Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
Plaintiffs, who are victims and families of victims of terrorist attacks carried out by Hamas between 2001 and 2003, sued BLOM Bank SAL under the Anti-Terrorism Act for allegedly aiding and abetting the attacks by providing financial services to Hamas-affiliated customers. BLOM argued that the complaint failed to state a claim, and plaintiffs repeatedly affirmed they would not seek to amend their complaint if it were dismissed.
The district court dismissed the complaint with prejudice, finding that plaintiffs hadn’t adequately alleged that BLOM had the requisite general awareness for aiding-and-abetting liability.
The court denied leave to amend because plaintiffs had declined several opportunities to amend and failed to identify additional facts they could allege. The 2nd Circuit Court of Appeals affirmed the dismissal, finding that even though the district court had applied too stringent a standard for the general awareness element, plaintiffs’ claims still failed under the correct standard. Following the affirmance, plaintiffs returned to the district court and moved under Federal Rule of Civil Procedure 60(b)(6) to vacate the final judgment so that they could file an amended complaint to meet the 2nd Circuit’s clarified standard. The district court denied the motion, ruling that the 2nd Circuit’s clarification didn’t constitute the extraordinary circumstances required for Rule 60(b)(6) relief, and that plaintiffs’ prior deliberate choices not to amend counseled against relief. On appeal, the 2nd Circuit reversed, holding that when a party seeks Rule 60(b) relief to file an amended complaint, district courts must not apply Rule 60(b)(6)’s extraordinary circumstances standard in isolation but must instead balance Rule 60(b)’s finality principles with Rule 15(a)’s liberal amendment policy.
The U.S. Supreme Court held that relief under Rule 60(b)(6) requires extraordinary circumstances, and this standard doesn’t become less demanding when the movant seeks to reopen a case to amend a complaint. A party must first satisfy Rule 60(b) before Rule 15(a)’s liberal amendment standard can apply.
Justice Clarence Thomas delivered the opinion of the court, in which Chief Justice John Roberts Jr. and Justices Samuel Alito Jr., Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett joined, and in which Justice Ketanji Brown Jackson joined as to all but Part III. Jackson filed an opinion concurring in part and concurring in the judgment.
CC/Devas (Mauritius) Ltd. v. Antrix Corp.
Devas Multimedia Private Ltd. signed a satellite-leasing agreement with Antrix Corporation Ltd., which is owned by the Republic of India for use by its Department of Space. But when the Indian Government later determined it needed more satellite capacity for itself, Antrix terminated the contract under its force majeure clause. The parties proceeded to arbitration. After unanimously concluding that Antrix had breached the contract, the arbitral panel awarded Devas $562.5 million in damages plus interest.
Devas then petitioned the U.S. District Court for the Western District of Washington to confirm the award. The district court confirmed the award and entered a $1.29 billion judgment against Antrix.
The 9th Circuit Court of Appeals reversed, finding that personal jurisdiction was lacking. Under the Foreign Sovereign Immunities Act of 1976, personal jurisdiction over a foreign state exists when an immunity exception applies, and the foreign defendant has been properly served.
The 9th Circuit didn’t question that Antrix is a “foreign state” under the FSIA, that an immunity exception applies, and that Devas effectuated proper service. Yet bound by circuit precedent, the panel explained that the act imposes an additional requirement: personal jurisdiction under the FSIA also requires a traditional minimum contacts analysis as set forth in International Shoe Co. v. Washington, and its progeny. Applying that standard, the court concluded it couldn’t exercise personal jurisdiction over Antrix because Antrix lacked sufficient suit-related contacts with the U.S.
The U.S. Supreme Court held that personal jurisdiction exists under the FSIA when an immunity exception applies and service is proper. The FSIA doesn’t require proof of minimum contacts over and above the contacts already required by the act’s enumerated exceptions to foreign sovereign immunity.
The high court reversed and remanded.
Justice Samuel Alito Jr. delivered the opinion for a unanimous court.
Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Comm’n.
Wisconsin law exempts certain religious organizations from paying unemployment compensation taxes. The relevant statute exempts nonprofit organizations operated primarily for religious purposes and operated, supervised, controlled or principally supported by a church or convention or association of churches.
Petitioners, Catholic Charities Bureau Inc., and four of its subentities, sought this exemption as organizations controlled by the Roman Catholic Diocese of Superior, Wisconsin. The Wisconsin Supreme Court denied the exemption, holding that petitioners weren’t operated primarily for religious purposes because they neither engaged in proselytization nor limited their charitable services to Catholics.
The U.S. Supreme Court held that the Wisconsin Supreme Court’s application of Section 108.02(15)(h)(2) to petitioners violates the First Amendment.
The high court reversed and remanded.
Justice Sonia Sotomayor delivered the opinion for a unanimous court. Justice Clarence Thomas and Justice Ketanji Brown Jackson filed concurring opinions.
Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos
The Protection of Lawful Commerce in Arms Act bars certain lawsuits against manufacturers and sellers of firearms. As relevant, it provides that a qualified civil liability action may not be brought in any federal or state court, Section 7902(a), and defines that term to include a “civil action or proceeding” against a firearms manufacturer or seller stemming from the criminal or unlawful misuse of a firearm by a third party, Section 7903(5)(A).
But PLCAA’s general bar on these suits has an exception, usually called the predicate exception. That exception applies to lawsuits in which the defendant manufacturer or seller knowingly violated a state or federal statute applicable to the sale or marketing of firearms, and the violation was a proximate cause of the harm for which relief is sought.
The predicate violation PLCAA demands may come from aiding and abetting someone else’s firearms offense. PLCAA itself lists as examples two ways in which aiding and abetting qualifies — when a gun manufacturer or seller aids and abets another person in making a false statement about a gun sale’s legality or in making specified criminal sales. And more broadly, because federal law provides that whoever aids and abets a federal crime is punishable as a principal, a gun manufacturer that aids and abets a federal gun crime may itself commit a PLCAA predicate violation.
Here, the government of Mexico sued seven American gun manufacturers, alleging that the companies aided and abetted unlawful gun sales that routed firearms to Mexican drug cartels. The basic theory of its suit is that the defendants failed to exercise reasonable care to prevent trafficking of their guns into Mexico, and so are responsible for the harms arising there from the weapons’ misuse. That theory implicates PLCAA’s general prohibition, so the complaint tries to plead its way into the predicate exception. It alleges that the manufacturers were willful accessories in unlawful gun sales by retail gun dealers, which in turn enabled criminals in Mexico to acquire guns.
And it sets out three kinds of allegations relating to how the manufacturers aided and abetted retailers’ unlawful sales: The manufacturers allegedly supply firearms to retail dealers whom they know illegally sell to gun traffickers in Mexico; have failed to impose the kind of controls on their distribution networks that would prevent illegal sales to traffickers in Mexico; and make design and marketing decisions intended to stimulate cartel members’ demand for their products.
The district court dismissed the complaint, but the 1st Circuit Court of Appeals reversed, finding Mexico had plausibly alleged that defendants aided and abetted illegal firearms sales.
The U.S. Supreme Court held that, because Mexico’s complaint doesn’t plausibly allege that the defendant gun manufacturers aided and abetted gun dealers’ unlawful sales of firearms to traffickers in Mexico, PLCAA bars the lawsuit.
The high court reversed and remanded.
Justice Elena Kagan delivered the opinion for a unanimous court. Justices Clarence Thomas and Ketanji Brown Jackson filed concurring opinions.
Ames v. Ohio Department of Youth Services
Marlean Ames, a heterosexual woman, has worked for the Ohio Department of Youth Services in various roles since 2004. In 2019, the agency interviewed Ames for a new management position but ultimately hired another candidate — a lesbian woman. The agency subsequently demoted Ames from her role as a program administrator and later hired a gay man to fill that role. Ames then filed this lawsuit against the agency under Title VII, alleging that she was denied the management promotion and demoted because of her sexual orientation.
The district court granted summary judgment to the agency, and the 6th Circuit Court of Appeals affirmed. The courts below analyzed Ames’s claims under McDonnell Douglas Corp. v. Green, which sets forth the traditional framework for evaluating disparate-treatment claims that rest on circumstantial evidence.
At the first step of that framework, the plaintiff must make a prima facie showing that the defendant acted with a discriminatory motive. Like the district court, the 6th Circuit held that Ames had failed to meet her prima facie burden because she had not shown background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.
The court reasoned that Ames, as a straight woman, was required to make this showing in addition to the usual ones for establishing a primafacie case.
The U.S. Supreme Court held that the 6th Circuit’s background circumstances rule — which requires members of a majority group to satisfy a heightened evidentiary standard to prevail on a Title VII claim — cannot be squared with the text of Title VII or the court’s precedents.
The high court vacated and remanded.
Justice Ketanji Brown Jackson delivered the opinion for a unanimous court. Justice Clarence Thomas filed a concurring opinion, in which Justice Neil Gorsuch joined.