September 2019 Legal Report
The U.S. Supreme Court delivered a divided decision on a significant lawsuit against a large online marketplace company. In the 5–4 vote, the Court ruled that a group of iPhone owners can proceed in a suit against technology company Apple Inc. for allegedly violating antitrust laws.
The plaintiffs suing the company allege that app prices increased because Apple charged the developers high fees. The Court rejected the company’s claim that the lawsuit should be dismissed because Apple was selling apps at the prices set by the app developers and that customers bought the apps from the developers instead of the company. The Court’s decision will allow the suit to move forward in the U.S. Court of Appeals for the 9th Circuit.
The Supreme Court’s decision said that Apple’s argument was inconsistent with federal antitrust laws, and that if a retailer is violating these laws—resulting in higher prices for consumers—then the consumers’ lawsuit should not rely on how the retailer established its relationship with suppliers, including app developers. This could potentially allow for consumers to file claims against other online marketplace companies. (Apple Inc., v. Robert Pepper, et al., U.S. Supreme Court. 2019 No. 17-204)
A U.S. district court sentenced a former CIA officer to 20 years in prison for working with an agent of the People’s Republic of China.
According to the U.S. Department of Justice (DOJ), Kevin Patrick Mallory was convicted under the Espionage Act for conspiring to transmit national defense information to a Chinese intelligence officer.
According to court records and evidence, Mallory was approached by the foreign agent, who initially represented himself as a think tank employee.
Although Mallory later determined the man’s connection with Chinese intelligence, he continued to covertly communicate with him, sometimes selling classified information. The FBI discovered that Mallory had likely transmitted at least two classified U.S. government documents and was ready to transmit another three.
Mallory worked with several government agencies and defense contractors, including as a covert case officer for the CIA and an intelligence officer for the Defense Intelligence Agency.
U.S. Assistant Attorney General John Demers noted in a press release that Mallory’s case reflects “an alarming trend of former U.S. intelligence officers being targeted by China and betraying their country and colleagues.” (United States of America v. Kevin Patrick Mallory, U.S. District Court for the Eastern District of Virginia, No. 1:17-cr-00154-TSE, 2019)
The White House will no longer pursue attempts to include a citizenship question to the 2020 Census after the U.S. Supreme Court determined the federal government’s reason for the question was “contrived.”
“The explanation provided here was more of a distraction,” wrote Chief Justice John Roberts, Jr., in the majority opinion, which upheld a lower court’s decision.
Both courts found that reintroducing a citizenship question “for improved citizenship data to better enforce the (Voting Rights Act)” was an inadequate explanation, especially given a discrepancy between U.S. Secretary of Commerce Wilbur Ross’s decision to include the question and his rationale, specifically that Ross appeared set to include the question prior to discussions about supporting the Voting Rights Act (VRA).
Supporting the VRA—the only reason provided by the Trump administration—was referenced late in the Commerce Department’s efforts to include the question. Justices Clarence Thomas, Brett Kavanaugh, Samuel Alito, and Neil Gorsuch dissented from this part of the opinion.
Challengers claimed a citizenship question could skew census results because some individuals may fear disclosing their noncitizen status or that of a member of their household. In these instances, an undercount of the population would impact areas with large immigrant communities—potentially altering the number of congressional representatives for a state and allocation of federal funds.
Concerns about the question, and its effects, were introduced after memos from a deceased Republican political supporter were disclosed, including one that said a citizenship question could benefit Republicans and white voters in future redistricting decisions.
After the Court’s decision, the U.S. Department of Justice said that there would not be sufficient time to continue a legal battle and meet deadlines for the census questionnaire. (Department of Commerce et al. v. New York et al., U.S. Supreme Court, No. 18-966, 2019)
A U.S. federal grand jury charged two Dallas, Texas, men with committing hate crimes, as well as kidnapping and carjacking in a 15-count indictment.
Daniel Jenkins and Daryl Henry allegedly created fake profiles on Grindr, a dating app catering to members of the LGBT community, in a ploy to lure gay men and later kidnap, assault, rob, and carjack them, with victims forced at gunpoint to hand over their possessions, according to the DOJ.
The indictment listed nine victims that Jenkins and Henry attacked, including five who were held against their will in an apartment, four who were physically assaulted, three who were sexually assaulted, and one who was urinated on and had human feces wiped on him. The attackers allegedly targeted these men because of their actual and perceived sexual orientation. (United States of America v. Daniel Jenkins, Daryl Henry, U.S. District Court for the Northern District of Texas, No. 3:18-cr-00406-K, 2018)
The U.S. House of Representatives passed H.R. 2476, the Securing American Nonprofit Organizations Against Terrorism Act of 2019. The bipartisan legislation would ensure federal support to protect nonprofits that terrorists target. Such institutions include churches, mosques, synagogues, and other places of worship.
If enacted, the bill would approve a security grant program within the U.S. Department of Homeland Security for certain nonprofits considered at risk of a terrorist attack. The funding would allow institutions to counter potential threats by providing aid towards purchasing and implementing appropriate equipment, hiring security staff, and training for the prevention of or protection against attacks.
The bill, authored by three Democrat and three Republican congressmen, including three from the Committee on Homeland Security (Representatives Bennie G. Thompson (D-MS), Peter King (R-NY), Max Rose (D-NY), Steve Stivers (R-OH), Bill Pascrell, Jr. (D-NJ), and Troy Balderson (R-OH)), was introduced in response to a recent increase in violence and threats of violence against nonprofit institutions over the past few years. The Homeland Security Committee pointed specifically to a fatal 27 April shooting during a Passover celebration at a California synagogue; coordinated attacks in April on churches and hotels in Sri Lanka, resulting in the deaths of more than 250 people; the 15 March shooting at a New Zealand mosque; and other similar incidents in the United States in 2018, 2017, 2015, and 2012.
“It’s painfully clear that these houses of worship are under threat of violence committed by terrorists of all extreme ideologies,” said Thompson in a press release. “We urgently must address the root causes of hatred and extremism, but in the short-term, these synagogues, mosques, and churches need our help and protection just to stay safe.”
The National Labor Relations Board determined that Uber drivers are independent contractors, effectively limiting them from certain U.S. federal protections.
The advisory opinion, which was issued after Uber agreed to a roughly $100 million settlement with its drivers, means Uber drivers face restrictions to their right to unionize, file labor complaints, or pursue certain federal protections.
“On any given day, at any free moment, UberX drivers could decide how best to serve their economic objectives: by fulfilling ride requests through the app, working for a competing rideshare service, or pursuing a different venture altogether,” according to the board.
The opinion follows a similar stance from other agencies and courts; the U.S. Department of Labor penned a letter in April 2019 explaining that employees working for a “virtual marketplace company” do not qualify for minimum wages, overtime pay, and tax deductions because they operate as independent contractors. (Uber Technologies, Inc., U.S. National Labor Relations Board, Cases 13-CA-163062 et al.)
The European Parliament determined that Nigel Farage, leader of the United Kingdom’s Brexit Party, infringed upon the organization’s code of conduct when he failed to disclose £450,000 worth of gifts.
The Parliament’s Advisory Committee on the Conduct of Members investigated the allegations against Farage and recommended that his behavior warranted “the highest penalty,” although there was no mention of what the penalty should involve.
The investigation began after a British news outlet reported that Farage had not reported the gifts, all of which were from Arron Banks, a founder of campaign group Leave.EU.
Elsewhere in the Courts
The U.S. Equal Employment Opportunity Commission (EEOC) is suing a New York-based eatery, alleging the owner and general manager, Paul Pelczynski, routinely sexually harassed female employees. The EEOC said Pelczynski made unwelcome sexual comments and advances, including repeated invitations for dinner and sharing a hotel room; forcibly kissing, touching, or groping employees; and displaying pornography at work and in a staff group text. Women who objected or rejected him were fired, while others quit, citing a hostile work environment. The commission is seeking back pay, damages, and injunctive relief to prevent future harassment. (EEOC v. Protocol of Amherst, Inc., U.S. District Court for the Western District of New York, Buffalo Division, No. 1:19-cv-00598, 2019)
A Minnesota appeals court ruled that the state’s Sick and Safe Ordinance applies to workers who complete at least 80 hours of work per benefit year within the City of Minneapolis. This includes employees whose employers are located outside of the city’s limits. The ruling means employers must comply with city requirements, including providing one hour of “sick and safe time” for every 30 hours of work, with a maximum of 48 hours granted per year. The Minneapolis Chamber of Commerce and other interested parties litigated against the ordinance and will likely appeal. (Minnesota Chamber of Commerce v. Minneapolis, Minnesota Court of Appeals, No. A18-0771, 2019)
A U.S. business executive admitted to a foreign bribery scheme involving bribing officials of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA), and its Texas-based subsidiary, Citgo Petroleum Corporation. According to the U.S. Department of Justice, the bribes were an effort to retain energy and logistics contracts. Jose Gonzalez-Testino pled guilty to conspiracy to violate the Foreign Corrupt Practices Act (FCPA), violating the act, and failing to report foreign bank accounts. He admitted to paying at least $629,000 in bribes to a PDVSA subsidiary’s former general manager, as well as bribes to another official for inside information. (United States of America v. Jose Manuel Gonzalez-Testino, U.S. District Court for the Southern District of Texas, No. 19-cr-00341, 2019)