This morning, the Court issued the final three decisions of OT23:

  • In Trump v. United States (No. 23-939), a 6-3 Court held that a former President enjoys absolute immunity from criminal prosecution for actions within his conclusive and preclusive constitutional authority and has at least presumptive immunity for all official acts. That standard means that former President Trump is definitely immune from criminal prosecution for some of the conduct charged in the Special Prosecutor’s indictment, which is currently on hold in the District of Columbia. However, the Court declined to decide whether any of Trump’s charged conduct falls outside the scope of his newly articulated immunity, leaving the lower courts to sort out that question in the first instance. While the decision will long loom large in the Court’s separation-of-powers canon, the most important immediate takeaway may be the practical one: It will likely be impossible for the lower courts to sort out what, if any, of Trump’s alleged misconduct falls outside the scope of his immunity in time for him to be tried before the November election.
  • In Moody v. NetChoice, LLC (No. 22-277), decided along with NetChoice, LLC v. Paxton (No. 22-555), an effectively unanimous Court vacated and remanded two cases challenging Florida and Texas laws regulating speech on social-media platforms, concluding that the Eleventh and Fifth Circuits both erred in failing to properly apply the Court’s precedents on facial First Amendment challenges. Despite that seemingly simple result, the Justices managed over 100 pages of opinions and concurrences relevant to various points that are likely to come up on remand.
  • And in Corner Post v. Board of Governors of the Federal Reserve System (No. 22-1008), a 6-3 Court held that the six-year statute of limitations for challenging an agency rule under the APA accrues when the challenged rule injures the plaintiff, not (as most courts had previously held) when the agency issues the rule.

With that, OT23 comes to a close for The Nine, though not for us. We’ll have a number of Updates for you over the next few days, as we work through summaries of more than a dozen cases that the Court issued over the last week.

We’ll make some headway on that task today with discussions of two closely watched—and unusually divided—opinions:

  • Harrington v. Purdue Pharma L.P. (No. 23-124), a 5-4 decision by Justice Gorsuch (joined by Justices Thomas, Alito, Barrett, and Jackson) holding that the bankruptcy code does not authorize non-consensual releases of non-debtors as part of a bankruptcy plan, over the lengthy (and unusually vigorous) dissent of Justice Kavanaugh (joined by the Chief and Justices Sotomayor and Kagan); and
  • Fischer v. United States (No. 23-5572), a 6-3 decision by Chief Justice Roberts (on behalf of the Court’s conservatives minus Justice Barrett, but joined by Justice Jackson) holding that an obstruction of justice statute used to prosecute some of the January 6th defendants requires the Government to prove that the defendant tried to impair the availability or integrity of records, documents, or other evidence for use in Congress’s certification of the electoral college results and not simply that the defendant tried to impede those proceedings alone.

Harrington resolved a long-simmering dispute about the legality of Purdue Pharma’s bankruptcy plan. In a 5-4 decision, the Court held that members of the Sackler family, who were the principal owners and officers of Purdue, cannot be shielded from liability for opioid-related claims as part of the company’s bankruptcy. Justice Gorsuch wrote the majority opinion, joined by Justices Thomas, Alito, Barrett and Jackson. Justice Kavanagh penned a vigorous dissent, which Chief Justice Roberts and Justices Sotomayor and Kagan joined.

In the mid-1990s, Purdue Pharma, a pharmaceutical company owned by the Sackler family, began manufacturing and selling OxyContin, an opioid prescription pain reliever. OxyContin proved to be addictive, and over the ensuing decades, it contributed to the opioid crisis throughout the country. Lawsuits followed, with thousands of private plaintiffs and government entities (like state attorneys general) suing Purdue, seeking money damages for injuries they suffered as a result of Purdue’s allegedly deceptive marketing of OxyContin. When it became clear that Purdue was likely to face significant liability, the Sackler family began withdrawing their money from Purdue, ultimately distributing approximately $11 billion of the company’s assets to themselves, leaving it in a precarious financial condition.

In 2019, Purdue filed for Chapter 11 bankruptcy, seeking to resolve the enormous volume of claims asserted against it. But when Purdue and its creditors sat down to negotiate a bankruptcy plan, they immediately encountered a major problem: There just wasn’t that much money left in the company to distribute to claimants. Attention then turned to the Sackler family, who agreed to contribute up to $4.325 billion back into Purdue’s estate so it could then be distributed through the bankruptcy. That contribution came with a significant caveat, though: The Sacklers insisted that they receive a release of all current and future opioid-related claims asserted against the family that were connected to Purdue’s conduct. When the final plan was put to a vote, most creditors supported it, but eight states and the U.S. Bankruptcy Trustee (a kind of bankruptcy watchdog housed within the Department of Justice) objected. The Bankruptcy Court nonetheless rejected their objections and confirmed the plan.

Soon afterward, however, the District Court reversed the Bankruptcy Court, holding that the bankruptcy code did not authorize the court to extinguish victims’ claims against the Sacklers without claimants’ consent. While that decision was on appeal to the Second Circuit, the reorganization plan was revised, with the Sacklers agreeing to pay an additional $1.175 to $1.675 billion to Purdue’s estate in an effort to win over some of the holdouts. Those additional funds convinced the last eight states to consent to the plan, but the Bankruptcy Trustee maintained its objection. Ultimately, a divided Second Circuit panel reversed the District Court and revived the Bankruptcy Court’s approval of the (now-modified) bankruptcy plan, relying on circuit precedent authorizing such non-consensual, third-party releases. Because the courts of appeal had come to conflicting decisions about the validity of third-party releases like these as part of a bankruptcy plan, the Court granted certiorari.

Writing for the slightly horseshoe-shaped majority of the Court’s four most conservative justices and Justice Jackson, Justice Gorsuch reversed again. His opinion focused heavily on the unusual nature of the releases in this specific case. Purdue’s reorganization plan broadly extinguished the claims of third parties without their consent, providing the Sacklers with (at least as a practical matter) the equivalent of a discharge in bankruptcy. But in the majority’s view, the Sacklers didn’t deserve such a discharge: They didn’t file for bankruptcy themselves, and they didn’t place virtually all their assets into the estate to be available to pay creditors’ claims, as a debtor in a Chapter 11 proceeding would ordinarily have to do to receive such a discharge. On the contrary, Justice Gorsuch emphasized, the Sacklers didn’t even put back most of the $11 billion they took out of Purdue from 2008 to 2016, when the OxyContin litigation against Purdue and the Sacklers was exploding.

But while Justice Gorsuch’s decision made much of these case-specific facts, he ultimately reached a much broader conclusion: The bankruptcy code never authorizes a bankruptcy court to extinguish claims of third parties against non-debtors without the third parties’ consent. Gorsuch focused on Section 1123 of the bankruptcy code, which lists six types of provisions that may be included in any reorganization plan. He dismissed the first five provisions as inapplicable. That left only the sixth—Section 1123(b)(6)—as a potential source of statutory authorization for a non-consensual third-party release. Section 1123(b)(6) is essentially a catch-all provision, authorizing a bankruptcy plan to “include any other appropriate provision not inconsistent with the applicable provisions of this title.” As a matter of statutory construction, the majority concluded that a catch-all provision like this one must be interpreted in line with the provisions immediately preceding it. And since the first five provisions in Section 1123 authorized various forms of relief directed at the debtor, the catch-all provision must be read similarly, so it does not authorize a release in favor of non-debtors like the Sacklers.

Justice Gorsuch then rejected two main arguments for a broader construction of Section 1123(b)(6). First, he addressed the claim that third-party releases further the purposes of the bankruptcy code, namely, to gather as many assets into the estate as possible and orchestrate an orderly and fair distribution of those assets to creditors, avoiding a rush to the courthouse by creditors that might result in the earliest successful litigants depleting the estate’s assets. What matters is not so much these purposes themselves, Gorsuch emphasized, but what Congress actually authorized to fulfill those purposes. The limited text of Section 1123(b) shows that Congress did not provide “limitless” authority to bankruptcy courts “to extinguish without their consent claims held by nondebtors (here, the opioid victims) against other nondebtors (here, the Sacklers).” Second, Gorsuch responded to the claim of the plan’s proponents (and the dissent) that without the benefit of a non-consensual release of claims against them, the Sacklers will withdraw the money they would otherwise contribute to the bankruptcy estate, undermining the bankruptcy plan’s ability to provide meaningful compensation to creditors and opioid victims. True or not, that rationale provides no basis for reading into the statute authority for non-consensual releases for non-debtors that is just not there.

Justice Kavanaugh’s unusually long and strident dissent took issue with every aspect of the majority opinion. He focused on the basic goals of bankruptcy: avoiding a race to the courthouse in which the first creditors to prevail may deplete the estate’s assets and prevent the fair and equitable distribution of those assets to all creditors. That concern is especially acute in mass-tort cases involving thousands of plaintiffs throughout the country, and for that reason courts in those cases have often approved reorganization plans that extinguished claims against non-debtors who were closely connected to the bankrupt entity, enabling the orderly distribution of assets to creditors.

In the dissenters’ view, Purdue’s plan was a “shining example of the bankruptcy system at work.” By releasing claims against the Sacklers in exchange for their contribution of assets to the bankruptcy estate, the plan provides the only realistic avenue for providing compensation to creditors, opioid victims, and the states. That’s why “virtually all of the opioid victims and creditors” and all 50 state AGs supported the plan. And according to Kavanaugh, the majority’s decision precluding this more-efficient solution makes little sense even in this case, because the non-debtors being released—the Sacklers—were the principal owners, officers, and directors of Purdue, and they are entitled to be indemnified by the company against the very claims being released. That dynamic means that a suit against the Sacklers is “in essence, a suit against the debtor” because a judgment on any opioid claims against the Sacklers would come out of the same pot as a judgment on claims against Purdue, all but assuring that a creditor race to the courthouse will exhaust the limited assets in the bankruptcy estate. Kavanaugh thus warned that the consequences of the majority’s decision are likely to be severe: Without the approximately $6 billion contribution from the Sacklers, there will be no viable path to recovery for most opioid victims and the states.

Having addressed policy, Justice Kavanaugh turned to the text. In his view, Section 1126(b)(6)’s broad authorization of “any other appropriate provision not inconsistent with the applicable provisions” of the bankruptcy code should be understood to allow the release of claims against non-debtors, like the Sacklers, who are closely connected to the debtor company and are being indemnified by it. Indeed, Kavanaugh saw such provisions as “not merely ‘appropriate’ but . . . absolutely critical to achieving the goal of bankruptcy – fair and equitable recovery for victims and creditors.” For this reason, the principle of statutory construction relied on by the majority—requiring that Section 1126(b)(6)’s catch-all be limited to orders concerning the debtor—is actually satisfied because the non-debtor releases at issue here do concern the debtor: They are written to protect the Sacklers only from claims that are based on Purdue’s alleged misconduct and protect it from having to indemnify the Sacklers for those claims. Kavanaugh also criticized the majority’s likening of these releases to the sort of discharge a debtor would receive in bankruptcy, observing that the release being provided to the Sacklers was not a general release but was limited only to claims against the Sacklers arising out of Purdue’s bankruptcy, in which Purdue’s misconduct is part of the claims.

Finally, Justice Kavanagh addressed the majority’s concern that the releases are inappropriate because the Sacklers are not contributing enough to the bankruptcy estate. Even if that were true, “it would not be a reason to categorically disallow non-debtor releases as a matter of law.” At most, it should lead to a remand to determine whether, given the Sacklers’ contribution to the estate, the releases are “appropriate” under Section 1126(b)(6). Kavanaugh warned that the majority’s much broader approach instead undermines the flexibility needed to fashion reorganization plans in other mass-tort bankruptcy cases, like those involving vast numbers of sexual misconduct claims against the Boy Scouts and the Catholic Church.

Our second case, Fischer v. United States (No. 23-5572), is similar to Purdue in two respects. First, like Purdue, it asks whether a statutory catch-all provision should be read broadly, in line with what its plain language suggests, or narrowly, in line with the more-specific statutory provisions preceding it. And second, like in Purdue, most of the Court’s conservative justices, again joined by Justice Jackson, adopted the narrower approach over a dissent from one of the Court’s other conservatives (here, Justice Barrett), joined by Justices Sotomayor and Kagan. But the factual context couldn’t be more different: It arises from the events of January 6, 2021, when hundreds of Trump supporters stormed the U.S. Capitol in an apparent effort to disrupt Congress’s certification of the electoral college vote. In a relatively narrow decision, the Court’s majority concluded that a provision of the Sarbanes-Oxley Act, 18 U.S.C. §1512(c)(2), used to prosecute some of the January 6th defendants requires the Government to show not simply that the defendant tried to obstruct an official proceeding—the certification of the electoral college—but that they tried to do so by impairing records or documents of relevance to that proceeding.

Joseph Fischer was not part of the first wave of Capitol trespassers, which led to Congress recessing from its joint session to certify the votes in the 2020 presidential election. An hour into the recess, Fischer entered the Capitol and was alleged to have physically confronted police officers. In addition to being charged with trespassing and assault, Fischer was indicted for violating Section 1512(c)(2), a charge that would carry a much longer prison sentence. It makes it a crime to “otherwise obstruct[], influence[], or impede[] any official proceeding, or attempt[] to do so.” Fischer moved to dismiss that charge, pointing out that the statutory provision right before it, Section 1512(c)(1), prohibits altering, destroying, or concealing documents or other records to impair the document’s integrity for use in an official proceeding. Section 1512(c)(2)’s “otherwise” thus has to be read similarly as baring obstructing, influencing, or impeding official proceedings through the destruction of evidence or documents and not simply obstructing the proceedings alone. The District Court accepted that argument, granting his partial motion to dismiss, but a divided D.C. Circuit panel reversed, concluding that (c)(2) covers all manner of actions to obstruct an official proceeding and not simply those affecting the integrity or availability of “evidence.”

In a 6-3 decision, the Supreme Court agreed with the D.C. Circuit’s dissenter. Writing for a majority comprised of Justices Thomas, Alito, Gorsuch, Kavanaugh, and Jackson, Chief Justice Roberts engaged in a grammar lesson in construing parts of a statute in context, sprinkled with Latin phrases for maxims of statutory construction. Using examples from other statutes and made-up hypotheticals of prohibited conduct at zoos and football games, the Chief Justice wrote that “otherwise” in (c)(2) cannot broadly encompass all types of conduct that corruptly impedes an official proceeding but instead takes its cues from the specific examples in (c)(1). Whatever “otherwise” means, it must be similar in kind to what’s banned in (c)(1) even if not exactly the same. A contrary reading, by contrast, results in (c)(2) swallowing up (c)(1), making it unnecessary. So, while (c)(1) prohibits destroying or altering evidence like documents or objects, (c)(2) could prohibit “creating false evidence” or impairing the availability of evidence other than objects, such as witness testimony or intangible information.

The Chief Justice also looked at the statute’s history. As you may recall, Sarbanes-Oxley came out of the Enron accounting scandal. Some of those who participated in Enron’s misconduct were charged with violating an earlier version of Section 1512, which criminalized improperly persuading others to shred documents. But that statutory language proved an obstacle to some prosecutions because some of those involved did the shredding themselves. Section 1512(c)(2)’s residual clause must be understood as intended to address that kind of illogical (and unforeseen) gap rather than a broad and independent font of criminal charges. Roberts also pointed out that other parts of the criminal code already addressed conduct that would be encompassed by reading (c)(2) as reaching all manner of corruptly obstructing justice, often with a lower maximum sentence. The majority thus expressed concern about prosecutorial efforts to threaten 20-year sentences under (c)(2) even for innocuous conduct like peaceful protesting or lobbying intended to affect an official proceeding. But though the Court adopted Fischer’s narrower reading of (c)(2), it did not order that charge dismissed, instead remanding the case to the D.C. Circuit to decide in the first instance whether Fischer’s charged conduct was criminal even under the Court’s construction of the statute.

Justice Jackson joined the majority’s opinion in full but also separately concurred to explain her vote. Ultimately, the question in the case was not the morality of the January 6th defendants’ conduct but whether Congress had prescribed that conduct as a crime in a particular statute. While she covered much of the same ground as the majority in her statutory interpretation, she also referenced legislative history, not mentioned by the Chief Justice, supporting the narrower approach to Section 1512(c)(2).

The conservative Justice Barrett broke with her conservative brethren to pen a dissent, joined by Justices Sotomayor and Kagan. In her view, (c)(2) is written broadly, and Congress “meant what it said,” even if no one in 2002 could have imagined events like January 6. That is hardly a unique phenomenon: statutes often go beyond the problem that inspired them, but courts are required to follow their text regardless. In the dissenters’ view, the use of “otherwise” in (c)(2) includes obstructing by means other than those listed in (c)(1). Further, (c)(2) appears in the statute as an independent clause and not simply at the end of the list of items within (c)(1). Barrett also addressed the majority’s interpretive logic in some detail, taking issue with it at every step. And she thought the majority’s fear of prosecutorial overreach was overblown, as a peaceful activist or lobbyist won’t have “corruptly” impaired proceedings (i.e., used unlawful means, acted with unlawful purpose, or intended to procure an unlawful benefit). As for the 20-year maximum sentence, there also is no minimum sentence, so the breadth of sentences matches the breadth of the conduct proscribed by the statute’s text.