Today, the Supreme Court granted certiorari in three cases of interest to the business community:

Title VII—Award of Attorney's Fees to Prevailing Defendant

CRST Van Expedited, Inc. v. EEOC, No. 14-1375

Title VII of the Civil Rights Act of 1964 provides for an award of attorney's fees and costs to prevailing parties. In Christiansburg Garment Co. v. EEOC, the Supreme Court held that prevailing defendants in a Title VII suit are entitled to an award of fees if they can show that the plaintiffs' claims are "frivolous, unreasonable, or without foundation." The EEOC brought Title VII claims against CRST, a long-haul trucking firm, alleging that CRST female employees had been sexually harassed in the workplace. The district court dismissed 67 of those individual claims because the EEOC failed to fulfill its statutory obligation to investigate the claims, find reasonable cause, and attempt to conciliate them prior to bringing suit. The district court awarded attorney's fees and expenses to CRST, finding that it satisfied the Christiansburg standard. The Eighth Circuit affirmed the dismissal of the 67 claims but reversed the award of attorney's fees, holding that because the district court's dismissal of the claims was not on the "merits" it could not be a basis for a fee award. The Supreme Court has granted certiorari to determine whether the dismissal of a Title VII claim because of the EEOC's failure to comply with its pre-suit investigation obligations provides a basis for a fee award.

Chapter 9 Bankruptcy—Preemption of Puerto Rico Recovery Act

Puerto Rico v. Franklin CA Tax-Free Trust, No. 15-233
Acosta-Febo v. Franklin CA Tax-Free Trust, No. 15-255

The fifty United States may restructure the debts of their public utilities under Chapter 9 of the Bankruptcy Code. The Commonwealth of Puerto Rico, however, is excluded from restructuring its public utilities' debts under Chapter 9. Facing a mounting fiscal crisis, Puerto Rico passed a Recovery Act on June 25, 2014, which provides a mechanism for its public corporations to restructure their debts. Bondholders of Puerto Rico's public corporations brought suit to challenge the validity of the Recovery Act. The district and appellate courts held that Puerto Rico's Act is preempted by Section 903(1) of the Bankruptcy Code, ruling that the provision preempting state bankruptcy laws applied to Puerto Rico even though Puerto Rico's instrumentalities cannot restructure themselves under Chapter 9. The Supreme Court has granted certiorari to determine whether Section 903 preempts the Recovery Act.

False Claims Act—Implied Certification

Universal Health Services, Inc. v. Escobar, No. 15-7

The False Claims Act makes it unlawful for a contractor to present a "false or fraudulent claim" for reimbursement by the federal government. The Circuits are divided over whether the False Claims Act encompasses claims that a contractor "impliedly certified" its compliance with certain statutory or regulatory obligations by submitting claims for reimbursement, making the claim "legally false" when the contractor has not complied with those obligations even though it provided the service for which it seeks reimbursement. Universal Health Services operates a mental health clinic in Massachusetts that receives federal and state Medicaid funds. Respondents alleged deficiencies in the services provided by the clinic and brought a qui tam action alleging violations of the False Claims Act. The district court dismissed the complaint, finding that the respondents did not allege any plausible violation of the regulations they identified. The appellate court reversed, holding that the district court had overlooked a regulation listing the specific duties of the clinic director that could form the basis of a False Claims Act suit. The Supreme Court granted certiorari to determine whether the "implied certification" theory of liability under the False Claims Act is viable, and, if it is, whether it encompasses claims that a contractor violated a statute or regulation that was not expressly made a condition of payment.

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