On Monday at 9:30 a.m. we expect orders from the March 7 Conference, followed by one or more opinions in argued cases at 10:00 a.m. The live blog will be available here beginning at 9:15. The next Conference is scheduled for March 21. Our list of “Petitions to watch” for that Conference will be available soon.
The petition of the day is:
Issue: Whether an individual may be held personally liable for a corporation’s violation of the Fair Labor Standards Act merely because the individual had general control over corporate affairs, but exercised no personal responsibility over the conduct that caused the violation.
The last argument of the March argument calendar, Halliburton Co. v. Erica P. John Fund, has the potential to become one of the most important business-law cases of the decade, but only if the Justices decide to overrule the 1988 decision in Basic Inc. v. Levinson. Given the significance of the case, perhaps readers will excuse a much longer than normal summary of the argument here.
As every securities and class-action lawyer in the country must know, Justice Blackmun, writing for a four-Justice Court (only six Justices participated), held in Basic that a Rule 10b-5 class action can proceed based on a misrepresentation alleged to have affected the price of a stock, without any proof that the individual members of the class were aware of the misrepresentation. Specifically, the Court held, it satisfied the “reliance” requirement of Rule 10b-5 that class members made purchases in a market presumably affected by the misrepresentation. After a flurry of separate opinions in recent years calling into question the underpinning of Basic, the Court granted review in this case to consider overruling Basic.
Legal academics are playing an unusually prominent role in Halliburton Co. v. Erica P. John Fund, Inc., argued on Wednesday. At issue is whether the Court should rethink its approach to securities class actions established in Basic Inc. v. Levinson, and, if so, what the new standard should be. In Basic, a four-Justice majority embraced the “efficient capital markets hypothesis,” which assumes that capital markets integrate all public information into a stock price, and thus that purchase and sale price is always affected by material misrepresentations. As a result, plaintiffs do not have to prove that they relied on the misrepresentation when they purchased or held the stock, which makes bringing a class action on behalf of securities holders a much easier proposition. Halliburton, the petitioner in the case, is hoping to put an end to that presumption, replacing it with the requirement that securities plaintiffs first prove that the misrepresentations actually distorted the market price for the stock. At the very least, Halliburton wants the opportunity to rebut the presumption prior to class certification. Academic commentators have had a lot to say on this topic, and the Supreme Court appears to be listening.
The Oyez Project has posted recordings from this week’s oral arguments. The Court heard arguments this week in:
John Elwood reviews Monday’s relisted cases from aboard Virgin America #84 over Red Cloud, Nebraska
Good news for those mourning the conclusion of this year’s award season: the Court has been busy this week burnishing its own versions of little golden idols statuettes, and winnowing its list of award winners. So thank your lucky stars—be they falling, fading, or shooting – and brace yourself for another week’s Relist Watch.
The American Constitution Society will be hosting a briefing on the challenges to the Affordable Care Act’s contraception mandate. The event, which is open to the public, will be held at the Center for American Progress on March 12 from 9:00 a.m. to 11:00 a.m. For more information and to RSVP, visit ACS’s website.
- At the Maryland Appellate Blog, Steve Klepper contends that, “consciously or unconsciously,” the Chief Justice’s “background as a civil litigator informed his dissent” in last week’s decision in Kaley v. United States, in which the Court held that a criminal defendant whose assets are frozen is not entitled to a pre-trial hearing to challenge the probable cause for his indictment. Continue reading »
The petition of the day is:
Issue: Whether the Third Circuit erred in constructing a new test for the application of Bethel School District No. 403 v. Fraser that would prohibit regulation of lewd expression in the public schools, even in the absence of issue preclusion; (2) whether the Third Circuit misapplied the narrowest grounds doctrine to hold that Morse v. Frederick dictated a modification of the holding in Fraser by creating a two-part test for regulation of expression controlled by Fraser; and (3) whether the Third Circuit abused its discretion in failing to give due deference to school administrators’ objectively reasonable determination that a sexual double entendre constituted lewd or vulgar speech which could be prohibited under Fraser.
Diane Marie Amann is the Emily and Ernest Woodruff Chair in International Law at the University of Georgia School of Law.
The Supreme Court yesterday decided its first arbitration case involving a sovereign nation-state much as it would any other international commercial arbitration matter. Overturning an appellate ruling that a private investor’s failure to fulfill a treaty requirement had deprived arbitrators of jurisdiction, the Court’s seven-member majority effectively reinstated a multimillion-dollar arbitral award against the sovereign state, the Republic of Argentina. The judgment rebuffed a treaty interpretation proffered by the United States, which had briefed and argued the case as an amicus. Yet the Court left open the question of how it would interpret certain investment treaties to which the United States is party.