Justices to Hear Cases on Voting Rights and Internet Taxes
Posted January 12, 2018 5:19 p.m. EST
WASHINGTON — The Supreme Court on Friday added 12 cases to its docket, including ones on whether voting districts in Texas were the product of racial discrimination and whether online merchants must collect sales taxes.
The court agreed to decide whether congressional and state legislative districts in Texas violated the Constitution and the Voting Rights Act by discriminating against minority voters. The move opened the latest chapter in a long-running dispute over voting maps drawn after the 2010 census.
In August, a three-judge panel of the U.S. District Court for the Western District of Texas, in San Antonio, ruled that a congressional district including Corpus Christi denied Hispanic voters “their opportunity to elect a candidate of their choice.” The district court also rejected a second congressional district stretching from San Antonio to Austin, saying that race had been the primary factor in drawing it.
In a separate decision, the district court found similar flaws in several state legislative districts.
There was a curious wrinkle in the case: The district court itself had, for the most part, endorsed the maps in 2012, after the Supreme Court rejected earlier ones and told the court to try again. The 2012 maps, the panel later said, had been considered in haste in advance of pending elections. In 2013, the Texas Legislature decided not to draw new maps and instead mostly adopted the one drawn by the court in San Antonio.
After three election cycles using the interim maps, the district court ruled that they were flawed. “Although this court had ‘approved’ the maps for use as interim maps, given the severe time constraints it was operating under at the time of their adoption,” the court said that approval was “not based on a full examination of the record or the governing law” and was “subject to revision.”
The court concluded that Texas’ adoption of the interim maps was part of “a litigation strategy designed to insulate the 2011 or 2013 plans from further challenge, regardless of their legal infirmities.”
State officials then filed emergency applications in the Supreme Court, asking the justices to block the district court’s order until their appeal was heard. In a brief order in September, the Supreme Court agreed. The vote was 5-4, with the court’s more conservative members in the majority.
The new cases, Abbott v. Perez, No. 17-568, and Abbott v. Perez, No. 17-626, join two voting rights cases already on the court’s docket concerning partisan gerrymandering.
Internet Sales Taxes
The Supreme Court also agreed to reconsider a 1992 ruling that helped spur the rise of internet shopping. The ruling, Quill Corp. v. North Dakota, barred states from forcing companies to collect sales taxes if they do not have a local physical presence.
States say the ruling has deprived them of tens of billions of dollars in annual revenue. Brick-and-mortar companies complain that they are put at a competitive disadvantage when they are required to collect sales taxes and online companies are not.
Three members of the Supreme Court have indicated that they may be ready to re-examine the Quill decision.
Justice Anthony Kennedy, in a concurring opinion in 2015, seemed to call for a fresh challenge to the ruling.
“It is unwise to delay any longer a reconsideration of the court’s holding in Quill,” he wrote. “A case questionable even when decided, Quill now harms states to a degree far greater than could have been anticipated earlier.”
Justices Clarence Thomas and Neil M. Gorsuch have also written about their uneasiness with the decision and the constitutional justifications for it.
The petition in the new case, South Dakota v. Wayfair, No. 17-494, asked the Supreme Court to overrule Quill, and 35 states and the District of Columbia filed a supporting brief making the same request.
The petition said that a central rationale for the decision — that it would be burdensome for out-of-state retailers to calculate and collect taxes for thousands of state and local jurisdictions — had been solved by modern software.
The defendants in the case, three internet retailers, responded that “the largest online sellers collect sales tax in all states.”
“Amazon.com, the poster child of online marketing, which accounts for half of all internet sales and 60 percent of the growth, now collects sales tax in every state that has a sales tax,” they wrote. “If Quill is overruled the burdens will fall primarily on small and medium-size companies whose access to a national market will be stifled.”
The Supreme Court also announced that it would decide whether in-house judges at the Securities and Exchange Commission had been deciding cases without constitutional authorization.
The in-house judges, known as administrative law judges, were appointed by the commission’s personnel office rather than by the five-member commission itself. That may have run afoul of the Constitution’s appointments clause, which requires “inferior officers” to be appointed by the president, the courts or “heads of departments.” The commission itself is a “head of department,” while its personnel office is not.
If the in-house judges were “inferior officers,” their appointments were unconstitutional. If they were mere employees, there is no constitutional problem.
The Justice Department, which had long contended that the in-house judges were employees and not officers, switched positions in the Supreme Court in November 2017. In an unusual move, it urged the justices to grant review in the case, Lucia v. Securities and Exchange Commission, No. 17-130, even though it had won in the appeals court.
The day after the Justice Department request, the commission appeared to cure the constitutional problem. It issued an order ratifying the appointments of the in-house judges. And it instructed judges to give fresh consideration to pending matters.
The case arose from charges that Raymond J. Lucia and his firm had made misleading presentations to prospective clients about a retirement strategy they called “Buckets of Money.”
Lucia lost before an administrative law judge and the SEC, and a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected a challenge to the judge’s authority. The full appeals court agreed to rehear the case, but its judges deadlocked 5-5.
In a brief filed last month urging the Supreme Court to hear the case notwithstanding recent developments, Lucia’s lawyers said he would not benefit from the commission’s order.