllabus (SCOTUS Podcast‪)‬ Jake Leahy

McIntosh v. United States
Petitioner Louis McIntosh was indicted on multiple counts of Hobbs Act robbery and firearm offenses. The indictment set forth the demand that McIntosh “shall forfeit . . . all property . . . derived from proceeds traceable to the commission of the [Hobbs Act] offenses.” The Government also later provided McIntosh with a pretrial bill of particulars that included as property subject to forfeiture $75,000 in cash and a BMW that McIntosh purchased just five days after one of the robberies. After a jury convicted McIntosh, the District Court imposed a forfeiture of $75,000 and the BMW at the sentencing hearing. Although the District Court also ordered the Government to submit an order of forfeiture for the court’s signature within a week from the hearing, the Government failed to do so. On appeal, the Government moved for a limited remand to supplement the record with a written order of forfeiture. The Second Circuit granted the unopposed motion. Back in District Court, McIntosh argued that the failure to comply with Federal Rule of Criminal Procedure 32.2(b)(2)(B)—which provides that “[u]nless doing so is impractical,” a federal district court “must enter the preliminary order [of forfeiture] sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final as to the defendant”—meant that the District Court could not proceed with forfeiture at all. The District Court overruled McIntosh’s objections, finding that the Rule is a timerelated directive, and that the failure to enter a preliminary order of forfeiture before sentencing did not prevent the court from ordering forfeiture because the missed deadline did not prejudice McIntosh. The Second Circuit affirmed in relevant part. Held: A district court’s failure to comply with Rule 32.2(b)(2)(B)’s requirement to enter a preliminary order before sentencing does not bar a judge from ordering forfeiture at sentencing subject to harmless-error principles on appellate review.

(a) Although the District Court did not comply with Rule 32.2(b)(2)(B) when it failed to enter a preliminary order of forfeiture before McIntosh’s initial sentencing, the District Court retained its power to order forfeiture against McIntosh. 

(b) McIntosh’s contrary arguments are unpersuasive. He points to he Rule’s use of the word “must” to highlight its mandatory character, but such language standing “alone has not always led this Court to interpret statutes to bar judges . . . from taking action to which a missed statutory deadline refers.” 

(c) Noncompliance with Rule 32.2(b)(2)(B) is a procedural error subject to harmlessness review. Because McIntosh did not challenge the lower courts’ harmlessness analysis in either his certiorari petition or his opening brief, this Court need not revisit it. P. 13. 

Read by Founder RJ Dieken

 Petitioner James Rudisill enlisted in the United States Army in 2000 and served a total of eight years over three separate periods of military service. He became entitled to Montgomery Bill benefits as a result of his first period of service. Rudisill earned an undergraduate degree and used 25 months and 14 days of Montgomery benefits to finance his education. Through his subsequent periods of service, Rudisill also became entitled to more generous educational benefits under the Post-9/11 GI Bill. Rudisill sought to use his Post-9/11 benefits to finance a graduate degree. Rudisill understood that such benefits would be limited to 22 months and 16 days under §3695’s 48-month aggregate-benefits cap. But the Government informed Rudisill that he was only eligible for 10 months and 16 days of Post-9/11 benefits (the length of his unused Montgomery benefits) due to §3327, a provision in the Post-9/11 Bill designed to coordinate benefits for those servicemembers meeting the criteria for both Montgomery benefits and Post-9/11 benefits. Section 3327 provides that a servicemember meeting the criteria for both GI bills can elect to swap Montgomery benefits for the more generous Post-9/11 benefits, up to a total of 36 months of benefits. §3327(d)(2)(A). Ultimately, the Federal Circuit, sitting en banc, sided with the Government, explaining that when Rudisill sought to use his Post-9/11 benefits, he had made an “election” under §3327(a)(1) to swap his Montgomery benefits for Post 9/11 benefits, making his benefits subject to §3327(d)(2)’s 36-month limit. 

Held: Servicemembers who, through separate periods of service, accrue educational benefits under both the Montgomery and Post-9/11 GI Bills may use either one, in any order, up to §3695(a)’s 48-month aggregate-benefits cap. Pp. 8–18. 

(a) The Government claims that someone in Rudisill’s position is subject to §3322(d)’s mandatory coordination clause, so, to receive any Post-9/11 benefits, he must make an election under §3327(a), which in turn subjects him to §3327(d)(2)’s 36-month benefit limit. Rudisill counters that §3322(d) does not apply to him because he has earned two separate entitlements to benefits. Rudisill further maintains that §3327(a)’s election mechanism is optional in any event, and that he does not forfeit any entitlement by declining to make a §3327(a) election. The statutory text resolves this case in Rudisill’s favor. 

 (b) Section 3322(d), which creates a mechanism for certain servicemembers to “coordinate” their benefits, does not limit Rudisill’s entitlement. First, nothing in the statute imposes a duty for any veteran to “coordinate” entitlements in order to receive benefits. Section 3322(d) does not mention the receipt of benefits but addresses instead the “coordination of entitlement.” Because Rudisill is already entitled to two separate benefits, he has no need to coordinate any entitlement under §3327. As used in the statute, the word “coordination” denotes a swap. Section 3327, to which §3322(d) points, describes coordination as making an election that permits the individual to get Post-9/11 benefits “instead of” Montgomery benefits. §3327(d)(1).  
 (c) The contention that Rudisill can only use his Post-9/11 benefits by invoking §3327 is contradicted by that provision’s text. 

Reversed and remanded. 

 JACKSON, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SOTOMAYOR, KAGAN, GORSUCH, KAVANAUGH, and BARRETT, JJ., joined. KAVANAUGH, J., filed a concurring opinion, in which BARRETT, J., joined. THOMAS, J., filed a dissenting opinion, in which ALITO, J., joined. 

Read by Jeff Barnum. 

DEVILLIER v. TEXAS

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
Argued Jan. 16, 2024—Decided Apr. 16, 2024 

Richard DeVillier and more than 120 other petitioners own property north of U. S. Interstate Highway 10 between Houston and Beaumont, Texas. The dispute here arose after the State of Texas took action to use portions of I–10 as a flood evacuation route, installing a roughly 3- foot-tall barrier along the highway median to act as a dam. When subsequent hurricanes and storms brought heavy rainfall, the median barrier performed as intended, keeping the south side of the highway open. But it also flooded petitioners’ land to the north, causing significant damage to their property. DeVillier filed suit in Texas state court. He alleged that by building the median barrier and using his property to store stormwater, Texas had effected a taking of his property for which the State must pay just compensation. Other property owners filed similar suits. Texas removed the cases to federal court, where they were consolidated into a single proceeding with one operative complaint. The operative complaint includes inverse condemnation claims under both the Texas Constitution and the Takings Clause of the Fifth Amendment. As relevant, Texas moved to dismiss the federal inverse-condemnation claim, arguing that a plaintiff has no cause of action arising directly under the Takings Clause. The District Court denied Texas’ motion, concluding that a property owner may sue a State directly under the Takings Clause. The Fifth Circuit reversed, holding “that the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right of action for takings claims against a state.” 53 F. 4th 904 (per curiam). 

Held: DeVillier and the other property owners should be permitted to pursue their claims under the Takings Clause through the cause of action available under Texas law. The Takings Clause of the Fifth  Amendment states: “nor shall private property be taken for public use, without just compensation.” The Court has explained that “a property owner acquires an irrevocable right to just compensation immediately upon a taking” “[b]ecause of ‘the self-executing character’ of the Takings Clause ‘with respect to compensation.’ ” Knick v. Township of Scott, 588 U. S. 180, 192 (quoting First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304, 315). The question here concerns the procedural vehicle by which a property owner may seek to vindicate that right. Constitutional rights do not typically come with a built-in cause of action to allow for private enforcement in courts, see Egbert v. Boule, 596 U. S. 482, 490–491, and so they are asserted offensively pursuant to an independent cause of action designed for that purpose, see, e.g., 42 U. S. C. §1983. DeVillier relies on First English and other cases to argue that the Takings Clause creates by its own force a cause of action authorizing suits for just compensation. But those cases do not directly confront whether the Takings Clause provides a cause of action. It would be imprudent to decide that question without first establishing the premise in the question presented that no other cause of action exists to vindicate the property owner’s rights under the Takings Clause. Texas state law does provide an inverse-condemnation cause of action by which property owners may seek just compensation against the State based on both the Texas Constitution and the Takings Clause. This case therefore does not present the circumstance in which a property owner has no cause of action to seek just compensation. The Court therefore remands so that DeVillier and the other property owners may proceed through the cause of action available under Texas law. 53 F. 4th 904, vacated and remanded. 

THOMAS, delivered the opinion for a unanimous Court. 

George Sheetz was required by the County of El Dorado to pay $23,420
George Sheetz tried to get a residential building permit from El Dorado County.  To do so, the County made him pay a $23,420 "traffic impact fee."  The fee was part of the County's "General Plan" -- this plan was intended to address the impact that development has on public services. 

This fee was calculated based on a standard schedule, rather than any actual impact resulting from his development.  Sheetz paid the fee under protest.  He sued in state court, claiming that the fee amounted to an "exaction" that violated the Takings Clause.  Sheetz argued that the Supreme Court's decisions in Nollan v. California Coastal Comm'n and Dolan v. City of Tigard, require the County to make an individualized determination. The County argued that these cases only apply to individual decisions by administrators, but not by legislative bodies.  

Held: The Takings Clause does not distinguish between legislative and administrative land-use permit conditions.

a) The Takings Clause of the Fifth Amendment requires the government to pay "just compensation" when property is taken.  This Clause also stands for the notion that public costs should be paid by the public, not individual people.  Yet, States do have substantial authority to generally regulate land use.   Land use regulations are generally acceptable so long as they are “reasonably necessary to the effectuation of a substantial government purpose” -- so long as it does not take too much value or frustrate the investment backed expectations of the owner.  The government may also deny a building permit within its police power purpose when the ends match it.  The government can prevent development if it is related to the issues (i.e. giving land to widen a road when congestion will be increased), but this needs to be related to the government interest, otherwise, it amounts to extortion.  To be constitutional, permit conditions must have an 1) essential nexus to the government interest; and 2) must have rough proportionality to the public use.  

b) The decisions below upheld the traffic impact fee because they reasoned that Nolan and Dolan do not apply to legislative fees (but instead, only administrative), nothing in the constitutional text or history suggests this reading.  There is no reason why the Nolan and Dolan tests should not apply to legislation, but only to administrative actions.  

c) Building permit conditions are not exempt from Nolan or Dolan scrutiny only because they were imposed by a legislative body.  

Vacated and remanded. 

Justice Barrett delivered the opinion for a unanimous Court.  Sotomayor filed a concurrence, which was joined by Jackson.  Gorsuch filed a concurrence.  Kavanaugh filed a concurrence, in which Kagan and Jackson joined.  

Macquarie Infrastructure Corporation owns a subsidiary that operates terminals to store bulk liquid commodities, including No. 6 fuel oil, which has almost 3% sulfer. The UN adopted IMO in 2016, which set in in 2020. This regulation capped the sulfur content on fuel oil used in shipping to 0.5%. Macquarie did not discuss this IMO in its public documents, but in February 2018, its stock fell 41% after announcing that it lost contracts in of its subsidiary. Moab partners sued for violating SEC Rule 10b-5(b) - failure to omit material facts about securities. The trial court dismissed the complaint, the Second Circuit reversed because of its duty to disclose.

 Held: Pure omissions are not actionable under Rule 10b–5(b). Rule 10b– 5(b) makes it unlawful “[t]o make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” In addition to prohibiting “any untrue statement of a material fact”—i.e., false statements or lies—the Rule also prohibits omitting a material fact necessary “to make the statements made . . . not misleading.” Ibid. This case turns on whether this second prohibition bars only half-truths or instead extends to pure omissions. A pure omission occurs when a speaker says nothing, in circumstances that do not give any special significance to that silence. Halftruths, on the other hand, are “representations that state the truth only so far as it goes, while omitting critical qualifying information.” Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U. S. 176, 188. Rule 10b–5(b) requires disclosure of information necessary to ensure that statements already made are clear and complete. Logically and by its plain text, Rule 10b–5(b) therefore covers halftruths, not pure omissions, because it requires identifying affirmative assertions (i.e., “statements made”) before determining if other facts are needed to make those statements “not misleading.” Statutory context confirms what the text plainly provides. Section 11(a) of the Securities Act of 1933 prohibits any registration statement that “omit[s] to state a material fact required to be stated therein.” 15 U. S. C. §77k(a). By its terms, §11(a) creates liability for failure to speak. Neither §10(b) nor Rule 10b–5(b) contains language similar to §11(a), and that omission is telling. “Silence, absent a duty to disclose, is not misleading under Rule 10b–5.” Basic Inc. v. Levinson,. A duty to disclose, however, does not automatically render silence misleading under Rule 10b–5(b). The failure to disclose information required by Item 303 can support a Rule 10b–5(b) claim only if the omission renders affirmative statements made misleading. Moab and the United States suggest that a plaintiff does not need to plead any statements rendered misleading by a pure omission because reasonable investors know that the Exchange Act requires issuers to file periodic informational statements in which companies must furnish the information required by Item 303. But that argument reads the words “statements made” out of Rule 10b–5(b) and shifts the focus of that Rule and §10(b) from fraud to disclosure. See Chiarella v. United States, (“Section 10(b) is aptly described as a catchall provision, but what it catches must be fraud”). Moab also contends that without private liability for pure omissions under Rule 10b–5(b), there will be “broad immunity any time an issuer fraudulently omits information 

 Congress and the SEC require it to disclose.” But private parties remain free to bring claims based on Item 303 violations that create misleading half-truths, and the SEC retains authority to prosecute violations of its own rules and regulations, including Item 303. Vacated and remanded. SOTOMAYOR, J., delivered the opinion for a unanimous Court. 

Read by J

Flowers makes baked goods that are then distributed across the country.  Bissonnette owned the distribution rights in a certain part of the country.  Their contract subjected them to the F.A.A..  After Bissonnette sued under Labor (wage) laws, Flowers moved to compel arbitration.  Bissonnette said they're exempt because the F.A.A. exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  The District Court dismissed the case, sending it to Arbitration.  The Second City affirmed, finding that the exemption only applied to workers in the transportation industry, but these were workers in the bakery industry. 

Held: A transportation worker need not work in the transportation industry to be exempt from coverage under §1 of the FAA.

(a) The Court has long recognized that the exemption in §1 is limited to transportation workers. See Circuit City Stores, Inc. v. Adams. Applying the ejusdem generis canon of statutory interpretation to §1, the Court in Circuit City read the general phrase “class of workers engaged in . . . commerce” to be “controlled and defined by reference to” the specific categories “seamen” and “railroad employees” that precede it. The Court concluded that the “linkage” between “seamen” and “railroad employees” is that they are both transportation workers, and the Court thus interpreted the class of workers in the residual clause of §1 to be limited in the same way. The Court again considered the scope of the residual clause in Southwest Airlines Co. v. Saxon and declined to adopt an industrywide approach to §1, rejecting the employee’s claim that she was a member of a “class of workers engaged in foreign or interstate commerce” simply because she worked for an airline and carried out its customary work. Instead, the language of §1—referring to “ ‘workers’ ” who are “engaged” in commerce—focuses on the performance of work rather than the industry of the employer. The relevant question was what the employee does at the airline, not what the airline does generally. Saxon. Here the Second Circuit fashioned its transportation-industry requirement without any guide in the text of §1 or this Court’s precedents. The Second Circuit decided that an entity would be considered within the transportation industry if it “pegs its charges chiefly to the movement of goods or passengers” and its “predominant source of commercial revenue is generated by that movement.” But that test would often turn on arcane riddles about the nature of a company’s services. For example, does a pizza delivery company derive its revenue mainly from pizza or delivery? Extensive discovery might be necessary before deciding a motion to compel arbitration, adding expense and delay to every FAA case. That “complexity and uncertainty” would “‘breed[] litigation from a statute that seeks to avoid it.’ ” 

(b) Flowers argues that the §1 exemption would sweep too broadly without an implied transportation-industry requirement. Because “virtually all products move in interstate commerce,” Flowers warns that nearly all workers who load or unload goods would be exempt from arbitration. But §1 does not define the class of exempt workers in such limitless terms. Instead, as the Court held in Saxon, a transportation worker is one who is “actively” “ ‘engaged in transportation’ of . . . goods across borders via the channels of foreign or interstate commerce.” In other words, a transportation worker “must at least play a direct and ‘necessary role in the free flow of goods’ across borders.” 596 U. S., at 458. These requirements “undermine[] any attempt to give the provision a sweeping, open-ended construction,” instead limiting §1 to its appropriately “narrow” scope. Id., vacated and remanded.