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Supreme Court to rule on EEOC cases, BP oil spill and World War II fraud law

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The U.S. Supreme Court's October term opened with the justices poised to consider a handful of risk management-related cases.

Unlike some previous terms in which groups of cases revolved around a single issue, the new term deals with a scattershot of issues that range from accommodating religion in the workplace to imposing a World War II-era criminal fraud law on civil actions brought against civilian contractors.

Instead of a theme, the current docket is “more unfinished business,” said Robin Conrad, a partner in the Washington office of McKenna Long & Aldridge L.L.P. and former executive vice president of the Washington-based U.S. Chamber Litigation Center, which handles litigation for the U.S. Chamber of Commerce.

The U.S. Equal Employment Opportunity Commission is providing the court with two cases this term.

In EEOC v. Abercrombie & Fitch Stores Inc., the high court will decide whether the retailer violated discrimination law by not hiring an applicant who did not tell the company her Muslim religion required her to wear a hijab.

Gerald L. Maatman Jr., a partner at Seyfarth Shaw L.L.P. in Chicago, said the case “tees up the extent that the EEOC is entitled deference in construing employer obligations under anti-discrimination laws.”

He said businesses have criticized the EEOC for “legislating through regulation” in ways Congress never intended.

Meanwhile, Mach Mining L.L.C vs. EEOC asks whether and to what extent may a court enforce the EEOC's duty to resolve discrimination claims before filing suit.

The EEOC is required to attempt to conciliate complaints before entering litigation, and most appeals courts have upheld the requirement. However, a three-judge panel of the 7th U.S. Circuit Court of Appeals held that courts are forbidden from investigating whether the EEOC met the conciliation requirement.

In recent years, “federal judge after judge” has sanctioned the EEOC for bringing suits it shouldn't have, Mr. Maatman said. “The case has huge practical significance because if the EEOC is subject to judicial review, it acts very differently. If it knows a judge can't review what it does, it tends to act in an extremely aggressive manner.”

A third employment case deals with workplace accommodations for pregnant employees. At issue in Peggy Young v. United Parcel Service Inc. is whether, and in what circumstances, an employer must accommodate pregnant employees who are “similar in their ability or inability to work” to employees who are not pregnant.

According to court documents, UPS did not allow Ms. Young to work during her pregnancy after her doctor and midwife recommended she lift no more than 20 pounds. Ms. Young alleged UPS' lack of accommodation violated the Pregnancy Discrimination Act of 1978, but a three-judge panel of the 4th U.S. Circuit Court of Appeals sided with UPS in ruling it had a “pregnancy-blind” policy.

Beyond employment, the court will examine whether the 72-year-old Wartime Suspension of Limitations Act applies to claims of civil fraud in Kellogg Brown & Root Services Inc. et al v. United States.

The law includes criminal charges for “any offense” involving fraud against the government while the country is at war. The U.S. Department of Justice said some courts have held that it also applies to civil fraud claims brought by private parties and is triggered without a formal declaration of war.

“This is a huge case,” said Ms. Conrad. “This is the sleeper case of the term. This country is in a perpetual state of war.”

An analysis by the Washington-based National Association of Manufacturers concludes that “the expansive reading of the statute paired with the argument that the U.S. has been at war since Sept. 11, 2001, leads to a tremendous expansion of potential liability for never-ending claims about which evidence may be long gone.”

The case is an opportunity for the high court “to prevent an unwarranted judicial expansion” of the wartime law “beyond the plain text of the statute and contrary to congressional intent,” the association said in its analysis.

“The courts have said these guys have forever to file these claims,” Ms. Conrad said. “It has the potential to apply across the board to any type of false claim that is filed.”

Observers also are waiting to see if the Supreme Court takes up a case stemming from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico concerning whether a class can be certified in a civil damages case if a large portion of the class did not have a valid claim under applicable state law.

In BP Exploration & Production Inc. et al. v. Lake Eugenie Land & Development Inc. et al., a three-judge panel of the 5th U.S. Circuit Court of Appeals held that a class can be certified even if it includes members who suffered no damage from the defendants.

“It's a fundamental issue of whether the courts will enforce agreements that involve parties that are not actually injured by the spill, or by any act that causes damage somewhere,” said Quentin Riegel, vice president and deputy general counsel with the National Association of Manufacturers, which has urged the Supreme Court to review the case.

“If there's any situation where a company is sued, you can see where there would be parties that might take advantage of the situation,” Mr. Riegel said.