This Monday the U.S. Supreme Court will conduct its Long Conference, so named for the larger than usual number of certiorari petitions it considers there. With the fate of so many cert petitions hanging in the balance—and the overwhelming majority of them about to be denied—now is an opportune time to look back at the top 10 cases that were wrongly denied cert in the Court’s last term.
As with the previous installments of my “Not Top 10” list (see here and here), no more than half the cases discussed below will be ones in which Washington Legal Foundation filed a brief in support of certiorari. Also, the cases will once again be limited to those that affect economic liberty, including the need for legal certainty around key legal policies and regulatory regimes. From WLF’s free-enterprise perspective, those cases that implicate competition in the marketplace, limited and accountable government, individual and business civil liberties, or rule of law concerns matter the most.
Before delving into the disappointeds docket, I should note that the commentariat blames Justice Scalia’s untimely death as the main culprit for the current dearth of cert grants. But whatever the effect on the coming term’s caseload, the lion’s share of last term’s cert petitions were decided before Justice Scalia passed away. So that excuse cannot explain why most of the cases below failed to attract the Court’s attention. Without further ado, here are the top 10 cases the U.S. Supreme Court wrongfully discarded last term:
1) Apple Inc. v. United States—Apple’s decision to enter the e-books market indisputably benefitted consumers through lower overall prices and increased retail competition. But the Second Circuit didn’t see it that way. Rather than allow Apple to defend its contracts with publishers under the antitrust law’s rule of reason, the Court’s denial of cert left in place a decision that condemned Apple’s pro-consumer conduct as per se unlawful. The message this sends to would-be entrants in other markets is unmistakable: enter at your own risk. Nor is the damage limited to the tech sector. The most-favored-nation contract clauses at issue in the Apple case are widely used in any market where distributors want equal access to the goods they are competing to distribute.
2) Johnson & Johnson v. Reckis—the Court turned down numerous important cases from the pharmaceutical industry this term, but this one takes the cake. Federal law prohibits companies from unilaterally adding language to drug warning labels without FDA approval. Here, FDA had rejected requests to add a nearly identical warning about an extremely rare skin disorder to the label for Children’s Motrin, and J&J had already won a case on similar facts in Massachusetts federal court. Ignoring the split it left between state and federal court decisions in the same jurisdiction—a well-established basis for granting certiorari—the Court refused to hear an appeal from the Massachusetts Supreme Judicial Court that upheld a massive liability judgment against J&J for not adding the warning.
3) International Franchise Ass’n v. City of Seattle—this Court apparently dislikes Dormant Commerce Clause challenges, as its denial of cert in the PhRMA v. Alameda County case showed last term. But it would be hard to find a more blatant violation of the Constitution’s prohibition on treating out-of-state entities differently from in-state entities than Seattle’s differential minimum wage law based on whether an employer is a nationwide franchise or a local establishment. The Court’s refusal to hear this case left national franchisors dumbfounded.
4) AT&T v. United States ex rel. Heath—although the Court took another high-profile False Claims Act (FCA) case last term, and held this one to conference after it rendered its decision in Universal Health Services v. U.S. ex rel. Escobar, it still failed to grant cert in this case. The split among the circuits could hardly be deeper, with at least 11 circuits implicated. And the issue dividing them arises frequently, i.e., to what extent must a relator plead at least one false or fraudulent claim in specific detail in order to meet Federal Rule of Civil Procedure 9(b)’s particularity requirement. The sooner the Court settles this question, the less time and money will be wasted in the lower courts. False Claims Act cases are where much of the (non-class-action) action is today, so the Court should not be loath to take more than one FCA case per term.
5) USA Funds v. Bible—Auer deference is a frothy topic of discussion among au courant members of the Supreme Court bar. This case raised hopes the Court might revisit the question of whether courts must defer to agencies’ interpretations of their own regulations—or whether in fact such deference interferes with the role of judges to say what the law is. Although no federal agency was a party to this case, the panel decisions below teed up the Auer issue perfectly (as the Seventh Circuit’s Judge Easterbrook noted at the en banc stage). One judge had sided with the plaintiff borrower’s interpretation, one sided with the defendant lender’s, and the third sided with the borrower solely on the basis of the government’s input. Auer deference dictated the outcome of this case, and it deserved the Court’s attention.
6) Arrigoni Enterprises, LLC v. Town of Durham, CT—like USA Funds, this case presented the question of whether the Court should overturn one of its own precedents. Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, held that when a plaintiff alleges that local government action resulted in a taking, that case is not “ripe” for review in federal court until the plaintiff has sought compensation through state-level procedures. To their credit, Justices Thomas and Kennedy dissented from this denial of cert., noting that Williamson County’s state-litigation requirement is inconsistent with the Takings Clause and has “inspired gamesmanship in the lower courts.”
7) Nestlé U.S.A., Inc. v. Doe—the Court has done yeoman’s work reining in abuse of the Alien Tort Statute (ATS) by activists in other cases. Here, however, the Court refused to review a Ninth Circuit decision that created two circuit splits and allowed a lawsuit to proceed against chocolate manufacturers for allegedly aiding and abetting human rights/child labor/child slavery violations in the Ivory Coast. Merely purchasing cocoa from Ivory Coast farmers, whatever its ethical implications, does not create legal liability under the ATS because the purchaser was not acting with the purpose of facilitating abuse and the alleged conduct occurred overseas. By refusing to hear this case, the Court has reopened the can of ATS worms it sought to close in Kiobel and undone much of its prior good work.
8) Schwab Investments v. Northstar Financial Advisors, Inc.—like Nestlé, this petition raised an important issue on which the Ninth Circuit decision below created a circuit split. Schwab sought strict enforcement of the rule that a plaintiff must have standing to bring suit at all times during a federal court proceeding. Several courts of appeal have held as much, but failing to take this case allows the Ninth Circuit to persist in the mistaken position that a plaintiff who lacks Article III standing when filing can cure this defect by subsequently acquiring an interest in the litigation. That way lies much mischief.
9) Exxon Mobil Corp. v. State of New Hampshire—the Court denied cert for the second time in a major MTBE case, leaving this important area of liability law untouched. In addition to the federal preemption issue lurking in all MTBE cases, this case merited the Court’s attention because the New Hampshire Supreme Court below countenanced exactly the kind of trial by formula that the U.S. Supreme Court rejected in the Wal-Mart Stores v. Dukes case several years ago. Rather than force the state to prove that Exxon Mobil’s actions had caused gasoline spills, the New Hampshire courts found the company liable based solely on its share of the gasoline market—depriving it of the ability to assert individualized defenses as to its liability for polluting particular wells. When the Court decided Tyson Foods, Inc. v. Bouaphakeo on a limited statutory basis, it should have revisited the trial-by-formula issue via this case.
10) Procter & Gamble v. Rikos—it may seem churlish to name yet another class-action case when last term was supposed to be the blockbuster year for them at the Court. But with the exception of Spokeo v. Robins, that expectation did not pan out. Class-action cases continue to be among the most problematic and most significant matters reaching the Court, so it really needs to be taking a few of them every year. The issue in Rikos is one the Court has been ducking for years now, and companies keep getting forced to the settlement table without any evidence of commonality, because too many judges allow plaintiffs to defer a showing of common injury at the class-certification stage by merely promising to prove it at the merits stage (which never arrives, because the leverage of certification leads to settlement).
Ten is of course an arbitrary cut-off, and there were several other cases worthy of certiorari that the Court passed over. Perhaps you’re wondering why class-action cases like Wal-Mart v. Braun, Direct Digital v. Mullins, or Wells Fargo Bank v. Gutierrez are missing from the list. Or perhaps your taste runs to a First Amendment case like CPP v. Harris or an attorney work product doctrine case like Boehringer Ingelheim v. FTC or an equitable mootness in bankruptcy case like Aurelius Capital Management v. Tribune Media.
In renewing this annual jeremiad against a miserly docket, the hope is to spur the Supreme Court to grant more cert petitions. By spotlighting some worthy cases that were passed over last year, it might cause a clerk or justice to eye a pending petition with just a little less skepticism than he or she otherwise would. A case mentioned above might even have a viable analogue in this term’s offerings. At a time when the Court’s docket is historically light, the justices should err on the side of hearing significant controversies like those listed above, even if they do not check every box. The rule of law cannot survive on grants from cert splits alone. And even those have no guarantee of getting reviewed, as the above examples amply demonstrate.
The Court could use the current impasse on naming a ninth justice as an excuse for granting fewer cases this term, but it should not. If it decides to pass on contentious cases to avoid 4-4 splits, then the Court should round out its docket with “housekeeping” matters—like reinforcing existing precedents that some lower courts are not following (i.e., Daimler or Daubert). The Court could also use this opportunity to decide cases in more obscure areas of the law that might get overlooked when meatier fare is available. Such decisions might even produce a bit less turmoil and a bit more useful guidance for litigants.
Also published by Forbes.com on WLF’s contributor page.