WASHINGTON (Reuters) - Lawyers for companies trying to fend off costly class action lawsuits are rethinking longstanding legal strategies after businesses lost two key U.S. Supreme Court cases as well as their staunchest supporter on the bench.
At the start of the court’s term in October, the business community had reason to believe the justices would further pare back class action litigation after rulings spearheaded by conservative Justice Antonin Scalia favoring corporate defendants in prior years. But the term has defied expectations.
The justices ruled against businesses in two of the three class action cases they considered, with the sole case won by a corporate defendant coming in a narrow decision favoring online people-search company Spokeo Inc on Monday.
And Scalia died in February, depriving companies of their most vigorous ally on the court in such cases.
Lawyers representing employees and consumers now see the chance of a legal counterattack aimed at expanding the type of class action cases that courts will allow, with the possibility that the conservative Scalia will be replaced by a more liberal appointee.
Without Scalia, “it’s statistically harder to get the votes you need” on the Supreme Court, said Warren Postman, a lawyer with the U.S. Chamber of Commerce’s litigation arm. Lawyers for corporations will be “waiting to see how the court shapes up based on the next appointee,” Postman added.
Scalia’s seat may remain vacant well into 2017.
The Republican-led Senate has refused to act on Democratic President Barack Obama’s nomination of centrist appellate judge Merrick Garland to replace Scalia. If Democratic front-runner Hillary Clinton wins the Nov. 8 presidential election and gets to replace Scalia, she may choose a more liberal nominee.
There are signs that the uncertainty about Scalia’s replacement and how long the court will be shorthanded is affecting companies’ decisions on whether they will seek Supreme Court review of cases they lose in lower courts.
DRI, a group that files friend-of-the-court briefs supporting companies in such cases, has received fewer requests for help since Scalia’s death, indicating businesses are thinking twice before asking the high court to get involved, said William Jay, a lawyer in private practice who works with the group.
Since Scalia’s death, the court has declined to hear a series of class action appeals brought by companies.
Plaintiffs’ lawyers hope there will be a liberal majority on the court, currently split with four liberals and four conservatives, that would roll back recent pro-business rulings.
“If Scalia is replaced by a justice who is far more progressive, there are some reasons to hope the court will revisit some of the extremely anti-consumer cases it has decided in recent years,” said Paul Bland, executive director of consumer advocacy group Public Justice.
Scalia’s death did not affect the outcome of the three recent cases, which all had six justices in the majority. Scalia’s vote may have affected the court’s decisions on whether to hear such cases, with only four votes needed for the justices to consider an appeal.
In the three class action cases decided this term, the court ruled against food producer Tyson Food Inc (TSN.N) in March and advertising firm Campbell Ewald in January before the Spokeo decision.
All three cases were “designed to further an anti-class-action agenda” but largely failed to achieve that goal, said Deepak Gupta, a lawyer who represents plaintiffs.
Reporting by Lawrence Hurley; Editing by Will Dunham