ANALYSIS OF OCTOBER 22, 2020 SUPREME COURT OPINIONS
(Posted October 22, 2020) Let’s divert our attention from the most important nationwide event these days – I’m referring to the World Series, of course – to peer into today’s crop of four published opinions from the Supreme Court.
Government data collection
The same dance partners return to the court today, after a two-year absence, in Neal v. Fairfax County Police Department. This is a challenge to the department’s passive use of automated license-plate recognition readers, usually mounted on police cars. The readers record every license plate that comes close enough, and stores that information in a database.
I mentioned passive use, and the distinction is worth noting here. Police can use the system actively, by checking to see if a given license plate has been reported as stolen or involved in an abduction. That’s hunting actively for a Bad Guy. Passive use merely records the information and stores it away in a metaphorical dungeon for 364 days. After that, the custodian has to purge it. This passive use is what’s in issue today.
Two years ago, The Robes sent the case back after ruling that the photos of a given plate and a given car can constitute “personal information.” The justices directed the circuit court to determine whether the license-plate-reader system met the statutory definition of an information system. The trial court held that it did, and enjoined the passive use. The delighted citizen submitted a $600,000 attorneys’-fee petition; the judge awarded only $75K.
Both parties appealed – the citizen wanted all those fees, while the department wanted to avoid being probably the only agency in America to suffer a loss on this issue – and the justices granted both petitions. Today the court reverses again, this time entering final judgment for the police department. They reach this conclusion because the challenged system only stores the license plate information. It doesn’t list who the plate is registered to; to find that, an officer must log out of the reader system and log into some other database managed by a separate entity – for example, the Department of Motor Vehicles or the State Police. Because the plate-reader system alone doesn’t contain that information, it doesn’t meet the statutory definition.
The bad news doesn’t end there for the citizen; this ruling means that he loses his entire fee claim, because he wasn’t a prevailing party. As for the circuit court, it might feel whipsawed in this case. It first ruled in favor of the department, only to have the Supreme Court reverse; it then ruled for the citizen, only to be reversed again.
Justice McCullough, writing for a unanimous court, achieves something special today. I’m a strong proponent of personal-privacy rights. I wholly dislike these automated readers, which I see as a form of Big Brother surveillance. But as Justice McCullough notes, the court’s task here “is not to reach the right public policy balance by weighing competing demands for efficiency and security against considerations of privacy. Our duty is more modest: we must determine from the text and structure of the Data Act where the legislature has drawn the line.” He’s absolutely right, and I (perhaps grudgingly) find no fault with the analysis in his opinion today.
The right-for-a-different-reason doctrine gets a workout in McCrary v. Jenkins. This appeal challenges a local sheriff’s agreement with federal Immigrations and Customs Enforcement agents to ask immigration-status questions of arrestees, and take related actions. Two citizens challenged the agreement, suing the sheriff and the county board on the basis that local funds were being improperly used for this work.
The sheriff demurred, asserting federal preemption, lack of standing, and the sheriff’s right to enter into the agreement. The board also demurred, raising standing and the contention that the sheriff acted within his authority. The citizens field responsive briefs that included a request for leave to amend should the court find that their allegations were in any way insufficient.
The circuit court sustained the demurrers and dismissed without leave to amend. It ruled that the sheriff’s action was lawful, and evidently didn’t address the standing issue.
But the Supreme Court does. Standing is a jurisdictional issue; today’s opinion points to caselaw holding that a suit filed without standing is “a legal nullity.” The court accordingly takes up that issue first.
Despite what you might think, there is such a thing as taxpayer standing in Virginia. The justices have handed down several decisions recognizing the right of taxpayers to sue localities where they challenge public expenditures. The taxpayers here cite one of those rulings, noting that it imposes a “minimal requirement” to allege the expenditure of public funds. They specifically asserted that the sheriff acted outside his authority, and because the county board allotted funds to run his office, that satisfied the minimal requirement.
Not enough, the Supreme Court rules today. Calling this a “vague, speculative, and conclusory” allegation, the court finds that the taxpayers don’t identify any specific local funds that went to this project. That means that they haven’t established taxpayer standing.
Normally, this holding would call for remand for the taxpayers to pursue that amended pleading, so they could make more specific allegations. But there’s a bomb in footnote 3 on the last page of today’s opinion:
Given our ruling regarding standing, the action filed by McClary and Stockton is a legal nullity, and the appellants’ assignment of error concerning the circuit court’s failure to grant them leave to amend that action is moot.
Appellate lawyers will likely read this twice or more to make sure they get it. The Supreme Court rules that because the suit is a nullity, it can’t be amended to correct the pleading deficiency that makes it so. This holding is comparable to those in suits filed by an estate, which isn’t a legal entity. But really, in this context the taxpayers should have had at least one chance to clean up their pleading, and I’m quite surprised that the justices have barred them from doing so.
Is there a way around this? Can the taxpayers seize on this nullity ruling and file a new suit on the same cause of action, where they beef up their fiscal allegations by including descriptions of specific expenditures and sums? Maybe, though I’d hate to have to tangle with the fire-eating dragon that is Rule 1:6 on claim preclusion.
We find several interesting tidbits in Dumfries-Triangle Rescue Squad, Inc. v. Prince William County. This is a proceeding by the county to dissolve the squad’s corporate existence. The squad’s primary asset is a parcel of land with a rescue-squad station on it, valued at $1.6 million. That’s enough to get most people’s attention.
The squad incorporated during the Eisenhower Administration with stated purposes to “assist in the saving of life, administer first aid and teach methods of safety.” (Because of the squad’s salutary purpose, I’m going to forgive the absence of the Oxford comma there. Also, the lawyer who drafted it back then has probably gone on to that great appellate court in the sky. Let’s be gracious.) It provided rescue services in the county for decades, in return for financial support.
Three years ago, the county decided to get in on the action. It created its own Fire and Rescue System and terminated its contract with the squad. But the county didn’t stop there: Citing a statute giving it authority over rescue squads, the county filed an action to dissolve the squad’s corporate existence and to force a sale of its assets, including the valuable land.
The squad filed a demurrer and special plea, challenging the county’s authority to impose the corporate death sentence upon it. The circuit court overruled the demurrer and plea and entered summary judgment for the county, directing a receiver to wind up the squad’s affairs and distribute its assets to organizations providing similar services. Pouring salt in the wound, the court refused a motion to stay the judgment pending appeal.
The justices were moved by this haste; they granted the requested stay and took up the case on the merits.
To see how we got to this point, let’s look at the language of the statute that the county cited so lovingly. To clarify one of the points I’m going to make, I’m going to insert bracketed numbers to indicate parallel provisions:
An emergency medical services agency established pursuant to this section may be dissolved  when the local governing body of the county, city, or town in which the emergency medical services agency is located determines that the emergency medical services agency has failed, for three months successively, to have or keep in good and serviceable condition emergency medical services vehicles and equipment and other proper implements, or  when the governing body of the county, city, or town for any reason deems it advisable.
My first thought upon reading this was who on Earth wrote that statute? Translated, it says that a locality can dissolve an EMS agency (1) when the agency doesn’t keep up its equipment for three straight years, or (2) whenever the locality feels like it. Why is the first option in there, when the second one is so comprehensive? Hmmm?
Well, it turns out that the patron of the bill that created this statute comes from my fair city of Virginia Beach, so maybe I’d better keep my head down after posting this. Let’s get back to our appellate story.
The decisive language for today’s ruling is “established pursuant to this section.” The justices observe that there’s no way the squad could have been established pursuant to this statute, because the act dates only to 2015, while the squad is over 60 years old. This means that the county can’t rely on these provisions to snuff out the squad’s corporate existence and liquidate its assets. It can, of course, decline to continue its contract for provision of rescue services; that doesn’t seem to be in issue in this appeal.
Readers of today’s opinion, authored by Justice Powell for a unanimous court, will see a passage on page 9 noting that the county cited three circuit-court opinions in support of one of its contentions. Don’t try this at home, folks; like water, decisional authority flows downhill. You can’t cite a trial-court opinion as authoritative in an appellate court. I can think of only three uses for citing a circuit-court decision in the Supreme Court: First, to establish res judicata in the event of subsequent litigation between the same parties; second, for its persuasive value, if the learned judge has set out a particularly scholarly opinion; and third, to establish a split between two or more circuits.
The result of today’s ruling, reversing and entering final judgment for the squad, is that the squad gets to keep its corporate existence and, more important, its land. One wonders what can be done with that property now. Today’s opinion notes that the squad has commendably allowed the county to use the station for free during the pendency of this case.
An assignment of life-insurance benefits forms the heart of the dispute in Wood v. Martin. A man we’ll call Husband obtained a seven-figure life-insurance policy while married to Wife. The marriage soured a few years later, and the spouses entered into a settlement agreement that a circuit court eventually ratified and incorporated into a divorce decree.
The relevant provision of the agreement provided that Husband would maintain Wife as a 50% beneficiary on the policy even after the divorce. The obligation was to endure as long as Husband owed spousal support, or until the couple’s youngest child finished college or turned 23.
A few years later, Husband found himself on the wrong end of a contempt citation for sloughing off his obligations to Wife. The court tossed him in jail, allowing himself to purge the contempt by satisfying various support obligations, including telling Wife about the named beneficiaries on the policy.
The story then takes a tragic turn: Husband changed the beneficiaries on the policy, cutting Wife out entirely, and two days later took his own life.
Because the divorce-related obligation hadn’t expired yet, Wife filed a suit for declaratory judgment, naming the new beneficiaries and the insurance company. The company paid the disputed proceeds into court and was dismissed from the litigation. Wife also dismissed her request for an injunction and the parties settled down to litigate their in rem claims against the money.
The circuit court ruled in favor of Wife, awarding her the principal and accumulated interest. The other beneficiaries appealed, and today the Supreme Court affirms. The court rejects the argument that Wife’s claim was barred by a statute governing legal claims. This is an equitable claim, the court holds, and Wife is entitled to enforce her chose in action in a court of equity. As there are no plausible equitable defenses to the circuit court’s relief, the circuit court correctly allocated the disputed amount to Wife.