The U.S. Supreme Court held its first Conference of 2016 on Friday, January 8, where it considered cert petitions in several high-profile cases impacting free enterprise. The Court issued an orders list on January 11 from that Conference, which, while it did not include any cert grants in these cases, potentially offers positive results for free-market enthusiasts.
First, the Court issued a CVSG in State Farm v. U.S. ex. rel. Rigsby. For those not versed in Supreme Court-speak, CVSG=Calling for the Views of the Solicitor General. The U.S. government is not a party in Rigsby, but because the case involves a key federal law, the False Claims Act (FCA), the justices want to give the government a chance to weigh in with a yay or nay on cert before deciding. It takes the vote of four justices—the same number it takes to grant cert—for the Court to seek the Solicitor General’s views. A CVSG is thus a very good sign that the Court has an elevated interest in a case. Continue reading
The battle over general jurisdiction in a post-Daimler AG v. Bauman world continued as 2015 drew to a close, with lingering inconsistency. Two recent trial court decisions, Cahen v. Toyota Motor Corp. and Jeffs v. Anco Insulations, demonstrate how judges in different jurisdictions with different interests apply general jurisdiction differently, and in these cases, to the very same defendant. While a federal district court judge held that California could not exercise general jurisdiction over Ford Motor Co.—a company incorporated in Delaware and headquartered in Michigan—Circuit Judge Stephen Stobbs of Madison County, a perennial magnet jurisdiction for plaintiffs, found that his Illinois court could. Continue reading
In 2015, the Federal Communications Commission (FCC) penalized numerous private companies that have allegedly blocked Wi-Fi hotspots. The problem is, FCC hasn’t bothered to promulgate any regulations that detail when such blocking is unlawful. Instead, the Commission bases its claim of authority on a 1990 statute meant to protect radio stations from malicious interference. FCC’s wielding the heavy hand of enforcement actions for Wi-Fi blocking is troubling in principle and unlawful in practice.
With no rule on point, the Commission has failed to provide businesses with fair notice. Further, FCC’s attempt to stretch the applicability of an off-point regulation could have widespread consequences if followed to its logical conclusion. As a result, the time for FCC to issue rules on Wi-Fi blocking through notice-and-comment rulemaking is now well overdue. Continue reading
Most product-liability claims against drug manufacturers fall into one of two categories—the plaintiff alleges that his/her injury was caused by: (1) the manufacturer’s failure to include adequate safety warnings on its label; or (2) a defect in the drug’s design. In a major defeat for drug-company defendants, the U.S. Supreme Court ruled in 2009’s Wyeth v. Levine that state-law failure-to-warn claims against brand-name drug companies are not preempted by federal law in most instances, even though (as is virtually always the case) the product bears labels approved and mandated by the federal Food and Drug Administration (FDA). Some commentators concluded that Wyeth foreshadowed a similar rejection of preemption defenses in design-defect cases. However, a December 11, 2015 decision from the U.S. Court of Appeals for the Sixth Circuit suggests that those commentators likely erred; the appeals court concluded in Yates v. Ortho-McNeil-Janssen Pharmaceuticals, Inc. that design-defect claims are preempted in most instances. Continue reading
Featured Expert Contributor – Civil Justice/Class Actions
By Frank Cruz-Alvarez, Shook, Hardy & Bacon L.L.P. (co-authored with Rachel A. Canfield, an associate with the firm)
Last week, in a 6-3 decision, the U.S. Supreme Court reversed and remanded a California Court of Appeal’s interpretation of and refusal to enforce an arbitration agreement. Justice Breyer delivered the Court’s well-reasoned opinion, which concluded that the California court’s arbitration-specific interpretation of contractual language was preempted by the Federal Arbitration Act (“FAA”). DirecTV Inc. v. Imburgia, et al.
Petitioner DirecTV entered into service agreements with certain customers. Although governed by the FAA, the agreement’s arbitration provision contained a class-action waiver which rendered the entire provision unenforceable if the waiver clause was deemed unenforceable under the law of the customer’s state. Seeking damages for early termination fees that allegedly violated California law, respondents Amy Imburgia and Kathy Greiner filed suit against DirecTV in California state court. Continue reading
The U.S. Supreme Court’s 2009 decision in Wyeth v. Levine placed significant limits on the ability of brand-name drug manufacturers to defend against failure-to-warn state tort-law claims. Even though manufacturers invariably label their products precisely as the Food and Drug Administration (FDA) has mandated, Wyeth held that state courts could penalize manufacturers for failing to include additional health warnings on their labels. The Court explained that it was possible for manufacturers to simultaneously comply with both FDA and state-court-determined labeling requirements because FDA’s “Changes Being Effected” (CBE) regulation permits brand-name companies to unilaterally change the FDA-mandated label and then seek FDA’s after-the-fact approval of the changes. But as the Court recognized, the CBE regulation limits the circumstances under which unilateral label changes are permissible—and when a unilateral change is not permitted, any tort claim premised on a state-law duty to make such a change is still preempted.
Unfortunately, many lower courts have failed to recognize this important limitation imposed by Wyeth on tort liability. At its January 8, 2016 conference, the U.S. Supreme Court will consider a certiorari petition that provides it with an opportunity to clear up the confusion among the lower courts regarding when federal law preempts failure-to-warn claims against the manufacturers of drugs bearing FDA-mandated labels. The Court should seize that opportunity by granting review in Johnson & Johnson v. Reckis, a case in which the Massachusetts Supreme Judicial Court upheld a $140 million judgment against a manufacturer of ibuprofen—a generic over-the-counter pain-relief medication sold under such brand names as Advil and Motrin. Continue reading
Matthew G. Kaiser, Partner, Kaiser, LeGrand & Dillon PLLC
A court case that should be on the radar screen of all business executives and white-collar criminal-defense attorneys in 2016 is United States v. Clay, in which the U.S. Court of Appeals for the Eleventh Circuit heard oral argument on October 2.
The case, about which I authored a Washington Legal Foundation Legal Backgrounder last March, implicates the fundamental question of who decides the meaning of a law—a judge or a jury? The Eleventh Circuit will also implicitly decide whether the government can cast aside more appropriate civil or administrative remedies and prosecute corporate officers operating a business in a complex regulatory environment when their interpretation of a law is objectively reasonable. Continue reading