The Volokh Conspiracy

If you're interested in the intersection of corporate law, trademark, accounting for profits, and federal equity jurisdiction, you'll be interested in a new amicus brief that my colleague Paul Miller and I just filed in support of a cert petition in Dewberry Group, Inc. v. Dewberry Engineers Inc. A huge thank you to Donald Burke, John B. Goerlich, and William Weber, all of Willkie Farr & Gallagher, for outstanding work on the brief.

The basic issue is whether "equity" is a talisman that allows a court, in awarding an accounting for profits, to override separate corporate personality. We answer no. And the answer matters not only for the resolution of a circuit split, and not only for the interpretation of the Lanham Act, but also more generally for how federal courts interpret the many federal statutes authoring "equitable relief" or relief according to "principles of equity." As we say near the end of the brief,

You can watch on YouTube (see here for past episodes), or subscribe on any podcast platform. This series put together by the Hoover Institution at Stanford University, where I'll be starting as the Thomas M. Siebel Senior Fellow in May.

While the Judicial Conference's policy on venue and judge shopping is dead, debates about this issue are not. Today, the New York Times reported on the kerfuffle, which quoted at least one District Court judge from Dallas who was not happy with his Chief Judge's letter to Senator Schumer. I suspect there is some backstory here.

This evening, the Fifth Circuit decided a case on its "emergency" docket. The posture is somewhat complex. A judge in the Northern District of Texas-Fort Worth Division transferred a case brought by the Chamber of Commerce against the CFPB to the District for the District of Columbia. (See, the conservative Judges in the Fifth Circuit are not automatons.) Almost immediately, the Chamber sought an emergency stay, and the Fifth Circuit granted a temporary administrative stay. Now, the Fifth Circuit panel, by a 2-1 vote, mandamused the transfer. Judge Willett wrote the majority, joined by Judge Oldham; Judge Higginson dissented.

Here is a summary of the opinion:

Because the plaintiffs appealed the district court's effective denial of their preliminary-injunction motion before the district court granted the motion to transfer the case, we agree that the district court acted without jurisdiction.

The basis of the panel's ruling is somewhat narrow. The Chamber filed a notice of appeal before the district court judge transferred the case, thereby divesting the district court of jurisdiction to transfer the case. There is a well-established doctrine that only one court can have jurisdiction at a time.

What interests me far more is how this case affects broader discussions of venue, judge-shopping, and transfers. At present the case exists in something of a limbo--not quite in D.C., not quite in Texas. I am very familiar with this limbo, as the Defense Distributed case is stuck somewhere between the Garden State and the Lone Star State. See Defense Distributed v. Bruck (2022). (Our appellant brief was recently filed in the Third Circuit.) There was also a recent case in which SpaceX filed suit against the NLRB in Texas, and the District Court transferred the California. Over Judge Elrod's dissent, the panel (without opinion) denied mandamus. The panel has also asked the NLRB to explain its actions in contacting the California District Court. There may be some chicanery going on. I'm sensing a pattern: one way that District Court judges in Texas can avoid the Fifth Circuit's appellate review is to send cases to more friendly jurisdictions. Judge Willet recognized the Fifth Circuit was "Facing an uptick in intercircuit transfer orders." I don't think this is what happened in the Chamber case, but it may be happening elsewhere. Judge Oldham suggested that a "higher burden should be met in advocating a § 1404(a) transfer from a district court in one circuit to a district court in another circuit more than 1,000 miles away." This could be an issue the en banc Fifth Circuit considers, perhaps in the SpaceX case.

Judge Oldham's concurrence respectfully calls out the District Court judge for improperly transferring the case.

Second, the district court appeared to analyze the motion to transfer with an eye towards discouraging forum and / or judge-shopping. See District Court Op. at 5–7. However well-intentioned this approach may have been, I cannot find support for it in Supreme Court or Fifth Circuit precedent. True, Congress added the qualification "substantial" to § 1391(e)(1)(B). Cf. District Court Op. at 5; see also id. at 6 (recommending that plaintiffs bring cases "in jurisdictions where the impact is uniquely and particularly felt," notwithstanding the fact that those words do not appear in the relevant federal venue statute). But that only highlights that Congress did not require "substantiality" in § 1391(e)(1)(A) and (C). It is not for federal district courts to add additional qualifications on top of statutory law, especially where the Supreme Court has previously declined to impose judicial barriers to forumshopping. [FN2] See, e.g., Ferens v. John Deere Co., 494 U.S. 516, 527–29 (1990).

[FN2] 2 The district court noted that "[v]enue is not a continental breakfast; you cannot pick and choose on a Plaintiffs' whim where and how a lawsuit is filed." District Court Op. at 5. But so long as the plaintiffs complied with federal law, any complaint about the scope of venue statutes is better addressed to Congress.

Judge Oldham is exactly right. And footnote 2 reinforces why the Judicial Conference should have stayed in its lane, and let Congress deal with venue reform. The New York Times buries at the bottom of its article this correct statement of law:

If the Northern District of Texas does not adopt random assignment for consequential cases, the Judicial Conference could try to put forth a binding rule under the Rules Enabling Act. Such a rule would have to survive review by the Supreme Court and Congress, and some judges have questioned whether it would supersede the statutory authority of the district courts.

Judge Oldham also proposes what I think would be a salutary reform: any transfer of venue should be stayed by the district court to seek appellate review:

This case again highlights why a district court should stay a transfer order for a short period so that opposing parties may appeal it. We commended that procedure in Clarke, 94 F.4th at 507 n.1. And that procedure would have avoided the very unfortunate circumstance presented by this motion: we've been forced to consider a mandamus application on a highly truncated timeline and to grant relief that could've otherwise been avoided. I have zero doubt about the conscientiousness of the learned district court judge. The district court's forum-shopping concerns might be wellfounded. And I certainly don't think the district court "defied" anyone or anything. Post, at 3 (Higginson, J., dissenting). But I do think the preexisting transfer rules precluded sending this case to Washington, D.C. That result is dictated by Clarke and the ample authorities underlying that decision—not some "new proposition of law created by [today's] majority." Post, at 5 (Higginson, J., dissenting).

If Justice Barrett and others are troubled by circuit courts granted administrative stays, then Judge Oldham's reform would be quite helpful.

Judge Higginson, who was on the panel in Defense Distributed v. Bruck, dissented here. He expressly cited the Judicial Conference's judge shopping policy:

Gutting in this manner a district judge's discretion to expeditiously transfer a case it has good reason to believe is improperly before it— especially when Petitioners have insisted that time is of the essence—is particularly worrisome not just as our usurpation of district courts' docket control, but also in its implications for the judiciary's ability to prevent forum shopping. Cf. Judicial Conference Committee on Court Administration and Case Management, Guidance for Civil Case Assignment in District Courts (Mar. 2024).

And Judge Higginson's conclusion seems to suggest that D.D.C. may choose to keep the case.

For the foregoing reasons, I believe that the new proposition of law created by the majority is incompatible with district court discretion over docket management and prudent policing of forum shopping. Finally, I am confident the District Court for the District of Columbia will give the suggestion that it should disregard a case docketed by it its closest attention.

The Fifth Circuit's opinion is but a mere "suggestion." This permissiveness would create comedy, rather than comity. Much the same happened in Defense Distributed, where the District Court in New Jersey declined to return the case to Texas, as the Fifth Circuit had asked. Another salutary reform would be to create some mechanism whereby district courts can be mandamused to return cases in the interest of interstate comity.

There is much at play here, and we are seeing some of the fractures form on the Fifth Circuit. The Fifth Judicial Conference should be fun. Hopefully it will not be transferred to San Francisco.

The Establishment Clause is something of an outlier in constitutional jurisprudence.

First, the Establishment Clause, as ratified in 1791, was a federalism provision. It prevented Congress from interfering with state establishments of religion. That provision suggests that states can have established religions, and that Congress cannot disestablish any of those religions. As all know, there were several established churches at the time of the founding. And if tradition means anything, then practices from 1791 are directly relevant to this question.

Second, as Justice Thomas has observed, such a federalism provision resists incorporation. I've not seen any compelling evidence from debates during the 39th Congress suggesting that the Fourteenth Amendment would place the states under the strictures of the Establishment Clause. (And if the Section 3 debates has taught us anything, the only relevant speeches that matter to understand the Fourteenth Amendments are remarks from congressional republicans in a narrow two-year window.)  To be sure, there were comments about the freedom of conscience, perhaps as a privilege or immunity of citizenship, but not about the Establishment Clause in particular--and certainly not about how the Warren Court understood the Establishment Clause. And by the 1860s, all of the Established Churches had been disestablished. But as a practical matter, it was never clear to me how the Establishment Clause could even be incorporated as a privilege or immunity of citizenship, or even as a liberty protected by the Due Process Clause.

Third, the Establishment Clause doctrine developed in the Twentieth Century was based on a misreading of Jefferson's letter to the Danbury Baptist, and ignored the overwhelming amount of evidence that others in the founding generation did not share Jefferson's views. (See Justice Scalia's dissents in Lee v. Weisman and McCreary County.) And there was no attempt to graft it in how religion was understood in the 1860s.

Fourth, the Establishment Clause has had anomalous effects in other areas of the law, such as "taxpayer" standing and "offended observer" standing. (I've referred to these adjustments as "epicycles.") These doctrines were invented to ensure there was standing to consider cases based on invented doctrines. Legal fictions all the way down. Really, all we are left with is a stare decisis defense of Establishment Clause cases. We know how much that is worth.

The Court has begun to correct course. The Court (effectively) overruled the Lemon test in Kennedy, favoring a "text, history, and tradition" approach. No more concerns about "purpose" or "entanglement." American Legion cabined McCreary County with regard to public displays of religion. I don't think any such new cases are even in the pipeline. Town of Greece cabined Lee v. Weisman for public prayer cases. I've seen some arguments that prayer in school may be in play, if done in a voluntary, separate setting. And Carson v. Makin has largely addressed funding of religious institutions. Providing the funding indirectly, instead of directly, gets around most issues. Blaine Amendments are on precarious ground, even if not formally declared unconstitutional.

What remains of the Establishment Clause going forward? I think cases of actual coercion are still viable. In my view, those sorts of claims always seemed more grounded in Free Exercise doctrine than in Establishment Clause doctrine. That is, coercing a person to engage in any particular faith is itself a violation of that person's own rights of conscience. Justice Gorsuch's opinion in Kennedy recognized this principle. That sort of argument works even for an atheist, whose system of conscience is to have no religion at all.

There are also cases where the government prefers one particular religion, or disfavors a particular religion. We saw these claims raised during the travel ban litigation--that is, the policy expressed a disfavor (animus) towards Islam. At the time, I thought these claims sounded in the Free Exercise Clause, like in Lukumi. That is, the government was burdening the rights of Muslims because of their religion. But of course, that argument would not work with the travel ban, because non-citizens seeking entry to the United States could not assert a free-standing Free Exercise claim. Instead, they had to assert some sort of structural Establishment Clause against the federal government. That argument never made much sense to me.

In candor, there is not much Establishment Clause caselaw left over after Kennedy, Carson, Town of Greece, and American Legion. A union of church and state that would have been unconstitutional a generation ago is now constitutionally mandated--Justice Sotomayor's Carson dissent makes this point directly. And what little doctrine exists is probably better conceptualized as Free Exercise jurisprudence.

So I pose the question: can the Establishment Clause be unincorporated? The federal government would remain subject to the clause--perhaps even subject to modern doctrine. National policy would still have to be religiously neutral. But states would only be subject to the strictures of the Free Exercise Clause. The originalist case for incorporating the Establishment Clause never made sense. That caselaw has engendered massive and unending controversies. And it has distorted other areas of caselaw. Whatever concrete reliance interests could be addressed through a properly-understood Free Exercise Clause. The only claims that would fall out would be those that have no basis on text, history, or tradition.

Readers of this post may be rolling there eyes, but this is how change start. Seeds are planted and things grow. There is some scholarship defending the incorporation of the Establishment Clause by Kurt Lash and Fred Gedicks. Those might be good places to start thinking about the issue.