The first Monday in October represents the start of a new term for the United States Supreme Court. The Supreme Court has already agreed to hear over 50 cases during the term that began October 4, 2010. This alert highlights some of the important cases that will be presented in the next few months, organized by their general subject matter.

Some of these cases are particularly interesting because they were recommended to the Supreme Court while Justice Elena Kagan was acting as the U.S. Solicitor General. Justice Kagan has recused herself on many of these cases, meaning only eight of the nine Justices will take part in deliberations, greatly increasing the likelihood of decisions without a clear majority. Because Justice Kagan replaced Justice John Paul Stevens (considered a more liberal member of the court) her absence could also shift the court’s ideological makeup to the right. Justice Kagan’s recusals are noted when applicable.

Employment & Labor

National Aeronautics and Space Administration v. Nelson (Docket No. 09-530)

The plaintiffs in this case are twenty-eight employees of the California Institute of Technology working at NASA’s Jet Propulsion Laboratory. The Supreme Court is asked to decide whether public employers can require job applicants to disclose counseling for illegal drug use they received within the previous year, and whether they can ask an applicant’s references for any information that could be adverse to the applicant’s employment at a federal facility (including the applicant’s mental and emotional history, sexual history, and financial stability). The scientists and engineers argued that NASA’s inquiries violated their Fourth Amendment right to informational privacy. The Ninth Circuit Court of Appeals agreed that the practice was unconstitutional, and it granted an injunction barring the government from implementing its background checks at NASA’s Jet Propulsion Laboratory. NASA appealed to the U.S. Supreme Court.

Oral argument was scheduled for October 5, 2010, and did not include Justice Kagan, who recused herself.

Kasten v. Saint-Gobain Performance Plastics Corp. (Docket No. 09-834)

Under the Fair Labor Standards Act (FLSA), employees who report violations of the statute are protected from retaliation by their employer. The Supreme Court must decide whether an oral report is entitled to the same protection as a written report under the FLSA. Kevin Kasten claimed he made several verbal reports to his employer, and was disciplined and fired in retaliation. Saint-Gobain Performance Plastics claimed it fired Kasten because he repeatedly violated company policies. Saint-Gobain also claimed that it never received a verbal report, but that even if it had, the FLSA requires official reports to be made in writing. Kasten admitted that he never made a written report, but he argued that oral reports should also qualify for protection under the FLSA. The Seventh Circuit Court of Appeals agreed with the employer, and held that oral reports are not entitled to protection under the FLSA. Kasten appealed to the U.S. Supreme Court.

Oral argument was scheduled for October 13, 2010, and did not include Justice Kagan, who recused herself.

Staub v. Proctor Hospital (Docket No. 09-400)

This case requires the Supreme Court to consider the liability of employers that unknowingly make illegal employment decisions based on the influence or advice of nondecisionmakers with a discriminatory motive. The Uniformed Services Employment and Reemployment Rights Act (USERRA) prohibits employers from taking discriminatory action based on an employee’s status as military servicemember. Vincent Staub’s immediate supervisors at Proctor Hospital resented his absences from work for his Army Reserve duties, which required additional employees to fill his shifts. Although they had no authority to make employment decisions, Staub’s supervisors attempted to manufacture circumstances to convince his employer that he was insubordinate and unreliable. The employer had no knowledge of the supervisors’ illegal motives, but nevertheless relied in part on their advice and decided to dismiss Staub. The Seventh Circuit Court of Appeals ruled that because his employer had no anti-military bias when it made the decision to dismiss Staub and was unaware of the supervisors’ discriminatory motive, no reasonable jury could have found Staub’s employer liable. Staub appealed to the U.S. Supreme Court.

Oral Argument was scheduled for November 2, 2010, and did not include Justice Kagan, who recused herself.

CIGNA Corp. v. Amara

The Employee Retirement Income Security Act (ERISA) requires plan administrators to provide all participants with a “summary plan description” (SPD) in addition to a “summary of material modifications” when material changes are made to a plan. In this consolidated action the Supreme Court will resolve a circuit split regarding what plan beneficiaries must show in order to recover benefits when suing because of alleged inconsistencies or misrepresentations in the SPD. The Second Circuit Court of Appeals ruled that a showing of only “likely harm” was required in order to recover. Three circuits have adopted a more lenient standard, requiring only the existence of a conflict between the SPD and other plan documents to recover, while six circuits require a more difficult showing of “reliance or prejudice” in order to recover. Both sides appealed to the U.S. Supreme Court.

Oral Argument is scheduled for November 30, 2010.

Thompson v. North American Stainless, LP (Docket no. 09-291)

The Supreme Court is asked to decide whether the anti-retaliation provision of Title VII is violated when an employer fires the fiancé of an employee who made a protected report. Title VII prohibits workplace harassment and discrimination based on several factors including race, color, national origin, religion, and sex. Eric Thompson’s then-fiancée (and co-worker) filed a charge with the EEOC against her employer, claiming that her supervisors discriminated against her based on her gender. About three weeks later, their employer fired Mr. Thompson. His employer disputed the charge that his termination was in retaliation to Mrs. Thompson’s report, but the employer alternatively argued that Mr. Thompson is not protected by Title VII’s anti-retaliation provisions under his fiancé’s report. The Sixth Circuit Court of Appeals ruled that Title VII’s protections are limited to the individual employee that makes a protected report. Mr. Thompson appealed to the U.S. Supreme Court.

Oral argument is scheduled for December 7, 2010, and will not include Justice Kagan, who has recused herself.

Chamber of Commerce of the United States v. Whiting (Docket No. 09-115)

The Supreme Court is asked whether a state law that requires employers to use the optional federal E-Verify system to check on the immigration status of workers and imposes sanctions on employers that hire unauthorized aliens is preempted by federal immigration law. The Arizona law has not yet been enforced against any businesses. The Ninth Circuit Court of Appeals ruled that the statute was not preempted by federal immigration law. The Chamber of Commerce of the United States appealed to the U.S. Supreme Court.

Oral Argument is scheduled for December 8, 2010, and will not include Justice Kagan, who has recused herself.

Schindler Elevator Corp. v. United States ex rel. Kirk (Docket No. 10-188)

The Supreme Court will decide whether information produced by a private company and subsequently released by the U.S. government in response to a Freedom of Information Act request constitutes a “government report” under the False Claims Act (“FCA”). The FCA establishes liability for individuals and companies that submit false claims for payment to the government. But liability cannot be based on information contained in a “congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation.” The Freedom of Information Act allows citizens to request copies of documents in the possession of the government.

In this case, Daniel Kirk’s former employer was required to track and report the number of U.S. Military veterans it employed in order to qualify for certain government contracts. Daniel Kirk believed his employer was not complying with its responsibilities and requested copies of all of his employer’s filings from the Secretary of Labor under the Freedom of Information Act. The documents he received in response showed that his employer either had failed to file the required reports, or had filed false reports for a number of years. Kirk brought a lawsuit against his former employer on behalf of the United States government under the FCA. His employer argued that the documents produced in response to the Freedom of Information Act request were a government report, and therefore could not be the basis of liability. The Second Circuit Court of Appeals ruled that the documents were not a government report and remanded the case for further proceedings on the FCA claim. Kirk’s former employer appealed to the U.S. Supreme Court.

Oral argument will be scheduled for a later date and will not include Justice Kagan, who has recused herself.

Bankruptcy

Ransom v. MBNA, American Bank, N.A. (Docket No. 09-907)

The Supreme Court will consider whether a Chapter 13 debtor can deduct the “ownership costs” of a vehicle from his disposable income when he owes no further payments on the vehicle. A Chapter 13 debtor is entitled to deduct his vehicle ownership expenses when calculating his disposable income. The statute requires the courts to use standards developed by the IRS in determining ownership costs. The current IRS guidelines include a chart that allows a deduction of up to $471. Guidelines that interpret the chart allow the use of the deduction only if the debtor is required to make car payments. Ransom argued that Congress intended to adopt the dollar value limitation in the IRS guideline, but not the requirement that the debtor be making car payments. The creditors argued that because Ransom does not have any vehicle “ownership costs” as the IRS defines it, he should not be entitled to the deduction. The Ninth Circuit Court of Appeals ruled that Ransom was not entitled to the deduction, and he appealed to the U.S. Supreme Court.

Oral argument was scheduled for October 4, 2010.

Constitutional Rights and Freedoms

Snyder v. Phelps (Docket No. 09-751)

Supreme Court precedent precludes awarding damages to public figures for intentional infliction of emotional distress; the Court is asked to determine whether that precedent applies to prevent Snyder, the father of a fallen U.S. soldier, from recovering damages from Fred Phelps and the Westboro Baptist Church (WBC). Phelps and his family members demonstrated at the funeral of Snyder’s son with signs reading “Thank God for Dead Soldiers” and other hateful messages, and published a self-described “epic” on their website containing a similar message. A jury awarded a multi-million dollar verdict to the soldier’s father, but the Fourth Circuit Court of Appeals reversed, holding that the jury’s award violated WBC’s and Phelps’s First Amendment right to freedom of speech. Snyder appealed to the U.S. Supreme Court.

Oral argument was scheduled for October 6, 2010.

Schwarzenegger v. Entertainment Merchants Association (Docket No. 08-1448)

The Supreme Court is asked to decide whether a California law banning the sale of violent video games to minors violates the First Amendment, and is additionally asked to determine the appropriate standard of review for laws restricting display of harmful and offensive content to children. The Ninth Circuit Court of Appeals ruled that the California law represented a restriction on the freedom of speech under the First Amendment, and ruled the law invalid when subjected to strict scrutiny. To pass the strict scrutiny test, the law must be narrowly tailored to accomplish a compelling government purpose, and there must be no less restrictive means available to the government. The State of California appealed to the U.S. Supreme Court.

Oral argument is scheduled for November 2, 2010.

Intellectual Property

Costco Wholesale Corp. v. Omega (Docket No. 08-1423)

The Supreme Court is asked to decide whether the “first-sale doctrine” of U.S. copyright law applies to imported goods manufactured abroad. The first-sale doctrine allows a legitimate purchaser of a copyrighted work to resell the work without the permission of the copyright holder. In this case, a Swiss watchmaker (Omega) sold its watches at different price points throughout the world. Costco took advantage of this fact by purchasing genuine Omega watches abroad, and then reselling them in its U.S. stores at a 30% discount over domestic competitors. To put an end to this practice, Omega inscribed a small (5 mm in diameter) copyrighted symbol on the back of watches sold abroad. Because U.S. copyright law prohibits the importation of copyrighted works without the author’s permission, Omega claimed that Costco should be prohibited from importing Omega watches bearing this small symbol. Costco countered that since Omega had already sold the watches to distributors in other countries, the first-sale doctrine prevented Omega from asserting its copyright to prevent Costco’s purchase. The Ninth Circuit ruled that the first-sale doctrine only applies to copies manufactured in the United States and ruled for Omega. Costco appealed to the U.S. Supreme Court.

Oral argument is scheduled for November 8, 2010, and will not include Justice Kagan, who has recused herself.

Arbitration

AT&T Mobility LLC v. Concepcion (Docket No. 09-893)

The Supreme Court will decide whether the Federal Arbitration Act prohibits states from broadly declaring that all arbitration agreements that do not allow class-action arbitration are unenforceable, even when such a limitation in the agreement does not prevent a fair resolution. California law generally prohibits limitations on class-action arbitration under a unique unconscionability standard. The Federal Arbitration Act preempts state laws that contain defenses to arbitration agreements that do not also apply equally to all contracts. The Ninth Circuit Court of Appeals ruled that because unconscionability is a defense to all contracts, the standard California applies to contractual limitations on class-action arbitration is not preempted by the Federal Arbitration Act. AT&T Mobility appealed to the U.S. Supreme Court.

Oral argument is scheduled for November 9, 2010

Securities

Janus Capital Group, Inc. v. First Derivative Traders (Docket No. 09-525)

The Supreme Court is asked whether financial service providers can be held primarily liable for the false statements in a prospectus issued by a different company if the service provider participated or assisted in the drafting and distribution of the false statements. The Fourth Circuit Court of Appeals ruled that participating service providers could be held liable even if the false statements in a prospectus were not directly attributable to the service provider. Janus Capital Group and Janus Capital Management appealed to the U.S. Supreme Court. Oral argument is scheduled for December 7, 2010.

Product Liability

Bruesewitz v. Wyeth (Docket No. 09-152)

The National Childhood Vaccine Injury Act grants vaccine manufacturers immunity from liability for some injuries caused by vaccines. The Supreme Court has been asked to decide if the Act bars state-law claims that the vaccine was defectively designed.

Hanna Bruesewitz received a Diphtheria-Tetanus-Pertussis vaccine when she was six months old. She started suffering from seizures and developmental impairment shortly thereafter. Her parents filed a claim in the special “Vaccine Court,” which was dismissed for failure to prove that her injuries were caused by the vaccination. Her parents brought a new suit against the manufacturer in Pennsylvania state court, and the manufacturer removed the case to federal court. The federal court ruled that the parents’ state-law tort claim was preempted by the National Childhood Vaccine Injury Act. The parents argued that the National Childhood Vaccine Injury Act should be interpreted much more narrowly, barring only state-law claims based on a defect that could not have been prevented. The Third Circuit Court of Appeals disagreed, affirming the district court’s dismissal, and the Bruesewitz family appealed to the U.S. Supreme Court.

Oral argument was scheduled for October 12, 2010, and did not include Justice Kagan, who recused herself.

Williamson v. Mazda (Docket No. 08-1314)

The Supreme Court must decide whether a car manufacturer that relies on federal safety regulations and installs only the minimum required safety equipment can be sued by an accident victim for injuries that could have been prevented by more extensive safety equipment.

Thahn Williamson was killed in a car accident while she was riding in the back of a 1993 Mazda MPV minivan. Sitting in the middle seat, the vehicle was only equipped with two-point lap belts, rather than the safer three-point lap and shoulder belt configuration. The force of the accident caused her body to “jackknife” which resulted in fatal injuries that likely would have been prevented by three-point restraints. Her family sued the manufacturer, claiming the design of the van was defective because it did not include three-point restraints in the middle back seat. The California Court of Appeals ruled that the Williamsons’ claim was preempted by federal automobile safety regulations and dismissed the suit. The Williamsons appealed to the U.S. Supreme Court.

Oral Argument was scheduled for November 3, 2010, and did not include Justice Kagan, who recused herself.