ANALYSIS OF OCTOBER 12, 2017 SUPREME COURT OPINIONS
(Posted October 12, 2017) After a two-week opinion drought, the Supreme Court of Virginia hands down two published decisions this morning.
A lawyer up in the State of Northern Virginia is kicking himself this morning after reading Justice McCullough’s opinion for the court in Graham v. Community Management Corp.
Heather Graham served as CEO for Community Management, and had an employment contract. That contract contained a fee-shifting provision: In any litigation between the two over the contract, the loser had to pay the winner’s attorneys.
Graham left the company, and the company sued her, claiming that she had breached a confidentiality agreement. That suit went all the way to a jury trial; the jury found in favor of Graham.
With a favorable judgment in her pocket, Graham filed this lawsuit, seeking an award of attorneys’ fees under the fee-shifting clause. The trial court dismissed her claim, finding that she needed to raise it in the original litigation. The justices agreed to take a look at the case.
The Supreme Court unanimously affirms today, finding that Rule 3:25 required Graham to plead her fee claim in the first lawsuit. The court rejects her argument that her claim didn’t accrue until she got the favorable judgment. When you think about it, this ruling makes perfect sense: Plaintiffs have to set out their fee claims in advance, even though they aren’t entitled to an award of fees until they win, so the same rule should apply to defendants.
The lesson here is simple: If you think you have a fee claim, raise it in your opening or responsive pleading. If you leave it out, you can still get leave to amend to add it; Rule 3:25(C) states that expressly. But if you don’t make the claim, and list the basis for it (contract, statute, fraud), then the same subsection provides that your claim is waived.
When a penal statute specifies a mandatory minimum sentence, but no maximum, what’s the maximum? That’s the issue in Graves v. Commonwealth.
To be fair, this situation doesn’t occur often. In fact, according to the opinion released today, there’s only one instance of it in the entire Code: §18.2-53.1, which sets a mandatory minimum sentence for use of a firearm in the commission of a felony. That mandatory minimum – which the sentencing judge may not suspend – is three years for a first offense and five years for second and subsequent offenses.
Graves pleaded guilty to various crimes, including a first-offense firearm count. The trial court assigned a five-year prison term for that count, and suspended two years. Graves later moved to vacate the sentence, claiming that the trial court wasn’t authorized to assign a sentence greater than three years. The circuit court wouldn’t budge, but today a divided Supreme Court reverses.
This appeal is rare in one respect: The Commonwealth, in the person of the Attorney General, agreed that in this situation, the mandatory minimum is also the maximum. In doing so, it evidently relied on a 2-1 panel decision from the Court of Appeals in 2012, holding that the minimum is also the maximum.
Justice McCullough, writing for four other justices, turns to legislative history to conclude that in this unique situation, the only permissible sentence is three years. He notes that the previous sentencing structure called for a unitary sentence, and this statute was amended as part of a set of corrective changes designed to make mandatory-minimum language uniform throughout the Code. He also observes that if the legislature had really intended to change the maximum penalty for use of a firearm from one year (the penalty back then, before the legislature made it three years) to life in prison, there would have been a budgetary analysis and at least some legislative discussion of such a major change.
Justice Kelsey, joined by Justice McClanahan, dissents. He feels that there’s nothing at all anomalous about a statute that fixes a sentence with a minimum but no maximum. In that situation, it’s up to the discretion of the court to fix an upper limit, which can reach all the way to life in prison. (A quick query: Why not death? But I digress.) That’s the way it works in federal courts and elsewhere in America. The dissent goes on to chide the majority for utilizing legislative history to effectively amend the statute.
That brings us to the remedy. Graves sought remand for a new sentencing hearing, but the majority finds that unnecessary. Here, there’s only one permissible sentence, and that’s three years. The court thus enters final judgment accordingly. Careful readers will note that while Graves wins this appeal, it really does almost nothing to him other than remove a two-year suspended sentence. He still has the same number of years to serve for his crimes.
This ruling is only the latest in a string of rulings that will cause grammar geeks to cringe. The court has often interpreted statutes so that may means shall (and vice versa), and I’m aware of at least one decision in which the court unanimously held that above means above or below. Here, the court finds that the word minimum also means maximum.
One last point: Justice Kelsey must have found it easy to pen this dissent. In that 2-1 decision in the CAV five years ago, guess who the dissenting judge was?
NEW 4TH CIRCUIT RULING EXPLORES FORFEITURES
(Posted September 25, 2017) Last year, the Supreme Court of the United States ruled that federal criminal forfeiture laws don’t authorize the government to seize untainted assets from a defendant before trial. Luis v. US, 136 S.Ct. 1083 (2016). That’s because the defendant’s right to the assistance of counsel outweighs the government’s interest in seizing that pot of money. Today, in US v. Marshall, the Fourth Circuit takes up the question whether the same rule applies after a conviction, when the defendant wants to use untainted assets to appeal.
Since this appeal implicates that vital three-word phrase, appellate attorneys’ fees, I will assume that I have your attention. Here’s the setup: The government can seize any assets that it can trace to criminal activity. If it can’t find those assets, it can move the trial court to allow it to seize “substitute assets,” including those that aren’t related to any crimes.
The government accused Marshall of what appear to be some high-level drug-distribution and money-laundering crimes, to the tune of $108 million. That money wasn’t lying around under his mattress when Marshall was arrested, so the government filed papers indicating that it would seek seizure of $59,000 out of a bank account.
As noted above, that substitution had to wait, based on last year’s ruling out of First Street. After conviction, the government followed through with the seizure, but Marshall indicated that he wanted to use that money to hire an appellate lawyer. After obtaining a stay below, Marshall filed a motion in the Fourth Circuit seeking release of the funds for that purpose.
A panel of the court today unanimously denies the motion, finding that Luis expressly has no application after conviction. Unlike a defendant’s constitutional right to be tried by a jury of his peers, there is no constitutional right to appeal. (Maybe we ought to work on getting that oversight fixed. More work for appellate lawyers.) In the absence of a constitutional right, the government’s interest in the property outweighs Marshall’s.
Technically, that’s because Marshall’s interest in it is zero. By law, tainted funds become property of the government as soon as the crime is committed. Untainted funds become government property once the trial court enters a substitution order, and once that happened here, Marshall didn’t own the money anymore. The panel quotes a SCOTUS opinion’s memorable language on this point: “It would be illogical to hold that a defendant is entitled to use assets that he no longer owns to hire counsel.”
Note that this isn’t the criminal appeal of the underlying conviction, so Marshall can still try to obtain his freedom. He will, however, be represented by a court-appointed lawyer in that appeal, instead of the privately retained lawyer he wanted.
UPDATE ON CURRENT APPELLATE DEVELOPMENTS
(Posted September 19, 2017) Here are a few tidbits from the appellate world that have caught my eye lately.
New Solicitors General
The Senate today confirmed Noel Francisco as the 47th Solicitor General of the United States. The vote was 50-47, and while I haven’t seen an official listing, I strongly suspect that it was a straight party-line vote, or something close to that. Francisco has been serving as the Acting Solicitor General for eight months, since being appointed Principal Deputy three days after the President took office.
The SG is the highest-ranking practicing lawyer in the federal government. His boss, the Attorney General, is an administrator who doesn’t actually practice law, but the SG actually walks into the well of the Supreme Court and intones, “May it please the Court …” The position is so influential and so respected that the SG is often described informally as “the tenth justice.” This reflects the fact that when the Supreme Court wants the government’s views on litigation in which the United States is not a party, it often issues a call for the views of the solicitor general (abbreviated CVSG), and the court respects the resulting brief. Litigants often clamor to get amicus support from the SG.
Being eagle-eyed, you will have noted my use of the plural in the header for this section. The Solicitor General of Virginia, Stuart Raphael, stepped down last month to return to private practice after crafting a remarkable body of appellate advocacy on behalf of the Commonwealth. His deputy, Trevor Cox, is the Acting Solicitor General, but in my mind, the adjective is unnecessary; he’s our Solicitor General for now. In case you’re wondering, we are indeed in very good hands.
Once upon a time, before I was able to create an exclusively appellate practice, I daydreamed about being the solicitor general. Since then, I’ve come to realize that Messrs. Francisco and Cox don’t live in a perfect world, no matter how much you enjoy handling appeals. The Solicitor sometimes has to take positions and defend causes that he finds morally repugnant or analytically indefensible, because that’s the government’s position. (Stuart Raphael has assured me that it doesn’t happen very often, and I believe him.) In those cases, you suck it up and do your job. But my position is much happier: I can just say no.
As a parting gift, I’ll leave you with this bit of Solicitor General trivia. Only one person has ever served as both Solicitor General of the United States and as President: William Howard Taft was the nation’s chief advocate from 1890-92 under President Benjamin Harrison. He reached the Oval Office in 1909, and as most of you already know, was appointed Chief Justice of the United States in 1921.
A bountiful crop of writs
The Supreme Court of Virginia convened writ panels in late August, and a few days after that, it started raining writs. From August 30 to September 12, the clerk issued 15 of them.
There’s always an uptick in writs right after panels convene, for obvious reasons. This number does give me pause, though, in one small respect. I’ve always heard that the court doesn’t segregate the grants from the refusals and issue them separately. Put another way, there’s no relation between the amount of time that elapses from argument to order, on the one hand, and success or failure on the other. But if that were true, then you’d expect to see a steady stream of writs over a period of several weeks, not a clump of them all at once like this.
One possible explanation for this is that Clerk of Court Trish Harrington’s staff has been especially diligent with this batch, and all of the orders – good and bad – are getting processed quickly.
The justices began hearing arguments this morning in the Supreme Court’s September session. They heard six sets of arguments today. They’ll hear six more tomorrow, five on Thursday, and two on Friday.
Once, not long ago, the court began its sessions on Mondays and went all the way through Fridays. Of course, back then they were hearing 30 or more arguments in a week, so the extra day made sense.
The shift to a Tuesday start is more recent; it came just within the last few years. My best guess is that this allows the justices who don’t live in the Richmond area to use Monday for travel, instead of devoting Sunday to their official duties. (Now that Justice Kinser has retired, the gross miles traveled are way down anyway.) The longest trip by far for any member of the court is Justice McClanahan, who travels from her home in the Abingdon area, probably on the order of five hours’ drive.
One last point: You’ve probably wondered why the court has a short concluding day – just two Friday arguments – instead of adding those to an earlier day and wrapping up sooner. On this, I don’t know the answer; I only have that virtually useless tool, idle speculation, to draw upon. One possible reason is that the court has more to do during session week than just listen to you arguing against the Bad Guys. They have administrative duties, too, and the extra time allows them to spend part of Friday wrapping those up as well. And maybe – just maybe – some of the decision conferences get heated and require a bit more deliberations. I’ll admit that I’m rooting for this one.
PREPARING FOR ORAL ARGUMENT THE VIRGINIA WAY
(Posted September 15, 2017) If you’ve seen this week’s edition of Virginia Lawyers Weekly, you’ve no doubt noticed the article entitled, “10 Steps for Preparing for an Appellate Argument.” That’s because it’s on page 1, above the fold, in the paper’s prime real estate. You can’t miss it.
But for the most part, you wouldn’t be harmed by missing it. Some of the basic advice is well worth heeding, but some is less useful and at least two items are utterly useless here in Virginia.
The author of the article is a Massachusetts lawyer. It’s possible that this is the way they do it up in the Bay State, but you can do better here in Virginia.
What the article gets right
I’ll give the author this much: She does include the #1 must-do item in preparing for an appellate argument, although she buries it as her entry #8, “Anticipate the hardest questions.” When I prepare for an argument, I spend one unit of time preparing a speech and about four units anticipating the toughest, most difficult questions I might get. I then prepare concise answers to each, including cites to pages in the record or caselaw, and I put those on a sheet in my argument notebook. When I get one of those questions at the lectern, I can turn to that page, refresh my memory if necessary, and deliver a polished answer instead of either incoherent ramblings or stunned silence.
Speaking of a notebook, the author does refer to that obliquely, late in segment #5, which is titled, “Read the key cases and have them at your fingertips.” I always use a three-ring binder for arguments, and one of my most important pre-argument tasks is selecting what will go into it. I use ruthless triage to ensure that I don’t bring too much with me; that’s cumbersome and a form of defensive lawyering. My estimable legal assistant then prepares tabs for easy reference and inserts everything I’ve chosen into a binder, so in court I can turn instantly to any document I want. A typical binder will have tabs something like this:
Smith v. Jones
Brown v. Day
Some of my technophile pals will use a laptop or tablet at the lectern, and that’s fine; I won’t argue with them. (The screen on my binder has never frozen; nor has it ever run low on battery life. But I digress.) If you’re one of the technophiles, that’s good; just know that the VLW article includes no information about how to organize your e-notes.
What the article gets sort-of right
There are some good tips that don’t break any new ground or provide any special insight into the appellate argument process, but they’re a decent reminder of basics. For example, entry #4 is “Update your research.” For you, my loyal readers, that’s usually less of a concern because you always stay up-to-date on new appellate decisions the easy way, by reading this website. But no lawyer wants to arrive at the lectern and be asked about an unknown decision that came down a month earlier.
Item #7 is “Prepare a list of ‘must-make points.’” The author of the article begins to justify this sensible advice by writing, “The reality is that, in most cases, you will spend most of your allotted time answering questions from the judges.” In my experience, that’s just not true. You should expect questions, of course; and experienced appellate lawyers are silently begging to be interrupted from the moment they arrive at the lectern. But in most appellate arguments I spend far more time giving a speech than in answering questions. (There are, of course, exceptions, arguments to a particularly hot bench where the questions fly around like swallows. But that’s definitely not “most cases.”)
It is a good idea, of course, to identify your key points; that’s basic argument preparation. But the real skill of an appellate advocate – one the author doesn’t mention – is responding to a question and weaving that answer into the flow of the argument, so that it comes across as seamless. A journeyman appellate advocate gets all the points out; a master creates an oral tapestry.
The article devotes a single sentence, buried at the bottom of point #8, to a topic that’s dear to many appellate lawyers: moot court. About 85% of appellate lawyers use moot courts as part of their preparation. That 85% is probably convinced that not mooting an appeal is malpractice. Guess what? I’m part of the other 15%. I never participate in moot courts, because of the way I was trained as a speaker. Unlike the 85%, I don’t insist that others have to do it my way; in fact, I believe that for most advocates, it’s a good idea to moot it. In any event, whether you like mooting or not, a serious article on preparing for appellate argument should include more than a drive-by mention of this tool.
The article concludes with a point that’s purloined directly from John W. Davis’s now-legendary 1940 address to the New York City bar association: “Put yourself in the judges’ shoes.” Davis phrased it this way: “Change places (in your imagination of course) with the Court.” This is a fundamental that belongs in Public Speaking 101; any speaker should consider the listener’s perspective, and craft something accordingly.
What the article gets (ahem) less than right
If you’re appearing in an appellate court here in Virginia – either the Supreme Court or Court of Appeals of Virginia or the Fourth Circuit – then points #2 and 3 will be useless to you: “2. Research the panel. 3. Read your judges’ other opinions.” Elsewhere in the Nation’s appellate landscape, courts announce in advance which jurists will be assigned to a specific case, so if you really want to hone in on a particular judge, you might be able to do that.
But none of our three courts identify panel members in advance. Whether it’s a writ panel in the SCV or a three-judge panel in the CAV or the Fourth, you find out who’s on your panel when you walk into the courthouse and check in, just before your argument. That means that if you really want to bone up in advance on the jurisprudential tendencies of each potential member of your panel, you have to research seven members on the Supreme Court (leaving aside for now the senior justices), eleven in the CAV, and 15 in the Fourth. Good luck with that.
The author of the article fails to include an important caveat, in case you realize that a member of your panel wrote a seminal decision that helps you: Don’t mention that fact in your argument. That is, do not say from the lectern, “And Justice Jones, I know you’re well aware of this doctrine, because you wrote the Johnson opinion.” I cringe even to type this, because I know that approach doesn’t go over well. Just cite the case and trust Justice Jones to recall it.
Instead of trying to divine who’ll be on your panel, it’s better by far to familiarize yourself with the relevant caselaw on your specific appellate issues, paying particular attention to the more recent ones. If you’re relying on an obscure decision from the Nineteenth Century, you’ll have to do more work, and waste more time at the lectern, than if you’re citing something from last year.
In my mind, the article’s most egregious sin of omission is that it tells the reader nothing about how to organize the argument that he’s preparing. Isn’t that what “preparation” is supposed to be? In this regard, oral argument differs from briefwriting. If you have multiple issues, modern appellate-advocacy theory is to put your most interesting issue first in your brief. The task of a brief, from the standpoint of persuasion, is to grab the reader’s attention quickly and get that reader leaning in your direction, ideally from page 1 on.
In contrast, with oral argument it’s better to focus first on the most vital issue in the case. But you can usually do both at once. In some instances, we can begin the argument forcefully with something like this (after we introduce ourselves, of course; an oral argument essential that the article again fails to mention):
While there are a number of sub-issues in the briefs, in truth this case will turn on how you rule on the admissibility of Exhibit 2. If you rule that it was inadmissible, then I’m going to lose this appeal. But I have no fear on that point, because the trial court got this right. Here’s why …
A lawyer who begins an argument this way has metaphorically grabbed the court by the lapels. She has seized each jurist’s full attention after only fifteen seconds of argument, particularly with the startling admission, delivered confidently, “If you do this, then I’m going to lose.” She’s avoided a long windup in favor of going straight to the narrow, decisive issue.
Trust me on this: They love that. Flowery oratory is part of the appellate tradition, but guess what? Daniel Webster is dead! So are the days of long orations; nowadays you have to get right to the point. (Daniel Webster couldn’t clear his throat in the 15 minutes that advocates get in merits appeals these days.) You may as well get to that key point forcefully.
The article also omits one vital element of preparation: How much argument should you prepare? That is, if you were to get no questions, how much of your allotted time will you take? If you answered, “All of it, of course,” you’re making a mistake. You probably will get some questions, and if you get several minutes’ worth, that time bumps aside the points you had planned to end with. A good rule of thumb is to prepare argument for somewhere around 70-75% of the allotted time – so, for a 15-minute argument, between ten and eleven minutes – and allow yourself a degree of comfort. (If you reach the end and you still have time left, then for God’s sake, take John W. Davis’s closing advice: “Sit down.” Thou shalt not wing it.)
As I noted, the likelihood is that you’ll get questions. If you don’t, that’s often a bad sign, especially at the petition stage in state court. No experienced appellate advocate wants to deliver what I call the Easter Island speech to a solemn, mute audience. We want to know what’s on the jurists’ minds so we can address those issues, preferably with our carefully prepared answers. In case you’re wondering, Davis agreed: “Rejoice when the Court asks questions.”
* * *
I have perhaps been unfair to the author of the VLW article by pointing out that she’s from Massachusetts and by titling this essay the way I did. I’m confident that she’s quite capable, and good appellate advocacy really isn’t much different from state to state. My point here is that neither that article nor this essay will make you an expert on appellate advocacy. I’ve seen plenty of arguments given by good lawyers who nevertheless had no more business stepping up to an appellate lectern than I would have stepping into the octagon.
If you want to cultivate an appellate career, great; there’s always more room in the appellate bar, which is a wonderfully collegial group. Just get some real training and don’t rely on an article in a journal to get you up to speed.
ANALYSIS OF SEPTEMBER 14, 2017 SUPREME COURT OPINIONS
(Posted September 14, 2017) The Supreme Court today decides three appeals by published opinion and one by published order. In doing so, it clears from its figurative desk the hoariest appeal on the docket.
The three primary types of easement are express (usually set out in a deed or will), by prescription (think adverse possession), and by necessity. The third type is the backdrop for Palmer v. R. A. Yancey Lumber Corp., which comes to us from Albemarle County.
The two parcels at issue here came from a common grantor two centuries ago. When one Richard Richardson died in 1828, he left portions of a single tract to two heirs. The larger one, now over 300 acres, was landlocked by this separation, and under Virginia law, an easement automatically arose over the smaller parcel, now 44 acres, to a public road.
Isn’t that a taking, you might wonder? After all, the recipient of the smaller tract never agreed to allow its use by the owner of the larger one, and the late Mr. Richardson didn’t expressly create such an easement in his will.
The answer is that public policy frowns on landlocked parcels, because they thwart the development, use, and enjoyment of real property. The law accordingly creates an automatic easement by necessity, irrespective of the “subdivider’s” intention.
I suppose the owner of the large parcel could fly a helicopter in, but that isn’t realistic. It’s especially unrealistic when you consider the primary use of the large parcel: as a lumber “farm.” Its owner grew trees there and wanted to send equipment in to harvest the lumber, and semis in to haul the logs away. The owner of the smaller parcel didn’t mind the activity when it last occurred 30 years ago, using smaller hauling trucks; but now the lumber company wanted to widen and improve the access road to allow big trucks. Nowadays, the most efficient way to haul logs is by tractor-trailer, and the existing road wasn’t suitable for those vehicles.
The lumber company filed suit seeking a declaratory judgment that it had the right to widen and improve the road. Its owner and two experts testified about the current need to use semis and the inadequacy of the road for that purpose. The small-parcel landowner didn’t use experts; she simply said that she didn’t consent to a larger easement and nobody was paying her to take away her land. She argued that an easement, “once located cannot be widened.”
The trial court disagreed and allowed the lumber company to make certain improvements to accommodate the semi traffic. The company didn’t get all it had asked for, but it was enough of a victory to convince the defendant to appeal.
The justices affirm today. They observe that there’s no caselaw to support the defendant’s “once located” contention, noting that on brief, she called it “Palmer’s rule.” Actually, there’s plenty of precedent for judicial authority to modify the dimensions of easements, based on changing circumstances over the years. After all, the court notes, if an easement started out as a path for horses in, say, 1828, it would be largely useless in the 21st Century. That would defeat the public policy I described above.
Justice Mims offers an intriguing dissent. He’s okay with some of the majority’s holding, allowing a few minor modifications to the road, but he parts company with the rest of the court over the use of semis. he notes that the lumber company’s testimony only established that tractor-trailers are the most efficient way to remove the logs; not that they were the only possible way. The company could, for example, cut the logs shorter and continue to use the smaller trucks that it had used in the 1980s. That wouldn’t maximize its profit, but the easement-by-necessity doctrine doesn’t go that far. Justice Mims believes that in order to justify the relief granted by the trial court, the company would have to show that the smaller-log approach was economically unviable, not merely less profitable.
I referred above to “the hoariest appeal the docket,” and this is it. The parties argued this appeal on March 1, and have been sitting on their hands for over six months, waiting for a ruling. That makes this the longest period between argument and decision I can recall in my nearly 13 years of publishing this analysis; the previous record holder was Muhammad v. Commonwealth, the DC sniper appeal that produced 137 pages’ worth of opinion back in April 2005. The court took five months to decide that one.
Separation of powers
When I set out just now to specify the heading under which I’d analyze Old Dominion Committee for Fair Utility Rates v. SCC, I hesitated. It involves the power of the SCC to regulate utility rates, so I considered “Administrative law” and “Utilities” before discarding those as too general, given the issues in the appeal. I briefly considered “Constitutional law,” but that might lead you, my dear readers, astray. In the end, this case is about the ability of the General Assembly to restrict the Commission’s ability to use a power granted unto the SCC by the Constitution of Virginia.
The setup will be familiar to anyone who followed the 2015 session of the General Assembly. That year, the legislature agreed to suspend for 4-5 years the SCC’s usual biennial reviews of rates charged by Dominion Energy (I’m using its current name) and Appalachian Power Company. Over protests by the Attorney General and the SCC itself, the legislature agreed to do this in exchange for certain commitments by the utility companies.
Old Dominion Committee is “an association of large industrial customers of APCO.” It petitioned the SCC for a declaratory judgment that the statute suspending the reviews was unconstitutional, since it deprived the SCC of constitutionally conferred powers. Soon, an association of local governments joined, as did a private citizen. Each petitioner asserted that the constitution gave the SCC the power to regulate utility rates, and that the General Assembly could only specify the “criteria and requirements” for exercise of that regulatory power. The constitution never gave the legislature the right to prevent the SCC from regulating rates at all. According to the petitioners, the statute did just that: No regulation for the next four years (five, in the case of Dominion).
A divided SCC, acting in its judicial capacity, ruled that the statute was constitutional. It began with the strong presumption that any statute is constitutional, and held that the statute constituted nothing more than the “criteria and other requirements” that the legislature still controls. The commission rejected the contention that the SCC has “a plenary power to legislate [note: rate-setting is a legislative act] that is both exclusive of, and superior to, the General Assembly.”
The petitioners exercised their right to a rare appellate treat: an of-right appeal to the Supreme Court. There is no petition stage in appeals from SCC decisions; the justices must accept the case — assuming, of course, that there are no jurisdictional defects in the pleadings. Today, the Supreme Court rules 6-1 that the SCC majority got it right: The statute is constitutional.
Justice McClanahan writes for the majority. She starts with the language of the constitution that grants rate-setting authority to the SCC. Importantly, that section begins, “Subject to such criteria and other requirements as may be prescribed by law,” the commission has the power to set rates. While the SCC can set rates, it’s always subject to control by the General Assembly. As the court had held in a 1974 case involving VEPCO, the SCC’s powers are subordinate to those of the General Assembly.
It’s worthwhile to pause momentarily here for a minor digression, one that I’ve recognized for years, but that is spelled out well in the majority opinion. The Virginia legislature is unlike its federal cousin in that the federal Constitution enumerates Congress’s powers, while Virginia’s General Assembly has unlimited powers — except where the Constitution limits them. The implicit underpinning of this section of today’s opinion is the concept that the General Assembly can do whatever it wants, unless that’s something that the constitution clearly forbids. Close calls go to the legislature.
In that context, the majority today reaffirms that 1974 decision, holding that the General Assembly had enough power over the functioning of the SCC that it could do what it did in 2015.
Justice Mims again dissents, in one of the most fascinating pieces of judicial writing I’ve seen in quite a while. (Justice McCullough’s recent discussion of substantive due process also gets a nod in this category, as do several of Justice Kelsey’s forays into the arcana of legal history.) His thesis is that the 1974 VEPCO case was wrongly decided. While he respects stare decisis as well as the next Robe, he notes that that doctrine has to yield when it runs up against the constitution.
I’ll allow you to read the dissent to get Justice Mims’s sense of why the 1974 decision was wrong — it has to do with an interpretation that either would or would not lead to a redundancy — and skip right to the fire-and-brimstone part. Here is the heading to part C of his dissent. He wrote it in all caps, and I won’t change that.
IF THE GENERAL ASSEMBLY CAN SUSPEND THE
COMMISSION’S RATE-MAKING POWERS FOR A PERIOD OF YEARS,
IT CAN SUSPEND THEM FOREVER
Well, now. That, my brethren and sistren, is how you make a point forcefully.
The dissent points out that the people of Virginia, not the General Assembly, created the Commission and the people, not the General Assembly, gave the commission the power to regulate rates. Once upon a time, before the 1902 Constitution of Virginia, the legislature did have this power, but that constitution took that power away and gave it to the SCC. The 1971 constitution repeated that distribution. Justice Mims regards the majority’s opinion as essentially rescinding the people’s allocation of governmental power between the legislature and the commission. And that makes this a case about separation of powers.
I haven’t listened to the audio recording of the oral argument of this appeal, but I infer that Justice Mims put this very conundrum to the Commonwealth’s lawyer: “Can the General Assembly suspend the SCCs rate-making powers forever?” That lawyer replied that if the legislature did that, the people would react by exercising what I’ll call the democratic veto, also known as “throw the bums out” on election day. Justice Mims, the only member of the court who’s a former legislator, has a skeptical reply. He notes that the Commonwealth and today’s majority
seem to envision that after some period of sufficient duration, a majority of voters in a majority of the districts will revolt, uniting under the banner that the Commission’s authority must be restored, and secure a bicameral legislative majority to compel that outcome. Despite having been previously elected to legislative office, I cannot begin to speculate how many years would have to pass before the esoteric issue of the Commission’s constitutional authority to set rates rose to predominate over other public policy issues.
He’s right about this last point, of course; probably 90%+ of Virginia voters have never heard of the State Corporation Commission, have no idea what its function is, and won’t get worked up over a perceived power grab by the legislature in a matter like this.
In reality, the only body that provides a meaningful check on legislative power — the only body that can really halt a governmental power grab — is the Supreme Court. Today, the court declines to do so. Perhaps this ruling will inspire the villagers to gather with pitchforks and torches (if only metaphorically, on election day), but I doubt it. Pocketbook issues and disputes that fit into a 30-second commercial will drown this issue out when voters go to the polls.
The court decides one appeal by published order today: Erie Ins. Co. v. McKinley Chiropractic Center, PC. It’s a suit by some doctors who treated a patient after an auto collision. The doctors got the patient to sign an agreement assigning to the doctors “all insurance and/or litigation proceeds to which Patient is now or may hereafter become entitled” as a result of her bodily injury claim. The doctors faxed a copy of the assignment to Erie, which insured the driver of the car that hit the patient, and then proceeded to treat the patient.
A funny thing happened at some point thereafter: The patient settled with Erie, the insurer sent her a check for the full amount of the settlement — essentially ignoring the assignment — and the patient signed a full release of all claims. When the doctors found out about that, they sued Erie for the amount of its unpaid bill. The doctors won in GDC and in circuit, but today the justices reverse and enter final judgment for the insurer.
One of the fundamentals of insurance law is that an insurer has no duty to pay a claim until it’s reduced to judgment. That never happened here; the patient settled without getting a judgment, and maybe even without filing suit. By statute, an injured party can’t sue the tortfeasor’s insurance company. That means that the doctors don’t have a right to sue as an assignee.
My sense is that this ruling is going to generate substantial wailing and gnashing of teeth among the healthcare industry. How do healthcare providers enforce these assignments? They obviously have a right to sue their patient, but the point of the assignment was to ensure a liquid, no-fuss source of payment. (One never knows what the patient has done with the money in the intervening years.) I suppose that providers could ask insurers for a contractual commitment to honor their patients’ assignments, but I doubt any such commitment will be forthcoming.
A LOOK INSIDE THE SCV’S 2016 STATISTICS
(Posted March 23, 2017) The Supreme Court has now gone two Thursdays without releasing any published opinions, so it’s time for a different angle. The court’s 2016 statistical report is out. Since I know that most of you hate numbers – that’s why you got into a profession that emphasizes words – I’ve done the digging and sifting for you. That being said, if you really-most-sincerely hate numbers, I might not be able to soften this enough for you. I hope you’ll bear with me, for the lessons are worth learning.
Here are a few items that caught my eye.
How’s appellate business?
Business is down (mostly). SCV Clerk Trish Harrington opened just 1,852 new files last year. That’s the smallest number since 1990, and it’s off 7% from the 2015 total of 1,996. But the drop-off is one-sided: by coincidence, the court received the same number of civil petitions in each year: 569.
The big change is in criminal petitions, which fell from 974 in 2015 to just 774 last year, a reduction of just over 20%. I could speculate whether this means that inmates are more accepting of their fates (doubtful) or they’re getting demoralized by the puny reversal rate. The justices ruled in favor of the prosecution in 25 of the 28 criminal appeals that it decided on the merits last year (including published opinions and unpublished orders). The overwhelming majority of criminal appellants never even got a writ. The accused’s overall success rate before the justices last year was on the order of one-third of one percent; the other 99.7% lost.
I do have a couple of encouraging upticks to report: the justices are granting more writs and are publishing more opinions. Last year’s 123 writs – 93 civil, 30 criminal – represented a healthy increase from the four-year average of about 106 writs a year from 2012-15. And the court handed down 78 published opinions in 2016. That’s up slightly over the past three years, though it still lags far behind the 119 opinions we got as recently as 2012. In the halcyon days of the late 1990s, we regularly got 150+ new opinions every year, but those times are gone.
What about the procedural-default rate?
I detest reporting on this, because it’s an embarrassment. In 2016, 7.8% of criminal petitions and 23.6% of civil petitions were dismissed for procedural defaults; they never even got to the writ panel. I suspect that many of the civil appeals were filed by pro se litigants, but I’m confident that an alarming number came from law offices.
Why is the criminal-petition rate so much lower? Possibly because the lawyers who file those petitions have been down this road before and they know the appellate landmarks – and landmines – better than their civil counterparts. It’s also conceivable that the justices may be a bit more lenient with a borderline defect if it occurs in a criminal appeal, but I have no way to evaluate that hypothesis.
I could start offering advice here on avoiding procedural default; but that’s a much longer essay, and it would probably get me on a rant about dabbling in appeals, so I’ll move on now.
How’s the “pace of play”?
(Pardon a golfer’s metaphor here.) My regular readers recall well that in September 2015, the Supreme Court shifted from its nice, predictable, six-days-yearly release dates for opinions, to a rolling-release practice in which opinions might hit the wire any Thursday. I heard several musings back then over how this would affect the time it takes the court to get opinions out. Faster or slower?
Since that sounded like a reasonable question, and since lawyers frequently ask me when to expect an opinion after argument, I decided to keep records on the release dates, so I could determine whether the pace of the decisions would now be faster or slower. Here’s a quick refresher on the previous setup:
The old practice gave us opinions on a seven-week turnaround, though on occasion the court would hold an opinion to the next session – a delay of seven more weeks – if the opinion wasn’t ready for release. In my estimation, that happened in about one case in twenty. Also, unpubs might arrive at any time; the court didn’t hold them until opinion day. Finally, the court’s schedule built in two extra-long breaks: January’s opinion day was about ten or eleven weeks after October/November’s, and the long summer recess meant that lawyers who argued in June would have to wait about 14 weeks before getting their rulings.
I decided to start with the appeals argued in the February 2016 session, because those argued that January were skewed by the Roush Effect. (See the opening paragraphs of my February 12, 2016 SCV analysis for the full story.) After that, I figured we’d see a normal pattern emerge.
The court took, on average, 11.2 weeks to release opinions from the March session, and 6.4 weeks to release unpubs. That makes it look like the smart betting is on “longer.”
For the April session, it was noticeably quicker: 7.8 weeks for opinions and 6 weeks flat for unpubs. That’s still about a week later than the previous seven-week schedule, but it’s not a huge difference.
For June, the court beat its previous pace. Remember, previously June-session arguments resulted in September-session opinions, a delay of 14 weeks. But in 2016, opinions arrived an average of 12.3 weeks after the previous session’s opinion day, with unpubs taking 11.3. Lawyers who argued in June got results sooner, on average, than they had in past years.
The court slipped a bit on appeals argued in the September session, releasing opinions after an average delay of 9.8 weeks and unpubs in 7.3. That’s noticeably slower than the previous seven-week pace.
But the justices more than made up for it in the November session, which previously had meant a delay of 10-11 weeks. The court released opinions from that session in an average of 9.6 weeks, and unpubs in 6.6.
In all, if you were looking for a significant change in the pace, you won’t find it. What you may find instead is that an opinion comes down in eight or nine weeks instead of the 14 that it would previously have taken if the court had held it over for further massaging. That is a decidedly good development.
What’s the trend in tort litigation?
The caveat here is that I cannot give you statistics from the petition stage, other than petitions filed, petitions refused, petitions granted, and procedural dismissals, as noted above. I cannot know how many plaintiffs vis-à-vis defendants filed unsuccessful petitions for appeal, because no one at Ninth and Franklin keeps that kind of record.
Not so on the merits; we have a handy compendium of those decisions, called Virginia Reports. The cases decided in 2016 are all published now – some of them still in advance sheets – and a little metaphorical elbow grease will tell us how the current set of justices is ruling in tort cases.
It’s one-sided. In 2016, the court handed down 15 opinions in appeals involving claims of bodily injury (including medical malpractice and wrongful death) and wrongful termination. In those 15 decisions, the injured party (including the terminated employee in this category) won twice, while the tort defendant (including the employer) won 13. This continues a trend that has been accelerating in the last few years. The last time the justices handed down a published opinion that affirmed a bodily-injury judgment in favor of the plaintiff, where the defendant sought a reversal, was almost 2½ years ago, in October 2014.
I hasten to add that this could be due to a skewed sample. After all, any statistician worth his pocket calculator will tell you that a sample size of 15 cases isn’t sufficient to draw firm conclusions. But I now have detailed statistics on these decisions going back to 1999, and we’ve never seen an imbalance like this before. The defense is winning these appeals by historic margins.
While we could theorize about unusual suspects – that skewed sample size, perhaps; or the possibility that trial courts, en masse, have all started making pro-plaintiff mistakes – I prefer the Occam’s razor approach: the Supreme Court has become far more conservative in the past few years, and that’s showing up in its current body of caselaw.
How’s the success rate for rehearings?
Grim, as always. In 2016, the court granted eight petitions for rehearing filed after a writ-stage refusal, and rejected the other 294, for a success rate of 2.6%. Keep in mind that the appellant may have won only a temporary reprieve; the court may ultimately affirm some of those eight.
After a decision on the merits, 23 losing litigants summoned the courage to seek rehearing last year, but the court refused each petition. RGR v. Settle is the only PFR that the court has granted after a merits decision since the beginning of 2013. The other 102 petitions filed in that time have all been in vain, a success rate of 0.97%. Of course, the success rate for those losing appellate litigants who do not choose to file a PFR is 0.00%, so you can see why they’d try.