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Mayer Brown's Supreme Court and Appellate Practice Group distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community. We also email the Docket Report to our subscribed members and if you don't already subscribe to the Docket Report and would like to, please click here.

October Term 2012 - April 15, 2013

April 15, 2013

Today the Supreme Court granted certiorari in two cases of interest to the business community:

Federal Courts—Younger Abstention

Under the judicially created doctrine of abstention, federal courts are required to abstain from deciding certain cases over which they otherwise have jurisdiction, in order to prevent “interference” with related state-court proceedings. In Younger v. Harris, 401 U.S. 37, 43 (1971), the Supreme Court held that, based on a “longstanding public policy against federal court interference with state court proceedings,” federal courts should not enjoin a state criminal prosecution begun before institution of the federal suit. Younger has since been extended beyond state criminal proceedings; and in Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423 (1982), the Court held that Younger abstention is appropriate when (1) there is an ongoing state judicial proceeding that (2) implicates important state interests, and (3) the state proceedings provide an adequate opportunity to raise constitutional challenges. Today, the Supreme Court granted certiorari in Sprint Communications Co. v. Jacobs, No. 12-815, to clarify which types of state proceedings require Younger abstention.

Sprint had a dispute with Windstream, an Iowa communications company, over access charges for “voice over Internet protocol” calls. Sprint sought declaratory relief from the Iowa Utilities Board, which found that Sprint was required to pay the access charges. Sprint then filed a complaint in federal district court, arguing that only the Federal Communications Commission has authority to decide the issue. At the same time, Sprint petitioned for review of the IUB’s decision in Iowa state court. The district court dismissed the federal case on abstention grounds.

The Eighth Circuit affirmed, holding that Younger abstention was appropriate because the three Middlesex factors were met. Sprint had argued that Younger abstention could not apply because the state’s enforcement interests were not implicated by the proceeding, which was “remedial” rather than “coercive.” In rejecting this argument, the court of appeals explained that, “[a]lthough we have recognized the existence of the coercive–remedial distinction in other of our abstention cases, we have not considered the distinction to be outcome determinative.” 690 F.3d 864, 868. In so holding, the Eighth Circuit created a split with at least four other circuits—the First, Sixth, Seventh, and Tenth—which explicitly apply Younger only when the state proceeding is deemed “coercive.” The Supreme Court granted Sprint’s petition to decide whether Younger abstention is warranted when there is a related state proceeding that is, instead, “remedial.”

Because the Supreme Court’s decision in Sprint will affect how broadly federal courts apply the abstention doctrine to appeals of state-agency proceedings, the case has broad implications for businesses subject to agency regulation.

Absent extensions, which are likely, amicus briefs in support of the petitioner will be due on June 6, 2013, and amicus briefs in support of the respondents will be due on July 8, 2013. Any questions about the case should be directed to Andrew Pincus (+1 202 263 3220) or Archis Parasharami (+1 202 263 3328) in our Washington office.

ERISA—Limitations Period for Judicial Review of Adverse Benefits Determinations

The Employee Retirement Income Security Act does not contain a statute of limitations for suits brought by plan participants to challenge the denial of benefits by a plan administrator. Rather, courts borrow the limitations period for the most analogous state statute. Often, the applicable state statute of limitations will also allow parties to contract for a shorter limitations period.

Today, the Supreme Court granted certiorari in Heimeshoff v. Hartford Life & Accident Insurance Co., No. 12-729, to determine whether (and under what circumstances) an ERISA plan can provide that the limitations period for filing a judicial action begins to run before the plan issues a final denial of the participant’s claim—that is, before the participant has exhausted administrative remedies with the plan administrator. (Exhaustion of those remedies is a prerequisite to filing an action in federal court.)

The petitioner, Julie Heimeshoff, filed a benefits claim under a group-disability-insurance policy issued and administered by Hartford. Under the policy, Heimeshoff was required to submit a written “proof of loss,” establishing her eligibility for benefits, within 90 days after the date that she believed that benefits first became payable—which was in December 2005. The Policy also included a contractual limitations provision stating that “[l]egal action cannot be taken…3 years after the time written proof of loss is required to be furnished.”

Hartford initially denied Heimeshoff’s claim in December 2005 because she had failed to provide satisfactory proof of loss. After Heimeshoff submitted additional information, Hartford reopened her claim, entertained her administrative appeal, and then finally denied her claim in November 2007.

In November 2010 (not quite three years after the final denial, but nearly five years after the original benefits determination), Heimeshoff brought suit in federal district court to challenge the denial. The district court enforced the policy’s limitations provision, dismissing the suit because it had not been brought within three years after the proof of loss was originally due in December 2005. The court also rejected Heimeshoff’s argument that she was entitled to equitable tolling of the statute of limitations, because she had received actual notice of the policy’s limitations provision before the three-year period expired.

The Second Circuit affirmed based on an earlier decision of that court, which in turn relied on decisions of the Sixth, Seventh, Eighth and Tenth Circuits, holding that ERISA allows a limitations period to begin running before the right to bring a judicial claim accrues (i.e., before administrative remedies have been exhausted), unless the application of the contractually shortened limitations period would be unreasonable in the particular case case (as, for example, when the limitations period would expire before the administrative remedies are exhausted). In contrast, the Fourth Circuit has held that limitations periods are per se unenforceable when they start to run before the time for bringing suit.

The Supreme Court granted certiorari today to resolve this circuit split. The Court’s decision will be important to all ERISA plan sponsors and administrators. Depending on the analysis employed by the Court, the decision may also affect the limitations periods applicable under other federal statutes.

Absent extensions, which are likely, amicus briefs in support of the petitioner will be due on June 6, 2013, and amicus briefs in support of the respondent will be due on July 8, 2013. Any questions about the case should be directed to Marcia Goodman (+1 312 701 7953) in our Chicago office, Maureen Gorman (+1 212 506 2679) in our New York office, or Richard Katskee (+1 202 263 3222) in our Washington office.

Today, the Supreme Court also invited the Solicitor General to file briefs expressing the views of the United States in the following cases of interest to the business community:

Republic of Argentina v. NML Capital, Ltd., No. 12-842: The question presented is whether post-judgment discovery in aid of enforcing a judgment against a foreign state can be ordered with respect to all assets of a foreign state regardless of their location or use, as held by the Second Circuit, or is limited to assets located in the United States that are potentially subject to execution under the Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. § 1602 et seq., as held by the Seventh, Fifth, and Ninth Circuits.

Texas v. New Mexico, Original No. 141: In this original-jurisdiction case, Texas alleges that New Mexico is diverting water to which Texas is entitled under the Rio Grande Compact. (There is already a case on the Court’s plenary docket—Tarrant Regional Water District v. Oklahoma Water Resources Board, in which Mayer Brown will argue for the petitioner—involving the right of the water agency that supplies the Fort Worth area to obtain water in Oklahoma under the terms of the Red River Compact.)

Mayer Brown's Supreme Court & Appellate practice ordinarily distributes a Docket Report when the Supreme Court grants certiorari in a case of interest to the business community and a Docket Report-Decision Alert when the Court decides such a case. We hope that you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Richard B. Katskee, their general editor, at rkatskee@mayerbrown.com or +1 202 263 3222).

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Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case. We hope you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Andrew Tauber, their general editor, at atauber@mayerbrown.com or +1 202 263 3324).

Mayer Brown Supreme Court Docket Reports provide information and comments on legal issues and developments of interest to our clients and friends. They are not a comprehensive treatment of the subject matter covered and are not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed. 

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