On April 16, 2013, Bancroft partner Paul D. Clement presented argument in the Supreme Court on behalf of the Guardian ad Litem as representative of respondent Baby Girl in Adoptive Couple v. Baby Girl, a Minor under the Age of Fourteen Years, Birth Father, and the Cherokee Nation, No. 12-399. The Supreme Court will review a South Carolina Supreme Court decision holding that the Indian Child Welfare Act (“ICWA”) required that at 27 months old, Baby Girl be transferred from petitioners’ custody to the custody of her biological father, whom she had never met because he had abandoned her before birth and shown no interest in her before finding out, four months after she was born, that the biological mother had placed her in an adoptive home. The Guardian argues that the South Carolina Supreme Court’s interpretation and application of ICWA in this case violated Baby Girl’s equal protection and due process rights under the U.S. Constitution. Paul D. Clement and Kelsi Brown Corkran prepared the briefing.
Adoptive Couple v. Baby Girl, a Minor under the Age of Fourteen Years, Birth Father, and the Cherokee Nation
On January 22, 2013, Bancroft lawyers Paul D. Clement and Michael H. McGinley filed a brief in the United States Supreme Court on behalf of Italian Colors Restaurant and other small businesses, as Respondents in American Express Co. v. Italian Colors Restaurant, No. 12-133. Respondents are merchants who sued American Express for violations of the federal antitrust laws. American Express seeks to compel one-on-one arbitration according to the terms of its standard arbitration clause. Those terms do not allow Respondents to share the costs of proving their claims, as they could in litigation, or to shift the costs to American Express in the event Respondents prevail, as they could under many other companies’ arbitration agreements. Respondents presented undisputed evidence that those prohibitive costs, which include an extensive expert study, would exceed each individual Respondent’s expected recovery by several hundred thousand dollars and therefore would prevent Respondents from effectively vindicating their federal antitrust rights. The question presented to the Supreme Court is whether an arbitration clause should be enforced when there is no dispute that litigants would be unable effectively to vindicate their federal statutory rights in the arbitral forum. Oral argument for the case will be on February 27, 2013.
On May 8, 2013, Bancroft lawyers Paul D. Clement and Erin E. Murphy filed an opening brief in the United States Supreme Court on behalf of petitioner in Bond v. United States, No. 08-2677. The case arises out of the federal government’s use of a statute designed to implement the United States’ treaty obligations under the 1993 Chemical Weapons Convention to prosecute petitioner for her attempt to exact revenge on her husband’s paramour by spreading toxic chemicals on her car handle, doorknob, and mailbox. On remand from the Supreme Court’s unanimous 2011 holding, in a case also briefed and argued by Paul Clement, that petitioner had standing to challenge the constitutionality of her prosecution, the Third Circuit accepted the federal government’s argument that the Supreme Court’s 1920 decision in Missouri v. Holland renders the Constitution’s structural limits on federal power irrelevant whenever Congress legislates to implement a valid treaty. The questions presented are whether the Constitution’s structural limits on federal authority impose any constraints on Congress’ power to enact legislation to implement a valid treaty, and whether the chemical weapons statute should be interpreted not to reach ordinary poisoning cases like this one, so as to avoid the difficult constitutional questions that would otherwise arise.
On November 19, 2012, and January 9, 2013, Bancroft lawyers Paul D. Clement and Michael H. McGinley filed briefs in the United States Supreme Court on behalf of the International Municipal Lawyers Association, other state and local government organizations, and the Cities of Carlsbad, California, and Dubuque, Iowa, as Respondents in Support of Petitioners in City of Arlington, Texas v. FCC, Nos. 11-1545 & 11-1547. The case involves the Federal Communications Commission’s assertion of jurisdiction to regulate state and local zoning decisions concerning personal wireless service facilities. The question presented is whether courts should defer to an agency’s determination of its own statutory jurisdiction, under Chevron, USA, Inc. v. National Resource Defense Council, Inc., 467 U.S. 837 (1984).
On January 9, 2013, Bancroft partner Paul D. Clement presented argument in the Supreme Court on behalf of Respondents in Maracich v. Spears, No. 12-25. The case involves a provision of the federal Driver’s Privacy Protection Act, 18 U.S.C. 2721 et seq., that permits disclosure of information contained in state DMV databases for use in connection with litigation. The question before the Court is whether a separate provision of the DPPA that permits bulk distribution of DMV information with consent for purposes of surveys, marketing, or solicitation somehow trumps or limits the litigation provision, such that the DPPA no longer permits disclosure or use of information in connection with litigation if it might be characterized as solicitation. The brief argues that the DPPA’s litigation provision plainly permitted Respondents to obtain and use DMV information for purposes integral to ongoing state court litigation in which they were engaged, whether or not their use of that information might be considered solicitation. Paul D. Clement and Erin E. Murphy prepared the briefing.
On February 20, 2013, Bancroft lawyer Paul D. Clement presented argument in the Supreme Court on behalf of PPL in PPL Corporation v. Commissioner of Internal Revenue, No. 12-43. The case involves the creditability for U.S. purposes of a U.K. windfall tax imposed on certain companies after their privatization in the 1980s and 1990s led to greater profitability than the U.K. government had anticipated. The question presented is whether courts should look solely at the form of a foreign tax statute when determining creditability, or should employ a substance-based approach that considers factors such as the practical operation and intended effect of the foreign tax. Paul D. Clement and Erin E. Murphy prepared the briefing.
On April 23, 2013, Bancroft lawyer Paul D. Clement presented argument in the Supreme Court on behalf of Giridhar C. Sekhar, petitioner in the case Sekhar v. United States, No. 12-357. The case concerns whether the recommendation of an attorney is “property” that can be the subject of extortion under the Hobbs Act, 18 U.S.C. § 1951(a). Sekhar’s brief argues that in enacting the Hobbs Act, Congress only intended for the Act to cover the wrongful obtaining of transferable, alienable things of value, and did not intend for it to reach intangible rights to autonomy like a recommendation or the right to make a recommendation. Paul D. Clement and George W. Hicks prepared the briefing.
On May 3, 2013, Bancroft lawyers Paul D. Clement and Jeffrey M. Harris filed a brief in the United States Supreme Court on behalf of the petitioners in Willis of Colorado, et al., v. Troice, No. 12-86. This case concerns the Securities Uniform Litigation Act of 1998 (“SLUSA”), which precludes certain state-law securities claims from being litigated as class actions. The question presented is whether a complaint that unquestionably includes SLUSA-covered allegations can nonetheless escape preclusion if the plaintiffs also allege other misrepresentations that are farther removed from covered securities. This case will likely have far-reaching implications for third-party defendants (such as banks, law firms, and insurance companies) that are sued as “aiders and abettors” of another party’s fraud. The Supreme Court will hear arguments next fall.
Crest Financial Offers Positive Scenarios If Stockholders Block Sprint-Clearwire Merger; Urges Clearwire Stockholders to Vote Against Sprint-Clearwire Combination
On May 17, 2013, Crest Financial Limited, the largest of the independent minority stockholders of Clearwire Corporation (NASDAQ: CLWR), sent a letter to Clearwire stockholders explaining the many ways that Clearwire could improve its financial position if they reject the proposed merger with Sprint Nextel Corporation. In particular, the letter explains “there are several scenarios that can be imagined in which direct bidding for Clearwire could occur.”
Crest Financial Issues Letter Urging Clearwire Shareholders to Reject Sprint Merger
On May 15, 2013, Crest Financial Limited, the largest of the independent minority stockholders of Clearwire Corporation, sent a letter to Clearwire stockholders detailing why it is asking Clearwire stockholders to reject the proposed merger with Sprint Nextel Corporation.
Crest Financial Issues Presentation Urging Clearwire Stockholders to Vote Against Sprint-Clearwire Merger
On May 8, 2013, Crest Financial filed a 40-page presentation with the SEC detailing its reasons for asking Clearwire stockholders to reject the proposed merger with Sprint Nextel Corporation. This presentation elaborates on Crest’s long-held contentions that the price Sprint is offering to pay Clearwire stockholders for their shares is highly inadequate and that the Clearwire Board entered into an unfair Merger Agreement with Sprint, is plagued by weak corporate governance, is under undue influence of Sprint and has failed to protect non-Sprint stockholders.
Crest Financial Names John Quinn to Lead Trial, Mails Proxies to Block Sprint-Clearwire Merger; Urges Holders to Vote AGAINST the Proposed Merger by Voting the GOLD Proxy Card
On May 6, 2013, Crest Financial Limited formally began its campaign to persuade Clearwire stockholders to reject the proposed merger with Sprint Nextel Corporation by mailing its proxy statement to the Clearwire stockholders. The proxy statement was cleared by the Securities and Exchange Commission on Friday, May 3. Crest also announced that an experienced team of trial lawyers from Quinn Emanuel Urquhart & Sullivan LLP, the largest U.S. law firm devoted solely to business litigation, will prosecute Crest’s claims against Sprint and Clearwire in Delaware’s Chancery Court.
Crest Financial Ltd. Files Revised Preliminary Proxy Statement to Oppose Sprint-Clearwire Merger
On April 24, April 30, and May 2, 2013, Crest Financial Limited filed with the Securities and Exchange Commission revised preliminary proxy statements urging Clearwire stockholders to reject the proposed merger with Sprint Nextel Corporation.
Crest Financial Ltd. Urges Clearwire to Shun Sprint’s “Coercive” Terms
On April 23, 2013, Crest Financial Limited wrote a letter to Clearwire’s board detailing in stark terms the damage that Crest believes Clearwire is doing to itself and its stockholders by refusing financing and spectrum-purchase offers from companies other than Sprint Nextel Corporation.
Crest Financial Ltd. Files Proxy Statement to Oppose Sprint-Clearwire Merger
On April 10, 2013, Crest Financial Limited filed with the Securities and Exchange Commission a preliminary proxy statement urging Clearwire stockholders to reject the proposed merger with Sprint Nextel Corporation.
New Report by Former FCC Commissioner Refutes Sprint Study on Value of Clearwire
On April 8, 2013, Crest filed a study with the FCC and the Securities and Exchange Commission. The new study by Harold Furchtgott-Roth, a former commissioner of the Federal Communications Commission, disputes the conclusions of a study commissioned by Sprint Nextel Corporation and a separate institutional equity research report published by DA Davidson about the value of Clearwire Corporation.
Crest Proposes Debt Financing to Clearwire As Alternative to Sprint Financing
On April 3, 2013, Crest Financial Limited proposed to provide Clearwire $240 million in financing through a convertible debt facility.
Crest Financial Ltd. Makes Demand for Clearwire’s Shareholders List and Hires Proxy Solicitation Firm D.F. King & Co.
On March 20, 2013, Crest Financial announced that it had hired D.F. King & Co. to help it oppose the proposed acquisition of Clearwire Corporation by Sprint Nextel and that it had demanded that Clearwire make available the company’s list of shareholders.
Crest Financial Ltd. files Petition to Deny with the FCC
On January 28, 2013, Crest Financial Limited formally asked the Federal Communications Commission to block the proposed mergers between Softbank and Sprint and between Sprint and Clearwire.
Petition to Deny (January 28, 2013)
Reply in Support of Petition to Deny with Report of Information Age Economics (February 25, 2013)
Report of Harold Furchtgott-Roth (March 12, 2013)
Crest Financial Ltd. files Petition for Reconsideration with the FCC
On January 4, 2013, Crest Financial Limited formally asked the Federal Communications Commission to reconsider its use of pro forma procedures to approve the purchase by Sprint of the Clearwire shares previously held by Eagle River Investments, LLC.
Petition for Reconsideration (January 4, 2013)
Reply in Support of Petition for Reconsideration (January 22, 2013)
Supplemental Letter in Support of Petition for Reconsideration (April 19, 2013)
Crest Financial Sends Letter to Mount Kellett about Clearwire and Sprint
On November 6, 2012, Crest Financial sent a letter to Mount Kellett Capital Management LP stating that Crest believes that the Softbank-Sprint merger may not be in the Company’s best interest.
Crest Financial Ltd. v. Sprint Nextel Corp.
On December 21, 2012, Crest Financial Limited, a Texas-based investment company and a substantial minority shareholder in Clearwire Corporation, filed a second amended complaint in the Delaware Court of Chancery against Sprint Nextel Corporation, Sprint Holdco LLC, Eagle River Investments LLC, Clearwire, and the members of the board of directors of Clearwire. The lawsuit alleges that the Sprint, Eagle River, and the board of director defendants breached their fiduciary duties by allowing Sprint to extract for itself the value of Clearwire’s high-speed, broadband spectrum to the detriment of Clearwire’s minority shareholders, and that the Clearwire defendants abetted that breach of duty.
Crest Financial separately requested expedited consideration of its complaint by May 2013. Crest Financial is seeking injunctive relief against Sprint’s transaction with Softbank and against Sprint’s interference with Clearwire’s previously announced plans to raise funds and build out Clearwire’s network. The lawsuit also seeks compensatory damages.
CREST FINANCIAL LIMITED AND OTHER PERSONS MAY BE DEEMED TO BE PARTICIPANTS (THE “PARTICIPANTS”) IN A SOLICITATION OF PROXIES IN RESPECT OF THE PROPOSED MERGER OF CLEARWIRE WITH SPRINT NEXTEL CORPORATION. THE PARTICIPANTS HAVE FILED A PRELIMINARY PROXY STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”). THE PRELIMINARY PROXY STATEMENT IS AVAILABLE AT NO CHARGE ON THE WEBSITE OF THE PARTICIPANTS’ PROXY SOLICITOR AT HTTP://WWW.DFKING.COM/CLWR AND ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV. THE PARTICIPANTS INTEND TO FILE WITH THE SEC A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD IN CONNECTION WITH SUCH PROXY SOLICITATION. WHEN COMPLETED, ANY SUCH DEFINITIVE PROXY STATEMENT AND PROXY CARD WILL BE FURNISHED TO SOME OR ALL OF THE STOCKHOLDERS OF THE ISSUER AND WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE ON THE WEBSITE OF THE PARTICIPANTS’ PROXY SOLICITOR AT HTTP://WWW.DFKING.COM/CLWR AND ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD (WHEN AVAILABLE) AT NO CHARGE UPON REQUEST. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION IS CONTAINED IN THE PRELIMINARY PROXY STATEMENT. STOCKHOLDERS OF THE ISSUER ARE ADVISED TO READ THE PRELIMINARY PROXY STATEMENT, WHICH IS AVAILABLE NOW, AND ANY DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS IN ANY SUCH SOLICITATION.
On October 1, 2012, Bancroft PPLC filed a complaint in the United States District Court for the District of Columbia against President Obama and the Committee on Foreign Investment in the United States (CFIUS) on behalf of Ralls Corporation, a Delaware company based in Georgia that is owned by two Chinese citizens. The complaint alleges that the President and CFIUS violated Ralls’s constitutional rights and acted in an unauthorized manner when the President, acting on a report from CFIUS and citing only unspecified “national security” concerns, ordered the prohibition of Ralls’s acquisition of four small windfarms in Oregon, barred Ralls from accessing its own property, required Ralls to destroy all items on the property, precluded Ralls’s sale of items intended for use on the property, and permitted warrantless searches of Ralls’s premises in Oregon and Georgia. Ralls contends that the government’s conduct infringes its constitutional rights to due process and equal protection, is not authorized by law, and violates the Administrative Procedure Act. On February 22, 2013, the district court held that Ralls may proceed with its constitutional claim for violation of due process, and it rejected the government’s position that the conduct of the President and CFIUS is not subject to judicial review. The case is Ralls Corporation v. Obama, No. 12-1513 (D.D.C.).