Business and the Roberts Court Revisited (Again)

Sunday’s NYT featured an extensive article by Adam Liptak arguing that the Roberts Court has been particularly friendly to business interests, particularly in comparison to its predecessors. This is not a new claim. In fact, Liptak has reported on the Roberts’ Court’s alleged pro-business leanings before, drawing on many of the same experts (including yours truly).  We’ve discussed this issue frequently on the VC as well. (Here are posts from 2008, 2009, 2010, and 2011.)

Sunday’s article relies heavily on a new study evaluating the Court’s business-related cases over several decades.

the business docket reflects something truly distinctive about the court led by Chief Justice John G. Roberts Jr. While the current court’s decisions, over all, are only slightly more conservative than those from the courts led by Chief Justices Warren E. Burger and William H. Rehnquist, according to political scientists who study the court, its business rulings are another matter. They have been, a new study finds, far friendlier to business than those of any court since at least World War II.

In the eight years since Chief Justice Roberts joined the court, it has allowed corporations to spend freely in elections in the Citizens United case, has shielded them from class actions and human rights suits, and has made arbitration the favored way to resolve many disputes. Business groups say the Roberts court’s decisions have helped combat frivolous lawsuits, while plaintiffs’ lawyers say the rulings have destroyed legitimate claims for harm from faulty products, discriminatory practices and fraud.

Whether the Roberts court is unusually friendly to business has been the subject of repeated discussion, much of it based on anecdotes and studies based on small slices of empirical evidence. The new study, by contrast, takes a careful and comprehensive look at some 2,000 decisions from 1946 to 2011.

The new study cited by Liptak is “How Business Fares in the Supreme Court” by Lee Epstein, William Landes, and Richard Posner, recently published in the Minnesota Law Review.  In addition to concluding that the Roberts Court is more friendly to business interests than its predecessors, the study also concludes that Chief Justice Roberts and Justice Alito are more likely to vote in favor of business interests than any other justices to have served on the Court during the past 65 years.  The other conservatives on the Court also rank in the top ten most business-friendly justices during this period.

The Epstein-Landes-Posner (ELP) study is certainly the most comprehensive examination of the Supreme Court’s handling of business-related cases in the post-New Deal era.  But I am not sure that this study can really substantiate the claim that the Roberts Court is notably more “pro-business” than its predecessors or that current justices are any more sympathetic to business interests.  The reason for this is that the methodology chosen by the study’s authors — determining whether a business interest won or lost in each case and then tallying up the decisions and individual justices’ votes — doesn’t account for the content of the studies or the doctrinal baseline.  As a consequence, a more “pro-business” court may actually produce decisions that are less business-friendly than one the is deemed “anti-business.”  Further, while the dataset used in this study is more comprehensive than that used in prior reports (including a prior study by these same authors) it still fails to account for classes of cases that could alter the results.

The ELP study bases its characterization of the Roberts Court as more “business friendly” than prior courts because the Roberts Court ruled in favor of business litigants more often than did its predecessors in cases in which business litigants faced off against a “non-business entity expected to have an adverse view of business, such as a union or the government.” (The study also included a smaller set of business-vs-business cases that could be characterized as “pro” or “anti” business.)  Individual votes for or against business litigants are also considered. This methodology treats all votes in favor of the business litigant equally, no matter what was at stake.  The reason this matters is because the legal baselines has shifted dramatically in the period under study.   So, for example, if the Court votes 6-3 in period A to recognize a new implied cause of action, but then votes 6-3 to reject further expansion of the cause of action, this ELP methodology will find that the court has become more “pro-business,” even though the law remains less business friendly than it had been the first decision.  Further, insofar as we can expect more litigation seeking to expand causes of action than to overturn prior precedents authorizing such suits — even if only because the current court is even more reluctant to revisit settled interpretations of extant statutes than it is to green-light new avenues of litigation — we can expect a status-quo oriented court to be “pro-business” under the ELP methodology, even if it continues to shift the law in a less business-friendly direction.

The potential problems with this approach can be readily seen in the environmental context.  In Massachusetts v. EPA the Court held 5-4 that the EPA has authority to regulate greenhouse gases under the Clean Air Act.  Several years later, the Court held, 8-0, that the Clean Air Act displaced suits against corporations alleging that greenhouse gas emissions contributed to a public nuisance under federal common law.  Under the ELP methodology, we have one pro-business and one anti-business decision and 12 pro-business votes and only 5 anti-business votes.  Yet the combination of these two cases is a dramatic expansion of federal regulatory authority over American business.  Massachusetts is without doubt one of the most significant business-related decisions of the Roberts Court, while AEP was a footnote.  Massachusetts altered the law of standing and triggered a new burst of federal regulatory activity, while AEP applied well-settled doctrine in a clear and straight-forward manner. So a combination of decisions that, on the whole, are quite “anti-business” would not be characterized as such in the ELP methodology.

The dataset relied upon in the ELP study is also limited, as the authors readily acknowledge.  Although the authors improved upon the case characterizations routinely used in the relevant political science literature — and chronicle how poorly the many business-related cases have been coded in past studies — the new dataset has potentially significant blind spots as well.  By focusing on cases with business litigants, ELP were able to account for cases that were not classified as concerning economic activity or other business-related questions in the Supreme Court Database.  But the focus on business litigants as named parties in the case caption leads to significant omissions, including cases in which business litigants were parties but not the first named party, were intervenors, or otherwise had substantial interests at stake.  So, for example, the aforementioned Massachusetts v. EPA is not included in the ELP study because neither Massachusetts nor the EPA would be classified as a business litigant.  Yet there are few cases in the past decade that were more important to business.

The number of omitted cases could be quite significant.  As ELP note, their dataset omitted just over 20 percent of the cases in which the Chamber of Commerce filed an amicus curiae brief between 1979 and 2006.  Whether the omissions matter depends on whether the omitted cases are representative of those included in the study. Among the business-related cases omitted are all those styled as between a government agency and a public interest group.  So just as “anti-business” decisions of the Roberts Court like Massachusetts v. EPA were omitted, so were “pro-business” decisions of earlier courts, such as Lujan I, Lujan II, and Sierra Club v. Morton, just to name a few that came immediately to mind.  Other cases in which public interest organizations, unions, or private individuals  were the first named parties suing government agencies would also have been excluded, and there’s reason to suspect there are enough of these cases to affect the study’s results to some degree.

Quantitative studies of the Supreme Court’s behavior can be illuminating, but they only go so far, and they have a difficult time accounting for the actual impact of the Court’s decisions.  Not all cases are created equal.  A single case, such as Massachusetts v. EPA (or Wyeth v. Levine, to note another significant business loss in the Roberts Court), may be more significant than a half-dozen cases in which differently aligned interests prevailed.  Ultimately, if one wants to know whether the Court is more or less friendly to business (or any other interest) one should look at the doctrinal result of the Court’s decisions.  More “pro-business” decisions do not necessarily create a more “business-friendly” legal environment.

Several years ago I offered this preliminary assessment of the Roberts Court and its treatment of business cases:

To the extent the Roberts Court is pro-business, it is so not because it has embraced an aggressive agenda to impose constitutional constraints on the government’s power to regulate economic activity or to rewrite the law to favor business interests. . . . Rather, the Roberts Court can be called pro-business insofar as it is sympathetic to some basic business oriented legal claims, reads statutes narrowly, resists finding implied causes of action, has adopted a skeptical view of antitrust complaints, and does not place its finger on the scales to assist non-business litigants

I think this assessment still holds, though I would add that the Roberts Court does appear particularly hostile to what some might call “regulation-by-litigation,” particularly as practiced by plaintiffs lawyers, though not to regulation, as such.  The Roberts Court has largely (though not completely) turned away efforts by plaintiffs lawyers and others to open new avenues of litigation against corporations, but it has also largely (though not completely) preserved the inroads made by plaintiffs’ lawyers and progressive interest groups in the 1970s.  That’s not the record one would expect from the most “pro-business” court of the past 65 years.

UPDATE: William Landes responds with two points:

(1) I would have added the finding that the main reason the Roberts Court is more pro-business is that it takes about 2/3rd of the cases from business petitioners compared to 1/3rd during the Warren Court. Since petitioners win about 65 % of the cases, this is pretty good evidence that the Roberts Court is more pro-business. (2) It is much easier to point out shortcomings of our study then to come up with a better way to study the Court”s attitude towards business–that you haven’t done.

Prof. Landes is right to note that the increase in the percentage of business cases with business litigant petitioners is notable.  But there are multiple plausible explanations for this, including the existence of a “status quo” court that is uninterested in expanding new avenues of litigation, but also reluctant to disturb settled expectations or overturn prior decisions recognizing implied causes of action and the like.  If, as I suggested, we may expect to see more litigation seeking to expand causes of action against businesses than litigation designed to eliminate such causes of action, the majority of relevant cases to reach the court will be filed by business petitioners seeking to overturn lower court decisions that departed from the status quo by expanding on the pre-existing range of recognized avenues of litigation.  Such a pattern — which I think can be observed in the Court’s securities cases — would yield both an increase in the portion of business litigant cases in which businesses are petitioners and an increase in business win rates, without making the law any more business friendly than it had been before.

The significance of the increase in business litigant petitioners may also be the result of more active litigation by business interests.  As the Liptak article notes, research by Adam Chandler shows that the U.S. Chamber of Commerce and other business-oriented groups have dramatically increased their efforts by, among other things, filing more cert-state amicus briefs.  Further, as Richard Lazarus has documented, the business community has relied more heavily on an increasingly specialized Supreme Court bar, suggesting another reason we may see more successful business petitions.

As for my alternative, I think that broad gauge quantitative studies of this sort are inherently limited.  More useful, in my view, are analyses that focus on more clearly defined sets of cases (e.g. employment discrimination, securities, class-actions, etc.) in which it is easier to generalize about the interests involved and that pay some attention to the underlying doctrine (a point Michael Greve also makes here).  If a given Court is more “liberal,” “conservative,” “pro-business,” “anti-business,” or whatever, we should expect to see some difference in the underlying doctrine and substantive case results.  Thus (and I repeat myself), one case that shifts doctrine in a given area is far more significant then a half-dozen that maintain the status  quo.  Accounting for this sort of thing is more difficult — and cannot always be reduced to quantitative terms — but it can also yield a better understanding of the Court.

Finally, let me reiterate that, with this study ELP have made an important contribution in identifying some of the significant limitations of the case characterizations in the Supreme Court Database relied upon in much of the political science literature.  This, in itself, is no small thing.