author: Justice Kennedy Justice Thomas,

text:
    CAMPBELL v. LOUISIANA
    No. 96-1584.
    Argued January 20, 1998
    Decided April 21, 1998

      Kennedy, J., delivered the opinion for a unanimous Court with respect to Parts I, II, IV, and V, and the opinion of the Court with respect to Part III, in which Rehnquist, C. J., and Stevens, O’Connor, Souter, Ginsburg, and Breyer, JJ., joined. Thomas, J., filed an opinion concurring in part and dissenting in part, in which SCALIA, J., joined, post, p. 403.

      Dmitrc I. Burnes argued the cause for petitioner. With him on the briefs was Richard'V. Burnes.

      Richard P. leyoub, Attorney General of Louisiana, argued the cause for respondent. With him on the brief were Kathleen E. Petersen and Mary Ellen Hunley, Assistant Attorneys General, and Paul R. Baier.

         Joshua L. Dratel, Lisa Kemler, and Richard A. Greenberg filed a brief for the National Association of Criminal Defense Lawyers as amicus curiae urging reversal.

   Justice Kennedy

delivered the opinion of the Court.

We must decide whether a white criminal defendant has standing to object to discrimination against black persons in the selection of grand jurors. Finding he has the requisite standing to raise equal protection and due process claims, we reverse and remand.

I

A grand jury in Evangeline Parish, Louisiana, indicted petitioner Terry Campbell on one count of second-degree murder. Campbell, who is white, filed a timely pretrial motion to quash the indictment on the grounds the grand jury was constituted in violation of his equal protection and due process rights under the Fourteenth Amendment and in violation of the Sixth Amendment’s fair-cross-section requirement. Campbell alleged a longstanding practice of racial discrimination in the selection of grand jury forepersons in the parish. His sole piece of evidence is that, between January 1976 and August 1993, no black person served as a grand jury foreperson in the parish, even though more than 20 percent of the registered voters were black persons. See Brief for Petitioner 16. The State does not dispute this evidence. The trial judge refused to quash the indictment because “Campbell, being a white man accused of killing another white man,” lacked standing to complain “where all of the forepersons were white.” App. to Pet. for Cert. G-33.

After Campbell’s first trial resulted in a mistrial, he was retried, convicted of second-degree murder, and sentenced to life in prison without possibility of parole. Campbell renewed his challenge to the grand jury foreperson selection procedures in a motion for new trial, which was denied. See id., at 1-2. The Louisiana Court of Appeal reversed, because, under our decision in Powers v. Ohio, 499 U. S. 400 (1991), Campbell had standing to object to the alleged discrimination even though he is white. 651 So. 2d 412 (1995). The Court of Appeal remanded the ease for an evidentiary hearing because it found Campbell’s evidence of discrimination inadequate. Id., at 413.

The Louisiana Supreme Court reversed. It distinguished Powers as turning on the “considerable and substantial impact” that a prosecutor’s discriminatory use of peremptory challenges has on a defendant’s trial as well as on the integrity of the judicial system. See 661 So. 2d 1321, 1324 (1995). The court declined to extend Powers to a claim of discrimination in the selection of a grand jury foreperson. It also found Hobby v. United States, 468 U. S. 339 (1984), did not afford Campbell standing to raise a due process objection' In Hobby, this Court held no relief could be granted to a white defendant even if his due process rights were violated by discrimination in the selection of a federal grand jury foreperson. Noting that Hobby turned on the ministerial nature of the federal grand jury foreperson’s duties, the Louisiana Supreme Court held “[t]he role of the grand jury foreman in Louisiana appears to be similarly ministerial” such that any discrimination “has little, if any, effect on the defendant’s due process right of fundamental fairness.” 661 So. 2d, at 1S24. Because the Court of Appeal had not addressed Campbell’s other asserted points of error, the Louisiana Supreme Court remanded the ease. After the Court of Appeal rejected Campbell’s remaining claims, 673 So. 2d 1061 (1996), the Louisiana Supreme Court refused to reconsider its ruling on the grand jury issue, 685 So. 2d 140 (1997). We granted certiorari to address the narrow question of Campbell’s standing to raise equal protection, due process, and fair-cross-section claims. 521 U. S. 1151 (1997).

II

As an initial matter, we note Campbell complains about more than discrimination in the selection of his grand jury foreperson; he alleges that discrimination shaped the composition of the grand jury itself. In the federal system and in most States which use grand juries, the foreperson is selected from the ranks of the already seated grand jurors. See 1 S. Beale, W. Bryson, J. Felman, & M. Elston, Grand Jury Law and Practice §4:6, pp. 4-20 to 4-21 (2d ed. 1997) (either the judge selects the foreperson or fellow grand jurors elect him or her). Under those systems, the title “foreperson” is bestowed on one of the existing grand jurors without any change in the grand jury’s composition. In Louisiana, by contrast, the judge selects the foreperson from the grand jury venire before the remaining members of the grand jury have been chosen by lot. La. Code Crim. Proc. Ann., Art. 413(B) (West Supp. 1997); see also 1 Beale, supra, at 4-22, n. 11 (Ohio, Oklahoma, Tennessee, and Virginia use procedures similar to Louisiana’s). In addition to his other duties, the foreperson of the Louisiana grand jury has the same full voting powers as other grand jury members. As a result, when the Louisiana judge selected the foreperson, he also selected one member of the grand jury outside of the drawing system used to compose the balance of that body. These considerations require us to treat the ease as one alleging discriminatory selection of grand jurors.

r-H HH J — I

Standing to litigate often turns on imprecise distinctions and requires difficult line-drawing. On occasion, however, we can ascertain standing with relative ease by applying rules established in prior cases. See Allen v. Wright, 468 U. S. 787, 751 (1984). Campbell’s equal protection claim is such an instance.

In Powers v. Ohio, supra, we found a white defendant had standing to challenge racial discrimination against black persons in the use of peremptory challenges. We determined the defendant himself could raise the equal protection rights of the excluded jurors. Recognizing our general reluctance to permit a litigant to assert the rights of a third party, we found three preconditions had been satisfied: (1) the defendant suffered an “injury in fact”; (2) he had a “close relationship” to the excluded jurors; and (3) there was some hindrance to the excluded jurors asserting their own rights. Powers, supra, at 411 (citing Singleton v. Wulff, 428 U. S. 106 (1976)). We concluded a white defendant suffers a serious injury in fact because discrimination at the voir dire stage “‘easts doubt on the integrity of the judicial process’ ... and places the fairness of a criminal proceeding in doubt.” 499 U. S., at 411. This cloud of doubt deprives the defendant of the certainty that a verdict in his case “is given in accordance with the law by persons who are fair.” Id., at 413. Second, the excluded juror and criminal defendant have a close relationship: They share a common interest in eliminating discrimination, and the criminal defendant has an incentive to serve as an effective advocate because a victory may result in overturning his conviction. Id., at 413-414. Third, given the economic burdens of litigation and the small financial reward available, “a juror dismissed because of race probably will leave the courtroom possessing little incentive to set in motion the arduous process needed to vindicate his own rights.” Id., at 415. Upon consideration of these factors, we concluded a white defendant had standing to bring an equal protection challenge to racial discrimination against black persons in the petit jury selection process.

Although Campbell challenges discriminatory selection of grand jurors, rather than petit jurors, Powers' reasoning applies to this case on the question of standing. Our prior cases have not decided whether a white defendant’s own equal protection rights are violated when the composition of his grand jury is tainted by discrimination against black persons. We do not need to address this issue because Campbell seeks to assert the well-established equal protection rights of black persons not to be excluded from grand jury service on the basis of their race. See Tr. 9 (Dec. 2, 1993); see also Carter v. Jury Comm’n of Greene Cty., 396 U. S. 320, 329-330 (1970) (racial exclusion of prospective grand and petit jurors violates their constitutional rights). Campbell satisfies the three preconditions for third-party standing outlined in Powers.

Regardless of his or her skin color, the accused suffers a significant injury in fact when the composition of the grand jury is tainted by racial discrimination. “[Discrimination on the basis of race in the selection of members of a grand jury . . . strikes at the fundamental values of our judicial system” because the grand jury is a central component of the criminal justice process. Rose v. Mitchell, 443 U. S. 545, 556 (1979). The Fifth Amendment requires the Federal Gov-eminent to use a grand jury to initiate a prosecution, and 22 States adopt a similar rule as a matter of state law. See 1 Beale, supra, §1:2, at 1-3; see also Hurtado v. California, 110 U. S. 516 (1884) (Fifth Amendment’s grand jury requirement is not binding on the States). The grand jury, like the petit jury, “acts as a vital check against the wrongful exercise of power by the State and its prosecutors.” Powers, supra, at 411. It controls not only the initial decision to indict, but also significant decisions such as how many counts to charge and whether to charge a greater or lesser offense, including the important decision to charge a capital crime. See Vasquez v. Hillery, 474 U. S. 254, 263 (1986). The integrity of these decisions depends on the integrity of the process used to select the grand jurors. If that process is infected with racial discrimination, doubt is cast over the fairness of all subsequent decisions. See Rose, supra, at 555-556 (“Selection of members of a grand jury because they are of one race and not another destroys the appearance of justice and thereby easts doubt on the integrity of the judicial process”).

Powers emphasized the harm inflicted when a prosecutor discriminates by striking racial minorities in open court and in front of the entire jury pool. The Court expressed concern that this tactic might encourage the jury to be lawless in its own actions. See 499 U. S., at 412-413. The State suggests this sort of harm is not inflicted when a single grand juror is selected based on racial prejudice because the discrimination is invisible to the grand jurors on that panel; it only becomes apparent when a pattern emerges over the course of years. See Brief for Respondent 16. This argument, however, underestimates the seriousness of the allegations. In Powers, even if the prosecutor had been motivated by racial prejudice, those responsible for the defendant’s fate, the judge and the jury, had shown no actual bias. If, by contrast, the allegations here are true, the impartiality and discretion of the judge himself would be called into question.

The remaining two preconditions to establish third-party standing are satisfied with little trouble. We find no reason why a white defendant would be any less effective as an advocate for excluded grand jurors than for excluded petit jurors. See Powers, supra, at 413-414. The defendant and the excluded grand juror share a common interest in eradicating discrimination from the grand jury selection process, and the defendant has a vital interest in asserting the excluded juror’s rights because his conviction may be overturned as a result. See Vasquez, supra, at 264; Rose, supra, at 551; Cassell v. Texas, 339 U. S. 282 (1950). The State contends Campbell’s connection to “the excluded class of . . . jurors . . . who were not called to serve ... for the prior 1614 years is tenuous, at best.” Brief for Respondent 22. This argument confuses Campbell’s underlying claim with the evidence needed to prove it. To assert the rights of those venirepersons who were excluded from serving on the grand jury in his case, Campbell must prove their exclusion was on account of intentional discrimination. He seeks to do so based on past treatment of similarly situated venire-persons in other cases, see Castaneda v. Partida, 430 U. S. 482, 494 (1977), but this does not mean he seeks to assert those venirepersons’ rights. As a final matter, excluded grand jurors have the same economic disincentives to assert their own rights as do excluded petit jurors. See Powers, supra, at 415. We find Campbell, like any other white defendant, has standing to raise an equal protection challenge to discrimination against black persons in the selection of his grand jury.

IV

It is axiomatic that one has standing to litigate his or her own due process rights. We need not explore the nature and extent of a defendant’s due process rights when he alleges discriminatory selection of grand jurors, and confine our holding to his standing to raise the issue. Our decision in Peters v. Kiff addressed the due process question, although a majority of Justices could not agree on a comprehensive statement of the rule or an appropriate remedy for any violation. See 407 U. S. 493, 504 (1972) (opinion of Marshall, J.) (“[Wjhatever his race, a criminal defendant has standing to challenge the system used to select his grand... jury, on the ground that it arbitrarily excludes ... members of any race, and thereby denies him due process of law”); id., at 507 (White, J., joined by Brennan and Powell, JJ., concurring in judgment) (“[Tjhe strong statutory policy of [18 U. S. C.] §243, which reflects the central concern of the Fourteenth Amendment” permits a white defendant to challenge discrimination in grand jury selection). Our more recent decision in Hobby v. United States proceeded on the implied assumption that a white defendant had standing to raise a due process objection to discriminatory appointment of a federal grand jmy foreperson and skipped ahead to the question whether a remedy was available. 468 U. S., at 350. It is unnecessary here to discuss the nature and full extent of due process protection in the context of grand jmy selection. That issue, to the extent it is still open based upon our earlier precedents, should be determined on the merits, assuming a court finds it necessary to reach the point in light of the concomitant equal protection claim. The relevant assumption of Hobby, and our holding here, is that a defendant has standing to litigate whether his conviction was procured by means or procedures which contravene due process.

The Louisiana Supreme Court erred in reading Hobby to foreclose Campbell’s standing to bring a due process challenge. 661 So. 2d, at 1324. In Hobby, we held discrimination in the selection of a federal grand jury foreperson did not infringe principles of fundamental fairness because the foreperson’s duties were “ministerial.” See Hobby, supra, at 345-346. In this case, the Louisiana Supreme Court decided a Louisiana grand jury foreperson’s duties were ministerial too, but then couched its decision in terms of Campbell’s lack of standing to litigate a due process claim. 661 So. 2d, at 1324.

The Louisiana Supreme Court was wrong on both counts. Its interpretation of Hobby is inconsistent with the implicit assumption of standing we have just noted and with our explicit reasoning in that case. In Hobby, a federal grand jury foreperson was selected from the existing grand jurors, so the decision to pick one grand juror over another, at least arguably, affected the defendant only if the foreperson was given some significant duties that he would not have had as a regular grand juror. See swpra, at 396. Against this background, the Court rejected the defendant’s claim because the ministerial role of a federal grand jury foreperson “is not such a vital one that discrimination in the appointment of an individual to that post significantly invades” due process. Hobby, supra, at 346. Campbell’s challenge is different in kind and degree because it implicates the impermissible appointment of a member of the grand jury. See supra, at 396-397. What concerns Campbell is not the foreperson’s performance of his duty to preside, but performance as a grand juror, namely, voting to charge Campbell with second-degree murder.

The significance of this distinction was acknowledged by Hobby’s discussion of a previous ease, Rose v. Mitchell, 443 U. S. 545 (1979). In Rose, we assumed relief could be granted for a constitutional challenge to discrimination in the appointment of a state grand jury foreperson. See id., at 556. Hobby distinguished Rose in part because it involved Tennessee’s grand jury system. Under the Tennessee law then in effect, 12 members of the grand jury were selected at random, and then the judge appointed a 13th member who also served as foreperson. See Hobby, 468 U. S., at 347. As a result, Hobby pointed out discrimination in selection of the foreperson in Tennessee was much more serious than in the federal system because the former can affect the composition of the grand jury whereas the latter cannot: “So long as the grand jury itself is properly constituted, there is no risk that the appointment of any one of its members as foreman will distort the overall composition of the array or otherwise taint the operation of the judicial process.” Id., at 348. By its own terms, then, Hobby does not address a claim like Campbell’s.

V

One of the questions raised on certiorari is whether Campbell also has standing to raise a fair-cross-section claim. It appears neither the Louisiana Supreme Court nor the Louisiana Court of Appeal discussed this contention. “With 'very rare exceptions,’... we will not consider a petitioner’s federal claim unless it was either addressed by or properly presented to the state court that rendered the decision we have been asked to review.” Adams v. Robertson, 520 U. S. 83, 86 (1997) (per curiam). Campbell has made no effort to meet his burden of showing this issue was properly presented to the Louisiana appellate courts, even after the State pointed out this omission before this Court. See Brief for Respondent 29-30. In fact, Campbell devotes no more than one page of text in his brief to his fair-eross-seetion claim. See Brief for Petitioner 31-32. We decline to address the issue.

The judgment of the Louisiana Supreme Court is reversed. The case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Justice Thomas,

with whom Justice Scalia joins, concurring in part and dissenting in part.

I fail to understand how the rights of blacks excluded from jury service can be vindicated by letting a white murderer go free. Yet, in Powers v. Ohio, 499 U. S. 400 (1991), the Court held that a white criminal defendant had standing to challenge his criminal conviction based upon alleged violations of the equal protection rights of black prospective jurors. Today’s decision, rather than merely reaffirming Powers’ misguided doctrine of third-party standing, applies that doctrine to a context in which even Powers’ rationales are inapplicable. Because Powers is both incorrect as an initial matter and inapposite to the case at hand, I respectfully dissent from Part III of the Court’s opinion. I join Parts I, II, IV, and V and concur in the judgment reversing and remanding to the Louisiana Supreme Court.

Powers broke new ground by holding for the first time that a criminal defendant may raise an equal protection challenge to the use of peremptory strikes to exclude jurors of a different race. See id., at 422 (Scalia, J., dissenting) (explaining that Powers was inconsistent with “a vast body of clear statement” in our precedents). Recognizing that the defendant could not claim that his own equal protection rights had been denied, the Court held that the defendant had standing to assert the equal protection rights of veniremen excluded from the jury. Id., at 410-416. The Court concluded that the defendant had such “third party standing” because three criteria had been met: he had suffered an “injury in fact”; he had a “close relation” to the excluded jurors; and there was “some hindrance” to the jurors’ ability to protect their own interests. Id., at 410-411.

Powers distorted standing principles and equal protection law and should be overruled. As Justice Scalia explained at length in his dissent, the. defendant in Powers could not satisfy even the first element of standing — injury in fact. Id., at 426-429. The defendant, though certainly displeased with his conviction, failed to demonstrate that the alleged discriminatory use of peremptory challenges against veniremen of another race had any effect on the outcome of his trial. The Court instead found that the defendant had suffered a “cognizable” injury because racial discrimination in jury selection “ ‘casts doubt on the integrity of the judicial process’ ” and “invites cynicism respecting the jury’s neutrality and its obligation to adhere to the law.” Id., at 411-412. But the severity of an alleged wrong and a perception of unfairness do not constitute injury in fact. Indeed, “ ‘[i]n~ jury in perception’ would seem to be the very antithesis of ‘injury in fact.’” Id., at 427 (Scalia, J., dissenting). Furthermore, there is no reason why a violation of a third party’s right to serve on a jury should be grounds for reversal when other violations of third-party rights, such as obtaining evidence against the defendant in violation of another person’s Fourth or Fifth Amendment rights, are not. Id., at 429 (Scalia, J., dissenting).

Powers further rested on an alleged “close relationship]” that arises between a defendant and veniremen because voir dire permits them “to establish a relation, if not a bond of trust,” that continues throughout the trial. Id., at 411, 413. According to the Court, excluded veniremen share the accused’s interest in eliminating racial discrimination because a peremptory strike inflicts upon a venireman a “profound personal humiliation heightened by its public character.” Id., at 413-414. But there was simply no basis for the Court’s finding of a “close relationship]” or “common interest,” id., at 413, between black veniremen and white defendants. Regardless of whether black veniremen wish to serve on a particular jury, they do not share the white defendant’s interest in obtaining a revei’sal of his conviction. Surely a black venireman would be dismayed to learn that a white defendant used the venireman’s constitutional rights as a means to overturn the defendant’s conviction.

Finally, Powers concluded that there are substantial obstacles to suit by excluded veniremen, including the costs of proceeding individually and the difficulty of establishing a likelihood of recurrence. Id., at 414-415. These obstacles, though perhaps often present in the context of Batson v. Kentucky, 476 U. S. 79 (1986), are alone insufficient to justify third-party standing.

Even if the Powers justifications were persuasive, they would still be wholly inapplicable to this case, which involves neither peremptory strikes nor discrimination in the selection of the petit jury. The “injury in fact” allegedly present in Powers is wholly absent from the context at hand. Powers reasoned that repeated peremptory strikes of members of one race constituted an “overt wrong, often apparent to the entire jury panel,” that threatened to “cas[tj doubt over the obligation of the parties, the jury, and indeed the court to adhere to the law throughout the trial of the cause.” Powers, 499 U. S., at 412. Here, in contrast, the judge selected one member of the grand jury venire to serve as foreman, and the remaining members of the grand jury were selected at random. Even if discriminatory, the judge’s selection (rather than exclusion) of a single member of the grand jury could hardly constitute an “overt” wrong that would affect the remainder of the grand jury proceedings, much less the subsequent trial. The Court therefore resorts to emphasizing the seriousness of the allegation of racial discrimination (as though repetition conveys some talismanie power), but that, of course, cannot substitute for injury in fact.

In this case, unlike Powers, petitioner’s allegation of injury in fact is not merely unsupported; it is directly foreclosed. There is no allegation in this case that the composition of petitioner’s trial jury was affected by discrimination. Instead, the allegation is merely that there was discrimination in the selection of the grand jury (and of only one member). The properly constituted petit jury’s verdict of guilt beyond a reasonable doubt was in no way affected by the composition of the grand jury. Indeed, to the extent that race played any part in the composition of petitioner’s petit jury, it was by petitioner’s own actions, as petitioner used 5 of his 12 peremptory strikes to eliminate blacks from the petit jury venire. Petitioner’s attempt to assert that he was injured by the alleged exclusion of blacks at the grand jury stage is belied by his own use of peremptory strikes against blacks at the petit jury stage.

It would be to no avail to suggest that the alleged discrimination in grand jury selection could have caused an indictment improperly to be rendered, because the petit jury’s verdict conclusively establishes that no reasonable grand jury could have failed to indict petitioner. Nor can the Court find support in our precedents allowing a defendant to challenge his conviction based upon discrimination in grand jury selection, because all of those cases involved defendants’ assertions of their own rights. See, e. g., Rose v. Mitchell, 443 U. S. 545 (1979); Cassell v. Texas, 339 U. S. 282 (1950). Although we often do not require a criminal defendant to establish a eause-and-effect relationship between the procedural illegality and the subsequent conviction when the defendant asserts a denial of his own rights, see 499 U. S., at 427-428 (SCALIA, J., dissenting) (noting that the government generally bears the burden of establishing harmlessness of such errors), even the Powers majority acknowledged that such a showing is the foremost requirement of third-party standing, as evidenced by the lengths to which it went in an attempt to justify its finding of injury in fact.

The Court’s finding of a close relationship (an ambient fraternity of sorts) between petitioner and the black veniremen whose rights he seeks to vindicate is likewise unsupported. The Court, of course, never identifies precisely whose rights petitioner seeks to vindicate. Is it all veniremen who were not chosen as foreman? Is it all nonwhite veniremen? All black veniremen? Or just the black veniremen who were not ultimately chosen for the grand jury? Leaving aside the fact that the Court fails to identify the rights-holders, I fail to see how a “close relationship” could have developed between petitioner and the veniremen. Even if a “bond,” Powers v. Ohio, supra, at 413, could develop between veniremen and defendants during voir dire, such a bond could not develop in the context of a judge’s selection of a grand jury foreman — a context in which the defendant plays no role. Nor can any “common interest” between a defendant and excluded veniremen arise based upon a public humiliation suffered by the latter, because unlike the exercise of peremptory strikes, Evangeline Parish’s process of selecting foremen does not constitute “overt” action against particular veniremen. Rather, those veniremen not chosen (all but one) are simply left to take their chances at being randomly selected for the remaining seats on the grand jury.

Finally, there are ample opportunities for prospective jurors whose equal protection rights have been violated to vindicate those rights, rather than relying upon a defendant of another race to do so for them. In contrast to the Batson line of eases, where an allegation may concern discrimination in the defendant’s case alone, in this case petitioner alleges systematic discrimination in the selection of grand jury foremen in Evangeline Parish. Such systematic discrimination provides a large class of potential plaintiffs and the opportunity for declaratory or injunctive relief to prevent repeated violations.

For these reasons, I would hold that petitioner — who does not claim that he was discriminated against or that the alleged discrimination against others had any effect on the outcome of his trial — lacks standing to raise the equal protection rights of excluded black veniremen. Accordingly, I join Parts I, II, IV, and V of the Court’s opinion and concur in the judgment.

       As I have explained elsewhere, the entire line of eases following Batson v. Kentucky, 476 U. S. 79 (1986) (holding that the Equal Protection Clause applies to the use of peremptory strikes), including Powers, is a misguided effort to remedy a general societal wrong by using the Constitution to regulate the traditionally discretionary exercise of peremptory challenges. The Batson doctrine, rather than helping to ensure the fairness of criminal trials, serves only to undercut that fairness by emphasizing the rights of excluded jurors at the expense of the traditional protections accorded criminal defendants of all races. See Georgia v. McCollum, 505 U. S. 42, 60-62 (1992) (Thomas, J., concurring in judgment).

       Of course, the same sense of dismay would arise if the defendant and the excluded venireman were of the same race.

       For this reason, it is unlikely that petitioner ultimately will prevail on the merits of his due process daim. However, I agree with the Court’s condusion that petitioner has standing to raise that daim because petitioner asserts Ms own due process right. I join Part IV of the Court’s opinion because it addresses only standing and does not address “the nature and extent” of petitioner’s due process right. Ante, at 400.


source: Caselaw Access Project

author: Justice Souter

license: Public Domain

text:
    BEACH et ux. v. OCWEN FEDERAL BANK
    No. 97-5310.
    Argued March 2, 1998

    Decided April 21, 1998

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

      Bruce S. Bogow argued the cause for petitioners. With him on the briefs were Beverly A. Pohl and Michael Tankersley.

      Carter G. Phillips argued the cause for respondent. With him on the brief were James A. Huizinga, Michael F. Wos-serman, Steven Ellison, and Patricia Lebow

      Briefs of amici curiae urging reversal were filed for the American Association of Retired Persons by Jean Constantine-Davis and Nina F. Simon; and for Dorothy Botelho et al. by Richard J. Rubin and Gary Klein.

        Thomas M. Hefferon, John C. Englander, and Jeremiah S. Buckley filed a brief for the Federal Home Loan Mortgage Corp. et al. as amici curiae urging affirmance.

   Justice Souter

delivered the opinion of the Court.

Under the Truth in Lending Act, 82 Stat. 146, 16 U. S. C. § 1601 et seq., when a loan made in a consumer credit transaction is secured by the borrower’s principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately. See 15 U. S. C. § 1635. Under § 1635(f) of the statute, this right of rescission “shall expire” in the usual case three years after the loan eloses or upon the sale of the secured property, whichever date is earlier. The question here is whether a borrower may assert this right to rescind as an affirmative defense in a collection action brought by the lender more than three years after the consummation of the transaction. We answer no and hold that § 1635(f) completely extinguishes the right of rescission at the end of the 3-year period.

I

The declared purpose of the Act is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.” 15 U. S. C. § 1601(a); see Mourning v. Family Publications Service, Inc., 411 U. S. 356, 363-368 (1973). Accordingly, the Act requires creditors to provide borrowers with clear and accurate disclosures of terms dealing with things like finance charges, annual percentage rates of interest, and the borrower’s rights. See §§1631, 1632, 1635, 1638. Failure to satisfy the Act subjects a lender to criminal penalties for noncompliance, see § 1611, as well as to statutory and actual damages traceable to a lender’s failure to make the requisite disclosures, see §1640. Section 1640(e) provides that an action for such damages “may be brought” within one year after a violation of the Act, but that a borrower may assert the right to damages “as a matter of defense by recoupment or set-off” in a collection action brought by the lender even after the one year is up.

Going beyond these rights to damages, the Act also authorizes a borrower whose loan is secured with his “principal dwelling,” and who has been denied the requisite disclosures, to rescind the loan transaction entirely “until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later.” § 1635(a). A borrower who exercises this right to rescind “is not liable for any finance or other charge, and any security interest given by [him], including any such interest arising by operation of law, becomes void” upon rescission. § 1635(b). Within 20 days after receiving notice of rescission, the lender must “return to the [borrower] any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction.” Ibid. The Act provides, however, that the borrower’s right of rescission “shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first,” even if the required disclosures have never been made. § 1685(f). The Act gives a borrower no express permission to assert the right of rescission as an affirmative defense after the expiration of the 3-year period.

The borrowers in this case, petitioners David and Linda Beach, built a house in Jupiter, Florida, in 1986 with a secured $85,000 construction loan from Fidelity Federal Savings Bank of Florida. In the same year, the Beaches refinanced the house with a loan from Great Western Bank. In 1991, the Beaches stopped making mortgage payments, and in 1992 the bank began this foreclosure proceeding. The Beaches acknowledged their default but raised affirmative defenses, alleging that the bank’s failure to make disclosures required by the Act gave them rights under §§1635 and 1640 to rescind the mortgage agreement and to reduce the bank’s claim by the amount of their actual and statutory damages.

The Circuit Court of the 15th Judicial Circuit of Florida agreed that under § 1640 the Beaches were entitled to “offset the amount owed to Great Western” by $896 in actual damages and $1,000 in statutory damages because the bank had overstated the monthly mortgage payment by $0.58 and the finance charge by $201.84. But the court rejected the Beaches’ effort to rescind the mortgage under § 1685, holding that the loan at issue was immune to rescission as part of a “residential mortgage transaction” (defined in § 1602(w)) and, in the alternative, that any right to rescind had expired after three years, in 1989. The court found it telling that Congress had included no saving clause to revive an expired right of rescission as a defense in the nature of recoupment or setoff.

The State’s intermediate appellate court affirmed, Beach v. Great Western Bank, 670 So. 2d 986 (Fla. 4th Dist. Ct. App. 1996), and so did the Supreme Court of Florida, which addressed only the issue of rescission as a defense, Beach v. Great Western Bank, 692 So. 2d 146 (1997). That court remarked on the plain language of § 1685(f) as evidence of unconditional congressional intent to limit the right of rescission to three years and explained that its prior cases permitting a defense of recoupment by an ostensibly barred elaim were distinguishable because, among other things, they involved statutes of limitation, not statutes extinguishing rights defensively asserted.

Because the reading of § 1635(f) given by the Supreme Court of Florida conflicts with the decisions of several other courts, we granted certiorari, 522 U. S. 912 (1997), to determine whether under federal law the statutory right of rescission provided by §1635 may be revived as an affirmative defense after its expiration under § 1635(f). We affirm.

II

The Beaches concede that any right they may have had to institute an independent proceeding for rescission under § 1635 lapsed in 1989, three years after they closed the loan with the bank, but they argue that the restriction to three years in § 1635(f) is a statute of limitation governing only the institution of suit and accordingly has no effect when a borrower claims a § 1635 right of rescission as a “defense in recoupment” to a collection action. They are, of course, correct that as a general matter a defendant’s right to plead “recoupment,” a “ ‘defense arising out of some feature of the transaction upon which the plaintiff’s action is grounded,’ ” Rothensies v. Electric Storage Battery Co., 329 U. S. 296, 299 (1946) (quoting Bull v. United States, 295 U. S. 247, 262 (1935)), survives the expiration of the period provided by a statute of limitation that would otherwise bar the recoupment claim as an independent cause of action. So long as the plaintiff’s action is timely, see ibid., a defendant may raise a claim in recoupment even if he could no longer bring it independently, absent “‘the clearest congressional language’ ” to the contrary. Reiter v. Cooper, 507 U. S. 258, 264 (1993) (quoting United States v. Western Pacific R. Co., 352 U. S. 59, 71 (1956)). As we have said before, the object of a statute of limitation in keeping “stale litigation out of the courts,” id., at 72, would be distorted if the statute were applied to bar an otherwise legitimate defense to a timely lawsuit, for limitation statutes “are aimed at lawsuits, not at the consideration of particular issues in lawsuits,” ibid.

The Beaches come up short, however, on the question whether this is a case for the general rule at all. The issue here is not whether limitation statutes affect recoupment rights, but whether § 1635(f) is a statute of limitation, that is, “whether [it] operates, with the lapse of time, to extinguish the right which is the foundation for the claim” or “merely to bar the remedy for its enforcement.” Midstate Horticultural Co. v. Pennsylvania R. Co., 320 U. S. 356, 358-359, and n. 4 (1943). The “ultimate question” is whether Congress intended that “the right shall be enforceable in any event after the prescribed time,” id., at 360; accord, Burnett v. New York Central R. Co., 380 U. S. 424 (1965), and in this instance, the answer is apparent from the plain language of § 1635(f). See Good Samaritan Hospital v. Shalala, 508 U. S. 402, 409 (1993).

The terms of a typical statute of limitation provide that a cause of action may or must be brought within a certain period of time. So, in Reiter v. Cooper, supra, at 263-264, we concluded that 49 U. S. C. § 11706(c)(2), providing that a shipper “‘must begin a civil action to recover damages under [§ 11705(b)(3)] within two years after the claim accrues,’” was a statute of limitation raising no bar to a claim made in recoupment. See Note, Developments in the Law: Statutes of Limitations, 63 Harv. L. Rev, 1177, 1179 (1950) (most statutes of limitation provide either that “all actions . . . shall be brought within” or “no action ... shall be brought more than” so many years after “the cause thereof accrued” (internal quotation marks omitted)); H. Wood, 1 Limitation of Actions § 1, pp. 2-3 (4th ed. 1916) (“[Statutes which provide that no action shall be brought, or right enforced, unless brought or enforced within a certain time, are . . . statutes of limitation”).

To be sure, a limitation provision may be held to be nothing more than a bar to bringing suit, even though its terms are ostensibly more ambitious than the language of the classic formulations cited above. Thus, for example, in Distribution Servs., Ltd. v. Eddie Parker Interests, Inc., 897 F. 2d 811 (1990), the Fifth Circuit concluded that §3(6) of the Carriage of Goods by Sea Act is a statute of limitation permitting counterclaim brought by way of recoupment, despite its fierce-sounding provision that “the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods,” 46 U. S. C. App. § 1303(6).

Section 1635(f), however, takes us beyond any question whether it limits more than the time for bringing a suit, by governing the life of the underlying right as well. The subsection says nothing in terms of bringing an action but instead provides that the “right of rescission [under the Act] shall expire” at the end of the time period. It talks not of a suit’s commencement but of a right’s duration, which it addresses in terms so straightforward as to render any limitation on the time for seeking a remedy superfluous. There is no reason, then, even to resort to the canons of construction that we use to resolve doubtful cases, such as the rule that the creation of a right in the same statute that provides a limitation is some evidence that the right was meant to be limited, not just the remedy. See Midstate Horticultural Co., supra, at 360; Burnett, supra, at 427, n. 2; Davis v. Mills, 194 U. S. 451, 454 (1904).

The Act, however, has left even less to chance (if that is possible) than its “expire” provision would allow, standing alone. It is useful to look ahead to § 1640 with its provisions for recovery of damages. Subsection (e) reads that the 1-year limit on actions for damages “does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law.” 15 U. S. C. § 1640(e). Thus the effect of the 1-year limitation provision on damages actions is expressly deflected from recoupment claims. The quite different treatment of rescission stands in stark contrast to this, however, there being no provision for rescission as a defense that would mitigate the uncompromising provision of § 1635(f) that the borrower’s right “shall expire” with the running of the time. Indeed, when Congress amended the Act in 1995 to soften certain restrictions on rescission as a defense in §8, 109 Stat. 275-276, 15 U. S. C. §§1635(i)(1) and (2) (1994 ed., Supp. I), it took care to provide that any such liberality was “subject to the [three year] time period provided in subsection (f),” ibid., and it left a borrower’s only hope for further recoupment in the slim promise of § 1635(i)(3), that “[n]othing in this subsection affects a consumer’s right of rescission in recoupment under State law.” § 8,109 Stat. 276. Thus, recoupment of damages and rescission-in the nature of recoupment receive unmistakably different treatments, which under the normal rule of construction are understood to reflect a deliberate intent on the part of Congress. See Bates v. United States, 522 U. S. 23, 29-30 (1997) (““‘[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion” ’ ”) (quoting Russello v. United States, 464 U. S. 16, 23 (1983), in turn quoting United States v. Wong Kim Bo, 472 F. 2d 720, 722 (CA5 1972)). And the distinction thus indicated makes -perfectly good sense. Since a statutory right of rescission could cloud a bank’s title on foreclosure, Congress may well have chosen to circumscribe that risk, while permitting recoupment damages regardless of the date a collection action may be brought. See Board of Governors of Federal Reserve System, Annual Report to Congress on Truth in Lending for the Year 1971, p. 19 (Jan. 3, 1972); National Commission on Consumer Finance, Consumer Credit in the United States 189-190 (Dee. 1972).

We respect Congress’s manifest intent by concluding that the Act permits no federal right to rescind, defensively or otherwise, after the 3-year period of § 1635(f) has run. Accordingly, we affirm the judgment of the Supreme Court of Florida.

It is so ordered.

       The Act provides a limited extension of this 3-year time period when "(1) any agency empowered to enforce the provisions of this subchapter institutes a proceeding to enforce the provisions of this section within three years after the date of consummation of the transaction, (2) such agency finds a violation of this section, and (3) the obligor’s right to rescind is based in whole or in part on any matter involved in such proceeding.” 15 U. S. C. § 1635(f). Under such circumstances, “the obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding, or any judicial review or period for judicial review thereof, whichever is later.” Ibid.

       Ocwen Federal Bank was substituted as the plaintiff while this case was pending in the trial court.

       Specifically, the Beaches claimed that the bank had failed to disclose properly and accurately (1) the amount financed, in violation of § 1638(a)(3); (2) the finance charge, in violation of § 1638(a)(3); (3) the annual percentage rate, in violation of § 1638(a)(4); (4) the number, amounts, and timing of payments scheduled to repay the obligation, in violation of § 1638(a)(6); and (5) the total of payments, in violation of § 1638(a)(5).

       Although the per curiam opinion posed the question as one “[u]nder Florida law," 692 So. 2d, at 147, it distinguished cases based on state law as inapposite and held that a defense of rescission was unavailable under the Act after three years.

       See, e. g., In re Barsky, 210 B. R. 683 (Bkrtcy. Ct. ED Pa. 1997); In re Botelho, 195 B. R. 558 (Bkrtcy. Ct. Mass. 1996); In re Shaw, 178 B. R. 380 (Bkrtcy. Ct. NJ 1994); Federal Deposit Ins. Corp. v. Ablin, 177 Ill. App. 3d 390, 532 N. E. 2d 379 (1988); Community Nat. Bank & Trust Co. of N. Y. v. McClammy, 525 N. Y. S. 2d 629, 138 App. Div. 2d 339 (1988); Dawe v. Merchants Mortgage and Trust Corp., 683 P. 2d 796 (Colo. 1984) (en bane).

       Since there is no claim before us that Florida law purports to provide any right to rescind defensively on the grounds relevant under the Act, we have no occasion to explore how state recoupment law might work when raised in a foreclosure proceeding outside the 8-year period.