RELIST WATCH

Federal ban on inducing unlawful immigration for financial gain may get another Supreme Court test

The Relist Watch column examines cert petitions that the Supreme Court has “relisted” for its upcoming conference. A short explanation of relists is available here.

After a few slow weeks on the relist front, the Supreme Court came roaring back this week with four newly relisted petitions that, if granted, will likely be added to the March 2023 argument calendar.

Two years ago, in United States v. Sineneng-Smith, the Supreme Court reversed a circuit-court decision that struck down a federal law criminalizing the act of “encourag[ing] or induc[ing]” noncitizens to enter or remain in the United States for financial gain. In what would be Justice Ruth Bader Ginsburg’s penultimate majority opinion, the court unanimously reversed, on the grounds that the decision of the U.S. Court of Appeals for the 9th Circuit was a “drastic departure from the principle of party presentation” that “constituted an abuse of discretion.” Basically, while the defendant’s own counsel had challenged her criminal conviction by arguing that the statute was unconstitutionally vague and that her own prosecution had violated the First Amendment, the 9th Circuit panel had appointed amici to raise a broader theory that the law was unconstitutionally overbroad and invalid in all applications. By reversing on the grounds of the appellate court’s procedural overreach, the Supreme Court dodged the substantive question of whether the law is unconstitutionally overbroad.

Our first new relist this week, United States v. Hansen, squarely raises that First Amendment challenge. Helaman Hansen ran an immigration-advising service. Hansen charged undocumented immigrants to advise them on what he claimed was a pathway to U.S. citizenship through adult adoption. The only catch?  Hansen’s method was not actually a valid means to obtain citizenship. A federal court in California convicted Hansen of multiple counts of fraud, as well as convincing customers to overstay their visas and participate in his adoption program in violation of the encourage-or-induce statute.

Hansen appealed to the 9th Circuit. While Hansen’s case was pending, the 9th Circuit issued its soon-to-be-reversed ruling in Sineneng-Smith holding the statute unconstitutionally overbroad because it penalizes general, benign immigration advocacy. In response, Hansen raised the First Amendment overbreadth issue in his own appeal. The 9th Circuit placed Hansen’s case on hold while the Supreme Court considered its Sineneng-Smith ruling. After the justices reversed that ruling on procedural issues not present in Hansen’s case, the court of appeals resumed Hansen’s appeal and reaffirmed its previous conclusion in Sineneg-Smith, again striking down the statute as overbroad and reversing Hansen’s convictions under it.

The government again seeks review of the 9th Circuit’s holding. The government argues that the terms “encourage” and “induce” have a long history of specific association with aiding and abetting criminal conduct. Criminalizing the encouragement or inducement of immigration violations for financial gain, the government maintains, is perfectly consistent with the general principle that the First Amendment does not protect speech that is intended to instigate illegal activity. Hansen argues that there’s no split on the issue and the case is a poor vehicle because the jury that convicted Hansen wasn’t presented with the theory the government currently is advocating. This case strikes me as a very likely grant.

Next up is Polselli v. Internal Revenue Service. A provision of the Internal Revenue Code generally requires the IRS, when it serves a summons for records about a taxpayer on a third-party recordkeeper (like a bank, accountant, or lawyer) to give that person notice of the summons. The same provision provides that “any person who is entitled to notice of a summons … shall have the right to begin a proceeding to quash” that summons in district court. There are a few exceptions to the notice requirement. As relevant here, the IRS need not provide notice of “any summons … issued in aid of the collection of (i) an assessment made or judgment rendered against the person with respect to whose liability the summons is issued; or (ii) the liability at law or in equity of any transferee or fiduciary of any person referred to in clause (i).” Where notice is not required, the authorization to initiate a proceeding to quash a summons is also inapplicable.

The IRS summonsed the bank records of two law firms that represent delinquent taxpayer Remo Polselli and his wife, Hanna Karcho Polselli, on the theory that the records might reveal how Remo paid the firms. The law firms’ bank records also reveal information about the firms’ other clients, such as Hanna. The banks informed Hanna and the law firms, which sought to quash the summonses. The district court granted the government’s motion to dismiss the action, holding that they fell within the notice exception and thus were powerless to quash. A divided panel of the U.S. Court of Appeals for the 6th Circuit affirmed, following similar precedent of the U.S. Court of Appeals for the 7th Circuit. Judge Raymond Kethledge dissented, saying that he would have construed the notice exception “more narrowly than it would ordinarily be read” as limited to records the delinquent taxpayer owned or had a legal interest in, consistent with an opinion of the 9th Circuit. Hanna and the law firms seek review, asserting a 2-1 split. The government contends that, in a more recent opinion, the 9th Circuit “has clarified the limited effects of” the decades-old case the petitioners rely on, and it argues that the plain language of the statute bars the suit.

Next up is Lora v. United States, presenting an issue of federal criminal sentencing. District courts have discretion to impose either consecutive or concurrent sentences unless a statute mandates otherwise. Section 924(c)(1)(D)(ii) of Title 18, which imposes penalties for using or carrying a firearm during and in relation to a crime of violence or drug-trafficking crime, specifies that sentences imposed “under this subsection” must run consecutive to other sentences. Efrain Lora was convicted and sentenced for a drug-trafficking-related murder under a different subsection, Section 924(j). Lora therefore argued that the district court had discretion to impose concurrent sentences because Section 924(j) creates an offense distinct from Section 924(c)(1)(D)(ii). But the U.S. Court of Appeals for the 2nd Circuit ruled that the district court was required to impose consecutive sentences because it concluded that Section 924(j) is essentially an aggravated form of the Section 924(c) offense.

Lora argues that four circuit courts have reached the same conclusion as the 2nd Circuit, and at least two circuits have disagreed. The government acknowledges what it calls a “narrow conflict in the circuits as to whether [Section] 924(c)’s consecutive-sentence mandate applies to a conviction for the greater-included offense under [Section] 924(j).” But it argues that the issue “has limited practical importance” and notes that the Supreme Court has repeatedly denied cert on the issue.

Lastly, we have Coinbase, Inc. v. Bielski. Under Section 16(a) of the Federal Arbitration Act, an interlocutory appeal “may be taken from an order … denying an application … to compel arbitration.” The Supreme Court held in Griggs v. Provident Consumer Disc. Co. that an appeal “divests the district court of its control over those aspects of the case involved in the appeal.” Coinbase, a cryptocurrency exchange, contends that six circuits have held that a non-frivolous appeal of the denial of a motion to compel arbitration divests the district court of jurisdiction over a case, thereby automatically staying proceedings in the district court. But it contends that three circuits have held that such an appeal does not divest the district court of jurisdiction over the underlying litigation, and the appealing party must obtain a stay pending appeal pursuant to the traditional discretionary test or else face ongoing district court litigation pending appeal.

The joint petition involves two underlying disputes, involving separate putative class actions brought by users of Coinbase. When they sued, Coinbase sought to compel arbitration under a clause in the standard user agreement, and the district court refused to compel arbitration. While those appeals are pending, Coinbase sought to stay district court proceedings, the district courts refused, and then the 9th Circuit also refused to stay district court proceedings. Coinbase sought an emergency stay (and requested expedition) from the Supreme Court, which denied the request. Later, the district court in one of the two underlying actions stayed the case pending appeal as a matter of its discretion. One of the two respondents argues that the granting of a discretionary stay underscores the case’s lack of importance. We’ll find out soon what the Supreme Court thinks.

Until next time, stay safe! 

New Relists

Polselli v. Internal Revenue Service, 21-1599
Issue: Whether the exception in I.R.C. § 7609(c)(2)(D)(i) to the notice requirements for an Internal Revenue Service summons on third-party recordkeepers applies only when the delinquent taxpayer owns or has a legal interest in the summonsed records, as the U.S. Court of Appeals for the 9th Circuit has held, or whether the exception applies to a summons for anyone’s records whenever the IRS thinks that person’s records might somehow help it collect a delinquent taxpayer’s liability, as the U.S. Courts of Appeals for the 6th and 7th Circuits have held.
(relisted after the Dec. 2 conference)

Lora v. United States, 22-49
Issue: Whether 18 U.S.C. § 924(c)(1)(D)(ii), which provides that “no term of imprisonment imposed … under this subsection shall run concurrently with any other term of imprisonment,” is triggered when a defendant is convicted and sentenced under 18 U.S.C. § 924(j).
(relisted after the Dec. 2 conference)

Coinbase, Inc. v. Bielski, 22-105
Issue: Whether a non-frivolous appeal of the denial of a motion to compel arbitration ousts a district court’s jurisdiction to proceed with litigation pending appeal.
(relisted after the Dec. 2 conference)

United States v. Hansen, 22-179
Issue: Whether the federal criminal prohibition against encouraging or inducing unlawful immigration for commercial advantage or private financial gain, in violation of 8 U.S.C. § 1324(a)(1)(A)(iv) and (B)(i), is facially unconstitutional on First Amendment overbreadth grounds.
(relisted after the Dec. 2 conference)

Returning Relists

Escobar v. Texas, 21-1601
Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to SCOTUSblog in various capacities, is among the counsel to petitioner in this case.
Issue: Whether the Texas Court of Criminal Appeals erred in holding that the prosecution’s reliance on admittedly false DNA evidence to secure petitioner’s conviction and death sentence is consistent with the due process clause of the 5th Amendment because there is no reasonable likelihood that the false DNA evidence could have affected the judgment of the jury.
(relisted after the Nov. 4, Nov. 10, Nov. 18 and Dec. 2 conferences)

Counterman v. Colorado, 22-138
Issue: Whether, to establish that a statement is a “true threat” unprotected by the First Amendment, the government must show that the speaker subjectively knew or intended the threatening nature of the statement, or whether it is enough to show that an objective “reasonable person” would regard the statement as a threat of violence.
(relisted after the Nov. 18 and Dec. 2 conferences)