Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund

Issues

Does Section 11 of the Securities Act of 1933 require a showing that an opinion contained in a registration statement was objectively wrong and subjectively false? 

The Supreme Court will decide whether, in a Section 11 claim, an opinion itself can be a misleading or untrue material fact if objectively wrong, or if a plaintiff must also show that the speaker did not subjectively believe the stated opinion. While Omnicare argues that an opinion is actionable only when subjectively wrong, Laborers District Counsel Construction Industry Pension Fund contends that an objectively wrong statement qualifies as misleading under Section 11 of the Securities Act of 1933. This decision will affect the liability stock issuers have in connection with public offerings and could potentially affect underwriters’ willingness to finance securities. 

Questions as Framed for the Court by the Parties

Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k, provides a private remedy for a purchaser of securities issued under a registration statement filed with the Securities and Exchange Commission if the registration statement “contained an untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statement therein not misleading.” Against that statutory backdrop, this case presents the following question:

For purposes of a Section 11 claim, may a plaintiff plead that a statement of opinion was “untrue” merely by alleging that the opinion itself was objectively wrong, as the Sixth Circuit has concluded, or must the plaintiff also allege that the statement was subjectively false—requiring allegations that the speaker’s actual opinion was different from the one expressed—as the Second, Third, and Ninth Circuits have held?

Petitioner Omnicare is a large pharmaceutical care services provider operating in Canada and the United States. See Ind. State Dist. Council, et al. v. Omnicare, Inc., et al., 719 F.3d 498, 500 (6th Cir. 2013). Omnicare engaged in a public offering of securities on December 15, 2005 where it offered 12.8 million shares of common stock.

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The authors would like to thank Professor Charles K. Whitehead for his advice and assistance with this preview. 

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Johnson v. United States

Issues

Is possession of a short-barreled shotgun a violent felony under the Armed Career Criminal Act?

The Supreme Court will consider whether possession of a short-barreled shotgun can be considered a violent felony for purposes of the Armed Career Criminal Act (“ACCA”). Johnson argues that possession alone of a short-barreled shotgun is not inherently violent, unlike the other violent felonies listed in the ACCA. The United States asserts that possession of a short-barreled shotgun is a violent felony because the possession of a dangerous weapon greatly increases the likelihood that a possessor will injure or kill others. The Court’s ruling implicates the law of sentencing enhancements, the classification of violent felonies, and the scope of the ACCA. 

Questions as Framed for the Court by the Parties

Whether the mere possession of a short-barreled shotgun should be treated as a violent felony under the Armed Career Criminal Act?

The Federal Bureau of Investigation started investigating Samuel James Johnson’s participation in the Aryan Liberation Movement (“Movement”) in 2010. See United States v. Johnson, No. 12-3123, 2013 WL 3924353, at *1 (8th Cir. 2013). Johnson intended to counterfeit United States currency in order to support the activities of the Movement.

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The authors would like to thank Professor Jens Ohlin from Cornell Law School for his insights into this case.

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Jesinoski v. Countrywide Home Loans

Issues

May a borrower simply provide written notice to a creditor to exercise a statutory right to rescind a home-secured loan under the Truth In Lending Act, or must the borrower file a lawsuit to exercise that right?

This case presents the Supreme Court with an opportunity to determine the procedural requirements for exercising the right to rescission under the Truth In Lending Act (“TILA”). The Jesinoskis argue that if a creditor fails to strictly comply with TILA’s terms, then borrowers only need to provide written notice in order to rescind a loan any time within a three-year period. Meanwhile, Countrywide maintains that any rescission occurring after the first three days of the loan requires a lawsuit if the rescission is contested by the creditor. This case ultimately will determine who bears the cost of litigation in rescinding home-secured loans, and also determines the scope of TILA’s protection for borrowers.

Questions as Framed for the Court by the Parties

The Truth in Lending Act provides that a borrower “shall have the right to rescind the transaction until midnight of the third business day following . . . the delivery of the information and rescission forms required under this section ... by notifying the creditor ... of his intention to do so.” 15 U.S.C. § 1635(a). The Act further creates a “[t]ime limit for [the] exercise of [this] right,” providing that the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction” even if the “disclosures required ... have not been delivered.” Id. § 1635(f). 

The question presented is: 

Does a borrower exercise his right to rescind a transaction in satisfaction of the requirements of Section 1635 by “notifying the creditor” in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or must a borrower file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held?

On February 23, 2007, Larry and Cheryle Jesinoski refinanced their home for a $611,000 loan from Countrywide Home Loans. See Jesinoski v. Countrywide Home Loans, Inc., No. 11-cv-0474-DWF-FLN, 2012 WL 1365751, at *1 (D. Minn. Apr. 19, 2012).

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The authors would like to thank Professor Cynthia Farina for her guidance.

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Department of Homeland Security v. MacLean

Issues

Does the Whistleblower Protection Act bar an agency from taking enforcement action against an employee who violated one of the agency’s regulations?

The Supreme Court will address whether employees may violate government agency regulations without losing their rights under the Whistleblower Protection Act (“WPA”). The Court’s decision will clarify whether certain regulations have the force and effect of law under the WPA, which will, in turn, influence the extent to which employees will be willing to disclose information involving perceived government missteps. The Department of Homeland Security argues that violations of legislatively mandated regulations are unprotected under the WPA. MacLean contends, however, that an agency regulation is not an exception to the WPA, and thus disclosures that violate an agency regulation are still protected under the WPA.

Questions as Framed for the Court by the Parties

Congress has directed that the Transportation Security Administration “shall prescribe regulations prohibiting” the “disclosure of information obtained or developed” in carrying out certain transportation security functions, if the agency “decides” that “disclosing the information would * * * be detrimental” to transportation security. Aviation and Transportation Security Act, Pub. L. No. 107-71, § 101(e), 115 Stat. 603; Homeland Security Act of 2002, Pub. L No. 107-296, Tit. XVI, § 1601(b), 116 Stat. 2312. Such information is referred to in the regulations as “Sensitive Security Information.” See, e.g., 67 Fed. Reg. 8351 (Feb. 22, 2002).

The question presented is whether certain statutory protections codified at 5 U.S.C. 2302(b)(8)(A), which are inapplicable when an employee makes a disclosure “specifically prohibited by law,” can bar an agency from taking an enforcement action against an employee who intentionally discloses Sensitive Security Information.

In 2001, Respondent Robert J. MacLean became a Federal Air Marshal (“Air Marshal”). See MacLean v. Dep't of Homeland Sec., 714 F.3d 1301, 1304 (Fed. Cir. 2013).

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The authors would like to thank Professors Cynthia Farina and Aziz Rana of Cornell Law School for their insights into this case.

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Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.

Issues

Should the Federal Circuit review the construction of patent claims de novo or for clear error?

The Federal Circuit reviewed the district court’s claims construction in a patent infringement case de novo and reversed that court’s decision. The Supreme Court’s decision in this case will impact whether the interpretation of patent claim construction involves questions of law. Sandoz and amici argue that claim construction involves questions of law, and to review interpretations deferentially would cause interpretive contradictions between district courts. However, Teva and amici argue that de novo review would undermine the district courts and lead to over-litigation of issues.

Questions as Framed for the Court by the Parties

Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case), or only for clear error, as Rule 52(a) requires.

Teva Pharmaceuticals USA, and other related companies (collectively, “Teva”), developed and obtained a patent for Copaxone, a drug used in the treatment of multiple sclerosis. See Teva Pharmaceuticals USA Inc. et al., v. Sandoz Inc., 876 F. Supp.

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The authors would like to thank Professor Oskar Liivak for his insights into this case. 

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North Carolina State Board of Dental Examiners v. Federal Trade Commission

Issues

Whether state-action immunity should be given to a state regulatory board that is dominated by professionals in the regulated market.

The Federal Trade Commission (“FTC”) alleges that the North Carolina Board of Dental Examiners (“Board”) has engaged in unfair methods of competition by trying to exclude non-dentists from the teeth-whitening market. The Supreme Court will now determine two legal issues: (1) whether the Board is a public actor or private actor for purposes of federal antitrust liability; and (2) if the Board is a private actor, whether the Board is subject to active supervision by the state. The Board argues that it is a public actor and thus does not need “active supervision” to be immune from federal antitrust law. The FTC argues that the Board is a private actor and is not subject to active state supervision. The Supreme Court’s resolution of this case will impact both the efficacy of future state regulatory boards and the balance of federalism.

Questions as Framed for the Court by the Parties

Whether, for purposes of the state-action exemption from federal antitrust law, an official state regulatory board created by state law may properly be treated as a “private” actor simply because, pursuant to state law, a majority of the board’s members are also market participants who are elected to their official positions by other market participants.

The North Carolina State Board of Dental Examiners (“Board”), enacted by the Dental Practice Act, N.C. Gen. Stat. § 90–48, is a state agency comprised of six licensed dentists, one licensed dental hygienist, and one consumer member. See N.C. State Bd. of Dental Examiners v.

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The authors would like to thank Professor George A. Hay for his insight into this case.

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Kansas v. Nebraska and Colorado

Issues

In a water compact between two states, what remedies are available to an injured state if the other state breaches the compact?

The Supreme Court has original jurisdiction over disputes arising between states. In this case, Kansas has revived previous litigation regarding a water compact between itself and Nebraska, seeking damages ranging from monetary relief to contempt of court and injunctive relief. Kansas and Nebraska disagree on what type of relief is proper when a state breaches a compact and how the compact at hand should calculate water usage. The Court’s ruling in this case will impact the remedies available for a state when another state breaches a water rights agreement and could serve as important precedent for water rights cases as the Western United States potentially enters into a period of sustained drought.

Questions as Framed for the Court by the Parties

Should the Court reform the RRCA Accounting Procedures to correct what Nebraska and Colorado contend is a mistake in those procedures? By what amount of water did Nebraska fail to meet the applicable 2006 compliance test? And what is the remedy to which Kansas is entitled as a result? (Report of the Special Master at 14).

On May 3, 2010, Kansas filed a Motion with the Supreme Court of the United States that revived previous litigation between Kansas and Nebraska concerning a water rights dispute. See Report of the Special Master at 9. The dispute reflects ongoing tensions between Kansas and Nebraska concerning a water rights agreement signed in 1943.

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Steve Eder: Kansas vs. Nebraska Heads Back to Court, The Wall Street Journal (Aug. 13, 2012).

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Jennings v. Stephens

Issues

Is a federal habeas petitioner required to file a Certificate of Appealability, a separate motion for appeal, or even both before presenting an alternative argument on appeal in support of the district court's judgment where that argument failed at the district court?

The Supreme Court will decide whether a federal habeas petitioner must file a Certificate of Appealability (“COA”), a cross-notice of appeal, or even both before raising an argument at the court of appeals level that the district court rejected. Jennings, a prisoner on death row, asserts that he was not required to obtain a COA or a cross-notice of appeal in order to present a cross-point in support of the district court’s judgment. Stephens, the Director of the Texas Department of Criminal Justice, Correctional Institutions divisions, argues that the Fifth Circuit did not have jurisdiction to hear Jennings’ alternative claim because Jennings had not timely requested a COA or filed a cross-notice of appeal. The Supreme Court’s resolution of this case will have important consequences for habeas corpus applicants like Jennings, a death row inmate, as well as on the judicial efficiency of the courts in hearing habeas corpus appeals.

Questions as Framed for the Court by the Parties

  1. Did the Fifth Circuit err in reversing the district court's grant of habeas corpus relief based on ineffective assistance of counsel at the punishment stage of a death penalty trial by deferring to a state court prejudice determination that was contrary to or involved an unreasonable application of clearly established Supreme Court precedent?
  2. Did the Fifth Circuit err in holding that the state court reasonably determined that trial counsel made a sound strategic decision not to present any evidence of petitioner's disadvantaged background in a capital case where, in its absence, the jury was deprived of meaningful mitigating evidence that could have resulted in a life sentence?
  3. Did the Fifth Circuit err in holding that the federal doctrine of waiver precludes a federal habeas court from considering an argument made initially in a footnote in a state court brief that was not waived under state law?
  4. Did the Fifth Circuit err in holding that a federal habeas petitioner who prevailed in the district court on an ineffective assistance of counsel claim must file a separate notice of appeal and motion for a certificate of appealability to raise an allegation of deficient performance that the district court rejected even though the Fifth Circuit acquired jurisdiction over the entire claim as a result of the respondent's appeal?

On July 19, 1988, Petitioner Robert Mitchell Jennings entered an adult bookstore with the intent to commit a robbery. Jennings v. Stephens, 537 Fed. Appx. 326, 328 (5th Cir. 2013). At the time, Elston Howard, a police officer, was arresting the bookstore clerk.

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Integrity Staffing Solutions, Inc., v. Busk et al.

Issues

Must employers compensate employees for the time spent undergoing security screenings at the end of the workday under the Fair Labor Standards Act? 

Jesse Busk and Laurie Castro, employees of Integrity Staffing Solutions, Inc. (“Integrity”), sued Integrity alleging violations of the Fair Labor Standards Act (“FLSA”). Specifically, the employees alleged that Integrity required post-shift security screenings lasting up to 25 minutes, yet failed to compensate their employees for the time spent undergoing the screenings. Integrity claims that it is immune from liability under the Portal-to-Portal Act of 1947, which provides that employers are not required to compensate for activities that are postliminary to an employee’s primary work activities. The Supreme Court will address whether under the FLSA, as amended by the Portal-to-Portal Act, employers must compensate employees for post-shift security screenings.  The Supreme Court’s decision in the case will reflect its view on the correct balance between the interest of employers in preventing employee theft, and the interest of employees in obtaining compensation for time spent undergoing screenings related to theft prevention or similar activities. This decision will affect the range of activities that employers can require employees to perform with and without compensation. 

Questions as Framed for the Court by the Parties

Whether time spent in security screenings is compensable under the FLSA, as amended by the Portal-to-Portal Act?

Integrity Staffing Solutions, Inc. (“Integrity”) is a corporation that “provides warehouse space and staffing to clients such as Amazon.com.” Busk v. Integrity Staffing Solutions, Inc., 713 F.3d 525, 527 (9th Cir.

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The authors would like to thank Professor Angela B. Cornell for her assistance in the research for this preview.

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Heien v. North Carolina

Issues

Can a police officer’s misinterpretation of the law provide the reasonable suspicion necessary to justify a traffic stop? 

On April 29, 2009, Sergeant Matt Darisse arrested Nicholas Heien in North Carolina after a traffic stop that Darisse initiated based on his misinterpretation of relevant state statutes. When Heien tried to exclude evidence that resulted from the traffic stop during his subsequent trial, the trial court denied his request. The North Carolina Court of Appeals reversed the trial court’s decision, holding that an officer cannot justify a traffic stop when a mistake of law serves as the primary justification for the stop. In December 2012, the North Carolina Supreme Court overturned the appellate court’s ruling. The Supreme Court of the United States will now consider whether a police officer’s mistake of law can serve as the requisite reasonable suspicion needed for a constitutional traffic stop. Heien argues that allowing police officers to base traffic stops on misinterpretations of the law would violate the Fourth Amendment rights of those stopped. North Carolina, however asserts that just as police officers can execute constitutional traffic stops by relying on reasonable mistakes of fact, a police officer can justify a stop if it is based on a reasonable but mistaken interpretation of a statute. The Court’s ruling implicates the Fourth Amendment practices of law enforcement, the right to privacy of individuals, and the right of individuals to be free from restraint. 

Questions as Framed for the Court by the Parties

Whether a police officer’s mistake of law can provide the individualized suspicion that the Fourth Amendment requires to justify a traffic stop.

On April 29, 2009, Sergeant Matt Darisse of the Surry County Sheriff’s Department in North Carolina pulled over a vehicle in which Nicholas Heien was a passenger. See State v. Heien, 737 S.E.2d 351, 352 (N.C. 2012). Darisse initiated the stop because one of the rear brake lights on the vehicle was not working properly.

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The authors would like to thank Professor Sherry Colb of Cornell Law School for her help and for directing them to her work on Heien v. North Carolina. 

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