Litigation Practice Group Podcast
On June 10, U.S. Sens. Ted Cruz, John Cornyn, Orrin Hatch, James Lankford, and Mike Lee introduced the Stop Settlements Slush Fund Act. The Act would prohibit the Department of Justice from enforcing settlements that allow parties to give money to outside parties chosen by the administration instead of the Treasury. Many of these outside parties have been non-profits that Congress had recently removed from federal funding.
Litigation Practice Group Podcast
- Paul J. Larkin Jr., Senior Legal Research Fellow, Edwin Meese III Center for Legal and Judicial Studies, The Heritage Foundation
- Prof. David Min, Assistant Professor of Law, University of California, Irvine School of Law
After a bailout that arguably helped keep them afloat, the United States government has effectively nationalized two of the nation's largest financial institutions, Fannie Mae and Freddie Mac. Attorney David Thompson, managing partner of Cooper and Kirk, surveyed the legal landscape, which includes numerous suits across the United States advancing different challenges to the government's actions.
SCOTUScast 7-12-16 featuring Brad Shannon
- David H. Thompson, Managing Partner, Cooper & Kirk PLLC
On June 9, 2016, the Supreme Court decided Dietz v. Bouldin. Petitioner Rocky Dietz sued respondent Hillary Bouldin for negligence for injuries suffered in an automobile accident. Bouldin removed the case to Federal District Court. At trial, Bouldin admitted liability and stipulated to damages of $10,136 for Dietz’ medical expenses. The only disputed issue remaining was whether Dietz was entitled to more. During deliberations, the jury sent the judge a note asking whether Dietz’s medical expenses had been paid and, if so, by whom. Although the judge was concerned that the jury may not have understood that a verdict of less than the stipulated amount would require a mistrial, the judge, with the parties’ consent, responded only that the information being sought was not relevant to the verdict. The jury returned a verdict in Dietz’ favor but awarded him $0 in damages. After the verdict, the judge discharged the jury, and the jurors left the courtroom. Moments later, the judge realized the error in the $0 verdict and ordered the clerk to bring back the jurors, who were all in the building—including one who may have left for a short time and returned. Over the objection of Dietz’s counsel and in the interest of judicial economy and efficiency, the judge decided to recall the jury. After questioning the jurors as a group, the judge was satisfied that none had spoken about the case to anyone and ordered them to return the next morning. After receiving clarifying instructions, the reassembled jury returned a verdict awarding Dietz $15,000 in damages. On appeal, the Ninth Circuit affirmed.
The question before the Supreme Court was whether a federal district court can recall a jury it has discharged, or whether the court can remedy the error only by ordering a new trial. By a vote of 6-2, the Supreme Court affirmed the judgment of the Ninth Circuit. Justice Sotomayor delivered the opinion of the Court, which held that a federal district court has a limited inherent power to rescind a jury discharge order and recall a jury in a civil case for further deliberations after identifying an error in the jury's verdict. The district court did not abuse that power here. Justice Sotomayor’s majority opinion was joined by the Chief Justice and Justices Ginsburg, Breyer, Alito, and Kagan. Justice Thomas filed a dissenting opinion, in which Justice Kennedy joined.
To discuss the case, we have Brad Shannon, who is Professor of Law at Florida Coastal School of Law. SCOTUScast 7-12-16 featuring Richard A. Samp
On June 16, 2016, the Supreme Court decided Universal Health Services v. United States ex rel. Escobar. This case involves the federal False Claims Act, which allows a private party to bring a “qui tam” action alleging that the defendant defrauded the federal government. In a “qui tam” action the government remains the actual plaintiff, but the private party--referred to as the “Relator”--typically litigates the case for the government’s benefit and receives a specified share of any recovery.
Here, Relators alleged that their daughter--who died of a seizure in 2009--was treated by various unlicensed and unsupervised staff at Arbour Counseling Services, a facility owned by Universal Health Services, in violation of Massachusetts regulations. They argued that Arbour's alleged noncompliance with various supervision and licensing requirements rendered its reimbursement claims submitted to the state Medicaid agency actionably false under both the federal and Massachusetts False Claims Acts. The district court dismissed the complaint for failure to state a claim, holding that regulatory noncompliance alone was inadequate to render Arbour’s reimbursement claims “false.” The U.S. Court of Appeals for the First Circuit, however, reversed that judgment and remanded the case. Compliance with the regulations at issue, the court concluded, was a condition of government reimbursement to Arbour. By submitting reimbursement claims, the Court reasoned, Arbour implicitly certified compliance with that condition. Thus, by pleading regulatory noncompliance Relators adequately pleaded falsity.
By a vote of 8-0, the Supreme Court vacated the judgment of the First Circuit and remanded the case for further proceedings. In an opinion delivered by Justice Thomas, a unanimous Court agreed that the implied false certification theory can be a basis for liability under the False Claims Act--when a defendant submitting a claim makes specific representations about the goods or services provided, but fails to disclose non-compliance with material statutory, regulatory, or contractual requirements that make those representations misleading with respect to those goods or services. But liability under the False Claims Act for failing to disclose violations of legal requirements, the Court explained, does not turn upon whether those requirements were expressly designated as conditions of payment. What matters is not the label 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.
To discuss the case, we have Richard A. Samp, who is Chief Counsel at Washington Legal Foundation. SCOTUScast 7-12-16 featuring Cory Andrews
On June 20, 2016, the Supreme Court decided RJR Nabisco, Inc. v. The European Community. The European Community and 26 of its member states sued RJR Nabisco (RJR) in the U.S. District Court for the Eastern District of New York, alleging that RJR conducted a global money-laundering enterprise in violation of several laws, including the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal statute. The alleged RICO enterprise involved the importation of illegal drugs into European countries by Colombian and Russian criminal organizations, with RJR helping to launder their drug money through a cigarette import-purchase scheme. Applying a presumption against extraterritorial application of federal law, the district court dismissed The European Community’s civil RICO claim. The U.S. Court of Appeals for the Second Circuit vacated that judgment and reinstated the RICO claim, however, concluding that various alleged predicates for RICO liability had been intended by Congress to apply extraterritorially, and that other offenses asserted sufficiently important domestic activity to come within RICO’s coverage. RJR subsequently obtained a writ of certiorari from the U.S. Supreme Court on the following question: whether, or to what extent, RICO applies extraterritorially.
By a vote of 4-3, the Supreme Court reversed the judgment of the Second Circuit and remanded the case. Justice Alito delivered the opinion of the Court, which determined that the question of RICO’s extraterritorial application really divides into two questions: (1) Do RICO’s substantive prohibitions, contained in §1962, apply to conduct that occurs in foreign countries? (2) Does RICO’s private right of action, contained in §1964(c), apply to injuries that are suffered in foreign countries? On the first question, the Court held that under the facts asserted in this case, RICO’s prohibitions did apply extraterritorially. On the second question, however, the Court held that §1964(c)’s private right of action did not overcome the presumption against extraterritoriality, and thus a private RICO plaintiff must allege and prove a domestic injury. Because in this case an earlier stipulation had resulted in waiver and dismissal of respondents’ domestic claims, the Court explained, their remaining RICO damages claims rest entirely on injury suffered abroad and must be dismissed.
Justice Alito’s majority opinion was joined in full by the Chief Justice and Justices Kennedy and Thomas, and as to Parts I, II, and III by Justices Ginsburg, Breyer, and Kagan. Justice Ginsburg filed an opinion concurring in part, dissenting in part, and dissenting from the judgment, in which Justices Breyer and Kagan joined. Justice Breyer filed an opinion concurring in part, dissenting in part, and dissenting from the judgment. Justice Sotomayor took no part in the consideration or decision of the case.
To discuss the case, we have Cory L. Andrews, who is senior litigation counsel for the Washington Legal Foundation.