On May 21, 2015, Bancroft attorneys Paul D. Clement and D. Zachary Hudson obtained a unanimous victory in the United States Court of Appeals for the Seventh Circuit in Glickenhaus & Co. v. Household Int’l, Inc., No. 13-3532. In 2002, investors in Household International, Inc. filed suit alleging that Household and its executives made misleading statements about the company’s lending practices, financial accounting, and loan quality. After more than a decade of litigation, a U.S. district court judge entered a final judgment ordering payment of $2.46 billion, marking the largest judgment following a securities class action trial at the time. On appeal, the Seventh Circuit held that plaintiffs failed to offer adequate proof of loss causation; plaintiffs failed to establish that their losses were caused by Household’s alleged misstatements as opposed to non-fraud firm-specific factors that may have led to Household’s stock price decline during the relevant time period in contravention of the Supreme Court’s decision in Dura Pharmaceuticals, Inc. v. Broudo (2005). Plaintiffs’ expert had testified that the losses plaintiffs identified had not been caused by non-fraud factors, but the Seventh Circuit concluded that this testimony and the other limited information plaintiffs presented simply was not enough to establish loss causation. The Seventh Circuit also held that the district court instructed the jury on what it means to “make” a false statement in violation of Rule 10b-5 in a manner irreconcilable with the Supreme Court’s decision in Janus Capital Group. v. First Derivative Traders (2012). The district court had construed Janus as applicable only to legally independent third parties and not company executives. The Seventh Circuit held that Janus applies generally to all corporate speakers, including company executives, and that the district court’s contrary conclusion resulted in prejudicial error. The combination of loss causation deficiencies and Janus prejudice led the Seventh Circuit to conclude that the defendants are entitled to a new trial on these issues.
On April 28, 2015, Bancroft attorneys Paul D. Clement, Erin E. Murphy, Barbara Smith Grieco, and Taylor Meehan filed a complaint and a petition for a writ of mandamus on behalf of the State of Florida against the United States Department of Health and Human Services and the Centers for Medicare and Medicaid Services in the United States District Court for the Northern District of Florida. The State seeks injunctive and declaratory relief under the Administrative Procedure Act or, alternatively, the All Writs Act after the federal government levied an unconstitutionally coercive threat demanding that the State expand its existing Medicaid program or lose more than $2 billion in healthcare funding for safety-net hospitals, trauma centers, children’s hospitals, medical schools, local clinics, and other vital healthcare providers. That existing healthcare funding is made available through Florida’s Low Income Pool (“LIP”) program, a federal-state partnership that enables healthcare providers to offset the costs of providing health care services to underinsured and uninsured populations in Florida, costs that traditional Medicaid funding could not offset. Linking those existing healthcare dollars with Florida’s constitutionally protected decision not to expand its Medicaid program under the Affordable Care Act runs afoul of the Constitution. In 2012, the Supreme Court in NFIB v. Sebelius firmly foreclosed a nearly identical and unconstitutional attempt to coerce Florida and twenty-five other States to expand their existing Medicaid programs, lest they lose hundreds of billions of preexisting federal healthcare funding. With more than $2 billion in healthcare funding set to expire on June 30, 2015, Bancroft filed a motion for preliminary injunction and a memorandum of law in support of that motion or, alternatively, a petition for a writ of mandamus on May 5, 2015. Texas and Kansas have filed a brief as amici curiae in support of Florida.
On May 5, 2015, Bancroft attorney George W. Hicks, Jr., obtained a unanimous victory in the United States Court of Appeals for the Fourth Circuit in Bilheimer v. Federal Express Corp. Long Term Disability Plan, No. 13-1859. Hicks served as court-appointed amicus defending the judgment of the district court awarding appellee, a retired employee, benefits that he had been denied under a long-term disability plan governed by the Employee Retirement Income Security Act (ERISA). The appeal addressed two questions: (1) whether the appropriate standard of judicial review for denial of the employee’s benefits under the ERISA plan is de novo or abuse of discretion, and (2) whether the denial of the employee’s benefits was proper. The court unanimously held that de novo review is appropriate because the plan in question did not confer discretion upon the decisionmaker that ultimately denied the benefits, and it unanimously held that the evidence supported a determination that the benefits had been wrongly denied.
On April 27, 2015, Bancroft partner Paul D. Clement argued on behalf of jail officials in the U.S. Supreme Court in Kingsley v. Hendrickson, No. 14-6368. Bancroft attorneys D. Zachary Hudson and William R. Levi assisted with the briefing, as did co-counsel from Whyte Hirschboeck Dudek S.C. In 2010, pretrial detainee Michael Kingsley sued Stan Hendrickson and Fritz Degner for using excessive force while transferring him to a holding cell after he refused to remove paper covering the light above his bunk. A jury in the U.S. District Court for the Western District of Wisconsin ruled in the officers’ favor, noting that Kingsley failed to demonstrate that they recklessly disregarded his safety. The Supreme Court agreed to hear Kingsley’s case after the U.S. Court of Appeals for the Seventh Circuit affirmed the jury’s decision. While Kingsley argued pretrial detainees must prove only that the force was unreasonable, Supreme Court precedent establishes that, under the Due Process Clause, a detainee must demonstrate the guards intended to punish him. If adopted, Kingsley’s proposition would invite excessive second-guessing of the difficult choices jailers make to maintain security. The Supreme Court is expected to rule by June 2015.
Sam Hananel, Court Weighs Excessive Force against Inmates Awaiting Trial, The Associated Press (April 27, 2015)
Bruce Vielmetti, US Supreme Court Hears WI Case over Use of Force on Jail Prisoners, The Milwaukee Wisconsin Journal Sentinel (April 28, 2015)
On April 17, 2015, the National Law Journal ran a feature story on Bancroft associates Barbara Grieco, Taylor Meehan, Harker Rhodes, and Ray Tolentino. All four associates are leaving the firm for prestigious federal clerkships this summer: three at the Supreme Court of the United States (Grieco, Meehan, and Rhodes) and one on the U.S. Court of Appeals for the District of Columbia Circuit (Tolentino). The article also highlights the impressive work these associates and other Bancroft lawyers have done before the Supreme Court.
Tony Mauro, When Associates Leave Their Jobs to Clerk at the Supreme Court, The National Law Journal (Apr. 17, 2015).
On April 15, 2015, Bancroft partner Erin Murphy was named one of The National Law Journal’s “Outstanding Women Lawyers.” The list contains seventy-five “of the most accomplished female attorneys working in the legal profession today.” The article praises Erin’s first appearance in the Supreme Court and highlights other recent appellate victories.
The National Law Journal, Introducing The National Law Journal’s Outstanding Women Lawyers (Apr. 15, 2015)
The National Law Journal, Outstanding Women Lawyers – Erin Murphy (May 4, 2015)
On March 10, 2015, Bancroft partner Paul Clement argued on behalf of the International Franchise Association and several Seattle franchisees in the United States District Court for the Western District of Washington. A recently enacted Seattle ordinance, which is set to go into effect on April 1, 2015, singles out small franchised businesses for adverse treatment by forcing those businesses to adopt Seattle’s new minimum wage—the highest in the Nation—at an accelerated rate compared to their non-franchised competitors. The IFA and Seattle franchisees argued to the court that singling out franchised businesses for adverse treatment runs afoul of the Commerce Clause and other constitutional guarantees and asked the district court to enjoin the offending portions of the ordinance. If the IFA prevails, the result will be that small franchised businesses in Seattle will be treated the same as their similarly-situated non-franchised competitors.
Editorial, Seattle’s Minimum-Wage Law Unfairly Discriminates Against Franchise Owners, The Seattle Times (Mar. 10, 2015).
On March 2, 2015, Bancroft attorney Paul D. Clement presented oral argument in the United States Supreme Court in Arizona State Legislature v. Arizona Independent Redistricting Commission, No. 13-1314, on behalf of appellant Arizona State Legislature. Bancroft attorneys George W. Hicks, Jr., Taylor Meehan, and Raymond P. Tolentino assisted with the briefing. The question presented is whether the Elections Clause of the United States Constitution and 2 U.S.C. § 2a(c) permit the displacement of the Arizona State Legislature’s redistricting authority by an independent commission. The Court also requested briefing and argument on the question whether the Arizona State Legislature has standing to bring this suit. Arizona voters passed Proposition 106, which amended the state constitution to remove redistricting authority from the state legislature and place it in the hands of the Arizona Independent Redistricting Commission. But the Elections Clause provides that the “Times, Places and Manner” of holding congressional elections “shall be prescribed in each State by the Legislature thereof.” In a divided decision, a three-judge district court panel held that this displacement of the Arizona Legislature’s redistricting authority does not violate the Elections Clause. The Supreme Court is expected to issue a decision no later than June 2015.
Adam Liptak, Court Skeptical of Arizona Plan for Less-Partisan Congressional Redistricting, The New York Times (Mar. 2, 2015)
Brent Kendall, Supreme Court Skeptical of Arizona Initiative on Congressional Districting, The Wall Street Journal (Mar. 2, 2015)
Lyle Denniston, Literalism vs. the Power of the People, SCOTUSblog (Mar. 2, 2015)
On February 13, 2015, Bancroft attorneys Paul Clement, Erin Murphy, Will Levi, and Taylor Meehan filed a response brief in the United States Court of Appeals for the Third Circuit on behalf of the NCAA, NBA, NFL, NHL, and the Office of the Commissioner of Baseball. This appeal is the second round of litigation involving New Jersey’s efforts to once again circumvent the Professional and Amateur Sports Protection Act of 1992 (PASPA), a federal law prohibiting the spread of state-sponsored sports gambling. After the Sports Organizations successfully defeated the state defendants in the first round of litigation, the New Jersey Legislature passed new legislation allowing exclusively Atlantic City casinos and New Jersey racetracks to offer sports gambling. The Sports Organizations successfully moved for summary judgment enjoining that new legislation, and the state defendants appealed. On appeal, the Sports Organizations explain that the newly passed state legislation unlawfully authorizes Atlantic City casinos and New Jersey racetracks to offer sports gambling and is no different in effect than New Jersey’s predecessor law so clearly in violation of PASPA.
After “another stunning year,” The Legal 500 recognized Bancroft as the 2014 “Supreme Court and Appellate Team of the Year.” Highlighting the firm’s victories in Bond v. United States, Northwest v. Ginsberg, and McCutcheon v. FEC, the award announcement declared that Bancroft “continues to be a natural choice to conduct difficult and high-profile matters before the highest court in the land.”