Significant Matters

Mylan Pharmaceuticals v. Apotex Inc.

On September 8, 2015, Bancroft attorneys Paul D. Clement, D. Zachary Hudson, and Edmund G. LaCour Jr. filed a petition for certiorari in the United States Supreme Court on behalf of petitioner Mylan Pharmaceuticals.  Apotex filed suit against Daiichi Sankyo, Inc. seeking a declaratory judgment that its generic version of a Daiichi Sankyo drug would not infringe one of the patents associated with the drug.  Daiichi Sankyo—and Mylan as intervenor—argued that Apotex lacked standing to bring suit:  Daiichi Sankyo had disclaimed the patent at issue years earlier and thus there could be no case or controversy regarding infringement of that patent.  In Apotex Inc. v. Daiichi Sankyo, Inc., the Federal Circuit held that Apotex had standing to bring suit notwithstanding Daiicho Sankyo’s disclaimer because a judgment of non-infringement could trigger certain statutory consequences under the Hatch-Waxman Act.  The questions presented are: (1) whether Article III’s case or controversy requirement can be satisfied when the suit seeks a judgment of non-infringement of a disclaimed patent, and (2) whether Congress can create Article III jurisdiction by imposing statutory consequences that turn on obtaining a judgment of non-infringement of a disclaimed patent.

Cert Petition
John Kennedy, Mylan Takes Benicar Patent Dispute to the Supreme CourtLaw360 (Sept. 21, 2015)

FERC v. Electric Power Supply Association, et al.

On August 31, 2015, Bancroft filed a brief for the respondents in the United States Supreme Court in FERC v. Electric Power Supply Association, et al., No. 14-840, and EnerNOC, Inc., et al., v. Electric Power Supply Association, et al., No. 14-841. The Federal Power Act grants FERC jurisdiction to regulate wholesale sales of electricity in interstate commerce while reserving for the States the exclusive power to regulate retail sales of electricity to consumers. Although States can and do regulate retail demand as part of their exclusive jurisdiction over the retail markets, FERC claims that it, too, may regulate retail demand, by requiring wholesale-market operators to pay retail customers to forego retail electricity purchases at certain times of day.  FERC has asserted this power as part of an avowed effort to countermand the policy choices of many state and local regulators to keep retail rates fixed and stable even though FERC-regulated wholesale rates fluctuate throughout the day to reflect changes in supply and demand.

A group of electric utilities, competitive power suppliers, and not-for-profit electric cooperatives challenged FERC’s regulatory scheme in the U.S. Court of Appeals for the District of Columbia Circuit, and the court agreed with the challengers that FERC’s rule exceeds its jurisdiction.  The court further concluded that even if the rule were within FERC’s jurisdiction, it would still have to be vacated because FERC acted arbitrarily and capriciously in adopting it.  The Supreme Court granted petitions for certiorari to review the Circuit Court’s opinion. Representing the respondents defending the D.C. Circuit’s decision, Bancroft attorneys Paul D. Clement, Erin E. Murphy, and Edmund G. LaCour Jr. argued that FERC exceeded its jurisdiction by claiming the power to regulate retail demand. Bancroft also argued that FERC’s compensation formula for reduced retail demand is irrational and fails to further FERC’s professed goal of better aligning retail and wholesale rates. Oral argument is set for October 14, 2015.

Ameritox v. Millennium Labs

On September 3, 2015, Bancroft attorneys Paul D. Clement, H. Christopher Bartolomucci, and D. Zachary Hudson secured a unanimous victory for Millennium Labs in the United States Court of Appeals for the Eleventh Circuit in Ameritox, Ltd. v. Millennium Laboratories, Inc., No. 14-14281.  Ameritox brought suit against Millennium alleging violations of the Lanham Act and several state unfair competition statutes.  Before trial, Ameritox’s lone federal claim dropped out of the case and, despite the fact that there was no diversity jurisdiction, the district court proceeded to hold a trial involving only state law claims.  At the end of that trial, which involved the application of the unfair competition laws of nine different states, the jury returned a verdict in favor of Ameritox.  On appeal, the Eleventh Circuit held that the district court’s decision to retain jurisdiction over novel and complex state law claims involving the law of nine different states constituted an abuse of discretion and vacated the judgment.


NCAA v. Governor of New Jersey II

On August 25, 2015, Bancroft attorneys Paul Clement, Erin Murphy, Will Levi, and Taylor Meehan secured a victory in the U.S. Court of Appeals for the Third Circuit in NCAA v. Governor of New Jersey  (Nos. 14-4546, 14-4568, and 14-4569) on behalf of the NCAA, NBA, NFL, NHL, and the Office of the Commissioner of Baseball.*  This appeal was 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, in 2014 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 law, and the state defendants appealed.  On appeal, the Sports Organizations explained that the newly passed state legislation unlawfully authorized Atlantic City casinos and New Jersey racetracks to offer sports gambling and was no different in effect than New Jersey’s predecessor law that was struck down originally.  The Third Circuit agreed, finding that “PASPA, by its terms, prohibits states from authorizing by law sports gambling, and the 2014 Law does exactly that.”

*Will Levi and Taylor Meehan left the firm before the Third Circuit announced its ruling.


American Council of Life Insurers v. District of Columbia Health Benefit Exchange Authority, et al.

On June 23, 2015, Bancroft filed a reply brief on appeal before the United States Court of Appeals for the District of Columbia Circuit in American Council of Life Insurers v. District of Columbia Health Benefit Exchange Authority, et al., No. 14-7206. The District of Columbia has funded the operation of its healthcare exchange by imposing user fees on insurance products that cannot be sold on the exchange. In 2014, the American Council of Life Insurers, which represents approximately 300 insurance companies—many of which are subject to the assessment—filed suit to prevent the District from collecting these fees. That motion was dismissed by the District Court. On appeal, Bancroft attorneys Paul D. Clement, Erin E. Murphy, and Barbara S. Grieco argued that the District’s funding mechanism violates and is preempted by the Affordable Care Act’s mandate that state health care exchanges be “self-sustaining.” Bancroft also argued that by imposing what amount to user fees on non-users, the District has violated the Takings, Due Process, and Equal Protection clauses of the Constitution, all of which prohibit singling out groups and requiring them to pay special fees without receiving special benefits. Finally, the firm argued that the District violated non-delegation principles by allowing the Health Care Exchange Authority to impose these fees without any limiting factor on entities it does not even regulate.

Opening Brief for Plaintiff-Appellant
Reply Brief for Plaintiff-Appellant

Franchise Tax Board of the State of California v. Hyatt

On June 30, 2015, the Supreme Court granted certiorari in Franchise Tax Board of the State of California v. Hyatt, No. 14-1175.  Bancroft attorneys Paul D. Clement, George W. Hicks, Jr., and Stephen V. Potenza represent petitioner Franchise Tax Board, the sovereign taxing authority of the State of California.  The Board conducted an audit of respondent Gilbert Hyatt and concluded that he had falsely claimed residency in Nevada to avoid substantial California income taxes.  Hyatt sued the Board in Nevada state court, alleging various intentional torts arising out of the Board’s audit, and was awarded $490 million.  On appeal, the Nevada Supreme Court refused to apply a $50,000 cap on compensatory damages that Nevada law applies to its own agencies sued in Nevada courts.  The Supreme Court of the United States agreed to review the following questions:  (1) Whether Nevada may refuse to extend to sister States haled into Nevada courts the same immunities Nevada enjoys in those courts; and (2) whether Nevada v. Hall, 440 U.S. 410 (1979), which permits a sovereign State to be haled into the courts of another State without its consent, should be overruled.

Merits Brief

You can find links to the petition for certiorari and reply here:

Glickenhaus & Co. v. Household Int’l, Inc.

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.

Opening Brief for Defendants-Appellants
Reply Brief for Defendants-Appellants

Scott v. U.S. Dep’t of Health & Human Services

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.

Complaint for Injunctive and Declaratory Relief
Petition for Writ of Mandamus
Memorandum of Law in Support of Preliminary Injunction or Writ of Mandamus

Bilheimer v. Federal Express Corp. Long Term Disability Plan

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.


Kingsley v. Hendrickson

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 (Apr. 27, 2015)

Bruce Vielmetti, US Supreme Court Hears WI Case over Use of Force on Jail Prisoners, The Milwaukee Wisconsin Journal Sentinel (Apr. 28, 2015)