U.S. Supreme Court: April 2010 Archives
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April 2010 Archives

Establishment Clause Case Involving Cross On Federal Lands

Salazar v. Buono, No. 08-472, concerned an action involving an underlying Establishment Clause challenge to a Latin cross placed on federal land by members of the Veterans of Foreign Wars (VFW) to honor American soldiers who died in World War I.  The Supreme Court reversed the Ninth Circuit's order precluding the government from transferring the cross and the land on which it stood to the VFW in order to comply with a prior injunction, holding that 1) plaintiff had standing to maintain the instant action because a party that obtains a judgment in its favor acquires a "judicially cognizable" interest in ensuring compliance with that judgment; but 2) the district court erred in enjoining the government from implementing the land-transfer statute on the premise that the relief was necessary to protect plaintiff's rights under the 2002 injunction.

As the Court wrote:  "The Court is asked to consider a challenge, not to the first placement of the cross or its continued presence on federal land, but to a statute that would transfer the cross and the land on which it stands to a private party. . . . The District Court permanently enjoined the Government from implementing the statute. The Court of Appeals affirmed. We conclude that its judgment was in error."

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Merck & Co. v. Reynolds, No. 08-905, concerned a 2003 securities fraud class action alleging that Merck & Co. knowingly misrepresented the heart-attack risks associated with its drug Vioxx.  The Supreme Court affirmed the Third Circuit Court of Appeals' reversal of the district court's dismissal of the complaint as untimely, on the grounds that 1) the limitations period in 28 U.S.C. section 1658(b)(1) begins to run once the plaintiff actually discovers or a reasonably diligent plaintiff would have discovered the facts constituting the violation (including scienter), whichever came first; and 2) prior to November 6, 2001, the plaintiffs did not discover, and Merck did not show that a reasonably diligent plaintiff would have discovered the facts constituting the violation.

As the Court wrote:  "This case concerns the timeliness of a complaint filed in a private securities fraud action. The complaint wastimely if filed no more than two years after the plaintiffs "discover[ed] the facts constituting the violation." 28 U. S. C. §1658(b)(1). Construing this limitations statutefor the first time, we hold that a cause of action accrues (1) when the plaintiff did in fact discover, or (2) when a reasonably diligent plaintiff would have discovered, "the facts constituting the violation"--whichever comes first. We also hold that the "facts constituting the violation" include the fact of scienter, "a mental state embracing intent to deceive, manipulate, or defraud," Ernst & Ernst v. Hochfelder, 425 U. S. 185, 194, n. 12 (1976). Applying this standard, we affirm the Court of Appeals' determination that the complaint filed here was timely."

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Stolt-Nielsen S.A. v. AnimalFeeds Int'l. Corp., No. 08-1198

Stolt-Nielsen S.A. v. AnimalFeeds Int'l. Corp., No. 08-1198, involved an antitrust class action in which the Second Circuit Court of Appeals reversed the district court's order vacating an arbitration panel's order allowing for class arbitration of the dispute.

As the court wrote:  "We granted certiorari in this case to decide whether imposing class arbitration on parties whose arbitration clauses are "silent" on that issue is consistent with the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq."

The Supreme Court reversed, holding that imposing class arbitration on parties who had not agreed to authorize class arbitration was inconsistent with the Federal Arbitration Act, and the arbitration panel imposed class arbitration despite the parties' stipulation that they had reached "no agreement" on that issue.

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ERISA Decision in Conkright v. Frommert

Conkright v. Frommert, No. 08-810, involved an ERISA action based on a plan administrator's interpretation of the benefits plan at issue to call for an approach known as the "phantom account" method.  The Supreme Court reversed the Second Circuit's order affirming the district court's order declining to apply a deferential standard to the administrator's interpretation, on the ground that the district court should have applied a deferential standard of review to the administrator's interpretation of the plan on remand, despite the administrator's earlier mistaken interpretation.

As stated in the majority opinion, delivered by Chief Justice Roberts:  "People make mistakes. Even administrators of ERISA plans. That should come as no surprise, given that the Employee Retirement Income Security Act of 1974 is "an enormously complex and detailed statute," Mertens v. Hewitt Associates, 508 U. S. 248, 262 (1993), and the plans that administrators must construe can be lengthy and complicated. (The one at issue here runs to 81 pages, with 139 sections.) We held in Firestone Tire & Rubber Co. v. Bruch, 489 U. S. 101 (1989), that an ERISA plan administrator with discretionary authority to interpret a plan is entitled to deference in exercising that discretion. The question here is whether a single honest mistake in plan interpretation justifies stripping the administrator of that deference for subsequent related interpretations of the plan. We hold that it does not."

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Attorney Fees Award Reversed in Perdue v. Kenny A.

Perdue v. Kenny A., No. 08-970, involved a civil rights action alleging deficiencies in the Georgia foster care system.  The Supreme Court reversed the district court's award of attorney's fees to plaintiffs' counsel, holding that the calculation of an attorney's fee based on a lodestar may be increased due to superior performance, but only in extraordinary circumstances.

As stated in the majority decision, delivered by Justice Alito: "This case presents the question whether the calculation of an attorney's fee, under federal fee-shifting statutes, based on the "lodestar," i.e., the number of hours worked multiplied by the prevailing hourly rates, may be increased due to superior performance and results.  We have stated in previous cases that such an increase is permitted in extraordinary circumstances, and we reaffirm that rule. But as we have also said in prior cases, there is a strong presumption that the lodestar is sufficient; factors subsumed in the lodestar calculation cannot be used as a ground for increasing an award above the lodestar; and a party seeking fees has the burden of identifying a factor that the lodestar does not adequately take into account and proving with specificity that an enhanced fee is justified. Because the District Court did not apply these standards, we reverse the decision below and remand for further proceedings consistent with this opinion."

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Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, No. 08-1200

Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, No. 08-1200, involved an action contending that, by sending a notice requiring her to dispute the debt in writing, defendant law firm violated section 1692g(a) of the Fair Debt Collection Practices Act (FDCPA), which governed the contents of notices to debtors.  The Supreme Court reversed the Sixth Circuit's affirmance of summary judgment for defendant, holding that the bona fide error defense in section 1692k(c) of the FDCPA did not apply to a violation resulting from a debt collector's mistaken interpretation of the legal requirements of the FDCPA.

As stated in the majority decision, delivered by Justice Sotomayor:  "The Fair Debt Collection Practices Act (FDCPA or Act) imposes civil liability on "debt collector[s]" for certain prohibited debt collection practices. Section 813(c) of the Act, 15 U. S. C. §1692k(c), provides that a debt collector is not liable in an action brought under the Act if she can show "the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error." This case presents the question whether the "bona fide error" defense in §1692k(c)applies to a violation resulting from a debt collector's mistaken interpretation of the legal requirements of the FDCPA. We conclude it does not."

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Law Criminalizing Cruelty to Animals Struck Down in US v. Stevens

In US v. Stevens, No. 08-769, the Supreme Court affirmed the Third Circuit's reversal of defendant's conviction under 18 U.S.C. section 48 for selling videos depicting dogfighting, on the ground that section 48 was substantially overbroad, and therefore invalid under the First Amendment, because section 48 explicitly regulated expression based on content and was thus presumptively invalid.

As the Court wrote:  "Congress enacted 18 U. S. C. Section 48 to criminalize the commercial creation, sale, or possession of certain depictions of animal cruelty. The statute does not address underlying acts harmful to animals, but only portrayals of such conduct. The question presented is whether the prohibition in the statute is consistent with the freedom of speech guaranteed by the First Amendment."

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