The Supreme Court decided a complex but important case on June 16, 2014, Republic of Argentina v. NML Capital, Limited. The Republic of Argentina issued bonds to American investors, correspondingly waiving its sovereign immunity and consenting to jurisdiction in New York State. Argentina subsequently defaulted on those bonds. Plaintiff bondholder NML did not participate in a renegotiation of the bonds and sued to prevent Argentina from paying other bondholders that agreed to settle their claims.
At issue were whether NML Capital could bring suit against Argentina under the Foreign Sovereign Immunities Act (FSIA) and the extent of discovery to which plaintiffs are entitled. In court, the United States sided with Argentina. Argentina asserted it should be able to block third party disclosure of its assets, since some assets might be sensitive diplomatic or military assets. The Supreme Court ruled, 7-1, that Argentina is subject to the FSIA, and thus liable to suit pursuant to it, and that American banks can be ordered to disclose Argentina’s assets in the U.S. as part of discovery in the default lawsuit. This decision has potential ramifications for government debt restructuring around the world. Our experts examined these and other possible effects of the decision.
On April 2, 2014, the Supreme Court issued its decision in Northwest, Inc. v. Ginsberg. The question here is whether the Airline Deregulation Act of 1978 (the “ADA”) preempts Ginsburg’s claim that Northwest Air Lines breached an implied covenant of good faith and fair dealing when it unilaterally terminated his membership in Northwest’s frequent-flier program.
In an opinion delivered by Justice Alito, the Court unanimously held that the Airline Deregulation Act preempts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge the contractual obligation that the parties voluntarily adopt. The opinion of the Ninth Circuit was reversed and remanded for further proceedings.
To discuss the case, we have Lee Strang, who is a Professor of Law at the University of Toledo College of Law.
On January 27, 2014, in Sandifer v. United States Steel, the U.S. Supreme Court unanimously held that time employee time spent donning and doffing their protective gear is not compensable by application of the Fair Labor Standards Act. The impact of the Court’s decision may have a substantial impact on employers, especially manufacturers. Our experts discussed the breadth and impact of the decision.
On December 3, 2013, the Supreme Court issued its decision in Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas. This case involves a forum selection clause, which is contractual language specifying the judicial forum for resolution of any litigation that may arise regarding the contract in question. The question before the Supreme Court was twofold: (1) Does the Court's earlier decision in Stewart Organization, Inc. v. Ricoh Corp. require federal courts to enforce forum selection clauses strictly, or are such clauses subject to a discretionary balancing-of-conveniences analysis; and (2) how should courts allocate the burden of proof between parties seeking to enforce or avoid the clause?
The Supreme Court unanimously reversed the judgment of the US Court of Appeals for the Fifth Circuit, which had effectively declined to enforce the forum selection clause. In a decision delivered by Justice Alito, the Court held that a forum-selection clause may be enforced by a motion to transfer venue under 28 U.S.C. § 1404(a). When a defendant files such a motion, the Court declared, the lower courts should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer. The burden is on the party acting contrary to the selection clause to show that the public interest overwhelmingly disfavors a transfer. The Court remanded the case for the Fifth Circuit to consider that issue in the context of this case.
To discuss the case, we have Stephen Sachs, who is an Assistant Professor of Law at Duke University School of Law. It should be noted that Professor Sachs submitted an amicus brief in support of neither party.