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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because its circuit precedent had concluded that more recent statutory amendments to section 1391 had effectively superseded the Fourco interpretation of “reside” in section 1400(b) and thus the broader understanding expressed in section 1391 now applied to section 1400(b) too.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.

Sandoz, Inc. v. Amgen, Inc. Post-Decision SCOTUScast

SCOTUScast 8-11-17 featuring Erika Lietzan
Erika Lietzan August 11, 2017

On June 12, 2017, the Supreme Court decided Sandoz, Inc. v. Amgen, Inc. consolidated with Amgen Inc. v. Sandoz Inc. 

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) provides an abbreviated pathway for obtaining Food and Drug Administration (FDA) approval of a drug that is biosimilar to an already licensed biological product.  Among other things, BPCIA provisions require applicants for approval of a new biosimilar to provide the manufacturer of the already licensed product with a notice of commercial marketing and certain information about the biosimilar.  Failure to comply permits the manufacturer to pursue infringement litigation against the applicant on an accelerated basis.

Amgen claims to hold patents on methods of manufacturing and using filgrastim--a biologic used to stimulate the production of white blood cells--and markets one such product, Neupogen. Sandoz sought FDA approval to market a biosimilar called Zarxio.  When the FDA accepted Sandoz’s application for review, Sandoz notified Amgen that Sandoz intended to market Zarxio upon receipt of FDA approval.  Sandoz also indicated that it would not share with Amgen the relevant application and manufacturing information as required by the BPCIA and invited Amgen immediately to sue for infringement.  Amgen did so, and further asserted claims for “unlawful” conduct in violation of California’s unfair competition law.  The basis for the latter claims was Sandoz’s alleged failure to comply with the BPCIA requirements that Sandoz (a) share the application and manufacturing information pertaining to Zarxio, and (b) provide a notice of commercial marketing prior to obtaining FDA licensure.  Amgen sought injunctive relief in federal district court to enforce both requirements against Sandoz, which counterclaimed for declaratory judgments that Amgen’s patent was invalid and not infringed, and that Sandoz had not violated the BPCIA.

While the litigation was pending, the FDA licensed Zarxio, and Sandoz provided Amgen with further notice of commercial marketing.  The district court thereafter granted partial judgment in favor of Sandoz on its BPCIA counterclaims and dismissed Amgen’s unfair competition claims with prejudice.  A divided U.S. Court of Appeals for the Federal Circuit affirmed in part, vacated  in part, and remanded the case.  The Federal Circuit held that Sandoz had not violated the BPCIA disclosure requirements and that Amgen could not pursue state law remedies to enforce the BPCIA.  The court also held that an applicant may provide effective notice of commercial market only after FDA licensure and therefore enjoined Sandoz from marketing Zarxio until 180 days passed after Sandoz’s second notice.

By a vote of 9-0, the Supreme Court unanimously vacated in part and reversed in part the judgment of the Federal Circuit and remanded the case. In an opinion by Justice Thomas, the Court held that the BPCIA’s requirement on sharing application and marketing information is not enforceable by an injunction under federal law, but that the Federal Circuit should determine on remand whether a state-law injunction is available.  The Supreme Court further held that an applicant may provide the requisite notice of commercial marketing before obtaining FDA licensure; therefore Sandoz fully complied with this requirement through its initial notice, the Federal Circuit erred in enjoining Sandoz from marketing Zarxio on this basis, and Amgen’s state law unfair competition claim predicated on the view that the BPCIA forbids pre-licensure notice must fail.  Justice Breyer issued a concurring opinion.

And now, to discuss the case, we have Erika Lietzan, who is Associate Professor of Law at the University of Missouri School of Law.

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.

Sessions v. Morales-Santana Post-Decision SCOTUScast

SCOTUScast 8-7-17 featuring Curt Levey
Curt Levey August 07, 2017

On June 12, 2017, the Supreme Court decided Sessions v. Morales-Santana, formerly known as Lynch v. Morales-Santana.  The Immigration and Nationality Act (INA) provides for derivative acquisition of U.S. citizenship from birth, by a child born abroad, when one parent is a U.S. citizen and the other is not.  At the relevant time here, the INA required the U.S.-citizen parent to have ten years’ physical presence in the United States prior to the child’s birth, at least five of which were after attaining age 14. Although the rule applies in full to unwed U.S.-citizen fathers, there is an exception for an unwed U.S.-citizen mother, whose citizenship can be transmitted to a child born abroad if she has lived continuously in the United States for just one year prior to the child’s birth. 

Morales-Santana, who was born in the Dominican Republic, asserted U.S. citizenship from birth based on the citizenship of his father--but his father had fallen 20 days short of satisfying the requirement of five years’ physical presence after attaining age 14.  In 2000, the government sought to remove Morales-Santana as a result of several criminal convictions, classifying him as alien rather than citizen because of his father’s failure to satisfy the full physical presence requirement.  The immigration judge rejected Morales-Santana’s citizenship claim and ordered him removed.  The Board of Immigration Appeals denied his subsequent motion to reopen proceedings on the claim that the INA’s gender-based rule violated the Fifth Amendment’s Equal Protection Clause--but the U.S. Court of Appeals for the Second Circuit reversed, holding the differential treatment of unwed fathers and mothers unconstitutional and acknowledging Morales-Santana’s U.S. citizenship. 

The U.S. Supreme Court granted certiorari and by a vote of 8-0, affirmed in part and reversed in part the judgment of the Second Circuit, and remanded the case. In an opinion by Justice Ginsburg, the Court held that (1) the gender line Congress drew in the INA, creating an exception for an unwed U.S.-citizen mother but not for such a father, to the physical-presence requirement, violated the Fifth Amendment's equal protection clause as the Second Circuit had determined; but (2) the remedial course that Congress would most likely have chosen if apprised of this constitutional infirmity would have been not a broader application of the one-year exception but rather preservation of the five-year general rule; thus the Court cannot grant the relief Morales-Santana seeks.  Going forward it falls to Congress to select a uniform prescription that neither favors nor disadvantages any person on the basis of gender, but in the interim the five-year requirement applies prospectively to children of unwed U.S.-citizen mothers just as with such fathers.

Justice Ginsburg’s majority opinion was joined by the Chief Justice and Justices Kennedy, Breyer, Sotomayor, and Kagan. Justice Thomas filed an opinion concurring in the judgment in part, in which Justice Alito joined. Justice Gorsuch took no part in the consideration or decision of the case. 

And now, to discuss the case, we have Curt Levey, who is President, Committee for Justice; Legal Affairs Fellow, Freedom Works.
 

Maslenjak v. United States - Post-Decision SCOTUScast

SCOTUScast 7-26-17 featuring Vikrant P. Reddy
Vikrant P. Reddy July 26, 2017

On June 22, 2017, the Supreme Court decided Maslenjak v. United States. At the close of the Bosnian civil war, Divna Maslenjak sought refugee status for herself and her family in the U.S. due to fear of persecution regarding their Serbian identity in modern-day Bosnia and the threat of reprisal against her husband, who she claimed had evaded military conscription in the Bosnian Serb militia. After the family was granted refugee status and Maslenjak became a U.S. citizen, a U.S. court convicted Maslenjak’s husband, Ratko, on two counts of falsifying claims regarding Serbian military service on U.S. government documents, since Ratko had in fact served in the Serbian military. When Ratko applied for asylum to avoid deportation, Divna Maslenjak admitted to lying about her husband’s military service and was charged with two counts of naturalization fraud. At her trial, jurors were told that a naturalization fraud conviction could be carried out for false claims in Maslenjak’s application process, even if the claims did not affect whether she was approved. Convicted on both counts, Divna Maslenjack was stripped of her citizenship. The Sixth Circuit affirmed her conviction.

By a vote of 9-0, the Supreme Court vacated the judgment of the Sixth Circuit and remanded the case. In an opinion by Justice Kagan, the Court held that (1) the text of 18 U.S.C. § 1425(a) -- which prohibits "procur[ing], contrary to law, the naturalization of any person" -- makes clear that, to secure a conviction, the federal government must establish that the defendant's illegal act played a role in her acquisition of citizenship; (2) when the underlying illegality alleged in a Section 1425(a) prosecution is a false statement to government officials, a jury must decide whether the false statement so altered the naturalization process as to have influenced an award of citizenship; and (3) measured against this analysis, the jury instructions in this case were in error, and the government's assertion that any instructional error was harmless if left for resolution on remand. Justice Kagan’s majority opinion was joined by the Chief Justice and Justices Kennedy, Ginsburg, Breyer, and Sotomayor. Justice Gorsuch filed an opinion concurring in part and concurring in the judgment, in which Justice Thomas joined. Justice Alito filed an opinion concurring in the judgment.

And now, to discuss the case, we have Vikrant P. Reddy, who is Senior Research Fellow at the Charles Koch Institute.