Insight

Decisions, Decisions

Leading cases on the Supreme Court’s 2018 business docket.

The Supreme Court's Top 2018 Cases
BB

Boris Bershteyn

December 12, 2018 03:57 PM

The Supreme Court’s 2018 term got underway on October 1, with the media spotlight focused on the naming of a successor to Justice Anthony M. Kennedy. On the docket itself, however, and away from the headlines, are a host of cases with important implications for the business community. In the context of smartphone apps, the Court will consider longstanding doctrines of standing to bring antitrust damages claims. It also will confront a number of questions about arbitration, including significant cases about class arbitration and the relationship between arbitration and the courts. In the area of class-action procedure, the Court will address the way settlement funds can be distributed and the time in which to appeal the class-certification decisions of trial courts. The Justices also will delve into the interstices of securities laws, examining (in the context of a case that newly confirmed Justice Kavanaugh helped adjudicate below) when conduct that falls short of a “misstatement” can nonetheless lead to liability. Thus, in a season in which the Court has drawn attention mostly for its changing composition, the business community may find much to monitor in its decisions. Below are some key cases to keep an eye on.

Antitrust

Karen Hoffman Lent | Partner, Antitrust/Competition; Sports; Complex Litigation and Trials

Tara L. Reinhart | Partner, Antitrust/Competition

Having considered the application of antitrust laws to credit-card networks last year, the Supreme Court now turns to another modern technology. In Apple v. Pepper, plaintiff iPhone users claim Apple monopolized the market for iPhone app distribution by requiring developers to sell apps only through its App Store and collecting an allegedly supra-competitive 30 percent commission on each app sold. In response, Apple invoked the Illinois Brick doctrine, under which only direct purchasers of a product have standing to bring claims under federal antitrust law. According to Apple, app developers pay the commission; therefore, only they can sue, even if they pass the commission cost on to app purchasers. The Ninth Circuit disagreed, holding that Apple—as the distributor to iPhone users—is the appropriate defendant.

If the Court adopts the Ninth Circuit’s position, the scope of the Illinois Brick doctrine would diminish, leaving some online distribution platforms—and, potentially, other similar forms of distribution—at increased risk of consumer antitrust litigation. Conversely, a favorable decision for Apple would confirm that distribution platforms involving third-party commissions fall within the doctrine.

Arbitration

Lea Haber Kuck | Partner, International Litigation and Arbitration

Gregory A. Litt | Partner, International Litigation and Arbitration

The Supreme Court has a number of arbitration cases on next term’s docket. All stand to make a splash.

  • Who gets to hear “gateway” questions of arbitrability: a court or an arbitrator? In Henry Schein, Inc. v. Archer and White Sales, Inc., the Court will consider whether the Federal Arbitration Act (FAA) permits a court to decline to enforce an agreement sending such questions to an arbitrator if the court concludes the claim of arbitrability is “wholly groundless.”
  • Class arbitration is still getting attention from the Supreme Court as well. In Lamps Plus, Inc. v. Varela, the Court will consider whether the FAA forecloses a state-law interpretation of an arbitration agreement authorizing class arbitration based solely on general language common to many commercial contracts. The Court’s decision could help lower courts better understand how to apply the Court’s prior class-arbitration decisions.
  • The FAA does not apply to “contracts of employment” for some categories of transportation workers. What about independent contractors? And is the applicability of this FAA exemption best treated as a question of arbitrability? In New Prime, Inc. v. Oliveira, the Supreme Court is poised to answer both these questions, with important implications for employment disputes in exempted industries.

Class Actions

John H. Beisner | Partner, Litigation; Mass Torts, Insurance and Consumer Litigation Group

In Frank v. Gaos, the Supreme Court will address the permissibility of “cy-pres” distributions in class-action settlements. Cy-pres distributions are typically made to non-party organizations in class proceedings where it is not feasible to distribute the entire recovery to class members. In Frank, the parties reached a class settlement of $8.5 million, under which all net proceeds were awarded to third-party organizations selected by the defendant and class counsel. The petitioners argue that class settlements should never be certified under the premise that all recovery would be distributed via cy-pres. The respondents contend that nothing in the history or text of applicable federal rules bars such settlements.

In Neutraceutical Corp. v. Lambert, the Supreme Court will review a Ninth Circuit decision to accept a petition for discretionary review of a class-certification ruling outside of the 14-day period for filing such petitions prescribed by the Federal Rules of Civil Procedure. The Ninth Circuit concluded that it could apply an “equitable exception” to the 14-day rule based on the appellant's counsel's oral statements to the trial court of his intent to seek appellate review. In the Supreme Court, the petitioner argues that the Ninth Circuit lacked the authority to extend the deadline because the 14-day deadline constitutes a “claim-processing rule” that is “mandatory and unalterable.” Respondent argues that the appeal was timely and, in any event, courts are free to craft equitable exceptions to claim-processing rules that are not considered jurisdictional.

SEC/Misstatements

Colleen P. Mahoney | Partner, Securities Enforcement; Government Enforcement and White Collar Crime

Charles F. Walker | Partner, Securities Enforcement; Government Enforcement and White Collar Crime

Andrew M. Lawrence | Partner, Securities Enforcement

In Lorenzo v. SEC, the Commission found a broker-dealer employee violated securities laws, including Rule 10b-5, by emailing misstatements to investors drafted by his boss and sent at his request. Upon review, the D.C. Circuit concluded he did not “make” the misstatements, and thus did not violate Rule 10b-5(b)—but nonetheless violated the other securities-fraud provisions at issue by engaging in a fraudulent scheme. Then-Judge Brett Kavanaugh dissented, arguing for a more limited scheme liability standard.

The primary issue before the Supreme Court is whether conduct not meeting the elements of a misstatement claim can nevertheless be pursued as a fraudulent-scheme claim. The Court may use this case to limit scheme liability claims available to private plaintiffs involving someone not “making” a misstatement. A decision in favor of the Commission, however, could blur the line between primary and secondary liability, with potential implications for Commission enforcement and significant implications for the plaintiffs’ bar. With Justice Kavanaugh now confirmed to the Court, his recusal could result in a 4–4 split among the Justices.

Related Articles

Destiny Fulfilled


by Sara Collin

Was Angela Reddock-Wright destined to become a lawyer? It sure seems that way. Yet her path was circuitous. This accomplished employment attorney, turned mediator, arbitrator and ADR specialist nonpareil discusses her career, the role of attorneys in society, the new world of post-pandemic work and why new Supreme Court Justice Ketanji Brown Jackson represents the future.

Interview with Lawyer Angela Reddock-Wright

Ketanji Brown Jackson Becomes Joe Biden’s Nominee for Vacant SCOTUS Seat


by Gregory Sirico

President Joe Biden has nominated former lawyer Ketanji Brown Jackson for the Supreme Court of the United States.

Biden Nominates Ketanji Brown Jackson

Biden’s History-Making SCOTUS Nominees


by Gregory Sirico

The promise of the first Black female Supreme Court Justice in history is on the verge of reality as the top three candidates for the most recent vacant seat are announced.

Biden Promises First Black Female SCOTUS Pick

Don’t Fall Asleep at the Wheel


by Paul Goatley

Identify Exhaustion or Risk Waiving a Defense.

Don’t Fall Asleep at the Wheel

What New York's Child Victims Act Means for Public Schools


by Anastasia M. McCarthy

The new Child Victims Act is expected to have a profound and long-lasting impact on public school systems.

Understanding New York's Child Victims Act

Staying Competitive in Competitions and Antitrust Law


by Best Lawyers

Igor Svechkar of Asters talks with Best lawyers about his firm's 2019 Antitrust "Law Firm of the Year" award for Ukraine.

Asters Q&A Law Firm of the Year

Davies Points to “Groupthink” as Contributor to Industry Stagnation


by Best Lawyers

The 2019 Canaidan "Law Firm of the Year" honoree for Competitions/Antitrust Law shares the keys to their success.

Davies "Law Firm of the Year" Q&A

Supreme Court Decision Will Play Important Role in Shaping Defendant Privacy Rights


by Gus Kostopoulos

The primary question will likely come down to whether or not cell phone data and location records are protected interests under the Fourth Amendment.

Defendant Privacy Rights

Send, Serve, or Both


by Holly M. Polglase and Matthew E. Bown

The Supreme Court decides the meaning of Article 10(A) of the Hague Service Convention.

Article 10(A) of the Hague Service Convention

Victory for The Slants and Redskins


by Carol Steinour Young and Emily Hart

On June 19, 2017, the United States Supreme Court settled the issue of whether an offensive name—in this case, an Asian-American rock band called “The Slants”—can properly be registered as a trademark.

The Slants Legal Case Decoded

Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco


by Clifford J. Zatz and Josh Thomas Foust

The decision “may make it impossible to bring certain mass actions at all.”

Bristol-Myers Squibb Co. Mass Tort

Obtaining Cell Phone Records in Civil Litigation


by Jeff S. Korek

You might think that cell phone records could help put a distracted driver behind bars. But getting them isn't so simple.

Are Cell Phone Records Used in Court?

Post-Conviction Relief


by Douglas Trant

In these post-conviction cases, we look for Constitutional violations that deprived the defendant of a fair trial and undermined confidence in the outcome.

Post-Conviction Relief

In the News: Austin/San Antonio


by Compiled by Tess Congo

A summary of newsworthy content from Austin/San Antonio lawyers and law firms.

Austin/San Antonio In the News

Supreme Court of New Jersey Affirms Rules as to Priority of Discretionary Advance Mortgages


by Mark Rattner

Supreme Court of New Jersey

Trending Articles

Presenting The Best Lawyers in Australia™ 2025


by Best Lawyers

Best Lawyers is proud to present The Best Lawyers in Australia for 2025, marking the 17th consecutive year of Best Lawyers awards in Australia.

Australia flag over outline of country

Best Lawyers Expands 2024 Brazilian Awards


by Best Lawyers

Best Lawyers is honored to announce the 14th edition of The Best Lawyers in Brazil™ and the first edition of Best Lawyers: Ones to Watch in Brazil™.

Image of Brazil city and water from sky

The Best Lawyers in Mexico Celebrates a Milestone Year


by Best Lawyers

Best Lawyers is excited to announce the 15th edition of The Best Lawyers in Mexico™ and the second edition of Best Lawyers: Ones to Watch in Mexico™ for 2024.

Sky view of Mexico city scape

How Palworld Is Testing the Limits of Nintendo’s Legal Power


by Gregory Sirico

Many are calling the new game Palworld “Pokémon GO with guns,” noting the games striking similarities. Experts speculate how Nintendo could take legal action.

Animated figures with guns stand on top of creatures

How To Find A Pro Bono Lawyer


by Best Lawyers

Best Lawyers dives into the vital role pro bono lawyers play in ensuring access to justice for all and the transformative impact they have on communities.

Hands joined around a table with phone, paper, pen and glasses

Announcing The Best Lawyers in New Zealand™ 2025 Awards


by Best Lawyers

Best Lawyers is announcing the 16th edition of The Best Lawyers in New Zealand for 2025, including individual Best Lawyers and "Lawyer of the Year" awards.

New Zealand flag over image of country outline

Presenting the 2024 Best Lawyers Family Law Legal Guide


by Best Lawyers

The 2024 Best Lawyers Family Law Legal Guide is now live and includes recognitions for all Best Lawyers family law awards. Read below and explore the legal guide.

Man entering home and hugging two children in doorway

Announcing The Best Lawyers in Japan™ 2025


by Best Lawyers

For a milestone 15th edition, Best Lawyers is proud to announce The Best Lawyers in Japan.

Japan flag over outline of country

The Best Lawyers in Singapore™ 2025 Edition


by Best Lawyers

For 2025, Best Lawyers presents the most esteemed awards for lawyers and law firms in Singapore.

Singapore flag over outline of country

Canada Makes First Foray Into AI Regulation


by Sara Collin

As Artificial Intelligence continues to rise in use and popularity, many countries are working to ensure proper regulation. Canada has just made its first foray into AI regulation.

People standing in front of large, green pixelated image of buildings

Commingling Assets


by Tamires M. Oliveira

Commingling alone does not automatically turn an otherwise immune asset into an asset subject to marital distribution as explained by one family law lawyer.

Toy house and figure of married couple standing on stacks of coins

How Much Is a Lawyer Consultation Fee?


by Best Lawyers

Best Lawyers breaks down the key differences between consultation and retainer fees when hiring an attorney, a crucial first step in the legal process.

Client consulting with lawyer wearing a suit

The Hague Convention and International Custody Battles


by Alexandra Goldstein

One family law lawyer explains how Joe Jonas and Sophie Turner’s celebrity divorce brings The Hague Convention treaty and international child custody battles into the spotlight.

Man and woman celebrities wearing black and standing for photo

Presenting the 2024 Best Lawyers Employment and Workers’ Compensation Legal Guide


by Best Lawyers

The 2024 Best Lawyers Employment and Workers' Compensation Legal Guide provides exclusive access to all Best Lawyers awards in related practice areas. Read below and explore the legal guide.

Illustration of several men and women in shades of orange and teal

New York Passes 9/11 Notice Act


by Gregory Sirico

Best Lawyers highlights the newly enacted 9/11 Notice Act, which seeks to find individuals eligible for medical care coverage under different federal programs.

Firefighter stands with their back turned with flames in the background

Filing For Divorce in North Carolina


by Melody J. King

Family law lawyer Melody King answers some of the most important questions individuals may have about filing for divorce in North Carolina.

Illustration of man and woman on paper that has been torn apart