Dykema shares Supreme Court cases that affect civil litigation

By Cynthia Price
Legal News

In a webinar Tuesday, Dykema attorneys Christopher Kratovil and Jill Wheaton generously allowed the approximately 80 people who attended a peek into the U.S. Supreme Court cases that are likely to affect various areas of civil litigation.

The current SCOTUS justices, operating much of the year short one member, seemed to have a strong interest in matters of jurisdiction in business cases, and, comparatively, in patent cases — reversing earlier Courts’ tendency not to accept cases from the U.S. Court of Appeals for the Federal Circuit.

All considered, the Supreme Court opinions were favorable to business. Wheaton quoted Adam Liptak of The New York Times, who wrote, “The Court ... continued to lean right in business cases. The Court added to its recent track record as a business friendly forum, particularly on the class-action and arbitration front.”

Wheaton, who  works out of Dykema’s Ann Arbor office, leads its appellate practice. She has expertise in high-profile appellate and often enters an appeals case in which Dykema did not represent the party in the trial court.

She has obtained favorable decisions from the Michigan Supreme Court in five cases just over the last five years: Covenant v. State Farm; Sauerman v. Residential Funding; Kim v. JP Morgan Chase; LaFontaine v. Chrysler Group; and State of Michigan v. CVS Caremark, et al. She also represented the County of Washtenaw in a highly publicized matter involving the provision of police services.

She was recently elected to serve on the Michigan Supreme Court Historical Society’s board, and has been named to the Leaders in the Law 2015 class  and as one of the Top 50 Women Super Lawyers in Michigan and Top Women Attorneys in Michigan.

Kratovil, also recipient of many honors including recognition in The Best Lawyers in America® for Appellate Practice this year, works out of Texas, where he is the Office Managing Member of Dykema Cox Smith, the name under which Dykema operates in that state.

He too has strong appellate experience, and is an expert in federal and state mandamus practice. Kratovil was the lead draftsman of the winning briefs in the Fifth Circuit case In re Volkswagen II, which authorized the use of mandamus to compel convenience-based venue transfers.

Tuesday’s webinar marked the third year that Dykema has shared information on the Supreme Court’s decisions and their impact on civil litigation, and the second time presenting for both Wheaton and Kratovil.

They started out talking about the unusual situation of having an eight-person court and then proceeded to note that the ninth, Neil Gorsuch, was “[p]roving to be a true conservative.” Interestingly, they observed that this is the first time a justice has served along with another justice for whom he clerked; Gorsuch was a former clerk for Justice Kennedy.

They also said that the 2017 court had a relatively higher percentage of unanimous cases, at 57%, and said that the overall reversal rate was 79%. “That makes sense, since the Supreme Court will generally take a case if it believes the decision or the law is wrong,” Wheaton said, adding that there are also a large number of cases derived from circuit court splits.

Seeing the most reversals were the Ninth Circuit and the Sixth Circuit courts, which also reflects the fact that those courts, along with the Federal Circuits, had the highest numbers accepted by the Supreme Court.

Wheaton summarized by saying, “This year, we didn’t see a big flashy case that drew a lot of media attention, although there were some that were more high-profile. What we did have was a steady extension in a predictable way of what the court had decided before.”

In both BNSF Railway v Tyrrell and Bristol-Myers Squibb v Superior Ct., SCOTUS continued its limitations on personal jurisdiction versus corporations.

In the first case, people brought suite against Burlington Northern Railways (the SF in the name stands for “Santa Fe,” but the company is owned by Berkshire Hathaway) in the state of Montana, alleging that was appropriate because BNSF had a significant presence in the state. The Court ruled that was insufficient to constitute jurisdiction, and that it applied only in a business’s state of incorporation and the state where it is headquartered, its “primary place of business.”

The same was deemed true in Bristol-Myers Squibb where hundreds of people sued in the state of California over the drug Plavix. Though 86 of the plaintiffs were indeed from California, the SCOTUS ruling held that did not mean the California court had jurisdiction over the non-residents’ claims.

Similarly, the opinion in T.C.Heartland v. Kraft Foods held that a defendant in patent litigation can only be sued in the state where the defendant is incorporated, or where it has committed acts of infringement and has a regularly established place of business. This reversed a 25-year tradition of allowing patent suits in any place where the defendant had conducted business, which had resulted in a disproportionate number of suits in the Texas courts with which Kratovil is very familiar.

“T.C. Heartland takes a group of rural district courts that had transformed themselves over the last 20 years and emerged as leaders and demotes them back to being a collections of rural district courts,” Kratovil said. “Amusingly, the Dallas Morning News reported on the  impact for the hotels and restaurants in the small town of Marshall, Texas.”

In Goodyear v. Heaeger, the court said that “when a federal court exercises its inherent authority to sanction bad-faith conduct by ordering a litigant to pay the other side's legal fees, the sanctions award is limited to the fees incurred solely because of the misconduct.”

In Samsung v. Apple, which along with T.C. Heartland continued the current court’s trend of accepting patent cases from the Federal Circuit, SCOTUS?cautioned courts to look carefully at whether an “article of manufacture” means either the entire product or just a component of it. In that case, a jury had awarded Apple the whole profit from the sales of the Samsung smartphone, whereas it was only the screen design that was deemed to be infringing. The Supremes sent that back to the Federal Circuit for determination.

“How you figure that out is beyond me,” Wheaton commented.

Another very important 2017 case was Microsoft v. Baker,  which prohibited the class action plaintiffs tactic voluntarily dismissing their claims after a denial of class certification in order to get a “final order” for purposes of appeal, only to later revive claims, in order to get around the Cooper v. Lybrand holding that a denial of class certification is not an appealable order.

Though the justices were unanimous, they differed as to why, but there was general agreement that “voluntary dismissals preclude appellate review.”

Wheaton and Kratovil reviewed a few other cases as well as some that may be coming up in 2018. The slides for the 2017 webinar, as well as last year’s, may be viewed by going to either attorney’s web pages at www.dykema.com.

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