Is the Supreme Court Biased towards Business? Judge Frank H. Easterbrook Answers

By: Max Steiner

JD/MBA’2019, VP Alumni of the JD/MBA Students’ Association and Hennick Fellow, Programs & Special Projects

On October 20th, 2017, the Helliwell Centre at Osgoode Hall Law School was filled with students and faculty eager to hear Judge Easterbrook answering the following. — Are Justices too favourable to Business Interests?

Frank H. Easterbrook is a Judge on the United States Court of Appeals for the Seventh Circuit. He is one of the most cited and prolific judges of our time.  His textbook, The Economic Structure of Corporate Law, is a classic.

In a 2013 Minnesota Law Review piece titled How Business Fares in the Supreme Court (“the Epstein study”), Lee Epstein, William M. Landes & Richard A. Posner took on the question of whether justices are too favourable to business interests. They concluded that the Supreme Court of the United States (SCOTUS), and especially the Roberts court, had become ever more likely to side with business interests.

Judge Easterbrook approached the Epstein study’s results, depicted to the right, with skepticism. He postulated that an ideological shift was unlikely, especially for such a strong-willed group of judges. He found that a whopping 79% of the cases considered needed adjustments in how they were categorized.

One does not simply classify a business case.

Correlation does not imply causation. An increase in what appear to be business law cases may have very little to do with a pro-business attitude. Should the Epstein study have considered cases not beginning with a business name? What about trustees in bankruptcy? How much variance would this have introduced? Then, are all business cases equally important? What about cases that simply maintain the status quo?

Easterbrook is undertaking a long-term study of such questions. He points out that classifying cases can be a subjective business. Still, he wants to know how business cases are performing today. Looking at every case since mid-2012, he is trying to ascertain how often businesses win?  Do larger businesses win more often than smaller ones? Do justices vote along political lines?

According to Easterbrook, the Epstein study actually underrepresented total business wins at 48%, instead citing 59% as a better representation of business wins. While more research (and graduate students) are required, he argues that some things are clear…

1. More than 1/3 of the cases are procedural.
2. More than 1/3 of business cases are not economic cases.
3. 1/3 cannot be classified as liberal or conservative.
4. 58% of business cases reviewed have been unanimous, and 8% have had one dissenting judgment. 13% had three dissenting judgments and only 10% had four dissenting judgements.
5. There was exceedingly little block voting or correlation between political appointment and vote.

While the average number of dissenting votes on business cases appears to be one (1); in constitutional cases that number is three (3). Roughly 70% of all cases selected to be heard by the SCOTUS are overturned.

According to Easterbrook, we need to ask more carefully whether decisions injure business interests. Looking at regulatory body vs. business interests he suggests that if an agency has open-ended, less direct, powers prescribed by Congress, its decisions are more likely to be deferred to by the Court.

Q&A with Frank H. Easterbrook

Osgoode students and faculty had some questions regarding Easterbrook’s analysis. Dean Sossin took the lead in asking what effect do SCOTUS  decisions have on business generally. Easterbrook admitted that there is just too much data on marketplace changes to make this question easy to answer. That said, a team of well-supervised graduate students might track stock market changes in response to major SCOTUS decisions. This may not be the most accurate picture, but it would be unbiased.

Returning to the question of bias, what if the court is not itself biased, but Congress is lobbied by biased special interest groups? This question struck at the Judge’s comments on growing textualism as an anti-bias force. Who is to say that giving unelected and tenured officials more leeway in decisions wouldn’t harm the progressive causes we fight for? Easterbrook replied if our faith in the political process is strained, recall that we separate the judiciary from the legislative and executive bodies to avoid exactly that.

We would like to express our appreciation to Judge Frank H. Easterbrook for making his time and thoughts available. We would especially thank Davies Ward Phillips & Vineberg LLP for their continuing support of this annual lecture series.

The Davies Fund for Business Law at the Jay and Barbara Hennick Centre for Business and Law supports innovative programs and projects related to the practice of business law.  Created in 2006 by the firm of Davies Ward Phillips & Vineberg LLP, the fund seeks to inspire interest in business law among students and build ties with the broader legal and business communities in Toronto.  –> Past Lecturers