The Impact of SCOTUS Rulings on the Business World
Monday, June 29, 2009PAUL KANGAS: From employment discrimination to regulating bank lending, the nation's highest court wrapped up its latest term with some important rulings for U.S. businesses. One key decision, a ruling the city of New Haven, Connecticut, violated the civil rights of some of its firefighters, discriminating against them on the basis of race. The U.S. Supreme Court also bid farewell to retiring Justice David Souter. Stephanie Dhue looks at what the high court's decisions could mean for corporate America.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The New Haven firefighters' decision could narrow employers' legal protections if a hiring practice has racial implications. But Supreme Court watcher Jonathan Massey says the unusual facts in that case that the employment test at issue was tossed out by the city may make it less significant for business law.
JONATHAN MASSEY, FOUNDING PARTNER, MASSEY & GAIL LLP: The luxury of being able to throw out an entire batch of applicants and not promote anybody is usually a luxury business doesn't have. It's engaged in a hiring or promotion decision precisely because it has a need to find an applicant, so the kind of decision that New Haven made here is probably not one that a lot of businesses will be making in the future.
DHUE: The high court also today ruled states can regulate lending practices of national banks. Those were just two decisions of an entire term that impact business. The court took the states' side in cases involving cigarette labeling and pharmaceutical liability. But Massey says the most important ruling for business had nothing to do with business at all.
MASSEY: It was a case involving someone who had been detained after the September 11 attacks, who claimed that government officials had discriminated against him in detaining him and the court said, in a decision which will be widely cited by business, that a plaintiff can't just proceed in court with sort of bare bones legal allegations.
DHUE: That decision could help companies by reducing time spent fighting frivolous lawsuits. Also surprising to court observers this term, the panel's decisions on environmental cases. Attorney Thomas Goldstein says the high court ruled against the environmentalist position in all five cases it heard.
THOMAS GOLDSTEIN, PARTNER, AKIN GUMP: It was a sweeping term in environmental regulation, where for example, in the Cercla context, which is disposing of hazardous waste that was a major victory for the business community on how much they can be held financially liable, but in case after case after case the deregulatory side won in the Supreme Court on environmental cases this term.
DHUE: Today, Justice David Souter said good bye to his colleagues. Supreme Court watchers say his retirement and his replacement likely won't change much.
GOLDSTEIN: For the business community, I think this term shows us that Judge Sotomayor's appointment to the Supreme Court probably won't make a difference, because Justice Souter in these cases generally tended to be on the left anyway, where we expect she'll end up.
DHUE: While this term wasn't a blockbuster one for business cases, the next term has more potential. The high court will hear a challenge to the Financial Accounting Standards Board. That's the agency that sets the rules for how all American companies keep their books. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
