September 28, 2020 BARRON’S 13
businesses, it’s that the court is likely to
be friendlier to free enterprise—chip-
ping away at regulatory powers, re-
straining consumer rights to sue, and
handing victories to companies on a
host of issues.
The court’s next term, starting Oct.
5, includes a high-profile battle be-
tween Alphabet (ticker: GOOGL) and
Oracle (ORCL) over software copy-
right: Oracle claims Alphabet owes it
$9 billion for code that Google used in
its Android operating system; Alpha-
bet says it doesn’t owe Oracle anything,
partly due to “fair use” legal principles.
Also on the docket: Facebook (FB)
is defending itself over potential fines
for robocalls. Ford Motor (F) says it
shouldn’t face liability for a car crash
in Montana. Cargill and Nestlé
(NESN.Switzerland) are co-defending
claims that they abetted child slave
labor in Africa, addressing corporate
liability for human rights abuses out-
side the U.S.
The government’s capacity to levy
fines for corporate wrongdoing is also
being challenged. And the Affordable
Care Act faces another test. The court
is scheduled to hear arguments over
the law’s controversial “individual
mandate” that every American must
have health insurance. Some legal
experts see the ACA’s survival dim-
ming without the mandate. Chief Jus-
tice John Roberts was the swing vote
that kept the mandate alive in 2012,
but he may be on the dissenting side
with one less liberal in the fold.
Beyond this term, the court’s new
makeup could have a major impact on
the tech industry. The Department of
Justice may be close to filing an anti-
trust case against Alphabet. A suit
against Facebook may be coming, and
antitrust probes are underway against
Amazon.com (AMZN). Apple
(AAPL) is also on the defense, after
the court allowed a class-action case to
proceed involving claims of anticom-
petitive pricing at its App Store.
Court rulings are unpredictable, of
course, and the breakdown isn’t al-
ways between conservatives and liber-
als. President Trump’s last two ap-
pointees split in the Apple case, with
Brett Kavanaugh joining the liberal
wing and Neil Gorsuch dissenting.
“A conservative philosophy doesn’t
necessarily mean a pro-business out-
come,” says William Jay, a partner at
law firm Goodwin and a former clerk
for Antonin Scalia. “Business cases
don’t divide the court the way that
high-profile 5-4 decisions on constitu-
tional or social issues do, and there
are cases in which conservative jus-
tices vote against business interests.”
Nicole Saharsky, a veteran Su-
preme Court litigator, doesn’t expect a
sea change in decisions with another
Trump appointee. “Would a conserva-
tive justice rule for business more
than Ginsburg? Yes, but it probably
won’t make a difference in outcomes,”
she says.
But ideological divides are likely to
harden on the court, impacting not
just rulings, but also the critical word-
ing of opinions, and petitions for cases
to be heard. Barrett is known as a
reliably conservative judge; she
clerked for Scalia and advocates a
“textualist” approach to statutes,
avoiding expansive interpretations.
She came out against the ACA in a
2017 law review article, criticizing
Roberts’ vote to save the law’s individ-
ual mandate.
Conservatives such as Barrett tend
to be more skeptical of regulatory
powers and aim to roll back “defer-
ence” to federal agencies—the practice
of granting them latitude to interpret
laws and impose remedies and fines.
That deference, stemming from a
1984 Supreme Court case involving
Chevron (CVX), has been challenged
repeatedly by conservative groups.
Antitrust claims may also face steeper
hurdles since conservatives tend to
set a higher bar for proving economic
harm, according to Joel Mitnick, an
antitrust expert at law firm Cad-
walader.
Adding another conservative to
the bench could solidify those princi-
ples, says Dennis Kelleher, head of
Better Markets, an investor advocacy
group and a former senior staffer to
Senate Democrats. He expects the
justices to hear more cases that could
chip away at the postwar “adminis-
trative state” framework that evolved
out of FDR’s New Deal laws from the
1930s. “This is the big sleeper issue
that is going to prevail in the coming
6-3 court and change the contours of
not just the law, but of American life
itself, in a way not seen since the New
Deal,” he says.
Conservative attorneys say a drift
to the right is what’s needed to rem-
edy decades of regulatory overreach.
“What you’re seeing—and this should
be good news for everyone—is that
justices are trying to be careful not to
write legislation, which isn’t their
job,” says Elizabeth Papez, a partner
at law firm Gibson Dunn and former
clerk for Justice Clarence Thomas.
The Facebook case, she says, is a
prime example of the government
potentially exposing corporations to
billions of dollars in fines and litiga-
tion, based on a few ambiguous
words in a 1991 consumer-protection
law. “Whether or not Ginbsurg was
on the court, you’d have a majority
saying that wasn’t the intent of this
statute,” she says.
Nonetheless, one big winner could
be the Chamber of Commerce. Gins-
burg ruled in favor of the Chamber’s
positions 46% of the time—less than
any other justice—versus 86% for Gor-
such at the other end of the spectrum,
according to the Constitutional Ac-
How a New Court Could
Redefine Free Enterprise
A more conservative Supreme Court will face a raft of thorny business cases. The
outcomes may chip away at regulation, but they aren’t as clear-cut as they seem.
“Would a
conservative
justice rule
for business
more than
Ginsburg?
Yes, but it
probably
won’t make a
difference in
outcomes.”
Nicole Saharsky
P
resident Donald Trump
appears poised to cement a
supermajority of conserva-
tive justices on the nation’s
highest court. The pre-
sumptive nominee to fill
Ruth Bader Ginsburg’s seat
is Amy Coney Barrett, a federal ap-
peals court judge, and Senate Republi-
cans aim to confirm her before or after
the election inNovember.
The battle over Trump’s nominee is
likely to consume Washington over the
next few weeks, stalling other legisla-
tive action, including another coronavi-
rus relief package. The markets have
grown skittish at the prospect of a fight
that could extend past the election.
And President Trump has said he
wants a new justice to weigh in on the
results. Chaos isn’t good for Wall
Street, but if there’s good news for
By DAREN FONDA
With the passing of Justice Ruth Bader
Ginsburg, the Supreme Court may well grow
more conservative, just as a number of
high-profile cases affecting business—and
perhaps the election—will be heard.
Craig Hudson/Bloomberg