Supreme Court Update: Bristol-Meyers Squibb Co. v. Superior Court of San Francisco, San Francisco County (16-466), Packingham v. North Carolina (15-1194), Sessions v. Morales-Santana (15-1191), Sandoz v. Amgen (15-1039) and Jenkins v. Hutton (16-1116)
Greetings, Court Fans!
The end-of-term rush is officially on. On Monday, the Court handed down six new decisions (including a per curiam summary reversal) and accepted a potential OT17 blockbuster for review. To summarize briefly: In Matal v. Tam (No. 15-1293), the Court unanimously (but with some disagreement on rationale) struck down the disparagement clause of the Lanham Act under the First Amendment. In Bristol-Myers Squibb v. Superior Court (No. 16-466), the Court (8-1) limited the specific jurisdiction of state courts to entertain cases involving companies with nationwide contacts. In Packingham v. North Carolina (No. 15-1194), the Court unanimously struck down a state ban on sex offenders' use of social media sites under the First Amendment. In Ziglar v. Abbasi (No. 15-1358), the Court (4-2) significantly narrowed the scope of Bivens actions for damages against federal officials for violations of civil rights. And in McWilliams v. Dunn (No. 16-5294), the Court (5-4) handed down a rare habeas win for a death-row inmate who argued that he was not provided meaningful expert assistance by a court-appointed psychiatric expert. (But, to even things out, in Jenkins v. Hutton (No. 16-1116), the Court issued one of its semi-regular summary reversals of a Sixth Circuit decision granting the writ.) All that, and yet the biggest news coming from One First Street Monday may have been the Court's acceptance of a new redistricting case, Gill v. Whitford (No. 16-1161), that directly presents the issue (last danced around in 2004) whether partisan-gerrymandering claims are justiciable.
This Update will cover a few of these momentous (in relative OT16 terms) decisions, as well as a couple of stragglers from last week. We've got a lot to cover here, so don't go printing this out if you're low on toner…
Depending on your perspective, Bristol-Meyers Squibb Co. v. Superior Court of San Francisco, San Francisco County (16-466) is either the latest in a series of decisions markedly limiting state court jurisdiction over out-of-state corporate defendants, or a tug on the reins of a California Supreme Court racing into uncharted jurisdictional territory.
Bristol-Meyers Squibb (BMS) makes a drug called Plavix. While Plavix wasn't developed, made or packaged in California, BMS earned nearly a billion dollars from the sale of Plavix there, and it has labs and hundreds of employees there as well, though its headquarters is in New York and it's incorporated in Delaware. More than 600 plaintiffs—fewer than 100 of them from California—joined together to sue BMS in a California state court, all based on the alleged defects in Plavix and its allegedly misleading marketing and promotion. BMS moved to dismiss for lack of personal jurisdiction, but it lost at all three levels of the California court system, with the California Supreme Court ultimately holding that the state courts had specific jurisdiction—also known as "case-linked" jurisdiction—over the Plavix claims. In so doing, the court applied what it called a "sliding scale approach to specific jurisdiction," in which it's easier to show "a connection between the forum contacts and the claim" as the defendant's contacts in the forum increase. Given BMS's extensive contacts in the state, including unrelated research facilities, the court found that California courts had specific jurisdiction not only over the claims of California residents—who saw advertising and promotion in California, bought the drug in California and were allegedly injured in California—but also over the out-of-state residents.
The Supreme Court reversed in an opinion by Justice Alito and joined by everyone but Sotomayor. Reaching back to International Shoe, the Court noted that it has consistently recognized two different types of personal jurisdiction: an all-purpose general jurisdiction that exists only in a defendant's home state or states, and a case-linked specific jurisdiction that exists where the relevant conduct occurred. California's sliding-scale approach, which loosens the required connection between the claims and the forum as the defendant's contacts as the state increase, amounted to an unholy mix of the two, "a loose and spurious form of general jurisdiction." Under settled principles, the out-of-state plaintiffs' claims had no meaningful link to California. They weren't prescribed Plavix in California, didn't buy or take it there, and weren't hurt by it there. It didn't matter, the Court held, that the California resident plaintiffs experienced all of those steps in California. Nor was it relevant that BMS conducted drug research unrelated to Plavix in California. And it was immaterial that BMS contracted with a California company to distribute Plavix nationally. None of these factors, alone or together, amounted to a sufficient link between California and the out-of-staters' claims.
To Justice Sotomayor, the Court's holding represented a disturbing second step in a path away from the two sorts of jurisdiction over defendants in mass-tort cases recognized in International Shoe. Three years ago, in Daimler AG v. Bauman (2014), over another Sotomayor dissent, the Court narrowed the kinds of forum connections that subjects a defendant to general jurisdiction. To Justice Sotomayor, Bristol-Meyers Squibb is the other shoe dropping: a narrowing of specific jurisdiction that amounts to a "holding that a corporation that engages in a nationwide course of conduct cannot be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State."
The majority and the dissent drew from very different principles. The Court reiterated that pragmatism does not prevail: even if a forum would be the most convenient spot for litigation, causing no inconvenience to the defendant, and even if the forum has a strong interest in applying its law to the controversy, the Due Process Clause of the Fourteenth Amendment trumps those interests, serving as protection from "the State's coercive power" and as an "instrument of interstate federalism" protecting each state from the encroachments of others. To Justice Sotomayor, personal jurisdiction should instead be measured "first and foremost by the yardstick set out in International Shoe – ‘fair play and substantial justice.'"
If that battle feels a little heady, the disagreement over consequences brings our boots back to earth. The Court noted that the California and non-California plaintiffs could still bring a nationwide mass action; they just have to do it in a state where BMS is at home, like New York or Delaware. Or the residents of each state could "probably" band together and sue in each state. The dissent questioned why the Court felt the need to create such a patchwork of jurisdictional limitations. The real purpose of these limitations, Justice Sotomayor concluded, was pure power: by "eliminat[ing] nationwide mass actions" anywhere except the defendant's "home," the Court "hands one more tool to corporate defendants determined to prevent the aggregation of individual claims, and forces injured plaintiffs to bear the burden of bringing suit in what will often be far flung jurisdictions." Even worse, she thought, plaintiffs may not be able "to bring a nationwide mass action against two or more defendants" with homes in different states, as there is no forum where they are both at home. The same is true of a mass action against a foreign defendant, which has no home in the U.S.
The dissent's questions about whether nationwide mass actions can be brought against multi-defendants and foreign defendants are not the only big questions left open by Bristol-Meyers Squibb, which explicitly left open whether federal courts have the same restrictions on personal jurisdiction as the states. And as the dissent also noted, the Court did not address whether the decision would also apply to a class action in which a forum resident sues as the named plaintiff of a nationwide class. It's a safe bet that briefs addressing each of those issues are already taking shape on computer screens across the nation.
Next, in Packingham v. North Carolina (No. 15-1194), the Court weighed in for the first time (or so the majority claimed) on "the relationship between the First Amendment and the modern Internet." In doing so, it unanimously struck down a North Carolina statute broadly barring sex offenders from accessing social-media sites like Facebook, but split on the proper approach for applying First Amendment jurisprudence to this (not actually all that) New Frontier.
Lester Gerard Packingham is a God-fearing, motor-vehicle-law skirting, North Carolinian who also happens to be a registered sex offender, having pled guilty to taking indecent liberties with a child back in 2002. In 2010, Packingham found himself in traffic court, where a prosecutor dismissed a ticket against him. Sensing divine intervention, Packingham took to Facebook to bear witness: "Man God is Good! How about I got so much favor they dismissed the ticket before court even started? No fine, no court cost, no nothing spent. . . . Praise be to GOD, WOW! Thanks JESUS!" One of his "friends" didn't like this post, however—specifically, a Durham cop who was trawling social media for users who might be violating a state law that made it a felony for a registered sex offender "to access a commercial social networking Web site where the sex offender knows that the site permits minor children to become members or maintain personal Web pages." Packingham was convicted of violating the statute, but the North Carolina Court of Appeals vacated the conviction, holding that the statute violated the First Amendment. The NC Supreme Court reversed, holding that the law did not run afoul of the First Amendment because it was carefully tailored to prohibit sex offenders from visiting only those Web sites that allow them the opportunity to gather information about minors, while leaving open adequate alternative means of communication, including (this being North Carolina) "the Paula Deen Network."
The U.S. Supreme Court reversed again, striking down the state statute as overbroad—"a prohibition unprecedented in the scope of First Amendment speech it burdens." The Court's actual doctrinal analysis of the statute was rather scant. Even if taken to be content neutral and therefore subject to intermediate scrutiny, and accepting that preventing child abuse is undoubtedly a significant government interest, the Court found that "[t]he State has not . . . met its burden to show that this sweeping law is necessary or legitimate to serve that purpose." The Court's analysis essentially boiled down to a citation to Airport Comm'rs of Los Angeles v. Jews for Jesus (1987), where the Court struck down an ordinance prohibiting "First Amendment activities" at LAX because it went too far in prohibiting protected, nondisruptive behavior. "If a law prohibiting ‘all protected expression' at a single airport is not constitutional, it follows with even greater force that the State may not enact this complete bar to the exercise of First Amendment rights on websites integral to the fabric of our modern society and culture."
None of that is particularly controversial and all eight justices (with Gorsuch on the bench) agreed that the North Carolina statute is unconstitutionally overbroad. But there was stark disagreement between the majority, led by Justice Kennedy, and concurring Justices (Alito, joined by the Chief and Thomas) over how the Court should approach applying the First Amendment to the Interwebs. Writing for the majority, Kennedy seemed to equate "cyberspace" (undoubtedly "the most important place . . . for the exchange of views" in modern society) with traditional public fora like streets and parks. In vintage Kennedese, he concluded that we are in the early stages of a "revolution in thought" and that "[t]he forces and directions of the Internet are so new, so protean, and so far reaching" that "the Court must exercise extreme caution before suggesting that the First Amendment provides scant protection for access to vast networks in that medium."
To the concurring Justices, Kennedy's opinion was marred by "undisciplined dicta" and "unnecessary rhetoric." They agreed that the North Carolina statute that the case is actually about is vastly overbroad and could not survive even the most deferential standard of First Amendment review. (Of particular concern to Alito was that the statute could in fact be read to apply to websites like Amazon.com, washingtonpost.com, and WebMD that are ill suited for use in stalking children.) But Alito decried the majority's "loose rhetoric," which appeared to equate "cyberspace" with traditional public fora without accounting for the doctrinal significance of that designation or the "important differences between cyberspace and the physical world."
Interestingly, the majority and concurring justices all agreed that the Court should be "cautious" in how it approaches the application of the First Amendment to the ever-evolving (even revolutionary) world of cyberspace, but they disagreed sharply on what caution actually means. To Kennedy and the more liberal justices, it means erring on the side of greater access to these new virtual fora; to Alito, Roberts, and Thomas, it means not biting off more of a new problem than the Court can (or must) chew in one case.
There were faint echoes of this divide in Sessions v. Morales-Santana (No. 15-1191), another case where the Court confronted a rather obviously unconstitutional statute but disagreed on how much needed to be said to resolve the particular case. Here, the Court considered a provision of the Immigration and Nationality Act that treats the child of an unwed U.S.-citizen mother differently than the child of an unwed U.S.-citizen father for naturalization purposes. Sounds unconstitutional, right? But what's the remedy? Should the favorable treatment of unmarried mothers simply be stricken, or should it instead be extended to unmarried fathers? By a 6-2 vote, the majority opted for the former course, but in so doing raised difficult (and scarcely considered) questions about whether, having done so, it was appropriate to reach the constitutional issue in the first place.
First some background: 8 U.S.C. § 1401 establishes the general rules for who obtains U.S. citizenship by birth. Section 1401(a)(7), which is now codified as 1401(g), provides that a child born outside the U.S. to one U.S. citizen parent and one non-citizen parent is only a born U.S. citizen if the citizen parent lived in the United States for a minimum period of time before the child's birth—now five years but, at the relevant time period for this case, ten years, at least five of which had to be after the citizen parent turned 14. Section 1401 is applicable to married couples. Section 1409 addresses the children of unmarried parents, but it draws a distinction between fathers and mothers. Section 1409(a) incorporates the general presence requirement for unwed fathers. But Section 1409(c) creates an exception to that requirement for unmarried U.S.-citizen mothers, who may pass citizenship on to their children if they were present in the United States for as little as one year at any point before the child's birth.
Respondent Morales-Santana moved to the United States at age 13 and has lived here for roughly 40 years. His father was a U.S. citizen, born and raised in Puerto Rico, who moved to the Dominican Republic 20 days before his 19th birthday, meaning that he (just barely) did not satisfy Section 1401(a)(7)'s requirement of five years of presence in the United States after age 14. When the Government sought to remove Morales-Santana as a criminal alien following some state criminal convictions, he argued that Section 1409(c)'s more favorable treatment of unmarried mothers violates the equal protection clause and that, as a remedy, he should receive U.S. citizenship (as he would if his unmarried U.S.-citizen father were treated the same as an unmarried U.S.-citizen mother). The Immigration Judge and the Board of Immigration Appeals rejected his argument, but the Second Circuit reversed, concluding that the disparate treatment of unmarried fathers and mothers is unconstitutional and that the proper remedy is to recognize Morales-Santana's citizenship, as though unmarried fathers were treated the same as unmarried mothers.
The Supreme Court affirmed in part and reversed in part. Writing for a majority of six (with Gorsuch on the sidelines), Justice Ginsburg began by identifying the appropriate level of scrutiny: Laws granting or denying benefits on the basis of a parent's sex attract heightened scrutiny and can be upheld only if the government provides an "exceedingly persuasive justification" for the differential treatment. That justification was lacking here. Indeed, a review of the history of the statutes demonstrated that they were based on overly broad stereotypes about the role men and women play in children's lives. Specifically, Congress was concerned that a child born to a U.S. citizen and a non-U.S. citizen might turn out "more alien than American in character." So it adopted the presence requirement, limiting U.S. citizenship to cases where the U.S.-citizen parent had a strong tie to the United States (because he or she had lived here for a substantial portion of his or her life). But Congress believed the risk of alien influence was greatly reduced for children born to unmarried U.S.-citizen mothers, because Congress assumed that children born outside of marriage would be raised exclusively by their mothers. If those mothers were citizens, Congress wasn't worried about the potentially corrupting influences of their deadbeat foreign dads, so a year's presence sufficed for the moms to pass on citizenship. Whether this rationale ever satisfied heightened scrutiny, the Court certainly did not find it "exceedingly persuasive" in 2017. And the Government's modern-day justifications (which amounted to little more than PC ways to voice the same gender stereotypes) failed to save the statute.
But this left the question of a proper remedy. Justice Ginsburg made note of two general alternatives where a statute unconstitutionally benefits one class. One approach is to declare the statute a nullity, effectively depriving everyone of the benefit; the other is to extend the benefit to all. Which approach is better depends on the legislature's intent, as revealed by the statute at hand. Because Section 1409(c)'s more favorable treatment of unmarried mothers was a narrow exception to the general physical-presence requirement of Section 1401(a), the Court unanimously agreed that the exception should be stricken (at least prospectively). The Court rejected the Second Circuit's approach of extending the exception to the children of unwed U.S.-citizen fathers, in part because that would result in the statute treating the children of unmarried parents (of either sex) more favorably than the children of married parents, whose citizenship would still be governed by the presence requirement of Section 1401(a), a result that may pose constitutional problems of its own. Thus, while Morales-Santa persuaded the Court that Section 1409(c)'s disparate treatment of moms and dads is unconstitutional, he won't be benefitting from the Court's ruling. Justice Ginsburg noted that Congress had the power to reduce the presence requirement, but the Court lacks that authority.
Justice Thomas, joined by Alito, concurred in the judgment, in part. Assuming Section 1409(c)'s unwed-mom exception is unconstitutional, Thomas agreed that the proper remedy under the circumstances would be to strike it, leaving everyone subject to the general presence requirement. But if that's the correct remedy, then there really is no justification for actually reaching the underlying constitutional question, because Morales-Santana would be out of luck either way. (Either Section 1409(c) is constitutional, or it's unconstitutional but stricken.) Thomas would therefore have simply reversed the Second Circuit's holding (that Morales-Santana is entitled to citizenship) without reaching out to render an advisory opinion on the constitutionality of Section 1409(c) that might have implications beyond the scope of the particular case the Court was asked to resolve.
By comparison, the Court was much more circumspect in Sandoz v. Amgen (No. 15-1039), where it weighed in on the relative rights of research pharmaceutical companies and their generic competitors under the Biologics Price Competition and Innovation Act of 2009 (BPCIA), an unheralded but way complicated subchapter of the Affordable Care Act. (Wouldn't be a complete term without an Obamacare decision, right?) In a unanimous opinion authored by Justice Thomas, the Court decided only what it had to to resolve the case, while leaving many other questions to percolate in the lower courts.
The BPCIA governs "biosimilars," a type of biologic drug that is highly similar to a biologic product that has already been approved by the FDA. (Biologics are drugs derived from natural, biological sources, rather than synthesized from chemicals.) It provides an abbreviated pathway for guiding these knock-offs to FDA approval, while also providing procedures for resolving patent disputes between biosimilar manufacturers ("applicants") and the manufacturers of the existing "reference products" on which the applicants seek to piggyback. The basic idea is that the manufacturer of a reference product (the "sponsor") gets twelve years after FDA approval to market its biologic without competition from generic biosimilars, but the generic applicants get a fast-track to licensing thereafter, provided they are not infringing on patents held by the sponsor, something the BPCIA aims to sort out in an accelerated way during the twelve-year period. So, to zero in on the provisions at issue in this case, § 262(l)(2)(A) requires the applicant, upon receipt of notice that the FDA has accepted its application for review, to provide the sponsor with a copy of its application and information about how its biosimilar is manufactured. This allows the sponsor to evaluate the biosimilar for possible infringement of patents it holds on the reference product. After the applicant makes the relevant disclosures, the BPCIA orchestrates a complex dance in which the applicant and sponsor first exchange prospective patent claims and defenses and then proceed to litigate in two phases. The second phase is commenced by the applicant's "notice of commercial marketing," which the applicant "shall provide" to the sponsor "not later than 180 days before the date of the first commercial marketing of the [biosimilar]." If all of these steps are followed, then the parties will be able to litigate the relevant patents before the biosimilar is marketed.
In this case, the applicant, Sandoz, preferred to get a little biosimilar marketing in before the patent litigation commenced. In May 2014, Sandoz filed an application with the FDA seeking approval to market Zarxio, a biosimilar that was essentially a generic version of Amgen's product Neopogen, a biologic used to stimulate the production of white blood cells. Soon after the FDA informed Sandoz that it had accepted the application for review, Sandoz notified Amgen that it had submitted the application and that, notwithstanding all those complicated procedures described above, it intended to market Zarxio immediately upon receiving FDA approval and had no intention of providing the application and manufacturing information required by § 262(l)(2)(A). Amgen sued Sandoz for patent infringement in October 2014, and also asserted claims under California's unfair competition law, which prohibits any "unlawful" business practice. Among other relief, it sought an injunction requiring Sandoz to turn over its application and manufacturing information and to refrain from marketing Zarxio in the interim. The District Court ruled mostly in Amgen's favor, but the Federal Circuit reversed in part. It held that Sandoz had not violated the BPCIA by failing to disclose its application and manufacturing information (and therefore rejected Amgen's request for an injunction requiring Sandoz to make the disclosures), but held that the BPCIA required Sandoz to provide its notice of commercial marketing only after the FDA had licensed the biosimilar, and therefore enjoined Sandoz from marketing Zarxio until 180 days after the date it had provided post-licensing notice.
The case and the statute are complicated, but the basic storyline is simple and familiar: The Federal Circuit got reversed (completing an 0-6 run this term), in a unanimous opinion authored by Justice Thomas. The Court actually agreed with the Federal Circuit that Amgen could not get an injunction requiring Sandoz to disclose its application and manufacturing details under the BPCIA, but for much different reasons. While the Federal Circuit held that the failure to disclose was not even a violation of the BPCIA, the Court held instead that no injunction was available because the statute provides that a declaratory-judgment action is the exclusive remedy for failure to disclose. Specifically, § 269(l)(9)(C) provides that, when an applicant refuses to comply with the disclosure requirement, the sponsor may bring an immediate declaratory-judgment action for artificial infringement. That enables the sponsor to jumpstart the patent litigation even if the applicant would rather delay it. And, because that declaratory-judgment remedy is exclusive, there is no room to infer a separate injunctive remedy in the statute. The Court declined to consider whether Amgen could seek injunctive relief under California's unfair competition law, because "[w]hether Sandoz's conduct was ‘unlawful' under the unfair competition law is a state-law question." However, the Court instructed the Federal Circuit to take up that question on remand.
Turning to the second issue in the case—namely, whether an applicant may provide notice of intent to market before the FDA grants it a license—the Court concluded that the plain language of the statute dictated the outcome. Section 262(l)(8)(A) states that an applicant "shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing." The provision contains only one timing requirement (at least 180 days before marketing) and does not make that requirement dependent upon licensing. Accordingly, an applicant may provide the requisites notice either before or after receiving FDA approval.
The Court's decision in Sandoz was based purely in statutory construction (albeit construction of an exceedingly complicated statute). While the Court acknowledged the policy arguments on both sides of the case, it declined to wade into the nettlesome questions of whether patent law should promote pharmaceutical advances by providing greater protection to patent holders like Amgen or promote increased access to existing pharmaceuticals by fostering competition from generic manufacturers like Sandoz.
From one whipping circuit to another, the Court also issued a per curiam summary reversal on Monday in Jenkins v. Hutton (No. 16-1116), where the Sixth Circuit had granted habeas relief to a death-row inmate despite his procedural default of his claim. The inmate, Percy Hutton claimed that the jury instructions at his criminal trial were erroneous, but he failed to raise this claim in his direct appeal. Accordingly, the District Court found that his later habeas claim was procedurally defaulted, but the Sixth Circuit reversed, holding that it could reach the merits of Hutton's claim, notwithstanding the procedural default, in order to "avoid a fundamental miscarriage of justice." Not so fast, said the Supreme Court in a swift summary reversal. The miscarriage of justice exception to the procedural default rule is reserved for situations where "but for a constitutional error, no reasonable jury would have found the petitioner eligible for the death penalty." Even assuming there was an error in the jury instructions here, the Sixth Circuit failed to address whether a reasonable jury might have found Hutton eligible for the death penalty if given the proper instructions. Inasmuch as several courts had already concluded that Hutton's death sentence was justified, the Sixth Circuit was wrong to hold that the miscarriage-of-justice exception applied.
Finally (for now), the Court granted review in one case on Monday, but it's a biggie: Gill v. Whitford (No. 16-1161) is an appeal by the State of Wisconsin from a three-judge district court ruling striking down its post-2010 census redistricting map on grounds that it was the product of partisan gerrymandering. Regular readers know that there is a very fine line between generally nonjusticiable partisan gerrymandering claims and cognizable racial gerrymandering claims, but in this case the District Court struck down Wisconsin's map purely on the ground that it was an unconstitutional partisan gerrymander. By accepting the case for review, the Court will be revisiting Vieth v. Jubelirer (2004), the 2004 case in which a plurality of the Court held that partisan gerrymandering claims are nonjusticiable. In Vieth, the four conservatives (none of whom remain on the Court) concluded that all partisan gerrymandering claims are nonjusticiable, while the four liberals (including Ginsburg and Breyer) disagreed. And, you guessed it, Justice Kennedy held the swing vote, agreeing that the partisan gerrymandering claims in that particular case were not justifiable, but holding open the possibility that judicially manageable standards could be developed in the future. The District Court in Wisconsin purported to do just that in Gill, and ordered Wisconsin to create a new map by this Fall, but the Supreme Court granted Wisconsin's request for a stay of that order pending the outcome of this case, with the four liberal justices dissenting. Because a stay, unlike cert (or, in this case, a notice of possible jurisdiction) requires 5 votes, there may be some indication that Kennedy is leaning toward reaffirming Jubelirer; then again, under the "courtesy fifth" tradition, where four justices vote to review a case, a fifth may join them in staying the effect of the lower court decision pending review. (This typically occurs in death-penalty cases, where it does little good to grant cert without a stay, but Justice Breyer provided a notable courtesy fifth last year in Gloucester County v. G.G., the transgender bathroom case.) One way or another, it's fair to say that the retirement rumors swirling around Justice Kennedy this summer will take on a new salience for folks with an interest in redistricting. We'll certainly be watching!
Alright, that does it for today, but you maybe hearing from us again before you even read this sign-off. We've still got three other decisions from Monday to tell you about and the Court's already announced another decision day tomorrow. Until then!