The U.S. Supreme Court granted Bell Wisconsin’s April 15 cert petition challenging the 7th U.S. Circuit Appeals Court ruling that E-rate reimbursement requests to the Universal Service Administrative Co. are actionable under the False Claims Act (FCA) (see 2405220039), said SCOTUS' order list Monday (docket 23-1127). In holding that the FCA’s treble damages and civil penalties apply to submissions made to USAC -- a private corporation paying private funds -- the 7th Circuit “explicitly acknowledged” that it was taking a “contrary view” from the 5th Circuit “about the identical program,” the petitioner said. The circuit split “directly affects billions of dollars distributed each year under the E-rate and three other universal service programs," it added.

The U.S. Supreme Court denied the Jan. 5 cert petition of Consumers’ Research challenging the FCC's method for determining the USF quarterly contribution factor (see 2401100044), a docket entry Monday said (docket 23-743). The petition asked SCOTUS to review a Dec. 14 decision of the 11th U.S. Circuit Court of Appeals upholding the Q4 2022 contribution factor (see 2312140058).

The 7th U.S. Circuit Appeals Court erred when it ruled that E-rate reimbursement requests to the Universal Service Administrative Co. (USAC) are actionable claims under the False Claims Act (FCA), Wisconsin Bell’s U.S. Supreme Court reply brief said Monday (docket 23-1127). The reply brief supported Wisconsin Bell's April 15 cert petition to reverse the 7th Circuit’s decision. In holding that the FCA’s treble damages and civil penalties apply to submissions made to USAC -- a private corporation paying private funds -- the 7th Circuit “explicitly acknowledged” that it was taking a “contrary view” from the 5th Circuit “about the identical program,” the reply brief said. The circuit split “directly affects billions of dollars distributed each year under the E-rate and three other universal service programs," it said. The acknowledged conflict “casts a shadow of extraordinary liability over a massive number of transactions involving numerous private entities that are subject to government supervision,” said the reply brief. SCOTUS should grant Wisconsin Bell’s cert petition “to resolve the circuit split and restore clarity to the scope of the FCA as applied to government-adjacent programs funded with private money,” it said. SCOTUS distributed Wisconsin Bell's cert petition for the justices' June 6 conference, said a text-only docket entry Tuesday.

Thursday’s unanimous decision in Smith v. Spizzirri in which the U.S. Supreme Court held that Section 3 of the Federal Arbitration Act requires district courts to stay cases that are headed for arbitration rather than dismissing them (see 2405160028) “establishes the proper way for federal courts to handle arbitration cases across the country,” said the petitioners’ lead attorney, Haynes Boone partner Daniel Geyser, in an email Thursday. The decision “secures a necessary backstop that protects litigant rights if an arbitration falls through,” said Geyser, who chairs his firm’s U.S. Supreme Court practice. The decision prevents “premature appeals that undermine the FAA’s scheme,” he said. It also “protects the ability of federal courts to seamlessly facilitate the underlying arbitration,” and it advances the FAA's “core purposes” by “eliminating waste, avoiding unnecessary litigation, and sending parties to arbitration as quickly as possible,” he said. The court’s decision “is short, sweet, and exactly right,” he said. “We are gratified the Court saw the issues our way, and we are thrilled for our clients, who are now positioned to obtain a long-awaited adjudication of their claims,” he said. Petitioners Wendy Smith, Michelle Martinez and Kenneth Turner are current and former drivers for an on-demand delivery service who initiated their suit for alleged violations of federal and state employment laws in an Arizona state court in July 2021. The petitioners conceded that all their claims were arbitrable, but they argued that Section 3 required the district court to stay the action pending arbitration rather than dismissing it entirely. The district court nevertheless issued an order compelling arbitration and dismissing the case without prejudice, and the 9th Circuit affirmed.

The U.S. Supreme Court distributed for the justices’ May 30 conference the cert petition of three former Twitter users who are seeking review of the 6th U.S. Circuit Appeals Court’s judgment affirming that they lacked Article III standing to bring First Amendment social media censorship claims against the Department of Health and Human Services (see 2403270011), said a text-only docket entry Tuesday (docket 23-1062). The Twitter accounts of petitioners Mark Changizi, Michael Senger and Daniel Kotzin were terminated or suspended by the platform for publishing COVID-19 tweets that were deemed to have run counter to HHS’ pandemic public information policy. They allege the same First Amendment government censorship claims as the five individual plaintiffs in Murthy v. Missouri (docket 23-411) who seek to affirm the 5th Circuit's social media censorship injunction against officials from the White House and four federal agencies.

The U.S. Appeals Court for the D.C. Circuit granted Meta's unopposed motion to hold its appeal against the FTC in abeyance until 21 days after the U.S. Supreme Court issues its decision in SEC v. Jarkesy, said a clerk's order Tuesday (docket 24-5054). The underlying Meta-FTC case in the district court similarly has been stayed (see 2404180029). The D.C. Circuit appeal arises from the district court’s denial of Meta’s motion for a preliminary injunction to block the FTC’s administrative proceeding into its privacy practices. In the same decision, the district court also denied the FTC’s motion to dismiss. The district court denied that motion without prejudice, concluding that it would be premature to dismiss Meta’s claims before SCOTUS has issued its decision in Jarkesy, as it’s possible that the SCOTUS decision may have some bearing on the Meta-FTC case. Though Jarkesy involves a different agency, it concerns many of the same constitutional challenges asserted by Meta against the FTC, said Meta's motion Monday. The D.C. Circuit should similarly stay the appeal pending the Supreme Court’s Jarkesy decision, it said. Holding the appeal in abeyance temporarily will accomplish the goal of judicial efficiency in at least two ways, it said. First, granting the stay will allow the parties to brief the appeal with the benefit of the Supreme Court’s ruling, it said. Second, within weeks of the Jarkesy decision, the parties must determine next steps in the district court action, including whether the FTC will renew its motion to dismiss, it said. A second motion to dismiss “has the potential to give rise to a second appeal raising similar questions concerning the state of the law and how it applies to Meta’s claims,” it said. It thus may provide an opportunity for the parties to discuss “whether the instant appeal should continue to be held in abeyance pending resolution of that motion,” it said. An abeyance to give the parties time to determine the best course forward “will therefore accomplish judicial efficiency,” it said. Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners exercise executive authority while being “unconstitutionally insulated from removal” by the president. The questions at stake in Jarkesy (docket 22-859) include whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.

U.S. District Judge Randolph Moss for the District of Columbia adopted the joint request of Meta and the FTC to stay Meta’s constitutional challenge of the commission’s administrative enforcement proceeding against the company for alleged privacy violations, said the judge’s text-only docket entry Wednesday (docket 1:23-cv-03562). Meta and the FTC sought the stay, pending a U.S. Supreme Court decision in SEC v. Jarkesy (docket 22-859), said their joint meet and confer statement Monday (see 2404160033). Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners exercise executive authority while being “unconstitutionally insulated from removal” by the president. The questions at stake in Jarkesy include whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.

The parties in Meta’s constitutional challenge of the FTC’s administrative enforcement proceeding against the company for alleged privacy violations want the U.S. District Court for the District of Columbia to stay the action, pending a U.S. Supreme Court decision in SEC v. Jarkesy (docket 22-859), said their joint meet and confer statement Monday (docket 1:23-cv-03562). The parties propose submitting a further joint meet and confer statement within 14 days of the SCOTUS ruling, it said. At stake in Jarkesy is whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection. Jarkesy was argued Nov. 29. Meta’s complaint challenges the constitutionality of the FTC’s “five structural characteristics” that render its actions against Meta “unconstitutional” (see 2311300039). Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners also exercise executive authority while being “unconstitutionally insulated from removal” by the president. Congress has delegated to the FTC power to assign disputes to administrative adjudication rather than litigating them before an Article III court, in violation of Article I of the Constitution, alleges Meta.

When the parties’ arbitration agreement delegates all issues in a lawsuit to arbitration, a court should dismiss the suit and compel arbitration, said the New England Legal Foundation in a U.S. Supreme Court amicus brief Monday (docket 22-1218). The brief supports respondent IntelliQuick Delivery CEO Keith Spizzirri’s bid to uphold the 9th U.S. Circuit Appeals Court decision affirming the district court’s dismissal of the case brought by petitioners Wendy Smith, Michelle Martinez and Kenneth Turner after the court compelled their claims to arbitration (see 2403280019). The petitioners are current and former IntelliQuick drivers who sued in Arizona for multiple violations of federal and state employment laws. Notwithstanding the petitioners’ “affirmative stay request,” the district court compelled their claims to arbitration and dismissed the case, and the 9th Circuit affirmed. The case is being watched closely to determine whether the Federal Arbitration Act's Section 3 requires district courts to stay a lawsuit pending arbitration, or whether they have discretion to dismiss when all claims are subject to arbitration (see 2403010007). Section 3 applies “only when an arbitration agreement is partial in scope and, therefore, “bifurcates the issues” between arbitration and a trial of the action in court, said the foundation’s amicus brief. In particular, when the agreement refers some issues to arbitration but leaves other issues in court, and a party files an application for a stay, Section 3 provides that the court shall stay the trial of the action until such arbitration has been held, it said. That language “clearly indicates that a court will adjudicate the merits of the parties’ nonarbitrable claims after the parties have resolved their arbitrable claims,” it said. Section 3 “ensures the orderly resolution of arbitrable and nonarbitrable claims in a bifurcated suit,” it said. But when the parties “have referred all issues in a lawsuit to arbitration, as in this case, Section 3 does not apply,” it said. In such a case, no issues remain in court for a trial of the action, it said: “To conclude otherwise would render this key statutory language superfluous.” Section 3 doesn’t apply when the whole suit belongs in arbitration, so the FAA “leaves undisturbed a federal court’s power to dismiss the suit and compel arbitration,” it said. Dismissal is appropriate because the court “has declined to exercise its jurisdiction to decide the underlying arbitrable controversy, in order to enforce the parties’ arbitration agreement and the FAA’s mandate,” the brief said.

Louisiana heads to the U.S. Supreme Court “to defend our First Amendment rights against government censorship,” said a media alert Wednesday from the office of Louisiana Attorney General Liz Murrill (R), trumpeting oral argument Monday in Murthy v. Missouri (docket 23-411) (see 2401290058). Louisiana and Missouri are the two state respondents challenging the government’s petition to vacate the injunction that would block officials from the White House and four federal agencies from coercing social media platforms to moderate their content. The Supreme Court has stayed the injunction pending its resolution of the case (see 2310230003). When George Orwell published Nineteen Eighty-Four in 1949 as a warning against tyranny, “he never intended it to be used as a how-to guide by the federal government,” said the Murrill media alert. Yet Murthy v. Missouri has uncovered more than 20,000 pages of documents “highlighting an extensive censorship campaign stemming directly” from President Joe Biden and his federal government, it said: “As a result, this has become one of the most important cases in a century related to the First Amendment.” The state respondents “will present a powerful argument” to the Supreme Court, “which we believe will validate the original ruling by a district judge that Biden’s censorship enterprise is a massive violation of the First Amendment,” it said. “We hope to get a strong, powerful message” from the Supreme Court that the First Amendment “still matters and that the federal government cannot engage in a broad ranging enterprise to stifle protected speech,” it said.