January 7
Merck Sharpe & Dohme Corp. v. Albrecht
No. 17-290, 3d Cir.
Preview by Samuel E. Meredith, Senior Online Editor
Merck was initiated by over 500 people who used an osteoporosis medication known as Fosamax. The plaintiffs claim that Fosamax caused them to experience “an atypical femoral fracture,” and that the drug manufacturer did not properly warn them that such fractures were among the possible side effects of the medicine. Brief for Respondents at 7, Merck Sharpe & Dohme Corp. v. Albrecht, No. 17-290 (U.S. filed Nov. 14, 2018).
In response to these allegations, Merck has argued that it is immune from state law failure-to-warn claims. In support of this assertion, Merck cites Wyeth v. Levine, in which the Court held that drug manufacturers are immune from state law failure-to-warn claims in situations where there is “clear evidence” that it is “impossible . . . to comply with both federal and state [warning label] requirements.” 555 U.S. 555, 571–73 (2009).
Merck moved for summary judgment based on this impossibility defense ahead of the first trial in the consolidated litigation. The district court did not rule on the motion before the first trial but eventually granted the motion after the jury in the first trial entered a verdict in favor of Merck.
The Third Circuit then reversed the district court’s ruling, explaining that Merck “ha[d] not carried its burden” under “[t]he Wyeth ‘clear evidence’ standard.” In re Fosamax Alendronate Sodium Prods. Liab. Litig., 852 F.3d 268, 271 (3d Cir. 2017).
Before the Court, Merck argues that it has demonstrated sufficient evidence of impossibility by showing that its attempts to publish warnings about the fractures were denied by the FDA. See Brief for Petitioner at 7–16, Merck Sharpe & Dohme Corp. v. Albrecht, No. 17-290 (U.S. filed Sept. 13, 2018). In response, the plaintiffs argue that the FDA rejected Merck’s proposals because they contained inaccurate information and not because of any objection to warnings about the fractures as a general matter. See Brief for Respondents at 35–40, Merck Sharpe & Dohme Corp. v. Albrecht, No. 17-290 (U.S. filed Nov. 14, 2018).
In addition to these disputes about the factual record, the litigants in Merck also disagree about who should ultimately be responsible for deciding whether a drug manufacturer has presented enough evidence to qualify for the impossibility defense. While Merck contends that the impossibility defense presents a legal question fit for a judge, the plaintiffs aver that impossibility is a factual issue for juries to decide. In any event, both parties agree that the Court may decide whether summary judgment was proper in this case without addressing this question.
Obduskey v. McCarthey & Holthus LLP
No. 17-1307, 10th Cir.
Preview by Michelle Divelbiss, Online Editor
This case involves the Fair Debt Collection Practices Act (“FDCPA”) and whether a certain kind of debt falls under the provisions of the FDCPA. 15 U.S.C. § 1692 (2018). A debt collector regulated by the FDCPA includes any person or entity “who regularly collects . . . debts owed or due” and also includes “any business the principal purpose of which is the enforcement of security interests.” Id. § 1692a(6). If a debtor disputes the validity of a debt, a debt collector must stop collection efforts until the debt is verified. Id. § 1692g(b).
Here, Petitioner Obduskey secured a loan from a bank with residential property. Petitioner later defaulted on the loan, and after 2011, no additional payments were made. In 2014, Respondent McCarthy & Holthus LLP was hired by the bank to institute a foreclosure on the residential property. This type of foreclosure is considered a non-judicial foreclosure and is governed by state law. Although this type of foreclosure is non-judicial, a court order is required, which certifies that there is a “reasonable probability that a default justifying the sale has occurred.” Colo. R. Civ. P. 120(d)(1)(D) (2018).
Petitioner claims that he responded to the non-judicial foreclosure proceedings by asking for verification of the debt and did not receive any response. Under the FDCPA, Respondent would have been required to cease debt collection while under state law Respondent need not cease debt collection as long as Respondent had satisfied the steps required for state non-judicial foreclosure.
Both the district court and the court of appeals held that Respondent’s actions did not fall under the FDCPA because Respondent was not attempting to collect money as a debt collector. Instead, the Tenth Circuit agreed with the Ninth Circuit and found that Respondent was only attempting to enforce a security interest, which is “not inherently an attempt to collect money,” and that Respondent therefore does not qualify as a debt collector under the FDCPA. Brief for Respondent at 10, Obduskey v. McCarthy & Holthus LLP, No. 17-1307 (U.S. filed Nov. 7, 2018). The Sixth Circuit, however, has held that the collectors of non-judicial mortgage foreclosures are considered debt collectors under the FDCPA. Although the Supreme Court has previously denied certiorari to a case addressing the same issue, the Court will likely settle the circuit split.
January 8
Herrera v. Wyoming
No. 17-532, Wyo. Dist.
Preview by Samuel E. Meredith, Senior Online Editor
In 2014, Clayvin Herrera and a group of other individuals from the Crow Tribe went elk hunting. Although the hunt began on the Tribe’s reservation in Montana, the group eventually entered the Bighorn National Forest in Wyoming where they shot a number of elk.
Because the hunt took place out of season, Wyoming filed criminal charges against Herrera. In response to these charges, Herrera claimed that he was exempt from criminal liability thanks to a nineteenth-century treaty granting the Tribe certain hunting privileges in what is now the Bighorn National Forest. The trial court disagreed with Herrera. The unsuccessful appeals that followed have led Herrera to seek relief from the Supreme Court.
The basic question before the Court is whether the treaty-based rights on which Herrera relies are still in force. Wyoming urges that the government’s actions since the treaty’s ratification have vitiated the hunting privileges granted in the treaty. Wyoming further claims that the question presented in this case was litigated and resolved in favor of the state in Crow Tribe of Indians v. Respis, 73 F.3d 982 (10th Cir. 1995). In light of this result, Wyoming argues, Herrera’s claim is precluded. Moreover, Wyoming argues, even if Herrera’s treaty-based defense is not precluded, it should nonetheless fail because “courts have held that . . . [similarly-worded grants of] off-reservation hunting right[s] ha[ve] expired.”
In response, Herrera argues that the government’s post-ratification actions, such as the acceptance of Wyoming’s application for statehood and the creation of the Bighorn National Forest, had no effect on the Tribe’s hunting rights. Herrera further argues that Respis does not preclude his defense because “there has been an intervening ‘change in the applicable legal context.’” Brief of Petitioner at 46–47, Herrera v. Wyoming, No. 17-532 (U.S. filed Sept. 4, 2018) (quoting Bobby v. Bies, 556 U.S. 825, 834 (2009)). According to Herrera, this change came in Minnesota v. Mille Lacs Band of Chippewa Indians, 526 U.S. 172 (1999), a case in which the Court “effectively overrule[d]” a precedent crucial to the holding in Respis. Brief of Petitioner at 30, 48, Herrera v. Wyoming, No. 17-532 (U.S. filed Sept. 4, 2018) (quoting Mille Lacs, 526 U.S. at 219 (Rehnquist, C.J., dissenting)).
Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC
No. 17-571, 11th Cir.
Preview by Michelle Divelbiss, Online Editor
On the second day of arguments in 2019, the Supreme Court will determine when the “registration of [a] copyright claim has been made.” 17 U.S.C. § 411(a) (2018). That is, does registration occur when the application, deposit, and fee are delivered to the Copyright Office or when the application is acted upon by the Copyright Office? The time of registration must be determined because “no civil action for infringement of the copyright . . . shall be instituted until preregistration or registration of the copyright claim has been made.” Id.
Petitioner Fourth Estate Public Benefit Corporation (“Fourth Estate”) is a news organization and Respondent Wall-Street.com (“Wall-Street”) had obtained a license for some of the written works produced by Fourth Estate journalists. The license stipulated that “if Wall-Street canceled its account with [Fourth Estate’s syndicate], Wall-Street was to ‘stop display of all [licensed material] . . . and permanently take down, remove and/or delete all . . . data.’” Brief for Petitioner at 15, Fourth Estate Public Benefit Corp. v. Wall-Street.com, No. 17-571 (U.S. filed Aug. 27, 2018). Wall-Street canceled its account but failed to take down or remove the licensed work. Fourth Estate subsequently filed its copyright application and sued Wall-Street. When Fourth Estate filed the complaint, the Copyright Office had not yet acted on the application.
The district court granted Wall-Street’s motion to dismiss because it found that registration had not yet occurred. On appeal, the Eleventh Circuit agreed because it found that “registration [is] a process that requires action by both the copyright owner and the Copyright Office.” Id. at 17 (quoting Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, LLC, 856 F.3d 1338, 1341 (11th Cir. 2017)). Wall-Street argues that registration only occurs once the Copyright Office acts on the application because if “registration occurred as soon as an application was filed, then the [Copyright Office] would have no power to ‘refuse registration.’” Id. (quoting Fourth Estate, 856 F.3d at 1341). On the other hand, Fourth Estate argues that “the phrase ‘registration . . . has been made’ . . . refers to the actions of the copyright owner in submitting the deposit, application, and fee required for registration” and not to actions by the Copyright Office. Id. at 21 (quoting 17 U.S.C. § 411).
Although the Fifth and Ninth Circuits have held that registration occurs once the application, deposit, and fee are delivered, the Tenth and Eleventh Circuits have held that registration occurs only once the Copyright Office acts on the application.
January 9
Franchise Tax Board of California v. Hyatt
No. 17-1299, Nev.
Preview by Samuel E. Meredith, Senior Online Editor
Faithful SCOTUS fans will recall that the Court decided last term to abandon one of its precedents in South Dakota v. Wayfair. This term, in Hyatt, the Court will once again decide whether one of its prior decisions should be overturned.
The underlying dispute in Hyatt began over 20 years ago when the Franchise Tax Board of California (“the FTB”) launched an investigation to determine whether Hyatt, who by then was living in Nevada, owed back taxes from when he lived in California. Several years after the audit began, Hyatt, citing investigatory misconduct, filed a number of tort claims against the FTB in Nevada state court. Constitutional disputes (and two visits to the Supreme Court) followed. When the case proceeded to trial, a jury ruled in favor of Hyatt on each of his claims. The Nevada Supreme Court reversed some of these findings but affirmed others.
This time, the parties’ dispute before the Court stems from Nevada v. Hall, 440 U.S. 410 (1979), in which the Court ruled that a state may be held fully liable in the courts of another state. The continued viability of Hall was among the issues presented in Hyatt’s second visit to the Court, but a deadlock among the Justices left the ruling of the court below in place. The Court’s treatment of Hall this time around will determine the validity of the outstanding judgments against the FTB.
The FTB contends that Hall was incorrectly decided because “a considerable body of historical evidence establishes that the Framers did not intend to abrogate States’ immunity in courts of other States.” Brief for Petitioner, Franchise Tax Board of Cal. v. Hyatt, No. 17-1299 (U.S. filed Sept. 11, 2018). To support this conclusion, the FTB points to cases predating the Constitution, and argues that the Constitution did nothing to disrupt the sovereign immunity framework embodied in those cases. The FTB further asserts that Hall should be overturned because it “has proven impracticable in its ‘real world implementation.’” Id. at 39 (quoting South Dakota v. Wayfair, 138 S. Ct. 2080, 2097 (2018)).
Hyatt, on the other hand, argues that this dispute should have never been brought to the Court in the first place, citing “the law of the case doctrine.” Brief for Respondent at 12, Franchise Tax Board of Cal. v. Hyatt, No. 17-1299 (U.S. filed Nov. 15, 2018). Alternatively, Hyatt argues that the FTB “waived the ability to ask for Nevada v. Hall to be overruled” by failing to raise the issue when the parties were before the Court for the first time. On the merits, Hyatt avers that the FTB “has failed to provide the ‘compelling justification’ for overruling a long-standing precedent.” Id. at 18.
January 14
Thacker v. Tennessee Valley Authority
No. 17-1201, 11th Cir.
Preview by Samuel E. Meredith, Senior Online Editor
In July 30, 2013, an accident at a facility managed by the Tennessee Valley Authority (“TVA”) caused a power line to fall into the Wheeler Reservoir on the Tennessee River. In response, the TVA enlisted the Coast Guard to patrol the area and prevent people from entering the affected area of the river. That same day, Gary Thacker and a companion were traveling down the river “at high speed.” Brief for the Respondent at 7, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Dec. 13, 2018). When Thacker’s vessel reached the affected area, the width of the river, along with “the speed of Thacker’s boat and the patrol patterns of the patrol boats,” made it so the Coast Guard was unable to reach Thacker before he made contact with the power line. The ensuing shock took the life of Thacker’s companion and severely injured Thacker.
Following the accident, Thacker and his wife sued the TVA. In their suit, the Thackers asserted that “the TVA had not used reasonable care in assembling and installing its power lines, in warning boaters of the hazard it had created, and in responding to the resulting emergency.” Brief for Petitioner at 3, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Nov. 13, 2018). In response, the TVA moved to dismiss the case on sovereign immunity grounds. The district court granted the motion and the Eleventh Circuit affirmed. The Eleventh Circuit based its decision on “the discretionary function exception” recognized in the Federal Tort Claims Act (“FTCA”). Brief of Respondent at 8, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Dec. 13, 2018). The issue before the Court is whether the Court of Appeals was right to apply the discretionary function standard.
The Thackers assert that “the FTCA [and, by extension, the discretionary function exception,] does not apply to the TVA.” Brief for Petitioner at 6, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Nov. 13, 2018). To support this conclusion, the Thackers point to the text of the FTCA. See 28 U.S.C. § 2680(l) (2018). The Thackers further claim that under Court precedent, non-FTCA agencies such as the TVA “are immune from suit in only a few circumstances.” Brief for Petitioner at 11, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Nov. 13, 2018).
In response, the TVA avers that although “the FTCA does not govern petitioners’ suit,” the TVA’s amenability to suit is “subject to implied limitations,” including one for “suit[s] based on claims arising out of the performance of discretionary functions.” Brief for the Respondent at 15–16, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Dec. 13, 2018). To support this view, the TVA cites United States v. Smith, in which the Court made note of a trend in other courts of attaching “certain exceptions” to the TVA’s general amenability to suit. 499 U.S. 160, 168–69 (1991). The TVA further claims that its preferred approach is more practical and will allow courts to avoid “second-guessing of executive policymaking decisions.” Brief for the Respondent at 37, Thacker v. Tenn. Valley Auth., 17-1201 (U.S. filed Dec. 13, 2018).
Rimini Street Inc. v. Oracle USA Inc.
No. 17-1625, 9th Cir.
Preview by Michelle Divelbiss, Online Editor
In another case involving statutory interpretation of the Copyright Act, the Supreme Court will hear arguments about whether “full costs” awarded under the Copyright Act include both taxable and non-taxable costs. 17 U.S.C. § 505 (2018).
Petitioner, Rimini Street Inc. (“Rimini”) was found to have “innocently” infringed copyrights held by Respondent Oracle USA Inc. (“Oracle”). See Brief for Petitioners at 2, Rimini Street Inc. v. Oracle USA Inc., No. 17-1625 (U.S. filed Nov. 13, 2018). The district court awarded Oracle $4.9 million in taxable costs (later reduced to $3.4 million due to an error) and $12.8 million in non-taxable costs. These non-taxable costs include certain litigation expenses. “Full costs” has historically meant costs between “party and party”—i.e., court and docketing fees, transcript fees, printing and copying fees, etc.—and has excluded non-taxable costs between client and lawyer—i.e., expenses such as the cost of an expert witness. The costs between client and lawyer are considered non-taxable because these costs can only be shifted to the losing party if there is a statute expressly permitting that shift.
Oracle requested more than $17.6 million in non-taxable costs that included fees for expert witnesses, fees for consultants, and e-discovery costs; the district court awarded Oracle more than $12.7 in non-taxable costs. Rimini argues that the Copyright Act limits costs to only taxable costs, citing both the Eighth and Eleven Circuits. Oracle and the district court, however, looked to the Ninth Circuit, which has allowed the award of both taxable and non-taxable costs. The Ninth Circuit affirmed the award. Rimini also notes that costs in patent and trademark cases are limited only to taxable costs and argues that cost recovery in copyright, patent, and trademark cases should be the same.
January 15
Home Depot U.S.A. Inc. v. Jackson
No. 17-1471, 4th Cir.
Preview by Samuel E. Meredith, Senior Online Editor
Home Depot concerns the ability of third-party counterclaim defendants to remove cases to federal court. The underlying litigation in this case began when Citibank sued George Jackson in a North Carolina court to collect on a debt. In response, Jackson instituted a class action against Citibank and joined Home Depot and Carolina Water Systems (“CWS”) as third-party counterclaim defendants.
After this class action was filed, Home Depot had the case removed to federal court. Before the district court, Jackson averred that Home Depot’s status as a third-party counterclaim defendant, the amount in controversy, and the makeup of the class rendered Home Depot incapable of removing the case. The district court agreed and the Fourth Circuit affirmed.
In affirming the district court, the Fourth Circuit cited Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941), and “held that [28 U.S.C. § 1441(a) (2018)] does not authorize removal by a defendant to a claim asserted as a counterclaim.” Brief for Petitioner at 9, Home Depot U.S.A. Inc. v. Jackson, No. 17-1471 (U.S. filed Nov. 9, 2018). The Court of Appeals also held that the provision of the Class Action Fairness Act (“CAFA”) that permits “any defendant” to remove, 28 U.S.C. § 1453(b), does not apply to third-party counterclaim defendants when they were “not an original plaintiff (or any kind of plaintiff).” Brief for Petitioner at 10, Home Depot U.S.A. Inc. v. Jackson, No. 17-1471 (U.S. filed Nov. 9, 2018). Home Depot has appealed both of these rulings.
With respect to the first of these rulings, Home Depot notes that the Court’s holding in Shamrock Oil only applies to “the original defendant,” and urges the Court not to expand Shamrock Oil to include third-party counterclaim defendants who are “involuntarily brought into state-court proceedings.” Id. at 11–13. Regarding the CAFA issue, Home Depot argues simply that “‘any defendant’ means any defendant.” Id. at 13. Furthermore, Home Depot argues, this understanding of CAFA’s text aligns with CAFA’s overall goal of “combat[ting] state-court biases against out-of-state defendants.” Id. at 14.
In response, Jackson argues that the Fourth Circuit’s application of Shamrock Oil is in line with “a consensus [that] has emerged among federal courts”—a pattern that Congress has not disrupted. Brief for Respondent at 14, Home Depot U.S.A. Inc. v. Jackson, No. 17-1471 (U.S. filed Dec. 10, 2018). According to Jackson, deviating from this trend could be “destabilizing” because it would raise new interpretive questions about other statutes employing the word “defendant.” Id. at 15. On the issue of CAFA, Jackson asserts that CAFA’s text is not as broad as Home Depot makes it seem, claiming that “when Congress wants to refer to counterdefendants, it does so expressly.” Id. at 16.
Azar v. Allina Health Services
No. 17-1484, D.C. Cir.
Preview by Samuel E. Meredith, Senior Online Editor
The litigants in Allina ask the Court to determine “the scope of notice-and-comment rulemaking requirements that the Department of Health and Human Services (HHS) must follow in administering the Medicare Act.” Brief for the Petitioner at 2, Azar v. Allina Health Services, No. 17-1484 (U.S. filed Nov. 13, 2018). The litigation stems from an HHS standard for calculating the amount of benefits to be given to Medicare Part C beneficiaries. The standard was initially introduced in 2004 in connection with formal notice-and-comment proceedings. Some years later, in Allina Health Services v. Sibelius, the standard was vacated because the district court found (and the D.C. Circuit agreed) that the standard “was not a logical outgrowth” of the policy introduced at the beginning of the comment period. 746 F.3d 1102, 1105, 1110–11 (D.C. Cir. 2014).
According to the respondents in this case, HHS responded improperly to the courts’ rulings when it again tried to enact its desired policy, “this time without undertaking any notice and comment.” Brief for Respondents at 1, Azar v. Allina Health Services, No. 17-1484 (U.S. filed Dec. 13, 2018). The respondents argue that this course of action was a violation of 42 U.S.C. § 1395hh(a)(2) and § 1395hh(a)(4). According to the respondents, these provisions impose notice-and-comment requirements for Medicare policy that are stricter than those codified in the Administrative Procedure Act.
HHS, on the other hand, contends that § 1395hh(a)(2) and § 1395hh(a)(4) “did not require notice-and-comment rulemaking.” Brief for the Petitioner at 15, 18, Azar v. Allina Health Services, No. 17-1484 (U.S. filed Nov. 13, 2018). According to HHS, the respondents’ reliance on § 1395hh(a)(2) is misplaced because § 1395hh(a)(2) “does not apply to interpretive rules,” and “[t]he challenged agency action here is, at most, an interpretive rule.” Id. at 16–17. HHS further contends that § 1395hh(a)(4) is inapplicable because “it applies only ‘[i]f the Secretary publishes a final regulation,’” and HHS “did not publish [the disputed standard] as a final regulation.” Id. at 19 (quoting 42 U.S.C. § 1395hh(a)(4)). Moreover, HHS argues, its response to the D.C. Circuit’s 2014 ruling was proper because it was “free to choose between rulemaking and adjudication,” and simply “chose to proceed by adjudication.” Id.
January 16
Knick v. Township of Scott
No. 17-647, 3d Cir.
Knick was argued in October but will be reargued this month so the Court can take a deeper dive into one of the issues that the petitioner raised in her brief and at oral argument. You can find our preview of the case here.
Tennessee Wine & Spirits Retailers Ass’n. v. Blair
No. 18-96, 6th Cir.
Preview by Michelle Divelbiss, Online Editor
It isn’t often that the Supreme Court addresses the 21st Amendment. In fact, there are only a handful of Supreme Court cases that involve this amendment, and this is only the third such case in thirty years.
States have authority under the dormant Commerce Clause to “directly to regulate the sale or use of liquor within [their] borders.” Brief for Petitioner at 6, Tennessee Wine & Spirits Retailers Assn. v. Blair, No. 18-96 (U.S. filed Nov. 13, 2018) (quoting Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 713 (1984)). To obtain a retail license to sell liquor in Tennessee, an individual must have been a Tennessee resident for at least two years; to renew a retail license, ten consecutive years of residency are required. For corporations or other legal entities who seek to obtain a retail license, all directors and officers must also satisfy the residency requirement. For all publicly-traded corporations, all stockholders must also conform to the residency requirements.
Respondent Tennessee Fine Wines & Spirits, LLC had applied for a retail license but hit a wall with the ten-year residency requirement. Each retail license is valid for only one year, and the renewal requirement effectively requires individuals to establish and maintain residency for at least nine years before applying for a retail license. The district court held that these residency requirements are unconstitutional because they “treat[] out-of-state economic interests differently from in-state economic interests,” and the Sixth Circuit affirmed. Id. at 13–14. Respondent argues that the Sixth Circuit’s holding was correct, especially because the Tennessee Attorney General had “previously admitted that the [residency] requirements are trade barriers that facially discriminate against interstate commerce.” Brief for Respondent at i, Tennessee Wine & Spirits Retailers Assn. v. Blair, No. 18-96 (U.S. filed Nov. 13, 2018). Petitioner, an association of Tennessee retailers, argues that the residency requirements help the state to ensure that retailers are “knowledgeable about the community’s needs and [are] committed to its welfare.” Brief for Petitioner at 16, Tennessee Wine & Spirits Retailers Assn. v. Blair, No. 18-96 (U.S. filed Nov. 13, 2018) (quoting Byrd v. Tenn. Wine & Spirits Retailers Ass’n, 883 F.3d 608, 633 (6th Cir. 2018) (Sutton, J., dissenting)). The Supreme Court will likely have to balance in-state and out-of-state interests, and this decision could affect other states that have a residency requirement for liquor retail licenses.
There are a lot of amici curiae interested in this case. The George Washington University Law School’s own Dean Morrison has filed an amicus brief, urging the Court to affirm the decision of the circuit court on alternative grounds.
