Supreme Court Docket Report - June 27, 2011

Originally published June 27, 2011

Keywords: Federal Meat Inspection Act, statute of limitations, patent denial, Hatch-Waxman, counterclaims, telecommunications, FCC regulation, indecency, telephone consumer protection

Today the Supreme Court granted certiorari in six cases of interest to the business community:

Federal Meat Inspection Act—Preemption Securities Law—Section 16(b)—Statute of Limitations Patent Act—Introduction and Review of Evidence in Challenges to Patent Denial Hatch-Waxman Act—Counterclaims Telecommunications Act—Constitutionality of FCC Regulation of Indecency Telephone Consumer Protection Act—Federal Jurisdiction Federal Meat Inspection Act—Preemption

Section 408 of the Federal Meat Inspection Act ("FMIA" or "Act") prohibits States from imposing "[r]equirements . . . with respect to premises, facilities and operations of any establishment at which inspection is provided . . . which are in addition to, or different than those made under" the Act. 21 U.S.C. § 678. Today the Supreme Court granted certiorari in National Meat Association v. Harris, No. 10-224, to decide whether the "presumption against preemption" requires a "narrow interpretation" of this express preemption provision.

The case is of course important to the meat industry, because it will affect the extent to which states can regulate federally inspected slaughterhouses. But the Court's decision could also affect businesses in the many other industries that are governed by a federal statute that expressly preempts state regulation.

The National Meat Association, the plaintiff below and petitioner in the Supreme Court, sought preliminary and permanent injunctive relief as well as a declaration barring the application of California Penal Code § 599f to federally inspected swine slaughterhouses in California. That provision requires that all non-ambulatory livestock be immediately euthanized and criminalizes any violation. Citing the Court's decision in Jones v. Rath Packing Co., 430 U.S. 519 (1977), petitioner alleged that the FMIA regulates all aspects of federally inspected slaughterhouse operations, and that because California's immediate-euthanization requirement differs from the Act's requirements for observing and inspecting non-ambulatory swine, the Act preempts California Penal Code § 599f.

The district court agreed, concluding that § 599f was preempted because it imposed requirements that were different from and in addition to those imposed by the FMIA. The Ninth Circuit reversed, invoking a "presumption against preemption" that, according to the court, required a "narrow interpretation" of the Act's express preemption provision. 599 F.3d 1093, 1098. Applying that interpretive principle, the Ninth Circuit concluded that section 599f was not preempted because, in the court's view, it regulates "the kind of animal" that may be slaughtered rather than the "premises, facilities, [or] operations" of slaughterhouses. Id. at 1098-99.

Absent extensions, which are likely, amicus briefs in support of the petitioner (or neither party) will be due on August 18, 2011, and amicus briefs in support of the respondents will be due on September 19, 2011.

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Securities Law—Section 16(b)—Statute of Limitations

Section 16(b) of the Securities Exchange Act of 1934 expressly prohibits so-called "short-swing" transactions, defined as "a coupled purchase-and-sale, or sale-and-purchase, completed within six months" by a statutorily defined "insider." 15 U.S.C. § 78p(b). To facilitate the identification of improper trades, Section 16(a) requires certain insiders to report transactions involving the relevant securities. Id.§ 78p(a). Section 16(b) allows a shareholder derivative suit to force an insider to disgorge the profits of an improper short-swing transaction, but states that "no such suit shall be brought more than two years after the date such profit was realized." Id. § 78p(b). The Supreme Court granted certiorari today in Credit Suisse Securities (USA) LLC v. Simmonds, No. 10-1261, to decide whether the two-year statute of limitations governing suits under Section 16 (b) is tolled by the failure to report the relevant transaction under Section 16(a) and, if...