The Supreme Court of the United States announced decisions in three cases today:
Bowman v. Monsanto Co., No. 11-796: Respondent Monsanto brought a patent infringement suit against Bowman, a farmer, for reproducing Monsanto’s genetically-modified Roundup Ready soybean seeds through planting and harvesting, rather than purchasing new seed each season as Monsanto requires. Bowman raised the defense of patent exhaustion, under which the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article, but does not permit the purchaser to make new copies of the patented product. The District Court rejected this defense, and the Federal Circuit affirmed. Today, the Court affirmed, holding that a farmer who buys patented seeds may not reproduce them through planting and harvesting without the patent holder’s permission.
The Court's decision is available here.
Bullock v. BankChampaign, N.A., No. 11-1518: In a bankruptcy case, the Bankruptcy Court granted summary judgment in favor of respondent BankChampaign’s opposition to discharge of petitioner’s state-court imposed debts to a trust, holding that the debts were not dischargeable under 11 U.S.C. § 523(a)(4), which provides that a bankruptcy discharge cannot be obtained for debts “for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” The District Court and Eleventh Circuit affirmed, with the Circuit Court reasoning that “defalcation requires a known breach of fiduciary duty, such that the conduct can be characterized as objectively reckless.” Today, the Court vacated and remanded, holding that the term “defalcation” includes a culpable state of mind requirement akin to that which accompanies application of the other terms in the same statutory phrase; one involving knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior.
The Court's decision is available here.
Dan’s City Used Cars, Inc. v. Pelkey, No. 12-52: Respondent Pelkey brought suit under New Hampshire law against the towing company Dan’s City Used Cars, alleging that Dan’s City took custody of his car after towing it without his knowledge, and then did not notify him of its plan to auction the car, held an auction despite Pelkey’s indication that he wanted the car returned, and ultimately traded away the car without compensating Pelkey. Pelkey alleged that Dan’s City had failed to follow New Hampshire’s statutory requirements for disposing of abandoned vehicles by a storage company, as well as Dan’s City’s statutory and common law duties as bailee. The state court granted summary judgment for Dan’s City, holding that the claims were preempted by the Federal Aviation Administration Authorization Act of 1994, which preempts state laws “related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 49 U. S. C. §14501(c)(1). The New Hampshire Supreme Court, however, reversed, holding that Pelkey’s claims did not concern “the transportation of property.” Today, the Court affirmed, holding that state-law claims stemming from the storage and disposal of a car, once towing has ended, are not sufficiently connected to a motor carrier’s service with respect to the transportation of property to warrant preemption under §14501(c)(1).
The Court's decision is available here.