On Nov. 8 and 9, the Supreme Court will take up two cases that hold promise and peril for businesses.  Blawgletter sees more cause for businesses to hope than fear.

The first of the pair, Costco Wholesale Corp. v. Omega, S.A., No. 08-1423 (U.S.), deals with the reach of copyright law's "first sale" doctrine.  If you buy something "lawfully made" under the Copyright Act — a book, a house blueprint, a Barbie® doll, even a fancy rug — the first sale rule entitles you to do pretty much whatever you want with it, as long as you don't make copies of it.  17 U.S.C. § 109(a).  But what about copyrightable works that originate in another country?  Do they count as "lawfully made"?

The Ninth Circuit said no.  It cited the Supreme Court's decision in Quality King Distrib., Inc. v. L'Anza Research Int'l, Inc., 523 U.S. 135 (1998), which held that the doctrine does extend to "round trip" works, which come into the U.S. from overseas but started in the U.S.  Copyright owners didn't like the ruling because, they said, it hurts their ability to control distribution of their products in the U.S.  The Ninth Circuit's decision, as one amicus points out, gives them more options on timing, price, and content of their works.

Companies that buy for resale oppose the Ninth Circuit's limit on the first sale doctrine.  They'd prefer freedom to get merchandise from any legitimate source, including overseas.  That allows them to pay less and get more — and that benefits consumers, too, they urge.

The second case on the calendar, AT&T Mobility LLC v. Concepcion, No. 09-893 (U.S.), also hales from the Ninth Circuit, but this one unites businesses against that court's decision.  Concepcion raises the question of how far state law can go in striking down arbitration agreements that ban class or aggregate treatment of multiple people's claims.  The Ninth Circuit applied California law to declare a class arbitration ban in AT&T Mobility's subscriber agreement unconscionable and therefore void. 

AT&T Mobility urges to the Supreme Court that the ruling violates the federal Arbitration Act, which calls for enforcement of arbitration clauses on the same footing as other contracts.  The Concepcions and consumer groups contend that the Ninth Circuit simply applied neutral state law principles.

Both sides all but hyperventilate over the bad effects of a ruling that goes against them.  The businesses assert that banning class bans would injure them — and consumers! — by depriving them of a cheap and effective way to resolve small disputes.  The consumers say upholding bans would kill the best means available to hold wrongdoing companies accountable and compensate their victims.

Blawgletter wishes to point out that, if AT&T Mobility wins (as we expect), class arbitrations will become as rare as unicorns.  Last term, in Stolt-Nielsen, the Court held that an arbitrator can't order class arbitration unless the parties' agreement more or less expressly allows class treatment.  The combination of upholding class arbitration bans and barring class arbitration absent express language permitting it will prove a fatal one-two punch.