SCRANTON, Pa. - A Pennsylvania physician who alleges that statutory restrictions on his ability to discover the chemicals in proprietary hydraulic fracturing fluids used in natural gas extraction violates his civil rights under the First and 14th amendments to the U.S. Constitution and exposes him to professional disciplinary action by the American Medical Association lacks standing to challenge the statute, a U.S. District Court for the Middle District of Pennsylvania judge ruled Oct. 23 (Dr. Alfonso Rodriguez, M.D., v. Michael L. Krancer, et al., No. 12-1458, M.D. PA.; 2013 U.S. Dist. LEXIS 152207).
NEW ORLEANS - Discharging a female employee because she is lactating or expressing breast milk constitutes gender discrimination in violation of Title VII of the Civil Rights Act of 1964, a Fifth Circuit U.S. Court of Appeals panel ruled May 30 (Equal Employment Opportunity Commission v. Houston Funding II, Limited, et al., No. 12-20220, 5th Cir.; 2013 U.S. App. LEXIS 10933).
DES MOINES, Iowa - The American Civil Liberties Union of Iowa filed a class complaint on April 18 in the U.S. District Court for the Southern District of Iowa on behalf of members of the Westboro Baptist Church of Topeka, Kan., alleging that their constitutional rights have been violated by law enforcement officials seeking to enforce an old law barring the desecration of the U.S. flag (Margie J. Phelps, et al. v. Red Oak Police Chief Drew Powers, et al., No. 13-11, S.D. Iowa).
SAN FRANCISCO - The personal injury lawsuit of a California plaintiff who alleges that the City of Richmond, Calif., and Chevron Oil Inc. violated her constitutional and civil rights by allowing petroleum fumes to leak from oil refinery pipes was dismissed with leave to amend on Jan. 14 for lack of federal jurisdiction (Sylvia Marie Williams v. Chevron Oil Inc., et al., No. 12-5488, N.D. Calif.; 2013 U.S. Dist. LEXIS 6106).
WASHINGTON, D.C. - A shareholder plaintiff and a pharmaceutical company debated in front of the U.S. Supreme Court whether a securities lawsuit may proceed as a class action even if the plaintiff is unable to plead materiality (Amgen Inc., Kevin W. Sharer, Richard D. Nanula, Roger M. Perlmutter and George J. Morrow v. Connecticut Retirement Plans and Trust Funds, No. 11-1085, U.S. Sup.).
Arguing for petitioners Amgen Inc., Kevin W. Sharer, Richard D. Nanula, Roger M. Perlmutter and George J. Morrow, attorney Seth P. Waxman of Wilmer Cutler Pickering Hale and Dorr said that "ur case is about whether the claim of liability is in a fundamental sense class wide or individual."
Waxman argued that an inability to prove to a judge at the class certification stage "that class-wide reliance can be - that class-wide reliance exists because the statement was material doesn't preclude a plaintiff like [shareholder] Connecticut Retirement [Plans and Trust Funds (CRPTF)], which has said it's going to proceed whether there's a class or not, or any other member of the class, from coming to court and saying either, 'I directly relied on this statement and here's my proof that it's material to the trier-of-fact,' because the decision that the judge makes at certification is not binding on the trier-of-fact; or even to say, 'I relied on the integrity of the market price, and I have proof that the market price was affected because here are three investors, they're all reasonable people, and they say that it was relevant, important to them in the total mix of information involved.'"
But Justice Elena Kagan questioned whether, if at the class certification stage, the court "holds that a statement is immaterial, it's immaterial for all members of the class, and the suit has to be dismissed? Isn't that right?"
Justice Kagan also questioned whether, under Amgen's theory, the class certification stage becomes a sort of "super merits inquiry."
Arguing for CRPTF, attorney David C. Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel said, "In a fraud-on-the-market case, the idea of reliance, the only theory of reliance that is being advanced, is indirect reliance on the integrity of the market."
"There is no other theory of reliance," Frederick said.
CRPTF sued the defendants in the U.S. District Court for the Central District of California under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.
CRPTF alleged that Amgen made misrepresentations regarding the safety of two of its products, Aranesp and Epogen, causing artificial inflation of the market price for Amgen stock. CRPTF moved to certify a class of people who bought Amgen stock from April 22, 2004, through May 10, 2007. The start of the period corresponds to a public statement by Amgen regarding a May 2004 Food and Drug Administration advisory committee meeting. CRPTF alleges that Amgen misrepresented that the meeting would not focus on the safety of Aranesp. The end of the class period corresponds with a later meeting of the same FDA committee. CRPTF alleged that the meeting constituted a corrective disclosure.
Amgen opposed class certification principally on the ground that CRPTF did not, and could not, establish that the alleged misrepresentations were material. The District Court rejected Amgen's arguments and granted CRPTF's motion for class certification, holding that CRPTF could invoke the presumption of reliance arising from the fraud-on-the-market theory because to trigger the presumption, CRPTF "need only establish that an efficient market exists." Amgen appealed to the Ninth Circuit U.S. Court of Appeals, which affirmed. The Ninth Circuit rejected Amgen's contention that CRPTF must provide proof of materiality at the class certification stage.
On March 1, Amgen and the individual defendants filed a petition for writ of certiorari with the U.S. Supreme Court.
The petition presented two questions: "Whether, in a misrepresentation case under SEC Rule 10b-5, the district court must require proof of materiality before certifying a plaintiff class based on the fraud-on-the-market theory" and "Whether, in such a case, the district court must allow the defendant to present evidence rebutting the applicability of the fraud-on-the-market theory before certifying a plaintiff class based on that theory."
The Supreme Court granted the petition on June 11. On Aug. 18, the petitioners filed a petitioners' brief, and on Sept. 20, CRPTF filed a respondent's brief.
Former SEC commissioners and officials and law and finance professors filed an amicus curiae brief in support of the petitioners on Aug. 14.
On Sept. 27, the following entities each filed amicus curiae briefs in support of CRPTF: the United States; the National Association of Shareholder and Consumer Attorneys; Public Justice P.C., civil procedure and securities law professors; AARP, New York City pension funds and the Colorado Public Employees' Retirement Association of the City of New York; Public Citizen Inc.; and financial economists.
The petitioners are represented by Noah A. Levine of Wilmer Cutler in New York, Waxman, Louis R. Cohen, Andrew N. Vollmer, Daniel S. Volchok and Weili J. Shaw of Wilmer Cutler in Washington, and Steven O. Kramer, John P. Stigi III, John M. Landry and Jonathan D. Moss of Shephard, Mullin, Richter & Hampton in Los Angeles. CRPTF is represented by Frederick, Derek T. Ho and Emily T.P. Rosen of Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington and Edward Labaton, Jonathan M. Plasse and Christopher J. McDonald of Labaton Sucharow in New York.
The former SEC commissioners and officials and law and finance professors are represented by Timothy S. Bishop, Joshua D. Yount and Frank M. Dickerson of Mayer Brown in Chicago. The United States is represented by Mark D. Cahn, Michael A. Conley, Jacob H. Stillman, John W. Wavery, Benjamin L. Schiffrin and Jeffrey A. Berger of the Securities and Exchange Commission in Washington and Donald B. Verrilli Jr., Malcolm L. Stewart and Nicole A. Saharsky of the Department of Justice in Washington. The National Association of Shareholder and Consumer Attorneys is represented by William C. Fredericks and Ann M. Lipton of Bernstein Litowitz Berger & Grossman in New York.
Public Justice P.C. is represented by Arthur Bryant of Public Justice P.C. in Oakland, Calif., and Earl Landers Vickery of Austin, Texas. The civil procedure and securities law professors are represented by David Marcus of the University of Arizona Rogers College of Law in Tucson, Ariz., and Darren J. Robbins and Eric Alan Isaacson of Robbins Geller Rudman & Dowd in San Diego. AARP is represented by Jay Sushelsky of AARP Foundation Litigation and Michael Shuster of AARP, both in Washington. The New York City pension funds are represented by Michael A. Cardozo of the City of New York.
The Colorado Public Employees' Retirement Association of the City of New York is represented by Gregory W. Smith of the Colorado Public Employees' Retirement Association in Denver. Public Citizen Inc. is represented by Scott L. Nelson and Allison M. Zieve of the Public Citizen Litigation Group in Washington. The financial economists are represented by Ernest A. Young in Durham, N.C., and William C. Fredericks and Ann M. Lipton of Bernstein Litowitz Berger & Grossman in New York.
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WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 29 heard arguments on the ability of a group of respondents to challenge the constitutionality of a law that its opponents characterize as "dragnet surveillance" related to the power that it gives the executive branch of the government to monitor telephone and email communication involving foreign parties (John R. Clapper Jr., et al. v. Amnesty International USA, et al., No. 11-1025, U..S. Sup.).
In July 2008, a group of attorneys and human rights, labor, legal and media organizations sued Director of National Intelligence John M. McConnell, Director of the National Security Agency and Chief of the Central Security Service Lt. Gen. Keith B. Alexander and Attorney General Michael B. Mukasey, in their official capacities, in the U.S. District Court for Southern District of New York. They sought to bring a constitutional challenge to the FISA (Foreign Intelligence Surveillance Act of 1978) Amendments Act of 2008 (FAA), which was signed into law the same day the complaint was filed. James R. Clapper Jr., Keith B. Alexander and Eric H. Holder Jr., respectively, were later substituted as defendants when they assumed the positions held by their predecessors.
The plaintiffs, led by Amnesty International USA, alleged that under the FAA, the executive branch of the government is permitted to monitor international telephone and e-mail communications. It stipulates that the government may not "intentionally target any person known at the time of the acquisition to be located in the United States." However, the plaintiffs claimed in their complaint that the amendment will allow the collection of all international communications by U.S. citizens and domestic communications if there is uncertainty about the location of one of the communicating parties. In addition, the plaintiffs alleged that under the amendment, the government does not have to show the Foreign Intelligence Surveillance Court, before getting approval to conduct the surveillance, that any of the targets are foreign agents, connected with terrorism or engaged in criminal activity.
Judgment And Reversal
The trial court granted the government's motion for summary judgment, finding that the plaintiffs "failed to establish standing to challenge the constitutionality of the FAA on the basis of their fear of surveillance." The court found that their "abstract fear that their communications will be monitored under the FAA" was insufficient to establish standing.
On appeal, a Second Circuit U.S. Court of Appeals panel reversed, finding that the plaintiffs had standing to sue. In a March 2011 ruling, the panel held that "[t]he plaintiffs' uncontroverted testimony that they fear their sensitive international electronic communications being monitored and that they have taken costly measures to avoid being monitored - because we deem that fear and those actions to be reasonable in the circumstances of this case - establishes injuries in fact that we find are causally linked to the allegedly unconstitutional FAA."
In December, the government filed a petition for a writ of certiorari with the Supreme Court, which was granted in May.
Cascade Of Speculation
Justice Sonia Sotomayor questioned Solicitor General Donald B. Verrilli Jr., who represented the government, as to who, under the government's position, has standing to challenge the FAA. Verrilli stated that standing exists when "an aggrieved person, someone who is party to a communication, gets notice that the government intends to introduce information in a proceeding against them." He also argued that "electronic communication service providers can challenge authorizations under the act" and noted the importance of "the Article III standing requirement of injury in fact" to establish standing.
Verrilli further stressed that "[t]he government conduct being challenged has to either have occurred or be certainly impending." But in the present case, Verrilli said the plaintiffs had only a "cascade of speculation" about the executive branch's "intelligence priorities and objectives," how the branch's "officials are going to exercise their judgment to translate those priorities into procedures" and "the independent judgment of an Article III court assessing the lawfulness of those procedures and assessing" Fourth Amendment compliance.
The justices and Verrilli also dialogued about whether injury could be claimed for surveillance under the FAA when surveillance might be proper under another existing authority. Also, the justices questioned the possibility of how many people might be subject to the "extraordinarily wide-reaching power" conferred by the statute, but never be aware of it and, as such, never have standing to sue.
Justices Stephen G. Breyer and Elena Kagan referred to the example of plaintiff Scott McKay, a lawyer who represented two purported al Qaeda operatives who are accused of many crimes. McKay stated that the government intercepted some 10,000 of his phone calls and 20,000 emails involving his clients. The justices questioned whether the existence of the FAA creates an ethics problem for such a lawyer and requires him to take specific steps to avoid surveillance in accordance with his duties and, therefore, whether this represents an injury in fact.
Verrilli turned the focus back to the "targeting requirements, minimization requirements [and] certification by the . . . highest levels of the executive" branch, as well as "independent review by an Article III judge to ensure compliance" with the statute and the Fourth Amendment. As such, Verrilli suggested that the FAA does not represent "unbounded authority" as its challengers suggest.
Jameel Jaffer, representing the plaintiffs, said they "have standing here because there is a substantial risk that their communications will be acquired under the act and because this substantial risk has effectively compelled them to take immediate measures to protect information that is sensitive or privileged." Jaffer stressed that the plaintiffs communicate "foreign intelligence information," which is "the kind of information that the statute expressly authorizes the Government to collect, to retain and disseminate."
Chief Justice John G. Roberts Jr. focused on the "vast difference" between the "certainly impending" standard and the "substantial risk" standard, stating that the former was the proper standard before the court. Jaffer countered that the standard at issue in prior Supreme Court constitutionality cases was a question of whether there is a substantial risk. In the present case, Jaffer stated that there is knowledge that the government is using the statute because it has acknowledges such use, establishing "a certainty of Government conduct."
No Probable Cause
Jaffer stated that the plaintiffs took issue with the FAA because it did not have the same "probable cause requirement" that FISA did, subjecting a broader group of people to potential surveillance by the government. As a result, Jaffer said parties such as his clients have to take precautions, "some of which are very costly," when speaking with clients that they think "the government might believe to be a foreign agent."
Plaintiffs, and those injured by FAA, Jaffer said, include journalists "who report on war zones or . . . investigate human rights abuses in places . . . where the government is likely to" "mine Americans' international communications for foreigner intelligence information." He noted that plaintiffs include people who represent defendants that have been charged in "terrorism crime and foreign intelligence related crimes."
Verrilli is the solicitor general with the U.S. Department of Justice in Washington. Jaffer is staff attorney with the American Civil Liberties Union in New York.
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WASHINGTON, D.C. - The U.S. Supreme Court yesterday denied an insurer's petition for a writ of certiorari challenging the Louisiana Supreme Court's finding that every member of a class of more than 18,000 insureds was entitled to recover the maximum $5,000 civil penalty based on the insurer's purported failure to comply with its statutory duty to timely initiate loss adjustment of the class members' Hurricanes Katrina and Rita claims (Louisiana Citizens Property Insurance Corp. v. Geraldine Oubre, et al.,, No. 11-1252, U.S. Sup.).
On Nov. 18, 2005, Geraldine Oubre and Linda Gentry filed a class action lawsuit against Louisiana Citizens Property Insurance Corp. (LCPIC), d/b/a Louisiana Citizens Fair Plan in the 24th Judicial District Court for the Parish of Jefferson, La. They alleged that the insurer failed to comply with its statutory duty under Louisiana Revised Statutes 22:658(A)(3) to timely initiate loss adjustment stemming from Hurricanes Katrina and Rita and sought statutory penalties under Section 22:1220.
On March 26, 2009, the trial court rendered a $92.9 million amended judgment against the insurer. The insurer appealed three of the trial court's summary judgment rulings in the Louisiana Fifth Circuit Court of Appeal, which found Nov. 10, 2010, that the trial court erred in finding that LCPIC's conduct was not a question of material fact.
The panel also found that the trial court erred in concluding that $5,000 represented the minimum bad faith penalty pursuant to the statutory provisions, reversing and remanding the three summary judgment rulings against the insurer.
The plaintiffs appealed to the Louisiana Supreme Court. On Dec. 16, a majority of that court reinstated the trial court's $92.9 million judgment against LCPIC. The majority found that Section 22:1220(C) caps the penalties at $5,000 when damages are not proven. LCPIC moved for a rehearing, which the majority denied Jan. 20.
On April 18, LCPIC filed a petition for a writ of certiorari in the U.S. Supreme Court, challenging the Louisiana Supreme Court's Dec. 16 and Jan. 20 rulings.
LCPIC argued that the Louisiana high court upheld the $92.9 million class action judgment "even though neither the class as a whole, nor any individual class member, had presented evidence attempting to justify imposition of the maximum civil penalty and Citizens had not been afforded an opportunity to present evidence regarding the appropriate penalty to be awarded to any member of the class."
In the petition, LCPIC presented the question of "hether the Due Process Clause prohibits a state court from relieving class members of their burden to prove a fundamental element of their individual claims - here, the size of the civil penalty to which each class member was entitled - and from depriving a defendant of its right to assert individualized defenses to that element of liability."
An opposition was filed May 21. One June 4, LCPIC filed its reply.
The petition was distributed for a June 21 conference. Four days later, the U.S. high court denied the petition.
Theodore B. Olson, Matthew D. McGill and Amir C. Tayrani of Gibson Dunn & Crutcher in Washington; Richard T. Simmons Jr., John E. Unsworth Jr. and Darren A. Patin of Hailey, McNamara, Hall, Larmann & Papale in Metairie, La.; James A. Babst of Wegmann & Babst in New Orleans; and Joshua S. Lipshutz of Gibson, Dunn & Crutcher in San Francisco represent LCPIC.
Robert S. Peck of the Center for Constitutional Litigation in Washington represents the respondents.
U.S. Supreme Court Holds Secret Service Immune From 1st Amendment Claim
WASHINGTON, D.C. - The U.S. Supreme Court ruled this morning that a Colorado man may not pursue his First Amendment claim against two Secret Service agents because they are entitled to qualified immunity (Virgil D. "Gus" Reichle, Jr., et al. v. Steven Howards, No. 11-262, U.S. Sup.).
Gus Reichle and Dan Doyle were members of a Secret Service detail on June 16, 2006, when then-Vice President Richard Cheney visited a shopping mall in Beaver Creek, Colo. Steven Howards also was at the mall that day. Doyle overheard Howards engaging in a conversation on his cell phone in which Howards stated, "I'm going to ask [the vice president] how many kids he's killed today." Doyle told two other agents what he had heard, and the three began monitoring Howards more closely.
Howards got in line to greet Cheney. When he approached the vice president, Howards told him that his "policies in Iraq are disgusting." The vice president thanked Howards and moved along. Howards touched the vice president's shoulder as Cheney walked away. Howards then walked away, too. The agents determined that Reichle, who coordinated the protective intelligence team responsible for interviewing individuals suspected of violating the law, should question Howards.
Reichle approached Howards, presented his badge and identified himself and asked to speak with Howards. Howards refused and attempted to walk away. At that point, Reichle stepped in front of him and asked if he had assaulted the vice president. Pointing his finger at Reichle, Howards denied assaulting Cheney. He told Reichle "if you don't want other people sharing their opinions you should have him [the Vice President] avoid public places." When Reichle asked Howards if he had touched Cheney, Howards denied doing so. After confirming that Howards had indeed touched Cheney, Reichle arrested Howards.
Howards was transferred to the custody of the local sheriff's department ,where he was charged by local officials with harassment in violation of state law. The charge was eventually dismissed.
Howards then sued a number of Secret Service agents, including Reichle and Doyle, in the U.S. District Court for the District of Colorado. Howards claimed that he was arrested and searched without probable cause in violation of the Fourth Amendment to the U.S. Constitution. He also alleged that he was arrested in retaliation for criticizing the vice president, in violation of his First Amendment rights.
Reichle and Doyle moved for summary judgment on the ground that they were entitled to qualified immunity. The District Court denied the motion. On interlocutory appeal, a divided panel of the 10th Circuit U.S. Court of Appeals affirmed in part and reversed in part. The majority held that Reichle and Doyle enjoyed qualified immunity with respect to Howards' Fourth Amendment claim but denied them qualified immunity from Howards' First Amendment claim. Reichle and Doyle then petitioned the U.S. Supreme Court.
Reversing the appellate panel's ruling, the Supreme Court opined that Reichle and Doyle are entitled to qualified immunity when it comes to both of Howards' claims because "it was not clearly established that an arrest supported by probable cause could give rise to a First Amendment violation."
Writing for the court, Justice Clarence Thomas opined, "Shortly before Howards' arrest, the Sixth Circuit held that Hartman [v. Moore (547 U.S. 250 )] required a plaintiff alleging a retaliatory arrest to show that the defendant officer lacked probable cause. . . . That court's treatment of Hartman confirms that the inapplicability of Hartman to arrests would not have been clear to a reasonable officer when Howards was arrested. Moreover, since Howards' arrest, additional Courts of Appeals have concluded that Hartman's no-probable-cause requirement extends to retaliatory arrests. . . . As we have previously observed, 'f judges thus disagree on a constitutional question, it is unfair to subject police to money damages for picking the losing side of the controversy.' Wilson v. Layne, 526 U.S. 603, 618 (1999)."
Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy, Samuel Anthony Alito Jr. and Sonia Sotomayor joined in the opinion.
Justice Ruth Bader Ginsburg filed a concurring opinion in judgment in which Justice Stephen G. Breyer joined. She opined that Hartman's no-probable-cause requirement is inapplicable but still concurred in the Supreme Court's judgment. "Officers assigned to protect public officials must make singularly swift, on the spot, decisions whether the safety of the person they are guarding is in jeopardy. In performing that protective function, they rightly take into account words spoken to, or in the proximity of, the person whose safety is their charge. Whatever the views of Secret Service Agents Reichle and Doyle on the administration's policies in Iraq, they were duty bound to take the content of Howards' statements into account in determining whether he posed an immediate threat to the Vice President's physical security. Retaliatory animus cannot be inferred from the assessment they made in that regard. If rational, that assessment should not expose them to claims for civil damages," she wrote.
Justice Elena Kagan took no part in the consideration or decision of the case.
Sean R. Gallagher of Polsinelli Shughart in Denver represents Reichle and Doyle. David A. Lane of Killmer, Lane & Newman in Denver represents Howards.
J. Brett Busby of Bracewell & Giuliani in Houston filed an amicus brief on behalf of FBI Agents Association and the Federal Law Enforcement Officers Association. Colorado Solicitor General Daniel D. Domenico in Denver filed an amicus brief on behalf of Colorado and 20 other states. Christopher A. Hansen of the American Civil Liberties Union Foundation in New York filed an amicus brief on behalf of the ACLU and ACLU of Colorado. Paul M. Pohl of Jones Day in Pittsburgh filed an amicus brief on behalf of William G. Moore Jr. Lisa E. Soronen of State and Local Legal Center in Washington, D.C., filed an amicus brief on behalf of International City/County Management Association, International Municipal Lawyers Association, National Association of Counties, National Governors Association, National League of Cities and United States Conference of Mayors. Solicitor General Donald B. Verrilli Jr. in Washington filed an amicus brief on behalf of the United States. John W. Whitehead of The Rutherford Institute in Charlottesville, Va., filed an amicus brief on behalf of The Rutherford Institute.
PHILADELPHIA - Treating federal employees applying for another federal position differently from those candidates who have not worked for the federal government does not violate Title VII of the Civil Rights Act of 1964 or the Age Discrimination in Employment Act (ADEA), the Third Circuit U.S. Court of Appeals ruled April 27 (Warren K. Gladden v. Thomas J. Vilsack, Secretary US Department of Agriculture, No. 11-3001, 3rd Cir.; 2012 U.S. App. LEXIS 8596).