Commercial Litigation Update

There has been a good deal of recent attention given to the Supreme Court's so-called "shadow docket," a term that refers generally to the Court's (conservative majority's) issuing brief orders and unsigned opinions resolving procedural motions in a way that effectively disposes of cases, but without their having been fully briefed and argued.

In many cases, the payment of restitution by a party in a lawsuit involving the government or a governmental entity creates a tax-deductible business expense under Title 26, United States Code, Section 162(f) (hereinafter, “Section 162”). When it comes to violations of the False Claims Act, the Anti-Kickback Statute, Stark Law, or even common law fraud claims and contract disputes, understanding how this statute operates can offer substantial short- and long-term tax-benefits to entities facing stiff financial recoupments.  While it is unlikely that the costs of an investigation or restitution order will ever generate a financial net-gain for the entity footing the bill, it is important to appreciate that restitution and proactive remediation costs are viewed differently by both government enforcers (i.e. prosecutors) and tax-collectors, compared with other types of remuneration. Recognizing that there is a difference can, in some cases, help mitigate significant financial burdens.

I write this from London on the eve of the announcement that the nomination of Judge Ketanji Brown Jackson to succeed Justice Breyer is about to go to the full Senate for confirmation. Those who follow my writings will know that I am among a group of right-of-center former public officials in Republican administrations who are on record as supporting this nomination of an experienced and well-qualified federal judge.

The Court has decided the latest in a series of important cases interpreting the reach of the Federal Arbitration Act (FAA), 9 U. S. C. §§ 1 et seq.

On March 31, in Badgerow v. Walters, by an 8-1 majority (opinion written by Justice Kagan, and a lone dissent by Justice Breyer), the Court reversed an order of the Fifth Circuit and held that the federal courts do not have authority to “look through” an arbitration dispute for a federal question that would establish jurisdiction to confirm or deny an arbitral award.

The Court issued opinions in two cases today, both interesting in their particular factual circumstances, but neither controversial, with one unanimously decided and the other with a lone dissent.

In an unsigned per curiam order, the Court today reversed a decision of the Supreme Court of Wisconsin that, in a dispute about the assignment of the number of so-called minority-majority districts, chose an electoral map drawn by the governor over several other such proposals. Wisconsin Legislature v. Wisconsin Election Commission.

On March 15, 2022, President Biden signed into law the 2022 Consolidated Appropriations Act containing the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (the “Cyber Incident Reporting Act”). While President Biden’s remarks highlighted the $13.6 billion in funding “to address Russia’s invasion of Ukraine and the impact on surrounding countries,” the 2022 Consolidated Appropriations Act contained numerous other laws, including the Cyber Incident Reporting Act, which should not be overlooked. The Cyber Incident Reporting Act puts in motion important new cybersecurity reporting requirements that will likely apply to businesses in almost every major sector of the economy, including health care, financial services, energy, transportation and commercial facilities. Critical infrastructure entities should monitor the upcoming rule-making by the Cybersecurity and Infrastructure Security Agency (“CISA”), as the final regulations will clarify the scope and application of the new law.

On a single evening, William Dale Wooden went on a spree, burglarizing 10 units in the same storage facility. The question resolved in the Supreme Court’s somewhat unanimous decision in Wooden v. United States is whether, under the Armed Career Criminal Act, 18 U. S. C. §924(e)(1) (ACCA), Wooden’s prior convictions were for offenses occurring on different “occasions,” because the burglary of each unit happened at a distinct point in time, rather than simultaneously. All of the Justices (Kagan, J., writing the definitive majority opinion) agreed that the answer is “no.” Convictions arising from a single criminal episode can only count once under ACCA.

Recently I was going back and forth with a colleague about training programs for our developing lawyers. This colleague, a respected friend, looked at the list I proudly provided of the various advocacy, writing, presentation and positioning lessons filling the educational schedule, and responded with the pith of perception “Not a word about listening.” I immediately saw the gap absent in my perception only moments before. And, I knew the truth of which Oliver Wendell Holmes (not the judge, but the judge’s father) wrote in Chapter X of The Poet At The Breakfast Table (1872), when he said "It is the province of knowledge to speak. And it is the privilege of wisdom to listen." What a great lesson for lawyers, especially trial lawyers, to remember.

The Supreme Court decided two more cases today, one unanimously, the other anything but so.

Yesterday, in United States v. Zubaydah, the Court upheld the government’s assertion of the state secrets privilege, rejecting an al Qaeda terrorist leader’s discovery request for information concerning his torture by the CIA. The Court continued its interest in the privilege in today’s unanimous opinion, authored by Justice Alito, in Federal Bureau of Investigation v. Fazaga.