Monday, May 21, 2018

Epic Systems Corp. v. Lewis, Docket No. 16-285

Labor law: Arbitration: Saving clause: Class actions:

Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective ac­tions, no matter what they agreed with their employers?
As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized pro­ceedings. Nor can we agree with the employees’ sugges­tion that the National Labor Relations Act (NLRA) offers a conflicting command. It is this Court’s duty to interpret Congress’s statutes as a harmonious whole rather than at war with one another. And abiding that duty here leads to an unmistakable conclusion. The NLRA secures to em­ployees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum. This Court has never read a right to class actions into the NLRA—and for three quar­ters of a century neither did the National Labor Relations Board. Far from conflicting, the Arbitration Act and the NLRA have long enjoyed separate spheres of influence and neither permits this Court to declare the parties’ agree­ments unlawful.
(…) Still, the employees suggest the Arbitration Act’s saving clause creates an exception for cases like theirs. By its terms, the saving clause allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract.” §2. That provision applies here, the employees tell us, because the NLRA renders their particular class and collective action waivers illegal. In their view, illegality under the NLRA is a “ground” that “exists at law . . . for the revocation” of their arbitration agreements, at least to the extent those agreements prohibit class or collective action proceedings (…) The saving clause still can’t save their cause.
It can’t because the saving clause recognizes only de­fenses that apply to “any” contract. In this way the clause establishes a sort of “equal-treatment” rule for arbitration contracts. Kindred Nursing Centers L. P. v. Clark, 581 U. S. ___, ___ (2017) (slip op., at 4). The clause “permits agreements to arbitrate to be invalidated by ‘generally applicable contract defenses, such as fraud, duress, or unconscionability.’” Concepcion, 563 U. S., at 339. At the same time, the clause offers no refuge for “defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” Ibid. Under our precedent, this means the saving clause does not save defenses that target arbitration either by name or by more subtle methods, such as by “interfering with fundamental attributes of arbitration.” Id., at 344; see Kindred Nursing, supra, at ___ (slip op., at 5). This is where the employees’ argument stumbles. They don’t suggest that their arbitration agreements were extracted, say, by an act of fraud or duress or in some other unconscionable way that would render any contract unenforceable. Instead, they object to their agreements precisely because they require individualized arbitration proceedings instead of class or collective ones. And by attacking (only) the individualized nature of the arbitra­tion proceedings, the employees’ argument seeks to inter­fere with one of arbitration’s fundamental attributes.
(…) The Court recog­nized that parties remain free to alter arbitration proce­dures to suit their tastes, and in recent years some parties have sometimes chosen to arbitrate on a classwide basis. Id., at 351. But Concepcion’s essential insight remains: courts may not allow a contract defense to reshape tradi­tional individualized arbitration by mandating classwide arbitration procedures without the parties’ consent.

(U.S.S.C., May 21, 2018, Epic Systems Corp. v. Lewis, Docket No. 16-285, J. Gorsuch)

Si un contrat de travail prévoit une clause d’arbitrage, cette clause doit être respectée en cas de litige, sauf à pouvoir alléguer utilement sa nullité en invoquant les motifs de nullité contractuels (illicéité, dol, contrainte notamment). Par ailleurs, si le contrat de travail prévoit une telle clause d’arbitrage, le droit fédéral ne permet pas à l’employé de participer à une procédure de classe. En particulier, la Cour n’a jamais jugé qu’un tel droit pouvait être déduit de la loi fédérale « National Labor Relations Act (NLRA) ». De la sorte, cette loi s’harmonise sans conflit avec la loi fédérale sur l’arbitrage. La récente opinion contraire du « National Labor Relations Board” est ici rejetée. La Cour précise en outre que dite opinion contraire ne mérite pas de déférence au sens de la jurisprudence Chevron, cette problématique n’étant pas laissée par le Congrès à l’appréciation de l’administration.
La Cour dispose ainsi que seuls les moyens permettant d’invoquer la nullité de tous types de contrats peuvent être invoqués pour tenter d’obtenir la nullité d’une clause d’arbitrage. De la sorte, un moyen de nullité qui n’est invocable que contre une clause d’arbitrage est dépourvu d’efficacité. C’est pourquoi en l’espèce les employés ne sont pas parvenus à obtenir la nullité de la clause d’arbitrage de leurs contrats de travail : le moyen de nullité invoqué (une disposition du droit fédéral qui prévoit l’action de classe dans les rapports de travail, et qui ne pourrait être écartée par une clause d’arbitrage 1 :1) n’est pas un motif susceptible d’être invoqué dans tous les litiges contractuels.
Par leur clause d’arbitrage, les parties peuvent moduler la procédure et choisir par exemple la possibilité d’un arbitrage de classe. Celui-ci ne peut cependant pas être imposé s’il n’a pas été choisi.
Cette décision a provoqué une opinion dissidente virulente.

Tuesday, May 15, 2018

Premerger notification: Reportable interest

Premerger notification: Reportable interest: FTC: Antitrust: Competition:

By Premerger Notification Office Staff
May 15, 2018

If your HSR compliance program tracks only those acquisitions that require a payment, you may miss a variety of reportable acquisitions, leading to liability and fines for failures to file. In most situations, you have to file notification under the Hart-Scott-Rodino Act before you pay to purchase voting securities, assets, or certain non-corporate interests. As a result, many HSR compliance programs kick in when someone has to write a check. Below we flag some examples of situations in which you may need to file – a compliance program that won’t catch these isn’t doing its job.
Exchange of one type of interest in a company for another
Acquisition of some kinds of interests in companies are reportable, while others are not. If you exchange one type of interest for another, that acquisition may be subject to HSR reporting and waiting requirements even though you’re exchanging one interest for another in the same company. For example, in 2013 Berkshire Hathaway exchanged convertible notes of USG Corporation for voting securities of USG Corporation. Even though both interests were in the same company, the conversion required an HSR filing. But Berkshire Hathaway’s compliance program missed it, and Berkshire Hathaway paid a civil penalty for the violation.
Backside acquisitions
When one corporation buys another, consideration often comes in the form of voting securities of the buyer. For example, Corporation A may buy Corporation B for cash and a certain number of shares in Corporation A.  The payment of Company A shares to the target's shareholders is known as a "backside transaction."  If you hold shares of company B and will end up holding shares of A as part of a backside transaction, you may have to file and observe the waiting period before acquiring these new shares.
Consolidations and acquisition of shares in Newco
In a Consolidation, when Corporation A and Corporation B combine under a Newco that will be its own ultimate parent entity, the shareholders of A and B may receive voting securities of Newco in exchange for their shares in A or B. Similar to backside transactions, if you are going to receive shares of Newco, you may have to file for the acquisition even though no money changed hands and you took no direct action to cause the acquisition or to exchange the shares.
When a partnership or LLC reorganizes into a corporation, or vice versa, you might have a reportable acquisition of voting securities or non-corporate interests as a result. For example, suppose partnership P plans to reorganize to become corporation C and distribute a different number of voting securities in C to partners of P in exchange for their partnership interests. If you are a partner, you may have to file and wait before you receive shares of C, even though you are not writing a check and did not take any action to effect the reorganization.
Employee compensation
Employees, particularly executives, may receive a portion of their compensation in the form of voting securities of the company they work for, and these stock awards may be reportable events. For example, if you know that you will receive voting securities or restricted share awards (RSAs) from your employer that entitle you to vote the shares and receive dividends, you may have to file and observe the waiting period before you receive them. On the other hand, if you acquire restricted stock units (RSUs), which do not carry the right to vote, you may have to file and wait not before you receive them, but before the shares vest. For example, in 2007 Brian L. Roberts, the Chief Executive Officer of Comcast Corporation, paid a civil penalty because he failed to file and wait before RSUs he had received vested and resulted in him holding voting securities above the HSR reporting threshold.

Monday, May 14, 2018

United States v. Sanchez-Gomez, Docket No. 17-312

Mandamus: Supervisory mandamus: Mootness:

Supervisory mandamus refers to the authority of the Courts of Appeals to exercise “supervisory control of the District Courts” through their “discretionary power to issue writs of man­damus.” La Buy v. Howes Leather Co., 352 U. S. 249, 259–260 (1957). There is no sign in our scant supervisory mandamus precedents that such cases are exempt from the normal mootness rules. See generally Will v. United States, 389 U. S. 90 (1967); Schlagenhauf v. Holder, 379 U. S. 104 (1964); La Buy, 352 U. S. 249. Indeed, as the court below acknowledged, “supervisory mandamus cases require live controversies.” 859 F. 3d, at 657.

(U.S.S.C., May 14, 2018, United States v. Sanchez-Gomez, Docket No. 17-312, C.J. Roberts, unanimous).

Les cours d'appel fédérales disposent d'un pouvoir discrétionnaire de rendre des "writs of mandamus". L'espèce se rapporte à un "supervisory mandamus", et la Cour rappelle qu'une telle affaire ne doit pas être "moot" pour procéder.

Byrd v. United States, Docket No. 16-1371

Fourth Amendment: Probable cause: Standing:

(…) It is worth noting that most courts analyzing the question presented in this case, including the Court of Appeals here, have described it as one of Fourth Amendment “standing,” a concept the Court has explained is not distinct from the merits and “is more properly subsumed under substantive Fourth Amendment doctrine.”
The concept of standing in Fourth Amendment cases can be a useful shorthand for capturing the idea that a person must have a cognizable Fourth Amendment interest in the place searched before seeking relief for an unconstitutional search; but it should not be confused with Article III standing, which is jurisdictional and must be assessed before reaching the merits. Arizona Christian School Tuition Organization v. Winn, 563 U. S. 125, 129 (2011) (“To obtain a determination on the merits in federal court, parties seeking relief must show that they have standing under Article III of the Constitution”). (…) Because Fourth Amendment standing is subsumed under substantive Fourth Amendment doctrine, it is not a jurisdictional question and hence need not be addressed before addressing other aspects of the merits of a Fourth Amendment claim. On remand, then, the Court of Appeals is not required to assess Byrd’s reasonable expectation of privacy in the rental car before, in its discretion, first addressing whether there was probable cause for the search, if it finds the latter argument has been preserved.
Though new, the fact pattern here continues a well-traveled path in this Court’s Fourth Amendment jurisprudence. Those cases support the proposition, and the Court now holds, that the mere fact that a driver in lawful possession or control of a rental car is not listed on the rental agreement will not defeat his or her otherwise reasonable expectation of privacy. The Court leaves for remand two of the Government’s arguments: that one who intentionally uses a third party to procure a rental car by a fraudulent scheme for the purpose of committing a crime is no better situated than a car thief; and that probable cause justified the search in any event. The Court of Appeals has discretion as to the order in which these questions are best addressed.

(U.S.S.C., May 14, 2018, Byrd v. United States, Docket No. 16-1371, J. Kennedy)

La notion de "standing" dans le cadre des affaires relatives au IVè Amendement n'est pas à confondre avec la notion juridictionnelle de "standing" au sens de l'Art. III.
La présente espèce se situe dans la continuité de la jurisprudence rendue par la Cour en application du IVè Amendement. Dans le contexte de cet Amendement, un Tribunal doit déterminer si le prévenu pouvait raisonnablement compter sur le respect, par l'autorité, de ses affaires privées, et doit déterminer s'il existait une "cause probable" permettant la "search" sans se soucier de l'"expectation of privacy" du prévenu. L'ordre dans lequel le Tribunal traite ces deux questions est sans importance.