Volume 30, Issue 13

This Report summarizes opinions issued on June 8, 2023 (Part I).

Part I: Opinions

Allen v. Milligan, 21-1086. By a 5-4 vote, the Court affirmed a three-judge district court’s ruling that Alabama’s congressional redistricting map drawn after the 2020 Census likely violates §2 of the Voting Rights Act by unlawfully diluting the voting strength of Black residents. In doing so, the Court upheld §2 and its application to single-member redistricting, as well as reaffirmed decades of §2 jurisprudence first set forth in Thornburg v. Gingles, 478 U.S. 30 (1986).

This case arises out of the redrawn congressional map for Alabama after the 2020 Census to account for population shifts. Like the previous map, in the new map only one of Alabama’s seven congressional districts contained a population in which Black voters constituted a majority of the voting age population, despite Black voters making up 27% of Alabama’s voting age population. Groups of Black Alabamans sued to enjoin the map under §2 of the Voting Rights Act and the Fourteenth Amendment’s Equal Protection Clause. A three-judge district court heard voluminous evidence at a preliminary injunction hearing and ruled in favor of the challengers’ §2 claim. Alabama then moved the Supreme Court for a temporary stay of the district court’s injunction, which the Court granted. The case then returned to the Supreme Court after full briefing and argument. In an opinion by Chief Justice Roberts, the Court affirmed the district court’s ruling.

The Court first explicated the three-part framework to evaluate §2 claims established in Gingles. To succeed in proving a §2 violation under Gingles, plaintiffs must satisfy the following three preconditions: (1) the minority group is “sufficiently large and geographically compact” to constitute a majority in a reasonably configured district; (2) the minority group is “politically cohesive”; and (3) the minority group “must be able to demonstrate that the white majority votes sufficiently as a bloc to enable it . . . to defeat the minority’s preferred candidate.” A plaintiff who demonstrates those three preconditions must also show that, under the “totality of circumstances,” the political process is not “equally open” to minority voters.

The Court then held that these preconditions were met sufficiently here to establish a likelihood of success under Gingles. The Court held that the district court correctly found that the first precondition was met because Black voters could constitute a majority in a second congressional district that was “reasonably configured” under traditional districting criteria. Maps submitted by plaintiffs’ experts with two majority-Black districts contained equal population sizes, were compact and contiguous, and respected existing political subdivisions such as counties, cities, and towns. The district court also was correct in finding the second and third Gingles preconditions met because there was “no serious dispute that Black voters are politically cohesive, nor that the challenged districts’ white majority votes sufficiently as a bloc to usually defeat Black voters’ preferred candidate.” And finally, the Court held, the district court was correct in concluding that, based on Alabama’s racially polarized elections and history, the totality of the circumstances test was met because Alabama’s map prevented complete openness to the Black population in congressional elections.

The Court next turned to Alabama’s “attempt to remake our §2 jurisprudence anew.” In this respect Alabama proffered a theory known as the “race-neutral benchmark” for §2 redistricting cases, by which computer technology generates millions of maps designed to comply with traditional districting criteria without considering race. The median number of majority-minority districts in the entire millions-map set is called the “race-neutral benchmark.” If the state map contains a similar number of majority-minority districts, Alabama argued, it cannot have denied anyone’s right to vote on account of race. And to prove a §2 claim, Alabama proffered, a challenger would have to show that any deviation between the state’s plan and the race-neutral benchmark is explainable only by race, not based on any other factor.

The Court rejected this proposal. The Court ruled that Alabama’s proposed test deviates from precedent, which focuses on the specific illustrative maps a plaintiff adduces to show that it is possible that the state’s map has a disparate effect on account of race. And Alabama’s test undermines the “totality of the circumstances” aspect of Gingles, by asking only how the state’s map compares to the race-neutral benchmark. Contrary to Alabama’s contention, the Court explained, the current Gingles framework does not require forced proportional representation based on race—which is unlawful and inconsistent with §2 precedent. Rather, it looks to a totality of the circumstance to determine whether a cohesive minority group is being disenfranchised by the state’s map.

The Court also found that Alabama’s proposal would be unworkable as a practical matter. First, in the sole section of the opinion that Justice Kavanaugh declined to join (Section III-B-1), the plurality explained that Alabama’s proposal requires a totally race-neutral approach, which goes above and beyond Gingles and §2. While states may consider race in drawing maps, it must not be the predominant factor in drawing district lines unless there is a compelling reason: “The contention that mapmakers must be entirely ‘blind’ to race has no footing in our §2 case law. The line that we have long drawn is between consciousness and predominance.” And, found the plurality, “[w]hile the line between racial predominance and racial consciousness can be difficult to discern, it was not breached here.” (Citation omitted.) The plurality pointed to testimony by one of the plaintiffs’ experts that “while it was necessary for him to consider race, he also took several other factors into account, such as compactness, contiguity, and population equality.” He further “testified that he gave all these factors ‘equal weighting.’” The plurality rejected the dissent’s contention “that race nevertheless predominated in both [experts’] maps because they were designed to hit ‘express racial target[s]’—namely, two ‘50%-plus majority-black districts.’” The “flaw in the dissent’s proposed approach is its inescapable consequence: Gingles must be overruled. According to the dissent, racial predominance plagues every single illustrative map ever adduced at the first step of Gingles. For all those maps were created with an express target in mind—they were created to show, as our cases require, that an additional majority-minority district could be drawn. That is the whole point of the enterprise.”

The Court (with Justice Kavanaugh) then turned to criticizing Alabama’s race-neutral benchmark’s application. Alabama’s experts created two million “race blind” maps, none of which contained two majority-Black districts. In addition to pointing out that those experts used outdated census data to derive these maps, the Court noted fundamental flaws with that methodology because it fails to illustrate how actual congressional maps are created in the real world: “Districting involves myriad considerations—compactness, contiguity, political subdivisions, natural geographic boundaries, county lines, pairing of incumbents, communities of interest, and population equality.” Alabama does not say how the computer modelling—unlike actual map drawers—balances those considerations for determining which map to submit to the state legislature for approval. The Court also noted that while two million maps may seem like a lot, the actual number of possible maps numbers in the trillions, so Alabama was leaving out many possibilities. The Court also rejected Alabama’s proposal that plaintiffs be required to show that racial discrimination is the only explanation for the difference between the maps. The Court stated that “our precedents and the legislative compromise struck in the 1982 amendments clearly rejected treating discriminatory intent as a requirement for liability under §2.”

Finally, the Court rejected Alabama’s additional arguments that §2 should not be applied in this case. The Court first rejected Alabama’s argument that §2 does not apply to single-member redistricting as contrary to 40 years of an unbroken line of precedent and the statutory text, which includes “all action necessary to make a vote effective.” The Court also rejected Alabama’s argument that §2 is unconstitutional under the Fifteenth Amendment for similar reasons.

Justice Kavanaugh wrote a concurring opinion to emphasize four points. First, he said that overruling Gingles, as Alabama proposed, was rightly declined by the Court because the “stare decisis standard for this Court to overrule a statutory precedent, as distinct from a constitutional precedent, is comparatively strict.” That is because, unlike constitutional precedents, Congress and the President may enact new legislation to alter statutory precedent such as Gingles. Second, Justice Kavanaugh emphasized, as the Court majority recognized, that Gingles and other §2 precedent does not require majority-minority proportionality based on the statewide population. Third, Justice Kavanaugh wrote that §2 establishes an effects test, not an intent test, which “requires in certain circumstances that courts account for the race of voters so as to prevent the cracking or packing—whether intentional or not—of large and geographically compact minority populations.” And fourth, Justice Kavanaugh pointed to the notion that “the authority to conduct race-based redistricting cannot extend indefinitely into the future,” but declined to consider that temporal argument because Alabama did not raise it in this case.

Justice Thomas wrote a 48-page dissenting opinion to express his view that §2 does not require another majority-Black district, and if it did that would be unconstitutional. Justice Gorsuch joined the opinion in full; Justices Alito and Barrett joined it in part. Justice Thomas first reiterated his long-held view that §2 does not cover redistricting claims, but instead covers only laws regulating ballot access and vote counting. In his view, the text and history of the Voting Rights Act “refer specifically to voting qualifications for individuals and the actions of state and local officials in administering such requirements. And even if precedent turned in the majority’s favor on this issue, Justice Thomas wrote, “stare decisis should be no barrier to reconsidering a line of cases that ‘was based on a flawed method of statutory construction from its inception,’ has proved incapable of principled application after nearly four decades of experience, and puts federal courts in the business of ‘methodically carving the country into racially designated electoral districts.’”

Next, Justice Thomas wrote that even if §2 does apply here, Alabama should prevail. On this point, Justice Thomas agreed with Alabama’s methodology: “To avoid setting §2 on a collision course with the Constitution, courts must apply a race-neutral benchmark in assessing any claim that a districting plan unlawfully dilutes a racial minority’s voting strength.” That would allow the court to gauge just how diluted the voting power of a racial minority group actually was. Instead, Justice Thomas wrote, the “benchmark” the district court used was the simple percentage of the Black population statewide. Similarly, the plaintiffs’ maps unconstitutionally favored race in seeking an additional majority-Black congressional district to reflect the proportion of the state’s Black population. Adopting that approach would be, in Justice Thomas’s view, an impermissible “racial gerrymander,” and would unconstitutionally “entitle members of racial minorities, qua racial minorities, to have their preferred candidates win elections.” And, said Justice Thomas, even though Congress has power to enforce the Fifteenth Amendment—and purported to do so via §2—it cannot do so in a way that would violate the race-neutrality principles embedded in the Constitution. Justice Thomas concluded that interpreting §2 to provide a majority-Black district proportional to the statewide Black population in this way would violate those principles, and therefore would be unconstitutional.

Justice Alito also wrote a dissenting opinion, which was joined by Justice Gorsuch, to express his view that under the Gingles framework, the district court’s decision was wrong. Justice Alito’s “fundamental disagreement” with the majority concerned the first Gingles precondition, in particular the finding that an additional majority-Black district would be “reasonably configured” under traditional districting principles. He criticized the forced redistricting of the Alabama map because the new district would be “attributable predominantly to race,” which would necessarily violate those traditional districting principles along with likely being unconstitutional. Doing so, he explained, “goes beyond making the electoral process equally open to the members of the group in question,” and “gives the members of that group an advantage that §2 does not require and that the Constitution may forbid.” Thus, in order to succeed on a §2 claim, a challenger must present a map where race is not a “predominant factor” in creating the new district. In this case, Justice Alito wrote, the district court failed to consider whether the plaintiffs had convincingly demonstrated that their illustrative districts were created without giving race a “predominant role”; accordingly, the district court’s §2 analysis under Gingles was deficient and must be vacated. And, in his view, “there is strong evidence that race played a predominant role in the production of the plaintiffs’ illustrative maps and that it is most unlikely that a map with more than one majority-black district could be created without giving race such a role.”

Health and Hospital Corp. of Marion County v. Talevski, 21-806. By a 7-2 vote, the Court held that plaintiffs may use 42 U.S.C. §1983 to enforce rights created by Spending Clause statutes, in general, and the Federal Nursing Home Reform Act (FNHRA), specifically. Respondent’s father, Mr. Talevski, had dementia. His family placed him in a nursing home run by petitioners. According to the complaint, the nursing home improperly restrained Mr. Talevski by sedating him with medications. Later, the home transferred him to a dementia facility located 90 minutes away from his family without providing notice beforehand. Mr. Talevski’s family sued petitioners under §1983, claiming that they sedated and transferred him in violation of the rights guaranteed to nursing home residents under the FNHRA. The district court dismissed the complaint, finding that plaintiffs cannot use §1983 to enforce the FNHRA. The Seventh Circuit reversed, holding that the FNHRA created individually-enforceable rights and that nothing in the statute foreclosed enforcement under §1983. In an opinion by Justice Jackson, the Court affirmed.

Section 1983 permits plaintiffs to sue those who, when acting under color of state law, violate “any rights, privileges, or immunities secured by the Constitution and laws” of the United States. The Court rejected petitioners’ argument that §1983 does not apply to laws, like the FNHRA, which Congress enacted under the Spending Clause. Congress passed §1983 to address “pervasive state-sanctioned lawlessness and violence” after the Civil War. By its plain language, said the Court, it applies to all federal “laws,” not just a subset of them. Petitioners argued that because Spending Clause legislation operates “much in the nature of a contract” between the state and federal governments, private plaintiffs are like third-party beneficiaries to the contract. Because third-party beneficiaries “generally” could not sue to enforce contractual obligations when Congress enacted §1983, that statute did not give plaintiffs the right to do so under Spending Clause legislation. The Court rejected this argument: §1983 incorporates only “firmly rooted” common law principles, and petitioners’ description of the law in 1871 was “at a minimum, contestable.” Moreover, ruled the Court, courts have always thought of §1983 as a tort claim, so it would not make sense to incorporate contract law concepts to limit liability.

The Court next turned to whether the FNHRA itself created rights enforceable under §1983. Under Gonzaga Univ. v. Doe, 536 U.S. 273 (2002), plaintiffs may presumptively enforce a federal statute using §1983 if it “unambiguously confer[s]” “individual rights upon a class of beneficiaries to which the plaintiff belongs.” (Quotation marks omitted.) In particular, “the Gonzaga test is satisfied where the provision in question is phrased in terms of the persons benefited and contains rights-creating, individual-centric language with an unmistakable focus on the benefited class.” (Quotation marks omitted.) The Court found that the FNHRA satisfies that test in its relevant parts. It expressly refers to the “rights” of nursing home residents to be free from unnecessary restraint and to be transferred only under certain circumstances.

Even when a statute confers individual rights, a defendant may defeat the presumption that §1983 applies by showing that Congress either expressly forbade its application or implicitly did so by providing a “comprehensive enforcement scheme that is incompatible with individual enforcement under §1983.” The Court found that petitioners could not satisfy this requirement. Although the statute has its own administrative enforcement scheme, it did not create a separate private right of action or otherwise suggest an intent to foreclose private enforcement under §1983. The Court contrasted the FNHRA with the statutes it had previously found to be incompatible with §1983 suits. In those cases, a §1983 action “would have thwarted Congress’s scheme coming and going: It would have circumvented the statutes’ presuit procedures, and would have also given plaintiffs access to tangible benefits as remedies that were unavailable under the statutes.” (Quotation marks omitted.) By contrast, the FNHRA does not create “a private judicial right of action, a private federal administrative remedy, or any carefu[l] congressional tailor[ing] that §1983 actions would distort.” (Citation and quotation marks omitted.)

Justice Gorsuch concurred. He agreed with the majority’s conclusions, and his own reasoning “largely track[ed]” that of Justice Barrett’s concurring opinion. He agreed that the FNHRA and some other Spending Clause legislation is enforceable through §1983, but left the door open to future challenges in which a defendant could show that spending legislation did not “secure[]” a right against a state without violating the anti-commandeering principle.

Justice Barrett, joined by the Chief Justice, separately concurred. She emphasized “three important points” about the majority opinion. First, it recognized that Maine v. Thiboutot, 448 U.S. 1 (1980), remains good law and that, consequently, §1983 may in principle apply to all federal laws, not just a subset of them. Second, the majority recognized that Gonzaga identified the test for determining when Spending Clause statutes create enforceable rights under §1983. Finally, it illustrated that courts must “carefully consider” whether Spending Clause statutes create liability under §1983. Justice Barrett characterized this as a “high” bar that many federal statutes will not satisfy. When determining whether Congress intended to foreclose §1983 liability under another statute, Justice Barrett encouraged courts to consider a “wide range of contextual clues,” including the statute’s own enforcement scheme. “The more comprehensive the scheme, the less likely that it leaves the door open for §1983 suits.”

Justice Thomas wrote a lengthy dissent in which he argued that plaintiffs cannot use §1983 to enforce rights in spending legislation because Congress cannot “secure” rights by “law” that way. He distinguished between Congress’s “sovereign legislative powers” on the one hand and the ability to spend money on the other. In his view, spending legislation was such “an extraordinarily potent instrument of federal control” that states virtually are no longer “separate sovereigns.” (Quotation marks omitted). Spending legislation cannot create rights because, under the anti-commandeering principle, their provisions have no force if not “freely accepted by the State.” Justice Thomas traced more than 200 years of case law and public debate over spending legislation to support his interpretation. He called on the Court to “re-examine Thiboutot and the nature of Congress’ spending power.” That is because, “[i]n holding that spending conditions are not merely contractual, but can directly impose obligations on the States with the force of federal law, the Court unravels the very rationale for their constitutionality. Either conditions in statutes enacted under the spending power are in the nature of contract terms and do not secure rights by federal law, or they are unconstitutional because they exceed the spending power and illicitly commandeer the States.”

Justice Alito separately dissented, joined by Justice Thomas. He saw “much common ground with the majority and agree[d] entirely with Justice Barrett’s explanation of the governing standard.” He agreed that the FNHRA created substantive rights. But he believed that the statute’s remedial mechanism foreclosed §1983 suits. In his view, “[t]he Act creates a reticulated remedial regime that both balances federal and state enforcement and channels disputes through that regime. Allowing §1983 suits will upend this careful balance.” In particular, “[b]y specifying limited remedies for federal authorities and tasking States with otherwise determining the consequences for violations, the Act creates a clear division of authority that ensures States retain their historical control over nursing-home regulation. Allowing §1983 suits will upset this balance by allowing any plaintiff to demand damages regardless of the remedial regime that States establish pursuant to their explicit authority under the Act.” In addition, he stated, “whenever a plaintiff files suit, the determination about noncompliance will be taken away from federal and state authorities and given to courts.”

Jack Daniel’s Properties, Inc. v. VIP Products LLC, 22-148. The Court unanimously vacated a Ninth Circuit opinion rejecting Jack Daniel’s claim that a “poop-themed” dog toy resembling a bottle of Jack Daniel’s whiskey infringed upon and diluted Jack Daniel’s trademarks. The Lanham Act creates a federal cause of action for trademark infringement, which permits the owner of a mark to sue someone using a mark that closely resembles its own. When adjudicating a claim of trademark infringement, courts decide whether the defendant’s use is “likely to cause confusion, or to cause mistake, or to deceive.” The “keystone” in this statutory standard is “likelihood of confusion,” and the single type of confusion most commonly in trademark law’s sights is confusion “about the source of a product or service.” The Lanham Act also creates a cause of action for the dilution of famous marks, which can succeed without likelihood of confusion. Dilution of such a mark can occur “by tarnishment,” where an “association arising from the similarity between” two marks—one of them famous—may “harm[] the reputation of the famous mark,” and thus make the other mark’s owner liable. But there are “[e]xclusions”—categories of activity not “actionable as dilution,” including protection for “noncommercial use of a mark.” Another exclusion protects “fair use” of a mark “in connection with . . . parodying, criticizing, or commenting upon the famous mark owner or [its] goods,” but not where the similar-looking mark is used “as a designation of source for the [defendant’s] own goods.”

VIP is a dog toy company that makes and sells a product line of chewable dog toys, many of which are designed to look like and parody popular beverage brands. One of those toys was designed to look like a bottle of Jack Daniel’s Old No. 7 Tennessee Sour Mash Whiskey. Among other things, the words “Bad Spaniels” replace “Jack Daniel’s,” and “The Old No. 2 On Your Tennessee Carpet” replaces “Old No. 7 Tennessee Sour Mash Whiskey” in similar graphic form. Soon after this toy hit the market, Jack Daniel’s sent a demand letter to VIP to stop selling this product. In turn, VIP sued seeking declaratory judgment that Bad Spaniels did not infringe or dilute Jack Daniel’s trademark; Jack Daniel’s countersued under the Lanham Act for both trademark infringement and dilution. VIP moved for summary judgment on both claims. As to the infringement claim, VIP argued that it fails under a test designed to protect “expressive work,” the so-called Rogers test after Rogers v. Grimaldi, 875 F.2d 994 (2d Cir.1989). The “Rogers test requires dismissal of an infringement claim at the outset unless the complainant can show one of two things: that the challenged use of a mark ‘has no artistic relevance to the underlying work’ or that it ‘explicitly misleads as to the source or the content of the work.’” As to the dilution claim, VIP argued that it fails because Bad Spaniels was a parody and as such made “fair use” of Jack Daniel’s famous trademarks.

The district court rejected VIP’s summary judgment arguments, and at a bench trial ruled in favor of Jack Daniels. The district court found, based largely on survey evidence, that consumers were likely to be confused about the source of the Bad Spaniels toy. And the court found that the toy, by creating “negative associations” with “canine excrement,” would cause Jack Daniel’s “reputational harm.” The Ninth Circuit reversed. On the infringement claim, it held that the Rogers test applied because the toy is an “expressive work” that communicates a “humorous message,” and it remanded for the district court to apply that test. On the dilution claim, the Ninth Circuit ruled in favor of VIP because the exclusion for “noncommercial use” applied and shielded liability because the dog toy “parodies” and “comments humorously” on Jack Daniel’s. On remand the district court found that Jack Daniel’s failed the Rogers test and awarded judgment to VIP on the infringement claim. The Ninth Circuit affirmed. In an opinion by Justice Kagan, the Court vacated and remanded.

Beginning with the infringement claim, the Court held that “[w]ithout deciding whether Rogers has merit in other contexts, we hold that it does not when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods.” And here, VIP used the Jack Daniel’s marks as a “designation of source for the infringer’s own good”; the infringement claim thus rises or falls on whether VIP’s use likely causes confusion with Jack Daniel’s. The Court explained that the Rogers test is to be applied only where the defendant’s use of an owner’s trademark does not designate the work’s source, but solely performs some other expressive function. For example, when trademarks are used in works of artistic expression, they do not typically indicate the work’s source, but rather are used for artistic, expressive purposes. The Court ruled that, even if the use of a mark has some expressive content (i.e., because it conveys some message on top of source), it is not automatically entitled to Rogers’ protection, contrary to what the Ninth Circuit held. And in those cases, the likelihood-of-confusion inquiry will account for interests of free expression because it considers whether the public will understand the parodic or satirical nature of the use of the mark or whether it will be confused as to the work’s source. Instead, to determine if Rogers applies, the Court held, courts must look only to whether the mark is used as a mark.

The Court ruled that here, Rogers does not apply because VIP used the Bad Spaniels trademark and trade dress—which adapts the Jack Daniel’s mark—as a source identifier of its dog toy. In its pleadings and arguments, VIP had represented that the mark and dress, although not registered, are used to “identify and distinguish [VIP’s] goods” and to “indicate [their] source. Thus, the only question is whether the Bad Spaniel’s marks are likely to cause confusion. On this question, the Court remanded to the lower courts to make that determination in the first instance.

As to the dilution claim, the Court held that the “noncommercial use” exclusion from trademark dilution liability cannot include “every parody or humorous commentary.” Although the fair-use exclusion covers parodies, criticisms, commentary, and the like, critically it has its own exclusion: “It does not apply when the use is as a designation of source for the person’s own goods or services.” Thus, the Ninth Circuit’s “expansive view of the ‘noncommercial use’ exclusion effectively nullifies Congress’s express limit on the fair-use exclusion for parody, etc.” Here, because VIP used the challenged marks as source identifiers, it could not benefit from the fair-use exclusion for parody.

Justice Sotomayor, joined by Justice Alito, wrote a concurring opinion to emphasize that “in the context of parodies and potentially other uses implicating First Amendment concerns, courts should treat the results of surveys with particular caution.” Justice Sotomayor stated that cleverly designed surveys could prompt consumer confusion by “making consumers think about complex legal questions around permission that would not have arisen organically out in the world.” Allowing such surveys to drive the infringement analysis, she wrote, would risk silencing parodies and could upset the Lanham Act’s careful balance of the needs of merchants to protect their trademarks with the needs of society for free expression and communication.

Justice Gorsuch, joined by Justices Thomas and Barrett, wrote a one-paragraph concurring opinion to underscore that lower courts should be careful about applying the Rogers test. Justice Gorsuch suggested that the test is flawed and should be revisited in the appropriate case.

Dubin v. United States, 22-10. The Court unanimously held that petitioner did not commit aggravated identity theft in violation of 18 U.S.C. §1028A(a)(1) when he defrauded Medicaid, rejecting the Fifth Circuit’s broad interpretation of the statute. David Dubin defrauded Medicaid by overbilling it for psychological testing. After another employee at his office assessed a patient, Dubin overstated that employee’s qualifications and changed the date on the claim so that the government would pay more money. The government charged him not only with healthcare fraud, but also with aggravated identity theft under §1028A(a)(1). That statute imposes a mandatory two-year sentencing enhancement when, “during and in relation to” a predicate offense, a defendant “knowingly . . . uses, without lawful authority, a means of identification of another person.” The government alleged that Dubin violated the statute because he used the patient’s Medicaid reimbursement number when he submitted the fraudulent claim. Although the district court observed that “this doesn’t seem to be an aggravated identity theft case,” it followed circuit precedent interpreting the statute and applied the sentencing enhancement. A panel of the Fifth Circuit affirmed, as did the full court in a divided opinion on en banc rehearing. In an opinion by Justice Sotomayor, the Court vacated and remanded.

The parties offered competing interpretations of the statute. Under the government’s view, it applies any time a defendant uses identifying information to “facilitate[] or further[]” a predicate offense. Dubin argued that the use of identifying information must have “a genuine nexus” to the underlying crime. Borrowing from a Sixth Circuit opinion, Dubin maintained that “[t]he relevant language in §1028A(a)(1) ‘covers misrepresenting who received a certain service,’ but not ‘fraudulent claims regarding how or when a service was performed.’” The Court stated that, “[i]n deciding between the parties’ readings, one limited and one near limitless, precedent and prudence require a careful examination of §1028A(a)(1)’s text and structure. While ‘uses’ and ‘in relation to’ are, in isolation, indeterminate, the statutory context, taken as a whole, points to a narrower reading.” It therefore held that “§1028A(a)(1) is violated when the defendant’s misuse of another person’s means of identification is at the crux of what makes the underlying offense criminal, rather than merely an ancillary feature of a billing method.”

As to context, the Court pointed to the title of the statute, “Aggravated identity theft,” which suggests that its terms should track the ordinary meaning of identity theft. Dictionary definitions of “identity theft” usually emphasize the “central role” of stealing or using identifying information. Moreover, stated the Court, the word “aggravated” suggests that Congress intended the statute to apply only to an especially culpable subset of identity theft, undercutting the government’s broad interpretation, which would apply it to “everyday” cases of overbilling.

The Court next found that canons of statutory construction supported a narrower reading of the statute. The statute also applies when a defendant unlawfully “transfers” and “possesses” identifying information, which “are most naturally read in the context of §1028A(a)(1) to connote theft” and “identity theft in particular.” And “[u]nder the familiar interpretive canon noscitur a sociis, ‘a word is known by the company it keeps.’” “Because ‘transfer’ and ‘possess’ channel ordinary identity theft, noscitur a sociis indicates that ‘uses’ should be read in a similar manner to its companions.” Next, the Court pointed to the canon against superfluity, which instructs that the three verbs―transferring, possessing, and using―should each have a distinct meaning. Yet the government’s interpretation would render “uses” superfluous because “in virtually all cases where a defendant employs a means of identification to facilitate a crime, the defendant will also possess or transfer the means of identification in a way that facilitates the crime.”

The Court next found that the purpose of the statute also supported a narrower reading. It provides for a mandatory prison sentence for “underlying offenses that do not impose a mandatory prison sentence of any kind.” Under the government’s interpretation, the enhancement would automatically apply to many ordinary crimes instead of the most culpable subset. Because patient names or identifiers are found on “the great majority of healthcare billing” and prescriptions, many defendants will use that information to facilitate unrelated fraud. The “far more sensible reading” limited the statute to situations in which “the means of identification is at the crux of the underlying criminality, not an ancillary feature of billing.” The Court had previously rejected overbroad interpretations of criminal statutes, particularly when they would lead to “implausible” results. And here, the government’s position would require a mandatory two years in federal prison for “the hour-inflating lawyer, the steak-switching waiter, the building contractor who tacks an extra $10 onto the price of the paint he purchased.” The Court reversed Dubin’s conviction because his use of the patient’s name “was not at the crux of what made the underlying overbilling fraudulent. The crux of the healthcare fraud was a misrepresentation about the qualifications of petitioner’s employee.”

Justice Gorsuch concurred in the judgment. He agreed that the government’s interpretation was overbroad and “rapacious.” But he believed that the Court’s proposed reading, which focused on “the crux” of the fraud, was too vague. Although the majority’s standard calls for some sort of causal analysis, it was unclear to him “[j]ust how much ‘causation’ must a prosecutor establish to sustain a §1028A(a)(1) conviction[.]” By posing a series of hypothetical questions, Justice Gorsuch attempted to show that it was difficult to come up with a principled way to tell when identifying information plays a crucial role in fraud and when it does not. In his view, §1028A(a)(1) is unconstitutionally vague because it does not provide fair notice of what conduct it punishes. He predicted that the Court would have to review the statute again unless Congress clarifies the standard.

NAAG Center for Supreme Court Advocacy Staff

• Dan Schweitzer, Director and Chief Counsel, (202) 326-6010
• Todd Grabarsky, Supreme Court Fellow
• Van Snow, Supreme Court Fellow

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