Tag: supreme court

Supreme Court: False Claims Act & Materiality Requirement

False claims act Supreme courtThe U.S. Supreme Court has rendered a unanimous decision in the hotly-awaited False Claims Act case of Universal Health Services v. United States ex rel. Escobar.  This case squarely presented the issue of whether liability may be based on the so-called “implied false certification” theory.  Universal Health Service’s (“UHS) problem originated when it was discovered that its contractor’s employees who were providing mental health services and medication were not actually licensed to do so. The relator and government alleged that UHS had filed false claims for payment because they did not disclose this fact and thus had impliedly certified that it was in compliance with all laws, regulations, etc.  The District Court granted UHS’s motion to dismiss because no regulation that was violated was a material condition of payment. The United States Court of Appeals for the First Circuit reversed, holding that every submission of a claim implicitly represents regulatory compliance and that the regulations themselves provided conclusive evidence that compliance was a material condition of payment because the regulations expressly required facilities to adequately supervise staff as a condition of payment.

The Supreme Court vacated and remanded the matter in a manner that represents a compromise view of implied false certification.

The Court recognized the vitality of the implied false certification theory but also held that the First Circuit erred in adopting the government’s expansive view that any statutory, regulatory, or contractual violation is material so long as the defendant knows that the Government would be entitled to refuse payment were it aware of the violation.

Instead, the Court held that the claims at issue may be actionable because they do more than merely demand payment; they fall squarely within the rule that representations that state the truth only so far as it goes, while omitting critical qualifying information, can be actionable misrepresentations.   Here, UHS and its contractor, both in fact and through the billing codes it used, represented that it had provided specific types of treatment by credentialed personnel.  These were misrepresentations and liability did not turn upon whether those requirements were expressly designated as conditions of payment.

The Court next turned to the False Claims Act’s materiality requirement, and stated that statutory, regulatory, and contractual requirements are not automatically material even if they are labeled conditions of payment. Nor is the restriction supported by the Act’s scienter requirement. A defendant can have “actual knowledge” that a condition is material even if the Government does not expressly call it a condition of payment. What matters is not the label that the Government attaches to a requirement, but whether the defendant knowingly violated a requirement that the defendant knows is material to the Government’s payment decision.

The FCA’s materiality requirement is demanding. An undisclosed fact is material if, for instance, “[n]o one can say with reason that the plaintiff would have signed this contract if informed of the likelihood” of the undisclosed fact.   When evaluating the FCA’s materiality requirement, the Government’s decision to expressly identify a provision as a condition of payment is relevant, but not automatically dispositive. A misrepresentation cannot be deemed material merely because the Government designates compliance with a particular requirement as a condition of payment. Nor is the Government’s option to decline to pay if it knew of the defendant’s noncompliance sufficient for a finding of materiality. Materiality also cannot be found where noncompliance is minor or insubstantial.

Moreover, if the Government pays a particular claim in full despite its actual knowledge that certain requirements were violated, that is very strong evidence that those requirements are not material. The FCA thus does not support the Government’s and First Circuit’s expansive view that any statutory, regulatory, or contractual violation is material so long as the defendant knows that the Government would be entitled to refuse payment were it aware of the violation.

The materiality requirement, stringently interpreted, and the fact that the First Circuit’s expansive view was rejected suggest that the game is far from over and that there still are viable defenses, facts allowing, to cases premised upon the implied false certification theory.

ARTICLE BY Stuart M. Gerson of Epstein Becker & Green, P.C.
©2016 Epstein Becker & Green, P.C. All rights reserved.

Supreme Court Stryker/Halo Decision Makes it Easier for Courts to Award Enhanced Damages In Patent Infringement Cases

The recent Supreme Court decisions in the Stryker and Halo cases just made it easier for courts to award enhanced damages in patent infringement cases, discarding Seagate’s “objective recklessness” test.

The Seagate Test

In 2007, the Federal Circuit announced a test for enhanced damages whereby a plaintiff seeking enhanced damages had to show that the infringement of his patent was “willful.”  In re Seagate Technology, LLC,  497 F. 3d, 1360, 1371.  The Federal Circuit set forth a two-part test to establish such willfulness: First, “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” without regard to “[t]he state of mind of the accused infringer.” Id., at 1371. This objectively defined risk is to be“determined by the record developed in the infringement proceedings.” Ibid. “Objective recklessness will not be found” at this first step if the accused infringer, during the infringement proceedings, “raised a ‘substantial question’ as to the validity or noninfringement of the patent.” That bar applied even if the defendant was unaware of the arguable defense when he acted.Supreme Court Patent infringement

Second, after establishing objective recklessness, a patentee had to show by clear and convincing evidence the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.”Seagate, 497 F. 3d, at 1371. Only when both steps were satisfied could the district court proceed to consider whether to exercise its discretion to award enhanced damages. Ibid. 

Stryker / Halo Decisions Restore Courts’ Discretion to Award Enhanced Damages

The Supreme Court’s recent decision in the Stryker and Halo cases discarded the Seagate test and restored courts’ discretion to award enhanced damages.  The Court held “[t]he Seagate test is not consistent with §284.”  The relevant language of § 284 contains “no explicit limit or condition on when enhanced damages are appropriate, and this Court has emphasized that the “word ‘may’ clearly connotes discretion.”  So the Court found no explicit requirement for Seagate’s “objective recklessness” test.

The Court also found Seagate unnecessarily required a finding of “objective recklessness” even when wrongdoing was demonstrated by the facts of a case.  The Court also disagreed with Seagate’s requirement of a “clear and convincing evidence” standard for showing recklessness, and held that the proper standard for enhanced damages was a “preponderance of the evidence” — the same standard as for patent infringement determinations.

The Court explained that its decision did not contradict § 298, that failure to present advice to the court may not be used to prove willful infringement:

Section 298 provides that “[t]he failure of an infringer to obtain the advice of counsel” or “the failure of the infringer to present such adviceto the court or jury, may not be used to prove that the accused infringer willfully infringed.” 35 U.S.C. § 298. Respondents contend that the reference to willfulness reflects an endorsement of Seagate’s willfulness test. But willfulness has always been a part of patent law, before and after Seagate. Section 298 does not show that Congress ratifiedSeagate’s particular conception of willfulness. Rather, it simply addressed the fallout from the Federal Circuit’s opinion in Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F. 2d 1380 (1983), which had imposed an “affirmative duty” to obtain advice of counsel prior to initiating any possible infringing activity, id., at 1389–1390. See, e.g., H. R. Rep. No. 112–98, pt. 1, p. 53 (2011).

Consequently, nine years after Seagate, the Supreme Court has made it easier for courts to make a determination of enhanced damages.  Time will tell if this decision will spur additional patent opinion practice, such as prior to the 2007 Seagate decision.

ARTICLE BY Timothy Bianchi of Schwegman, Lundberg & Woessner, P.A.
© 2016 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

U.S. Supreme Court Allows Pre-Permit Challenges to Approved Jurisdictional Determinations

waters of the united statesIn a major new legal development for the Clean Water Act’s Section 404 wetlands permitting program, landowners can now challenge the federal government’s claim that areas targeted for fill are “waters of the United States” without first having to seek a permit to fill those waters, according to the Supreme Court’s decision issued on May 31st in United States Army Corps of Engineers v. Hawkes Co., Inc., No. 15-290 (U.S. May 31, 2016) (Hawkes). Until now, landowners could not immediately contest in court a determination by the Corps of Engineers (“Corps”) or the U.S. Environmental Protection Agency that jurisdictional wetlands, ephemeral drainages, vernal pools or any other types of “waters” existed on property targeted for fill. Instead, landowners had to first complete the Section 404 permitting process – a process that can take months or even years – before challenging the underlying jurisdictional determination, or proceed to fill the site without a permit and risk possible civil penalties of up to $37,500 per day, or even criminal prosecution. Under Hawkes, a landowner can now seek judicial review of the Corps’ formal assertion of jurisdiction without waiting for the conclusion of the Section 404 permitting process.

Unanimous Decision a Sharp Rebuke to the Corps and EPA

The Court’s opinion in Hawkes was unanimous (8-0), although some of the justices differed in their reasoning in support of the outcome. Nonetheless, at a time when the Court has been sharply divided on other issues, the unanimity of result in this case is a sharp rebuke to both the Corps and EPA.

At issue were plans by three mining companies to engage in the mining of peat, which is an organic material that forms in waterlogged ground. The companies applied for a Section 404 permit, and were told by the Corps that it would be very expensive and take years to complete the permitting process. The Corps issued an approved jurisdiction determination (“JD”) stating that the property contained jurisdictional “waters” by virtue of a “significant nexus” to a river, located some 120 miles away. The companies administratively appealed the JD within the Corps to no avail, and then sought judicial review in the federal district court. Following established legal precedent, the district court dismissed the case on the grounds that a JD does not constitute a “final agency action,” which is a prerequisite for judicial review under the federal Administrative Procedures Act. The 8th Circuit Court of Appeals reversed, holding that a JD was “final agency action,” and today the Supreme Court affirmed the 8th Circuit’s ruling.

Important Takeaways and Observations from Hawkes

  • The underlying merits of the challenge in Hawkes – whether the peat bog was jurisdictional under the Clean Water Act by virtue of its alleged “significant nexus” to a river 120 miles away – was not reached by the Supreme Court. Instead, under the posture of the case, the “waters” of the U.S.” determination will be returned to the District Court with instructions to hear the challenge to the JD, assuming the companies still wish to pursue their case.

  • The right to pre-permit judicial review of a JD applies only to “approved” jurisdictional determinations. These are the formal JD’s verified by the Corps (or the EPA in certain circumstances), which typically are based on extensive fact-finding by qualified experts following written guidance established by the Corps and EPA. These are distinguished from “Preliminary Jurisdictional Determinations” (“PJD’s”), which are also officially recognized as a basis for the issuance of a Section 404 permit, but which are not definitive declarations of jurisdiction by the Corps. Instead, PJD’s essentially operate as determinations by the Corps on the scope of jurisdictional waters that the landowner has agreed not to contest. The intent is to avoid a time-consuming, expensive and exacting jurisdictional determination and to instead move more quickly into the permitting process. It was the approved JD – not the PJD – that was the subject of the Supreme Court’s decision in the Hawkes case.

  • In order to challenge an approved JD, it still will be necessary for permit applicants to exhaust their administrative appeals within the Corps pursuant to the applicable Corps’ regulations (33 CFR Part 331) before they can file suit in federal court.

Implications of Hawkes

The Court’s decision in Hawkes is significant. Until now, the Corps and EPA held many of the cards in any proposed project that threatened to disturb or fill alleged “waters of the United States.” The landowner faced a Hobson’s choice of filling the potential “waters” and risking a civil or criminal enforcement action, or delaying project plans for months or even years while navigating the Section 404 permitting process. Now, in situations involving marginal claims of jurisdiction, the landowner has one more card to play – the opportunity to seek court review of an approved JD without waiting for the Section 404 permitting process to be completed.

Article By James T. Burroughs of Allen Matkins Leck Gamble Mallory & Natsis LLP

© 2010-2016 Allen Matkins Leck Gamble Mallory & Natsis LLP

Supreme Court Cert: Laches (in Patent Cases) and Copyrightable Subject Matter to Be Reviewed

U_S_-Supreme-Court1Laches

The Supreme Court of the United States granted certiorari to review a patent case on the law of laches. SCA Hygiene Products v. First Quality Baby Products, Case No. 15-927 (Supr. Ct., May 2, 2016).

In its cert petition, SCA argued that the en banc decision of the US Court of Appeals for the Federal Circuit conflicts with the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer (IP Update, Vol. 17, No. 5) that, under the Copyright Act, laches cannot bar damages claims brought within a statutory limitations period, even though the initial violation may have occurred years earlier. SCA also argued that the Federal Circuit observes a presumption in favor of laches that is inconsistent with Supreme Court precedent.

The question presented is: Can the defense of laches bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period (35 USC § 286), and if so, to what extent?

In SCA, the Federal Circuit granted en banc review to determine if the Supreme Court’s Petrella decision required a change to the law of laches in patent cases (IP Update, Vol. 18, No. 10). In a 6–5 decision, the Federal Circuit held that in terms of patent infringement actions, Petrella did not require a change in the laches rule set out by the court in 1992 in A.C. Aukerman v. R.L. Chaides Constr. Rather, the en banc Court explained that notwithstanding the provisions of § 286, Congress codified the laches defense in § 282 when it included an unenforceability defense in that statute. Thus, the Court found that laches could bar a damages claim even for acts occurring within the six-year period of § 286.

The Federal Circuit also held, however, that Petrella requires a change in the Aukerman rule that only pre-suit damages may be barred by laches. The Court explained that the availability of injunctive relief or ongoing royalties now depends on an analysis of the circumstances of the delay under the Supreme Court’s 2006 decision in eBay, Inc. v. MercExchange (IP Update, Vol. 9, No. 5).

Copyrightable Subject Matter                

The Supreme Court also granted certiorari in a copyright case arising from the US Court of Appeals for the Sixth Circuit and presenting the issue of copyrightability of cheerleader uniforms. Star Athletica, L.L.C. v. Varsity Brands, Inc., Case No. 15-866 (Supr. Ct., May 2, 2016).

The question presented is: What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?

In Star, a split panel of the Sixth Circuit held that the arrangement of colors, stripes, chevrons, zigzags and other designs on a cheerleading uniform are copyrightable, separate from utilitarian aspects of the uniform itself (IP Update, Vol. 18, No. 9). The Court rejected the argument that the pictorial, graphic or sculptural features are simply performing a decorative function (which is itself a “utilitarian aspect of an article”) and are therefore not separable from the utilitarian aspects of the cheerleading uniform. The dissent argued that the case turned on how “function” is defined (i.e., in terms of the decorations in issue), which would determine whether the designs were copyrightable.

Article By Paul Devinsky of McDermott Will & Emery

© 2016 McDermott Will & Emery

SCOTUS Rejects a Rule Neither Employers nor Employees Wanted: Green v. Brennan Decision

Supreme Court Green v. BrennanIn Monday’s Green v. Brennan ruling, the U.S. Supreme Court decided that the limitations period for constructive discharge runs from the date the employee gives notice of the intent to resign. The 7-1 outcome was not a surprise following the questioning by the justices during oral arguments. The justices held that the filing period begins when an employee resigns as a result of discriminatory behavior, not when an employer creates an environment so adversarial that an employee feels forced to resign, previously ruled in 2014 by the Tenth Circuit.

The case stems from an original complaint in 2008 by Green, a postmaster in Colorado. Green, who was passed over for a promotion, claimed someone less qualified received the position which caused him to file a discrimination complaint with the equal employment opportunity commission (EEOC).

The court was confronted with three alternative dates by which the limitations period that the EEOC must be contacted would begin to run:

  1. The date Green signed a settlement agreement giving him the option to retire or take a position 300 miles away with a significant pay cut, Dec. 16, 2009, and also the date alleged to be the last act of discriminatory conduct compelling petitioner Green to resign

  2. The date on which Green notified the respondent Postal Service of his intention to resign, Feb. 9, 2010, or,

  3. The date Green’s resignation actually became effective, March 31, 2010.

The choice was determinative because the controlling statute of limitations required Green to contact an EEOC counselor within 45 days of the “matter alleged to be discriminatory,” a notably ambiguous requirement. Green contacted an EEOC counselor on March 22, 2010, 96 days after signing a settlement agreement and 41 days after submitting his notice of resignation. The circuits were split on whether the limitations period ran from the “last discriminatory act” or the date the employee resigns.

The rule represents both interpretive and practical considerations that should be viewed favorable to employers, including:

  • It places constructive discharge claims on equal footing with ordinary wrongful discharge claims that require both discrimination and notification of being fired

  • Nothing in the limitations regulation provided an “exception” to the ordinary rule

  • Practical consideration supported the rule applied because it made little sense to start the clock ticking before a plaintiff could actually file suit

Employers should welcome this outcome and breathe a sigh of relief because of the definitiveness and certainty it brings to both the accrual and repose of limitation periods applying to federal employment discrimination claims.

Article By Douglas D. Haloftis of Barnes & Thornburg LLP

© 2016 BARNES & THORNBURG LLP

Religious Freedom Regarding ACA Contraceptive Mandate Still In Limbo

On May 16, 2016, the U.S. Supreme Court offered only limited guidance on the challenges to the religious “accommodation” procedure under the Affordable Care Act’s (ACA’s) contraceptive mandate. Numerous faith-based institutions had challenged the mandate and the procedural requirements for seeking an exemption on religious grounds as violations of the Religious Freedom Restoration Act (RFRA) and the First Amendment of the federal Constitution. In an unusual (but not unprecedented) move, the Court relied on confirmations from both sides that an alternative solution may resolve this dispute, and remanded the cases back to the Third, Fifth, Tenth, and D.C. Circuits to allow the parties to work it out. Zubik v. Burwell, 578 U.S. ___ (2016).

Religious Objection Form At Issue

Under the ACA, organizations providing health insurance to their employees must cover certain FDA-approved contraceptives as part of their health plans. Federal regulations, however, permit organizations to object to providing contraceptives on religious grounds. To avoid recourse for failing to provide mandated contraceptive coverage, such organizations must provide a form, either to their insurer or to the federal government, stating their religious objection.

Numerous faith-based nonprofit organizations, including the Little Sisters of the Poor Home For the Aged in Denver, argue that the ACA’s procedures require them to be complicit in providing services that violate their sincerely held religious beliefs. In various federal courts throughout the country, these religious institutions filed lawsuits challenging the legality of having to submit the religious objection form. After various appellate courts weighed in, the cases were consolidated for the Supreme Court to decide.

Court Sought Alternate Solutions

In late March, the Court asked both sides to come up with new proposals on how the female employees of these nonprofit organizations could receive cost-free contraceptive coverage without burdening the organizations’ religious  freedoms. After reviewing the parties’ submissions, the Court concluded that both sides confirmed there was a feasible option to provide contraceptive coverage through the organizations’ insurance companies without any objection notice from the religious parties.

In its per curiam opinion, the Court vacated the judgments and remanded the cases back to the respective appellate courts to allow the parties “an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans receive full and equal health coverage, including contraceptive coverage.” The Court stated that the parties should be given “sufficient time to resolve any outstanding issues between them.”

The Court, including the concurrence by Justice Sotomayor joined by Justice Ginsburg, emphasized that it was not ruling on the merits of the case and that the lower courts should not read anything into the Court’s opinion as leaning one way or the other. As it relates to the nonprofits in this case, the Court stated that the government has notice that they object on religious grounds so no further notice is required going forward. It also emphasized that the government should not fine or penalize the nonprofits.

What It Means

The Supreme Court’s failure to decide the legal issues surrounding the ACA’s contraceptive mandate and the religious “accommodation” means that numerous federal appeals courts will individually address whether the parties can come up with a mutually satisfactory resolution of the cases. It is unclear whether any of the courts will have to decide the legal issues (again). In any event, the very real possibility is that one or more cases could end up before the Supreme Court in a later session.

Article By Steven T. Collis of Holland & Hart LLP

Copyright Holland & Hart LLP 1995-2016.

Supreme Court Rules Public Employee Demoted For Perceived Political Activity Can Bring First Amendment Challenge

In a 6-to-2 decision, the Supreme Court ruled that when a public employer demotes an employee in order to prevent the employee from exercising his free-speech rights, the employee may challenge that action as a violation of the First Amendment and §1983, even if the employer was mistaken about the employee’s behavior. The Court found that the government’s motive is what matters and that the constitutional violation of discouraging employees from engaging in protected political activity and speech is the same regardless of whether or not the employer was mistaken about the employee’s political involvement. Heffernan v. City of Paterson, 578 U.S. ___ (2016).

Supervisor Assumed Employee Supported Opposing Candidate

Jeffrey Heffernan was a police officer in Paterson, N.J., a twenty-year veteran of the force. After being promoted to detective in 2005, he was assigned to the office of the chief of police. In April 2006, the city was in the middle of a mayoral election where the incumbent had the support of Heffernan’s supervisors, but the challenger was a former Paterson police chief and friend of Heffernan. Heffernan could not even vote in the election as he did not live in the city but his mother did.

One afternoon, while off duty, Heffernan went, at his mother’s request, to the challenger’s campaign office to get a new yard sign for his mother’s yard. Other members of the police force saw him with the sign. The following day, Heffernan’s supervisors demoted him to patrol officer and assigned him to a walking patrol post. They demoted him as punishment for what they thought was his “overt involvement” in the challenger’s campaign, even though that belief was mistaken. Heffernan was not involved in the campaign but merely picked up the sign to help his bedridden mother.

Heffernan sued, alleging his demotion violated the First Amendment. He asserted that his supervisors demoted him because they thought he engaged in constitutionally protected speech, even though they were mistaken about his actions. The district court and Third Circuit Court of Appeals rejected his claim, holding that a free-speech retaliation claim under §1983 lies only when the government retaliated against an employee who actually exercised his First Amendment rights, not on the mistaken perception that he exercised protected rights.

High Court Rules In Favor Of First Amendment Protection 

Generally, the First Amendment prohibits government officials from dismissing or demoting an employee because that employee engaged in constitutionally protected political activity or speech. Heffernan argued that the government’s motive in taking an adverse employment action is the key to a public employee’s retaliation claim. He alleged that as long as a government employer believed that the employee was engaged in protected activity and took adverse action because of that belief, the employer violated the First Amendment.

The Supreme Court agreed. Writing for the majority, Justice Breyer stated that “the government’s reason for demoting Heffernan is what counts here.” The Court ruled that when a government employer demotes an employee because it wants to prevent the employee from engaging in political activity protected by the First Amendment, the employee is entitled to challenge that unlawful action under the First Amendment and §1983, even if the employer is acting upon a factual mistake regarding the employee’s behavior. The Court stated that the employer’s mistake does not diminish the risk of harm to the demoted employee or to others who fear similar adverse consequences of engaging in protected activity.

The Court left the door open, however, for government employers to adopt a neutral policy that prohibits police officers from overt involvement in any political campaign. Whether a specific neutral policy meets constitutional muster is a question the Court left for another day.

It’s the Employer’s Ill Motive that Matters, Not the Employee’s Exercise of Rights

The Court’s ruling means that a public employer can be held liable for violating an employee’s constitutional rights even where the employee admits he wasn’t exercising those rights. The public employer’s desire or motive to keep the employee from engaging in protected political activity is enough to give the employee a viable claim for damages under §1983 regardless of whether the employee engaged in any activity protected by the Constitution.

Article By Joanna R. Vilos of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2016.

How a Supreme Court Vacancy Actually Works and Its Implications Part 1 of 2

Justice Scalia’s unexpected passing has created political upheaval, judicial uncertainty, and a procedural anomaly for the Supreme Court.  The entire nation is receiving a crash course in Civil Procedure as the Court responds to the vacancy created by Scalia. Barring any massive changes in the political situation, it seems this vacancy is one we’re all going to live with for a while.  It seems prudent, then, to analyze and talk to Supreme Court litigation experts about expectations of this extended vacancy, how it might impact the Court, the cases before the Court, and the country.

There is every indication that Scalia’s vacancy will have a big impact on some major issues.  Boris Bershteyn of  Skadden Arps,1  says, “Indeed, some of the most anticipated cases of this Term—including those involving Texas’s regulation of abortion clinics and the Obama Administration’s immigration initiatives—have been or will be heard after Justice Scalia’s death. “With that in mind, Tejinder Singh of Goldstein & Russell, P.C.,2 says, “Until a replacement Justice is confirmed, cases will either be decided by an eight-member Court or rescheduled for hearing later, depending on what the Court decides would be best for that particular case. There is no rule that the Court has to follow; it can do what it wants.”

What Happens to Cases Currently Before the Court that had Scalia’s Involvement Prior to his Death?

Scalia’s death affects any case where the court had not issued an opinion before he died. As Andy Pincus of Mayer Brown3 says, “Justice Scalia’s death impacts every undecided case on which he sat – because the Court will now have to decide the case without Justice Scalia’s participation.  If he had responsibility for drafting a majority opinion or dissent, another Justice must take over that role.  If his vote was critical to the decision in the case, the Court will have to reconsider the matter and figure out how to decide it – or divide 4-4.”  This will have a greater impact as time goes on.  Any votes Scalia had cast in cases where the opinion had not been issued do not count. Wilmer Hale Appellate Partner Daniel Volchok4 says, “At the time of Justice Scalia’s death, the Court had decided more cases from the October sitting than from any of the later sittings, so in that sense the impact on the later sittings is greater.”

What Happens to Cases During the Vacancy, Where the Court Issues a Ruling but is Divided Evenly?

In the instance where the court is divided evenly, and they agree there is no narrow interpretation they can all agree with, they can ask the case be reargued, or they can issue a short order stating that “the judgment under review is affirmed by an equally divided Court.” This is known as a per curiam opinion, and it is usually issued under the court’s name, instead of a majority and a minority opinion. This split effectively holds up the decision of the lower court, and it does not establish any sort of precedent.  According to Volchok, “Whichever option the Justices take for any particular case, they can do so on their own timetable; they do not have to choose immediately after a 4-4 vote.”

Another option, according to Volchok is “The Court has in the past ordered that cases be re-argued following the appointment of a new Justice.  That occurred, for example, when Justice Samuel Alito succeeded Justice Sandra Day O’Connor.  There’s no reason that couldn’t happen again here.” Less likely, is that a case is just held in limbo after the Court has decided to hear it.  Volchok thinks, “It seems more likely that the Court would simply decide those cases—by a 4-4 tie if necessary—and then take the same issues up again in different cases once the vacancy was filled.”

Some evidence suggests that the court might be taking steps to avoid 4-4 ties.   In Zubik v Burwell, the challenge to the contraceptive mandate in the Affordable Care Act, the court took the somewhat unconventional step of asking for supplemental briefs detailing possible compromises to the case.  Bershteyn says, “the Court’s recent, highly unusual order in Zubik v. Burwell . . . heard during the March sitting—may well be an effort to resolve the case in a way that avoids a 4-4 tie.”

Looking ahead, the case selection might be impacted by the vacancy, especially the longer the vacancy persists.  According to Singh, “the Court itself may become more reticent to take on issues that it believes are likely to end in 4-4 ties. So it may eschew cases raising some of the more controversial constitutional issues until it has a ninth Justice.”

How Does Scalia’s Vacancy Impact Certiorari?

Another area that will be impacted by the vacancy on the court is how the court grants certiorari, or decides which cases to hear.  Every year, the court is asked to hear around 7,000 cases.  And every year, the court hears between 75-80 of those cases.  Four justices must vote “yes” to grant certiorari for a case, and it is very difficult to get a case in front of the court.  Now, there is some speculation that it will become herculean to put a case before the Supreme Court.  Volchok says, “four votes are required for a petition to be granted, and now those four votes must now be found among eight Justices rather than nine.  So just as a statistical matter it will be more challenging for any party seeking Supreme Court review.”  Pincus agrees, saying, “it could well be more difficult to obtain four votes to grant certiorari, because there is one fewer Justice to vote on that issue.”

How will Scalia’s Absence Impact the Decision to Seek Appeal?

Other factors complicate the picture further.  Scalia was often among the majority when cases were decided 5 to 4, and this record could impact some litigants desire to seek a hearing by the court. Singh hypothesizes, “any litigant who has a case where they were relying on Justice Scalia as the fifth vote may now be reluctant to try to take the case up, because winning may now be impossible.”   Additionally, possibly, the decision making process of the court might change when it comes to granting certiorari.  Volchok says, “this is highly speculative, but some or all of the Justices will be less willing to vote to grant a petition if they think there is a good chance the Court will ultimately divide 4-4.  To the extent that phenomenon does exist, it is another reason that securing Supreme Court review in the coming months will be even more difficult than usual.”

Additional Supreme Court Procedural Questions and their Implications will be Addressed in Part Two – Next Week.

Article By Eilene Spear, Jennifer Schaller, Nicole Cudiamat Minnis

Copyright ©2016 National Law Forum, LLC

1 Boris Bershteyn is a litigation partner in Skadden, Arps, Slate, Meagher & Flom LLP’s New York office and practices before the Supreme Court of the United States and other appellate courts. He has also held various government positions including: Acting Administrator, Office of Information and Regulatory Affairs; General Counsel, White House Office of Management and Budget; Special Assistant to the President and Associate White House Counsel and Deputy General Counsel, White House Office of Management and Budget.

2 Tejinder Singh is a Lecturer on Law at Harvard Law School’s Supreme Court Litigation Clinic and a partner at Goldstein & Russell, P.C. in Washington D.C. Mr. Singh has represented various parties and amici before the Supreme Court and lower courts.  In 2014, Tejinder argued and won the Supreme Court case Lane v. Franks, establishing that the First Amendment protects the subpoenaed testimony of public employees. 

3 Andrew J. Pincus is a litigation partner at Mayer Brown LLP’s Washington D.C. office.   Mr. Pincus has argued 25 cases before the Supreme Court of the United States.  He has also authored more than 250 appellate briefs.  Andrew is also a former Assistant to the to the Solicitor General in the United States Department of Justice and co-founded and serves as co-director of the Yale Law School’s Supreme Court Advocacy Clinic.

4 Daniel Volchok is a partner in Wilmer Cutler Pickering Hale and Dorr LLP’s Litigation/Controversy Department, and a member of the Appellate and Supreme Court Litigation Practice Group located in Washington D.C. Mr. Volchok has filed numerous merits and amicus briefs in the US Supreme Court as well as in state and federal appellate courts, and has also participated in successful efforts to obtain or oppose certiorari.

Supreme Court’s Decision on Future of DACA and DAPA

Supreme Court argument has taken place in United States v. Texas, a high-stakes, hotly contested case on the Administration’s executive programs that deferred possible deportation of millions of undocumented individuals. The Court’s expected June decision is likely to have far-reaching implications for employers.

In 2012, the Obama Administration introduced through executive action Deferred Action for Childhood Arrivals (DACA), a program which deferred deportation of certain individuals who arrived to the United States unlawfully as minors. DACA allowed these individuals access to employment authorization. In late-2014, the Administration, again through executive action, expanded DACA, in part, by increasing the available periods of employment authorization for DACA beneficiaries from two years to three years, and introduced Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). DAPA is a program which deferred deportation of and created a basis for employment authorization for parents who, as of November 20, 2014, had a child who was a U.S. citizen or green card holder.

In February 2015, the U.S. District Court for the Southern District of Texas concluded the 2014 DACA expansion and DAPA creation were unconstitutional and enjoined the 2014 executive action. The U.S. Circuit Court of Appeals for the Fifth Circuit upheld the lower court’s injunction later that year. The Administration appealed that decision to the U.S. Supreme Court.

The case raises the threshold issue as to whether states have the right to bring such an action and carries with it broad implications for the limits on and use of executive power. The case is important for employers because hundreds of thousands of individuals have obtained employment authorization through DACA’s 2012 guidelines and more than 100,000 more received three-year employment authorization approvals through the 2014 expansion before the district court’s injunction.  It was expected that many individuals would continue to apply for three-year employment authorization under the DACA expansion and DAPA creation.  Since February 2015 and until the Supreme Court renders a decision, only individuals qualifying under the original 2012 DACA guidelines may obtain employment authorization, limited to two-year increments.  If the Supreme Court agrees with the Fifth Circuit, then the DACA expansion and DAPA program will be nullified.  Whether the pre-2014 DACA program and guidelines would survive a Supreme Court decision affirming the Fifth Circuit’s ruling is unclear.

Contributing to the interest in and speculation about this case is the vacancy on the Supreme Court created by Justice Antonin Scalia’s recent death. Should the Supreme Court’s deliberations end in a 4-4 tie, the lower court’s ruling  would remain intact and undisturbed, thus foreclosing the ability of individuals who would otherwise be qualified for employment authorization under DACA expansion and DAPA to receive employment authorization as the 2014 executive action intended.  However, because an affirmance by an equally divided 4-4 Court would be non-precedential, the issues could be raised again in another case, after a ninth justice was seated on the Court.

There will be great interest in the outcome of this case as the end of the current term approaches.

Limelight Networks v. Akamai Tech. – Supreme Court Cert. Denied

Yesterday, the Supreme Court declined to hear Limelight’s petition for cert. on the question of whether an accused infringer may be held liable for direct infringement of a claim to a method where multiple parties perform the steps of the method.

On August 13, 2016, the S. Ct. remanded the en banc decision of the Fed. Cir. that set forth the law of divided infringement under s. 271(a), and found that Limelight directly infringed U.S. Pat. No. 6,108,703. The court held that an entity will be found responsible for others’ performance of method steps “(1) where that entity directs or controls others’ performance, [or] (2) where the actors form a joint enterprise.”

As well as in the case of agency or contractual direct infringement, the court concluded that liability under s.271(a) can also be found what an infringer “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner and timing of that performance.” The infringer must have the right and ability to stop the infringement.

In those instances, “the third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with infringement.” The element of direction or control is a question of fact, as is the presence of a joint enterprise.

If the facts support the presence of a joint venture, all parties involved can be found liable for direct infringement, “as if each were a separate actor.”

The court found that Limelight directed or controlled its customer’s performance of each remaining method step: “tagging and serving content”). Don’t ask me what this means. See slip. op. at 8-9. Of course, this decision is relevant to a drug company instructing a physician and, ultimately, the patient, via labelling and/or training, about how to use a drug or biological.

Article By Warren Woessner of Schwegman, Lundberg & Woessner, P.A.

© 2016 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.