June 28, 2018 / 10:05 PM / a year ago

SCOTUS lawyers: For business clients, Kennedy exit means business as usual – for now

(Reuters) - If you represent plaintiffs in civil rights or social justice cases, Justice Anthony Kennedy’s retirement announcement on Wednesday was a seismic event. As my Reuters colleague Lawrence Hurley wrote yesterday, Justice Kennedy’s signature gay and abortion rights decisions will be back in play if the Senate confirms a reliably conservative nominee without Kennedy’s maverick streak.

If you represent businesses, according to seven Supreme Court lawyers I talked to or corresponded with on Thursday, Justice Kennedy’s departure isn’t likely to prompt similar strategic consternation. Justice Kennedy was a solid supporter of businesses on key issues like arbitration and restricting class actions, they said. Any successor on President Trump’s announced list of candidates will be the same.

So businesses, according to these lawyers, don’t have to worry about whether or not to ask the Supreme Court to take their cases in light of Justice Kennedy’s retirement. Their clients’ calculations are more or less the same.

“If you go back to when Judge (Merrick) Garland was nominated, there was a lot of discussion in the business community about whether it made sense to hold off on bringing cases to the Supreme Court,” said Gregory Garre of Latham & Watkins. “Whoever the nominee is this time, that’s not going to be the case.”

The Supreme Court lawyers did highlight a couple issues for businesses to watch as the court’s composition changes for the second time since Justice Antonin Scalia’s death in 2016: federal pre-emption of state law and punitive damages. Justice Clarence Thomas, ordinarily a staunch conservative, is a states-rights stalwart who frowns on federal pre-emption in such varied contexts as personal injury litigation and state-court arbitration. If President Trump’s next Supreme Court candidate is also a states-first federalist, said Carter Phillips of Sidley Austin, pre-emption could be “a huge issue.” In fact, the Supreme Court on Thursday granted review in a pre-emption case, Merck v. Albrecht, which presents the question of the FDA’s rejection of a proposed pharmaceutical warning label pre-empts state-law failure-to-warn claims.

Justice Thomas also bucked his usual conservative allies back in 2003, when an unusual coalition of justices restricted punitive damages in State Farm v. Campbell. All of the justices in the majority of that opinion are now gone from the court except for Justice Stephen Breyer. Justices Ruth Bader Ginsburg and Thomas both dissented. If a plaintiff can persuade two more justices to take up the issue again, Phillips said, “all bets are off….The Chamber of Commerce should not be jumping up and down and clapping their hands until we find out who on that list is selected.”

Strategy will come into play, Supreme Court lawyers said, in framing briefs and arguments for a court without Justice Kennedy. The lawyers I talked to said the trope of pitching arguments to an audience of one – Justice Kennedy acting as a swing vote – was always a bit of “overblown,” to borrow a word from Neal Katyal of Hogan Lovells, at least in business litigation. “Over-personalizing arguments can backfire,” said Shay Dvoretzky of Jones Day, who will be arguing the Merck pre-emption case. “Of course, you take into account what you know about individual justices’ approaches to the law and what they’ve said about particular issues. But that’s true for Justice Kennedy just as for other justices.”

But it’s also true, said Lisa Blatt of Arnold & Porter, Kannon Shanmugam of William & Connolly and Daniel Geyser of Geyser PC, that good Supreme Court advocates tailor arguments to convince their very small audience of justices. Kennedy’s departure changes the composition of the court. So will the arrival, presumably, of a new conservative justice to take his place.

After Justice Neil Gorsuch joined the Supreme Court in the spring of 2017, for instance, lawyers intensified arguments based on statutory texts and proposed ending long-standing precedent requiring the Supreme Court to defer to administrative agencies on statutory interpretation. They’ll make similar adjustments to the next new justice.

Of course, even business lawyers don’t handle care just about business cases. Katyal said in an email that he’s disappointed Kennedy won’t be on the court to hear a death penalty appeal. Phillips said he had been counting on the prospect of support from Justice Kennedy in a pro bono case brought on behalf of Detroit public school students whose schools he describes as little more than warehouses.

Phillips said he’s braced to lose in the trial court and at the 6th U.S. Circuit Court of Appeals. “My only hope was the Supreme Court but I can only count to four now,” he said.

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