Under current law, the Judicial Council distributes funds among trial courts. If passed, AB 1208 would make some significant changes to the existing structure. Government Code section 77006.5, for example, currently defines “trial court funding” to mean “state funds provided for the operation of the trial courts…appropriated by the Budget Act, and allocated or reallocated by the Judicial Council.” AB 1208 would amend this section to provide that trial court funds be allocated “by law” instead – in effect, removing the intermediary role of the Judicial Council and providing a direct financial link between the Legislature and the trial courts. Government Code section 68502.5(c), which grants the Judicial Council the “ultimate responsibility” of creating a budget and allocating funds among trial courts, would be deleted entirely under AB 1208.

AB 1208 represents a bold step in the effort to ensure access to justice, but it has proven controversial nonetheless. Judges are split on the bill. The Judicial Council and Chief Justice Tani Cantil-Sakauye have voiced strong opposition, while a number of individual judges have given their support. The Los Angeles Superior Court – the largest in the state – has endorsed the bill, which may give it the needed boost to guarantee passage.

There is undoubtedly appealing logic in decentralizing the court system and cutting overhead administrative costs. And given the perpetual budget woes facing the state, AB 1208 is, at the very least, a reminder that the Legislature is aware of the consequences of shuttering courtroom doors. It is too early to judge whether AB 1208 itself is the right vehicle for curing the courts’ budgetary problems. Nonetheless, it is an important first step.

In Grutter, the Court found the law school admission plan sufficiently narrowly tailored to meet a compelling government interest under the Equal Protection Clause for three main reasons. First, the Court accepted the school’s stated need for diversity in education as a valid justification under the “compelling state interest” prong of Equal Protection analysis. Second, Justice O’Connor emphasized the distinction between rigid quotas and flexible goals, criticizing the former for “insulat[ing] the individual from comparison with all other candidates” while endorsing the latter as “permit[ting] consideration of race as a plus factor…while still ensuring that each candidate competes with all other qualified applicants.” This distinction suggests that the ability of similarly qualified candidates to directly compete, with race playing only a factor, is a critical component of any permissible affirmative action plan. Third, the Court stated that race-conscious admissions plans are acceptable only when the university makes individualized considerations in which race is part of a holistic determination, which underscores the distinction between quotas and goals. Thus, the law school plan was sufficiently narrowly tailored to satisfy the Equal Protection Clause because race was not the sole determinative factor. These latter two points define the Court’s “narrowly tailored” analysis of affirmative action plans. For example, in Grutter’s companion case, Gratz v. Bollinger,[4] the Court struck down the University of Michigan’s undergraduate admissions policy of automatically awarding minority applicants a decisive number of points on a scale. The issue raised in Fisher, on the other hand, implicates the more basic premise of Grutter – that achieving a “diverse student body” is a compelling state interest – which would render the Court’s subsequent “narrowly tailored” determination moot.

There are a few ways this case could ultimately play out. The New York Times article, for instance, anticipates a wholesale rejection of Grutter, which would presumably mean that “achieving a diverse student body” is no longer a compelling state interest. Alternatively, the Court may also decide to adhere to Grutter, but narrow it considerably in such a way as to defeat the University’s admissions plan. In Grutter, Justice O’Connor emphasized that “because universities, and in particular, law schools, represent the training ground for a large number of the Nation’s leaders, the path to leadership must be visibly open to talented and qualified individuals of every race and ethnicity.” Thus, the Court may decide that a diverse student body is a compelling state interest, but only in the context of graduate or law school. In either scenario, the University loses its compelling state interest justification.

It is important to note, however, that the University could still prevail. Any change to the Grutter framework, which was the basis of the district court’s decision, would require the case to be remanded, giving the school the opportunity to articulate a different interest. Furthermore, the New York Times analysis ignores the standing issue. The Fifth Circuit noted that, because the plaintiffs had no intention of reapplying to the University of Texas at Austin and had not established a class, there was no “imminent threat of future injury” and thus no equitable relief may be granted. If the Supreme Court accepts this view and denies cert, then the predicted Grutter showdown may have to wait for another day.

The immediate consequence of the Court’s decision is to prevent Robert Nicastro from making a case against J. McIntyre in his home state, forcing him to sue in the United Kingdom or take his chances on establishing jurisdiction in another state.  This defeat for American consumers is hardly one that contradicts the Court’s pro-corporate image.  Furthermore, the ruling suggests a means by which foreign corporations can do business throughout the United States without ever being subjected to products liability claims in state courts.

To be sure, Ginsburg’s dissent is clearly written and stakes a principled position consistent with existing law.  Joined by Justices Sotomayor and Kagan, Ginsburg challenges the foundation of the plurality’s opinion – that consent of the defendant to the sovereign’s jurisdiction, direct or implied, is the cornerstone of personal jurisdiction.  From this perspective, availment of the benefit of state laws must be sufficiently purposeful as to support an inference of consent to jurisdiction.  Ginsburg persuasively argues that the only limit to a state’s adjudicatory authority is the individual Due Process liberty interest recognized by the Constitution, and thus courts should weigh the connection between the forum state and the controversy – essentially the interest of the state – against any potential unfairness or unreasonableness of exercising jurisdiction – the liberty interest of the defendant.  For Ginsburg, making J. McIntyre defend in New Jersey as a cost of doing business throughout the United States is fairer and more reasonable than forcing Mr. Nicastro to litigate far from his home.  The manufacturer’s overt acts (marketing throughout the country, offering services to consumers in all states) demonstrate that the company was purposefully availing itself of the laws and protections of all states.

Nicastro illustrates that the corporatism of the U.S. Supreme Court is robust across the ideological spectrum.  Even though European courts would have found jurisdiction in this case, the joint concurrence of Justices Breyer and Alito appears ready to deny American consumer claims against foreign manufacturers under any test.  Seemingly out of genuine respect for the institution of the Supreme Court and concern for its reputation, Ginsburg suggests that by choosing to put American companies at a disadvantage relative to foreign corporations the plurality is contradicting the common view of the Court with respect to corporate interests.  While we can certainly hope that future cases afford the Court the opportunity to adopt the position elucidated in Ginsburg’s dissent, softening its pro-corporate image may only deflect legitimate criticism of a Court that has taken great strides in recent years to limit individuals’ access to justice.

Congress enacted the FCPA in 1977, in response to investigations by the SEC that led over 400 U.S. companies to admit to making questionable or illegal payments to foreign government officials, politicians, and political parties. The FCPA makes it illegal for a person or corporation to make a payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person. Lightly enforced in its nascence, the number of prosecutions brought under the FCPA has grown exponentially in the last five years. In 2002, there were only 7 prosecutions under the statute, compared to 38 in the last two years of the Bush administration and 74 in the first two years of the Obama administration. The Justice Department recovered over $1 billion in penalties in fiscal year 2010 alone.

 

Lobbyists advocating reform of the FCPA argue that enforcement of the law has been too strict, making it difficult for American businesses to compete in the global economy. They cite hefty legal fees and protracted investigations into allegations that wouldn’t qualify as traditional bribes, such as paying for taxi rides or buying dinner for business contacts. Those satisfied with the status quo believe the FCPA is not a burden on American business, arguing that American companies should compete based on the quality of their products and services, not corruption.

 

Mr. Mukasey’s proposal for reform includes 6 basic elements, which he hopes will bring predictability and stability to FCPA enforcement: 1) adding a compliance defense; 2) clarifying the meaning of “foreign official”; 3) limiting successor liability; 4) adding a willfulness requirement for corporate criminal liability; 5) improving guidance from the DOJ; and 6) limiting parent liability for subsidiary conduct not known to the parent. Business advocates worry that the force and uncertainty with which the DOJ has gone after alleged violations has caused an undue level of risk avoidance, which harms U.S. business interests abroad. In a survey of business professionals conducted by Deloitte, 63 percent of respondents stated that FCPA issues caused them to renegotiate or abandon planned business relationships, mergers or acquisitions over the past three years. Considering, however, how new this uptick in enforcement has been, it is possible businesses are reacting not to the alleged unpredictability of the statute but to actual enforcement of a statute long unenforced. If this is the case, reform may, at this juncture, be premature. As one defender of the current law put it “[American businesses] want a strong law, but they don’t want it enforced.”

Besides providing funding, San Francisco Superior Court’s agreement with the Judicial Council came with additional commitments: the court will step up its efforts to collect delinquent fees and fines, and implement cost saving measures. The Judicial Council has committed to increase pressure on the legislature to restore trial court funding and put revenue sources in place (such as additional fees for filings and attorney appearances in complex civil matters) over which the local courts will have spending discretion.

 

We lawyers-to-be who tire of hearing about California’s endless budget troubles should remember that these deficits have meaningful impact right here in our communities. I recently attended a complex civil proceeding in San Francisco, before news of the deficit solution.  At the conclusion of the proceeding, the judge gloomily described what litigation would be like if court leaders did not find a fix. “I’ll have to run my courtroom like Ira Brown,” he said, referring to the legendary courtroom tyrant and brilliant proceduralist of the San Francisco trial court, who allegedly heard 60 to 80 motions on a law and motion calendar, in one morning, making many a young lawyer shake in his boots.

The 90-day period elapsed on June 19, but the question still remains: does the WPR require President Obama to obtain congressional authorization to continue U.S. military engagement in Libya? According to a report released by the Obama Administration on June 15, “[t]he President is of the view that the current U.S. military operations in Libya are consistent with the [WPR] and do not under the law require further congressional authorization.” The report explains that this is because “U.S. military operations are distinct from the kind of ‘hostilities’ contemplated by the Resolution’s 60 day termination provision,” noting, for example, that U.S. engagement does not involve any ground troops. While the White House Counsel and State Department Legal Adviser have publicly supported the President’s interpretation of “hostilities,” the Pentagon General Counsel and the acting head of the Justice Department’s Office of Legal Counsel are reported to believe that the U.S. military actions amount to “hostilities” and thus require the President to obtain congressional authorization.

Members of Congress are divided on whether the WPR requires authorization in these circumstances. A bipartisan group of ten U.S. House members led by Rep. Dennis Kucinich filed a lawsuit in the D.C. District Court on June 15 against Obama for failing to obtain requisite authorization under the statute. The members’ suit is likely to be dismissed for lack of standing (see Campbell v. Clinton, 52 F. Supp. 2d 34 (D.D.C. 1999), a case with nearly identical facts). Congress could also try to impact the President’s decision by passing a resolution in support or disapproval of U.S. operations in Libya or by suspending funding for the operations pursuant to its powers under Article I, § 8 of the Constitution. On June 24, the House voted on two such bills – H.R. 2278 (limiting the use of funds by the U.S. Armed Forces in NATO’s Libya mission) and H.J.Res 68 (authorizing the limited use of the U.S. Armed Forces in NATO’s Libya mission). Both pieces of proposed legislation failed to pass.

Presidents of both parties have been known to ignore the WPR. This is not surprising given that the Resolution’s constitutionality is frequently questioned on the grounds that it may infringe on the President’s Article II powers.

In our previous post we briefly discussed United States v. Reynolds, the case in which the Court officially recognized the state secrets doctrine. The facts and circumstances surrounding, Reynolds, however, lend credence to the argument that the doctrine is used not to protect national security but to protect the federal government from liability and accountability. In Reynolds, three civilian observers were killed when a military aircraft crashed during a flight test. Their widows brought an action against the government, requesting that the government produce a number of investigatory reports and statements. The Government filed an affidavit stating that the material could not be produced without “seriously hampering national security.” The Supreme Court agreed with this argument and dismissed the suit, which was later settled out of court.

In 2000, almost fifty years after the case was dismissed, the documents requested were made available online and what they showed was that the plane crashed because a fire started in an engine. Nothing in the documents suggested anything about the flight test, the aircraft or the crash was a matter of national security. Many commentators consider United States v. Reynolds (the case establishing the doctrine) a perfect example of how the government can and does misuse the state secrets doctrine.

By denying the petition for certiorari in Jeppesen the Court has signaled that it is unwilling to reconsider the state secrets doctrine. The end of the Jeppesen case shifts the matter into the political arena. Unless Congress chooses to act, the only check on the Executive’s power to invoke the state secrets doctrine will be the Executive itself – an unpromising solution considering that the Bush and Obama White Houses, two politically divergent administrations, have both invoked the doctrine at will. Congress has attempted to reform the doctrine in the past to no avail. It may now be time to reintroduce prior legislation and begin to clarify the state secrets doctrine going forward.

California’s prison population has grown dramatically in recent years; over the course of the Plata litigation, the population has averaged around 160,000, 190% of the system’s designed capacity. Proceedings before the three-judge panel, including a 14-day trial, produced extensive testimony about conditions inside California’s prisons. In 2009 the three-judge panel found that overcrowding was the primary cause of the constitutional violations, and requested the state to submit a plan to bring the population to 137.5% of the system’s designed capacity. In an Order issued in 2010, the three-judge panel gave the state two years to reduce the prison population by 40,000.

The Supreme Court affirmed this Order in its decision last month on California’s appeal. In the 58-page decision, Justice Kennedy notes many of the details that came out of the proceedings before the three-judge panel regarding the conditions inside California prisons: people stacked in “triple-bunks” in prison gymnasiums because of insufficient cell space; backlogs of up to 700 awaiting medical care; 54 people sharing a single toilet. The suicide rate in California prisons is 80% higher than the national average in prisons, and the wait to receive mental health care can last as long as 12 months.

Justice Kennedy discusses some alternatives available to the state for reducing the population, including building more facilities, and transferring inmates to local, out-of-state, and privately-operated facilities. The opinion does not mandate that the state adopt a particular approach; it merely approves the lower court’s order that a reduction in the population of the system is constitutionally required. The Court acknowledges the difficulty of the problem and extends the amount of time the state has to comply to five years.

Earlier in the year, Governor Jerry Brown ordered thousands of prisoners serving shorter sentences to be transferred to county-run jails, but this policy has been stalled while the state legislature ensures funding for the counties to handle this influx of prisoners. Transferring inmates to county facilities will alleviate some of the strain on the California prison system, but the counties are struggling with funding as many other previously state-provided services are being “realigned” to the local level. Many commentators (including Hastings faculty) argue that prison over-crowding is a symptom of the state’s broken sentencing policy, and transferring inmates to different facilities will do little to fix the underlying problem; they advocate a shift in criminal justice policy away from longer sentences and towards education and re-entry programs for people who have served time.

The state’s ability to comply with the Order depends on its political will to dedicate the funding required for prison population reduction. The prison medical care emergency is just one of the many public services emergencies (mental health, education, aging infrastructure) that are placing demands on California’s budget.