November 8, 2017

Case Summaries for Ohio v. American Express Co. and Digital Realty Trust, Inc. v. Somers

Holland & Knight’s Fifth Annual Supreme Court Webinar: Cases of Significance to Business
Timothy James Taylor

Litigation attorney Timothy Taylor prepared two cases summaries, for Ohio v. American Express Co. and Digital Realty Trust, Inc. v. Somers, for presentation at Holland & Knight’s annual Supreme Court Webinar. The overall implications in each case are summarized below and the full case studies can be accessed via the related links.

Implications of Ohio v. American Express Co.

The Amex case will provide new guidance to actors in two-sided markets—markets which are rapidly growing because of information-technology’s ability to bring actors together at a low cost. Ride-share services like Uber and Lyft; dating services like OkCupid and Tinder; buy-sell platforms like Amazon, eBay, and StubHub; and any other platform that matches users could be affected.

The Amex case will also affect the credit-card industry, and thereby nearly all of us. An amicus brief authored by the credit-card network Discover suggested that allowing merchants to discriminate among cards would allow Wal-Mart to have a quicker Discover-only checkout line or offer a discount on prescriptions if paid by Discover card. It is just as easy to picture an Internet checkout screen where the price changes slightly in response to your credit-card information.

Finally, the Amex case may provide additional guidance on the rule-of-reason’s burden-shifting framework. The briefs devoted less attention to this question, but the Supreme Court could further develop its doctrine on what an antitrust plaintiff must prove as part of its initial burden.

READ THE FULL CASE STUDY: Ohio v. American Express Co.

Implications of Digital Realty Trust, Inc. v. Somers

If the Ninth Circuit’s decision is affirmed, the real-world consequences for employers are unclear. On the one hand, employees who report internally would be protected from retaliation. This would encourage internal reporting, which most employers view as a more favorable action by employees than external reporting. But on the other hand, it would grant those internally reporting employees more leverage. They could bring suit immediately in federal court rather than go through an administrative process. They could wait years to bring that suit rather than act within SOX’s 180-day time limit. And they could receive double back-pay, rather than single back-pay. And its possible such employees could get two bites at the apple. If a first claim under SOX fails, they could then sue in federal court under Dodd-Frank.

More broadly, encouraging internal reporting may, ironically, result in more securities fraud being exposed than a regime that encourages external reporting. Some of the amici discuss the data, which shows that far more corporate malfeasance comes from employee tips than from management detection, auditing, or government investigations.

READ THE FULL CASE STUDY: Digital Realty Trust, Inc. v. Somers

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