As promised, I'll write today of some of SCOTUS' wrestling this term with issues of statutory construction.
In the realm of Labor Law, this was the term of Encino Motorcars v. Navarro, a case that turns on the meaning of an exemption from the Fair Labor Standards Act. This is important, even though the specific category of worker involved may not include very many people, because the New Deal era legislation continues to provide a classification system in a dynamic world of work.
The relevant requirement of the FLSA is that which requires overtime pay for workers who don't fall within exemptions., and that exempts "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles trucks, or farm implements...." if employed by a dealership primarily engaged in selling said autos or implements.
The specific problem is that auto dealers including the petitioner Encino nowadays employ so-called "service advisors." As the term implies, these employees consult with customers on service arrangements, trying to keep the customers' coming back regularly to the same shop through the life of the car. The service department, after all, is a big revenue center for most dealerships.
Service advisors don't fit literally into the language quoted above. They are neither salesmen nor partsmen nor mechanics. But they do seem to fit the spirit of them -- they do much the same work and with pay arrangements quite analogous to those of the exempt salesmen. There was a 1973 decision by a circuit court that treated service advisors as statutory salesmen, and since then the treatment of them as such has been routine.
The petitioners claim that the 9th Circuit decision in this litigation, which broadens the scope of the OT mandate by reading the exemption narrowly, would work an injustice by resulting in large unanticipated liabilities for the country's auto dealerships.
Decision
On June 20, Monday, the Court issued an opinion, in which it seemed to be willing to say only that the 9th Circuit had failed to explain itself well, and had relied upon Chevron deference to the Department of Labor. SCOTUS says Chevron does not apply, and it remands so the 9th circuit so it can "interpret the statute in the first instance." So nothing is really settled about how the statute should be read.
Kennedy wrote the opinion for the court, split 6 to 2.
Ginsburg concurred, writing for herself and Sotomayor. Apparently, they simply wanted to emphasize that if the Department of Labor wants to persuade the federal courts that the statute mandates overtime for these workers, it has to try harder than it did in this case. "We're hoping you do a better job next time, D of L" is the subtext.
Thomas, dissented, joined by Alito. Actually, though this is called a dissent, it is at least as much as a concurrence. Nobody on the court was ready to uphold the 9th Circuit. Thomas was dissenting from the opinion's caution, from its willingness to give the case for mandatory overtime pay another shot in the appellate court.
Another Statute
In intellectual property law, this session will be remembered for Cuozzo Speed Technologies v. Lee, an opinion on the proper interpretation of the America Invests Act (AIA). Should the patent board construe the claims in an issued patent according to their broadest reasonable interpretation [BRI] or according to their "plain and ordinary meaning [POM]"? This may not sound to a layperson like a huge deal, but to patent attorneys it evidently is.
The patent in question is for a speedometer that shows a driver when he is exceeding the speed limit. It involves a connection to a GPS receiver, and a chip that is programmed with the speed limit of all the nation's roads.
Claim construction is a part of the post-grant review that the AIA authorizes. A party trying to invalidate a patent goes before the Patent Trial and Appeal Board within the Patent and Trademark Office to press these administrative appeals, known as "inter pares review."
This IPR is a much more daunting prospect for a patent holder under the BRI standard than under the POM standard, because under the former they are more likely to be found to have infringed upon the domain of some prior patent, and for that reason to have their patent invalidated.
Decision
This case, like Encino, was decided in an opinion issued Monday, June 20th.
The court, speaking through Justice Breyer, came down on the side of the BRI standard rather than POM. It is not unfair to the patent holder, apparently simply because it seems reasonable to the court to think that Congress has burdened the patent holder, formerly known as the patent applicant, with a duty of clarity with respect to the width of the claim.
In this instance, the court does believe that Chevron applies and it is deferring to the Patent Office's own rule-making as the dispositive interpretation of the statutory language. So Chevron deference, although the court seems to be pulling back on it of late, is still with us. Conceivably the Justices released the two cases on the same day in order to make this point, that it is neither pro nor anti Chevron, simply selective about its invocation.
Insider Trading
Finally, in the domain of insider trading law, the next session may be remembered for Salman v. United States, because in this one the Court granted cert.
This case arose via a Citigroup investment banker with a big mouth. The banker talked to his brother about a pending acquisition, and the brother in turn blabbed about this to the defendant, Bassam Yacoub Salman.
The banker (Maher Kara) doesn’t seem to have received much of a benefit – certainly no such suitcase of cash as the bad guys receive in Wall Street themed movies. He has testified that his brother had become a pest, and stopped being such a pest once he, Maher, had told him, Michael Kara, about a pending acquisition. The brothers both cut deals with the government and testified against Salman.
The arbitrariness with which the govt sometimes focuses on the tipper as the Big Bad Wolf and sometimes on the tippee fascinates me. In this case, the government cut a deal with tippers to go after the tippee; in other cases it has done the reverse.
Salman, convicted in the trial court in April 2014, sentenced to three years, appealed, arguing to the Ninth Circuit that an insider tip to a non-insider can be the predicate of an insider trading charge against the non-insider (or even the next non-insider link on the chain of tipper-tippees) if and only if the original tipper received a personal benefit from making the disclosure.
The circuit court rejected Salman's argument. As to what the Justices think: we will find out next year.
Well before then, indeed on Thursday, I'll pursue this discussion of the court's 2016 term with a few words on the constitutional cases decided on the merits.
Decision
On June 20, Monday, the Court issued an opinion, in which it seemed to be willing to say only that the 9th Circuit had failed to explain itself well, and had relied upon Chevron deference to the Department of Labor. SCOTUS says Chevron does not apply, and it remands so the 9th circuit so it can "interpret the statute in the first instance." So nothing is really settled about how the statute should be read.
Kennedy wrote the opinion for the court, split 6 to 2.
Ginsburg concurred, writing for herself and Sotomayor. Apparently, they simply wanted to emphasize that if the Department of Labor wants to persuade the federal courts that the statute mandates overtime for these workers, it has to try harder than it did in this case. "We're hoping you do a better job next time, D of L" is the subtext.
Thomas, dissented, joined by Alito. Actually, though this is called a dissent, it is at least as much as a concurrence. Nobody on the court was ready to uphold the 9th Circuit. Thomas was dissenting from the opinion's caution, from its willingness to give the case for mandatory overtime pay another shot in the appellate court.
Another Statute
In intellectual property law, this session will be remembered for Cuozzo Speed Technologies v. Lee, an opinion on the proper interpretation of the America Invests Act (AIA). Should the patent board construe the claims in an issued patent according to their broadest reasonable interpretation [BRI] or according to their "plain and ordinary meaning [POM]"? This may not sound to a layperson like a huge deal, but to patent attorneys it evidently is.
The patent in question is for a speedometer that shows a driver when he is exceeding the speed limit. It involves a connection to a GPS receiver, and a chip that is programmed with the speed limit of all the nation's roads.
Claim construction is a part of the post-grant review that the AIA authorizes. A party trying to invalidate a patent goes before the Patent Trial and Appeal Board within the Patent and Trademark Office to press these administrative appeals, known as "inter pares review."
This IPR is a much more daunting prospect for a patent holder under the BRI standard than under the POM standard, because under the former they are more likely to be found to have infringed upon the domain of some prior patent, and for that reason to have their patent invalidated.
Decision
This case, like Encino, was decided in an opinion issued Monday, June 20th.
The court, speaking through Justice Breyer, came down on the side of the BRI standard rather than POM. It is not unfair to the patent holder, apparently simply because it seems reasonable to the court to think that Congress has burdened the patent holder, formerly known as the patent applicant, with a duty of clarity with respect to the width of the claim.
In this instance, the court does believe that Chevron applies and it is deferring to the Patent Office's own rule-making as the dispositive interpretation of the statutory language. So Chevron deference, although the court seems to be pulling back on it of late, is still with us. Conceivably the Justices released the two cases on the same day in order to make this point, that it is neither pro nor anti Chevron, simply selective about its invocation.
Insider Trading
Finally, in the domain of insider trading law, the next session may be remembered for Salman v. United States, because in this one the Court granted cert.
This case arose via a Citigroup investment banker with a big mouth. The banker talked to his brother about a pending acquisition, and the brother in turn blabbed about this to the defendant, Bassam Yacoub Salman.
The banker (Maher Kara) doesn’t seem to have received much of a benefit – certainly no such suitcase of cash as the bad guys receive in Wall Street themed movies. He has testified that his brother had become a pest, and stopped being such a pest once he, Maher, had told him, Michael Kara, about a pending acquisition. The brothers both cut deals with the government and testified against Salman.
The arbitrariness with which the govt sometimes focuses on the tipper as the Big Bad Wolf and sometimes on the tippee fascinates me. In this case, the government cut a deal with tippers to go after the tippee; in other cases it has done the reverse.
Salman, convicted in the trial court in April 2014, sentenced to three years, appealed, arguing to the Ninth Circuit that an insider tip to a non-insider can be the predicate of an insider trading charge against the non-insider (or even the next non-insider link on the chain of tipper-tippees) if and only if the original tipper received a personal benefit from making the disclosure.
The circuit court rejected Salman's argument. As to what the Justices think: we will find out next year.
Well before then, indeed on Thursday, I'll pursue this discussion of the court's 2016 term with a few words on the constitutional cases decided on the merits.
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