Latest 4 Cases: Xereas v. Heiss (Business Law), United States v. Greer (Civil Procedure), Community Oncology Alliance, Inc. v. Office of ...

The Upside-Down Treatment of Religious Exceptions Cases in the Supreme Court

MICHAEL C. DORF

Cornell law professor Michael C. Dorf comments on the U.S. Supreme Court’s decision last week to reject an emergency application from the State of Alabama to lift a stay on the execution of Willie B. Smith III. Professor Dorf observes the Court’s unusual alignment of votes in the decision and argues that, particularly as reflected by the recent COVID-19 decisions, the liberal and conservative Justices have essentially swapped places from the seminal 1990 case Employment Division v. Smith, which established that the First Amendment does not guarantee a right to exceptions from neutral laws of general applicability.

Read More

Xereas v. Heiss

Docket: 19-7108

Opinion Date: February 16, 2021

Judge: Wilkins

Areas of Law: Business Law, Contracts

Plaintiff, who holds the RIOT ACT trademark, entered into a business agreement with defendants to open the Riot Act Comedy Club in downtown D.C. Plaintiff subsequently filed suit to recover damages from defendants' alleged breaches of fiduciary duty and of the operating agreement of the limited liability company the parties formed to start the club. Defendants counterclaimed. The DC Circuit reversed the district court's dismissal of plaintiff's breach of fiduciary duty claim, holding that plaintiff adequately alleged that he and defendants were members of a member-managed LLC and that under D.C. law that suffices to plead the existence of a fiduciary duty. In this case, the district court improperly found it "clear" that a "special confidential relationship transcending an ordinary business transaction did not take place" between the parties. The court explained that the district court failed to consider relevant District of Columbia and Maryland law, the statute's clear imposition of duties of loyalty and care typical of a fiduciary, or the nature of the parties' relationship—as partners and co-managers in a business venture, not merely arms-length parties to a standard commercial transaction. However, plaintiff failed to show that the court should reverse any of the district court's evidentiary rulings. The court affirmed the district court's decision to deny defendants judgment as a matter of law on plaintiff's breach of contract claim and to deny defendants' fee petition. The court remanded for further proceedings.

United States v. Greer

Docket: 19-5070

Opinion Date: February 16, 2021

Judge: Walker

Areas of Law: Civil Procedure, Contracts

The DC Circuit reversed the district court's grant of summary judgment for the government in an action brought by the government seeking to collect a settlement against defendant. The court first rejected defendant's claim that the settlement contract is unenforceable because the parties omitted essential terms. In regard to defendant's claim that the district court should have granted him summary judgment because the government brought its suit too late, the court concluded that there is a material and disputed question of fact regarding performance that the district court should resolve after a bench trial. In this case, the government had six years to sue for breach of contract; the government filed suit in April 2016; and, if defendant breached the contract before April 2010, then the government's suit was untimely. Accordingly, the court remanded for further proceedings.

Community Oncology Alliance, Inc. v. Office of Management and Budget

Docket: 19-5116

Opinion Date: February 16, 2021

Judge: Katsas

Areas of Law: Civil Procedure, Government & Administrative Law

The DC Circuit held that the district court lacked subject matter jurisdiction over plaintiff's challenge to a reduction in Medicare drug reimbursement rates caused by a sequestration order under the Balanced Budget Act. The court explained that the Balanced Budget Act creates neither subject matter jurisdiction nor a cause of action that covers the claims. Therefore, the district court properly declined to convene a three-judge court. In any event, the claims also arise under the Medicare Act, which is enough to strip away federal question jurisdiction. Finally, because Community Oncology did not identify any concrete reimbursement claim that its members presented to the agency, 42 U.S.C. 405(g) does not confer subject-matter jurisdiction.

Fleming v. United States Department of Agriculture

Docket: 17-1246

Opinion Date: February 16, 2021

Judge: Srikanth Srinivasan

Areas of Law: Government & Administrative Law

The DC Circuit granted petitions for review asking the court to set aside the Department's decisions imposing sanctions on petitioners for violating the Horse Protection Act. The Supreme Court subsequently decided Lucia v. SEC, 138 S. Ct. 2044 (2018), holding that the SEC's ALJs had not been appointed in compliance with the Appointments Clause. In light of Lucia, the government agrees with petitioners that the ALJ who presided over petitioners' cases was improperly appointed, and moved for vacatur of the challenged orders. Petitioners oppose the government's motion, seeking to address a number of additional challenges in advance. In regard to petitioners' argument that the dual layers of for-cause-removal protections for the Department's ALJs unconstitutionally limit the President's removal power under Free Enterprise Fund v. PCAOB, 561 U.S. 477, 492 (2010), the court concluded that petitioners have forfeited their argument by failing to raise it before the ALJ or Judicial Officer, and thus the argument is subject to a mandatory, non-excusable, issue-exhaustion requirement imposed by statute. The court concluded that petitioners preserved the remainder of their claims before the agency, but they fare no better in terms of obtaining additional relief from the court at this time.