U.S. Supreme Court Justices Face High-Profile Cases As New Term Opens

October 6, 2009

Questions about securities fraud, Sarbanes-Oxley, financial executives’ compensation and football merchandise are among the high-profile cases that the Supreme Court will take up in its term that began this week:

  • Vioxx suits: Merck & Co. shareholders sued the drugmaker for securities fraud after its former blockbuster painkiller Vioxx was pulled from the market. The suit concerns whether Merck provided adequate information about Vioxx’s risks. But at issue before the court is whether the shareholders waited too long to file their suits. The court could use the case to decide what constitutes proper notice to investors under securities laws.
  • Sarbanes-Oxley: The court could decide the validity of a part of the Sarbanes-Oxley anti-fraud law, enacted as Congress’ response to the wave of corporate scandals that started with energy giant Enron’s collapse. The court is considering whether the board established to oversee the accounting industry by the 2002 law violates the constitutionally mandated separation of powers between the branches of government. One irony of the case is that pro-business conservatives who are mounting the legal challenge are arguing that President Barack Obama should have more power to control the makeup of the board, while his administration is defending the law.
  • Honest services fraud: Newspaper baron Conrad Black and a former Alaska legislator separately are challenging their fraud convictions under an open-ended federal law that has become a favorite of prosecutors in white-collar and public corruption cases. The law says that depriving the public or, in Black’s case, shareholders of honest services is a crime. Justice Antonin Scalia pointed out recently that, taken to its extreme, the law could be used to prosecute any employee who has ever called in sick to attend a ballgame.
  • Prosecutorial liability: Two prosecutors who allegedly fabricated evidence in a murder case that led to life sentences for two men want the court to throw out a civil rights suit against them. The sentences, for killing a retired police officer, were set aside after roughly 25 years. The men sued after being released from prison. The prosecutors say they are immune from suits because they were acting within the scope of their job. Federal courts have rejected their arguments, noting alleged misconduct that included a failure to share evidence that pointed to another man as a possible suspect.
  • Mutual fund fees: A fight over the fees paid to an investment adviser gives the court a timely chance to weigh in on compensation paid to financial services executives. Individual mutual fund investors claim in a suit that they are paying unreasonably higher fees than institutional investors to the adviser who chooses their funds’ stocks. The court could use this case to resolve disagreements among lower courts about whether plaintiffs have to prove merely that the fees are excessive or demonstrate that the adviser misled the mutual funds’ directors who approved the fees.
  • NFL merchandise: A business case for sports fans gives the court the chance to decide whether NFL teams can get together to license the sale of caps and other gear without violating antitrust laws.
  • Guns: The Second Amendment’s right to keep and bear arms has never been held to apply to state and local laws restricting guns. The court is taking up a challenge to a handgun ban in Chicago to decide whether this right, like many others in the Bill of Rights, acts to restrict state and local laws or only federal statutes. If the court sides with gun rights supporters, lawsuits to overturn all manner of gun control laws are likely.
  • Animal cruelty videos: A 1999 federal law bars depictions of acts of animal cruelty, including pit bull fights. A federal appeals court overturned a Virginia man’s conviction and struck down the law because it impermissibly restricted his First Amendment rights. The Obama administration says courts should treat this issue the same as child pornography and rule that pictures and videos deserve no constitutional protection.
  • Mojave cross: For most of the past 75 years, a cross on public land in a remote part of the Mojave National Preserve has stood as a memorial to World War I soldiers. The court takes up a long-running legal fight over whether the cross, which Congress declared a national memorial, violates First Amendment religious protections despite Congress’ decision to transfer the land to private ownership.
  • Lawyer request: The court will use this case to decide how long a suspect’s request for a lawyer is valid. Police investigated Michael Shatzer for the sexual abuse of a boy in 2003, but the case was dropped after Shatzer asked for a lawyer. Three years later, the victim was old enough to offer details, and a new police officer interviewed Shatzer, who confessed. The Maryland Court of Appeals threw out Shatzer’s confession because he had asked for a lawyer back in 2003. State prosecutors want the Supreme Court to reinstate his confession.
  • Life without parole for juveniles: In two cases from Florida, the justices will explore whether the constitutional prohibition on cruel and unusual punishment bars sentences of life without parole for people who were under 18 when they committed a crime. The defendants were 13 and 17 when they were sentenced and neither was involved in a killing. The court previously banned executing juveniles.
  • Child custody: The court will take its first look at how American authorities handle an international treaty on child abduction, aimed at preventing one parent from taking children to other countries without the other’s permission. A British father says his 10-year-old son was taken from Chile to Texas without his consent, and wants American courts to send him back. Despite a Chilean court order, the child’s American mother says she has exclusive custody and that U.S. courts are powerless under the treaty to do anything. American courts have sided with the mother, but the administration says the child should be sent back.

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