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Costco case ends in tie, with Kagan not hearing it

- The Washington Times - Monday, December 13, 2010

For the first time this term, the Supreme Court split evenly on a case because new Justice Elena Kagan took no part, a result that is likely to occur again in other decisions.

The court's 4-4 ruling Monday leaves standing a lower court's ruling that discount warehouse club Costco violated copyright laws by selling Omega luxury watches at a cut rate.

Justice Kagan had stepped aside because of her involvement in the case as the Obama administration's top appellate lawyer, solicitor general, before she joined the Supreme Court over the summer. The administration filed a brief in the case that sided with Omega.

Her work as solicitor general has led to her recusing herself in an unusually large number of cases, about half of the roughly 50 cases the court has agreed to hear so far.

Excerpts of an interview Justice Kagan gave to C-SPAN, her first since becoming a justice, indicate she anticipates recusing herself in far fewer future cases.

"The worst month was October and I think by the middle of this year most of the recusal issues are likely to be gone," she said during the interview, which is scheduled to be broadcast Sunday. "There will be an occasional case even after this year and in the spring where I will have to recuse myself, but the arc is definitely subsiding."

It remains to be seen how many cases she stepped aside in will result in 4-4 rulings. So far, the court has released opinions in only three cases in which she did not take part, and only the most recent case ended in a tie.

Justice Kagan did step aside for one of the year's most anticipated cases, a look at an Arizona law that imposes severe sanctions on businesses that hire illegal immigrants.

During arguments heard last week, it appeared that the court may be moving toward a 4-4 split in that case, which would result in the Arizona law being upheld. Under that scenario, Justice Kagan's participation would likely have resulted in a 5-4 decision to strike down the law.

While rare, it is not unprecedented for cases to end with a 4-4 split as justices occasionally do not participate in cases because of conflicts, illness or other reasons. A 4-4 ruling means the ruling of the next-highest court is upheld, but sets no precedent.

Typically, the court announces an even split with a terse document known as a "per curiam," or "by the court," decision. That was the case with the decision issued Monday, which didn't include any opinions or indicate how the justices voted.

In the case, Costco, which is not an authorized Omega dealer, bought watches manufactured by the Swedish company through an importer. According to court documents, Costco sold the watches for far less than Omega's suggested for retail price. Costco sold one particular model, the "Seamaster," for $1,299 instead of the suggested price of $1,995.

Omega sued Costco, arguing that copyright protections allow it to decide what retailer can legally sell its watches. Costco countered that such protections only extend to the first purchaser of the watches, in this case the importer.

The Ninth Circuit Court of Appeals in California sided with Omega, ruling the manufacturer has total control over the distribution of its watches in the U.S. The Supreme Court upheld that decision through its 4-4 vote.

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