Perez v. Mortgage Bankers Association (13-1041); Nickols v. Mortgage Bankers Association

Issues

Is a federal agency required to engage in notice-and-comment rulemaking before it can alter an interpretive rule that articulates an interpretation of the agency’s regulation?

The Supreme Court will consider whether a significant change in an interpretive rule issued by the Department of Labor (“Department”) requires the Department to undergo the notice-and-comment process. The Department, Secretary of Labor Perez, and Nickols argue that the APA explicitly exempts interpretative rules from the notice-and-comment process. However, the Mortgage Bankers Association (“MBA”) argues that when an agency issues new interpretation that substantially changes a prior definitive interpretation and has the force of law, the agency has in fact engaged in substantive or legislative rulemaking and must undergo the notice-and-comment. The Supreme Court’s decision in this case may affect the extent to which agencies are held accountable for significant changes in their policy interpretations and the agencies’ power to amend rules that are ineffective or reflect an outdated view of the agency. 

Questions as Framed for the Court by the Parties

Perez v. Mortgage Bankers Assn.

The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., generally provides that “notice of proposed rule making shall be published in the Federal Register,” 5 U.S.C. 553(b), and, if such notice is required, the rulemaking agency must give interested persons an opportunity to submit written comments, 5 U.S.C. 553(c). The APA further provides that its notice-and comment requirement “does not apply * * * to interpretative rules,” unless notice is otherwise required by statute. 5 U.S.C. 553(b) (A). No other statute requires notice in this case. The question presented is:

Whether a federal agency must engage in notice-and-comment rulemaking before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation.

Nickols v. Mortgage Banker Assn.

The Administrative Procedure Act, 5 U.S.C. §§ 551-59, “established the maximum procedural requirements which Congress was willing to have the courts impose upon agencies in conducting rulemaking procedures.” Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 524 (1978). Section 553 of the Act sets forth notice-and-comment rulemaking procedures, but exempts “interpretative rules,” among others, from the notice-and-comment requirement. 5 U.S.C. § 553(b). The D.C. Circuit, in a line of cases descending from Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579 (D.C. Cir. 1997), has created a per se rule holding that although an agency may issue an initial interpretative rule without going through notice and comment, “[o]nce an agency gives its regulation an interpretation, it can only change that interpretation as it would formally modify the regulation itself: through the process of notice and comment rulemaking.” Id. at 586. In this case, the D.C. Circuit invoked the Paralyzed Veterans doctrine-which is contrary to the plain text of the Act, numerous decisions of this Court, and the opinions of the majority of circuit courts-to invalidate a Department of Labor interpretation concluding that mortgage loan officers do not qualify for the administrative exemption under the Fair Labor Standards Act.

The question presented is: 

Whether agencies subject to the Administrative Procedure Act are categorically prohibited from revising their interpretative rules unless such revisions are made through notice-and- comment rulemaking.

Under the Fair Labor Standards Act (“FLSA”), Congress established federal overtime guarantees for employees who work more than forty hours per week. See Mortgage Bankers Association v. Harris (“Harris”), 720 F.3d 966, 968 (D.C. Cir. 2013). At the same time, the FLSA exempts certain employees from its overtime requirements, including those “employed in a bona fide executive, administrative, or professional capacity[,] . . .

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Acknowledgments

The authors would like to thank Professor Cynthia Farina of Cornell Law School for her helpful insight into the issues of this case.

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Hana Financial v. Hana Bank

Issues

Is trademark tacking an issue of law or fact?

The Supreme Court will have the opportunity to address the issue of whether trademark tacking is a question of law or fact. In this case, Hana Bank argues that its use of “Hana Overseas Korean Club” should be tacked to its use of “Hana World Center”—as the district court jury seemingly allowed. Hana Financial counters, argues that a judge, not a jury, should decide the tacking issue; and, Hana Bank’s tacking claim fails as a matter of law. The outcome of this case may touch on judicial efficiency, predictability of trademark law, and consumer protection. 

Questions as Framed for the Court by the Parties

To own a trademark, one must be the first to use it; the first to use a mark has “priority.”  The trademark “tacking” doctrine permits a party to “tack” the use of an older mark onto a new mark for purposes of determining priority, allowing one to make slight modifications to a mark over time without losing priority. Trademark tacking is available where the two marks are “legal equivalents.” The question presented, which has divided the courts of appeals and determined the outcome in this case, is:

Whether the jury or the court determines whether use of an older trademark may be tacked to a newer one is a question of fact?

In the mid-1990s two companies began providing financial services in the United States. See Hana Financial, Inc. v Hana Bank, 735 F.3d 1158, 1161 (9th Cir.

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Elonis v. United States

Issues

Does a conviction for threatening another person in interstate communications require proof of the defendant’s subjective intent to threaten and, if not, does the First Amendment prevent a conviction based only on a showing that a reasonable person would regard the statement as threatening?

The Supreme Court granted certiorari to address a circuit split on the question of whether the 18 U.S.C. § 875(c) (“§ 875(c)”) requires a showing of subjective intent in order to convict and, if not, whether conviction based only on a showing that a reasonable person would regard the statement as threatening violates the First Amendment. In this case, Anthony D. Elonis was convicted for publishing a series of Facebook posts describing committing acts of violence towards various people in violation of § 875(c). Elonis contends that the government must offer proof of a subjective intent to threaten, and that his speech is protected by the First Amendment. The United States, however, argues that § 875(c) requires only proof of general intent and that threats as defined in § 875(c) should not receive First Amendment protection. The Supreme Court’s ruling in this case could affect free speech rights as well as the rights of those who are victims of threats.

Questions as Framed for the Court by the Parties

It is a federal crime to “transmit[] in interstate or foreign commerce any communication containing * * * any threat to injure the person of another,” 18 U.S.C. § 875(c). Numerous states have adopted analogous crimes. The question presented is:

Whether, consistent with the First Amendment and Virginia v. Black, 538 U.S. 343 (2003), conviction of threatening another person requires proof of the defendant's subjective intent to threaten, as required by the Ninth Circuit and the supreme courts of Massachusetts, Rhode Island, and Vermont; or whether it is enough to show that a “reasonable person” would regard the statement as threatening, as held by other federal courts of appeals and state courts of last resort.

IN ADDITION TO THE QUESTION PRESENTED BY THE PETITION, THE PARTIES ARE DIRECTED TO BRIEF AND ARGUE THE FOLLOWING QUESTION: “Whether, as a matter of statutory interpretation, conviction of threatening another person under 18 U.S.C. §875(c) requires proof of the defendant’s subjective intent to threaten.”

Anthony D. Elonis was indicted with five counts of making threats in violation of 18 U.S.C. § 875(c) (“§ 875(c)”). United States v. Elonis, 730 F.3d 321, 327 (3rd Cir. 2013). Section 875(c) provides that it shall be illegal to transmit “in interstate or foreign commerce any communication containing . . .

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B&B Hardware, Inc. v. Hargis Indus., Inc.

Issues

Does the Trademark Trial and Appeal Board’s (“TTAB”) likelihood-of-confusion determination have a preclusive effect in a trademark infringement claim; or, alternatively, should federal courts defer to the TTAB’s findings on likelihood-of-confusion absent strong evidence to rebut the finding?

The Supreme Court’s decision in this case will determine whether a Trademark Trial and Appeal Board (“TTAB”) likelihood-of-confusion finding has preclusive effect in a subsequent trademark-infringement claim. If the Court finds that issue preclusion does not apply, the Court will address whether federal courts should defer to the TTAB’s likelihood-of-confusion determination in the absence of strong contrary evidence. B&B Hardware argues that the concept of “likelihood of confusion” has the same meaning in both TTAB and federal court proceedings and applies equally to both trademark-registration proceedings and trademark-infringement actions. Hargis Industries counters that preclusion is inapplicable because TTAB administrative decisions are not binding on Article III courts. The Court’s ruling will have significant implications for judicial efficiency in TTAB infringement cases before both the TTAB and federal courts, and will potentially also impact consumer confidence in trademarks. 

Questions as Framed for the Court by the Parties

  1. Whether the TTAB’s finding of a likelihood of confusion precludes Hargis from relitigating that issue in infringement litigation, in which likelihood of confusion is an element.
  2. Whether, if issue preclusion does not apply, the district court was obliged to defer to the TTAB’s finding of a likelihood of confusion absent strong evidence to rebut it.

For over fifteen years, B&B Hardware, Inc. (“B&B”), doing business as Sealtight Technology, and Hargis Industries, Inc. (“Hargis”), doing business as Sealtite Building Fasteners, have been involved in trademark litigation over the similarity of their marks. See B&B Hardware, Inc. v.

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T-Mobile South v. City of Roswell

Issues

Does a letter from a local government denying an application to construct a cell tower without providing reasons for the denial, but offering the minutes of the meeting denying the application, satisfy the “in writing” requirement of the Telecommunications Act of 1996?

In this case, the Supreme Court will address whether the Telecommunications Act of 1996 (“1996 Act”) requires State or local governments that deny an application to construct a new cell tower to provide clear reasons for the decision in the same written document as the denial. Citing the statute’s text, purpose, and legislative history, T-Mobile argues that the City of Roswell violated the 1996 Act when it denied T-Mobile’s permit application but did not provide a clear statement of reasons for the denial. The City of Roswell argues that the 1996 Act merely requires that a state or local government provide the denial “in writing,” regardless of whether the reasons for the denial appear in a separate written record. The Supreme Court’s decision will likely have significant implications for the future of wireless deployment and judicial review of state and local resistance to wireless telecommunications services. The Court’s decision may also impact economic growth and public safety. 

Questions as Framed for the Court by the Parties

In order to promote the prompt deployment of telecommunications facilities and to enable expedited judicial review, the Communications Act of 1934, as amended by the Telecommunications Act of 1996, provides that any decision by a state or local government denying a request to place, construct, or modify a personal wireless service facility “shall be in writing and supported by substantial evidence contained in a written record.” 47 U.S.C. § 332 (c)(7)(B)(iii).

The question presented is whether a document from a state or local government stating that an application has been denied, but providing no reasons whatsoever for the denial, can satisfy this statutory “in writing” requirement.

In 2003, the Respondent City of Roswell, Georgia (“City”) enacted an ordinance (Roswell City Ordinance 21.2) governing the standards for wireless communication towers. T-Mobile South LLC v.

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Additional Resources

  • Seth L. Cooper: States Can Promote Next-Generation Wireless by Removing Regulatory Barriers, American Legislator (Apr. 3, 2014).
  • Brian Heaton: U.S. Supreme Court to Decide Key Cell Tower Siting Case, Government Technology (May 29, 2014).
  • Brent Kendall: Supreme Court to Hear T-Mobile Cell-Tower Case, The Wall Street Journal (May 5, 2014).
  • Matthew Schettenhelm: Is a Local Government’s Decision in Writing? The U.S. Supreme Court To Rule, Best Best & Krieger, LLP (July 29, 2014).
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M&G Polymers USA, LLC v. Tackett

Issues

In determining whether retiree health-care benefits provided under collective bargaining agreements should continue indefinitely, how should courts interpret collective bargaining agreements that are silent on the duration of retiree health-care benefits?

When interpreting a collective bargaining agreement that is silent on the duration of retiree health-care benefits, the Sixth Circuit inferred that the health-care benefits are vested (and therefore continue indefinitely). This approach, however, differs from the interpretative approach of other federal appellate courts. The Supreme Court will now resolve this circuit split. M&G Polymers USA, LLC argues that health-care benefits should terminate when the collective bargaining agreement ends unless there is a clear and explicit statement that such benefits should continue indefinitely. In opposition, several M&G retirees argue that, notwithstanding contractual silence, the parties’ intent that health-care benefits should continue indefinitely can be presumed. The resolution of this case will impact both the retention of retiree health-care benefits and the operational costs of American companies. 

Questions as Framed for the Court by the Parties

  1. Whether, when construing collective bargaining agreements in Labor Management Relations Act (LMRA) cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest (and therefore continue indefinitely), as the Sixth Circuit holds; or should require a clear statement that health-care benefits are intended to survive the termination of the collective bargaining agreement, as the Third Circuit holds; or should require at least some language in the agreement that can reasonably support an interpretation that health-care benefits should continue indefinitely, as the Second and Seventh Circuits hold.
  2. Whether, as the Sixth Circuit has held in conflict with the Second, Third, and Seventh Circuits, different rules of construction should apply when determining whether health-care benefits have vested in pure ERISA plans versus collectively bargained plans.

In 1992, Shell Chemical Company (“Shell”) purchased a West Virginia polyester plant from The Goodyear Tire & Rubber Company (“Goodyear”). See Tackett v. M & G Polymers USA, LLC, 733 F.3d 589, 593 (6th Cir. 2013).

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Maryland State Comptroller of the Treasury v. Wynne

Issues

Does a state tax scheme violate the United States Constitution by taxing all resident income earned in-state and out-of-state and requiring residents to take out a credit against taxes paid on income earned in other states?

In this case, the Supreme Court will have the opportunity to address whether a state may tax its residents’ out-of-state income where the state in which the resident earned the income has already taxed the resident’s income earned in that state. The Maryland State Comptroller of the Treasury claims that the Supreme Court has recognized a state’s right to tax all of its residents’ income, whether earned inside or outside of the state, and even where the result is multiple taxation of the same income. Notwithstanding that, the Wynnes argue that Maryland’s tax scheme unduly burdens interstate commerce—and thereby violates the Commerce Clause—because it does not offset that multiple taxation through a credit, or otherwise. The Court’s ruling will determine the constitutionality of so-called “double taxation” schemes in light of a state’s sovereign power to tax its residents as well as constitutional requirements against discriminatory tax schemes.

Questions as Framed for the Court by the Parties

Does the United States Constitution prohibit a state from taxing all the income of its residents-wherever earned-by mandating a credit for taxes paid on income earned in other states?

In 2006, Respondents Brian and Karen Wynne owned 2.4% of the stock in Maxim Healthcare Services, Inc. (“Maxim”), a national healthcare services company classified as an S corporation in Maryland. See Maryland State Comptroller of the Treasury v. Wynne, 431 Md. 147, 158 (Md. Ct. App.

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Alabama Legislative Black Caucus v. Alabama; Alabama Democratic Conference v. Alabama (Consolidated)

Issues

  1. Does Alabama’s legislative redistricting plan violate the Equal Protection Clause because its drafters attempted to maintain black voting population percentages in order to comply with Section 5 of the Voting Rights Act?
  2. Does the Alabama Democratic Conference have standing to challenge the constitutionality of Alabama’s redistricting plan?

The Supreme Court’s decision in this case will likely clarify the extent that state redistricting plans may take race into consideration when trying to comply with the Voting Rights Act or the Constitution. The Alabama Legislative Black Caucus and the Alabama Democratic Conference allege that Alabama’s 2012 redistricting plan impermissibly focused on race in drawing new district lines. Alabama responds that the 2012 redistricting plan’s primary motivations were compliance with the Constitution’s requirement of “one person, one vote” and prevention of retrogression under the Voting Rights Act. The resolution of this case will likely address the role courts play in policing redistricting plans enacted by state legislatures.

Questions as Framed for the Court by the Parties

No. 13-895

Whether Alabama’s legislative redistricting plans unconstitutionally classify black voters by race by intentionally packing them in districts designed to maintain supermajority percentages produced when 2010 census data are applied to the 2001 majority-black districts.

No. 13-1138

This appeal in a legislative redistricting case presents issues of law in regard to how a State may rely on race in setting district boundaries. It is undisputed that the State had, among its chief goals, the idea that when possible it would redraw each majority--black district to have the same percentage of black population as the district would have had using 2010 census data as applied to the former district lines. This goal, particularly when combined with the new goal of significantly reducing population deviation among districts, led the State to stark racial intentionality in district-drawing, packing more super-majorities of black voters into already-majority-black districts, without regard to whether such efforts were actually necessary in each district to allow black voters to elect candidates of their choice. A divided three-judge District Court rejected the challenge to this map. This appeal presents issues summarized as follows:

a. Whether, as the dissenting judge concluded, this effort amounted to an unconstitutional racial quota and racial gerrymandering that is subject to strict scrutiny and that was not justified by the putative interest of complying with the non-retrogression aspect of Section 5 of the Voting Rights Act?

b. Whether these plaintiffs have standing to bring such a constitutional claim?

After the 2010 census revealed malapportionment in most electoral districts in Alabama, the Republican-controlled Alabama legislature declared that compliance with the Constitution’s mandate of “one person, one vote” would be its highest priority in creating new district lines in 2012.

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Zivotofsky v. Kerry

Issues

Does a federal statute that directs the Secretary of State, upon an American citizen’s request, to record the birthplace of an American citizen born in Jerusalem as born in “Jerusalem, Israel” on a United States passport and on a Consular Report of Birth Abroad infringe upon the President’s authority to recognize foreign states and governments?

When the United States does not have an official position regarding which country controls a city, United States passports will list the city of birth but not a country of birth. The Supreme Court will now determine two legal issues: (1) whether Foreign Relations Authorization Act’s Section 214(d) is an exercise of regulating the issuance of passports or an exercise of recognizing foreign nations; and (2) if Section 214(d) is an act of recognition, whether the President has exclusive authority to recognize foreign nations. Zivotofsky argues that Section 214(d) is a constitutional exercise of Congress’ power to regulate the issuance of passports and also contends that the Constitution does not vest exclusive recognition authority in the President. The Secretary of State argues that Section 214(d) is a constitutional exercise of the President’s power to recognize foreign nations and also contends that the Constitution vests exclusive recognition authority in the President. The Supreme Court’s decision could affect U.S. foreign policy and the allocation of powers between the legislative and executive branches.

Questions as Framed for the Court by the Parties

Whether a federal statute that directs the Secretary of State, on request, to record the birthplace of an American citizen born in Jerusalem as born in “Israel” on a Consular Report of Birth Abroad and on a United States passport is unconstitutional on the ground that the statute “impermissibly infringes on the President’s exercise of the recognition power reposing exclusively in him.”

Due to the Arab-Israeli conflict, the "political status of Jerusalem has been in dispute since 1948." Zivotofsky v. Sec’y of State, 511 F.Supp. 2d 97, 100 (D.D.C. 2007). As part of peacekeeping efforts, the United States government does not recognize Jerusalem as belonging to any sovereign nation.

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Yates v. United States

Issues

Does the term “tangible objects” in 18 U.S.C. § 1519 encompass all physical objects, including fish, or only those objects that are meant to preserve information?

In this case the Supreme Court will address whether the term “tangible objects” in 18 U.S.C. § 1519 encompasses more than objects that preserve information—specifically whether it includes fish. Section 1519 criminalizes destroying or concealing a “tangible object with the intent to impede, obstruct, or influence” a government investigation. While Yates encourages the Court to look at the statutory language surrounding “tangible objects” and argues that fish are not “tangible objects” within the meaning of the statute, the government contends that “tangible objects” is an unambiguous term that applies to all objects, including fish. The Court’s ruling will implicate the reach of federal law, statutory interpretation, and the notice requirement of the Fourteenth Amendment. 

Questions as Framed for the Court by the Parties

In the wake of the criminal charges filed against Enron's corporate officers, Congress passed the Sarbanes-Oxley Act of 2002. Known as the “anti-shredding provision” of the Act, 18 U.S.C. § 1519 makes it a crime for anyone who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object’ with the intent to impede or obstruct an investigation. 18 U.S.C. § 1519 (emphasis supplied). John L. Yates, a commercial fisherman, was charged and convicted under this anti-shredding criminal statute for destroying purportedly undersized, harvested fish from the Gulf of Mexico after a federally-deputized officer had issued him a civil citation and instructed him to bring them back to port.

This petition presents the important question of whether the reach of section 1519 extends to the construction of anything meeting the dictionary definition of “tangible objects,” or instead is limited to the destruction of tangible objects related to record-keeping as follows:

Whether Mr. Yates was deprived of fair notice that destruction of fish would fall within the purview of 18 U.S.C. § 1519, where the term “tangible object” is ambiguous and undefined in the statute, and unlike the nouns accompanying “tangible object” in section 1519, possesses no record-keeping, documentary, or informational content or purpose?

On August 23, 2007, Petitioner John Yates and his crew were actively engaged in fishing aboard their vessel when Officer John Jones (“Officer Jones”) of the Florida Fish and Wildlife Conservation Commission approached for an inspection. See United States v. Yates, 733 F.3d 1059, 1061 (11th Cir. 2013).

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