Business May Get More Days In Court
On Oct. 3, as Chief Justice John G. Roberts Jr. presided over his first day at the Supreme Court, President George W. Bush was in the West Wing introducing the woman who might soon take her own seat on the court -- White House Counsel Harriet Miers. "Senators of both parties will find that Harriet Miers' talent, experience, and judicial philosophy make her a superb choice," Bush said, kicking off the lobbying drive for his surprise pick.
Clearly, not everyone, including members of Bush's own base, shares that opinion. But one segment of American society is cheering: Big Business. Sensing that Miers might be a boon, the boardroom set is hoping her confirmation could herald a sea change on the high court. The addition of Roberts, who spent years as a corporate litigator, was heartening to them. The prospect of Miers, who has defended the likes of Microsoft Corp. (MSFT ) and Walt Disney Co. (DIS ) and has been a leading advocate for tort reform, has many executives downright giddy.
No one knows how Miers might vote on key issues such as federal preemption of state law or caps on damage awards. What's important is that she and Roberts bring a one-two punch of practical business experience to the bench. That won't necessarily always mean a win for business. Rather, execs hope their real-world perspective will help them persuade the high court's other justices to hear more cases of interest to business. The expectation is that the duo will help reverse a trend set by the Rehnquist Court, which had little appetite for such cases. "The court takes less than 2% of the cases that come its way. Of that 2%, very few are business cases, so the ones that get accepted are critical," says Robin Conrad, a senior vice-president at the U.S. Chamber of Commerce. "That's where we think a John Roberts or a Harriet Miers could be most helpful."
Indeed, one of the defining characteristics of the Rehnquist Court was its lack of zeal for resolving conflicting appeals court opinions. These circuit court splits have dogged business for years as it has watched the high court repeatedly rebuff appeals to settle conflicts in such areas as federal preemption and antitrust. That benign neglect has allowed the nation's 10 circuit courts to effectively establish different rules of engagement for different parts of the country. "You end up in a situation in which whether you win or lose depends solely on where the case is brought," says Gregory Coleman, a partner at Weil, Gotshal & Manges LLP in Austin. "It creates this huge pressure for forum-shopping."
The current state of affairs means actions that are acceptable in one part of the country might be unacceptable in another. Case in point: the hundreds of product-liability lawsuits filed every year in state courts that seek to hold companies to a standard above and beyond federal safety regulations. In one pending case, consumers sued Nokia Corp. (NOK ) in Louisiana, claiming that the radio frequencies emitted by its phones were "unreasonably dangerous" despite the phone's compliance with federal safety standards. The lower court found that oversight of the technical aspects of wireless communications traditionally falls to federal, not state, regulators. The U.S. Court of Appeals for the Fourth Circuit disagreed, creating a conflict with a different ruling from the Seventh Circuit on a similar issue. Nokia has asked the Supreme Court to use the case to clarify when a federal regulatory scheme can preempt a tort claim in state courts.
Circuit splits are nothing new, but the patchwork of case law gives companies that operate nationally a particular headache. Miers and Roberts can't solve the problem on their own; they bring only two of the four votes required for the high court to accept a case. But business hopes that they will persuade other justices to hear critical appeals that might otherwise be rejected. "The court benefits from having someone who knows what it's like out there," says Nathan Hecht, a Texas Supreme Court justice and longtime friend of Miers. "She understands the realities of the legal world, how litigation costs people and what it does to their businesses."
Corporations also are grappling with the high court's refusal to hear disputes over the certification of class actions. Massive class-action injury claims can become bet-the-company lawsuits, often leading to huge settlements if a company's lawyers can't convince a judge that plaintiffs have too little in common to be designated a class. Despite a statute explicitly making it easier to appeal class-certification complaints to the Supreme Court, the justices have demurred, most recently turning back a class-action dispute in 2004.
Even as critics bemoan Miers' lack of bench experience, she brings critical expertise in one key area dear to many executives: tort reform. Back in Texas she was on the front lines of the tort-reform revolution in 1988 when she helped Hecht win election to the Texas Supreme Court. He is credited with spearheading the tort-reform movement in the Lone Star State. Miers was on the campaign trail again in 1994, this time throwing her support behind Raul A. Gonzalez, a tort reform-minded Democrat who was facing a tough primary in his bid to retain his seat on the Texas Supreme Court. A year later the Texas Civil Justice League hired her to lobby for legislation to cap punitive damage awards and discourage medical malpractice claims. But it was a short-lived gig. Miers felt uneasy lobbying her former client, George W. Bush, who had just been elected governor, and withdrew.
In recent years, as the top White House lawyer, Miers has been intimately involved in the Administration's drive to limit jury awards, create an asbestos-claims trust fund, and pass business-friendly rules for class actions. In April she spoke at an annual meeting of the American Tort Reform Assn., delivering a crowd-pleasing rallying cry to take on plaintiffs' lawyers.
Given that history, Miers, more than the other high court justices, could be amenable to considering cases involving limits on punitive damages or class certification. Since gaining a 2003 Supreme Court victory in State Farm Mutual Automobile Insurance Co. v. Campbell, which set caps on punitive damages, business has seen lower courts poke holes in the high court ruling. Despite Big Business' entreaties, the high court so far has declined to revisit the issue.
Miers allies of all stripes compare her to another pro-business judge: Justice Sandra Day O'Connor, long the court's swing vote and a fount of pragmatism. Miers "will fill the role that O'Connor is leaving," says Tom Dunning, a Dallas insurance executive, Democratic activist, and longtime friend. "She will decide cases from a legal standpoint, not from her personal feelings." Others call her an "originalist" who will decide disputes based on a broad reading of the letter of the law without confining herself to a strict constructionist interpretation à la Justice Clarence Thomas. That's bad news for the GOP's right wing, many of whom swiftly denounced Miers' nomination, but good news for pragmatism-minded executives.
The Right might not like her, but Miers wins praise from many on the Left who know her. "The biggest compliment I ever heard about a lawyer is: You can shoot dice with him over the phone," says Franklin Jones Jr., a Marshall (Tex.) trial attorney and self-described "bomb-throwing" Democrat. "The only problem with that description is that she's probably too virtuous to shoot dice."
That penchant for straight-shooting will come in handy on a divided high court. But beyond that, many executives are hoping that the business-savvy pairing of Roberts and Miers might herald a new day -- and finally give corporate interests their day in court.
By Lorraine Woellert, with Richard S. Dunham, in Washington