Articles Posted in U.S. Supreme Court

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Based on alleged work-related injuries, Nelson, a North Dakota resident, and Tyrrell, the administrator of a South Dakota estate, brought Federal Employers’ Liability Act, 45 U.S.C. 51, suits against BNSF Railroad. Neither injury occurred in Montana. Neither incorporated nor headquartered there, BNSF maintains less than five percent of its workforce and about six percent of its total track mileage in Montana. The Montana Supreme Court held that Montana courts could exercise general personal jurisdiction over BNSF because the railroad “d[id] business” in the state within the meaning of 45 U.S.C. 56. The U.S. Supreme Court reversed. Section 56 does not address personal jurisdiction over railroads but is only a venue prescription. The Montana courts’ exercise of personal jurisdiction did not comport with the Due Process Clause. Only the propriety of general personal jurisdiction was at issue because neither plaintiff alleged injury from work in or related to Montana. A state court may exercise general jurisdiction over out-of-state corporations when their “affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” The “paradigm” forums in which a corporate defendant is “at home” are its place of incorporation and its principal place of business. In an “exceptional case,” a corporate defendant’s operations in another forum “may be so substantial and of such a nature as to render the corporation at home in that State,” but that constraint does not vary with the type of claim asserted or business enterprise sued. View "BNSF Railroad Co. v. Tyrrell" on Justia Law

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The patent venue statute, 28 U.S.C. 1400(b), provides that “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” In its 1957 “Fourco” decision, the Supreme Court concluded that for purposes of section 1400(b) a domestic corporation “resides” only in its state of incorporation, rejecting the argument that section 1400(b) incorporates the broader definition of corporate “residence” contained in the general venue statute, 28 U.S.C. 1391(c). Congress has not amended section 1400(b) since Fourco. Kraft filed a patent infringement suit in the District of Delaware against TC, a competitor, organized under Indiana law and headquartered in Indiana. TC ships the allegedly infringing products into Delaware. Reversing the district court and Federal Circuit, the Supreme Court held that, ss applied to domestic corporations, “reside[nce]” in section 1400(b) refers only to the state of incorporation. Section 1400(b) was enacted as a "stand alone" statute. Amendments to section 1391 did not modify the meaning of 1400(b) as interpreted by Fourco. View "TC Heartland LLC v. Kraft Foods Group Brands LLC" on Justia Law

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Water Splash sued Menon, a former employee, in Texas state court. Because Menon resided in Canada, Water Splash obtained permission to effect service by mail. Menon declined to answer or enter an appearance. The trial court issued a default judgment. Menon argued that service by mail was impermissible under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (Hague Service Convention). Vacating a Texas Court of Appeals decision in Menon’s favor, the Supreme Court held that the Convention does not prohibit service of process by mail. Article 10(a) uses the term “judicial documents” and the ordinary meaning of the word “send” is broad enough to cover the transmission of any judicial documents. The Convention’s drafting history strongly suggests that the drafters understood that service by postal channels was permissible; in the half-century since the Convention was adopted, the Executive Branch has consistently maintained that it allows service by mail. Other Convention signatories have consistently adopted that view. That Article 10(a) encompasses service by mail does not mean that it affirmatively authorizes such service; service by mail is permissible if the receiving state has not objected to service by mail and if such service is authorized under other applicable laws. View "Water Splash, Inc. v. Menon" on Justia Law

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A case falls within the scope of the Foreign Sovereign Immunities Act, 28 U.S.C. 1604, “expropriation exception” and may be pursued against a foreign state in U.S. federal courts only if the property in which the party claims to hold rights was indeed “property taken in violation of international law.” The Supreme Court held that the exception should not be evaluated under the “nonfrivolous-argument standard” and remanded to the District of Columbia Circuit. The case was filed by a wholly-owned Venezuelan subsidiary and its American parent company that supplied oil rigs to entities that were part of the Venezuelan Government, claiming that Venezuela had unlawfully expropriated the subsidiary’s rigs by nationalizing them. A court should decide the foreign sovereign’s immunity defense at the threshold of the action, resolving any factual disputes as near to the outset of the case as is reasonably possible. The expropriation exception grants jurisdiction only where there is a legally valid claim that a certain kind of right is at issue (property rights) and that the relevant property was taken in a certain way (in violation of international law). Simply making a nonfrivolous argument to that effect is not sufficient. View "Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co." on Justia Law

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The Haegers sued Goodyear, alleging that the failure of a Goodyear G159 tire caused their motorhome to swerve and flip over. After years of contentious discovery, marked by Goodyear’s slow response to repeated requests for internal G159 test results, the parties settled. Months later, the Haegers’ lawyer learned that, in another lawsuit involving the G159, Goodyear had disclosed test results indicating that the tire got unusually hot at highway speeds. Goodyear conceded withholding the information. The district court exercised its inherent power to sanction bad-faith behavior to award the Haegers $2.7 million—their legal fees and costs since the moment, early in the litigation, of Goodyear’s first dishonest discovery response. The court held that in cases of egregious behavior, a court can award all attorney’s fees incurred in a case, without any need to find a causal link between the expenses and the sanctionable conduct. The court made a contingent award of $2 million, to take effect if the Ninth Circuit reversed the larger award, deducting fees related to other defendants and to proving medical damages. The Ninth Circuit affirmed the $2.7 million award. The Supreme Court reversed. When a federal court exercises its inherent authority to sanction bad-faith conduct by ordering a litigant to pay the other side’s legal fees, the award is limited to fees that the innocent party would not have incurred but for the bad faith. The sanction must be compensatory, not punitive. The Haegers did not show that this litigation would have settled as soon as Goodyear divulged the heat-test results and cannot demonstrate that Goodyear’s non-disclosure so permeated the suit as to make that misconduct a but-for cause of every subsequent legal expense. View "Goodyear Tire & Rubber Co. v. Haeger" on Justia Law

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Ochoa worked in a physically demanding job for McLane, which requires new employees in such positions and those returning from medical leave to take a physical evaluation. When Ochoa returned from three months of maternity leave, she failed the evaluation three times and was fired. She filed a sex discrimination charge under Title VII of the Civil Rights Act. The Equal Employment Opportunity (EEOC) began an investigation, but McLane declined its request for names, Social Security numbers, addresses, and telephone numbers of employees asked to take the evaluation. After the EEOC expanded the investigation’s scope, it issued subpoenas under 42 U.S.C. 2000e–9, requesting information relating to its new investigation. The district judge declined to enforce the subpoenas. The Ninth Circuit reversed, holding that the lower court erred in finding the information irrelevant. The Supreme Court vacated. A district court’s decision whether to enforce or quash an EEOC subpoena should be reviewed for abuse of discretion, not de novo. The Court noted “the longstanding practice of the courts of appeals," to review a district court’s decision to enforce or quash an administrative subpoena for abuse of discretion. In most cases, the enforcement decision will turn either on whether the evidence sought is relevant to the specific charge or whether the subpoena is unduly burdensome under the circumstances. Both tasks are well suited to a district judge’s expertise. Deferential review “streamline[s] the litigation process by freeing appellate courts from the duty of reweighing evidence and reconsidering facts already weighed and considered by the district court,” something particularly important in a proceeding designed only to facilitate the EEOC’s investigation. Not every decision touching on the Fourth Amendment is subject to searching review. View "McLane Co. v. Equal Employment Opportunity Commission" on Justia Law

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In 2003, SCA notified First Quality that its adult incontinence products infringed an SCA patent. First Quality responded that its patent antedated SCA’s patent and made it invalid. In 2004, SCA sought reexamination of its patent. In 2007, the Patent and Trademark Office confirmed the SCA patent’s validity. SCA sued for patent infringement in 2010. The district court granted First Quality summary judgment, citing equitable estoppel and laches. While SCA’s appeal was pending, the Supreme Court held that laches could not preclude a claim for damages incurred within the Copyright Act’s 3-year limitations period. The Federal Circuit nevertheless affirmed, based on Circuit precedent, which permitted laches to be asserted against a claim incurred within the Patent Act’s 6-year limitations period, 35 U.S.C. 286. The Supreme Court vacated. Laches cannot be invoked as a defense against a claim for damages brought within the limitations period. A statute of limitations reflects a congressional decision that timeliness is better judged by a hard and fast rule instead of a case-specific judicial determination. Applying laches within a statutory limitations period would give judges a “legislation-overriding” role that exceeds the Judiciary’s power and would clash with the gap-filling purpose for which the laches defense developed in the equity courts. View "SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC" on Justia Law

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The Federal National Mortgage Association (Fannie Mae) is a federally-chartered corporation that participates in the secondary mortgage market, with authority “to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal,” 12 U.S.C. 1723a(a). Plaintiffs filed suit in state court alleging deficiencies in the refinancing, foreclosure, and sale of their home. Fannie Mae removed the case to federal court, relying on its sue-and-be-sued clause as the basis for federal jurisdiction. The district court denied a motion to remand the case to state court and later entered judgment against plaintiffs. The Ninth Circuit affirmed. A unanimous Supreme Court reversed. The clause does not grant federal courts jurisdiction over all cases involving Fannie Mae. Distinguishing cases in which a sue-and-be-sued clause was held to confer jurisdiction, the Court noted that Fannie Mae’s clause adds the qualification “any court of competent jurisdiction.” A court of competent jurisdiction is a court with an existing source of subject-matter jurisdiction; the clause does not grant federal court subject-matter jurisdiction, but confers only a general right to sue. View "Lightfoot v. Cendant Mortgage Corp" on Justia Law

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Before Hurricane Katrina, State Farm issued federal government-backed flood insurance policies and its own homeowner policies. Relators, former claims adjusters for a State Farm contractor (Renfroe) filed a complaint under seal in April 2006, claiming that State Farm instructed adjusters to misclassify wind damage as flood damage to shift its insurance liability to the government. The district court extended the seal several times at the government’s request, lifting it in part in January 2007 for disclosure to another district court hearing a suit by Renfroe against the relators. In August, the court lifted the seal. The government declined to intervene. State Farm moved to dismiss on grounds that the relators’ attorney had disclosed the complaint’s existence to news outlets, which issued stories about the fraud allegations, but did not mention the False Claims Act (FCA, 31 U.S.C. 3729) complaint and the relators had met with a Congressman who later spoke against the purported fraud. Under the FCA: “The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” The court decided against dismissal, balancing actual harm to the government, severity of the violations, and evidence of bad faith. The Fifth Circuit and a unanimous Supreme Court affirmed. A seal violation does not mandate dismissal. The FCA has several provisions expressly requiring the dismissal, indicating that Congress did not intend to require dismissal for a violation of the seal requirement. This result is consistent with the purpose of section 3730(b)(2), which was enacted to “encourage more private enforcement suits,” and to protect the government’s interests when a relator filing a civil complaint could alert defendants to a pending federal criminal investigation. View "State Farm Fire & Casualty Co. v. United States ex rel. Rigsby" on Justia Law

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Following a Montana automobile accident, Dietz sued Bouldin. Bouldin admitted liability and stipulated to damages of $10,136 for Dietz’ medical expenses. Dietz wanted more. During deliberations, the jury sent a note asking whether Dietz’ medical expenses had been paid and by whom. The judge, with the parties’ consent, responded that the information was not relevant. The jury returned a verdict in Dietz’ favor, awarding $0 in damages. The judge discharged the jury; they left the courtroom. Moments later, the judge realized that the verdict was not “legally possible in view of stipulated damages.” He ordered the clerk to bring back the jurors, who were all in the building. One may have briefly left. Over Dietz's objection, in the interest of judicial economy and efficiency, the judge recalled the jury. After questioning the jurors as a group, the judge determined that none had spoken about the case and ordered them to return the next morning. After receiving clarifying instructions, the jury returned a verdict awarding Dietz $15,000. The Ninth Circuit and Supreme Court affirmed. A 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 verdict. The court did not abuse that power here. The jury was out for only minutes, and, with the exception of one juror, remained inside the courthouse. They did not speak about the case; there is no indication that the verdict generated any emotional reaction or electronic exchanges that could have tainted the jury. There would be no benefit to imposing a categorical rule that as soon as a jury is free to go, a judge cannot rescind that order to correct an easily fixable mistake. View "Dietz v. Bouldin" on Justia Law