February 25, 2026 — SCOTUS Morning Report

The National Endowment for Democracy is a congressionally funded independent body that grants money to international democracy-support projects. The Trump administration cut off its funding, the Endowment sued, and the court issued a preliminary injunction after months of the administration promising to pay — then not paying. The administration filed an appeal, then paid the 2025 funds and asked the court of appeals to dismiss. But it's now the end of February 2026, and Congress has appropriated a new NED budget that hasn't been paid. The administration's court filings in the appellate case say everything is resolved; the Endowment's filings say the 2026 money is still missing. The judge ordered both parties to appear in court this afternoon to explain themselves. Bryan's framing: "The administration is acting like that cousin who keeps making up excuses at Christmas for the money he borrowed at Thanksgiving, but you have to be kind of nice to him because his mom brings the deviled eggs."

The Federal Tort Claims Act (FTCA) allows you to sue the federal government for most torts, but contains a postal exception: the USPS handles too many packages daily for every damage claim to be litigable, and requiring value confirmation for every package would make the post office non-functional. In Konan, the facts were extreme: postal employees appeared to have intentionally damaged a package, possibly motivated by racism. If any case would support an exception to postal immunity, this was it. SCOTUS held that postal immunity is categorical — courts should not be in the business of distinguishing accidental damage from intentional damage on a spectrum, or parsing motive. The immunity exists for a systemic reason and provides a clean, certain rule. Bryan's framing: "Sometimes the court looks for an extreme fact pattern so they can give us a nice clean rule. That's what they gave us yesterday."

The Palmquists sued both Whole Foods (Texas company) and Hain Celestial (Delaware/New York) in Texas state court for selling allegedly contaminated baby food. Hain removed to federal court based on diversity jurisdiction (requires parties from different states, more than $75K at stake). But Whole Foods and the Palmquists were both from Texas — no diversity. Hain got Whole Foods dismissed, argued its dismissal was justified (no one contests this dismissal argument), and then claimed the remaining parties (Hain + Palmquists) were now diverse. District court agreed; Palmquists lost. SCOTUS reversed: Whole Foods should never have been dismissed — everyone concedes that argument was garbage. Courts can allow judgments to stand when diversity jurisdiction got fuzzy at the start but was properly resolved by the end. Here it was never properly resolved: Hain created diversity by making a bad argument that worked. You don't get to keep your federal forum built on a dismissed party that should never have been dismissed.

The Pung family had a small outstanding property tax bill — roughly $2,200 — that fell through the cracks after a family member died. The county eventually seized and sold the property. It sold at auction for $76,000. The county kept the full $76,000, even though only $2,200 was owed. Through prior litigation, the family recovered the surplus over their tax debt. But the house was valued at roughly $200,000, so the auction price was $76,000 against a $200,000 market value — and the county made no effort to get closer to fair market value. Today's SCOTUS questions: (1) Does the Just Compensation Clause of the Fifth Amendment require the government to maximize value when selling seized property to settle a debt — or is "whatever it happened to sell for" constitutionally sufficient? (2) Was the original seizure-and-sale an excessive fine under the Eighth Amendment, even though fines are usually considered punitive and this is remedial (collecting a tax debt)? Bryan drew on his bankruptcy trustee experience: there's a real practical difference between a liquidation-speed sale and a market-value sale, and forcing government entities to maximize value in every tax-seizure sale would be genuinely disruptive. But selling a $200K house for $76K to collect $2,200 is hard to defend as "just."