FTC Enforcement Powers Face Serious Challenge

FTC_Man_Controlling_TradeThe Federal Trade Commission (FTC) has long asserted broad authority to sue businesses for engaging in unfair or deceptive acts or practices.  But a recent federal court decision (Federal Trade Commission v. Shrire Viropharma Inc.) calls that authority into serious question.  If upheld on appeal, the decision could lead to major changes in the way FTC carries out its enforcement responsibilities.

The decision focused on § 13(b) of the Federal Trade Commission Act (FTCA).  That statute authorizes FTC to seek injunctive relief in federal court against anyone who “is violating, or is about to violate” a law enforced by FTC.  FTC has long contended that § 13(b) also authorizes actions against entities based on past violations, even in the absence of evidence that the entity “is about to” commit new violations.  A Delaware federal district judge’s rejection of that contention has thrown a monkey wrench into FTC’s enforcement apparatus. Continue reading “FTC Enforcement Powers Face Serious Challenge”

Supreme Court Continues to Nibble Away at Alien Tort Statute’s Sweep

supreme courtYesterday’s decision in Jesner v. Arab Bank, PLC, the U.S. Supreme Court’s third major decision involving the Alien Tort Statute (ATS), continues a trend of reining in human rights activists’ efforts to police private businesses’ overseas conduct through ATS litigation.  The Court held that foreign corporations may not be sued under the ATS for their overseas conduct.  But as with past Supreme Court ATS decisions, the justices once again failed to shut the door entirely on human rights activists: the ruling said nothing about the many ATS claims pending against American corporations.  It thereby ensured that U.S. companies will continue to face such claims for the foreseeable future.

While Jesner suggests that five justices likely would rule that the federal courts should not recognize an ATS cause of action against American corporations for their overseas activities, several federal appeals courts have exhibited little willingness to limit the scope of ATS liability unless directly ordered to do so by the Supreme Court. Continue reading “Supreme Court Continues to Nibble Away at Alien Tort Statute’s Sweep”

“China Agritech” SCOTUS Case Will Turn on Justices’ Opinions of Class Actions

supreme courtDuring oral arguments this coming Monday in China Agritech, Inc. v. Resh (click here for WLF’s amicus brief) the U.S. Supreme Court ostensibly will be considering a technical issue regarding statutes of limitations: when should the doctrine of “equitable tolling” be applied to extend the deadline for filing a class action lawsuit? But how the justices determine the scope of that judge-made doctrine has little to do with applying well-established equitable doctrines in this area of the law (there aren’t any) and everything to do with how warmly they feel about class litigation as a vehicle for providing effective relief for large numbers of plaintiffs with small claims. The evidence suggests that the Court is far less enamored with class actions than it once was and will use China Agritech to cut back on their use. Continue reading ““China Agritech” SCOTUS Case Will Turn on Justices’ Opinions of Class Actions”

Second Circuit Improperly Ducks Important First Amendment Issues

FirstAmendmentThe U.S. Supreme Court has repeatedly held that federal courts are under a “virtually unflagging” obligation to hear and decide federal claims over which they possess jurisdiction.  Yet, the U.S. Court of Appeals for the Second Circuit has repeatedly refused to decide a First Amendment challenge to a New York statute that restricts merchants’ ability to inform their customers of credit-card surcharges.

Just this past week, the appeals court yet again put off a decision by certifying to the New York Court of Appeals (the state’s highest court) a question on the meaning of the challenged statute.  The federal court’s rationale for its delay does not hold water and betrays a thinly disguised hostility to the First Amendment claims at issue. Continue reading “Second Circuit Improperly Ducks Important First Amendment Issues”

Third Circuit Antitrust Decision Makes Pharmaceutical Patent Disputes Nearly Impossible to Settle

FTC_Man_Controlling_TradeThe U.S. Supreme Court’s 2013 FTC v. Actavis, Inc. decision held that “reverse payment” settlement agreements—in which a drug company suing a generic competitor for patent infringement pays the alleged infringer a substantial amount of cash to settle the litigation—are subject to antitrust scrutiny.  The Court reasoned that such reverse payments are unusual and may indicate that the generic company is really being paid not to compete.

An August 21, 2017 decision from the U.S. Court of Appeals for the Third Circuit has stretched the Actavis holding far beyond anything intended by the Supreme Court.  If the appeals court’s decision in In re: Lipitor Antitrust Litigation is allowed to stand, it may become virtually impossible for drug companies to settle patent-infringement litigation. Continue reading “Third Circuit Antitrust Decision Makes Pharmaceutical Patent Disputes Nearly Impossible to Settle”

Pending High Court Case Tests Congress’s Authority to Detain and Deport Criminal Aliens

supreme courtThe US Supreme Court on October 3, 2017 will hear oral arguments for the second time in an important immigration case, Jennings v. Rodriguez.  The Court was unable to reach a decision the first time around, apparently because it divided 4-4 on how to resolve the case.  A key issue in the case is which constitutional body—Congress or the federal courts—gets to make policy governing the treatment of aliens convicted of serious crimes.

An unbroken line of Supreme Court precedent (including 1976’s Mathews v. Diaz) provides a ready answer to that question: immigration policy is “so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference.”  Congress determined that aliens convicted of serious crimes should be deported and should be detained pending final removal; courts should not be second-guessing that determination. Continue reading “Pending High Court Case Tests Congress’s Authority to Detain and Deport Criminal Aliens”

High Court Must Review ESA Decision that Endangers Ability to Appeal Agency Actions

st_tammany_navA group of Louisiana landowners is asking the Supreme Court to review a US Court of Appeals for the Fifth Circuit decision that dramatically expands the scope of the Endangered Species Act (ESA).  Weyerhaeuser Co. and Markle Interests, L.L.C.. v. U.S. Fish and Wildlife Service.  Their concerns are well-justified; the appeals court upheld land-use restrictions imposed by the Fish and Wildlife Service (FWS) for the purpose of protecting an endangered species of frog—even though the frog does not exist in Louisiana and could not live on the Petitioners’ land unless they substantially modified it.

But Supreme Court review is warranted for an additional and perhaps more important reason: the Fifth Circuit agreed with FWS that the Service’s refusal to undertake a cost-benefit analysis of its actions was not subject to judicial review.  As Judge Edith Jones stated in dissent, that decision plays havoc with administrative law and significantly undercuts the “strong presumption” that the actions of federal administrative agencies are subject to judicial review.

Worse still, the appeals court established a double-standard.  It permits environmental groups to seek judicial review when FWS invokes cost considerations as a reason not to impose land-use restrictions, but it denies landowners the right to go to court when FWS reaches the opposite conclusion.  That denial is particularly troubling, given that FWS’s own studies indicated that its land-use restrictions could cost landowners up to $34 million while providing no discernable benefit to the endangered frog. Continue reading “High Court Must Review ESA Decision that Endangers Ability to Appeal Agency Actions”