May 2010 was a groundbreaking one for the Supreme Court. On May 10th, President Obama announced Solicitor General Elena Kagan as his nomination to replace retiring Justice John Paul Stevens. Kagan already has made the rounds on Capitol Hill with key Senators in preparation for her upcoming confirmation hearings.
The Court also announced that due to security concerns, visitors will no longer pass under the famous words "Equal Justice Under Law" and enter the Court through its massive bronze front doors. Instead, the public will enter on the plaza level through a security checkpoint. Visitors will be able to leave the Court through the main entrance. For those who have not had the opportunity to see the beautiful building or the Court in session, I urge you to go – it is truly an inspirational experience. DRI Young Lawyers offers two opportunities each year to be admitted to the Court which allows you to be a member of the bar of our Nation's highest court.
In addition to these new developments shaping the Court, the Court also released several opinions which could have a tremendous impact on defense lawyers:
In Stolt-Nielsen v. AnimalFeeds, the Supreme Court held, in a 5-3 decision, that class arbitrations are not allowed under the Federal Arbitration Act, 9 U.S.C. § 1 et seq., when the contract says nothing regarding arbitration. Although potentially a game changer, the majority opinion, authored by Justice Alito, indicates potential limitations in the scope of the Court's decision. First, the decision emphasized the specific facts of this case – particularly, the parties' stipulation that there was "no agreement" on the issue of class arbitration. Second, although the Court acknowledged that an arbitrator may infer the implicit consent of the parties, it made clear that it was not deciding what contractual basis could support a finding that the parties agreed to authorize class arbitration. The Court's opinion can be found at http://www.supremecourt.gov/opinions/09pdf/08-1198.pdf. In Perdue v. Kenny A., the Court reversed a district court's award of a $4.5 million attorney fee enhancement in a case that uncovered deficiencies in Georgia's foster care system. In awarding the enhancement (in addition to a $6 million lodestar attorney fee award), the district court found that plaintiffs' counsel "brought a higher degree of skill, commitment, dedication and professionalism to this litigation than the Court has seen displayed by the attorneys in any other case." Writing for the majority, Justice Alito reasoned that "there is a strong presumption that the lodestar is sufficient; factors subsumed in the lodestar calculation cannot be used as a ground for increasing an award above the lodestar; and a party seeking fees has the burden of identifying a factor that the lodestar does not adequately take into account and proving with specificity that an enhanced fee is justified." While the Supreme Court did not rule out a "performance enhancement" for exceptional legal work, the Court held that enhancements are warranted only under "extraordinary circumstances." Concurring in part and dissenting in part, Justices Breyer, Stevens, Ginsburg and Sotomayor agreed with the majority's conclusion that fee enhancements are allowed, but opined that the district court is in the best position to make such a determination.
The Court also released several other opinions of note for those specializing in securities and ERISA litigation:
In Merck & Co. v. Reynolds, the Court held that the two-year statute of limitations for a private securities fraud action found in 28 U.S.C. § 1658(b) begins to run when a plaintiff discovers, or a reasonably diligent plaintiff should have discovered, "the facts constituting the violation"—whichever comes first. The Merck decision likely will reduce the number of private securities fraud suits dismissed on limitations grounds as defendants will have a more difficult time than in the past showing that securities law claims are time-barred. DRI filed an Amicus Brief in Support of Merck. http://www.supremecourt.gov/opinions/09pdf/08-905.pdf
In Conkright v. Frommert, the Court held that a United States District Court should have deferred to an ERISA plan administrator's "reasonable" interpretation of the plan's terms if such an interpretation is reached outside the context of an administrative claim for benefits. "We held in Firestone Tire & Rubber Co. v. Bruch that an ERISA plan administrator with discretionary authority to interpret a plan is entitled to deference in exercising that discretion. The question here is whether a single honest mistake in plan interpretation justifies stripping the administrator of that deference for subsequent related interpretations of the plan. We hold that it does not," Chief Justice Roberts wrote for the majority. http://www.supremecourt.gov/opinions/09pdf/08-810.pdf
Two recent decisions garnered significant media attention due to First Amendment concerns.
Salazar v. Buono presented an Establishment Clause challenge to a cross that members of the Veterans of Foreign Wars placed on federal land in 1934 to honor American soldiers. As a result of the litigation, a 2004 federal law transferred the land to the VFW. Lower courts found that the cross violated the Establishment Clause and invalidated the land transfer. The divided Court overturned the lower court's ruling ordering the removal of the cross. Six justices wrote separate opinions, none speaking for a majority of the court. "Although certainly a Christian symbol, the cross was not emplaced on Sunrise Rock to promote a Christian message," Justice Kennedy wrote in the lead opinion. "Rather, those who erected the cross intended simply to honor our nation's fallen soldiers." In one of the two dissenting opinions, Justice Stevens said the transfer of the property to the Veterans of Foreign Wars would not remove the government's religious endorsement: "Making a plain, unadorned Latin cross a war memorial does not make the cross secular," Stevens wrote. "It makes the war memorial sectarian." The case now will be returned to the district court to further address the land transfer.
In United States v. Stevens, the Supreme Court struck down 18 U.S.C. § 48, which prohibits the depiction of animal cruelty in commercial expression, as facially invalid under the First Amendment. The Court, in an opinion by Chief Justice Roberts, noted that it had previously excluded "a few historic categories" of speech from the protection of the First Amendment, but concluded that "depictions of animal cruelty should not be added to the list." However, the opinion stressed that it was not restricting the power of government to punish animal cruelty. Justice Alito, the lone dissenter, wrote: "[t]he Court strikes down in its entirety a valuable statute. . . that was enacted not to suppress speech, but to prevent horrific acts of animal cruelty — in particular, the creation and commercial exploitation of 'crush videos,' a form of depraved entertainment that has no social value." The complete opinion can be found at http://www.supremecourt.gov/opinions/09pdf/08-769.pdf.
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