The Supreme Court deals with jurisdiction, liability and privileges in corporate cases (2023)

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(Video) Supreme Court Hears Oral Arguments In Case Regarding Attorney-Client Privilege

Jan 6, 2023 – The Supreme Court's 2022 term is off to a slow start. The Court ended the calendar year without issuing an opinion on any dispute, which had not happened for more than a century. The rate of issuance of certificates, which has already been falling, is also at a record low. While the Court recently won an average of nearly 60 grants through early January, only 51 cases are on the agenda for the 2022 term so far.

That sleepy start makes the second half of the semester even busier. Over the next six months, the court will make decisions on important issues, including affirmative action on college admissions, scrutiny of elections by the state legislature, and the intersection of free speech and anti-discrimination laws. The court will also decide a number of important issues affecting companies, including where they can be sued, what they can be held liable for, and how to contact their lawyers.

Mallory v. Norfolk Southern Railway Co. could have a significant impact on where the companies can be sued. The Due Process Clause in the 14th Amendment limits the jurisdiction of the courts over the defendant. If the jurisdiction does not have general personal jurisdiction over a defendant (for corporations, this is the place of incorporation or principal place of business), it must have specific personal jurisdiction: the corporation must be involved in the activities that gave rise to the claims. A defendant can also consent to jurisdiction, and Mallory is testing the limits of what constitutes consent.

Pennsylvania law provides that any corporation that registers there to conduct business consents to the general jurisdiction within the state. Relying on that implied consent law, Mallory, a former Norfolk Southern employee, sued the Virginia-based Pennsylvania Railroad for alleged exposure to carcinogens through his work for the company in Virginia and Ohio. Norfolk Southern argued that there was no personal jurisdiction and that Pennsylvania's implied consent law violated due process. The Pennsylvania Supreme Court agreed, and the United States Supreme Court granted certification.

The parties' arguments in this case pit historical notions of personal liability against the modern realities of a mobile economy. Emphasizing the history of consent-by-record laws, Mallory urges judges to keep Pennsylvania's statute consistent with the original understanding of the 14th Amendment. Norfolk Southern argues that consent-by-record laws were a solution to a problem that, thanks to the framework developed by the Court of Justice in its 1945 decision, International Shoe Co. v. now deprecated activities in any state, regardless of your consent.

Questions at the November hearing suggested that the judges' views on Mallory may be divided and ideologically confused. Chief Justice John Roberts and Justice Elena Kagan appeared to agree with Norfolk Southern's argument that International Shoe has superseded previous cases in which consent-by-registration laws were upheld. But Judge Ketanji Brown Jackson suggested that both avenues of personal jurisdiction could co-exist, and Justices Sonia Sotomayor and Neil Gorsuch questioned whether Norfolk Southern's consent to these facts was actually coerced.

Meanwhile, Justices Samuel Alito and Brett Kavanaugh raised concerns about the potential practical implications of Mallory's position, which could change the landscape of jurisdiction by subjecting companies to lawsuits wherever they do business.

Regardless of what the court ultimately decides, Mallory will likely have a significant impact on companies and where they can be sued.

While Mallory addresses the state's power to bring defendants to justice, the court will also consider questions about the state's ability to regulate behavior in other states.

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The National Council of Pig Farmers v. Ross includes a constitutional challenge to California's Proposition 12, a ballot initiative that requires farms to meet certain criteria before their pork can be sold in the state.

Farmers and hog producers say the law violates the dormant commerce clause, the theory that states cannot interfere with Congress's constitutionally granted powers over interstate commerce. Because California imports more than 99% of its pork, those challenging Proposition 12 argue that the law unconstitutionally discriminates against interstate commerce by "transforming the statewide pork industry."

But supporters of Proposition 12 say the alleged impact is exaggerated. They say Proposition 12 is not unlike many laws that states routinely pass to regulate quality and safety standards. They argue that continuing this challenge would dramatically expand the scope of the dormant commerce clause in a way that would undermine states' sovereignty.

Justices have verbally disagreed on where to draw the line when it comes to allowing states to impose political preferences on the rest of the country. For more than two hours, they peppered lawyers with hypotheses about state laws ranging from banning the picking of fruit by undocumented workers or goods made by vaccinated workers to requiring that firewood be treated with certain pesticides. And when some states enact competing laws, such as one requiring union workers to make products and another prohibiting the use of union labor in manufacturing, companies would be forced to choose between markets to sell their chosen products. This, several judges feared, would allow the kind of "economic balkanization" that the commerce clause was intended to prevent.

Time will tell if the court will ultimately address these broader issues or settle the case in a more limited fashion, relegating the case to the lower courts for further factual development on whether Proposition 12 will truly wreak nationwide havoc on the hog industry, a question that the lower courts asked. dismissal because they rejected the plaintiff's action in the challenge phase.

In addition to questions about which states regulate conduct within each other's territories, the Court faces questions about the extent to which the United States can regulate conduct abroad.

In the case of Abitron Austria GmbH v. Hetronic International, Inc., the court will consider whether the Lanham Act, which protects US trademarks against infringement, applies only to foreign sales.

After a dispute over trademarks of radio remote controls used to operate heavy machinery, a jury awarded Hetronic International $90 million in damages for Lanham Law violations by Abitron Austria GmbH, despite only 3% of Abitron's global sales have a significant impact on the US. . 10th US Circuit Court of Appeals upheld the ruling, ruling that the Lanham Act applies to Abitron's foreign sales because those sales ended up affecting Hetronic's cash flow in the United States.

Abitron sought certiorari and asked the Supreme Court to consider how the Lanham Act applied to foreign conduct.

US law generally only applies at the national level, unless otherwise clearly stated by Congress. In the absence of such a clear statement, courts often have to decide whether a given application of the law is domestic or extrastate. The application of a law is domestic, and therefore permissible, if the conduct relevant to the substance of the law, the primary concern of Congress in passing the law, occurred in the United States.

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The question at Abitron is how this framework relates to the Lanham Law. Abitron claims that the Lanham Act only applies domestically and only when American consumers are confused, not, as in this case, when the confusion occurs abroad. Hetronic contends that the Lanham Act is extraterritorial and covers violations of foreign rights that have significant domestic implications. The court agreed to a balance and will hear the case on March 1.

The court's final decision will have obvious implications for the scope of potential liabilities companies may face under the Lanham Act for foreign sales. The 10th Federal Court ruling reveals significant foreign behavior that could exponentially increase damage payments.

This case could also have broader implications, affecting the Court's broader framework for assessing extraterritoriality and potentially creating a ripple effect on other laws affecting business abroad.

As companies await the ramifications of these and other important matters in court, many will be eager to speak with a lawyer. But another case on the court's docket could affect those communications: On January 9, the court will hear In re Grand Jury, a case about the scope of attorney-client privilege for multipurpose communications containing a mix of legal and business issues. . appendix.

This case stems from the Justice Department's criminal investigation into an unidentified law firm client. In response to a grand jury subpoena, the law firm produced more than 20,000 pages, but withheld communications containing legal advice on the client's taxes. The US Court of Appeals for the Ninth Circuit upheld a federal district court's contempt order, ruling that the attorney-client privilege protects multipurpose communications only when the primary purpose of the communication is to provide legal advice.

The decision of the 9th Federal Court of Justice implies a tripartite division in terms of attorney-client confidentiality. Three other circuits - 2nd, 5th and 6th - also limit the privilege to communications whose main objective is legal advice. 7. The US Circuit Court of Appeals goes further, at least in the tax context, and finds that the attorney-client privilege does not protect cross-functional communications about tax advice.

But in a 2014 ruling by then-Justice Kavanaugh, the US Court of Appeals for the District of Columbia took a broader approach that expanded the privilege when providing legal advice was an essential purpose of the communication.

Along with the anonymous law firm, several friends are urging the court to review the D.C. accept circuit. A more restrictive test is in keeping with modern business realities and legal practice and will make it more difficult for lawyers to communicate with their clients, since most communications have multiple purposes. The United States claims that D.C. The circuit is very permissive and would facilitate too aggressive information shielding.

While the court may limit its decision to the tax context, it may also broaden the scope of the attorney-client privilege. Either way, their decision is likely to affect how lawyers communicate with their corporate clients and whether they need to separate legal advice from other business conversations.

Regardless of the outcome of this and other cases, one thing seems likely: in the coming months, the 2022 term decisions will give companies much to talk about with their lawyers.

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and non-bias in accordance with the Trust Principles. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.

Shay Dvoretzky

Shay Dvoretzky, a partner in the Washington, D.C., office of Skadden, Arps, Slate, Meagher & Flom, is the head of the firm's Supreme Court Litigation and Appellate Group. He represents clients in US appeals. Federal Supreme Court, Federal Courts of Appeal and State Courts of Appeal. He can be reached at

emily kennedy

Emily Kennedy is an Associate Attorney with the Supreme Court Appellate Body and Litigation Group in the Washington, D.C. office of Skadden, Arps, Slate, Meagher & Flom. You can reach her at

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What cases does the Supreme Court have jurisdiction over? ›

The Constitution limits original jurisdiction cases to those involving disputes between the states or disputes arising among ambassadors and other high-ranking ministers. Appellate jurisdiction means that the Court has the authority to review the decisions of lower courts.

What is the supreme courts jurisdiction? ›

What are the 3 responsibilities of the Supreme Court? ›

As the final arbiter of the law, the Court is charged with ensuring the American people the promise of equal justice under law and, thereby, also functions as guardian and interpreter of the Constitution. The Supreme Court is "distinctly American in concept and function," as Chief Justice Charles Evans Hughes observed.

What rights did the Supreme Court give to business? ›

Case law in the United States

This opinion appears to us to be equally supported by reason, and by the former decisions of this Court." Beginning with this opinion, the U.S. Supreme Court has continuously recognized corporations as having the same rights as natural persons to contract and to enforce contracts.

What 3 types of cases are usually are heard by the Supreme Court? ›

Types of cases heard by the Supreme Court
  • The Court will hear cases to resolve a conflict of law. ...
  • The Court will hear cases that are of great public importance. ...
  • The Court hears cases when lower courts ignore Supreme Court precedent. ...
  • The Court will hear cases where an area of law is unsettled.
Aug 19, 2014

What are the four jurisdiction that the Supreme Court enjoy? ›

The SC has original, appellate, advisory and review jurisdiction.

Does the Supreme Court controls its jurisdiction? ›

Generally, Congress determines the jurisdiction of the federal courts. In some cases, however — such as in the example of a dispute between two or more U.S. states — the Constitution grants the Supreme Court original jurisdiction, an authority that cannot be stripped by Congress.

What is the Supreme Court's jurisdiction quizlet? ›

What kind of jurisdiction does the Supreme Court have? Original jurisdiction is a court in which a case is first heard while appellate jurisdiction is a court in which a case is heard on appeal from a lower court. The Supreme Court has appellate jurisdiction.

What does the Supreme Court have jurisdiction over quizlet? ›

The Supreme Court has original jurisdiction in cases which involves states and cases involving citizen and foreign people. It also has an original jurisdiction in cases where the United States is involved.

What are the 2 primary functions of the Supreme Court? ›

First, as the highest court in the land, it is the court of last resort for those looking for justice. Second, due to its power of judicial review, it plays an essential role in ensuring that each branch of government recognizes the limits of its own power.

What are the four functions of Supreme Court? ›

Supreme Court of India – Functions

It settles disputes between various government authorities, between state governments, and between the centre and any state government. It also hears matters which the President refers to it, in its advisory role. The SC can also take up cases suo moto (on its own).

What are the 3 most important significant Supreme Court decisions of all time? ›

Landmark United States Supreme Court Cases
  • Marbury v. Madison (1803) ...
  • McCulloch v. Maryland (1819) ...
  • Gibbons v. Ogden (1824) ...
  • Dred Scott v. Sandford (1857) ...
  • Schenck v. United States (1919) ...
  • Brown v. Board of Education (1954) ...
  • Gideon v. Wainwright (1963) ...
  • Miranda v. Arizona (1966)

What did the Supreme Court allow corporations to do in 2010? ›

It was argued in 2009 and decided in 2010. The court held 5-4 that the free speech clause of the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations, including nonprofit corporations, labor unions, and other associations.

What rights do corporations have? ›

Today, corporations have nearly every right a corporation might want under the Constitution: free speech, freedom of religion, Fourth Amendment privacy rights, due process, equal protection, property rights – rights corporations use to challenge laws regulating the economy and the marketplace.

What are the rights of a legal person in corporation? ›

They can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Some refer to a corporation as a "legal person."

What are the two 2 types of cases that get heard by the Supreme Court? ›

What Cases Does the U.S. Supreme Court Hear? The United States Supreme Court is a federal court, meaning in part that it can hear cases prosecuted by the U.S. government. (The Court also decides civil cases.)

What are the 7 types of cases the Supreme Court hears? ›

Federal courts generally have exclusive jurisdiction in cases involving (1) the Constitution, (2) violations of federal laws, (3) controversies between states, (4) disputes between parties from different states, (5) suits by or against the federal government, (6) foreign governments and treaties, (7) admiralty and ...

What does the Supreme Court regulate? ›

As the final arbiter of the law, the Court is charged with ensuring the American people the promise of equal justice under law and, thereby, also functions as guardian and interpreter of the Constitution.

What cases fall under the jurisdiction of the Supreme Court quizlet? ›

a court has original jurisdiction if it is the first court to hear a case. The SC has original jurisdiction in cases involving foreign dignitaries, one or more states, or cases involving other public ministers.

What are the 3 responsibilities of the Supreme Court quizlet? ›

Describe the three decision-making tasks of a Supreme Court justice. The three tasks are deciding which cases to hear, deciding individual cases, and determining an explanation for the decision of the Court.

Which of the following is not a jurisdiction of the Supreme Court? ›

The correct answer is option 4. i.e. Financial. The Supreme Court of India has Original, Appellate, writ and Advisory jurisdiction.

What are two types of jurisdiction courts can have? ›

Jurisdiction may be broken down into two categories: personal jurisdiction and subject matter jurisdiction.

What types of cases does the Supreme Court get involved in quizlet? ›

List nine types of cases the Supreme and Federal Courts have jurisdiction over:
  • the Constitution.
  • federal laws.
  • treaties.
  • laws governing ships.
  • ambassadors/public ministers.
  • the United States government.
  • two or more state governments.
  • citizens of different states.

What are the five functions of the Supreme Court? ›

  • Composition.
  • Jurisdiction.
  • Exercise of Jurisdiction.
  • Judicial Administration.
  • The Council of Supreme Court Justices.
  • Power to Establish Rules and Regulations.
  • Right to Present an Opinion.
  • Judicial Research Team.

What are the powers of the Supreme Court answer? ›

The Supreme Court has also a very wide appellate jurisdiction over all Courts and Tribunals in India in as much as it may, in its discretion, grant special leave to appeal under Article 136 of the Constitution from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any Court ...

What is the most influential Supreme Court case? ›

Brown v. Board of Education is perhaps one of the most famous cases to have gone through the US Supreme Court. The landmark 1954 case saw justices rule unanimously that the racial segregation of children in public schools was unconstitutional.

What are the 3 types of judicial decisions? ›

Legal (law-based), attitudinal (value-based), and strategic (both) are the main three models of the judicial decision-making.

What is the most controversial Supreme Court case ever decided? ›

Roe v.

Wade might be one of the most famous and controversial U.S. Supreme Court cases in history, with its ruling permeating our U.S. politics to this day. Roe v. Wade determined that the right to privacy under the Due Process Clause of the Fourteenth Amendment extended to a woman's decision to have an abortion.

What precedent did a Supreme Court decision in 1886 have on corporations? ›

Southern Pacific Railroad Company, 118 U.S. 394 (1886), is a corporate law case of the United States Supreme Court concerning taxation of railroad properties. The case is most notable for a headnote stating that the Equal Protection Clause of the Fourteenth Amendment grants constitutional protections to corporations.

What did the 2010 Supreme Court decision in Citizens United v FEC allow quizlet? ›

Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), is a US constitutional law case, in which the United States Supreme Court held that the First Amendment prohibits the government from restricting political independent expenditures by corporations, associations, or labor unions.

In which case did the Supreme Court rule that corporations have First Amendment rights and may independently spend unlimited amounts of money on elections? ›

On January 21, 2010, the Supreme Court issued a ruling in Citizens United v. Federal Election Commission overruling an earlier decision, Austin v. Michigan State Chamber of Commerce (Austin), that allowed prohibitions on independent expenditures by corporations.

What are the 3 power of a corporation? ›

The specific powers of a corporation, also called Theory of Specific Capacity, are the following: power to extend or shorten corporate term; power to increase or decrease corporate stock; power to incur, create, or increase bonded indebtedness; power to deny pre-emptive right; power to sell, dispose, lease, encumber ...

Do corporations have personal rights? ›

Corporations do not have coequal constitutional rights as living, breathing human citizens, but they are making claims on more rights that, until relatively recently, were only asserted by real people.

Do corporations have fundamental rights? ›

Union of India, [1964] 1 S.C.R. 371, referred to. In numerous cases in this Court it was assumed, without contest, that a company is a citizen of India and competent to enforce fundamental rights under Art. 19(1)(f) and (g) of the Constitution.

What are the legal liabilities of a corporation? ›

Corporate legal liability is a corporation's legal responsibility related to any criminal actions — or in some cases, their failure to act — that were committed by the employees of the corporation.

Who has legal protection in a corporation? ›

Analysis. The general rule in its simplest terms is corporations are treated as people under the law, and people performing services on behalf of a corporation (e.g., employees) cannot be held personally liable if those services go wrong. This is a key reason why many businesses choose to incorporate.

Who bears the legal responsibility for a corporation? ›

Corporation. A corporation is an incorporated entity designed to limit the liability of its owners (called shareholders). Generally, shareholders are not personally liable for the debts of the corporation. Creditors can only collect on their debts by going after the assets of the corporation.

What are the 5 Supreme Court cases? ›

Landmark United States Supreme Court Cases
  • Marbury v. Madison (1803) ...
  • McCulloch v. Maryland (1819) ...
  • Gibbons v. Ogden (1824) ...
  • Dred Scott v. Sandford (1857) ...
  • Schenck v. United States (1919) ...
  • Brown v. Board of Education (1954) ...
  • Gideon v. Wainwright (1963) ...
  • Miranda v. Arizona (1966)

In what cases does the Supreme Court have jurisdiction quizlet? ›

The Supreme Court has original jurisdiction in cases which involves states and cases involving citizen and foreign people. It also has an original jurisdiction in cases where the United States is involved.

How many types of cases are in the Supreme Court? ›

There are only three cases in modern English, they are subjective (he), objective (him) and possessive (his). They may seem more familiar in their old English form - nominative, accusative and genitive. There is no dative case in modern English.

What are the 4 types of opinions that the Supreme Court can issue? ›

There are a few different types of Supreme Court opinions, such as dissenting opinions, majority opinions, plurality opinions, concurring opinions, and per curiam opinions.

What are 2 famous Supreme Court decisions and what did they decide? ›

Edwards v. California, 314 U.S. 160 (1941) A state cannot prohibit indigent people from moving into it. Kent v. Dulles, 357 U.S. 116 (1958) The right to travel is a part of the "liberty" of which the citizen cannot be deprived without due process of law under the Fifth Amendment.

What are 4 kinds of cases that can only be heard in the Supreme Court of British Columbia? ›

Supreme Court of British Columbia

It hears civil cases over $35,000, family law cases involving divorce and custody, as well as serious criminal cases.

Why are there 7 supreme courts? ›

Stanton, from office. Congress wanted to limit Johnson's power as much as it could. It passed legislation in 1866 decreasing the number of judges from 10 to 7 so that Johnson wouldn't be able to appoint a new justice.


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