What Supreme Court Justice Breyer's retirement means for business

U.S. Supreme Court Justice Stephen Breyer’s retirement at the end of the court's current term has court watchers wondering if a more liberal successor could make the court more united along ideological lines, a change that could benefit certain business interests.

Constitutional law scholars say the court’s persuasions under a yet-to-be-named and confirmed nominee are difficult to predict. Under one theory, his replacement could deepen the court’s 6-3 conservative-liberal divide, if he's replaced with someone more liberal, leading to a higher percentage of decisions along ideological lines. That, in turn, could lead to more decisions benefiting businesses since collectively conservative justices side with corporations more frequently than liberals do.

Another theory hypothesizes that the new justice's particular legal expertise and analytical approach will have a bigger impact on future court rulings.

University of New Haven constitutional law associate professor, Chris Haynes, cautions that even though Breyer’s vacancy presents President Joe Biden with an opportunity to replace one liberal justice with another, the change isn’t a guaranteed apples-to-apples switch.

“Even if you have another liberal Justice taking Breyer’s place, the one thing about Breyer, and also Ginsburg to a large extent, is a lot of experience, a lot of rapport built up with the current justices to forge coalitions or to persuade other justices,” Haynes said, referring to the late liberal justice, Ruth Bader Ginsburg.

In razor thin cases, Haynes says, it can be useful to have a moderate-to-liberal justice like Breyer who likes to build consensus. “I think on business matters, the court will become more united [along party lines] than it has been,” Haynes said.

Haynes notes that the court’s newer conservative members have joined several business related decisions in which the court’s conservative bloc held 6-3, including on president Biden’s COVID-19 vaccine-or-test order requirement for businesses with more than 100 employees.

In a parallel dissenting opinion, Amy Coney Barrett and Neil Gorsuch argued further that the administration does not have the authority to require that health care workers get vaccinated.

'The whole right, left divide ... is exaggerated'

Steve Johnson, a Florida State University law professor and former senior attorney with the IRS’ Chief Counsel’s Office, acknowledges decisions expose ideological divides on politically charged cases like Burwell v. Hobby Lobby, a dispute over whether religious employers have to pay for employee health insurance that covers contraception. However, he added, the bulk of cases that impact business interests like those impacting antitrust, tax law, and bankruptcy don't involve politics.

“The whole right, left divide, I believe, is exaggerated,” Johnson said. “Is there such an ideological divide on the court? Yes, of course on the hot-button ideological issues. But, the overwhelming majority of Supreme Court decisions are 7-2, or 8-1, or 9-0.”

All nine justices in the 2021 decision City of Chicago, Illinois v. Fulton, for example, held against the City and in favor of bankruptcy debtors, finding debtors could retain property after filing a bankruptcy petition, without violating the Bankruptcy Code. At least five other unanimous cases involving business issues have been handed down since 2012.

The perception that the justices will vote along ideological lines, Johnson says, is not well adapted to the business context. Johnson sees Breyer’s vacancy as most significant for the way he interpreted statutory law. Most business cases, he explains, deal with statutory law as opposed to Constitutional law or case law, and therefore turn on the justices’ interpretation of their text.

“That is a big division on the court,” Johnson said. “Breyer is distinctly a ‘purposivist’ (someone who interprets a statute's gray areas, not only by what the text says, but also by trying to elicit what end Congress intended to achieve by adopting it). He is arguably the strongest purposivist of the court."  

For whoever replaces Breyer, he says, the important question for business litigants is therefore: What is her approach to statutory interpretation?

Other major factors that will inform how business friendly the new court will become, Johnson said, are how the new justice views administrative law and standing, a legal doctrine requiring a party to show they're harmed from behavior they're suing over.

When Congress empowers a government agency to act, for example, some justices give more deference to the government than others. Breyer, he says, was mercurial in that respect, coming down on both sides of such disputes.

“There are big battles in the Supreme Court about deference,” Johnson said. “And a whole lot of agencies are charged with enforcing a whole lot of laws. So it'll be important for businesses to have a sense of what the next justice thinks about the degree of deference to the regulatory agencies.”

As for standing, the new justice’s decisions could impact businesses interests such as environmental disputes. Parties that allege harm based on a corporation’s disregard for the environment, for example, have sometimes struggled to get their cases into court because they're unable to show how they've been harmed by that behavior.

Breyer proved relatively lenient in permitting litigants to bring cases, Johnson said.

In one recent case, TransUnion LLC v. Ramirez, the Court made it more difficult for consumers to sue as a class, holding that a subset class of plaintiffs lacked standing to sue the credit reporting agency because they did not suffer an injury comparable to that of the class representative.

On Thursday, president Biden reaffirmed his pledge to nominate a Black woman to the Supreme Court. Among the suspected candidates are D.C. Circuit Judge Ketanji Brown Jackson, California Supreme Court Justice Leondra Kruger, and South Carolina U.S. District Judge J. Michelle Childs.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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