Smith v. Spizzirri

Docket: 22-1218

Opinion Date: May 16, 2024

Judge: Sonia Sotomayor

Areas of Law: Arbitration & Mediation, Labor & Employment Law

The case involves the interpretation of Section 3 of the Federal Arbitration Act (FAA), which outlines procedures for enforcing arbitration agreements in federal court. The petitioners, current and former delivery drivers for an on-demand delivery service operated by the respondents, filed a lawsuit alleging violations of federal and state employment laws. The respondents moved to compel arbitration and dismiss the suit. The petitioners agreed that their claims were arbitrable but argued that Section 3 of the FAA required the District Court to stay the action pending arbitration rather than dismissing it entirely. The District Court issued an order compelling arbitration and dismissed the case without prejudice. The Ninth Circuit affirmed the decision.

The Supreme Court of the United States reversed the Ninth Circuit's decision. The Supreme Court held that when a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, Section 3 of the FAA compels the court to issue a stay, and the court lacks discretion to dismiss the suit. The Court reasoned that the statutory text, structure, and purpose all point to this conclusion. The Court further explained that the FAA's structure and purpose confirm that a stay is required. The Court concluded that staying rather than dismissing a suit comports with the supervisory role that the FAA envisions for the courts. The case was remanded for further proceedings consistent with the Supreme Court's opinion.

Harrow v. Department of Defense

Docket: 23-21

Opinion Date: May 16, 2024

Judge: Elena Kagan

Areas of Law: Civil Procedure, Government & Administrative Law

The case revolves around Stuart Harrow, a Department of Defense employee who was furloughed for six days. Harrow challenged this decision before the Merit Systems Protection Board. After a five-year delay, the Board ruled against him. Harrow had the right to appeal this decision to the Court of Appeals for the Federal Circuit within 60 days of the Board's final order. However, Harrow did not learn about the Board's decision until after the 60-day period had elapsed, and he filed his appeal late. Harrow requested the Federal Circuit to overlook his untimeliness and equitably toll the filing deadline. The Federal Circuit, however, denied his request, believing that the deadline was an unalterable "jurisdictional requirement."

The Supreme Court of the United States reviewed the case. The main issue was whether the 60-day filing deadline under Section 7703(b)(1) was jurisdictional, meaning it marked the bounds of a court's power and could not be waived or subject to exceptions. The Supreme Court held that the 60-day filing deadline was not jurisdictional. The Court reasoned that procedural rules, even when phrased in mandatory terms, are generally subject to exceptions like waiver, forfeiture, and equitable tolling. The Court found no language in Section 7703(b)(1) that suggested it was a jurisdictional requirement. The Court also rejected the Government's argument that the term "pursuant to" in a different statute, 28 U.S.C. §1295(a)(9), made the deadline jurisdictional.

The Supreme Court vacated the judgment of the Federal Circuit and remanded the case for further proceedings consistent with its opinion. The Federal Circuit was directed to determine whether equitable tolling was available and, if so, whether Harrow was entitled to that relief given the facts of the case.

Consumer Financial Protection Bureau v. Community Financial Services Assn. of America, Ltd.

Docket: 22-448

Opinion Date: May 16, 2024

Judge: Clarence Thomas

Areas of Law: Constitutional Law, Government & Administrative Law

The case involves the Consumer Financial Protection Bureau (CFPB) and its funding mechanism. The CFPB, unlike most federal agencies, has a standing source of funding outside the ordinary annual appropriations process. Congress authorized the CFPB to draw from the Federal Reserve System an amount that its Director deems “reasonably necessary to carry out” the Bureau’s duties, subject only to an inflation-adjusted cap. Several trade associations representing payday lenders and credit-access businesses challenged this funding mechanism, arguing that it violates the Appropriations Clause of the Constitution.

The Fifth Circuit Court of Appeals agreed with the associations, ruling that the CFPB's funding mechanism violates the Appropriations Clause. The court reasoned that the Appropriations Clause requires both Chambers of Congress to periodically agree on an agency’s funding, which ensures that each Chamber reserves the power to unilaterally block those funding measures through inaction. The CFPB's funding mechanism, the court argued, allows it to draw funds indefinitely unless both Chambers of Congress step in and affirmatively prevent the agency from doing so.

The Supreme Court of the United States, however, reversed the Fifth Circuit's decision. The Supreme Court held that Congress’ statutory authorization allowing the Bureau to draw money from the earnings of the Federal Reserve System to carry out the Bureau’s duties satisfies the Appropriations Clause. The Court reasoned that under the Appropriations Clause, an appropriation is a law that authorizes expenditures from a specified source of public money for designated purposes. The statute that provides the Bureau’s funding meets these requirements. Therefore, the Court concluded that the Bureau’s funding mechanism does not violate the Appropriations Clause. The case was remanded for further proceedings consistent with the Supreme Court's opinion.