Business' High Court Handicap

Stock holdings of justices can keep corporate cases off the docket

Business cheered when John G. Roberts Jr. took his seat as the Supreme Court's new Chief Justice. With nearly a decade's experience representing companies, he promised to get the court to weigh in on more corporate issues. But Roberts has a connection to Big Business that executives hadn't counted on: a hefty stock portfolio that has created many conflicts of interest. In his first month on the bench, the Chief Justice recused himself 16 times.

On Oct. 11, when the court said it wouldn't hear Teva Pharmaceuticals USA Inc. (TEVA ) v. Pfizer Inc. (PFE ), a dispute over mail-order pharmacy rules, Roberts, Justice Sandra Day O'Connor, and Justice Stephen G. Breyer didn't participate in the decision, most likely because of financial conflicts arising from their stock portfolios. A week later, when the court rejected Merck & Co. v. Teva Pharmaceuticals USA Inc., Roberts, O'Connor, and Breyer again recused. On Oct. 31 the trio bowed out of Nokia Inc. v. Naquin, a case involving cell phone standards that the court decided not to hear.

These episodes are raising a larger question: whether some important business cases might have a higher bar to clear to reach the court. Four justices must give consent before a case can win a hearing. For every one that recuses, the odds of getting a case on the docket decrease. "We'll never know if there might have been three votes but not four" because of the recusals, says Mark I. Levy, who worked on the Nokia case. Other stocks owned by two or more justices include Cisco (CSCO ) Systems, Coca-Cola (KO ), and State Street Bank (STT ). Here's each justice's recusal history:

By Lorraine Woellert, with Susann Rutledge

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