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A Supreme Court term to remember for states: Rulings in eight cases have immediate, and long-term, effects

by Lisa Soronen ~ July/August 2015 ~ Stateline Midwest »
The biggest news for states (and everyone else) from the recent U.S. Supreme Court term is that same-sex couples now have a constitutional right to marry and the Affordable Care Act is intact. But less well known cases will also have a big impact on the states.
From striking down Clean Air Act rules to upholding Texas’s decision to keep the Confederate flag off of license plates, the court was busy this term with cases of major consequence for states and policymakers.
Court rules that redistricting powers do not need to rest with state legislatures.
Court rules that redistricting powers do not need to rest with state legislatures
The Supreme Court’s 5-4 decision in Arizona State Legislature v. Arizona Independent Redistricting Commission is a significant blow to state legislative redistricting authority. The court held that the U.S. Constitution’s Elections Clause permits voters to vest all congressional redistricting authority in an independent commission.
Justice Ruth Bader Ginsburg’s majority opinion favors direct democracy over representative democracy. She noted that founding-era dictionaries typically defined legislatures as the “power that makes laws”; that includes voters who pass laws through initiatives.
Fifteen years ago, Arizonans approved a constitutional amendment that took the power to redraw congressional and state legislative districts out of the hands of the Legislature. Instead, an independent redistricting commission was created.
Could similar changes to redistricting occur in the Midwest? Right now, no state in the region uses independent commissions; instead, the redistricting process is mostly controlled by state legislatures (see map). But in five Midwestern states — Michigan, Nebraska, North Dakota, Ohio and South Dakota — voter-initiated changes to the redistricting process are possible without approval by the legislature.


Historic ruling on same-sex marriage ends bans in several Midwestern states
Following the Supreme Court’s 5-4 decision in Obergefell v. Hodges, same-sex couples have a constitutional right to marry across the country. All state laws and court decisions banning same-sex marriage are now invalid.
Justice Anthony Kennedy’s opinion can fairly be described as a celebration of marriage generally.
“No union is more profound than marriage,” he wrote, “for it embodies the highest ideals of love, fidelity, devotion, sacrifice and family.”
The court relied on the U.S. Constitution’s Fourteenth Amendment Due Process Clause and the Equal Protection Clause in its opinion. It rejected the argument that sufficient debate had not occurred over this issue, noting that “individuals need not await legislative action before asserting a fundamental right.”
In the Midwest, same-sex marriage had already been permitted in six Midwestern states due to either state legislative action or state and federal court decisions. With this year’s U.S. Supreme Court decision, the right for gays to marry was extended to five other states in the region: Michigan, Nebraska, North Dakota, Ohio and South Dakota.


Supreme Court upholds use of tax credits in federally run health insurance exchanges
In its 6-3 decision in King v. Burwell, the U.S. Supreme Court held that health insurance tax credits can be available via the federally facilitated exchanges in 34 different U.S. states. In the Midwest, only Minnesota has established a state-run marketplace. In the region’s 10 other states, health insurance exchanges (established under the Affordable Care Act of 2010) are either facilitated by the federal government or run through a state-federal partnership.
As a result, King v. Burwell had implications for the delivery of health insurance across the Midwest. The Affordable Care Act allows the states and the federal government to sell insurance on health care exchanges, and under the law, tax credits are available when insurance is purchased through “an exchange established by the state.”
The question in this case was whether a federal exchange is “an exchange established by the state” and may offer tax credits. The Supreme Court said “yes.”
In his majority opinion, Chief Justice John Roberts reasoned that if tax credits weren't’t available on the federal exchanges, “it would destabilize the individual insurance market in any state with a federal exchange, and likely create the very ‘death spirals’ that Congress designed the act to avoid.”
As a result of this decision, the status quo remains: If an individual otherwise eligible for a tax credit buys health insurance on a state-based or a federally administered exchange, the tax credit will be available.


Ruling may pave way for greater supervision of many state boards and commissions
In North Carolina State Board of Dental Examiners v. FTC, the U.S. Supreme Court held that if the majority of members of a state board are “active market participants,” antitrust immunity applies only if the state actively supervises the board.
In North Carolina, dentists make up the majority of members on the state’s Board of Dental Examiners. And this board sought to bar non-dentists from providing teeth-whitening services in North Carolina — a violation of antitrust law, according to the Federal Trade Commission.
But the board then claimed it had “state-action immunity.” In a previous case, the justices held that states receive this immunity from federal antitrust law when acting in their sovereign capacity. In their 6-3 decision in the North Carolina case, however, the justices concluded that nonsovereign entities controlled by “active market participants” do not necessarily receive state-action immunity.
The state “must provide active supervision if state-action immunity ... is to be invoked,” Justice Kennedy wrote in the majority opinion. This case reduces the authority of state legislatures to compose state agencies, boards and commissions as they prefer. It will require additional state resources to actively supervise boards.


Michigan, 22 other U.S. states prevail in lawsuit against EPA over regulation of mercury emissions
In Michigan v. EPA, the Supreme Court held 5-4 that the U.S. Environmental Protection Agency acted unreasonably in failing to consider cost when deciding whether to regulate mercury emissions from power plants. Twenty-three states — including Indiana, Iowa, Kansas, Michigan, Nebraska, North Dakota and Ohio — had challenged the federal regulations.
Under the federal Clean Air Act, the EPA has the authority to limit emissions from power plants if it finds that such regulation is “appropriate and necessary.” But by deeming costs irrelevant to the regulatory decision, the EPA’s interpretation of the federal law was unreasonable, the majority of justices ruled.
“Agencies have long treated cost as a centrally relevant factor when deciding whether to regulate,” Justice Antonin Scalia wrote in the majority opinion. “Consideration of cost reflects the understanding that reasonable regulation ordinarily requires paying attention to the advantages and the disadvantages of agency decisions.
“It also reflects the reality that ‘too much wasteful expenditure devoted to one problem may well mean considerably fewer resources available to deal effectively with other (perhaps more serious) problems.’”


Majority of justices decide states have authority to control content of specialty license plates
In Walker v. Sons of Confederate Veterans, the Supreme Court held 5-4 that Texas may deny a proposed specialty license plate featuring the Confederate flag. License plates constitute government speech, the justices ruled, and a state is entitled to refuse issuing proposed designs of them.
In Texas, specialty plates can be proposed by the Legislature, the public or nonprofit organizations. They must receive final approval from a state board. In the majority opinion, Justice Stephen Breyer insisted that “government would not work” unless the government may determine “the content of what it says.”
In his dissent, Justice Samuel Alito questioned much of the majority’s analysis. He pointed out that only within the last 20 years has Texas allowed private groups to put messages on license plates. The state allows messages on license plates in order to make money, Alito argued, not to convey messages it supports.
Every U.S. state has a specialty license-plate program in place.


Supremacy Clause can’t be used to force states to increase rates for Medicaid providers
In Armstrong v. Exceptional Child Center, the Supreme Court held 5-4 that Medicaid providers cannot rely on the Supremacy Clause to sue states to enforce a Medicaid reimbursement statute. Under federal law, Medicaid reimbursement rates must be “consistent with efficiency, economy and quality of care” and “sufficient enough to enlist enough providers.” The law does not provide recourse for plaintiffs who argue a state is not in compliance.
However, a federal appeals court found that the U.S. Constitution’s Supremacy Clause offers a different type of recourse: allowing plaintiffs to sue if they believe federal and state policies conflict.
The appeals court found that Idaho must raise its Medicaid reimbursements to providers. But the nation’s highest court rejected the argument that the Supremacy Clause creates a private right of action. “It instructs courts what to do when state and federal law clash, but is silent regarding who may enforce federal laws in court, and in what circumstances they may do so,” Justice Scalia wrote in the majority opinion.
The decision has implications well beyond this single case. Had the Supreme Court ruled otherwise, the Supremacy Clause would have provided a cause of action for every federal statute that arguably conflicts with state law.


Justice Kennedy: Courts should reconsider ruling that has stymied taxation of Internet purchases
In Direct Marketing Association v. Brohl, Justice Anthony Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this court to reexamine Quill.” In that 1992 decision, Quill Corp. v. North Dakota, the court held that states cannot require retailers with no in-state physical presence to collect use taxes.
In Colorado, in order to improve tax collections, the Legislature began requiring remote sellers to inform their customers annually of the purchases that they made, with this same information also sent to the Colorado Department of Revenue.
The Direct Marketing Association sued Colorado in federal court, claiming that these new notice and reporting requirements are unconstitutional under Quill. The question before the U.S. Supreme Court this year was whether this legal dispute could be heard in federal court (as opposed to state court). In a unanimous decision, the court held that a federal court has jurisdiction.
This case is significant for all states because the court’s most influential justice (Kennedy) expressed skepticism about whether Quill should remain the law of the land.


Article written by Lisa Soronen, executive director of the State and Local Legal Center. The center is made up of the “Big Seven” national organizations representing state and local elected and appointed officials. The Council of State Governments is among the "Big Seven," which provides guidance to the State and Local Legal Center and recommends and votes on participation in cases before the Supreme Court. Since 1983, the center has s filed more than 300 amicus briefs in the U.S. Supreme Court.


Sneak-peek: Court will hear case next term with big ramifications for state redistricting process

The U.S. Supreme Court’s docket for next term is already about half full. So far, the show-stopper for states is Evenwel v. Abbott. At issue is whether state legislatures are allowed to use total population when apportioning state legislative districts.
As the Brennan Center for Justice notes, the long-standing practice of states has been to draw political maps that have the same total number of people in each district. But in Evenwel v. Abbott, a group of Texas residents argues this practice violates the Equal Protection Clause. The reason: not everyone is eligible to vote — noncitizens, for example — and this population group is not evenly distributed among different districts.
Over the last 25 years, the court has repeatedly refused to hear cases arguing that voter population must be equalized. That has now changed. Evenwel will be closely watched, the Brennan Center says, because it could impact minority representation as well as parts of a state with large numbers of people who are ineligible to vote.