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New Court, New Direction
The 2006-2007 term of the U.S. Supreme Court was anything but business as usual, and the upcoming one promises more of the same. With the addition of a new chief justice (Roberts) and associate justice (Alito), and the loss of a long-time "swing vote" associate justice (O'Connor), the court has shifted markedly to the right.
This historic shift is nearly as palpable as the liberal shift that occurred in 1961, when the so-called "Warren Court" materialized. Here are examples that illustrate this latest transition: In the antitrust area, the court abandoned a century of precedent by ruling that manufacturers may dictate to their distributors minimum resale prices. The previous automatic illegality of resale price maintenance agreements is now history. Also in the antitrust arena, the rules were substantially stiffened for pleading antitrust conspiracies, making it more difficult for those cases to survive early dismissal. The court is concerned with the cost of complex business litigation and settlements forced by such significant expense.
In the employment area, the majority of the Supreme Court justices overturned a long history by the Equal Employment Opportunity Commission of leniently interpreting the act's statute of limitations, construing that period very narrowly so as to cut down on pay bias claims (a decision that is now being challenged in Congress, with House legislation passing to broaden the time period for filing such claims; the president, however, has promised a veto). These are just a few decisions demonstrating the court's pro-business stance. And business interests will continue to receive more than their fair share of the court's attention as we enter the 2007-2008 term, with a host of critical issues, including ERISA, securities fraud, commercial arbitration and state taxes on out-of-state bonds, part of the docket. In nonbusiness areas, the new court's lean to the right is even more pronounced. The high court wasted no time taking an abortion case and upholding a federal statutory ban on certain partial abortion procedures. In two school race cases, it struck down affirmative-action schemes that only half a decade before had been blessed by the court. And in a school First Amendment case, the court sided with a public school's decision to discipline student speech and nearly decided that there is no protection of student speech at all, regardless of political content. The court's shift to the right will not be a short-term affair. The core conservative justices--Scalia, Thomas, Alito and Roberts--are relatively young as the Supreme Court goes, and they could possibly remain in their current positions for the next 20 years. What's more is that Justice Kennedy, who has now replaced retired Justice O'Connor as the principal swing vote, showed himself last term to be more conservative than previously thought. There were 23 court decisions in 2006-2007 involving a 5-4 vote (and one 5-3 vote), and Kennedy was in the majority of all 24 cases. Kennedy clearly is the key justice for the immediate future. What does this mean for business, insurance and risk? Most business and insurance cases never reach the Supreme Court. But when they do, they will be treated by a pro-business court intent upon cutting down litigation and its expense. PHILIP G. KIRCHER is co-chairman of the commercial litigation department at the law firm of Cozen O'Connor. TOP 5 MOST READ SEPTEMBER STORIES: 1. Innovation: The Tortoise and the Hare 2. Rousmaniere: The 'IT' Thing in Comp 4. A Firestorm of Lawsuits Over Global Warming 5. Innovation: Gaining Acceptance October 1, 2007 Copyright 2007© LRP Publications |
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