federal courts

After suffering property damage in a 2010 hailstorm, Greg Knowles filed a class action lawsuit in Miller County, Arkansas, against the Standard Fire Insurance Company ("Standard Fire") for failure to pay a contractor's retention fee. Standard Fire tried to remove the case to federal court under the Class Action Fairness Act of 2005 (“CAFA”), alleging that the amount in controversy exceeded $5,000,000. Pursuant to CAFA, a federal court has jurisdiction over a class action only if the amount in controversy exceeds $5,000,000. The district court remanded the case to state court because Knowles's complaint stipulated that he would not seek more than $5,000,000 in damages for the class. Standard Fire argues that Knowles cannot defeat removal under CAFA by using a stipulation because it would bind absent class members before class certification and before Knowles could be declared an adequate class representative. Knowles argues that as master of his complaint, he is free to limit his claims, and that class members are not adversely affected by the stipulation. The Supreme Court will determine whether a named plaintiff in a class action, before being declared an adequate class representative, can limit the entire class's claims to $5,000,000 in damages in order to defeat an attempt to remove the case to federal court.

Nike, Inc., sued Already, LLC d/b/a Yums, for selling shoes that allegedly infringed on Nike’s trademark covering the Air Force 1 shoe line. Yums counterclaimed to cancel Nike’s trademark. Shortly after Yums’s counterclaim, Nike dropped its claim and promised Yums that Nike would not assert its trademark against any of Yums’s current or previous products. The district court dismissed Yums’s counterclaim and the court of appeals affirmed the dismissal. Yums argues that a controversy remains after Nike’s promise not to sue because Nike’s trademark continues to hinder Yums’s ability to compete in the athletic footwear business. Nike argues that a court cannot hear a trademark claim without a controversy, and that Nike’s promise not to sue eliminated any controversy involving the Air Force 1 trademark. The Supreme Court’s decision here may determine whether intellectual property owners can drop infringement actions without having to defend counterclaims challenging their intellectual property rights. This decision may have a significant impact on intellectual property litigation and on the risks associated with commencing an infringement action.

Sean Carter was convicted of aggravated murder, aggravated robbery, and rape, and was sentenced to death in Ohio. His counsel filed a federal habeas corpus petition challenging his conviction and requested a pre-petition competency hearing to determine whether Carter was competent to participate in the federal habeas proceeding. The district court granted both the petition and the request. Two years later, the district court determined that Carter was incompetent and dismissed his petition while also stopping the one-year statute of limitations. When the warden at the facility where Carter is imprisoned challenged the district court's decision, the United States Court of Appeals for the Sixth Circuit determined that even though the district court was justified in finding Carter incompetent, the proper course of action was to stay, rather than dismiss, the habeas proceedings until Carter was competent. Another warden now argues that a district court does not have the authority to stay federal habeas proceedings, nor does Carter have a right to competence in his own habeas proceedings. How the Supreme Court decides this case will determine the balance between recognizing the finality of state-court criminal judgments and allowing federal courts to use their discretion to implement stays in federal habeas proceedings where a capital prisoner’s competence to assist counsel is questionable.