words of art

In October 1995, Saint Clair Adams applied for a job at Circuit City Stores, Inc., a national retailer of consumer electronics. Adams signed an employment application that included a provision stating he would settle any and all previously unasserted claims, disputes or controversies arising out of or relating to his application or candidacy for employment, employment and/or cessation of employment with Circuit City exclusively by final and binding arbitration before a neutral Arbitrator, with examples including claims under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, contract law, and tort law. Adams was hired as a sales counselor in Circuit City's store in Santa Rosa, California. Two years later Adams filed an employment discrimination lawsuit against Circuit City in California state court asserting claims under California's Fair Employment and Housing Act and other claims based on general tort theories under California law. Circuit City filed suit in the United States District Court for the Northern District of California seeking to enjoin the state-court action and to compel arbitration of Adams's claims pursuant to the Federal Arbitration Act. The district court entered an order concluding that Adams was obligated by the arbitration agreement to submit his claims to binding arbitration. Adams appealed to the Court of Appeals for the Ninth Circuit. While the appeal was pending the Ninth Circuit ruled in an unrelated case that the Federal Arbitration Act does not apply to contracts of employment. Following that ruling the Ninth Circuit held in Adams's case that the arbitration agreement was contained in a contract of employment and therefore was not subject to the Federal Arbitration Act. Circuit City petitioned the Supreme Court for review noting that the Ninth Circuit's conclusion that all employment contracts are excluded from the Federal Arbitration Act conflicts with every other Court of Appeals to have addressed the question. The Supreme Court granted certiorari to resolve the issue.

In 1981 Wisconsin Knife Works, a division of Black & Decker (U.S.), Inc., a Maryland corporation whose headquarters is in Maryland, sought to manufacture spade bits for its parent and therefore needed a supply of spade bit blanks. National Metal Crafters, a division of Keystone Consolidated Industries, Inc., a Delaware corporation with its principal place of business in Illinois, agreed to supply the blanks. Wisconsin Knife Works issued six purchase orders, each containing printed conditions stating that no modification of the contract would be binding on the buyer unless made in writing and signed by the buyer's authorized representative. National Metal Crafters acknowledged the first two purchase orders, placed August 21, 1981, by letters listing delivery dates; Wisconsin Knife Works inserted those dates into the orders. The remaining four orders, placed September 10, 1981, were accepted by performance after National Metal Crafters supplied oral delivery dates that Wisconsin Knife Works wrote into the forms. All deliveries were due in October and November 1981. National Metal Crafters missed the scheduled delivery dates. Wisconsin Knife Works did not cancel the contract or seek damages for delay; instead, on July 1, 1982, it issued a new set of purchase orders that were later rescinded. By December 1982 National Metal Crafters was producing adequate quantities of blanks, yet only 144,000 of the more than 281,000 blanks ordered had been delivered when Wisconsin Knife Works notified National Metal Crafters on January 13, 1983, that the contract was terminated. Wisconsin Knife Works sued National Metal Crafters in federal district court for breach of the delivery terms. National Metal Crafters counterclaimed for damages, including $30,000 stipulated as the amount owed for breach of a separate oral agreement concerning expenses of maintaining machinery used to fulfill the contract. The district court held that a contract existed. It submitted to the jury the question whether the contract had been modified. The jury found modification and no breach, resulting in dismissal of the complaint and judgment for National Metal Crafters on the counterclaim. Wisconsin Knife Works appealed to the United States Court of Appeals for the Seventh Circuit. The court first examined whether diversity jurisdiction existed, noting that the complaint alleged the plaintiff's corporate parent was a Maryland citizen but failed to state its principal place of business. The record and argument confirmed the headquarters was in Maryland.

Jose Padilla, a native of Honduras, has been a lawful permanent resident of the United States for more than forty years and served in the U.S. Armed Forces during the Vietnam War. He faced criminal charges in Kentucky after being arrested for transporting a large amount of marijuana in his tractor-trailer. Before entering a guilty plea to the drug distribution charges, Padilla's counsel did not advise him that the conviction would trigger deportation proceedings. Counsel instead told him that he did not have to worry about his immigration status because he had lived in the country so long. Padilla relied on that advice when he pleaded guilty and later alleged that he would have insisted on going to trial if he had received accurate information. In postconviction proceedings Padilla claimed that his attorney's erroneous advice about deportation constituted ineffective assistance. The Supreme Court of Kentucky denied relief without holding an evidentiary hearing, treating deportation as a collateral consequence outside the protection of the Sixth Amendment. The United States Supreme Court granted certiorari to review whether federal law imposed on counsel an obligation to advise Padilla that his guilty plea would result in removal from the country.

Stoneridge Investment Partners, LLC, a Delaware limited liability company, served as lead plaintiff in a class action filed in the United States District Court for the Eastern District of Missouri on behalf of purchasers of Charter Communications, Inc., common stock. The suit named as defendants Charter itself, some of its executives, its independent auditor Arthur Andersen LLP, and two other companies that had acted as both suppliers and customers of Charter. Charter, a cable operator, engaged in a variety of fraudulent accounting practices throughout 2000 so that its quarterly reports would meet Wall Street expectations for subscriber growth and operating cash flow. By late 2000 Charter executives realized that these practices would still leave the company short of projected operating cash flow by fifteen to twenty million dollars. To close the gap, Charter entered into arrangements with Scientific-Atlanta, Inc., and Motorola, Inc., under which Charter overpaid the respondents twenty dollars for each digital cable converter box it purchased through the end of the year. In return, the respondents agreed to purchase advertising time from Charter at prices higher than fair value, with the transactions documented through backdated contracts and false statements about increased production costs. The arrangements had no economic substance, yet Charter recorded the advertising purchases as revenue and capitalized its purchases of the set-top boxes, thereby inflating reported revenues and operating cash flow by approximately seventeen million dollars on financial statements filed with the Securities and Exchange Commission and disseminated to the public. Respondents had no role in preparing or disseminating Charter's financial statements, and they recorded the transactions as a wash on their own books under generally accepted accounting principles. It is alleged that respondents knew or were in reckless disregard of Charter's intention to use the transactions to mislead research analysts and investors. The District Court granted respondents' motion to dismiss for failure to state a claim. The Court of Appeals for the Eighth Circuit affirmed, holding that the allegations showed at most aiding and abetting by respondents. The Supreme Court granted certiorari to review the judgment.