Federal Judiciary

Ginsburg temporarily blocks Chrysler deal

By Akin Gump Supreme Court Practice Group

Supreme Court Justice Ruth Bader Ginsburg put a temporary hold Monday on the deal to sell Chrysler to save it from collapse.  Her order, however, simply gives her or the full Court more time to ponder whether to postpone the sale further, or allow it to go forward.

It would have taken the votes of five members of the Court to grant a full postponement.  Ginsburg’s brief, unexplained order said only that the bankruptcy court’s decisions approving the sale were “stayed pending further order” by her or the Court.

The Justice acted just minutes before a 4 p.m. deadline that the Second Circuit Court had set last Friday. At that hour, a delay ordered by the Circuit Court expired.  If Ginsburg had not acted, the sale would have been cleared under the terms of the lower court’s order.

The action had almost no legal significance, however.  The deal remains in legal limbo until Ginsburg, as the Circuit Justice, or the full Court takes some definitive action.

Among the likely explanations for her action:

* Ginsburg may have decided to share the decision on what to do with her eight colleagues, and they needed more time to think or talk about it.

* Members of the Court may have decided that they wanted to give some explanation, or perhaps some may have decided to dissent and wanted a chance to prepare a statement saying so.

* Ginsburg or the Court may be waiting to see how the Second Circuit explains its decision to uphold the terms of the sale.  The Circuit Court issued no opinion on Friday, indicating that such an explanation would come “in due course,” although the expectation was that one or more opinions would emerge Monday.

The wording of Ginsburg’s order — “stayed pending further order” — is the conventional way a Justice or the Court carries out an action that is expected to be short term in duration, and not controlling — or even hinting at — the ultimate outcome.  Any speculation that her order meant the Court was inclined to issue a further postponement would be unfounded.

The Circuit Court had given Ginsburg no option other than the one she chose if she wanted more time for herself or the Court to consider a large stack of filings for and against the idea of delaying the deal.

Full post as published by SCOTUSBLOG on June 08, 2009 (boomark / email).