Justice Anthony Kennedy’s retirement from the U.S. Supreme Court isn’t just an opportunity for President Donald Trump to cement a conservative majority on the court, potentially for decades. It also signals the transition from the Kennedy Court to the Roberts Court, as Chief Justice John Roberts will finally have a reliable majority of justices who share his views on environmental regulation, employment law and other issues of vital interest to business.
Justice Kennedy wasn’t such a reliable ally. While a staunch defender of the First Amendment and individual liberty, he was less supportive of business in its many fights with regulators, tax authorities and plaintiff lawyers. He deprived the conservatives of a clear victory in the 2006 decision Rapanos v. U.S., for example, by penning a muddled concurrence that allowed federal regulators to claim authority over any waters with a “substantial nexis” to the “navigable waterways” of the U.S. President Obama used that narrow sliver of language to ram through his expansive “Waters of the U.S.” regulation covering huge swaths of land miles from any navigable waterway. Farmers and businesses are still slugging it out in court to blunt the impact of WOTUS on their operations.
Kennedy’s designated replacement, Brett Kavanaugh, will display no such uncertainty if named to the court. Kavanaugh is in the middle of a contested confirmation hearing with the Senate this week.
As a judge on the U.S. Court of Appeals for the D.C. Circuit, Kavanaugh has consistently ruled in favor of narrow interpretations of the powers Congress has delegated to regulatory agencies. It’s not a popular philosophy with many members of Congress, since it forces political accountability back on them. But for business litigants it means more consistency and predictability in the courts when they challenge regulations based on ambiguous statutory language.
“Justice Kennedy’s departure gives corporations and employers an opportunity to advance their ball a bit further,” says Neal Katyal, a partner with Hogan Lovells in Washington who served as Acting Solicitor General in the Obama administration and has argued more than 30 cases before the Supreme Court.
With Kavanaugh on board, Roberts can count on a reliable majority in favor of tighter controls on class-action lawyers, who use mass litigation to extract large settlements and fees from companies regardless of the merits of the underlying case. Roberts also has demonstrated strong support for the Federal Arbitration Act, which gives companies the option of using arbitration instead of litigation to settle most disputes over employment and consumer transactions.
Plaintiff lawyers and more than a few judges hate arbitration, because it deprives them of fees and authority, but the future Roberts Court can be counted upon to defend arbitration, as it did this term in a trio of cases upholding arbitration clauses in employment contracts.
Democrats will call this a “pro-business” court but that’s not entirely accurate. The Chief Justice joined Justice Neil Gorsuch to dissent this term against the majority’s decision upholding inter partes review, a system Congress created to save businesses the expense of fighting patent trolls. And just as Roberts surprised many by siding with the liberals to uphold the constitutionality of Obamacare, Kavanaugh’s strict attention to the words of a statute might not always please corporate litigants.
“He’s very principled,” says Katyal. “If he thinks Congress has written a law that’s anti-business he’s going to enforce that law anyway.”