New England Biz Law Update
Starting on Oct. 4, the U.S. Supreme Court justices will take on issues ranging from the ability to file suit in matters involving arbitration clauses or federal regulations, to retaliation and privacy issues in employment law.
Preemption and arbitration
Two major cases deal with the issue of preemption: whether state law tort claims can be brought over products that are federally regulated.
“These types of cases fall below the radar screen, but they are significant” for attorneys, said Thomas Goldstein, a Supreme Court expert and partner in the Washington, D.C., office of Akin Gump.
In preemption cases it is difficult to predict how the court will rule. In a trio of decisions from the 2007 term — Riegel v. Medtronic, Preston v. Ferrer and Rowe v. New Hampshire Motor Transport — the court held that federal statutes preempted state laws, regulations and tort actions. Yet the following year, the justices held in Altria Group v. Good and Wyeth v. Levine that claims that tobacco companies deceptively marketed “light” or “low tar” cigarettes and state law tort claims against drug makers were not preempted by state law.
“The court has blown hot and cold on preemption in a way that I can’t figure out,” Goldstein said.
This term, the court will consider whether a tort claim against an automobile manufacturer for not installing a combination lap/shoulder belt in a vehicle’s middle backseat is preempted by a federal motor vehicle regulation (Williamson v. Mazda Motor of America). The California Court of Appeal held that that the regulation, which permitted rear seats to have either lap-only or lap/shoulder seatbelts, preempted the suit. Oral arguments in that case are set for Nov. 3.
The court will also look at whether the Vaccine Act preempts all vaccine design defect claims, regardless of whether the vaccine’s side effects were unavoidable, in Bruesewitz v. Wyeth. In the holding below, the 3rd Circuit ruled that federal law preempted design defect claims filed by a plaintiff who alleged that she suffered injuries as a result of taking the polio vaccine as a child. The case will be argued Oct. 12.
Justice Elena Kagan, who was solicitor general at the time the government filed briefs in both cases, will likely recuse herself, setting up the possibility of a 4-4 tie, in which case the lower courts’ rulings in favor of preemption would stand.
The court is taking up the perennially hot topic of arbitration in AT&T Mobility v. Concepcion, which asks whether states can condition the enforceability of arbitration agreements on the availability of class-wide arbitration.
Although the court took up the issue last term in cases such as Rent-A-Center, West v. Jackson, the Concepcion case is far more important, experts say.
“The $64,000 question — probably the $64 billion question — is really AT&T Mobility,” said Carter G. Phillips, managing partner in the Washington office of Sidley Austin, who wrote the winning brief in Jackson.
In Concepcion, the court will review a 9th Circuit decision holding that the Federal Arbitration Act did not preempt a California law rendering a cell phone company’s arbitration clause unconscionable because it made consumers waive their right to class-wide arbitration.
Oral arguments will be held Nov. 9.
“I do think that [the] survival of consumer-based arbitration is going to hang in the balance” of the court’s ruling, Phillips said. “No [company] is going to enter into an agreement where they think there is a risk that they are going to end up arbitrating small claims into multi-million- or tens-of-million-dollar claims and have no judicial review on the end to review what the arbitrator has done.”
Employment law
After a term with very few employment cases, the court will take on a number of job-related cases this term, beginning with NASA v. Nelson, in which the justices will consider whether the government violated the privacy rights of federal contract employees by conducting a background investigation into whether they had received treatment for drug use, or had mental or financial problems. That case will be argued Oct. 5.
In Thompson v. North American Stainless, the court will consider whether the retaliation prohibitions in Title VII cover an employee who did not personally engage in protected activity, but who claims his employer retaliated against him solely because of his association with another employee who engaged in protected activity.
On Nov. 2 the court will hear oral arguments in Staub v. Proctor Hospital to determine whether an employer may be held liable under a “cat’s paw” theory of employment discrimination if unlawful intent drove an individual who influenced the employment decision but not the ultimate decisionmaker. That case is one of several that Kagan will sit out due to her involvement as solicitor general
In Kasten v. Saint-Gobain Performance Plastics Corp., the court will decide if an employee who claimed he was retaliated against for complaining that the location of time clocks violated the Fair Labor Standards Act can sue where his complaints were verbal only and not in writing.
