Commercial Litigation Update

Notwithstanding its mounting backlog, the U.S. Supreme Court resolved only one case today, an unsurprising unanimous decision in Cunningham v. Cornell University. 

The case concerns pleading causes of action under the Employee Retirement Income Security Act of 1974 (ERISA), but provides a useful reminder to litigants more generally.

ERISA prohibits plan fiduciaries from causing a plan to engage in certain transactions with parties in interest. 29 U.S.C. §1106. However, another provision, §1108(b)(2)(A), provides an exemption for transactions that involve “[c]ontracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.” 

The question considered by the Court is whether a viable claim under §1106 requires a plaintiff to plead that §1108(b)(2)(A) does not apply to an alleged prohibited transaction. A unanimous Court, led by Justice Sotomayor, held that a plaintiff is not required to do so.

Late in the day on April 10, the U.S. Supreme Court issued a unanimous opinion relating to an order in the case of Noem v. Abrego Garcia.

This order is noteworthy for several reasons. First, this is yet another of what has become a series of emergency-motion cases resolved without full briefing or oral argument on the so-called “shadow docket.” Second, contrary to what some have argued about that docket in the past, there is nothing that isn’t fully transparent about this opinion rendered on behalf of all the Justices. Third, and most importantly, yesterday's opinion, while brief, might be a significant chapter in what very well may prove a classic separation-of-powers clash between the increasingly unorthodox executive branch and the Supreme Court.

The much-in-the-news Kilmar Armando Abrego Garcia was removed by the United States to El Salvador, where he is currently detained. The government now acknowledges that he had been subject to a withholding order forbidding his removal to El Salvador and that his removal was thus illegal. The government alleges the removal was caused by an “administrative error” but nevertheless argues that he was a member of a gang that had been designated as a foreign terrorist organization. Abrego Garcia denies this, and there is no record of his having engaged in any illegal activities. 

The motions docket of the U.S. Supreme Court remains busy.

Following the April 4 decision in Department of Education v. California—in which the Court, treating a temporary restraining order (TRO) as if it were a preliminary injunction, stayed an order that would have blocked the government from ending over 100 education-related grants and allowed the case to proceed in the U.S. Court of Appeals for the First Circuit without requiring the government to meet payment obligations—a similar result was reached today in the Court’s 7–2 order in the case of OPM v. AFGE.

In AFGE, the Court was again confronted with an application for a stay, this time with respect to an appeal to the Ninth Circuit from an injunction issued by the United States District Court for the Northern District of California that would have required the reinstatement of approximately 16,000 fired federal workers who had probationary status at the departments of Agriculture, Defense, Energy, Interior, Treasury and Veterans Affairs. The case had been brought by the American Federation of Government Employees, the AFL-CIO, and several other nonprofit organizations that argued that the terminations were based on the pretense that the employees’ performance was “deficient.” Over the dissents of Justices Sotomayor and Jackson, the Court held that the nine plaintiffs had failed to demonstrate organizational standing.

While not a decision on the merits, the U.S. Supreme Court’s opinion on April 4, 2025, in Department of Education v. California is worth considering.

The case came to the Court on an application to stay the temporary restraining order (TRO) of the U.S. District Court for the District of Massachusetts enjoining the government from terminating various education-related grants made by the U.S. Department of Education, and requiring that department’s payment of past-due grant obligations and the continuing payment of current and future ones. The district court based its conclusion on its finding that the respondents were likely to succeed on the merits of their claims under the Administrative Procedure Act (APA).

In a per curiam opinion, the Supreme Court viewed the TRO as having “many of the hallmarks of a preliminary injunction” and treated it that way. In granting the stay, the Court held that the government was likely to succeed in showing that the district court lacked jurisdiction under the APA to order the payment of money. While the APA provides a limited waiver of sovereign immunity on the part of the government, that waiver “does not extend to orders [of a district court] to enforce a contractual obligation to pay money” along the lines of what the district court ordered here. Instead, noted the Court, the Tucker Act, 28 U. S. C. §1491(a)(1), gives the Court of Federal Claims jurisdiction over suits based on “any express or implied contract with the United States.”

The Racketeer Influenced and Corrupt Organizations Act (RICO) allows any person “injured in his business or property by reason of” racketeering activity to bring a civil suit for damages. 18 U. S. C. §1964(c). However, the statute forbids suits based on “personal injuries.” But are economic harms resulting from personal injuries “injuries to ‘business or property?’”

Yesterday, in Medical Marijuana, Inc. v. Horn, the U.S. Supreme Court, in a 5–4 opinion written by Justice Barrett and joined by Justices Kagan, Sotomayor, Gorsuch, and Jackson, answered that question in the affirmative. Justices Thomas and Kavanaugh wrote dissenting opinions, the latter joined by the Chief Justice and Justice Alito.

Attempting to alleviate his chronic pain, Douglas Horn purchased and began taking “Dixie X,” advertised as a tetrahydrocannabinol-free (“THC-free”), non-psychoactive cannabidiol tincture produced by Medical Marijuana, Inc. However, when his employer later subjected him to a random drug test, Horn tested positive for THC. When Horn refused to participate in a substance abuse program, he was fired. Horn then brought his RICO suit.

On February 27, 2025, by a vote of 52 to 0, the Georgia Senate passed Senate Bill 69, titled “Georgia Courts Access and Consumer Protection Act.” If signed into law, the bill would regulate third-party litigation financing (“TPLF”) practices in Georgia where an individual or entity provides financing to a party to a lawsuit in exchange for a right to receive payment contingent on the lawsuit’s outcome. This bill represents another effort by states to restrain the influence of third-party litigation financiers and increase transparency in litigations.

Senate Bill 69 sets forth several key requirements. First, a person or entity engaging in litigation funding in Georgia must register as a litigation financier with the Department of Banking and Finance and provide specified information, including any affiliation with foreign persons or principals. Such filings are public records subject to disclosure.

The Supreme Court decided two cases today, continuing the release of opinions on which the Court is not deeply divided. The tougher ones are yet to come.

Despite the fact that today’s cases come from highly specialized areas of practice—firearms control and bankruptcy—both are interesting because they involve the interpretation of text, as Justices of all stripes continue to apply textual, literalist principles of interpretation rather than couching their views in a broader, arguably political, analysis of implied congressional intent.

New episode of our video podcast, Speaking of Litigation: How can legal professionals transform complex arguments into compelling visuals without losing their audience in dense text?

In this episode, Epstein Becker Green attorneys Lauren Brophy Cooper and James S. Tam are joined by guest Brandie Knox, Founder and Creative Director of Knox Design Strategy, to discuss the legal industry's shift toward visual storytelling.

The group explores how visuals are transforming the way lawyers present arguments, from infographics and timelines to courtroom animations. The discussion highlights strategies for tailoring visuals to audiences, the importance of timing and delivery, and how attorneys are even using visual storytelling outside the courtroom.

Discover practical tips for making legal presentations more impactful and engaging in any setting, from courtrooms to boardrooms.

On Monday, March 3, 2025, the Massachusetts Supreme Judicial Court (“SJC”) heard argument in Miele v. Foundation Medicine, Inc., regarding whether the Massachusetts Noncompetition Agreement Act, G. L. c. 149, § 24L (the “MNAA”), applies to a forfeiture-for-solicitation provision contained in a termination agreement. The outcome of this appeal will clarify the bounds of the recently enacted statute and may have a significant impact on the landscape of restrictive covenants in Massachusetts on the whole.

This appeal challenges the Superior Court’s July 2024 ruling that a contract provision requiring Plaintiff-Appellee to forfeit severance benefits upon breach of non-solicitation obligations was subject to, and prohibited by, the MNAA because it does not satisfy the requirements for an enforceable noncompetition agreement under the statute. The MNAA requires valid covenants to be reasonable in scope of proscribed activities in relation to the interests protected, supported by mutually agreed upon consideration, and consonant with public policy. G. L. c. 149, § 24L.

While much attention has been given to the Trump Administration’s early federal policy objectives to increase immigration enforcement, clients should also be aware of similar increased enforcement policies at the state level.

Last month, Tennessee Governor Bill Lee signed into law a bill passed by the state legislature during a recent special legislative session. The new Tennessee law attempts to strengthen immigration enforcement in Tennessee with the following measures:

1. Creates a Centralized Immigration Enforcement Division at the state level, to be led by a Chief Immigration Enforcement Officer (“CIEO”) appointed by the Governor. The CIEO will coordinate directly with the Trump Administration on federal immigration policies and implementation.