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The Biologics Price Competition and Innovation Act, concerning FDA approval of a drug that is biosimilar to an already-licensed biological “reference product,” 42 U.S.C. 262(k), treats submission of a biosimilar application as an “artificial” patent infringement. An applicant must provide its biosimilar application and manufacturing information to the reference product’s sponsor. The parties collaborate to identify patents for immediate litigation. Second phase litigation is triggered when the applicant gives the sponsor notice at least 180 days before commercially marketing the biosimilar. Amgen claims patents on methods of manufacturing and using filgrastim. Sandoz sought FDA approval to market a biosimilar, Zarxio, and notified Amgen that it had submitted an application, that it intended to market Zarxio immediately upon receiving FDA approval, and that it did not intend to provide application and manufacturing information. Amgen sued for patent infringement and asserted that Sandoz engaged in “unlawful” conduct under California law by failure to provide its application and manufacturing information and by notification of commercial marketing before obtaining FDA licensure. The FDA licensed Zarxio. Sandoz provided Amgen another notice of commercial marketing. The Supreme Court unanimously held that section 262(l)(2)(A) is not enforceable by injunction under federal law, but the Federal Circuit should determine whether a state-law injunction is available. Submitting an application constitutes artificial infringement; failing to disclose the application and manufacturing information does not. Section 262(l)(9)(C) provides a remedy for failure to turn over the application and manufacturing information, authorizing the sponsor, but not the applicant, to bring an immediate declaratory-judgment action, thus vesting in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation. An applicant may provide notice under section 262(l)(8)(A) before obtaining FDA licensure. View "Sandoz Inc. v. Amgen Inc." on Justia Law

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The Employee Retirement Income Security Act (ERISA) obligates private employers offering pension plans to adhere to rules designed to ensure plan solvency and protect plan participants, 29 U.S.C. 1003(b)(2). ERISA exempts “A plan established and maintained for its employees . . . by a church . . . [which] includes a plan maintained by an organization . . . the principal purpose . . . of which is the administration or funding of [such] plan . . . for the employees of a church . . . , if such organization is controlled by or associated with a church,” section 1002(33)(C)(i). Defendants, church-affiliated nonprofits that run hospitals, offer their employees defined-benefit pension plans, which were established by the hospitals themselves, and are managed by internal employee-benefits committees. Current and former employees filed class actions alleging that the hospitals’ plans did not fall within ERISA’s "church plan" exemption because they were not established by a church. The lower courts agreed with the employees. The Supreme Court reversed. A plan maintained by a principal-purpose organization qualifies as a “church plan,” regardless of who established it. In amending ERISA, Congress deemed the category of plans “established and maintained by a church” to “include” plans “maintained by” principal-purpose organizations. View "Advocate Health Care Network v. Stapleton" on Justia Law

Posted in: ERISA

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Sherman paid $2.7 million for land in Chester, New York, then sought approval of his development plan. Years later, he filed a regulatory takings suit. Laroe moved to intervene under FRCP 24(a)(2), which requires a court to permit intervention by a litigant that “claims an interest related to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” Laroe alleged that it had paid Sherman $2.5 million in relation to the project, that its resulting equitable interest would be impaired if it could not intervene, and that Sherman would not adequately represent its interest. A unanimous Supreme Court held that a litigant seeking to intervene as of right under Rule 24(a)(2) must meet Article III standing requirements if the intervenor seeks relief not requested by a plaintiff. To establish Article III standing, a plaintiff seeking compensatory relief must have suffered an injury-in-fact, that is fairly traceable to the defendant's challenged conduct, and that is likely to be redressed by a favorable judicial decision. An intervenor-of-right must demonstrate Article III standing when it seeks relief beyond that requested by the plaintiff. The Second Circuit must address, on remand, whether Laroe seeks different relief than Sherman. If Laroe wants only a money judgment of its own running directly against the town, then it seeks damages different from those sought by Sherman and must establish its own standing to intervene. View "Town of Chester v. Laroe Estates, Inc. " on Justia Law

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In the 1970s, federal district courts began ordering disgorgement in Securities and Exchange Commission enforcement proceedings. The Commission may also seek monetary civil penalties; 28 U.S.C. 2462 establishes a five-year limitations period for “an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture.” In 2009, the Commission brought an enforcement action against Kokesh for concealing the misappropriation of $34.9 million from business development companies, seeking monetary civil penalties, disgorgement, and an injunction. A jury found that Kokesh’s actions violated securities laws. The district court determined that section 2462’s limitations period applied to the monetary civil penalties but did not apply to the $34.9 million disgorgement judgment. The Tenth Circuit affirmed. A unanimous Supreme Court reversed. SEC disgorgement operates as a penalty under section 2462. It is imposed by the courts as a consequence for violating public laws, i.e., a violation committed against the United States rather than an aggrieved individual, and is imposed for punitive purposes. SEC disgorgement is often not compensatory. Disgorged profits are paid to the courts, which have discretion to determine how the money will be distributed. When an individual is made to pay a noncompensatory sanction to the government as a consequence of a legal violation, the payment is a penalty. Although disgorgement may sometimes serve compensatory goals, “sanctions frequently serve more than one purpose.” View "Kokesh v. Securities and Exchange Commission" on Justia Law

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Terry managed sales and inventory for a Tennessee hardware store owned by his brother, Tony. They were indicted for federal drug crimes including conspiracy to distribute a product used in methamphetamine production. The government sought judgments of $269,751 against each brother, under the Comprehensive Forfeiture Act, which mandates forfeiture of “any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of” certain drug crimes, 21 U.S.C. 853(a)(1). Tony pleaded guilty and agreed to forfeit $200,000. Terry was convicted. Despite conceding that Terry had no controlling interest in the store and did not stand to benefit personally from sales of the product, the government asked the court to hold him jointly and severally liable for the profits from the illegal sales and sought a judgment of $69,751.98, the outstanding conspiracy profits. The Sixth Circuit agreed that the brothers, as co-conspirators, were jointly and severally liable. The Supreme Court reversed. Forfeiture under section 853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime; the provision does not permit forfeiture with regard to Terry. Use of the adverbs “directly” and “indirectly” to refer to how a defendant obtains the property does not negate the requirement that he “obtain” it. Congress did not incorporate into the section the principle that conspirators are legally responsible for each other’s foreseeable actions in furtherance of their common plan. View "Honeycutt v. United States" on Justia Law

Posted in: Criminal Law

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The North Carolina General Assembly redrew state legislative districts in 2011 to account for population changes revealed by the 2010 census. Plaintiffs alleged that 28 majority-black districts in the new plan were unconstitutional racial gerrymanders. The district court ruled for the plaintiffs in August 2016, declined to require changes before the November 2016 election, but ordered the General Assembly to redraw the map. Three weeks after the November 2016 election, the court set a March 2017 deadline for drawing new districts, ordering that “[t]he term of any legislator elected in 2016” from a district later redrawn would be replaced by new ones, to be chosen in court-ordered special elections in fall, 2017, to serve a one-year term. The court suspended provisions of the North Carolina Constitution requiring prospective legislators to reside within a district for one year before they may be elected to represent it. The Supreme Court granted a stay pending appeal and subsequently vacated the remedial order. Relief in redistricting cases is “‘fashioned in the light of well-known principles of equity.’” The district court “addressed the balance of equities in only the most cursory fashion.” In determining whether or when a special election may be a proper remedy for a racial gerrymander, obvious considerations include the severity and nature of the particular constitutional violation, the extent of the likely disruption to the ordinary processes of governance if early elections are imposed, and the need to act with proper judicial restraint when intruding on state sovereignty. View "North Carolina v. Covington" on Justia Law

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Petitioner, a Mexican citizen and lawful permanent resident of the U.S., pleaded no contest in a California court under a statute criminalizing “unlawful sexual intercourse with a minor who is more than three years younger than the perpetrator,” defining “minor” as “a person under the age of 18.” He was ordered removed under 8 U.S.C. 1227(a)(2)(A)(3), as an “alien who is convicted of an aggravated felony,” including “sexual abuse of a minor.” The Supreme Court reversed. Under the categorical approach employed to determine whether an alien’s conviction qualifies as an aggravated felony, the court asks whether the state statute defining the crime of conviction categorically fits within the "generic" federal definition of a corresponding aggravated felony. Petitioner’s state conviction would be an “aggravated felony” only if the least of the acts criminalized by the state statute falls within the generic federal definition of sexual abuse of a minor, regardless of the actual facts of the case. The least of the acts criminalized by the California law would be consensual sexual intercourse between a victim who is almost 18 and a perpetrator who just turned 21. The generic federal definition of “sexual abuse of a minor” requires that the victim be younger than 16 and a significant majority of state criminal codes set the age of consent at 16 for statutory rape offenses predicated exclusively on the age of the participants. View "Esquivel-Quintana v. Sessions" on Justia Law

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Based on alleged work-related injuries, Nelson, a North Dakota resident, and Tyrrell, the administrator of a South Dakota estate, brought Federal Employers’ Liability Act, 45 U.S.C. 51, suits against BNSF Railroad. Neither injury occurred in Montana. Neither incorporated nor headquartered there, BNSF maintains less than five percent of its workforce and about six percent of its total track mileage in Montana. The Montana Supreme Court held that Montana courts could exercise general personal jurisdiction over BNSF because the railroad “d[id] business” in the state within the meaning of 45 U.S.C. 56. The U.S. Supreme Court reversed. Section 56 does not address personal jurisdiction over railroads but is only a venue prescription. The Montana courts’ exercise of personal jurisdiction did not comport with the Due Process Clause. Only the propriety of general personal jurisdiction was at issue because neither plaintiff alleged injury from work in or related to Montana. A state court may exercise general jurisdiction over out-of-state corporations when their “affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” The “paradigm” forums in which a corporate defendant is “at home” are its place of incorporation and its principal place of business. In an “exceptional case,” a corporate defendant’s operations in another forum “may be so substantial and of such a nature as to render the corporation at home in that State,” but that constraint does not vary with the type of claim asserted or business enterprise sued. View "BNSF Railroad Co. v. Tyrrell" on Justia Law

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The Los Angeles County Sheriff’s Department had information that a potentially armed and dangerous parolee-at-large had been seen at a certain residence. While others searched the main house, deputies searched the property. Unbeknownst to the deputies, Mendez and Garcia were napping inside a shack where they lived. Without a search warrant and without announcing their presence, the deputies opened the shack's door. Mendez rose from the bed, holding a BB gun that he used to kill pests. The deputies shot the men multiple times. In a suit under 42 U.S.C. 1983, the court awarded nominal damages on warrantless entry and knock-and-announce claims. The court found the use of force reasonable, but cited a Ninth Circuit rule, which makes an otherwise reasonable use of force unreasonable if the officer “intentionally or recklessly provokes a violent confrontation” and “the provocation is an independent Fourth Amendment violation. The Ninth Circuit held that the officers were entitled to qualified immunity on the knock-and-announce claim; that the warrantless entry violated clearly established law; and that the provocation rule applied. The Supreme Court vacated. There is a settled, exclusive framework for analyzing whether the force used in making a seizure complies with the Fourth Amendment: “whether the totality of the circumstances justifie[s] a particular sort of search or seizure.” The provocation rule instructs courts to look back to see if a different Fourth Amendment violation was somehow tied to the eventual use of force, mistakenly and unnecessarily conflating distinct Fourth Amendment claims that should be analyzed separately. If plaintiffs cannot recover on their excessive force claim, that will not foreclose recovery for injuries proximately caused by the warrantless entry. View "County of Los Angeles v. Mendez" on Justia Law

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Lexmark holds patents on the components of toner cartridges that it manufactures and sells. Lexmark allows consumers to buy a cartridge at full price, with no restrictions, or to buy a cartridge at a discount through Lexmark’s “Return Program,” by signing a contract agreeing to use the cartridge only once and to refrain from transferring the cartridge to anyone but Lexmark. Remanufacturers acquire empty Lexmark cartridges—including Return Program cartridges—from purchasers in the U.S. and overseas, refill them, and resell them in the U.S. Lexmark sued remanufacturers with respect to Return Program cartridges that Lexmark had sold within the U.S. and cartridges that Lexmark had sold abroad and that remanufacturers imported into the country. The Federal Circuit ruled for Lexmark with respect to both. The Supreme Court reversed. Lexmark exhausted its patent rights (35 U.S.C. 271(a)) in all of the cartridges. A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose. If a patentee negotiates a contract restricting the purchaser’s right to use or resell an item, it may be able to enforce that restriction as a matter of contract law, but may not do so through a patent infringement lawsuit. The exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is a limit on the scope of the patentee’s rights. The Patent Act just ensures that the patentee receives one reward—of whatever it considers satisfactory compensation—for every item that passes outside the scope of its patent monopoly. View "Impression Products, Inc. v. Lexmark International, Inc." on Justia Law