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September 9, 2019 |
Law360 Names Seven Gibson Dunn Lawyers as 2019 Rising Stars

Seven Gibson Dunn lawyers were named among Law360’s Rising Stars for 2019 [PDF], featuring “attorneys under 40 whose legal accomplishments transcend their age.”  The following lawyers were recognized: Washington D.C. partner Chantal Fiebig in Transportation, San Francisco partner Allison Kidd in Real Estate, Washington D.C. associate Andrew Kilberg in Telecommunications, New York associate Sean McFarlane in Sports, New York partner Laura O’Boyle in Securities, Los Angeles partner Katherine Smith in Employment and Century City partner Daniela Stolman in Private Equity. Gibson Dunn was one of three firms with the second most Rising Stars. The list of Rising Stars was published on September 8, 2019.

September 3, 2019 |
New York Court of Appeals Round-Up & Preview (September 2019)

The New York Court of Appeals Round-Up & Preview summarizes key opinions in civil cases issued by the Court over the past year and highlights a number of civil cases of potentially broad significance that the Court will hear during the coming year, beginning in September 2019.  The cases are organized by subject. From September 2018 through August 2019, the Court issued 106 decisions.  Looking ahead, the Court has scheduled 12 cases for argument in September 2019 (both civil and criminal) — with the session’s first cases being argued on the afternoon of September 4 — and 13 cases for argument in October 2019 (both civil and criminal). The Court has not yet scheduled argument for the remaining cases currently on its docket. To view the Round-Up, click here. New York-based members of the firm’s renowned Appellate and Constitutional Law Group have deep experience in front of New York State and federal courts of appeal, and a record of success in constitutional and other challenges to government action. They are often brought into a case at the onset to help craft the legal strategy, working seamlessly with our trial lawyers to take a matter from its inception all the way to the U.S. Supreme Court, if necessary. This integrated approach distinguishes Gibson Dunn from its competitors and is key to the wide recognition the firm receives. *   *   *  * Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the New York Court of Appeals, or any other state or federal appellate courts in New York.  Please feel free to contact any member of the firm’s Appellate and Constitutional Law practice group, or the following lawyers in New York: Mylan L. Denerstein (+1 212-351-3850, mdenerstein@gibsondunn.com) Akiva Shapiro (+1 212-351-3830, ashapiro@gibsondunn.com) Genevieve B. Quinn (+1 212-351-5339, gquinn@gibsondunn.com) Patrick Hayden (+1 212-351-5235, phayden@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

August 15, 2019 |
Gibson Dunn Lawyers Recognized in the Best Lawyers in America® 2020

The Best Lawyers in America® 2020 has recognized 158 Gibson Dunn attorneys in 54 practice areas. Additionally, 48 lawyers were recognized in Best Lawyers International in Belgium, Brazil, France, Germany, Singapore, United Arab Emirates and United Kingdom.

August 13, 2019 |
Federal Circuit Update (August 2019)

Click for PDF This edition of Gibson Dunn’s Federal Circuit Update summarizes the Supreme Court’s recent decisions in cases appealed from the Federal Circuit as well as key filings for certiorari or en banc review. Recent Federal Circuit news and practice changes are also noted. Recent precedential decisions are also summarized concerning the Federal Circuit’s identification of a presumption of patent eligibility, narrowing of the doctrine of equivalents, rejection of Fifth Amendment and sovereign immunity challenges to IPRs, and clarification of time-bar restrictions on IPRs, of Article III standing to appeal, and of the scope of design patents. Federal Circuit News Supreme Court: In June and July, the Supreme Court issued decisions in both a patent and a trademark case as noted below. The Court also granted certiorari in two more patent cases and one trademark case. Case Status Issue Amicus Briefs Filed Peter v. NantKwest Inc., No. 18-801 Set for argument on October 7, 2019. Whether the phrase “[a]ll the expenses of the proceedings” in 35 U.S.C. § 145 encompasses the personnel expenses the PTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation. 11 Dex Media Inc. v. Click-To-Call Techs., LP, No. 18-916 Petition for certiorari granted on June 24, 2019. Whether 35 U.S.C. § 314(d) permits appeal of the PTAB’s decision to institute an inter partes review upon finding that § 315(b)’s time bar did not apply. 3 Romag Fasteners Inc. v. Fossil Inc., No. 18-1233 Petition for certiorari granted on June 28, 2019. Whether, under Section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of Section 43(a), 15 U.S.C. § 1125(a). 0 Recent Supreme Court Decisions: Return Mail Inc. v. United States Postal Service (No. 17-1594) (Vote: 6-3, Author: Justice Sotomayor): The Court’s majority held that the government is not a “person” capable of instituting AIA review proceedings. The Court reasoned that, absent an express definition in the statute, “longstanding interpretive presumption” directed that a “person” does not include the sovereign, and “thus excludes a federal agency like the Postal Service.” The majority rejected the government’s view that other references to “person” in the AIA “appear” to include the government or that Congress intended “person” to include the government due to its “longstanding history with the patent system.” Justice Breyer dissented, joined by Justices Ginsburg and Kagan. Iancu v. Brunetti, No. 18-302 (Vote: 6-3, Author: Justice Kagan): A Court’s majority affirmed the Federal Circuit’s holding that the Lanham Act’s prohibition on registration of immoral or scandalous trademarks violates the First Amendment. As the majority explained, the immoral or scandalous bar discriminates on the basis of viewpoint and thus collides with First Amendment doctrine. The majority reasoned that the Lanham Act permits marks “that champion society’s sense of rectitude and morality, but not marks [deemed immoral] that denigrate those concepts.” Likewise, it “allows registration of marks when their messages accord with … society’s sense of decency or propriety,” but not “scandalous” marks that “defy” that sense. Thus, the “facial viewpoint bias in the law results in viewpoint-discriminatory application.” Justice Alito concurred, with Justices Breyer, Sotomayor and Chief Justice Roberts each filing opinions concurring in part and dissenting in part that the “scandalous” portion of the provision could be instead susceptible to a narrower construction. Chief Justice Roberts wrote that “scandalous” could, for example, be read narrowly to bar only marks that are “obscene, vulgar, or profane.” Noteworthy Petitions for a Writ of Certiorari: Acorda Therapeutics, Inc. v. Roxane Labs., Inc. (No. 18-1280): Question presented: “whether objective indicia of nonobviousness may be partially or entirely discounted where the development of the invention was allegedly ‘blocked’ by the existence of a prior patent, and, if so, whether an ‘implicit finding’ that an invention was ‘blocked,’ without a finding of actual blocking, is sufficient to conclude that an infringer has met its burden of proof.” Acorda is represented by Ted Olson, Thomas Hungar, and Amir Tayrani of Gibson Dunn. HP Inc. v. Berkheimer (No. 18-415): Question presented: “whether patent eligibility is a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of the art at the time of the patent.” On January 7, 2019, the Supreme Court invited the U.S. Solicitor General to file a brief expressing the views of the United States. Mark Perry of Gibson Dunn continues to serve as co-counsel for HP in this matter. Hikma Pharms. USA Inc. v. Vanda Pharms. Inc. (No. 18-817): Question presented: “whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps.” On March 18, 2019, the Supreme Court invited the U.S. Solicitor General to express the views of the United States. Atlanta Gas Light Co. v. Bennett Regulator Guards Inc. (No. 18-999): Questions presented: (1) whether the Federal Circuit erred in concluding that it had jurisdiction to review the PTAB’s decision to institute IPR of a patent over the patent owner’s objection that it was time-barred; and (2) whether the Federal Circuit erred in rejecting the “longstanding principle that a dismissal without prejudice leaves the parties as if a suit had never been brought, splitting the circuits.” Federal Circuit En Banc Review: Athena Diagnostics, Inc. v. Mayo Collaborative Services, No. 17-2508 (Fed. Cir. July 3, 2019) (denying petition 7-5): Although Athena’s petition was denied, the Federal Circuit’s response is remarkable for its eight separate opinions, each calling for Supreme Court guidance or legislative intervention to clarify the application of § 101 to novel medical diagnostics. Athena’s disputed claim covered a diagnostic method directed to neurotransmission disorders by examining the presence of naturally occurring MuSK antibodies in bodily fluids. Following the Supreme Court’s ruling in Mayo Collaborative Servs. v. Prometheus Labs., Inc., the Federal Circuit held Athena’s claim to be ineligible because the correlation between MuSK and neurological disease was “a law of nature.” But, as the panel observed, the result may have been different if the claim had been drafted as a method of treatment instead: “claiming a new treatment for an ailment, albeit using a natural law, is not claiming the natural law.” As Judge Moore summarized, all 12 judges reviewing Athena’s en banc petition agreed that its diagnostic should be patent-eligible. The seven judges who voted to deny the petition (Lourie, Reyna, Chen, Hughes, Prost, Taranto, and Dyk) held that the Supreme Court’s decision in Mayo left no room for eligibility, but indicated that Mayo should be revisited by the Supreme Court or Congress. The five dissenting judges found the diagnostic distinguishable from that in Mayo. Other Federal Circuit News: The annual Federal Circuit Bench and Bar Conference took place June 12–15, 2019 at the Broadmoor in Colorado Springs, CO. Next year’s conference will take place in Puerto Rico. On July 30, 2019, former Chief Judges of the Federal Circuit, Paul Michel and Randall Rader, joined a letter with others, including academics and former USPTO officials, urging Congress to pass legislation reforming the “patent eligibility doctrine.” The jurists noted the “extreme uncertainty about how patent examiners or judges will apply the Alice-Mayo framework that was recently created by the Supreme Court.” This letter responded to a letter from the American Civil Liberties Union and other organizations that opposed legislative reform efforts. The retired jurists argued that the ACLU and other’s view was “profoundly mistaken and inaccurate” and that draft legislation, if enacted, would not “authorize patenting products and laws of nature, abstract ideas, and other general fields of knowledge.” The judges and their co-signees stated that such legislative reform would not “eliminate constitutional and statutory bars to patenting laws of nature, abstract ideas, and general fields of knowledge,” and instead “is vitally important to sustain U.S. global leadership in innovation, resulting in increased jobs, economic growth, and a flourishing society.” Federal Circuit Practice Update Change to Electronic Filing Procedures During Weather-Related Closures: The Federal Circuit has announced that, effective October 1, 2019, it will no longer automatically consider weather-related closures as legal holidays for the purposes of Federal Appellate Rule of Procedure 26. In the event of inclement weather closing the courthouse, the Clerk’s office will continue to accept and process electronic filings based on the original electronic filing deadlines. Paper filings due on the date of a weather-related closure would be deemed timely filed if received by the next day the Clerk’s Office is open. The Federal Circuit’s notice can be found here. Key Case Summaries (May 2019–July 2019) Cellspin v. Fitbit, Nos. 18-1817 et al. (Fed. Cir. Jun. 25, 2019): A presumption of patent eligibility exists, just as there is a presumption of validity. Cellspin sued Fitbit and others, asserting multiple patents reciting claims related to connecting digital cameras to mobile devices. Fitbit and other defendants moved to dismiss under Rule 12, alleging lack of patentable subject matter under § 101. The district court granted the motion. The Federal Circuit (O’Malley, J., joined by Lourie and Taranto, JJ) vacated and remanded. Although the panel agreed the patents were directed to an abstract idea, the court followed its precedent in Berkheimer v. HP and held that the district court failed to credit Cellspin’s factual allegations in its pleadings. “Accepting the allegations … as true, we cannot conclude that the asserted claims lack an inventive concept” under step two of the Alice inquiry. The court ruled that patents “are presumptively valid” under § 282, and that this presumption includes § 101, making this the first Federal Circuit precedent to acknowledge a presumption of eligibility. Amgen Inc. v. Sandoz Inc., Nos. 18-1551, -52 (Fed. Cir. May 8, 2019): The doctrine of equivalents applies “only in exceptional cases.” Amgen sued Sandoz under the Biologics Price Competition and Innovation Act, alleging that Sandoz’s biosimilar application infringed, inter alia, Amgen’s patent to a method of preparing purified biologics. Amgen’s U.S. Patent 8,940,878 required a three-step, three-solution process that included specifically “washing” and “eluting” the desired protein. Sandoz’s accused process, however, used only one step, without washing or eluting steps. The district court granted summary judgment of non-infringement. Amgen appealed, asserting among other arguments that infringement should have been found under the doctrine of equivalents. The Federal Circuit (Lourie, J., joined by O’Malley and Reyna, JJ.) affirmed, rejecting Amgen’s view that a one-step method could be “insubstantially different from a claimed three-step, three-solution process” even if it achieved “the same result (protein purification).” The panel held that Amgen’s patent recited a specific sequence of steps, which could not be avoided by equivalents. The panel declared that the doctrine of equivalents “applies only in exceptional cases,” a more restrictive view than previously articulated, suggesting potential future narrowing of the doctrine. Celgene Corp. v. Peter, Nos. 18-1167 et al. (Fed. Cir July 30, 2019): The retroactive application of IPR proceedings to pre-AIA patents is not a Fifth Amendment taking. Celgene sells thalidomide, an immunomodulatory drug that causes severe birth defects. In response to an IPR, the Board held certain of Celgene’s claims to systems for prescription safety to be unpatentable. In addition to appealing the Board’s determinations, Celgene asserted that the retroactive application of an IPR to pre-AIA patents constituted an unconstitutional taking. The Federal Circuit (Prost, CJ., joined by Bryson and Reyna, JJ.) disagreed. According to the panel, patentees always had the expectation that their patents’ validity could be challenged in district court. And, when Celgene filed for its patents, ex parte reexamination had existed for two decades. Inter partes reexamination was also available when Celgene filed for one of its patents. Celgene’s pre-AIA patents were thus granted subject to existing judicial and administrative avenues for reconsidering validity. The court concluded that IPR proceedings do not significantly differ substantively or procedurally from pre-AIA challenges to effect a taking. Regents of the Univ. of Minn. v. LSI Corp., Nos. 18-1559 et al. (Fed. Cir. June 14, 2019). State sovereign immunity does not protect state-owned patents from IPR challenges. The University of Minnesota sued LSI among others for patent infringement and LSI and others petitioned for IPR. Before institution, the patentee filed a motion to dismiss based on sovereign immunity. An expanded panel of the PTAB concluded that sovereign immunity did apply to IPR proceedings but that the patentee waived its immunity by filing suit against the petitioners. The Federal Circuit (Dyk, J., joined by Wallach and Hughes, JJ.) affirmed, but held that sovereign immunity does not apply to IPRs. This followed the Federal Circuit’s recent decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., holding that IPRs were not barred by tribal immunity. The panel concluded that “differences between tribal and state sovereign immunity [did] not warrant a departure from the reasoning in Saint Regis.” Parallel to the analysis in Saint Regis, the court concluded that an IPR is more like an agency enforcement action, where sovereign immunity is not implicated, than like a private civil suit. Power Integrations, Inc. v. Semiconductor Components Indus., LLC d/b/a ON Semiconductor, No. 18-1607 (Fed. Cir. June 13, 2019)—Real-party-in-interest relationships arising after filing but before institution are considered for the § 315(b) statutory time-bar. In 2009, Power Integrations sued Fairchild Semiconductor for infringement. In late 2015, ON entered an agreement to merge with Fairchild. In March 2016 while the merger was pending, ON filed for an IPR against the patent being litigated against Fairchild. The merger closed later that year and, shortly after, the Board instituted the IPR. In its institution decision, the Board focused its § 315(b) analysis on whether ON and Fairchild were in privity when the petition was filed, holding that the mere agreement to merge did not create privity for the purpose of § 315(b). On appeal, the Federal Circuit (Prost, CJ, joined by Reyna and Stoll, JJ) reversed, holding that the “decision under § 315(b) is whether to institute or not.” The statute “specifically precludes institution, not filing” when time-barred parties are in privity. Thus, “relationships that may arise after filing but before institution [are] relevant to the § 315(b) time-bar.” AVX Corp. v. Presidio Components, Inc., 18-1106 (Fed. Cir. May 13, 2019)—Competitor standing is insufficient for Article III standing to appeal an IPR decision. Presidio and AVX are competitors in the market for electronic capacitors, and Presidio has repeatedly sued AVX for patent infringement. AVX preemptively filed an IPR against one of Presidio’s patents, although AVX did not yet have plans for a potentially infringing product. The Board held some claims unpatentable, but found AVX failed to meet its burden on others. AVX appealed, but the Federal Circuit (Taranto, J, joined by Newman and O’Malley, JJ) dismissed for lack of standing. The panel rejected AVX’s argument that the Board’s decision “reduces AVX’s ability to compete with Presidio” because, without plans for a product covered by the disputed claims, AVX had no “present or nonspeculative interest” in practicing the patent. As such, the panel held that AVX lacked Article III standing to appeal the Board’s decision. Automotive Body Parts Ass’n v. Ford Global Techs., No. 18-1613 (Fed. Cir. July 23, 2019): Showing that a design’s “aesthetic appeal” pleases consumers does not render it functional. Ford asserted that members of the Automotive Body Parts Association infringed its design patents, and the Association brought a declaratory action, alleging that the designs are primarily functional. The Association argued that car owners seeking to repair Ford trucks would desire replacement parts that matched the original part’s design. The district court rejected the Association’s arguments as effectively seeking to “eliminate design patents on auto-body parts.” The Federal Circuit (Stoll, J., joined by Hughes and Schall, JJ) affirmed, rejecting that consumer preference for replacement “hoods and headlamps that restore [a vehicle’s] original appearance” itself is a functional benefit. The court refused to apply the “aesthetic functionality” doctrine of trademark law to design patents, holding that, even if there is a “consumer preference for a particular design,” that aesthetic appeal “is inadequate to render that design functional.” Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Orange County (+1 949-451-3805, bevanson@gibsondunn.com) Raymond A. LaMagna – Los Angeles (+1 213-229-7101, rlamagna@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups: Appellate and Constitutional Law Group: Allyson N. Ho – Dallas (+1 214-698-3233, aho@gibsondunn.com) Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Intellectual Property Group: Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com) Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

August 13, 2019 |
Getting the Deal Through: Appeals 2019

Washington, D.C. partner Mark Perry and Los Angeles partner Perlette Jura are the contributing editors of “Appeals 2019,” a publication examining Appellate law and procedure between jurisdictions around the globe, published by Getting the Deal Through in June 2019.  Perry and Jura are the authors of the “Global Overview” and the “United States” chapters of the book, and London partners Patrick Doris and Doug Watson and associate Daniel Barnett are the authors of the “United Kingdom” chapter.

June 28, 2019 |
Supreme Court Sends 2020 Census Citizenship Question Back to the Department of Commerce, Citing Contrived Rationale

Click for PDF Decided June 27, 2019 Department of Commerce v. New York, No. 18-966 Yesterday, the Supreme Court held that the Secretary of Commerce’s decision to reinstate a citizenship question on the 2020 census violates the Administrative Procedure Act because the Secretary’s stated rationale—though reasonable and reasonably explained—was contrived. Background: To apportion Members of the House of Representatives among the States, the Constitution requires an “Enumeration” of the population every ten years, “in such Manner” as Congress “shall by Law direct.” Congress enacted the Census Act and delegated to the Secretary of Commerce the task of conducting the census “in such form and content as he may determine.” 13 U.S.C. § 141(a). In every census between 1820 and 1950, all households were asked about citizenship or place of birth. Since 1950, however, only some households have been asked these questions. Last year, the Secretary of Commerce announced that the 2020 census would reinstate a question about citizenship in order to collect data to aid the government in enforcing the Voting Rights Act. A group of state and local governments filed suit, alleging that the Secretary’s decision violates the Enumeration Clause and the Administrative Procedure Act. The district court dismissed the Enumeration Clause claim, but authorized discovery outside the administrative record on the other claims. The district court then held that the Secretary’s decision was not supported by the evidence before him, rested on a pretextual basis, and violated the Census Act.  The Secretary appealed directly to the Supreme Court. Issue:  Did the Secretary’s decision to reinstate a citizenship question on the 2020 census violate the Administrative Procedure Act?   Court’s Holding:  Yes. Although the Secretary’s decision was reasonable and supported by the evidence, the district court was warranted in remanding the case to the agency because the Secretary’s stated rationale was contrived. “Reasoned decisionmaking under the Administrative Procedure Act calls for an explanation for agency action. What was provided here was more of a distraction.” Chief Justice Roberts, writing for the majority What It Means: A majority of the Court—the Chief Justice and Justices Ginsburg, Breyer, Sotomayor, and Kagan—agreed that the Secretary’s explanation was contrived.  This aspect of the Court’s decision creates a potentially significant new basis for challenging discretionary administrative actions, at least where there is strong evidence of pretext in the administrative record. The Court acknowledged the general rule that judges generally avoid inquiring into “executive motivation,” but relied on a “narrow exception” that permits such inquiry “[o]n a strong showing of bad faith or improper behavior.” Though the Court could point to “no particular step” in the administrative process that was “inappropriate or defective,” it reasoned that “the Secretary began taking steps to reinstate a citizenship question about a week into his tenure,” yet did not identify a need for census data to enforce the Voting Rights Act until much later. The Court also held that the Secretary’s decision did not violate the Enumeration Clause.  That provision affords Congress “virtually unlimited discretion” in conducting the census. Congress, in turn, has properly “delegated its broad authority over the census to the Secretary.”  Here, the Chief Justice joined with Justices Thomas, Alito, Gorsuch, and Kavanaugh to form a 5-4 majority. Justice Thomas wrote an opinion concurring in part and dissenting in part, which Justices Gorsuch and Kavanaugh joined.  He viewed the Court’s holding as “an unprecedented departure from our deferential review of discretionary agency decisions”—one that, “if taken seriously as a rule of decision . . . would transform administrative law.” The Court’s decision was notable because it marked “the first time ever” that the Court has “invalidated an agency action solely because it questions the sincerity of an agency’s otherwise adequate rationale.”  Justice Thomas worried that the Court “has opened a Pandora’s box of pretext-based challenges in administrative law.” Given the nature of decisionmaking in the Executive Branch, “[o]pponents of future executive actions can be expected to make full use of the Court’s new approach.” Justice Breyer wrote an opinion concurring in part and dissenting in part, which Justices Ginsburg, Sotomayor, and Kagan joined. Justice Breyer believed that even if the Secretary’s rationale was not contrived, his decision still violated the Administrative Procedure Act because the evidence “indicated that asking the question would produce citizenship data that is less accurate, not more.” Justice Alito also wrote separately because he would have held that the Secretary’s decision was “committed to agency discretion by law” and thus not subject to judicial review.  “To put the point bluntly,” Justice Alito wrote, “the Federal Judiciary has no authority to stick its nose into the question whether it is good policy to include a citizenship question on the census or whether the reasons given by Secretary Ross for that decision were his only reasons or his real reasons.” As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Administrative Law & Regulatory Practice Eugene Scalia +1 202.955.8206 escalia@gibsondunn.com Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 26, 2019 |
Reinforcing Limits On Its Use, Supreme Court Upholds Auer Deference In Veterans Affairs Dispute

Click for PDF Decided June 26, 2019 Kisor v. Wilkie, No. 18-15 Today, the Supreme Court reaffirmed that an agency’s reasonable interpretation of its own ambiguous regulations is entitled to deference. Background: In 1982, the Department of Veterans Affairs (“VA”) denied a Vietnam War veteran’s claim for benefits after concluding that the veteran did not suffer from post-traumatic stress disorder (“PTSD”). When the veteran again sought benefits in 2006, the VA changed course, this time awarding benefits after concluding that the veteran did suffer from PTSD. This case arises out of a disagreement as to whether the veteran was also entitled to retroactive payments under a VA regulation permitting such payments when the VA fails to consider “relevant” records—in this case, records describing the veteran’s combat experience. The VA contends that the newly submitted records are not “relevant” because they do not go to the reason for its 1982 denial of benefits, i.e., that the veteran did not have PTSD.  Citing both Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), and Auer v. Robbins, 519 U.S. 452 (1997)—which require federal courts to defer to an agency’s reasonable interpretation of its own ambiguous regulations—the Federal Circuit deferred to the VA’s interpretation of “relevant,” and affirmed the VA’s denial of retroactive payments. Issue: Should the Supreme Court overrule Bowles v. Seminole Rock & Sand Co, 325 U.S. 410 (1945), and Auer v. Robbins, 519 U.S. 452 (1997), which require courts to defer to an agency’s reasonable interpretation of its own ambiguous regulations?  Court’s Holding:  No.  If, after exhausting the traditional tools of construction, a court concludes that a regulation is genuinely ambiguous, that the agency’s interpretation is reasonable, and that the context of the agency interpretation entitles it to controlling weight, a court must defer to the agency’s interpretation. “Auer deference retains an important role in construing agency regulations.  But even as we uphold it, we reinforce its limits.” Justice Kagan, writing for the Court What It Means: Although four justices would have overruled Auer, the majority declined to do so.  Nonetheless, the Court “reinforce[d]” the limits on when such deference can be deployed.  These limits are robust:  “When it applies, Auer deference gives an agency significant leeway to say what its own rules mean. . . .  But that phrase ‘when it applies’ is important—because it often doesn’t.” First, a court may not afford Auer deference unless the regulation is genuinely ambiguous.  This requires exhausting “all the ‘traditional tools’ of construction,” as even “hard interpretative conundrums . . . can often be solved.”  Second, a court must conclude that the agency’s reading of the ambiguous regulation is “reasonable,” which the Court emphasized “is a requirement an agency can fail.”  Finally, a court must “make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight.”  In undertaking this inquiry, courts should consider a variety of factors, including whether the agency’s interpretation constitutes the agency’s “official position,” whether the interpretation “implicate[s]” the agency’s “substantive expertise,” and whether the interpretation reflects a “fair and considered judgment,” as compared to a “convenient litigating position.” The Court’s discussion of stare decisis could have repercussions in other cases, as well. The Court highlighted three reasons for declining to overrule Auer and Seminole Rock.  First, those precedents have long been applied by lower courts. Second, overruling the precedents would cast doubt on many settled constructions of rules.  And third, Congress remains free to alter the effect of Auer and Seminole Rock through legislation. As Justice Gorsuch’s opinion concurring in the judgment states, “the majority retains Auer only because of stare decisis.” The Court did not foreclose the possibility of revisiting other questions involving deference to agencies, including the Chevron doctrine under which courts generally defer to agency interpretations of ambiguous statutes. As the Chief Justice’s concurring opinion makes clear, “[i]ssues surrounding judicial deference to agency interpretations of their own regulations are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress.” For this reason, the Chief Justice does “not regard the Court’s decision today to touch upon the latter question,” a point with which Justice Kavanaugh agreed in his own opinion concurring in the judgment. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Administrative Law & Regulatory Practice Eugene Scalia +1 202.955.8206 escalia@gibsondunn.com Helgi C. Walker +1 202.887.3599 hwalker@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 26, 2019 |
Supreme Court Upholds Dormant Commerce Clause Challenge To Tennessee’s Durational Residency Requirement For Liquor Retailers

Click for PDF Decided June 26, 2019 Tennessee Wine & Spirits Retailers Association v. Thomas, No. 18-96  Today, the Supreme Court struck down Tennessee’s 2-year durational residency requirement for obtaining retail liquor licenses, holding that it discriminates against interstate commerce in violation of the dormant Commerce Clause. Background: Tennessee law imposes a two-year residency requirement for applicants seeking to obtain a one-year license to sell liquor in the state, and a ten-year residency requirement for licensees seeking to renew their retail liquor license.  Two new applicants, Total Wine and the Ketchum family, sought to obtain retail liquor licenses in Tennessee.  Though neither satisfied the durational residency requirements, Tennessee’s Alcoholic Beverage Commission (the “Commission”) recommended that the licenses be approved.  Then, in response to a threatened lawsuit, the Commission sought a declaratory ruling from a federal district court on the constitutionality of the durational-residency requirements.  The district court held that the durational residency requirements violated the dormant Commerce Clause, notwithstanding the 21st Amendment’s express reservation of power to each state to regulate the importation and distribution of liquor into the state.  A divided panel of the Sixth Circuit affirmed. Issue: Does the 21st Amendment empower states, consistent with the dormant Commerce Clause, to regulate liquor sales by granting retail or wholesale licenses only to individuals or entities that have resided in-state for a specified time? Court’s Holding: No.  Tennessee’s 2-year durational residency requirement for retail liquor store license applicants violates the dormant Commerce Clause and is not rescued by the 21st Amendment.  The requirement discriminates against out-of-state applicants and is not justified by any legitimate state interest. “The aim of the [21st Amendment] was not to give States a free hand to restrict the importation of alcohol for purely protectionist purposes.” Justice Alito, writing for the majority What It Means: The Court’s decision reaffirms the line of cases, including Bacchus Imports v. Dias (1984) and Granholm v. Heald (2005), upholding certain dormant Commerce Clause challenges to state liquor laws.  These decisions represent a retreat from the prevailing view in the years following the repeal of Prohibition and the adoption of the 21st Amendment that states have plenary power to regulate liquor within their borders. In striking down the durational residency requirement for retailers, the Court explained that Section 2 of the 21st Amendment was meant to constitutionalize the basic understanding of the extent of the states’ power to regulate alcohol that prevailed under statutes passed by Congress before Prohibition.  The Court concluded that this standard gives states leeway in adopting alcohol-related public health and safety measures, but does not allow them to adopt purely protectionist restrictions on commerce in alcoholic beverages. The Tennessee Wine and Spirits Retailers Association argued that the durational residency requirement ensures that retailers are amenable to direct process of state courts, gives the State an opportunity to determine an applicant’s fitness to sell alcohol, and guards against undesirable non-residents moving into the State for the primary purpose of operating a liquor store.  The Court concluded, however, that the requirement is ill-fitted to those goals, and the goals could be achieved through less protectionist measures. Importantly, the Court reaffirmed that the 21st Amendment allows states to require a so-called “three-tier system.”  The three-tier system generally separates (and separately regulates) the production, distribution, and retail levels.  The Court emphasized that the three-tier system was not “[a]t issue in this case,” and confirmed that “States ‘remai[n] free to pursue’ their legitimate interest in regulating the health and safety risks posed by the alcohol trade” via the three-tier system. The dissent agreed with the arguments made by Gibson Dunn’s amicus brief, explaining that the 21st Amendment “embodied a classically federal compromise” that “allowed the States to regulate alcohol ‘unfettered by the Commerce Clause.’”  Justice Gorsuch, joined by Justice Thomas, maintained that under the terms of that compromise, “Tennessee’s law . . . would seem perfectly permissible.” The Court’s decision may make it more difficult for states to ensure that liquor retailers have sufficient ties to the communities they serve.  The decision will likely result in additional dormant Commerce Clause challenges to other aspects of state liquor regulation. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Miguel A. Estrada +1 202.955.8257 mestrada@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 24, 2019 |
Supreme Court Holds That A Federal Ban on “Immoral or Scandalous” Trademarks Violates the First Amendment

Click for PDF Decided June 24, 2019 Iancu v. Brunetti, No. 18-302 Today, the Supreme Court held 6-3 that the Lanham Act’s prohibition on the registration of “Immoral or Scandalous” trademarks infringes the First Amendment. Background: Two terms ago, in Matal v. Tam, 582 U.S. __ (2017), the Supreme Court declared unconstitutional the Lanham Act’s ban on registering trademarks that “disparage” any “person[], living or dead.”  15 U.S.C. § 1052(a).  The Court held that a viewpoint based ban on trademark registration is unconstitutional, and that the Lanham Act’s disparagement bar was viewpoint based (permitting registration of marks when their messages celebrate persons, but not when their messages are alleged to disparage).  Against that backdrop, Erik Brunetti, the owner of a streetwear brand whose name sounds like a form of the F-word, sought federal registration of the trademark FUCT.  The U.S. Patent and Trademark Office denied Brunetti’s application under a provision of the Lanham Act that prohibits registration of trademarks that “[c]onsist[] of or compromise[] immoral[] or scandalous matter.”  15 U.S.C. § 1052(a).  On Brunetti’s First Amendment challenge, the Federal Circuit invalidated this “Immoral or Scandalous” provision of the Lanham Act, on the basis that it impermissibly discriminated on the basis of viewpoint. Issue:  Does the Lanham Act’s prohibition on the federal registration of “Immoral or Scandalous” trademarks infringe the First Amendment right to freedom of speech? Court’s Holding:  Yes.  In an opinion authored by Justice Kagan on June 24, 2019, the Supreme Court held that the Lanham Act, which bans registration of “immoral … or scandalous matter,” violates the free speech rights guaranteed by the First Amendment because it discriminates on the basis of viewpoint. “If the ‘immoral or scandalous’ bar similarly discriminates on the basis of viewpoint, it must also collide with our First Amendment doctrine.” Justice Kagan, writing for the majority What It Means: The argument that the government advanced in this case—that speech is not restricted when you can call your brand or product anything you want even if you cannot get the benefit of federal trademark protection—will not save statutory bans on trademark registration that are viewpoint based. The Court made clear that its decision was based on the broad reach of the Lanham Act’s ban:  “[T]he ‘immoral or scandalous’ bar is substantially overbroad.  There are a great many immoral and scandalous ideas in the world (even more than there are swearwords), and the Lanham Act covers them all.”  In his concurring opinion, Justice Alito emphasized that the Court’s decision “does not prevent Congress from adopting a more carefully focused statute that precludes the registration of marks containing vulgar terms that play no real part in the expression of ideas,” thus leaving room for legislators to develop a more narrowly tailored alternative. Unless and until a new law is proposed and passed, however, the U.S. Patent and Trademark Office will have no statutory basis to refuse federal registration of potentially vulgar, profane, offensive, disreputable, or obscene words and images. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Intellectual Property Wayne Barsky +1 310.552.8500 wbarsky@gibsondunn.com Josh Krevitt +1 212.351.4000 jkrevitt@gibsondunn.com Mark Reiter +1 214.698.3100 mreiter@gibsondunn.com Related Practice: Fashion, Retail and Consumer Products Howard S. Hogan +1 202.887.3640 hhogan@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 17, 2019 |
Supreme Court Holds That The First Amendment Does Not Apply To Private Operators Of Public Access Television Channels

Click for PDF Decided June 17, 2019 Manhattan Community Access Corp. v. Halleck, No. 17-1702  Today, the Supreme Court held 5-4 that private operators of public access television channels are not state actors subject to the First Amendment. Background: The First Amendment generally restricts only state action.  Private entities, however, may be treated as state actors in some circumstances, such as where they perform functions traditionally performed by the government alone.  Here, New York City designated Manhattan Neighborhood Network (“MNN”)—a private, independent non-profit corporation—to operate public access television channels in Manhattan.  After Respondents produced a video criticizing MNN, MNN banned the video, and prohibited Respondents from submitting content to MNN.  Respondents sued MNN and others under the First Amendment.  The Second Circuit held that public access channels are public speech forums protected by the First Amendment, and that MNN—as the entity selected by the City to administer those channels—is a state actor, even though it is not controlled or funded by the government. Issue: Does a private entity that operates public access channels qualify as a state actor subject to the First Amendment?  Court’s Holding: No.  Private operators of public access channels are not state actors subject to the First Amendment because the operation of public access channels on a cable system is not a function traditionally reserved exclusively to the government. “[M]erely hosting speech by others is not a traditional, exclusive public function and does not alone transform private entities into state actors subject to First Amendment constraints.” Justice Kavanaugh, writing for the majority What It Means: While the First Amendment constrains state actors when they operate public speech forums, the decision confirms that those constraints do not apply to private entities.  Merely operating a public forum does not make a private entity into a state actor under the traditional test for state action because operating a public speech forum is not a traditional, exclusive public function.  Instead, private entities that operate forums for speech retain their “editorial discretion” over the speech and speakers on those forums. The Court rejected the argument that MNN qualifies as a state actor simply because the City designated it to operate the channels.  Instead, the Court compared the City’s designation to a government license, government contract, or government-granted monopoly, which “d[o] not convert the private entity into a state actor—unless the private entity is performing a traditional, exclusive public function.”  Similarly, the Court explained that a private entity does not become a state actor simply because the government regulates its activities. Justice Sotomayor’s dissent would have held that the City retained a property interest in the channels pursuant to an agreement with the cable system that hosted them.  She would have concluded, therefore, that MNN qualified as a state actor in administering the City’s property interest.  The majority disagreed, holding that the agreement did not give the City a formal property interest.  The majority emphasized that the analysis may have been different if the City administered the channels itself or retained a property interest in them. The opinion is the sixth this Term from Justice Kavanaugh, and offers insight into his approach to First Amendment issues.  The decision expressly applies to private operators of public access cable channels, but has implications for Internet companies and property owners that also provide forums for public speech. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Related Practice: Media, Entertainment and Technology Scott A. Edelman +1 310.557.8061 sedelman@gibsondunn.com Kevin Masuda +1 213.229.7872 kmasuda@gibsondunn.com Orin Snyder +1 212.351.2400 osnyder@gibsondunn.com

June 7, 2019 |
Matthew McGill Named Litigator of the Week

The Am Law Litigation Daily named Washington, D.C. partner Matthew McGill as its Litigator of the Week [PDF] for successfully challenging the U.S. Department of Justice’s recent Wire Act opinion that prohibited all forms of betting over the Internet. The profile was published on June 7, 2019. Matthew McGill is an appellate litigator who has participated in 21 cases before the Supreme Court of the United States, prevailing in 16. Outside the Supreme Court, his practice focuses on cases involving novel and complex questions of federal law, often in high-profile litigation against governmental entities. The Gibson Dunn global betting and gaming practice is one of the most preeminent betting and gaming legal practices worldwide, representing the most prestigious and influential clients in the industry across Europe, Asia and the Americas. We believe that the Gibson Dunn global betting and gaming practice provides our clients with a unique offering – no other global law firm can offer an award-winning regulatory and compliance capability alongside a market-leading transactional practice in the betting and gaming sector in the United Kingdom, the United States, Europe and the Asia-Pacific Region.

June 6, 2019 |
Supreme Court Round-Up: A Summary of the Court’s Opinions, Cases to Be Argued This Term, and Other Developments

As the Supreme Court continues its 2018 Term, Gibson Dunn’s Supreme Court Round-Up is summarizing the issues presented in the cases on the Court’s docket and the opinions in the cases the Court has already decided.  The Court has finished hearing arguments this Term, and we are awaiting decisions in 27 cases.  Gibson Dunn presented 3 oral arguments this Term, in addition to being involved in 12 cases as counsel for amici curiae.  The Court has granted certiorari in 18 cases for the 2019 Term. Spearheaded by former Solicitor General Theodore B. Olson, the Supreme Court Round-Up keeps clients apprised of the Court’s most recent actions.  The Round-Up previews cases scheduled for argument, tracks the actions of the Office of the Solicitor General, and recaps recent opinions.  The Round-Up provides a concise, substantive analysis of the Court’s actions.  Its easy-to-use format allows the reader to identify what is on the Court’s docket at any given time, and to see what issues the Court will be taking up next.  The Round-Up is the ideal resource for busy practitioners seeking an in-depth, timely, and objective report on the Court’s actions. To view the Round-Up, click here. Gibson Dunn has a longstanding, high-profile presence before the Supreme Court of the United States, appearing numerous times in the past decade in a variety of cases.  During the Supreme Court’s 5 most recent Terms, 9 different Gibson Dunn partners have presented oral argument; the firm has argued a total of 20 cases in the Supreme Court during that period, including closely watched cases with far-reaching significance in the class action, intellectual property, separation of powers, and First Amendment fields.  Moreover, although the grant rate for certiorari petitions is below 1%, Gibson Dunn’s certiorari petitions have captured the Court’s attention:  Gibson Dunn has persuaded the Court to grant 25 certiorari petitions since 2006. *   *   *   * Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following attorneys in the firm’s Washington, D.C. office, or any member of the Appellate and Constitutional Law Practice Group. Theodore B. Olson (+1 202.955.8500, tolson@gibsondunn.com) Amir C. Tayrani (+1 202.887.3692, atayrani@gibsondunn.com) Brandon L. Boxler (+1 202.955.8575, bboxler@gibsondunn.com) Andrew G.I. Kilberg (+1 202.887.3759, akilberg@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 3, 2019 |
Supreme Court Holds That Title VII’s Administrative Exhaustion Requirement Is Not A Jurisdictional Prerequisite To Suit

Click for PDF Decided June 3, 2019 Fort Bend County, Texas v. Davis, No. 18-525 Today, the Supreme Court unanimously held that Title VII’s requirement that employment-discrimination plaintiffs present their claims to the Equal Employment Opportunity Commission (“EEOC”) before filing suit is a mandatory claim-processing rule subject to ordinary principles of waiver and forfeiture, not a jurisdictional prerequisite that can be raised at any point during the litigation. Background: Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., requires employees to file a charge with the EEOC before suing an employer for discrimination. When it receives a charge, the EEOC must notify the employer and investigate the allegations. If the EEOC chooses not to sue, or if the EEOC cannot complete its investigation within 180 days, the employee is entitled to a “right-to sue” notice. That notice allows the employee to sue the employer for the claim(s) presented in the charge. In this case, an employer litigated a religious-discrimination claim for five years before arguing that the plaintiff did not properly raise the claim in her EEOC charge. The district court agreed, reasoned that Title VII’s charge-filing requirement is a non-waivable jurisdictional rule, and dismissed the case for lack of jurisdiction. The Fifth Circuit reversed, reasoning that the charge-filing requirement is a waivable claim-processing rule, and that the employer forfeited any arguments based on that rule by raising them too late in the litigation. Issue:  Is Title VII’s charge-filing requirement a non-waivable jurisdictional rule or a waivable claim-processing rule? Court’s Holding:  Title VII’s charge-filing requirement is a mandatory claim-processing rule that speaks to a plaintiff’s procedural obligations and “must be timely raised to come into play.” It is “not a jurisdictional prescription delineating the adjudicatory authority of courts” that may be raised at any point in the litigation. “[A] rule may be mandatory without being jurisdictional, and Title VII’s charge-filing requirement fits that bill.” Justice Ginsburg, writing for the unanimous Court What It Means: The decision does not change Title VII’s requirement that employees file a charge with the EEOC before suing an employer for discrimination. However, because this charge-filing requirement is a claim-processing rule, not a jurisdictional rule, employers must promptly raise any exhaustion-related defenses or risk waiver. The opinion might lead to increased litigation risks and costs for employers, as federal courts can exercise subject-matter jurisdiction over Title VII claims even when the plaintiff has failed to file a proper charge with the EEOC. The Court did not address whether the charge-filing requirement or other mandatory claim-processing rules are subject to equitable exceptions based on concerns for fairness and justice. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Labor and Employment Catherine A. Conway +1 213.229.7822 cconway@gibsondunn.com Jason C. Schwartz +1 202.955.8242 jschwartz@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 28, 2019 |
Supreme Court Holds That Third-Party Defendants May Not Remove Class Action Counterclaims To Federal Court

Click for PDF Decided May 28, 2019 Home Depot U.S.A., Inc. v. George W. Jackson, No. 17-1471 Today, the Supreme Court held 5-4 that when a defendant in a state court action files a counterclaim against a third party as a class action, the third-party defendant may not remove the class action counterclaim to federal court. Background: Citibank filed an action in state court to collect on a credit card debt.  In response, the debtor filed a class action counterclaim under state consumer protection law against Citibank and named Home Depot—a third-party retailer not previously involved in the case—as an additional defendant.  Relying upon the Class Action Fairness Act of 2005 (CAFA), which permits “any defendant” to remove certain state class actions to federal court, see 28 U.S.C. § 1453(b), as well as the general removal provision, 28 U.S.C. § 1441(a), Home Depot sought to remove the case to federal court.  A federal district court concluded that Home Depot could not do so because Home Depot was not a defendant in the original debt-collection action and therefore was not a “defendant” within the meaning of the removal statute.  The Fourth Circuit affirmed. Issue: Does a third-party defending itself against a class action counterclaim qualify as a “defendant” under the general removal provision or the removal provision of CAFA, such that the third-party may remove the case from state to federal court? Court’s Holding: No.  The term “defendant” in the removal statutes means only “the party sued by the original plaintiff,” not a counterclaim defendant or third-party joined in the case by a defendant. “[T]he limits that Congress has imposed on removal show that it did not intend to allow all defendants an unqualified right to remove.” Justice Thomas, writing for the majority What It Means: The Court explained that district courts determine whether a civil action is removable to federal court by assessing whether the action—not the claim—could have been filed originally in federal court.  As a result, the Court reasoned, removal must be based on the complaint, not any later-filed counterclaims or third-party claims. The Court emphasized that “the filing of counterclaims that included class-action allegations against a third party did not create a new ‘civil action’ with a new ‘plaintiff’ and a new ‘defendant.’”  Instead, the “defendant” for purposes of removal was the party sued by the original plaintiff.  The Court thus extended to third-party counterclaim defendants its longstanding holding in Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941), that an original plaintiff may not remove a state court counterclaim to federal court. The Court concluded that CAFA did not require a different result:  CAFA was “intended only to alter certain restrictions on removal”—such as the requirement that all defendants agree to removal—“not [to] expand the class of parties who can remove a class action.”  The Court thus held that the word “defendant” had the same meaning in CAFA as in the general removal provision. The decision was authored by Justice Thomas and joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan.  Justice Alito authored a dissent on behalf of the four remaining Justices.  Although “counterclaim class actions” are relatively rare, Justice Alito cautioned that the Court’s decision could encourage more plaintiffs to structure their class actions as counterclaims in state courts in an attempt to circumvent the protections afforded by CAFA and to avoid litigating in a federal forum.  The majority emphasized that authority to amend the statute to preclude such litigation tactics rests with Congress, not the Court. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 20, 2019 |
Supreme Court Holds That Courts, Not Juries, Must Decide Whether The FDA’s Rejection Of A Proposed Warning Label Provides “Clear Evidence” To Preempt A State-Law Failure-To-Warn Claim

Click for PDF Decided May 20, 2019 Merck Sharp & Dohme Corp. v. Albrecht, No. 17-290  Today, the Supreme Court unanimously held that courts, not juries, must decide as a matter of law whether there is “clear evidence” that the FDA would not have approved a proposed label warning about a risk of a drug, thereby preempting a state-law failure-to-warn claim based on that same risk. Background: Patients sued Merck for failing to warn that its prescription drug Fosamax is associated with “atypical femoral fractures.”  Merck moved for summary judgment, arguing that the claims were preempted because the FDA had rejected Merck’s proposed label warning about the risk of the fractures.  Specifically, Merck submitted to the FDA a “Prior Approval Supplement”—which requires the agency’s preapproval to add language to a warning label—seeking to warn about the risk of “stress fractures,” but the FDA rejected the proposal on the basis that Merck’s justification was “inadequate” because “[i]dentification of ‘stress fractures’ may not be clearly related to the atypical subtrochanteric fractures that have been reported in the literature.”  Merck argued that the FDA’s decision made it impossible for the company to comply with both state law and federal law and, therefore, the patients’ state-law failure-to-warn claims were preempted.  The district court granted summary judgment to Merck, but the U.S. Court of Appeals for the Third Circuit reversed, holding that Wyeth v. Levine, 555 U.S. 555 (2009), established an evidentiary standard of proof that required the factfinder to conclude that there is “clear evidence”—i.e., that it is highly probable—that the FDA would not have approved a change to the drug’s label to include the warning allegedly required under state law.  And because there was a genuine issue of material fact as to why the FDA rejected Merck’s proposed label, Merck was not entitled to summary judgment. Issue:  Federal law preempts a state-law failure-to-warn claim where there is “clear evidence” that the FDA would not have approved a drug manufacturer’s proposed label warning about a particular risk of using that drug.  Wyeth, 555 U.S. at 571.  “Is the question of agency disapproval primarily one of fact, normally for juries to decide, or is it a question of law, normally for a judge to decide without a jury?”  Court’s Holding:  Whether there is “clear evidence” that the FDA would have rejected a proposed label warning is a question of law for the courts to decide.  “We here decide that a judge, not the jury, must decide the pre-emption question . . . . The question often involves the use of legal skills to determine whether agency disapproval fits facts that are not in dispute.” Justice Breyer, writing for the Court What It Means: The Court preserved the ability of manufacturers to assert an impossibility preemption defense to state-law claims for failure to warn about a certain risk when the FDA has rejected a proposed label warning about the same risk. The decision clarified that the “clear evidence” phrase in Wyeth does not refer to an evidentiary standard of proof that applies to preemption questions, and reiterated that courts must answer such questions by asking whether state and federal law “irreconcilably conflict.” The Court explained that state and federal law “irreconcilably conflict” in the failure-to-warn context if (i) a manufacturer fully informed the FDA of the justifications for a drug label warning required by state law, and (ii) the FDA nevertheless disapproved of the manufacturer’s proposed change to the drug’s label to include the warning. The decision may improve the uniformity of preemption law in this area, as judges will be bound by precedent and are more familiar than lay juries with construing agency determinations. As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Life Sciences; FDA and Health Care Tracey B. Davies +1 214.698.3335 tdavies@gibsondunn.com Ryan A. Murr +1 415.393.8373 rmurr@gibsondunn.com Marian J. Lee +1 202.887.3732 mjlee@gibsondunn.com Daniel J. Thomasch +1 212.351.3800 dthomasch@gibsondunn.com © 2019 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 14, 2019 |
Supreme Court Holds That iPhone Users Have Standing To Seek Federal Antitrust Damages From Apple For App Store Purchases

Click for PDF Decided May 13, 2019 Apple, Inc. v. Pepper, No. 17-204 Yesterday, the Supreme Court held 5-4 that iPhone users are “direct purchasers” from Apple when they purchase apps on Apple’s App Store, and thus have standing to sue Apple for alleged monopolistic overcharges under Section 2 of the Sherman Act, even though third-party app developers pay for the allegedly monopolized app-distribution services and set the prices for apps charged to iPhone users. Background: A group of iPhone users sued Apple for damages under Section 2 of the Sherman Act, alleging that Apple monopolized the retail market for the sale of apps and unlawfully used its monopoly power to charge consumers higher-than-competitive prices. According to plaintiffs, Apple requires them to purchase iPhone apps from developers exclusively through Apple’s App Store. Although app developers independently set the retail price of each app, Apple charges developers a yearly fee to place their apps in the App Store, along with a commission on each sale. The iPhone users alleged that this arrangement caused them to pay inflated prices for apps and sought antitrust damages from Apple. Under Illinois Brick Co. v. Illinois, 431 U.S. 720, 729 (1977), only direct purchasers, “and not others in the chain of manufacture or distribution,” can sue for damages under federal antitrust law. The district court dismissed the action under Illinois Brick, reasoning that the app developers were the direct purchasers of Apple’s app-distribution services because they paid the annual fees and commissions charged by Apple. The Ninth Circuit reversed, holding that the iPhone users could sue Apple for allegedly monopolizing and attempting to monopolize the sale of iPhone apps. Issue: “Whether consumers may sue anyone who delivers goods to them for antitrust damages, even when they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense.” Court’s Holding: Yes. Illinois Brick does not bar plaintiffs’ claim for alleged monopoly overcharge damages because iPhone users are properly regarded as direct purchasers. “The [plaintiffs] pay the alleged overcharge directly to [defendant]. The absence of an intermediary is dispositive. Under Illinois Brick, the [plaintiffs] are direct purchasers … and are proper plaintiffs to maintain this antitrust suit.” Justice Kavanaugh, writing for the majority What It Means: The Court’s decision embraces a formal approach to antitrust standing in a claim arising under Section 2 of the Sherman Act that focuses on whether the plaintiff directly contracts with the alleged monopolist, irrespective of whether it directly bears the cost of the alleged monopolistic conduct. In doing so, the decision creates the risk that companies operating “electronic marketplaces” will be subject to suit by both the third-party sellers who pay to use the companies’ services and to end-consumers who purchase the third party’s products or services on the platform. The decision threatens to increase the cost and complexity of antitrust litigation, as courts may be required to engage in the complex task of apportioning antitrust damages among different levels of purchasers of a good or service. Justice Gorsuch, writing for a four-Justice dissent, highlighted some of the difficult questions lower courts must now address, including whether and to what extent third parties pass on alleged monopolistic charges, a question that will need to be addressed as to “all of the tens of thousands of developers who sold apps through the App Store at different prices and times over the course of years.” These increased litigation costs may have a negative financial impact on the e-commerce space as a whole. The Court was careful to note that it was not “assess[ing] the merits of the plaintiffs’ antitrust claims” or any “defenses Apple may have.” Having established standing, plaintiffs must now face the challenge of showing how a claim of charging “too much” overcomes Supreme Court precedent disapproving such claims. The Court’s decision raises the question whether it might overrule Illinois Brick in the future.  Although certain amici argued that the Court should do so here, the Court reasoned that “[i]n light of our ruling in favor of the plaintiffs in this case, we have no occasion to consider that argument.” Time will tell whether the Supreme Court’s formal approach to standing under Section 2 will carry over into substantive Section 1 analysis, e.g., requiring a reevaluation of principal-agent relationships that are not subject to Section 1 strictures under longstanding precedent. Gibson Dunn will be hosting a webcast on the current state of monopoly law and enforcement, including the impact of this decision, on May 23, 2019.  For more details, please click here.  As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Related Practice: Antitrust and Competition Scott D. Hammond +1 202.887.3684 shammond@gibsondunn.com M. Sean Royall +1 214.698.3256 sroyall@gibsondunn.com Daniel G. Swanson +1 213.229.7430 dswanson@gibsondunn.com

May 13, 2019 |
Federal Circuit Update (May 2019)

Click for PDF This edition of Gibson Dunn’s Federal Circuit Update summarizes key filings for certiorari or en banc review, as well as additional new Federal Circuit processes to address scheduling conflicts, for the period February through April 2019.  We also summarize recent Federal Circuit decisions concerning the patent eligibility of method of treatment claims, the impact of an inventor’s subjective views on the on-sale and prior use bars, and the constitutional and statutory standing requirements to appeal IPR decisions. Federal Circuit News Supreme Court: Decisions are pending from the Supreme Court for one patent case and one trademark case from the Federal Circuit.  In March, the Supreme Court also granted certiorari over an additional patent case from the Federal Circuit. Case Status Issue Amicus Briefs Filed Return Mail Inc. v. United States Postal Service, No. 17-1594 Argued on February 20, 2019. Whether the government is a “person” who may petition to institute review proceedings under the Leahy-Smith America Invents Act. 11 Iancu v. Brunetti, No. 18-302 Argued on April 15, 2019. Whether Section 2(a) of the Lanham Act’s prohibition on the federal registration of “immoral” or “scandalous” marks is facially invalid under the free speech clause of the First Amendment. 10 Iancu v. NantKwest Inc., No. 18-801 Petition for certiorari granted on March 4, 2019. Whether the phrase “[a]ll the expenses of the proceedings” in 35 U.S.C. § 145 encompasses the personnel expenses the PTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation. – Noteworthy Petitions for a Writ of Certiorari: Acorda Therapeutics, Inc. v. Roxane Labs., Inc. (No. 18-1280):  Question presented:  “whether objective indicia of nonobviousness may be partially or entirely discounted where the development of the invention was allegedly ‘blocked’ by the existence of a prior patent, and, if so, whether an ‘implicit finding’ that an invention was ‘blocked,’ without a finding of actual blocking, is sufficient to conclude that an infringer has met its burden of proof.”  Acorda is represented by Ted Olson, Thomas Hungar, Amir Tayrani, and Jessica Wagner of Gibson Dunn. Ariosa Diagnostics Inc. v. Illumina Inc. (No. 18-109):  Question presented:  “Do unclaimed disclosures in a published patent application and an earlier application it relies on for priority enter the public domain and thus become prior art as of the earlier application’s filing date, or, as the Federal Circuit held, does the prior art date of the disclosures depend on whether the published application also claims subject matter from the earlier application?” RPX Corp. v. ChanBond LLC (No. 17-1686):  Question presented:  “Can the Federal Circuit refuse to hear an appeal by a petitioner from an adverse final decision in a Patent Office inter partes review on the basis of lack of a patent-inflicted injury in fact when Congress has (i) statutorily created the right to have the Director of the Patent Office cancel patent claims when the petitioner has met its burden to show unpatentability of those claims, (ii) statutorily created the right for parties dissatisfied with a final decision of the Patent Office to appeal to the Federal Circuit, and (iii) statutorily created an estoppel prohibiting the petitioner from again challenging the patent claims?” HP Inc. v. Berkheimer (No. 18-415):  Question presented:  “whether patent eligibility is a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of the art at the time of the patent.”  On January 7, 2019, the Supreme Court invited the U.S. Solicitor General to file a brief expressing the views of the United States.  Mark Perry of Gibson Dunn continues to serve as co-counsel for HP in this matter. Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc. (No. 18-817):  Question presented:  “whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps.”  On March 18, 2019, the Supreme Court invited the U.S. Solicitor General to express the views of the United States. Other Federal Circuit News On March 22, 2019, the New York Intellectual Property Law Association held the 97th Annual Dinner in Honor of the Federal Judiciary.  The Honorable Kathleen O’Malley of the Federal Circuit was honored with the 17th Annual Outstanding Public Service Award. The annual Federal Circuit Bench and Bar Conference will take place June 12–15, 2019, at the Broadmoor in Colorado Springs, CO. Federal Circuit Practice Update New Process for Notifying Counsel of Accepted Scheduling Conflicts: On December 10, 2019, the Federal Circuit announced revisions to its process for advising it of scheduling conflicts.  Those changes were summarized in our January 2019 newsletter. The Federal Circuit has now issued a follow-up announcement, discussing the new process for notifying counsel of accepted scheduling conflicts: The Federal Circuit will continue to review Responses to Notice to Advise of Scheduling Conflicts to determine whether conflicts are accepted. Only accepted conflict dates will be indicated on the public docket.  Submitted conflict dates that are not accepted will not be listed on the public docket. The non-acceptance of a submitted conflict date does not mean that oral argument necessarily will be scheduled on that date. The Federal Circuit’s notice can be found here. Key Case Summaries (February 2019–April 2019) Natural Alternatives Int’l, Inc. v. Creative Compounds, LLC, No. 18-1295 (Fed. Cir. Mar. 15, 2019): Claims to treatment methods using existing products in new ways are patent eligible. Natural Alternatives’ patents relate to the use of the amino acid beta-alanine as a supplement to increase muscle capacity.  The district court granted judgment on the pleadings that the claims are ineligible as directed to the natural law that ingesting beta-alanine (a natural substance) will increase the carnosine concentration in human tissue and thereby increase muscle capacity. The Federal Circuit (Moore, J., joined by Wallach, J.; Reyna, J., dissenting in part) reversed.  The majority reasoned that the claims not only “embody” the “discovery” that administering certain quantities of beta-alanine alters a human’s natural state, but also require that an infringer actually administer the dosage claimed in the manner claimed to provide the described benefits.  Citing Vanda Pharms. Inc. v. West-Ward Pharms. Int’l Ltd. (Fed. Cir. 2018)—addressed in our January 2019 Update and pending petition for writ of certiorari—the majority reasoned that, because the claims specify a compound and dosages, they go “far beyond merely stating a law of nature, and instead set[] forth a particular method of treatment,” rendering them patent eligible at step one of the Alice inquiry.  The decision thus continues the Federal Circuit’s recent practice of distinguishing claims written as “methods of treatment” (held patent eligible) from those worded in “diagnostic” terms (held ineligible in Mayo).  The majority also ruled that “factual impediments” exist in analyzing step two of the Alice inquiry, such that disputed questions of eligibility “may not be made on a motion for judgment on the pleadings.”  This is challenged in the pending HP Inc. v. Berkheimer certiorari petition prepared by Gibson Dunn (see above). Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc., Nos. 2017-1240, 1455-1887 (Fed. Cir. Mar. 28, 2019):  Claims to treatments relying on natural laws can be patent eligible. Two weeks after Natural Alternatives was decided, another Federal Circuit panel (Wallach, Clevenger, and Stoll, JJ.) continued the Court’s view that “methods of treatment” can avoid ineligibility under Mayo and Alice.  In Endo, the claims relied on the relationship between the body’s rate of clearing the metabolite creatine and the rate for clearing opioids.  The method required measuring a patient’s creatine clearance rate and then administering an opioid based on that rate.  Citing Vanda Pharmaceuticals, the panel reversed the district court’s finding of ineligibility.  As the panel reasoned, method of treatment claims like in Endo and Vanda can be distinguished from Mayo in that, while the claims in Mayo merely required “giving [a] drug to a patent with a certain disorder,” the claims in Endo and Vanda require giving a specific dose of the drug based on specific testing.  According to the panel, such claims are eligible because they are “directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome” whether or not steps are governed by natural laws. Barry v. Medtronic, Inc., No. 2017-2463 (Fed. Cir. Jan. 24, 2019):  An inventor’s subjective and unclaimed “intended purpose” for an invention can determine public use and on-sale bars. More than a year before filing, Dr. Barry successfully used his claimed surgical method on three patients.  He then saw each patent for follow-up appointments that he deemed necessary to determine if his method worked, with two of the appointments also falling outside the pre-AIA Section 102(b) grace period.  It was only after the third of these appointments, which was within the Section 102(b) grace period, that Dr. Barry felt confident that his invention functioned for its intended purpose.  Accordingly, the district court held that his earlier actions did not constitute invalidating public use or sales (i.e., that the invention was not “ready for patenting” earlier). The Federal Circuit majority (Taranto, J., joined by Moore, J.) affirmed that the invention was not “ready for patenting” before the critical date and that the surgeries fell in the experimental-use exception to “on sale” and “public use” bars.  The majority concluded that Dr. Barry did not reduce his invention to practice until the final postoperative follow-up because that follow up was “reasonably needed” to determine if the invention worked for its “intended purpose.” In dissent, Chief Judge Prost argued that the “ready for patenting” requirement that defines the statutory bars is distinct from “reduction to practice” and meant to answer whether the inventor could have obtained a patent.  According to the dissent, Dr. Barry’s method was ready to patent after the first two surgeries and follow-ups, if not after the first.  Dr. Barry charged his usual fee for the surgeries, and the patients were not told that the surgery was experimental.  The early surgeries worked, and no multiple surgery or follow up requirement or “purpose” was claimed. On April 29, 2019, Medtronic’s petition for panel rehearing and rehearing en banc was denied, leaving stand the panel majority decision that gives strong weight in determining Section 102 bars to the inventor’s subjective view of whether an invention works for its “intended purpose.” Mylan Pharms. Inc. v. Research Corp. Techs., Inc., Nos. 2017-2088, -2089, -2091 (Fed. Cir. Feb. 1, 2019):  Joined parties can appeal adverse IPR decision without initial petitioner. An initial Petitioner timely filed an IPR, but had not been threatened with infringement and thus lacked Article III standing to appeal.  Three days after the Board instituted the initial petition, three other companies filed for joinder under 35 U.S.C. § 315(c).  Each joining company had been sued for infringement more than a year earlier, and thus, absent joinder, their petitions were otherwise time barred.  After an adverse decision from the Board, the initial petitioner did not appeal, leaving only the joined parties to appeal.  The patentee objected that, absent the initial petitioner, the joined parties lacked standing and did not “fall within the zone of interests of 35 U.S.C. § 319”—i.e., absent the initial petitioner, their own petitions were allegedly time barred. The Federal Circuit (Lourie, Bryson, and Wallach, JJ.) disagreed.  As the panel explained, Section 315 allows entities to be joined “as a party” and Section 319 gives a “party” a right to appeal.  Thus, even absent the initial petitioner, the joined parties fell “within the zone of interests of § 319 and are not barred from appellate review.” Momenta Pharma v. Bristol-Myers Squibb Co., No. 2017-1694 (Fed. Cir. Feb. 7, 2019):  IPR petitioner lacked standing for appeal after it suspended plans for a competing product. Momenta petitioned for IPR of a patent covering the immunosuppressant Orencia.  At the time, Momenta was planning a biosimilar, which it had in clinical trials.  But by the time of appeal, Momenta had suspended its development plans after its competing product failed Phase 1 trials.  The Federal Circuit (Newman, Dyk, and Chen, JJ.) held that Momenta thus lacked the present “concrete and particularized” interest required for Article III standing.  The panel rejected the argument that the patent could impact future development, finding a generalized threat of harm fell short of an “impending” injury: “[T]he cessation of potential infringement means that Momenta no longer has the potential for injury, thereby mooting the inquiry.”  Taken with Mylan above, Momenta illustrates that, while statutory standing may be durable, constitutional standing for Article III courts must be preserved up to and through appeal. Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Orange County (+1 949-451-3805, bevanson@gibsondunn.com) Raymond A. LaMagna – Los Angeles (+1 213-229-7101, rlamagna@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups: Appellate and Constitutional Law Group: Allyson N. Ho – Dallas (+1 214-698-3233, aho@gibsondunn.com) Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Intellectual Property Group: Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com) Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) © 2019 Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA 90071 Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 1, 2019 |
Gibson Dunn Named Best Regulatory Law Firm of the Year by GamblingCompliance

GamblingCompliance named Gibson Dunn “Best Regulatory Lawyer/Law Firm of the Year (North America)” at its 2019 GamblingCompliance Global Regulatory Awards.  The award recognized the firm’s “exceptional legal service and guidance to clients within the sector.” The results were announced at its annual dinner on May 1, 2019. Gibson Dunn’s Betting and Gaming Practice is one of the most preeminent betting and gaming legal practices worldwide, representing the most prestigious and influential clients in the industry across Europe, Asia and the Americas. We believe that the Gibson Dunn global betting and gaming practice provides our clients with a unique offering – no other global law firm can offer an award-winning regulatory and compliance capability alongside a market-leading transactional practice in the betting and gaming sector in the United Kingdom, the United States, Europe and the Asia-Pacific Region.

April 25, 2019 |
Gibson Dunn Earns 79 Top-Tier Rankings in Chambers USA 2019

In its 2019 edition, Chambers USA: America’s Leading Lawyers for Business awarded Gibson Dunn 79 first-tier rankings, of which 27 were firm practice group rankings and 52 were individual lawyer rankings. Overall, the firm earned 276 rankings – 80 firm practice group rankings and 196 individual lawyer rankings. Gibson Dunn earned top-tier rankings in the following practice group categories: National – Antitrust National – Antitrust: Cartel National – Appellate Law National – Corporate Crime & Investigations National – FCPA National – Outsourcing National – Real Estate National – Retail National – Securities: Regulation CA – Antitrust CA – Environment CA – IT & Outsourcing CA – Litigation: Appellate CA – Litigation: General Commercial CA – Litigation: Securities CA – Litigation: White-Collar Crime & Government Investigations CA – Real Estate: Southern California CO – Litigation: White-Collar Crime & Government Investigations CO – Natural Resources & Energy DC – Corporate/M&A & Private Equity DC – Labor & Employment DC – Litigation: General Commercial DC – Litigation: White-Collar Crime & Government Investigations NY – Litigation: General Commercial: The Elite NY – Media & Entertainment: Litigation NY – Technology & Outsourcing TX – Antitrust This year, 155 Gibson Dunn attorneys were identified as leading lawyers in their respective practice areas, with some ranked in more than one category. The following lawyers achieved top-tier rankings:  D. Jarrett Arp, Theodore Boutrous, Jessica Brown, Jeffrey Chapman, Linda Curtis, Michael Darden, William Dawson, Patrick Dennis, Mark Director, Scott Edelman, Miguel Estrada, Stephen Fackler, Sean Feller, Eric Feuerstein, Amy Forbes, Stephen Glover, Richard Grime, Daniel Kolkey, Brian Lane, Jonathan Layne, Karen Manos, Randy Mastro, Cromwell Montgomery, Daniel Mummery, Stephen Nordahl, Theodore Olson, Richard Parker, William Peters, Tomer Pinkusiewicz, Sean Royall, Eugene Scalia, Jesse Sharf, Orin Snyder, George Stamas, Beau Stark, Charles Stevens, Daniel Swanson, Steven Talley, Helgi Walker, Robert Walters, F. Joseph Warin and Debra Wong Yang.

April 24, 2019 |
Supreme Court Reaffirms Stolt-Nielsen And Holds That Class Arbitration Requires The Parties’ Unambiguous Consent

Click for PDF Decided April 24, 2019 Lamps Plus, Inc. v. Varela, No. 17-988 Today, the Supreme Court held 5-4 that the Federal Arbitration Act (FAA) preempts state laws that require class arbitration where an arbitration agreement is ambiguous as to whether the parties consented to such a procedure. Background: In Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (2010), the Supreme Court held that a party may not be compelled to submit to class arbitration if the parties’ agreement does not clearly evidence that the party agreed to do so. Here, the parties disputed whether their agreement could be read to allow class arbitration. The defendant argued that the agreement required individual arbitration because it provided that the plaintiff must arbitrate claims or controversies that “I may have against the Company.” The plaintiff argued that the agreement was ambiguous because it provided that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings.” Agreeing with the plaintiff, the Ninth Circuit found the agreement ambiguous. And because the agreement was governed by California law, the Ninth Circuit applied the state-law principle that contractual ambiguities are resolved against the drafter to hold that the agreement should be interpreted to require the defendant to submit to class arbitration. Issue: Whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration. Court’s Holding: Yes. The FAA preempts state laws that would “impose class arbitration in the absence of the parties’ consent,” and courts may not rely on state contract law to “infer from an ambiguous agreement that the parties have consented to arbitrate on a classwide basis.” “The [Federal Arbitration Act] requires more than ambiguity to ensure that the parties actually agreed to arbitrate on a classwide basis.” Chief Justice Roberts, writing for the majority What It Means: The Court’s opinion reaffirms Stolt-Nielsen’s observation that class arbitration is fundamentally different from bilateral arbitration, and that bilateral arbitration is the default mode of arbitrating under the FAA.  If parties wish to resolve disputes in arbitration on a classwide basis, their arbitration agreement must unambiguously so provide.  As the Court noted, “[l]ike silence, ambiguity does not provide a sufficient basis to conclude that parties to an arbitration agreement agreed to ‘sacrifice[] the principal advantage of arbitration’” by agreeing to classwide arbitration. The Court’s decision also makes clear that the FAA preempts state laws that conflict with the strong federal policy favoring bilateral arbitration.  Courts “may not rely on state contract principles to ‘reshape traditional individualized arbitration by mandating classwide arbitration procedures without the parties’ consent.’” The Court’s decision is a victory for defendants who are party to an arbitration agreement that is silent or ambiguous as to class arbitration.  The decision should help to ensure that defendants cannot be forced into unfair or inefficient class arbitration proceedings against their will. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court.  Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Related Practice: Class Actions Theodore J. Boutrous, Jr. +1 213.229.7804 tboutrous@gibsondunn.com Christopher Chorba +1 213.229.7396 cchorba@gibsondunn.com Theane Evangelis +1 213.229.7726 tevangelis@gibsondunn.com