SCOTUS | Fraser Blog

U.S. Supreme Court Clarifies Legal Standard for Threatening Speech in Counterman v. Colorado

The U.S. Supreme Court’s recent ruling in Counterman v. Colorado addressed the longstanding ambiguity surrounding the standards for criminal prosecution based on perceived threats of violence. The Court held that such a prosecution requires proof that the defendant subjectively understood the threatening nature of the statement such that making the statement was at least reckless. This case not only delves deep into First Amendment protections but also has broad implications for online communications and interactions.

In this case, Billy Counterman, the criminal defendant, sent numerous unwelcome messages via Facebook to a local musician, raising questions about the delicate balance between free speech and threatening conduct. After multiple block attempts by the musician, Counterman continued his messages from different accounts, leading the musician to believe she was under surveillance and in potential danger.

Colorado prosecutors charged Counterman solely based on his Facebook interactions, asserting that his messages transcended the bounds of protected speech under the First Amendment. Counterman contended that his messages were not “true threats,” arguing that he lacked a subjective understanding of their threatening nature. The lower courts, relying on an objective reasonableness standard, rejected this assertion, deeming the messages as unlawful threats.

The Supreme Court, however, overturned the lower courts’ decisions, opining that while “true threats of violence” are not shielded by the First Amendment, establishing whether a statement is a true threat necessitates a subjective test. The Court emphasized that an objective standard could potentially stifle legitimate speech. A subjective analysis is therefore crucial to reconcile the tension between safeguarding speech and enabling lawful prosecution for illicit expressions.

The ruling specified the requisite intent prosecutors must establish, decreeing that they must demonstrate that defendants made threatening statements recklessly, by ignoring a substantial risk of their statements being perceived as genuine threats.

Justice Kagan, writing for the majority, acknowledged that the balance the Court struck is an imperfect one. As she explained, “[a]s with any balance, something is lost on both sides: The rule we adopt today is neither the most speech-protective nor the most sensitive to the dangers of true threats. But in declining one of those two alternative paths,” she continued, “something more important is gained: Not ‘having it all’ — because that is impossible — but having much of what is important on both sides of the scale.”

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Paula Spicer is an attorney with Fraser Trebilcock with expertise in family law, juvenile justice law, mental health law, neurological disorders, and specialized “state of mind” defenses in criminal law. You can reach her at (517) 377-0823 or at pspicer@fraserlawfirm.com.

Supreme Court Strikes Down Affirmative Action in Higher Education

On June 29, 2023, in a 6–3 decision, the U.S. Supreme Court ruled that Harvard’s and the University of North Carolina’s admissions programs violate the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution, as well as Title VI of the federal Civil Rights Act.

The Court’s Ruling

In the cases Students for Fair Admissions v. President and Fellows of Harvard College and Students for Fair Admissions v. University of North Carolina (the “Cases”), a group of Asian-American students brought suits against Harvard and UNC alleging anti-Asian discrimination in the schools’ admissions process. In previous affirmative action cases, the Supreme Court held that universities could utilize “race-conscious” admissions policies when deciding whether to admit a student.

The Supreme Court held that both universities’ admissions programs violated equal protection. While the Court had permitted race-based college admissions as an exception to the Equal Protection Clause in the past, it did so on the basis that such programs satisfy the “strict scrutiny” standard, could not utilize race as a stereotype, and had to be finite.

According to the Court, Harvard and UNC’s admissions programs failed on all three counts. The Court stated in its opinion: “the student must be treated based on his or her experiences as an individual—not on the basis of race.”

However, the Court explained that universities may consider an applicant’s explanation of how race has impacted their life and experiences as part of an application process, as long as this information is considered as part of an assessment of an applicant’s “character” or “unique ability to contribute to the university.”

Broader Impact

The Court’s decision may have consequences beyond higher education and affect employers’ hiring and promotion policies across all sectors of the economy. Accordingly, employers should examine their approach to DE&I initiatives, particularly in the context of existing policies related to an organization’s diversity goals. Policies which consider race and ethnicity in a manner similar to Harvard and UNC should be carefully considered in light of the Court’s ruling.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.

Client Alert: SCOTUS Rules on Vaccine Mandate – OSHA’s Mandate Stricken; CMS Mandate Upheld

New Deadlines for Compliance Have Been Announced

On Thursday, January 13, 2022, the Supreme Court of the United States released opinions on the much anticipated vaccine mandate litigation. As discussed in our previous blog posts, late last year the Occupational Safety and Health Administration (OSHA) and the Center for Medicaid and Medicare Services (CMS) published two different vaccine mandates to respond to everlasting Covid-19 pandemic. OSHA’s mandate required all private employers of 100+ to enforce Covid-19 vaccinations on employees OR require them to wear a mask and test weekly. (OSHA COVID-19 Vaccination and Testing Emergency Temporary Standard.) CMS’ mandate subjected virtually all health care workers who work for providers and suppliers that participate in the Medicaid and Medicare programs to a Covid-19 vaccination requirement, allowing for religious and medical exemptions. (CMS Interim Final Rule: Omnibus COVID-19 Health Care Staff Vaccination.) Both mandates were challenged by conservative states resulting in a rollercoaster of litigation prohibiting and then again permitting enforcement. Just before SCOTUS heard the cases on January 7, 2022, the OSHA mandate had been validated by the Sixth Circuit Court of Appeals and OSHA had set new dates for enforcement to begin just a few days later. The CMS mandate, however, had been prohibited in 25 states and ordered eligible for enforcement in the other 25, District of Columbia, and US territories with deadlines for compliance of Phase 1 implementation set for January 27, 2022 and of Phase 2 implementation for February 28, 2022. Nonetheless, the Supreme Court released its decisions, and here is what you should know:

In the case of National Federation of Independent Business v. Department of Labor, the Supreme Court issued a stay on OSHA’s vaccine mandate, putting an indefinite hold on implementation and enforcement of the rule while its validity is challenged at the Sixth Circuit Court of Appeals. In the per curiam opinion, the court held: “Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly. Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category.” While this is not necessarily a final rule, it is almost impossible to foresee any difference in an outcome. The Supreme Court’s stay is a temporary halt as the merits are decided by the Sixth Circuit. However, even if the Sixth Circuit determines that the rule is valid, it will be appealed to the Supreme Court who has just expressed where it stands. Unless Congress takes any action, it will fall on states and employers to develop their own vaccine mandates and safety measures to combat Covid-19 in private workspaces.

Opposite to this defeat, the Biden administration received a victory with CMS’ health care worker vaccine mandate. In Biden v. Missouri, the Supreme Court by a 5-4 decision stayed the preliminary injunctions from the Eastern District of Missouri and the Western District of Louisiana, allowing the implementation and enforcement of the mandate in all jurisdictions except for Texas. Texas initiated its own litigation separate from the injunctions protecting the other 24 states and the Supreme Court’s ruling did not affect its current status. Considering the overwhelming support from health care workers and public health organizations, the court stated that “their support suggests that a vaccination requirement under these circumstances is a straightforward and predictable example of the health and safety regulations that Congress has authorized the Secretary to impose. We accordingly conclude that the Secretary did not exceed his statutory authority in requiring that, in order to remain eligible for Medicare and Medicaid dollars, the facilities covered by the interim rule must ensure that their employees be vaccinated against COVID–19.” As with the OSHA decision, this decision too is not a final rule but is unlikely to change once litigation on the merits proceeds through court channels.

As has been announced by several news articles quoting CMS officials today, the deadline to come into compliance (where employees are fully vaccinated) remains the same for the 24 states and D.C. not protected by the Missouri and Louisiana injunctions (including Michigan), which is February 28, 2022. As for the other 24 states (Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kentucky, Kansas, Louisiana, Missouri, Mississippi, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia, and Wyoming), health care facilities are required to have their staff fully vaccinated by March 15, 2022.

As deadlines approach, health care employers should consult with counsel as quickly as possible to establish the policies and procedures necessary to meet the rule’s requirements. Vaccinations are the pinnacle of the mandate, but there is work needed to facilitate reaching that goal.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Lauren D. Harrington is an associate attorney at Fraser Trebilcock focusing on Employment Law. You can reach her at 517.377.0874, or email her at lharrington@fraserlawfirm.com.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Rucho et al v Common Cause

The United States Supreme Court today issued a long-awaited ruling in Rucho et al v Common Cause, et al that immediately highlights the value of Michigan’s recent Voters Not Politicians ballot initiative to pass Proposal 2 ending partisan gerrymandering in Michigan.

Michigan has already insulated itself from much of the harsh impact of today’s federal decision, by moving forward to adopt Proposal 2 to amend Michigan’s Constitution, which will result in the formation of a citizen’s commission to redistrict the state for the 2022 elections.

The Fraser Trebilcock election team represented Voters Not Politicians in VNP’s successful 2018 litigation winning a ruling from the Michigan Supreme Court mandating that Proposal 2 appear on that year’s ballot, and changing Michigan law in the process.

To view the full opinion, click here.

Trust Income: SCOTUS to Consider State Tax Nexus Case Based on Beneficiary’s Residence

Last year, the U.S. Supreme Court decided South Dakota v. Wayfair upending 51-years of precedence holding that a state could require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to customers in the state. In January, the U.S. Supreme Court announced that it will hear another state tax nexus case, Kaestner 1992 Family Trust v North Carolina. Kaestner will address whether the due process clause prohibits states from taxing trusts based on the in-state residency of a beneficiary. In light of last year’s Wayfair decision and the Court’s apparent reluctance to take up nexus cases, the result is expected to have broad implications.

Background

In Kaestner, the trust’s only connection with the taxing state during the tax years at issue was a resident beneficiary. The Kimberly Rice Kaestner 1992 Family Trust, was created in New York and governed by New York Law. The Trust documents, financial books and records, and legal records were kept in New York and all tax returns and Trust accountings were prepared in New York. At the time it was created, neither the settlor nor any of the beneficiaries resided in North Carolina. The trustee was a Connecticut resident, and the trust held financial instruments located in Massachusetts. The beneficiary had no absolute right to the Trust’s assets or income, as distributions were made at the sole discretion of the trustee. No distributions were made to the beneficiary during the years at issue. The terms of the Trust provided that the trustee was to distribute the assets to Kimberly Kaestner when she reached a specified age, which did not occur until after the tax years at issue.

State Law

North Carolina tax law imposes a tax on the taxable income of trusts. The statute provides, in part: “The tax is computed on the amount of the taxable income of the estate or trust that is for the benefit of a resident of this State.” Adding to this, the North Carolina Department of Revenue issued administrative guidance interpreting the statute application based on the “beneficiary’s state of residence on the last day of the taxable year of the trust.” At this point it should be noted that Michigan law differs from that of North Carolina. In Blue v Department of Treasury, the Michigan Court of Appeals held that Michigan may not tax trust income if all trustees, beneficiaries and trust administration occurs outside of the state (even if there is non-income producing property in the state – including real property).

The Dispute

At first the trust in Kaestner paid the tax for tax years 2005 through 2008, but later filed a refund claim on the basis that the taxing statute is unconstitutional as the presence of a resident beneficiary was not a sufficient connection with North Carolina for the state to impose its income tax on the trust. The North Carolina Department of Revenue denied the claim and the underlying refund suit followed.

In a divided opinion, the North Carolina Supreme Court ruled in the trust’s favor finding that the presence of an in-state beneficiary alone was not enough to establish tax jurisdiction. The court reasoned that the trust is an entity separate from individual beneficiaries and distinguished cases in Connecticut and California that reached contrary results under similar facts. The dissent, argued that the trust had subjected itself to North Carolina’s taxing power because it, in the dissent’s view, purposely availed itself to the state through the in-state beneficiary.

Reasons to Watch

Trusts are a common planning tool and subjecting them to state income taxation based only upon an in-state beneficiary could have significant consequences. The states that have faced this issue are split on this question. The split is among nine states – four have said “Yes”; California, Missouri, Connecticut, and Illinois allow taxing a trust based on the presence of an in-state beneficiary, and five states have said “No”; New York, New Jersey, Minnesota, Michigan, and now, North Carolina. Nearly every state taxes trust income. As a result, the outcome of the Kaestner case could have important implications for tax planning and state tax policy. Some commentators have surmised that from the states’ perspective, a loss in Kaestner could nudge them away from extending the economic nexus reach of Wayfair into the area of state income taxation. All of this remains to be seen and deserves a close watch.

Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.

Tax Issues Following the Supreme Court Decision in Obergefell v. Hodges

In a legal landmark decision, the U.S. Supreme Court recently ruled that the Constitution guarantees a right to same-sex marriage (Obergefell v. Hodges). Previously, we blogged about changes to employee benefit plans, and trust and estate documents. Now, here’s a breakdown on some key state and federal tax implications. Continue reading Tax Issues Following the Supreme Court Decision in Obergefell v. Hodges

SCOTUS Same-Sex Marriage Decision May Impact Employee Benefits Plans

On Friday, June 26, 2015, the U.S. Supreme Court issued the 5-4 landmark decision in Obergefell v Hodges striking down same-sex marriage bans across the country as unconstitutional under the Fourteenth Amendment. Continue reading SCOTUS Same-Sex Marriage Decision May Impact Employee Benefits Plans

United States v. Windsor: One Year Later

On June 26, 2013, the U.S. Supreme Court issued its decision in United States v. Windsor, invalidating Section 3 of the Defense of Marriage Act (DOMA). In the year following the decision, its implications for employee benefit programs are becoming more clear. Fraser Trebilcock attorney Brian Gallagher recently spoke about these implications as the employee benefits panelist for a Thompson Reuters webcast on the current state of the law.

Continue reading United States v. Windsor: One Year Later

Defense of Marriage Act: What Today’s Supreme Court Ruling Means for Michigan

Expect to see renewed passion on both sides of the same-sex marriage debate in Michigan, following Wednesday’s U.S. Supreme Court decisions to strike down the federal Defense of Marriage Act (DOMA), and to allow same-sex marriage in California.

Continue reading Defense of Marriage Act: What Today’s Supreme Court Ruling Means for Michigan

DOMA Ruled Unconstitutional

This morning, in United States v. Windsor, the United States Supreme Court ruled that the Defense of Marriage Act (also known as “DOMA”) is unconstitutional because it violates the 5th Amendment’s guarantee of equal protection. Therefore, same-sex marriages that are valid under state law will be recognized for purposes of federal laws.

Continue reading DOMA Ruled Unconstitutional