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2017 National Lawyers Convention

Administrative Agencies and the Regulatory State Thursday, November 16, 12:00 AMThe Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

The 2017 National Lawyers Convention is scheduled for Thursday, November 16 through Saturday, November 18 at the Mayflower Hotel in Washington, D.C. The topic of this year's convention is: Administrative Agencies and the Regulatory State. More information will be posted soon!

Kokesh v. Securities and Exchange Commission - Post-Decision SCOTUScast

SCOTUScast 8-18-17 featuring Janet Galeria
Janet Galeria August 18, 2017

On June 5, 2017, the Supreme Court decided Kokesh v. Securities and Exchange Commission. In 2009, the Securities and Exchange Commission (SEC) alleged that Charles Kokesh had violated various securities laws by concealing the misappropriation of roughly $35 million in various development ventures dating back as far as 1995. Since the 1970s, the SEC has ordered disgorgement in addition to monetary civil penalties in its enforcement proceedings. In effect, the violator must not only pay monetary civil penalties, but also “disgorge” the profit he or she gained by the unlawful action. Under 28 U. S. C. §2462, however, a five-year limitations period applies to “an action, suit or proceeding for the enforcement of any civil fine, penalty or forfeiture” when the SEC seeks monetary civil penalties. In Kokesh’s case, the District Court concluded that the five-year limitations period did not apply to disgorgement. The U.S. Court of Appeals for the Tenth Circuit affirmed, holding that disgorgement was neither a penalty nor a forfeiture within the meaning of section 2462. As a result Kokesh could be required to disgorge the full $35 million, with interest.

By a vote of 9-0, the Supreme Court reversed the judgment of the Tenth Circuit. In an opinion delivered by Justice Sotomayor, a unanimous Court held that disgorgement, as it is applied in SEC enforcement proceedings, operates as a penalty under section 2462. Thus, any claim for disgorgement in an SEC enforcement action must be commenced within five years of the date the claim accrued. 

And now, to discuss the case, we have Janet Galeria, who is Senior Counsel for Litigation for the US Chamber Litigation Center at the US Chamber of Commerce.
 

TC Heartland LLC v. Kraft Foods Group Brands LLC - Post-Decision SCOTUScast

SCOTUScast 8-11-17 featuring J. Devlin Hartline
J. Devlin Hartline August 11, 2017

On May 22, 2017, the Supreme Court decided TC Heartland LLC v. Kraft Foods Group Brands LLC,  a dispute over the proper venue for a patent infringement suit.  Section 1400(b) of the patent venue statute states in relevant part that a civil action for patent infringement may be brought in the judicial district “where the defendant resides.”  In the 1957 case Fourco Glass Co. v. Transmirra Prods. Corp, the Supreme Court held that for purposes of section 1400(b) a domestic corporation “resides” only in its State of incorporation--a narrower understanding of corporate “residence” than that applicable under section 1391 of the general venue statute.  Under section 1391, a corporate defendant is typically deemed to reside in any judicial district where it is subject to the court’s “personal jurisdiction” with respect to the civil action in question.

TC Heartland LLC (Heartland) is organized under Indiana law and headquartered there. Kraft Food Brands LLC (Kraft) sued Heartland in federal district court in Delaware (where Kraft is organized), alleging that products Heartland shipped to Delaware infringed on Kraft’s patents for similar products. Heartland moved to dismiss the claim or transfer venue to Indiana, arguing that it did not reside in Delaware for purposes of section 1400(b).  The district court rejected these arguments and the U.S. Court of Appeals for the Federal Circuit denied mandamus relief, because its circuit precedent had concluded that more recent statutory amendments to section 1391 had effectively superseded the Fourco interpretation of “reside” in section 1400(b) and thus the broader understanding expressed in section 1391 now applied to section 1400(b) too.

By a vote of 8-0, the Supreme Court reversed the judgment of the Federal Circuit and remanded the case. In an opinion by Justice Thomas, the Court held that the amendments to section 1391 did not modify the meaning of section 1400(b) as interpreted in Fourco; as applied to domestic corporations, “residence” for purposes of section 1400(b) still refers only to the state of incorporation.  All other members of the Court joined in Justice Thomas’ opinion except Justice Gorsuch, who took no part in the consideration or decision of this case.

And now, to discuss the case, we have J. Devlin Hartline, who is Director, Center for the Protection of Intellectual Property (CPIP) and Adjunct Professor, Antonin Scalia Law School, George Mason University.

California Public Employees’ Retirement System v. ANZ Securities Post-Decision SCOTUScast

SCOTUScast 8-9-17 featuring Mark Chenoweth
Mark Chenoweth August 09, 2017

On June 26, 2017, the Supreme Court decided California Public Employees’ Retirement System v. ANZ Securities. Between 2007 and 2008, Lehman Brothers Holdings raised capital through a number of public securities offerings. California Public Employees’ Retirement System (CalPERS) purchased some of these securities.  In 2008, a putative class action alleging federal securities law violations was filed against respondents--various financial firms involved in underwriting the offerings--in the U.S. District Court for the Southern District of New York.  Because the complaint was filed on behalf of all persons who purchased the identified securities, petitioner CalPERS fell within the putative class. In 2011, however, CalPERS filed a separate action, alleging identical violations against respondent firms in the U.S. District Court for the Northern District of California.  That suit was then transferred and consolidated with other related litigation in the Southern District of New York.  The New York class action then settled, but CalPERS opted out of the settlement. Respondents thereafter moved to dismiss CalPERS’ separate suit based on Securities Act language providing that “[i]n no event shall any such action be brought … more than three years after the security was bona fide offered to the public,” the CalPERS suit having fallen outside the three-year limit.  CalPERS argued that the time limit was equitably tolled during the pendency of the class action, but the district court rejected the claim and U.S. Court of Appeals for the Second Circuit affirmed.

By a vote of 5-4, the Supreme Court affirmed the judgment of the Second Circuit. In an opinion by Justice Kennedy, the Court held that CalPERS’ untimely filing of its individual complaint more than three years after the relevant securities offering was grounds for dismissal.  The three-year limitation in the Securities Act, the Court indicated, is a “statute of repose” and therefore not subject to equitable tolling.  Justice Kennedy’s majority opinion was joined by the Chief Justice and Justices Thomas, Alito, and Gorsuch. Justice Ginsburg filed a dissenting opinion, in which Justices Breyer, Sotomayor, and Kagan joined.

And now, to discuss the case, we have Mark Chenoweth, who is General Counsel for the Washington Legal Foundation.

Microsoft Corp. v. Baker - Post-Decision SCOTUScast

SCOTUScast 7-14-17 featuring Theodore H. Frank
Theodore H. Frank July 14, 2017

On June 12, 2017, the Supreme Court decided Microsoft Corp. v. Baker. Plaintiffs brought a class action lawsuit against Microsoft Corporation (Microsoft) alleging that, during gameplay on the Xbox 360 video game console, discs would come loose and get scratched by the internal components of the console, sustaining damage that then rendered them unplayable. The district court, deferring to an earlier denial of class certification entered by another district court dealing with a similar putative class, entered a stipulated dismissal and order striking class allegations. Despite the dismissal being the product of a stipulation--that is, an agreement by the parties--the U.S. Court of Appeals for the Ninth Circuit determined that the parties remained sufficiently adverse for the dismissal to constitute a final appealable order. The Ninth Circuit, therefore, concluded it had appellate jurisdiction over the case. Reaching the merits, that Court held that the district court had abused its discretion, and therefore reversed the stipulated dismissal and order striking class allegations, and remanded the case.

The question before the Supreme Court was whether a federal court of appeals has jurisdiction to review an order denying class certification after the named plaintiffs voluntarily dismiss their claims with prejudice.

By a vote of 8-0, the Court reversed the decision of the Ninth Circuit and remanded the case. In an opinion by Justice Ginsburg, the Court held that Federal courts of appeals lack jurisdiction under 28 U. S. C. §1291 to review an order denying class certification (or, as in this case, an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice. Justice Ginsburg’s majority opinion was joined by Justices Kennedy, Breyer, Sotomayor, and Kagan. Justice Thomas filed an opinion concurring in the judgment, in which the Chief Justice and Justice Alito joined. Justice Gorsuch took no part in the consideration or decision of the case.

To discuss the case, we have Theodore H. Frank, who is Senior Attorney and Director of the Center for Class Action Fairness at the Competitive Enterprise Institute.