Significant Matters

United States v. Warner

On September 17, 2014, Bancroft attorney Paul Clement presented oral argument before the United States Court of Appeals for the Seventh Circuit in United States v. Warner, No. 14-1330.  The case involves the government’s appeal of a probation sentence imposed on H. Ty Warner for committing one count of tax evasion in connection with failure to disclose an offshore bank account.  In a brief filed on July 9, 2014, Clement and Bancroft attorney Erin Murphy argued that the District Court acted well within its discretion in concluding that Mr. Warner’s many extraordinary acts of charity and kindness throughout his life, combined with the complete absence of any risk of recidivism and the deterrence achieved by, inter alia, the more than $50 million civil fine that he has paid, all combine to make a probation sentence—the sentence most commonly imposed in offshore tax cases—appropriate in the unique circumstances of this case.

Defendant-Appellee Brief

Smith v. Delta Air Lines

On April 17, 2014, Bancroft attorneys Paul D. Clement and Jeffrey M. Harris secured victory for Delta Air Lines before the U.S. Court of Appeals for the Eleventh Circuit in Dennis Smith v. Delta Air Lines, Inc. et al., No. 13-15155.  A former employee brought a class-action suit against Delta under ERISA after he participated in Delta’s Employee Stock Ownership Plan and lost money when the price of Delta stock declined between 2000 and 2004.  The District Court dismissed the claim, and the Eleventh Circuit affirmed.  The plaintiff argued that it was “imprudent” for the Plan to continue investing in Delta stock while the company was encountering financial difficulties, but the Eleventh Circuit disagreed.  The court noted that it was “not at all obvious at the time” that the investments were imprudent, and that “a reasonable fiduciary could have concluded that investments in Delta stock during the class period remained appropriate.”

The plaintiffs also sought panel rehearing and rehearing en banc in light of the Supreme Court’s recent decision in Fifth Third Bancorp v. Dudenhoeffer, No. 12-751, but the Eleventh Circuit unanimously denied that petition on September 10, 2014.

Brief for Appellees

Ricardo Rivera-Gomez v. Eric H. Holder, Jr., Attorney General

On September 3, 2014, Bancroft partner Erin Murphy secured a unanimous victory before the United States Court of Appeals for the Ninth Circuit in Rivera-Gomez v. Holder, No. 12-70147, a pro bono case that she argued on behalf of a Honduran citizen seeking to reopen his removal proceedings.  The court concluded that the Board of Immigration Appeals abused its discretion by denying petitioner’s motion to reopen notwithstanding compelling evidence that the persecution he faces in Honduras on account of his refusal to join a gang has significantly worsened since he was ordered removed.  This is one of multiple cases in which Bancroft has successfully partnered with an immigration law clinic to provide pro bono assistance to individuals seeking asylum or withholding of removal.

Court Order


Asbestos Personal Injury Plaintiffs v. The Travelers Indemnity Company

On July 22, 2014, Bancroft secured a unanimous victory in the United States Court of Appeals for the Second Circuit in Asbestos Personal Injury Plaintiffs v. The Travelers Indemnity Company, No. 12-1094. Reversing a February 2012 decision by the U.S. District Court for the Southern District of New York, the Second Circuit ordered Travelers Cos. to pay more than $500 million to people who suffered from asbestos-related diseases. The settlement stemmed from Travelers’ insurance of the bankrupt Johns-Manville Corporation, an insulation manufacturer, which the plaintiffs believe exposed them to asbestos. The Second Circuit’s ruling reinstates a 2011 U.S. Bankruptcy Court decision in favor of the claimants.

Ralls Corporation v. Committee on Foreign Investment in the United States

On July 15, 2014, Bancroft attorneys Paul D. Clement, Viet D. Dinh, H. Christopher Bartolomucci, and George W. Hicks, Jr. secured a unanimous victory for Bancroft client Ralls Corporation in the United States Court of Appeals for the District of Columbia Circuit in Ralls Corp. v. Committee on Foreign Investment in the United States, No. 13-5315.  In September 2012, the President, acting on a report from the Committee on Foreign Investment in the United States (CFIUS) and citing only unspecified “national security” concerns, issued an order under Section 721 of the Defense Production Act that prohibited Ralls’s acquisition of four small windfarms in Oregon, barred Ralls from accessing its own property, and required Ralls to destroy all items on the property.  On behalf of Ralls, Bancroft brought suit claiming that the President and CFIUS had violated Ralls’s rights under the Constitution and Administrative Procedure Act.  The district court dismissed the suit, but the D.C. Circuit unanimously reversed, concluding that the President’s order deprived Ralls of property without due process of law.  The court held that the property interests that Ralls held at the time of the President’s order were constitutionally protected, and it held that before the issuance of such an order, a party must be informed of the official action, be given access to the unclassified evidence relied upon for the action, and be afforded an opportunity to rebut that evidence—none of which procedural protections Ralls received.  The court also held that Ralls was entitled to challenge orders by CFIUS preceding the President’s order as violating the Constitution and the Administrative Procedure Act even though they had been superseded by the President’s order, because those orders were capable of repetition but evaded review.



Burwell v. Hobby Lobby

On June 30, 2014, Bancroft attorneys Paul D. Clement and Michael H. McGinley secured a victory in the Supreme Court of the United States for the companies in Burwell v. Hobby Lobby Stores, Inc., No. 13-354, and Conestoga Wood Specialties Corp. v. Burwell, No. 13-356.  The question presented in the consolidated cases was whether the Department of Health and Human Services’ contraception mandate violates the companies’ rights under the Religious Freedom Restoration Act of 1993 (RFRA) or the First Amendment.  The companies’ owners operate their businesses according to deeply held religious beliefs that prohibit them from providing health care coverage for abortion-causing drugs and devices, including four out of the twenty mandated contraceptives.  The Supreme Court held that RFRA protects the companies’ religious free exercise rights and that the contraceptive mandate violates RFRA.

Supreme Court Opinion
Merits Brief for Respondents
Certiorari Brief for Respondents

ACE Securities Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB Structured Products Inc.

On June 26, 2014, the New York Court of Appeals granted the motion by Bancroft client HSBC Bank USA, N.A., as Trustee for a residential mortgage backed securities (RMBS) trust, for leave to appeal from the decision of the New York State Appellate Division, First Department, dismissing the Trustee’s claim.  Bancroft attorneys Paul D. Clement, Erin E. Murphy, and Stephen V. Potenza prepared the brief in support of the motion.  In the lawsuit, the Trustee seeks to enforce defendant DB Structured Products’ obligation to cure or repurchase defective loans pursuant to a RMBS contract.  On motion to dismiss, the trial court rejected the defendant’s arguments that the Trust’s claim is time barred under the applicable statute of limitations, but the First Department reversed.  The questions accepted for review by the Court of Appeals are: (1) Whether an RMBS contract obligates the sponsor to cure or repurchase loans upon notice or discovery that the loans do not comply with the sponsor’s repurchase accrue when the sponsor fails to cure or repurchase within the time period specified by the contract, or when the contract was made; and (2) Whether this action was timely filed even if the claim for breach of the RMBS contract accrued when the contract was made.  The Court of Appeals will likely hear the case in late 2014 or early 2015.

Memorandum of Law In Support of Plaintiff-Appellant’s Motion for Leave to Appeal to the Court of Appeals

American Broadcasting Companies v. Aereo

On June 25, 2014, Bancroft attorneys Paul D. Clement, Erin E. Murphy, and Barbara A. Smith secured a victory in the Supreme Court of the United States on behalf of petitioners (television producers, marketers, distributors, and broadcasters) in American Broadcasting Companies, Inc., et. al. v. Aereo, Inc., No. 13-461.  By a vote of 6-3, the Court ruled against Respondent Aereo, which is in the business of capturing over-the-air television broadcasts and retransmitting them over the internet for profit to tens of thousands of public members without permission from underlying copyright holders.  The Court held that Aereo “performs” petitioners’ works “publicly” within the meaning of the Transmit Clause, in violation of the Copyright Act.”

Supreme Court Opinion
Petition for Writ of Certiorari


Western Conference of Teamsters Pension Trust Fund and Countrywide Financial Corp. v. FDIC

On June 24, 2014, Bancroft attorneys Paul D. Clement, Jeffrey M. Harris, and Candice Chiu filed an opening brief in the United States Court of Appeals for the Ninth Circuit on behalf of Objectors-Appellants challenging the $500 million class-action settlement of investor lawsuits against Countrywide and its affiliates over their mass-production and sale of mortgage-backed securities backed by improperly underwritten Countrywide mortgages.  The district court below certified the settlement class and approved the settlement, despite having previously ruled that named plaintiffs lacked standing to represent the vast majority of the class and that still other class members’ claims were barred on tolling grounds.  Bancroft, representing Objectors-Appellants Broderick CDO 2 Ltd., Cimarron CDO, Ltd., Crystal Cove CDO, Ltd., Duke Funding IX, Ltd., G Square Finance 2006-1 Ltd., Hout Bay 2006-1 Ltd., Kleros Preferred Funding, Ltd., Millstone II CDO Ltd., Millstone III CDO, Ltd., and Millstone IV CDO, Ltd., argues that if named plaintiffs and their counsel lacked standing to represent the lion’s share of the class, they could not possibly be “adequate” and “typical” class representatives in settling their claims.  Bancroft further argues that the district court should not have approved the settlement as “fair, reasonable, and adequate,” particularly when the class members orphaned by the standing and tolling rulings saw their claims sacrificed for fractions of a cent on the dollar.  The case is Western Conference of Teamsters Pension Trust Fund and Countrywide Financial Corporation v. Federal Deposit Insurance Corp., Nos. 14-55120, 14-55121, 14-55122, 14-55125, 14-55128, & 14-55140.

Opening Brief 

NCAA v. Governor of New Jersey

On September 17, 2013, Bancroft lawyers Paul Clement, Erin Murphy, Candice Chiu, and Will Levi secured victory in the United States Court of Appeals for the Third Circuit on behalf of the NCAA, NBA, NFL, NHL, and Office of the Commissioner of Baseball.  The Sports Organizations had sued to halt New Jersey’s efforts to license gambling on certain sporting events as an unambiguous violation of the Professional and Amateur Sports Protection Act of 1992 (PASPA), a federal law that prohibits the spread of state-sponsored sports gambling.  New Jersey, meanwhile, had contended that the Sports Organizations lacked standing and that PASPA itself violates the U.S. Constitution.  In a 2-1 opinion by Judge Fuentes, the Third Circuit affirmed the district court’s grant of summary judgment to the Sports Organizations.  The Third Circuit first reached the “straightforward conclusion” that the Sports Organizations have standing to enforce a prohibition on state-licensed gambling on their own athletic contests.  The Third Circuit then proceeded to reject each of New Jersey’s constitutional attacks on PASPA, agreeing with the Sports Organizations that the law “neither exceeds Congress’ enumerated powers [under the Commerce Clause] nor violates any principle of federalism implicit in the Tenth Amendment or anywhere else in our Constitutional Structure.” On June 23, 2014, the Supreme Court denied petitions for certiorari filed by New Jersey and the other appellants-defendants.

Response Brief

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