SCOTUS: Six Cases to Watch This Term
The new term may lack the blockbusters seen in recent terms, but there's plenty to spotlight.
October 01, 2018 at 12:20 PM
7 minute read
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Apple v. Pepper
Counsel: Daniel Wall, Latham & Watkins, San Francisco, for Apple Inc.; David Frederick, Kellogg, Hansen, Todd, Figel & Frederick, Washington, D.C., for Robert Pepper
About: In this antitrust case, iPhone owners sued Apple claiming it ”illegally monopolized the distribution of iPhone apps, and that the excessive commissions charged to app developers inflate the prices consumers ultimately pay for apps.” The justices are asked whether consumers can sue for treble damages whoever delivers goods to them even if they seek pass-through damages as indirect purchasers. The Ninth Circuit said the iPhone users could sue Apple, not, as Apple argued, the app developers.
At Stake: Hundreds of millions of dollars if Apple loses, and potential antitrust liability for other large tech companies selling products from third parties. Big law firm input on behalf of the tech industry reflects the high stakes.
Snap Prediction:The United States is among Apple's supporters, arguing that the justices' 1977 decision in Illinois Brick v. Illinois bars a treble damages remedy for a “pass-on theory” of injury. Apple may have the winning argument here. Much depends on how the court reads “direct purchaser” under Illinois Brick in the modern electronic marketplace.
|Frank v. Gaos
Counsel: Theodore Frank, Competitive Enterprise Institute, for himself; Kassra Nassiri, San Francisco's Nassiri & Jung, for Paloma Gaos; Donald Falk, Mayer Brown, Palo Alto, California, for Google.
About: The justices are asked whether a cy pres-only settlement that awards all of the class action proceeds to non-parties and no relief to class members complies with the requirement that settlements be “fair, reasonable and adequate,” and supports class certification. In this case, the lower courts said it was not feasible to distribute $5.3 million in settlement funds to 129 million Google users, and instead approved cy pres awards to six organizations with Internet privacy programs. The Ninth Circuit called cy pres-only settlements “the exception, not the rule,” and said they were appropriate ”where the settlement fund is 'non-distributable' because 'the proof of individual claims would be burdensome or distribution of damages costly.'”
At Stake: The Supreme Court has declined, until now, to review challenges to cy pres awards but some justices have raised concerns about them. Google and others argue that district courts already apply “exacting standards” to these awards as they evaluate the need on a case-by-case basis. U.S. Attorney General Jeff Sessions this year directed his attorneys not to enter cy pres settlements.
Snap Prediction: The justices may want to tighten up standards for cy pres-only settlements, but it seems unlikely that they would eliminate cy pres awards completely.
|Timbs v. Indiana
Counsel: Wesley Hottot of Institute for Justice represents Tyson Timbs and his 2012 Land Rover vehicle. Indiana Solicitor General Thomas Fisher represents the state.
About: The issue seems dry, but the case could have wide ramifications: whether states and localities must obey the federal Eighth Amendment ban on “excessive fines.” In this case, Indiana police seized a $42,000 Land Rover from a resident who pleaded guilty to drug charges. A lower court said the seizure was “grossly disproportional” to the drug offense, but the Indiana Supreme Court reversed.
At Stake: Excessive forfeiture of assets to budget-starved state and local law enforcement agencies has become a major cause celebre for Institute for Justice and other groups that see it as government overreach, akin to eminent domain.
Snap Prediction: A broad array of amicus groups ranging from the Chamber of Commerce to the National Association of Criminal Defense Lawyers have sided with Timbs, and their position is likely to appeal to a majority of justices.
|Helsinn Healthcare v. Teva Pharmaceuticals
Counsel: Kannon Shanmugam of Williams & Connolly represents Helsinn Healthcare. Steffen Johnson of Winston & Strawn is counsel of record for Teva Pharmaceuticals.
About: This is a major patent case that asks when and whether an inventor's previous sale of an invention makes it ineligible for a patent as a form of “prior art.” Helsinn is a Swiss drug company that developed a drug to reduce nausea for cancer patients taking chemotherapy. To bolster financing for the drug project, Helsinn entered a sales agreement with a U.S. firm. When it then filed a patent application, Teva sued, claiming among other things that Helsinn's sale arrangement invalidated the patent claim. On appeal, the U.S. Court of Appeals for the Federal Circuit sided with Teva.
At Stake: A brief by PhRMA tells the court that allowing the federal circuit ruling to stand will call into question “countless” pending or existing patents, and asked the justices to clarify the meaning of relevant provisions of the 2011 America Invents Act.
Snap Prediction: Overturning a ruling by the federal circuit is nothing new for the justices, and it seems likely that the court will do it again in the Helsinn case.
|Fourth Estate Public Benefit v. Wall-Street.com
Counsel: Aaron Panner, Kellogg, Hansen, Todd, Figel & Frederick, Washington, D.C., for FFourth Estate Public Benefit Corp; Peter Stris, Los Angeles' Stris & Maher, for Wall-Street.com.
About: Fourth Estate Public Benefit Corp., an online news producer, brought a copyright infringement action against Wall-Street when it refused to remove Fourth Estate articles after its license expired. Fourth Estate had registered the articles with the U.S. Copyright Office but that office had not yet acted on the applications. The justices will decide whether registration of a copyright claim “has been made” within the meaning of copyright law when the application, deposit and fees have been delivered to the Copyright Office, as Fourth Estate argued, or, as Wall-Street contended, only when the office acts on the application. The Eleventh Circuit sided with Wall-Street.
At Stake: There is a wide circuit split on what appears to be a very practical issue. For entities claiming copyright infringement, delays by the Copyright Office can mean additional costs for the copyright owner and even loss of a remedy if the statute of limitations expires before the office acts.
Snap Prediction: This one seems tailor-made for Justice Neil Gorsuch, one of the high court's textualists. Although the court doesn't generally take cases to affirm, there is a real circuit split. Wall-Street appears to have the stronger argument: “A copyright simply cannot be registered or refused without action by the register of copyrights.”
|Lorenzo v. Securities and Exchange Commission
Counsel Robert Heim of Meyers & Heim represents plaintiff Francis Lorenzo, and the U.S. Securities and Exchange Commission will be represented by the U.S. Solicitor General's Office.
About: Francis Lorenzo was charged for conveying false statements to investors—statements that Lorenzo's boss drafted. The U.S. Court of Appeals for the D.C. Circuit ruled that because Lorenzo was not the “maker” of the statements, he could not be found guilty of fraudulent statements. But the panel said Lorenzo was guilty on another count because of his role in a fraudulent scheme.
At Stake The question is whether the U.S. Securities and Exchange Commission should have two bites at the apple in securities fraud prosecutions—nabbing wrongdoers for fraudulent schemes as well as fraudulent statements. The Chamber of Commerce and securities groups seek clarity from the high court.
Snap Prediction: Brett Kavanaugh dissented from the D.C. Circuit's ruling in Lorenzo's case, which probably means he will likely recuse if he has been confirmed to the Supreme Court by the time it is argued. With an eight-justice court, the SEC has a good chance of winning.
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