Commercial Litigation Update

A 6-3 Court, sharply divided along conservative and liberal jurisprudential lines, has decided the two headlining cases involving affirmative action in university admissions: Students for Fair Admissions, Inc. v. President and Fellows of Harvard College gets top billing, perhaps relating to the alumni status of several Justices, but the decision also resolves the case of Students for Fair Admissions, Inc. v. University of North Carolina. 

June 30th is the nominal last day of the Supreme Court's current term. The Court began the day with the long-awaited decision in 303 Creative LLC v. Elenis, another 6-3 jurisprudentially ideological split in which, per Justice Gorsuch, the Court holds that the First Amendment prohibits Colorado from forcing a website designer to create expressive designs speaking messages with which the designer disagrees. As was the situation with yesterday's affirmative action cases, it is hard to tell whether the majority and the dissenters (Justice Sotomayor writing their opinion) are speaking about the same case. The majority views this as a clear case of forced speech. To the dissenters, this is no more than a matter of requiring conduct—the sale of services—on the basis of equality. Thus, Justice Gorsuch opines, “Colorado seeks to force an individual to speak in ways that align with its views but defy her conscience about a matter of major significance.” As Justice Sotomayor sees it, ”[t]oday, the Court, for the first time in its history, grants a business open to the public a constitutional right to refuse to serve members of a protected class.”

In Mallory v. Norfolk Southern Railway Co., 600 U.S. __ (June 27, 2023), the United States Supreme Court upheld a Pennsylvania law that enables a plaintiff to show general personal jurisdiction over an out-of-state corporation based only upon that company’s registering to do business in Pennsylvania. 42 Pa. Const. Stat. § 5301(a)(2). It is well established that general personal jurisdiction permits a court to adjudicate any and all claims against an out-of-state corporate defendant only where a plaintiff demonstrates that the defendant has substantial contacts with the forum state. The majority decision, however, rules that a plaintiff need not engage in a contacts analysis where a state, such as Pennsylvania, has a corporate registration law deeming corporate registration as consent to jurisdiction. Other states will now likely emulate Pennsylvania by adopting similar statutory provisions authorizing general personal jurisdiction over out-of-state corporations registered to do business in those states even where there has been no showing of substantial state contacts.

New episode of our podcast, Speaking of Litigation: From chart-topping artificial rap songs to employment screening tools, artificial intelligence (AI) is not only a societal phenomenon but also a growing legal dilemma.

Trial lawyers around the globe are focused on the emergence of AI-related disputes in and out of the courtroom.

Epstein Becker Green attorneys Teddy McCormick, Jim Flynn, and Ali Nienaber illustrate the influence that AI has on litigation, employment practices, music, and more.

As the end of the term approaches, the Court is increasingly divided in its decisions. However, the composition of the majorities is not often the 6-3 conservative/liberal division stereotype that many observers, critics, and media expect. As several key decisions show today, the Chief Justice has taken up the center ground and, as I've suggested before, often has the ability to bring Justice Kavanaugh with him, as they, to paraphrase the country singer Maren Morris, meet in the middle.

Of the four cases decided today, the one that likely pertains to the largest number of this blog’s readers is Coinbase, Inc. v. Bielski, a 5-4 opinion delivered by Justice Kavanaugh, who wrote for himself, the Chief Justice, and Justices Alito, Gorsuch, and Barrett. Interestingly, Justice Thomas largely joined Justice Jackson’s dissenting opinion.

With four decisions today, the Court has now cut its backlog down to the mid-teens. And with decisions likely tomorrow as well, the Court is well on its way to clearing the docket as the term ends.

The question of whether a would-be trademark, “TRUMP TOO SMALL,” warrants a First Amendment exception to the Lanham Act’s prohibition on registering a living person’s name as a trademark without that person’s permission has now reached the United States Supreme Court. On June 5, 2023, in Vidal v. Elster, Case 22-704, the high court granted the United States Patent and Trademark Office’s (hereinafter, the “Government”) petition for certiorari to determine whether, under 15 U.S.C. § 1052(c), the refusal to register a trademark containing another person’s name violates the Free Speech Clause of the First Amendment when that mark implies criticism of a government official or public figure. As we wrote last year, one cannot normally trademark another person’s name, but in the case of Steve Elster’s trademark application for TRUMP TOO SMALL, the United States Court of Appeals for the Federal Circuit (the “CAFC”) held in In re Elster, 26 F.4th 1328, 2022 USPQ2d 195 (Fed. Cir. 2022), that one’s First Amendment right to make social commentary about a public figure trumps (bad pun intended) the Lanham Act. Whether the Supreme Court agrees with the CAFC soon will be determined.

It should come as no surprise to constitutionalists, practitioners under the Federal False Claims Act (31 U.S.C. §§3729–3733) (FCA), and auditors of the oral argument in the case that the Supreme Court has held that the federal government may move to dismiss an FCA action under §3730(c)(2)(A) whenever it has intervened—whether during the seal period or later on. United States ex rel. Polansky v. Executive Health Resources, Inc. To assert this right, the government must actually intervene (which is not difficult since the statute allows it at any time before final judgment, even on appeal), and the propriety of dismissal is to be adjudicated pursuant to Fed. R. Civ. P. 41(a), the rule generally governing voluntary dismissal of suits in ordinary civil litigation, and dismissal should be granted in all but the most extraordinary cases. 

Indian tribal rights led the Supreme Court’s docket today. In one case, the Court held that the federal Bankruptcy Code abrogated the sovereign immunity of tribal governments. And in another, this time upholding tribal rights, the Court held upheld the constitutionality of the Indian Child Welfare Act (ICWA), with its arguably discriminatory provision requiring the placement of foster or adoptive Indian children with Indian caretakers. Justice Gorsuch, perhaps the Court’s most interested and knowledgeable member concerning tribal rights and interests, was the lone dissenter in the bankruptcy case and provided a unique historical perspective in a scholarly concurrence in the ICWA case. Finally, a unanimous Court held that the Constitution allows the retrial of a defendant who had been tried in an improper venue before jurors drawn from the wrong district. Three interesting and detailed opinions, none reflecting any major division in the Court, though perhaps Justices Thomas and Alito might seem to live on an island of their own.