U.S. Supreme Court, Amina Bouarfa v. Alejandro Mayorkas, Secretary of Homeland Security, Docket No. 23-583

Judicial Review

 

Discretionary Agency Decisions

 

After Chevron Deference

 

Circuit Split

 

 

 

 

 

8 U.S.C. §1252(a)(2)(B)(ii) bars judicial review of decisions “made discretionary by legislation.” Kucana v. Holder, 558 U. S. 233, 246–247.

 

 

 

(…) Nor is it unreasonable to suggest that Congress created a system in which a sham-marriage determination is subject to judicial review when an agency denies a visa petition but not when the agency revokes a prior approval. That distinction “reflects Congress’ choice to provide reduced procedural protection for discretionary relief.” Patel v. Garland, 596 U. S. 328, 345.

 

 

(…) Because the presumption that administrative action is subject to judicial review may be overcome by “‘clear and convincing evidence’ of congressional intent to preclude judicial review,” Guerrero-Lasprilla v. Barr, 589 U. S. 221, 229, there is no need to resort to the presumption of reviewability where, as here, “the statute is clear,” Patel, 596 U. S., at 347.

 

 

The Secretary points to 8 U. S. C. §1155 as the source of the agency’s revocation authority; that provision states that the Secretary “may, at any time,” revoke approval of a visa petition “for what he deems to be good and sufficient cause.” The issue we address today is whether revocation under §1155 qualifies as a decision “in the discretion of” the Secretary such that it falls within the purview of a separate statute §1252(a)(2)(B)(ii)—that strips federal courts of jurisdiction to review certain discretionary actions. We hold that it does.

 

 

Through §1252(a)(2)(B), Congress stripped federal courts of jurisdiction to review two categories of discretionary agency decisions. First, Congress precluded review of “any judgment regarding the granting of relief under” five listed statutory provisions that empower the Attorney General to grant certain relief to noncitizens. §1252(a)(2)(B)(i). Second, in the provision at issue here, Congress barred review of “any other decision or action of the Attorney General or the Secretary of Homeland Security the authority for which is specified under this subchapter to be in the discretion of the Attorney General or the Secretary.” §1252(a)(2)(B)(ii).

 

 

We granted certiorari to resolve a question that has split the courts of appeals: Whether federal courts have jurisdiction to review the Secretary’s revocation of the agency’s prior approval of a visa petition.

 

 

It is clear on the face of §1155 that the revocation provision is a quintessential grant of discretion to the Secretary. Once again, that provision provides that the Secretary “may, at any time, for what he deems to be good and sufficient cause, revoke the approval of any visa petition.” §1155. As “this Court has ‘repeatedly observed,’” “‘the word “may” clearly connotes discretion.’” Biden v. Texas, 597 U. S. 785, 802 (2022) (quoting Opati v. Republic of Sudan, 590 U. S. 418, 428 (2020)). Moreover, here, Congress has in no way prescribed how that discretion must be exercised. There are no conditions that the Secretary must satisfy before he can revoke the agency’s approval; he may do so “at any time,” for whatever reason “he deems to be good and sufficient cause.” That broad grant of authority “fairly exudes deference” to the Secretary and is similar to other statutes that we have held “‘commit’” a decision “‘to agency discretion.’” Webster v. Doe, 486 U. S. 592, 600 (1988) (holding that a statute permitting the agency to terminate an employee whenever it “‘deems such termination necessary or advisable in the interests of the United States’” was discretionary).

 

 

That discretion is a two-way street. By granting the Secretary discretion to revoke the agency’s approval of visa petitions, Congress has also vested the Secretary with discretion to decline to revoke an approval the agency previously gave. So, if the Secretary determines that the agency’s approval of a visa petition was erroneous, he can revoke that approval—or he can let the error stand. As a general matter, then, this discretion may work to the benefit of visa-petition beneficiaries, since rather than tying the agency’s hands by forcing revocation, Congress created “room for mercy.” Patel v. Garland, 596 U. S. 328, 331 (2022).

 

 

Nor is it unreasonable, as Bouarfa protests, to suppose that Congress created a system in which a sham-marriage determination is reviewable if it is the reason for the agency’s denial of a petition, but not if it is the reason for the agency’s revocation. That distinction “reflects Congress’ choice to provide reduced procedural protection for discretionary relief.” Patel, 596 U. S., at 345. In the interest of finality, Congress vested the Secretary with the discretion to allow the agency’s mistakes to inure to the benefit of the noncitizen. At the same time, Congress did not want this discretion to open up a new source of litigation. Cf. Guerrero-Lasprilla v. Barr, 589 U. S. 221, 230 (2020) (observing Congress’s goal of “‘consolidating judicial review of immigration proceedings into one action’” (quoting INS v. St. Cyr, 533 U. S. 289, 313 (2001)). “The context in which” the agency makes the sham-marriage determination thus “explains the difference in protection afforded.” Patel, 596 U. S., at 345.

 

 

 

 

 

(U.S. Supreme Court, Dec. 10, 2024, Amina Bouarfa v. Alejandro Mayorkas, Secretary of Homeland Security, Docket No. 23-583, J. Jackson, Unanimous)

U.S. Supreme Court, Macquarie Infrastructure Corp. v. Moab Partners, L.P., Docket No. 22-1165

Securities

 

Securities Fraud Claim

 

Duty to Disclose

 

Pure Omissions

 

Private Action Under Rule 10b–5(b)

 

Section 10(b) of the Securities Exchange Act of 1934

 

Circuit Split

 

 

 

 

Securities and Exchange Commission (SEC) Rule 10b–5(b) makes it unlawful to omit material facts in connection with buying or selling securities when that omission renders “statements made” misleading. Separately, Item 303 of SEC Regulation S–K requires companies to disclose certain information in periodic filings with the SEC. The question in this case is whether the failure to disclose information required by Item 303 can support a private action under Rule 10b–5(b), even if the failure does not render any “statements made” misleading. The Court holds that it cannot. Pure omissions are not actionable under Rule 10b–5(b).

 

 

Section 10(b) of the Securities Exchange Act of 1934 makes it “unlawful for any person . . . to use or employ, in connection with the purchase or sale of any security . . ., any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the SEC may prescribe.” 48 Stat. 891, 15 U. S. C. §78j(b). Rule 10b–5 implements this prohibition and makes it unlawful for issuers of registered securities to “make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” 17 CFR §240.10b–5(b) (2022). This Court “has found a right of action implied in the words of §10(b) and its implementing regulation.” Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U. S. 148, 157 (2008).

 

 

Section 13(a) of the Exchange Act requires issuers to file periodic informational statements. See 15 U. S. C. §§78m(a)(1), 78l(b)(1). These statements include the “Management’s Discussion and Analysis of Financial Conditions and Results of Operation” (MD&A), in which companies must “furnish the information required by Item 303 of Regulation S–K.” See SEC Form 10–K; SEC Form 10–Q. Item 303, in turn, requires companies to “describe any known trends or uncertainties that have had or that are reasonably likely to have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.” 17 CFR §229.303(b)(2)(ii) (2022).

 

 

(…) The courts of appeals disagree on whether a failure to make a disclosure required by Item 303 can support a private claim under §10(b) and Rule 10b–5(b) in the absence of an otherwise-misleading statement.1 This Court granted certiorari to resolve that disagreement. 600 U. S. ___ (2023).

 

 

1 Compare Stratte-McClure v. Morgan Stanley, 776 F. 3d 94, 101 (CA2 2015) (“Item 303’s affirmative duty to disclose in Form 10–Qs can serve as the basis for a securities fraud claim under Section 10(b)”), with In re Nvidia, 768 F. 3d 1046, 1056 (CA9 2014) (“Item 303 does not create a duty to disclose for purposes of Section 10(b) and Rule 10b–5”); see also Oran v. Stafford, 226 F. 3d 275, 288 (CA3 2000) (“The ‘demonstration of a violation of the disclosure requirements of Item 303 does not lead inevitably to the conclusion that such disclosure would be required under Rule 10b–5. Such a duty to disclose must be separately shown’”).

 

 

Rule 10b–5(b) makes it unlawful “to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” 17 CFR §240.10b–5(b). This Rule accomplishes two things. It prohibits “any untrue statement of a material fact”—i.e., false statements or lies. Ibid. It also prohibits omitting a material fact necessary “to make the statements made . . . not misleading.” Ibid. This case turns on whether this second prohibition bars only half-truths or instead extends to pure omissions.

A pure omission occurs when a speaker says nothing, in circumstances that do not give any particular meaning to that silence.

 

 

Rule 10b–5(b) does not proscribe pure omissions. The Rule prohibits omitting material facts necessary to make the “statements made . . . not misleading.” Put differently, it requires disclosure of information necessary to ensure that statements already made are clear and complete (…). This Rule therefore covers half-truths, not pure omissions. Logically and by its plain text, the Rule requires identifying affirmative assertions (i.e., “statements made”) before determining if other facts are needed to make those statements “not misleading.”

 

 

(…) It once again “bears emphasis that §10(b) and Rule 10b–5(b) do not create an affirmative duty to disclose any and all material information.

Disclosure is required under these provisions only when necessary ‘to make . . . statements made, in the light of the circumstances under which they were made, not misleading.’” Matrixx Initiatives, Inc. v. Siracusano, 563 U. S. 27, 44 (2011) (quoting Rule 10b–5(b)).

 

 

Statutory context confirms what the text plainly provides. Congress imposed liability for pure omissions in §11(a) of the Securities Act of 1933. Section 11(a) prohibits any registration statement that “contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading.” 15 U. S. C. §77k(a). By its terms, in addition to proscribing lies and half-truths, this section also creates liability for failure to speak on a subject at all. See Omnicare, 575 U. S., at 186, n. 3 (“Section 11’s omissions clause also applies when an issuer fails to make mandated disclosures—those ‘required to be stated’—in a registration statement”). There is no similar language in §10(b) or Rule 10b–5(b). Cf. Ernst & Ernst v. Hochfelder, 425 U. S. 185, 208 (1976).

 

 

“Silence, absent a duty to disclose, is not misleading under Rule 10b–5.” Basic Inc. v. Levinson, 485 U. S. 224, 239, n. 17 (1988). Even a duty to disclose, however, does not automatically render silence misleading under Rule 10b–5(b). Today, this Court confirms that the failure to disclose information required by Item 303 can support a Rule 10b–5(b) claim only if the omission renders affirmative statements made misleading.

(Fn. 2: Moab and the United States spill much ink fighting the question presented, insisting that this case is about half-truths rather than pure omissions. The Court granted certiorari to address the Second Circuit’s pure omission analysis, not its half-truth analysis. See Pet. for Cert. I (“Whether . . . a failure to make a disclosure required under Item 303 can support a private claim under Section 10(b), even in the absence of an otherwise-misleading statement”); see also 2022 WL 17815767, *1 (Dec. 20, 2022) (distinguishing between these “two circumstances”). The Court does not opine on issues that are either tangential to the question presented or were not passed upon below, including what constitutes “statements made,” when a statement is misleading as a half-truth, or whether Rules 10b–5(a) and 10b–5(c) support liability for pure omissions.) 

 

 

 

 

 

(U.S. Supreme Court, April 12, 2024, Macquarie Infrastructure Corp. v. Moab Partners, L.P., Docket No. 22-1165, J. Sotomayor, Unanimous)

U.S. Supreme Court, ZF Automotive US, Inc. v. Luxshare, Ltd, Docket No. 21-401 and 21-518

Discovery

 

Evidence

 

Judicial Assistance

28 U. S. C. §1782 

Proceeding in a Foreign or International Tribunal 

Arbitration Proceedings Abroad

Are Adjudicative Bodies Here Governmental or Intergovernmental?

Comity

Split Among the Courts of Appeals

 

 

(…) 28 U. S. C.  §1782 permits district courts to order testimony or the production of evidence “for use in a proceeding in a foreign or international tribunal.” These consolidated cases require us to decide whether private adjudicatory bodies count as “foreign or international tribunals.” They do not. The statute reaches only governmental or intergovernmental adjudicative bodies, and neither of the arbitral panels involved in these cases fits that bill.

 

 

In the contract governing the sale, the parties had agreed that all disputes would be “exclusively and finally settled by three (3) arbitrators in accordance with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS).” App. in No. 21–401, p. 93. DIS is a private dispute-resolution organization based in Berlin. The agreement, which is governed by German law, provides that arbitration take place in Munich and that the arbitration panel be formed by Luxshare and ZF each choosing one arbitrator and those two arbitrators choosing a third.

 

 

(Section 1782 allows a party to obtain discovery even in advance of a proceeding. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U. S. 241, 259 (2004).)

 

 

(…) We granted a stay and certiorari before judgment to resolve a split among the Courts of Appeals over whether the phrase “foreign or international tribunal” in §1782 includes private arbitral panels.

 

 

Second case: The Fund initiated a proceeding against Lithuania under a bilateral investment treaty between Lithuania and Russia (titled “Agreement Between the Government of the Russian Federation and the Government of the Republic of Lithuania on the Promotion and Reciprocal Protection of the Investments”). App. to Pet. for Cert. in No. 21–518, p. 56a. The treaty seeks to promote “favourable conditions for investments made by investors of one Contracting Party in the territory of the other Contracting Party.” Ibid.

 

 

Relevant here, the treaty addresses the procedure for resolving “any dispute between one Contracting Party and an investor of the other Contracting Party concerning” investments in the first Contracting Party’s territory. Id., at 64a. It provides that if the parties cannot resolve their dispute within six months, “the dispute, at the request of either party and at the choice of an investor, shall be submitted to” one of four specified forums. Id., at 64a–65a. The Fund chose “an ad hoc arbitration in accordance with Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL),” with each party selecting one arbitrator and those two choosing a third. Id., at 65a; App. in No. 21–518, p. 159a. Under the treaty, “the arbitral decision shall be final and binding on both parties of the dispute.” App. to Pet. for Cert. in No. 21–518, at 65a.

 

Section 1782(a) provides: 

“The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.”

 

 

Luxshare argues that commercial arbitral panels are §1782 tribunals because they “fit comfortably” under the “quasi-judicial paradigm” from our decision in Intel. Brief for Respondent in No. 21–401, p. 19. There, we recognized that the body at issue, the Commission of the European Communities, was a §1782 tribunal in part because it was a “first-instance decisionmaker” that rendered dispositive rulings reviewable in court. 542 U. S., at 254–255, 258. But we did not purport to establish a test for what counts as a foreign or international tribunal. The issue before us now—whether a private arbitral body qualifies as a “foreign or international tribunal”—was not before us in Intel. No one there disputed that the body at issue exercised governmental authority. (Fn. 1).

 

 

(…) The word “foreign” takes on its more governmental meaning when modifying a word with potential governmental or sovereign connotations. That is why “foreign” suggests something different in the phrase “foreign leader” than it does in “foreign films.” Brief for Petitioners in No. 21–401, pp. 20–21; Brief for Respondent in No. 21–401, pp. 7–8. The phrase “foreign leader” brings to mind “an official of a foreign state, not a team captain of a European football club.” Brief for United States as Amicus Curiae 17. So too with “foreign tribunal.” “Tribunal” is a word with potential governmental or sovereign connotations, so “foreign tribunal” more naturally refers to a tribunal belonging to a foreign nation than to a tribunal that is simply located in a foreign nation.

 

 

This reading of “foreign tribunal” is reinforced by the statutory defaults for discovery procedure. In addition to authorizing district courts to order testimony or the production of evidence, §1782 permits them to “prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing.” §1782(a) (emphasis added). The reference to the procedure of “the foreign country or the international tribunal” parallels the authorization for district courts to grant discovery for use in a “foreign or international tribunal” mentioned just before in §1782. The statute thus presumes that a “foreign tribunal” follows “the practice and procedure of the foreign country.”

 

 

(…) So understood, “foreign tribunal” and “international tribunal” complement one another; the former is a tribunal imbued with governmental authority by one nation, and the latter is a tribunal imbued with governmental authority by multiple nations.

 

 

Extending §1782 to include private bodies would also be in significant tension with the FAA, which governs domestic arbitration, because §1782 permits much broader discovery than the FAA allows. Among other differences, the FAA permits only the arbitration panel to request discovery, see 9 U. S. C. §7, while district courts can entertain §1782 requests from foreign or international tribunals or any “interested person,” 28 U. S. C. §1782(a). In addition, prearbitration discovery is off the table under the FAA but broadly available under §1782. SeeIntel, 542 U. S., at 259 (holding that discovery is available for use in proceedings “within reasonable contemplation”). Interpreting §1782 to reach private arbitration would therefore create a notable mismatch between foreign and domestic arbitration. And as the Seventh Circuit observed, “it’s hard to conjure a rationale for giving parties to private foreign arbitrations such broad access to federal-court discovery assistance in the United States while precluding such discovery assistance for litigants in domestic arbitrations.” Rolls-Royce, 975 F. 3d, at 695.

 

 

That leaves the question whether the adjudicative bodies in the cases before us are governmental or intergovernmental. They are not.

 

 

Luxshare’s dispute with ZF is straightforward. Private parties agreed in a private contract that DIS, a private dispute-resolution organization, would arbitrate any disputes between them. See Stolt-Nielsen, 559 U. S., at 682 (“An arbitrator derives his or her powers from the parties’ agreement to forgo the legal process and submit their disputes to private dispute resolution”). By default, DIS panels operate under DIS rules, just like panels of any other private arbitration organization operate under private arbitral rules. The panels are formed by the parties—with each party selecting one arbitrator and those two arbitrators choosing a third. No government is involved in creating the DIS panel or prescribing its procedures. This adjudicative body therefore does not qualify as a governmental body.

 

 

The ad hoc arbitration panel at issue in the Fund’s dispute with Lithuania presents a harder question. A sovereign is on one side of the dispute, and the option to arbitrate is contained in an international treaty rather than a private contract. These factors, which the Fund emphasizes, offer some support for the argument that the ad hoc panel is intergovernmental. Yet neither Lithuania’s presence nor the treaty’s existence is dispositive, because Russia and Lithuania are free to structure investor-state dispute resolution as they see fit. What matters is the substance of their agreement: Did these two nations intend to confer governmental authority on an ad hoc panel formed pursuant to the treaty? See BG Group plc v. Republic of Argentina, 572 U. S. 25, 37 (2014) (“As a general matter, a treaty is a contract, though between nations,” and “its interpretation normally is, like a contract’s interpretation, a matter of determining the parties’ intent”).

 

 

The provision regarding ad hoc arbitration appears in Article 10, which permits an investor to choose one of four forums to resolve disputes:

 

“a) a competent court or court of arbitration of the Contracting Party in which territory the investments are made;

“b) the Arbitration Institute of the Stockholm Chamber of Commerce; 

“c) the Court of Arbitration of the International Chamber of Commerce; 

“d) an ad hoc arbitration in accordance with Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).” App. to Pet. for Cert. in No. 21–518, at 64a–65a.

 

 

(…) An ad hoc arbitration panel, by contrast, is not a pre-existing body, but one formed for the purpose of adjudicating investor-state disputes. And nothing in the treaty reflects Russia and Lithuania’s intent that an ad hoc panel exercise governmental authority.

 

For instance, the treaty does not itself create the panel; instead, it simply references the set of rules that govern the panel’s formation and procedure if an investor chooses that forum. In addition, the ad hoc panel “functions independently” of and is not affiliated with either Lithuania or Russia. 5 F. 4th, at 226. It consists of individuals chosen by the parties and lacking any “official affiliation with Lithuania, Russia, or any other governmental or intergovernmental entity.” Ibid. And it lacks other possible indicia of a governmental nature. See ibid. (“The panel receives zero government funding,” “the proceedings . . . maintain confidentiality,” and the “‘award may be made public only with the consent of both parties’”). 

 

(…) We reverse the order of the District Court in No. 21–401 denying the motion to quash, and we reverse the judgment of the Court of Appeals in No. 21–518. 

 

 

 

(U.S. Supreme Court, June 13, 2022, ZF Automotive US, Inc. v. Luxshare, Ltd, Docket No. 21-401 and 21-518, J. Barrett, for a Unanimous Court)

U.S. Supreme Court, Peter v. NantKwest, Inc., Docket No. 18-801, J. Sotomayor, Unanimous

Attorney’s Fees

American Rule

Baker Botts, 576 U. S., at ___ (slip op., at …)

Patents

Pathways to challenge an adverse decision by the United States Patent and Trademark Of­fice (PTO)

Salaries of attorney and paralegal employees of the PTO

The PTO moved for reimbursement of expenses that included—for the first time in the 170-year history of §145—the pro rata salaries of PTO attorneys and a paralegal who worked on the case.

Section 145 of the Patent Act affords applicants “dissat­isfied with the decision of the Patent Trial and Appeal Board” an opportunity to file a civil action in the United States District Court for the Eastern District of Virginia. 35 U. S. C. §145. The statute specifies that “all the ex­penses of the proceedings shall be paid by the applicant.” Ibid. The question presented in this case is whether such “expenses” include the salaries of attorney and paralegal employees of the United States Patent and Trademark Of­fice (PTO). We hold that they do not.

The Patent Act creates two mutually exclusive pathways to challenge an adverse decision by the PTO. The first per­mits judicial review by direct appeal to the United States Court of Appeals for the Federal Circuit. §141. There is “no opportunity for the applicant to offer new evidence” in a §141 proceeding, and the Federal Circuit “must review the PTO’s decision on the same administrative record that was before the agency.” Kappos v. Hyatt, 566 U. S. 431, 434 (2012); 35 U. S. C. §144.

The second pathway allows applicants to file a new civil action against the Director of the PTO in federal district court. §145. Unlike §141, §145 “permits the applicant to present new evidence . . . not presented to the PTO.” Kap­pos, 566 U. S., at 435. The district court “acts as a factfinder when new evidence is introduced in a §145 proceeding” and must make de novo determinations that take into account “both the new evidence and the administrative record be­fore the PTO.” Id., at 444, 446. The parties may appeal the district court’s final decision to the Federal Circuit. 28 U. S. C. §1295(a)(4)(C).

Because §145 does not limit an applicant’s ability to in­troduce new evidence to challenge the denial of a patent, Kappos, 566 U. S., at 439, it can result in protracted litiga­tion. As a condition for permitting such extensive review, the Patent Act requires applicants who avail themselves of §145 to pay “all the expenses of the proceedings.” 35 U. S. C. §145.

The PTO moved for reimbursement of expenses that included—for the first time in the 170-year history of §145—the pro rata salaries of PTO attorneys and a paralegal who worked on the case.

This Court’s “‘basic point of reference’ when considering the award of attorney’s fees is the bedrock principle known as the ‘“American Rule”’: Each litigant pays his own attor­ney’s fees, win or lose, unless a statute or contract provides otherwise.” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 252–253 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U. S. 680, 683 (1983)). The American Rule has “roots in our common law reaching back to at least the 18^th century.” Baker Botts, 576 U. S., at ___ (slip op., at 3) (citing Arcambel v. Wiseman, 3 Dall. 306 (1796)); see also Summit Valley Industries, Inc. v. Carpenters, 456 U. S. 717, 721 (1982) (observing that the American Rule “has been consist­ently followed for almost 200 years”); Alyeska Pipeline, 421 U. S., at 257 (referring to the presumption against shifting attorney’s fees as a “general” rule).

(…) Sebelius v. Cloer, 569 U. S. 369 (2013), confirms that the presumption against fee shifting applies to all statutes—even those like §145 that do not explicitly award attorney’s fees to “prevailing parties.”

(…) §145 has all the marks of the kind of adversarial litigation in which fee shifting, and the pre­sumption against it, is common; the statute authorizes fil­ing a separate civil action where new evidence can be intro­duced for de novo review by a district judge. Thus, the presumption against fee shifting not only applies, but is particularly important because §145 permits an unsuccess­ful government agency to recover its expenses from a pre­vailing party. Reading §145 to award attorney’s fees in that circumstance “would be a radical departure from longstand­ing fee-shifting principles adhered to in a wide range of con­texts.” Ruckelshaus, 463 U. S., at 683.

The American Rule thus provides the starting point for assessing whether §145 authorizes payment of the PTO’s legal fees.

To determine whether Congress intended to depart from the American Rule presumption, the Court first “looks to the language of the section” at issue. Hardt, 560 U. S., at 254. While “the ab­sence of a specific reference to attorney’s fees is not dispositive,” Key Tronic Corp. v. United States, 511 U. S. 809, 815 (1994), Congress must provide a sufficiently “specific and explicit” indication of its intent to overcome the Amer­ican Rule’s presumption against fee shifting. Alyeska Pipe­line, 421 U. S., at 260.

The reference to “expenses” in §145 does not invoke attor­ney’s fees with the kind of “clarity we have required to de­viate from the American Rule.” Baker Botts, 576 U. S., at ___ (slip op., at 4).

(…) Reading the term “expenses” alongside neighboring words in the statute, however, supports a conclusion ex­cluding legal fees from the scope of §145.

(…)  The modifier “all” does not expand §145’s reach to include attorney’s fees. Although the word conveys breadth, it cannot transform “expenses” to reach an outlay it would not otherwise include. Cf. Rimini Street, Inc. v. Oracle USA, Inc., 586 U. S. ___, ___–___ (2019) (slip op., at 6–7) (“The adjective ‘full’ in §505 therefore does not alter the meaning of the word ‘costs.’ Rather, ‘full costs’ are all the ‘costs’ otherwise available under law”).

Section 145’s plain text thus does not overcome the Amer­ican Rule’s presumption against fee shifting to permit the PTO to recoup its legal personnel salaries as “expenses of the proceedings.”

(…) That “expenses” and “attorney’s fees” appear in tandem across various statutes shifting litigation costs indicates that Congress understands the two terms to be distinct and not inclusive of each other.

(…) While some other statutes refer to attorney’s fees as a subset of expenses, they show only that “expenses” can in­clude attorney’s fees when so defined. See, e.g., 28 U. S. C. §361 (authorizing “reasonable expenses, including attor­neys’ fees”); §1447(c).

Simply put, in common statutory usage, the term “ex­penses” alone has never been considered to authorize an award of attorney’s fees with sufficient clarity to overcome the American Rule presumption.

Because Congress failed to make its intention (…) clear in §145, the Court will not read the statute to “contravene fun­damental precepts of the common law.” United States v. Rodgers, 461 U. S. 677, 716 (1983).

For the foregoing reasons, we conclude that the PTO can­not recover the pro rata salaries of its legal personnel under §145 and therefore affirm the judgment of the Court of Ap­peals for the Federal Circuit.

(U.S. Supreme Court, December 11, 2019, Peter v. NantKwest, Inc., Docket No. 18-801, J. Sotomayor, Unanimous)

Parker Drilling Management Services, Ltd. v. Newton, Docket No. 18-389, J. Thomas, Unanimous

Admiralty Law

Maritime Law

Continental Shelf

Drilling Platforms

State Law Adopted as Federal Law?

Pre-emption

California Law (Minimum Wages)

Interpretation (Statute)

The Outer Continental Shelf Lands Act (OCSLA), 67 Stat. 462, 43 U. S. C. §1331 et seq., extends federal law to the subsoil and seabed of the Outer Continental Shelf and all attachments thereon (OCS). Under the OCSLA, all law on the OCS is federal law, administered by federal officials. The OCSLA denies States any interest in or jurisdiction over the OCS, and it deems the adjacent State’s laws to be federal law “to the extent that they are applicable and not inconsistent with” other federal law. §1333(a)(2)(A). The question before us is how to determine which state laws meet this requirement and therefore should be adopted as federal law. Applying familiar tools of statutory interpretation, we hold that where federal law addresses the relevant issue, state law is not adopted as surrogate federal law on the OCS.

Respondent Brian Newton worked for petitioner Parker Drilling Management Services on drilling platforms off the coast of California. Newton’s 14-day shifts involved 12 hours per day on duty and 12 hours per day on standby, during which he could not leave the platform. He was paid well above the California and federal minimum wages for his time on duty, but he was not paid for his standby time.

(…) Parker, on the other hand, argues that state law is not “applicable” on the OCS in the absence of a gap in federal law that needs to be filled. Moreover, Parker argues that state law can be “inconsistent” with federal law even if it is possible for a party to satisfy both sets of laws. Specifically, Parker contends that, although the FLSA normally accommodates more protective state wage-and-hour laws, such laws are inconsistent with the FLSA when adopting state law as surrogate federal law because federal law would then contain two different standards.

Although this is a close question of statutory interpretation, on the whole we find Parker’s approach more persuasive because “ ‘the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’ ” Roberts v. Sea-Land Services, Inc., 566 U. S. 93, 101 (2012).

That rule is particularly relevant here, as the terms “applicable” and “not inconsistent” are susceptible of interpretations that would deprive one term or the other of meaning. If Newton is right that “applicable” merely means relevant to the subject matter, then the word adds nothing to the statute, for an irrelevant law would never be “applicable” in that sense (…) And if Parker is right that “applicable” means “necessary to fill a gap in federal law,” it is hard to imagine circumstances in which “not inconsistent” would add anything to the statute, for a state law would rarely be inconsistent with a federal law that leaves a gap that needs to be filled.

(…) In short, the two terms standing alone do not resolve the question before us. Particularly given their indeterminacy in isolation, the terms should be read together and interpreted in light of the entire statute. See Star Athletica, L. L. C. v. Varsity Brands, Inc., 580 U. S. ___, ___ (2017) (slip op., at 6) (“ ‘Interpretation of a phrase of uncertain reach is not confined to a single sentence when the text of the whole statute gives instruction as to its meaning’ ”).

Our pre-OCSLA decisions made clear that the Federal Government controlled the OCS in every respect, and the OCSLA reaffirmed the central role of federal law on the OCS. As discussed, the OCSLA gives the Federal Government complete “jurisdiction, control, and power of disposition” over the OCS, while giving the States no “interest in or jurisdiction” over it. §§1332(1), 1333(a)(3). The statute applies federal law to the OCS “to the same extent as if the OCS were an area of exclusive Federal jurisdiction located within a State.” §1333(a)(1). Accordingly, the only law on the OCS is federal law, and state laws are adopted as federal law only “to the extent that they are applicable and not inconsistent with” federal law. §1333(a)(2)(A).

Taken together, these provisions convince us that state laws can be “applicable and not inconsistent” with federal law under §1333(a)(2)(A) only if federal law does not address the relevant issue. As we have said before, the OCSLA makes apparent “that federal law is ‘exclusive’ in its regulation of the OCS, and that state law is adopted only as surrogate federal law.” Rodrigue v. Aetna Casualty & Surety Co., 395 U. S. 352, 357 (1969). The OCSLA extends all federal law to the OCS, and instead of also extending state law writ large, it borrows only certain state laws. These laws, in turn, are declared to be federal law and are administered by federal officials.

Given the primacy of federal law on the OCS and the limited role of state law, it would make little sense to treat the OCS as a mere extension of the adjacent State, where state law applies unless it conflicts with federal law. See PLIVA, Inc. v. Mensing, 564 U. S. 604, 617–618 (2011). That type of pre-emption analysis is applicable only where the overlapping, dual jurisdiction of the Federal and State Governments makes it necessary to decide which law takes precedence.

(…) The question is whether federal law has already addressed the relevant issue; if so, state law addressing the same issue would necessarily be inconsistent with existing federal law and cannot be adopted as surrogate federal law. Put another way, to the extent federal law applies to a particular issue, state law is inapplicable.

(…) In Chevron Oil Co. v. Huson, 404 U. S. 97 (1971), the Court again viewed the OCSLA as adopting state law to fill in federal-law gaps. In Huson, the question was whether federal admiralty law or a state statute governed a tort action arising from an injury that occurred on the OCS. Id., at 98–99. Describing Rodrigue’s analysis, we explained that where “there exists a substantial ‘gap’ in federal law,” “state law remedies are not ‘inconsistent’ with applicable federal law.” 404 U. S., at 101. We highlighted that “state law was needed” as surrogate federal law because federal law alone did not provide “ ‘a complete body of law,’ ” which is why “Congress specified that a comprehensive body of state law should be adopted by the federal courts in the absence of existing federal law.” Id., at 103–104. In other words, the OCSLA “made clear provision for filling in the ‘gaps’ in federal law.” Id., at 104. And because Congress had decided not to apply federal admiralty law on the OCS, leaving a gap on the relevant issue, we held that it was appropriate to “absorb” the state law as federal law. Id., at 104, 109.

(…) All law on the OCS is federal, and state law serves a supporting role, to be adopted only where there is a gap in federal law’s coverage.

(…) Applying this standard, some of Newton’s present claims are readily resolvable. For instance, some of his claims are premised on the adoption of California law requiring payment for all time that Newton spent on standby. See Mendiola v. CPS Security Solutions, Inc., 60 Cal. 4th 833, 842, 340 P. 3d 355, 361 (2015); Cal. Lab. Code Ann. §510(a) (West 2011). But federal law already addresses this issue. See 29 CFR §785.23 (2018) (“An employee who resides on his employer’s premises on a permanent basis or for extended periods of time is not considered as working all the time he is on the premises”); see also 29 U. S. C. §207(a). Therefore, this California law does not provide the rule of decision on the OCS, and to the extent Newton’s OCS-based claims rely on that law, they necessarily fail.

Likewise, to the extent Newton’s OCS-based claims rely on the adoption of the California minimum wage (currently $12), Cal. Lab. Code Ann. §1182.12(b) (West Supp. 2019), the FLSA already provides for a minimum wage, 29 U. S. C. §206(a)(1), so the California minimum wage does not apply.

(…) Of course, it is conceivable that state law might be “inconsistent” with federal law for purposes of §1333(a)(2) even absent an on-point federal law. For example, federal law might contain a deliberate gap, making state law inconsistent with the federal scheme. Or, state law might be inconsistent with a federal law addressing a different issue. We do not foreclose these or other possible inconsistencies (fn. 2, p. 14). 

(U.S. Supreme Court, June 10, 2019, Parker Drilling Management Services, Ltd. v. Newton, Docket No. 18-389, J. Thomas, unanimous)

U.S. Supreme Court, Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, Docket No. 17-571, J. Ginsburg, unanimous

Copyright Infringement

License Agreement

Application to Register

No Civil Action for Infringement of the Copyright shall be Instituted until . . . Registration of the Copyright Claim has been Made

Expedited Processing of a Claim for an Additional $800 Fee

Statute of Limitations

Foreign Works

Berne Convention for the Protec­tion of Literary and Artistic Works’ bar on Copyright For­malities for such Works

Title 17 U. S. C. §411(a) states that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.”

(…) Section 411(a) provides, in principal part: “No civil action for in­fringement of the copyright in any United States work shall be insti­tuted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been deliv­ered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringe­ment (…)”.

Registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registra­tion.

Under the Copyright Act of 1976, as amended, a copyright au­thor gains “exclusive rights” in her work immediately upon the work’s creation. 17 U. S. C. §106. A copyright owner may institute a civil action for infringement of those exclusive rights, §501(b), but generally only after complying with §411(a)’s requirement that “reg­istration . . . has been made.” Registration is thus akin to an admin­istrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights.

True, registration processing times have in­creased from one to two weeks in 1956 to many months today. De­lays, in large part, are the result of Copyright Office staffing and budgetary shortages that Congress can alleviate, but courts cannot cure.

Unfortunate as the current administrative lag may be, that factor does not allow this Court to revise §411(a)’s congressionally composed text.

(The Register of Copyrights is the “director of the Copyright Office of the Library of Congress” and is appointed by the Librarian of Congress. 17 U. S. C. §701(a). The Copyright Act delegates to the Register “all administrative functions and duties under [Title 17].”)

In limited circumstances, copyright owners may file an infringement suit before undertaking registration. If a copyright owner is preparing to distribute a work of a type vulnerable to predistribution infringement—notably, a movie or musical composition—the owner may apply for preregistration. §408(f)(2); 37 CFR §202.16(b)(1) (2018). The Copyright Office will “conduct a limited review” of the application and notify the claimant “upon completion of the preregistration.” §202.16(c)(7), (c)(10). Once “prereg­istration . . . has been made,” the copyright claimant may institute a suit for infringement. 17 U. S. C. §411(a). Preregistration, however, serves only as “a preliminary step prior to a full registration.” Preregistration of Cer­tain Unpublished Copyright Claims, 70 Fed. Reg. 42286(2005). An infringement suit brought in reliance on pre­registration risks dismissal unless the copyright owner applies for registration promptly after the preregistered work’s publication or infringement. §408(f)(3)–(4). A copyright owner may also sue for infringement of a live broadcast before “registration . . . has been made,” but faces dismissal of her suit if she fails to “make registration for the work” within three months of its first transmission. §411(c). Even in these exceptional scenarios, then, the copyright owner must eventually pursue registration in order to maintain a suit for infringement.

(…) Noteworthy, too, in years following the 1976 revisions, Congress resisted efforts to eliminate §411(a) and the registration requirement embedded in it. In 1988, Con­gress removed foreign works from §411(a)’s dominion in order to comply with the Berne Convention for the Protec­tion of Literary and Artistic Works’ bar on copyright for­malities for such works. See §9(b)(1), 102 Stat. 2859. Despite proposals to repeal §411(a)’s registration require­ment entirely, however, see S. Rep. No. 100‒352, p. 36 (1988), Congress maintained the requirement for domestic works, see §411(a). Subsequently, in 1993, Congress considered, but declined to adopt, a proposal to allow suit immediately upon submission of a registration application. See H. R. Rep. No. 103–338, p. 4 (1993). And in 2005, Congress made a preregistration option available for works vulnerable to predistribution infringement. See Artists’ Rights and Theft Prevention Act of 2005, §104, 119 Stat. 221.

(…) Fourth Estate raises the specter that a copyright owner may lose the ability to enforce her rights if the Copyright Act’s three-year statute of limitations runs out before the Copyright Office acts on her application for registration (…). Fourth Estate’s fear is overstated, as the average processing time for registration applications is currently seven months, leaving ample time to sue after the Register’s decision, even for infringement that began before submission of an application. See U. S. Copyright Office, Registration Processing Times (Oct. 2, 2018) (Regis­tration Processing Times), https://www.copyright.gov/registration/docs/processing-times-faqs.pdf

Further, in addition to the Act’s provisions for preregistration suit, the Copyright Office allows copyright claimants to seek expedited processing of a claim for an additional $800 fee. See U. S. Copyright Office, Special Handling: Circular No. 10, pp. 1–2 (2017). The Copy­right Office grants requests for special handling in situations involving, inter alia, “pending or prospective litigation,” and “makes every attempt to examine the application . . . within five working days.” Compendium of U. S. Copyright Practices §623.2, 623.4 (3d ed. 2017).

(U.S. Supreme Court, March 4, 2019, Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, Docket No. 17-571, J. Ginsburg, unanimous)

Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., Docket No. 17-1229

License Agreement

Supply and Purchase Agreement

Form 8–K Filing with the Securities and Exchange Com­mission

Patent

Prior Art

AIA bars a person from receiving a patent on an invention that was in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.

The sale of an invention to a third party who is contractually obligated to keep the invention confidential places the invention “on sale” within the meaning of §102(a).

We granted certiorari to determine whether, under the AIA, an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential quali­fies as prior art for purposes of determining the patentability of the invention. 585 U. S. ___ (2018). We conclude that such a sale can qualify as prior art.

The Leahy-Smith America Invents Act (AIA) bars a person from receiving a patent on an invention that was “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U. S. C. §102(a)(1). This case requires us to decide whether the sale of an invention to a third party who is contractually obligated to keep the invention confidential places the invention “on sale” within the meaning of §102(a).

(…) Accordingly, a commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under the AIA.

Petitioner Helsinn Healthcare S. A. (Helsinn) is a Swiss pharmaceutical company that makes Aloxi, a drug that treats chemotherapy-induced nausea and vomiting. Hel­sinn acquired the right to develop palonosetron, the active ingredient in Aloxi, in 1998 (…)

In September 2000, Helsinn announced that it was beginning Phase III clinical trials and was seeking marketing partners for its palonosetron product.

Helsinn found its marketing partner in MGI Pharma, Inc. (MGI), a Minnesota pharmaceutical company that markets and distributes drugs in the United States. Helsinn and MGI entered into two agreements: a license agreement and a supply and purchase agreement. The license agreement granted MGI the right to distribute, promote, market, and sell the 0.25 mg and 0.75 mg doses of palonosetron in the United States. In return, MGI agreed to make upfront payments to Helsinn and to pay future royalties on distribution of those doses. Under the supply and purchase agreement, MGI agreed to purchase exclusively from Helsinn any palonosetron product ap­proved by the FDA. Helsinn in turn agreed to supply MGI however much of the approved doses it required. Both agreements included dosage information and required MGI to keep confidential any proprietary information received under the agreements.

Helsinn and MGI announced the agreements in a joint press release, and MGI also reported the agreements in its Form 8–K filing with the Securities and Exchange Com­mission. Although the 8–K filing included redacted copies of the agreements, neither the 8–K filing nor the press releases disclosed the specific dosage formulations covered by the agreements.

Helsinn filed its fourth patent application—the one relevant here—in May 2013, and it issued as U. S. Patent No. 8,598,219 (‘219 patent). The ’219 patent covers a fixed dose of 0.25 mg of palonosetron in a 5 ml solution. By virtue of its effective date, the ’219 patent is governed by the AIA. See §101(i).

(…) In 2011, Teva sought approval from the FDA to market a generic 0.25 mg palonosetron prod­uct. Helsinn then sued Teva for infringing its patents, including the ’219 patent. In defense, Teva asserted that the ’219 patent was invalid because the 0.25 mg dose was “on sale” more than one year before Helsinn filed the provisional patent application covering that dose in Janu­ary 2003.

(U.S. Supreme Court, Jan. 22, 2019, Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., Docket No. 17-1229, J. Thomas, unanimous)