Pro-Business Myth


For a preview of the Supreme Court's October Term 2008, click here.

On July 23, the Senate Judiciary Committee held a hearing on the Supreme Court's business cases titled "Courting Big Business." A related press release from Committee Chairman Patrick Leahy declared that recent Supreme Court decisions such as Exxon Shipping Co. v. Baker "have not only allowed some corporations to evade justice but have provided pro-business shields to some of the nation's largest corporations."

The perception is understandable, given high-profile cases such as Exxon, Riegel v. Medtronic and Stoneridge Investment Partners v. Scientific-Atlanta, all of which came out this term in favor of business interests, made headlines in the popular press and garnered some measure of outrage from consumers. Such cases have led to stories such as Jeffrey Rosen's "Supreme Court, Inc." in the New York Times--the theme of which is evident from its headline.

However, followers of the court's most recent term take issue with this characterization. "It has been pro-business in recent years, but this year cut against the trend," says Tom Goldstein, a partner in Akin Gump Strauss Hauer & Feld's Supreme Court practice and contributor to the firm's oft-cited SCOTUSblog.

The court may have pleased businesses with Exxon, but it also expanded plaintiffs' opportunities to pursue age- and race-based retaliation claims in Gomez-Perez v. Potter and CBOCS West v. Humphries, respectively.
According to SCOTUSblog, of the 2006 term's 28 decisions involving businesses or business interests,
17 were in favor of business while seven were seen as setbacks and four as neutral to business. This term had more variety, with 13 of 24 business cases decided in favor of business, 10 against and one neutral.

"I don't think it's accurate to say the court is pro-business," says Robin Conrad, executive vice president of the U.S. Chamber of Commerce's Litigation Center. "There's a greater percentage of the docket that is made up of business cases. Has the court been siding with business in all these cases? No, and this term is an example of the mixed bag of decisions on business cases."


Federal Court Upkeep

A few apparent trends could be the source of the "pro-business" perception. Access to the courts, for instance, has proved to be an important issue to the justices.

"The court is really looking at how to make sure the federal courts don't get flooded with ridiculous amounts of lawsuits that they can't handle because the dockets are already so busy, and to make sure that they don't impede the business community from conducting its business, which litigation can do if it gets out of hand or if the wrong standards are adopted," says Jeffrey Sarles, a partner at Mayer Brown.

With this in mind, he notes, in-house counsel articulating a legal position should make sure their position is consistent with the idea of reducing federal litigation, because that's the kind of thing federal courts like to hear. This is clear in the court's ongoing interest in arbitration cases. While the court only hears a handful of business cases every year, it tends to grant cert to at least one or two arbitration cases each term. Last term it published opinions in two, Hall Street Associates v. Mattel and Preston v. Ferrer. In the coming term, the court will address arbitration in two cases. Vaden v. Discover Bank asks whether federal court is the appropriate venue for compelling arbitration of state law claims. The opinion in 14 Penn Plaza v. Pyett asks whether an arbitration clause in a collective bargaining agreement can waive an individual's right to bring claims in court.


Revisiting Riegel

The issue of access to the court also is addressed in the Supreme Court's focus on federal pre-emption. It addressed pre-emption last term most notably in Riegel, in which the court barred claims against the manufacturers of medical devices that comply with federal regulation.

"Part of the point of [next term's] Wyeth v. Levine, and Riegel before it, is that an extremely high percentage of new civil case filings in federal court are drug or device related, partially as a result of the Class Action Fairness Act," says David Gossett, a partner at Mayer Brown. "Surely at the back of people's minds is, how many cases against manufacturers of drugs could be filed in any given year, and how quickly would that slow the federal court system to an entire halt?"

In the October term, the court will address in Wyeth whether federal regulation of drug labeling pre-empts state liability claims. Although very similar, Wyeth may prove to be a tougher case than Riegel. Unlike medical devices, in the drug arena there is no express provision that federal regulation of drug labels pre-empts state regulations.

"If you're talking about limiting access to the court and making it harder for the plaintiffs bar to succeed, I think the court is right there," Goldstein says. "But [the court] is not just single minded. It's not going to construe the civil rights statutes however necessary to favor business."

For proof, just look to the two cases that opened up retaliation claims: CBOCS West v. Humphries and Gomez-Perez v. Potter.


Nuts and Bolts

Those cases also feature another consistency among many of the court's cases: narrow, technical statutory interpretations that leave little room for personal doctrinal views to enter the analysis.

"The business cases are not terribly controversial, and the issues are not terribly controversial," Conrad says, pointing to margins of 7-2 and better in many of the last term's business cases. "Any time you get cases where there are very few or no dissents, it shows there is a consensus."

Riegel, for instance, may have enraged consumers and the plaintiffs bar, but in the end the 8-1 ruling is generally thought to be a straightforward reading of the Medical Device Amendments of the federal Food, Drug and Cosmetic Act, which clearly bar differing state law requirements. "Labor and employment cases tend to be more ideological," Goldstein notes, citing last year's Ledbetter v. Goodyear Tire & Rubber Co., a 5-4 conservative-liberal split in a case that made it harder for women to file pay discrimination claims. This year, however, all the employment cases were determined by margins of 7-3 or better.

"What you do see is the judges being really quite disciplined about statutory interpretation," says John Kiernan, a partner at Debevoise & Plimpton and co-chair of the firm's litigation practice. As a former law school classmate of Chief Justice John Roberts, Kiernan is familiar with his style. "There's a certain tough-mindedness about some of the decisions that I could see people characterizing as pro-business."


Stare Decisis Deference

This "nuts and bolts" approach manifests itself in the court's adherence to stare decisis. "Chief Justice Roberts is a big precedent freak," Kiernan says. "This Supreme Court has not been an overruler of prior law even though they have their five-vote conservative bloc. The first thing they do is look at the precedent."

It is in the tougher cases that the court's deference to prior cases becomes clear. This idea is expressed in last term's John R. Sand & Gravel v. U.S., in which the 7-2 majority stuck with 1880s-era precedent it noted was "anomalous." The ruling said the Federal Circuit must always consider the timeliness of filings when considering claims against the federal government, even if the government waives the issue. In Justice Stephen Breyer's majority opinion he noted, "To overturn a decision settling one such matter simply because we might believe that decision is no longer 'right' would inevitably reflect a willingness to reconsider others. And that willingness could itself threaten to substitute disruption, confusion and uncertainty for necessary legal stability."

In regards to granting cert, Kiernan also discerns a straightforward approach. "I think Chief Justice Roberts is a guy who was out in the world for a little while and feels some affection for cases that just need to have a decision made," he says.

Perhaps if the mixed record stands, this will be the ultimate impact of the Roberts Court on business. "I think you're more likely to get a business case accepted today," Sarles says. "People like Chief Justice Roberts are more interested in the issues and more open to resolving issues that businesses and their lawyers want to get resolved. But that's no indication of how the ruling is finally going to come out."

Associate Editor

Melissa Maleske

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