Supreme Court Midterm for Local Governments 2020-21

By:

  • Lisa Soronen
February 3, 2021

The State and Local Legal Center (SLLC) files Supreme Court amicus curiae briefs on behalf of the Big Seven national organizations representing state and local governments.

*Indicates a case where the SLLC has filed or will file an amicus brief.


This year’s U.S. Supreme Court Midterm article for local governments features something rare, if not unique—a decision in a case of significance to local governments. In December and January, the Court typically issues just a handful of decisions, this year including City of Chicago v. Fulton.

As of the end of January 2021, the Supreme Court has filled its docket with all the cases it intends to hear this term. The last opinions of this term should be issued by the end of June. Since the summer of 2020, when the SLLC published its Supreme Court Preview for Local Governments 2020-2021, the Supreme Court has decided to hear a number of other cases impacting the local governments on a wide range of issues. Two of the most interesting and significant cases for local governments are summarized below.

In an 8-0 decision in City of Chicago v. Fulton,* the Supreme Court held that the City of Chicago didn’t violate the Bankruptcy Code’s automatic stay provision by holding onto a vehicle impounded after a bankruptcy petition was filed.

The City of Chicago impounds vehicles where debtors have three or more unpaid fines. Robbin Fulton’s vehicle was impounded for this reason. She filed for bankruptcy and asked the City to return her vehicle; it refused.

The Seventh Circuit held the City violated the Bankruptcy Code’s automatic stay provision. The Supreme Court unanimously reversed.

When a bankruptcy petition is filed, an “estate” is created which includes most of the debtor’s property. An automatic consequence of the bankruptcy petition is a “stay” which prevents creditors from trying to collect outside of the bankruptcy forum.

The automatic stay prohibits “any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate.” The Bankruptcy Code also has a “turnover” provision which requires those in possession of property of the bankruptcy estate to “deliver to the trustee, and account for” that property.

The Supreme Court held that “mere retention” of a debtor’s property after a bankruptcy petition is filed doesn’t violate the automatic stay. According to Justice Alito, “[t]aken together, the most natural reading of . . . ‘stay,’ ‘act,’ and ‘exercise control’—is that [the automatic stay provision] prohibits affirmative acts that would disturb the status quo of estate property as of the time when the bankruptcy petition was filed.”

However, the Court, conceded it did not “maintain that these terms definitively rule out” an alternative interpretation. According to the Court, “[a]ny ambiguity in the text of [the automatic stay provision] is resolved decidedly in the City’s favor” by the turnover provision.

First, reading “any act . . . to exercise control” in the automatic stay provision “to include merely retaining possession of a debtor’s property would make that section a blanket turnover provision,” rendering the turnover provision “largely superfluous.”

Second, the turnover provision includes exceptions that the automatic stay provision doesn’t include. “Under respondents’ reading, in cases where those exceptions to turnover . . . would apply, [the automatic stay provision] would command turnover all the same.”

The issue the Supreme Court will decide in Caniglia v. Strom* is whether the Fourth Amendment “community caretaking” exception to the warrant requirement extends to the home.

A police officer determined Edward Caniglia was “imminently dangerous to himself and others” after the previous evening he had thrown a gun on the dining room table and said something to his wife like “shoot me now and get it over with.” Officers convinced Caniglia to go to the hospital for a psychiatric evaluation after apparently telling him they wouldn’t confiscated his firearms. The officers went into his home and seized the guns regardless.

Caniglia sued the officers for money damages claiming that he and his guns were unconstitutionally seized without a warrant in violation of the Fourth Amendment.

The First Circuit held that the Fourth Amendment’s “community caretaker” exception to the
warrant requirement applies in this case and that neither of the seizures violated the Fourth
Amendment.

The Supreme Court first applied the community caretaking exception in Cady v. Dombrowski (1973). In that case the Supreme Court held police officers could search without a warrant a disabled vehicle they reasonably believed contained a gun in the truck and was vulnerable to vandals. Police activity in furtherance of the community caretaker function is permissible as long as it is “executed in a reasonable manner pursuant to either ‘state law or sound police procedure.’”

Importantly, the Supreme Court has never extended the community caretaking exception beyond
the motor vehicle context.

The First Circuit decided to do so in this case in light of the “special role” that police officers play in our society. The First Circuit reasoned: “[A] police officer — over and above his weighty responsibilities for enforcing the criminal law — must act as a master of all emergencies, who is ‘expected to aid those in distress, combat actual hazards, prevent potential hazards from materializing, and provide an infinite variety of services to preserve and protect community safety.’”

In Cedar Point Nursery v. Hassid,* the Supreme Court will decide whether a temporary easement is a taking. The U.S. Constitution’s Fifth Amendment allows the government to “take” private property as long as it pays “just compensation.”

In this case a number of agriculture employers argue California statutes “take” their property by allowing union organizers access to agricultural employees on the grower’s property. The access period may be during four 30-day periods each year for up to three hours each day. The union organizers must provide notice to the employers.

The Ninth Circuit ruled against the employers. According to the Ninth Circuit, “[t]he Growers base their Fifth Amendment argument entirely on the theory that the access regulation constitutes a permanent physical invasion of their property and therefore is a per se taking.” The Ninth Circuit found no permanent physical invasion in this case.

The lower court compared this case to Nollan v. California Coastal Commission (1987), where the California Coastal Commission offered to give a homeowner a permit to rebuild a house in exchange for an easement allowing the public to cross the property to access the beach. In Nollan, the Supreme Court required the Coastal Commission to provide just compensation for the easement. Here, according to the Ninth Circuit, “[t]he regulation significantly limits organizers’ access to the Growers’ property. Unlike in Nollan, it does not allow random members of the public to unpredictably traverse their property 24 hours a day, 365 days a year.”

Conclusion

Beyond the cases discussed in this article, this has been a banner term from local governments. The Court will decide cases on a wide range of issues where Philadelphia, San Antonio, and Baltimore are a named party. While City of Chicago v. Fulton was unanimous, it is not likely most of the other cases will be including Cedar Point Nursery v. Hassid or Caniglia v. Strom.

About the Author

Lisa Soronen

About the Author

Lisa Soronen is the Executive Director of the State & Local Legal Center.