Case Notes

North Carolina has had a tough time in the Supreme Court in the last two weeks. Last week the Court refused to review the 4th U.S. Circuit Court of Appeal's decision holding that North Carolina’s voter ID law is unconstitutional and violates the Voting Rights Act. This week it concluded two congressional districts are unconstitutional racial gerrymanders. Cooper v. Harris raises an issue litigated over and over since the 2010 census. Challengers claim the North Carolina legislature unconstitutionally packed minority voters into a few legislative districts to lessen their ability to influence races in other districts. The Supreme Court agreed, holding 5-3 that a North Carolina District Court correctly ruled that North Carolina relied too heavily on race in designing two majority-minority congressional districts.

The glass is more than half full after the Supreme Court’s ruling in Bank of America v. Miami , but not as full as local governments would like. The Supreme Court could have completely shut down local government lawsuits against banks for discriminatory lending practices—but it didn’t. The Supreme Court also could have made it easier for local governments to prove these cases—but it didn’t. In Bank of America v. Miami , the Supreme Court held 5-3 that local governments have “standing” to bring Fair Housing Act (FHA) lawsuits against banks alleging discriminatory lending practices. But to win these claims local governments must show that their injuries were more than merely foreseeable. The State and Local Legal Center (SLLC) filed an amicus brief in this case on the side of the City of Miami.   

The Seventh Circuit has become the first federal circuit court of appeals to rule that employees may bring sexual orientation discrimination claims under Title VII. This case directly affects state and local governments in their capacity as employers in Indiana, Illinois, and Wisconsin. Title VII of the Civil Rights Act of 1964 makes it unlawful for employers to discriminate on the basis of a person’s “race, color, religion, sex, or national origin.” Kimberly Hively is openly lesbian. She sued Ivy Tech Community College where she taught as a part-time, adjunct professor. She applied for at least six full-time positions between 2009 and 2014, didn’t receive any of them, and in July 2014, her part-time contract was not renewed. She believes her sexual orientation is the reason. The Seventh Circuit had long held that sexual orientation discrimination claims weren’t cognizable under Title VII. The court decided to revisit this conclusion “in light of developments at the Supreme Court extending over two decades.” These decisions include Obergefell v. Hodges (2015), which granted same-sex couples a constitutional right to marry. 

The Trump administration asked the Supreme Court to hold “in abeyance” litigation over whether a federal district court or a federal court of appeals has jurisdiction to rule whether the current 2015 Waters of the United States (WOTUS) definitional rule violates the Clean Water Act. On April 2, 2017 the Supreme Court denied the motion, allowing the litigation to proceed. President Trump’s February 28, 2017 executive order Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the "Waters of the United States" Rule calls for the “rescinding or revising” of the WOTUS rule. Many state and local governments objected to the broad nature of this rule, in particular to the expansive definition of ditches and the ambiguous definition of tributaries. 

While President Trump’s executive order (EO) on Promoting Energy Independence and Economic Growth merely calls for the “review” of the Clean Power Plan (CPP), it has been widely viewed as the President’s first step to dismantle President Obama’s signature climate change measure. The EO goes on to say that after review, the Environmental Protection Agency (EPA) “if appropriate, shall, as soon as practicable, suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules.” According to the CPP, by 2030 carbon pollution from the power sector is supposed to be 32 percent below 2005 levels. State-by-state targets are to be accomplished by increased production of renewable energy. A number of states sued the Obama administration claiming the CPP regulations exceeded EPA’s authority under the Clean Air Act. In February 2016, the Supreme Court prevented the CPP regulations from going into effect until the D.C. Circuit Court of Appeals (and the Supreme Court, if it chooses to) rules on the regulations.

Expressions Hair Design v. Schneiderman is the Supreme Court’s first First Amendment free speech ruling since Reed v. Town of Gilbert, Arizona (2015), where the Supreme Court defined content-based speech very broadly and held it is subject to strict (usually fatal) scrutiny. The Court didn’t cite to Reed in its opinion in this newly decided case. The Court held unanimously that a New York statute prohibiting vendors from advertising a single price, and a statement that credit card customers must pay more, regulates speech under the First Amendment. The State and Local Legal Center (SLLC) filed an amicus brief in this case arguing this law doesn’t violate the First Amendment because it regulates conduct rather than speech. When customers pay with a credit card, merchants must pay a transaction fee to the credit card company. Some merchants want to pass this fee along to credit card customers. But a New York statute states that “[n]o seller in any sales transaction may impose a surcharge on a [credit card] holder who elects to use a credit card in lieu of payment by cash, check, or similar means.” Twelve states have adopted credit-card surcharge bans.

The Supreme Court’s decision in Endrew F. v. Douglas County School District was bad timing for Supreme Court nominee Judge Neil Gorsuch. The Supreme Court held unanimously that public school districts must offer students with disabilities an individual education plan (IEP) “reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.” The Court rejected the Tenth Circuit’s holding that an IEP must merely confer “some educational benefit” that is “more than de minimis.” This ruling came down while Judge Gorsuch was testifying before the Senate Judiciary Committee. Judge Gorsuch was the author of a 2008 opinion

In  S. Dakota v. Wayfair, Inc., 2017 U.S. Dist. LEXIS 7669, a state trial court judge in South Dakota has ruled that a South Dakota law requiring remote sellers to collect sales tax is unconstitutional. This ruling was expected for precisely the reason the judge stated—a lower court must follow Supreme Court precedent.    In Quill Corp. v. North Dakota, decided in 1992, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax. The South Dakota law directly contradicts this precedent.

The Supreme Court will not decide—at least not this term—whether transgender students have a right to use the bathroom consistent with their gender identity due to changes in position on this issue from the Obama to Trump administration. Title IX prohibits school districts that receive federal funds from discriminating “on the basis of sex.” A Title IX regulation states if school districts maintain separate bathrooms (locker rooms, showers, etc.) “on the basis of sex” they must provide comparable facilities for the other sex. In a 2015 letter the Department of Education (DOE) interpreted the Title IX regulation to mean that if schools provide for separate boys’ and girls’ bathrooms, transgender students must be allowed to use the bathroom consistent with their gender identity. DOE and the Department of Justice reaffirmed this stance in a May 2016 “Dear Colleague” letter. On February 22, 2017, DOE issued a “Dear Colleague” letter withdrawing the previous letters. The new “Dear Colleague” letter takes no position on whether the term “sex” in Title IX includes gender identity. G.G. is transgender. The Gloucester County School Board prevented him from using the boy’s bathroom. He sued the district arguing that is discriminated against him in violation of Title IX.

The fate of the most controversial case the Supreme Court has agreed to decide this term is uncertain now that the Department of Education (DOE) has issued a “Dear Colleague” letter withdrawing a previous letter requiring school districts to allow transgender students to use the bathroom consistent with their gender identity. Title IX prohibits school districts that receive federal funds from discriminating “on the basis of sex.” A Title IX regulation states if school districts maintain separate bathrooms (locker rooms, showers, etc.) “on the basis of sex” they must provide comparable facilities for the other sex. In a 2015 letter, DOE interpreted the Title IX regulation to mean that if schools provide for separate boys' and girls’ bathrooms, transgender students must be allowed to use the bathroom consistent with their gender identity. The new “Dear Colleague” letter takes no position on whether the term “sex” in Title IX includes gender identity. G.G. is biologically female but identifies as a male. The Gloucester County School Board prevented him from using the boys' bathroom. He sued the district arguing that it discriminated against him in violation of Title IX.