Commercial Litigation Update

On July 7, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued an advisory opinion entitled ‘“Fair Credit Reporting: Permissible Purposes for Furnishing, Using, and Obtaining Consumer Reports.”[1] The advisory opinion clarifies that “permissible purposes” under the Fair Credit Reporting Act (the “FCRA”) are “consumer specific” and highlights that a person who uses or obtains a “consumer report” is “strictly prohibit[ed]” from doing so without a permissible purpose under the FCRA. In the midst of ongoing Congressional efforts to pass a comprehensive federal data privacy law, the CFPB’s advisory opinion is a reminder of the existing rules that protect consumer privacy.

Due to the large-scale shutdowns triggered by the Coronavirus pandemic (“COVID-19”), many businesses were unable to operate fully, or not at all. Litigants across the country have sought to be relieved of their obligations under contracts as a result of the pandemic-related disruptions, under legal theories including impossibility, frustration of purpose, and force majeure. As recently decided cases demonstrate, proponents of these theories have faced uphill battles.

On June 24, 2022, the U.S. Supreme Court released its opinion in Dobbs v. Jackson Women’s Health Organization, overturning Roe v. Wade—the 1973 landmark ruling that established the constitutional right to abortion. Now, companies that operate in states where abortions are banned or restricted are facing a quagmire of laws and risks regarding enforcement. Additionally, the risk landscape is not static, but rather in flux, as the federal government (agencies such as the U.S. Department of Justice and the U.S. Department of Health and Human Services) and a myriad of states introduce new legislation and issue guidance on a near-daily basis.

Last month, former attorney Michael Avenatti was sentenced to four years in prison for stealing about $300,000 from his client, Stormy Daniels. But Mr. Avenatti was already serving a thirty-month prison sentence for attempting to extort a “settlement” from Nike.

Now that the Supreme Court of the United States has declared that authority to regulate abortion rests with the states, organizations operating across state lines face new and some unprecedented challenges created by the civil and criminal legal issues arising from risks of enforcement in any state where abortion is or will be banned (a “ban state”). Health care providers, employers, and other organizations with any nexus to such states will need to conduct careful analyses and may have to accept an unknown level of enforcement risk while various jurisdictions respond to their newfound power and determine if and how to wield it. The risks may extend to providers who deliver abortions, patients seeking abortions, companies who support their employees traveling to non-ban states to receive abortions, and their executives. The outer parameters of who is subject to enforcement risk are presently unknown but are likely to vary from jurisdiction to jurisdiction.

The Court has now delivered its final two decisions of the term, one of them of great consequence to administrative law. With adjournment comes the retirement of Justice Stephen Breyer and the swearing-in of his successor, Judge Ketanji Brown Jackson, his former clerk, who is expected to be a dependable member of the Court’s liberal jurisprudential wing. All in all, a day of significance.

With his retirement to begin on June 30 at noon, Justice Breyer leads a 5-4 split in Torres v. Texas Department of Public Safety, with the Chief Justice and Justice Kavanaugh, along with Justices Sotomayor and Kagan, joining him in holding that, by virtue of the states having ratified the Constitution, they agreed that their sovereignty would yield to the national power to raise and support the Armed Forces. Accordingly, Congress may exercise this national power to authorize private damages suits against nonconsenting states. Congress did just that when it passed the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which gives returning servicemembers the right to reclaim their prior jobs with state employers, and authorizes suit if those employers refuse to accommodate veterans’ service-related disabilities. See 38 U. S. C. § §4301 et seq.

For better or worse, trademark infringement claims enjoy relaxed standing requirements which enable plaintiffs to move quickly to quash would-be infringers. These requirements are at their lowest ebb when parties seek declaratory judgments. This results in some creative uses of the declaratory judgment claim.

Coming off the decisions in the landmark Dobbs and Bruen cases, the rest of the term might seem anticlimactic. Nevertheless, as the shelf is being cleared of the remaining cases, there are still rulings of significance to come. As the week opened, one of them—a religious freedom case—likely didn't surprise anyone who listened to the oral argument or, indeed, who has been paying attention to the conservative Justices having changed the valences in religious liberty cases. The other two cases decided on the opening day of the week were both criminal cases of limited interest, but important nevertheless.

The day after the Gallup organization reported that public confidence in the Supreme Court has reached new lows, the Court has added what, to many, will be more fuel to that fire. The long-awaited, hotly contested, and divisive opinion in Dobbs v. Jackson Women's Health Organization has officially come down and, given reactions to the premature release of a draft of Justice Alito's majority opinion, the public's expectations on both sides of the abortion debate have been realized.