Justices grant review in cases on Bank Secrecy Act and False Claims Act

SCOTUS NEWS Justices grant review in cases on Bank Secrecy Act and False Claims Act By Amy Howe
on Jun 21, 2022 at 5:18 pm Share

The Supreme Court on Tuesday morning added two cases — one involving the Bank Secrecy Act, the other involving the government’s power to dismiss fraud claims — to its 2022-23 docket. In a list of orders from the justices’ private conference last week, the justices also turned down – over a dissent from Justice Clarence Thomas that was joined by Justice Samuel Alito – a request from Ohio to reinstate the conviction and death sentence of an inmate who was convicted of killing his cellmate.

The justices did not act on several high-profile petitions that they considered last week, including a challenge to New York’s COVID-19 vaccine mandate for health-care workers and a North Carolina case asking the justices to weigh in on the election-law doctrine known as the “independent state legislature” theory. The justices could decide whether to take up those cases as soon as next Monday.

Filing requirements under the Bank Secrecy Act

By granting review in Bittner v. United States, the justices agreed to weigh in on whether the failure to file an annual report disclosing foreign bank accounts counts as a single violation of the Bank Secrecy Act, no matter how many foreign accounts a taxpayer has, or whether a violation occurs each time an individual account is not properly reported.

The question came to the court in the case of Alexandru Bittner, a businessman with dual U.S./Romanian citizenship who did not report his foreign bank accounts while living in Romania. When Bittner eventually returned to the U.S. and learned that he was required to report his foreign bank accounts, he filed reports that disclosed only his largest account and erroneously stated that he did not have an interest in more than 25 accounts. The IRS fined Bittner $2.72 million — $10,000 for each unreported bank account each year from 2007 to 2011. The district court ruled that the appropriate fine was $50,000 — $10,000 for each report that Bittner had not filed. But the U.S. Court of Appeals for the 5th Circuit reversed and reinstated the $2.72 million fine. It ruled that each failure to report an account constituted a violation of the Bank Secrecy Act. Bittner came to the Supreme Court in February, asking the justices to weigh in, which they agreed on Tuesday to do.

Dismissing cases under the False Claims Act

In United States ex rel. Polansky v. Executive Health Resources, the court agreed to decide whether, when an individual brings a lawsuit on behalf of the government alleging fraud on the United States, the government has the power to dismiss the lawsuit after initially declining to take over the case. The question came to the court in a case brought by Jesse Polansky, who alleges that a private billing company was fraudulently billing the government for unnecessary inpatient stays. Two years after Polansky filed the case, the federal government opted not to participate in the case, and the case went forward, but several years later the government sought to dismiss the case.

An interstate seaport saga

The justices also agreed to wade into a dispute between New York and New Jersey over the latter’s efforts to withdraw from a 1953 agreement between the two states intended to combat corruption and racketeering in the port that the states share. The agreement created a commission to oversee hiring at the port and to work with law enforcement to investigate crime there. In December 2021, New Jersey announced that it planned to pull out of the agreement and end the commission.

In 2018, the commission filed a lawsuit to block then-Gov. Chris Christie from enforcing the New Jersey law that would dissolve the commission and give money intended for the commission to the state police to investigate crime in the port instead. But the U.S. Court of Appeals for the 3rd Circuit ruled that New Jersey’s sovereign immunity barred the commission from bringing a lawsuit, and the Supreme Court declined to review that ruling.

New York came to the Supreme Court in March of this year, asking the justices to decide its dispute with New Jersey as part of its original jurisdiction – that is, a case brought directly to the court, a power that the Constitution gives the court for disputes between the states. The breach of the compact violates federal law, New York told the justices, as well as the Constitution. If the compact is terminated, New York added, it “would likely increase the opportunities for individuals associated with organized crime families or other criminal enterprises to obtain access to waterfront employment at the Port and use that employment for criminal activities.”

New Jersey agreed with New York both that the justices should take up the dispute and that the court should resolve the case without appointing a “special master,” an expert who could be appointed by the court to hold a trial and make a recommendation to the justices. The justices can decide the case based only on briefs from both states, New Jersey insisted, because the dispute hinges on the interpretation of the compact. And if they do, New Jersey argued, New Jersey should prevail because it is clear that the state can withdraw from the compact without New York’s approval.

In a brief order on Tuesday, the justices granted New York’s request to file its complaint and ordered both sides to file briefs to decide the case without a special master. The briefing will be complete by late November, potentially setting the stage for the justices to hear oral argument and decide the case next term.

A CVSG in an education case

The justices called for the views of the U.S. solicitor general in Perez v. Sturgis Public Schools, a case involving whether and when federal education law requires a student to fully pursue claims that are not made under the Individuals with Disabilities Education Act when doing so would be futile, as well as whether that requirement applies to claims seeking remedies that are not available under the IDEA.

The question comes to the court in a case brought by a deaf student, Miguel Perez, who did not receive a qualified sign language interpreter for 12 years – leaving him, he says, “unable to learn or communicate with others and making him an academic and social outcast.” Perez brought claims in a state administrative proceeding under both the IDEA and the Americans with Disabilities Act. The hearing officer dismissed the ADA claim, reasoning that he lacked the power to hear it, and the school district then settled Perez’s IDEA claim. When Perez then filed a lawsuit in federal court for his ADA claim, the district court dismissed the claim because he had not fully pursued it in the state administrative proceedings, and the court of appeals upheld that ruling. Perez asked the Supreme Court to take up his case, but the justices on Tuesday asked the Biden administration to weigh in first.

There is no deadline for the Biden administration to file its brief.

An overturned conviction in a capital case

The justices declined to reinstate the conviction of Ohio inmate August Cassano, who was sentenced to death for the 1997 murder of his cellmate. Last year the U.S. Court of Appeals for the 6th Circuit ordered the state to either retry him promptly or vacate his conviction, and on Tuesday the justices allowed that ruling to stand.

Cassano’s case centered on whether he had properly invoked his constitutional right to represent himself. Shortly before his trial, Cassano had filed a form waiving his right to an attorney at the same time that he asked the trial judge to appoint a lawyer for him. He also asked the judge about representing himself. The 6th Circuit found that Cassano’s rights were violated when the judge did not allow him to represent himself.

The state came to the Supreme Court in November, asking the justices to either weigh in or summarily reverse the 6th Circuit. It argued that although defendants have a right to represent themselves, because they do not generally do so as effectively as attorneys, courts require defendants to make clear and specific requests – which Cassano did not do in this case. Moreover, the state added, because the case came to federal court on a request for post-conviction relief, the federal courts can award relief only if the state-court ruling was either contrary to the Supreme Court’s decisions or was based on an unreasonable view of the facts, neither of which is true here.

Cassano, in turn, told the justices they should not “wade into such a fact-intensive case.” And on Tuesday, they declined to do so.

Thomas, joined by Alito, dissented from the decision not to summarily reverse the 6th Circuit’s decision. He regarded the case as “straightforward.” He contended that an earlier decision from the Ohio Supreme Court, which ruled against Cassano, “leaves no doubt that the state high court reached and decided the merits of Cassano’s” claim, and as a result the 6th Circuit could grant Cassano post-conviction relief only if it was clearly wrong under federal law – which, Thomas asserted, it was not.

Thomas observed that the Supreme Court had repeatedly reversed the 6th Circuit’s decisions because the lower court had not applied federal post-conviction law properly. “Many of those reversals,” Thomas added, “have been summary. The Court should add this case to the list.” Instead, Thomas continued, “[b]y saddling the State with the risk and expense of retrying a repeat murderer’s quarter-century-old capital case, the Court permits the Court of Appeals to ‘intrud[e] on [Ohio’s] sovereignty to a degree matched by few exercises of federal judicial authority.’”

The justices will meet again for another private conference on Thursday, June 23. The court will release orders from that conference on Monday, June 27, at 9:30 a.m.

This article was originally published at Howe on the Court. 

Posted in Featured, Merits Cases

Cases: United States, ex rel. Polansky v. Executive Health Resources, Inc., New York v. New Jersey, Shoop v. Cassano, Bittner v. United States, Perez v. Sturgis Public Schools

Recommended Citation: Amy Howe, Justices grant review in cases on Bank Secrecy Act and False Claims Act, SCOTUSblog (Jun. 21, 2022, 5:18 PM), https://www.scotusblog.com/2022/06/justices-grant-review-in-cases-on-bank-secrecy-act-and-false-claims-act/