The Big Business Court

The current Supreme Court is unabashedly friendly towards big business. How friendly? If the Court’s trajectory continues, perhaps as friendly as any Court dating back to the Lochner-era where laissez-faire policies exuded from the Court’s rulings. Prominent scholars, most notably Epstein, Landes, and Posner found empirical support for the proposition that the current Court is more pro-business than previous constructions (that study was recently updated through the 2015 term).  This post uses data from the 2015 through 2017 terms to add to this discussion. In particular it seeks to locate the trajectory of the Court with the possible addition of Judge Kavanaugh to the Court for the 2018 term. Although the Court’s right and left sides found themselves on opposite ends of business rulings during the 2017 term, we might expect an even stronger pro-business Court next term with the addition of another likely predictably pro-business justice in Kavanaugh.

The Last Three Years

Not that Kennedy tended to clash with conservative positions in business rulings. On the contrary, Kennedy authored many decisions that enhanced the power of businesses including the Court’s decision giving corporations First Amendment free speech protection in Citizens United v. FEC.  Still for the 2015 through 2017 terms, Kennedy was less pro-business than several of his conservative counterparts.

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This figure was created by coding all of the Court’s 2015 through 2017 orally argued cases as focused on a business interest or not and then narrowing the scope to cases that pitted a clear business interest against a contrary interest, thus excluding cases with dueling business interests.  66 cases met the narrowed criteria which underlie the construction of the figure above.

The next figure examining majority opinion authorship in pro/ani business decisions corroborates this account of greater recent conservative support for business interests.

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Three of the more more conservative justices — Roberts, Alito, and Gorsuch only authored pro-business majority opinions during this period within this set of cases.  Kennedy was actually the only conservative justice to author more anti than pro-business opinions during this period.

An Even Bigger Push for Business

While the Court continued its pro-business trajectory during the past three terms it also increased its pro-business momentum over this period.  This increase is evident based on the Court’s fraction of pro-business rulings.  The following figure looks at the number of cases the justices heard across the 2015 through 2017 terms that contained pro and anti business interests as well as the percentage of these decisions that were pro-business.

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Although the Court heard fewer business-related cases in the 2017 term the Court heard fewer total cases last term as well making the downshift in business cases more proportional to the Court’s actual merits docket.  With this curtailed caseload the Court ruled a stagering 81.25% of time in favor of pro-business interests. Even in the few cases where the Court ruled against business interests, the downstream effects are not going to necessarily negatively impact business interests in the aggregate. One example of this is the Court’s decision in South Dakota v. Wayfair.  Although the Court’s immediate holding was in favor of giving states the ability to tax out of state businesses, the repercussions of this decision may well be to enhance competition by leveling the advantage out of state businesses had over businesses located within states.

Major Interests

Since the stakes in these cases are quite large for formidable entities, the parties bring out some of the top Supreme Court advocates to support them in these matters.  The list of repeat attorneys in this set of cases from 2015 through 2017 is a veritable who’s who of the Supreme Court bar.

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Many of the most notable appellate attorneys now in practice argued several of these cases with Paul Clement in the lead followed by fellow veteran Supreme Court veteran attorneys Carter Phillips, David Frederick, and Seth Waxman.  While several other big firm attorneys top this list, the list also includes a handful of attorneys from smaller appellate boutiques including Peter Stris and Daniel Geyser from the Los Angeles based firm Stris & Maher (Geyser has since started his own boutique Geyser PC) and Thomas Goldstein, a named partner from the D.C. area firm Goldstein & Russell.

Amicus support for positions in these cases is another indication that these outcomes matter to a variety of interests.  Many of these cases had over ten merits amicus briefs while several had 20 or more.  The cases with the top number of cumulative merits amicus briefs supporting petitioners’ or respondents’ positions in this set of cases are displayed below.

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The two cases with the most merits amicus briefs were the Friedrichs and Janus decisions which both looked at forced union dues.  Several patent-related cases, Oil States and Impressions Products also made the top of the list along with two other cases from this past term — Wayfair and Epic Systems. As these cases already make up a large portion of the Court’s docket, we may expect to see an even greater influx of similarly minded petitions as the Court moves policy in an even more favorable direction for big businesses.

What to Expect

If Kavanaugh is confirmed by the beginning the the 2018 term we can expect the Court to be even further inclined towards ruling in favor of business interests.  The first indication of this is from the first figure in this post that shows Kennedy was on the lower end of support for business interests over the last three terms for the conservative justices on the Court.

Furthermore, while the Court sided with pro-business interests more last term than it has in previous terms, many of these were decided based on close votes.  The following figure shows the difference in majority and minority votes in this set of decisions for the past three terms (the row labeled “1” is for cases decided by a single vote).

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The justices decided eight business-related cases last term by one vote. That was compared to one such decision in both the 2016 and 2015 terms.  While not all of the decisions were based on close voting decisions in the past several terms, we may expect more hotly contested cases on the horizon, especially if the Court’s liberal and conservative justices continue to rule in divergent directions.

With this increased polarity, Kavanaugh will in all likelihood provide greater support for pro-business interests. How do we know this? The best signs are from his written opinions while on the D.C. Circuit. His opinions in the following cases are not only examples of his positions, but cumulatively show a propensity to rule in big businesses’ favor.  These cases constitute the set of pure business cases as coded for a previous post.

In the case Wu v. Strombler, Kavanaugh ruled in favor of Carlyle Capital which was accused of making material mistatements and ommissions to investors about the sale of securities.

Kavanaugh ruled in favor of Exxonmobile in Metroil v. Exxonmobil, where Exxon was accused of violating state and federal laws by selling a station leased and operated by Metroil to Anacostia.

Kavanaugh wrote the majoirty opinion in Stilwel v. Office of Thrift Supervision, where the D.C. Circuit upheld a regulation that allowed subsidiaries of mutual holding companies to limit minority shareholders to 10% of the subsidiary’s minority stock in order to prevent minority holders from taking advantage of voting rules regarding stock benefit plans.

In Pirelli Armstrong Trust v. Raines, Kavanaugh wrote for the majority holding in favor of Fannie Mae in a case dealing with serious of accounting failures reported in corporate earning restatements. Kavanaugh’s opinion upheld that District Court of D.C.’s ruling against allowing shareholder derivative suits filed against Fannie Mae’s directors.

In Doe v. Exxonmobile, Kavanaugh dissented in favor of Exxon in a suit where Exxoon was sued under the Alien Tort Statute for aiding and abetting Indonesian officials’ abusive behavior towards Indonesian citizens.

While Kavanaugh was consistently on the pro-business side of these decisions, not all decisions divided the panels ideologically.  Several judges appointed by Democrats sided with Kavanaugh’s decisions listed above including both Garland and Edwards in Metroil. This is likely a similar orientation to what Kavanaugh will find on the Supreme Court if he is confirmed — the liberal and conservative justices often rule in the same direction in these cases even though that pattern was inconsistent last term.

Although the Court still has a little less than half of its 2018 docket to fill, many cases on the horizon will juxtapose pro and anti-business interests.  Attorneys in several of these cases are listed in the attorney figure above further amplifying this trend of repeat attorneys in this set of cases.  These cases include:

  • Weyerhaeuser Company v. United States Fish and Wildlife Servicewhich looks at a business interest contrary to an endangered species designation.
  • New Prime Inc. v. Oliveira which deals with an exemption from the Federal Arbitration Act.
  • Air and Liquid Systems Corp. v. Devrieswhich is a products liability case.
  • Virginia Uranium v. Warren which looks atfederal versus state regulations on uranium mining.
  • BNSF Railway Company v. Looswhich looks at the applicability of taxes on lost time payments.
  • Fourth Estate Public Benefit Corp. v. Wall-Street.comwhich examines when the registration of a copyright claim is complete.
  • Merck Sharp & Dohme Corp. v. Albrechtwhich deals with a failure to warn claim.
  • Apple v. Pepper which focuses on consumers’ right to sue a deliverer of goods for antitrust damages.
  • Lamps Plus v. Varela which looks at whether the Federal Arbitration Act precludes a state law interpretation of an abitration agreement.
  • Henry Schein Inc. v. Archer and White Sales, another Arbitration Act case where the Court will look at when a court can decline to enforce an arbitration agreement.
  • Helsinn Healthcare S.A. v. Teva Pharmaceuticals USAwhere the Court will look at questions surrounding when a sold item can be properly patented.
  • Lorenzo v. Securities and Exchange Commisionwhich examines whether a misstatement claim can be repackaged into a fradulent-scheme claim.

From the previous figure of repeat player attorneys , the following attorneys are already counsel of record in the list of cases above (the numbers in parentheses indicate whether these attorneys are already listed in more than one of these cases): David Frederick (3), Shay Dvoretzky (2), Kannon Shanmugam (2), Peter Stris, , Carter Phillips, and Andrew Pincus.  Clearly the trend of big name attorney representing and opposing business interests will continue unabated.

The convergence of the factors described above almost ensures the likelihood that a large portion of the Court’s docket will be filled with cases implicating businesses’ interests.  If Kavanaugh is confirmed we can expect the pro-business direction of the Court’s rulings to continue and even to increase in momentum.  With five solid conservative votes on the Court, the conservative justices will have more control over the Court’s docket as they can predict their desired outcomes each time they congregate as a united front.  If they do so they will have great leeway in case selection and in defining the Court’s direction moving forward be it in favor of pro-business interests or otherwise.


On Twitter: @AdamSFeldman

Consulting @ Optimized Legal

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