Supreme Court to Review NRA's Coercion Claim / Actual Recovery Should Dictate Attorney Fees

• Date: 01 April 2024

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++Supreme Court to Review NRA’s Coercion Claim

++Actual Recovery Should Dictate Attorney Fees

SUPREME COURT

First Amendment

The U.S. Supreme Court will hear a

National Rif‌le Association (NRA) appeal

of a 2022 ruling by the U.S. Court of

Appeals for the Second Circuit holding

the group’s First Amendment constitu-

tional rights were not violated by a New

York state ocial’s urging companies

to end ties with the group. The NRA

alleges the then-ocial’s warning that

companies faced “reputational risks” by

partnering with the group constituted

unlawful coercion, violating its constitu-

tional rights.

The appeals court found that the

NRA failed to plausibly allege that the

conduct “crossed the line between per-

missible persuasion and unconstitutional

coercion,” and the ocial’s actions in

warning companies of the “reputational

risks” of doing business with the NRA

did not violate the First Amendment;

and even if they did, the ocial would

be protected from liability by the quali-

f‌ied immunity shield given to govern-

ment ocials. National Rif‌le Association

of America v. Maria T. Vullo, No. 22-842.

Federal Authority

The U.S. Supreme Court will reconsider

the 1984 Chevron v. Natural Resources

Defense Council decision establish-

ing the factors necessary to determine

when courts should defer to a govern-

ment agency’s interpretation of the law.

The appeal by Atlantic Ocean her-

ring f‌ishermen presents the issue of

whether the National Marine Fisheries

Service has the authority to require

them to pay the salaries of government

monitors who ride aboard the f‌ishing

vessels. The result could scale back the

power of federal agencies, impacting

how the government handles pressing

issues. Loper Bright Enterprises et al. v.

Raimondo et al., No. 22-451.

FEDERAL APPELLATE COURTS

Second Circuit: Ethics

A federal judicial panel unanimously

declined to reconsider its previous

AND MORE . . . BY HO N. ORAN F. WHITI NG (RET.), LITIGATION NEWS ASSOCIATE EDITOR

decision dismissing a misconduct

complaint against two judges for hir-

ing an allegedly racist law clerk. The

13-member U.S. Judicial Conference’s

Committee on Judicial Conduct and

Disability, faulting the Second Circuit

for clearing the judges of misconduct

without f‌irst establishing a special com-

mittee to investigate the allegations,

ordered the court to reinvestigate the

matter, via a July 2022 directive.

In a two-page order, the Second

Circuit cited arguments by the judges

that the Judicial Conference Committee

had exceeded its authority in ordering

an investigation because the Second

Circuit’s dismissal order was f‌inal under

the relevant statute. In re Charge of

Judicial Misconduct, Nos. 21-90142-jm,

21-90143-jm.

Third Circuit: Class Action

On November 2, 2023, the U.S. Court of

Appeals for the Third Circuit vacated an

attorney fee award and remanded the

case “for consideration of the amounts

distributed to and expected to be

claimed by the class,” thus materially

aecting the attorney payout.

The Center for Class Action Fairness

objected to a class action settlement

that would have paid attorneys more

than their class member clients in a

lawsuit concerning damages from a

breach of customer data.

Attorneys general for 10 states

jointly f‌iled an amicus brief in support

of claimants’ contentions that attor-

ney fees should be awarded based on

what class members actually receive as

compensation. The Third Circuit panel

rejected the argument that money

hypothetically made available to class

members controls the fee award, f‌ind-

ing that this practice “is not required by

history or precedent.” In re Wawa, Inc.

Data Security, No. 22-1950.

STATE S

Delaware: Securities

Regulation/Labor Law

A Delaware state court judge canceled

Elon Musk’s 2018 pay package, ruling

that Musk and the Tesla board failed to

meet their burden of proving the com-

pensation plan’s fairness. Plainti share-

holders argued Musk’s stock option

package was excessive, Tesla’s board

was not truly independent, and Musk’s

performance was overstated.

The Delaware Chancery Court

Chancellor rejected Musk’s arguments,

particularly that Musk would be uncom-

pensated if the package was voided,

stating “Musk’s preexisting equity stake

provided him tens of billions of dollars

for his eorts.” Richard J. Tornetta et al.

v. Elon Musk et al., No. 2018-0408.

Tennessee: Copyright

Tennessee Governor Bill Lee recently

revealed bipartisan legislation designed

to protect songwriters, performers,

and other music industry professionals

against the dangers of artif‌icial intelli-

gence, including AI deep fakes and voice

cloning. Specif‌ics of the legislation will

be available on the bill’s f‌iling. Several

U.S. senators are working to push similar

bipartisan legislation on the federal level.

U.S. DEPAR TMENT OF

EDUCATION

Fraud

Grand Canyon University (GCU), the

largest Christian university in the United

States, has been f‌ined $37.7 million by

the Department of Education for mis-

leading students about the cost of its

doctoral programs. A Department of

Education press release stated GCU

“falsely advertised” a lower cost for its

doctoral programs, adding that about

98 percent of students paid more than

the advertised cost, in violation of the

Higher Education Act.

Though the university does not dis-

pute the department’s f‌indings that

only 2 percent of the student popu-

lation paid the advertised costs, and

admits that most students paid thou-

sands more than the advertised cost,

the president of GCU believes the uni-

versity is unfairly being targeted by the

department and other federal agencies

because of religion.

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