At high court, big business wins, so does the First Amendment.

By Marcia Coyle

The story of the U.S. Supreme Court’s 2010-11 term can be gleaned from the decisions on its last day: high hurdles for injured persons seeking to hold companies accountable, vigorous protection for speech of most types and the quick emergence of a freshman justice with analytical and writing chops.

Who would have imagined that five years after the Roberts Court’s most divisive term — the 2006 term involving major race, abortion and religion challenges — the headline grabber of this year would be a case involving the federal rules for class action certification?

Wal-Mart v. Dukes, of course, was not just any class action, but the largest discrimination class action in history, and therein lay the seeds of its ultimate 5-4 rejection.

But the Wal-Mart decision also is emblematic of what has become a recurring theme in the Roberts Court, and one that sometimes crosses the now clear ideological divide on the Court.

“The only real theme I picked up this term is the Court’s basic and continuing skepticism about very large litigations,” said veteran high court litigator Carter Phillips of Sidley Austin, who argued five cases this term. “It is obvious in the two biggest business cases — Wal-Mart v. Dukes and AEP v. Connecticut [global-warming nuisance suits] — but was also fairly evident in Janus Capital Group v. First Derivative Traders — perhaps the last indirect liability case under [U.S. Securities and Exchange Commission Rule] 10b-5 the Court will have to decide.”

In fact, no sooner had the term’s final gavel dropped, than certain special interest organizations, such as the Alliance for Justice and the Constitutional Accountability Center, added those rulings and others this term to their list of Roberts Court decisions proving, they claim, a pro-corporate Court.

But a second theme did dominate, one that, like the Court’s “skepticism” or even hostility to big litigation, now seems firmly identified with the Roberts Court. “This is the most consistently and strongly protective free speech Court in history,” said Michael McConnell of Stanford Law School during the recent conference of the U.S. Court of Appeals for the 4th Circuit.

The Court refused to carve out of First Amendment protection violent video games in Brown v. Entertainment Merchants Association, a 7-2 ruling, and hateful speech by protesters at military funerals in Snyder v. Phelps, an 8-1 ruling. The justices, voting 5-4 in Arizona Free Enterprise v. Bennett, held that the state’s matching-funds trigger in its public-financing system for elections violated the speech rights of nonparticipating candidates. And in Sorrell v. IMS Health Inc., a 6-3 majority struck down that state’s law prohibiting pharmacies from selling physicians’ prescribing information to data-mining and drug companies.

Sorrell was a “rather aggressive” First Amendment decision, McConnell said, explaining that the Court found that the conveyance of information, even when the purpose is to make a profit, is protected speech.

The only exception to the First Amendment array, he said, was Nevada Commission on Ethics v. Carrigan, in which the justices unanimously upheld a state ethics law after finding that voting by legislators was not speech, but an exercise of power. Sorrell and Carrigan, he said, “show how important it is to get into that speech box” in order to prevail in this Court.

AN EVOLVING COURT

A clearer picture of a particular Supreme Court generally emerges after nine to 10 years, said A.E. Dick Howard of the University of Virginia School of Law at the same conference. “We are now two-thirds of the way through that period with the Roberts Court,” he noted.

There is more predictability to the justices’ votes, he said. Shifts to the right in certain areas of the law are more episodic than a steady march. And there are still open questions: Is the Court actually a pro-business court? With the retirement of Justice John Paul Stevens, the moral and tactical leader of the left, who will fill that void? And is it really the Roberts Court when Justice Anthony Kennedy so often controls the outcome in the closest cases?

The just-ended term did shed additional light on one question: What kind of role will the two newest justices play on the Court?

Justices Sonia Sotomayor and Elena Kagan agreed with each other and with Justice Ruth Bader Ginsburg more often than with any other justice this term.

Both Sotomayor and Kagan are aggressive questioners during oral arguments but with noticeably different styles. Sotomayor asks questions in a careful, deliberate and straightforward manner and rarely allows a lawyer to dance or weave in reply. Kagan brings to the bench the same sense of humor that marked her confirmation hearings last summer. Before reading a summary of her opinion in Smith v. Bayer, a case involving the relitigation exception to the Anti-Injunction Act, she warned the public audience that the decision would be appreciated by only those who had “a law degree and a strong cup of coffee” that morning. Her style of questioning is more informal, and she uses hypotheticals to a greater degree.

Sotomayor, a former prosecutor and trial judge, increasingly is making her voice heard in criminal cases. She wrote the 5-4 majority opinion this term in J.D.B. v. North Carolina, ruling that a criminal suspect’s age should be a factor in determining whether he or she is in custody for purposes of Miranda rights. What to her was a “commonsense” approach to the Miranda issue was the beginning of the end of the one-size-fits-all, bright- line justification for Miranda, according to Justice Samuel Alito Jr., also a former prosecutor, who led the dissenters.

The J.D.B. decision “continues the constitutional transformation of the justice system for juveniles begun in 2005’s Roper v. Simmons and continued in last term’s Graham v. Florida (holding, respectively, that the Eighth Amendment prohibits capital punishment and life without parole for juvenile offenders),” noted John Elwood, a partner in the Washington office of Vinson & Elkins.

But Sotomayor is not easily pigeon-holed even in this area of the law. Her ruling in Michigan v. Bryant that there was no confrontation clause violation in the admission into evidence of statements by a mortally wounded man to the police about the shooter and the location of the shooting drew a near apoplectic dissent from Justice Antonin Scalia, who has led the revitalization of that clause in recent years. But, concurring in part, she joined him and three other justices in Bullcoming v. New Mexico, finding a confrontation clause violation in the admission of a blood-alcohol report without in-court testimony by the analyst.

Many court watchers expected Kagan’s first term to be a relatively quiet one as she found her sea legs. Not so, said Heather Gerken of Yale Law School. The newest justice has “already made her presence known and shown every sign of becoming one of its intellectual leaders.”

Kagan was assigned two particularly important dissents this term: Arizona Christian School Tuition Organization v. Winn and Arizona Free Enterprise v. Bennett, considered her strongest of the term. In the former, a 5-4 majority led by Kennedy held that taxpayers challenging a state tax credit for contributions to student tuition organizations that primarily fund religious schools had no standing to sue. And in the latter, the same 5-4 majority, led by Chief Justice John Roberts Jr., invalidated the matching-funds trigger in Arizona’s public financing system for state elections.

In the campaign-finance case, Kagan, at the least, made Roberts work for his victory, Gerken said. “Justice Kagan went toe to toe with the chief justice — an experienced judge and one of the Court’s finest lawyers — and didn’t cede him an inch. Her prose was pointed and powerful. No argument made by the majority went unanswered.”

Kagan, she added, “managed to convey complex analytic points in a highly accessible fashion. All of this suggests that Justice Kagan is going to be an important presence on the Court. At the very least, she is on track to becoming as stylish and engaging a dissenter as Justice Scalia.”

FOR AND AGAINST BUSINESS

Despite charges by some that the Roberts Court is pro-business, the term was not a bed of roses in all respects for American companies.

Employees prevailed in a trio of retaliation cases: Staub v. Proctor Hospital, Kasten v. St. Gobain and Thompson v. North American Stainless.

The U.S. Chamber of Commerce, which participated in more cases this term than in any other past term, saw its views prevail in its three top cases: Wal-Mart, AEP and AT&T v. Concepcion, in which the court upheld that company’s ban on class action arbitrations.

Wal-Mart and AT&T were a one-two punch, leaving the class action mechanism badly battered, said Suzette Mal­veaux of Catholic University Columbus School of Law. Wal-Mart raises the bar for plaintiffs in meeting the “commonality” requirement for class certification. And AT&T will encourage companies to insert class action bans in their arbitration clauses.

“This means that more Davids in the world will go up against Goliaths alone,” she said. “To the extent that those with small claims and resources are unlikely to challenge powerful corporations on their own, corporate defendants will be given a pass.”

But the Chamber did lose its own challenge — a federal pre-emption argument — to an Arizona immigration law in Chamber of Commerce v. Whiting.

Pre-emption is an issue dear to the business community, particularly those businesses operating across state lines. And this term saw a “potentially enduring shift” in the Court’s pre-emption analysis — the disappearance of the historic “presumption against pre-emption,” according to Patricia Millett, head of the Supreme Court practice at Akin Gump Strauss Hauer & Feld. “There also appeared to be apparent consolidation of pre-emption jurisprudence with the same five justices in the majority (or coming together to provide five votes) in every single pre-emption decision, whether finding or rejecting it,” she said, noting such cases as Whiting, PLIVA v. Mensing (finding pre-emption of state failure-to-warn suits against generic drug companies), Williamson v. Mazda (rejecting pre-emption of state tort suits against car manufacturers over failure to install lap-shoulder belts).

Why do these cases matter, and not just to business? “We live in a world of broad congressional power, and pre-emption cases are the way federalism is worked out day to day,” said Neil Siegel of Duke Law School.

And this term the justices continued a keen interest in patent law — but with a notable shift, said Deanne Maynard, chairwoman of Morrison & Foerster’s Supreme Court and appellate practice.

In the past decade, a grant of review in a patent case usually signaled a potential reversal of the U.S. Court of Appeals for the Federal Circuit, she said, but not this term. The Court affirmed all three rulings from that lower court: Global-Tech Appliances v. SEB S.A.; Stanford University v. Roche Molecular Systems; and Microsoft v. i4i.

While much media and scholarly attention focuses on the Court’s most closely divided rulings (20% of the decisions this term), there is considerable consensus each term, said Gregory Garre, head of Latham & Watkins’ Supreme Court and appellate practice.

“For the second term in a row, the vast majority of decisions were decided by a 7-2 or greater margin,” Garre said. “Justices Sotomayor and Kagan were materially more likely to join the majority than were their predecessors in their final years on the Court. And many of the biggest cases were decided unanimously or by wide margins.

“No doubt the justices had their share of disagreements, too, and the Court remains divided in important areas like campaign finance, pre-emption and standing,” he said, but at least for now, “the chief justice seems to be getting his wish of a more consensus-oriented Court.”