Corporations and the Supreme Court

The Chamber May Not Have Had Its Best Term Ever, But It Still Did Pretty Well | October Term 2015

Despite losing one reliable vote for business interests in Justice Scalia, and despite pressing an exceptionally aggressive agenda before the Court, the Chamber still had a reasonably successful Term. Even if the Chamber did not achieve the radical game-changing successes it has secured in recent Terms, the Chamber and its allies nevertheless won a majority of their cases, and, overall, netted a legal landscape friendlier to business interests.


The Roberts Court issued its final decisions of the Term on June 27, including blockbuster rulings in McDonnell v. United States and Whole Woman’s Health v. Hellerstedt, but quietly wrapped up its business docket in mid-June, handing the Chamber of Commerce an 8-4 winning record for the current Term (67%) – up from 62% last Term. Overall, the Chamber has a 69% success rate during Chief Justice Roberts’s tenure to date, compared to 56% during the stable Rehnquist Court and 43% during the late Burger Court.

As the data and overall win record show, the Roberts Court has been an exceptionally friendly forum for big business. As a result, the Chamber has been emboldened to pursue its agenda with accelerating aggressiveness, inviting the Justices to stretch the law in its favor far beyond what would have been considered possible several years ago. That aggressiveness caught up with the Chamber this Term, as the Court rejected a number of the Chamber’s more radical legal arguments. That said, it was hardly a bad Term for the Chamber. Significantly, the Chamber still won a majority of its cases; and, importantly, the Court showed no inclination to pare back radically pro-business precedents set in recent prior Terms.

This was an unusual Term, as Justice Scalia’s death in February created a vacancy on the Court that the Senate’s Republican leadership so far has refused to allow to be filled. Justice Scalia, usually a reliable vote for big business, voted for the Chamber’s position in two of the three Chamber cases affecting consumer interests that were decided this Term prior to his passing. The Chamber’s wins before the Roberts Court, however, have not been dependent solely on Justice Scalia; in fact, the Chamber had several victories after his death.

The Chamber scored several unqualified wins this Term: For example, in DirecTV, Inc. v. Imburgia, the Court held, 6-3, that a California court erroneously refused to enforce a contractual class arbitration waiver, which the contract labeled unenforceable if invalid under state law, when the applicable state law had been preempted by an intervening U.S. Supreme Court decision. In CRST Van Expedited, Inc. v. EEOC, the Court unanimously held that a defendant can be considered a “prevailing party” for purposes of attorney’s fees without obtaining a favorable judgment on the merits, reviving CRST’s attempts to recover more than $4 million in attorney’s fees from the EEOC. And in Puerto Rico v. Franklin California Tax-Free Trust (II), the Court held, 5-2, that Puerto Rico cannot restructure the debt it owes to its creditors because federal bankruptcy law prevents it from doing so, a decision the dissent characterized as removing the power of a government to protect its citizens.

There were several other “wins” for the Chamber, however, that suggest the Chamber has begun to overreach in its cases before the Court. These wins were much narrower decisions than the Chamber would have preferred. We have scored these cases as Chamber wins since the business party it supported achieved part of what it was seeking, although the relief obtained, or the Court’s rationale—or both—were less far-reaching than the Chamber and its allies had sought.  These “qualified wins” are:

  • Encino Motorcars, LLC v. Navarro, in which the Chamber won when the Court overturned the Ninth Circuit’s decision upholding the Department of Labor’s rule, promulgated pursuant to the Fair Labor Standards Act, that car dealership service advisors are entitled to overtime. The Court concluded that the Ninth Circuit should not have deferred to the Department of Labor’s rule, but it sent the case back to the Ninth Circuit to determine whether the statute itself requires that service advisors be paid overtime. The Chamber scored this as a win, and we do as well because the lower court decision was vacated. That said, on remand, the Ninth Circuit remains free to conclude that service advisors should be paid overtime.
  • Spokeo, Inc. v. Robins, in which the Court considered whether Congress had the power under the Constitution to create a right for individuals to sue for damages to vindicate individual rights protected by federal law—in this case, when a credit reporting agency allegedly violated the Fair Credit Reporting Act (FCRA) ban on disseminating false credit information about individuals. For the Chamber and big business, the goal was radical: to invalidate court enforcement of prophylactic protections, like the FCRA false information ban, designed to prevent individuals from being injured. The Court vacated the Ninth Circuit’s judgment on the ground that it failed to consider both the particularization and concreteness aspects of the injury-in-fact requirement, but the Court affirmed that Congress has the power to ensure that consumers can seek redress in court when companies violate their federal legal rights. The Chamber scored this case as a win, and we have as well because the Court vacated the Ninth Circuit’s judgment, but it is clear that this was hardly the big win the Chamber was hoping for, as the Court did not eliminate Congress’s authority to empower individuals to enforce statutory protections like the FCRA ban.
  • Universal Health Services, Inc. v. United States ex rel. Escobar, in which the Chamber sought and secured Supreme Court reversal of a First Circuit decision upholding False Claims Act liability for a federal contractor under a theory of “implied certification” of compliance with applicable government rules when submitting invoices for payment. In remanding the case, the Supreme Court (unanimously) did not invalidate or limit the implied certification theory as the Chamber had urged, but it did impose limits on the theory that were more favorable to contractors than the Justice Department supported. The Chamber scored this mixed result as a defeat, but we score it as a Chamber victory, in that the Chamber won the result (reversal) that it sought, and made the law more business-friendly than it was prior to the Supreme Court’s decision.

The Chamber also lost in several cases, most notably the ones in which it sought to impose drastic, potentially crippling limits on class actions as a viable remedial procedure (an area in which it has previously had marked success before the Roberts Court). In Tyson Foods, Inc. v. Bouaphakeo, the Chamber argued that the Court should reject certification of the class because, in part, the primary method of proving injury relied on representative evidence. The Court rejected the Chamber’s argument 6-2, an argument that would have made class actions infeasible in workplace discrimination cases when the employer had not kept good records. In Campbell-Ewald v. Gomez, the Chamber argued that a company could moot a class action simply by offering complete relief to the named plaintiff, even if the offer was declined. The Court rejected this argument 6-3, although it left open the question whether a defendant could moot a named plaintiff’s claims by depositing adequate funds to pay the plaintiff’s claim in an account payable to the plaintiff.

In sum, despite losing one reliable vote for business interests in Justice Scalia, and despite pressing an exceptionally aggressive agenda before the Court, the Chamber still had a reasonably successful Term. Even if the Chamber did not achieve the radical game-changing successes it has secured in recent Terms, the Chamber and its allies nevertheless won a majority of their cases, and, overall, netted a legal landscape friendlier to business interests.

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