Until now, there has been a split of appellate authority in New York concerning what a prospective purchaser must show in seeking damages for a seller’s repudiation of a contract for the sale of real property. It is the general rule that a prospective purchaser seeking specific performance of a real estate contract must demonstrate that it is “ready, willing and able to close.” However, there has been a split of authority concerning whether the purchaser must demonstrate that it is “ready, willing and able” to close in seeking damages for seller’s anticipatory breach of contract.

Private attorneys representing government entities are entitled to assert qualified immunity as a defense to civil rights claims, the U.S. Supreme Court unanimously ruled on Tuesday in Filarsky v. Delia.  The Court’s decision allows private attorneys to rely on the same protections that their public counterparts use.

The U.S. Supreme Court heard oral argument Monday on the hotly questioned issue of whether pharmaceutical sales representatives are subject to the outside sales exemption under the Fair Labor Standards Act.  

On January 23, 2012, the Supreme Court issued a unanimous opinion in the case of National Meat Association v. Harris, No. 10-224.  

On Monday, January 9, 2012, the Supreme Court heard argument in a case challenging the Environmental Protection Agency’s issuance of administrative compliance orders under the Clean Water Act, 33 U.S.C. §§ 1251 et seq. (the “CWA”).  Sackett v. United States Environmental Protection Agency, No. 10-1062. 

Chantell and Mike Sackett bought a vacant lot near Priest Lake, Idaho, intending to build their home there.  The lot is zoned residential and is located in a platted subdivision, with sewer and water hookups.  Surrounding lots already have homes built on them.  The Sacketts applied for and obtained the necessary building permits from the local authorities.  Once they began laying gravel, however, they were hit with a compliance order from the EPA.  The order declared the Sacketts’ property to be “wetlands,” and charged the Sacketts with discharging pollutants into the waters of the United States, absent a permit, in violation of 33 U.S.C. § 1311(a).  In the order, the EPA required the Sacketts to return the property to its prior condition and to seek a wetlands permit – costs that, according to the Sacketts, would add up to tens of thousands of dollars, many times the $23,000 they paid for the property.  Failure to comply with the order could result in fines of up to $37,500 per day. 

The Sacketts tried to challenge the wetlands finding – both before the EPA and in federal court under the Administrative Procedure Act, but their challenges were rejected.  The district court in Idaho concluded that the CWA precludes judicial review of compliance orders before the EPA has started an enforcement action in federal court, and granted the EPA’s motion to dismiss.  Sackett v. EPA, No. 08-CV-185-N-EJL, 2008 WL 3286801 (D. Idaho Aug. 7, 2008).  The Ninth Circuit affirmed.  Sackett v. EPA, 622 F.3d 1139 (9th Cir. 2010).  In other words, the only way in which the Sacketts could obtain judicial review of the order would be to violate the order and then raise their arguments in any enforcement action brought by the EPA. 

Arguing on behalf of the Sacketts, Damien Schiff of the Pacific Legal Foundation stated that his clients’ inability to seek relief from the courts when the EPA issues a compliance order under the CWA amounts to a denial of due process.  The majority of the justices seemed sympathetic with his argument.  Justice Stephen Breyer, for example, later commented that not allowing judicial review of administrative actions would represent a “huge upheaval” of federal practice, because “for 75 years the courts have interpreted statutes with an eye towards permitting judicial review, not the opposite.”  Justice Elena Kagan, however, suggested that the Sacketts had not exhausted all of their administrative remedies and could have obtained a wetlands permit from the Army Corps of Engineers.  Mr. Schiff disagreed, stating that having to go through the wetlands permit process before a second agency was not an adequate remedy. 

Deputy Solicitor General Malcolm Stewart argued for the EPA, and stuck to the EPA’s position that the Sacketts’ property is a wetland and that the CWA precludes any judicial review of compliance orders.  The Court did not appear to be persuaded.  In particular, Justice Anthony Scalia and Justice Samuel Alito sharply criticized the EPA’s argument.  Justice Alito remarked at one point that “most ordinary homeowners would say this kind of thing can’t happen in the United States,” adding later that the EPA’s conduct is even more “outrageous” because it can change its mind at any time after issuing the compliance order.

The case is being closely watched by industry and public interest groups alike.  Fifteen different amicus briefs have been filed, fourteen of them in favor of the Sacketts – including briefs filed by the Chamber of Commerce, the State of Alaska and various trade and industry groups.  The media is describing the case as a fight between the “little guy” and big government.  We’ll find out if David or Goliath wins this fight when a decision is issued this spring.  The Court’s decision could impact not only CWA enforcement authority, but possibly also review of compliance orders issued under other federal environmental statutes. 

Carmen R. Toledo is a partner at King & Spalding in Atlanta, Georgia.  

In a unanimous ruling, the U.S. Supreme Court adopted the “ministerial exception” developed in the lower courts and held that the First Amendment flatly prohibits the application of discrimination laws to the employment of “ministers” by religious institutions.  The Court’s decision in Hosanna-Tabor Evangelical Lutheran Church and School v. E.E.O.C., though fact-specific, affords broad discretion to churches and other religious entities to hire and fire employees engaged in preaching or teaching their faith, without fear of a discrimination suit.  

In CompuCredit Corp. v. Greenwood, 10-948, the Court held that pre-dispute agreements to arbitrate claims under the Credit Repair Organizations Act (CROA) are valid and enforceable.  Although the CROA requires that consumers be informed of their “right to sue,” the Court held that this is simply “a colloquial method of communicating to consumers that they have the legal right, enforceable in court, to recover damages from credit repair organizations that violate the CROA.”  These provisions do not require that the action proceed in court, as opposed to in a arbitration.  Furthermore, the statute’s use of terms such as “action” and “court” in its liability provision do not require a judicial forum either.  The Court recognized that it was “utterly commonplace” for statutes to use such language.  In light of these points, the CROA’s non-waiver provision does not preclude arbitration.

Perhaps most significantly, the Court’s opinion emphasizes that if Congress had meant to prohibit arbitration agreements, it would have spoken much more clearly.  Citing several other federal statutes that expressly precluded predispute arbitration agreements, the Court found it “unlikely” that the use of “right to sue” and “action” signaled an intent to do the same in this context.

Linda Coberly is a partner in Winston & Strawn's litigation practice and serves as vice chair of the firm's appellate and critical motions practice group. She is also the author of DRI's Amicus brief filed in this case.  Contact Linda at lcoberly@winston.com.

In “RULE OF EVIDENCE 703 — Problem Child of Article VII (Sept. 19, 2011),” I wrote about how Federal Rule of Evidence 703 is generally ignored and misunderstood in current federal practice.  The Supreme Court, in deciding Daubert, shifted the focus to Rule 702, as the primary tool to deploy in admitting, as well as limiting and excluding, expert witness opinion testimony.  The Court’s decision, however, did not erase the need for an additional, independent rule to control the quality of inadmissible materials upon which expert witnesses rely.  Indeed, Rule 702 as amended in 2000, incorporated much of the learning of the Daubert decision, and then some, but it does not address the starting place of any scientific opinion:  the data, the analyses (usually statistical) of data, and the reasonableness of relying upon those data and analyses.  Instead, Rule 702 asks whether the proffered testimony is based upon:

The Supreme Court heard oral argument on two consolidated cases, Florence v. The Board of Chosen Freeholders of the County of Burlington.  Two well-known and experienced members of the United States Supreme Court appellate bar, Thomas C. Goldstein and Carter Phillips, squared off as the Court considered whether the Fourth Amendment permits a jail to conduct a suspicion-less search whenever an individual is arrested, including for minor offenses.  DRI, which has an active committee for lawyers engaged in representing local governments, filed an amicus brief in support of the county jails.  Written by Mary Massaron Ross, the brief focused on the difficult problems of administration that would arise with a “reasonable suspicion” rule as urged by the class action plaintiffs and reminded the Court of past precedent adopting a bright line rule for Fourth Amendment searches in some categories of cases.  DRI argued that a bright line rule was necessary to give guidance to jailers, to facilitate their efforts to ensure that contraband is not introduced into jail, to help with prison security by identifying those with gang tattoos, and to ensure that lice and other health issues are identified and addressed. 

Can a spouse recover for loss of consortium if he testifies that the marital relationship actually improved after the accident?  He can in California.

On May 26, 2011, the California Court of Appeal issued its decision in Mealy v. B-Mobile, Inc. (2011 DJDAR 7497). 

Background

Plaintiffs Donald Mealy and Adelaide Mealy were born in 1925 and 1927, respectively.  In 1952, Adelaide suffered nearly complete paralysis in both legs and was confined to a wheelchair after battling polio. Nevertheless, she lived an active life, driving a car, working outside the home, and having five children with Donald.  Id.

Beginning in 2000, Adelaide used a lift system to transfer her between her bed, the bathroom, and her wheelchair.  She fell from the lift in 2006, suffering a broken hip.  After a year of recovery, she resumed an independent lifestyle including household chores, cooking, gardening, and travelling.  Id.

In 2008, Adelaide fell from the sling of a replacement lift system.  Unfortunately, her recovery was not as successful as it was in 2006.  Thereafter, Adelaide was unable to perform household services or enjoy leisure activities, and her husband became her fulltime caretaker.  Id.

Trial

During trial, Donald testified that he spent more time with his wife after the accident.  He testified that they love each other even more than they did before the accident.  Finally, he testified that the accident did not hurt his relationship with his wife—“Not a bit.”  Id. at 7497-7498.

Based on this testimony, defendants moved for entry of judgment.  In deciding the issue, the court examined whether partial loss of consortium was a recognized legal theory (discussing Park v. Standard Chem. Way Co. (1976) 60 Cal.App.3d 47, 50-51).  Id. at 7498-7499.  After a brief discussion, the court ruled that partial loss of consortium was like “being a little bit pregnant.”  Finding that plaintiff did not establish complete loss of consortium, judgment was entered in defendants’ favor.  Id.

Analysis on Appeal

The Court of Appeal dismissed the Park Court’s statement regarding partial loss of consortium as dicta.  The court instead relied on the California Supreme Court’s holding in Rodriguez v. Bethlehem Steel Corp. (1974) 12 Cal.3d 382 which “expressly recognized the right to recover damages for the ‘loss or impairment’ of the plaintiff’s rights of consortium, and we see no basis to conclude that a loss of consortium must be so extensive as to be considered complete in order to be compensable.”  Id. at 7499.  

As for Donald’s trial testimony that he and his wife loved each other more after the accident, the Court of Appeal concluded that they were understandable comments of a loving husband.  “Those supportive comments do not negate the tangible impact of his wife’s injury on Donald Mealy and the inevitable loss of conjugal society, comfort, affection, moral support and other noneconomic elements of the marital relationship resulting from his becoming virtually a full-time caregiver for his wife.”  Id.  As such, the trial court was overturned and the case was remanded for a limited trial on damages for loss of consortium.  

About the author, Richard Crites.