The Supreme Court 2016:What’s At Stake For People

50+ In America

A Preview of the 2016 Term

AARP FOUNDATION

Lisa Marsh Ryerson

President

William Alvarado Rivera

Senior Vice President, Litigation

Attorneys

Kelly Bagby

Iris Gonzalez

Maame Gyamfi

Barbara Jones

Daniel Kohrman

Laurie McCann

Julie Nepveu

Mary Ellen Signorille

Susan Silverstein

Dara Smith

Andrew Strickland

THE SUPREME COURT 2016:

WHAT’S AT STAKE FOR PEOPLE 50+ IN AMERICA?

A Preview of the 2016 Term

601 E Street, N.W. • Washington, D.C. 20049 • (202) 434-2060

Website: www.aarpfoundation.org/litigation

On Twitter: @AARPCares, #AARPAFL

AARP Foundation advocates for the rights of people 50 and older, initiating and supporting litigation in courts

nationwide. Our attorneys are responsible for carrying out the judicial advocacy activities of AARP and AARP Foundation, focusing on issues related to income, isolation, hunger and housing. These issues include age discrimination in employment; disability rights protection; employee benefits; housing discrimination; health; investor protection; consumer protection; and other issues affecting low-income people. AARP Foundation Litigation has already filed or intends to file amicus briefs in most of the cases discussed herein. This Supreme Court Preview discusses cases that will have significant impact on older people, and it advances AARP Foundation’s education and advocacy efforts.

News media and others may quote extensively from this publication, as long as appropriate attribution is given

to AARP Foundation. Media inquiries should be directed to AARP Media Relations at (202) 434-2560.

TABLE OF CONTENTS INTRODUCTION ........................................................................................................................ 1 CASES – 2016 TERM ................................................................................................................. 2 Income ........................................................................................................................................ 2 Housing....................................................................................................................................... 6 Isolation ...................................................................................................................................... 8 Access to Courts ....................................................................................................................... 10 GAZING INTO THE CRYSTAL BALL ...................................................................................... 12 Income ...................................................................................................................................... 12 Voting Rights and Campaign Finance ...................................................................................... 17 CONCLUSION .......................................................................................................................... 22

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INTRODUCTION

As the Term begins, the biggest question for Court-watchers is when Justice Scalia’s successor will be confirmed. On average, the Senate has taken 25 days to act on a Supreme Court nomination. The longest time the Senate has ever taken to vote on a successor was 125 days from the time of nomination of Justice Brandeis until his confirmation. In recent times, the Senate has usually voted on a Supreme Court nominee within 60 to 90 days. As of September 1, it has been 168 days since President Obama nominated Chief Judge Merrick Garland. Given these timelines, if Donald Trump as the Republican nominee wins the election, the earliest a Justice could be confirmed would be towards the end of the Term. If Hillary Clinton as the Democratic nominee wins the election, then the question becomes whether Chief Judge Merrick Garland finally receives a hearing and a vote on his nomination. Commentators are split as to whether that will happen. If it does, then Chief Judge Garland could be seated as early as the beginning of 2017.

In the meantime, the eight-Justice Court must continue to do its work, but it is already clear that the lack of a full Court has resulted in fewer grants of certiorari. Indeed, Justices may be more reluctant to grant certiorari if they think they may have difficulty in securing the fifth vote for their positions. Therefore, we do not believe that the Justices will take groundbreaking cases this Term until the Senate confirms a new Justice.

Regardless of election politics, for the 2016 Term, the Court has granted certiorari on a wide variety of cases that AARP and AARP Foundation believe may affect people age 50 and older. Some of the cases address questions left unanswered by previous Supreme Court decisions or in need of clarification. Other cases involve substantive rights. Still others involve seemingly procedural issues that may determine whether individuals will be able to access the courts. The Preview discusses those cases in which the Court has granted certiorari that AARP and AARP Foundation believe will affect the 50+.

Gazing Into the Crystal Ball discusses the pending petitions for certiorari that AARP Foundation Litigation believes are likely to be granted because of a split in the circuit courts or the importance of the issue. Finally, Gazing Into the Crystal Ball attempts to predict what legal issues affecting the lives of people over age 50 may soon arrive in the Court.

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CASES - 2016 TERM

INCOME

Shaw v. United States, No. 15-5991 781 F.3d 1130 (9th Cir. 2015), cert. granted, 136 S. Ct. 1711 (Apr. 25, 2016). Oral argument scheduled Oct. 4, 2016.

Issue: Whether, in the bank-fraud statute, 18 U.S.C. § 1344, subsection (1)’s “scheme to defraud a financial institution” requires proof of a specific intent not only to deceive, but also to cheat, a bank, as nine circuits have held, and as Petitioner argued here?

Shaw v. United States will decide whether federal prosecutors seeking a conviction under the Bank Fraud Act, 18 U.S.C. § 1344(1), must prove that the defendant specifically intended not only to deceive a bank, but also to cause a bank to bear a financial loss.

Lawrence Shaw was tried and convicted for violating the first of two clauses of the Bank Fraud Act, 18 U.S.C. § 1344(1), which makes it a crime to knowingly execute a scheme to “defraud a financial institution.” Shaw’s scheme was to open a PayPal account in the name of a businessperson, Mr. Hsu, who was living outside the United States. Shaw used the PayPal account to transfer approximately $300,000 out of Hsu’s account at Bank of America and into accounts that Shaw controlled at Washington Mutual.

Shaw argued that prosecutors seeking a conviction under 18 U.S.C. § 1344(1) are required to prove a defendant intended to deceive and cheat the bank. He draws support for this interpretation from the Supreme Court’s recent decision in Loughrin v. United States, 134 S. Ct. 2384 (2014).

The question presented in Loughrin involved only the second clause of the bank fraud statute. 18 U.S.C. § 1344(2). That clause makes it a crime to “knowingly

execut[e] a scheme . . . to obtain” property owned by, or under the custody or control of, a bank “by means of false or fraudulent pretenses.” Loughrin, 134 S. Ct. at 2388. However, the Court read the text of the statute as a whole to aid its interpretation. Id. at 2389-90. It held that Congress enacted the two sections to address two distinct types of bank fraud and imposed different intent requirements. Id. at 2391-92 (holding that second clause required no proof of intent to defraud a bank by means of a statement and that loss of bank-owned funds was not required to prove a violation of the second clause).

In particular, the Loughrin decision pointed to textual and structural differences that required the first and second clauses to be interpreted as imposing different intent requirements. For example, the Court found that the “whole sum and substance” of the first clause “includes the requirement that a defendant intend to ‘defraud a financial institution.’” Id. at 2389-90. The second clause, on the other hand, targets schemes that use false statements, including those directed at third parties, to attempt to obtain bank-owned or bank-held property (such as making a purchase using a forged check or stolen credit card). Moreover, the first clause is silent regarding bank-held property; in contrast, the second clause explicitly differentiates between bank-owned and bank-held property. This comparison would suggest a broader reach for the second clause than for the first clause. Finally, in rejecting Loughrin’s argument that the intent requirement of the first clause should be read into the second clause, the Court pointed to the use of the word “or” between the two clauses.

Shaw argues that his conviction should be overturned because principles of statutory construction relied upon in Loughrin support his construction of the first clause of the Bank Fraud Act. Specifically, he argues that the first clause is limited to loss of bank-

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owned property, given that only the second clause explicitly addresses bank-held property. Because his scheme targeted only bank-held, not bank-owned, property, he argues that only the second clause covers his conduct. Moreover, he argues that the scheme caused loss only to Mr. Hsu and PayPal, not to a bank. Those losses do not support a conviction under 18 U.S.C. § 1344(1) because neither Hsu nor PayPal is a “financial institution” as defined by the bank fraud statute. See 18 U.S.C. § 20 (defining “financial institution”).

Rejecting this position, the district court instructed that the jury could convict Shaw, if it found that he had deceived or cheated the bank; it did not instruct that the bank must be the principal financial victim of Shaw’s fraud. The Ninth Circuit also rejected Shaw’s arguments. Shaw, 781 F.3d at 1135. In fact, relying on Loughrin, the Ninth Circuit held that “[n]either clause requires the government to establish the defendant intended the bank to suffer a financial loss.” Id. It also found that Loughrin “confirms our conclusion that the difference between the two clauses is which entity the defendant intended to deceive, not which entity the defendant intended to bear the financial loss.” Id. at 1135-36 (citing Loughrin, 134 S. Ct. at 2389-90).

The issues before the Court are highly relevant to AARP and AARP Foundation because older people are frequently victims of financial fraud involving unauthorized access to their bank accounts. Banking laws generally do not penalize the account holders if they report unauthorized access within 60 days of a written statement being sent. However, such fraud often goes undetected for longer periods of time, for a variety of reasons. People often fail to scrutinize their bank or credit card statements on a monthly basis. By the time account holders notice the fraudulent transactions, it may be too late for them to avoid significant financial losses, possibly losing their entire life savings.

At particular risk of bank fraud are older people who are seriously ill; are losing

their financial decision making capacity; have Alzheimer’s or dementia; are living in nursing facilities; or are being exploited by family members and others who have access to their banking information, such as unethical guardians and telemarketers. People who rely only on identity theft products to alert them to fraud, rather than personally and timely reviewing their statements, may also be at higher risk of bank fraud of this type. Most people do not realize that such products cannot detect when an existing account has been accessed without authorization.

As the Supreme Court explained in Loughrin, Congress enacted the bank fraud statute to fill prosecutorial gaps that limited criminal penalties for unauthorized use of a credit card. 134 S. Ct. at 2391-92 (citing United States v. Maze, 414 U.S. 395, 402 (1974)). A holding that narrows the reach of the Bank Fraud Act could reopen the gap that Congress sought to fill and increase the risk of financial fraud and exploitation.

Julie Nepveu jnepveu@aarp.org

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Visa, Inc. v. Osborn, No. 15-961 797 F.3d 1057 (D.C. Cir. 2015), cert. granted, 136 S. Ct. 2543 (June 28, 2016).

Visa, Inc. v. Stoumbos, No. 15-962 797 F.3d 1057 (D.C. Cir. 2015), cert. granted, 136 S. Ct. 2543 (June 28, 2016). Oral argument not yet scheduled.

Issue: Whether allegations that members of a business association agreed to adhere to the association’s rules and possess governance rights in the association, without more, are sufficient to plead the element of conspiracy in violation of section 1 of the Sherman Act, 15 U.S.C. § 1, as the court of appeals held below, or are insufficient, as the Third, Fourth, and Ninth Circuits have held?

The consolidated cases of Visa, Inc. v. Osborn and Visa, Inc. v. Stoumbos willresolve a circuit court split over what allegations suffice to plead an antitrust injury in violation of Section 1 of the Sherman Act. Consumers and operators of independent automatic teller machines (ATMs) allege that they pay higher fees and earn lower profits because banks follow certain Visa and MasterCard network rules that prohibit lowering customer fees when an independent ATM uses a lower-cost network to connect to a bank.

Each time someone accesses an ATM, they pay a fee that is split between the bank and the network. Plaintiffs allege that when ATMs first became popular, banks formed an association to develop the Visa and MasterCard networks and created rules setting the fees customers are charged to use ATMs. These rules were allegedly designed to protect the Visa and MasterCard network from price competition from lower cost networks, such as those operated by Discover and American Express.

Visa and MasterCard eventually became independent from banks. Plaintiffs allege that the banks nevertheless continue to follow the association rules established

when they controlled Visa and MasterCard. The rules allegedly eliminate banks’ incentive to connect to ATMs via lower-cost networks, so consumers continue to pay higher fees, and independent ATM operators earn lower fees on each transaction. They allege that this scheme amounts to a horizontal restraint of trade that violates Section 1 of the Sherman Act, which prohibits antitrust activity.

The district court dismissed Plaintiffs’ claims, holding they did not have standing to sue. The court found that Plaintiffs did not adequately allege that banks and ATM network companies are engaged in activity that forms a horizontal restraint that raises the price consumers must pay and lowers what ATM operators earn for ATM access. See Osborn, 797 F.3d at 1064. The district court found that the banks’ continued participation in the association that formed the original network rules was insufficient to claim an antitrust injury-in-fact.

The U.S. Court of Appeals for the District of Columbia Circuit reversed, holding that Plaintiffs specifically alleged details of the banks’ current activities that were adequate to describe a violation of Section 1 of the Sherman Antitrust Act. Id. at 1066-67. The court reiterated the standard that courts must use when they evaluate a plaintiff’s allegations at the motion to dismiss stage of the case. A court must take the allegations as true and to draw all reasonable inferences from those allegations in the plaintiff’s favor. Id. at 1065-66. Here, the D.C. Circuit found that Plaintiffs’ allegations are specific, plausible, and capable of proof at trial. Therefore, they are sufficient to survive a motion to dismiss for lack of standing. Defendants petitioned for certiorari, which was granted.

This is the second year in a row in which the Court has granted certiorari in a case concerning a plaintiff’s standing to sue. Last year, the Court ruled in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), that courts must make specific findings that an alleged injury is both concrete and particularized. The

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requirements for establishing standing are extremely important to older people seeking a remedy for a violation of law. Frequently, at the time they file a lawsuit, plaintiffs do not have access to all the facts necessary to prove their claim that a defendant unlawfully caused them an injury. If, in order to file a lawsuit and get access to discovery, the Court makes plaintiffs’ pleading requirements too strict, those plaintiffs may not be able to have a day in court to enforce the laws that protect them from high prices, unfair and deceptive practices, access to their retirement benefits, fair housing opportunities, and other laws that protect the health, financial security, and well-being of older people.

Julie Nepveu jnepveu@aarp.org

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HOUSING

Bank of Am. Corp. v. City of Miami, No. 15-1111 800 F.3d 1262 (11th Cir. 2015), cert. granted, 136 S. Ct. 2544 (June 28, 2016).

Wells Fargo & Co. v. City of Miami, No. 15-1112 801 F.3d 1258 (11th Cir. 2015), cert. granted, 2016 U.S. LEXIS 4268 (June 28, 2016). Oral argument scheduled Nov. 8, 2016.

Issue: Whether, by limiting suit to “aggrieved person[s],” Congress required that a Fair Housing Act plaintiff plead more than just Article III injury-in-fact?

Whether proximate cause requires more than just the possibility that a defendant could have foreseen that the remote plaintiff might ultimately lose money through some theoretical chain of contingencies?

In these two consolidated cases, the Court, once again, has taken up the issue of who has standing to bring a lawsuit. In 2013, the City of Miami filed lawsuits against Bank of America, CitiGroup and Wells Fargo (the banks) under the Fair Housing Act (FHA). The City alleged that the banks had used inferior loan products—loans with higher interest rates and worse terms—in neighborhoods with higher minority populations. As a result, many areas of Miami had high foreclosure rates, leading to a decrease in its municipal tax base and an increase in municipal service needs. The City of Miami lawsuits were part of a series of cases filed around the country by cities such as Baltimore, Los Angeles, Oakland, and Chicago seeking redress for similar discriminatory predatory lending practices. For instance, in July 2012, in a settlement with the U.S. Department of Justice concerning similar practices, Wells Fargo agreed to pay $7.5 million to the City of Baltimore.

This case has the potential to affect enforcement of the FHA significantly. The FHA prohibits housing discrimination based on race, color, national origin, religion, sex, family status, and disability. This Term’s FHA case comes after Tex. Dep’t of Hous. and Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507 (2015). That case was an important civil rights decision that affirmed plaintiffs’ ability to prove a violation of the FHA through disparate impact, without the need to show intentional discrimination. Id. at 2525. The petitioners in this case again seek to narrow the reach of the FHA by restricting who can bring FHA cases and what they must allege.

Unlike many other statutes that might limit the right to sue to an employee of a specific company or the purchaser of a product, the FHA allows any aggrieved person who has been injured by a discriminatory housing action to file suit. From the FHA’s earliest days, the Court has stated that standing under the FHA extends as broadly as permitted by Article III of the Constitution. Havens Realty Corp. v. Coleman, 455 U.S. 363, 375-76, 378-79 (1982) (standing applied to fair housing agency and testers); Gladstone, Realtors v. Bellwood, 441 U.S. 91, 109, 110-11 (1979) (municipality had standing based on diminution of tax base); Trafficante v. Metro. Life Ins., 409 U.S. 205, 209 (1972) (standing applied to other tenants in rental complex not denied housing, which led to a segregated community). A litigant shows Article III standing by alleging 1) an injury that is concrete, particularized, and actual or imminent; 2) a causal connection between the alleged injury that is fairly traceable to the challenged conduct; and 3) that a favorable decision will likely redress the injury. City of Miami, 800 F.3d at 1272. Although the District Court never reached the issue of standing because it dismissed the case on other grounds, the Eleventh Circuit Court of Appeals held that the City met these requirements. Id. at 1272-73. The Eleventh Circuit held that the City demonstrated standing by showing that the banks’ discriminatory lending practices caused

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minority-owned properties to fall into foreclosure when they otherwise would not have done so (or earlier than they otherwise would have done so). These foreclosures, in turn, decreased the value of the foreclosed and neighboring properties, thereby depriving the City of property tax revenue, and created blight. This urban decay led the City to spend additional money on municipal services. Consequently, the City had standing to bring the case under the FHA. Id.

The banks argue that a recent Supreme Court case demands that plaintiffs show at the pleading stage that they meet a statutory “zone of interest”; and 2) they satisfy a proximate cause “directness requirement.” Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1387 (2014). Under this higher bar to meet Article III standing, lower courts already have begun to dismiss cases that otherwise would have survived. Compare, e.g., Cty. of Cook v. Wells Fargo & Co., 115 F. Supp. 3d 909 (N.D. Ill. 2015), with City of Los Angeles v. JPMorgan Chase & Co., No. 2:14-cv-04168, 2014 U.S. Dist. LEXIS 161164 (C.D. Cal. Nov. 14, 2014). In addition, while those bringing their housing discrimination cases to court always have had to demonstrate a causal connection between the defendant’s offending actions and the harm they want the court to redress, the banks now want to limit the FHA’s coverage to only those cases where the plaintiff can allege how the defendant could have foreseen every step in the chain of causation.

Miami argues that Congress intended for the FHA to be as broad as the limits of the Constitution, as the Court has acknowledged, in order to fight discrimination and eradicate segregation. Even if a zone-of-interest test were to limit standing under the FHA, the Court likely would find that the City of Miami could proceed here. As Miami has alleged, it and other municipalities are important partners in enforcement of the FHA and in the furtherance of the FHA’s goals. Indeed, cities are required to affirmatively further fair housing in all of their activities, as a condition of receiving federal funds.

Without municipalities suing on behalf of their own injuries, these discriminatory practices will not be fully eliminated or reformed. The effects of such practices fall on communities where the direct victims are mostly elderly, minorities, and low-income individuals. This case also is important because a decision in the banks’ favor will result in a narrowing of the FHA, at a time when the problems the FHA are designed to address—segregation and integration, the deepening wealth divide, and the lack of access to opportunities, such as employment and health care—are subjects of public concern. In drafting this statute to eliminate discrimination and establish fair housing, Congress intended standing to be as broad as Article III of the Constitution and for litigants to show at the pleading stage a not-so-attenuated line of causation between the alleged conduct and the injury.

Susan Silverstein ssilverstein@aarp.org

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ISOLATION

Ivy v. Morath, No. 15-486 781 F.3d 250 (5th Cir. 2015), cert. granted, 136 S. Ct. 1242 (June 28, 2016). Oral argument scheduled Nov. 7, 2016.

Issue: Whether a state agency is liable for discrimination against persons with disabilities by a state-licensed private company providing public services for the agency?

Public agencies increasingly outsource their provision of services to the private sector. In Ivy v. Morath, the Supreme Court will decide whether state agencies can be held liable when a state-licensed service provider discriminates against people with disabilities. The Court’s decision may have a serious impact on protection and relief from discrimination for older adults with disabilities.

In 2010, Texas instituted a requirement that new driver license applicants under the age of 25 complete a state-approved driver-education course. The state agency implementing this driver-education requirement—the Texas Education Agency (TEA)—licensed private driver schools to provide the courses. This class-action case began when five Texas residents with hearing disabilities sued TEA after TEA-licensed driver schools refused to provide them with sign-language interpreters for their courses.

Plaintiffs sued TEA under Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act. Both statutes prohibit state agencies from discriminating against persons with disabilities in the provision of public programs. Ivy, 781 F.3d at 254-55. Plaintiffs argued that TEA’s control over the driver schools—including evaluation, licensing, curriculum requirements, instructor credentials, approval for certain hiring, and unique, state-tracked certificates of completion—made TEA a provider of driver

education and, therefore, liable for discrimination against Plaintiffs.

TEA moved to dismiss the suit, arguing that the agency was not responsible for private companies’ compliance with federal laws. The district court denied TEA’s motion. But, the Fifth Circuit Court of Appeals reversed, finding that TEA was not providing driver education. The Fifth Circuit reasoned that because TEA did not provide direct instruction—and because there was no contract designating the driver schools as state actors—TEA was not providing a public program. Id. at 256, 257-58. Therefore, it was not liable under the ADA and Rehabilitation Act. Plaintiffs petitioned the Supreme Court.

The Court has granted certiorari to determine whether a public entity in a public-private arrangement is liable for discrimination against persons with disabilities by a private actor. Several federal and state courts have addressed the issue, including the Second Circuit in Noel v. N.Y.C. Taxi & Limousine Comm’n, 687 F.3d 63, 72-73 (2d Cir. 2012), when the court issued a ruling similar to the Fifth Circuit’s decision. Although all courts addressing the question apply a test that looks at similar factors—such as whether there is an express contractual or agency relationship between the public entity and private actor—there is no uniform test guiding these cases.

A Court ruling that largely exempts state agencies from liability for their licensees’ actions may hurt older Americans who are disproportionately likely to have disabilities. State agencies will continue to provide services through private vendors. Especially in light of increased privatization and outsourcing, if agencies have no responsibility for private actors’ conduct, persons with disabilities may lose protections that federal disability laws guarantee. In addition, persons with disabilities may need to seek relief in costly individual suits against each private actor. This may hamper efforts to combat systemic discrimination and reduce incentives for voluntary compliance in the private sector.

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AARP Foundation is dedicated to serving people age 50+ by creating solutions that help them secure the essentials and achieve their best lives. Assisting older people to avoid and combat isolation is one of the Foundation’s key missions. Among the primary risk factors that trigger isolation is the inability to participate fully in the community due to mobility, sensory, and other impairments. Ensuring people with disabilities’ access to public services in accordance with federal disability laws also promotes their integration into the community and their ability to achieve their best lives. This case is critical to ensuring that outcome.

Maame Gyamfi mgyamfi@aarp.org

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ACCESS TO COURTS

Microsoft Corp. v. Baker, No. 15-457 797 F.3d 607 (9th Cir. 2015), cert. granted, 136 S. Ct. 890 (Jan. 15, 2016). Oral argument not yet scheduled.

Issue: Whether a federal court of appeals has jurisdiction to review an order denying class certification after the named plaintiffs voluntarily dismiss their claims with prejudice?

This is a case about what class action plaintiffs can do when a district court rejects their attempt to proceed as a class, and the court of appeals decides not to hear the case on an interlocutory basis. Because individual claims are often not worth pursuing on their own, this is a critical question for plaintiffs’ access to courts.

Here, Xbox owners filed a class action lawsuit claiming that Microsoft Xbox consoles have a design defect. The disc drives are very sensitive to vibration, which causes the discs to dislodge and strike other components and become scratched and unusable. Based on a decision in a related case finding that class issues did not “predominate” over individual ones, the court granted Microsoft’s motion to strike the plaintiffs’ class claims and deny class certification. Plaintiffs petitioned for interlocutory review under Fed. R. Civ. P. 23(f), but the Ninth Circuit declined to hear the appeal.

The parties then stipulated to a dismissal of Plaintiffs’ individual claims with prejudice. However, Plaintiffs reserved the right to resurrect and pursue those individual claims if the Ninth Circuit reversed the district court’s order striking the class claims. Plaintiffs appealed to the Ninth Circuit, framing the appeal as one from a final order under 28 U.S.C. § 1291(a). Microsoft claimed the appellate court lacked jurisdiction to hear the appeal. The Ninth Circuit rejected Microsoft’s arguments, holding that a stipulated dismissal does not destroy the adversity of the final decision necessary to

support appellate jurisdiction if the dismissal is not a settlement. The court reversed the denial of class certification. Microsoft filed a petition for certiorari with the Supreme Court.

Before the Court, Microsoft argues that Plaintiffs may not appeal the denial of class certification in this manner. The company contends that the “tactic” of dismissing individual claims to manufacture an appealable final order on the class claims is an end run around Rule 23(f), which gives appellate courts sole discretion to determine whether interlocutory review is appropriate. The company also argues that Plaintiffs cannot obtain appellate review of their individual claims because they voluntarily dismissed those claims with prejudice.

Plaintiffs argue that dismissing individual claims with prejudice in order to pursue an appeal of the order striking the class claims is a legitimate method of obtaining appellate review. They contend that this will not create an end run around the general prohibition on interlocutory appeal because it will occur only rarely—as in situations like this one, where the plaintiffs are willing to stake everything on an appellate reversal, rather than pursuing their individual claims. They point out that proceeding as a class is critical to vindicating their rights and that a decision leaving them without any practical avenue for challenging a denial of class certification would effectively be fatal to their case. Finally, they argue that voluntary dismissal with prejudice always creates an appealable final order.

This issue concerns a core question about access to courts for class action plaintiffs. The Court’s opinion on these issues of appellate jurisdiction and procedure will determine whether plaintiffs in this common predicament must pursue their typically low-dollar-value individual claims piecemeal, or whether they may take another route to appellate review. In short, this case will address whether a denial of interlocutory review is, essentially, the end of any class action case. Consequently, AARP and AARP

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Foundation are interested in the case’s outcome, which will significantly affect access to courts for many older adults whose rights in many contexts realistically can be vindicated only through class actions.

Dara Smith dsmith@aarp.org

Julie Nepveu jnepveu@aarp.org

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GAZING INTO THE CRYSTAL BALL

This section discusses not only pending petitions for certiorari that AARP and AARP Foundation are following (those case names are bolded), but also significant cases in the lower courts and issues on which the Court may grant certiorari within the next few years. These petitions may be important to a particular area of law or involve a procedural issue concerning access to the courts, but the petitions, even if granted, may not garner the public’s interest in the same way as high profile cases. We note that several important decisions from past Supreme Court Terms left unresolved legal issues of critical importance to older people. Of course, as lower courts issue decisions and legislatures make laws, new issues inevitably arise.

INCOME

Age Employment Discrimination

The Age Discrimination in Employment Act (ADEA) celebrates its 50th anniversary next year. Not surprisingly, few statutory interpretation issues remain to be resolved. One notable exception, however, is whether or not section 4(a)(2), 29 U.S.C. § 623(a)(2), protects prospective employees—and not just current employees—from employer policies or practices that have a discriminatory impact on older workers. The issue is currently on rehearing en banc before the U.S. Court of Appeals for the Eleventh Circuit. In late 2015, a panel of that court ruled that § 4(a)(2) authorizes disparate impact claims by applicants for employment because the Equal Employment Opportunity Commission (EEOC) had reasonably and consistently interpreted the statute to cover such claims. Villarreal v. R. J. Reynolds Tobacco Co., 806 F.3d 1288 (11th Cir. 2015).

AARP Foundation Litigation is co-counsel in two cases that squarely present this issue. In Kleber v. CareFusion, Inc., No. 15-cv-1994 (N.D. Ill.), Plaintiff, an attorney, is challenging a maximum-years-of-experience hiring criterion. He alleges that the “no more than seven years of experience” requirement disproportionately screens out older applicants. The district court dismissed his disparate impact claim, ruling that § 4(a)(2) does not allow claims by applicants. 2015

U.S. Dist. LEXIS 157645 (N.D. Ill. Nov. 23, 2015).

In the other case, Rabin v. PriceWaterhouse Coopers, No. 3:16-cv-02276 (N.D. Cal.), we are challenging the defendant accounting firm’s practices of recruiting exclusively on college campuses and requiring applicants to be affiliated with a university for certain classes of jobs under the disparate impact theory. The scope of § 4(a)(2) almost certainly will be contested. Ifa split emerges as these cases progress, the Supreme Court will be asked to resolve this statutory interpretation issue.

The Supreme Court also may be called upon to resolve emerging issues surrounding waivers of rights and claims under the ADEA, including the contours of the Older Workers Benefit Protection Act’s (OWBPA) otherwise clear statutory requirements that defendants must strictly satisfy to enforce such waivers. One such issue is whether or not employers can require employees to bring challenges to the validity of waivers in arbitration as opposed to in court. This issue arose in McLeod v. General Mills, Inc., 140 F. Supp. 3d 843 (D. Minn. 2015), where workers terminated in a reduction-in-force challenged their terminations in a “collective action” under the ADEA. They also challenged the severance agreements they signed, alleging that they violated the OWBPA. McLeod and the other plaintiffs claimed that the agreements are confusing and otherwise non-compliant with the OWBPA and, thus, void. The class asked the district court to decide their OWBPA

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claims, and if they succeeded in voiding the severance agreement, to proceed to consider their ADEA claims—on behalf of themselves and all others “similarly situated.” General Mills argued that a unilateral mandatory arbitration clause in the workers’ severance agreement required that the case be dismissed and asked the district court to enter an order compelling Plaintiffs to resolve the validity of the waiver in arbitration. The district court declined to compel arbitration based on the OWBPA’s express congressional command that employers “shall” bear the burden of proving the validity of a waiver of “any” claims or rights “in a court of competent jurisdiction.” 29 U.S.C. § 623(f)(3). General Mills filed an interlocutory appeal, and the issue is currently pending before the U.S. Court of Appeals for the Eighth Circuit.

Finally, two Terms ago, the Court dismissed Madigan v. Levin, 134 S. Ct. 2 (2013), as “improvidently granted.” As a result, the Court preserved a Seventh Circuit ruling that, despite the ADEA’s comprehensive remedial scheme, older workers may bring age discrimination claims against their state employers under 42 U.S.C. § 1983 on grounds that their employerparticipated in depriving them of their rights under the Equal Protection Clause of the Fourteenth Amendment. The Seventh Circuit remains the only federal appellate court to allow an age discrimination claim under § 1983. The First, Third, Fifth, Ninth, Tenth, and District of Columbia Circuits all have barred § 1983 age discrimination claims. Thus, the issue of whether the ADEA is the exclusive remedy for age discrimination may come before the Court again.

ERISA and Employee Benefits

The issue of whether a pension plan’s limiting venue-selection clause can nullify ERISA’s broad venue provision is still percolating among the district and circuit courts. Last year, the Supreme Court denied a petition for certiorari on this issue, but, at the time, there was no split in the circuits. See Smith v. AEGON Cos. Pension Plan, 769

F.3d 922 (6th Cir. 2014), cert. denied, 136 S. Ct. 791 (Jan. 11, 2016). Many practitioners think that the issue will eventually reach the Court.

Another case that left many open issues was the Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459 (2014). In that case, the Court provided new and detailed pleading requirements for claims that fiduciaries breached their duty of prudence by including and keeping employer stock funds in 401(k) plans. In Amgen Inc. v. Harris, 136 S. Ct. 758 (2016), the Court rebuked the Ninth Circuit for its refusal to provide a detailed analysis of the new pleading requirements under Dudenhoeffer. The Court made it clear that employer stock complaints must plead the elements identified in Dudenhoeffer. Complaints in cases filed before the Dudenhoeffer decision will need to be amended to comply with the new requirements. Circuit courts are currently considering whether the complaints in those cases meet the revised pleading standards. It would not be surprising if one of these cases reaches the Court as the lower courts struggle to figure out where to draw the appropriate line.

The scope of appropriate equitable relief in employee benefits cases is still a contentiously litigated question. CIGNA Corp. v. Amara, 563 U.S. 421 (2011), explicitlyapproved the concept that equitable relief authorized under ERISA refers to categories of relief that were “typically available” in equity courts before the merger of law and equity. In that vein, the Court stated that a district court had the authority to grant traditional equitable remedies, such as reformation, estoppel, and surcharge. The boundaries of equitable relief will continue to be litigated, and we expect these issues to again reach the Court.

AARP and AARP Foundation are watching the so-called “church plan” litigation, and have filed amici curiae briefs in many of these cases. The issue is what is required for an entity to be considered a church plan—

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that is, a plan that may be exempted from ERISA’s requirements and corresponding participant protections. Petitions for certiorari have been filed in Stapleton v. Advocate Health Care Network, 817 F.3d 517 (7th Cir. 2016), petition for cert. filed, No. 16-74 (July 15, 2016), Kaplan v. St. Peter’s Healthcare Sys., 810 F.3d 175 (3d Cir. 2015), petition for cert. filed, No. 16-86 (July 18, 2016), and Rollins v. Dignity Health, 2016 U.S. App. LEXIS 13574 (9th Cir. 2016), petition for cert. filed, No. 16-259 (Aug. 28, 2016).

Finally, there have been five challenges under numerous theories to the Department of Labor’s revised definition of fiduciary/conflict of interest regulation, which requires investment advisers, brokers and insurance agents, among others, to provide advice in the best interest of the client. It is clear that these litigants have taken a page from the Affordable Care Act litigation and are attempting to generate a split in the circuit courts to obtain certiorari. These cases are on a fast track, with hearings in two of the cases in August 2016.

Affordable Care Act Challenges

Although the Supreme Court has upheld challenged portions of the Affordable Care Act (ACA) in two high-profile cases, Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2594 (2012) (finding the individual mandate constitutional), and King v. Burwell, 135 S. Ct. 2480, 2496 (2015) (holding that the law allowed for tax credits to individuals in states operating under federal health exchanges), legal challenges against the health law continue. Another case may be headed for a decision in the Supreme Court in the near future.

In U.S. House of Representatives v. Burwell, No. 14-1967 (RMC), 2016 U.S. Dist. LEXIS 62646 (D.D.C. May 12, 2016), the U.S. House of Representatives sued the Secretaries of Health and Human Services and Treasury, alleging that the Secretaries expended funds for cost-sharing subsidies under the ACA that were not appropriated by Congress, as required by the Appropriations

Clause of the Constitution. After holding that the House had standing to sue on the appropriations issue, the district court also held that it was unconstitutional for the Treasury to pay cost-sharing subsidies directly to insurers because the funds were not appropriated by Congress.

The cost-sharing subsidies at issue in this case are found in Sections 1401 and 1402 of the ACA. Known as premium tax credits, Section 1401 provides tax credits to individuals to reduce the cost of insurance premiums. Section 1402, known as cost-sharing subsidies, provides low-income eligible insureds reimbursement for out-of-pocket expenses, such as deductibles and co-pays. Premium tax credits are funded through a permanent appropriation and are statutorily codified in the Internal Revenue Code as an official tax credit. The cost-sharing subsidies, however, did not have a permanent appropriation. The Secretaries argued that 1402 could be funded through the 1401 permanent appropriation because the cost-sharing provisions were programmatically integrated.

The court rejected the Secretaries’ argument and held that despite Congressional authorization of cost-sharing subsidies, Congress failed to pass appropriations to fund the program, and an appropriation could not be inferred from a related program. Therefore, the spending to fund the cost-sharing subsidies was unconstitutional.

The Secretaries filed a notice of appeal on July 6. Though the D.C. Circuit Court of Appeals has not yet resolved the issues on appeal, unless these issues are resolved through the legislative process, it is likely that the matter will reach the Supreme Court. The cost-sharing subsidies are an important tool to implement the ACA objective of making health insurance affordable and achieving near-universal coverage–an objective that is critical to AARP and AARP Foundation, as explained in AARP’s amicus brief filed in King v. Burwell.

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Federal Program Fraud and Abuse

The False Claims Act (FCA) is an important legal tool to combat fraud on government programs, including Medicare and Medicaid. In 2015 alone, the Federal Government recovered $3.5 billion under the FCA. FCA prosecutions also have led to provider agreements that improve the quality of care for older adults in many healthcare settings, including nursing facilities. Limiting FCA liability weakens the statute’s anti-fraud impact and undermines the financial integrity of government programs.

After upholding implied certification liability under the False Claims Act (FCA) in Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989, 1995 (2016), last Term, the Supreme Court may consider cases that could limit the FCA’s anti-fraud reach in the present Term. For example, in United States ex rel. Willette v. Univ. of Mass., 812 F.3d 35 (1st Cir. 2016), petition for cert. filed, No. 15-1437 (May 24, 2016), the Court may grant certiorari to establish the legal test that determines whether an entity is a state agency, and therefore, immune from FCA liability.

Pharmaceuticals

Older adults, who are more likely than others to require daily prescription medications, are disproportionately affected by high prices for prescription drugs. Competition in prescription drug markets is the single most important factor in lowering drug prices. Any period where competition exists between prescription drug manufacturers, no matter how short, may yield billions of dollars in savings for consumers, private insurers, and government payors.

In Amgen, Inc. v. Sandoz, Inc, 794 F.3d 1347 (Fed. Cir. 2015), petitions for cert. filed, Nos. 15-1039, 15-1195 (Feb. 16, 2016, Mar. 21, 2016), the parties filed cross petitions for certiorari. This case concerns competition among manufacturers of an important class of prescription drugs known

as “biologics.” Biologics are drugs created from biological sources (such as vaccines) and are at the forefront of medical research and treatment. In 2010, Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) to speed the release of “biosimilars,” which are similar to traditional generic drugs: they are nearly identical to biologics and are released by competing companies after the patents for biologics expire.

Sandoz v. Amgen involves when and how would-be manufacturers of biosimilars must provide manufacturers of name-brand biologics with notice of their intent to market a competing product. In Sandoz, the Federal Circuit held that a biosimilar applicant who does not engage in a special information-sharing process under BPCIA must give a 180-day notice to the name-brand manufacturer only after the applicant receives FDA approval for its biosimilar—any notice a biosimilar applicant gives before FDA approval is insufficient. The Federal Circuit’s ruling effectively extends the 12-year market-exclusivity period for biologics by an additional six months, delaying competition that would lower prices in the biologics market.

On June 20, 2016, the Court invited the Solicitor General of the United States to file a brief expressing the federal government’s views of the cases. 136 S. Ct. 2501. The Court’s invitation to the Solicitor General indicates that there is a reasonable possibility that the Court will grant certiorari.

The affordability of prescription drugs, both brand name and generic, is an important issue to AARP and AARP Foundation because 64 percent of older adults take three or more medications on a regular basis. Many older adults have to pay for the out-of-pocket cost of these medications from a fixed and limited income, causing many to choose between paying for other daily needs like food or their medications. Anticompetitive practices that delay market entry of the more affordable generic equivalents unnecessarily and unfairly prolong this hardship for older

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persons. AARP and AARP Foundation believe that courts should interpret antitrust laws in a way that primarily looks at the effect of these practices on the prices of products and on the consumer, and in a way that discourages drug companies from finding creative ways to avoid their legal obligations.

Also pending before the Court is the petition for certiorari in Sergeants Benevolent Ass'n Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, 806 F.3d 71 (2d Cir. 2015), petition for cert. filed, No. 15-1525 (June 17, 2016). In that case, several health plans allege that they paid higher costs for prescription medications because of fraud committed by a Racketeer Influenced Corrupt Organizations (RICO) Act enterprise. The issue in the case is whether a doctor’s prescribing activities break the causal chain between the RICO enterprise and the health plans. Santos-Aventis developed and marketed an antibiotic for respiratory infections called Ketek. The company falsified the safety data about Ketek when it sought FDA approval, in order to hide the drug’s serious risk of causing liver damage. The company also marketed Ketek to doctors without revealing those risks or that it was no more effective than other—and far less expensive—antibiotics on the market. Ketek quickly became a blockbuster drug, but its success was short-lived. It caused serious liver damage and numerous deaths, which prompted the FDA to restrict its use and send letters to doctors warning them of the risks. Prescriptions for Ketek dropped precipitously; it is now prescribed only rarely. The Second Circuit dismissed the claim, holding that the doctor’s prescribing actions broke the causal chain between the manufacturer and the harm to the health plans. AARP and AARP Foundation filed a brief in support of Plaintiffs’ petition for certiorari, arguing that the fraudulent marketing of prescription medications interferes with doctors’ ability to intervene in prescribing decisions, preventing them from serving their intended roles as intermediaries.

Patent Infringement

The Patent Act grants patent owners an exclusionary right that allows the patent owner to prevent others from making, using, selling, or offering for sale any patented invention or patented product within the United States. However, once a patented product is sold, the “patent exhaustion doctrine” provides that the sale of the patented product “exhausts” or “terminates” the patent owner’s rights. Historically, authorized buyers of a patented product could do whatever they wanted to do with the product, including resell it. But, a recent Federal Circuit decision has limited those buyers’ rights. Consumer advocates argue that under this decision, if patent owners retain rights to a product even after it is sold, they can limit the resale and modification of products. This, in turn, can prevent competition and, thus, raise prices or limit access for consumers. As such, consumer advocates have argued that companies should not be able to restrict the use of consumer products after they are sold.

Lexmark Int’l, Inc. v. Impression Prods., 816 F.3d 721 (Fed. Cir. 2016), petition for cert. filed, No. 15-1189 (Mar. 21, 2016), will address this issue, if the Court grants certiorari. Lexmark involves a patent infringement suit against Impression Products, a business that refurbishes and refills printer toner cartridges. Impression Products argued that Lexmark, the patent owner, no longer had a monopoly over the sale of those cartridges, which had already been sold once. But the Federal Circuit held that the sale of a product does not exhaust patent rights—even when that sale is overseas. Impression Products petitioned for certiorari to contest this ruling.

If allowed to stand, the Federal Circuit’s decision will affect far more than printer cartridges, affecting a broad range of products, prices, and consumers. In particular, AARP is interested in this case because the decision would allow medical device manufacturers to keep disposable parts competitors (such as manufacturers of

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catheters) out of the market, potentially raising prices on an ongoing basis for consumers who rely on medical devices, many of whom are older adults.

Consumer

Consumer cases that we expect to be heard in the near future largely involve challenges to administrative agency actions.

In PHH Corp. v. Consumer Fin. Prot. Bureau, No. 15-cv-01177 (D.C. Cir.), the U.S. Court of Appeals for the District of Columbia Circuit is reviewing a challenge to a $108 million disgorgement order that the Consumer Financial Protection Bureau (CFPB) imposed on PHH. PHH, a mortgage company, wants the court to vacate a June 2015 enforcement ruling by CFPB Director Richard Cordray finding that PHH violated anti-kickback provisions in Section 8(a) of the Real Estate Settlement Procedures Act (RESPA) and had to give up $109 million in what Cordray said were ill-gotten mortgage reinsurance premiums. PHH required companies that provided private mortgage insurance to obtain reinsurance from PHH’s wholly owned subsidiary. If they refused, PHH stopped referring business to them.

PHH asserts three main challenges to the CFPB’s order. First, it claims that the structure of the CFPB, with its Director who allegedly has no accountability to Congress or the President, violates the U.S. Constitution. Second, PHH disputes the CFPB’s argument that the RESPA administrative action is not subject to any statute of limitations. Finally, PHH claims that the CFPB’s reading of RESPA is contrary to law and previous interpretations by the Department of Housing and Urban Development.

AARP filed a brief in support of the CFPB, arguing that the agency’s structure is constitutional. AARP also argued that the RESPA violation harms consumers, who pay higher private mortgage insurance each month because of the monthly reinsurance charge.

The D.C. Circuit heard argument in the case in April 2016. It is anticipated that, when a decision is issued in the case, one or both parties will petition for en banc review and then for certiorari. This case is one of several cases in which CFPB-regulated entities are challenging the constitutionality, authority, and regulatory interpretations governing their actions.

In addition, the CFPB is proposing other regulations that are likely to draw court challenges. Among the proposals are a prohibition against class action bans in arbitration agreements, regulation of payday loans, and implementation of the Fair Debt Collection Practices Act. If these regulations are challenged, they are likely to make their way to the Supreme Court over the next two years.

The Federal Communication Commission (FCC) is also facing numerous challenges by the communications industry. In ACA Int'l v. FCC, No. 15-1211, 2015 U.S. App. LEXIS 18554 (D.C. Cir. July 13, 2015), debt collectors and others are challenging the FCC’s omnibus order implementing the Telephone Consumer Protection Act (TCPA) in the U.S. Court of Appeals for the District of Columbia Circuit. The industry claims that the FCC exceeded its authority under the TCPA by restricting the use of automated dialers to make prerecorded calls and texts to cell phones. The FCC enlarged the definition of an automated dialer to include any system that is capable of making automated calls, even if it is not actually being used as such. Additionally, the FCC provided that consumers have a right to revoke consent to receive robocalls at any time. It is possible that whatever ruling the D.C. Circuit issues, the FCC’s omnibus order will also be appealed to the Supreme Court in the next few Terms.

VOTING RIGHTS & CAMPAIGN FINANCE

Last year, we said: “Voting rights continues to be an area of the law producing contentious litigation in a variety of contexts. This trend shows no signs of abating. In that

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event, it is likely to generate significant cases before the Supreme Court for many years to come.” Already the upcoming Term confirms this prediction.

Voter ID

As the November 2016 federal elections approach, lower federal courts passed judgment on state voter identification (ID) laws enacted in North Carolina, North Dakota, Texas, Wisconsin and Virginia. Their rulings portend possible further action by the Supreme Court in one or more voter ID cases, due to petitions for relief on the ultimate merits from decisions by the Fourth, Fifth, Seventh and Eighth Circuits, in addition to various petitions for emergency relief that have been filed and others that may yet be filed prior to the election. The Court’s orders responding to petitions for emergency relief have left in place an appellate decision overturning the North Carolina voter ID law and another sustaining state restrictions on voter registration and voting in Ohio. This virtually guarantees that the Court will not take any definitive action on voter ID or related voting issues until well after November 2016 The courts of appeals ruling on voter ID laws enacted in North Carolina and Texas showed grave concern that state officials not be required implement significant modifications to state voter ID laws without adequate time to assure fair and orderly administration of state voting laws. And, the Supreme Court has shown—if its treatment of voter ID cases in the run-up to the 2012 election is any basis for judgment—no appetite for being rushed into consideration of merits issues raised by state voter ID laws simply because of the timing of lower federal court decisions regarding such laws.

In a divided 9-6 ruling under Section 2 of the Voting Rights Act (VRA), the en banc Fifth Circuit, consistent with AARP’s amicus brief, declared the Texas photo ID requirement for in-person voting to be unlawful because of its discriminatory effects on African-American and Latino voters. Veasey v. Abbott, No. 14-41127, 2016 U.S. App. LEXIS 13255 (5th Cir. July 20, 2016)

(en banc). The court rejected a claim that the Texas voter ID law (SB 14) also amounted to an unconstitutional “poll tax,” but remanded the case for the trial court to reconsider whether SB 14 also intentionally discriminates against African-American and Latino voters in violation of Section 2. While the State of Texas seems likely to ask the Supreme Court to reverse the en banc court’s VRA rulings, it will likely do so only for future elections. Just two weeks after the en banc court’s ruling, on August 3, 2016, the State of Texas agreed to relax SB 14 for November 2016 by expanding the scope of documents acceptable to permit in-person voting, so long as a voter without SB 14-compliant photo ID also completes a declaration that they lack such ID because of a “reasonable impediment.” The Supreme Court will rule after the November 2016 election on a petition for review of the en banc decision of the Fifth Circuit.

The other case that presents the Supreme Court with an opportunity to revisit voter ID issues is N.C. State Conference of the NAACP v. McCrory, Nos. 16-1468, et al., 2016 U.S. App LEXIS 13797 (4th Cir. July 29, 2016), in which a panel of the Fourth Circuit ruled 3-0 that the State Legislature adopted the photo ID requirement and four other provisions of State Law 2013-381 for the purpose of discriminating against African-American voters. The court also struck down the law’s reduction of early voting days (from 17 to 10), and its elimination of same-day voter registration, out-of-precinct voting, and pre-registration of 16- and 17-year-olds. In its emergency petition for certiorari, North Carolina focused on three provisions of the voting law that the state wants to reinstate before the November election: the voter ID requirement; the reduction in the number of days of early voting from 17 to 10; and eliminating voter preregistration for teenagers who have not yet turned 18. And on August 31, in a decision split 4-4, the Supreme Court declined to issue an emergency stay pending appeal of the Fourth Circuit’s decision striking down the voter ID law.

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In two separate cases challenging Act 23, Wisconsin’s voter ID law, federal district courts granted limited relief to challengers, after a long string of defeats. In Frank v. Walker, No. 11-cv-1128, 2016 U.S. Dist. LEXIS 93878 (E.D. Wis. July 19, 2016), the court granted a preliminary injunction, declaring the State’s voter ID Petition Process to impose an unconstitutional “undue burden,” not across the board, as in Crawford v. Marion Cty. Election Bd., 553 U.S. 181(2008), but rather, only “as applied to those who cannot obtain [voter] ID with reasonable effort.” The court determined that the appropriate remedy for such burdens is a “safety net” in the form of a “reasonable impediment” affidavit procedure, modeled on North Carolina’s example, permitting persons unable to produce a photo ID to vote in-person. Consequently, prospective voters without valid photo ID are permitted to vote if they swear, under penalty of perjury, that they cannot produce photo ID because of a “reasonable impediment” to their doing so. However, in early August, the Seventh Circuit granted a stay pending an appeal by the State Attorney General, declaring that the district court’s ruling appeared to extend too far, to protect voters without photo ID absent proof they had made reasonable efforts to comply with Act 23. Hence, the district court’s order calling for an affidavit process to be implemented as soon as the November 2016 elections will not go into effect, and changes to Act 23 as a result of the Frank lawsuit, if any, will be delayed beyond the next Presidential contest.

In One Wisconsin Institute, Inc. v. Thomsen, No. 15-cv-324-jdp, 2016 U.S. Dist. LEXIS 100178 (W.D. Wis. July 29, 2016), the court also issued a preliminary injunction prohibiting the State from enforcing the ID Petition Process as enacted, as well as various provisions of Wisconsin voting law, also on grounds that they created an unconstitutional undue burden on the rights of voters unable to produce a valid photo ID. As in Frank, the court ruled that the State’s interests in enforcing the voter ID law in the case of those unable to comply was

insufficient to justify the onerous restrictions on voting contained in the law.

The Wisconsin Attorney General also sought and obtained emergency relief from the order in One Wisconsin. The district court agreed to limited relief from its order for the upcoming election, declaring that emergency measures that the State of Wisconsin already had in effect for persons without a photo ID were acceptable for November 2016. However, the district court refused to stay various other aspects of its ruling, including provisions loosening Act 23’s restrictions on hours for in-person absentee voting, invalidating the law’s lengthening of the period of residency required to register to vote, and striking down the law’s exclusion of student ID cards from the list of acceptable voter ID. The State is likely to seek a stay of these other provisions of the district court’s order in the Court of Appeals.

Regardless of whether the district court grants such relief, it seems likely that further review of the “as applied” rulings in Frank and One Wisconsin will occur. The issues raised may not ultimately be resolved until the Supreme Court considers them.

Redistricting

The Court likely will hear at least two redistricting cases, one from Virginia and one from North Carolina.

In Bethune-Hill v. Virginia State Board of Elections, 141 F. Supp. 3d 505 (E.D. Va. 2015), appeal filed, No. 15-680 (Nov. 20, 2015), prob. juris. noted, 136 S. Ct. 2406 (June 6, 2016). African-American voters ask the Court to overturn the Virginia Legislature’s decisions in taking into account the race of voters to an excessive degree. Plaintiffs allege that the State has harmed minority voting rights by concentrating African-American voters into too few State House of Delegate districts in percentages higher than necessary to elect candidates of choice for minority voters. Plaintiffs argue that a three-judge panel of the U.S District Court for the Eastern District of Virginia erred in

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holding “that race cannot predominate even where it is the most important consideration in drawing a given district unless the use of race results in ‘actual conflict’ with traditional districting criteria” and “that racial goals must negate all other districting criteria in order for race to predominate.” They also argue that the court should have disapproved a “55% black voting age population floor [used] to draw twelve separate House of Delegates districts,” and that the Virginia General Assembly's “use of race in drawing House District 75 was narrowly tailored to serve a compelling government interest.”

In Harris v. McCrory, No. 1:13-cv-949, 2016 U.S. Dist. LEXIS 14581 (M.D.N.C. Feb. 5, 2016), appeal filed, No. 15-1262 (Apr. 8, 2016), prob. juris. noted, 136 S. Ct. 2512 (June 27, 2016), the State of North Carolina challenges the decision of a three-judge panel holding unlawful the State Legislature’s use of race in creating two U.S. House of Representatives districts. The State contends that the three-judge court erred in “presuming racial predominance from North Carolina’s reasonable reliance” on a supposed rule adopted by the Supreme Court “that a district created to ensure . . . African Americans have an equal opportunity to elect their preferred candidate of choice complies with the Voting Rights Act (VRA) if it contains a numerical majority of African Americans.” The State further asserts that the court below erred in requiring it “to demonstrate its construction of North Carolina Congressional District 1 was ‘actually necessary’ under the VRA instead of simply showing it had ‘good reasons’ to believe the district, as created, was needed to foreclose future vote dilution claims.” The State also challenges the decision as “relieving plaintiffs of their burden to prove ‘race rather than politics’ predominated” in creating the district, “clearly erroneous fact-finding,” and various other legal miscues.

Campaign Finance

Three cases now pending before lower federal courts in the District of Columbia present issues that seemingly were resolved long ago, but are making their way

to the Supreme Court. Two are pending before three-judge district court panels, with a possible appeal available directly to the Supreme Court, and the other will soon be before the en banc D.C. Circuit. Each presents issues of potential significant impact that the Court may hear in the coming Terms.

Twice before, advocates of looser regulation of “soft money” contributions to local, state, and federal political party committees for use in federal elections—that is, contributions not subject to source and amount limits in the Federal Election Campaign Act—have failed to persuade the Supreme Court that First Amendment protections insulate these contributions. See McConnell v. FEC, 540 U.S. 93, 161-71 (2003); Republican Nat’l Comm. v. FEC, 561 U.S. 1040 (2010). Another effort to accomplish the same objective is Republican Party of Louisiana v. FEC, No. 15-cv-01241 (D.D.C.). There, Plaintiffs, a State party and two local parties, argue that the Bipartisan Campaign Reform Act (BCRA, also known as “McCain-Feingold”) establishes expenditure limits on “soft money” contributions, which the Supreme Court has held unlawful. However, the so-called spending limits at issue consist of restrictions on the amounts that may be contributed by individuals and entities to party committees and the sources of such contributions that are permissible; the BCRA imposes no limits on the amounts party committee committees can spend on “independent” federal election activities from funds raised within contribution amount and source limits.

The other case pending before a three-judge federal district court in D.C. is Independence Institute v. FEC, No. 1:14-cv-01500 (D.D.C.), which concerns expenditures by a non-profit advocacy organization for what that group calls “issue ads.” However, the proposed ads would be aired in a manner that the BCRA treats as “electioneering communications.” The Independence Institute, a group located in Colorado, planned to air radio ads favoring certain federal legislation and urging voters to contact their Senators—Senators who are

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identified by name, at a time when one of Colorado’s Senators was running for re-election. Generally, expenditures for issue ads do not require the advertiser to reveal the identity of contributors of the funds used to air the ads; however, ads mentioning the names of Congressional candidates during an election in which they are running do require such disclosure. The Independence Institute claims First Amendment protection from disclosure of its contributors, and it asked the district court to convene a three-judge district court to hear its claims.

Another case challenging contribution limits long accepted as a feature of the U.S. campaign finance system is scheduled for argument before the en banc D.C. Circuit at the end of October. See Holmes v. FEC, 823 F.3d 69 (D.C. Cir. 2016), reh’g en banc granted, No. 16-5194. The district court

dismissed the case, ruling that Congress was clearly within its power to set separate contribution limits for the primary and general election stages of federal elections—limits that apply even if a contributor donates nothing at one or another of the two election stages—rather than a cumulative limit of $5,200 for both stages combined. The district court declined to convene a three-judge court to consider the claims and refused to certify Plaintiffs’ constitutional claims to the en banc D.C. Circuit on the grounds that such claims clashed with “settled law.” On appeal, a unanimous 2-0 D.C. Circuit panel (Supreme Court nominee and Chief Judge Merrick Garland participated in oral argument but not the opinion) reversed the district court’s ruling and certified the First Amendment question to the en banc court.

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CONCLUSION

Supreme Court decisions like these will affect a growing percentage of the American population, due to the growth of the number of individuals over age 50. Participation in these cases is an integral part of AARP Foundation Litigation’s advocacy, and we will continue to advocate on behalf of older Americans in the Supreme Court and courts throughout the country.

ABOUT AARP FOUNDATION

AARP Foundation works to ensure that

low-income vulnerable older adults have

nutritious food, affordable housing, a steady

income, and strong and sustaining social

bonds. We collaborate with individuals and

organizations who share our commitment to

innovation and our passion for problem-

solving. Supported by vigorous legal

advocacy, we create and advance effective

solutions that help struggling older adults

transform their lives. AARP Foundation is

the charitable affiliate of AARP.

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