The plaintiffs in Warner-Lambert, asserting various common-law claims under Michigan law, alleged that they had suffered injuries caused by an FDA-approved drug that was marketed and sold by the defendant. Michigan's product-liability statute, Mich. Comp. Laws § 600.2946(5), confers immunity on drug manufacturers in product-liability suits if the drug in question has been approved by the FDA. Under the statute's "fraud exception," however, the immunity does not apply if the manufacturer withheld or misrepresented information that would have affected the FDA's approval of the drug.

Deeming the "fraud exception" preempted under the reasoning of Buckman, the district court dismissed the claims. The Second Circuit reversed and held that there was no preemption because (i) unlike the state law at issue in Buckman, there was a presumption against federal preemption of the Michigan statute; (ii) the plaintiffs were asserting claims that sounded in traditional state tort law, not "fraud-on-the-FDA" claims; and (iii) proof of fraud on the FDA was not an element of the plaintiffs' claims. Desiano v. Warner-Lambert, 467 F.3d 85 (2006). In so holding, the Second Circuit explicitly declined to follow the reasoning of the Sixth Circuit, which had found the Michigan "fraud exception" to be preempted under Buckman.

This case is important for all manufacturers of federally regulated products and will have significant implications for the future exposure of such manufacturers to state-law tort liability. Although it nominally implicates only Michigan's particular statutory scheme, the Court's resolution of this case will determine whether state courts may independently evaluate whether a federal agency's approval of a regulated product was procured through fraud. The case will also provide the Court an opportunity to decide the proper level of deference that courts should accord to the pronouncements of federal agencies regarding the preemptive effect of their regulations. Amicus briefs in support of the petitioner are due on November 12, 2007, and amicus briefs in support of the respondent are due on December 10, 2007. Any questions about this case should be directed to appellate@mayerbrown.com.

In this case, a contractual dispute arose between the respondent--Judge Alex Ferrer, star of the television show Judge Alex--and his manager, petitioner Arnold Preston. When Judge Ferrer refused to pay his manager's commission, contending that the management contract was unlawful under the CTAA, Preston initiated arbitration proceedings against Judge Ferrer. Judge Ferrer obtained a preliminary injunction against the arbitration proceedings from a California trial court under the theory that Preston had failed to exhaust his remedies before the Labor Commissioner. The California Court of Appeal affirmed, holding that the injunction was appropriate because the "standard [American Arbitration Association] clause" included in the management contract did not explicitly provide for the Labor Commissioner to receive the requisite notice of and right to attend all arbitration hearings. 51 Cal. Rptr. 3d 628 (2006). The court also held that the FAA did not preempt the CTAA's "exhaustion" requirement--i.e., that the Labor Commissioner resolve the dispute. Id. at 633-34.

This case is of broad significance to any business or entity that relies upon arbitration agreements to resolve disputes. If sustained, the decision below would authorize states to declare causes of action non-arbitrable by requiring the parties to pursue costly administrative proceedings followed by de novo judicial review. Amicus briefs in support of the petitioner are due on November 12, 2007, and amicus briefs in support of the respondent are due on December 10, 2007. Any questions about this case should be directed to appellate@mayerbrown.com.

Respondent LG Electronics (LGE) owns a patent that is practiced by certain Intel chips. LGE sold Intel the unrestricted right to practice the patent with respect to Intel's own products, but required that Intel send a "notice" to its customers informing them that Intel's rights did not extend to any product made "by combining any Intel product with a non-Intel product." When original equipment manufacturers (OEMs) purchased Intel chips practicing the patent and combined them with computer memory manufactured by other manufacturers, LGE sued the OEMs for patent infringement.

The district court granted the OEMs partial summary judgment because it found that, under the patent exhaustion doctrine, Intel's authorized sale of the chips to the OEMs exhausted LGE's patent rights in those chips. The Federal Circuit reversed, holding that the patent exhaustion doctrine applies only to "unconditional" sales and does not prevent a patent owner from selling its patent rights piecemeal, subject to conditions on subsequent purchasers that allow the patent owner to extract a separate royalty each time that the patented article changes hands.

This case is of tremendous significance to all industries that deal in patent rights, particularly high technology industries. Many high technology products contain thousands of different physical components, each of which may be the subject of many patents. During the manufacturing process, it is common for patented components to pass through the hands of multiple firms before reaching the final product and, ultimately, the end user. If patent owners can extend their patent rights past the first authorized sale of a patented article, they will be able to impose significant real and transactional costs on each of those downstream firms as well as on the ultimate end user.

Mayer Brown LLP filed an amicus brief supporting certiorari in this case on behalf of Dell Inc., Hewlett-Packard, Co., and Gateway, Inc. Amicus briefs in support of the petitioner are due on November 12, 2007, and amicus briefs in support of the respondent are due on December 10, 2007. Any questions about this case should be directed to Andy Pincus (202-263-3220) in our Washington, D.C. office.

In the decision below, the Seventh Circuit held that a terminated employee who sues a former employer may assert a race retaliation claim under section 1981. 474 F.3d 387, 398 (7th Cir. 2007). The court reasoned that the "plain text of the statute, as amended in 1991 makes clear that section 1981 encompasses the 'termination of contracts,' and . . . a retaliatory discharge is indeed a termination of a contract." Id. The court also found support for this reading in the legislative history of the statute and in the Supreme Court's recent decision in Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005).

The Court's resolution of this issue should be of considerable importance to all employers, as retaliation claims can greatly expand the scope of liability in discrimination cases. This case may also provide the Court with an opportunity to address whether Congress's failure to include an explicit retaliation provision precludes a court from reading such a cause of action into the statute. Amicus briefs in support of petitioners will be due on November 12, 2007, and amicus briefs in support of the respondent will be due December 10, 2007. Any questions about this case should be directed to Bob Davis (202-263-3207) in our Washington, D.C. office.

The Kentucky state retirement plan for public employees provides retirement benefits for "hazardous duty" workers at age fifty-five or older, or after twenty years of service regardless of age; retirement benefits are based on the employee's final salary and years of service. The state also provides a disability plan, available to employees who become disabled before reaching normal retirement eligibility, the benefits of which are similarly based on final salary and years of service. However, in order to put retirement-ineligible employees who become disabled closer to the position in which they would have been had they continued working until retirement eligibility, the disability plan imputes to the employee the number of years of service he or she would have needed to reach retirement eligibility.

The EEOC brought an age discrimination claim on behalf of a "hazardous duty" worker who became disabled at age sixty-one, with seventeen years, seven months of service, and--because he was eligible for normal retirement benefits--was denied disability benefits. The district court granted summary judgment in favor of the defendants, holding that the Kentucky plan was not facially discriminatory insofar as there was no showing of discriminatory intent. The en banc Sixth Circuit reversed, holding that the Kentucky plan discriminated on its face against older employees by denying them benefits available to younger workers and that the terms of the plan itself sufficed to infer intent to discriminate on the basis of age. 467 F.3d 571 (6th Cir. 2006). The dissenting judges argued that the Kentucky plan--because it considered age only in relation to years of service and years until retirement eligibility, and served to protect retirement-ineligible employees against disability rather than to exclude retirement-eligible employees, who tended to be older, from a benefit--was not motivated by discrimination on the basis of age, and as such did not constitute the kind of disparate treatment contemplated by the ADEA.

The resolution of this case is of particular interest to any employer offering benefit programs in which age is a factor in determining eligibility or benefit levels. If the Sixth Circuit's reasoning is upheld, any such plan would automatically suffice to support a prima facie case under the ADEA. The Court may also use this case to clarify the scope of the "arbitrary discrimination" prohibited by the ADEA, an issue of interest to all employers covered by the Act. Amicus briefs in support of petitioners will be due on November 12, 2007, and amicus briefs in support of the respondent will be due December 10, 2007. Any questions about this case should be directed to Bob Davis (202-263-3207) in our Washington, D.C. office.

In late 2000 and early 2001, when the electricity markets in the western states were in turmoil, the respondent utilities entered into long-term contracts to purchase wholesale electricity from the petitioners at agreed upon rates. Subsequently, after market rates declined, the utilities asked FERC to find the contractual rates "unjust and unreasonable" and to fix lower rates. Having previously determined that the wholesale suppliers did not exercise undue market power, FERC refused to do so, finding that the utilities had failed to satisfy the criteria for revising private contracts set forth in United Gas Pipe Line Co. v. Mobile Gas Services Co., 350 U.S. 332 (1956), and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). The Ninth Circuit, in a decision reported at 471 F.3d 1053, reversed and remanded for further consideration, holding that the Mobile and Sierra criteria apply only in "certain limited circumstances" and that FERC, by neglecting to consider the particular market conditions that gave rise to the contracts in question, had failed to determine whether those circumstances were in fact present.

The Supreme Court's decision, which will determine the circumstances under which FERC is obligated to revise the terms of a wholesale energy contract, will be extremely important to participants in the energy market. Depending on how broadly the decision is written, it may also prove important to individuals and entities involved in other industries subject to federal price regulation. Amicus briefs in support of petitioners will be due on November 12, 2007, and amicus briefs in support of the respondents will be due December 10, 2007. Any questions about this case should be directed to Andrew Tauber (202-263-3324) in our Washington, D.C. office.

Petitioner was convicted of tax evasion based, in part, on his failure to pay personal income tax on certain funds that he received from a corporation that he controlled. Petitioner argues that those distributions must be treated as non-taxable returns of capital, even absent contemporaneous evidence that they were intended as such, because the corporation had no earnings or profits and thus could not distribute dividends. The circuits are divided on the issue of what contemporaneous evidence of intent, if any, is required in such situations. Compare 470 F.3d 931, 933-34 (9th Cir. 2006) (relying on United States v. Miller, 545 F.2d 1204, 1214 (9th Cir. 1976)), with United States v. D'Agostino, 145 F.3d 69, 72-73 (2d Cir. 1998).