Yesterday’s opinion in Mission Product Holdings Inc. v. Tempnology, LLC resolved a long-standing disagreement in the lower courts about what happens when a debtor exercises its statutory right to reject a contract in bankruptcy. Section 365 of the Bankruptcy Code gives the debtor an explicit right to “reject” contracts, and tells us that rejection amounts to a “breach” of the contract, which gives the nonbankrupt counterparty a right to sue the bankrupt for damages. The lower courts have struggled, though, in deciding whether the rejection’s “breach” also rescinds the entire contract. In this case, for example, the contract in question is a trademark license, and the debtor not only wants to terminate its own obligations under the contract; it also wants to retract the licensee’s right to use the debtor’s trademark. Justice Elena Kagan’s opinion for the Supreme Court gives us a clear answer: Rejection breaches but does not rescind the contract in question.
Justice Kagan with opinion in Mission Product Holdings v Tempnology (Art Lien)
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In Merck Sharpe & Dohme v. Albrecht, the Supreme Court yesterday issued the latest in its burgeoning canon of drug pre-emption cases, offering clarity on the procedure for deciding pre-emption defenses, but little additional elucidation on the contours of those defenses. The court first held that judges, rather than juries, should decide whether FDA actions pre-empt state tort suits alleging failure to warn consumers of adverse effects. This is a strategic win for drug manufacturers, clarifying that their go-to defense of “impossibility preemption” – the claim that federal regulation would have prohibited the additional warnings plaintiffs allege state tort law required – can be decided on motions before the case reaches a jury. A decade ago in Wyeth v. Levine, the court held that to succeed with the impossibility pre-emption defense, defendants had to produce “clear evidence” that the FDA would have prohibited an additional warning. Yesterday’s opinion in Albrecht attempted to clarify Wyeth’s application by explaining abstractly that the “clear evidence” standard contemplates an irreconcilable conflict between federal and state law, rather than a heightened standard of evidentiary proof.
Justoce Breyer with opinion in Merck Sharp & Dohme v. Albrecht (Art Lien)
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Yesterday the Supreme Court issued three opinions. In Herrera v. Wyoming, the court held 5-4 that the Crow Tribe did not lose its rights under an 1868 treaty to hunt on unoccupied federal lands when Wyoming became a state, and that establishment of a national forest did not make land within the forest categorically “occupied.” Gregory Ablavsky has this blog’s opinion analysis. Domenico Montanaro and Nina Totenberg report for NPR that “Justice Neil Gorsuch, the only Westerner on the court, provided the decisive vote in this case, showing himself again to be sensitive to Native American rights.” At Greenwire (subscription required), Ellen Gilmer reports that the ruling is “a rare win for tribes at the Supreme Court.” Additional coverage comes from Kevin Daley at The Daily Caller and Jess Bravin for The Wall Street Journal. Brian Pierson discusses the decision at The National Law Review.
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Chief Justice John Roberts presents retired Justice Anthony Kennedy with the Henry J. Friendly Medal.
“This award will inspire me in future years to bring again the message of civility and decency and progress to all of those who, like you, revere the law,” retired Justice Anthony Kennedy promised today as he received the Henry J. Friendly Medal at the American Law Institute’s annual meeting.
Two summers ago, “it seemed to me appropriate to re-read Plato and Aristotle,” Kennedy related, remarking that “it always irritated me that they gave a low grade to democracy” in their evaluations of different forms of governance. The philosophers held this view, Kennedy explained, “because they thought that democracy did not have the capacity to mature.”
“It is our destiny to prove them wrong,” Kennedy continued; “at the moment, we are not doing that.”
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In Herrera v. Wyoming, the Supreme Court today overruled the Wyoming courts and held that the Apsáalooke Nation, also known as the Crow Tribe, retains its treaty-guaranteed right to hunt on unoccupied lands outside its reservation. Although the case turned on complicated questions of precedent and preclusion, the decision is perhaps most significant for what it augurs for future struggles for tribal rights before this court.
Wyoming convicted Clayvin Herrera, a Crow tribal member, for violating state hunting laws, notwithstanding the promise in an 1868 federal treaty that the tribe and its members preserved the right to hunt on “unoccupied” lands. The lower courts had reasoned that an earlier decision of the U.S. Court of Appeals for the 10th Circuit, Crow Tribe of Indians v. Repsis, which held that the tribe’s treaty right was abrogated when Wyoming became a state, precluded Herrera from arguing that the treaty right was still valid. In an opinion by Justice Sonia Sotomayor, the Supreme Court disagreed.
Justice Sotomayor with opinion in Herrera v. Wyoming (Art Lien)
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In this week’s episode of SCOTUStalk, Amy Howe of Howe on the Court briefly covers the latest Supreme Court news before speaking with Tom Goldstein of SCOTUSblog and David Savage of the Los Angeles Times about abortion and recent legislation aimed at overturning Roe v. Wade.
This morning the Supreme Court issued orders from the justices’ private conference last week. The justices added one new case to their merits docket for next term: Ritzen Group v. Jackson Masonry, a bankruptcy case. The filing of a petition for bankruptcy creates an “automatic stay” – a freeze on most efforts by creditors to collect debts from the debtor. However, creditors can ask the bankruptcy court to lift the automatic stay. The question that the Supreme Court agreed to hear today in Ritzen Group is whether an order denying a creditor’s motion to lift the automatic stay is a final order that the creditor can appeal.
The justices did not act on a pair of petitions asking them to weigh in on the constitutionality of Indiana abortion laws: One petition, which the justices have considered at 14 consecutive conferences, asks the Supreme Court to review a ruling by the U.S. Court of Appeals for the 7th Circuit striking down a law that bans abortions based on the race, sex or disability of the fetus and requires fetal remains to be buried or cremated, while the other petition involves a challenge to the requirement that a pregnant woman obtain an ultrasound at least 18 hours before an abortion. The justices also did not act on the petition for review filed by an Oregon couple who declined on religious grounds to make a custom cake for a same-sex wedding.
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We live-blogged as the Supreme Court released orders from the May 16 conference, granting Ritzen Group Inc. v. Jackson Masonry, LLC, and its opinions in Mission Product Holdings Inc. v. Tempnology, LLC, Herrera v. Wyoming and Merck Sharp & Dohme Corp. v. Albrecht. The transcript of the live blog is available below and at this link. SCOTUSblog is sponsored by Casetext: A more intelligent way to search the law.
For The Wall Street Journal, Brent Kendall and Jess Bravin report that several “petitions seeking Supreme Court review of abortion restrictions are currently pending, and the justices could act on some of them in coming weeks.” At Jost on Justice, Kenneth Jost discusses what the court’s ruling last week overruling a 40-year-old precedent in Franchise Tax Board of California v. Hyatt may mean for the justices’ approach toward abortion cases.
Briefly:
- At E&E News, Pamela King reports on Lynda Like v. Transcontinental Gas Pipe Line Company, a cert petition that challenges a natural-gas pipeline in Pennsylvania, in which the petitioners claim that “many appellate courts are improperly allowing Transco and other pipeline developers to engage in a ‘take-first-pay-later’ form of eminent domain sometimes known as ‘quick take’ or immediate possession.”
- Kimberly Robinson reports for Bloomberg Law that “[c]hallenges over cross-border shootings of Mexican teens by U.S. border patrol agents are again before the Supreme Court, which confronts the issue amid tension over Trump administration immigration policies.”
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The Supreme Court released orders from the May 16 conference on Monday; the justices granted Ritzen Group Inc. v. Jackson Masonry, LLC.
On Monday, the justices released their opinions in Mission Product Holdings Inc. v. Tempnology, LLC, Herrera v. Wyoming and Merck Sharp & Dohme Corp. v. Albrecht.
On Thursday, the justices meet for their May 23 conference.
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