Sotomayor Hews to the Middle on Business Cases

Washington Matters

Sotomayor Hews to the Middle on Business Cases

Federal Appeals Court Judge Sonia Sotomayor, if confirmed to the Supreme Court as we expect, brings a largely moderate and pragmatic record on business case law. It's far from definitive and her decisions in hundreds of cases are sure to get additional scrutiny, but there is little to arouse alarm on the part of the business community.  

As one of nine Supreme Court judges, Sotomayor won't have the opportunity or power to bring a large change in direction for the high court. And given her past record as a moderate on business issues, she's unlikely to try. Her varied life experience that Obama touted in announcing her nomination includes practicing corporate law from 1984 to 1992 in New York, defending the interests of manufacturers, financial investment and insurance firms. Her subsequent court decisions show she understands the dilemmas faced by business as well as by workers and consumers.

Among the decisions:

Employment law. Her most controversial opinion may be in the Ricci v. DeStefano case now pending in the Supreme Court. As part of a three-judge panel, Sotomayor upheld New Haven's rejection of the results of an exam used to determine fire department promotions. No African Americans and only one Hispanic scored well enough on the exam to warrant promotion and the city decided not to use the test. Her ruling was brief and senators are sure to ask her to expand on her reasoning and on her views about affirmative action. A Supreme Court decision on the case could come in July, probably just before Sotomayor's hearings.


Federal regulations. In a 2007 case, Riverkeeper v. EPA, Sotomayor ruled that the EPA could not engage in a cost-benefit analysis in requiring best available technology to be used in power plant cooling structures to reduce environmental damage to fish and other aquatic life. The Supreme Court later reversed her ruling, allowing cost-benefit analysis, which the Bush administration and many in the business community favor as a way to keep the cost of regulations in check.

Labor, Management. In 1995, Sotomayor ruled that Major League baseball owners could not use replacement players or discard the free agency rule. The ruling effectively ended the baseball strike by unionized players and was a defeat for owners who wanted more leverage on player salary.

Intellectual property. In 1997, as a district judge, Sotomayor ruled with publishing companies who were sued by freelance workers objecting to the use of their work in electronic databases without their permission. An appeals court overturned her position, supporting the copyright rights of freelance authors.

Insurance claims. In 2005, she ruled against a health insurance company suing to retrieve benefits after the wife of a deceased insurance beneficiary won millions in a separate lawsuit against third parties that she claimed caused her husband's injuries. The insurers said the settlement should be used to offset the medical treatment they had paid for, but the Supreme Court upheld her ruling.


Investor rights. In 2007, Sotomayor ruled in favor of the New York Stock Exchange in a suit by investors charging there was improper trading by floor traders. Sotomayor said the stock exchange should not be held liable for actions of floor traders. 

Damage claims. In 2000, Sotomayor dissented in a ruling that effectively allowed families of victims in a 1996 TWA disaster to sue the airline and manufacturer. In other damage claim cases, Sotomayor has shown a disinclination to allow punitive damage awards that are far larger than related regular or non-punitive damage awards. She has also tended to side with defendant companies and against plaintiffs in business antitrust complaints.

Wine business. Sotomayor was part of a three judge panel that ruled in favor of a New York law barring direct shipment of out-of-state wine to in-state New York consumers. The Supreme Court later struck down the ban, saying it unfairly limited interstate commerce.