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In its conference of March 24, 2017, the court will consider petitions involving issues such as whether Item 303 of Securities and Exchange Commission Regulation S-K creates a duty to disclose that is actionable under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5; whether the proper test for determining non-statutory insider status requires bankruptcy courts to conduct an “arm’s length” analysis or to apply a “functional equivalent” test; and whether reasonable jurists could disagree that, by anticipatorily applying a procedural default not actually grounded in state law, a district court abused its discretion when it refused a routine stay and amendment necessary to exhaust claims associated with newly discovered evidence revealing overt discrimination in the prosecution’s decision to seek the death penalty.

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On Wednesday, the court heard oral argument in Water Splash v. Menon, a case about the meaning of the Hague Service Convention. In particular, the dispute concerns Article 10 of the Convention, which has three parts. First, Article 10(a) preserves individuals’ “freedom to send” judicial documents abroad by “postal channels” when the receiving country does not object. In contrast, Articles 10(b) and 10(c) reference freedom to “effect service” across borders via judicial officers. The case turns on whether the freedom to “send” judicial documents encompasses service of a complaint by mail, or if – as Menon argued successfully in the Texas 14th Court of Appeals – that provision refers only to sending documents for other purposes. If Article 10(a) does encompass service by mail, then Water Splash’s complaint against Menon was likely properly served; if it doesn’t, then Menon was within her rights to ignore the complaint, as she did.

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The confirmation hearing for Judge Neil Gorsuch continues today, as senators hear from a variety of witnesses who are testifying for and against Gorsuch’s nomination to fill the vacancy left by the death of Justice Antonin Scalia. However, this morning’s biggest news on the Gorsuch nomination came from outside the hearing room. In an announcement made over Twitter this morning, Senate Minority Leader Chuck Schumer announced that he “cannot support Judge Neil Gorsuch’s nomination to the Supreme Court.” That announcement was hardly a surprise. And because Republicans currently hold 52 of the 100 seats in the U.S. Senate, they wouldn’t need Schumer’s vote to confirm Gorsuch on a straight up-or-down vote. However, Schumer also seemed to suggest that he would support a filibuster of the Gorsuch nomination. Under the current Senate rules, if the Democrats were to threaten a filibuster, Republicans would need at least 60 votes to force a vote on the nomination – a process known as “cloture.” Schumer warned that “Judge Gorsuch’s nomination will face a cloture vote & as I’ve said, he will have to earn sixty votes for confirmation.” Schumer’s vote on cloture, he indicated, will be “no.” There was no indication yet, though, that 40 senators would vote against cloture to sustain a filibuster. A filibuster would put the ball in the Republicans’ court, possibly leading them to eliminate the filibuster for Supreme Court nominees, which would allow Gorsuch to be confirmed by a simple majority. Democrats made a similar change, known as invoking the “nuclear option,” to confirm lower-court nominees in 2013. That move drew strong condemnation at the time from Sen. Mitch McConnell, now the Senate Majority Leader, who would be left with a difficult choice.

It’s not often that a unanimous Supreme Court decision on special education makes national headlines. But that’s exactly what happened yesterday, when the justices issued their ruling in Endrew F. v. Douglas County School District. The issue in the case is undoubtedly important to many American families: What kind of “educational benefit” does the Individuals with Disabilities Education Act require public schools to provide to students with disabilities? The Supreme Court unanimously rejected the lower court’s ruling that schools only need to provide a non-trivial benefit.

That’s not why the case drew so much attention, however. When the Supreme Court handed down its ruling yesterday, shortly after 10 a.m., the question presented by Endrew’s case had already been a hot topic of discussion just down the street from the court, at the confirmation hearing for Judge Neil Gorsuch, President Donald Trump’s nominee to fill the vacancy created by the death of Justice Antonin Scalia last year. In 2008, Gorsuch had ruled against the family of an autistic child, explaining that the IDEA requires educational benefits that are “merely … ‘more than de minimis.’”

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Yesterday’s argument in County of Los Angeles v. Mendez was, in a word, unsatisfying. The question of governmental liability for a law enforcement shooting of innocent individuals is extremely fact-intensive, and the law in this area is unsettled enough that assembling a majority for general Fourth Amendment rules on this record presents quite a challenge. It is possible to imagine some general statements that the court could agree on, but when it comes time to either affirm or reverse the specific award here, the justices might well split 4-4. Accurate tea-leaf reading seems impossible based on this argument transcript; the justices themselves seemed undecided. But in the end, at least four justices may view a tie as the fairest result on this record: The damages award for the sympathetic plaintiffs here would be left in place, without a divided Court issuing conflicting opinions on the law.

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Thursday round-up

By on Mar 23, 2017 at 7:36 am

Yesterday the court heard oral argument in two cases. The first was County of Los Angeles v. Mendez, a Fourth Amendment case stemming from a police search that resulted in a shooting. Ryan Lockman discusses the case in an interview on WNYC’s The Takeaway. Yesterday’s second argument was in Water Splash v. Menon, which involves service of process under the Hague Service Convention.

The court also issued three opinions yesterday. In Czyzewski v. Jevic Holding Corporation, the court held 6-2 that structured bankruptcy dismissals must follow priority rules unless creditors consent. Daniel Bussel analyzes the opinion for this blog. At his eponymous blog, Ross Runkel writes that in “sweeping terms, the Court rejected the notion that there could be ‘rare cases’ in which courts could find ‘sufficient reasons’ to disregard priorities,” and warns that all “bankruptcy lawyers will need to pay close attention to this case.” In Star Athletica, LLC v. Varsity Brands, Inc., a 6-2 court held that a feature of a useful article is copyrightable if it can be perceived as a separately protectable work. Ronald Mann has this blog’s opinion analysis. In The National Law Journal (subscription or registration required), Tony Mauro reports that the opinion “included four pages of colored drawings and photographs—three of them inserted by dissenting Justice Stephen Breyer—as well as 10 pages of reproduced copyright registration forms,” noting that the court “rarely illustrates its decisions,” but that “when it does, the images can draw criticism as shiny distractions that distort or confuse the facts of the case.”

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Czyzewski v. Jevic Holding Corp. is the latest battleground in a 150-year struggle over whether senior creditors whose liens exhaust a bankruptcy estate, and junior creditors or equity holders with control over the bankruptcy proceeding, can combine to use bankruptcy processes to implement a division of value that skips over otherwise out-of-the-money intervening creditors over their objection. In the landmark  case of Northern Pacific Railway Company v. Boyd, the court created the “absolute priority rule” to prevent just that eventuality in federal equity receiverships over 100 years ago, before any federal statutory reorganization procedure existed. Ever since and all along, bankruptcy practitioners struggling to make deals and solve practical problems have creatively fought, evaded, and sought to limit the scope of that prohibition. The most fashionable current step in this never-ending bankruptcy dance has been the “structured dismissal.” The court’s opinion in Jevic puts the brakes on this device by making clear that priority deviations implemented through non-consensual structured dismissals are not permitted.

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Petition of the day

By on Mar 22, 2017 at 11:23 pm

The petition of the day is:

16-894

Issue: Whether the Second Amendment entitles ordinary, law-abiding citizens to carry handguns outside the home for self-defense in some manner, including concealed carry when open carry is forbidden by state law.

It’s the kind of case my colleagues who teach copyright law might spend an entire class session analyzing, pondering the pros and cons of copyright protection for industrial designs. In a rare moment for the Roberts Court, the opinion in Star Athletica v Varsity Brands addressed that question broadly and categorically, passing up every opportunity to narrow or confine its ruling.

The case involves cheerleader uniforms designed by Varsity Brands, the market leader, and copied by Star Athletica. The legal problem is whether copyright protection, which extends naturally not only to works of music and literature, but also to “pictorial, graphic, or sculptural” works, protects the particular combination of chevrons, zigzags and stripes that characterizes Varsity’s uniforms. Star Athletica argues, with considerable support from lower courts and commentators, that this kind of “industrial” design, largely influenced by utilitarian considerations, does not warrant copyright protection, which is best reserved for wholly aesthetic creations. The majority opinion of Justice Clarence Thomas, though, has nothing to say about concerns of competition policy. Rather, as you might expect from a Thomas opinion, the text addresses the topic wholly as a matter of statutory interpretation. Working in that vein, it reads the statute as giving remarkably broad protection to industrial designs.

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We live-blogged the third day of the Senate Judiciary Committee’s hearing on the nomination of Judge Neil Gorsuch to the Supreme Court. The transcript is available at this link.

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