By Sara Kobak, W. Michael Gillette, and Aukjen Ingraham, Shareholders with Schwabe, Williamson & Wyatt, P.C. in Portland, OR.
Since the US Supreme Court clarified the due-process limits on the exercise of general or all-purpose jurisdiction in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), plaintiffs have reached for new arguments to support the exercise of general jurisdiction over corporate defendants in forums where the defendants cannot fairly be considered “at home.” With notable exceptions—including the decisions at issue in Bristol-Myers Squibb Co. v. Superior Court of California, Case No. 16-466, and Tyrell v. BNSF Railway Co., Case No. 16-405, both scheduled for argument before the Supreme Court on April 25, 2017—the majority of lower courts have rejected these attempts to evade Daimler and its due-process requirements. The most recent examples of decisions enforcing Daimler come from the high courts of Oregon and Missouri, with the Washington Legal Foundation submitting an amicus brief in the Oregon case. Continue reading
By John Lauro, a white-collar defense attorney who represented one of the WellCare defendants at trial and at the Eleventh Circuit.
On Friday, April 21, 2017, the US Supreme Court will meet in conference to consider a pending petition for certiorari in Farha v. United States, No. 16-888, a major white-collar fraud case raising an important issue of concern to the defense bar and their clients: whether “deliberate indifference” is a sufficient level of mens rea for proving “knowledge” with respect to federal criminal statutes. The High Court should grant review and reverse the US Court of Appeals for the Eleventh Circuit ruling holding otherwise.
Farha is a classic case of overcriminalization, where civil and administrative remedies are more appropriate in the regulatory area of complex healthcare and business law. The case was extensively discussed in prior postings at the WLF Legal Pulse (here and here) and a WLF Legal Backgrounder [hot link to Kaiser’s piece]. In brief, following a raid by 200 FBI Agents at the offices of WellCare, a Florida Medicaid health maintenance organization, several executives, including the CEO, CFO, and general counsel, were indicted on healthcare fraud charges based on the government’s interpretation of Florida’s Medicaid law. Continue reading
Featured Expert Contributor – Intellectual Property (Patents)
Jeffri A. Kaminski, Partner, Venable LLP, with Tyler Hale, Associate, Venable LLP.
In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, commonly known as the Hatch-Waxman Act, and redrew the legal landscape for intellectual property in the pharmaceutical industry. The law balanced the need for brand-name drug innovators to profit from their research and development investments with the public good of low-cost generic drugs by creating a pathway for swift FDA approval of generic drugs immediately following the expiration of patent exclusivity. By all accounts, the law has been a success, creating the drug lifecycle we know and expect today: new drugs enter the market at a high price with a limited period of exclusivity, after which several generic competitors enter the market and drive prices down to a fraction of their original cost. Continue reading
By David E. Sellinger and Aaron Van Nostrand, Greenberg Traurig LLP
In a closely watched appeal, the US Court of Appeals for the Ninth Circuit has squarely weighed in on the “ascertainability” of class members in a class-action lawsuit. The three-judge panel further widened a rift among federal courts of appeal on the issue, holding that plaintiffs need not demonstrate an administratively feasible way to identify class members at the class-certification stage.
In an August, 2016 WLF Legal Backgrounder, we predicted that a trio of class actions then-pending in the Ninth Circuit could prompt the US Supreme Court to resolve the circuit split on the ascertainability issue. Although that issue was briefed in all three cases, it was not decided in Brazil v. Dole Packaged Foods, LLC (No. 14-17480), and a hold placed on Jones v. ConAgra Foods, Inc. (No. 14-16327) pending a Supreme Court decision in Microsoft v. Baker is still in effect. The Ninth Circuit did address ascertainability in the third case discussed in that Legal Backgrounder—Briseno v. ConAgra Foods, Inc. The January 3 decision presents a view sharply in contrast with that of certain other circuits, most notably the Third Circuit. 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.
On November 17, 2016, Washington Legal Foundation petitioned the US Supreme Court to review a US Court of Appeals for the Ninth Circuit decision, Gordon v. Consumer Financial Protection Bureau. CFPB had pursued a substantial fine against WLF’s client, Chance Gordon, in June 2013, a time during which the Bureau lacked a properly appointed Director. Mr. Gordon’s petition argues that the attempted corrective action Richard Cordray took once he lawfully became CFPB Director—a blanket, retroactive ratification of all actions taken during his unconstitutional recess appointment—runs afoul of the US Constitution’s Appointments Clause (contained in Article II). Mr. Gordon also argues that because Mr. Cordray had not been properly appointed, CFPB lacked standing to pursue a claim against him in federal court.
This week, three organizations filed amicus curiae briefs with the Supreme Court in support of Mr. Gordon’s writ of certiorari. The briefs positively reinforce WLF’s two major justifications for the Court’s review of Gordon v. CFPB. The petition first argues that the Ninth Circuit’s acceptance of Director Cordray’s blanket ratification severely undermines a fundamental check on Executive power: the requirement that Congress must first approve presidential nominees before they can be lawfully appointed. The Gordon decision is also contrary to Supreme Court precedent and furthers a split in the circuit courts over when ratification of ultra vires administrative action is permissible. Continue reading
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