The U.S. Supreme Court will begin its November oral argument session Monday, during which the justices will consider President Donald Trump's authority to impose tariffs on foreign countries under an emergency statute, whether military contractors can be held liable for alleged breaches of contracts in war zones, and if there are time limits for litigants who want to vacate a void judgment.
The justices will also consider whether defendants who abscond from supervised release terms can earn credit toward their sentences for time on the lam and the proper remedy for final judgments issued by federal courts that previously erroneously dismissed a non-diverse party from a case removed from state court.
Here, Law360 breaks down the week's oral arguments.
Supervised Release Fugitives
On Monday, the Supreme Court will debate whether the so-called fugitive-tolling doctrine applies to terms of supervised release and if it pauses the clock when a defendant absconds.
California defendant Isabel Rico, who absconded while on supervised release for a drug-related conviction, has asked the justices to overturn a Ninth Circuit decision affirming a new sentence for an offense she committed while on the lam but after her original period of supervised release was scheduled to end. Her original sentence was set to expire in June 2021, but she escaped in early 2018 and wasn't rearrested until January 2023.
A three-judge panel unanimously found that Rico could be sentenced to new terms of imprisonment and supervised release for possessing fentanyl with the intent to sell it in January 2022, six months after her original sentence was scheduled to expire. The fugitive-tolling doctrine, which prevents defendants from earning credit toward a sentence during a period of abscondment, had paused the clock on Rico's term of supervised release and pushed back the end date to February 2026, the panel held. Five other circuits — the Second, Third, Fourth, Fifth and Tenth — have similarly held that the doctrine applies to terms of supervised release, while the First and Eleventh Circuits say it doesn't.
Rico argues that applying the doctrine to terms of supervised release would unlawfully allow courts to subject defendants to terms that exceed statutory maximums, which vary based on the severity of the underlying offense but are capped at five years for the worst crimes. She said Congress didn't explicitly authorize such extensions in the Sentencing Reform Act of 1984, which replaced the parole scheme, including its allowance of tolling for absconders, with today's supervised release system.
Lawmakers also limited tolling for supervised release terms under Chapter 18, Section 3624(e) of the U.S. Code to only situations in which the defendant is imprisoned for less than 30 days in relation to another conviction, Rico claims.
The federal government, on the other hand, contends exempting defendants on supervised release from the fugitive-tolling doctrine would give absconders an "unjustified windfall." Allowing a defendant's time on the loose to count toward their sentence is both inconsistent with the purposes of supervised release and contrary to how pre-trial detention, furlough and prison escapees are treated, it said. In enacting the SRA, Congress presumably incorporated the usual practice of tolling sentences for absconders, and nothing in Section 3624(e)'s instructions on how courts should treat short-term prison sentences prohibits courts from tolling supervised release sentences in other circumstances, the government argues.
Jenner & Block LLP partner Adam G. Unikowsky will argue for Rico, and Joshua K. Handell of the U.S. Solicitor General's Office will argue for the federal government.
The case is Rico v. U.S., case number 24-1056.
Military Contractor Liability
Also on Monday, the justices will consider whether military contractors are immune from state tort liability for alleged contract breaches and violations of military orders.
U.S. Army veteran Winston Hencely has petitioned the high court to review a Fourth Circuit ruling that found he couldn't pursue various state-law negligence claims against Texas-based military contractor Fluor Corp. in relation to the 2016 bombing at Bagram Airfield in Afghanistan. Hencely, who was injured in the attack, claimed Fluor's negligent supervision of a local Afghan employee allowed them to plan and carry out the bombing, which killed five people and injured a dozen more.
A 2-1 appellate panel determined that Hencely's claims were preempted by the Federal Tort Claims Act's "combatant activities" exception — Chapter 28, Section 2680(j) of the U.S. Code — which prohibits "any claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war." The majority also held the claims were barred under the Supreme Court's 1988 ruling in Boyle v. United Technologies because they touched on the "uniquely federal interest" of regulating the military during wartime.
But Hencely argues the FTCA generally allows claims against government contractors, and that the "combatant activities" exception doesn't overcome that presumption, especially because contractors aren't authorized to participate in combat. Fluor, for example, was only tasked with providing construction services, facilities administration and hazardous materials management at the airfield.
Hencely added that extending Boyle's logic to categorically immunize military contractors operating in war zones would be incompatible with the original ruling as well as the court's more recent supremacy clause and preemption jurisprudence. The Supreme Court allows state laws to stand except in the most unique and limited of circumstances, and Fluor's failure to comply with contractual obligations to supervise its employees isn't one of them, he said.
Fluor counters that military contractors play a critical role in the nation's ability to wage war and that subjecting them to liability for actions taken in war zones would hamper the nation's military power. It argues Congress used the words "any claim" in the FTCA's "combatant activities" exception to reflect that important relationship and to cover all injuries even potentially related to wartime activities. Adopting Hencely's view would require the Supreme Court to not only overturn Boyle, but to also overrule its 1940 decision in Yearsley v. W.A. Ross Construction , which found contractors were entitled to derivative immunity. The ruling was issued only a few years before the FTCA was enacted, so lawmakers presumably implicitly incorporated it into the act, Fluor said.
The federal government adds that opening the courtroom doors to suits like Hencely's would violate the separation of powers by empowering the judicial branch to superintend the political branches' war authorities. There are other, better legal avenues for individuals to seek compensation for contractor negligence, the government said, including the U.S. Court of Appeals for Veterans Claims for Hencely and other servicemembers.
Consovoy McCarthy PLLC counsel Frank H. Chang will argue for Hencely, Covington & Burling LLP partner Mark W. Mosier will argue for Fluor, and Curtis E. Gannon of the U.S. Solicitor General's Office will argue for the federal government in favor of Fluor.
The case is Hencely v. Fluor Corp. et al., case number 24-924.
Vacating Void Judgments
On Tuesday, the Supreme Court will debate whether there's a time limit for filing motions to vacate allegedly void default judgments based on claims that the issuing court lacked personal jurisdiction over a party.
Coney Island Auto Parts Unlimited Inc., a New York-based car parts seller, has asked the justices to overrule a Sixth Circuit panel's refusal to vacate a 2015 default judgment for unpaid invoices issued against it in relation to a now-defunct Tennessee company's bankruptcy proceedings. The Tennessee company's trustee, Jeanna Ann Burton, moved to collect roughly $97,000 under the judgment in 2021, but Coney Island Auto Parts claims it was void when issued and is unenforceable now.
A 2-1 panel affirmed a Middle District of Tennessee district judge's denial of Coney Island Auto Parts' motion under Federal Rule of Civil Procedure 60(b)(4), which allows motions to vacate void judgments, finding that it had failed to file the motion within a "reasonable time," as required by Rule 60(c)(1). Under circuit precedent from 2003, which the panel admitted was "out of step with the majority view," Coney Island Auto Parts' motion had to be denied because it couldn't show that its six-year delay in challenging the default judgment was reasonable, the panel held.
Coney Island Auto Parts claims the Sixth Circuit's reading of Rule 60(c)(1) cannot be reconciled with its plain text and history or the reality of void judgments. While the rule establishes a one-year deadline for motions to vacate based on mistakes, new evidence or fraud, it only states that motions based on other reasons should be filed in an undefined "reasonable time." Since void judgments are invalid from the very beginning and cannot become valid over time, the company argues they can be challenged at any time without harming the other parties involved.
Additionally, notes from the rule's drafting committee show it was expected that there would be no deadline for motions to vacate invalid judgments, Coney Island Auto Parts said. The Supreme Court and every other circuit court that addressed this issue has agreed with that view and the justices should correct the Sixth Circuit's outlier reading of the rule to ensure courts across the country treat motions to vacate void judgments uniformly, it said.
Meanwhile, Burton argues that if the rule's drafters truly wanted there to be no time limit on filing motions to vacate void judgments, they would've placed those types of motions outside the Rule 60(b) framework. Because they didn't, parties seeking to vacate allegedly void judgments must show that their motion was made within a "reasonable time," which Burton described as a fact- and case-specific inquiry.
Coney Island Auto Parts' proposed rule would allow "gamesmanship" by the moving party, including delaying the filing of a motion for years to ensure that evidence and witnesses that supported the allegedly void judgment are lost. Burton added that the Supreme Court has also previously held that parties can forfeit their right to bring Rule 60(b)(4) motions. That ruling would be incompatible with one that finds there's no deadline to filing motions to vacate void judgments, she said.
Daniel Ginzburg of The Ginzburg Law Firm PC will argue for Coney Island Auto Parts, and Williams & Connolly LLP partner Lisa S. Blatt will argue for Burton.
The case is Coney Island Auto Parts Unlimited Inc. v. Burton, case number 24-808.
Diversity Jurisdiction Review
Also on Tuesday, the justices will consider whether a final judgment must be vacated when an appellate court finds a federal judge erroneously dismissed a non-diverse party from a case that was removed from state court.
The Hain Celestial Group Inc., a natural food and product manufacturer incorporated in Delaware, has petitioned the high court to review a Fifth Circuit decision vacating a ruling that found the company couldn't be held liable for selling allegedly tainted baby food. Texas couple Sarah and Grant Palmquist had originally sued Hain and Texas-based Whole Foods Market Inc. in state court for selling baby food that purportedly contained high levels of heavy metals and caused their son's autism, but Whole Foods was dismissed when Hain removed it to the Southern District of Texas.
A three-judge panel unanimously vacated Hain's win, finding the district court wrongly dismissed Whole Foods from the case after determining the Palmquists had failed to properly state negligence and breach of warranty claims under Texas's Products Liability Act against the grocery store chain. The couple had satisfied the pleading standard after amending their complaint before Whole Foods was dismissed, the panel said as it sent the case back to state court for a redo.
Hain argues the Fifth Circuit's decision ignores the principles that jurisdiction is dynamic and that courts should strive to preserve the finality of judgments. The only parties that had claims before the federal court at the time of the summary judgment were diverse ones, so the court had full authority to issue its decision. Hain said it would be prejudicial, as well as a waste of judicial and litigant resources, to force it to relitigate a battle it has already won.
The Supreme Court could alternatively dismiss Whole Foods as an improperly jointed party under Federal Rule of Civil Procedure 21, the company said. That would allow the Palmquists to pursue claims against the grocer in state court while respecting the finality of the federal court's judgment, Hain said.
But the Palmquists contend the district court's erroneous dismissal of Whole Foods tainted the rest of federal court proceedings. Involuntary dismissals like the one in this case are subject to appellate review after a final ruling, the couple said, meaning Whole Foods was never fully dismissed from the case — and the district court therefore lacked jurisdiction over the dispute — up until the Fifth Circuit's ruling.
It would also be improper for the Supreme Court to dismiss Whole Foods now, the Palmquists said. That request is well outside the question the justices agreed to consider and would strip the couple of their right as plaintiffs to select their preferred legal forum, they argued.
Covington & Burling LLP partner Sarah E. Harrington will argue for Hain, and Beck Redden LLP partner Russell S. Post will argue for the Palmquists.
The case is The Hain Celestial Group Inc. et al. v. Palmquist et al., case number 24-724.
Presidential Tariff Power
On Wednesday, the Supreme Court will hear arguments over whether the International Emergency Economic Powers Act authorizes the president to impose tariffs.
In a pair of consolidated cases, President Donald Trump has asked the justices to overturn decisions from the Federal Circuit and a Washington, D.C., federal judge that found he lacked authority to issue tariffs under an IEEPA provision that grants the president authority to "regulate ... importation and exportation" during a national emergency. The tariffs at issue in this pair of cases are the global reciprocal tariffs aimed at addressing the U.S.'s trade deficits with various countries and those targeting Canada, China and Mexico to stanch the flow of fentanyl into the country.
A 7-4 en banc Federal Circuit held that Trump couldn't issue the reciprocal and so-called fentanyl trafficking tariffs under IEEPA, although it declined to determine whether the statute categorically bars the president from issuing any kind of tariff. Meanwhile, U.S. District Judge Rudolph Contreras went further, declaring IEEPA's grant of authority to "regulate ... importation" does not authorize the president to impose tariffs.
However, Trump and his administration claim the president's interpretation that IEEPA grants him the authority to issue tariffs is consistent with the plain language of the act and historic methods of regulating imports. The act doesn't need to include the word "tariff" or any of its synonyms to confer the power, he said. Congress clearly intended to grant the president broad tariff authority during declared emergencies while also establishing some guardrails, as required whenever lawmakers delegate their power to another branch of government.
The act includes time limits for emergencies, an enumerated list of exceptions to the president's power, and an avenue for congressional oversight, Trump said. Additionally, he said his determination that tariffs are required to address the trade deficits and fentanyl trafficking demand a high level of deference from the Supreme Court since they operate in the foreign affairs realm.
Several small businesses, led by Learning Resources Inc. and V.O.S. Selections Inc., counter that the omission of the terms "tariffs," "duties" and "taxes" from IEEPA is significant and telling, because when Congress wants to delegate its taxing power, it does by explicitly using those words.
The statute's history, and the fact that no other president has invoked it to impose tariffs, also suggest that federal lawmakers didn't mean to delegate their taxing power to the president in this statute, the companies said. Trump's reading of the "regulate ... importation" provision as allowing tariffs would also make the law unconstitutional, they argue. Along with regulating importation, the provision also empowers the president to regulate exports, but the Constitution explicitly forbids the imposition of export taxes, they said.
Oregon and 11 other states add that the words surrounding "regulate" in IEEPA suggest the emergency power is limited to halting transactions between the U.S. and other countries, not taxing imports. The provision also authorizes the president to "investigate," "direct and compel," and "nullify" imports and exports of property that a foreign country or national "has any interest" in. Even if IEEPA allowed Trump to impose some tariffs, its lack of guidelines on the percentage and dollar amount that can be imposed makes it's an unconstitutional delegation of legislative authority, the states said. The Supreme Court has stopped other administrations from reading expansive powers into old statutes, and the justices should do so again in this case, Oregon said.
U.S. Solicitor General D. John Sauer will argue for Trump, Milbank LLP partner Neal K. Katyal will argue for the businesses, and Oregon Solicitor General Benjamin N. Gutman will argue for the states.
The consolidated cases are Learning Resources Inc. et al. v. Trump et al., case number 24-1287, and Trump et al. v. V.O.S. Selections Inc. et al., case number 25-250.
Oct 31
Deal Summary
