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Gobeille v. Liberty Mutual Insurance Company

Issues

Does the Employee Retirement Income Security Act of 1974 (ERISA) preempt Vermont data reporting laws, which require companies that process insurance claims to report certain medical claims data to the state?

 

Vermont enacted legislation that created a “unified health care database” designed to improve the affordability and quality of health care in Vermont by collecting and analyzing statewide data on insurance claims.  See Liberty Mut. Ins. Co. v. Donegan, 746 F.3d 497, 500–01 (2d Cir. 2014); see also Vt. Stat. Ann. tit. 18 § 9410(a)(1)Liberty Mutual offers a health insurance benefit plan to Vermont residents; the Employee Retirement Income Security Act of 1974 (“ERISA”) governs benefit plans. See id. ERISA requires benefits plans to make claim data reports to the Department of  Labor,  and generally preempts any state laws that relate to an employee benefit plan.  See id. at 503. In August 2011, the Vermont Department of Banking, Insurance, Securities and Health Care Administration (the “Department”) subpoenaed claims data from Blue Cross and Blue Shield of Massachusetts, the company that administers Liberty Mutual’s Plan. See id. at 502. In  district  court, Liberty Mutual sought to enjoin the subpoena, arguing ERISA preempted Vermont’s reporting requirements. See id. On appeal, the Court of Appeals for the Second Circuit held that ERISA did preempt the reporting requirements. See id. But Alfred Gobeille, chair of the Vermont Green Mountain Care Board, maintains that ERISA does not preempt Vermont’s law, because (1) Vermont’s law falls under the traditional state power to regulate health care, (2) the law does not infringe any core function of ERISA, and (3) Congress intended for states to retain the ability to collect health care data. See Brief for Petitioner, Alfred Gobeille at 25. Liberty Mutual counters, arguing that Vermont’s reporting requirements conflict with Congress’s intent to create a uniform federal reporting regime, and thus constitute precisely the kind of state law that Congress intended ERISA to preempt. See Brief for Respondent, Liberty Mut. Ins. Co. at 13. The Supreme Court’s resolution of this case will impact the cost to consumers of purchasing health care, the quality of that care, and the resources that the insurance companies must spend on claims data reporting procedures. See Brief of Amici Curiae AARP et al., in Support of Petitioner at 9-10, 11; Brief of Amici Curiae The American Benefits Council et al., in Support of Respondent at 24, 27-28.

Questions as Framed for the Court by the Parties

May Vermont apply its health care database law to the third-party administrator for a self-insured ERISA plan?

Liberty Mutual Insurance Company administers a health plan, the Liberty Mutual Medical Plan (the “Plan”), which covers 84,000 people nationwide and 137 people in Vermont. See Liberty Mut. Ins. Co. v. Donegan, 746 F.3d 497, 501 (2d Cir.

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Global-Tech Appliances, Inc. v. SEB S.A.

Issues

To prove that a defendant induced patent infringement, is it necessary to show that the defendant intended or actually knew of the infringement, or is evidence of the defendant’s deliberate indifference sufficient?

 

PATENT, INFRINGEMENT, INDUCEMENT, STATE OF MIND

Respondent SEB S.A. owns a patent for a deep fryer featuring an inexpensive, insulated plastic outer shell. In 1997, Petitioner Pentalpha Enterprises, LTD, a subsidiary of petitioner Global-Tech Appliances, Inc. (collectively, “Global-Tech”), developed and manufactured a deep fryer that copied features of SEB's deep fryer. On August 27, 1999, SEB sued Global-Tech for patent infringement in the United States District Court for the Southern District of New York. The jury found Global-Tech liable for direct and active inducement of patent infringement, and Global-Tech appealed to the Court of Appeals for the Federal Circuit. That court affirmed, holding that Global-Tech acted with deliberate indifference to the risk of infringing SEB's patent. Global-Tech appealed, arguing that the Federal Circuit applied the wrong standard for the mental-state element of actively inducing patent infringement under 35 U.S.C. § 271(b). Global-Tech asserts that the proper standard is “purposeful, culpable expression and conduct to encourage an infringement,” the standard the Supreme Court articulated in MGM Studios, Inc. v. Grokster, Ltd. On the other hand, SEB argues that a patent infringer does not need to have actual knowledge of a patent to be liable for actively inducing patent infringement. The Supreme Court’s decision will affect patent litigation, the extent and cost of patent searches, and market competition and innovation.

Questions as Framed for the Court by the Parties

Whether the legal standard for the state of mind element of a claim for actively inducing infringement under 35 U.S.C. § 271(b) is “deliberate indifference of a known risk” that an infringement may occur, as the Court of Appeals for the Federal Circuit held, or “purposeful, culpable expression and conduct” to encourage an infringement, as this Court taught in MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 937, 125 S. Ct. 2764, 2780, 162 L. Ed. 2d 781, 801 (2005)?

SEB S.A. specializes in the design and manufacture of home cooking appliances. See SEB S.A. v. Montgomery Ward & Co, Inc., 594 F.3d 1360, 1365 (Fed. Cir. 2010). SEB owns a patent for a deep fryer featuring an inexpensive, insulated plastic outer shell, or skirt. See id. at 1365–66. In 1997, Sunbeam Products, Inc. requested that Pentalpha Enterprises, a subsidiary of Global-Tech Appliances Inc. (collectively “Global-Tech”) develop and manufacture a deep fryer. See Brief for Petitioners, Global-Tech Appliances Inc. and Pentalpha Enterprises, Ltd. at 3.

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Acknowledgments

The authors would like to thank former Supreme Court Reporter of Decisions Frank Wagner for his assistance in editing this preview.

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Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.

Issues

Whether a payphone service provider can sue a long distance carrier in federal court when that carrier fails to pay compensation for dial-around calls made in violation of Federal Communications Commission regulations.

 

Payphone users can circumvent the usual payment method and avoid inserting a coin by using an access code or 800 number provided by a long distance carrier. These “dial-around” numbers, while convenient for users, leave payphone service providers uncompensated for the call made. The Federal Communications Commission, as instructed by Congress in the Telecommunications Act of 1996, created regulations to ensure that payphone service providers receive compensation for these “dial-around” calls. Metrophones Telecommunications, Inc., a payphone service provider, argues that Global Crossing Telecommunications, Inc., a long distance provider, has violated these regulations by failing to compensate Metrophones for such calls. Metrophones argues that under Section 201(b) of the Communications Act, Global Crossing Telecommunications’ violation of the Federal Communications Commission regulation constitutes an unjust and unreasonable practice, making it unlawful and actionable in federal court. Both the District Court and Ninth Circuit Court of Appeals held that a private cause of action does exist under Section 201(b). The Supreme Court’s decision in this case will define the scope of Section 201(b) of the Communications Act as well as give insight into the amount of deference to agency pronouncements that the court deems fit. It will also either provide a long awaited opportunity for payphone service providers to assert their rights in this area or leave them looking for another way to obtain compensation.

Questions as Framed for the Court by the Parties

Whether 47 U.S.C. § 201(b) of the Communications Act of 1934 creates a private right of action for a provider of payphone services to sue a long distance carrier of alleged violations of the FCC’s regulations concerning compensation for coinless payphone calls.

Metrophones Telecommunications, Inc. (“Metrophones”) is a payphone service provider (“PSP”). Global Crossing Telecommunications, Inc. (“Global Crossing”) is a long distance provider. The basis of the dispute is compensation Global Crossing is required by law to pay Metrophone for “dial around” calls from payphones.

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Georgia v. Randolph

Issues

Can police legally search the home of an occupant who consents to the search despite the objections of another present occupant?

 

In this case the Supreme Court will resolve the issue of whether or not police can legally search the home of an occupant who consents to a search despite the explicit objections of another occupant. Police searched the house of Mr. Randolph with the consent of his estranged wife but against his unequivocal objections. Randolph would have the Court find that the search violated his reasonable expectation of privacy guaranteed by the Fourth Amendment. Georgia, however, reasons that a joint tenant's reasonable expectation of privacy is not infringed in this case because joint tenants assume a reduced expectation of privacy. Thus, the Supreme Court's decision in this case will interpret the scope of the Fourth Amendment's protection against unreasonable searches of homes with multiple occupants.

Questions as Framed for the Court by the Parties

Can police search a home when a co-habitant consents and the other co-habitant is present and does not consent?

On July 6, 2001, police arrived at the Randolph residence after Mrs. Randolph reported a domestic dispute with her estranged husband, Defendant Scott Randolph. Randolph v. State, 590 S.E.2d 834, 836 (Georgia, 2003). The couple had separated two months earlier, and Mrs. Randolph left the home at that time with their son to Canada. Id.

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Genesis HealthCare Corp. v. Symczyk

Issues

Does a purported collective action become moot, and thus beyond the judicial power of Article III, when the lone plaintiff in the case receives a complete offer of judgment from the defendants and all other potential plaintiffs have not yet joined the case?

 

In a putative collective action, Laura Symczyk alleged that Genesis HealthCare Corporation violated the Fair Labor Standards Act by automatically deducting break time from her and other employees’ pay, regardless of whether they performed compensable work during their breaks. Before any other plaintiffs joined the action, Genesis made an offer of judgment for full relief of Symczyk’s claims. Symczyk did not accept the offer, but the district court dismissed the case because the offer of judgment left Symczyk without a personal stake in the litigation. Symczyk argues that she continues to have a personal stake and that the interests of plaintiffs yet to join the action creates jurisdiction. Genesis argues that a complete offer to satisfy a lone plaintiff’s claim renders the case moot. In resolving the question presented, the Supreme Court will decide whether an unaccepted offer of judgment can render a case moot and whether courts may consider the interests of unnamed, hypothetical parties in determining whether the parties have a personal stake in the litigation. The decision will affect collective-action trial practices for both plaintiffs and defendants, including plaintiffs’ use of the discovery process to join class members and defendants’ use of individual offers of judgment to forestall or avoid collective actions.

Questions as Framed for the Court by the Parties

Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff’s claims.

Between April and December 2007, Laura Symczyk worked as a Registered Nurse at a healthcare facility in Philadelphia, Pennsylvania. See Symczyk v. Genesis HealthCare Corp., 656 F.3d 189, 190 (3d Cir.

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General Dynamics Corp. v. United States; Boeing Company v. United States

Issues

Can the government maintain a suit against a party while simultaneously seeking to prohibit that party from raising a defense that could lead to the disclosure of state secrets that might harm national security?

 

In 1988, the United States Navy contracted with McDonnell Douglas and General Dynamics Corporation to build stealth aircraft. In 1991, the Navy discontinued the stealth aircraft program and terminated the contract. McDonnell Douglas and General Dynamics sued in the Court of Federal Claims, alleging that delays in the building of the aircraft were due to the government's failure to share information. The United States asserted the state secrets privilege, claiming that disclosure of this information would harm national security. The Federal Circuit ruled in favor of the United States, holding that the government could assert its termination claim against the contractors and invoke the state secrets privilege to preclude the contractors' defense. The Boeing Company (which merged with McDonnell Douglas during the litigation) and General Dynamics appealed, arguing that the government cannot maintain a claim against a party when it invokes the state secrets privilege to preclude that party from raising a defense in a civil case where the government is the moving party. The contractors also claimed the invocation of the privilege violates the Due Process Clause of the Fifth Amendment. The Supreme Court's decision will affect the use of the state secrets privilege to protect national security and the right of private litigants to assert defenses against government claims.

Questions as Framed for the Court by the Parties

General Dynamics Corp.

Whether the government can maintain its claim against a party when it invokes the state-secrets privilege to completely deny that party a defense to the claim.

Boeing Company

Whether the Due Process Clause of the Fifth Amendment permits the government to maintain a claim while simultaneously asserting the state secrets privilege to bar presentation of a prima facie valid defense to that claim.

In 1988, the United States government contracted with McDonnell Douglas Corporation (“McDonnell Douglas”) and General Dynamics Corporation (“General Dynamics”), two defense contractors. See McDonnell Douglas Corp. v. United States, 567 F.3d 1340, 1342 (Fed. Cir.

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Additional Resources

· Bloomberg, Greg Stohr: Boeing, General Dynamics Get High Court Hearing in Stealth-Fighter Dispute (Sep. 28, 2010)

· Constitutional Law Prof Blog, Steven D. Schwinn: Court to Consider a More Ordinary State Secrets Privilege (Sep. 29, 2010)

· Lewis & Clark Law Review, Carrie Newton Lyons: The State Secrets Privilege: Expanding its Scope Through Government Misuse

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Gall v. United States

Issues

Can a district court impose a sentence outside of the range recommended by the United States Sentencing Guidelines without providing an extraordinary reason to justify the deviation?

 

In 2000, Brian Michael Gall was involved in a drug ring for approximately 8 months. Five years later, he pled guilty to conspiracy to distribute a controlled substance. The judge sentencing Gall chose to impose a sentence far below the sentence range recommended by the United States Sentencing Guidelines (“Guidelines”) because of Gall’s exemplary and law-abiding behavior after he left the conspiracy. On appeal, this sentence was held unreasonable because of its great deviation from the sentence range recommended by the Guidelines. In two recent cases, the Supreme Court held that requiring a judge to impose a sentence within the Guidelines sentence range violates the Sixth Amendment, but that a sentence within the Guidelines range can be presumed reasonable. Consequently, though courts are not required to sentence within the Guidelines range, they are expected to consider the range in their sentencing decisions, and it is uncertain how much discretion they have to depart from the range. Gall v. United States will clarify the role of the Federal Sentencing Guidelines in sentencing decisions and what justification is needed for a departure from the Guidelines sentencing range.

 

    Questions as Framed for the Court by the Parties

    Whether, when determining the “reasonableness” of a district court sentence under United States v. Booker, 543 U.S. 220 (2005), it is appropriate to require district courts to justify a deviation from the United States Sentencing Guidelines with finding of extraordinary circumstances.

     

    In early 2000, Brian Michael Gall, began selling methylenedioxymethamphetamine (“MDMA” or ecstasy) as part of a drug distribution ring in Iowa. U.S. v. Gall, 446 F.3d 884, 885 (8th Cir. 2006). Gall would purchase MDMA in 1,000 tablet increments, and then sell the tablets to others whom he knew were distributing the drug in the community. Id. While part of the drug conspiracy, Gall earned $30,000 to $40,000 in profit. Brief for Petitioner at 2. In September 2000, Gall decided to leave the drug conspiracy. Gall, 446 F.3d at 886.

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