Reflections on the Pending Supreme Court Challenge to the Affordable Care Act in California v. Texas: Part One in a Series

VIKRAM DAVID AMAR, EVAN CAMINKER, JASON MAZZONE

In this first of a series of columns on the latest prominent challenge to the Affordable Care Act (ACA), Illinois law dean Vikram David Amar, Michigan Law dean emeritus Evan Caminker, and Illinois law professor Jason Mazzone examine the stare decisis effects of the Supreme Court’s initial blockbuster decision involving the ACA. The authors demonstrate several, perhaps surprising, ways that the earlier decision should shape how the Court views the present challenge.

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Freed v. Thomas

Court: US Court of Appeals for the Sixth Circuit

Docket: 18-2312

Opinion Date: September 30, 2020

Judge: Siler

Areas of Law: Civil Procedure, Civil Rights, Constitutional Law, Government & Administrative Law, Real Estate & Property Law, Tax Law

Freed owed $735.43 in taxes ($1,109.06 with penalties) on his property valued at about $97,000. Freed claims he did not know about the debt because he cannot read well. Gratiot County’s treasurer filed an in-rem action under Michigan's General Property Tax Act (GPTA), In a court-ordered foreclosure, the treasurer sold the property to a third party for $42,000. Freed lost his home and all its equity. Freed sued, 42 U.S.C. 1983, citing the Takings Clause and the Eighth Amendment. The district court first held that Michigan’s inverse condemnation process did not provide “reasonable, certain, and adequate” remedies and declined to dismiss the suit under the Tax Injunction Act, which tells district courts not to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had" in state court, 28 U.S.C. 1341. The court reasoned that the TIA did not apply to claims seeking to enjoin defendants from keeping the surplus equity and that Freed was not challenging his tax liability nor trying to stop the state from collecting. The TIA applied to claims seeking to enjoin enforcement of the GPTA and declare it unconstitutional but no adequate state court remedy existed. The court used the same reasoning to reject arguments that comity principles compelled dismissal. After discovery, the district court sua sponte dismissed Freed’s case for lack of subject matter jurisdiction, despite recognizing that it was “doubtful” Freed could win in state court. The Supreme Court subsequently overturned the "exhaustion of state remedies" requirement for takings claims. The Sixth Circuit reversed without addressing the merits of Freed’s claims. Neither the TIA nor comity principles forestall Freed’s suit from proceeding in federal court.

Lopez v. City of Los Angeles

Court: California Courts of Appeal

Docket: B288396(Second Appellate District)

Opinion Date: October 1, 2020

Judge: Brian M. Hoffstadt

Areas of Law: Personal Injury, Real Estate & Property Law

After plaintiff, a pedestrian, tripped and fell in a pothole located on city-owned property, he filed suit against the City and Wally's Wine & Spirits for negligence and premise liability. The Court of Appeal held that the commercial business leasing the property that the driveway services did not exercise control over the location of the pothole (so as to create a duty of care to passersby) when the business has done no more than put the driveway and gutter to their "ordinary and accustomed" uses. Therefore, the trial court was correct in granting judgment notwithstanding the verdict to overturn a jury verdict that found the business partially liable for the pedestrian's injury.

Massey et al. v. Duke Builders, Inc.

Court: Supreme Court of Georgia

Docket: S20G0018

Opinion Date: September 28, 2020

Judge: David E. Nahmias

Areas of Law: Construction Law, Contracts, Real Estate & Property Law

Property owners and the contractors they hired to build a house had a dispute. The Georgia Supreme Court granted the owners' request for review to consider: (1) whether anticipated profits could be included in a materialmen’s lien; and (2) if so, whether the improper inclusion of such profits rendered the entire lien void. Because the Court of Appeals correctly held that anticipated profits could not be included in a lien and that their inclusion does not invalidate the entire lien, the Supreme Court affirmed.

Kenton County Board of Adjustment v. Meitzen

Court: Kentucky Supreme Court

Docket: 2018-SC-0677-DG

Opinion Date: September 24, 2020

Judge: Hughes

Areas of Law: Government & Administrative Law, Real Estate & Property Law, Zoning, Planning & Land Use

The Supreme Court reversed the court of appeals' decision reversing the circuit court's order dismissing Property Owners' appeal from the decision of the Kenton County Board of Adjustment granting approval of a conditional use application to allow the operation of a nursery school in a residential zone, holding that Kentucky law requires that a party must claim to be "injured or aggrieved" to perfect an appeal to circuit court under Ky. Rev. Stat. 100.347(1). After the Board unanimously granted the conditional use application Property Owners filed an appeal, alleging that the Board's action was improper because it did not meet certain statutory requirements and the requirements of the Kenton County Zoning Ordinance. The circuit court dismissed the appeal, concluding that Property Owners failed to allege that they were injured or aggrieved by the final action of the Board, and therefore, the court lacked subject matter jurisdiction. The court of appeals reversed, interpreting the "injured or aggrieved" language to be a standing requirement rather than a jurisdiction requirement. The Supreme Court reversed, holding that Property Owners failed to follow the appeal procedures in section 100.347(1) by not claiming in the complaint to be injured or aggrieved, and therefore, the circuit court appeals properly dismissed the action for lack of jurisdiction.

County of Hennepin v. Laechelt

Court: Minnesota Supreme Court

Docket: A19-0473

Opinion Date: September 30, 2020

Judge: G. Barry Anderson

Areas of Law: Real Estate & Property Law

The Supreme Court affirmed the decision of the court of appeals affirming the jury's award of damages to Tamara Laechelt in this eminent domain action, holding that evidence of construction-related interference that arises after the date of taking is admissible to establish the value of the remainder property. A panel of commissions determined the amount of compensation Laechelt should be awarded for the County's acquisition of temporary and permanent easements from Laechelt. The County appealed the award and moved to exclude evidence of construction-related interference because the interference occurred after the date of the taking. The district court denied the motion and subsequently denied the County's motion for a new trial. The court of appeals affirmed. The Supreme Court affirmed, holding that the district court did not err by denying the County a new trial.

Gibson v. Bell

Court: Supreme Court of Mississippi

Citation: 2019-CA-00395-SCT

Opinion Date: October 1, 2020

Judge: Griffis

Areas of Law: Civil Procedure, Real Estate & Property Law

Mark Gibson and Court Properties, Inc., appeal the circuit court’s dismissal for lack of jurisdiction of their county-court appeal. In 2009, the Bells acquired a loan from Tower Loan. The Bells’ house was collateral for the loan. The Bells later experienced financial hardship. As a result, Tower Loan recommended that the Bells contact Gibson and Court Properties, Gibson’s wholly owned corporation, for financial assistance. On September 20, 2013, the Bells executed a promissory note, a deed of trust, and an assumption warranty deed with Court Properties. Approximately three months later, Gibson evicted the Bells and shortly thereafter, sold their house. The Bells sued Gibson and Court properties alleging fraud, breach of fiduciary duty, bad faith and wrongful foreclosure. A jury returned a verdict unanimously in favor of the Bells. Gibson and Court Properties moved for a new trial and for judgment notwithstanding the verdict. The motion was denied, and the Bells' request for attorneys' fees was granted. Gibson appealed within thirty days of the trial court's denial of his motions, but did not pay the cost bond within thirty days of the final judgment as required by statute. Gibson paid the estimated costs on April 18, 2018, which was one day before the circuit clerk’s deadline, but five days after the thirty-day statutory deadline required by Section 11-51-79. The Bells moved to dismiss the appeal for lack of jurisdiction, which was granted. Because Gibson and Court Properties failed to pay the cost bond within thirty days of the final judgment as required by Mississippi Code Section 11-51-79 (Rev. 2019), the Mississippi Supreme Court affirmed the circuit court’s dismissal for lack of jurisdiction.

In Re Estate of Harry J. Green

Court: Supreme Court of Mississippi

Citation: 2017-CT-01641-SCT

Opinion Date: October 1, 2020

Judge: Leslie D. King

Areas of Law: Real Estate & Property Law, Trusts & Estates

Harry Green owned multiple properties at the time of his death, eight of which were at issue in this appeal. Several years prior to his death, Harry conveyed these properties to his sister Shirley Cooley, and later had Shirley reconvey six of the properties back to him. The reconveyance deeds were not notarized or recorded. Years later, Harry executed a will that divested the properties to his wife, Cristina Green, and to his grandchildren. The chancery court and the Court of Appeals found that Harry never accepted the reconveyance deeds and declined to impose a constructive trust, holding that Shirley owned all eight properties. Because the evidence clearly indicates that Harry accepted the six reconveyance deeds, the Mississippi Supreme Court reversed the judgments of the Court of Appeals and the chancery court as to the ownership of the six reconveyed properties. However, the Court found Cristina did not establish by clear and convincing evidence that a constructive trust was warranted. The Court therefore affirmed the judgments of the Court of Appeals and the chancery court regarding the ownership of the two properties not subject to reconveyance deeds.

Fouse v. Saratoga Partners, et al

Court: Supreme Court of Pennsylvania

Docket: 67 MAP 2019

Opinion Date: October 1, 2020

Judge: Max Baer

Areas of Law: Constitutional Law, Government & Administrative Law, Real Estate & Property Law

Appellants Fred and Jolene Fouse owned two parcels of land in Huntingdon County, Pennsylvania, identified which they used as their primary residence from the time they acquired the two parcels in 1976 and 1987, respectively. Eventually, the Fouses fell behind in paying their property taxes. As mandated by the Real Estate Tax Sale Law (RETSL), the Huntington County Tax Claim Bureau scheduled an upset tax sale. Appellees Saratoga Partners, LP submitted the highest bid. Three months later, in December 2016, the Fouses filed a “petition to redeem property sold at tax sale,” even though Huntington County, a sixth class county, prohibited post-sale redemptions. Instead, the Fouses asserted, inter alia, a right to redeem under section 7293 of the Municipal Claims and Tax Liens Act (MCTLA), by paying the amount paid by Saratoga at the tax sale. In their brief, the Fouses acknowledged that the MCTLA applied only to first and second class counties, but the absence of a right of redemption provision in the RETSL resulted in citizens of second class A through eighth class counties being treated less favorably than citizens of first and second class counties, in violation of the equal protection provisions of the federal and state constitutions. After review, the Pennsylvania Supreme Court concluded the General Assembly’s decision to omit the right of post-sale redemption from the RETSL was constitutional because it was rationally related to a legitimate state interest. Accordingly, the Court affirmed the Commonwealth Court's order upholding the denial of the Fouses' petition for redemption.

In Re: Consol Apl of Chester-Upland SD, et al -

Court: Supreme Court of Pennsylvania

Docket: 55-57 MAP 2019

Opinion Date: October 1, 2020

Judge: Thomas G. Saylor

Areas of Law: Government & Administrative Law, Real Estate & Property Law, Tax Law

The appellant property owners (“Taxpayers”) allowed billboards to be placed their lands. The appellee local taxing authorities, Chester-Upland School District and Chichester School District (the “School Districts”), filed 22 assessment appeals relating to the subject properties for tax years 2014 and forward. In their appeals, the School Districts sought to increase the assessed value based on the presence of the billboards. After relief was denied by the county assessment board, the School Districts appealed to the Court of Common Pleas. Separately, four property owners also appealed to that court after their properties were reassessed due to the presence of billboards. The issue presented for the Pennsylvania Supreme Court's review was whether the presence of a billboard on a property could affect the valuation of that property, such as where the landowner was entitled to ongoing payments pursuant to a lease with the billboard company. The Supreme Court found the Pennsylvania General Assembly has directed that billboards and their supporting structures were not real estate for tax assessment purposes. Here, the Court concluded the Commonwealth Court appropriately concluded that, although a billboard’s value may not itself be considered when assessing the underlying real property’s value, any increase in such value attributable to the billboard’s presence could be considered.

Halsey v. Simmons

Court: South Carolina Supreme Court

Docket: 27997

Opinion Date: September 30, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure, Constitutional Law, Real Estate & Property Law

Petitioners' real property was sold at a delinquent tax sale. They filed an action in circuit court to challenge the sale, and all parties consented to have the case referred to a special referee for trial. Petitioners agreed to allow defendants (respondents here) to present their evidence first. After the testimony of one witness, the county's tax collector, defendants moved to approve the sale. The special referee granted the motion. Petitioners objected, arguing they were not permitted to give their factual presentation of the case. The special referee denied the motion, and the court of appeals affirmed. On appeal to the South Carolina Supreme Court, petitioners argued they were deprived of due process, including the right to be heard and the right to present witnesses and other evidence. The Supreme Court granted the petition, dispensed with briefing, reversed the court of appeals, and remanded to the circuit court for a new trial. "The special referee made factual findings and issued judgment in the middle of a trial after hearing from only one witness. ... The law ... does not permit a court to issue judgment against a party before giving that party an opportunity to present evidence in support of her position."

City of Morgantown v. Calvary Baptist Church

Court: Supreme Court of Appeals of West Virginia

Docket: 18-1134

Opinion Date: September 29, 2020

Judge: Margaret L. Workman

Areas of Law: Real Estate & Property Law, Zoning, Planning & Land Use

The Supreme Court affirmed the judgment of the circuit court finding that, as applied to an unimproved eighty-foot subdivided piece of property owned by the Calvary Baptist Church, the City of Morgantown's enforcement of its R-1 single-family residential zoning classification was unconstitutional, holding that the zoning ordinance, as applied to the particular property of the Church, was arbitrary and unreasonable. Upon finding that the enforcement of the R-1 single-family residential zoning classification was unconstitutional the circuit court ordered the City to cure the unconstitutional zoning classification of the property by amending it to that of a B-2 service business district that permits various commercial uses of the property. The Supreme Court affirmed, holding that the circuit court's order declaring the zoning enforcement action unconstitutional and ordering the City to cure the classification error by amending the classification of the partition was proper.

Fisher v. Wyoming Department of Environmental Quality

Court: Wyoming Supreme Court

Citation: 2020 WY 127

Opinion Date: September 28, 2020

Judge: Day

Areas of Law: Environmental Law, Real Estate & Property Law

The Supreme Court dismissed this appeal from the decision of the district court reversing the decision of the director of the Wyoming Department of Environmental Quality (WDEQ) and the Environmental Quality Council (EQC) denying Brook Mining Company's application for a permit to develop and operate a new surface coal mine, holding that the issues presented in this appeal were moot. The EQC concluded that the permit application was deficient and denied Brook Mining Company's application. The Director of the WDEQ then denied the permit. The district court reversed. While this appeal was pending, Brook Mining Company submitted a revised permit application. The Director issued a decision that approved the revised permit application. Also while the appeal was pending, the legislature changed the regulatory structure for the approval of new coal mine applications by removing the opportunity for an EQC contested case hearing prior to the Director's decision. The Supreme Court dismissed the appeal, holding that the issues in this appeal do not continue to present a justiciable controversy and have thus become moot.