Two recent US Supreme Court cases merged in a combined ruling, Axon Enterprise v. FTC and SEC v. Cochran allows the SEC and the FTC’s in-house litigation defendants to sue the regulators and is expected to increase the number of constitutional challenges against two of the most powerful regulators, and other federal agencies with a similar structure. The change will allow enforcement targets to challenge the agencies’ constitutional authority in federal district court without waiting for an in-house judge’s decision, as was previously required. The first direct attack against SEC authority has already been lodged at the Supreme Court. The SEC and the FTC will have to more aggressively defend their use of administrative law judges and in-house courts against accusations that they violate due-process rights. The ruling will allow companies to shop for friendly district courts when they're hit by administrative proceedings, such as an FTC suit attempting to block a merger. The change may also force agencies to expend more resources as they litigate on multiple fronts and is of a piece with some of our earlier reporting wherein courts have used the “major questions doctrine” to resist deferring to agency statutory interpretation where the underlying matter is of major economic or political significance. In sum, we may be on the precipice of seeing a substantially weakened administrative state.
Federal Agencies Face Constitutional Fights After High Court Loss
Food distributor Sysco is arguing that unionized workers cannot strike in solidarity with Sysco workers in the Midwest because they technically don’t work for the same company. This follows a recent strike by Sysco workers in Indiana and Kentucky over wages and retirement benefits. Sysco workers belonging to Teamsters Local 117 in Washington state followed suit, but Sysco Seattle filed a complaint in US District Court, stating that its workers could not join the picket because its operation is a separate entity from Sysco Louisville and Sysco Indianapolis. The pending lawsuit raises the question of whether large, multi-pronged corporations are one employer or multiple employers under the law. While the strikes in Indianapolis and Louisville have already ended, the answer is not immediately clear, but will depend on the facts of the case. While federal law allows workers to strike against their employers, it doesn’t extend to third parties, although the Labor-Management Relations Act also permits sympathy strikes, which are different from secondary strikes. The outcome in this case, should it be decided against workers, will significantly weaken labor and provide owners with a path forward to minimize the impact of strikes by creating separate regional entities.
Sysco Picketing Lawsuit Hinges on Standard for Secondary Strikes
The start of Dominion Voting Systems' $1.6 billion defamation trial against Fox News has been delayed by a day, and sources say that Fox is pursuing settlement talks. The trial is over the network's coverage of the 2020 US presidential election. Dominion is accusing Fox of ruining its reputation by airing baseless claims that its machines secretly changed votes in favor of Democrat Joe Biden, who defeated then-President Trump, a Republican, in the 2020 presidential election. Dominion is asking for $1.6 billion in damages, a figure Fox has said is unrealistic and based on flawed economic modeling. The trial is considered a test of whether Fox's coverage crossed the line between ethical journalism and the pursuit of ratings, as Dominion alleges and Fox denies. Rupert Murdoch, the founder of Fox News, is set to testify, along with a parade of Fox executives and on-air hosts, including Tucker Carlson, Sean Hannity, and Jeanine Pirro.
Fox defamation trial delayed, network pursues settlement talks | Reuters
US law firm Orrick, Herrington & Sutcliffe is facing a $10m lawsuit in California over claims that it misled a Hong Kong tribunal when it sought to enforce an arbitration award against a large Chinese real estate developer. Hong Kong-based Global Industrial Investment Ltd, a subsidiary of China Fortune Land Development, filed the lawsuit seeking more than $9.8m in damages for malicious prosecution and abuse of process. Orrick's clients won a $9.3m award in 2019, and the firm sought to enforce it in courts in Hong Kong and in the United States. Orrick used Hong Kong-based garnishment orders to freeze bank accounts belonging to Global Industrial Investment as part of enforcing the arbitration award, the lawsuit alleged. The Hong Kong court in 2020 set aside the arbitration order after finding "a deliberate attempt to hide relevant material". In a court filing, Orrick's attorneys denied acting with malice and accused Global Industrial Investment of waging a "retaliatory" campaign against the law firm.
Law firm Orrick fights $10 million 'malicious prosecution' case in California | Reuters
A federal appeals judge, Pauline Newman, is under investigation by her own court for allegedly failing to carry out her duties and refusing to respond to other judges' concerns, court officials at the US Court of Appeals for the Federal Circuit said. An order signed by Federal Circuit Chief Judge Kimberly Moore said a three-judge committee had determined that Judge Pauline Newman, who is 95, may "suffer a disability that interferes with her ability to perform the responsibilities of her office." Newman is also under investigation for misconduct for refusing to cooperate with the probe or submit to a medical evaluation. Newman is a leading intellectual property law jurist and a prominent dissenter on the patent-focused Federal Circuit. The Federal Circuit acknowledged the probe in a statement. It is highly unusual for a US judge to face a complaint from a colleague on the bench, especially on an issue as delicate as their competence to serve.
US appeals court judge faces rare probe into competency, misconduct | Reuters
