By J High, Sidley Austin LLP*
In Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, the US Supreme Court tightened the pleading standard for civil cases. Because of a quirk of the exemplary forms formerly included with the Federal Rules of Civil Procedure (specifically, Form 18), the US Court of Appeals for the Federal Circuit held that Twombly and Iqbal did not apply to claims of direct infringement of a patent (In re Bill of Lading Transmission & Processing Sys. Pat. Litig.). I discussed this state of affairs in two 2012 Washington Legal Foundation Legal Backgrounders (3/23/12 and 10/5/12).
This past fall, the Federal Circuit issued another decision on the pleading standard in patent cases, Lyda v. CBS Corp., 838 F.3d 1331 (Fed. Cir. 2016). However, Lyda did not address the question many have been waiting for the Federal Circuit to answer—how to implement the pleading standard of Iqbal and Twombly for claims of garden-variety direct infringement after the abrogation of Form 18. The district court proceedings in Lyda all occurred while Form 18 was part of the Federal Rules of Civil Procedure, and on appeal the Federal Circuit stated “that the repeal of Form 18 does not apply to this case.” Id. at 1337 n.2. Continue reading
In a year-end assessment of the Consumer Financial Protection Bureau (CFPB), attorneys from the law firm K&L Gates LLP evaluated the potential impact of Gordon v. CFPB, a constitutional challenge in which Washington Legal Foundation has filed a certiorari petition with the US Supreme Court on behalf of its client, Chance Gordon.
In the Legal Insight, “Down But Not Out: The CFPB’s Future May Be Uncertain, But Industry Participants Must Remain Vigilant,” the authors discuss judicial challenges facing the Bureau in 2017, including Gordon and PHH Corp. v. CFPB. In PHH Corp., the US Court of Appeals for the DC Circuit ruled that CFPB’s leadership structure runs afoul of the Constitution’s separation of powers. WLF’s petition in Gordon calls into question the subsequent, retroactive ratification of CFPB’s enforcement action against Mr. Gordon, as well as 15 other actions, that were taken during a time when Bureau Director Richard Cordray had not been lawfully appointed.
The K&L Gates Legal Insight notes:
With PHH concluding (for now) that the CFPB’s directorship structure is unconstitutional and Gordon questioning the validity of certain CFPB actions on other constitutionality grounds, a trend may be developing toward judicial challenges to the validity of the CFPB as an agency and the propriety of its enforcement activities.”
A WLF Legal Pulse post discussing Gordon and the three amicus briefs filed in support of WLF’s cert petition can be found here.
Featured Expert Contributor — Corporate Governance/Securities Law
Stephen M. Bainbridge, William D. Warren Distinguished Professor of Law, UCLA School of Law
In Salman v. United States, the US Supreme Court returned to the problem of insider trading for the first time in almost two decades. The Court reaffirmed a rule from prior insider-trade caselaw that a gift of information between friends and family constitutes the requisite benefit. Justice Alito’s very brief opinion for a unanimous Court, however, left a number of more difficult questions unresolved.
Bassam Salman was convicted of insider trading for using information he had received from a friend and relative by marriage named Michael Kara who, in turn, had received the information his brother Maher Kara, who was a Citigroup investment banker. Salman argued that liability in such cases should arise only when “there is proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature,” citing the Second Circuit’s decision in United States v. Newman. Continue reading
Featured Expert Contributor — Antitrust & Competition, U.S. Department of Justice
Anthony W. Swisher, a Partner in the Washington, DC office of Squire Patton Boggs (US) LLP
In April of this year President Obama issued an executive order designed to “protect American consumers and workers and encourage competition in the U.S. economy … .” The order aimed to expand competition policy beyond just the Justice Department Antitrust Division (DOJ) and the Federal Trade Commission (FTC), and encouraged every federal agency to consider ways to enhance competition when drafting and enforcing each given agency’s regulations. A notable element of the President’s executive order was the promotion of competition in labor markets. The order asserted that the economic growth that flows from competitive markets “creates opportunity for American workers,” and that anticompetitive practices can reduce those opportunities. Continue reading
By Burt M. Rublin, Partner, and Daniel L. Delnero, Associate, Ballard Spahr LLP
Prior restraints on speech are highly disfavored and presumptively unconstitutional. See Tory v. Cochran, 544 U.S. 734, 738 (2005) (“Prior restraints on speech and publication are the most serious and the least tolerable infringement on First Amendment rights.”). Yet the Consumer Financial Protection Bureau (CFPB) proposed exactly that in its Proposed Rule Relating to Disclosure of Records and Information (Proposed Rule), CFPB-2016-0039, 81 Fed. Reg. 58310 (Aug. 24, 2016). CFPB seeks to prohibit the recipient of a civil investigative demand (CID) or letter from the agency providing notice and opportunity to respond and advise (NORA letters) from disclosing the CID or NORA letter to third parties without prior written consent of a high-ranking CFPB official. In effect, this would constitute a “gag” rule that would stifle constitutionally protected speech.
The proposed gag rule is not only ill-advised as a matter of public policy, it is also unconstitutional both as a prior restraint on speech and a content-based restriction. It would be subject to strict scrutiny, and the CFPB would have to show a compelling government interest to justify it, which it could not. Indeed, CFPB has not claimed, nor could it claim, that the absence of a similar gag rule since the creation of CFPB has hindered or impaired its effectiveness. Continue reading
By Eric D. Miller, Partner, Perkins Coie LLP*
A pending petition for a writ of certiorari presents the United States Supreme Court with an opportunity to clarify whether a state may exercise personal jurisdiction over a nonresident defendant based solely on the defendant’s sale of components to third parties who incorporate those parts into finished products that are then sold in the forum State.
That question has divided the lower courts since Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987). In that case, Asahi, a Japanese manufacturer, had delivered tire-valve assemblies to a Taiwanese tire manufacturer that sold tires throughout the world, including in California. After a California resident was injured in an accident caused by a defective valve, he sued Asahi in California state court. The Supreme Court held that Asahi was not subject to personal jurisdiction in California, but no rationale commanded a majority of the Court. Justice O’Connor, writing for four justices, concluded that the connection between the defendant and the forum state necessary to establish specific personal jurisdiction “must come about by an action of the defendant purposefully directed toward the forum state.” In her view, placing a product “into the stream of commerce, without more,” is not such an act. Justice Brennan, on the other hand, wrote for four justices who believed that placement of goods into the stream of commerce, with the knowledge that they will ultimately be sold in a state, can be sufficient for jurisdiction in that state. Continue reading
Featured Expert Contributor – Intellectual Property (Patents)
Jeffri A. Kaminski, Partner, Venable LLP, with Ryan T. Ward, Associate, Venable LLP. Mr. Ward was a Judge K.K. Legett Fellow at the Washington Legal Foundation in the summer of 2009 prior to his third year at Texas Tech School of Law.
The Federal Circuit continues to struggle with determinations of patentability under 35 U.S.C. § 101 in the wake of the Supreme Court’s Alice decision (Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)). The most recent decision, Intellectual Ventures, LLC. v. Symantec Corp., (Intellectual Ventures) indicates a developing schism between the newer members of the court and the old guard. Continue reading