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04/2/2019

McDonough v. Smith: Why SCOTUS Should Revisit the Statute of Limitations for Fabrication of Evidence

By the time Annie Dookhan was finally caught in 2012, she had been falsifying drug test results at a state crime laboratory in Massachusetts for several years. The rogue chemist had managed a productivity rate 500% higher than her peers by not actually running tests at all, and her misconduct would ultimately impact over 36,000 criminal cases.

Dookhan is not alone – fabricated evidence is far more common than it may seem, and it can impact thousands of people falsely accused of crimes. The legal remedy for this misconduct is known as a Section 1983 lawsuit, but a significant decision by the Second Circuit in McDonough v. Smith would sharply limit when those lawsuits could be filed. This case was appealed to the Supreme Court, which recently agreed to hear the case. On March 4, 2019, Cause of Action Institute filed an amicus curiae brief urging the court to overturn the Second Circuit.

The question in front of the Supreme Court is when the countdown begins on the limited amount of time available for filing a claim that fabricated evidence was used (i.e. when the statute of limitations begins to run, also known as when the claims “accrue”). In this case, petitioner Edward McDonough endured two criminal trials for election-related crimes that he was ultimately acquitted of. McDonough now argues that Youel Smith, the prosecutor in his criminal case, fabricated evidence in an attempt to falsely convict him. In response, Smith filed a motion arguing claims related to fabricating evidence accrue when the defendant first becomes aware of the tainted evidence and its improper use.

Several other appellate courts had previously decided that the claim accrued when the criminal proceeding ended in the defendant’s favor. That could mean an acquittal, winning on appeal and having the charges dropped, or other, less-common means of victory. Only after the possibility of criminal charges was gone were courts ready to hear a claim that evidence used to support those charges had been fabricated.

In McDonough’s case, however, the Second Circuit took a different view. Instead of waiting for criminal proceedings to end, they decided that defendants were ready to file lawsuits the moment they became aware that fabricated evidence was being used against them.  The Second Circuit thus granted Smith’s motion to dismiss, leaving McDonough with no legal redress. It was the first appellate court in the country to use this rule, and the decision will result in unfair treatment of defendants and unnecessary complications for prosecutors and judges as well. This is especially true given the level of factual support needed to successfully file a lawsuit under the current Supreme Court precedent.

For someone sitting in an interrogation room, it is impossible to know exactly what is happening when fabricated evidence is first used. Imagine the police just said you were seen leaving the house after a robbery occurred. You know you weren’t there, so why is someone saying that? Are they mistaken? Lying for their own benefit? Or did the police induce them to lie so the case would be closed? Only the last explanation justifies a Section 1983 lawsuit, and asking a defendant in this position to walk directly from the police station to the courthouse (if they are even free to do so) is both unrealistic and against the “complete and present” standard the Second Circuit used to determine if a claim had accrued.

Even if a defendant immediately knew a police officer had fabricated evidence, as recently happened in nearly 2,000 cases in Baltimore, it is almost impossible for a defendant to have enough evidence to successfully file a lawsuit. In two cases decided approximately ten years ago, the Supreme Court raised the bar for what must be included in the initial filing of lawsuits. Mere “conclusions” were not enough; factual support was needed. This is understandable in theory, but someone accused of having drugs in their pocket when they know that pocket was empty has almost nothing to offer but the conclusion that police or prosecutors must be responsible.

There are other problems with the Second Circuit decision, including the possibility that prosecutors being sued will be tempted to punish those filing the lawsuits. At the very least, those prosecutors will have to defend themselves while simultaneously trying to perform their official duties. There are many reasons why having the statute of limitations begin to run earlier is an unwise decision that will prevent government agents from being held accountable for these abuses of power, and we hope the Supreme Court chooses to endorse the rule used by other appellate courts instead of the new approach used by the Second Circuit.

John McGlothlin is Counsel at Cause of Action Institute. Libby Rudolf is a litigation support analyst at Cause of Action Institute.

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03/5/2019

Federal Court Rules Agency Actions within Congressional Review Act Subject to Judicial Review

In a positive decision that will be felt throughout the federal government, the United States District Court for the District of Idaho recently ruled that agency compliance with the Congressional Review Act (CRA) is subject to judicial review. First signed into law in 1996, the CRA requires that agencies submit new and amended rules to Congress for review, creating an essential check on the increasingly powerful administrative state. The CRA was used effectively in the first year of the Trump Administration to overturn numerous Obama Administration rules. But language in the CRA raises a question about whether courts can review agency compliance.

In this case, a cattle-ranching operation based in Oakley, Idaho was adversely affected by the Bureau of Land Management (BLM), the Department of Agriculture, and the Forest Service’s controversial amended rules regarding land use in 11 western states, including Idaho. The ranchers alleged that because the agencies never properly submitted the land use amendments to Congress, the agencies violated the CRA. In an attempt to evade oversight that could potentially limit agency power, the government argued that the ranchers’ motion should be dismissed, claiming that an agency’s violations of the CRA are not subject to judicial review and thus, the Court lacks jurisdiction. The district court rejected the government’s argument, stating that “such un-checked authority does not make sense, defeats the general purpose of the act, is contradicted by the legislative history, and ultimately leaves third parties without any remedy at law against violations of the act itself.”[1] If the Court had ruled that agency compliance with the CRA is not subject to judicial review, it would have opened the door for agencies throughout the federal government to ignore the law’s constraint on their authority.

This case is not the only instance where government agencies have avoided complying with the CRA. In 2017, Cause of Action Institute released a list of 835 economically significant rules and regulations that appeared in the Federal Register but were not submitted to Congress, as required by the CRA. As Congress continues to delegate more and more authority to agencies, it is crucial that the CRA is used to ensure that agencies aren’t abusing their power and risking Americans’ economic freedom and prosperity. By recognizing that judicial review exists, this decision will require agencies to be accountable for their actions and will hopefully encourage them to submit all proposed rules to Congress for review.

 

Libby Rudolf is a litigation support analyst at Cause of Action Institute.

 

[1] Tugaw Ranches, LLC v. United States Department of Interior, et al., 2019 WL 938865 (D. Idaho 2019)

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11/28/2018

Supreme Court Rules Economic Impact of Fish and Wildlife Decision Subject to Judicial Review

In an ongoing battle between landowners and the federal government, the U.S. Supreme Court unanimously ruled against the U.S. Fish and Wildlife Service, in Weyerhaeuser Co. vs. U.S Fish and Wildlife Service, when it designated private land in Louisiana as “unoccupied critical habitat.”  In a significant portion of the Court’s opinion, it also ruled against the government’s effort to block judicial review of that designation.  Had the Supreme Court upheld the Fifth Circuit’s determination and denied judicial review, agencies throughout the government would be permitted to make unconstrained decisions, potentially depriving individuals and businesses affected by the regulatory powers of the administrative state of their right to challenge agency abuse and discretion in court.

Today’s decision marks an important victory in our ongoing effort to reign in the government’s abuse of power and ensure citizens can seek recourse in the courts when the government infringes on our freedoms.  We filed an amicus brief in this case because it was clear that the government had abused its discretion by designating inhabited and inhabitable land as “unoccupied critical habitat,” and then blocked the rights of citizens subject to these decisions to seek review and recourse from the courts.

The designation of private land in Louisiana as “unoccupied critical habitat” at issue in this case is not only questionable on its face, as the species it’s intended to conserve cannot survive on the land as it is now, but it also significantly threatens the economic freedom and property rights of the landowners, potentially costing them $34 million in lost development opportunities.  Lower courts previously determined that the agency action in this case, though “odd,”[1] is not subject to judicial review and subsequently deferred to the agency’s decision.

As CoA Institute pointed out to the court in our amicus brief, and as the Supreme Court stated in its opinion, there is a “strong presumption favoring judicial review of administrative action.”[2]  Further, the narrow exception to judicial review of agency action under Section 701(a)(2) of the Administrative Procedure Act only applies when the action falls within one of the traditional categories committed to agency discretion or is one of the “rare circumstances where the relevant statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion.”[3]  These exceptions are intended to reduce and specify the circumstances in which agency action is exempt from judicial review, not broaden them.  The Supreme Court notes that not only does the Service’s decision in this case fail to apply to one of the exceptions, but it “involves the sort of routine dispute that federal courts regularly review.”[4]

In addition to addressing whether the agency’s action was subject to judicial review, the Supreme Court was asked to address whether the ESA prohibits designation of private land as unoccupied critical habitat that is neither habitat nor essential to species conservation. In its opinion, the Supreme Court asked the Fifth Circuit to consider the meaning of the word “habitat” in its decision, for the land at issue must first and foremost be “habitat” if it is to be designated as “critical habitat.” Additionally, they asked the Fifth Circuit to consider whether the Service’s cost and benefits analysis of the designation was flawed and thus made the Service’s decision not to exclude the land at issue “arbitrary, capricious, or an abuse of discretion.”[5]

Read more about this case in our previous blog post here.

Libby Rudolf is a litigation support analyst at Cause of Action Institute.

 

 

[1] Markle Interests, LLC v. U.S. Fish & Wildlife Serv., 40 F. Supp. 3d. 744, 758–59 (E.D. La. 2014).

[2] Mach Mining, LLC v. Equal Emp’t Opportunity Comm’n, 135 S. Ct. 1651 (2015).

[3] Lincoln v. Vigil, 508 U.S. 182, 191 (1993).

[4] Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., No. 17-71, slip op. at 12 (U.S. Nov. 27, 2018).

[5] Id. at 15.

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11/13/2018

HUD Emails Reveal Significant Agency Confusion Regarding 2013/2014 Multi-Billion Dollar Mortgage Settlements

More than three years ago, Cause of Action Institute (CoA Institute) filed a Freedom of Information Act (FOIA) request for information related to the U.S. Department of Housing and Urban Development’s (HUD) involvement in the 2013/2014 multibillion-dollar mortgage settlements between the U.S. Department of Justice (DOJ) and Bank of America, J.P. Morgan Chase, and Citigroup. The settlements, drafted by a number of government agencies including HUD, were intended to make the banks pay compensation for their alleged involvement in faulty residential mortgage securities practices that contributed to the 2008 financial crisis.

The agreements included “consumer-relief provisions” that required or permitted banks to provide billions of dollars in “donations” to government-approved third parties in lieu of paying funds to the U.S. Treasury. CoA Institute was suspicious of how this money would be given out, and we suspected favored special interest groups from the Obama-era were lobbying high-level HUD officials and seeking hand-outs. In 2016, CoA Institute filed a complaint after HUD failed to produce records responsive to our 2015 FOIA request, and in late 2016, the agency began producing responsive documents. As CoA Institute explained in a 2017 blog post, many of the early communications produced show evidence of the behavior we’re most concerned with. However, the most recent productions reveal an additional troublesome fact – there was a significant amount of uncertainty among influential HUD officials regarding the details of the agreements that led to HUD employees scrambling to answer settlement-related questions posed by popular media outlets.

The following screenshots are excerpts of internal HUD email communications regarding an inquiry from Fox News in 2015, about a year after the settlements were finalized. A Fox News reporter questioned whether La Raza and NeighborWorks America, both intermediaries[1], were “HUD-approved” and eligible to receive funding under the terms set forth in the settlements. Despite being responsible for providing the list of eligible beneficiaries for consumer-relief donations, HUD officials reveal in these communications a significant amount of uncertainty, confusion, and disagreement regarding what organizations are eligible to receive such donations. Specifically, they struggled to determine whether intermediaries and housing counseling agencies or solely housing counseling agencies were entitled to receive the funding. The screenshots included below are only pieces of the full email thread that continued for many pages as HUD personnel went back and forth with each other in an attempt to find answers.

Most of the individuals included in these emails were not only senior HUD officials at the time of the correspondence, but they were also in similar, if not the same, positions at the time the settlements were drafted. Those individuals included: Michelle Aronowitz was the Deputy General Counsel for Enforcement and Fair Housing from October 2009 until January 2017; from about 2009 until 2017, Jacob Press was a legal counsel and worked in HUD’s congressional relations office; Edward Golding was a senior advisor until April 2015 when he became the Principal Deputy Assistant Secretary for Housing; Sarah Gerecke remains the Deputy Assistant Secretary at the Office of Housing Counseling, the same role she had when the settlements were drafted.

The confusion illustrated in these communications raises a number of questions, including why didn’t these prominent HUD officials know which types of organizations (e.g., intermediaries, housing counseling agencies, etc.) were eligible to receive funding? And, why did it take so long to determine which organizations were considered “HUD-approved housing counseling agencies”? These are questions that should have been resolved in 2013 when the settlements were being drafted rather than a year after they were finalized. This confusion further illustrates the disturbing nature of these agreements, which benefited a substantial number of third-party organizations at the expense of those harmed.

A complete copy of the most recent HUD production that contained these emails can be viewed here and here.

[1] HUD-Approved Intermediaries provide supportive housing counseling services through a network of affiliates or branches. Services include training, pass-through funding, technical assistance, and overseeing their networks to ensure services are satisfactory. In contrast, HUD-Approved Housing Counseling Agencies directly provide advice on buying a home, renting, defaults, foreclosures, and credit issues.

Libby Rudolf is a litigation support analyst at Cause of Action Institute.

 

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09/13/2018

CoA Institute Defends U.S. Citizens’ Privilege and Immunity From Excessive Fines in Latest Amicus Brief

On Tuesday, September 11, 2018, Cause of Action Institute (“CoA Institute”) filed an amicus curiae brief in the Supreme Court case Tyson Timbs v. State of Indiana in support of the Petitioners, who asked the Court to determine whether the Eighth Amendment’s Excessive Fines Clause is incorporated against the States through the Fourteenth Amendment. The matter arises from a civil action against both Tyson Timbs and his vehicle, which the State sought to forfeit. The state trial court and intermediate appellate court ruled that forfeiture of the vehicle (worth about $40,000) would be “excessive” and “grossly disproportional to the gravity of”[i] crimes to which Timbs pleaded guilty in a separate case (the maximum fine for which was $10,000, and Timbs was actually fined much less). But the Indiana Supreme Court reversed because the U.S. Supreme Court has not yet held that the Excessive Fines Clause applies to the States.[ii] CoA Institute argues that the Indiana Supreme Court should be reversed because, as a citizen of the United States, Timbs is privileged and immune under the Fourteenth Amendment from the grossly disproportionate fine that Indiana seeks to impose through forfeiture of his vehicle.

Our brief calls attention to the fact that the Supreme Court has never ruled on whether the Excessive Fines Clause is applicable against the States. We argue that the Excessive Fines Clause is, in fact, enforceable against Indiana through the Privileges or Immunities Clause of the Fourteenth Amendment. That clause provides that “no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States.” CoA Institute relies on recent jurisprudence, like Justice Thomas’s concurrence in McDonald v. City of Chicago, which notes that on its face, Section 1 of the Fourteenth Amendment grants U.S. citizens a “certain collection of rights – i.e., privileges or immunities – attributable to [their] status” as citizens of the country as well as an individual state.[iii]

Additionally, our brief demonstrates that Excessive Fines Clause includes the ancient principle of salvo contenemento, which prohibits fines that would deny any defendant the basic ability to earn a living. Forfeiture of Timbs’ vehicle in this case would violate this ancient principle.

Our amicus brief is available here

Libby Rudolf is a Research Assistant at Cause of Action Institute.

[i] State v. Timbs, 84 N.E.3d 1179, 1181 (Ind. 2017) (quoting trial court).

[ii] Id.

[iii] McDonald v. City of Chicago, 561 U.S. 742, 808 (2010) (Thomas, J., concurring in part and concurring in judgment).

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08/22/2018

U.S. Fish and Wildlife Service Attempts to Evade Judicial Review of an Unnecessary Critical Habitat Designation That Would Significantly Cost Landowners

On August 8, 2018, the U.S. Solicitor General sent a letter to the Supreme Court informing them of a proposed rule change published by the U.S. Fish and Wildlife Service (the “Service”) that would relate to a pending case: Weyerhaeuser Company v. U.S. Fish & Wildlife Service. While the proposed rule would only apply to future critical habitat designations and would not permit a reevaluation of the designation at issue in Weyerhaeuser, the proposed changes do relate to the underlying issues in the case and would support the argument Cause of Action Institute (“CoA Institute”) made in its amicus brief that the Service’s actions are subject to judicial review.

On April 30, 2018, CoA Institute filed an amicus curiae brief in Weyerhaeuser in support of Petitioner, Weyerhaeuser Company. The company asked the Supreme Court to review the Fifth Circuit’s decision upholding the Service’s questionable designation of 1,544 acres of private land in Louisiana, identified as “Unit 1,” as “unoccupied critical habitat” for the dusky gopher frog, an endangered species. As the Service has acknowledged, Unit 1 is not only currently uninhabitable by the dusky gopher frog, but the critical habitat designation could result in up to $34 million of lost revenue for the private landowners. Simply put, the designation of Unit 1 as critical habitat is not necessary for the conservation of the dusky gopher frog but would come at a significant cost to the landowners. Nevertheless, the Service included Unit 1 as critical habitat. Completely ignoring the landowners’ interests, the Service is forcing these individuals to forfeit a significant profit from their land for a frog that has not been able to survive on their land for over 50 years.

Weyerhaeuser Company, who leases the land at issue, along with other Unit 1 landowners, challenged this designation in 2013, alleging that because Unit 1 is uninhabitable by the dusky gopher frog, Unit 1 is not essential for the conservation of the frog as required by the Endangered Species Act (“ESA”), 16 U.S.C. § 1531 et seq., for unoccupied critical habitat. Additionally, Weyerhaeuser argues that the Service did not adequately weigh the costs of inclusion against the benefits of exclusion, failing to effectively consider the significant economic costs the landowners will have to endure from lost development opportunities.[i] The district court recognized that the agency action in this case is “odd,” but it nonetheless proceeded to grant summary judgment in the Service’s favor, deferring to the agency action and finding itself “without power” to overturn it.[ii]

On appeal, a divided Fifth Circuit panel affirmed the district court.[iii] The Fifth Circuit held that, under the Administrative Procedure Act (“APA”), the Service’s decision not to exclude Unit 1 was discretionary and not subject to judicial review, a decision that, if it remains unchecked, could give excessive and unregulated power to not only the Service but throughout the administrative state.[iv] After being denied a petition for rehearing en banc, Weyerhaeuser Company petitioned the Supreme Court to address the following two questions:

  1. Whether the ESA prohibits designation of private land as unoccupied critical habitat that is neither habitat nor essential to species conservation.
  1. Whether an agency decision not to exclude an area from critical habitat designation because of the economic impact of the decision is subject to judicial review.

While CoA Institute agrees with Petitioner on both issues, it chose to address the latter question in its brief because of the momentous consequences it perceives on the administrative state if the Service’s determinations are not subject to judicial review.

In her dissent from denial of rehearing en banc, Judge Jones expresses these same concerns by warning that the “ramifications” of the panel’s decision regarding judicial review of agency action “cannot be underestimated.”[v] Should the Fifth Circuit’s determination stand, agencies throughout the administrative state could be permitted to make unconstrained decisions.

In its brief, CoA Institute argues that the Fifth Circuit’s determination that judicial review is precluded under the APA’s § 701(a)(2) exception, which states that judicial review will not apply when “agency action is committed to agency discretion by law,” is erroneous. The court failed to perform the necessary analysis required to make this determination, and had the court done so, it would have been clear that the Service’s actions in this instance are subject to judicial review. The Supreme Court has recognized that there is a “‘strong presumption’ favoring judicial review of administrative action” because “Congress rarely intends to prevent courts from enforcing its directives to federal agencies.”[vi] The Fifth Circuit’s conclusory determination in this case, however, contradicts this “strong presumption” of reviewability, because the court instead seems to have wrongly relied on a strong presumption of “unreviewability.”[vii]

CoA Institute argues that, in failing to apply the “strong presumption” of judicial review of agency action, the lower courts did not perform the “careful examination” that the exception requires. The only way for judicial review to be barred in this case, under the § 701(a)(2) exception, is if the language in the ESA that describes how the Secretary makes critical habitat determinations  is drawn in such a way that it precludes a reviewing court from having a “meaningful standard against which to judge the agency’s exercise of discretion.”[viii] To determine this, the court would have needed to conduct a more-adequate examination of the language of the ESA.

Instead of conducting this essential examination of the statutory language, the Fifth Circuit relied on caselaw from the Ninth Circuit and several district courts that suffer from similar analytical ailments. In its brief, CoA Institute performs that careful examination of the ESA’s statutory language, showing that the language of 16 U.S.C § 1533(b)(2) and the overall structure of the ESA do not preclude judicial review. We depend on our courts to conduct the analyses necessary to ensure that government agencies are acting justly and not needlessly impeding individuals lives, a step which the Fifth Circuit failed to do in this case. Had the Fifth Circuit applied the “strong presumption” of judicial reviewability of agency actions, conducted the “careful examination” that is required to establish that judicial review is precluded under § 701(a)(2), and not simply relied on previous erroneous findings in other courts, it would have been evident that the Service’s decision is subject to judicial review.

In its recent notice of proposed rulemaking, the Service offers revisions to portions of the regulations implementing Section 4 of the ESA that would create an even more “meaningful standard” that reviewing courts could use to judge the agency’s use of discretion. Specifically, the proposed rule “provides additional predictability to the process of determining when designating unoccupied habitat may be appropriate”[ix] by clarifying when the Secretary may determine that unoccupied areas are essential for the conservation of a species.

The current rule only provides two ambiguous situations when unoccupied areas would be considered essential to species conservation, while the proposed rule will include additional situations that would clarify the meaning of “essential.” For example, the proposed rule would require that the Secretary determine “that there is a reasonable likelihood that the area will contribute to the conservation of the species.”[x] Additionally, the Service would consider the “current state of the area and the extent to which extensive restoration would be needed for the area to become usable,” and how willing a non-federal landowner is to undertake such restoration.[xi] This language articulates an even stronger and “meaningful” standard that the Service uses in determining whether to exclude an area in a critical habitat designation, making the §701(a)(2) exception to judicial review even more inapplicable to this type of agency action. Even more, should this rule become final, this more-clearly articulated standard will ensure that the essential steps are being taken to conserve endangered species without unnecessarily hindering landowners’ use of their land – a win-win situation.

Comments regarding the proposed rule are due September 24, 2018. The Supreme Court will hear oral argument in Weyerhaeuser on October 1, 2018.

Libby Rudolf is a litigation support analyst at Cause of Action Institute.

 

[i] Markle Interests, LLC v. U.S. Fish & Wildlife Serv., 40 F. Supp. 3d. 744, 759–760 (E.D. La 2014).

[ii] Id. at 758–59.

[iii] Markle Interests, LLC v. U.S. Fish & Wildlife Serv., 827 F.3d 458 (5th Cir. 2016).

[iv] Id. at 473–75.

[v] Markle Interests, LLC v. U.S. Fish & Wildlife Serv., 848 F.3d 635 (5th Cir. 2017).

[vi] Mach Mining, LLC v. Equal Emp’t Opportunity Comm’n, 135 S. Ct. 1651 (2015).

[vii] Brief for Petitioner at 48, Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., No. 17-71 (U.S. Apr. 23, 2018), available at http://bit.ly/2PrkGjz.

[viii] Heckler v. Chaney, 470 U.S. 830 (1985).

[ix] Endangered and Threatened Wildlife and Plants; Revision of the Regulations for Listing Species and Designating Critical Habitat, 83 Fed. Reg. 35193 (proposed July 25, 2018) (to be codified at 50 C.F.R. pt. 424).

[x] Id. at 35198

[xi] Id.

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