Sentencing Guidelines, Disparate Impact Under ADEA Top Supreme Court Docket

The U.S. Supreme Court justices will consider in the current session what some attorneys have called the biggest criminal cases in a generation – two rulings that question the constitutionality of the federal sentencing guidelines, which could impact white-collar criminal activity within companies.

But while these two consolidated cases are arguably the most significant of the term, attorneys say that other important cases on the docket will also have a significant impact on companies, including a case concerning age discrimination as it relates to disparate salary plans for younger workers.

Following is a closer look at some of the important cases the court has agreed to hear this term and their potential impact.

Sentencing Guidelines

The justices begin their term Oct. 4 with a case that attorneys say will have a more significant impact on the criminal justice system than any case in years.

Earlier this year, the Supreme Court held that any factors a judge considers in enhancing a criminal sentence under Washington state’s guidelines must be proved to a jury beyond a reasonable doubt, and that the failure to do so violates the Sixth Amendment. (Blakely v. Washington, 124 S. Ct. 2531.)

However, the majority stated, “[t]he Federal Guidelines are not before us, and we express no opinion on them.”

The court has since decided to address that issue by considering two consolidated cases.

The two consolidated cases are U.S. v. Booker, Supreme Court No. 04-104, and U.S. v. Fanfan, Supreme Court No. 04-105.

In the first, defendant Ducan Fanfan was convicted by a jury of one count of conspiracy to distribute cocaine. At his sentencing, which happened to be scheduled for four days after Blakely was decided, the U.S. District Court judge in the District of Maine (Docket No. 03-47) did not sentence the defendant to the federal guidelines range of 15 to 19 years, which included a substantial enhancement based on information from the prosecutor that the case also involved trafficking in crack cocaine.

Instead, the judge sentenced the defendant to six years, the maximum sentence allowed without a finding of any additional facts.

In the second case, a Wisconsin jury convicted Freddie J. Booker of possessing and distributing crack cocaine. A jury concluded that the defendant had a certain amount of drugs on him, subjecting him to just under 22 years in prison.

But the trial judge found that the defendant distributed an additional amount of drugs, which, coupled with a finding that the defendant had obstructed justice, drove up the permissible sentencing range to 30 years to life. The judge gave the defendant 30 years.

But the 7th U.S. Circuit Court of Appeals overturned the sentence, citing Blakely (Docket No. 03-4225).

The Supreme Court must now decide whether the Federal Sentencing Guidelines pass constitutional muster.

Douglas A. Berman, professor of Law at Moritz College of Law at The Ohio State University in Columbus, authors an extensive Blakely blog at http://sentencing.typepad.com.

While he’s not taking bets on how the court will rule, “all the academics say they can’t imagine a way the court wouldn’t find [Blakely] applicable [to the federal guidelines].”
Berman said a related issue is whether the guidelines will be deemed severable should any part of them be determined unconstitutional.

Stephen Bronis of Miami, who recently spoke on this issue at the ABA’s Annual Meeting in Atlanta, said the government’s position is that the guidelines aren’t severable.

Bronis said that if the court strikes down the guidelines, it could give Congress some guidance about what a constitutionally sound set of guidelines would look like.

But, he predicts the opinion won’t go that far.

“If I was a betting man, I wouldn’t bet that they would formulate any sort of guidance,” he said.

Age Discrimination And Disparate Impact

The court will review a 5th U.S. Circuit Court of Appeals’ decision holding that a group of police officers couldn’t sue under the ADEA by claiming that a new salary plan had a disparate impact on older workers

The plan in that case provided proportionally bigger raises to officers with five or fewer years of tenure than it did to officers with longer tenure.

The plaintiffs argued that since “disparate impact” claims are allowed under Title VII, they should also be permitted under the ADEA, because the statutes are worded similarly.

But the 5th Circuit in Smith v. City of Jackson, Miss., 351 F.3d 183, said that the two statutes differed in an important respect: the ADEA has “an express exception permitting employer conduct based on ‘reasonable factors other than age’ – an exception absent from Title VII. …

“Facially, the exception appears to serve as a safe harbor for employers who can demonstrate that they based their employment action on a reasonable non-age factor, even if the decision leads to an age-disparate result,” the 5th Circuit said.

The circuits are split on this issue. The 1st, 7th, 10th and 11th Circuits have held similarly, while the 2nd, 8th and 9th Circuits have allowed disparate impact claims.

Toxic Waste Cleanup

The court will review an en banc 5th Circuit decision that allowed a landowner who voluntarily cleaned up a toxic waste site to sue for contribution from the prior owner, even though it was never subject to a CERCLA suit.

In that case, after the plaintiff purchased the property, it discovered the previous owner had contaminated the site. It began a voluntary clean-up after the state natural resources agency said it was in violation of state environmental laws. However, the EPA never filed a CERCLA suit against it.

Under CERCLA, a property owner “may seek contribution from any other person who is liable or potentially liable … during or following any civil action” brought under the act. “Nothing … shall diminish the right of any person to bring an action for contribution in the absence of a civil action under … this title.” (42 U.S.C. §9613(f)(1)).

The previous owner claimed that it couldn’t be sued for contribution because the EPA had never initiated a CERCLA suit against the plaintiff.

The en banc court disagreed in Cooper Industries, Inc. v. Aviall Services, Inc., 312 F.3d 677.
A party “may sue at any time for contribution under federal law to recover costs it has incurred in remediating a CERCLA site. [CERCLA] authorizes suits against [potentially responsible parties] in both its first and last sentence which states without qualification that ‘nothing’ in the section shall ‘diminish’ any person’s right to bring a contribution action in the absence of a … [CERCLA] action.”

The 5th Circuit said that to hold otherwise would “create substantial obstacles to achieving the purposes of CERCLA … by slowing the reallocation of cleanup costs from less culpable [parties] and by discoursing the voluntary expenditure of … funds for cleanup activities.”

Suing Pesticide Makers

The Supreme Court will review a decision from the 5th Circuit that that a farmers’ state law tort claims for damaged peanut crops allegedly caused by the manufacturer of an herbicide were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

The farmers claimed that the herbicide stunted the growth of their peanut plants, caused yellowing, inhibited growth and reduced production. They sent the manufacturer demand letters threatening to sue for false advertising, breach of warranty and fraudulent trade practices. They claimed that the product representative misrepresented its effectiveness.

The manufacturer sued, seeking a declaratory judgment that the farmers’ claims were preempted by FIFRA.
FIFRA preempts all state-law requirements for labeling and packaging that are “in addition to or different from” federal regulations. 7 U.S.C. §136v.

The farmers argued that their claims concerned the product’s effectiveness as represented by company representatives, and shouldn’t be preempted by FIFRA because they weren’t sufficiently related to the product’s label.

But the 5th Circuit disagreed.

“[T]he farmers’ claims are expressly preempted under [the act] if a judgment against [the manufacturer] would induce it to alter its product label. … Claims for breach of warranty based upon an ‘off label’ representation are preempted by FIFRA … if the representation deviates from the contents of the product label. … Success on such an ‘off label’ claim would provide a manufacturer with a strong incentive to alter its label to avoid future liability,” the 5th Circuit wrote in Bates v. Dow Agrosciences, 332 F.3d 323.