Alright — in my quest to keep up with the numerous court battles playing out at the moment, I'm left still playing catch-up on this term's Supreme Court decisions, but we'll get there.
The court has handed down 24 decisions thus far for the 2024 term, and we've covered eight. Our next set of cases were all handed down on February 21. They're all essentially procedural rulings and a bit on the wonky side, but among them, we've got two unanimous (9-0) decisions and one with a rather interesting split (5-4, with Justice Kavanaugh and Chief Justice Roberts siding with the liberal justices).
Given their wonkiness, translating these holdings to non-legalese is a bit of a challenge, but hopefully, the overviews below will prove helpful.
February 2025 Decisions - Part 1
Date: February 21, 2025
Author: Sotomayor
Split: 9-0
Dissent: N/A
Appeal From: D.C. Circuit
The Foreign Sovereign Immunities Act of 1976 (FSIA) provides foreign states with presumptive immunity from suit in the United States. 28 U. S. C. §1604. To sue a foreign sovereign in United States courts, plaintiffs must satisfy one of the exceptions to immunity set forth in the FSIA. The FSIA’s expropriation exception permits claims when “rights in property taken in violation of international law are in issue” and either the property itself or any property “exchanged for” the expropriated property has a commercial nexus to the United States. 28 U. S. C. §1605(a)(3).
Respondents, Jewish survivors of the Hungarian Holocaust and their heirs, sued Hungary and its national railway (MÁV) in federal court, seeking damages for property allegedly seized during World War II. Respondents’ complaint alleged that Hungary and MÁV liquidated the expropriated property, commingled the proceeds with other government funds, and later used funds from those commingled accounts in connection with commercial activities in the United States. The District Court determined that this “commingling theory” satisfied §1605(a)(3)’s commercial nexus requirement. The D. C. Circuit affirmed, reasoning that requiring plaintiffs to trace the particular funds from the sale of their specific expropriated property to the United States would make the exception a “nullity” in cases involving liquidated property.
- Whether historical commingling of assets suffices to establish that proceeds of seized property have a commercial nexus with the United States under the expropriation exception to the Foreign Sovereign Immunities Act.
- Whether a plaintiff must make out a valid claim that an exception to the Foreign Sovereign Immunities Act applies at the pleading stage, rather than merely raising a plausible inference.
- Whether a sovereign defendant bears the burden of producing evidence to affirmatively disprove that the proceeds of property taken in violation of international law have a commercial nexus with the United States under the expropriation exception to the Foreign Sovereign Immunities Act.
Holding: Vacated and remanded.
Alleging commingling of funds alone cannot satisfy the commercial nexus requirement of the FSIA’s expropriation exception.
Skinny: In order to bring a claim against a foreign country in the U.S. for improperly seizing property, plaintiffs need to "plead some facts that enable the reasonable tracing of the property to the United States." It's not enough simply to allege that proceeds from the property were combined with other government funds, and funds from those accounts were later used for commercial activity in the U.S.
This is one of those tug-at-the-heartstrings situations, but as Sotomayor notes in conclusion:
As the Government correctly recognizes, “the moral imperative has been and continues to be to provide some measure of justice to the victims of the Holocaust, and to do so in their remaining lifetimes.” The Government also represents, however, that “[r]especting the limits in the FSIA aids in the United States’ efforts to persuade foreign nations to establish appropriate redress and compensation mechanisms for human-rights violations, including the horrendous human-rights violations perpetrated during the Holocaust.”
(citations omitted)
Wisconsin Bell, Inc. v. United States ex rel. Heath
Date: February 21, 2025
Author: Kagan
Split: 9-0
Dissent: N/A
Appeal From: 7th Circuit
The E-Rate (short for Education-Rate) program, established under the Telecommunications Act of 1996, subsidizes internet and other telecommunications services for schools and libraries across the United States. To finance those subsidies, Congress required that telecommunications carriers pay into a fund (now known as the Universal Service Fund) that is administered by the Universal Service Administrative Company, a private not-for-profit corporation. The Company collects and distributes the resulting pot of money to beneficiaries pursuant to regulations prescribed by the Federal Communications Commission (FCC). In addition to providing for subsidies, those regulations impose upon carriers a rule called the “lowest corresponding price” rule, which prohibits them from charging schools and libraries more than what they would charge a “similarly situated” non-residential customer. Once an appropriate charge is set, a school can obtain its subsidy by paying the carrier a discounted price and requiring the carrier to seek the remainder from the Fund, or by paying the carrier full freight and then applying for reimbursement from the Fund.
Respondent Todd Heath is an auditor of telecommunications bills who believes that petitioner Wisconsin Bell defrauded the E-Rate program out of millions of dollars. According to Heath, Wisconsin Bell consistently overcharged schools in violation of the “lowest corresponding price” rule. Heath brought suit under the False Claims Act (FCA), which enables private parties to bring civil actions on the Government’s behalf to protect federal programs and funds from fraud. The FCA imposes civil liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim” as statutorily defined. 31 U. S. C. §3729(a)(1)(A). In Heath’s view, Wisconsin Bell’s violations of the “lowest corresponding price” rule led to reimbursement requests for amounts higher than the E-Rate program should have paid. The premise of Heath’s suit is that an E-Rate reimbursement request can give rise to FCA liability because it qualifies as a “claim,” which, as relevant here, requires the Government to “provide[] or ha[ve] provided any portion of the money” requested. §3729(b)(2)(A)(ii)(I).
Wisconsin Bell moved to dismiss Heath’s suit. In its view, an E-rate reimbursement request can never qualify as a “claim” under the FCA because the money comes from private carriers and is handled by a private corporation, meaning the Government does not “provide[ ] any portion of the money” requested. The District Court and the Seventh Circuit rejected that argument. The Court of Appeals held that the Government “provided” E-Rate program funding for two independent reasons. First, it held that the Government provided all the money in the program through its regulatory role in the collection and distribution of contributions. Second and more narrowly, it found that the Government provided some “portion” of E-Rate funding by depositing into the Fund, in the relevant years, more than $100 million directly from the U. S. Treasury.
Whether reimbursement requests submitted to the E-rate program are"claims" under the False Claims Act.
Holding: Affirmed and remanded.
The E-Rate reimbursement requests at issue are “claims” under the False Claims Act because the government “provided” (at a minimum) a “portion” of the money applied for by transferring more than $100 million from the Treasury into the fund.
Skinny: This one's a bit in the weeds, but the bottom line is that the government's involvement in collecting money for the fund in question and routing it through the Treasury is sufficient to allow private individuals who believe the government is being defrauded to bring suit on the government's behalf under the False Claims Act.
Or, put another way, if government cheese is involved, expect some added oversight.
Date: February 21, 2025
Author: Kavanaugh
Split: 5-4
Dissent: Thomas, Alito, Gorsuch, Barrett
Appeal From: Alabama Supreme Court
Petitioners are unemployed workers who contend that the Alabama Department of Labor unlawfully delayed processing their state unemployment benefits claims. They sued the Alabama Secretary of Labor in state court under 42 U. S. C. §1983, raising due process and federal statutory arguments and seeking a court order requiring the Department to process their claims more quickly. The Secretary moved to dismiss on several grounds, including that the state trial court lacked jurisdiction because the claimants had not satisfied the relevant statute’s strict administrative-exhaustion requirement. See Ala. Code §25–4–95. The state trial court granted the Secretary’s motion and dismissed the complaint, leaving the claimants in a catch-22—unable to sue to obtain an order expediting the administrative process because they had not yet completed the process allegedly being delayed. The Alabama Supreme Court affirmed on failure-to-exhaust grounds, concluding that §1983 did not preempt the State’s administrative-exhaustion requirement.
Whether exhaustion of state administrative remedies is required to bring claims under 42 U.S.C.§ 1983 in state court.
Holding: Reversed and remanded.
Where a state court’s application of a state exhaustion requirement in effect immunizes state officials from §1983 claims challenging delays in the administrative process, state courts may not deny those §1983 claims on failure-to-exhaust grounds.
Skinny: A state can't immunize itself by dragging out the administrative process and then saying plaintiffs can't sue over that delay because the administrative process hasn't been completed. That's a bit convoluted, but the description in the Basic Facts pretty well sums it up: "The claimants [are] in a catch-22—unable to sue to obtain an order expediting the administrative process because they had not yet completed the process allegedly being delayed."
Justice Thomas, in dissent, contends that states have the ultimate say in whether their courts will hear federal causes of action, and plaintiffs can always bring their federal claims in federal courts.
You can check out prior installments of The Skinny on SCOTUS series here.
