Jennings et al. v. Rodriguez et al., individually and on behalf of all others similarly situated

Certiorari To The United States Court Of Appeals For The Ninth Circuit

No. 15-1204. Argued November 30, 2016--Reargued October 3, 2017-Decided February 27, 2018

Immigration officials are authorized to detain certain aliens in the course of immigration proceedings while they determine whether those aliens may be lawfully present in the country. For example, 1225(b) of Title 8 of the U. S. Code authorizes the detention of certain aliens seeking to enter the country. Section 1225(b)(1) applies to aliens initially determined to be inadmissible due to fraud, misrepresentation, or lack of valid documentation, and to certain other aliens designated by the Attorney General in his discretion. Section 1225(b)(2) is a catchall provision that applies to most other applicants for admission not covered by 1225(b)(1). Under 1225(b)(1), aliens are normally ordered removed “without further hearing or review,” 1225(b)(1)(A)(i), but an alien indicating either an intention to apply for asylum or a credible fear of persecution, 1225(b)(1)(A)(ii), “shall be detained” while that alien’s asylum application is pending, 1225(b)(1)(B)(ii). Aliens covered by 1225(b)(2) in turn “shall be detained for a [removal] proceeding” if an immigration officer “determines that [they are] not clearly and beyond a doubt entitled” to admission. 1225(b)(2)(A).

The Government is also authorized to detain certain aliens already in the country. Section 1226(a)’s default rule permits the Attorney General to issue warrants for the arrest and detention of these aliens pending the outcome of their removal proceedings. The Attorney General “may release” these aliens on bond, “[e]xcept as provided in subsection (c) of this section.” Section 1226(c) in turn states that the Attorney General “shall take into custody any alien” who falls into one of the enumerated categories involving criminal offenses and terrorist activities, 1226(c)(1), and specifies that the Attorney General “may release” one of those aliens “only if the Attorney General decides” both that doing so is necessary for witness-protection purposes and that the alien will not pose a danger or flight risk, 1226(c)(2).

After a 2004 conviction, respondent Alejandro Rodriguez, a Mexican citizen and a lawful permanent resident of the United States, was detained pursuant to 1226 while the Government sought to remove him. In May 2007, while still litigating his removal, Rodriguez filed a habeas petition, claiming that he was entitled to a bond hearing to determine whether his continued detention was justified. As relevant here, he and the class of aliens he represents allege that 1225(b), 1226(a), and 1226(c) do not authorize “prolonged” detention in the absence of an individualized bond hearing at which the Government proves by clear and convincing evidence that detention remains justified. The District Court entered a permanent injunction, and the Ninth Circuit affirmed. Relying on the canon of constitutional avoidance, the Ninth Circuit construed 1225(b) and 1226(c) as imposing an implicit 6-month time limit on an alien’s detention under those sections. After that point, the court held, the Government may continue to detain the alien only under the authority of 1226(a). The court then construed 1226(a) to mean that an alien must be given a bond hearing every six months and that detention beyond the initial 6-month period is permitted only if the Government proves by clear and convincing evidence that further detention is justified.

Held: The judgment is reversed, and the case is remanded.

804 F. 3d 1060, reversed and remanded.

Justice Alito delivered the opinion of the Court, except as to Part II, concluding that 1225(b), 1226(a), and 1226(c) do not give detained aliens the right to periodic bond hearings during the course of their detention. The Ninth Circuit misapplied the canon of constitutional avoidance in holding otherwise. Pp. 12–31.

(a) The canon of constitutional avoidance “comes into play only when, after the application of ordinary textual analysis, the statute is found to be susceptible of more than one [plausible] construction.” Clark v. Martinez, 543 U. S. 371. The Ninth Circuit’s interpretations of the provisions at issue, however, are implausible. Pp. 12–13.

(b) Read most naturally, 1225(b)(1) and (b)(2) mandate detention of applicants for admission until certain proceedings have concluded. Until that point, nothing in the statutory text imposes a limit on the length of detention, and neither provision says anything about bond hearings. Pp. 13–19.

(1) Nothing in the text of 1225(b)(1) or 1225(b)(2) hints that those provisions have an implicit 6-month time limit on the length of detention. Respondents must show that this is a plausible reading in order to prevail under the canon of constitutional avoidance, but they simply invoke the canon without making any attempt to defend their reading.

The Ninth Circuit also all but ignored the statutory text, relying instead on Zadvydas v. Davis, 533 U. S. 678, as authority for grafting a time limit onto 1225(b)’s text. There, this Court invoked the constitutional-avoidance canon, construing 1231(a)(6)—which provides than an alien subject to a removal order “may be detained” beyond the section’s 90-day removal period—to mean that the alien may not be detained beyond “a period reasonably necessary to secure removal,” id., at 699, presumptively six months, id., at 701. The Court detected ambiguity in the statutory phrase “may be detained” and noted the absence of any explicit statutory limit on the length of permissible detention following the entry of an order of removal.

Several material differences distinguish the provisions at issue in this case from Zadvydas’s interpretation of 1231(a)(6). To start, the provisions here, unlike 1231(a)(6), mandate detention for a specified period of time: until immigration officers have finished “consider[ing]” the asylum application, 1225(b)(1)(B)(ii), or until removal proceedings have concluded, 1225(b)(2)(A). Section 1231(a)(6) also uses the ambiguous “may,” while 1225(b)(1) and (b)(2) use the unequivocal mandate “shall be detained.” There is also a specific provision authorizing temporary parole from 1225(b) detention “for urgent humanitarian reasons or significant public benefit,” 1182(d)(5)(A), but no similar release provision applies to 1231(a)(6). That express exception implies that there are no other circumstances under which aliens detained under 1225(b) may be released. Pp. 14–17.

(2) Respondents also claim that the term “for” in 1225(b)(1) and (b)(2) mandates detention only until the start of applicable proceedings. That is inconsistent with the meanings of “for”—“[d]uring [or] throughout,” 6 Oxford English Dictionary 26, and “with the object or purpose of,” id., at 23—that make sense in the context of the statutory scheme as a whole. Nor does respondents’ reading align with the historical use of “for” in 1225. Pp. 17–19.

(c) Section 1226(c)’s language is even clearer. By allowing aliens to be released “only if” the Attorney General decides that certain conditions are met, that provision reinforces the conclusion that aliens detained under its authority are not entitled to be released under any circumstances other than those expressly recognized by the statute. Together with 1226(a), 1226(c) makes clear that detention of aliens within its scope must continue “pending a decision” on removal. Section 1226(c) is thus not silent as to the length of detention. See Demore v. Kim, 538 U. S. 510. The provision, by expressly stating that covered aliens may be released “only if” certain conditions are met, also unequivocally imposes an affirmative prohibition on releasing them under any other conditions. Finally, because 1226(c) and the PATRIOT Act apply to different categories of aliens in different ways, adopting 1226(c)’s plain meaning will not make any part of the PATRIOT Act, see 1226a(a)(3), superfluous. Pp. 19–22.

(d) Nothing in 1226(a), which authorizes the Attorney General to arrest and detain an alien “pending a decision” on removal and which permits the Attorney General to release the alien on bond, supports the imposition of periodic bond hearings every six months in which the Attorney General must prove by clear and convincing evidence that continued detention is necessary. Nor does it hint that the length of detention prior to the bond hearing must be considered in determining whether an alien should be released. Pp. 22–23.

(e) The Ninth Circuit should consider the merits of respondents’ constitutional arguments in the first instance. But before doing so, it should also reexamine whether respondents can continue litigating their claims as a class. Pp. 29–31.

Alito, J., delivered the opinion of the Court, except as to Part II. Roberts, C. J., and Kennedy, J., joined that opinion in full; Thomas and Gorsuch, JJ., joined as to all but Part II; and Sotomayor, J., joined as to Part III–C. Thomas, J., filed an opinion concurring in part and concurring in the judgment, in which Gorsuch, J., joined except for footnote 6. Breyer, J., filed a dissenting opinion, in which Ginsburg and Sotomayor, JJ., joined. Kagan, J., took no part in the decision of the case.

Patchak v. Zinke, Secretary of the Interior, et al.

Certiorari To The United States Court Of Appeals For The District Of Columbia Circuit

No. 16-498. Argued November 7, 2017—Decided February 27, 2018

Petitioner David Patchak filed suit challenging the authority of the Secretary of the Interior to invoke the Indian Reorganization Act, 25 U. S. C. 5108, and take into trust a property (Bradley Property) on which respondent Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians wished to build a casino. In Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U. S. 209 (Patchak I), this Court held that the Secretary lacked sovereign immunity and that Patchak had standing, and it remanded the case for further proceedings. While the suit was back in District Court, Congress enacted the Gun Lake Act, 128Stat. 1913, which “reaffirmed as trust land” the Bradley Property, 2(a), and provided that “an action . . . relating to [that] land shall not be filed or maintained in a Federal court and shall be promptly dismissed,” 2(b). In response, the District Court dismissed Patchak’s suit, and the D. C. Circuit affirmed.

Held: The judgment is affirmed.

828 F. 3d 995, affirmed.

Justice Thomas, joined by Justice Breyer, Justice Alito, and Justice Kagan, concluded that 2(b) of the Gun Lake Act does not violate Article III of the Constitution. Pp. 4–16.

(a) Congress may not exercise the judicial power, see Plaut v. Spendthrift Farm, Inc., 514 U. S. 211, but the legislative power permits Congress to make laws that apply retroactively to pending lawsuits, even when it effectively ensures that one side will win, Bank Markazi v. Peterson, 578 U. S. ___, ___–___. Permissible exercises of the legislative power and impermissible infringements of the judicial power are distinguished by the following rule: Congress violates Article III when it “compel[s] . . . findings or results under old law,” Robertson v. Seattle Audubon Soc., 503 U. S. 429, but not when it “changes the law,” Plaut, supra, at 218. Pp. 4–6.

(b) By stripping federal courts of jurisdiction over actions “relating to” the Bradley Property, 2(b) changes the law. Pp. 6–10.

(1) Section 2(b) is best read as a jurisdiction-stripping statute. It uses jurisdictional language, imposes jurisdictional consequences, and applies “[n]otwithstanding any other provision of law,” including the general grant of federal-question jurisdiction, 28 U. S. C. 1331. And while 2(b) does not use the word “jurisdiction,” jurisdictional statutes are not required to do so. See Sebelius v. Auburn Regional Medical Center, 568 U. S. 145. Indeed, 2(b) uses language similar to language used in other jurisdictional statutes. See, e.g., Gonzalez v. Thaler, 565 U. S. 134. And 2(b) cannot plausibly be read as anything other than jurisdictional. Pp. 6–7.

(2) When Congress strips federal courts of jurisdiction, it exercises a valid legislative power. This Court has held that Congress generally does not violate Article III when it strips federal jurisdiction over a class of cases, see Ex parte McCardle, 7 Wall. 506, 514, and has reaffirmed these principles on many occasions, see, e.g., Steel Co. v. Citizens for Better Environment, 523 U. S. 83–95. Pp. 7–10.

(b) Patchak’s two arguments for why 2(b) violates Article III even if it does strip jurisdiction—that the provision flatly directs federal courts to dismiss lawsuits without allowing them to interpret or apply any new law, and that it attempts to interfere with this Court’s decision in Patchak I that his suit “may proceed,” 567 U. S., at 212—are unpersuasive. Pp. 10–15.

Justice Ginsburg, joined by Justice Sotomayor, concluded that Congress’ authority to forgo or retain the Government’s sovereign immunity from suit suffices to decide this case. With Patchak I in mind, Congress acted effectively to displace the Administrative Procedure Act’s waiver of immunity for suits against the United States—which enabled Patchak to launch this litigation—with a contrary command applicable to the Bradley Property. Pp. 1–2.

Justice Sotomayor concluded that 2(b) of the Gun Lake Act is most naturally read as having restored the Federal Government’s sovereign immunity from Patchak’s suit challenging the trust status of the Bradley Property. Pp. 1–2.

Thomas, J., announced the judgment of the Court and delivered an opinion, in which Breyer, Alito, and Kagan, JJ., joined. Breyer, J., filed a concurring opinion. Ginsburg, J., filed an opinion concurring in the judgment, in which Sotomayor, J., joined. Sotomayor, J., filed an opinion concurring in the judgment. Roberts, C. J., filed a dissenting opinion, in which Kennedy and Gorsuch, JJ., joined.


Certiorari To The United States Court Of Appeals For The Seventh Circuit

No. 16-784. Argued November 6, 2017—Decided February 27, 2018

The Bankruptcy Code allows trustees to set aside and recover certain transfers for the benefit of the bankruptcy estate, including, as relevant here, certain fraudulent transfers “of an interest of the debtor in property.” 11 U. S. C. 548(a). It also sets out a number of limits on the exercise of these avoiding powers. Central here is the securities safe harbor, which, inter alia, provides that “the trustee may not avoid a transfer that is a . . . settlement payment . . . made by or to (or for the benefit of) a . . . financial institution . . . or that is a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract.” 546(e).

Valley View Downs, LP, and Bedford Downs Management Corp. entered into an agreement under which Valley View, if it got the last harness-racing license in Pennsylvania, would purchase all of Bedford Downs’ stock for $55 million. Valley View was granted the license and arranged for the Cayman Islands branch of Credit Suisse to wire $55 million to third-party escrow agent Citizens Bank of Pennsylvania. The Bedford Downs shareholders, including petitioner Merit Management Group, LP, deposited their stock certificates into escrow. Citizens Bank disbursed the $55 million over two installments according to the agreement, of which petitioner Merit received $16.5 million.

Although Valley View secured the harness-racing license, it was unable to achieve its goal of opening a racetrack casino. Valley View and its parent company, Centaur, LLC, filed for Chapter 11 bankruptcy. Respondent FTI Consulting, Inc., was appointed to serve as trustee of the Centaur litigation trust. FTI then sought to avoid the transfer from Valley View to Merit for the sale of Bedford Downs’ stock, arguing that it was constructively fraudulent under 548(a)(1)(B). Merit contended that the 546(e) safe harbor barred FTI from avoiding the transfer because it was a “settlement payment . . . made by or to (or for the benefit of)” two “financial institutions,” Credit Suisse and Citizens Bank. The District Court agreed with Merit, but the Seventh Circuit reversed, holding that 546(e) did not protect transfers in which financial institutions served as mere conduits.

Held: The only relevant transfer for purposes of the 546(e) safe harbor is the transfer that the trustee seeks to avoid. Pp. 9–19.

(a) Before a court can determine whether a transfer was “made by or to (or for the benefit of)” a covered entity, it must first identify the relevant transfer to test in that inquiry. Merit posits that the relevant transfer should include not only the Valley-View-to-Merit end-to-end transfer, but also all of its component parts, i.e., the Credit-Suisse-to-Citizens-Bank and the Citizens-Bank-to-Merit transfers. FTI maintains that the only relevant transfer is the transfer that it sought to avoid, specifically, the overarching transfer between Valley View and Merit. Pp. 9–14.

(1) The language of 546(e) and the specific context in which that language is used support the conclusion that the relevant transfer for purposes of the safe-harbor inquiry is the transfer the trustee seeks to avoid. The first clause of the provision—“Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and 548(b) of this title”—indicates that 546(e) operates as an exception to trustees’ avoiding powers granted elsewhere in the Code. The text makes clear that the starting point for the 546(e) inquiry is the expressly listed avoiding powers and, consequently, the transfer that the trustee seeks to avoid in exercising those powers. The last clause—“except under section 548(a)(1)(A) of this title”—also focuses on the transfer that the trustee seeks to avoid. Creating an exception to the exception for 548(a)(1)(A) transfers, the text refers back to a specific type of transfer that falls within the avoiding powers, signaling that the exception applies to the overarching transfer that the trustee seeks to avoid, not any component part of that transfer. This reading is reinforced by the 546 section heading, “Limitations on avoiding powers,” and is confirmed by the rest of the statutory text: The provision provides that “the trustee may not avoid” certain transfers, which naturally invites scrutiny of the transfers that “the trustee . . . may avoid,” the parallel language used in the avoiding powers provisions. The text further provides that the transfer that is saved from avoidance is one “that is” (not one that involves) a securities transaction covered under 546(e). In other words, to qualify for protection under the securities safe harbor, 546(e) provides that the otherwise avoidable transfer itself be a transfer that meets the safe-harbor criteria. Pp. 11–13.

(2) The statutory structure also supports this reading of 546(e). The Code establishes a system for avoiding transfers as well as a safe harbor from avoidance. It is thus only logical to view the pertinent transfer under 546(e) as the same transfer that the trustee seeks to avoid pursuant to one of its avoiding powers. In an avoidance action, the trustee must establish that the transfer it seeks to set aside meets the carefully set out criteria under the substantive avoidance provisions of the Code. The defendant in that avoidance action is free to argue that the trustee failed to properly identify an avoidable transfer under the Code, including any available arguments concerning the role of component parts of the transfer. If a trustee properly identifies an avoidable transfer, however, the court has no reason to examine the relevance of component parts when considering a limit to the avoiding power, where that limit is defined by reference to an otherwise avoidable transfer, as is the case with 546(e). Pp. 13–14.

(b) The primary argument Merit advances that is moored in the statutory text—concerning Congress’ 2006 addition of the parenthetical “(or for the benefit of)” to 546(e)—is unavailing. Merit contends that Congress meant to abrogate the Eleventh Circuit decision in In re Munford, Inc., 98 F. 3d 604, which held that 546(e) was inapplicable to transfers in which a financial institution acted only as an intermediary. However, Merit points to nothing in the text or legislative history to corroborate its argument. A simpler explanation rooted in the text of the statute and consistent with the interpretation of 546(e) adopted here is that Congress added the “or for the benefit of” language that is common in other substantive avoidance provisions to the 546(e) safe harbor to ensure that the scope of the safe harbor and scope of the avoiding powers matched.

That reading would not, contrary to what Merit contends, render other provisions ineffectual or superfluous. Rather, it gives full effect to the text of 546(e). If the transfer the trustee seeks to avoid was made “by” or “to” a covered entity, then 546(e) will bar avoidance without regard to whether the entity acted only as an intermediary. It will also bar avoidance if the transfer was made “for the benefit of” that entity, even if it was not made “by” or “to” that entity.

Finally, Merit argues that reading the safe harbor so that its application depends on the identity of the investor and the manner in which its investment is held rather than on the general nature of the transaction is incongruous with Congress’ purportedly “prophylactic” approach to 546(e). But this argument is nothing more than an attack on the text of the statute, which protects only certain transactions “made by or to (or for the benefit of)” certain covered entities. Pp. 14–18.

(c) Applying this reading of the 546(e) safe harbor to this case yields a straightforward result. FTI sought to avoid the Valley-View-to-Merit transfer. When determining whether the 546(e) safe harbor saves that transfer from avoidance liability, the Court must look to that overarching transfer to evaluate whether it meets the safe-harbor criteria. Because the parties do not contend that either Valley View or Merit is a covered entity, the transfer falls outside of the 546(e) safe harbor. Pp. 18–19.

830 F. 3d 690, affirmed and remanded.

Sotomayor, J., delivered the opinion for a unanimous Court.