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OT 07 Business Docket Review

Continuing our look back at October Term 2007 (a review that began here with a look at criminal cases), we turn to the Court’s business docket. After a spectacularly successful term for corporate parties in 2006, the Court’s treatment of business cases received considerable attention this year. In a New York Times Magazine cover story, George Washington University Law Professor Jeffrey Rosen dubbed the Justices “Supreme Court, Inc.” This year, by contrast, the outlook for business was decidedly more mixed. While the Court sharply limited the maritime punitive damages award in Exxon v. Baker and rejected shareholders’ theory of “scheme liability” in Stoneridge v. Scientific-Atlanta, it delivered a host of worker-friendly rulings in the employment context. This post will look at decisions affecting business this term and last.

As mentioned above, OT 2006 was a banner year for business interests before the Court. Over 40% of the Court’s signed opinions — 28 of 68 cases — involved businesses or business interests; of those, 17 (60%) were decided in support of business interests, with only seven setbacks (the remaining four decisions neither helped nor hindered business interests). On issues ranging from employment discrimination to anti-competitive practices, from punitive damages to campaign finance, business won an almost unbroken string of victories. For example, the U.S. Chamber of Commerce’s litigation arm filed 16 briefs in 2006; of 14 signed opinions (one case was withdrawn, and another — Ford Motor Co. v. Buell-Wilson — was GVR’d in light of Phillip Morris v. Williams) the Chamber’s side won 12.

OT07 continued business’ run of success before the Court, though not quite at the torrid rate of OT06. This term, the Court issued opinions in 24 cases involving business concerns, making up nearly 36% of the docket. Of those 24, 13 were decided in favor of business, a “win percentage” of 54% — a drop from the 2006 term. (See a chart of business cases and business victories here.) While businesses won some significant victories this term, there were also more defeats — 10 of 24 cases — both overall and in a series of high-profile employment law cases.

The Chamber of Commerce’s fortunes once again serve as a microcosm for the term as a whole: after posting a stellar 85% “winning percentage” in OT 06, the Chamber won just 8 of 15 cases in which it was a party or wrote an amicus in 2007 — still winning more often than losing, but not reaching the sustained level of success of a year ago.

A few things remained constant across both terms: in general, the Court is more unanimous when addressing business cases than in other cases on its docket. In 2006, only 32% of business cases garnered three or more dissenting votes; for the term as a whole, that number was 37%. Over 43% of the Court’s 37 opinions decided without dissent or with a single were business cases. In 2007, the numbers were similar, even trending slightly further towards unanimity: 25% of business cases had three or more dissents, compared to a term-wide average of nearly 35%. Once again business accounted for over 43% of cases decided either 9-0 or 8-1.

Another constant between the terms is the high recusal rate for business cases. Because federal law requires judges to recuse themselves if they own stock in a company appearing before the Court, recusals are fairly common in business cases. This term, two business cases could not be decided due to recusals. In Warner-Lambert v. Kent, the Chief Justice’s recusal led to a 4-4 split and an affirmance by an equally divided Court. In American Isuzu Motors v. Ntsebeza, the Court affirmed the judgment below after four Justices recused themselves from the case, three due to presumed financial conflicts, thus preventing a quorum.

Overall, five of seven recusals in 2007 came in business cases, a rate which mirrored 2006’s six of seven. Earlier in the term, Court-watchers expressed concern that Justice Alito’s recusal in Exxon v. Baker, arguably the highest profile business case before the Court this term, would lead to a 4-4 split and no clear statement on punitive damages from the Court (the case was decided 5-3 in relevant part). Though Congress has made divestment a more attractive option for judges by permitting deferment of capital gains taxes on profits reinvested in approved securities, recusals are certain to remain a problem for the Court until the Justices actually go though with a divestment plan.

Sheldon Gilbert of the U.S. Chamber of Commerce Assisted with the collection of statistics for this analysis.