The Skinny on SCOTUS (2023 Term - April - Part 1)

As indicated in prior installments of this series, the Supreme Court has already issued 18 Opinions in this term, though roughly 40 more will be handed down before all is said and done at the end of June. I'm playing a bit of catch-up with these first few installments.

Moving on to April, there have been seven decisions issued thus far. Part 1 will address the first three. As with the first set of decisions, this one features only unanimous opinions.

And, as always, this is not intended as a thorough analysis — just a quick overview for the non-law-geek sorts:

April 2024 Decisions (Part 1)

Bissonnette v. LePage Bakeries Park St., LLC

Date: April 12, 2024

Author: Roberts

Split: 9-0

Dissent: N/A

Appeal From: Second Circuit

Basic Facts:

Respondent Flowers Foods, Inc. produces and markets baked goods that are distributed nationwide. Petitioners Neal Bissonnette and Tyler Wojnarowski owned the rights to distribute Flowers products in certain parts of Connecticut. To purchase those rights, they entered into contracts with Flowers that require any disputes to be arbitrated under the Federal Arbitration Act, 9 U. S. C. §1 et seq. After petitioners sued Flowers and two of its subsidiaries for violating state and federal wage laws, Flowers moved to compel arbitration. Petitioners responded that they are exempt from coverage under the FAA because they fall within an exception in §1 of the Act for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The District Court dismissed the case in favor of arbitration, concluding that petitioners were not “transportation workers” exempt from the Act under §1. The Second Circuit ultimately affirmed on the ground that the §1 exemption was available only to workers in the transportation industry, but that petitioners were in the bakery industry.

Issue: To be exempt from the Federal Arbitration Act, must a class of workers that is actively engaged in interstate transportation also be employed by a company in the transportation industry?

Holding: Vacated and remanded.

A transportation worker need not work in the transportation industry to be exempt from coverage under §1 of the FAA.

Macquarie Infrastructure Corp. v. Moab Partners, L.P.

Date: April 12, 2024

Author: Sotomayor

Split: 9-0

Dissent: N/A

Appeal From: Second Circuit

Basic Facts:

Petitioner Macquarie Infrastructure Corporation owns a subsidiary that operates terminals to store bulk liquid commodities, including No. 6 fuel oil, a byproduct of the refining process with a typical sulfur content close to 3%. In 2016, the United Nations’ International Maritime Organization formally adopted IMO 2020, a regulation capping the sulfur content of fuel oil used in shipping at 0.5% by 2020. In the ensuing years, Macquarie did not discuss IMO 2020 in its public offering documents. In February 2018, however, Macquarie announced a drop in the amount of storage contracted for use by its subsidiary due in part to the decline in the No. 6 fuel oil market. Macquarie’s stock price fell 41%.
In response, Moab Partners, L. P., sued Macquarie and various officer defendants. Moab alleged, among other things, that Macquarie violated Securities and Exchange Commission Rule 10b–5(b)—which makes it unlawful to omit material facts in connection with buying or selling securities when that omission renders “statements made” misleading—because it had a duty to disclose the IMO 2020 information under Item 303 of SEC Regulation S–K. Item 303 requires companies to disclose “known trends or uncertainties that have had or that are reasonably likely to have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations” in periodic filings with the SEC. 17 CFR §229.303(b)(2)(ii). The District Court dismissed Moab’s complaint. The Second Circuit reversed, concluding in part that Moab’s allegations concerning the likely material effect of IMO 2020 gave rise to a duty to disclose under Item 303, and Macquarie’s Item 303 violation alone could sustain Moab’s §10(b) and Rule 10b–5 claim.

Issue: Whether the Second Circuit erred in holding — in conflict with the Third, Ninth, and Eleventh Circuits — that a failure to make a disclosure required under Item 303 can support a private claim under Section 10(b), even in the absence of an otherwise misleading statement.

Holding: Vacated and remanded.

Pure omissions are not actionable under SEC Rule 10b–5(b), which makes it unlawful to omit material facts in connection with buying or selling securities when that omission renders “statements made” misleading.

A bit more of the Court's rationale:

A pure omission occurs when a speaker says nothing, in circumstances that do not give any special significance to that silence. Halftruths, on the other hand, are “representations that state the truth only so far as it goes, while omitting critical qualifying information.” Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U. S. 176, 188. Rule 10b–5(b) requires disclosure of information necessary to ensure that statements already made are clear and complete. Logically and by its plain text, Rule 10b–5(b) therefore covers halftruths, not pure omissions, because it requires identifying affirmative assertions (i.e., “statements made”) before determining if other facts are needed to make those statements “not misleading.”

Sheetz v. El Dorado County

Date: April 12, 2024

Author: Barrett

Split: 9-0

Dissent: N/A

Appeal From: California Court of Appeals

Basic Facts:

As a condition of receiving a residential building permit, petitioner George Sheetz was required by the County of El Dorado to pay a $23,420 traffic impact fee. The fee was part of a “General Plan” enacted by the County’s Board of Supervisors to address increasing demand for public services spurred by new development. The fee amount was not based on the costs of traffic impacts specifically attributable to Sheetz’s particular project, but rather was assessed according to a rate schedule that took into account the type of development and its location within the County. Sheetz paid the fee under protest and obtained the permit. He later sought relief in state court, claiming that conditioning the building permit on the payment of a traffic impact fee constituted an unlawful “exaction” of money in violation of the Takings Clause. In Sheetz’s view, the Court’s decisions in Nollan v. California Coastal Comm’n, 483 U. S. 825, and Dolan v. City of Tigard, 512 U. S. 374, required the County to make an individualized determination that the fee imposed on him was necessary to offset traffic congestion attributable to his project. The courts below ruled against Sheetz based on their view that Nollan and Dolan apply only to permit conditions imposed on an ad hoc basis by administrators, not to a fee like this one imposed on a class of property owners by Board-enacted legislation.

Issue: Whether a permit exaction is exempt from the unconstitutional-conditions doctrine as applied in Nollan and Dolan simply because it is authorized by legislation.

Holding: Vacated and remanded.