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Briefs Recently Filed

Heffernan v. City of Paterson, New Jersey

In Heffernan v. City of Paterson, New Jersey the State and Local Legal Center (SLLC) Supreme Court amicus brief argues that a government employer’s perception that an employee has exercised his or her First Amendment rights cannot be the basis for a First Amendment retaliation lawsuit. 

Officer Heffernan was assigned to a detail in the Office of Chief of Police. He was reassigned after he was seen picking up a campaign sign for the current police chief’s opponent.

The First Amendment protects non-policymaking public employees who support a candidate in an election. Officer Heffernan maintains that he was in no way involved with the police chief race. The sign wasn’t for himself; it was for his bedridden mother.

Officer Heffernan’s claims he was retaliated against based on the City’s perception he was exercising his First Amendment free association rights. He points to lower court precedent holding that public employees may bring First Amendment retaliation claims if an adverse employment action is taken because they remain politically neutral or silent.

The Third Circuit concluded Heffernan could not bring a perceived free-association claim because he wasn’t retaliated against for “taking a stand of calculated neutrality.” Instead, he was demoted on a “factually incorrect basis.” The Supreme Court has held that it does not violate the Constitution to discipline an employee based on incorrect information. To bring a First Amendment claim an employee must engage in First Amendment speech protected conduct, which Officer Heffernan failed to do in this case.

The SLLC amicus brief argues the Supreme Court need not find a constitutional claim exists when an employer misperceives that an employee has engaged in political speech. Collective bargaining statutes, “just cause” protections, civil service statutes, and statutes protecting against interference or attempts to interfere with any individual’s civil rights would prevent a state or local government employer from lawfully taking an adverse employment action in such circumstances. 

The SLLC amicus brief also argues that if the Court were to hold that the First Amendment covers perceived First Amendment violations, it should clarify that the First Amendment does not protect political speech made by employees in sensitive and confidential positions, such as Heffernan.

Collin O’Connor Udell and Anne Selinger, Jackson Lewis, wrote the SLLC brief which was joined by the National Conference of State Legislatures, the National Association of Counties, the National League of Cities, the United States Conference of Mayors, the International City/County Management Association, the International Municipal Lawyers Association,  the International Public Management Association for Human Resources, and the National Public Employer Labor Relations Association.

Hughes v. PPL EnergyPlus

In a Supreme Court amicus brief the State and Local Legal Center (SLLC) argues that Maryland directing its local utilities to enter into a long-term contract providing stable revenue to the successful power plant bidder isn’t field or conflict preempted.  

In Hughes v. PPL EnergyPlus and CPV Maryland v. PPL EnergyPlus the Maryland Public Service Commission offered the successful bidder a twenty-year “contract for differences.” The power plant would sell its capacity at Federal Energy Regulatory Commission (FERC)-regulated auction price. If the action price was lower than its bid price, local utilities would make up the difference. If it was higher, the developer would rebate the utilities who would pass the cost recovery onto retail customers.

Per the Federal Power Act (FPA), FERC has the authority to regulate interstate wholesale rates. FERC claims that Maryland’s program amounts to rate-setting and is field and conflict preempted by the U.S. Constitution’s Supremacy Clause.

Field preemption applies when “Congress has legislated comprehensively to occupy an entire field of regulation, leaving no room for the States to supplement federal law.” Conflict preemption applies “where under the circumstances of a particular case, the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” 

The Fourth Circuit concluded that Maryland’s program is barred based on “field preemption” because it “effectively supplants the rate generated by the auction with an alternative rate preferred by the state.” It is conflict preempted because it disrupts FERC-controlled federal markets by setting the price the bidder receives for a substantial time period.   

The SLLC amicus brief argues that the founding principle of cooperative federalism requires a different result in this case and that the lower court misapplied preemption doctrine. The Fourth Circuit found field preemption “without identifying any affirmative statements or actions by Congress or FERC indicating an intent to occupy the field.” Regarding conflict preemption, the Fourth Circuit took an open-ended approach, which always favors preemption, to finding tension between FERC’s policies and Maryland’s plan.  

Bill Stein, Scott Christensen, Eric Parnes, and Elizabeth Solander, Hughes Hubbard & Reed wrote the SLLC amicus brief which the National Governors AssociationNational Conference of State Legislatures, and Council of State Governments joined.  

Luis v. United States 

If someone has spent or hidden their ill-gotten gain but has additional assets untainted by their crime, should the government be able to freeze the untainted assets? The State and Local Legal Center (SLLC) amicus brief in Luis v. United States argues yes. State and local governments—police departments in particular—receive criminal asset forfeitures. Any many states statutes also allow freezing of substitute assets.

Sila Luis was indicted on charges related to $45 million in Medicare fraud. Her personal assets amounted to much less than $45 million. The federal government sought to freeze the use of her assets not traceable to the fraud. She claimed that she has a constitutional right to use them to hire an attorney of her choice.

In Kaley v. United States (2015), the Supreme Court held 6-3 that defendants may not use frozen assets which are the fruits of criminal activities to pay for an attorney. Luis argued that it is “inconceivable” that she may not use “her own legitimately-earned assets to retain counsel.” The federal government responded that per her reasoning criminal defendants “could effectively deprive her victims of any opportunity for compensation simply by dissipating her ill-gotten gains.” The lower court agreed with the federal government.

The SLLC amicus brief argues that ruling in favor of Luis “will result in a massive unwarranted preemption of validly-enacted state laws and would create an artificial distinction . . . between directly forfeitable property and substitute assets . . . when directly forfeitable assets are hidden or can’t be reached. This would be particularly problematic because state and local governments, with their varied forfeiture systems, provide a laboratory of options that can be used to fight increasingly sophisticated and often international criminal enterprises.”

Mary Massaron, Plunkett Cooney, wrote the SLLC brief, which was joined by the National Conference of State Legislatures, the Council of State Governments, the National Association of Counties, the National League of Cities, the United States Conference of Mayors, the International City/County Management Association, and the International Municipal Lawyers Association.

Franchise Tax Board of California v. Hyatt

If A state is sued in B state, do the courts of B state have to extend to A state the same immunities that they would apply to B state? And…can state A even be sued in state B?   

While this may sound like a nonsensical hypothetical, these are the issues the Supreme Court has agreed to decide in Franchise Tax Board of California v. Hyatt. The State and Local Legal Center (SLLC) filed an amicus brief arguing that states must extend the same immunities that apply to them to foreign state and local governments sued in their state courts.

In 1993 the Franchise Tax Board (FTB) of California audited Gilbert Hyatt following a newspaper article reporting he made a lot of money patenting a computer chip. Hyatt’s 1991 tax return indicated he lived in California for only nine months and relocated to Nevada. FTB concluded that Hyatt moved to Nevada in 1992 and assessed him $10.5 million in taxes and interest.

Hyatt sued FTB in Nevada alleging invasion of privacy, fraud, and intentional infliction of emotional distress, among other claims. In 2003 in Franchise Tax Board of California v. Hyatt the Supreme Court held that the constitution’s Full Faith and Credit Clause does not require Nevada to offer FTB the full immunity that California law provides.

A Nevada jury ultimately awarded Hyatt nearly $400 million in damages. The Nevada Supreme Court refused to apply Nevada’s statutory cap on damages to Hyatt’s fraud claim. According to the court, Nevada has a policy interest in ensuring adequate redress for Nevada citizens that overrides providing FTB the statutory cap because California operates outside the control of Nevada.  

Hyatt has also asked the Supreme Court to overrule Nevada v. Hall (1979), holding that a state may be sued in another states’ courts without consent. If the Court overrules this case, the question of whether the immunities a state enjoys must be offered to a foreign state or local government will be moot.    

The SLLC amicus brief argues that Nevada purposely treating a California government agency worse than a similarly-situated Nevada government agency offends a core principle of the Constitution: that the states enjoy equal sovereignty. The SLLC brief also argues that the Nevada Supreme Court’s ruling creates a number of practical problems for state and local governments including encouraging plaintiffs to forum shop and exposing state and local governments to unpredictable litigation costs.

The SLLC brief does not take a position on whether Nevada v. Hall should be overruled. Interestingly, at the petition stage, 39 attorneys general signed onto West Virginia’s amicus brief asking the Court to overrule Nevada v. Hall, including Adam Paul Laxalt of Nevada.

Quin Sorenson and Spencer Driscoll, Sidley Austin, Washington D.C. wrote the SLLC amicus brief which was joined by the Council of State Governments, the National Association of Counties, the National League of Cities, the United States Conference of Mayors, the International City/County Management Association, and the International Municipal Lawyers Association

Gobeille v. Liberty Mutual Insurance Company

Vermont and at least 16 other states collect health care claims data. In Gobeille v. Liberty Mutual Insurance Company the Supreme Court will decide whether the Employee Retirement Income Security Act (ERISA) preempts Vermont’s all-payers claims database (APCD) law. The State and Local Legal Center (SLLC) filed an amicus brief arguing against ERISA preemption.

ERISA applies to most health insurance plans and requires them to report detailed financial and actuarial information to the Department of Labor (DOL). ERISA preempts state laws if they “relate to” the core functions of an ERISA plan. Vermont’s APCD law seeks the following medical claims data: services provided, charges and payments for services, and demographic information about those covered.  

The Second Circuit concluded that ERISA preempts Vermont’s law because one of the key functions of ERISA is reporting. Vermont’s law imposes “burdensome, time-consuming, and risky” reporting obligations which are multiplied by other states’ APCD laws.

One judge dissented. He opined that that the ERISA and Vermont reporting requirements are too different to warrant preemption and that Vermont’s data collection isn’t burdensome. ERISA requires data reporting focused on asset allocation to avoid the mismanagement of funds or the failure to pay employee benefits. Vermont seeks different information “to fulfill its role of providing health care to its citizens.” Vermont’s law isn’t burdensome because it seek data that health insurance companies already possess.

The SLLC amicus brief provides examples of how states, consumers, and health insurance companies are using APCD data to reduce the cost and increase the quality of health care. The brief also argues that the Second Circuit should have applied the presumption against preemption in this case because DOL doesn’t collect the same data as the states. And the brief points out that efforts towards uniformity among state APCD laws minimize the burden of reporting this already-available data.      

The National Governors Association, National Conference of State Legislatures, Council of State Governments, National Association of Health Insurance Commissioner, and Association of State and Territorial Health Officials join the SLLC amicus brief which was written by Jennifer McAdams of the National Association of Insurance Commissioners.