Federal Judiciary

Torture, Chrysler cases ended; 3 grants

By Akin Gump Supreme Court Practice Group

The Supreme Court refused on Monday to hear a major new case involving a claim of torture by four Britons while they were held at Guantanamo Bay, it wiped out the last remaining challenge to the deal that saved the automaker Chrysler, and it granted three new cases.

Finishing its public activity for the calendar year, the Court also asked for the federal government’s views on whether the federal law that bars retaliation against a worker who challenges bias in the workplace applies to an employee as a way to punish a relative or close friend who had made the challenge (Thompson v. North American Stainless, 09-291).  And the Court turned aside a new constitutional challenge to the 2005 federal law immunizing gun manufacturers from many lawsuits when guns cause injury or death (Adames, et al., v. Beretta USA Corp., 09-253).

The three newly granted cases raised these issues: whether the Fourth Amendment protects the privacy of text messages than an employee sends by an electronic paging device (Ontario, Calif., et al., v. Quon, et al., 08-1332); whether prosecution for criminal contempt of a court created by Congress may be brought by a private individual in her own name (Robertson v. U.S. ex rel. Watson, 08-6261), and whether a legal alien living permanently in the U.S. is subject to deportation for simple possession of a drug, if that was a second or third such prosecution but the individual was not formally charged as a repeat offender (Carachuri-Rosendo v. Holder, 09-60).

The Court’s denial of review of Rasul, et al., v. Myers, et al. (09-227) leaves intact a federal appeals court ruling that former Defense Secretary Donald Rumsfeld and ten military officers are legally immune to claims of torture and religious bias against inmates who were at Guantanamo but have since been released.  The Obama Administration had urged the Court not to hear the case, saying that, whatever claims the four ex-detainees were now making, they had no legal basis for those challenges at the time they were at the U.S. military prison in Cuba — that is, between January 2002 and March 2004.

The D.C. Circuit Court had ruled in favor of immunity, and in doing so avoided a repeat of its earlier decision — vacated by the Supreme Court — that Guantanamo prisoners had no constitutional rights.  The Justices had ordered reconsideration of that conclusion. Instead of ruling anew on the legal challenges, the Circuit Court opted for an immunity finding.  The Supreme Court’s denial of review does not stand as a precedent on that point, or on the substance of the ex-prisoners’ challenges.

In the Chrysler bankruptcy case (Indiana State Police Pension Trust, et al., v. Chrysler LLC, et al., 09-285), the Court vacated a Second Circuit Court ruling that had endorsed the use of a reorganization-bypass method — a quick sale of assets — in order to save a failing company.  Three investment trusts for workers in Indiana contended that the lower court ruling enabled Chrysler to make an end-run around the requirements of a Chapter 11 reorganization. 

Both the Obama Administration and the new Chryler opposed the three trusts’ appeal, contending that the Chrysler sale to the Italian automaker, Fiat, was now final, and thus could not be unscrambled.  (The deal actually closed on June 10, a day after the Supreme Court had refused to block it temporarily pending an appeal.)  On Monday, the Justices, in a summary order, vacated the Circuit Court ruling, and told the lower court to “dismiss the appeal as moot.”  That nullified the Circuit Court ruling as a precedent on the bankruptcy law issue.

Troubled corporations have made an increasing use of the quick-sale option — under Section 363 of the Bankruptcy Code — and thus have avoided the more investor-protective provisions of Chapter 11.  The Indiana trusts’ appeal sought to block that avenue, and, in the Chrysler deal in particular, sought to force the United Auto Workers and an autoworkers’ benefit fund to return to the bankruptcy estate of the old Chrysler firm a $4.6 billion note and common stock they received as part of the Chrysler-Fiat deal, which was financed with public funds from the U.S. and Canadian governments.

Full post as published by SCOTUSBLOG on December 14, 2009 (boomark / email).