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22 September 2008

Among business cases, pre-emption looms large
The National Law Journal

National Law Journal; September 22, 2008

Andy Pincus quoted on pre-emption.  “It seems to me if you’re looking for the issue keyed up front and center for business in the new term, it’s pre-emption.  There were so many cases last term and the issue is arising in so many areas- in courts and in Congress.”  The business community is focused on pre-emption because it seeks one set of rules “that it can play by.  There is one set of rules across Europe, but having the federal regulatory system and the tort liability and jury systems makes it harder for US businesses to compete here and harder to compete around the world,” he said.

WASHINGTON — The Roberts Court's affinity for issues close to the heart of the nation's business community will continue into the October 2008 U.S. Supreme Court term as the justices take on major questions concerning federal pre-emption of state tort suits, environmental regulation, workplace discrimination, arbitration, pensions and antitrust.

The court has agreed to decide 15 business-related cases thus far, noted Mark I. Levy, chairman of the Supreme Court and appellate advocacy practice in the Washington office of Atlanta's Kilpatrick Stockton. "That's a pretty impressive number, about 30 to 40% of the docket, and a number in line with what the court had last term and where it was 10 years ago," he said. "That is a trend that is continuing."

The argument docket, which is likely to increase in number after the justices' summer conference on Sept. 29, is also notable for the type of business cases not there yet, but which have been something of a staple in recent terms: patent, securities and tax. And what was missing last term has returned: environmental cases — significantly, four very different ones — and an antitrust challenge.

"There also are a significant number of labor and employment cases on the docket," said Levy, adding, "I think that is a trend and probably reflects the underlying circumstances of our society and the legal system. We see a lot of ERISA [Employee Retirement Income Security Act] and age discrimination cases as the work force ages."

The justices in the new term also return to an issue that dominated the business docket last term — pre-emption.

"It seems to me if you're looking for the issue keyed up front and center for business in the new term, it's pre- emption," said high court veteran litigator Andrew J. Pincus, partner in the Washington office of Chicago's Mayer Brown. "There were so many cases last term and the issue is arising in so many areas — in courts and in Congress."

The business community is focused on pre-emption because it seeks one set of rules "that it can play by," he said, adding, "There is one set of rules across Europe, but having the federal regulatory system and the tort liability and jury systems makes it harder for U.S. business to compete here and harder to compete around the world."

Pincus, Levy and others said all eyes are on Wyeth v. Levine, No. 06-1249, stemming from a personal injury suit by Diana Levine, a musician whose arm was amputated after complications following injection of a drug made by Wyeth. Wyeth is asking the justices if federal law pre-empts a state law personal injury action against a drug manufacturer for failing to include a warning label when the drug at issue met the labeling requirements of the U.S. Food and Drug Administration.

"The impact [of a pro-pre-emption ruling in Wyeth] would be enormous," said Allison Zieve of Public Citizen Litigation Group, supporting Levine. "It would say even though we've had 70 years of federal regulation of pharmaceutical drugs and product liability suits, in fact these suits were pre-empted all along. The reason it goes that far is because there is really nothing unique about Diana Levine's case; it's a fairly run-of-the-mill tort case, so a pro-pre-emption decision would be hugely significant and an unnecessary rewrite of pre-emption law."

The court's second pre-emption challenge — Altria v. Good, No. 07-562 — asks whether the Maine Unfair Trade Practices Act is pre-empted by the Federal Cigarette Labeling and Advertising Act in a suit brought by cigarette smokers alleging that Altria Group Inc. misrepresented its product as "light" and having "lowered tar and nicotine."

Environmental battles

The four environmental cases on the docket thus far are:

• Summers v. Earth Island Institute, No. 07-463, stemming from a lawsuit against the U.S. Forest Service over regulations limiting notice, appeals and public comment for certain activities.

• Winter v. Natural Resources Defense Council, No. 07-1239, in which the Navy, which did not complete an environmental impact statement, challenges an injunction on sonar training exercises that could harm marine mammals.

• Entergy Corp. v. EPA, nos. 07-588, -589, -597, raising the issue of whether the Clean Water Act authorizes the Environmental Protection Agency to weigh costs and benefits of systems to be used at water cooling structures rather than using the most advanced technology available.

• Coeur Alaska Inc. v. Alaska Conservation Group, nos. 07-984, -990, in which a gold mining company and Alaska challenge a bar against an Army Corps of Engineers permit for discharging toxic tailings into the Lower Slate Lake.

John Echeverria, director of Georgetown University Law Center's Environmental Law & Policy Institute, noted that environmental groups won in the lower courts in all four cases and he voiced pessimism about the justices' rulings.

"The Supreme Court increasingly has become the place where environmental laws go to die, and the coming term doesn't look like it's going to be any more positive for the environment," he said. "Most interesting," said Echeverria, is Winter — a dispute between national security concerns and environmental protection — and Entergy, raising a "fundamental question" about cost-benefit analysis.

Environmental scholar Amy Sinden of Temple University James E. Beasley School of Law also flagged Entergy, saying, "It's really about an economic framework in which we monetize all values in environmental policy. Industry from the beginning has argued for cost-benefit analysis because environmental values tend to get undervalued."

The court has two major job bias cases involving Title VII of the 1964 Civil Rights Act in a term with "significant stakes for women," said Dina Lassow, senior counsel at the National Women's Law Center.

In Crawford v. Metropolitan Gov't of Nashville, No. 06-1595, the justices will decide whether Title VII protects someone who is fired because she cooperated in her employer's investigation of sexual harassment complaints against another employee. At issue is the scope of Title VII's "opposition" and "participation" clauses.

"The court has been favorable to employees in retaliation cases recently," said Lassow. "The 6th Circuit decision created a clear gap that I don't think Congress possibly intended."

AT&T v. Hulteen, No. 07-543, stems from a suit by a group of AT&T employees who claim that their smaller pensions resulted from the company's failure to give them full credit for pregnancy leaves taken before the effective date of the Pregnancy Discrimination Act, violating Title VII.

In addition, the high court finally has an ERISA case "that people can understand," chuckled Kilpatrick's Levy, and it happens to be one he will argue.

In Kennedy v. Dupont Plan Administrator, No. 07-636, the court will decide if ERISA's rule that pension benefits may not be assigned or alienated prevents enforcement of a spouse's waiver in a divorce decree of her rights to her husband's pension benefits, particularly when the husband never removed her as beneficiary.

The justices have two arbitration cases, the most potentially significant of which is 14 Penn Plaza v. Pyett, No. 07-581, asking whether an arbitration clause in a collective bargaining agreement is a waiver of an employee's right to sue for violations of anti-discrimination law. Vaden v. Discover Bank, No. 07-773, involves both arbitration and pre-emption, asking whether federal courts have jurisdiction to enforce a state law arbitration agreement and whether the claims here are pre-empted by the Federal Deposit Insurance Act.

The court's only antitrust challenge this term is Pacific Bell v. Linkline Communications, No. 07-512. It asks whether Section 2 of the Sherman Antitrust Act permits a "price squeeze" claim if the defendant has no duty to deal.

Reprinted with permission from the September 22, 2008 edition of National Law Journal © 2008 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.


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