Resolving a circuit split, the US Supreme Court held that the limitations periods in the Federal Tort Claims Act (FTCA) are subject to equitable tolling. The Supreme Court rejected the government's contention that the limitations periods are jurisdictional requirements that cannot be tolled.

The FTCA provides that a tort claim against the US is "forever barred" unless the injured party presents the claim to the relevant federal agency within two years after the claim accrues and then to a federal court within six months after the agency acts on the claim (28 U.S.C. § 2401(b)). In both actions decided in United States v. Wong (135 S. Ct. 1625 (2015)), the plaintiff missed one of these two FTCA deadlines and, in each case, the district court dismissed the action, holding that the deadlines were jurisdictional and therefore not subject to equitable tolling. The Ninth Circuit reversed, and the Supreme Court granted certiorari in each case and heard them together.

The Supreme Court affirmed the Ninth Circuit's ruling, relying primarily on the framework established in Irwin v. Department of Veterans Affairs. In that case, the Supreme Court extended the presumption that a court may equitably toll limitations periods in suits between private parties to suits against the US. However, one way that the government may rebut the presumption is by establishing a clear statement by Congress that the limitations period is jurisdictional. After noting that most time bars are not jurisdictional, the Supreme Court in Wong examined the text of the FTCA and the legislative history, and concluded that Irwin's high evidentiary bar had not been met.

See Legal Update, Supreme Court Finds FTCA's Statute of Limitations Subject to Equitable Tolling for more on this decision.

See Statutes of Limitation: State Q&A Tool to compare various statutes of limitation across multiple jurisdictions.

The Third Circuit recently joined other circuit courts in holding that a plaintiff's expert testimony, when critical to class certification, must satisfy the standard set out by the Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc. to support class certification.

In In re Blood Reagents Antitrust Litigation, the plaintiffs, direct purchasers of blood reagents from defendants Immucor, Inc. and Ortho-Clinical Diagnostics, Inc., brought a putative class action seeking damages for alleged horizontal price fixing by the two companies. The plaintiffs relied on expert testimony to produce most of their antitrust impact analyses and damages models. The testimony was offered to satisfy Federal Rule of Civil Procedure (FRCP) 23(b)(3)'s class certification requirement that common questions predominate over individual issues.

Although Ortho challenged the reliability of the expert testimony, the district court certified the class, stating that the testimony "could evolve to become admissible evidence" at trial. Ortho appealed, arguing that the trial court should have scrutinized the plaintiffs' expert's testimony under Daubert.

The Third Circuit agreed and vacated the district court's class certification order. The Third Circuit remanded the matter to the district court to decide which of Ortho's objections challenged those aspects of the plaintiffs' expert testimony offered to satisfy FRCP 23 and, if necessary, to conduct a Daubert inquiry before assessing whether the FRCP 23 requirements have been met. (783 F.3d 183 (3d Cir. 2015).)

See Legal Update, Expert Testimony Supporting Class Certification Must Satisfy Daubert: Third Circuit for more on this decision.

See Practice Notes, Class Actions: Certification and Experts: Daubert Motions for more on the FRCP's class certification requirements and the Daubert standard.

The Class Action Fairness Act of 2005's (CAFA's) single local event exception to federal jurisdiction applies only to a single event or happening rather than to a continuing set of circumstances or a continuous pattern culminating in a single injury-causing event, held the Ninth Circuit. With this decision, the Ninth Circuit expressly split from the Third and Fifth Circuits. (Allen v. The Boeing Co., No. 15-35162, (9th Cir. Apr. 27, 2015).)

See Legal Updates, Ninth Circuit Splits with Third and Fifth Circuits over CAFA's Single Happening Exception and CAFA Clarity from the Ninth Circuit for more on this decision.

See Practice Note, Class Action Fairness Act of 2005 (CAFA): Overview for more on CAFA.

The Federal Circuit issued a decision that serves as an important reminder that counsel must read the substance of all orders issued in a case without relying on the court's notice of electronic filing (NEF) that is circulated to counsel via e-mail.

In Two-Way Media LLC v. AT&T, Inc., after losing on certain patent infringement claims, AT&T filed four post-judgment motions and requested that three of the motions be filed under seal. The court denied all four post-judgment motions and entered judgment against AT&T on all pending claims. However, three of the orders were docketed only as "orders granting the motions to seal," without indicating that they denied the substantive relief AT&T sought. The court subsequently corrected the docket but did not send revised NEFs.

AT&T discovered that the orders denied its post-judgment motions after the time to appeal had expired, and moved to extend or reopen the appeals period under Federal Rules of Appellate Procedure 4(a)(5) and (6). The Federal Circuit affirmed the district court's denial of AT&T's motion, holding that AT&T had not shown excusable neglect in failing to timely appeal, despite receiving incomplete descriptions of the final orders. The court emphasized, among other things, that:

(782 F.3d 1311 (Fed. Cir. 2015).)

Counsel's failure to download and read the full text of orders issued in a case can negatively impact a party's substantive rights. Not only may counsel miss the trigger to appeal, but orders might contain additional substantive rulings and internal case deadlines. Counsel has an independent obligation to monitor the docket that cannot be satisfied by relying on NEFs.

See Legal Update, Extension of Time to File Notice of Appeal Denied Where Party Failed to Show Excusable Neglect: Fed. Cir. for more on this decision.

See Practice Note, Federal Circuit Appeals: Initiating an Appeal for more on commencing an appeal to the Federal Circuit and Standard Document, Notice of Appeal (Federal) for a sample notice of appeal, with explanatory notes and drafting tips.

A Sixth Circuit decision highlights for companies offering price discount programs that a differential pricing policy can constitute unlawful tying if the policy lowers the discounted product's price below cost.

Differential pricing occurs when a company offers a product at a higher price if the customer does not buy an additional tied product. In Collins Inkjet Corp. v. Eastman Kodak Co., the Sixth Circuit, in upholding a preliminary injunction issued by the district court, found that Kodak's differential pricing policy may constitute unlawful tying. Under the policy, customers purchasing both Kodak's refurbished printer components (the tying product) and its Versamark ink (the tied product) received a discount, whereas prices were higher for customers purchasing only components and no ink. Collins, Kodak's competitor in the Versamark ink market, alleged that Kodak was using the policy and its 100% market share in the refurbished printer component market to:

Differential pricing can constitute coercive, unlawful tying if the discount allows the tied product to be sold below cost and selling the tied product below cost makes it unreasonable for a customer to buy the tying product without also buying the tied product.

The Sixth Circuit held that Collins could likely prove that Kodak's pricing policy was unlawful tying because:

(781 F.3d 264 (6th Cir. 2015).)

See Legal Update, Sixth Circuit Holds that Differential Pricing May Constitute Tying for more on this decision.

See Practice Note, Customer Loyalty Programs in the US for more on below-cost pricing.

Judicial review of arbitration decisions is extremely narrow and exceedingly deferential. Even decisions that may be incorrect as a matter of law may be upheld on appeal, as demonstrated by a First Circuit decision.

In Raymond James Financial Services, Inc. v. Fenyk, Raymond James Financial Services (RJFS) challenged an arbitration panel's award of $600,000 in back pay for disability discrimination to Robert Fenyk, a securities broker associated with RJFS. The district court vacated the award and concluded, among other things, that the arbitrators exceeded their powers by awarding damages based on a violation of a Florida statute even though Fenyk pled no claims under that statute.

On appeal, the First Circuit reversed the district court's decision vacating the arbitration award and remanded the case with an order to confirm the award, holding that although the arbitrators' decision may have been incorrect as a matter of law, it was not beyond the scope of the panel's authority. The First Circuit questioned, but did not decide, whether the "manifest disregard of the law" standard was still available to vacate arbitration awards after the Supreme Court's decision in Hall Street Associates, L.L.C. v. Mattel, Inc. The First Circuit found that, even if the standard was still available, the arbitration decision did not demonstrate the willful flouting of the applicable law needed to vacate the award. (780 F.3d 59 (1st Cir. 2015).)

See Legal Update, Court Confirms Arbitration Award Deemed Incorrect as a Matter of Law: First Circuit for more on this decision.

See US Arbitration Toolkit for a collection of resources to assist counsel with US commercial arbitration and drafting alternative dispute resolution clauses.

A recent Ninth Circuit decision makes it easier for plaintiffs to seek redress for false and deceptive advertising at the state and federal levels.

In Astiana v. Hain Celestial Group, Inc., the plaintiffs sought injunctive relief and damages under California law, claiming that they were deceived into purchasing the defendant's cosmetics due to false and misleading product labels. Notably, the plaintiffs did not seek relief under or cite the federal Food, Drug and Cosmetic Act (FDCA) as a cause of action. The Ninth Circuit held that the FDCA did not preempt the state law deception and false advertising claims relating to cosmetic labeling requirements because the state laws did not impose additional or different requirements than the FDCA.

The Ninth Circuit reasoned that:

The Ninth Circuit determined that removing the allegedly misleading statements from the product labels would not run afoul of the FDCA because the changes would be incidental and identical to the federal rules. (783 F.3d 753 (9th Cir. 2015).)

See Legal Update, Ninth Circuit: Food, Drug and Cosmetic Act (FDCA) Does Not Expressly Preempt State Cosmetics Labeling Laws for more on this decision.

See Practice Note, Product Labeling for more on federal product labeling requirements.

Proposed legislation to create a new Chapter 58, Title 10 of the Delaware Code, entitled the Delaware Rapid Arbitration Act (DRAA), was signed into law on April 2, 2015 by the governor, with one amendment. The DRAA will provide an option for business entities formed in Delaware to resolve business disputes through voluntary arbitration conducted by expert arbitrators under strict timelines. Arbitrations commenced under the DRAA must be completed within 120 days, with only one 60-day extension possible if all parties and the arbitrator agree. The DRAA will not be available for disputes:

The amendment to the DRAA clarifies that it is not intended to apply to an agreement entered into by an organization representing residents or tenants of a residential community.

The DRAA became effective on May 2, 2015.

See Legal Update, DGCL Amendments Proposed on Fee-shifting, Forum Selection and Appraisal Rights for more on the DRAA.

In determining what standard of review should apply to an insurer's decision to terminate benefits under an employer's long-term disability plan, the Ninth Circuit recently concluded that the plan's insurance certificate, not the summary plan description (SPD), was the governing plan document.

In Prichard v. Metropolitan Life Insurance Co., the insurer argued that the deferential abuse of discretion standard of review should apply to its benefits decision, based on Firestone discretionary language in the plan's SPD. The participant, on the other hand, asserted that the Supreme Court's decision in CIGNA Corp. v. Amara, which held that an SPD's terms may not be enforced as the terms of the plan, required a de novo standard of review. The district court determined that the SPD was the controlling plan document and therefore reviewed the insurer's decision for abuse of discretion.

The Ninth Circuit reversed and remanded the case to the district court to review the insurer's decision de novo, rejecting the insurer's assertion that the SPD was the only formal plan document and that its terms constituted the plan terms. The Ninth Circuit concluded that the governing plan document was the insurance certificate and its integrated documents, and observed that the insurance certificate failed to grant discretionary authority to the insurer.

The Ninth Circuit declined to address whether its ruling would be different where a plan uses a single document to constitute both the formal plan document and the SPD. However, the Ninth Circuit quoted language from Amara suggesting that it would be unusual for a document intended to inform participants of their rights under a plan to be itself part of the plan. (No. 12-17355, (9th Cir. Apr. 21, 2015).)

See Legal Update, SPD Language Alone Did Not Grant Firestone Discretion: Ninth Circuit for more on this decision.

See Standard Clause, SPD Language, Firestone Plan Interpretation for a model clause describing a plan administrator's power and authority to interpret and administer an employee benefit plan subject to ERISA, with explanatory notes and drafting tips.

A decision by the US Bankruptcy Court for the District of Delaware continues the trend of courts denying make-whole provisions after the automatic acceleration of debt unless clearly and unambiguously provided for in the governing loan documents.

In Delaware Trust Co. v. Energy Future Intermediate Holding Co. LLC, the debtors issued a series of notes under an indenture which provided that the commencement of bankruptcy proceedings by the debtors qualified as an event of default that causes the automatic acceleration of the notes. After the debtors later filed for bankruptcy, the trustee for the noteholders initiated an adversary proceeding, claiming that the debtors' repayment of the notes would constitute an optional redemption under the indenture that required payment of a make-whole premium.

The court held that the automatic acceleration caused by the bankruptcy filing did not trigger the debtors' obligation to pay the make-whole premium, in the absence of explicit language providing otherwise. The court found that:

The court also found that the trustee had a qualified right under the indenture to rescind the acceleration of the notes. (527 B.R. 178 (Bankr. D. Del. 2015).)

See Legal Update, In re Energy Future Holdings Corp.: Delaware Bankruptcy Court Extends SDNY's Momentive Ruling in Denying Make-whole Claims for more on this decision.

See Practice Note, Treatment of Make-whole and No-call Provisions in Bankruptcy for more on make-whole provisions.

Trademark Trial and Appeal Board (TTAB) determinations can have preclusive effect in federal district courts.

In B&B Hardware, Inc. v. Hargis Industries, Inc., the Supreme Court held that issue preclusion should apply to TTAB decisions when:

The Supreme Court reversed the Eighth Circuit's decision, which affirmed a district court's holding that a TTAB decision denying registration based on likelihood of confusion should not be given preclusive effect in a federal trademark infringement action. The Eighth Circuit had based its conclusion primarily on the fact that the TTAB and Eighth Circuit consider different likelihood of confusion factors.

The Supreme Court explained that:

(135 S. Ct. 1293 (2015).)

Trademark owners should carefully plan their long-term strategies when challenging or defending a mark, as TTAB actions may no longer be a lower-stakes alternative to federal court litigation. In particular, they should consider:

See Legal Update, Supreme Court: TTAB's Likelihood of Confusion Decisions Can Have Preclusive Effect for more on this decision.

See Practice Note, Trademark Infringement and Dilution Claims, Remedies and Defenses for more on likelihood of confusion.

The Federal Circuit recently issued an order sua sponte vacating its April 20, 2015 decision in In re Tam and directing that an en banc hearing be held to decide whether the bar on registration of disparaging marks in Section 2(a) of the Lanham Act (15 U.S.C. § 1052(a)) violates the First Amendment.

The dispute in In re Tam (No. 2014-1204, (Fed. Cir. Apr. 20, 2015), opinion vacated and rehearing en banc granted, (Fed. Cir. Apr. 27, 2015)) arose from Tam's application to register the mark THE SLANTS for performances by his musical band of the same name. The examining attorney found the mark disparaging to people of Asian descent and refused registration under Section 2(a). The TTAB agreed and the Federal Circuit affirmed the TTAB's decision, applying the two-part disparagement test formulated in In re Geller.

In so deciding, the Federal Circuit rejected Tam's constitutional arguments, including Tam's First Amendment challenge to the anti-disparagement provisions in Section 2(a). The panel, relying on the US Court of Customs and Patent Appeals' opinion in In re McGinley, reasoned that Section 2(a) does not abridge First Amendment rights because it restricts only an applicant's right to register, rather than use, an applied-for mark.

However, in a separate opinion, Judge Moore urged the court to revisit In re McGinley to reconsider the constitutionality of Section 2(a)'s imposing conditions on the exercise of free speech. One week later, the Federal Circuit vacated the panel's decision and ordered an en banc hearing on this issue.

See Legal Update, Call for New Slant on Disparaging Marks: Federal Circuit for more on this decision.

See Practice Notes, Trademark: Case Tracker (Federal) and Acquiring Trademark Rights and Registrations for summaries of recent federal trademark infringement and dilution cases and for more on the eligibility of marks for federal registration.

When a district court finds that a case is exceptional due to litigation misconduct, it must identify support for denying a fee request by the aggrieved party under Section 285 of the Patent Act (35 U.S.C. § 285), according to the Federal Circuit.

Section 285 gives courts discretion to award attorneys' fees in exceptional patent cases. In Oplus Technologies, Ltd. v. Vizio, Inc., the Federal Circuit held that the district court abused its discretion in denying Vizio's request for attorneys' fees and expert witness fees, noting that the district court found the case exceptional under Section 285 due to harassing, unprofessional and vexatious litigation conduct by Oplus Technologies, Ltd. and failed to provide a sufficient reason for denying the fee request. The Federal Circuit explained that:

(782 F.3d 1371 (Fed. Cir. 2015).)

See Legal Update, In Exceptional Cases, District Court Must Articulate Reasons for Fee Denial: Federal Circuit for more on this decision.

See Practice Note, Patent Infringement Claims and Defenses for more on Section 285 and Legal Update, Supreme Court Reverses Federal Circuit's Rigid Fee-shifting Standard in Patent Cases for more on the Octane Fitness decision.

The Supreme Court established a new "significant burden" standard for analyzing claims under the Pregnancy Discrimination Act (PDA), holding that a pregnant worker claiming disparate treatment under the PDA can use indirect evidence to show that her employer's legitimate non-discriminatory justifications for its facially neutral policies are pretextual under the McDonnell Douglas burden-shifting framework.

In Young v. United Parcel Service, Inc., the plaintiff sued her employer after it denied her requested accommodation for light duty due to pregnancy-related lifting restrictions. The Supreme Court vacated the Fourth Circuit's decision granting summary judgment for the employer and remanded for further consideration in light of its interpretation of the PDA and its new standard for analyzing disparate treatment claims under the statute. In particular, the Supreme Court concluded that under the McDonnell Douglas burden-shifting analysis, a pregnant employee who has stated a prima facie claim of disparate treatment can obtain a jury trial without direct evidence of intentional discrimination if she provides sufficient circumstantial evidence that:

Added costs or inconvenience alone do not ordinarily justify policies that tend to exclude pregnant workers from programs such as light duty work. Notably, the Supreme Court acknowledged that the Americans with Disabilities Act Amendments Act of 2008, which includes lifting restrictions as a covered "disability," may limit the practical impact of its holding. (135 S. Ct. 1338 (2015).)

See Legal Update, SCOTUS Adopts New "Significant Burden" Test for Analyzing Pregnancy Discrimination Act Claims for more on this decision.

See Practice Note, Pregnancy Discrimination for more on the McDonnell Douglas burden-shifting framework and disparate treatment in pregnancy discrimination cases.

Employees’ internal complaints to employers are sufficient to support retaliation claims under both the Fair Labor Standards Act (FLSA) and Title VII of the Civil Rights Act of 1964 (Title VII), according to recent decisions by the Second and Sixth Circuits. The cases were matters of first impression in each circuit.

In Greathouse v. JHS Security Inc. (No. 12-4521, (2d Cir. Apr. 20, 2015)), the plaintiff claimed that his employer retaliated against him in violation of the FLSA after he complained orally to his supervisor that he was not paid his full wages. The Second Circuit held that an employee may premise an FLSA retaliation claim on an oral complaint made internally to an employer, as long as the complaint is sufficiently clear so that a reasonable employer would understand it as an assertion of the employee’s FLSA rights. Additionally, the Second Circuit concluded that the FLSA does not require an employee to have filed a complaint with a government agency as a predicate for a retaliation claim.

Similarly, in EEOC v. New Breed Logistics (No. 13-6250, (6th Cir. Apr. 22, 2015)), the Equal Employment Opportunity Commission sued an employer for retaliation, alleging that four employees were terminated after they complained to their supervisor about his sexually inappropriate conduct. The Sixth Circuit held that employees’ demands to a supervisor that the supervisor stop harassing conduct constitute protected activity to support a Title VII retaliation claim.

Following these decisions, employers should:

See Legal Updates, Internal, Oral Complaint Can Be Predicate to FLSA Retaliation Claim: Second Circuit and Complaint to Harasser Constitutes Protected Activity for Title VII Retaliation Claim: Sixth Circuit for more on these decisions.

See Pratice Note, Retaliation for more on retaliation claims and defenses.

A recent decision by the National Labor Relations Board (NLRB) demonstrates that its stated commitment to encourage mutually agreeable settlements without litigation does not trump its policies designed to prevent unfair labor practices (ULPs) on a larger scale.

Flyte Tyme Worldwide involved a motion to dismiss a wage and hour class action and to compel arbitration based on Flyte Tyme's mandatory arbitration policy, which also contained a class and collective action waiver. Relying on D.R. Horton, Inc., an administrative law judge found that Flyte Tyme's maintenance and enforcement of the arbitration agreement violated the National Labor Relations Act (NLRA). While the case was pending before the Board, the parties settled the class action and agreed to request withdrawal of the ULP charge as part of the settlement. However, the settlement was not contingent upon the Board's approval of the withdrawal.

The Board denied the parties' motion to withdraw the ULP charge because withdrawal did not give effect to the policies of the NLRA. The Board reasoned, among other things, that the settlement agreement:

(362 N.L.R.B. slip op. 46 (Mar. 30, 2015).)

Following this decision, when settling a lawsuit that has a parallel NLRB proceeding, employers should condition any settlement payment on the Board granting the charging party's motion to withdraw the related ULP charge.

See Legal Update, NLRB Refuses to Approve Withdrawal of ULP Charge Parties Agreed to in Wage and Hour Settlement for more on this decision.

See Practice Note, Employee Rights and Unfair Labor Practices Under the National Labor Relations Act for more on ULPs.