Who’s Afraid of Assuming Federal Jurisdiction?

In the Supreme Court’s much-discussed Hobby Lobby decision (decided at the end of June), the Court addressed whether for-profit corporations should be able to assert claims under the Religious Freedom Restoration Act (RFRA). The majority answered “yes” for a variety of reasons, mostly involving the statute’s text and history. But at one juncture, the majority and dissent also jousted over a pre-RFRA decision called Gallagher v. Crown Kosher Super Market. In the opinion of the Hobby Lobby majority, Gallagher “suggests, if anything, that for-profit corporations possess [free exercise] rights.”

Gallagher is a remarkable decision. In short, a plurality of the Court assumed standing before reaching the merits—contrary to the general rule later established in Steel Co. v. Citizens for a Better Environment. And, almost as remarkably, both the majority and the dissent in Hobby Lobby appear to be in denial about it. Hobby Lobby thus represents an interesting example of the Court’s willingness to engage in doctrinal revisionism. And, on inspection, the Court’s revisionism could have been done better.

Gallagher involved a Free Exercise Clause challenge against Sunday closing laws. The plaintiffs included customers of a kosher market, the kosher market itself, and a rabbi. In addition to addressing the merits, the defendants vigorously disputed whether any of the plaintiffs – either individual or corporate – had standing to sue.The Court splintered. A plurality, led by Chief Justice Warren, found no violation based on another case, Braunfeld v. Brown, decided on the very same day: “Since the decision in that case rejects the contentions presented by these appellees on the merits, we need not decide whether appellees have standing to raise these questions.” Meanwhile, the concurring and dissenting justices didn’t specifically address the majority’s reservation. Because the plurality expressly reserved standing and no other justices complained about it, Gallagher seems like powerful evidence that it was once accepted practice to assume standing on the way toward the merits.

Remarkably, the Hobby Lobby majority and dissent papered over the Gallagher Court’s reservation of jurisdiction.

Start with the Hobby Lobby majority’s oddly misleading summary of Gallagher. At the outset, the Hobby Lobby majority observed that the Gallagher defendants “argued that the corporation lacked ‘standing’ to assert a free-exercise claim.” The Hobby Lobby majority then dropped a footnote indicating that the defendants had objected to the corporate plaintiff’s standing. Finally, the Hobby Lobby majority noted that the Gallagher plurality had “reserved decision on the question whether the corporation had ‘standing’ to raise the claim.” But the defendants in Gallagher had vigorously argued not just that the corporation lacked standing, but that none of the plaintiffs had standing. And the Gallagher plurality expressly reserved whether “appellees” had standing, without limiting that reservation to the corporate party.

The Hobby Lobby dissent gamely engaged in the same revisionist account, wherein Gallagher assumed only corporate standing. “True,” the Hobby Lobby dissent conceded, “one of the five challengers to the Sunday closing law assailed in Gallagher was a corporation owned by four Orthodox Jews.” However, the “other challengers were human individuals, not artificial, law-created entities, so there was no need to determine whether the corporation could institute the litigation.” The Hobby Lobby dissent offered this line of reasoning specifically to help explain why “the plurality [in Gallagher] stated it could pretermit the question ‘whether appellees ha[d] standing.'” Perhaps the Gallagher plurality should have resolved the standing issue by focusing on the non-corporate plaintiffs, as the Hobby Lobby dissent suggested. But that approach doesn’t line up with what was actually argued or reserved in Gallagher.

Fortunately, there’s another, better way to harmonize Gallagher with now-settled notions of federal jurisdiction. The key is that the Gallagher plurality adjudicated the merits based on another case issued the very same day. That scenario triggers a kind of exception (recognized in Steel Co.) for cases where there is “a merits issue dispositively resolved in a companion case.” The basic idea is that, if your claim was just rejected on the merits, then there’s no longer a substantial federal question for purposes of federal jurisdiction. So while Gallagher’s use of hypothetical jurisdiction was unusually blatant, it doesn’t contradict the rule against assuming jurisdiction—or, at least, doesn’t contradict it to any greater extent than already allowed by Steel Co. itself.

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6 Comments

Filed under Jurisdiction

6 responses to “Who’s Afraid of Assuming Federal Jurisdiction?

  1. Perhaps I’ve missed something but the last three paragraphs don’t seem to actually show any sort of error on the part of the Justices. Would You be willing to elaborate?

    • My basic point is that Gallagher’s assumption of jurisdiction was categorical as to all the plaintiffs, whereas the Hobby Lobby opinions treat the plurality as though the assumption was limited to the corporate party. Reading the Gallagher plurality that way makes it easier for a present-day, post-Steel Co. lawyer to make sense of it. But, again, that reading seems inconsistent with what Gallagher plurality itself thought it was doing.

  2. Hash

    I also think the conflict with Steel Co is less pronounced than you suggest. Gallagher is silent about the nature of the “standing” objection raised, and it seems like it was not an Article III standing objection, but merely a prudential third-party standing objection (after all, the corporation clearly had an injury in fact caused by the law that would be redressable by the law’s invalidation; the only question was whether the corporation could invoke the religious beliefs of its owners).

    This is important, because it’s not at all clear that third-party standing must be resolved before the merits. See Steel Co (recognizing that merits can be resolved before statutory standing); Lexmark (suggesting that third-party standing, like other types of “prudential” standing, may really be merits concepts about who has a valid right of action).

    At a minimum, the fact that third-party standing was involved makes it even more justified to rely on the Steel Co exception for simultaneous merits disposition in another case. Third-party standing concerns are rooted in a desire for a different (better?) plaintiff to litigate the merits, and that concern is obviated once the court has already litigated the merits in a different case.

    • Hash, I think we basically agree on the law here, but we may have somewhat different goals. For me, what makes this situation interesting is that Gallagher is a Warren-era opinion by Chief Justice Warren, whereas Steel Co. is a Rehnquist-era decision by Justice Scalia. So there are two very different conceptions of standing at work in these cases. Given that tension, how should the Court of 2014 assimilate Gallagher into the post-Steel Co. landscape? You seem to suggest that the Court could: (i) reject Gallagher’s own conception of what it did (i.e., assume jurisdiction); and/or (ii) alter the current state of the law by resolving a present-day uncertainty regarding the ability to assume third-party standing. Those solutions would be considerably bigger lifts than the one suggested in the last paragraph of my post. That said, I agree that those options are interesting and am glad you raised them.

  3. Hash

    More simply put, Gallagher’s reservation of “standing” is analogous to the fact that Kagan and Breyer in Hobby Lobby refused to decide whether for-profit corps can exercise religion under RFRA. No one thinks they violated Steel Co, and that’s because it’s a merits question about who can invoke the right of action.

  4. Pingback: The Doctrine Formerly Known as “Statutory Standing” | Re’s Judicata

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