Month: December 2016

On December 5, 2016, the Supreme Court heard oral argument in McCrory v. Harris and Bethune-Hill v. Virginia State Board of Elections. In these related cases, the Court considered redistricting plans introduced in North Carolina and Virginia after the 2010 census. -- Plaintiffs in McCrory argued that North Carolina used the Voting Rights Act’s “Black Voting Age Population” requirements as a pretext to place more black voters in two particular U.S. House of Representatives districts in order to reduce black voters’ influence in other districts. The district court determined that the redistricting plan was an unconstitutional racial gerrymander that violated the Equal Protection Clause because race was the predominant factor motivating the new plan. -- Plaintiffs in Bethune-Hill each resided in one of twelve newly proposed majority-minority districts for the Virginia Legislature, created to satisfy Section 5 of the Voting Rights Act (VRA), which requires that any new districting plan must ensure that there be no “retrogression” in the ability of racial minorities to elect the candidate of their choice. They argued that the new districts constituted racial gerrymanders that violated the Equal Protection Clause of the Fourteenth Amendment. The district court held that the plaintiffs did not establish that race was the predominant factor in the creation of 11 of the 12 challenged districts. The district court also held that, although race was the predominant factor in the creation of one district, the General Assembly was pursuing a narrowly tailored compelling state interest in creating it. -- In McCrory, appellants contend the lower court decision against them erred in five critical ways: (1) presuming racial predominance from North Carolina's legitimate reliance on Supreme Court precedent; (2) applying a standard of review that required the State to demonstrate its construction of North Carolina Congressional District 1 was “actually necessary” under the VRA instead of simply showing it had “good reasons” to believe the district, as created, was needed to foreclose future vote dilution claims; (3) relieving plaintiffs of their burden to prove “race rather than politics” predominated with proof of a workable alternative plan; (4) clearly erroneous fact-finding; and (5) failing to dismiss plaintiffs' claims as being barred by claim preclusion or issue preclusion. Appellants further argue that, in the interests of judicial comity and federalism, the Supreme Court should order full briefing and oral argument to resolve the split between the court below and the North Carolina Supreme Court which reached the opposite result in a case raising identical claims. -- The Bethune-Hill appellants also assert five errors by the lower court: (1) holding that race cannot predominate even where it is the most important consideration in drawing a given district unless the use of race results in “actual conflict” with traditional districting criteria; (2) concluding that the admitted use of a one-size-fits-all 55% black voting age population floor to draw twelve separate House of Delegates districts did not amount to racial predominance and trigger strict scrutiny; (3) disregarding the admitted use of race in drawing district lines in favor of examining circumstantial evidence regarding the contours of the districts; (4) holding that racial goals must negate all other districting criteria in order for race to predominate; and (5) concluding that the General Assembly's predominant use of race in drawing House District 75 was narrowly tailored to serve a compelling government interest. -- To discuss the case, we have Jack Park, who is Of Counsel at Strickland Brockington Lewis LLP.

On November 28, 2016, the Supreme Court heard oral argument in Beckles v. United States. Travis Beckles, who had previous felony convictions (mostly for drug possession and sales), was an armed career criminal under the Armed Career Criminal Act (ACCA) and was therefore convicted in district court and subject to sentencing enhancement under the Sentencing Guidelines after being found in possession of a firearm. Pursuant to the Sentencing Guidelines, Beckles was eligible for a sentence range from 360 months to life imprisonment, and the court sentenced him to 360 months in prison, five months of supervised release, and a $5,000 fine. Beckles appealed and argued that the Sentencing Guidelines imposed an unreasonable sentence, that his prior convictions did not qualify as “violent felonies” subject to sentencing enhancement under ACCA, and that possession of a sawed-off shotgun was not a “crime of violence” subject to sentencing enhancement under the Sentencing Guidelines. The U.S. Court of Appeals for the Eleventh Circuit affirmed his conviction and sentence. -- The U.S. Supreme Court vacated the appellate court’s decision and remanded the case for reconsideration in light of Johnson v. United States, which determined that the residual clause of ACCA was unconstitutional. On remand, the appellate court again upheld Beckles’ conviction and sentence. The appellate court also held that the Johnson decision did not affect this case because Beckles was not sentenced under the residual clause of ACCA but rather under express language from the Sentencing Guidelines about sentencing enhancements for crimes of violence. -- The three questions now before the Supreme Court are: (1) Whether Johnson v. United States applies retroactively to collateral cases challenging federal sentences enhanced under the residual clause in United States Sentencing Guidelines (U.S.S.G.) § 4B1.2(a)(2) (defining “crime of violence”); (2) whether Johnson's constitutional holding applies to the residual clause in U.S.S.G. § 4B1.2(a)(2), thereby rendering challenges to sentences enhanced under it cognizable on collateral review; and (3) whether mere possession of a sawed-off shotgun, an offense listed as a “crime of violence” only in commentary to U.S.S.G. § 4B1.2, remains a “crime of violence” after Johnson. -- To discuss the case, we have Carissa Byrne Hessick, who is the Anne Shea Ransdell and William Garland "Buck" Ransdell, Jr. Distinguished Professor of Law at the University of North Carolina School of Law.

On December 6, 2016, the Supreme Court decided Salman v. United States. Bassam Yacoub Salman was convicted in a jury trial of conspiracy to commit securities fraud, as well as several counts of actual securities fraud. The government’s theory was that Salman, whose brother-in-law Mounir Kara (along with Mounir’s older brother Maher Kara) worked for Citigroup, had coordinated with Mounir in an insider trading scheme that, over the course of just a few years, grew a $396,000 brokerage account controlled by Salman into one worth more than $2 million. -- Salman moved for a new trial, arguing that there was no evidence he knew that the tipper had disclosed confidential information in exchange for a personal benefit. The district court denied the motion. Salman made a similar argument to the U.S. Court of Appeals for the Ninth Circuit on appeal, urging the Court to adopt the then-recently established standard set out by the Second Circuit in United States v. Newman. Under Newman, the government must present sufficient evidence that the accused knew the “inside” information he received had been disclosed in breach of a fiduciary duty. Invoking Supreme Court precedent in Dirks v. SEC, the Ninth Circuit rejected Salman’s challenge, holding that the close familial relationship between Salman and the Karas was sufficient to sustain Salman’s convictions. -- The question before the Supreme Court was whether the personal benefit to the insider that is necessary to establish insider trading under Dirks requires proof of “an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature,” as the Second Circuit held in Newman, or whether it is enough that the insider and the tippee shared a close familial relationship, as the Ninth Circuit held here. -- By a vote of 8-0, the Supreme Court affirmed the judgment of the Ninth Circuit. In an opinion delivered by Justice Alito, a unanimous Court held that the Ninth Circuit properly applied the court's decision in Dirks v. Securities and Exchange Commission to affirm Bassam Salman's conviction because, under Dirks, the jury could infer that Salman's tipper personally benefited from making a gift of confidential information to a trading relative. -- To discuss the case, we have Thaya Brook Knight, who is associate director of financial regulation studies at the Cato Institute.