Sunday, July 13, 2014

Roberts Court Still Friendly to Business

       The Supreme Court ended its term with an important victory for two businesses that claimed a religious-freedom exemption from the Obama administration’s mandate to provide cost-free coverage of contraception for employees in their health insurance plans. But you won’t find Burwell v. Hobby Lobby Stores in the list of business-related cases that the U.S. Chamber Litigation Center released at the end of the Supreme Court term.
       The U.S. Chamber of Commerce sat out the Hobby Lobby case and now is studiously ignoring the case. “We don’t comment on our decision not to get involved in a case,” says Kate Todd, vice president and chief counsel of the center’s Supreme Court program.
      Todd declines to comment on whether to count the bitterly divided ruling as a victory for business. She has no comment either on the majority’s prediction that the religious exemption extended to closely-held, family owned companies will not spread to the big publicly traded companies that the Chamber represents.
       The Chamber is less shy, however, about noting the increasing percentage of business-related cases on the Court’s docket or about touting its own winning record in the past term. Out of 16 decided cases in which the Chamber participated either as party or friend-of-the-court, the end-of-term tally sheet counts 12 wins and only four losses. “We regard [the term] overall as positive,” Todd says.
       “This term, the Court relied on established principles to reject the plaintiffs’ bar’s attempts to expand liability and regulatory agencies’ efforts to stretch executive power,” says Lily Fu Claffee, the center’s general counsel, in a prepared statement. “There were many important wins for the business community.”
       Oddly, the center appears to be exaggerating its success somewhat; it counts as wins at least two important decisions that other groups count as losses for business and victories for the broader public interest. Despite Claffee’s statement, the Chamber failed in separate cases to knock out controversial Environmental Protection Agency (EPA) regulations on air pollution and greenhouse gases. It failed as well to erase a 25-year-old precedent used as the foundation of the modern securities fraud class actions.
       The center’s positive spin on the term represents a change from the efforts a few years back by its former director, Robin Conrad, to minimize somewhat the Roberts Court’s favorable stance toward business interests. Conrad sought to defang the criticism from the political left of the “pro-business” court by depicting the court’s record as mixed even while touting the Chamber’s successes. Critics were never convinced.
       The designated scorekeeper for the critics continues to criticize the Chambe and the court. “The U.S. Chamber Continues Its Winning Ways,” the Constitutional Accountability Center wrote in its wrap-up.
      The center differed slightly with the Chamber’s count for the term: 11 and 5 instead of 12 and 4. But it reiterated its broader criticism of the Roberts Court for favoring the Chamber in 70 percent of the group’s cases over the years; the Chamber’s record had been lower: 56 percent record under the Rehnquist Court and 43 percent record during the Burger Court years.
       Analyzing the term’s rulings, Tom Donnelly, the center’s message director and counsel, conceded that the Chamber’s wins came mostly in low-profile cases. But he also emphasized that the Chamber made gains by taking very aggressive positions in some of the most important cases. The court “gave the Chamber less than it wanted,” Donnelly noted, “while still managing to shift the law in a business-friendly direction.”
       Donnelly’s scorecard differed with the Chamber’s on the securities fraud ruling: Halliburton v. Erica P. John Fund. The Chamber was asking the court to overrule the so-called “fraud on the market theory,” established in the 1988 decision Basic, Inc. v. Levinson. That decision eases requirements for investors defrauded by false or misleading financial statements from publicly traded companies. Donnelly counted the court’s refusal to overturn the precedent as a defeat for the Chamber, but the Chamber itself counted it as a win because the ruling gave defendants a better chance to knock out securities fraud suits at an early stage.
       The Chamber also counts as a win the mixed ruling in on the EPA’s greenhouse gas regulations in Utility Air Regulatory Group v. EPA. The court rejected on a 5-4 vote the EPA’s main attempt to limit greenhouse gas emissions by power plants and industry, but gave the agency a 7-2 win on an alternate approach. Donnelly agrees with the Chamber in calling that a win for business, but many other court watchers are calling it a victory for the government.
      The Chamber scored a more clear-cut win in the ruling that limits the president’s power to make recess appointments, NLRB v. Noel Canning, even though again the court did not go as far as the Chamber urged.
       Whatever the exact count may be, the Roberts Court remains a favorable venue for business interests. The five conservatives remain distrustful of government regulation and overtly unfriendly toward many forms of civil litigation. In addition, the conservative majority’s decision this term to strike down aggregate campaign contribution in McCutcheon v. FEC favors business donors and the business-friendly Republican Party. Even in a low-key term, Donnelly is right to note that the Roberts Court this term “continued to shift the law in a business-friendly direction.”

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