June 25, 2014 / 7:25 PM / in 4 years

INSIGHT-U.S. high court bucks pro-business trend this term

(Adds Wednesday’s Supreme Court rulings)

By Lawrence Hurley

WASHINGTON, June 25 (Reuters) - With only days remaining in its term, the U.S. Supreme Court is on track to at least partly dispel the impression that it is pro-business.

In cases brought by business interests over the last nine months, including an effort to curb shareholder class actions and challenges to environmental regulations, the court has either issued narrow rulings that fell short of what those interests sought or ruled against them outright.

By contrast, the court last year issued a string of rulings in favor of business, including several that curbed consumer claims against companies.

Lawyers and law professors following the business cases offer various explanations for the losses and narrower victories this year. One theory is that the court under Chief Justice John Roberts is reluctant to overturn longstanding precedents, even when they happen to be anti-business.

Jonathan Adler, a law professor at Case Western Reserve University School of Law in Cleveland, said the court has shown “it is more a minimalist status-quo court than a ‘pro-business’ court.”

By one measure the business community has fared reasonably well this year. Its leading representative before the high court, the U.S. Chamber of Commerce, has so far amassed a record of 11 wins to 4 losses during the nine-month term due to end next Monday. That’s a winning percentage just slightly lower than last year’s 14-3 record. In the previous year the Chamber went undefeated at 7-0.

The Chamber participates mainly by filing friend-of-the-court briefs, but is also directly involved in some cases, such as regulatory challenges. It does not generally participate in business-against-business disputes, such as a case on Wednesday in which the court ruled for TV broadcasters in finding that online startup Aereo Inc had violated copyright law.

One remaining case yet to be decided involves the Chamber - a challenge to President Barack Obama’s appointments to the National Labor Relations Board, which has the potential to be a broad ruling. Even a win in that case, due to be decided as early as Thursday, would mean a year of mixed results.


The Chamber’s wins have mostly been on technical issues. Even when the court has ruled in favor of business interests this term, the justices have ruled narrowly and rejected arguments that would have led to blockbuster decisions.

On Monday, the court did exactly that in cases on securities class actions and environmental regulations.

The court stopped short of overturning a precedent that favors plaintiffs in securities class actions and mostly upheld the authority of the Environmental Protection Agency to regulate greenhouse gases under a long-running air pollution program. The environmental ruling was so mild that the EPA announced it was pleased with the ruling even though it had technically lost.

Monday’s ruling in the environmental case handed a partial win to industry by exempting smaller pollution sources from the regulation.

“It wasn’t a perfect win but we think it was a very positive step in the right direction and a shot across the bows of the EPA,” Kate Comerford Todd, a lawyer in the Chamber’s legal office, said in an interview.

Saying that “overall it’s a good term for the business community,” Todd cited a January win for Daimler AG in which the court put limits on the ability of plaintiffs to file human rights claims against multinational companies in U.S. courts.

In the securities class action case, which was brought to the court by Halliburton Co, the justices were unanimous in reaching a middle ground that could benefit corporate defendants, but the court didn’t go as far as the business community hoped.

Roberts himself wrote the majority opinion in which the court declined to overturn a precedent that favors shareholders, saying Halliburton had failed to show the “special justification” that is required before the court throws out its prior holdings.

“We are disappointed,” said Lily Fu Claffee, the Chamber’s chief legal officer.

The justices again failed to give the Chamber what it wanted on Wednesday when the high court ruled in a class-action case brought against Fifth Third Bancorp. The court threw out an appeals court ruling in favor of the plaintiffs, giving a technical win to the bank and Chamber. But the court rejected the Chamber’s argument, which would have had broader pro-defendant implications if adopted.

The bulk of the Chamber’s outright wins were on technical legal issues, such as a decision in December in favor of Sprint Corp over a dispute with the utilities regulator in Iowa.


By contrast, the Chamber lost some higher-stakes cases. Most notably, the court in April upheld a separate environmental regulation proposed by President Barack Obama’s administration that was strongly opposed by utilities. The court, on a 6-2 vote, ruled that the EPA had not exceeded its authority in requiring some states to limit pollution that contributes to unhealthy air in neighboring states.

The court also found against the Chamber in a 6-3 vote in March that whistleblower protections apply not only to publicly traded companies but also to subcontractors that do business with them. The ruling extends the protections to investment advisers, law firms, accounting firms and other such businesses.

Business also didn’t fare particularly well in seven other cases involving corporate interests in which the Chamber did not participate and that did not involve a company versus company dispute. Business interests lost four out of seven, including one in which the court said on a 7-2 vote that victims of Allen Stanford’s Ponzi scheme could sue lawyers and insurance brokers who worked for him.

Doug Kendall, president of the left-leaning Constitutional Accountability Center, said the business community’s failure this year to reach its goals may stem from its having taken “very aggressive positions,” setting its sights too high to garner a majority on the nine-member court.

“They didn’t get what they asked for, but they are playing offense,” Kendall said. (Reporting by Lawrence Hurley; Editing by Howard Goller, Amy Stevens and John Pickering)

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