December 3
Dawson v. Steager
No. 17-419, W. Va.
Preview by Samuel E. Meredith, Senior Online Editor
West Virginia does not collect tax on some kinds of retirement benefits given to former state law enforcement officials. The state does not, however, extend this same tax relief to retired federal law enforcement personnel. The question presented by Dawson v. Steager is whether this tax policy is permissible under “the doctrine of intergovernmental tax immunity.” Brief for the Petitioners at i, Dawson v. Steager, No. 17-419 (U.S. filed Aug. 28, 2018); see also 4 U.S.C. § 111 (2018).
James Dawson served for many years as a federal law enforcement official, including as the U.S. Marshal for the Southern District of West Virginia. Dawson is now retired and must pay taxes on money received from his retirement plan. Dawson and his wife applied to the state for a tax exemption, believing that Dawson’s retirement plan should be taxed in the same manner as those of former state law enforcement officers.
The state rejected the Dawsons’ request for an exemption, a decision that the Dawsons then challenged in court. The first court to review the issue agreed with the Dawsons that the state was required to provide the exemption, citing the intergovernmental tax immunity doctrine. The Supreme Court of West Virginia reversed.
The Dawsons rely on Davis v. Michigan Department of Treasury, 489 U.S. 803 (1989), and argue that the intergovernmental tax immunity doctrine is “a bright-line rule” that precludes states from placing disparate tax obligations on federal and state employees absent “‘significant differences between the two classes.’” Brief for the Petitioners at 10, No. 17-419 (U.S. filed Aug. 28, 2018) (quoting Davis, 489 U.S. at 815–16).
The state, on the other hand, contends that its approach to taxing former state law enforcement officials is permissible because it is only “a granular exemption” that “does not create the inconsistent tax treatment with which [the intergovernmental tax immunity doctrine] is concerned.” Brief for Respondent at 17, Dawson v. Steager, No. 17-419 (U.S. filed Oct. 16, 2018).
Lorenzo v. SEC
No. 17-1077, D.C. Cir.
Preview by Samuel E. Meredith, Senior Online Editor
In 2009, Charles Vista, LLC worked with a company named Waste2Energy Holdings, Inc. (“W2E”) on a private debenture offering. W2E’s estimation of its value at the time was based on its belief that it had devised a “gasification” mechanism that made it possible to produce gas using solid waste. Brief for Petitioner at 8, Lorenzo v. SEC, No. 17-1077 (U.S. filed Aug. 20, 2018). The gasification mechanism never came together, and the company’s value accordingly plummeted. Thereafter, W2E updated its filings with the SEC and sent copies of the filings to Charles Vista.
At the time, Francis Lorenzo was Charles Vista’s director. He was aware that W2E updated its filings, but never actually reviewed them. Lorenzo subsequently contacted some possible investors via e-mail and provided false information about W2E. These false statements triggered a set of proceedings in which the SEC alleged that Lorenzo, his company, and his colleagues defrauded investors. One of the allegations against Lorenzo was based on 17 C.F.R. § 240.10b-5 and similar provisions, which make it illegal “[t]o make any untrue statement of material fact” or “employ any device, scheme, or artifice to defraud [investors]” in the course of securities transactions.
Lorenzo responded to the allegations by explaining that he sent the e-mails in question under the direction of his colleagues, and that he was not even fully aware of what the e-mails said because they were “copy and pasted.” Id. at 10. The administrative law judge (“ALJ”) in the initial SEC proceeding believed this portion of Lorenzo’s testimony but nevertheless found that Lorenzo had committed the alleged violations.
When Lorenzo appealed this ruling, the SEC affirmed the ALJ. Lorenzo appealed to the D.C. Circuit. The D.C. Circuit agreed with Lorenzo that he did not actually “make” the false statements but held that Lorenzo’s actions nevertheless violated the relevant provisions.
Before the Court, Lorenzo argues that, according to precedent, “only defendants who make a misstatement may be held primarily liable [for false statements].” Id. at 16. The decision below, Lorenzo contends, “virtually eliminates the distinction between primary and secondary liability.” Id. at 17. The SEC, on the other hand, asserts that “a straightforward interpretation of the statutory and regulatory text” confirms Lorenzo’s liability. Brief for the Respondent at 11, Lorenzo v. SEC, 17-1077 (U.S. filed Oct. 5, 2018).
December 4
Biestek v. Berryhill
No. 17-1184, 6th Cir.
Preview by Samuel E. Meredith, Senior Online Editor
When an individual requests disability benefits through the Social Security Administration (“SSA”), the SSA may decline to extend such benefits if it finds that the individual “can make an adjustment to other work.” 20 C.F.R. § 404.1520(a)(4)(v). In deciding whether individuals are capable of assuming “other work,” the SSA often employs “vocational experts.” Brief of Petitioner at 3, Biestek v. Berryhill, No. 17-1184 (U.S. filed Aug. 27, 2018). If the SSA hears testimony from such an expert, may that testimony provide the basis for rejecting a request for benefits even if the SSA did not allow the individual requesting the benefits to access the materials underlying the expert’s testimony? This is the question that the court must address in Biestek v. Berryhill.
Michael Biestek was a construction worker before depression, Hepatitis C, and back problems rendered him unable to continue working. Biestek applied to the SSA for disability benefits. During the ensuing proceedings, an expert opined that Biestek, in spite of his various maladies, was still capable of performing other work. When Biestek asked the expert to provide the materials upon which her opinion was based, the expert said she was unable to do so, citing confidentiality concerns. The SSA did not require the expert to provide access to the materials. The SSA subsequently denied Biestek’s request for benefits, a decision that was based solely on the expert’s testimony. This district court and the Sixth Circuit affirmed the SSA’s decision.
Biestek argues that the SSA’s ruling “defies common sense,” and encourages the Court to adopt the approach of the Seventh Circuit, under which the expert would have been obligated to produce the materials Biestek requested. Brief of Petitioner at 5, Biestek v. Berryhill, No. 17-1184 (U.S. filed Aug. 27, 2018). In response, the SSA points out that there were other strategies that Biestek did not pursue by which he could have challenged the expert’s conclusions. See Brief for the Respondent at 20–22, Biestek v. Berryhill, No. 17-1184 (U.S. filed Oct. 15, 2018). The SSA further argues that the approach Biestek urges “would be impractical and burdensome.” Id. at 52.
Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc.
No. 17-1229, Fed. Cir.
Preview by Michelle Divelbiss, Online Editor
This case threatens to shake up established patent law. Under 35 U.S.C. § 102, “[a] person shall be entitled to a patent unless . . . the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public.” This rule, which specifies just one of several requirements for patentability, is “subject to a grace period” of one year. Brief for Respondents at i, Helsinn Healthcare S.A. v. Teva Pharms. USA Inc., No. 17-1229 (U.S. filed Oct. 9, 2018); see 35 U.S.C. § 102(b)(1) (2018). For an invention to be “on sale” and therefore ineligible for a patent, “the product must be the subject of a commercial offer for sale,” and “the invention must be ready for patenting.” Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67 (1998).
Petitioner, Helsinn Healthcare, is a Swiss pharmaceutical company, and its product Aloxi, a treatment for nausea and vomiting associated with chemotherapy, is at the center of this dispute. Petitioner sued Respondent, Teva Pharmaceuticals, for patent infringement based on Teva filing a drug application with the FDA to market their generic version of the drug. At issue is whether Helsinn’s patented product was “on sale” more than one year prior to the patent application.
Research and development efforts for Aloxi had been abandoned by another company so Helsinn acquired rights to develop it. Helsinn, however, faced difficulty navigating the expense and complexity of bringing a drug to market in the United States, and entered licensing and purchase agreements with a U.S.-based pharmaceutical company. The existence of the agreement was made public, but the actual invention was kept confidential. The Federal Circuit held the patent invalid because the existence of the purchase agreement was public, triggering the one-year timer for filing the patent; the patent was filed more than one year after the sale.
Helsinn argues that because the private sale agreement did not make the invention available to the public, the licensing and purchase agreements do not trigger the on-sale bar to patentability. Teva disagrees and claims that 200 years of precedent have established that “[t]he on-sale bar is triggered by commercial exploitation—not public dissemination of every detail of the invention.” Brief for Respondents at 1, Helsinn Healthcare S.A. v. Teva Pharms. USA Inc., No. 17-1229 (U.S. filed Oct. 9, 2018) (emphasis in original). Dozens of intellectual property professors agree with Teva; as amici curiae they explain that the “on sale” issue has been settled and that a change to the precedent would “cause all manner of mischief” by “sweep[ing] away scores of cases [] accumulated over two centuries.” Brief Amici Curiae of 45 Intellectual Property Professors in Support of Respondents at 11, Helsinn Healthcare S.A. v. Teva Pharms. USA Inc., No. 17-1229 (U.S. filed Oct. 9, 2018). Given the potential to radically shake up patent law, lawyers, inventors, and pharmaceutical companies are watching this case closely.
December 6
Gamble v. United States
No. 17-646, 11th Cir.
Preview by Samuel E. Meredith, Senior Online Editor
Because he had a prior felony conviction, Terance Gamble was arrested in 2015 when a police officer found a gun in his car. Gamble was charged for “being a felon in possession of a firearm,” first by the state and then by federal authorities. Brief for Petitioner at 2, Gamble v. United States, No. 17-646 (U.S. filed Sept. 4, 2018). Gamble challenged the federal charges when they were filed, arguing that they violated the Double Jeopardy Clause of the Fifth Amendment. See U.S. Const. amend. V. The district court rejected Gamble’s request to have the charges dropped, citing the “separate-sovereigns exception.” Id. at 3; see also Abbate v. United States, 359 U.S. 187, 194–96 (1959). The Eleventh Circuit affirmed. Now, the Court must decide whether the separate-sovereigns exception should be discarded.
Gamble contends that “the . . . exception is incompatible with the text, original meaning, and purpose of the Double Jeopardy Clause.” Brief for Petitioner at 4, Gamble v. United States, No. 17-646 (U.S. filed Sept. 4, 2018). To support this conclusion, Gamble points to “[a] long line of English cases, dating to at least 1662,” and “[e]arly American sources,” which, according to Gamble, demonstrate that “[t]he framers of the Bill of Rights understood the Double Jeopardy Clause to incorporate English common law protections against successive prosecutions . . . by separate sovereigns.” Id. at 4–5.
The government, on the other hand, avers that Gamble’s interpretation of the Double Jeopardy Clause “would allow a foreign sovereign . . . to preclude U.S. prosecutions for crimes against Americans.” Brief for the United States at 7, Gamble v. United States, No. 17-646 (U.S. filed Oct. 25, 2018). Further, the government argues that deviating from the Court’s traditional interpretation of the Double Jeopardy Clause would be unwise because it would “saddle courts with the confounding task of comparing different sovereigns’ laws,” and foster uncertainty in the criminal justice system. Id. at 8.
