Supreme Court News

by Professor William Funk
Lewis and Clark Law School
Editor, Administrative and Regulatory Law News

In Seminole Tribe of Florida v. Florida, 116 S.Ct. 1114 (1996), the Supreme Court overruled Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989), and held that the Commerce Clause does not authorize Congress to abrogate states' sovereign immunity recognized by the Eleventh Amendment. The Court has long recognized that the Fourteenth Amendment trumps the Eleventh Amendment, so that if Congress clearly intends to authorize suits against states under the Fourteenth Amendment, it can do so. In Union Gas, a case involving a state's liability under the Comprehensive Environmental Response, Compensation, and Liability Act, the federal hazardous waste clean-up law, a plurality of the Court reached a similar conclusion with respect to the Interstate Commerce Clause. Seminole arose in the context of the Indian Gaming Regulatory Act, which authorizes an Indian tribe to sue a state to enforce a state duty to negotiate a compact between the state and tribe relating to Indian gambling activities in the state. Consequently, the Indian Gaming Regulatory Act reflected an exercise of the Indian Commerce Clause ("to regulate commerce ... with the Indian tribes"). Nevertheless, the Court found no basis for distinguishing between the Interstate and Indian Commerce Clauses for purposes of Congress's power to abrogate states' Eleventh Amendment rights. Instead, with Justice Thomas joining the four dissenters in Seminole (Justices Rehnquist, Scalia, Kennedy, and O'Connor), the Court overruled Union Gas, finding that it "deviated sharply from our established federalism jurisprudence."

Overruling Union Gas, though, did not dispose of the case. The plaintiffs argued that under Ex parte Young, 209 U.S. 123 (1908), persons may sue state officials to enjoin their violation of federal law, as opposed to suing the state itself, without running afoul of the Eleventh Amendment. The Court concluded that Ex parte Young did not apply here because Congress had "prescribed a detailed remedial scheme" for enforcement of a state's obligation under the Act. Even though that detailed remedial scheme was itself unconstitutional, violating the Eleventh Amendment, the particular procedures, limitations, and remedies afforded by that scheme were evidence of Congress's intent not to leave enforcement to "the full remedial powers of a federal court," as an injunction action under Ex parte Young would. Seminole breaks new ground in subjecting Ex parte Young's doctrine to what Congress may have intended in a particular situation.

More broadly, however, Seminole reflects the tendency of the Court in recent years to give new force to federalism concepts, extending from New York v. United States, 112 S.Ct. 2408 (1992), in which the Court found a federal statute to violate the Tenth Amendment, to United States v. Lopez, 115 S.Ct. 1624 (1995), in which the Court struck a federal criminal statute as beyond the Commerce Clause. And while this general tendency must be viewed as real and significant, it is difficult to see how the Seminole decision itself will have meaningful impact on federal regulatory activities. Undoubtedly, by its overruling of Union Gas, states will no longer be subject to CERCLA liability, but the logic of Seminole, despite the dissents' suggestions, would not seem to extend state immunity from judicial enforcement of general regulatory statutes. For example, in a footnote the Court cited a couple of regulatory statutes, the Emergency Planning and Community Right-to-Know Act, 42 U.S.C.  11001 et seq., and the citizen suit provision of the Clean Water Act, 33 U.S.C.  1365, as examples of situations where Congress had apparently intended to impose duties on officers of states and made them responsible in federal court for complying with those duties, suggesting that these provisions would be consistent with Ex parte Young.

If Seminole raises questions going to the heart of our constitutional system, Holly Farms Corp. v. NLRB, 116 S.Ct. 1396 (1996), deals with the more mundane, if arcane, question of whether a chicken catcher employed by a poultry processor to catch chickens raised by an independent grower in order to bring them to slaughter is an "employee" protected by the National Labor Relations Act, rather than an "agricultural laborer" exempt from coverage. This issue split the Court 5-4, with the majority upholding the NLRB's determination that they were "employees" subject to the Act. Under the NLRA an employee cannot include an "agricultural laborer." Congress has in essence defined that term through annual riders to the NLRB's appropriations that adopt by reference the definition of agriculture in the Fair Labor Standards Act. There, agriculture is defined by a list of primary agricultural activities, including the "raising of ... poultry." It then also includes "any practices ... performed ... on a farm as an incident to or in conjunction with such farming operations." These have by tradition been denominated "secondary farming activities." Here it was undisputed that the chicken catching was not "raising poultry," but that it was "performed on a farm." Holly Farms argued that catching the chickens was incidental to farming activities, so that the catchers were agricultural laborers engaged in secondary farming activities. The NLRB conceded that if the catchers had been employed by the grower, they would have been engaged in activity incidental to farming, but because they were employed by the processor, their activities were not incidental to farming but to processing. The majority found both interpretations plausible, but not compelled. While this alone would suffice for deference under Chevron v. NRDC, 467 U.S. 837 (1984), or NLRB v. Hearst Publications, 322 U.S. 111 (1944), the Court spent some effort to demonstrate that the NLRB's interpretation was of long standing, was consistent with the Wage and Hour Administrator's interpretation under the FLSA, and was consistent with the general rule that exceptions from the coverage of the NLRA should be narrowly construed, before giving a nod toward deference to the agency's interpretation. The dissent believed that the catchers' activity was plainly "incident to farming operations" and that the employer of the catcher was irrelevant to the statutory language, so that the NLRB's interpretation failed the first step of Chevron.

In 44 Liquormart, Inc. v. Rhode Island, 116 S.Ct. ---- (1996), the Court was unanimous that Rhode Island's prohibition of the advertising of liquor prices violated the First Amendment, but the Court could not agree on a rationale, other than agreeing that the Twenty First Amendment, repealing prohibition, did not alter otherwise applicable First Amendment analysis. Rhode Island had prevailed in the court of appeals because it convinced the court that its prohibition satisfied the test in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557 (1980), by advancing the legitimate public purpose of furthering "temperance," by artificially keeping the price of liquor high due to lack of price competition. The court of appeals acknowledged that there were "perhaps more effective means" of achieving the state's goal, but that under Central Hudson's test, the state's choice of means was "not unreasonabl[y]" related to its goal. This opinion reflects the difficulty courts have had in applying the fourth prong of the Central Hudson test -- how close a relationship the restriction on speech must bear to the goal sought to be achieved. Justice Stevens wrote the principal opinion for himself and Justices Kennedy and Ginsburg, and in part concurred in by Justices Souter and Thomas. The thrust of Justice Stevens opinion was that when government merely regulates commercial speech to protect against misleading, deceptive, or overbearing sales practices, its action is consistent with the policies behind protecting commercial speech under the First Amendment. Accordingly, judicial review of such regulations under the Central Hudson test should be more deferential as to the regulator's means/end relationship. When, however, government simply bans truthful, non-misleading commercial speech, to pursue a policy not related to consumer protection, the Central Hudson test should be applied with "special care." Justice O'Connor, joined by the Chief Justice and Justices Souter and Breyer, believed that application of the traditional Central Hudson test invalidated the Rhode Island law because a ban on advertising price as a means of keeping the price high, compared with setting minimum prices or imposing a higher state sales tax on liquor, was not a reasonable fit between means and end. Justice Scalia indicated that he believes Central Hudson is ripe for replacement, but because the parties had not addressed such a possibility, he would concur in the judgement. Justice Thomas simply disavowed Central Hudson in cases where "the government's asserted interest is to keep legal users of a product or service ignorant in order to manipulate their choices in the marketplace." In such circumstances, he concluded, the First Amendment protects so-called commercial speech to the same degree as non-commercial speech. Interestingly, four justices specifically disavowed the analysis in Posadas de Puerto Rico Associates v. Tourism Co. of P.R., 478 U.S. 328 (1986), in which the Court by a 5-4 vote indicated that because Puerto Rico could clearly ban gambling altogether, its restriction on advertising gambling to decrease the amount of gambling was subject to a lessened scrutiny. 44 Liquormart raises grave questions about restrictions on the advertising of liquor and cigarettes in various media.

The Court has granted certiorari in Bennett v. Plenert, 63 F.3d 915 (9th Cir. 1995), in which the Ninth Circuit held that a "zone-of-interests" test applies to a suit brought not under the APA but under the Endangered Species Act citizen suit provision and that a person not seeking to protect endangered species is not within that statute's zone of interests. The Eighth Circuit in Defenders of Wildlife v. Hodel, 851 F.2d 1035 (1988), rev'd on other grounds sub nom. Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), had earlier concluded that the ESA's citizen suit provision, which authorizes "any person" to sue to enjoin "any person ... who is alleged to be in violation of any provision of [the ESA]," did not include a zone-of-interests test. Bennett was suing to enjoin actions of the Fish and Wildlife Service in part because the F&WS had allegedly failed to consider the economic impacts of designating critical habitat of a species of sucker, as required by the ESA.