Supreme Court Notebook

Court to decide: Does defense’s mixed-motive analysis apply in retaliation case?
BOSTON (Daily Record Newswire) — The U.S. Supreme Court will decide whether Title VII’s retaliation provision requires a plaintiff to prove but-for causation, or only that the employer had a mixed motive.
The Court will review a 5th Circuit decision upholding a verdict in favor of an employee based upon a mixed-motive jury instruction.
The plaintiff is a doctor of Middle Eastern descent who was a faculty member at a University of Texas hospital. After resigning his position, he sued the hospital for constructive discharge and retaliation under Title VII.
A jury found that the plaintiff was constructively discharged from his faculty position because of racially motivated harassment by a superior. The jury also found that the hospital retaliated against the plaintiff by preventing him from obtaining a position at an affiliated institution after his resignation.
The hospital argued that the district court improperly allowed the jury to find liability based on a mixed-motive theory of retaliation.
In a footnote, the 5th Circuit said that the hospital’s argument was foreclosed by a prior 5th Circuit decision, Smith v. Xerox (602 F.3d 320). (See “Mixed-motive analysis applies to Title VII retaliation suit,” Lawyers USA, April 2, 2010. )
The Supreme Court is expected to decide the case this term.

Court to decide: Can plaintiffs recover from Ponzi scheme in state court?
BOSTON (Daily Record Newswire) — Does the Securities Litigation Standards Act preempt state law class actions claiming that the defendant engaged in a Ponzi scheme involving misrepresentations about transactions with securities covered by the federal act?
The U.S. Supreme Court has agreed to answer this question.
It will review a decision from the 5th Circuit which held that the purchase or sale of securities was only tangentially related to the scheme alleged by the plaintiffs, and therefore their suits were not preempted.
In a trio of consolidated cases, investors who were scammed by the multi-billion dollar Ponzi scheme coordinated by R. Allen Stanford filed suit in state courts to recover their losses.
Stanford argued the cases were preempted by the federal Securities Litigation Standards Act because they included allegations that he made misrepresentations about federally regulated securities covered by the act.
A U.S. District Court agreed and dismissed the suits.
But the 5th Circuit reversed.
It found that the CDs at issue were not covered by federal regulation and that the schemes and purposes of the fraud alleged by the plaintiffs were not directly related to securities covered by the federal act.
“When we look over the complaints against the [defendants], we find that the heart, crux, and gravamen of their allegedly fraudulent scheme was representing to the [plaintiffs] that the CDs were a ‘safe and secure’ investment that was preferable to other investments for many reasons. … That the CDs were marketed with some vague references to [Stanford’s] portfolio containing instruments that might be SLUSA-covered securities seems tangential to the schemes advanced by the [defendants],” the court said.
A decision from the Supreme Court is expected later this term.