DISGORGEMENT

Issues

In this case, the Supreme Court will decide whether the five-year statute of limitations on forfeitures and penalties in 28 U.S.C. § 2462 applies when the Securities and Exchange Commission (“SEC”) directs a wrongdoer to surrender proceeds stemming from his illegal activity (“disgorgement claims”). Petitioner Charles R. Kokesh argues that § 2462 applies to SEC disgorgement claims because these claims fell within the ordinary meaning of “forfeiture” at the time Congress enacted the statute. In addition, Kokesh contends that § 2462 applies because disgorgement claims are in part to punish the wrongdoer and are therefore penalties. Respondent SEC counters that disgorgement claims are not forfeitures under § 2462 because the term “forfeiture” was only intended to include procedures to take tangible property when Congress enacted the statute. The SEC also argues that disgorgement claims are not penalties because they do not make wrongdoers worse off financially than they would have been if they did not violate the law. This case will resolve a circuit split regarding whether § 2462’s statute of limitations applies to SEC disgorgement claims. In doing so, this case will also determine whether the SEC can enforce U.S. securities laws through disgorgement orders without regard to when the alleged violation occurred.

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Issues

This case asks the Supreme Court if a judge can include profits of corporate affiliates, not named as defendants in a trademark infringement case when calculating how much to award in damages. Dewberry Group argues that under the Lanham Act, only the profits of the named defendant can be used in this calculation. Dewberry Group further argues that if the non-party affiliates’ profits were to be used, there should be an opportunity to litigate the matter of corporate separateness. Dewberry Engineers, on the other hand, counters that the Lanham Act consists of a two-step process where the second step allows the judge to award a “just sum” that may include the non-party affiliates’ profits. Additionally, Dewberry Engineers contends that there is no need for a separate legal analysis to disregard corporate separateness because the Lanham Act allows a judge to consider all relevant evidence including the non-party affiliates’ profits. The Supreme Court’s decision in this case will impact future trademark infringement cases, particularly how the corporate form will be considered in awarding damages under the Lanham Act.

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Issues

This case asks the Supreme Court to determine whether the Securities and Exchange Commission (“SEC”) may obtain disgorgement in civil actions under its power to seek equitable relief, even though the Supreme Court has previously ruled that disgorgement is a penalty rather than an equitable remedy at least under some circumstances. Petitioners Liu and Wang contend that the Supreme Court ruled in Kokesh v. SEC that disgorgement was a penalty, and that therefore the SEC lacks the authority to order Liu and Wang to disgorge any ill-gotten gains in connection with their investment fund. The SEC counters that Kokesh held disgorgement to be a penalty only for statute of limitations purposes. The outcome of this case has implications on the SEC’s effectiveness in future civil actions at deterring financial crime and at making the victims of financial crime whole.

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