Opinion

Alison Frankel

In new SCOTUS brief, Argentina pledges to comply with U.S. courts

Alison Frankel
May 30, 2014 20:44 UTC

The most notorious deadbeat in the U.S. courts made an historic concession this week.

In a May 27 response brief at the U.S. Supreme Court, Argentina said that, contrary to the accusations of its hedge fund foes, it will comply with directives from the 2nd U.S. Circuit Court of Appeals to pay renegade sovereign debtholders if the Supreme Court refuses to hear its appeal. That pledge marks a big departure from the outright defiance Argentina showed last year at the 2nd Circuit, when its lawyers informed the court that the government “would not voluntarily obey” a U.S. court order it disagreed with. Even after the appeals court ruling — which upheld an injunction that bars Argentina from making payments to holders of its restructured debt before it pays more than $1 billion it owes to the hedge fund holdouts — the Argentine government vowed that it would never negotiate with the rapacious hedge funds. Argentina now seems to be reconsidering that vow, both outside of the courts, as Reuters reported Thursday, and within the U.S. litigation, as the May 27 filing indicates.

In the new brief, Argentina’s lawyers — Paul Clement of Bancroft, who is counsel of record and a recent addition to Argentina’s team, and the country’s longtime advisers Jonathan Blackman and Carmine Boccuzzi from Cleary Gottlieb Steen & Hamilton — repeated their arguments that the Supreme Court should grant certiorari and ask New York’s highest state court to interpret the pari passu, or “equal footing,” provision in Argentina’s sovereign debt contracts. Argentina also suggested that this case is of such overwhelming importance to foreign sovereigns and to foreign debt markets that the Supreme Court might want to invite the views of the U.S. government, which (as I noted in March) didn’t file an amicus brief supporting Argentina’s cert petition.

One of the hedge funds holding judgments against Argentina, Aurelius, anticipated that suggestion in its brief opposing Supreme Court review; Aurelius’s counsel of record, Roy Englert of Robbins, Russell, Englert, Orseck, Untereiner & Sauber said that the justices shouldn’t give Argentina the tactical victory of delay when they’re already familiar with the U.S. government’s arguments from briefing in the lower courts and in other Supreme Court litigation over Argentina’s debt. Both Aurelius and Argentine creditor NML Capital, which is represented by Gibson, Dunn & Crutcher, asserted that there’s no reason for the Supreme Court to hear a dispute over the interpretation of a New York contract in a case that presents no split in the federal circuits on any matter of U.S. law.

Those were, of course, predictable responses. A bigger surprise was a May 5 amicus brief from six former federal judges who voiced outright the sentiment that surely motivated the 2nd Circuit. The former judges — Alfred Lechner of New Jersey district court, Michael McConnell of the 10th Circuit, Paul Cassell of Utah, Michael Chertoff of the 3rd Circuit, Mark Filip of Chicago and Michael Mukasey of Manhattan — said that Argentina has repeatedly demonstrated its refusal to be bound by the judgments of U.S. courts, so it doesn’t deserve the Supreme Court’s attention.

Justice Department sides with Madoff’s banks on SCOTUS review

Alison Frankel
May 27, 2014 20:02 UTC

Not every shred of hope is lost for Bernard Madoff trustee Irving Picard in his quest to recover billions from the international banks he has accused of abetting Madoff’s fraud. But it’s looking bleak for the Madoff trustee after the Justice Department filed a brief Friday at the U.S. Supreme Court. In response to the court’s request for the government’s view of Picard’s petition for a writ of certiorari, Solicitor General Donald Verrilli advised the justices to reject Picard’s appeal.

The dismissal in 2013 of Picard’s fraud suits by the 2nd U.S. Circuit Court of Appeals “does not conflict with any decision of (the Supreme Court) or of another court of appeals,” the SG’s brief said. “The decision below also does not preclude customers from pursuing their own actions against (the banks) based on the same alleged conduct that forms the basis of (Picard’s) claims. Further review is not warranted.”

The brief is an arduous trudge through the deep weeds of the law on federal pre-emption of state contribution claims; subrogation rights of the Securities Investor Protection Corporation; and the Bankruptcy Code standing of securities trustees to bring common-law claims on behalf of brokerage customers. If you are in the extremely small group of people for whom these are consequential questions, perhaps you’ll find illumination in the SG’s discussion of the intersection of Picard’s claims with such precedent as Caplin v. Marine Midland and Redington v. Touche Ross. For the rest of us, the brief is notable for the many different ways in which the Justice Department and its co-signer, the Securities and Exchange Commission, undercut Picard’s arguments for Supreme Court review.

SCOTUS’s Prop 8 ruling will complicate ballot initiative process

Alison Frankel
Jul 1, 2013 20:28 UTC

On Friday, two days after the U.S. Supreme Court announced its ruling in Hollingsworth v. Perry, marriage equality came back to California. Governor Jerry Brown, who had refused to appeal U.S. District Judge Vaughn Walker’s beautiful 2010 decision that the state’s bar on same-sex marriage was unconstitutional, ordered county clerks to begin issuing licenses to gay and lesbian couples. California Attorney General Kamala Harris performed the first wedding under the new regime, the San Francisco marriage of Kristin Perry and Sandy Stier, whose challenge to California’s ballot-initiative ban on same-sex marriage led to the Supreme Court’s decision last Wednesday. In Los Angeles, Mayor Antonio Villaraigosa married the other plaintiffs in the original case, Paul Katami and Jeff Zarrillo. Opponents of same-sex marriage filed an emergency petition at the U.S. Supreme Court over the weekend, seeking a temporary halt to the weddings, but Justice Anthony Kennedy, who oversees the 9th Circuit, denied it on Sunday. Marriage equality is now officially the law in California.

The means to that end, as you’ve probably heard, were not the equal rights of same-sex couples, at least not as far as the Supreme Court majority was concerned. An unusual five-judge coalition of Chief Justice John Roberts and Justices Antonin Scalia, Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan found that the private proponents of the ballot initiative barring gay marriage, known as Proposition 8, did not have standing to appeal Judge Walker’s 2010 ruling, even though the public officials originally named as defendants by Kristin Perry and her fellow plaintiffs declined to ask for review from the 9th Circuit Court of Appeals. You won’t find any soaring language on equal rights in the Perry opinion. (For that, you have to look to Justice Anthony Kennedy’s companion decision in United States v. Windsor, striking down the federal Defense of Marriage Act.) Hollingsworth v. Perry is instead a technical ruling on one of the Chief Justice’s favorite subjects, standing under Article III of the U.S. Constitution.

And for all the wedding hoopla right now in California, Hollingsworth v. Perry will live on in legal citations not for what it says about the marriage-equality rights of gays and lesbians but for its rejection of the rights of private ballot initiative proponents to appear in court in place of public officials who don’t support their law. I predicted after oral arguments in the case that the justices’ ruling could end up “better remembered for setting precedent on standing, stage agency and ballot initiatives than for civil rights.” I’m sticking with that prediction. Sooner than later, same-sex marriage will be the right of people across America, and for that we can count among those we thank the lawyers who took up the Proposition 8 challenge four years ago, David Boies of Boies, Schiller & Flexner and Theodore Olson of Gibson, Dunn & Crutcher. But this opinion’s holding that private citizens do not have standing to defend the constitutionality of ballot initiatives when state officials refuse to do so is also going to affect whether voters can override their elected officials.

Justices throw up Comcast obstacle in two more class actions

Alison Frankel
Apr 2, 2013 21:31 UTC

Last week, after the U.S. Supreme Court issued its deeply divided 5-to-4 ruling in Comcast v. Behrend, the antitrust class action bar breathed a sigh of relief. Lawyers had been worried the court would rule broadly that in order to be certified, classes must show that they are “susceptible to awarding damages on a classwide basis,” which was the question the Supreme Court had asked Comcast counsel to address. The majority, in an opinion written by Justice Antonin Scalia, seemed to answer the somewhat different question of whether trial and appellate courts may delve into the merits of the plaintiffs’ damages theory before certifying the class. Antitrust plaintiffs’ lawyers told my Reuters colleague Andrew Longstreth that the Comcast decision would have little impact on class certification because they could tailor damages allegations to match their theories of liability.

But yesterday the Supreme Court signaled that, at the very least, class action lawyers – and not just those in the antitrust bar – will have to address the Comcast opinion if they’re going to win certification rulings. In two different cases, one involving consumer product defect claims against Whirlpool, the other over alleged wage-and-hour violations by Charter One bank, the justices granted certioriari, vacated class certification rulings by the federal circuits and sent the cases back to the appellate courts for reconsideration in light of Comcast. The dissent in Comcast, written jointly by Justices Ruth Ginsburg and Stephen Breyer, said that the majority’s holding “should not be read to require, as a prerequisite to certification, that damages attributable to a classwide injury be measurable ‘on a class-wide basis,’ (since) recognition that individual damages calculations do not preclude class certification under Rule 23(b)(3) is well nigh universal.” Nevertheless, it’s now going to be up to the federal circuits to confirm the Comcast dissenters’ reading of the majority opinion.

The Whirlpool case, which comes out of the 6th Circuit Court of Appeals, is precisely the sort of class action the dissent was concerned about. The trial court, and then the appeals court, certified a statewide class of about 200,000 Ohio consumers who purchased front-loading Whirlpool washing machines that are allegedly prone to develop mold or emit a moldy smell. (The litigation is part of a much broader consumer offensive against makers and sellers of supposedly defective washing machines, as Whirlpool discusses in its petition requesting Supreme Court review.) The class contains some members who claim that their machines developed mold or a moldy smell and others whose machines are still fine, so obviously there are disparities in the damages class members may ultimately be entitled to. The trial judge dealt with that issue by certifying the class only for the purpose of determining whether Whirlpool’s machines are defective. Damages, he said, would be determined individually after any finding of Whirlpool’s classwide liability. The class affirmed by the 6th Circuit, in other words, is a liability-only class, though the appeals court said that all Whirlpool buyers could show injury, and thus standing to sue, if they paid a premium price for a defect-prone product.

Should Scalia step aside in gay marriage cases?

Alison Frankel
Dec 12, 2012 22:33 UTC

Controversy follows U.S. Supreme Court Justice Antonin Scalia like Pig Pen’s cloud of dirt. You’ve probably heard that on Monday night, when the justice was speaking at Princeton, a gay student confronted him about his dissent in the 2003 case of Lawrence v. Texas, in which the majority struck down a state law banning same-sex sodomy. Scalia’s dissent discussed the legitimate state interest in legislating morality, and warned that the majority’s holding called into question “state laws against bigamy, same-sex marriage, adult incest, prostitution, masturbation, adultery, fornication, bestiality, and obscenity.” He also called the opinion “the product of a Court, which is the product of a law-profession culture, that has largely signed on to the so-called homosexual agenda, by which I mean the agenda promoted by some homosexual activists directed at eliminating the moral opprobrium that has traditionally attached to homosexual conduct.”

In responding to the brave Princeton student, Duncan Hosie, who asked about his comparison of homosexuality to bestiality, Scalia was characteristically unrepentant. “If we cannot have moral feelings against homosexuality, can we have it against murder?” Scalia said, according to the Los Angeles Times. “Can we have it against other things? I don’t apologize for the things I raise.” (MSNBC did an extended segment on the flap, featuring Hosie and Georgetown University law professor Jonathan Turley.)

It’s safe to say that Scalia, an avowed Catholic, is not likely to receive huzzahs at his local Gay Pride march. But does his apparent approval of “the moral opprobrium that has traditionally attached to homosexual conduct” mean that he should not be part of the court that decides the constitutionality of gay marriage?

New SCOTUS brief: Keep international human rights cases in U.S. courts

Alison Frankel
Jun 11, 2012 22:55 UTC

Are the high seas the legal equivalent of foreign soil?

According to a new U.S. Supreme Court brief by the victims of alleged state-sponsored violence on an oil rig in Nigeria, they are indeed. The brief, filed in a case that will determine the role of the United States in international human rights litigation, argues that the very first Congress enacted the Alien Tort Statute in 1789 to establish federal-court jurisdiction over piracy cases. The sort of robbery on the high seas that Congress had in mind, the brief said, clearly took place off the shores of the United States. So it doesn’t make sense to presume, more than 200 years later, that Congress intended the Alien Tort Statute to apply only to alleged wrongdoing inside U.S. borders, especially because in all those intervening years Congress has never redefined the scope of the statute.

The brief, filed by Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison in the case known as Kiobel v. Royal Dutch Petroleum, is the opening salvo in the Supreme Court’s reshaping of the Kiobel case. As you may recall, the justices first heard oral argument in Kiobel in February, when lawyers on both sides addressed the issue of whether corporations can be held liable under the law. (The 2nd Circuit Court of Appeals had ruled in Kiobel that they can’t be, in a split with several other circuit courts.) Argument had hardly begun when Justice Anthony Kennedy asked a broader question prompted by Royal Dutch amici: Why was this case, which involved Shell’s alleged complicity with the Nigerian government in the torture and killing of Nigerian nationals, even in a U.S. court? In an extraordinary order issued days after the Kiobel oral argument, the Supreme Court essentially said it had been looking at the wrong question in the case. The justices called for all new briefing on “whether and under what circumstances the Alien Tort Statute allows courts to recognize a cause of action for violations of the law occurring within the territory of a sovereign other than the United States.”

Underlying that issue, of course, is the high court’s 2010 ruling in Morrison v. National Australia Bank, which held that U.S. laws should not be presumed to apply to conduct outside our borders. As I’ve reported, no federal appeals court has decided an ATS case based only on a Morrison analysis of extraterritoriality, though both the 9th Circuit and the District of Columbia Circuit have addressed whether the ATS applies overseas. (Majorities in both circuit court rulings concluded that it does, despite Morrison and dissenting opinions.)

SCOTUS to Federal Circuit: Think harder about what’s patentable

Alison Frankel
May 23, 2012 05:35 UTC

In March, when the U.S. Supreme Court ruled unanimously that Prometheus Laboratories was not entitled to a patent on a diagnostic process because it’s a law of nature, On the Case (and many others) predicted the justices would subsequently call for reconsideration of Myriad Genetics’ patents on breast cancer genes, since genes are, of course, also natural phenomena. Within a week we were all proven right. But the second case the Supreme Court has remanded to the Federal Circuit Court of Appeals in light of the Mayo ruling – which involves a patent on viewing copyrighted content on the Internet – suggests the justices want greater scrutiny of a wide array of patents, not just biotech IP.

Mayo addressed Section 101 of the Patent Act, which holds that “laws of nature, natural phenomena, and abstract ideas” are not patentable. That seems simple, but in interpretation it’s not. If patent seekers can show their invention involves a unique application of an abstract idea or law of nature, they’re entitled to a patent, so analysis of Section 101 patentability has focused on what constitutes an application. In Mayo, the justices unanimously agreed that a diagnostic test based on how patients respond to autoimmune drugs is not a patentable process under Section 101. But the cases the Supreme Court cited to reach that conclusion involved patents far removed from the human body: a process for molding rubber and a process for monitoring the catalytic conversion of hydrocarbons. Both processes relied on math and science formulas, which aren’t patentable. The rubber molding system, however, transformed a non-patentable law of nature into a patentable process, while the alarm system for catalytic converters did not.

That reasoning leaves plenty of room for cases that have nothing to do with diagnostic procedures to be re-evaluated under Section 101. “The basic analysis the Supreme Court lays out isn’t limited by subject matter,” said Gregory Garre of Latham & Watkins, who represents an online game company called WildTangent in the case the Supreme Court remanded to the Federal Circuit on Monday. WildTangent was one of three defendants sued by a company called Ultramercial, which holds a patent on a process for distributing copyrighted material on the Internet. Hulu and YouTube settled out of the patent infringement litigation in federal court in Los Angeles. But WildTangent continued, through both U.S. District Judge Gary Klausner‘s finding that Ultramercial’s patent was impermissibly abstract and the Federal Circuit’s restoration of the case last September. A three-judge appellate panel headed by Chief Judge Randall Rader held that Ultramercial’s patent – which calls for online viewers to watch an ad before being permitted access to copyrighted content – was not excluded by Section 101 because it described “the application of an abstract idea to a ‘new and useful end,’” which the Federal Circuit said was “the type of invention that the Supreme Court has described as deserving of patent protection.”

SCOTUS: Corporations are people, unless they torture other people

Alison Frankel
Apr 24, 2012 17:36 UTC

Corporations, as Mitt Romney famously reminded us this summer in Iowa, are people under the laws of the United States. Just take a look at the U.S. Supreme Court‘s 2010 ruling in Citizens United v. Federal Election Commission. The five justices in the majority (you know who they are) held that corporations are entitled to the same First Amendment right to free speech as regular old people, so Congress’ attempt to ban corporate electioneering was unconstitutional.

When are corporations not people in the eyes of the Supreme Court? When they’re accused of torturing or killing real live human beings. Last week, in Mohamad v. Palestinian Authority, all nine justices agreed that when Congress enacted the Torture Victim Protection Act in 1991, it restricted causes of action to those against “an individual” — and individuals aren’t organizations or corporations. The court looked at the dictionary definition of the word individual, as well as the legislative history of the anti-torture law, to conclude that Congress intended the law to apply only to “natural persons.” The opinion said it’s notable that lawmakers used the word “individual” instead of “person” in defining potential torture defendants because “‘person,’ as we have recognized, often has a broader meaning in the law than ‘individual.’”

Right. Corporate “persons” have First Amendment rights to unlimited Super PAC spending but corporate “individuals” don’t exist. I’m sure the relatives of Azzam Rahim, the naturalized U.S. citizen who was kidnapped, tortured, and killed by the Palestinian Authority in the case that gave rise to the Supreme Court’s ruling, were compelled by the high court’s parsing of the distinction between a “person” and an “individual.”

Sex tapers can thank 3rd Circuit for First Amendment protection

Alison Frankel
Apr 17, 2012 22:00 UTC

There’s no question what Congress intended when it passed a pair of laws requiring producers of sexually-explicit materials to keep records on the age of the people engaged in sex acts (or simulated sex acts): curb child pornography. Lawmakers had already banned commercial child porn, but producers hired actors who were of age but looked young, making it tough to enforce the ban. In frustration, Congress passed a 1988 law that imposed specific record-keeping demands on porn producers, who must verify that performers are of age, maintain records to back the verification, and provide the location of those records in labels affixed to the sexually-explicit products. The law said that producers must maintain age records at their “business premises,” and must make the records available for government inspection, or else face a stiff fine and a prison sentence. A 2006 amendment to the law set the same record-keeping, labeling, and inspection requirements when sex is only simulated (albeit with a carve-out demanded by non-porn movie studios).

Because much child porn trafficking takes place underground, via private channels, the Justice Department said it would enforce the laws broadly, targeting not just porn-movie makers, but non-commercial producers of sexually-explicit material as well. The government did promise, however, that it would only prosecute those who intended to sell or trade the material.

The porn industry, as is its wont, brought constitutional challenges to the record-keeping laws, claiming that they violated the First, Fourth, and Fifth Amendments (specifically, free speech, equal protection, self-incrimination, and search and seizure provisions). In 2009, the 6th Circuit Court of Appeals sided with the Justice Department on the First Amendment question, in an 11-to-6 en banc ruling that held the record-keeping laws don’t unconstitutionally target porn producers and have only a collateral effect on free speech that’s justified by the government’s interest in protecting children from exploitation.

SCOTUS: Should U.S. courts police international human rights?

Alison Frankel
Mar 7, 2012 15:53 UTC

In a stunning order Monday, the U.S. Supreme Court essentially said it had been looking at the wrong issue in an Alien Tort Statute case called Kiobel v. Royal Dutch Petroleum. It called for new briefs that reframe Kiobel as an examination of the extraterritorial application of the ATS. Given the justices’ reluctance to extend U.S. jurisdiction beyond our borders, expressed so fatefully in their 2010 ruling in Morrison v. National Austrialia Bank, the recasting of Kiobel has the potential to devastate U.S. human rights litigation based on overseas conduct.

The comparatively narrow question Kiobel originally presented to the Supreme Court was whether corporations can be held liable under the ATS, a once-obscure 1789 law that human rights advocates revived in the 1980s to address international atrocities against non-U.S. citizens. The 2nd Circuit Court of Appeals had ruled in Kiobel that corporations are immune under the ATS; three other federal appeals courts had held otherwise. The Kiobel merits briefing by Shell and the Nigerian claimants (available here) mostly addressed the corporate liability question.

But barely had Kiobel oral arguments begun last Tuesday when Justice Anthony Kennedy interrupted plaintiffs lawyer Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison to point out that the United States appears to be the only country in the world to “exercise universal civil jurisdiction over alleged extraterritorial human rights abuses to which the nation has no connection.” (Kennedy was reading from an amicus brief Chevron filed in support of Shell.) Other justices picked up and amplified Kennedy’s point. Justice Samuel Alito put the question most bluntly, asking Hoffman, “What business does a case like this” — a suit by foreign nationals against a foreign-based corporation for its alleged complicity in state-sponsored torture and murder in Nigeria — “have in the courts of the United States?”

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