Category Archives: U.S. Supreme Court

by

Supreme Court Observations: “Blame-the-Bean” Defense Fails in Bowman v. Monsanto

Haas_ThomasGuest Commentary

by Thomas M. Haas, Thompson Hine LLP

In a short, unanimous decision, the U.S. Supreme Court held Monday that the doctrine of patent exhaustion “does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder’s permission.” (Bowman v. Monsanto) Thus, for the time being, the Supreme Court has maintained the status quo for patent exhaustion.

Farmer Vernon Hugh Bowman purchased patented “Roundup Ready” seeds for his initial crop of soybeans. He subsequently chose to plant cheaper seed for late-season soybean planting. He went to a grain elevator that held soybeans typically sold for feed, milling and other uses to purchase new seed, reasoning that most of those soybeans would be resistant to Roundup, as they initially came from patented Roundup Ready seeds. Bowman was correct; the seeds did in fact contain the genetic material conferring resistance to Roundup.

Bowman argued that Monsanto’s patent rights were exhausted with the sale of the first crop of beans. Bowman also said he should not be liable, in part, because soybeans naturally sprout when planted.

His request found no sympathy. The Court considered Bowman’s argument essentially an argument for an exception to the patent exhaustion doctrine. “Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article,” Justice Kagan wrote for the Court. “Patent exhaustion provides no haven for such conduct.” The Court also failed to accept Bowman’s argument regarding the nature of seeds. “We think the blame-the-bean defense tough to credit,” the Court said.

This ruling is no surprise to those who follow the Supreme Court. In fact, this decision was foreshadowed in the opinion the Court set out in J.E.M. Ag Supply v. Pioneer Hi-Bred Int’l  (2001), in which the Court clearly explained that a patent holder could prohibit a farmer who legally purchases and plants a protected seed from saving harvested seed for replanting. For those in the biotech industry, Monday’s decision merely reaffirmed the law as it has been understood for years – the purchase of a patented product does not confer the right to make copies of the patented product. Mitchell v. Hawley, 16 Wall. 544 (1873).

For other industries, some mystery remains. Though the Court has maintained the status quo for certain types of patented products, it has left the door open for revisiting patent exhaustion in the future. “Our holding today is limited – addressing the situation before us, rather than every one involving a self-replicating product,” the Court said. “We recognize that such inventions are becoming ever more prevalent, complex, and diverse.”

by

Supreme Court Observations: Kiobel v. Royal Dutch Petroleum & the Future of Alien Tort Litigation

Barbary pirates

Barbary pirates

Cross-posted at WLF’s Forbes.com contributor site

The wave of tort suits under the Alien Tort Statute (ATS) may not be brought to an end as a result of a decision issued yesterday by the U.S. Supreme Court, Kiobel v. Royal Dutch Petroleum, but it is likely to subside considerably.  For the past several decades, the ATS has served as the favorite vehicle of human rights activists seeking to challenge the overseas business practices of U.S. corporations, but the Supreme Court has now ruled that the ATS applies only to conduct within the United States or on the high seas.

The ATS is a 1789 law that grants jurisdiction to federal courts to hear tort claims by aliens alleging violations of “the law of nations.”  The law lay dormant for two centuries, primarily because litigants assumed that the number of torts to which the law applied was extremely narrow – perhaps limited only to claims by foreign ambassadors that they had been assaulted in this country.  But in 1980, the U.S. Court of Appeals for the Second Circuit held in Filartiga v. Pena-Irala that the ATS applied to a wide array of alleged human rights violations.  In the decades that followed, activists sued U.S. corporations under the ATS for an increasing variety of overseas activities, from operating facilities that allegedly polluted the environment to administering medications without allegedly first providing informed consent to giving financial support to oppressive foreign governments.  WLF has been actively involved in many of those suits, opposing expansive interpretations of the ATS, including through an amicus brief in Kiobel. Continue reading →

by

Supreme Court Observations: Standard Fire Ins. Co. v. Knowles

Cruz-Alvarez_FFeatured Expert Column

Frank Cruz-Alvarez, Shook, Hardy & Bacon, L.L.P. (co-authored with Talia Zucker, Shook, Hardy & Bacon, L.L.P.)

On March 19, 2013, the Supreme Court of the United States issued a unanimous opinion in Standard Fire Insurance Company v. Knowles, No. 11-1450, 2013 WL 1104735 (2013), derailing a plaintiff’s efforts to sidestep the provisions of the Class Action Fairness Act (“CAFA”) by way of a precertification stipulation for damages of less than $5 million.  With clever plaintiffs’ lawyers constantly dreaming up ways to prevent removal and avoid the rigorous proceedings in federal court, this opinion will assist defendants in future jurisdictional battles by eliminating this particular avenue for defeating jurisdiction.

Knowles had filed a putative class action lawsuit in Arkansas state court against Standard Fire Insurance Company.  Knowles, 2013 WL 1104735, at *2.  In describing the relief sought, the complaint provided that plaintiff and the class (which had yet to be certified) would seek to recover total aggregate damages of less than $5 million.  Id.  The insurance company removed the case to federal court pursuant to CAFA.  Id.  Although the district court found that in the absence of the stipulation the amount in controversy would have fallen just above the $5 million threshold, it remanded the case to state court in light of the stipulation.  Id.  The insurance company appealed the remand order, but the Eighth Circuit declined to hear the appeal.  Id.  The Supreme Court, however, granted the insurance company’s writ of certiorari in light of conflicting lower court viewpoints.  Id.

CAFA provides federal courts with original jurisdiction over class actions in which, among other things, the matter in controversy exceeds $5 million.  28 U.S.C. § 1332(d)(2).  To determine whether that sum is exceeded, the claims of the individual class members are aggregated. § 1332(d)(6).  The issue presented to the Supreme Court – whether a precertification stipulation can defeat federal jurisdiction under CAFA – was answered in the negative.  Knowles, 2013 WL 1104735, at *3.   Continue reading →

by

Supreme Court Observations: Clapper v. Amnesty International

supreme court

Cross-posted at Forbes.com’s WLF contributor page

The Supreme Court this week ruled that a group of American lawyers lack standing to challenge the 2008 law that expanded the U.S. government’s authority to engage in electronic surveillance of overseas aliens suspected of terrorism.  To hear the reaction of the ACLU and other civil liberties groups to the decision in Clapper v. Amesty International, one would think that the Supreme Court is abandoning the rule of law and abdicating its responsibility to oversee the activities of the Executive Branch.  Nonsense.  The Court simply denied a right to sue by individuals who concede that they have no evidence that they have been subjected to surveillance.  The decision is consistent with a long line of cases that have insisted on evidence of injury before a suit can go forward, particularly when the suit implicates national security concerns.

At issue are the 2008 amendments to the Foreign Sovereign Immunities Act (FISA).  The amendments permit the federal government to engage in overseas surveillance of suspected terrorists under limited circumstances.  But such surveillance is permitted under the FISA Amendments (FAA) only after the government has sought and obtained the consent of the FISA Court, a special court established to address national security issues.

On the day that the FAA was enacted, several lawyers and organizations (represented by the ACLU) filed a lawsuit seeking an injunction against surveillance conducted pursuant to the FAA.  They alleged that the FAA violated their First and Fourth Amendments rights as well as separation-of-powers principles.  Named as defendants were several senior Obama Administration officials, including Attorney General Eric Holder (whose authorization is required before any surveillance may be undertaken under the FAA).  Although the law does not permit American citizens to be targeted for surveillance, the plaintiffs expressed a fear that the government would end up overhearing some of their conversations with those foreigners who are being targeted. Continue reading →

by

WLF Program Panelists Discuss Supreme Court’s “Deja Vu Docket”

PodiumPic1On Tuesday, February 12, WLF held its annual media briefing on the U.S. Supreme Court at its mid-term/winter break point.  As we’ve traditionally done, the program focused largely on cases to which the Court has granted cert since the term commenced back on the First Monday of October. The program, which was moderated by former Attorney General Dick Thornburgh, can be viewed in its entirety, at readers’ leisure, by clicking here (if you don’t have Microsoft Silverlight installed on your computer, you will be prompted to do so before you can view).

Our speakers, Patricia Millett, Roy T. Englert, Jr., and Catherine E. Stetson, focused on cases arising in the areas of intellectual property, arbitration, antitrust, class actions, and federal preemption.

One theme that emerged from the discussion was how many of the cases the Court will address in the coming months are “follow-on” cases from recent past Supreme Court decisions. Ms. Stetson termed this phenomenon the “deja vu docket.” She and the other panelists drew the following lines between past and current cases:

We would humbly add two cases that the speakers did not directly address from the “first half” of the October 2012 term:

by

Update: Published Dissent, New WLF Paper Criticize Alabama Supreme Court’s Weeks v. Wyeth Ruling

Alabama Supreme Court

Alabama Supreme Court

In mid-January, we discussed a troubling decision from the Alabama Supreme Court, Weeks v. Wyeth.  In Weeks, 8 of the Court’s 9 justices agreed that a plaintiff allegedly harmed by a generic drug can sue the manufacturer of the branded drug on which the generic is based. The opinion noted a dissent by Justice Murdock would be forthcoming.

That dissent came out on February 4. In 45 well-reasoned pages, Justice Murdock illuminates how far the Weeks majority strayed from, as he put it, “bedrock principles of tort law,” and how dramatically out of line the decision is with an overwhelming majority of analogous state and federal court decisions.

The opinion begins by expressing an overarching principle that courts must consider when assessing legal controversies that affect commerce and industry. It’s a statement that WLF should etch into the front of our headquarters:

The law must protect the fruits of enterprise and create a climate in which trade and business innovation can flourish. Concomitantly, the law must justly allocate risks that are a function of that free trade and innovation.”

One fundamental principle of tort law which advances this allocation of risks is that businesses should only be responsible for injuries caused by their own products. There must be some relationship between plaintiff and defendant which gives rise to a duty of care to which businesses must conform. Continue reading →

by

DOJ’s Advantage-Seeking Delay Maneuvers at Supreme Court: Time for Transparency

delay of game

Cross-posted at WLF’s Forbes.com contributor page

When a litigant files a certiorari petition in the U.S. Supreme Court, seeking review of a lower court decision, the opposing party has 30 days to file a response.  The Supreme Court Clerk’s office can and does grant extensions of time to file a response when counsel for the opposing party sets out “specific reasons why an extension of time is justified.”  But one should reasonably expect complete candor from attorneys, particularly federal government attorneys, when requesting such extensions.  Events this week call into question whether the United States is being completely candid in explaining its extension requests.

The U.S. Court of Appeals for the Sixth Circuit last May handed the federal government a major victory when it largely rejected First Amendment challenges to the new federal law that strictly regulates the labeling of tobacco products.  The tobacco industry filed a Supreme Court certiorari petition in October, and the federal government’s brief in response to the petition was initially due on November 26, 2012.  Since then, the Solicitor General’s Office has sought and received three successive extensions of time to respond, first to December 26, then to February 1, and then (in response to a request submitted just this week) to March 8.  On all three occasions, the “specific reason” proffered for seeking an extension was that the government attorney assigned to the case was busy attending to other legal matters.

I have no inside knowledge regarding the workloads of government attorneys, but the too-busy-on-other-matters explanation is highly suspect in this instance.  While the federal government routinely obtains one 30-day extension of filing deadlines in its Supreme Court cases and not infrequently obtains a second, the 98-day extension in this case is very unusual, even by federal government standards.  Given the importance of the issues raised by the Sixth Circuit petition, entitled American Snuff Co. v. United States, and the Solicitor General’s ability to handle briefing in other cases, it does not seem plausible that his office could not have met the February 1 filing deadline. Continue reading →

by

And After All That Work!: The Dreaded U.S. Supreme Court “DIG”

mc sungailaGuest Commentary

by Mary-Christine Sungaila, Snell & Wilmer*

In the last days of the 2011 Term, fresh off its decisions in the Patient Protection and Affordable Care Act cases, the Supreme Court dismissed a case many observers believed to be one of the most important “sleeper” cases of the Term. Indeed, according to SCOTUSblog, “[t]he case was regarded as quite a big deal when it was argued, with massive potential implications for Congress’s power to define injury.” Twenty-six amicus briefs in total were filed, including one by the Solicitor General of the U.S. The case, First American Financial Corp. v. Edwards, No. 10-708, raised the question of what limits Article III of the Constitution places on Congress’s power to create private rights of action.

Cleveland home buyer Denise Edwards sued First American Title Insurance for paying an allegedly improper fee to a title agency that agreed to sell First American policies exclusively. Her claim was founded on the Real Estate Settlement Procedures Act (RESPA), which prohibits title insurers and other real-estate-related companies from participating in such payment or “kickback” schemes related to real estate closings. Under RESPA, a consumer who discovers an improper payment related to her closing can sue to recover statutory damages without having to prove that the violation caused her any financial injury or any diminution in the quality of services. First American argued that the plaintiff had suffered no discernible injury from the alleged illegal fee because the rates charged the plaintiff were set by state law and did not change as a result of the title agency’s relationship with First American. Accordingly, First American asserted, Congress was prohibited from authorizing suit against it. The Court granted certiorari, after the lower courts rejected First American’s argument. Oral argument took place and, from the comments made by the Justices, the Court appeared poised to establish new Article III limitations on Congress’s power to create private statutory rights of action. Continue reading →

by

DOJ/FDA Brief in SCOTUS Generic Drug Preemption Case Hands Plaintiffs New Liability Theories

DOJ

Cross-posted at WLF’s Forbes.com contributor page

During the last four years, the Food and Drug Administration has been a faithful ally of the plaintiffs’ bar, routinely opposing any suggestion that federal approval of a prescription drug preempts a state-law tort claim against the drug’s manufacturer.  That’s why it came as surprise to some when last week the United States filed an amicus curiae brief urging the Supreme Court to rule in Mutual Pharmaceutical Co. v. Bartlett that federal law preempts design-defect claims against the manufacturer of a generic drug.  The plaintiffs’ bar need not worry, however; the amicus brief set out a detailed roadmap that explained to plaintiffs how they can avoid preemption findings in all future cases.  The roadmap was wholly gratuitous; it raised issues not presented by Bartlett, and its only apparent purpose was to help lawyers filing tort suits to draft complaints that could withstand preemption claims.

Plaintiffs already have a clear path for suing brand-name drug companies; the Supreme Court held in 2009’s Wyeth v. Levine that failure-to-warn claims against brand-name companies were not preempted, even though the warning language on product labeling has in all cases been explicitly approved by FDA.  But tort suits against generic drug companies have been more difficult to maintain.  Over the objections of FDA and the Solicitor General, the Supreme Court held in 2011’s PLIVA, Inc. v. Mensing that failure-to-warn claims against generic drug companies are preempted by federal law, primarily because generic companies have no authority to make unilateral changes to their product labels even if they come to believe that stronger safety warnings are warranted. Continue reading →

by

Finger on the Pulse: From Our Blogroll and Beyond

  • A breath of fresh air from California: A class of a substantial number of uninjured plaintiffs cannot be certified, says federal judge (Class Defense)
  • In advance of argument in FTC v. Watson, FTC spins its data to show “increase” in “pay for delay” drug patent litigation settlements (FDA Law Blog)
  • In advance of argument in Bowman v. Monstanto, U.S. House member seeks to impose compulsory license on genetically engineered seed patents (Patent Docs)
  • Class action alleging misleading “natural” labeling on orange juice dismissed for lack of standing (Mass Tort Defense)
  • EPA drops “chicken droppings are pollution” suit against West Virginia farmer (Daily Caller via Overlawyered)
  • From the “here we go again” department: New Mexico and Washington pursue mandatory “GM food” labeling (Private Surgeon General Class Action Defender)
  • What to expect from OSHA in 2013 (OSHA Law Update)