What the Supreme Court Pick Will Mean for Business

A striking part of the debate over President Barack Obama's imminent pick for the U.S. Supreme Court is what's missing from the clamor: how the nomination will affect business. "Business issues tend not to be what drives Supreme Court nominee choices," says Patricia A. Millett, co-chairman of the Supreme Court practice at law firm Akin Gump Strauss Hauer & Feld.

In part that's because ideologically charged clashes over abortion, civil rights, and other social issues tend to soak up all the attention, a pattern dating back decades. But there's another reason as well. Even though financial, regulatory, and other subjects vital to companies occupy a significant portion of the high court's docket, business cases are not a single body of jurisprudence guided by strongly held doctrine. Pigeonholing how a particular justice will vote on this complex array of topics is thus extremely difficult.

With the Obama Administration and a Democratic Congress sketching out sweeping reforms for the financial sector, as well as fresh approaches in such areas as antitrust law, health care, and policing of the environment and the workplace, legal challenges to that agenda are certain to emerge.

Yet these and other business issues don't fall neatly into the court's standard ideological divide. In the court's review of punitive damages, for instance, the justices most against limits on such awards have been Clarence Thomas and Antonin Scalia, who are generally conservative on social matters. Those advocating caps include David H. Souter and John Paul Stevens, part of the liberal wing. How Obama's choice to replace Souter will tip key rulings is hard to say.

In recent years the court has been seen as generally probusiness, making it harder for plaintiffs to pursue securities fraud, antitrust, and pay discrimination suits, for example. In some areas, however, the court appears to be in flux. While its pay discrimination ruling favored employers, a 2006 opinion made it easier for workers to pursue retaliation claims. And after initially showing itself sympathetic to shielding federally regulated products from state laws, the court rejected the principle, known as preemption, in two high-profile cases this year. The rulings allowed a drug product liability case to move forward against Wyeth (WYE) and a suit alleging deceptive marketing to proceed against cigarette maker Philip Morris, a unit of Altria (MO).


The most discussed potential nominees—appellate judges Sonia Sotomayor and Diane P. Wood, Solicitor General Elena Kagan, and Kathleen M. Sullivan, a former dean of Stanford University Law School—are known to be well versed on some matters likely to surface in the Obama era. For example, Wood is the co-author of a widely used law school text on trade regulation and antitrust law.

But antitrust captures the difficulty of speaking monolithically about business interests; the desire for strong or lax enforcement will vary with circumstances. Witness chipmaker Advanced Micro Devices' (AMD) tenacious pursuit of monopoly claims against rival Intel (INTC). Patent issues are similar. Notes John F. Duffy, a professor at George Washington University Law School and a former Supreme Court clerk: "You have whole industries on one side and whole industries on another side."

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