U.S. Supreme Court Justice Antonin Scalia. (Diego M. Radzinschi/NLJ.)
Gun control. Abortion. Immigration.
These are the issues that stir most voters when presidential candidates Hillary Clinton and Donald Trump discuss the future of the U.S. Supreme Court.
But business litigators have other matters in mind when they contemplate how the election will affect the Supreme Court and who will choose the replacement for the late Justice Antonin Scalia. In two areas — arbitration and class actions — the post-Scalia eight-member court has given lawyers a sneak preview of how things may trend after November.
With Scalia at the forefront and business groups cheering from the sidelines, the Roberts court embraced the use of arbitration to resolve consumer and employment disputes in the last decade, while discouraging and limiting class actions. Scalia was known inside the court as the justice who would pick petitions on both issues out of the pile and urge his colleagues to grant review.
Almost immediately after Scalia’s death, the court’s pro-business momentum in those areas slowed — and could be reversed if nominees of a Democratic president fill the Scalia vacancy and others in coming years. Republican appointees, on the other hand, could pick up where Scalia left off, if Trump wins the election.
“To the extent there are areas of the law affecting business where the court is closely divided, the choice will be between the status quo and potentially broad changes,” said Allyson Ho, co-chair of the appellate practice at Morgan, Lewis & Bockius.
Certiorari grants in both areas dropped off after Scalia died, and may be sparse in the upcoming term too. Direct Digital v. Mullins, a class action case that might well have been granted if Scalia were voting, was discussed by the court soon after his death and denied review Feb. 29. When the court in April denied review in Dickey’s Barbecue Restaurants v. Chorley Enterprises, a closely watched arbitration case, one commentator asserted that the justices were “not very interested” in arbitration anymore.
Also without Scalia’s vote, the high court’s decisions showed more-than-usual sympathy toward plaintiffs and consumers. After the court sided with employees in the Tyson Foods v. Bouaphakeo class-action decision in March, Columbia University Law School professor John Coffee Jr. declared, “The Scalia Revolution, which arguably sought to do to the class action what the French Revolution did to the French aristocracy, is now over and has fallen well short of its original goals.”
Others on both sides in business cases agree that the outcome of the presidential election could bring significant changes — but those changes might not be as dramatic as Coffee suggests.
“It’s worth remembering that many business-related cases are 9-0 or 8-1 affairs,” said Case Western Reserve University School of Law professor Jonathan Adler, editor of a new book, “Business and the Roberts Court.” “In those sorts of cases, it should be some time before we see too much of a shift.”
Deepak Gupta of Gupta Wessler, a leading plaintiff and consumer advocate before the court, said he does not foresee outright reversals in class action cases. But he doubts the court would push ahead with Scalia’s campaign to weaken class actions if more Democratic appointees join the court. “The change in the court’s composition means that a lot of cutting-edge industry arguments — on ascertainability doctrine, due-process challenges, standing, etc. — are now dead in the water,” Gupta said.
As for arbitration, Gupta also thinks that stare decisis — the high court’s traditional adherence to precedent — will make abrupt change unlikely. But he sees a different story in lower courts, where judges are issuing decisions that are “far more skeptical of arbitration agreements than we would have seen this time last year.”
An early test that involves both arbitration and class actions could come next year if the high court agrees to rule on one or more of three petitions filed with the justices in recent days. In Epic Systems v. Lewis, Ernst & Young v. Morris and National Labor Relations Board v. Murphy Oil USA, the court is being asked to decide whether the National Labor Relations Act bars employers from forcing employees to waive their right to collective action in employment disputes. A split among the circuits makes the cases likely candidates for review.
Meanwhile, another front in the battle over arbitration agreements that ban class actions has opened over the Department of Labor’s fiduciary rule. Among other things, the controversial rule would expose financial advisers to class actions. The financial industry has filed suit in the Northern District of Texas. Titled Chamber of Commerce v. Perez, the case could make its way to the high court.
Among the lead lawyers representing the Chamber of Commerce is Gibson, Dunn & Crutcher partner Eugene Scalia — son of the late justice who led the now-weakened battle against class actions in the Supreme Court.