Sotomayor's Previous Decisions on Key Business Issues
Here are some key business cases decided by Sonia Sotomayor, who President Barack Obama chose to succeed Justice David Souter on the Supreme Court:
- Supported the right to sue national investment firms in state court, rather than in federal court. Was overturned unanimously by the Supreme Court.
- Ruled that a federal law allowing lawsuits against individual federal government officers and agents for constitutional rights violations also extends to private corporations working on behalf of the federal government. Was overturned by the Supreme Court.
- Environment (Protection of fish at power plants): Sotomayor, writing for a three-judge panel, ruled that the Environmental Protection Agency may not engage in a cost-benefit analysis in implementing a rule that the "best technology available" must be used to limit the environmental impact of power plants on nearby aquatic life. The case involved power plants that draw water from lakes and rivers for cooling purposes, killing various fish and aquatic organisms in the process. Sotomayor ruled that the "best technology" regulation did not allow the EPA to weigh the cost of implementing the technology against the overall environmental benefit when issuing its rules. The Supreme Court reversed Sotomayor's ruling in a 6-3 decision, saying that Sotomayor's interpretation of the "best technology" rule was too narrow. Justices Stevens, Souter, and Ginsburg dissented, siding with Sotomayor's position. Riverkeeper, Inc. vs. EPA, 475 F.3d 83 (2007)
- Taxes (Deductability of trust fees): In 2006, Sotomayor upheld a lower tax court ruling that certain types of fees paid by a trust are only partly tax deductable. The Supreme Court upheld Sotomayor's decision but unanimously rejected the reasoning she adopted, saying that her approach "flies in the face of the statutory language." Knight vs. Commissioner, 467 F.3d 149 (2006)
- Finance (Rights of investors to sue firms in state court): In a 2005 ruling, Sotomayor overturned a lower court decision and allowed investors to bring certain types of fraud lawsuits against investment firms in state court rather than in federal court. The lower court had agreed with the defendant Merrill Lynch's argument that the suits were invalid because the Securities Litigation Uniform Standards Act of 1998 required that such suits be brought only in federal court. The Supreme Court unanimously overturned Sotomayor's ruling in an 8-0 decision, saying that the federal interest in overseeing securities market cases prevails, and that doing otherwise could give rise to "wasteful, duplicative litigation." Dabit vs. Merrill Lynch, 395 F.3d 25 (2005)
- Health Insurance (Reimbursement of insurance benefits): In 2005, Sotomayor ruled against a health insurance company that sued the estate of a deceased federal employee who received $157,000 in insurance benefits as the result of an injury. The wife of the federal employee had won $3.2 million in a separate lawsuit from those whom she claimed caused her husband's injuries. The health insurance company sued for reimbursement of the benefits paid to the federal employee, saying that a provision in the federal insurance plan requires paid benefits to be reimbursed when the beneficiary is compensated for an injury by a third party. The Supreme Court upheld Sotomayor's ruling in a 5-4 opinion. Justices Breyer, Kennedy, Souter, and Alito dissented. Empire Healthchoice Assurance, Inc. vs. McVeigh, 396 F.3d 136 (2005)