Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Fri 1/19 - JFK Assassination Record Lawsuit, FTX Bankruptcy Probe, SCOTUS Shifts from Chevron to Skidmore and Binance vs. SEC

Legal News for Fri 1/19 - JFK Assassination Record Lawsuit, FTX Bankruptcy Probe, SCOTUS Shifts from Chevron to Skidmore and Binance vs. SEC

Today we delve into the JFK assassination records lawsuit, FTX bankruptcy probe, Supreme Court's shift from Chevron to Skidmore, and Binance's legal battle with the SEC.

Nixon with his face in his hands, pencil sketch.

This Day in Legal History: Nixon Nominates a White Supremacist 

On January 19, 1970, President Richard Nixon's judicial appointment landscape was forever altered when he nominated Judge G. Harrold Carswell to the U.S. Supreme Court. This decision marked a pivotal moment in legal history, steeped in controversy and intense political debate. Carswell, a member of the US Fifth Circuit Court of Appeals, was initially seen as a suitable candidate. However, this perception rapidly changed following a profound revelation.

The nomination's controversy ignited when a tenacious reporter unearthed a speech from 1948 in the Wilkinson County courthouse basement in Georgia. This speech, delivered by Carswell during a political campaign and preserved as the lead story in The Irwinton Bulletin, a weekly newspaper he edited, contained a statement that "segregation of the races is proper." This declaration, in itself contentious, was not the only incendiary element. Far more striking was Carswell's avowed "firm, vigorous belief in the principles of white supremacy."

The discovery of these remarks set the stage for a heated debate in the Senate and across the nation. The context of Carswell's speech was significant; it not only reflected the then-prevailing legal norms, which were later overturned by Brown v. Board of Education, but also revealed a deeper, more troubling ideological stance. The revelation of Carswell's explicit support for white supremacy principles proved to be a turning point in the nomination process.

Despite the legal backdrop of the era, which often upheld segregationist policies, the Senate could not overlook Carswell's explicit statements. This led to a rare instance where a Supreme Court nominee was rejected primarily due to their expressed views on race and equality. On April 8, 1970, the Senate rejected Carswell's nomination with a vote of 51-45, marking a significant moment in the history of judicial appointments in the United States.

The aftermath of Carswell's failed nomination highlighted the importance of thorough vetting in judicial appointments and the evolving standards of what was acceptable in the public and legal spheres. It also underscored the role of investigative journalism in shaping national discourse and decision-making processes. This event remains a poignant reminder of the intersection between law, societal values, and the enduring impact of past statements on public and professional life.

In a recent legal development, archivists seeking records about President John F. Kennedy's assassination received a partial victory in their lawsuit against the National Archives and Records Administration (NARA). The Northern District of California court ruled that the plaintiffs could proceed with claims under the Federal Records Act (FRA) regarding documents they allege were destroyed, but not those merely missing.

The plaintiffs, including the Mary Ferrell Foundation Inc., Josiah Thompson, and Gary Aguilar, sued NARA under the FRA, asserting the agency's failure to request the U.S. Attorney General to recover records tied to the assassination. Judge Richard Seeborg of the US District Court for the Northern District of California, in his ruling, acknowledged that the plaintiffs could pursue claims for destroyed records. They argued that recovery might be possible, including through computerized versions of the documents.

However, the judge stated that NARA is not obligated to track down missing records, clarifying that this aspect of the lawsuit was essentially a reiteration of the plaintiffs' unsuccessful attempt to compel NARA to complete outstanding record searches. He reiterated a previous ruling that NARA is not required to finish searches initiated by the Assassination Records Review Board, which ceased operations in 1998.

The Assassination Records Review Board, established by the President John F. Kennedy Assassination Records Collection Act of 1992, was an independent agency tasked with overseeing the identification and release of records related to Kennedy's assassination. The plaintiffs' lawsuit, filed on October 19, 2022, and amended on September 11, 2023, also alleged violations of the Administrative Procedure Act (APA) and the JFK Act.

The court dismissed the plaintiffs' claim that NARA acted arbitrarily in violation of the APA and largely denied their motion to compel agency action under the APA, except for the claim regarding NARA's failure to maintain identification aids for each assassination record and to release legislative records. The lawsuit, represented by Lawrence Schnapf of New York and William Morris Simpich in Oakland, California, continues to be a significant case in the ongoing quest for full disclosure of records related to the JFK assassination.

JFK Assassination Records Suit Gets Partial Green Light (1)

The Third Circuit Court of Appeals has overruled a Delaware judge's decision and mandated an independent examination of the FTX Group's collapse. This ruling requires US Bankruptcy Judge John Dorsey to appoint an external examiner to investigate the downfall of the FTX crypto exchange, which filed for Chapter 11 bankruptcy in November 2022 amid allegations of widespread fraud. The US Trustee, a federal entity overseeing corporate bankruptcies, had contested Dorsey's original ruling, emphasizing the necessity of an independent investigation for the public to gain a comprehensive understanding of the circumstances surrounding FTX's failure. This decision ensures that the findings of the investigation will be made public, providing transparency in the case.

Third Circuit Orders Independent Examiner in FTX Bankruptcy

The Supreme Court's recent hearings suggest a potential shift away from the Chevron doctrine, a cornerstone of administrative law, towards the older Skidmore doctrine. This change, primarily supported by the court's conservative majority, emerged during arguments in cases involving the FTX crypto exchange's bankruptcy. The Chevron doctrine, established in 1984, mandates judicial deference to agency interpretations of ambiguous statutes, while the 1944 Skidmore doctrine suggests deference only if the agency's interpretation is persuasive. The court's inclination to favor Skidmore, which grants less deference to agencies, aligns with conservative criticism that Chevron gives excessive power to executive agencies.

By way of very brief background, Skidmore deference, a principle within administrative law, allows federal courts to defer to a federal agency's interpretation of statutes it administers based on the persuasiveness of the agency's reasoning. This form of deference was developed in the U.S. Supreme Court case Christensen v. Harris County in 2000 and named after the 1944 decision in Skidmore v. Swift & Co. Unlike Chevron deference, which requires courts to defer to an agency's reasonable interpretation of an ambiguous statute, Skidmore deference grants courts the flexibility to determine the level of deference based on the agency's ability to justify its interpretation convincingly. In practice, Skidmore deference is applied to interpretations like those in agency manuals, policy statements, and enforcement guidelines, which do not go through the formal rulemaking process. This approach reflects a judicial attitude that respects agency expertise while maintaining a critical review of its interpretations.

This debate highlights differing judicial philosophies on agency power. Some justices, like Elena Kagan, argue that Skidmore offers minimal support to agencies, while others, such as Neil Gorsuch, view it as providing agencies with significant interpretative weight. The transition from Chevron to Skidmore could lead to agencies winning fewer cases, as Skidmore's threshold for deference is lower. This shift would also require agencies to present more thorough, persuasive reasoning for their actions, potentially reducing their ability to enact broad policy changes. This change is seen as a move to balance the power between branches of government and increase judicial oversight of agency regulations.

Overall, the Supreme Court's leanings suggest a future where administrative agencies may face greater scrutiny and have reduced regulatory power, a development aligned with the broader conservative goal of diminishing the so-called "administrative state." This evolution in administrative law will likely affect how agencies regulate various aspects of American life and business, underscoring the ongoing debate over the balance of power between different branches of the federal government.

Supreme Court Eyes World War II Era Doctrine for Agency Rules

Binance, the world's largest crypto exchange, is set to confront the U.S. Securities and Exchange Commission (SEC) in a Washington courtroom next week. This high-profile hearing follows a lawsuit filed by the SEC against Binance in June, alleging the exchange of artificially inflating trading volumes, misusing customer funds, failing to restrict U.S. customers, and misleading investors about its market surveillance controls. Central to the case is the accusation that Binance facilitated the trading of crypto tokens that the SEC classifies as securities.

The hearing, originally scheduled for Friday but postponed due to snow, will now take place on Monday, Jan. 22. This case, along with the SEC's ongoing lawsuit against rival U.S. exchange Coinbase, is expected to significantly shape the regulatory landscape for cryptocurrencies in the U.S. The SEC has consistently argued that most crypto tokens are similar to securities and fall under its regulatory purview, a stance largely contested by the crypto industry.

Binance and BAM Trading, the operator of Binance.US, have countered in court filings, arguing that the SEC hasn't proven its allegations of fraud and overstepping its regulatory authority over crypto assets. Additionally, Binance Holdings agreed to a $4.3 billion settlement with the U.S. Department of Justice and Commodity Futures Trading Commission last year, with its CEO, Changpeng Zhao, admitting to violating U.S. anti-money laundering laws. The outcome of this upcoming hearing is poised to have a substantial impact on how crypto firms operate in the U.S. and the SEC's authority over the sector.

Binance to face off against US securities regulator in court | Reuters

Minimum Competence - Daily Legal News Podcast
Minimum Competence
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