Sotomayor On the High Court: What Business Can Expect
Though Sonia Sotomayor is widely expected to win Senate confirmation to the US Supreme Court, the business community is still wondering just what kind of justice she'll be.
Confirmation hearings for the appeals court judge continued Wednesday and confirmation is likely in time for the Supreme Court's Fall term.
Most legal experts point to three important business cases that the court will decide with Sotomayor on the bench:
- Bilski v. Doll—a case about the question of whether business methods can be patented.
- Free Enterprise Fund v. Public Company Accounting Oversight Board—a challenge to the structure of the Public Company Accounting Oversight Board, created by Sarbanes-Oxley.
- Merck v. Richard Reynolds et al—Merck's appeal in a lawsuit filed by shareholders who argue that the company misled them by downplaying data that suggested the anti-inflammatory drug Vioxx raised the risk of heart attacks.
"Bilski is a case that could define the scope of so called 'business-method' patents," says Jonathan Adler, Professor of Law and Director, Center for Business Law & Regulations at Case Western Reserve University Law School. "The court is being asked to reconsider a Federal Circuit ruling limiting the scope of innovations that are eligible for patent protection."
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"It will have a huge impact on patent matters," says Marc Pernick, attorney at Morrison and Foerster. "The patent office and trademark office have rejected so far, many applications under the idea that a patent must be tied to a particular machine or apparatus."
As for Free Enterprise Fund v. PCAOB, opponents of the board say the red tape generated by the PCAOB and has been very costly to investors and the economy.
Adler says the case raises a constitutional issue over Sarbanes-Oxley. "The PCAOB is nominally under the control of the SEC," says Adler. "But there is a dispute over the manner in which its members are appointed and whether this is done in a way that is unconstitutional."
The Merck case has had a long legal path. A federal judge ruled that the statute of limitations had expired before the lawsuit by the investors was filed in November 2003, more than two years after the FDA issued Merck a warning letter, in September 2001, that accused Merckof misrepresenting Vioxx CV data.
An appeals court overturned that decision but Merck appealed that ruling all the way to the Supreme Court. It's a case that causes some concern for Theodore Bolema, Adjunct Professor and principal at Anderson Economic Group at Central Michigan University.
"There's not much in the record to show what she will do," says Bolema. "She's not reliably pro-business like [Justice] Souter who she's replacing, has been. If she rules against Merck, it makes her less predictable when it comes to business."
And these will not be the only business cases the Court and Sotomayor will have to face in the months and years ahead, says Alan Rubin Director of Federal Government Relations at Buchanan, Ingersoll & Rooney law and lobbying firm.
"There's the whole issue of electronic medical records," says Rubin. "From 2011 to 2015 hospitals are to going to have to go on line as mandated by the government. There are massive issues of security, privacy that will come into play for the court."
"The banking industry is struggling with additional consumer protection laws," says Rob Azarow, Head of Financial Institutions practice at Sonnenschein, Nath and Rosenthal, in New York City.
"A recent Supreme Court ruling came out in favor of state attorney generals to enforce state lending laws against national banks," says Azarow. "And with a consumer protection agency proposed by Obama administration I think we'll see more litigation because of that."
Other issues cited by the experts the court will likely face include age and race discrimination laws in the workplace. There's also cases expected on labor issues, such as contract negotiations, union benefits and arbitration.
So is there any way to tell how Sotomayor will rule on any business related cases? Critics have pointed to speeches where she expressed 'empathy' as a judge and to one ruling that they say show she's 'biased against white males', in their words. But experts say that not all her decisions have been anti-business.
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"I think the general analysis of her past opinions is that she's a moderate," says Lauren Stiller Rikleen, a partner at the law firm Bowditch and Dewey and Executive Director of the Bowditch Institute for Women's Success. "Nobody on either side of the aisle is really able to hold up a sign and paint her as anything, regardless of her speeches."
"She's hard to read," says Central Michigan University's Bolema. "She's not reliably pro-business but she seems not to have an agenda."
Even some main stream conservative critics can't find much to complain about her, yet. "I think she's somewhere in the middle," says Larry Klayman, found of the conservative and libertarian group Freedom Watch. "I think the Republicans will keep her from going to far to the left. Besides, business is not always conservative."
In the end, legal experts say Sotomayor is the type of judge businesses would actually want.
"People are going to be surprised," says Stiller Rikleen. "She's a judge who goes out of her way to take every case on its merits."
"I really don't have worries, in terms of business issues," says Mary Massaron Ross, head of appellate practice group at Plunkett and Coony, a Detroit, Michigan law firm.
Ross says her firm represents a great many businesses, as well as individuals in commercial litigation. "I think that she is a balanced jurist," says Ross. "It's important for Supreme Court justices in the business area to approach cases with a minimalist philosophy by making small incremental changes in rulings. I hope she does that. I expect her to."