Trial Magazine

This Term, the U.S. Supreme Court faces a variety of issues—from the scope of Title VII protections to ERISA class actions. The Court’s decisions, including whether to accept cases for review, will have a major impact on plaintiff attorneys’ practices and the rights of their clients. Here are a few key issues to follow.

The Aviation Industry and Preemption

Perhaps one of this Term’s most highly anticipated certiorari petitions is in Avco Corp. v. Sikkelee, on appeal for the second time from the Third Circuit.¹ In 2007, the wife of a pilot killed in an airplane crash sued the manufacturers of the plane’s engine and components. The district court found that the ­plaintiff’s state law products liability claims were “field” preempted because federal law had left “no room for state regulation”—but a unanimous Third Circuit panel reversed and held that that summary judgment was precluded.²

The Supreme Court denied certiorari, and on remand, the district court granted the defendants’ motion for summary judgment. The Third Circuit again reversed, this time holding, 2-1, that conflict preemption did not bar the plaintiff’s state law claims.³ The court reasoned that the manufacturer could be held liable because it was aware of and discussed the engine problems with the Federal Aviation Administration (FAA) but did not seek FAA approval to address the problem, so no federal ruling conflicted with state law requirements.⁴

In March 2019, defendants filed a cert petition asking the Supreme Court to consider whether “the Federal Aviation Act preempts state law design-defect claims.”⁵ In June 2019, the Court requested a response from the U.S. solicitor general, which has not been filed yet.⁶

The Third Circuit’s second, more focused decision, which marked a major victory for plaintiffs, may prompt the Court to accept review. If it overturns the lower court, aviation manufacturers could have near-immunity for design defects, including in plane crash cases. The Court’s action, or inaction, is important not just for AAJ aviation lawyers but for all practitioners who handle products liability cases.⁷

Title VII Rights at Risk

On Oct. 8, 2019, the Supreme Court heard oral arguments in three high profile cases addressing the rights of LGBT workers.⁸ The employees—seeking protection under Title VII of the Civil Rights Act of 1964—argue that the statute’s ban on employment discrimination “because of . . . sex” extends to discrimination based on sexual orientation and gender identity.

In Bostock v. Clayton County, Ga. and Altitude Express, Inc. v. Zarda, the plaintiffs, both gay men, claim they were fired because of their sexual orientation.⁹ In consolidated proceedings, their attorney argued that when a male employee is fired for dating men—but a female employee is not—then the employer is discriminating based on sex. Conversely, attorneys for the employers and the U.S. government argued that Title VII’s language should be narrowly construed and that “sex” should not be read to include “sexual orientation.”

In R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC, the plaintiff employee’s attorney argued that his client, a transgender woman who was fired after she told her employer she intended to begin living openly as a woman, was treated differently due to the sex she was assigned at birth—that is, if she had been assigned “female” at birth instead of “male,” she would not have been fired.¹⁰ The employer’s attorney argued, however, that treating men and women equally does not mean treating men as women, and vice versa; that is, equal treatment does not mean treating two different groups exactly the same. The government also expressed concerns about how resolving the issue could impact employers with religious objections.

It appears that some justices will struggle to decide whether sexual orientation or gender identity fall within the meaning of “sex” under Title VII. During oral arguments, Justice Neil Gorsuch, for example, expressed concern over what he suggested could be “massive social upheaval” if the Court rules in favor of the plaintiffs—but also acknowledged that the law’s text may favor them.¹¹

When issued, the Court’s decisions will have a major impact on the millions of LGBT employees in the United States.¹² Ruling against the plaintiffs could create new hurdles in employment discrimination cases, making it harder for LBGT employees who have been wrongfully fired to bring claims.

ERISA Class Actions Under Fire

AAJ has filed an amicus brief in Retirement Plans Committee of IBM v. Jander, one of two pending cases involving ERISA class actions.¹³ In Jander, a “stock-drop” case, the certified question involves whether the “‘more harm than good’ pleading standard can be satisfied by generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time.”¹⁴

The plaintiffs allege that employee stock ownership plan (ESOP) administrators violated their fiduciary duty by failing to disclose their knowledge that IBM’s microchip division was sustaining losses when employees’ retirement funds were invested in IBM stock. The Second Circuit held that a prudent fiduciary in the defendants’ position would not have concluded that this action would do “more harm than good.”¹⁵ The defendant employers’ cert petition was granted in June 2019.

Although the Second Circuit ruled for the employees, the same result is not certain before the Supreme Court, which has been seen as employer friendly. During oral arguments on Nov. 6, 2019, the justices debated if and how to reconcile ESOP fiduciaries’ obligations under ERISA and securities laws.¹⁶ A decision for the employer could lower or eliminate the fiduciary duty employers owe to employees when they know that company stocks are about to fall, essentially eliminating stock drop cases and any remedy for employees. At the very least, the Court’s decision in the pending ERISA cases likely will shed light on fiduciaries’ duties and what steps they must take when they have advance knowledge of stock drops.

AAJ will continue to follow these and other cases of interest closely.

Amy Brogioli is AAJ’s associate general counsel and can be reached at amy.brogioli@justice.org.

Notes

1. Sikkelee v. Precision Airmotive Corp., 907 F.3d 701 (3d Cir. 2018) [hereinafter Sikkelee II], cert. pending, No. 18-1140.2.
2. Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 688, 709 (3d Cir. 2016), cert. denied, 137 S. Ct. 495 (2016). 
3. Sikkelee II, 907 F.3d 701. 
4. Id. at 713–14 (relying on principles from Wyeth v. Levine, 555 U.S. 555 (2009)).
5. Petition for a Writ of Certiorari, Sikkelee II, No. 18-1140 (U.S. Mar. 1, 2019).
6. The solicitor general’s response had not been filed as of Dec 3, 2019. 
7. If the Court grants certiorari, AAJ will file an amicus brief in close consultation with AAJ aviation law practitioners. AAJ has already filed amicus briefs in this case in the lower courts and both times in the Third Circuit. AAJ amicus briefs filed in 2014 and later are available at www.justice.org/amicusbriefs.
8. Bostock v. Clayton Cnty., Ga., 723 F. App’x 964 (11th Cir. 2018), cert. granted, 139 S. Ct. 1599 (2019) (No. 17-1618); Altitude Express, Inc. v. Zarda, 883 F.3d 100 (2d Cir. 2018), cert. granted, 139 S. Ct. 1599 (2019) (No. 17-1623); R.G. & G.R. Harris Funeral Homes v. EEOC, 884 F.3d 560 (6th Cir. 2018), cert. granted, 139 S. Ct. 1599 (2019) (No. 18-107). AAJ signed on to a joint amicus brief in all three cases with 56 other groups, authored by Lawyers’ Committee for Civil Rights Under Law and The Leadership Conference on Civil and Human Rights.
9. Nos. 17-1618 & 17-1623 (U.S. oral arg. Oct. 8, 2019). 
10. No. 18-107 (U.S. oral arg. Oct. 8, 2019). 
11. Oral Arg. Tr. 25:17-18, R.G. & G.R. Harris Funeral Homes, No. 18-107 (U.S. oral arg. Oct. 8, 2019), https://tinyurl.com/y34mjaud. 
12. See Movement Advancement Project & Nat’l LGBTQ Workers Ctr., LGBT People in the Workplace: Demographics, Experiences and Pathways to Equity (Aug. 2018), www.lgbtmap.org/lgbt-workers-brief. 
13. Retirement Plans Comm. of IBM v. Jander, No. 18-1165 (U.S. oral arg. Nov. 6, 2019). Oral arguments for the second case, Intel Corp. Inv. Policy Comm. v. Sulyma, No. 18-1116, were held Dec. 4, 2019. 
14. Petition for a Writ of Certiorari, Jander, No. 18-1165 (U.S. Mar. 4, 2019). When employee stock ownership plan fiduciaries have information about the company’s stock value, plan participants may sue the fiduciaries when company stock prices drop, arguing that the stock should have been sold based on the fiduciaries’ known information. This is known as a stock-drop case. The “more harm than good” standard comes from Fifth Third Bancorp v. Dudenhoeffer (573 U.S. 409 (2014)). 
15. Jander, 910 F.3d 620, 631 (2d Cir. 2018).
16. Oral Arg. Tr., Jander, No. 18-1165 (U.S. oral arg. Nov. 6, 2019), https://tinyurl.com/y4bq33dp.