5 of the Largest Business Litigation Cases in History
High profile court cases involving businesses are gold for news headlines. However, many cases donâ€™t have a serious impact on legislation and the buzz surrounding these cases quickly dissolves. On the other hand, there are cases that completely change an industry or change the fate of a powerful organization. These cases live on to influence the legal system forever.
The landscape of business today is largely shaped by litigation cases from the past. The following are five landmark Supreme Court cases that have had a significant impact on the course of American business.
Fletcher v. Peck (1810)
Fletcher v. Peck is a landmark US Supreme Court decision and marks the first time in history that the Supreme Court ruled a state law unconstitutional. This decision also set a precedent for the sanctity of legal contracts.
In 1975, a land grant that awarded territory to four land development companies was passed by state legislature. However, due to a scandal that involved bribery, the legislature voided the law a year later and voided all rights and claims under the land grant as well. In 1800, John Peck purchased land that was part of the original land grant and sold it to Robert Fletcher three years later, assuring Fletcher that the past sales of the land were valid. Fletcher later argued that since the original sale of the land had been voided, Peck was in breach of contract because he did not possess the legal right to sell the land in the first place.
The Supreme Court unanimously ruled that because the estate had legally â€śpassed into the hands of a purchaser for a valuable consideration,â€ť the Georgia legislature did not have the right to take away the estate and void the contract. The court noted that the Constitution did not permit bills of attainder or ex post facto laws, and thus held that laws annulling contracts or grants made by prior legislative acts were constitutionally impermissible.
Lochner v. New York (1905)
Lochner v. New York is a famous US Supreme Court case that held that â€śliberty of contractâ€ť was implicit in the Due Process clause of the Fourteenth Amendment. This case involved a law in New York that set the maximum amount of hours a baker could legally work at ten hours per day and 60 hours per week.
The Supreme Court decided by a 5-4 vote that this law wasnâ€™t necessary to protect the health of bakers, stating that it was an â€śunreasonable, unnecessary, and arbitrary interference with the right and liberty of the individual to contract.â€ť Following this landmark case, the Supreme Court made several other controversial rulings that invalidated various laws regarding working conditions.
Standard Oil Co. of New Jersey v. United States (1911)
Standard Oil Co. of New Jersey v. United States is the case where the US Supreme Court found Standard Oil in violation of the Sherman Act by monopolizing the oil and gas industry through actions considered â€śanticompetitiveâ€ť and â€śabusive.â€ť
Leading up to this case, John D. Rockefeller (founder of Standard Oil) owned the wealthiest trust in the country and virtually controlled the entire petroleum industry in the United States. Rockefeller had a significant influence on congress and had ensured that efforts to limit his business were unsuccessful. Due to their size and power, Standard Oil was able to significantly restrain competition and eventually bought up nearly all of their competitors.
The result of the case was a geographic separation of Standard Oil that created several competing companies out of the original company.
New York Times Co. v. Sullivan (1964)
New York Times Co. v. Sullivan was the US Supreme Court case that established the actual malice standard, which is the requirement that must be met before the press can be charged with defamation or libel when reporting about public officials. The actual malice standard requires a plaintiff in defamation/libel cases to prove that the defendant knew the statement in question was false before publishing it or that they acted in â€śreckless disregardâ€ť of its truth.
This particular case concerned an ad in the New York Times that claimed the arrest of Martin Luther King Jr. was part of a campaign to destroy MLKâ€™s efforts to integrate public facilities and encourage African-Americans to vote. Sullivan won the case at the state level, because Alabama law didnâ€™t require Sullivan to prove that he had been harmed. Once the case reached the Supreme Court, it was unanimously ruled in favor of the New York Times and the press was able to freely report throughout the entire Civil Rights movement in the south.
Bowman v. Monsanto Co. (2012)
Bowman v. Monsanto Co. is a US Supreme Court patent decision in where the Court unanimously held that patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent owner’s permission.
Monsanto was granted a patent in 1994 for genetic material that allowed them to incorporate new genetic material into a plant. Later in 2006, they received a patent on a gene that made plants resistant to herbicides that farmers used to kill weeds. When buying Monsantoâ€™s products, farmers sign an agreement stating that growers who purchase their products can only use a seed for a single season and canâ€™t sell the seeds to other growers. However, growers can sell the second-generation seed to a grain elevator.
In 1999, a farmer named Vernon Hugh Bowman started purchasing Monsantoâ€™s Pioneer Hi-Bred seed and abided by the terms by not saving any of his seeds. That same year, Bowman also purchased second-generation seeds from a grain elevator for his second planting and ended up saving some of those seeds for reuse.
Monsanto contacted Bowman to inspect his crops in 2006 and found their patented genetic material in his second-round crops. Monsanto sued Bowman for patent infringement and their case won in district and federal court.
About the author:
Kyle Stout is a freelance writer based out of Tulsa, Ok. This article was written on behalf of Vethan Law Firm P.C.