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Supreme Court Adds 11 New Cases to Calendar

Taking up 11 new cases Friday on its way into summer hiatus, the Supreme Court stoked political passions this morning with the addition of cases about school choice and immigrant rights.

WASHINGTON (CN) - Taking up 11 new cases Friday on its way into summer hiatus, the Supreme Court stoked political passions this morning with the addition of cases about school choice and immigrant rights.

Less conspicuously but still of legal interest, several of the other cases added to the calendar Friday tackle issues including trademark law, discrimination and the Armed Career Criminal Act.

Courthouse News takes a look at these seven cases below.

Romag Fasteners Inc. v. Fossil Inc.

A Connecticut-based maker of magnetic bag fasteners, Romag sued Fossil and Macy’s in 2010 for trademark infringement. Though a federal jury sided with Romag, hitting Fossil with a $6.7 million fine to deter future infringement, on top of more than $90,000 to prevent unjust enrichment, the District Court struck the profits award in its entirety based on Romag’s failure to prove that Fossil’s trademark infringement was willful.

The Federal Circuit affirmed, prompting Romag to ask in its petition whether willful infringement is a prerequisite under the Lanham Act “for an award of an infringer’s profits.”

Williams & Connolly represents Romag, and Gibney, Anthony & Flaherty represents Fossil and Macy’s

Lucky Brand Dungarees Inc. v. Marcel Fashions Group Inc.

Though the companies here have been suing each other for years, American denim company Lucky claims that it was improperly barred from raising a new defense to Marcel’s latest infringement suit.

“The Second Circuit held that the prior judgment between the parties did not preclude the plaintiff from raising new claims, but did preclude the defendants from raising a defense to those new claims that was never previously resolved,” Lucky’s petition states. “That ‘sounds absurd, because it is.’”

Lucky says the decision created “a textbook circuit split.”

“The decision below thus not only runs roughshod over basic preclusion principles and basic common sense,” the petition continues.

Marcel first sued Lucky for trademark infringement and unfair competition in 2001 over the use of the latter’s use of the phrase “Get Lucky.”

Per a 2003 settlement, Lucky agreed to stop using Get Lucky as a trademark, and Marcel agreed that, in exchange for $650,000, it would not interfere in Lucky’s use of the trademark Lucky Brand.


Lucky sued next when one of Marcel’s partners “launched a ‘Get Lucky’ line of jeanswear and sportswear.” Marcel countersued, however, and ultimately succeeded in getting Lucky enjoined from using the "Get Lucky” trademark.

The latest suit was also brought by Marcel, this time in 2011. Rather than alleging that Lucky is using the “Get Lucky" trademark, Marcel says the Lucky Brand trademarks are infringing.

Twice the District Court sided with Lucky and twice the Second Circuit vacated and remanded.

Lucky is represented by Kirkland & Ellis. Marcel is represented by Louis Gigliotti of Hollywood, Florida.

Thole v. U.S. Bank NA

Though lead plaintiffs James Thole and Sherry Smith claim that fiduciary breaches by U.S. Bank caused $750 million in losses to their pension plan, a federal judge dismissed their class action after determining that the plan would have to face a risk of default to cause actual financial harm.

The Eighth Circuit affirmed, but Thole and Smith claim in their petition for certiorari that this holding conflicts with the decisions of sister circuits as well as Labor Department policy.

Thole and Smith want the Supreme Court to decide whether an ERISA plan participant or beneficiary must demonstrate individual financial loss, or that such loss is imminent, to seek injunctive relief against fiduciary misconduct or to seek restoration of plan losses caused by fiduciary breach.

Stris and Maher represents the plan participants, while U.S. Bank is represented by Dorsey & Whitney and Morrison & Foerster.

Per it custom, the Supreme Court did not issue any statement Friday in taking up the case. They did note, however, that they want the parties to also brief and argue whether the petitioners have demonstrated Article III standing.

Rodriguez v. FDIC

This case arose from the successive bankruptcies of United Western Bank, a federally chartered savings and loan association also based in Colorado, and its holding company, United Western Bancorp Inc.

With both entities filing competing claims for a $4 million tax return issued to the holding company, the Bankruptcy Court determined that UWBI rather than its subsidiary owns the refund pursuant to Colorado law.

The 10th Circuit reversed meanwhile after applying what is known as the Bob Richards rule.

A federal common law rule that has been adopted by two other circuits, this rule presumes that a tax refund paid to an affiliated group belongs to the corporate subsidiary whose losses gave rise to the refund unless the parties clearly agree otherwise.


UWBI notes in its petition meanwhile that four circuits have rejected the rule, relying instead on state law to determine tax-refund ownership.

“The stakes are considerable,” the petition states. “Corporate tax refunds often run into the tens or hundreds of millions of dollars. Assigning those assets to the right owner matters greatly to the corporations and their shareholders. And when corporations enter bankruptcy, it matters to their creditors, too. If a refund is part of a parent corporation’s estate, it can be used to repay the corporation’s unsecured creditors. But if the refund is owned by the subsidiary, the parent must transfer it to the subsidiary in full.”

Going on to call the rule “profoundly incorrect,” UWBI says the Bob Richards rule “has no statutory foundation and satisfies none of the stringent prerequisites for federal common lawmaking.”

“The court should not permit the rights of corporations, shareholders, and creditors to vary dramatically circuit-by-circuit based on this invented presumption," the petition continues.

Hogan Lovells attorney Neal Kumar Katyal represents Simon Rodriguez, as Chapter 7 trustee for UWBI’s bankruptcy estate.

Former U.S. solicitor general.

Katyal served as acting solicitor general from May 2010 to 2011 and will go up in this case against U.S. Solicitor General Noel Francisco.

Orrick, Herrington & Sutcliffe represents the American College of Tax Counsel.

Babb v. Wilkie

Noris Babb is a Florida pharmacist who says gender discrimination by the Bay Pines Veteran Affairs Medical Center cost her at a chance at career advancement and a higher salary.

She seeks a reversal from the Supreme Court after the 11th Circuit affirmed dismissal of her claims. In Babb’s petition, filed by the law firms Latham & Watkins and Merkle & Magri, she notes that federal employees filing claims under Title VII and the Age Discrimination in Employment Act “face inexplicably differing standards of proof depending on where they file.”

In taking up the case, the Supreme Court notes that ADEA’s federal-sector provision “provides that personnel actions affecting agency employees aged 40 years or older shall be made free from any “discrimination based on age.” The court said it will decide whether this “requires a plaintiff to prove that age was a but-for cause of the challenged personnel action.”

GE Energy Power Conversion v. Outokumpu Stainless

Whether foreign entities can invoke arbitration clauses from contracts to which they are not a party is the question asked by this case.

It stems from an equipment-purchasing agreement between Outokumpu Stainless and Fives St. Corp., which in turn subcontracted to get equipment parts from Converteam SAS, a foreign entity now known as GE Energy Power Conversion France SAS.

When those parts failed, Outokumpu and its insurers sued the parent company, GE Energy, in Alabama.

Though GE initially managed to have the case removed to federal court and then dismissed in favor of arbitration, the company’s luck changed at the 11th Circuit.

Deepening a 2-to-2 circuit split, that appeals court held that a nonsignatory to a contract cannot compel arbitration if one of the parties is a foreign entity.

“GE Energy should not have been worse off simply because it is a foreign corporation,” the company says in its petition for certiorari.

GE is represented by Jones Day, and Outokumpu is represented by the Birmingham firm Burr & Forman. Clausen Miller represents one of Outokumpu’s insurers, Sompo Japan Insurance Company of America.

Shular v. U.S.

Representing yet another successor to evolving precedent over the Armed Career Criminal Act, this case asks whether a categorical approach should be used to determine whether convictions represent “serious drug offenses,” thus triggering the ACCA’s sentencing enhancements for convicted felons convicted of gun possession.

As with violent felonies, the ACCA says that a person who has three prior convictions for “serious drug offenses” is mandated to serve a 15-year minimum prison sentence  for firearm possession.

In the underlying case, a probation officer classified Eddie Lee Shular as an armed career criminal based on his six prior Florida cocaine convictions — five for sale and one for possession with intent to sell.

The designation stuck even though Shular argued that Florida prosecutors faced no requirement to prove he knew he was selling a controlled substance. This is a critical threshold, according to Shular’s petition because Congress intended for serious drug offenses “to be those offenses that require the mens rea element that is missing from the Florida statute.”

Shular was sentenced to 15 years in prison, a term that the 11th Circuit affirmed. He is represented by federal public defender Richard Michael Summa.

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