Supreme Court on Verge of Historic Shift Is Stuck in Limbo for Now

  • Insider trading, Samsung-Apple fight highlight business docket
  • Nomination fight, election will determine whether court shifts

The U.S. Supreme Court opens its new term next week in a holding pattern while waiting for a ninth justice. After the next president takes office in January, it may be on the cusp of a historic transformation.

A victory in November for Democrat Hillary Clinton would give the court a majority of Democratic appointees for the first time since 1969, at the end of the liberal era under Chief Justice Earl Warren. A 5-4 Democratic court would be more receptive to class-action lawsuits, campaign-finance rules, gun control and pollution regulations.

A win for Republican Donald Trump, by contrast, could leave the court leaning right on most of those issues. He has pledged to select from a list of 21 generally conservative potential nominees.

The next justice is "effectively going to decide the direction of the court," said Kannon Shanmugam, a lawyer at Williams & Connolly LLP who appears frequently before the high court.

Merrick Garland, center, with Obama, right, and Biden.
Merrick Garland, center, with Obama, right, and Biden.
Photographer: Joshua Roberts/Bloomberg

The vacancy -- created by Justice Antonin Scalia’s Feb. 13 death and prolonged by Senate Republicans’ refusal to consider President Barack Obama’s nomination of federal appellate judge Merrick Garland -- will hang over the justices in all sorts of ways when they take the bench on the traditional first Monday in October.

The next justice’s space at the end of the nine-member bench will remain empty. Arguments will be quieter occasions without the pugnacious Scalia. And the pared-down docket will reflect the reality that, as currently constituted, the justices can’t resolve some of the nation’s most divisive legal issues.

Insider Trading

The nine-month calendar includes important cases in October on insider trading and patent disputes. The former will set the bar for prosecutions stemming from information passed by a corporate insider to a friend, relative or business associate. The question is whether prosecutors must show that the insider received a concrete benefit in exchange.

The patent case marks probably the final chapter in the legal war between Apple Inc. and Samsung Electronics Co. over smartphones. Samsung is seeking to reduce a $399 million award to Apple for infringement of its patented iPhone designs.

Missing, at least for now, are the types of class-action and arbitration cases that helped define the court as a business-friendly forum in recent years. Business advocates won a string of decisions, many them 5-4 with Scalia in the majority, that let companies channel consumer disputes into arbitration instead of court and limited the ability of people to press claims as a group.

Those issues may be back soon. By the end of the year, the court is likely to accept a case that will determine whether employers can use arbitration agreements to force workers to press legal claims individually, and not as a class action.

Liberal Majority

Arguments in that case could take place in March or April -- potentially after a ninth justice is confirmed. Should Clinton win the presidential election, Garland or another nominee could give the court’s liberal wing a majority to begin opening companies to more class-action lawsuits.

"When you think about what’s going to happen with the ninth justice, I think actually class actions is one of the most important areas where we’ll see change," said Neal Katyal, an appellate lawyer at Hogan Lovells and formerly the Obama administration’s top Supreme Court advocate.

Katyal blames the vacancy -- and the prospect of a 4-4 deadlock -- for the court’s rejection in June of a class-action appeal he filed on behalf of Google Inc. "I think it was denied because the court really is not sure which direction to go," he said.

The prospect of an even divide might also explain the court’s handling of a church-state case on its docket. The issue is whether Missouri violated the Constitution by excluding a church preschool from state funding for new playground surfaces.

Slow-Walking

The court agreed to hear the church’s appeal in January, before Scalia’s death, but didn’t include the dispute on its argument calendars for October and November, and instead scheduled several newer cases. The unusual delay sparked speculation that Chief Justice John Roberts might be trying to slow-walk the case with an eye toward having a full bench.

"It does sort of seem like the court is waiting to schedule this case until, or if, they have nine justices," said Paul Clement, former U.S. solicitor general for President George W. Bush, who is joining the law firm of Kirkland & Ellis LLP.

The next justice also might break last term’s deadlock over Obama’s effort to defer deportation for as many as 4 million unauthorized immigrants. The divide left intact a ruling blocking the plan, and the administration is asking the court to take the unusual step of reconsidering once a ninth justice is seated. Even if the high court rebuffs that request, the issue could return after additional lower court proceedings.

To a large degree, the Supreme Court’s agenda will hinge on the results of the presidential election. A victory by Trump would give him not only the right to fill the Scalia vacancy, but also the power to rescind the deportation program and other disputed Obama initiatives.

Transgender Rights

A fight over transgender rights is one that could be derailed. A Virginia school board is appealing a ruling that would let a transgender student use the boys’ bathroom although he was born with female sexual organs. In backing the boy, a federal appeals court deferred to the Obama administration’s interpretation of federal anti-discrimination regulations -- an approach Trump would have the power to change.

Election-related uncertainty is one reason Steven Shapiro, legal director of the American Civil Liberties Union, is optimistic the Supreme Court won’t get involved in the transgender case. "There are a lot of reasons for the court to sort of step back," said Shapiro, whose organization represents the student.

The next president may have several chances to fill a vacancy on the court. Three of the remaining eight justices are 78 or older.

A liberal shift may take time, though. Changes will happen slowly, even for the 2010 Citizens United campaign-finance decision, which has been a target for Democratic ire, says Paul Smith, a Supreme Court and appellate lawyer at Jenner & Block LLP.

"The court doesn’t like to come in and overrule lots of cases very quickly just because there’s been a change of personnel caused by an election," Smith said. "The difference will take place over a decade or more, not in just a couple of years."

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