Today, the Supreme Court granted certiorari in five cases of interest to the business community:
Arbitration—Preemption Under Federal Arbitration Act
MHN Government Services, Inc. v. Zaborowski, No. 14-1458
Two consultants working with certain military contractors signed agreements requiring them to arbitrate any disputes arising out of their contracts. When the consultants subsequently brought a class-action lawsuit against the contractors, the contractors moved to compel arbitration. The district court found certain portions of the arbitration agreement unconscionable but invalidated the entire arbitration agreement, despite its severability clause, citing a California case that held that if a contract is "permeated by unconscionability," it can be completely invalidated. The Supreme Court granted certiorari to decide whether this state-law severability rule is preempted by the Federal Arbitration Act on the ground that, in practice, it has a disproportionate impact on arbitration agreements.
Federal Jurisdiction—State of Citizenship for a Trust
Americold Logistics, LLC v. ConAgra Foods, Inc., No. 14-1382
Federal courts have diversity jurisdiction only when the plaintiffs and defendants are completely diverse. In many circumstances, identifying the citizenship of the parties is straightforward. But the lower courts are divided as to how to identify the citizenship of a trust. Some courts look to the citizenship of the trustees; others look to the citizenship of the beneficiaries. The Court is set to resolve the dispute in Americold Logistics.
Separation of Powers—Single-Case Exceptions to Generally Applicable Laws
Bank Markazi v. Peterson, No. 14-770
In 2010, plaintiffs holding billions of dollars in default judgments against the Iranian government sought to enforce those judgments against $2.5 billion of assets at a New York bank that were related to foreign currency reserves held by Bank Markazi, the Iranian central bank, in Europe. Under the Uniform Commercial Code, the New York assets were not considered assets of Bank Markazi and thus could not be attached by the plaintiffs. The assets were also immune from attachment under the Foreign Sovereign Immunities Act. But, while the case was pending, Congress enacted Section 502 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which applied only to the Bank Markazi litigation and provided that the $2.5 billion at issue could be attached, notwithstanding any other law. The Supreme Court has granted certiorari to decide whether Section 502 violates the separation of powers because it directs a particular result in a single pending case.
Racketeer Influenced and Corrupt Organizations Act—Extraterritorial Applicability
RJR Nabisco, Inc. v. The European Community, No. 15-138
The European Community, now known as the European Union, filed suit against RJR Nabisco Inc. under RICO, alleging a worldwide money-laundering scheme, with overt acts taking place overseas. The Supreme Court granted certiorari to decide whether and to what extent RICO applies to extraterritorial conduct and to foreign entities.
Administrative Law—Alaska National Interest Lands Conservation Act
Sturgeon v. Masica, No. 14-1209
The National Park Service promulgated regulations prohibiting the operation or use of hovercraft within all national parks. But the Alaska National Interest Lands Conservation Act (ANILCA) limits the applicability of national park regulations in Alaska for land that is not federally owned. A lawsuit was filed to challenge the enforcement of the hovercraft restriction on Alaska's navigable rivers on the theory that the rivers are state land. The Supreme Court granted certiorari to decide whether ANILCA prevents the National Park Service from regulating hovercraft on Alaska's navigable waterways.
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