Supreme Court Observations: Michigan v. EPA

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Ben Tannen, Sidley Austin LLP

On June 29, in Michigan v. EPA, the U.S. Supreme Court reversed and remanded EPA’s Mercury and Air Toxics Standards (“MATS”) rule to the D.C. Circuit, holding the agency should have considered costs when determining whether or not to regulate emissions of hazardous air pollutants from power plants.  The MATS rule, promulgated in 2012, had set standards for emissions of toxic air pollutants such as mercury from new and existing coal and oil-fired power plants.

This decision is a significant victory for industry on the legal interpretation of Section 112 of the Clean Air Act (“CAA”).  However, it raises major uncertainties with regard to the steps the D.C. Circuit and EPA will take towards emissions of mercury and other air toxics from power plants going forward, as well as with regard to anticipated litigation surrounding EPA’s soon to be promulgated “Clean Power Plan” regulations. Continue reading

King v. Burwell’s Implications for Employer-Sponsored Health Plans

Guest Commentary

Kim Wilcoxon, Thompson Hine LLP

Three years ago, the Supreme Court of the United States announced its decision in NFIB v. Sebelius and upheld the individual mandate under the Patient Protection and Affordable Care Act (ACA). Last week, the Supreme Court announced its decision in King v. Burwell and upheld the Internal Revenue Service’s (IRS) interpretation that tax credits were available under the ACA for taxpayers in all states, whether or not a state’s exchange was established by the state government or the federal.

There are many similarities in how these decisions affect employer-sponsored health plans. It’s déjà vu all over again, so this post revisits questions addressed in this blog three years ago in light of King v. Burwell. Continue reading

Supreme Court Observations: Kimble v. Marvel Entertainment, LLC

Kaminski_Jeffri_LRFeatured Expert Contributor – Intellectual Property (Patents)

Jeffri A. Kaminski, Venable LLP

The U.S. Supreme Court recently decided a closely watched case concerning contract rights and patent royalties. In Kimble v. Marvel Entertainment, LLC the Court upheld its long standing precedent and determined that parties cannot agree to patent royalty payments that extend beyond the expiration of the patent.

The case originated when Kimble and Marvel agreed to a patent license for a toy glove that Kimble had patented. The licensing agreement called for a lump sum payment and running royalties for a license to the patent as part of a settlement of ongoing litigation. The agreement did not set an end date for the royalty payments. In making its decision the Court upheld its ruling in Brulotte v. Thys Co., 379 U.S. 29 (1964), holding that licenses requiring payment of patent royalties after patent expiration are “unlawful per se.” Brulotte has been the subject of criticism in the 50 years since it was decided, but the Court determined that was not enough of a reason to overturn its longstanding precedent. Continue reading

Appeals Court Confounds Military Justice by Importing Foreign Law into the U.S. Constitution

DC CircuitSince the war against militant Islamists began in earnest in 2001, a cornerstone of U.S. national security policy has been to employ military commissions to hear criminal charges filed against al Qaeda leaders responsible for the September 11 (and subsequent) attacks. A decision last week by the U.S. Court of Appeals for the D.C. Circuit, al Bahlul v. U.S., throws that policy into disarray. It struck down a 2006 congressional statute permitting a wide variety of criminal charges to be brought before military commissions. Incredibly, the court invoked international law to do so, ruling that the U.S. Constitution only permits military commissions to consider those criminal charges that are accepted throughout the world as constituting violations of the international law of war.

It is questionable whether U.S. courts should ever look to international law for guidance when interpreting the U.S. Constitution. It is unfathomable for a court to hold (as did the D.C. Circuit) that the U.S. Constitution is controlled by international law, and to do so in a manner that significantly impedes the government’s ability to conduct trials before military commissions. The Obama Administration should ask the Supreme Court to overturn this ill-conceived decision. Continue reading

Law Professor’s Attack on WLF’s “Legislative Grace Canon” Argument in “King v. Burwell” Brief Sails Wide of the Mark

Not a "canon"

Not a “canon”

University of Iowa College of Law Professor Andy Grewal blogged earlier this year about WLF’s amicus curiae brief in King v. Burwell at the Yale Journal on Regulation’s Notice & Comment Blog. While we’ll refrain from comment on his rather pedantic advice as to what material is best included in a brief, we did want to set the record straight about the crux of WLF’s argument, especially given the decision’s imminent release before the Supreme Court term ends later this month.

In a nutshell, WLF’s brief asks the U.S. Supreme Court to reverse an appeals court ruling that, if upheld, would allow IRS to appropriate billions of dollars a year in tax credits without authorization from Congress. IRS argued that it was entitled to Chevron deference for the agency’s interpretation of § 1321 of the Affordable Care Act (ACA), which authorizes subsidies for an exchange “established by the State.” Continue reading

Supreme Court Holds that Belief Patent Is Invalid Is No Defense to Induced Infringement

Kaminski_Jeffri_LRFeatured Expert Contributor – Intellectual Property (Patents)

Jeffri A. Kaminski, Venable LLP

The Supreme Court declined to create a new defense this week for defendants in patent infringement cases, holding that a defendant’s belief regarding patent validity is not a defense to a claim of induced infringement under 35 U.S.C. § 271(b), as a matter of first impression in Commil USA, LLC v. Cisco Systems, Inc. This is welcome news to some patent owners who have felt the legal tide has been turning against them. However, the Court also recognized that so-called “patent trolls” exist and that frivolous patent infringement lawsuits are being brought in federal courts. The Court stressed that district courts have authority under Rule 11 and 35 U.S.C § 285 to levy sanctions and award fees to dissuade frivolous cases from being filed. With its ruling, the Court continued its trend of trying to maintain a balance between patent owners and accused infringers.

The Court began its analysis by clarifying the current state of the law. Direct infringement is a strict liability offense. The state of mind of the infringer is not relevant in determining liability for direct infringement. In contrast to direct infringement, liability for inducing infringement attaches only if the defendant knew of the patent and that “the induced acts constitute patent in­fringement.” Global-Tech Appliances, Inc. v. SEB S.A. It is not enough if the party charged with induced infringement did not know that the acts it induced would infringe. Continue reading

California’s New Scrutiny of Patent Litigation Settlements Will Not Stand Under Federal Law

cali sealThe California Supreme Court earlier this month issued an opinion that subjects litigants who settle their patent disputes to scrutiny under state antitrust law. The court reasoned that such settlements may create unreasonable restraints on trade. While the decision in In re Cipro Cases I & II to reinstate antitrust claims was not overly surprising—after all, the U.S. Supreme Court had previously held in FTC v. Actavis, Inc. that some patent litigation settlements might violate federal antitrust law—the breadth of the California Supreme Court’s decision could have a particularly negative impact on the free-enterprise system. Indeed, the decision suggests that parties to a patent litigation settlement will have great difficulty ever avoiding California antitrust liability if the settlement entails transferring anything of value from the patent holder to the alleged infringer. Because Cipro’s new state-law antitrust standard is so much more exacting than the standard announced by the U.S. Supreme Court in Actavis, federal antitrust law may well trump California’s standard. Indeed, were Cipro to reach the U.S. Supreme Court, the Court likely would reverse on federal preemption grounds.

“Reverse-Payment” Patent Settlements

When parties to litigation enter into a settlement, one would normally expect that any cash payments would flow from the defendant to the plaintiff. The normal expectations have been reversed in the context of litigation involving prescription-drug patents, however, as a result of financial incentives created by the Hatch-Waxman Act, a federal statute designed to ensure that generic versions of prescription drugs enter the market more quickly. The Act includes a provision that permits generic companies, by declaring to the Food and Drug Administration a belief that the patent held by a brand-name drug company is invalid, to essentially force the patentee to immediately file a patent infringement suit. It also grants huge financial awards to generic companies that successfully challenge drug patents. Continue reading