The Supreme Court of the United States announced decisions in two cases today:
Lexmark Int’l v. Static Control Components, Inc., No. 12-873: Respondent Static Control Components brought a claim of false or misleading advertising against Lexmark under §43 of the Lanham Act, 15 U.S.C. §1125(a). Static Control, a maker and seller of products used in remanufacturing Lexmark printer cartridges, alleged that Lexmark had purposely misled end-users to believe that they are legally bound by Lexmark’s “Prebate” program to return Prebate-labeled cartridges to Lexmark, and also misrepresented Static Control’s products in letters Lexmark sent to remanufacturing companies stating that it was illegal to use Static Control’s products to refurbish Prebate cartridges. The District Court held that Static Control lacked “prudential standing” to bring the Lanham Act claim, and the Sixth Circuit reversed, applying a different prudential standing test. Today, the Supreme Court affirmed, establishing a new test, whereby to invoke a Lanham Act’s cause of action for false advertising, a plaintiff must plead (and ultimately prove) an injury to a commercial interest in sales or business reputation proximately caused by the defendant’s misrepresentations.
The Court's decision is available here.
United States v. Quality Stores, Inc., No. 12-1408: Respondent Quality Stores, Inc., involuntarily terminated thousands of employees before and after entering Chapter 11 bankruptcy proceedings. These employees received severance payments which varied based on job seniority and time served, and were made pursuant to plans that did not tie payments to the receipt of state unemployment insurance. Quality Stores paid and withheld taxes required under the Federal Insurance Contributions Act (FICA), 26 U.S.C. §3101 et seq., but later sought a refund from the Internal Revenue Service upon the belief that the payments were not taxable as wages under that statute. After the IRS denied the refund, Quality Stores prevailed on summary judgment before the Bankruptcy Court on this issue. The District Court and Sixth Circuit affirmed. The Court today reversed, holding that FICA’s broad definition of wages includes the severance payments made here, which were made to employees terminated against their will, were varied based on job seniority and time served, and were not linked to the receipt of state unemployment benefits.
The Court's decision is available here.
On Monday, March 24, the Court granted certiorari in the following case:
Jennings v. Stephens, No. 13-7211: Did the Fifth Circuit err in holding that a federal habeas petitioner who prevailed in the district court on an ineffective assistance of counsel claim must file a separate notice of appeal and motion for a certificate of appealability to raise an allegation of deficient performance that the district court rejected even though the Fifth Circuit acquired jurisdiction over the entire claim as a result of the respondent's appeal?