Supreme Court Ends Term with Big Business Decisions

By Bob Drummond Bloomberg News | THE JOURNAL RECORD, July 1, 1997 | Go to article overview

Supreme Court Ends Term with Big Business Decisions


Bob Drummond Bloomberg News, THE JOURNAL RECORD


WASHINGTON -- The business world celebrated historic victories and suffered stinging defeats during the Supreme Court term that ended Friday.

In some of the biggest decisions -- announced during the term's final week -- the high court stood up for free speech in cyberspace, raised stiff hurdles to class-action settlements of large personal- injury cases and backed tough law enforcement powers for curbing insider trading.

Still, in business disputes, the nine-month session was vividly characterized by a lack of defining ideology from nine justices who were most comfortable with a deliberate, case-by-case approach that sometimes raised more questions than it answered. "They tended to decide business cases narrowly," Washington appellate lawyer Charles Rothfeld said. "They're not really on an ideological warpath. They don't want to make mistakes." "If one thing's sure," Supreme Court litigator Carter Phillips said, "it's that if it's not clear, it'll come back up." For companies and their lawyers, though, Phillips said, "it's a very frustrating thing." In a prime example of that trend, the Supreme Court seemed to simply surrender after trying to clear up important but complex questions about when to start a four-year statute of limitations for lawsuits under a federal racketeering law, which is increasingly used to seek stiff penalties for business-related fraud. Faced with four conflicting legal theories by different judges, the high court earlier this month rejected one approach that gave people the longest time to file a lawsuit. Because that was enough to settle the specific case at hand, the justices decided not to decide among the other three. That move continues to leave companies and their lawyers in the dark -- prompting Justice Antonin Scalia to accuse his colleagues of "timidity" for failing to "summon the courage to unravel . . . the mess." In another high-stakes business dispute, the justices reviewed an appeal by General Motors Corp.'s Hughes Electronics subsidiary, which asked the high court to settle several common and crucial questions about when companies can be sued by corporate whistleblowers alleging government-contracting fraud. The court unanimously found a relatively limited legal reason to throw out the suit against Hughes, without addressing several far more sweeping questions that continue to confront a wide range of government contractors. "It's a nice win for Hughes, but doesn't do much to tell the rest of us what the law means," Phillips said. The high court ended with a bang, as the justices handed down almost a quarter of their opinions for the year -- including most of the term's marquee cases -- during five frantic days before starting their summer break. On Thursday, Internet-related companies got perhaps the business community's biggest victory in a landmark decision to strike down a law that made it a crime to post indecent material on a computer network where children might see it. That came a day after the asbestos industry was stung by a ruling that threw out a $1.3 billion class-action settlement designed to protect 20 companies from all current and future lawsuits over asbestos-related injuries. The high court imposed stiff rules about when large groups of lawsuits can be resolved in a single settlement, undermining a company's ability to eliminate massive legal problems in a one class- action agreement. In other high profile cases, the court upheld federal rules that require cable television companies to carry the signals of local broadcast stations, ratified rules that make it easier for patent owners to claim infringement damages from competing products that are similar to patented inventions and upheld the U.S. Department of Agriculture's ability to impose mandatory fees on farmers and ranchers to pay for generic industry advertising. During the last week of the term, the high court handed federal prosecutors a major victory when it upheld their ability to press insider-trading charges against investors who aren't true company insiders. …

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