Corporations and the Supreme Court

Corporate Clout: As The Roberts Court Transforms, The Chamber Has Another Big Term | 2016-2017 Term

Even a shorthanded Roberts Court proved capable of giving big business another enormously successful Term. And now that Neil Gorsuch has taken the Court’s ninth seat, all signs indicate that corporate interests will be able to press full steam ahead with an even more aggressive agenda in the years to come.


The more things change, the more they stay the same.

When the Supreme Court completed the work of its 2016-2017 Term last month, it ended a year of transition unlike any in its modern history. But amid the uncertainty that dogged the Court through most of the Term, one thing remained steady: the success of big business in advancing its interests. While commentators have noted that this Term produced many victories for “the little guy,” those cases involved victories over the government—not conflicts between ordinary people and corporate interests. On that front, by contrast, it was simply another good year for big business at the Roberts Court.

While there were few blockbuster rulings this Term, the U.S. Chamber of Commerce prevailed in 80% of the cases in which it participated—one of its highest success rates ever. Those wins allowed the Chamber to consolidate and expand upon earlier landmark victories, quash attempts to carve out exceptions to recent pro-business rulings, and secure important new precedents making it harder for workers, consumers, and others to hold corporations accountable in the courts. And based on early signs from the newest Justice on the bench, Neil Gorsuch, the Court’s pro-corporate tilt will not lessen anytime soon.

An Impressive Winning Record for the Chamber of Commerce

First, the numbers. The Chamber submitted friend-of-the-court briefs in 15 cases decided by the Court this Term. And in 12 of those cases, or 80%, the position advocated by the Chamber prevailed—the strongest showing for business interests in the past five years.[1]

All told, since Justice Samuel Alito joined Chief Justice John Roberts on the bench in 2006, the Court has ruled for the Chamber in fully 70% of its cases. This record marks a drastic swing in favor of business compared with earlier decades.

Justice Alito continues to lead the Court in pro-business votes, siding with the Chamber a whopping 93% of the time this Term—and 75% overall during his tenure on the Court. But his longstanding conservative colleagues are not far behind. Together, Justices Alito, Kennedy, Roberts, and Thomas have voted with the Chamber in more than 72% of its cases since 2006. By contrast, the moderate-to-liberal bloc of Justices Breyer, Kagan, Ginsburg, and Sotomayor have collectively voted for the Chamber only 50% of the time.

As we have previously reported, this ideological disparity becomes even sharper when one examines closely divided cases, those decided by a five-Justice majority. In those cases, the four conservatives have collectively voted for the Chamber nearly 83% of the time under Chief Justice John Roberts, while the four liberal-to-moderates have averaged 23%. A similar pattern held true this Term: Justices Alito and Thomas cast zero votes against the Chamber in closely divided cases, while Justices Kagan, Ginsburg, and Sotomayor cast zero votes in favor of the Chamber in those cases. In between were Justice Kennedy (voting for the Chamber 75% of the time), Chief Justice Roberts (66%), and Justice Breyer (25%).[2]

Notably, however, this Term included fewer sharply divided decisions than usual. The Court was shorthanded for most of the Term, owing to Senate Republicans’ refusal to consider President Obama’s nominee to fill the vacancy created by the passing of Justice Antonin Scalia in February 2016. That situation appears to have prompted the eight sitting Justices to avoid politically charged disputes that might divide evenly and to gravitate toward narrow outcomes. This trend characterized the Court’s business docket as well, and as a result many of the Term’s pro-business rulings were decided by lopsided majorities or were unanimous. At first blush, this might suggest that judicial ideology played a small role in corporate America’s success this Term. But that interpretation would be wrong for several reasons.

First, as law professor Adam Winkler has observed, today even the Court’s relatively left-leaning members are not “economic populists” in the mode of Hugo Black, William O. Douglas, and other Justices from earlier eras, whose judicial philosophies prized the role of the courts in securing the rights of individuals against encroachment by powerful financial interests. Meanwhile, as Winkler suggests, some of the present Court’s conservative Justices “were probably chosen in part because they are committed to scaling back government regulation, expanding property rights and limiting lawsuits against business.” That certainly appears to have been true of the Court’s newest member, discussed below.

In addition, the majority coalitions in this Term’s lopsided business victories nearly always included all of the Court’s conservative members. What differed from case to case was simply how many of their moderate-to-liberal colleagues joined them. Indeed, in all 12 cases in which the Chamber prevailed this Term, only a single vote was cast in dissent by any of the conservative Justices.[3]

Finally, simple arithmetic explains why the ideological patterns described above result in many lopsided victories for business. As noted, the Roberts Court’s four moderate-to-liberal Justices have consistently voted with the Chamber roughly 50% of the time. That is what one might expect from jurists who are evaluating each case on its individual merits. After all, there is no inherent connection between whether a legal argument is correct and whether it will be good for business. Yet the right-leaning Justices, as noted, have sided with the Chamber nearly three times out of four (72%) in the Roberts Court.

Those figures help explain why this Term’s eight-Justice Court came down so heavily in favor of corporate interests, even without the usually pro-business votes of the late Justice Scalia. With the four conservative Justices reliably placing a thumb on the scale in favor of business, and the four moderate-to-liberal Justices willing to join them half of the time, a significant number of lopsided business victories were inevitable.

Another remarkable figure from this Term’s Chamber cases drives the point home. Tallying all of the votes cast by all of the Court’s conservatives in these cases—a total of 65 votes—only 7 of those 65 votes were cast against the Chamber’s position.[4]

Consolidating Prior Gains and Achieving Significant New Victories

In terms of raw numbers, therefore, the Chamber won big this Term, as it routinely has in the Roberts Court. Beyond the numbers, though, how significant were this Term’s business victories?

To be sure, some of these victories merely fortified or expanded upon earlier landmark decisions favoring business—a pattern consistent with the Court’s generally cautious approach this Term. In earlier cases, for instance, the Roberts Court has raised the standards for employees and others to sue as a class against a common corporate defendant. This Term, in Microsoft Corp. v. Baker, the Court eliminated a tool that allowed plaintiffs to seek immediate review when a trial court concludes that those high standards are not met.

Similarly, in recent years the Justices have limited the places where corporate defendants can be sued under a court’s general personal jurisdiction. In this Term’s BNSF Railway Co. v. Tyrrell, the Justices doubled down on that precedent—giving a “windfall to large multistate or multinational corporations that operate across many jurisdictions,” in the words of Justice Sotomayor’s dissent. Likewise, the Roberts Court has repeatedly made it easier for companies to force aggrieved customers into private arbitration proceedings. This Term, in Kindred Nursing Centers Limited Partnership v. Clark, the Court ruled that arbitration agreements can override a person’s right to a civil jury trial even when he or she (here, a nursing home resident) never agreed to surrender that right—but gave power of attorney to someone who did.

This Term’s most significant decisions, however, did not merely consolidate business’s earlier gains. Instead, they established new roadblocks making it harder for injured workers, consumers, and others to obtain effective relief in the courts.

For instance, the bottom line of California Public Employees’ Retirement System v. ANZ Securities is that many plaintiffs will have to spend more money attempting to recoup their injuries in court—and will likely end up with worse results—while Wall Street defendants stand a better chance of avoiding full liability for the harms they cause. This decision represents exactly the type of complex, procedural ruling that does not grab the headlines as do cases involving hot-button social issues, but which can have immense real-world effects nevertheless.

To explain, in most class actions every plaintiff has the right to opt out of the class litigation to pursue an individual lawsuit. Crucially, therefore, if plaintiffs realize that the class attorneys are negotiating a cushy settlement that is too easy on the defendant, they can go it alone to pursue a better result. But in ANZ Securities, the Court severely restricted this option for investors harmed by securities violations—limiting the time period in which such individual lawsuits can be filed. Now, plaintiffs must essentially bind themselves in advance to whatever payout ultimately results from the class litigation or, in the alternative, preemptively file their own costly lawsuits.

All too fittingly, this ruling departed from the reasoning of a unanimous Burger Court precedent that “has been accepted law for decades.” And it means that a pension fund entrusted with the savings of over a million people cannot seek to recoup the damage caused by Lehman Brothers’ notorious malfeasance during the financial crisis.

Unfortunately, that was not the only ruling this Term that will make it more difficult for injured parties to hold corporate defendants accountable. In Bristol-Myers Squibb Co. v. Superior Court of California, the Justices cut back on state courts’ ability to exercise specific personal jurisdiction over corporations based in other states. The Justices ruled that although California residents could sue Bristol-Myers in California over the harmful drugs it sold them, residents of other states who were injured by the same type of conduct could not join the California plaintiffs in one efficient lawsuit against the company. The upshot, as explained by the dissent, is that “a corporation that engages in a nationwide course of conduct cannot be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State.” And this ruling “will make it difficult to aggregate the claims of plaintiffs across the country whose claims may be worth little alone.”

Other significant rulings this Term set up new barriers to effective government policing of corporate wrongdoing. In National Labor Relations Board v. SW General, the Court made it harder for presidents to fill vacancies in agencies that enforce critical environmental, labor, and other rules. And in Kokesh v. Securities and Exchange Commission, the Court limited the government’s ability to impose civil penalties on financial firms that violate the law.

In other cases, the Court lifted restraints on the conduct of debt collectors. In Henson v. Santander Consumer USA (Justice Gorsuch’s first opinion for the Court), the Justices exempted an entire industry—one that is increasingly responsible for debt-collection abuses—from the Fair Debt Collection Practices Act. Companies that purchase defaulted debt at steep discounts and then attempt to collect on it, the Court ruled, are exempt from the Act’s limits on debt collectors, because they own the debt themselves. And for those entities still bound by the Act, the Court enshrined a loophole for objectionable tactics in Midland Funding, LLC v. Johnson. A majority ruled that debt collectors may attempt to recover debts in a person’s bankruptcy proceedings even though they know the debts are time-barred, and thus legally unenforceable. While the obvious goal of this tactic is for such debts to be paid inadvertently because their untimeliness is overlooked, the Court ruled that such conduct is neither “unfair” nor “unconscionable” within the meaning of the Act.

Of course, it wasn’t all good news for the Chamber this Term. The most important of the Chamber’s few defeats was likely Bank of America & Wells Fargo v. City of Miami, in which the Court ruled that the Fair Housing Act allows cities like Miami to sue banks for discriminatory mortgage lending that increases urban blight and decreases tax revenue. Although this decision was an important reaffirmation that cities can play a key role in enforcing the promise of housing equality, it was simply that: a reaffirmation of previous rulings about the ability of cities to sue under the Act, in the face of an aggressive attempt to cut back on those rulings. And the Justices still vacated the decision below favoring Miami, instructing the lower court to reconsider its analysis of a separate issue.

Justice Gorsuch

Finally, what of the Court’s newest member, Justice Neil Gorsuch? Upon his nomination, the Chamber lauded him as a “fantastic” choice, and corporate attorneys predicted he would advance the Court’s “pro-business conservative trajectory.” Indeed, his record as a lower-court judge had a decidedly pro-business tilt. How has his brief tenure on the Supreme Court stacked up?

Although Justice Gorsuch participated in only thirteen cases argued this Term, that batch included five of the Chamber’s cases. And in all five, Gorsuch sided with the Chamber. This 100% pro-Chamber record is based on a small sample size, so it may be too early to predict the effect that Gorsuch will have on the Court’s business rulings. But one ominous data point deserves mention: in the Chamber cases that were decided by a full complement of nine Justices this Term, all five conservative Justices voted with the Chamber every time.[5]

In sum, even a shorthanded Roberts Court proved capable of giving big business another enormously successful Term. And now that Neil Gorsuch has taken the Court’s ninth seat, all signs indicate that corporate interests will be able to press full steam ahead with an even more aggressive agenda in the years to come.

[1] The Chamber also filed a brief in Visa, Inc. v. Osborn, but the Court later dismissed that case as improvidently granted.

[2] In Murr v. Wisconsin, Justice Kennedy joined the Court’s left-leaning members in ruling against the Chamber’s position. Although Chief Justice Roberts, joined by Justices Alito and Thomas, dissented from that ruling, the dissent did not endorse the argument advanced by the Chamber. We have therefore scored the votes of Roberts, Alito, and Thomas in this case as being neither for nor against the Chamber.

[3] Justice Thomas dissented in Kindred Nursing Centers Limited Partnership v. Clark (the only Justice to do so), in keeping with his view that the Federal Arbitration Act does not apply to state-court proceedings.

[4] In the three cases that the Chamber lost this Term, Chief Justice Roberts provided a single tie-breaking vote in one of them (Bank of America & Wells Fargo v. City of Miami), Justice Kennedy did so in another (Murr v. Wisconsin), and all four conservatives joined a unanimous opinion in the third (State Farm Fire and Casualty Co. v. U.S. ex rel. Rigsby). As noted above, Justice Thomas dissented from the Chamber’s victory in Kindred Nursing Centers Limited Partnership v. Clark, providing the Term’s seventh vote from a conservative Justice against the Chamber.

[5] To be clear, however, only one of those cases involved a 5-4 split along ideological lines. The rest were lopsided or unanimous Chamber victories in which moderate-to-liberal Justices joined the Court’s conservatives in siding with business interests.