LaRue decision good news - for defense attorneys?

An ABA Journal piece today suggests that yesterday’s Supreme Court decision allowing individuals to sue their 401(k) plans under ERISA isn’t just good news for plaintiffs’ attorneys.

In LaRue v. DeWolff Boberg & Associates, No. 06-856, the Court held that ERISA provides a remedy for recovery for fiduciary breaches that impair the value of retirement plans.

But defense attorneys are taking a careful look at Chief Justice John G. Roberts, Jr.’s concurrence, which- as one attorney put it - “provide[s] a pleasant surprise from the defense perspective.”

According to the article, which cites reports from Portfolio, The New York Times and The Washington Post:

A concurrence by Chief Justice John G. Roberts Jr. said that the wording of the 401(k) plan may require LaRue to pursue a narrower “denial of benefits” remedy that would require him to exhaust administrative remedies [first]. His opinion was joined by Justice Anthony M. Kennedy.

Still the ruling was unhappy news for some business advocates, the Post reports:

Business advocates predicted the ruling would unleash a raft of lawsuits by employees, particularly as stock market volatility once again is causing havoc with investment accounts.

“Ultimately, employers aren’t going to sponsor plans if they’re going to be sued every time they make an innocent mistake,” said Thomas Gies, a Washington lawyer who defended the consulting firm, which denies any wrongdoing.

Kennedy: Congress should act after Medtronic

Could a congressional response to today’s decision in Riegel v. Medtronic be on the way?

Massachusetts Sen. Edward M. Kennedy, who chairs the Senate Health, Education, Labor and Pensions Committee, hinted at that today in his statement in response to the case.

“In enacting legislation on medical devices, Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices,” Kennedy said. “Congress obviously needs to correct the court’s decision. Otherwise, FDA approval will become a green light for shoddy practices by manufacturers.”

Last year, just days after the U.S. Supreme Court handed down its decision in Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162, declining to restart the statute each time a paycheck reflecting the alleged unequal pay is issued, Kennedy and a host of other sponsors including Sen. Hillary Clinton filed a bill seeking to overturn the decision. The legislation would give employees 180 days after the date of the last affected paycheck to file a claim.

Scalia offers help to attorney during CBOCS argument

While trying to guess which way a Supreme Court justice is leaning based on his or her comments during oral argument is never an exact science, DC Dicta will go out on a limb and say Justice Antonin Scalia is probably not in favor of granting employees the right to bring retaliation claims under 42 U.S.C. §1981.

In today’s oral arguments in CBOCS v. Humphries, No. 06-1431 (asking whether an African American restaurant assistant manager who claims he was fired after complaining about racially charged comments made by his manager can sue for retaliation under §1981) Scalia seemed to make his feelings clear.

At several points Scalia even told the attorney representing the employer to make better arguments for his case.

When attorney Michael W. Hawkins ran into trouble explaining to Justice Stephen Breyer why, if the Court has implied rights of actions under other statutes, it shouldn’t do so in this case, Scalia came to Hawkins’ rescue.

“Mr. Hawkins, don’t we have a whole line of recent cases which say we have set our face against implying causes of action?” Scalia asked.

“Yes,” Hawkins said.

“A whole bunch of recent cases saying we’re not going to do that any more?” Scalia continued.

“Yes, Your Honor.”

“We used to do it, but we said we’re not going to do it any more?” Scalia went on.

“That’s correct, Your Honor.”

“So why don’t you invoke those?!” Scalia shot.

[More after the jump]

Trial lawyers’ group, device maker react to Medtronic decision

The American Association for Justice (formerly known as the Association of Trial Lawyers of America) is reacting to today’s decision by the U.S. Supreme Court barring state tort law claims by patients against medical devise manufacturers, Riegel v. Medtronic.

AAJ CEO Jon Haber issued this statement this afternoon:

“Today’s Supreme Court decision in Riegel v. Medtronic limits the rights of people to receive justice through the legal system when they are injured by the negligence or misconduct of others,” Haber said. “This decision should be narrowly viewed as applying only to certain medical device cases and should not serve as precedent for cases involving drugs and other consumer products.

“We believe this ruling seriously misconstrues Congressional intent.”

Meanwhile, in a statement to The Minneapolis Star-Tribune, Medtronic spokesman Rob Clark said:”We are aware of today’s favorable decision for Medtronic by the Supreme Court. This is an important decision for the medical device industry and our continued ability to innovate and bring lifesaving technology to patients.”

High Court rules in favor of federal preemption

Today, the Supreme Court issued five decisions, three of which hold that federal law preempts certain state regulations, state claims, or claims of jurisdiction by state administrative authorities.

In a decision that surely disappoints the plaintiff’s bar, the Supreme Court held in Riegel v. Medtronic, No. 06-179, that state law tort claims challenging the safety of FDA-approved medical devices are barred by federal law.

The opinion, authored by Justice Antonin Scalia, was based on the rationale that the Food and Drug Administration and federal laws covering device pre-market approval create a carefully-crafted balancing system for ensuring that safe products are on the market, while assuring that devices needed by patients are accessible. Federal regulators - not state authorities, and certainly not juries seated in state court trials - are in the best position to weigh the risks and benefits in this scheme.

“When state common law requires a recalculation of that balance, it frustrates” the regulatory scheme, Scalia said in comments this morning from the bench. “Leaving [it] to a jury [is] even worse.”

In Preston v. Ferrer, No. 06-1463, the Court held that the Federal Arbitration Act precluded the attempt by television’s “Judge Alex” Ferrer to go to a state court seeking a ruling that his contract with his former manager was void, rendering the contract’s arbitration clause void as well. He also sought to have the case heard before a state labor commission, claiming it held exclusive jurisdiction.

The opinion by Justice Ruth Bader Ginsburg held that once parties agree to arbitrate all disputes arising out of a contract, as Ferrer and his manager did, the Federal Arbitration Act preempts state administrative agencies, and the parties must arbitrate the dispute.
Allowing parties to go to state courts first “would likely [create] long delays, and Congress enacted the FAA to avoid delays,” Ginsburg said from the bench.

The court also ruled in favor on federal preemption in Justice Stephen Breyer’s opinion in Rowe v. New Hampshire Motor Transport Ass’n, No. 06-457, that federal law trumps two state laws requiring carriers delivering tobacco products to ensure that the recipients of the packages were of legal age to buy tobacco products.

In the other two opinions, both penned by Justice John Paul Stevens, the Court held that ERISA does not provide a remedy for individual injuries distinct from plan injuries for an administrator’s failure to follow the plan holder’s investment directions. But, the Court held that it does authorize recovery for for fiduciary breaches that impair the value of the entire plan. (LaRue v. DeWolff Boberg & Associates, No. 06-856) and that state courts can adopt broader rules of criminal procedure than those required by the U.S. Supreme Court (Danforth v. Minnesota, No. 06-8273).

More on these cases on coming up on this blog over the next few days, tomorrow on Lawyers USA’s website, and in the next print edition of Lawyers USA.

Missing statute peeves Scalia

Note to all attorneys preparing to argue before Justice Antonin Scalia and the rest of the justices of the Supreme Court: if you are going to bring up a statute in your argument, you’d better make sure you include the language of that statute in your brief.

An attorney who failed to adhere to that rule seemed to irk Scalia this morning.

Washington D.C. attorney Joseph R. Guerra, arguing on behalf of a postal employee seeking the right to sue her supervisor for retaliation under the Age Discrimination in Employment Act in the case Gomez-Perez v. Potter, sought to compare that statute’s language to that of Title VII.

“Where is this stuff?” Scalia interjected. “Where is this text that we’re talking about?”

“I apologize, Justice Scalia,” Guerra said. “It is not in-”

“It’s not in your brief,” Scalia said, finishing Guerra’s sentence for him. “It’s not in the appendix. So I don’t know what you’re talking about.”

Guerra tried to clarify. “I am talking about subsection (c) of 717a, the federal sector provisions of Title VII.”

“Which we don’t have here now,” Scalia persisted.

If Guerra thought that was the end of it, he was wrong.

[More after the jump]

Busy morning for the Supremes

It’s barely noon, but it’s already a busy news day at the Supreme Court.

Before hearing oral arguments this morning in cases dealing with federal employees’ rights to seek retaliation claims under the ADEA and the government’s ability to renegotiate long-term contracts with wholesale energy suppliers, the court announced a number of cases it will - and will not - be adding to its docket.

The Court will decide a dispute over a labor union’s use of fees paid by non-union employees to finance the labor organization’s court battles in other states. (Locke v. Karass, No. 07-610.)

It also allowed Montana to file a lawsuit against Wyoming over water rights in two rivers that flow through both states. (Montana v. Wyoming, 137-original)

The Court also agreed to decide whether evidence must be suppressed when an officer makes an arrest based on erroneous information obtained by another officer. (Herring v. U.S., No 07-513)

Justices also agreed to weigh in on whether the right to bring employment discrimination claims in court can be negotiated away in union contracts (14 Penn Plaza v. Pyett, No. 07-581) and take a case involving divorce and pension benefits under ERISA (Kennedy v. DuPont Plan Admin., No. 07-636)

What the Court did not do also made some news.

Two former Alabama assistant football coaches lost their bid for Supreme Court review of their case against the NCAA.

The ACLU lost its bid to challenge the Bush Administation’s wiretapping program before the high court.

The Court also declined to hear a case involving flood insurance payments for Hurricane Katrina victims.

Finally, the Court issued still more GVR orders (Grant, Vacate, Remand) in cases involving sentencing guidelines after their last year’s decisions in the Gall and Kimbrough cases. The complete list of today’s orders can be found on the Court’s website here (PDF file).

Monday status conference: Happy Birthday to George and Abe!

In honor of our presidents, the Capitol, U.S. Supreme Court, and all other federal offices are closed today. Oral arguments at the Supreme Court resume tomorrow (see previous post for details on that). President Bush is in Africa this week, and there’s a lot on his itinerary.

Meanwhile,

The behind-the-scenes drama never seems to end in the case of D.C. v. Heller, in which the Court will decide the constitutionality of Washington, D.C.’s handgun ban. First, lawyers were getting fired. Now the district is arguing with the Justice Department over how much time each will have during oral arguments. (BLT)

The second honeymoon between the White House and Capitol Hill is over. (AP)

Television’s “Judge Alex” Ferrer already has a civil dispute pending before the U.S. Supreme Court. Now, he’s taking heat from the Florida Supreme Court for ruling on post-trial motions on a case in which he served as a witness. (ABA Journal)

Former First Lady Nancy Reagan is recovering after a fall. (NYT)

Friday morning docket: the Supremes are back

The justices of the Supreme Court head back to work today, where they are scheduled to conference for the first time this month. They could grant some petitions for certiorari or issue other orders today, and this blog will be updated with news on that front.

Next week, after the President’s Day holiday Monday, oral arguments resume, and two cases on the court’s docket involve employment retaliation claims. (As always, links go to the case summaries by the Oyez Project).

Tuesday, the Court will consider whether a federal employee, who has complained of age discrimination and was later fired, can bring a retaliation claim against her employer under the Age Discrimination in Employment Act in Gomez-Perez v. Potter, No. 06-1321. In Wednesday’s oral argument in CBOCS West, Inc. v. Humphries, No. 06-1431, the justices will consider whether an employee, fired after complaining that his supervisor used racial slurs, can bring a retaliation claim under 42 U.S.C. §1981 (the Civil Rights Act of 1866).

Tuesday, The Court will also consider whether the government can allow utility companies to renegotiate long-term contracts with wholesale energy suppliers in Morgan Stanley Capital Group v. Public Utility District No. 1, No. 06-1457, consolidated with Calpine Energy Services v. Public Utility District No. 1, No. 06-1462.

Meanwhile,

Lawmakers in the House don’t like the wiretap bill. (WaPo)

Lawmakers in the Senate don’t like waterboarding. (NYT).

Unhappy with the FDA’s performance, Michigan Democrat Rep. Bart Stupak called for agency Commissioner Andrew von Eschenbach’s resignation. (AP)

One lawmaker is pushing to give banks immunity from patent infringement lawsuits. (WaPo).

Rep. Tom Lantos is remembered. (SF Chronicle)

Drama during House contempt vote

The House voted to hold former White House counsel Harriet Miers and chief of staff Josh Bolton in contempt of Congress, citing their refusal to turn over documents relating to the inquiry over possible political motivations for the firing of nine U.S. attorneys under Attorney General Alberto Gonzales’s Justice Department tenure.

But before the vote, a group of GOP lawmakers walked out in protest, saying that the time would be better spent working on the surveillance bill than voting on contempt charges for the Bush confidantes, according to the Associated Press.

In the first full-chamber House contempt vote in 25 years, the representatives voted 223-32 to hold Bolton and Miers in contempt. The White House has said that it would not direct the justice department to pursue the Congressional contempt citation.