J. Michael Eakin
Richard F. Maffett, Jr.

On November 30, 1986, a patrol officer saw Inocencio Muniz and another passenger in a car stopped on the shoulder of a highway. When the officer approached, he could smell alcohol on Muniz’s breath and saw that his eyes were bloodshot and his face was flushed. The officer advised Muniz to remain parked, but as he was leaving he saw Muniz drive off. The officer pulled Muniz over and had him perform three field sobriety tests, all of which Muniz failed. Muniz told the officer he failed them because he had been drinking. The officer arrested Muniz and took him to a booking center, where he was told that his actions and voice were being recorded, but no one read him his Miranda rights. Muniz answered a series of questions about himself and stumbled over an answer regarding the year he turned six. Muniz again failed three field sobriety tests and refused a breathalyzer test. The officer then read Muniz his Miranda rights, and Muniz signed a statement waiving them. In subsequent questioning, he admitted to being under the influence of alcohol.

At trial, the video and audio recordings of Muniz’s behavior at the booking center were admitted into evidence, along with the officer’s reports of Muniz’s failure of the field sobriety tests and his incriminating statements. Muniz was convicted of driving under the influence of alcohol. He filed a motion for a new trial and argued that the evidence of his behavior and statements prior to the Miranda warning should have been excluded from trial. The trial court denied the motion. The Superior Court of Pennsylvania reversed and held that the testimony regarding Muniz’s behavior and the results of the field sobriety tests was physical in nature, not testimonial, but that the audio portion of the recording should have been suppressed. The Pennsylvania Supreme Court denied the application for review.

No. Justice William J. Brennan, Jr. delivered the opinion of the 8-1 majority. The Supreme Court held that the Fifth Amendment distinguishes between real or physical evidence and testimonial evidence, of which only testimonial evidence is protected under the Amendment. Based on this analysis, the incriminating evidence drawn from physical evidence is admissible, but evidence drawn from the content of statements that relate factual information is not. The Court also held that the Fifth Amendment does not require the suppression of information not elicited by an officer.

In his opinion concurring in part and dissenting in part, Chief Justice William H. Rehnquist wrote that answers to an officer’s questions should be admissible when the questions are meant to elicit responses to ascertain the suspect’s mental state. In such a case, the questions serve the same purpose as the field sobriety tests, and the answers are not testimonial. Justice Byron R. White, Justice Harry A. Blackmun, and Justice John Paul Stevens joined in the partial concurrence and partial dissent. In his separate opinion concurring in part and dissenting in part, Justice Thurgood Marshall wrote that creating an exception for routine booking questions and their answers undermined the rights the Miranda warning was meant to protect. He argued that the questions the police asked Muniz were intended to elicit incriminating responses, and because the police asked the questions before reading Muniz his Miranda rights, the evidence of the questions and their answers should be suppressed.


Dan W. Evers
Marcia L. Friedl
Paul J. Larkin, Jr.

While being held in jail, Perkins freely confessed to committing a murder to an undercover police officer who was posing as another inmate.

The Court held that conversations between suspects and undercover officers are not afforded Miranda protection since they are not done in a "police-dominated atmosphere" where compulsion to confess is present. "It is the premise of Miranda that the danger of coercion results from the interaction of custody and official interrogation," argued Justice Kennedy. There was no danger of coercion in this case.


In November 1980, Governor James Thompson of Illinois issued an order that prohibited state officials from hiring new employees, promoting state employees, or recalling state employees after layoffs without the approval of the Governor's Office of Personnel. The Office of Personnel based hiring and promotion decisions on factors such as the applicant's contributions to the Republican Party, the applicant's record of service to the Republican Party, and the support of local Party officials. In the jointly decided case of Frech v. Rutan, Cynthia B. Rutan and a number of other potential and current state employees challenged this patronage system, alleging that the Governor was violating their First Amendment rights by practicing unfair political patronage and party-based discrimination.

In a 5-to-4 decision, the Court held that Governor Thompson's practices amounted to an unconstitutional patronage system. The Court found that employees would feel "a significant obligation to support political positions held by their superiors" in lieu of their true beliefs in order to progress up the career ladder. The Court thus held that "promotions, transfers, and recalls after layoffs based on political affiliations or support" were impermissible infringements on the right to free expression of public employees. The Court noted that while the First Amendment was not "a tenure provision" protecting employees from "constructive discharge," it nevertheless prevented the government from interfering with its employees' freedom "to believe and associate."


W.S. Kirkpatrick & Company, Inc. v. Environmental Tectonics Corporation, International

Edward Brodsky
Thomas W. Merrill
Thomas B. Rutter

In 1981, the Republic of Nigeria was interested in building an aeromedical center at Kaduna Air Force Base. Both W.S. Kirkpatrick & Co., Inc. (Kirkpatrick) and Environmental Tectonics Corporation International (Environmental Tectonics) bid for the contract. Kirkpatrick established a deal with a Nigerian citizen who would attempt to ensure Kirkpatrick received the contract. In exchange, Kirkpatrick would pay two Panamanian companies owned by the Nigerian individual 20% of the contract price, which would be distributed as bribes to Nigerian officials. Kirkpatrick succeeded in obtaining the contract, and Environmental Tectonics brought the issue to the attention of the authorities. The United States Attorney for the District of New Jersey brought charges against Kirkpatrick and its CEO, and both pled guilty.

Environmental Tectonics sued Kirkpatrick in district court and sought damages under anti-racketeering acts. Kirkpatrick moved to dismiss the complaint by arguing that the action was barred by state doctrine that prohibited courts from considering cases that would result in embarrassment for a sovereign nation or interfere with US foreign policy. The district court treated the motion as one for summary judgment and granted the motion in favor of Kirkpatrick. The district court held that Environmental Tectonics would have to prove that Nigerian officials accepted bribes and allowed the bribes to influence governmental decisions. The US Court of Appeals for the Third Circuit reversed and held that Kirkpatrick had not met its burden to show that the case could not proceed.

No. Justice Antonin Scalia delivered the opinion of the unanimous Court. The Supreme Court held that state doctrine only applies when the case requires a US court to declare an act of a foreign sovereign nation invalid. The Court held that this suit only requires the district court to rule on the motivation underlying an action rather than the validity of the action itself. Since nothing in this case required the court to declare an action by Nigeria’s government invalid, state doctrine does not apply, and the case should be allowed to proceed.


On February 11, 1985, a Florida Highway Patrol officer stopped Martin Wells for speeding and smelled alcohol on his breath. Wells was arrested for driving under the influence and taken to the police station for a breathalyzer test. While in custody, police told Wells that his car would be impounded, and he granted permission to the officer to open the trunk. An inventory search of the car at the impoundment revealed two marijuana cigarette butts and a locked suitcase in the trunk. Under the direction of a trooper, impoundment employees opened the suitcase and found a garbage bag of marijuana.

Wells was charged with possession of a controlled substance. He moved to suppress the marijuana evidence by arguing that it was seized in violation of the Fourth Amendment. The trial court denied the motion. Wells pleaded nolo contendere but reserved the right to appeal on the motion to suppress. The Florida District Court of Appeal for the Fifth District reversed the ruling on the motion to suppress, and the Florida Supreme Court affirmed.

No. Justice William H. Rehnquist delivered the opinion for five members of the court. The Supreme Court held that there must be a policy in place that determines whether inventory searches include opening closed containers or not. Such a policy allows the situation to be regulated. Absent such a policy, as in this case, the search is not regulated sufficiently to be permissible under the Fourth Amendment. The Fourth Amendment does allow police officers to use discretion in determining whether a container can be opened based on the nature of the search.

Justice William J. Brennan, Jr. wrote an opinion concurring in the judgment where he argued that there must be a standard inventory search policy in place that limits police discretion to prevent the abuse of a suspect’s Fourth Amendment rights. Justice Thurgood Marshall joined in the opinion. In his separate opinion concurring in the judgment, Justice Harry A. Blackmun argued that the majority opinion went beyond the bounds of the case by allowing individual police discretion to determine whether to open a sealed container in an inventory search. Justice John Paul Stevens also wrote an opinion concurring in the judgment where he argued that the majority opinion represented blatant judicial activism by granting certiorari to a case that the Florida Supreme Court adequately handled. He also wrote that the majority’s opinion on the issue of police discretion extended beyond the question at hand.

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Peel v. Attorney Registration and Disciplinary Commission of Illinois

Bruce J. Ennis, Jr.
Steven J. Marzen
William F. Moran, III

Gary Peel, an attorney licensed to practice in three states, received a "Certificate in Civil Trial Advocacy" from the National Board of Trial Advocacy (NBTA). This certificate is earned by compiling extensive trial experience, completing continuing legal education classes, and passing a day-long examination. In addition to listing the three states in which he was licensed to practice, Peel listed his NBTA certification on his letterhead. The Administrator of the Attorney Registration and Disciplinary Commission of Illinois filed a complaint against Peel and argued that he was publicly presenting himself as a certified legal specialist in violation of the Illinois Code of Professional Responsibility. At Peel's disciplinary hearing, the Illinois Supreme Court agreed with the Commission and held that Peel's letterhead was commercial speech that could be governed by the lawyer advertising regulations. The Illinois Supreme Court also held that Peel's letterhead amounted to an unwarranted claim of superior quality of service because it could lead the public to believe that his authority to practice trial advocacy was derived from his NBTA certification.

No. Justice John Paul Stevens delivered the opinion for the 5-4 majority. The Court held that the letterhead was neither actually nor inherently misleading because advertising an NBTA certification did not suggest a greater degree of qualification than could be inferred by evaluating the certification's requirements. Furthermore, the Court held that, whether or not the letterhead was misleading, Illinois' categorical prohibition on providing this type of information was "broader than reasonably necessary to prevent the perceived evil." Additionally, the concern about deception was insufficient to outweigh the "constitutional presumption favoring disclosure over concealment."

Justice Thurgood Marshall wrote an opinion concurring in the judgment in which he argued that, because the letterhead may be deceiving, Illinois could enact regulations short of a complete ban to make sure the public is not misled by similar representations.

In his dissenting opinion, Justice Byron R. White wrote that the letterhead could be potentially misleading and that the state should have the power to prevent these types of advertisements when they are not accompanied by a disclaimer aimed at avoiding the misconception. Justice Sandra Day O'Connor wrote a separate dissenting opinion in which she argued that the Illinois rule barring this type of misleading speech is valid and that the public's comparative lack of knowledge justifies the state's interest in controlling this type of speech. Chief Justice William H. Rehnquist and Justice Antonin Scalia joined the dissent.


Eli Lilly and Company v. Medtronic, Inc.

In 1983, the predecessor-in-interest to Eli Lilly & Co. sued Medtronic, Inc. for patent infringement to enjoin Medtronic’s research and marketing of an implantable cardiac defibrillator, a device used to treat heart problems. Medtronic argued that the information was used to develop and submit new information under the Food, Drug, and Cosmetic Act (FDCA), and therefore it was exempt from the statutes governing patent infringement. The district court held that there was no such exemption and issued a permanent injunction. The U.S. Court of Appeals for the Federal Circuit reversed and held that Medtronic’s actions could not be considered patent infringement if they were reasonably related to obtaining approval under the FDCA.

Yes. Justice Antonin Scalia delivered the opinion of a 6-2 majority. The Court held that, based on the phrasing of the FDCA, the exemption refers to all actions in the process of developing and submitting information to the FDA. Reading the statute in this way prevents distortions of patent law and allows the development of medical technology to logically proceed. The Court held that only the broader interpretation of the statute respects legislative intent.

Justice Anthony Kennedy wrote a dissent where he argued that the FDCA refers specifically to an exemption for drugs, not medical devices and/or technologies. He argued that to read the statute in any broader manner is to unnecessarily twist Congress’ words from their normal meaning. He also wrote that Congress’ distinction between drugs and devices would be a logical one, as the use of a patent holder’s devices for medical testing would infringe on the patent holder’s sales in a way that the use of a drug would not. Justice Byron R. White joined in the dissent.

Justice Sandra Day O’Connor did not participate in the discussion or decision of this case.


On September 24, 1985, a yacht owned by Everett Sisson caught fire while it was moored at a Lake Michigan marina. The fire destroyed the yacht and damaged several others in the vicinity. The owners of the other yachts sued Sisson for $275,000 for the damage to their yachts and the marina. Sisson filed a petition for declaratory and injunctive relief to limit his liability to $800, the value of his yacht after the fire. He argued that the district court had maritime jurisdiction, but the court disagreed and dismissed the petition. Sisson moved for reconsideration, and the district court denied the motion. The U.S. Court of Appeals for the Seventh Circuit affirmed.

Yes. Justice Thurgood Marshall delivered the opinion of seven members of the court. The Court held that the district court has maritime jurisdiction when the incident in question represents a potential hazard to maritime commerce and bears a substantial relationship to maritime activity. In this case, although the fire caused minimal damage, it had the potential to be extremely destructive and disrupt the maritime activity of the marina. The Court held that such a determination should be made based on the nature of the incident rather than its actual result. The fire bore a substantial relationship to maritime activity because it stemmed from the maintenance of a vessel in a marina located on a navigable waterway, which is a part of traditional maritime activity.

In his opinion concurring in the judgment, Justice Antonin Scalia argued that the majority’s test is unnecessary because it merely proves that district courts have jurisdiction over all tort cases involving vessels in navigable waterways. He wrote that the use of such a test only adds confusion to an otherwise-settled area of law. Justice Byron R. White joined in the concurring opinion.


Burnham v. Superior Court of California, County of Marin

Dennis and Francie Burnham were married in 1976 and moved to New Jersey in 1977. In July of 1987, they decided to separate and agreed that Mrs. Burnham would take custody of the children, move to California, and file for divorce citing irreconcilable differences. In October of 1987, Mr. Burnham filed for divorce in New Jersey citing desertion. Mrs. Burnham successfully demanded that Mr. Burnham respect their previous agreement and filed for divorce in California in January 1988. Later that month, Mr. Burnham was in California on business and visited his children. While there, he was served with a California court summons and a copy of the divorce petition. Later that year, Mr. Burnham appeared before the California Superior Court and moved to quash the petition because the court lacked jurisdiction over him, as his only contacts with California were short business trips. The Superior Court denied the motion and the California Court of Appeal affirmed.

No. Justice Antonin Scalia delivered the opinion of the 9-0 majority. The Supreme Court held that one of the most firmly established precedents in American judicial history is the fact that states have jurisdiction over nonresidents within their borders. As long as the “traditional notions of fair play and substantial justice” are not offended by the state’s assertion of jurisdiction, there is no violation of the Fourteenth Amendment. The Court also held that the addition of a subjective jurisdiction determination to be made by a judge would make the process less fair.

Justice Byron R. White wrote an opinion concurring in part and concurring in the judgment. He argued that there is no evidence that the rule allowing states to have jurisdiction over nonresidents had arbitrarily or unfairly violated due process. In his opinion concurring in judgment, Justice William J. Brennan, Jr. wrote that historical precedent is not the only factor that should determine whether the jurisdictional issue satisfies the Due Process Clause. He argued that, when a person visits a state, they knowingly and willingly avail themselves of the benefits of that state’s laws, and therefore are subject to them as well. Justice Thurgood Marshall, Justice Harry A. Blackmun, and Justice Sandra Day O’Connor joined in the opinion concurring in judgment. Justice John Paul Stevens wrote a separate opinion concurring in judgment where he argued that the majority’s opinion was unnecessarily broad, but he agreed with its conclusion.


The Michigan Campaign Finance Act prohibited corporations from using treasury money for independent expenditures to support or oppose candidates in elections for state offices. However, if a corporation set up an independent fund designated solely for political purposes, it could make such expenditures. The law was enacted with the assumption that "the unique legal and economic characteristics of corporations necessitate some regulation of their political expenditures to avoid corruption or the appearance of corruption." The Michigan Chamber of Commerce wanted to support a candidate for Michigan's House of Representatives by using general funds to sponsor a newspaper advertisement.

No. In making its case, the Michigan Chamber of Commerce argued that it should have been excluded from the act's restrictions since the Chamber was a "nonprofit ideological corporation" which was more analogous to a political association than a business firm. The Court disagreed and upheld the Michigan law. Justice Marshall found that the Chamber was akin to a business group given its activities, linkages with community business leaders, and high degree of members (over seventy-five percent) which were business corporations. Furthermore, Marshall found that the statute was narrowly crafted and implemented to achieve the important goal of maintaining integrity in the political process.


William C. Bryson
Rolf Michael Kehne
James Thomas Jones

Laura Lee Wright and her ex-husband Louis Wright had jointly agreed that they would share custody of their daughter, while her half-sister would live with her parents, Laura Lee Wright and Robert Giles. In November 1986, when the girls were five years old and two years old, respectively, the older daughter told Cynthia Goodman, a friend of Louis Wright’s, that Giles had sexually assaulted her while Laura held her down and covered her mouth. The girl also said that she had seen the same thing happen to her younger sister. Goodman reported this information to the police and took the girl to the hospital where Dr. John Jambura examined her. Dr. Jambura found conditions highly suggestive of sexual intercourse that had occurred two or three days previously. Laura Wright and Giles were jointly charged with two counts of lewd conduct with a minor.

During the trial, the court conducted a voir dire examination of the younger daughter, aged three years at the time of the trial, to determine whether she was capable of testifying. The court found, and the parties agreed, that she was not. Over the objection of the defense, the court allowed Dr. Jambura to testify to certain statements the younger daughter made during the examination. Laura Wright and Giles were convicted on both counts, and they appealed on the conviction regarding the conduct with the younger daughter. They argued that the trial court erred in admitting the hearsay testimony of Dr. Jambura. The Idaho Supreme Court held that the admission of the hearsay testimony violated the Confrontation Clause of the Sixth Amendment because the testimony did not fall under a hearsay exception and the interview in question lacked procedural safeguards. The Idaho Supreme Court also noted that children are highly susceptible to suggestion and can easily be influenced by leading questions. Because the Idaho Supreme Court was not convinced that the jury would have reached the same conclusion had the testimony been excluded, it reversed the conviction.

Yes. Justice Sandra Day O’Connor delivered the opinion of the 5-4 majority. The Supreme Court held that the state bears the burden of showing that the testimony of a witness who is unavailable for trial is sufficiently reliable to withstand scrutiny under the Confrontation Clause. Testimony is deemed reliable when it otherwise falls within a hearsay exception or shows “particularized guarantees of trustworthiness.” In order to meet this high standard of trustworthiness, testimony must be so reliable that adversarial testing under cross-examination would not alter its credibility. Corroborating evidence is not enough to establish the trustworthiness of testimony; it must be inherently reliable. Because the state could neither show that the testimony fit within a hearsay exception nor could they prove that it was inherently trustworthy, it was unreliable and therefore inadmissible under the Confrontation Clause.

Justice Anthony M. Kennedy wrote a dissenting opinion in which he argued that the majority’s opinion erred in establishing a rule that corroborating evidence is not sufficient to establish the trustworthiness of testimony. Because corroborating evidence is often the most commonly used and effective ways of determining the reliability of testimony, there is no reason for the majority to remove it as a method of determining whether testimony is sufficiently trustworthy to be admissible under the Confrontation Clause. Justice William H. Rehnquist, Justice Byron R. White, and Justice Harry A. Blackmun joined in the dissent.


Ohio v. Akron Center for Reproductive Health

In 1985 the Ohio legislature passed House Bill 319, which requires a physician to notify the parents of an unmarried minor who is requesting an abortion, unless the situation falls under one of the exceptions. Exceptions include: the minor providing a letter of parental consent; the physician providing the parents with actual notification 24 hours before the procedure or notification by mail 48 hours before the procedure; and a judicial bypass procedure that allows a minor to obtain the approval of a specified relative upon filing an affidavit with a juvenile court or receive a notification waiver from a juvenile court if parental notification would cause the minor emotional, sexual, or physical abuse. Before the law was put into effect, an abortion clinic, one of its doctors, and a minor seeking an abortion sued in federal district court and claimed that the judicial bypass procedures the law required violated a minor’s Fourteenth Amendment due process rights. The district court found in favor of the plaintiffs and issued a preliminary injunction preventing Ohio form enforcing the statute. Ohio appealed and the U.S. Court of Appeals for the Sixth Circuit affirmed.

No. Justice Anthony M. Kennedy delivered the opinion for the 6-3 majority in which the Court held that the bill did not violate a minor’s right to due process under the Fourteenth Amendment because it satisfied the four factors used to determine the constitutionality of this type of consent statutes. Those four factors are whether the minor was allowed to show that she was mature enough to make the abortion decision without her parents’ help, whether she was allowed to show that the abortion is in her best interest, whether the judicial bypass procedure took reasonable measures to ensure the minor’s anonymity, and whether the statute set reasonable time limits for judicial action. The Court ruled that requiring a minor to prove maturity by clear and convincing evidence is a fair evidentiary burden and that the requirement that the treating physician performs the notification is not an undue burden on the doctor or the minor.

Justice Antonin Scalia wrote a concurring opinion in which he highlighted the importance of leaving abortion statutes such as this one to be decided by the majority-influenced state legislatures instead of by the “lawyerly dissection” of judicial precedent.

Justice Harry A. Blackmun wrote a dissenting opinion in which he argued that the judicial bypass procedure created a system that was a “tortious maze” and lacked the sensitivity required when dealing with such an intimate decision. Justice Blackmun also argued that the state lacked a sufficiently significant interest to interfere with the minor’s right to make this decision. Justice Thurgood Marshall and Justice William J. Brennan, Jr. joined in the dissent.


Employment Division, Department of Human Resources of Oregon v. Smith

Two counselors for a private drug rehabilitation organization ingested peyote -- a powerful hallucinogen -- as part of their religious ceremonies as members of the Native American Church. As a result of this conduct, the rehabilitation organization fired the counselors. The counselors filed a claim for unemployment compensation. The government denied them benefits because the reason for their dismissal was considered work-related "misconduct." The state appellate court reversed the denial of benefits, finding that the denial violated their First Amendment right to the free exercise of religion. The state supreme court affirmed the appellate court. The U.S. Supreme Court vacated the Oregon Supreme Court's judgment against the disgruntled employees, and returned the case to the Oregon courts to determine whether or not sacramental use of illegal drugs violated Oregon's state drug laws (485 U.S. 660 (1988)). On remand, the Oregon Supreme Court concluded that while Oregon drug law prohibited the consumption of illegal drugs for sacramental religious uses, this prohibition violated the Free Exercise Clause. The case returned to the U.S. Supreme Court in this new posture.

Yes. Justice Antonin Scalia, writing for the majority, observed that the Court has never held that an individual's religious beliefs excuse him from compliance with an otherwise valid law prohibiting conduct that government is free to regulate. Allowing exceptions to every state law or regulation affecting religion "would open the prospect of constitutionally required exemptions from civic obligations of almost every conceivable kind." Scalia cited as examples compulsory military service, payment of taxes, vaccination requirements, and child-neglect laws.


William C. Bryson
Bernard J. Panetta, II

Guadalupe Montalvo-Murillo (Montalvo) was held in pretrial custody on federal criminal charges for attempting to enter New Mexico from Mexico with 72 pounds of cocaine. Montalvo cooperated with authorities and agreed to make a controlled delivery to the intended purchasers in Chicago. The authorities took Montalvo to Chicago where the purchase fell through, so they transferred Montalvo back to New Mexico where the criminal complaint charging him with possession of cocaine was originally filed. Montalvo’s detention hearing was not held until 13 days after his initial arrest in New Mexico because of the need to transfer him, the passage of two weekends, a federal holiday, and the fact that the government attorneys were unprepared. At Montalvo’s detention hearing, the district court determined that the delays violated the timeliness of proceedings required by the Bail Reform Act (Act). The district court also determined that Montalvo did not pose a flight risk and, to remedy the untimeliness of the pre-trial proceedings, released him. Montalvo fled upon his release. The U.S. Court of Appeals for the Tenth Circuit affirmed the district court’s ruling and held that the government’s failure to uphold the Act’s directions for a timely hearing justified Montalvo’s release.

Yes. Justice Anthony M. Kennedy delivered the opinion for the 6-3 majority. The Court held that the Bail Reform Act (Act) does not require the government to remedy untimely proceedings by releasing someone who may pose a flight risk or endanger the community. Montalvo’s counsel argued that the government deviated from the time limits set forth in the Act; therefore, the hearing was not in accordance with the Act and the government should lose its authority to detain Montalvo. The Court rejected this argument and noted that no rule requires punitive sanction for every departure from a duty imposed upon the courts or government. The Court held that release in this and similar situations would defeat the Act’s purpose of providing fair bail proceedings, protecting the public, and assuring that defendants appear at trial.

Justice John Paul Stevens filed a dissenting opinion in which he argued that the severity of pre-trial detention and its deprivation of personal liberty requires strict procedural safeguards that cannot be sacrificed in the name of community safety with impunity.


David B. Byrne, Jr.
Joseph G. L. Marston, III

An anonymous caller told Montgomery, Alabama police that Vanessa Rose White had cocaine in an attaché case in her car.  The caller gave certain specific details about the car and White’s future movements.  Following that tip, police followed Vanessa Rose White as she drove from an apartment complex to Doby’s Motel Court, where they pulled her over.  When asked, White gave the officers permission to search her car and an attaché case found in the car.  Police found marijuana in the case and arrested White.  During processing at the police station, officers also found 3 milligrams of cocaine in White’s purse.  After being charged with possession of marijuana and cocaine, White moved to suppress evidence of the drugs.  The trial court denied the motion and White plead guilty.  On appeal, the Court of Criminal Appeals of Alabama reversed the motion, finding that the officers did not have reasonable suspicion to stop and search White’s car.  This search violated the Fourth Amendment protection against unreasonable searches and seizures.

Yes.  In a 6-3 decision, Justice Byron R. White wrote for the majority, reversing the lower court.  The Court held that the totality of the circumstances provided a sufficiently reasonable suspicion that White possessed illegal drugs.  Even though police had no way to confirm the credibility of the caller, police verified many allegations made by the caller about White’s car and movements.  Because the police had a reasonable suspicion, the search did not violate the Fourth Amendment.

Justice John Paul Stevens dissented, stating that the majority’s standard allows anyone with enough knowledge of a person’s routine to cause police to search that person.  The standard also gives officers too much freedom to claim that they received an anonymous tip to justify any search.  Justice William J. Brennan and Justice Thurgood Marshall joined in the dissent.


E. Barrett Prettyman, Jr.
John G. Roberts, Jr.

The National Wildlife Federation (NWF) challenged 1,250 land-use designations made by the federal Bureau of Land Management (BLM). NWF filed suit under section 10(e) of the Administrative Procedure Act (APA), claiming that the actions were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." NWF argued that it had standing to sue because two of its members used public lands "in the vicinity" of lands affected by the BLM's decisions (four other members submitted affidavits claiming that they, too, used lands close to affected areas, but the District Court ruled that the affidavits had been submitted too late).

The BLM challenged the NWF's right to sue, and the District Court agreed. It found that the two affidavits filed in a timely manner did not show that the members had been sufficiently affected to have standing to sue. Furthermore, the court ruled that even if they had had standing to challenge those specific BLM decisions, they would not have had standing to challenge all 1,250.

On appeal, however, the D.C. Circuit Court of Appeals reversed, holding that the initial two affidavits were enough to give them standing to challenge all 1,250 decisions. Moreover, the Court ruled that the District Court had abused its discretion by refusing to consider the additional four affidavits.

No and no. In a 5-to-4 decision written by Justice Antonin Scalia, the Supreme Court held that NWF did not have standing to challenge the land-use designations. The two timely affidavits were not enough to show that the group members had actually been affected by the BLM decisions. Even if they had been, and if the four additional affidavits had been considered (which the Supreme Court ruled had not been necessary), the right to challenge the individual decisions would not have conveyed a right to challenge all of them. The decisions were not a single "agency action" but rather a series of actions which would have to be challenged individually. "The case-by-case approach that this requires is understandably frustrating to an organization such as [NWF], which has as its objective across-the-board protection of our Nation's wildlife and the streams and forests that support it," wrote Justice Scalia. "But this is the traditional, and remains the normal, mode of operation of the courts. ... Until confided to us, ... more sweeping actions are for the other branches."


Metro Broadcasting, Inc. v. Federal Communications Commission

Margaret Polivy
Gregory H. Guillot
Daniel M. Armstrong, III

This case challenged the constitutionality of two minority preference policies of the Federal Communications Commission. Under the first policy challenged by Metro Broadcasting, Inc., minority applicants for broadcast licenses were given preference if all other relevant factors were roughly equal. The second policy, known as the "distress sale," was challenged by Shurberg Broadcasting of Hartford Inc. This policy allowed broadcasters in danger of losing their licenses to sell their stations to minority buyers before the FCC formally ruled on the viability of the troubled stations. This case was decided together with Astroline Communications Co. v. Shurberg Broadcasting, in which Faith Center Inc. made a "distress sale" of its television license to a minority outfit owned by Astroline. Shurberg, a non-minority applicant for a similar license, challenged the FCC's approval of Faith Center's sale to Astroline.

No. The Court, in a 5-to-4 decision, held that the FCC's minority preference policies were constitutional because they provided appropriate remedies for discrimination victims and were aimed at the advancement of legitimate congressional objectives for program diversity. The FCC's minority preference policies were closely related to, and substantially advanced, Congress's legitimate interest in affording the public a diverse array of programming options. The availability of program diversity serves the entire viewing and listening public, not just minorities, and is therefore consistent with First Amendment values. Finally, the Court noted that the FCC's minority preference policy did not unduly burden nonminorities. The FCC did not predetermine the number of distress sales, and could only invoke them in a small number of cases, when no competing bids were filed and the licensee elected to sell at a lower price rather than risk an FCC investigation (see also Adarand Constructors v. Pena).


In order to combat segregation in public schools in compliance with court directives, the Kansas City, Missouri School District (KCMSD) sought to enhance the quality of schools and to attract more white students from the suburbs. The KCMSD's ability to raise taxes, however, was limited by state law. After determining that the District did not have alternative means of raising revenue for the program, federal district judge Russell G. Clark ordered an increase of local property taxes for the 1991-92 fiscal year. The U.S. Court of Appeals for the Eighth Circuit affirmed the decision, but ruled that the courts should enjoin state tax laws that prevented the District from raising the necessary funds and allow the state to set tax rates.

The Court held that the District Court "abused its discretion" by imposing a specific tax increase. The Court also held, however, that the modifications of the District Court's order made by the Court of Appeals satisfied "equitable and constitutional principles governing the District Court's power...." The majority found that court orders directing local governments to levy their own taxes were "plainly" judicial acts within the powers of federal courts. When a constitutional justification existed, courts had the authority to order tax increases despite statutory limitations. The Court reasoned that "[t]o hold otherwise would fail to take account of the obligations of local governments, under the Supremacy Clause, to fulfill the requirements that the Constitution imposes on them."


According to Arizona state law, after a person has been convicted of first-degree murder, there is a separate sentencing hearing to determine whether the punishment will be death or life imprisonment. The court must determine whether aggravating or mitigating factors were present. The judge imposes the death sentence if one or more aggravating factors are proven to exist.

On March 2, 1986, Jeffrey Alan Walton, Robert Hoover, and Sharold Ramsey went to a bar in Tucson intending to rob someone at random and steal that individual’s car. The three robbed Thomas Powell at gunpoint and forced him into his car that they drove into the desert. They later stopped the car, forced Powell to lie on the ground, and Walton shot him in the head. After the body was found, the coroner determined that the shot did not kill Powell, but rather that he died from dehydration, starvation, and pneumonia from being left in the desert. Walton was convicted of first-degree murder.

At the sentencing hearing, the prosecution argued that two aggravating factors were present: the murder was committed in “an especially heinous, cruel, or depraved manner” and for the purposes of financial gain. The defense argued that mitigating factors were present in the form of Walton’s history of substance abuse, possible sexual abuse as a child, and the fact that he was 20 years old at the time of the trial. The court found that the aggravating factors were present, and the judge sentenced Walton to death. The Arizona Supreme Court affirmed.

Yes. Justice Byron R. White delivered the opinion of the 5-4 plurality. The Supreme Court held that the Arizona method of death penalty sentencing is not arbitrary and does not place an undue burden on the defendant. The burden on the defendant to prove mitigating circumstances exist is not unconstitutional because it does not lessen the burden on the prosecution to prove that aggravating circumstances exist. The Court also held that a determination by a judge rather than a jury is constitutional because a judge has a great deal more legal expertise than even a well-instructed jury and is better able to make fair determinations. The wording of the statute itself is sufficiently clear to prevent arbitrary sentencing.

In his opinion concurring in part and concurring in judgment, Justice Antonin Scalia argued that the judicial history of death penalty cases is based on contradictory lines of logic. The courts have attempted to reduce discretionary decision-making while at the same time affording each case individualized examination. Because the discretionary rule has less basis in judicial history, he argues that it should not be a consideration in the constitutionality of death penalty cases.

Justice William J. Brennan, Jr. wrote a dissenting opinion where he argued that the death penalty is always a cruel and unusual punishment. Justice Thurgood Marshall joined in the dissent. In his separate dissent, Justice Harry A. Blackmun wrote that the Arizona statute places an unconstitutional burden on the defendant to prove that the mitigating factors are “sufficiently substantial to call for leniency.” A defendant can produce evidence of mitigating factors that will have no weight if a judge determines them to lack the necessary significance. He also argued that the wording of the Arizona statute was too vague to provide sufficient guidance to the sentencing judge. Justice Brennan, Justice Marshall, and Justice John Paul Stevens joined in the dissent. Justice Stevens wrote a separate dissent where he argued that the Sixth Amendment requires death penalty sentencing to be conducted by a jury rather than a judge. He also argued that the individual facts of a case should have a bearing on sentencing decisions and that to ignore the role of discretion in such decisions would be unjust.


J. Joseph Curran, Jr.
William H. Murphy, Jr.

Sandra Ann Craig, the operator of a kindergarten and pre-school facility, was accused of sexually abusing a six-year-old child. Over Craig's objections, a trial court allowed the alleged child victim to testify via one-way closed circuit television. The child testified outside the courtroom while Mrs. Craig, through electronic communication with her lawyer, could make objections. The judge and jury also viewed the testimony in the courtroom. This was done in order to avoid the possibility of serious emotional distress for the child witness. The trial court convicted Craig, but the Maryland high court reversed.

No. In a 5-to-4 decision, the Court held that the Confrontation Clause of the Sixth Amendment, which guarantees criminal defendants face-to-face meetings with witnesses against them at trial, was not absolute. The Court found that "in certain narrow circumstances, 'competing interests, if closely examined, may warrant dispensing with confrontation at trial." The State's interest in protecting the physical and psychological well-being of children, the Court held, could be sufficiently important to outweigh defendants' rights to face their accusers in court.


On January 13, 1985, Erwin Paul Wallaker, the treasurer of the San Jose Coin Club, returned home with the proceeds from the annual coin convention, which Terry Brice Horton attended. Upon entering his garage, two robbers accosted Wallaker; one was armed with a machine gun and the other with an electric shocking device. They threw him to the ground, shocked him, bound him, and robbed him of jewelry and cash. During this interaction, Wallaker was able to identify Horton by the sound of his voice. The three witnesses who discovered Wallaker partially corroborated his identification of Horton. They saw someone leaving the scene carrying what looked like an umbrella.

Sergeant LaRault determined there was enough evidence to search Horton’s home, and obtained a warrant to do so. His affidavit for the search warrant described both the weapons and the proceeds of the robbery, but the warrant only granted permission to look for the stolen property. While searching Horton’s house, Sergeant LaRault did not find the property, but he did find an Uzi machine gun, a .38 caliber revolver, two stun guns, and a handcuff key, along with other items linking Horton to the crime.

The evidence was admitted into evidence at  trial, and Horton was found guilty. The California Court of Appeals affirmed the verdict, and the California Supreme Court denied the petitioner’s request for review.

No. Justice John Paul Stevens, writing for a 7-2 majority, held that the seizure of evidence in plain view does not constitute the invasion of privacy that the Fourth Amendment is meant to prohibit. Once an officer has a warrant to search a suspect’s house, that officer may seize any obviously incriminating evidence that the officer finds in plain view. The Court also held that the “inadvertent” limitation does not limit the scope of the search further than the warrant itself does. In this case, since the warrant was specifically for the stolen property, the officer had to limit his search to the likely places where the property might be kept. Since the officer also had probable cause to believe that certain types of weapons were used in the commission of the crime, he could legally seize the weapons if they were found in the course of that search.

Justice William J. Brennan, Jr. wrote a dissenting opinion in which he argued that the Fourth Amendment requires police officers to obtain specific warrants from impartial judges and to limit their searches to the items described. He defines the “inadvertent” limitation much more narrowly. It applies only when the officer is legally in a location and did not anticipate the discovery of such evidence. Justice Thurgood Marshall joined in the dissent.


Patricia T. Barmeyer
Thomas E. McCutchen, Jr.

The Charter of the Colony of Georgia described the Savannah River as its border with South Carolina. The Treaty of Beaufort (Treaty) further refined this boundary, which has since been disputed several times. This case was the third case since the Treaty that disputed this boundary. A Special Master was appointed to help resolve the dispute and filed two reports on the issue. This case was brought before the Supreme Court after Georgia and South Carolina filed disputes with the Special Master's reports .

Justice Harry A. Blackmun delivered the majority opinion. The Court agreed with the portion of the Special Master's report that held that the disputed Barnwell islands (Hog Island, Long Island, and Barnwell Island No. 3) rightfully belonged to South Carolina because of South Carolina's history of taxing, policing, and prosecuting activities on those islands. The Court also held that the islands that emerged after the Treaty of Beaufort (Treaty) had no effect on the boundary line between the two states. These islands were granted to whichever state held the side of the existing boundary on which they fell. The Court ruled in favor of the Special Master's conclusion regarding the location of the mouth of the Savannah River and overruled Georgia's exception that would have granted that state possession of Oyster Bed Island. Additionally, the Court ruled in favor of Georgia's objection to the "right angle principle" that the Special Master used to determine the boundary when there was an island that would alter the assumed border from the middle of the river. The Court also found that the Special Master correctly gave Denwill, Horseshoe Shoal, and the entirety of Bird Island to Georgia. Finally, the Court approved the Special Master's recommendation regarding the lateral seaward boundary.

Justice White wrote an opinion dissenting in part in which he argued that the Special Master's use of the "right angle principle" was a reasonable approach that was consistent with the Court's prior decisions. Justice Stevens wrote a separate opinion dissenting in part in which he argued that precedent favored South Carolina's exception to the lateral seaward boundary. In his separate opinion dissenting in part, Justice Scalia wrote that the facts do not support the Court's decision to award Denwill and Horseshoe Shoal to Georgia. Justice Kennedy also wrote a separate opinion dissenting in part in which he argued that every new island that is created by natural forces should belong to Georgia unless it has been specifically granted to South Carolina.


Office of Personnel Management v. Richmond

Charles Richmond worked as a welder at the Navy Public Works Center in San Diego, California until 1981, when the Office of Personnel Management (OPM) approved his application to for a disability retirement. OPM determined that Richmond’s poor eyesight prevented him from performing his job and entitled him to receive the benefits for disabled federal employees who have completed five years of service. Before 1982, an individual was ineligible for disability benefits if, in each of the two succeeding calendar years, the individual earns at least 80 percent of the current pay of the position occupied immediately prior to retirement. In 1982, this requirement was amended so that an individual becomes ineligible if he earns at least 80 percent of the pay of the previous position in any succeeding calendar year. Until 1985, Richmond worked part time and his earnings were low enough to keep him eligible for disability benefits. In 1985, he had the opportunity to earn more money, so he contacted OPM to make sure he would remain eligible. OPM provided him with the old requirements but not the new ones. Richmond subsequently accepted overtime work, earned more, and became ineligible for disability benefits. He lost six months of disability pay.

Richmond appealed the denial of benefits to the Merit Systems Protection Board (MSPB) and argued that the fact that he received incorrect information from OPM prevented them from denying his benefits. The MSPB denied Richmond’s appeal for review. Richmond appealed to the U.S. Court of Appeals for the Federal Circuit, which reversed the decision.

No. Justice Anthony Kennedy delivered the opinion of the 5-4 majority. The Court held that the Appropriations Clause of the Constitution explicitly states that no money can be paid from the Treasury unless specifically authorized by a statute. Since there is a statute that denies Richmond his benefits, and there is not one that provides an exception, the Court held that Richmond’s receipt of incorrect information cannot affect the non-payment of his benefits. Any precedent that would force the government to make a payment from the Treasury in contravention of a statute forbidding it would essentially nullify the Appropriations Clause. The Court also held that a ruling that made the government liable for the statements of all its agents would result in restrictions on public information that would be detrimental, especially to those of little means.

Justice Byron R. White wrote a concurring opinion where he argued that the majority’s opinion does not foreclose the possibility of statutory restrictions being overturned and government actions changed if they violate other commands of the Constitution. Justice Harry A. Blackmun joined in the concurrence.

Justice John Paul Stevens wrote an opinion concurring in judgment. He argued that the majority opinion’s reliance on the Appropriations Clause is not relevant to the overall issues at hand in the case.

Justice Thurgood Marshall wrote a dissenting opinion in which he argued that there was precedent for the Court to interpret statutes loosely when a strict interpretation would produce results that Congress would not have desired. Since the legislative intent behind the creation of the federal disability benefit system was to provide for former government employees who are now disabled, the principles of equitability support Richmond’s continued receipt of his benefits. Justice Marshall also argued that the majority’s opinion refused to analyze the burden the government must bear because of the false information it provided. Justice William J. Brennan, Jr. joined in the dissent.


Rene Martin Verdugo-Urquidez was a citizen and resident of Mexico. In cooperation with the Drug Enforcement Agency (DEA), Mexican police officers apprehended and transported him to the U.S. border, where he was arrested for various narcotics-related offenses. Following his arrest, a DEA agent sought authorization to search Verdugo-Urquidez's residences for evidence. The Director General of the Mexican Federal Judicial Police authorized the searches, but no search warrant from a U.S. magistrate was ever received. At trial, the district court granted Verdugo-Urquidez's motion to suppress the evidence on the ground that the search violated the Fourth Amendment to the Federal Constitution.

No. The text of the Fourth Amendment concerns "the people," suggesting a concern with persons who are part of the national community, as contrasted with aliens without any substantial connection to the U.S. Moreover, extraterritorial aliens are not even entitled to rights under the Fifth Amendment, which speaks in the relatively more universal term of "person." And non-"fundamental" rights are not even guaranteed to inhabitants of unincorporated territories under U.S sovereign control, much less aliens. Therefore, any restrictions on searches and seizures of nonresident aliens and their foreign property must be imposed by the political branches through diplomatic understanding, treaty or legislation.


R. Claire Guthrie
Walter E. Dellinger, III
John G. Roberts, Jr.

To qualify for federal funding under the Medicaid Act, states must submit to the Secretary of Health and Human Services a plan that establishes a system by which healthcare providers will be reimbursed. Under the Boren Amendment, the reimbursement rates must be "reasonable and adequate" to meet the costs of efficiently operated facilities.

In 1986, a group of hospitals brought sought against the state of Virginia, arguing that its reimbursement rates (which had been approved in 1982 and again in 1986 by the Secretary) were not "reasonable and adequate." The suit was brought under 42 U.S.C. 1983, which allows individuals or organizations to bring suit for the "deprivation of any rights ... secured by [federal] laws." Virginia argued that the Boren Amendment had not been intended to create a an enforceable right, but simply to provide guidelines for the Secretary to follow, and that the hospitals therefore could not bring suit under 1983. The state also argued that Congress had intended to prevent private parties from bringing suit to enforce the provisions of the Amendment. The District Court disagreed, allowing the suit to proceed. The Fourth Circuit Court of Appeals affirmed.

Yes and no. In a 5-to-4 decision, the Court held that the Boren Amendment clearly established a right to reasonable and adequate reimbursement rates for the hospitals. Justice William J. Brennan, Jr., writing for the majority, stated that a right exists if "the provision in question was intend[ed] to benefit the ... plaintiff." The requirement of reasonable rates was clearly intended to benefit the hospitals, so it amounted to a right under 1983. Without explicit language within the Amendment preventing private suits under 1983, or an alternative remedial scheme that would make such suits unnecessary, it was not reasonable to conclude that Congress had intended to prevent private suits to enforce the right it had created.


Around 6:30 p.m. on October 3, 1987, Thomas Corbin drove his car across the yellow line that separated lanes of traffic and struck two oncoming cars on Route 55 near LaGrange, New York. Assistant District Attorney Thomas Dolan arrived on the scene and learned that Brenda and Daniel Dirago, the driver and passenger of one of the cars, had been injured. Later that night, Dolan learned Brenda Dirago had died in the hospital. Corbin received two misdemeanor tickets, one for driving while intoxicated and one for failing to keep to the right of the median.

Corbin pled guilty to both misdemeanors. The judge was unaware of the fatality the accident caused. On January 19, 1988, a grand jury indicted Corbin on charges of manslaughter, vehicular manslaughter, criminally negligent homicide, and reckless assault. Corbin filed a motion to dismiss the charges by arguing double jeopardy, but the county court denied the motion. Corbin sought a writ of prohibition to prevent further prosecution, which the Appellate Division denied. The New York Court of Appeals reversed.

Yes. Justice William J. Brennan, Jr. delivered the opinion of the 5-4 majority. The Court held that the Double Jeopardy Clause bars subsequent prosecution if the offenses share identical elements or if one is a lesser-included offense within the other. A second prosecution is also prohibited if the second trial would require a re-litigation of the same factual issues as the first one. Because the state would use the crimes of which Corbin had already been convicted in order to establish elements of the subsequent charges, the Court held that the secondary charges violated the Double Jeopardy Clause.

Justice Sandra Day O’Connor wrote a dissent where she argued that the majority’s opinion was inconsistent with the Court’s decision in a previous case from that term and takes too broad a view of the Double Jeopardy Clause.

In his dissenting opinion, Justice Antonin Scalia wrote that the Double Jeopardy Clause only prevents double prosecution for the same offense, not necessarily the same action. He argued that the Clause had historically been interpreted as allowing multiple prosecutions if a single action violated multiple laws. He argued that the majority’s opinion unnecessarily complicated and limited the courts’ ability to try a person for multiple crimes stemming from the same action. Chief Justice William H. Rehnquist and Justice Anthony M. Kennedy joined the dissent.


Atlantic Richfield Company v. USA Petroleum Company

Ronald C. Redcay
Maxwell M. Blecher
John G. Roberts, Jr.

Atlantic Richfield Company (ARCO) is an integrated oil company that sells gasoline to consumers through its own retail stations as well as independent ARCO-brand stations. USA Petroleum (USA), a competitor of ARCO, is an independent retail marketer that purchases gasoline from major petroleum companies and resells it under its own brand name. USA sued ARCO under the Clayton Act in the U.S. District Court for the Central District of California, alleging that ARCO had violated Section 1 of the Sherman Act by conspiring with the independent ARCO-brand stations to sell gasoline at below-market prices (the Clayton Act allows private parties to bring suit when they have been harmed by anticompetitive practices that violate the Sherman Act).

The District Court ruled for ARCO, finding that even if USA could prove the conspiracy, it would not be an "antitrust injury" to USA under the Clayton Act unless it could also prove that the pricing was predatory (that is, that it was intended to drive USA and other competitors out of business). It would be impossible to prove this, the District Court concluded, because ARCO was not dominant enough in the market to exert that sort of power.

A divided panel of the 9th Circuit Court of Appeals reversed, finding that it was not necessary to show predatory intent to prove an "antitrust inquiry." All that was necessary was a showing that the party bringing the suit had been harmed by price fixing carried out by the party being sued.

Yes. In a 7-to-2 decision, the Supreme Court held that it was necessary to prove predatory intent in order for a competitor to establish a private cause of action under the Clayton Act. According to Justice William J. Brennan, Jr.'s majority opinion, the standard for competitors is different than for affiliated dealers or consumers because competitors would only bring suit when the low prices that resulted from the price-fixing scheme hurt their business. As long as these prices are not predatory, however, they are actually good for consumers and increase competition. Allowing competitors to sue without showing predatory intent would therefore decrease competition, exactly the opposite of the intent of the Sherman and Clayton Acts.


In an effort to comply by its duty to promote programming diversity, under the Communications Act of 1934, the Federal Communications Commission (FCC) adopted two minority preference policies. The first policy awarded preferences to minority ownership bids for licenses for new radio or television broadcasting stations. The second policy allowed radio or television broadcasters with questionable license qualifications, to avoid an FCC investigation of their actions by making a "distress sale" of their licenses to a legitimate minority outfit. Upon FCC approval, Faith Center Inc. "distress sold" its television license to Astroline's minority-owned outfit. Shurberg, a nonminority applicant for a similar license, sought appellate review of Astroline's award. The appellate court agreed, and invalidated the distress sale policy as unconstitutional. Astroline appealed and the Supreme Court granted certiorari.

No. The Court, in the last opinion authorer by Justice William J. Brennan,Jr., held that the FCC's minority preference policies are constitutional because they provide appropriate remedies for discrimination victims and are aimed at the advancement of the legitimate congressional objective of program diversity. The FCC's minority preference policies were closely related to, and substantially advanced, Congress's legitimate interest in affording the public a diverse array of programming options. The availability of program diversity serves the entire viewing and listening public, not just minorities, and is therefore consistent with First Amendment values. Finally, the Court noted that the FCC's minority preference policy did not unduly burden nonminorities. The FCC did not predetermine the number of distress sales, and could only invoke them in a small number of cases, when no competing bids are filed and the licensee elects to sell at a lower price rather than risk an FCC investigation.


After obtaining a warrant, Ohio police searched the home of Clyde Osborne and found explicit pictures of naked, sexually aroused male adolescents. Osborne was then prosecuted and found guilty of violating an Ohio law that made the possession of child pornography illegal.

The Court held that Ohio could constitutionally proscribe the possession of child pornography. The Court argued that the case at hand was distinct from Stanley v. Georgia, "because the interest underlying child pornography prohibitions far exceed the interests justifying the Georgia law at issue in Stanley." Ohio did not rely on "a paternalistic interest in regulating Osborne's mind;" rather, Ohio merely attempted to protect the victims of child pornography. The Court argued that regulations on production and distribution of child pornography were insufficient and could not dry up the market for pornographic materials. The Court also found that an error in jury instructions in the lower courts mandated Osborne be given a new trial.


John L. Kopolow
Lawrence S. Robbins
Dennis M. Sweeney

On February 3, 1986, two men robbed a Godfather’s Pizza in Prince George’s County, Maryland. One of the men was wearing a red running suit. Later that day, the police obtained warrants for the arrest of Jerome Edward Buie and Lloyd Allen and put Buie’s house under surveillance. On February 5, the police arrested Buie in his house. Police found him hiding in the basement. Once Buie emerged and was handcuffed, an officer went down to determine if there was anyone else hiding. While in the basement, the officer saw a red running suit in plain view and seized it as evidence.

The trial court denied Buie’s motion to suppress the running suit evidence, and he was convicted. The Court of Special Appeals of Maryland affirmed the trial court’s denial of the motion. The Court of Appeals of Maryland reversed.

No. Justice Byron R. White delivered the opinion of the 7-2 majority. The Court held that the potential risk to police officers of another person on the arrest site must be weighed against the invasion of privacy. Because the arrest in this case happened in the suspect’s home, the officer was put at even greater risk because of the possibility of an ambush. This risk justified the protective sweep. The Court also held that a protective sweep was meant to be a cursory one, and not an in-depth search of the premises that would require a specific warrant.

In his concurring opinion, Justice John Paul Stevens wrote that the state has the burden to prove that the search was protective in nature. He argued that the state must show that the officers had a “reasonable basis” for believing that there was a risk to themselves.

In his concurring opinion, Justice Anthony M. Kennedy wrote that he disagreed with Justice John Paul Stevens. He argued that the protective sweep was an element of police safety procedure, so the state did not have as high of a burden as Justice Stevens’ concurrence implied.

Justice William J. Brennan, Jr. wrote a dissent where he argued that the protective sweep represented the type of intrusive unwarranted search that the Fourth Amendment was created to prevent. He also argued that the majority opinion’s limits as to the scope and timeliness of the protective search are not enough to prevent the police from abusing such an unwarranted search. Justice Thurgood Marshall joined the dissent.


Marsha Kokinda and Kevin Pearl were volunteers for the National Democratic Policy Committee. They set up a table on a sidewalk near a post office to solicit contributions and sell political literature. After post office employees received a large number of complaints, Kokinda and Pearl were asked to leave. They refused, at which point postal inspectors arrested them. They were charged and convicted of violating 39 CFR 232.1(h)(1)(1989), which prohibits "soliciting alms and contributions ... on postal premises." They appealed the convictions, arguing that they violated the Free Speech clause of the First Amendment. The District Court, ruling that the sidewalk in question (which was entirely on Postal Service property and was intended only for traffic to and from the Post Office) was not a public forum, found that the restrictions were reasonable and therefore did not violate the First Amendment. On appeal, however, a divided panel of the Fourth Circuit Court of Appeals ruled that the sidewalk was a traditional public forum and that the government's regulations were therefore subject to strict scrutiny. Because the government had no significant interest in banning solicitation, the convictions were unconstitutional.

In a divided opinion, the Court ruled that the prohibition was not unconstitutional. Justice Sandra Day O'Connor, writing for a four-member plurality, wrote that the sidewalk was not a public forum. "Regulation of speech activity on governmental property that has been traditionally open to the public for expressive activity, such as public streets and parks, is examined under strict scrutiny. ... But regulation of speech activity where the Government has not dedicated its property to First Amendment activity is examined only for reasonableness." The need to prevent solicitors from interrupting postal business satisfied this "reasonableness" test, so the convictions were constitutional. Justice Anthony Kennedy, writing separately, held that it was unnecessary to determine whether the sidewalk was a public forum because the regulation met the traditional standard applied to time, place, and manner restrictions of protected expression.


Michigan Department of State Police v. Sitz

Thomas L. Casey
Stephen L. Nightingale
Mark Granzotto

In 1986, the Michigan State Police Department created a sobriety checkpoint program aimed at reducing drunk driving within the state. The program included guidelines governing the location of roadblocks and the amount of publicity to be given to the operation. Before the first roadblock went into effect, Rick Sitz, a licensed Michigan driver, challenged the checkpoints and sought declaratory and injunctive relief. Sitz was victorious in the Michigan lower courts.

In a 6-to-3 decision, the Court held that the roadblocks did not violate the Fourth Amendment. The Court noted that "no one can seriously dispute the magnitude of the drunken driving problem or the States' interest in eradicating it." The Court then found that "the weight bearing on the other scale--the measure of the intrusion on motorists stopped briefly at sobriety checkpoints--is slight." The Court also found that empirical evidence supported the effectiveness of the program.


Michael Milkovich, Maple Heights High School’s wrestling coach, testified at a hearing concerning a physical altercation at a recent wrestling meet.  After the hearing, Theodore Diadiun published an article in the local newspaper saying that anyone at the wrestling meet “knows in their heart” that Milkovich lied at the hearing.  Milkovich sued Diadiun and the paper for defamation, alleging that the article accused him of perjury, damaged his occupation, and constituted libel.  The court ruled in favor of the paper, holding that Milkovich failed to show the article was published with actual malice.  The Ohio Court of Appeals reversed and remanded.

On remand, the trial court ruled in favor of the paper, holding that the article was a constitutionally-protected opinion.  The Ohio Court of Appeals affirmed, but the Supreme Court of Ohio reversed and remanded, holding that Milkovich was not a public figure and the defamatory statements were factual assertions, not constitutionally-protected opinions.

No.  In a 7-2 decision, Justice William H. Rehnquist wrote the majority opinion reversing and remanding.  The Supreme Court held that there is no special constitutional privilege for opinions.  The statements in the newspaper were sufficiently factual to be proved true or false.  Justice William J. Brennan wrote a dissent, expressing that the statements could not reasonably be interpreted as defamatory.  Justice Thurgood Marshall joined in the dissent.


University of Pennsylvania v. Equal Employment Opportunity Commission

Rosalie Tung was an Asian-American professor who believed that she was denied tenure because of her sex and her race. To investigate her claim, the Equal Employment Opportunity Commission asked the University for access to Tung's confidential peer review file. Citing the protection of academic freedom, the University refused to cooperate so as to avoid breaching the confidentiality promised to reviewers.

A unanimous Court held that the need to ferret out invidious discrimination served a compelling government interest which justified inspection of confidential files. Since the EEOC was not interested in forcing the University to accept specific standards for promotion and it did not attempt to control the content of speech on campus, Justice Blackmun dismissed Pennsylvania's argument that the EEOC's actions violated academic freedom.


Peter D. Coddington
Barrington D. Parker, Jr.

On January 1, 1984, officers of the New York City Police Department found Thelma Staton murdered in her apartment. Various facts of the case linked Bernard Harris to the crime. On January 16, police officers responded to Harris’ house to take him into custody. Although the police had not obtained an arrest warrant, when they knocked on his door, Harris let them enter. The police officers read Harris his Miranda rights, and Harris admitted to committing the murder. The police officers arrested Harris and took him to the police station, where he was read his Miranda rights again and signed an inculpatory statement. The police then videotaped an incriminating interview between Harris and the district attorney, despite Harris' requests to cease the interrogation.

The trial court suppressed Harris’ initial confession and video interview but allowed the signed statement into evidence. After a bench trial, Harris was convicted of second-degree murder. The Appellate Division affirmed the conviction. The Court of Appeals of New York reversed and found the signed statement inadmissible because it was the fruit of an illegal arrest.

No. Justice Byron R. White delivered the opinion of the 5-4 majority. The Supreme Court held that the exclusionary rule was designed to protect the physical sanctity of the home, not to grant criminal suspects protection from statements made outside the premises when the police have probable cause for arrest. Since the police had probable cause for an arrest, Harris was not unlawfully in custody when he was read his Miranda rights at the station and made the statement in question.

In his dissent, Justice Thurgood Marshall wrote that Harris’ arrest without a warrant and without exigent circumstances violated the Fourth Amendment, and the signed statement was therefore inadmissible because it was the fruit of an illegal arrest. He argued that the exclusionary rule was meant to prevent police officers from violating the Fourth Amendment in general, and it did not specifically apply to the home. He also argued that there is no evidence that a statement made at the police station is removed from the taint of an illegal arrest. Whether or not Harris was unlawfully in custody at the time his statement was made, he was in custody as a result of an illegal arrest, so the statement was still affected. Justice William J. Brennan, Jr., Justice Harry A. Blackmun, and Justice John Paul Stevens joined in the dissent.


Cruzan by Cruzan v. Director, Missouri Department of Health

William H. Colby
Robert L. Presson
Kenneth W. Starr

In 1983, Nancy Beth Cruzan was involved in an automobile accident which left her in a "persistent vegetative state." She was sustained for several weeks by artificial feedings through an implanted gastronomy tube. When Cruzan's parents attempted to terminate the life-support system, state hospital officials refused to do so without court approval. The Missouri Supreme Court ruled in favor of the state's policy over Cruzan's right to refuse treatment.

In a 5-to-4 decision, the Court held that while individuals enjoyed the right to refuse medical treatment under the Due Process Clause, incompetent persons were not able to exercise such rights. Absent "clear and convincing" evidence that Cruzan desired treatment to be withdrawn, the Court found the State of Missouri's actions designed to preserve human life to be constitutional. Because there was no guarantee family members would always act in the best interests of incompetent patients, and because erroneous decisions to withdraw treatment were irreversible, the Court upheld the state's heightened evidentiary requirements.


Under Section 2 of a Minnesota statute regulating a minor's access to abortion, women under 18 were denied access to the procedure until 48 hours after both their parents had been notified. Exceptions were made in the cases of medical emergencies and women who were victims of parental abuse. Section 6 of the law allowed the courts to judicially bypass Section 2 if the young woman could maturely demonstrate that notification would be unwise.

The Court found Section 2 of the statute unconstitutional because requiring notification of both parents, whether or not both wanted to know or had taken responsibility for raising the child, did not serve a legitimate state interest. The Court favored notification of only one parent and a 48 hour waiting period. The Court upheld Section 6 of the law.


James was a youth arrested for the murder of another adolescent. During his trial a witness testifying on his behalf described James's appearance on the night of the supposed crime. This description contradicted statements which James had made to police officers the day after the crime. To expose this perjured testimony, prosecutors moved to introduce James's statements into the trial even though they were obtained illegally.

The Court held that the statements could not be used. Justice Brennan argued that prosecutors are allowed to introduce illegally obtained evidence when using it to impeach a defendant's own testimony. However, in this case, the Illinois Supreme Court wrongly expanded that practice making it applicable to all defense witnesses. Brennan concluded that this expansion "would frustrate rather than further the purposes underlying the exclusionary rule."


Charles A. Rothfeld
H. Woodruff Turner
David L. Shapiro

FMC Corporation (FMC) provided its employees with a self-funded health benefit plan (Plan). The daughter of an FMC employee, Gerald Holliday (Holliday), was seriously injured in a car accident and the Plan paid for a portion of her medical expenses. Holliday also received, in settlement of a negligence action he brought on behalf of his daughter, payment from the driver of the automobile in which his daughter was injured. FMC sought reimbursement under the terms of the Plan. Holliday obtained a declaratory judgment that Section 1720 of the Pennsylvania Motor Vehicle Financial Responsibility Law - which precludes reimbursement from a claimant's tort recovery for benefit payments by a program, group contract, or other arrangement - prohibited FMC's exercise of subrogation rights. The Third Circuit affirmed, holding that the Employee Retirement Income Security Act (ERISA), which applies to employee welfare benefit plans such as FMC's Plan, did not preempt Section 1720.

Yes. Three provisions of ERISA speak to the question of preemption: the preemption clause, the saving clause, and the deemer clause. The preemption clause establishes as an area of exclusive federal concern the subject of every state law that "relate[s] to" an employee benefit plan governed by ERISA. The saving clause returns to the states the power to enforce those state laws that "regulat[e] insurance." The deemer clause dictates that an employee benefit plan governed by ERISA shall not be deemed an insurance matter. The Pennsylvania law is covered by the preemption clause since it relates to an employee benefit plan. It also falls within the saving clause because it invalidates certain insurance subrogation provisions. The deemer clause, however, exempts self-funded ERISA plans from being governed by state laws regulating insurance within the meaning of the saving clause. As a result, Section 1720 is preempted insofar as it prohibits FMC's self funded Plan from exercising its subrogation rights.


On May 5, 1983, an Eastern Airlines flight departed from Miami, bound for the Bahamas. After takeoff, one of the plane’s jet engines lost pressure. The flight crew shut down the failing engine and turned the plan around to return to Miami. The flight crew informed the passengers that the plane would be ditched in the Atlantic Ocean, but the crew managed to restart the engine and land the plane safely at Miami International Airport. A group of passengers, including Rose Marie Floyd, sued Eastern Airlines for mental distress caused by the incident. Eastern Airlines argued the engine failure and preparations for ditching the plane amounted to an accident under Article 17 of the Warsaw Convention and also that Article 17 requires physical injury a condition of liability. The district court concluded than mental distress alone is not enough to receive compensation under Article 17. The U.S. Court of Appeals for the Eleventh Circuit reversed and held the language in Article 17 encompasses purely emotional distress.

No. Justice Thurgood Marshall deliver the unanimous opinion of the Court, which held that Article 17 of the Warsaw Convention does not allow recovery for purely mental injuries. The translation of the direct language of the Convention can only be interpreted as “bodily injury,” which is consistent with the negotiating history of the Convention.


Shirley Irwin filed a complaint with the Equal Employment Opportunity Commission (EEOC), alleging that he had been unlawfully fired by the federal Veterans Administration on the basis of his race and disability. In order to sue the federal government for unlawful discrimination, one must obtain a right-to-sue letter from the EEOC (which is a waiver of the government's sovereign immunity from private suits). The EEOC mailed right-to-sue letters to both Irwin and his attorney. His attorney was out of the country, however, so while the letter arrived at his office on March 23, the attorney did not receive it until April 10. Irwin receive his copy of the letter on April 7. Less than a month from when Irwin received the letter, but more than a month from when the letter arrived at his attorney's office, Irwin filed suit in federal District Court. The court dismissed the suit, however, because it was filed more than a month after the attorney's office received the letter. Under 42 U.S.C. 2000e-16(c), suits against the government must be filed within 30 days "of receipt of notice of final action taken" by the EEOC. The court ruled that the 30-day window began when the attorney's office received the letter. On appeal, Irwin argued that the window should have started when he or his attorney - not just the attorney's office - actually received the letter. The Fifth Circuit Court of Appeals rejected that argument, however, upholding the District Court's decision.

The 30-day window begins as soon as either the attorney's office, the attorney, or the client receives notification - whichever comes first. In an opinion written by Chief Justice William H. Rehnquist, the Supreme Court held that lower courts have consistently held that notice to an attorney's office qualifies as notice to the client. "The practical effect of a contrary rule would be to encourage factual disputes about when actual notice was received, and thereby create uncertainty in an area of the law where certainty is much to be desired," wrote Chief Justice Rehnquist.


Ronald E. Niver
Clifford M. Sloan
James L. Lozenski

Two police officers dressed in street clothes and wearing jackets with the word “Police” on the front and back were on patrol in Oakland, California in an unmarked car.  As they approached a group of youths near Foothill Blvd. and 63rd Ave., the youths panicked and ran.  One of the officers left the car and ran after Hodari D.  Hodari tossed away something that looked like a small rock just before the officer tackled him and handcuffed him.  The officer retrieved the rock, which turned out to be crack cocaine.

At trial, Hodari moved to suppress evidence relating to the cocaine, arguing that the officer obtained it during an unlawful search and seizure.  The trial court denied the motion.  The California Court of Appeal reversed, holding that Hodari was “seized” when he saw the officer running towards him and that seizure was unreasonable under the Fourth Amendment.  The California Supreme Court denied the state’s application for review.

No. No.  Justice Antonin Scalia, writing for a 7-2 majority, reversed and remanded.  The Supreme Court held that a Fourth Amendment seizure requires some sort of physical force with lawful authority, or submission to an assertion of authority.  Hodari had not been touched when he discarded the cocaine, and had not submitted to authority because he was still attempting to escape.

Justice John Paul Stevens dissented, writing that a seizure takes place when a police officer conveys the message that a citizen is not free to leave.  In this situation, when the officer started chasing Hodari, he made it clear that Hodari was not free to leave.  Justice Thurgood Marshall joined in the dissent.


Following his conviction under Michigan law for possession of over 650 grams of cocaine, Ronald Harmelin was sentenced to life in prison without possibility of parole. Harmelin challenged his sentence as cruel and unusual, claiming it was disproportionate to the crime he committed and was statutorily mandated without consideration for the fact that he had no prior felony convictions. On appeal from an affirmance by the Michigan Court of Appeals, the Supreme Court granted certiorari.

No. The Court, in a 5-to-4 decision, held that since the Eighth Amendment does not contain a proportionality guarantee, the determination of whether a punishment is "cruel and unusual" is not made with reference to the particular offense. Moreover, the Cruel and Unusual Punishment Clause protects against unusual methods of punishment, not necessarily cruel ones. As such, while Harmelin's life sentence may have been cruel, it was not constitutionally unusual or unprecedented.


Elizabeth Alexander
William C. Bryson
Rita S. Eppler

While detained at the Hocking Correctional Facility in Nelsonville, Ohio, Pearly Wilson claimed he experienced cruel and unusual punishment in violation of the Eighth and Fourteenth Amendments. Wilson sought financial awards and an injunction against the prison under 42 U.S.C. 1983. He filed suit in a federal district court against two state prison officials, Richard P. Seiter and Carl Humphreys. The District Court ruled against Wilson, and the United States Court of Appeals for the Sixth Circuit affirmed. It held that Wilson had to show that the prison officials had a "culpable state of mind" when inflicting harm upon him.

No and Yes. Justice Antonin Scalia delivered the opinion for a unanimous court. The Court referred to its earlier decisions in Francis v. Resweber and Estelle v. Gamble to establish that cruel and unusual punishment required the "unnecessary and wanton infliction of pain." For this to occur, the prison officials had to exhibit intentional cruelty, which would result in a "culpable state of mind." However, "deliberate indifference" to a prisoner's conditions also constituted abusive treatment according to this standard. Therefore the Court of Appeals should have considered this aspect of Wilson's grievances.


Pamela S. Karlan
Robert G. Pugh, Jr.
Kenneth W. Starr

The Louisiana Supreme Court had 7 judges. The First Supreme Court District elected 2 judges, and the 5 other districts elected 1 judge each. The Orleans Parish was 1 of 4 parishes in the First Supreme Court District and the majority of its registered voters were black. However, more than 75% of the other 3 parishes' registered voters were white. Ronald Chisom and the other petitioners in this case, representing New Orleans's black majority, filed an action in the District Court against Louisiana's governor, Charles E. Roemer, and state officials, arguing that the state's justice election procedure weakened the minority's voting power, allegedly violating section 2 of the Voting Rights Act. The 1982 amendment to this act prohibited any voting procedure which caused minority voters to "have less opportunity than other members of the electorate to participate in the political process and to elect representatives of their choice." The District Court ruled against the petitioners. When the Court of Appeals evaluated the case, it sent the case back to the District Court with instructions to maintain the original ruling based partly on its claim that the 1982 amendment to section 2 of the Voting Rights Act did not apply to the election of judges. The District Court maintained their original opinion, but the petitioners and the United States appealed.

Yes. In a majority decision authored by Justice John Paul Stevens, the Court rejected the possibility that Congress had intended for the 1982 amendment to exclude judicial elections. The Court determined that if Congress had that aim, it would have indicated this exclusion explicitly. Consequently, the Court favored a broad interpretation of the word "representative" in section 2 of the Voting Rights Act, considering it to encompass all winners of popular elections. Thus, the Court reversed the decision of the Court of Appeals, sending the original case back to be reevaluated in light of the reversal.


Gary M. Luck
David J. Becker
Stephen L. Nightingale

When arrested for armed robbery, Paul McNeil did not initially invoke his Miranda right to counsel provided by the Fifth Amendment. However, he had a public defender represent him at a pretrial hearing at a county court in Milwaukee, Wisconsin. After the hearing, sheriffs asked him about his involvement in a unrelated set of crimes, including murder. The sheriffs informed McNeil of his Miranda rights again, but he signed a waiver authorizing his testimony. His answers incriminated him for the crimes and he was charged in a state trial court. He unsuccessfully petitioned the court to invalidate his testimony as evidence. A jury convicted him and sentenced him to 60 years in prison. He contended that having the public defender represent him invoked his Miranda rights, which were later violated. The Wisconsin Supreme Court ruled against him.

No. Justice Antonin Scalia delivered the opinion for a 6-3 court. The Sixth Amendment ensures competent legal representation in courts of law, whereas the Fifth Amendment ensures adequate counsel when confronting police. Because the Amendments have different purposes, invoking the Sixth Amendment by retaining a public defender does not invoke the Fifth Amendment when speaking with the police about an unrelated criminal charge. The Court reasoned that "[o]ne might be quite willing to speak to the police without counsel present concerning many matters, but not the matter under prosecution." McNeil's decision to have a public defender represent him at a pretrial hearing for armed robbery could not possibly indicate the choices he wished to make in the future regarding other confrontations with police.


Board of Education of Oklahoma City Public Schools v. Dowell

Ronald L. Day
Kenneth W. Starr
Julius LeVonne Chambers

In 1972, a federal district court issued an injunction ordering the Board of Education of Oklahoma City to implement the "Finger Plan," which bused black students to white schools. In 1977, the district court withdrew its enforcement of the plan, declaring that the Board had complied with the plan and reached "unitary" racial composition. In 1984, the Board passed the Student Reassignment Plan (SRP), which lessened busing in an effort to reduce travel time for black students. The group that originally protested segregation sought to restore the court-ordered desegregation, claiming that the school system again became segregated. The district court declined, but on appeal the United States Court of Appeals for the Tenth Circuit ruled that the injunction was never formally removed. On reconsideration, the district court again declined to restore the injunction because it found the original "Finger Plan" unworkable. The Court of Appeals reversed.

Yes. Chief Justice William Rehnquist delivered the opinion for a 5-3 court. The Court held that the "federal supervision of local school systems [has always] been intended as a temporary measure to remedy past discrimination." Once a school system demonstrates earnest compliance with an injunction, the federal court can consider removing it. The district court's finding in 1977 that the plan had achieved its goal of racially "unitary" schools was not sufficiently clear to dissolve the 1972 injunction. Instead, the district court could remove the injunction upon finding that "that the school system was being operated in compliance with the Equal Protection Clause, and that it was unlikely that the Board would return to its former ways." If the Board satisfied these goals, the district court could remove the injunction and consider the SRP separately and on its own merits.


In 1987, Arkansas amended its Gross Receipts Act (GRA), imposing a tax on cable television but not on print media. Cable companies and others filed suit in the State Chancery Court, alleging that taxing cable services, but not print and satellite broadcast services, violated their First Amendment expressive rights and 14th Amendment equal protection rights. In 1989, after the Chancery Court upheld the amendment, Arkansas again amended the GRA, extending the tax to satellite broadcast services. On appeal, the State Supreme Court upheld the GRA. However, the court ruled that the First Amendment prohibits differential taxation among members of the same medium. Therefore, because cable and scrambled satellite television services are essentially the same, the tax was unconstitutional when it applied only to cable services.

No and no. In an opinion delivered by Justice Sandra Day O'Connor, the Court held 7-2 that without the intent or effect of suppressing expression, the First Amendment allows differential taxation of different media and differential taxation of some members of the same medium. Specifically, the Court held that the GRA was a generally applicable sales tax, and that its burden on cable television, while exempting the print media, was content-neutral, not directed at a select few, and not intended to interfere with expression. The Court went on to rule that the First Amendment allows a differential tax burden on some members of pay television services (that is, a tax on cable but not satellite services), if the tax is not intended to suppress expression. The Court ordered the State Supreme Court to address the 14th Amendment claim on remand. Dissenting, Justice Thurgood Marshall, joined by Justice Harry A. Blackmun, argued that the First Amendment non-discrimination principle prohibits a heavier tax burden on one medium and not other media.


United States v. Centennial Savings Bank FSB

Centennial Savings Bank exchanged interests in one set of mortgage loans for another set of mortgage loans of the same market value. The mortgages were worth substantially less at the time they were exchanged than they had been at the time they were acquired, however, and Centennial reported the difference as lost income on its income tax return. In a separate set of transactions, Centennial collected early withdrawal penalties from customers who withdrew their certificates of deposit before they were scheduled. Centennial reported the early withdrawal penalties as "income from the discharge ... of indebtedness," meaning that it did not need to be reported as income under 26 U.S.C. 108(a)(1)(C).

With regard to the exchanged mortgages, the IRS did not allow the deduction, ruling that the properties exchanged had not been "materially different" and that the exchange therefore did not actually produce a reportable loss. With regard to the withdrawal penalties, the IRS ruled that they had to be reported as income. Centennial took the issue to federal District Court, where a judge ruled for the IRS on the mortgage exchange issue but for Centennial on the withdrawal penalty one. The Fifth Circuit Court of Appeals reversed the mortgage exchange holding and upheld the withdrawal penalty holding, siding with Centennial on both issues.

Yes and no. On the exchanged mortgage question, the Supreme Court referred to a companion case, Cottage Savings Association v. Commissioner of Internal Revenue, 499 U.S. 554, decided at the same time, in holding that the mortgages exchanged were "materially different" and could therefore be deducted as losses.

On the question of early withdrawal penalties, however, the Court sided with the IRS. Justice Thurgood Marshall, writing for the majority, stated that income comes from the "discharge ... of indebtedness" only when it is the result of the forgiveness of an obligation to repay assumed by the debtor (in this case the bank) at the outset of the debtor-creditor relationship. Because the early withdrawal fee was stipulated in the contract agreed upon at the outset of the certificate of deposit agreements, its payment was not the forgiveness of any obligation on behalf of the bank but rather the fulfillment of an obligation on behalf of the creditor. The bank was therefore required to list the penalties as income.