Supreme Court Update: Costco Wholesale Corp. v. Omega, S.A. (08-1423) and Order List

December 22, 2010 Supreme Court Update

Greetings, Court fans!

The Court has been relatively quiet heading into the end of the calendar year. We bring you a per curiam decision with no opinion, a handful of cert grants, a dissent from denial of cert, and two solicitor general invites.

We'll start with the decision, which came in Costco Wholesale Corp. v. Omega, S.A. (08–1423), which concerned whether the Copyright Act's first-sale doctrine, under which the owner of any particular copy "lawfully made" under the Act may resell that good without the authority of the copyright holder, applies to imported goods manufactured abroad. The Ninth Circuit held that it did not. With Justice Kagan sitting out, the Ninth Circuit's judgment was affirmed by an equally divided Court, with no written opinion. The result is an affirmance of the Ninth Circuit's decision, but without setting precedent governing future cases.

Cert was granted in Tapia v. United States (10-5400), which asks: "May a district court give a defendant a longer prison sentence to promote rehabilitation, as the Eighth and Ninth Circuits have held, or is such a factor prohibited, as the Second, Third, Eleventh, and D.C. Circuits have held?"

The Court consolidated and agreed to hear Pliva, Inc. v. Mensing (09-993), Actavis Elizabeth LLC v. Mensing (09-1039), and Actavis, Inc. v. Demahy (09-1501), which ask whether the Hatch-Waxman Act's requirement that a generic drug's labeling be the same as the FDA-approved labeling for the branded drug preempts state tort law from imposing liability on generic drug manufacturers for failing to strengthen the warnings in a generic drug's labeling.

The Court also consolidated and agreed to hear Talk America, Inc. v. Michigan Bell Telephone Co. (10-313) and Isiogu v. Michigan Bell Telephone Co. (10-329). To promote competition for local telephone service, the Telecommunications Act of 1996 required incumbent telephone companies to make entrance facilities available to competitors (1) for network interconnection at cost-based rates, and (2) as unbundled network elements. In a subsequent order, the Federal Communications Commission maintained the incumbent local telephone company's obligation to provide entrance facilities, which allow for interconnection, at cost-based rates, but found that competitors could effectively compete without access to entrance facilities as unbundled network elements.

The consolidated cases ask whether the Sixth Circuit erred by (1) determining that the Telecommunications Act and the FCC's rule permit incumbent local telephone companies to charge competing telephone companies competitive rates—which are higher than cost-based rates—for entrance facilities used for interconnection, and (2) disregarding the FCC's interpretation of its regulations, contrary to the deference standard established by this Court in Auer v. Robbins (1997).

Justice Scalia, joined by Thomas and Alito, penned a dissent from the denial of cert in a habeas case, Allen v. Lawhorn (10-24). James Lawhorn was convicted of murder and sentenced to death in 1989. Lawhorn did not deny guilt, but asked the jury for mercy in sentencing. Lawhorn's lawyer gave an opening argument and presented evidence mitigating against the imposition of the death penalty, but did not to give a closing argument. The Alabama courts later rejected Lawhorn's attempts to overturn the conviction for ineffective assistance of counsel based on his lawyer's failure to give a closing argument; the courts determined that the waiver of closing argument was part of an (unsuccessful) strategic attempt to preclude the prosecutor from making a closing argument, and that Lawhorn had failed to establish prejudice from the waiver. Lawhorn fared better on his petition for federal habeas relief. The District Court set aside both the conviction and the sentence. The Eleventh Circuit affirmed with regard to the sentence, agreeing with the District Court's finding that counsel's failure to give a closing argument was not a reasonable strategic decision, and that Lawhorn was prejudiced thereby.

The Court denied the State's petition for cert challenging the prejudice determination. The dissenters, however, would have granted the petition and summarily reversed. The dissenters faulted the lower court for failing to apply (or even cite) the deferential standard for reviewing state court decisions in habeas cases. In their view, the state courts should have been given "particularly expansive" leeway in this case because the Court had never considered whether the failure to give a closing argument could be considered prejudicial. Given that the jury had already heard the mitigating evidence and Lawhorn's plea for mercy, it was not unreasonable for the state courts to determine that a closing argument would not have changed the result. Justice Scalia saw the Eleventh Circuit's ruling as part of an undesirable trend: "I would not dissent from denial of certiorari if what happened here were an isolated judicial error. It is not. With distressing frequency, especially in capital cases such as this, federal judges refuse to be governed by Congress's command that state criminal judgments must not be revised by federal courts unless they are ‘contrary to, or involv[e] an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States'. . . . We invite continued lawlessness when we permit a patently improper interference with state justice such as that which occurred in this case to stand."

Finally, the Court invited the Acting Solicitor General to express his views on petitions for cert in two cases. Applera Corp. v. Enzo Biochem, Inc. (10-426) would ask the Court to determine whether the Federal Circuit's standard for determining whether a patent's claims are sufficiently "definite," which requires only that the language of a claim is not "insolubly ambiguous" or is capable of being construed, is consistent with the Patent Act's requirement that a patent may include only "claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention."

Schwarzenegger v. Rincon Band of Luiseno Mission Indians (10-330) would present two questions: (1) "Whether a state demands direct taxation of an Indian tribe in compact negotiations under Section 11 of the Indian Gaming Regulatory Act, when it bargains for a share of tribal gaming revenue for the State's general fund;" and (2) "Whether the court below exceeded its jurisdiction to determine the State's good faith in compact negotiations under Section 11 of the Indian Gaming Regulatory Act, when it weighed the relative value of concessions offered by the parties in those negotiations."

We'll be back as the Court issues additional orders and decisions, possibly next week, but more likely, in the new year. We look forward to an eventful 2011.

Kim and Jenny

From the Appellate and Complex Legal Issues Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400