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Supreme Court Delays Pending Sale of Chrysler to Fiat

June 8, 2009 at 12:00 AM EDT
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In a one-sentence order late Monday, the Supreme Court granted a request to delay the sale of bankrupt automaker Chrysler to a group led by Italian carmaker Fiat SpA. Marcia Coyle of the National Law Journal recaps the court's move on Chrysler and other key decisions.

JIM LEHRER:Ray Suarez has our Supreme Court coverage.

RAY SUAREZ: It was a busy day at the Supreme Court. One justice weighed in on the pending sale of Chrysler to Italian carmaker Fiat. And the full court issued decisions in several cases on topics as varied as the ethics of elected judges and the First Gulf War.

Here to walk us through all of this and today’s action, as always, Marcia Coyle of the National Law Journal.

And, Marcia, the Chrysler decision broke just before the time of this program. What did Justice Ginsburg have to say?

MARCIA COYLE, National Law Journal: Justice Ginsburg said very little. She simply imposed a delay, a temporary delay. She’s giving herself and the court more time to consider whether the court wants to get into the legal issues raised by a number of parties who are appealing the sale of Chrysler.

Ginsburg decides on Chrysler

RAY SUAREZ: Now, these are Chrysler debt-holders that are looking to put an end to the already-planned sale of the company. Does this tip her hand as to her own view of whether there's appealable action here?

MARCIA COYLE: I don't think it does at all, Ray. I think this is a huge, complicated case with significant ramifications, and the court did not get a lot of time to take a look at it.

The appeals for a delay came in over the weekend, late hours at night, and so the court only had basically this morning to take a look, up until 4 o'clock, the deadline imposed by the lower court.

RAY SUAREZ: Why does it happen that one justice makes the call on this?

MARCIA COYLE: We have 13 circuit courts of appeals in this country, and each of the nine justices is assigned one or more circuit courts to handle emergency requests.

Justice Ginsburg handles the Second Circuit in New York, and that's the circuit in which the bankruptcy, the Chrysler bankruptcy, court sits, as well as the Second Circuit Court of Appeals handled the challenges to the Chrysler sale, and it rejected those challenges, which is why we have now the appeals to the Supreme Court.

And those appeals come from basically not just the group you mentioned. There are really three separate parties here. There are the Indiana pension funds that provide benefits for teachers, police officers, and others. And they're claiming that the sale violates the Constitution because TARP money, money used to bail out financial institutions, is being used to bail out auto companies.

The second group are consumer groups, like the Center for Auto Safety, Public Citizen, and they're arguing that the sale wipes out all pending and future lawsuits for injuries caused by Chrysler products. And that's contrary, they say, to state laws.

And then, finally, there is a widow of a man who died of lung cancer allegedly caused by exposure to asbestos when working on auto brakes. And she says her suit, which is in a state court, will also be wiped out by the Chrysler sale.

RAY SUAREZ: Any indication of how long this could take?

MARCIA COYLE: I think it's probably going happen fairly quickly. The next thing we'll hear will either be from Justice Ginsburg or the full court telling us whether the court wants to get involved in this or not.

Judicial ethics in West Virginia

RAY SUAREZ: There was also a ruling in the case involving judicial ethics and recusals in West Virginia.


RAY SUAREZ: What did the justices decide?

MARCIA COYLE: This is a very important case, and it played out against a backdrop of increasing concern about big money, in particular in state supreme court elections.

The court here said -- well, first, let me back up a little bit and tell you that the challenge here was brought by a coal company owner. He had won a $50 million jury verdict against a competitor, and that competitor wanted to appeal that jury verdict.

At the time the appeal was moving, there was an election for the West Virginia Supreme Court. And this competitor, who was appealing the verdict, contributed $3 million directly and indirectly to elect a judge that probably he felt was going to be sympathetic to his appeal.

The other coal company owner, he sought the recusal of that judge when he was finally elected. The judge refused to step aside. He came to the Supreme Court saying the failure to step aside violated his due process rights.

The court, in a 5-4 decision by Justice Kennedy, agreed. Justice Kennedy said there's a serious risk of actual bias when someone with a personal stake in a particular case had a significant influence in placing a judge on that case by raising campaign funds.

Roberts writes dissent

RAY SUAREZ: Now this was a case where the man was a heavy supporter of the judge that sat on his appeal where he was a respondent to this lawsuit.


RAY SUAREZ: Did the justices sort of glom on to that and say, "Well, this is a case so clear that this is an easy call for us"?

MARCIA COYLE: The majority did. Justice Kennedy said, This is an extraordinary case. And then he repeated, this is an extreme case.

He said that most questions involving judicial disqualification are going to be resolved under state disqualification laws or under judicial codes of conduct that are established by courts and the bar. So he felt this was really limited to the extreme case.

And he said, The way you decide here whether it is extreme is you look at the amount of the contribution in relation to the total amount that was contributed to the campaign, the total amount spent in the election, and, finally, the effect of the contribution on the outcome.

And here he felt $3 million was more than the total amount contributed to this judicial candidate's campaign and more than what the judicial candidate's committee had spent.

RAY SUAREZ: Chief Justice John Roberts wrote the dissent. What did he have to say in argument to that Kennedy point?

MARCIA COYLE: Well, he was joined by Justices Scalia, Thomas and Alito, and he said that there was no limit, there was -- that the majority standard here really didn't give any guidance to judges or litigants in cases as to when a judge should disqualify himself or herself.

And he predicted that there would be lots of motions now in cases by parties saying that a judge is biased because somebody contributed to the judge's campaign.

He said it raised fundamental questions, and he listed in his dissent 40 questions that he felt the majority opinion raised, everything from how much money is too much money to whether the constitutionality would vary from state to state if a state had particularly expensive judicial races.

Iraqi case will not get hearing

RAY SUAREZ: Just briefly before we go, there's been a long saga in the courts of a group of people who were taken hostage and abused by the Saddam-era government of Iraq. They were asking for a day in court. Are they going to get it?

MARCIA COYLE: No, they're not. Justice Scalia wrote for the court today. It was a unanimous case in which he said that, in 2003, President Bush, who was authorized by Congress to do so, interpreted a statute, exercised his authority under a statute to protect Iraq from suits like this.

Before the 2003 action, there was a law that waived Iraq's immunity from suit because Iraq was considered a state sponsor of terrorism. But after 2003, Iraq was protected from any suits involving the former Hussein regime.

There are estimated $3 billion worth of claims now against the former Hussein regime, and many of those are not going to be paid.

RAY SUAREZ: Marcia Coyle, thanks for joining us.

MARCIA COYLE: My pleasure, Ray.