In the Front Door, Out the Back Door

Every lawyer has daydreamed about ascending the 53 marble steps of the U.S. Supreme Court Building prepared to deliver an oral argument to the nine (or eight) justices. With an ever-shrinking Supreme Court docket driven by a 1 percent certiorari grant rate, however, achieving that reality requires not just having the right issue for review at the right time, but extraordinary skill and effort in identifying that issue, carving it in high relief against muddle of facts and issues in the record below, and presenting that question in a compelling way.

The same is true for obtaining discretionary review by the Minnesota Supreme Court, which grants fewer than 10 percent of petitions for review. Defining the “Questions Presented,” and explaining why those questions warrant review, and why your case is a good vehicle for deciding those questions, are all vital to any successful ascent to either high court, and the mere fact of obtaining discretionary review represents an accomplishment in appellate advocacy. But a recent U.S. Supreme Court decision to dismiss a previously granted petition as improvidently granted (or DIG), reminds us that shifting arguments or legal theories away from the ones that got you in the front door of either high court can trigger a trap door to an unceremonious exit.

In Visa, Inc. v. Osborn and Visa, Inc. v. Stoumbos, the Supreme Court granted certiorari to review an issue concerning the pleading of the “conspiracy” element of a federal antitrust claim, but then dismissed the appeal when the petitioners presented different arguments in their merits briefing. The case involved antitrust suits by ATM operators against Visa and MasterCard and their member banks, challenging network rules that prevented ATMs from offering lower access fees for transactions over other credit card networks, and alleging that they were the product of an unlawful horizontal agreement between the member banks.

Defendants sought review of the D.C. Circuit’s decision that the complaint sufficiently alleged a conspiracy. The payment-card networks and banks petitioned the Supreme Court to review “whether allegations that members of a business association agreed to adhere to the association’s rules and possess governance rights in the association, without more, are sufficient to plead the element of conspiracy in violation of Section 1 of the Sherman Act.” The Court granted certiorari in June 2016. So far, so good for the petitioners.

But once the case arrived at the Supreme Court, the banks and networks brought in new counsel from the small cadre of Supreme Court practitioners who regularly appear before the Court. That kind of move is common, and in fact, often happens before the cert petition is even filed. See J. Biskupic et al., “At America’s court of last resort, a handful of lawyers now dominates the docket,” Reuters (Dec. 8, 2014), available at www.reuters.com/investigates/special-report/scotus/ (last visited January 9, 2017).

With their new Supreme Court counsel of record, the banks and networks substantially revised the arguments as to why the conspiracy element was not met. In their merits brief, the banks and card networks started by repeating the argument in their petition that mere adherence to association rules did not support a conspiracy. But then they explained that it was because the card networks and their member banks were single economic actors, incapable of colluding.

That strategy backfired.

After the United States filed an amicus brief pointing out the shift in legal theory, the Supreme Court DIGed the case just days before oral argument: “After having persuaded us to grant certiorari on this issue … petitioners chose to rely on a different argument in their merits briefing. The Court, therefore, orders that the writs in these cases be dismissed as improvidently granted.” Any chance at reversal was lost, and the lower court’s decision would stand.

DIGs are not unique to the U.S. Supreme Court. The Minnesota Supreme Court and other courts also exercise the discretion to undo the grant of discretionary review for any number of reasons. See State v. Hutchins, No. A14-0750 (July 20, 2015) (“It now appearing that the petition for further review of the decision of the Court of Appeals in this matter was improvidently granted by this court, IT IS HEREBY ORDERED that the order of this court filed December 30, 2014, granting review of the October 20, 2014, decision of the Court of Appeals be, and the same is, vacated and the appeal is dismissed.”); see also Murphy v. Milbank Mut. Ins. Co., 388 N.W.2d 732, 739 (Minn. 1986) (“Infrequently, after accepting a petition for what at the time seemed sufficient reasons, we may dismiss an appeal as improvidently granted for not meeting our review criteria.”). This generally happens for the simple fact that no matter how good, accurate and thorough the petitions and responses might be, the reviewing court has only a partial picture of the case at the time the petition is considered and may see the case in a different light when it has an opportunity to review the entire record.

And giving a high court the impression that a petition for discretionary review was a Trojan horse for arguing other points once inside its walls undoubtedly risks such a result. But sometimes the opposite happens: the Court itself turns the case into something that it wasn’t at the petition stage.

In another recent antitrust case, Comcast Corp. v. Behrend, the Supreme Court repeatedly reformulated the issue. The antitrust defendant’s petition sought review of whether a court can certify a class without resolving “merits arguments” that affect Rule 23’s requirements. In granting that petition, the Court instructed the parties to instead brief a different issue concerning the admissibility of expert testimony at the class-certification stage—an issue that was not briefed in the lower courts. And, despite the dissent’s view that the case deserved a DIG, the majority then based its ruling on the resolution of a third issue: the application of Rule 23(b)(3)’s predominance requirement to class-wide damages.

So, despite the risks associated with shifting arguments, appellate practice still requires flexibility in refining and evolving arguments to meet the needs of the case. What, then, are petitioners and respondents to do?

While refinements can be appropriate, even necessary, petitioners’ counsel need to remember to “dance with the one that brung ya” by including legal arguments that would allow the court to decide the issue upon which it granted review in the first place.

Start by asking if your merits brief actually answers the “Question Presented.” But don’t stop there — even refinements to your argument can be dangerous if they suggest that your case is no longer a “good vehicle” for the Court to adopt a rule of law that answers the question in a broadly applicable way.

The Visa DIG could be a prime example: if the Court agreed with Visa’s “single entity” arguments, it would not be providing much guidance on the original question of whether business association members’ adherence to association rules itself is sufficient to allege a conspiracy. New appellate counsel brought in to brief a case on the merits can and should innovate in developing and presenting the arguments in favor of reversal, as long as they remember that they are not writing on a blank slate.

Respondents and the amici supporting them should remember that, while they seldom succeed, DIG arguments like this may be the most potent weapons in their arsenal in the right case. See, e.g. Storms, Inc. v. Mathy Construction Co., No. A5-0484, (Minn. 2016, filed August 17, 2016), where the respondent argued strongly, albeit unsuccessfully, that the case should be dismissed on the ground that review was improvidently granted (“As a preliminary matter, Storms asserts that we should dismiss Mathy’s appeal as improvidently granted. We see no reason to revisit our decision to grant review. The record is adequate to resolve the issues presented, and how we interpret MnDOT’s Specifications has statewide impact.”). No matter how strong a petitioner’s position may be on the merits, if it is no longer aimed at an issue the high court wants to address, it is at risk of a DIG that would leave the lower court ruling intact.

Ultimately, both sides need to keep a close eye on the relationship between the merits arguments and the “Question Presented” for review. The farther those arguments take the case from the original reason that the Court wanted to hear it, the closer the case comes to the DIG trap door.