Justia U.S. Supreme Court Opinion Summaries

Slack, a technology company, conducted a direct listing to sell its shares to the public on the New York Stock Exchange. Pursuant to the Securities Act of 1933, Slack filed a registration statement, containing information about its business and financial health, with the SEC, 15 U.S.C. 77, for a specified number of shares. Under the direct listing process, holders of preexisting unregistered shares were free to sell them to the public immediately. Slack’s direct listing offered 118 million registered shares and 165 million unregistered shares. Pirani bought 250,000 Slack shares. When the stock price dropped, Pirani filed a class action alleging violations of the Act, Section 11, by filing a materially misleading registration statement. Slack argued that Pirani had not alleged that he purchased shares traceable to the allegedly misleading registration statement, leaving open the possibility that he purchased shares unconnected to the registration statement. The Ninth Circuit affirmed the denial of a motion to dismiss.The Supreme Court vacated and remanded. Section 11 requires a plaintiff to plead and prove that he purchased securities registered under a materially misleading registration statement. It authorizes an individual to sue for a material misstatement or omission in a registration statement when the individual has acquired “such security.” Contextual clues indicate that section 11(a) liability extends only to shares that are traceable to an allegedly defective registration, not “other securities that bear some sort of minimal relationship to a defective registration statement.” View "Slack Technologies, LLC v. Pirani" on Justia Law

Glacier delivers concrete using trucks with rotating drums that prevent the concrete from hardening. After a collective-bargaining agreement between Glacier and the Union for its drivers expired, the Union called for a work stoppage on a morning it knew the company was mixing substantial amounts of concrete, loading batches into trucks, and making deliveries. The Union directed drivers to ignore Glacier’s instructions to finish deliveries in progress. Several drivers who had already left for deliveries returned with loaded trucks. By initiating emergency maneuvers to offload the concrete, Glacier prevented significant damage to its trucks. All the concrete mixed that day became useless.Glacier sued the Union, alleging common-law conversion and trespass to chattels. The Union argued that the National Labor Relations Act (NLRA), 29 U.S.C. 157, protected the drivers’ conduct. The Washington Supreme Court agreed that the NLRA preempted Glacier’s tort claims.The Supreme Court reversed. The NLRA protects the right to strike but that right is not absolute; it does not shield strikers who fail to take “reasonable precautions” to protect their employer’s property from foreseeable, aggravated, and imminent danger due to the sudden cessation of work. The risk of harm to Glacier’s trucks and concrete was foreseeable and serious; the Union executed the strike in a manner designed to achieve those results. Given the lifespan of wet concrete, Glacier could not batch it until a truck was ready to take it. By reporting for duty and pretending that they would deliver the concrete, the drivers prompted the creation of the perishable product and waited to walk off the job until the concrete was in the trucks. View "Glacier Northwest, Inc. v. International Brotherhood of Teamsters" on Justia Law

Petitioners sued retail pharmacies under the False Claims Act (FCA), 31 U.S.C. 3729, which permits private parties to bring lawsuits in the name of the United States against those who they believe have defrauded the federal government and imposes liability on anyone who “knowingly” submits a “false” claim to the government. Petitioners claim that the pharmacies defrauded Medicaid and Medicare by offering pharmacy discount programs to their customers while reporting their higher retail prices, rather than their discounted prices, as their “usual and customary” charge for reimbursement. The Seventh Circuit concluded that the pharmacies could not have acted “knowingly” if their actions were consistent with an objectively reasonable interpretation of the phrase “usual and customary.”The Supreme Court vacated. The FCA’s scienter element refers to a defendant’s knowledge and subjective beliefs—not to what an objectively reasonable person may have known or believed. The FCA’s three-part definition of the term “knowingly” largely tracks the traditional common-law scienter requirement for claims of fraud: Actual knowledge, deliberate ignorance, or recklessness will suffice. Even though the phrase “usual and customary” may be ambiguous on its face, such facial ambiguity alone is not sufficient to preclude a finding that the pharmacies knew their claims were false. View "United States ex rel. Schutte v. Supervalu Inc." on Justia Law

Younger claims that during his pretrial detention in a Maryland state prison, Lieutenant Dupree ordered guards to attack him. Younger sued Dupree for damages under 42 U.S.C. 1983. The district court denied Dupree’s summary judgment motion, finding no dispute that the Maryland prison system had internally investigated Younger’s assault, which satisfied Younger’s exhaustion obligation. At trial, Dupree did not present evidence relating to his exhaustion defense. The jury found Dupree and four codefendants liable and awarded Younger $700,000 in damages. The Fourth Circuit—bound by its prior holding that any claim or defense rejected at summary judgment is not preserved for appellate review unless it was renewed in a post-trial motion—dismissed an appeal.The Supreme Court vacated. A post-trial motion under Federal Rule of Civil Procedure 50 is not required to preserve for appellate review a purely legal issue resolved at summary judgment. The factual record developed at trial supersedes the record existing at the time of the summary-judgment motion; that is not true for pure questions of law resolved on summary judgment, which are not “supersede[d]” by later developments in the litigation and merge into the final judgment. A reviewing court does not benefit from having a district court reexamine a purely legal pretrial ruling. While an interlocutory order denying summary judgment is typically not immediately appealable, 28 U.S.C. 1291 does not insulate interlocutory orders from appellate scrutiny but rather delays their review until final judgment. The Court did not decide whether Dupree's issue on appeal was purely legal, and remanded for the Fourth Circuit to evaluate that question. View "Dupree v. Younger" on Justia Law

Tyler's Hennepin County, Minnesota condominium accumulated about $15,000 in unpaid real estate taxes plus interest and penalties. The County seized the condo and sold it for $40,000, keeping the $25,000 excess over Tyler’s tax debt for itself, Minn. Stat. 281.18, 282.07, 282.08. The Eighth Circuit affirmed the dismissal of Tyler’s suit.The Supreme Court reversed. Tyler plausibly alleges that Hennepin County’s retention of the excess value of her home above her debt violated the Takings Clause. Whether the remaining value from a tax sale is property protected under the Takings Clause depends on state law, “traditional property law principles,” historical practice, and Supreme Court precedents. Though state law is an important source of property rights, it cannot “sidestep the Takings Clause by disavowing traditional property interests” in assets it wishes to appropriate. The County's use of its power to sell Tyler’s home to recover the unpaid property taxes to confiscate more property than was due effected a “classic taking in which the government directly appropriates private property for its own use.” Supreme Court precedent recognizes that a taxpayer is entitled to any surplus in excess of the debt owed. Minnesota law itself recognizes in other contexts that a property owner is entitled to any surplus in excess of her debt. The Court rejected an argument that Tyler had no property interest in the surplus because she constructively abandoned her home by failing to pay her taxes. View "Tyler v. Hennepin County" on Justia Law

Sackett began backfilling an Idaho lot with dirt to build a home. The Environmental Protection Agency informed Sackett that the property contained wetlands and that the backfilling violated the Clean Water Act, which prohibits discharging pollutants into “the waters of the United States,” 33 U.S.C. 1362(7). The EPA ordered Sackett to restore the site, threatening penalties of over $40,000 per day. The EPA classified the Sacket wetlands as “waters of the United States” because they were near a ditch that fed into a creek, which fed into Priest Lake, a navigable, intrastate lake. The Ninth Circuit affirmed summary judgment in favor of the EPA.The Supreme Court reversed. CWA jurisdiction over an adjacent wetland requires that the adjacent body of water constitutes waters of the United States (a relatively permanent body of water connected to traditional interstate navigable waters) and a continuous surface connection between the wetland and that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”The Court reviewed the history of judicial interpretation of “the waters of the United States” and enforcement by federal agencies, which argued that the significant-nexus test was sufficient to establish jurisdiction over “adjacent” wetlands. Under that test, nearly all waters and wetlands are potentially susceptible to regulation, “putting a staggering array of landowners at risk of criminal prosecution for such mundane activities as moving dirt.” The CWA’s use of “waters” encompasses only relatively permanent, standing, or continuously flowing bodies, ordinarily called streams, oceans, rivers, and lakes. Wetlands qualify as “waters of the United States” only if “indistinguishable from waters of the United States,” having a continuous surface connection to bodies that are waters of the United States in their own right, with no clear demarcation between waters and wetlands. View "Sackett v. Environmental Protection Agency" on Justia Law

Following the 2007-2009 “Great Recession,” the Federal Deposit Insurance Corporation (FDIC) brought an enforcement action against Calcutt, the former CEO of a Michigan-based community bank, for mismanaging one of the bank’s loan relationships. The FDIC ultimately ordered Calcutt removed from office, prohibited him from further banking activities, and assessed $125,000 in civil penalties.The Sixth Circuit agreed that Calcutt had proximately caused the $30,000 charge-off on one loan because he had “participated extensively in negotiating and approving” the transaction. The court concluded that $6.4 million in losses on other loans were a different matter and that none of the investigative, auditing, and legal expenses could qualify as harm to the bank, because those expenses occurred as part of its “normal business.” Despite identifying these legal errors in the FDIC analysis, the Sixth Circuit affirmed the FDIC decision, finding that substantial evidence supported the sanctions determination, even though the FDIC never applied the proximate cause standard itself or considered whether the sanctions against Calcutt were warranted on the narrower set of harms that it identified.The Supreme Court reversed. It is a fundamental rule of administrative law that reviewing courts must judge the propriety of agency action solely by the grounds invoked by the agency. An agency’s discretionary order may be upheld only on the same basis articulated in the order by the agency itself. By affirming the FDIC’s sanctions against Calcutt based on a legal rationale different from that adopted by the FDIC, the Sixth Circuit violated these commands. View "Calcutt v. Federal Deposit Insurance Corporation" on Justia Law

In 1984, Goldsmith, a portrait artist, granted Vanity Fair a one-time license to use a Prince photograph to illustrate a story about the musician. Vanity Fair hired Andy Warhol, who made a silkscreen using Goldsmith’s photo. Vanity Fair published the resulting image, crediting Goldsmith for the “source photograph,” and paying her $400. Warhol used Goldsmith’s photograph to derive 15 additional works. In 2016, the Andy Warhol Foundation (AWF) licensed one of those works, “Orange Prince,” to Condé Nast to illustrate a magazine story about Prince. AWF received $10,000. Goldsmith received nothing. When Goldsmith asserted copyright infringement, AWF sued her. The district court granted AWF summary judgment on its assertion of “fair use,” 17 U.S.C. 107. The Second Circuit reversed.The Supreme Court affirmed, agreeing that the first fair use factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes,” weighs against AWF’s commercial licensing to Condé Nast. Both the 1984 and the 2016 publications are portraits of Prince used in magazines to illustrate stories about Prince; the “environment[s]” are not “distinct and different.” The 2016 use also is of a commercial nature. Orange Prince reasonably can be perceived to portray Prince as iconic, whereas Goldsmith’s portrayal is photorealistic but the purpose of that use is still to illustrate a magazine about Prince. The degree of difference is not enough for the first factor to favor AWF. To hold otherwise would potentially authorize a range of commercial copying of photographs, to be used for purposes that are substantially the same as those of the originals. AWF offers no independent justification for copying the photograph. View "Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith" on Justia Law

LDL cholesterol can lead to cardiovascular disease, heart attacks, and strokes. PCSK9 is a naturally occurring protein that degrades LDL receptors responsible for extracting LDL cholesterol from the bloodstream. In 2011, Amgen and Sanofi each obtained a patent for the antibody employed in a PCSK9-inhibiting drug, describing the relevant antibody by its unique amino acid sequence. Amgen obtained two additional patents in 2014 that relate back to its 2011 patent and purport to claim “the entire genus” of antibodies that “bind to specific amino acid residues on PCSK9,” and “block PCSK9 from binding.” Amgen identified the amino acid sequences of 26 antibodies that perform those functions and described “roadmap” and “conservative substitution” methods for making other antibodies that perform the described functions.Amgen sued Sanofi for infringement. Sanofi argued that Amgen’s relevant claims were invalid under the “enablement” requirement, which requires a patent applicant to describe the invention “in such full, clear, concise, and exact terms as to enable any person skilled in the art” to make and use the invention,” 35 U.S.C. 112(a), characterizing the methods Amgen outlined for generating additional antibodies as a trial-and-error process.The district court, the Federal Circuit, and the Supreme Court sided with Sanofi. If a patent claims an entire class of processes, machines, manufactures, or compositions of matter, its specification must enable a person skilled in the art to make and use the entire class. The claimed class of antibodies does not include just the 26 that Amgen described by their amino acid sequences, but many additional antibodies. The “roadmap” and “conservative substitution” approaches are little more than research assignments. View "Amgen Inc. v. Sanofi" on Justia Law

When the IRS issues a summons, it must generally provide notice to any person identified in the summons, 26 U.S.C. 7609(a)(1). Anyone entitled to such notice may move to quash the summons. When the IRS issues a summons “in aid of the collection of” an assessment made “against the person with respect to whose liability the summons is issued,” no notice is required, 7609(c)(2)(D)(i).The IRS entered assessments against Polselli for more than $2 million in unpaid taxes and penalties. Revenue Officer Bryant issued summonses to three banks seeking financial records of third parties, including the petitioners. Bryant did not provide notice to the petitioners, but the banks did. The petitioners moved to quash the summonses. The district court concluded that no notice was required and that the petitioners therefore could not bring a motion to quash. The Sixth Circuit affirmed, finding that the summonses fell within section 7609(c)(2)(D)(i)'s exception to the general notice requirement.A unanimous Supreme Court affirmed, rejecting an argument that 7609(c)(2)(D)(i) applies only if the delinquent taxpayer has a legal interest in the accounts or records summoned by the IRS. The statute identifies three conditions to exempt the IRS from providing notice: the summons must be “issued in aid of” collection of “an assessment made or judgment rendered,” and must aid the collection of assessments or judgments “against the person with respect to whose liability the summons is issued.” The statute does not mention legal interest. To “aid” means “[t]o help” or “assist.” A summons that may not itself reveal taxpayer assets may nonetheless help the IRS find such assets. View "Polselli v. Internal Revenue Service" on Justia Law