In their stead, important questions about bankruptcy, corporate compensation, patents, antitrust and government oversight of the financial system will confront the justices.
Free Enterprise Fund v. Public Company Accounting Oversight Board, No. 08-861, for instance, concerns an issue that has engaged the court since the New Deal: at what point does the lack of presidential control over independent agencies violate separation-of-powers principles?
The case arose from the last big financial crisis, the accounting scandals at Enron, Worldcom and other companies. In response, in the Sarbanes-Oxley Act of 2002, Congress created an independent board to oversee accounting firms. The board’s members are appointed and may be removed for cause by the Securities and Exchange Commission, itself an independent agency, meaning the accounting board is doubly insulated from both political pressure and presidential oversight.
The Supreme Court’s ruling in the case, said Professor Pildes, who submitted a brief supporting the board to the appeals court, could affect “how much flexibility Congress will have to design new administrative structures to avoid future financial crises.”
In Jones v. Harris Associates, No. 08-586, the Supreme Court will decide what role the courts should play in regulating the compensation paid to investment advisers for mutual funds. In affirming dismissal of the case, a unanimous three-judge panel of the United States Court of Appeals for the Seventh Circuit, in Chicago, said the issue was a variation on the much-discussed question of whether the markets could be trusted to set executive compensation.
“Publicly traded corporations use the same basic procedures as mutual funds,” Chief Judge Frank H. Easterbrook wrote for the panel. Though he dissented from the full court’s decision not to rehear the case, Judge Richard A. Posner agreed that “executive compensation in large, publicly traded firms often is excessive because of the feeble incentives of boards of directors to police compensation.”
A case re-argued in September and technically part of last year’s docket, Citizens United v. Federal Election Commission, No. 08-205, is another example of the court’s more intensive focus on the limits of government regulation of businesses. The question in the case, which centers on the documentary “Hillary: The Movie,” is whether the government may ban political speech by corporations that concerns candidates during campaign season.
Another case about free speech rights, Milavetz, Gallop & Milavetz v. United States, No. 08-1119, arises from a 2005 federal law that appears to bar lawyers from advising their clients to take on more debt if they are considering bankruptcy, a practice that can be abusive. But there are perfectly lawful reasons to take on such debt, like refinancing a mortgage to pay down credit card debt. The Justice Department is urging the court to narrow the law.
The case that has most transfixed the business community is Bilski v. Doll, No. 08-964, a patent dispute that addresses the consequential question of whether intangible business methods may be patented. A federal appeals court last year rejected Bernard L. Bilski’s attempt to patent a method of hedging risks in commodities trading, ruling that only processes tied to a particular machine or capable of transforming an object into something different can be patented.
A broad ruling could affect many aspects of the economy, notably computer software.
“Bilski seems to have the makings of a landmark decision in patent law,” said Pamela Harris, executive director of the Supreme Court Institute at Georgetown University.