Here is an update on recent activity at the Supreme Court in cases decided by the Federal Circuit. With respect to granted cases, there is no new activity to report since our last update. With respect to petitions, one new petition was filed in a Merit Systems Protection Board case; a brief in opposition was filed by the government in response to petitions in three takings cases; and a reply brief was filed in a case concerning judicial disqualification. Here are the details.
There is no new activity to report.
One new petition was filed with the court in Fraternal Order of Police v. Department of the Interior, a Merit Systems Protection Board case. The petitioner presented the following question to the Court:
- “Whether the Court of Appeals for the Federal Circuit’s interpretation of 5 U.S.C. § 7703(a)(1)[stating that ‘[a]ny employee or applicant for employment adversely affected or aggrieved by a final order or decision of the Merit Systems Protection Board may obtain judicial review of the order or decision’] is incorrect in finding that an employee’s union, on the employee’s behalf and with the employee’s consent, does not have standing to seek judicial review under that statute?”
Brief in Opposition
The government filed a brief in opposition in response to three petitions challenging the rejection of their takings claims. All three of the cases concern the Federal Housing Financing Agency taking conservatorship of two private companies, Fannie Mae and Freddie Mac. The cases and associated questions presented for review are included below:
In Barrett v. United States, the petitioner presented the following question for review:
- “[W]hether the Government’s uncompensated appropriation of these private companies’ earnings and net worth through the Net Worth Sweep effects a taking under the Fifth Amendment.”
In Cacciapalle v. United States, the petitioner asked the Court to consider the following questions:
- “Did the Federal Circuit err in barring as ‘substantively derivative’ the claims of private shareholders of Fannie Mae and Freddie Mac for the Taking of their shareholder rights, and the transfer of 100% of their economic interest to the U.S. Treasury, without making a determination as to whether the private shareholders had identified a valid property right that they directly owned and that the government had taken?”
- “Were the rights to future dividends and other distributions held by shareholders cognizable property rights protected by the Takings Clause?”
In Owl Creek Asia I, L.P. v. United States, the petitioner asked the Court the following question:
- “If the United States causes a company to transfer to the United States for the public benefit private shareholders’ rights incident to their ownership of shares in the company, do the private shareholders have a direct, personal interest in a cause of action challenging that taking?”
Now, in response, the government argues that the cases do not warrant the Court’s review because, “any taking the Third Amendment might have effected was a taking of the enterprises’ quarterly net worth, not a taking of the shareholders’ property.” Accordingly, “[a]ny just-compensation recovery would therefore flow to the enterprises, not to petitioners.” The government contends that the “threshold argument that the succession clause [of the Recovery Act] bars petitioner’s suit . . . make[s] this case a poor vehicle for reviewing petitioner’s contentions.” Alternatively, it argues, the “Treasury did not simply take possession of the enterprises’ funds.” Instead, this case “involves a negotiated agreement between Treasury and the enterprises.” Accordingly, “the Third Amendment did not take the enterprises’ property.” Moreover, the government maintains, “[petitioners’] fears that the decision will lead to wide-spread government abuses are misplaced.”
Centripetal Networks filed a reply brief in support of its petition in Centripetal Networks, Inc. v. Cisco Systems, Inc., a case concerning judicial disqualification. The petition presented the following question: “Whether placing stock in a blind trust satisfies §455(f)[indicating when judicial disqualification is not required]—and, if not, whether placing trivial amounts of stock in a blind trust, in lieu of selling it outright, constitutes harmless error.”
In response, Cisco Systems argued that, “even were the Court contemplating engaging in splitless and factbound error correction, there would be nothing to correct.” Cisco Systems maintained that “Section 455(f)’s plain text makes clear that placing stock in a purported ‘blind trust’ does not amount to ‘divest[ing]’ it.” Divestment, according to Cisco Systems, “requires that the judge (or his or her family member) be deprived or dispossessed of ‘ownership of’ the disqualifying interest.” Here, it argued, the judge’s wife “still had ownership” of the stock and thus disqualification was required. It also maintained the Federal Circuit’s application of the Liljeberg factors (offering guidance on how courts should make a “harmless error” determination) was “correct in light of the highly unusual facts of this case” and does not warrant further review.
Now, in reply, Centripetal argues that Cisco “misdescribes the Federal Circuit’s opinion.” It maintains that, “[i]f selling stock outright is the only way to comply with §455(f), then Congress unwittingly created a Catch-22, as employing §455(f)’s divestiture-by-selling option would create an appearance-of-impropriety problem, triggering the need to ‘disqualify.’” According to Centripetal, “[i]f the only two potential options for complying with §455(f) . . . are divesting stock into a blind trust or giving it away, then the decision below foreclosing the first option cannot be correct.” Alternatively, Centripetal argues, the Federal Circuit’s decision “effectively nullifies Liljeberg.” Centripetal maintains that, under Liljeberg, “vacatur for non-recusal is appropriate only where the failure to recuse affected the parties’ rights and where vacatur would promote justice and public perception.” According to Centripetal, “[n]either is true here.” Centripetal contends that “there is no denying the importance of this case” and urges the Court to grant review.