Judge Sotomayor and Business

by Raymond J. Keating

Within the business community, President Obama’s selection of Court of Appeals Judge Sonia Sotomayor generated the inevitable question: Is she pro-business or anti-business?

The same question was asked of President George W. Bush’s court appointees – Chief Justice John Roberts and Justice Samuel Alito.

The notion behind the pro-business/anti-business question is whether or not businesses will be able to count on her to come down of their side in cases before the court. They want to take some uncertainty out of the business decision-making process when it comes to the courts.

But this is the wrong question and the wrong assumption.

The question that the business community should be asking is: Can Judge Sotomayor be relied on to responsibly apply the law and the Constitution, or will she be an activist legislating from the bench?

It is judicial activism that creates uncertainty. Businesses should be able to expect that the courts will act in a restrained manner, working to properly interpret and apply the law and Constitution as written and, to the extent possible, as intended by the authors of each. When judges stray from the proper role of the judiciary is when uncertainty mounts for the business community, and everyone else.

If the business community does not like certain laws, then the place to change those laws is in the legislature, not the judiciary.

On the matter of judicial restraint and business, Judge Sotomayor does not generate confidence.

Most worrisome, she joined an order in the 2006 property rights case of Didden v. Village of Port Chester that supported a town seizing private property for use by a developer. The decision lined up with the Supreme Court’s 5-to-4 Kelo decision that trampled all over the U.S. Constitution and the private property rights of individuals and small businesses.

This a fundamental issue, and individuals and small business owners should be concerned.

Other decisions should be noted as well.

In the 2007 case of Riverkeeper v. EPA, Sotomayor wrote an opinion barring the EPA from using cost-benefit analysis regarding an issue pertaining to a power plant and the environment. The Supreme Court on a 6-3 vote overturned her. And in the 2008 Ricci v. DeStefano case of white firefighters fighting the city of New Haven’s decision to toss out a promotion test upon which blacks and Hispanics disproportionately scored lower than whites, Sotomayor joined the opinion rejecting the firefighters case. The Supreme Court will decide that case this summer, before she would join the Court, and most analyses point to the justices being skeptical of the city’s case.

The New York Times noted: “In a securities case, Judge Sotomayor interpreted a 1998 federal law intended to limit class action lawsuits in a way that allowed such suits. In 2006, the Supreme Court reversed Judge Sotomayor’s opinion in the case, Merrill Lynch v. Dabit, by a vote of 8 to 0, and archly called the logic allowing the exemption ‘odd, to say the least.'”

The Times analysis of Sotomayor’s business opinions concluded that they are “unpredictable.”

That unpredictability comes from a lack of clarity and consistency regarding the proper roles played by judges versus legislators.

Her views indicate that she believes, as she declared in a 1996 lecture, that the courts and lawyers are “constantly overhauling the law and adapting it to the realities of ever-changing social, industrial and political conditions.”

But adapting and overhauling the law, if needed, is not the job of judges, including Supreme Court justices. Instead, it is the job of the lawmakers elected by the people.

If confirmed, Judge Sotomayor and her activist judicial philosophy will add another notch of uncertainty in an ever-growing list of uncertainties for business when it comes to government.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Source: Small Business Entrepreneurship Council, March 29, 2009.

Leave a Reply

Your email address will not be published.