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Advocate Health Care Network v. Stapleton - Post-Argument SCOTUScast

SCOTUScast 4-6-17 featuring Eric Baxter
Eric Baxter April 06, 2017

On March 27, 2017, the Supreme Court heard oral argument in Advocate Health Care Network v. Stapleton, which is consolidated with Saint Peter’s Healthcare System v. Kaplan and Dignity Health v. Rollins. The Employee Retirement Income Security Act of 1974 (ERISA) requires that employee retirement plans contain certain safeguards, but exempts “church plan[s]” from these requirements.  Under 29 U.S.C. 1002(33)(A), the term “church plan” means “a plan established and maintained… by a church or by a convention or association of churches which is exempt from tax….” After a controversy involving an Internal Revenue Service determination that the church plan exemption did not encompass pension plans established and maintained by two orders of Catholic sisters for the employees of their hospitals, Congress amended the statute to add subsection (C), which provides: “A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches.”

Plaintiffs in this case are a group of employees who work for Advocate Health Care Network (Advocate) and are members of Advocate’s retirement plan. Advocate is affiliated with a church, though it is not owned or financially operated by the church. Plaintiffs sued Advocate, arguing that the Advocate retirement plan is subject to ERISA, and therefore, by failing to adhere to ERISA’s requirements, Advocate has breached its fiduciary duty. Defendants moved for summary judgment, but the district court denied the motion because it determined that a plan established and maintained by a church-affiliated organization was not a church plan within the meaning of the statutory language. The U.S. Court of Appeals for the Seventh Circuit affirmed.

The question now before the Supreme Court is whether the Employee Retirement Income Security Act of 1974's church-plan exemption applies so long as a pension plan is maintained by an otherwise-qualifying church-affiliated organization, or whether the exemption applies only if, in addition, a church initially established the plan.

To discuss the case, we have Eric Baxter, who is Senior Counsel of the Becket Fund for Religious Liberty.

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

SCOTUScast 4-6-17 featuring J. Devlin Hartline
J. Devlin Hartline April 06, 2017

On March 27, 2017, the Supreme Court heard oral argument in TC Heartland LLC v. Kraft Foods Group Brands LLC. TC Heartland LLC (Heartland) is organized under Indiana law and headquartered in Indiana. Kraft Food Brands LLC (Kraft) is organized under Delaware law with its principal place of business in Illinois. Kraft sued Heartland in federal district court in Delaware, alleging that products Heartland shipped to Delaware infringed on Kraft’s patents for similar products. Heartland moved to dismiss the claim, arguing that the federal court in Delaware lacked the necessary jurisdiction over Heartland’s person--i.e., “personal jurisdiction.” Alternatively, Heartland sought transfer of the case to a venue in the Southern District of Indiana. The district court denied the motion to dismiss, holding that Heartland’s contacts with Delaware were sufficient to justify the exercise of personal jurisdiction. The court also denied the request to transfer venue, citing precedent in the U.S. Court of Appeals for the Federal Circuit indicating that, under 28 U.S.C. Secs. 1391 and 1400, venue for a corporate defendant, including in a patent infringement suit, is proper in any district in which the defendant is subject to a federal court’s personal jurisdiction.  

Heartland then sought a writ of mandamus from the Federal Circuit ordering the district court to dismiss the case or transfer venue, arguing that Heartland did not “reside” in Delaware for purposes of the patent venue statute, 28 U.S.C. Sec. 1400. The Federal Circuit denied the writ, indicating that the lower court had acted properly and that Congress’ 2011 amendments to the venue statute did not provide cause to change the Federal Circuit’s prevailing interpretation of the statute.

The question now before the Supreme Court is whether the patent venue statute, 28 U.S.C. § 1400(b), which provides that patent infringement actions “may be brought in the judicial district where the defendant resides[,]” is the sole and exclusive provision governing venue in patent infringement actions and is not affected by the statute governing “[v]enue generally,” 28 U.S.C. § 1391, which has long contained a subsection (c) that, where applicable, deems a corporate entity to reside in multiple judicial districts.

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

Microsoft Corp. v. Baker - Post-Argument SCOTUScast

SCOTUScast 4-6-17 featuring Cory L. Andrews
Cory L. Andrews April 06, 2017

On March 21, 2017, the Supreme Court heard oral argument in 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 now before the Supreme Court is 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.

To discuss the case, we have Cory L. Andrews, who is Senior Litigation Counsel for Washington Legal Foundation.

Impression Products, Inc. v. Lexmark International, Inc. - Post-Argument SCOTUScast

SCOTUScast 4-6-17 featuring David S. Olson
David S. Olson April 06, 2017

On March 21, 2017, the Supreme Court heard oral argument in Impression Products, Inc. v. Lexmark International, Inc. Lexmark International, Inc. (Lexmark), which owns many patents for its printer toner cartridges, allows customers to buy its cartridges through a “Return Program,” which is administered under a combination single-use patent and contract license. Customers purchasing cartridges through the Return Program are given a discount in exchange for agreeing to use each cartridge once before returning it to Lexmark. All of the domestically-sold cartridges at issue here and some of those sold abroad were subject to the Return Program. Impression Products, Inc. (Impression) acquired some Lexmark cartridges abroad--after a third party physically changed the cartridges to enable their re-use--in order to resell them in the United States. Lexmark then sued, alleging that Impression had infringed on Lexmark’s patents because Impression acted without authorization from Lexmark to resell and reuse the cartridges. Impression contended that its resale of the cartridges was not an infringement because Lexmark, in transferring the title by selling the cartridges initially, granted the requisite authority. The district court granted Impression’s motion to dismiss as it related to the domestically sold cartridges but denied it as to the foreign-sold cartridges. The U.S. Court of Appeals for the Federal Circuit reversed the district court’s judgment as to the domestically sold cartridges but affirmed dismissal regarding the cartridges sold abroad.

There are two questions now before the Supreme Court: (1) whether a “conditional sale” that transfers title to the patented item while specifying post-sale restrictions on the article's use or resale avoids application of the patent-exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law’s infringement remedy; and (2) whether, in light of this court’s holding in Kirtsaeng v. John Wiley & Sons, Inc. that the common-law doctrine barring restraints on alienation that is the basis of exhaustion doctrine “makes no geographical distinctions,” a sale of a patented article – authorized by the U.S. patentee – that takes place outside the United States exhausts the U.S. patent rights in that article.

To discuss the case, we have David S. Olson, who is Associate Professor of Law at Boston College Law School.

Murr v. Wisconsin - Post-Argument SCOTUScast

SCOTUScast featuring James S. Burling
James S. Burling April 06, 2017

On March 20, 2017, the Supreme Court heard oral argument in Murr v. Wisconsin. In 1960 and 1963, the Murrs purchased two adjacent lots (Lots F and E), each over an acre in size, in St. Croix County, Wisconsin. In 1994 and 1995, the parents transferred the parcels to their children. In 1995, the two lots were merged pursuant to St. Croix County’s code of ordinances. Seven years later, the Murrs wanted to sell Lot E but not Lot F, but they were denied permission to do so by the St. Croix County Board of Adjustment. The Murrs sued the state and county, claiming that the ordinance in question resulted in an uncompensated taking of their property and deprived them of “all, or practically all, of the use of Lot E because the lot cannot be sold or developed as a separate lot.” The circuit court granted summary judgment to the state and county. The Court of Appeals of Wisconsin affirmed, and the Wisconsin Supreme Court denied further review.

The question before the Supreme Court is whether, in a regulatory taking case, the “parcel as a whole” concept as described in Penn Central Transportation Company v. City of New York, establishes a rule that two legally distinct but commonly owned contiguous parcels must be combined for takings analysis purposes.

To discuss the case, we have James S. Burling, who is Director of Litigation, Pacific Legal Foundation.