Morgan v. Sundance, Inc.

Certiorari To The United States Court Of Appeals For The Eighth Circuit

No. 21–328. Argued March 21, 2022—Decided May 23, 2022

Petitioner Robyn Morgan worked as an hourly employee at a Taco Bell franchise owned by respondent Sundance. When applying for the job, Morgan signed an agreement to arbitrate any employment dispute. Despite that agreement, Morgan filed a nationwide collective action asserting that Sundance had violated federal law regarding overtime payment. Sundance initially defended against the lawsuit as if no arbitration agreement existed, filing a motion to dismiss (which the District Court denied) and engaging in mediation (which was unsuccessful). Then—nearly eight months after Morgan filed the lawsuit—Sundance moved to stay the litigation and compel arbitration under the Federal Arbitration Act (FAA). Morgan opposed, arguing that Sundance had waived its right to arbitrate by litigating for so long.

   The courts below applied Eighth Circuit precedent, under which a party waives its right to arbitration if it knew of the right; “acted inconsistently with that right”; and “prejudiced the other party by its inconsistent actions.” Erdman Co. v. Phoenix Land & Acquisition, LLC, 650 F. 3d 1115, 1117. The prejudice requirement is not a feature of federal waiver law generally. The Eighth Circuit adopted that requirement because of the “federal policy favoring arbitration.” Id., at 1120. Other courts have rejected such a requirement. This Court granted certiorari to resolve the split over whether federal courts may adopt an arbitration-specific waiver rule demanding a showing of prejudice.

Held: The Eighth Circuit erred in conditioning a waiver of the right to arbitrate on a showing of prejudice. Federal courts have generally resolved cases like this one as a matter of federal law, using the terminology of waiver. The parties dispute whether that framework is correct. Assuming without deciding that it is, federal courts may not create arbitration-specific variants of federal procedural rules, like those concerning waiver, based on the FAA’s “policy favoring arbitration.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24. That policy “is merely an acknowledgment of the FAA’s commitment to overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate and to place such agreements upon the same footing as other contracts.” Granite Rock Co. v. Teamsters, 561 U. S. 287, 302 (internal quotation marks omitted). Accordingly, a court must hold a party to its arbitration contract just as the court would to any other kind. But a court may not devise novel rules to favor arbitration over litigation. See Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 218–221. The federal policy is about treating arbitration contracts like all others, not about fostering arbitration.

  The text of the FAA makes clear that courts are not to create arbitration-specific procedural rules like the one here. Section 6 of the FAA provides that any application under the statute—including an application to stay litigation or compel arbitration—“shall be made and heard in the manner provided by law for the making and hearing of motions” (unless the statute says otherwise). A directive to treat arbitration applications “in the manner provided by law” for all other motions is simply a command to apply the usual federal procedural rules, including any rules relating to a motion’s timeliness. Because the usual federal rule of waiver does not include a prejudice requirement, Section 6 instructs that prejudice is not a condition of finding that a party waived its right to stay litigation or compel arbitration under the FAA.

  Stripped of its prejudice requirement, the Eighth Circuit’s current waiver inquiry would focus on Sundance’s conduct. Did Sundance knowingly relinquish the right to arbitrate by acting inconsistently with that right? On remand, the Court of Appeals may resolve that question, or determine that a different procedural framework (such as forfeiture) is appropriate. The Court’s sole holding today is that it may not make up a new procedural rule based on the FAA’s “policy favoring arbitration.” Pp. 4–7.

992 F. 3d 711, vacated and remanded.

 Kagan, J., delivered the opinion for a unanimous Court.


Certiorari To The United States Court Of Appeals For The Ninth Circuit

No. 20–1009. Argued December 8, 2021—Decided May 23, 2022 1

Respondents David Martinez Ramirez and Barry Lee Jones were each convicted of capital crimes in Arizona state court and sentenced to death. The Arizona Supreme Court affirmed each case on direct review, and each prisoner was denied state postconviction relief. Each also filed for federal habeas relief under 28 U. S. C. §2254, arguing that trial counsel had been ineffective for failing to conduct adequate investigations. The Federal District Court held in each case that the prisoner’s ineffective-assistance claim was procedurally defaulted because it was not properly presented in state court. To overcome procedural default in such cases, a prisoner must demonstrate “cause” to excuse the procedural defect and “actual prejudice.” Coleman v. Thompson, 501 U. S. 722, 750. To demonstrate cause, Ramirez and Jones relied on Martinez v. Ryan, 566 U. S. 1, which held that ineffective assistance of postconviction counsel may be cited as cause for the procedural default of an ineffective-assistance-of-trial-counsel claim. In Ramirez’s case, the District Court permitted him to supplement the record with evidence not presented in state court to support his case to excuse the procedural default. Assessing the new evidence, the court excused the procedural default but rejected Ramirez’s ineffective-assistance claim on the merits. The Ninth Circuit reversed and remanded for more evidentiary development to litigate the merits of Ramirez’s ineffective-assistance-of-trial-counsel claim. In Jones’ case, the District Court held a lengthy evidentiary hearing on “cause” and “prejudice,” forgave his procedural default, and held that his state trial counsel had provided ineffective assistance. The State of Arizona petitioned this Court in both cases, arguing that §2254(e)(2) does not permit a federal court to order evidentiary development simply because postconviction counsel is alleged to have negligently failed to develop the state-court record.

Held: Under §2254(e)(2), a federal habeas court may not conduct an evidentiary hearing or otherwise consider evidence beyond the state-court record based on the ineffective assistance of state postconviction counsel. Pp. 6–22.

 (a) To respect federal-state dual sovereignty, see Printz v. United States, 521 U. S. 898, 918, the availability of federal habeas relief is narrowly circumscribed, see Brown v. Davenport, 596 U. S. ___, ___–___. For example, only rarely may a federal habeas court hear a claim or consider evidence that a prisoner did not previously present to the state courts in compliance with state procedural rules. Pp. 6–13.

  (1) Federal habeas review overrides the States’ core power to enforce criminal law—an intrusion that “imposes special costs” on the federal system. Engle v. Isaac, 456 U. S. 107, 128. Two of those costs are particularly relevant here. First, a federal order to retry or release a state prisoner overrides the State’s sovereign power to enforce “societal norms through criminal law.” Calderon v. Thompson, 523 U. S. 538, 556. Second, federal intervention imposes significant costs on state criminal justice systems. See, e.g., Wainwright v. Sykes, 433 U. S. 72, 90. Pp. 6–8.

  (2) In light of these costs, this Court recognizes that federal habeas review is not “a substitute for ordinary error correction through appeal,” but is an “extraordinary remedy” that guards only against “extreme malfunctions in the state criminal justice systems.” Harrington v. Richter, 562 U. S. 86, 102–103. To ensure that federal habeas retains its narrow role, both Congress and federal habeas courts have set out strict rules requiring prisoners to raise all of their federal claims in state court before seeking federal relief. The Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA) requires state prisoners to “exhaus[t] the remedies available in the courts of the State” before seeking federal habeas relief. §2254(b)(1)(A). And the doctrine of procedural default—“an important ‘corollary’ to the exhaustion requirement,” Davila v. Davis, 582 U. S. ___, ___—generally prevents federal courts from hearing any federal claim that was not presented to the state courts “consistent with [the State’s] own procedural rules,” Edwards v. Carpenter, 529 U. S. 446, 453. Together, exhaustion and procedural default promote federal-state comity by affording States “an initial opportunity to pass upon and correct alleged violations of prisoners’ federal rights,” Duckworth v. Serrano, 454 U. S. 1, 3 (per curiam), and by protecting against “the significant harm to the States that results from the failure of federal courts to respect” state procedural rules, Coleman, 501 U. S., at 750. Pp. 8–10.

  (3) Nonetheless, a federal court is not required to automatically deny unexhausted or procedurally defaulted claims. For instance, when a claim is procedurally defaulted, a federal court can forgive the default and adjudicate the claim if the prisoner provides an adequate excuse. And if the state-court record for that defaulted claim is undeveloped, the prisoner must show that factual development in federal court is appropriate. Pp. 10–13.

   (i) Federal courts may excuse procedural default only if a prisoner “can demonstrate cause for the default and actual prejudice as a result of the alleged violation of federal law.” Coleman, 501 U. S., at 750. With respect to cause, “attorney error cannot provide cause to excuse a default” “in proceedings for which the Constitution does not guarantee the assistance of counsel at all.” Davila, 582 U. S., at ___. But in Martinez, this Court recognized a “narrow exception” to that rule, holding that ineffective assistance of state postconviction counsel may constitute “cause” to forgive procedural default of a trial-ineffective-assistance claim, but only if the State requires prisoners to raise such claims for the first time during state collateral proceedings. 566 U. S., at 9. Pp. 10–11.

   (ii) Excusing a prisoner’s failure to develop the state-court record faces an even higher bar. Section 2254(e)(2) applies when a prisoner “has failed to develop the factual basis of a claim,” i.e., is “at fault” for the undeveloped record in state court, Williams v. Taylor, 529 U. S. 420, 432. If a prisoner is “at fault,” a federal court may hold “an evidentiary hearing on the claim” in only two limited scenarios not relevant here. See §§2254(e)(2)(A)(i), (ii). The prisoner also must show that further factfinding would demonstrate, by clear and convincing evidence, that he is innocent of the crime charged. Pp. 12–13.

  (b) Although respondents do not satisfy §2254(e)(2)’s narrow exceptions, the Court of Appeals forgave respondents’ failures to develop the state-court record because, in its view, they each received ineffective assistance of state postconviction counsel. The Court of Appeals erred. Pp. 13–22.

  (1) Respondents primarily argue that a prisoner is not “at fault” for the undeveloped record if state postconviction counsel negligently failed to develop the state record for a claim of ineffective assistance of trial counsel. But under AEDPA and this Court’s precedents, state postconviction counsel’s ineffective assistance in developing the state-court record is attributed to the prisoner. Pp. 13–19.

   (i) A prisoner “bears the risk in federal habeas for all attorney errors made in the course of the representation.” Coleman, 501 U. S., at 754. And, because there is no constitutional right to counsel in state postconviction proceedings, a prisoner must ordinarily “bea[r] responsibility” for all attorney errors during those proceedings, Williams, 529 U. S., at 432, including responsibility for counsel’s negligent failure to develop the state postconviction record. This Court’s prior cases make this point clear. See, e.g., Keeney v. Tamayo-Reyes, 504 U. S. 1; Williams, 529 U. S. 420; Holland v. Jackson, 542 U. S. 649 (per curiam). Thus, a prisoner is “at fault” even when state postconviction counsel is negligent. Pp. 14–15.

   (ii) Respondents propose extending Martinez so that ineffective assistance of postconviction counsel can excuse a prisoner’s failure to develop the state-court record under §2254(e)(2). But unlike judge-made exceptions to procedural default, §2254(e)(2) is a statute, and thus, this Court has no power to redefine when a prisoner “has failed to develop the factual basis of a claim in State court proceedings.” Nor is it plausible, as respondents contend, that Congress might have enacted §2254(e)(2) with the expectation that this Court would one day open the door to allowing the ineffective assistance of state postconviction counsel to be cause to forgive procedural default. Finally, Martinez itself cuts against respondents’ proposed result. Martinez foreclosed any extension of its holding beyond the “narrow exception” to procedural default at issue in that case. See 566 U. S., at 9. That assurance has bite only if the State can rely on the state-court record. The cases here demonstrate the improper burden imposed on the States when Martinez applies beyond its narrow scope, with the sprawling evidentiary hearing in Jones’ case being particularly poignant. Pp. 15–19.

  (2) Respondents propose a second reading of §2254(e)(2) that supposedly permits consideration of new evidence in their habeas cases. First, they argue that because §2254(e)(2) bars only “an evidentiary hearing on the claim,” a federal court may hold an evidentiary hearing to determine whether there is cause and prejudice. Second, respondents contend that the habeas court may then consider that new evidence to evaluate the merits of the underlying ineffective-assistance claim. By considering already admitted evidence, respondents reason, the habeas court is not holding a “hearing” prohibited by §2254(e)(2). But, in Holland, this Court explained that §2254(e)(2)’s “restrictions apply a fortiori when a prisoner seeks relief based on new evidence without an evidentiary hearing.” 542 U. S., at 653 (emphasis deleted). Therefore, when a federal habeas court convenes an evidentiary hearing for any purpose, or otherwise reviews any evidence for any purpose, it may not consider that evidence on the merits of a negligent prisoner’s defaulted claim unless the exceptions in §2254(e)(2) are satisfied. Pp. 19–22.

937 F. 3d 1230 and 943 F. 3d 1211, reversed.

 Thomas, J., delivered the opinion of the Court, in which Roberts, C. J., and Alito, Gorsuch, Kavanaugh, and Barrett, JJ., joined. Sotomayor, J., filed a dissenting opinion, in which Breyer and Kagan, JJ., joined.

1 Together with Shinn, Director, Arizona Department of Corrections, Rehabilitation and Reentry, et al. v. Jones (see this Court’s Rule 12.4), also on certiorari to the same court.