SCOTUS and Me: High Times at the Highest Court

I am not a morning person. However, this past Monday found me waking up at 4:00am, getting on the FIRST Metro train that ran at 5am, and going into Washington DC before the sun had even risen. Why would I do this to myself, you ask? To see the highest court in the land!

Ready to see the Law in action!

The Supreme Court is currently in session, from October through June or July. And oral arguments are open to the public. Seats to any oral argument are available to members of the public on a first come, first served basis. You literally only need to show up and not bring in any prohibited items or wear inappropriate attire (and not be noisy or make a disturbance, or you will be quickly escorted out). You can find the schedule of the court on their website, here, or alternatively via SCOTUSblog, which also has some very handy case write-ups.
  
I have two big pieces of advice for those interested in attending a Supreme Court argument:

1.  Go early. No, earlier than that. EARLY.
2. Do your homework. Understand the case before you enter the courtroom.

There are usually at least 50 spots reserved for members of the general public, although the courtroom can seat about 250 visitors. But those 250 seats include any officials, dignitaries, lawyers, or groups of students who have advanced seating. People also literally hire 'sitters' to wait for them in the public line. So depending on how popular the case is, those seats can fill up FAST.

We (Benson and I) deliberately chose a day where the case looked like it wouldn't attract a lot of attention: a relatively unpublicized bankruptcy law appeal. Nothing super controversial or that would turn up in the news. Our logic was that ANY case that made it up to the Supreme Court was bound to be interesting, if only for the process, and to see the courtroom and the justices. We showed up at 5:45am. We almost didn't get in.

We got to the court at 5:45am and were #69 and #70 in line. Ahead of us, a long line of people were already sitting on the curb with blankets and backpacks. We joined them, sipping on the coffee we'd brought with us, Benson reading a physics paper on his tablet, me practicing my Cantonese on my phone. We chatted a little with the people around us, but we were mostly just trying to stay awake. There were several large groups ahead of us who had clearly come together -- some of them seemed like law students. Once it was late enough that a Starbucks would be open, a small group went and fetched several large containers of coffee, returning to the cheers of their friends.

A bit after 8am, the line finally moved: police officers came by and started counting who was there. We moved off of the curb and onto and up in front of the steps of the courthouse themselves. The first group of about 50 people were handed blue tickets and got moved in front of the door to the left of the stairs -- they were soon let into the building itself, where (I hear tell) there is a cafeteria, bathrooms, and most importantly, guaranteed seating. The rest of us stood in a line in the middle of the plaza, waiting and hoping there would be more slots. I used some of this time to take over the Supreme Court Gym in Pokémon Go to distract myself from the cold. I ended up holding control over the highest court in the land for 19 hours. This amused me to no end (though that could have been, in part, the sleep deprivation).

Around 9:20, they let about a dozen more in, handing out a few more precious blue tickets. At 9:45 we were still outside, shivering in the cold.  I was fully convinced that -- since the argument started at 10am and we still had to go through security -- there was NO WAY that we were getting in, and we'd have to settle for the 3 minute quick in-and-out for those who didn't get in for the full session. But then! An officer approached, with more blue tickets and the final count, and gave out the critical 7 tickets required for Benson and I to make it in, as well as maybe 10-15 more for people behind us. I was not paying too close attention to that particular number, I was too excited to be getting in! We zipped through security (X-ray machines for you and your stuff) and headed upstairs. There, there is ANOTHER round of security gates and X-rays: you are REQUIRED to check your coats, bags, phones, and devices in the coatroom (a quarter per locker). You are allowed to bring in are paper and writing implements, but you can't bring in your phone or anything that could create a disturbance. We dumped everything in a locker except our wallets and went in; by now, it was a bit after 10am: the Justices were in the front of the court, and they were swearing people in.

 This brings me to my second piece of advice: DO YOUR HOMEWORK.

I found the court case and the argument quite engaging, but this would NOT have been true if I had walked in blindly. The night before, we very carefully went through several summaries of the case, from SCOTUSblog, Ballotopedia, and the Legal Information Institute, amongst other sources. We spent at least an hour going through it. Whenever we came to a term we weren't sure about, we looked it up and talked it over between the two of us until we were clear on the terms. We made sure we knew who the groups of people were who were involved. We looked up summaries of the different types of bankruptcy and the specific codes that the case referred to. We formed our own opinion of what we thought might be the 'common sense' ruling as far, as far as we could tell.

With this preparation, the case itself was REALLY INTERESTING! We could follow the lawyers arguments, understand the questions that the Justices asked (and every single Justice save Clarence Thomas asked at least one question during the session), and understand the answers given (mostly); even when it involved specific references to bankruptcy code.

 I was seated behind a big marble pillar, so I couldn't see the whole court at once, but if I leaned to the left or right I could see pretty much all of the justices, though they were sometimes blocked from view by the lawyer or by heads of people in front of me. From left to right, it was Justices Kagan, Alito, Ginsburg, Kennedy, Roberts, Thomas, Breyer, Sotomayor, Gorsuch. (Alternating left/right from the center by seniority, with the Chief Justice in the middle). It was REALLY COOL to see them in action! Which brings me to....

Merit Management Group, LP v. FTI Consulting, Inc.

Background: If a company or person goes bankrupt, their stuff ends up being divvied out to their creditors by some Trustee of the bankrupt estate, who is in charge of dividing up the remaining assets to pay off as much of the debt as fairly and completely as possible. The Trustee also has some powers to undo recent transactions that the debtor may have made before going bankrupt -- so if you send 30 million dollars worth of stock to your cousin right before going bankrupt, the Trustee can undo that transaction and get your assets back to give to creditors.

BUT! You don't want to do things that will seriously damage the commodities or securities markets -- undoing a multi-million dollar deal that happened a few months ago could have huge consequences, and you want those very important markets protected, because THE ECONOMY. So certain types of transactions are protected, and cannot be undone. These transactions usually involve banks, or stock brokers -- financial institutions which are carefully defined by the bankruptcy code -- safe harbors. THIS case deals with a situation which tests the limit of these safe harbors.

The Facts Were These: Valley View Downs -- a Pennsylvania racetrack owner -- bought another racetrack, Bedford Downs. They borrowed (and then repaid) money from one bank (Credit Suisse) to do this, and the money and the Bedford Downs racetrack stock were held in escrow by another bank (Citizen's Bank) for some time during this transaction. Valley View Downs later declared bankruptcy. Can the Trustees of the bankrupt estate (FTI Consulting) undo this transaction? Or can the stockholders of the Bedford Downs racetrack (including the Merit Management Group) -- keep the funds because this transaction was protected?

Credit Suisse and Citizen's Bank ARE -- and no one is arguing this -- safe harbor institutions. But they were only conduits for the money: neither of the two banks would face any losses if the transaction was unwound. Merit Management Group says that transactions can't be ungrouped: if the transaction had ended at either Credit Suisse or Citizen's Bank they would have definitely been protected by the bankruptcy code -- so if the individual transactions would be protected, so should the whole. FTI Consulting says that even if the money and stocks went THROUGH these safe harbor institutions, that doesn't mean that the transaction itself is protected: ultimately the money and stock were traded between Valley View Downs and Merit Management, just moving through the two banks temporarily as the trade was made.

The Argument: Throughout the course of the case, every Justice -- except for the famously quiet Clarence Thomas -- asked a question to at least one of the two lawyers. Some of them were even rather snarky, and there were some pretty funny moments, to be honest.  I was surprised at how much humor a lot of the justices and the lawyers showed during the session. For example, Justice Gorsuch, after asking about the scope of the overlap between bankruptcy and security transactions, and getting a rather dodgy 'I don't have the numbers" response, quipped: "So [...] a triviality we don't need to worry about, even though it was a central feature of the Seventh Circuit's opinion?"

Based on their questions, it seemed to us that the Justices were already leaning on how the case was going to go, and were mainly prodding the two lawyers to check the scope of their decision -- and that they thought that the transaction should NOT be a protected one. For instance, Justice Breyer made a query about the limits of this type of ruling: if such transfers were protected, wouldn't just telling a bank to transfer shares from the bank to your wife be protected as well? Similarly, Chief Justice Roberts followed up on a line broached by the lawyer for FTI Consulting, asking why, if they ruled in favor of Merit Management, checks going through a bank would not similarly be protected transactions. By the end it seemed the lawyer for Merit Management was squirming a lot more than the one for FTI Consulting, and that the latter case seemed far easier to defend.

The Result: I'll definitely be following up on this and reading the decision when it is released, likely in a few months time. While I suspect I know which side the court will rule on, exactly how the decision is argued was *not* made clear, and will determine the scope of how the case can be used in future bankruptcy cases. Depending on how they argue it, it could be broad or narrow. I look forward to hearing the results, and HIGHLY recommend that anyone interested in our government's inner workings try their luck for attending a full argument.