Corporations and the Supreme Court

The U.S. Chamber of Commerce Continues Its Winning Ways | 2013-2014 Term

While the Court often shied away from the Chamber’s most sweeping arguments, this much is certain: in case after case, the Roberts Court continued to shift the law in a business-friendly direction.


The Roberts Court’s decision on June 26 in NLRB v. Noel Canning capped off yet another winning Supreme Court Term for the U.S. Chamber of Commerce, giving the Chamber an 11-5 record for the current Term (69%), a 32-8 record over the last three Terms (80%), and a 70% success rate overall since both John Roberts and Samuel Alito joined the Court.  Furthermore, the Canning case itself—in which the Chamber took the unprecedented step of directly representing one of its member companies before the Court—was also emblematic of a larger theme that runs through many of the Chamber’s most important cases this Term, with the Chamber making aggressive arguments intended to shake up the status quo and move the law dramatically in its preferred direction—a theme evident across a range of cases from Canning to Utility Air Regulatory Group v. EPA (UARG) to Halliburton v. Erica P. John Fund.

Let’s begin with the numbers.  This Term, the Chamber was involved in 17 cases overall—directly representing one of its member companies in Canning, litigating as a party in UARG, and filing amicus briefs in 15 other cases.  The Chamber’s 17 cases represent just under a quarter of the total cases set down for argument this Term.

All told, the Chamber racked up a record of 11 wins and 5 losses—or a 69% winning percentage.  (One of its cases—Mt. Holly v. Mt. Holly Gardens Citizens in Action—settled before oral argument.)  That means that, since Samuel Alito succeeded Sandra Day O’Connor on the Court in January 2006, the Chamber has won 70% of its cases (85 wins and 36 losses), compared with only 43% in the late Burger Court (15 of 35 from 1981-1986) and 56% in the stable Rehnquist Court (45 of 80 from 1994-2005).

However, as is often the case, the numbers this Term don’t tell the whole story.

This Term’s Chamber cases lacked some of the drama of last Term, which ended for the Chamber in a series of five ideologically divided rulings on issues ranging from workplace discrimination to drug safety to access to justice, with the Court’s conservatives invariably siding with the Chamber and the Court’s progressives responding with sharply worded dissents.  This Term, prior to Canning, the Chamber had prevailed mostly in lower-profile cases—cases covering issues of longstanding interest to the Chamber, like the jurisdictional reach of the federal courts, but that are of limited interest to a wider audience.

This lack of drama, however, should not obscure one of the defining features of this Term’s Chamber docket—the Chamber’s decision to offer ambitious arguments in some of this Term’s biggest business cases.  For instance, the Chamber argued that the Court should second-guess two centuries of executive practice in Canning, overrule a quarter-century’s worth of precedent in Halliburton, limit the EPA’s authority to regulate greenhouse gases in UARG, and toss out important interstate air pollution rules in EPA v. EME Homer.

In some of these cases (like EME Homer), the Chamber was playing offense and lost, with a cross-ideological coalition of Justices rejecting its aggressive arguments and preserving the status quo.  However, in a series of other important cases, the Court gave the Chamber less than it wanted, while still managing to shift the law in a business-friendly direction—Chamber overreach yielding real gains for the business community.

Candidly, these mixed outcomes made it difficult to score the Term’s final four Chamber cases—Canning, UARG, Fifth Third Bancorp v. Dudenhoeffer, and Halliburton.  In each of these cases, the Court rejected the Chamber’s broadest arguments, but still gave the Chamber (at least) some of what it wanted.  The Chamber scored all four of these cases as victories, and we can see an argument for doing so.  In the end, while we agreed with the Chamber’s scores for Canning, UARG, and Fifth Third, we disagreed with the Chamber’s score for Halliburton and have, therefore, characterized it in our study as a loss for the Chamber.

Below, we offer our justification for each of these scores, in an attempt to both clarify our reasoning and demonstrate the dynamics at play in many of this Term’s biggest Chamber cases.  As is our custom, we tried to categorize each case as either a “Win” or a “Loss” for the Chamber, granting some deference to how the Chamber itself has chosen to score its cases.

Canning:  In this case, the Chamber and its client, Noel Canning, challenged the validity of three of President Obama’s recess appointments to the National Labor Relations Board (NLRB).  The Chamber advanced aggressive arguments designed to sharply limit the President’s recess appointments power and, in turn, unsettle two centuries of executive practice.  While the Court rejected the Chamber’s broadest constitutional arguments in a 5-4 split, a unanimous Court agreed with one of the Chamber’s narrower arguments and concluded that the President’s recess appointments in this case were invalid.  Because the Chamber directly litigated this case, its client won, and the Chamber obtained the substantive relief its client desired (i.e., the recess appointments were declared invalid), we scored this case as a Chamber “Win.”

UARG:  The Chamber was an actual party in UARG, an important case challenging the EPA’s authority to regulate greenhouse gases under a key permitting program.  While the Court rejected the Chamber’s broadest argument—that greenhouse gases should be excluded from this program altogether—the Court’s five conservatives turned aside the EPA’s primary reading of the statutory provisions at issue and, in so doing, agreed with the Chamber that greenhouse gas emissions alone cannot trigger the substantive provisions of the program, an issue heavily briefed by the Chamber.  This part of the Court’s opinion also included language both on the unique nature of greenhouse gases and on the limits of executive discretion (generally) that may prove useful to industry challengers in future cases.  Indeed, the Chamber praised the Court’s UARG decision for rejecting EPA’s “unconstitutional power grab.”  Because the Chamber was a party in the case, had focused much of its brief on the winning issue, and managed to shift the law in its preferred direction (at least a bit), we scored this case as a Chamber “Win.”

Fifth Third:  This case involved the duty of prudence that managers of employee stock ownership plans (ESOPs) owe to their beneficiaries.  The Chamber spent much of its brief arguing in favor of a presumption of prudence for ESOP managers, a standard that would make it extremely difficult for beneficiaries to succeed in these cases.  While the Court unanimously rejected a presumption of prudence in this context, the Court largely granted the Chamber and its allies most of what they wanted by creating stiff pleading requirements for beneficiaries and, therefore, making it difficult for their claims to survive past the earliest stages of litigation.  Given that the Chamber-supported side won the case and the Chamber itself received much of what it wanted substantively, we scored this case as a Chamber “Win.”

Halliburton:  Halliburton was the most difficult case to score this Term.  The Chamber scored it as a “Victory,” but we reluctantly disagree.  Here’s why.  Beginning with its cert.-stage amicus brief and continuing through to the merits stage, the Chamber took dead aim at Basic Inc. v. Levinson, a case that the plaintiffs called “the foundation for modern, private securities litigation.”  Several of the conservative Justices had previously signaled that they’d be willing to consider overturning this important case.  The Chamber urged them to consider that question in Halliburton, and the Justices agreed to do so.  The Chamber then devoted much of its brief to why Basic should be overruled or, at least, why the plaintiff-friendly presumption arising from that case should be “substantially modified.”  The Court, however, in a 6-3 decision, largely rejected the Chamber’s call.  Given the focus of the Chamber’s brief, the Court’s sweeping rejection of the Chamber’s primary argument, and the limited nature of the Chamber-supported party’s victory, we decided to score this case as a Chamber “Loss.”  However, make no mistake, regardless of how one scores this case, and no matter how “disappointed” the Chamber may be that the Court left Basic in place, the Court’s ultimate decision still managed to shift the law in a business-friendly direction, making it easier for business defendants to toss out securities fraud suits at the class certification phase.  Only time will tell whether this represents “a small first step in a long journey toward reducing the costs of securities class actions,” as the Chamber argues, or something more.

In the end, this Term’s business docket was defined by a confident Chamber attempting to push the law aggressively in some of the Term’s biggest cases.  While the Court often shied away from the Chamber’s most sweeping arguments, this much is certain: in case after case, the Roberts Court continued to shift the law in a business-friendly direction.

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