What Would a Justice Elena Kagan Mean for Business?

Elena KaganAs the replacement for retiring Supreme Court Justice John Paul Stevens, "Blank slate" Elena Kagan would bring brilliance, hard work, good character and gender diversity to the Supreme Court, according to the coverage to date. But what about her substantive positions, especially regarding business issues? No one really knows, because as her critics note, she has taken very few positions on constitutional or legal issues.

It's not that she hasn't had the chance -- academics usually publish far more than she has, staking out their theories of law. And prominent lawyers often give speeches or write for mainstream audiences pronouncing on the issues of the day. See, for example, Ninth Circuit nominee Goodwin Liu, who recently updated his record to Congress by adding 117 papers and speeches that he apparently forgot about. Instead, Kagan has done something extremely unusual throughout her career: kept her mouth shut. If confirmed, Justice Elena Kagan would be as much of a mystery candidate as Justice David Souter was.

It's not enough to suggest that as an Obama (i.e. Democratic) nominee, Kagan will be anti-business. All of the Justices confirmed since 1987 except one received the Chamber of Commerce's endorsement during the nomination process. The one exception? The conservative Justice Anthony Kennedy.

Moreover, the most openly liberal short-list candidate, Justice Diane Wood of the Seventh Circuit, had a lot of business law experience and was seen as a potential positive, or at least "nonideological" by the business community. So, social-policy political positions, to the extent they define any justice as "liberal" or "conservative," simply don't seem to translate to business issues, making Kagan's business impact even more opaque. (She's on record as supporting gay rights, and she served in a domestic policy position in the Clinton administration, both of which suggest that on social issues she's at least somewhat liberal.)

Early Exposure to Big-Business Views

Nonetheless, a few data points provide glimmers of what a Justice Kagan might do. Bloomberg highlighted how as solicitor general, Kagan has joined lawsuits on the side of shareholders against companies and mutual funds. Previous solicitor generals did not take shareholders' side. Similarly, as solicitor general she has opposed the Chamber of Commerce's position in lawsuits nine out of 10 times. Last term, the Chamber had one of its worst years ever before the court, but much of the cause was the two conservative stalwarts, Justices Antonin Scalia and Clarence Thomas.

Twenty years ago, Kagan worked for a corporate law firm for three years, meaning that during her early career she had some socialization and training from the pro-big-business perspective. Finally, a Fortune article, written when Wood and Kagan were being considered for Justice Souter's seat, said the business lawyers interviewed were positive about either woman's appointment to the court, suggesting that at a minimum that the business community hasn't yet decided it has much to fear in a Kagan nomination.

Key business issues to watch over the next few years, to see the impact of not only Kagan but also of new Justice Sonia Sotomayor, are punitive damages and preemption of state law. The business community favors strict, low limits on punitive damages and as much preemption of state law as possible. Both of these issues have been flagged by SCOTUSBlog as up for grabs in the post-Stevens era. Whatever position Kagan might take on these issues is strictly a guess at this point.
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