Supreme Court to Hear Several Cases Affecting Business Community

The U.S. Supreme Court is about to plunge into an agenda laden with issues affecting the business sector. Tobacco companies, the biotech industry and operators of coal-fired power plants have a stake in cases the court will hear in the next month.

Of the 38 cases the court has agreed to consider so far in the term that begins Monday, 17 are business-related, “an unusually high fraction of the court’s docket,” Washington lawyer Roy Englert said.

Chief Justice John Roberts was managing partner of a major law firm that had a very sizable portfolio of business clients and is “comfortable with the issues presented in business cases in ways that Chief Justice William Rehnquist” was not, Pepperdine University law professor Douglas Kmiec says.

Philip Morris USA is fighting an $80 million (euro63 million) punitive damage award to the widow of a lung cancer victim who smoked two packs of Marlboro cigarettes a day.

Duke Energy Corp. is trying to protect its lower court victory enabling aging, refitted generating units to operate at full throttle without costly pollution-control equipment. In this case, the environmental movement is determined to finish a fight that the Clinton administration started when it sued the company.

On these and other cases, companies looking for help from the conservative wing of the court may have their work cut out.

For example, liberal Justice Ruth Bader Ginsburg and conservative Justice Antonin Scalia are allies when it comes to punitive damages. Scalia says the issue is “the province of state governments,” ominous words for Philip Morris’ position.

If the 2005-06 term is any indication, Roberts may be able to achieve consensus on some business cases. He wrote the 9-0 opinion rebuffing the efforts of a group of taxpayers to challenge nearly $300 million (euro237 million) in tax breaks for DaimlerChrysler AG.

The newest justice, Samuel Alito, comes to the court with a pro-business reputation. But it is uncertain where Alito and Roberts will come down on issues such as punitive damage awards.

As an appeals court judge, Alito sided with companies in employment and discrimination cases.

The court this term will consider the case of Lily Ledbetter, found by a jury to have been paid substantially less than the men in her department at Goodyear Tire & Rubber Co. A favorable ruling for business would sharply restrict the time that employees have to sue for illegal discrimination in pay.

In the area of antitrust law, there is a marked difference in emphasis between the court under Roberts and the late Rehnquist, says Englert, who has argued 15 cases before the Supreme Court.

From 1994 to 2005, the court heard five antitrust cases. There were three in Roberts’ first term and two to date this term.

In one case, the Bush administration wants the justices to reverse a $79 million (euro62.4 million) verdict against lumber industry giant Weyerhaeuser Co. in a lawsuit brought by a smaller company. In a second, the largest phone companies are accused of dividing up the market to protect regional monopolies.

In the realm of consumer rights, two insurance companies are fighting allegations they should have notified people about adverse information in their credit reports. The consumers say Geico and Safeco denied them insurance or increased premiums based on data in the reports.

Two major battles are under way involving patent law.

The court will consider a dispute over a gas-pedal design for trucks; this case asks whether an invention is so obvious it does not deserve a patent.

The issue is far more significant than it might sound, according to legal experts. They say many patents are granted thoughtlessly, with far-reaching consequences.

The perception of patents as necessary to protect innovation has shifted in some quarters, and the notion that patents can hinder innovation is now gaining ground, says Jonathan S. Franklin, a partner in a Washington law firm.

The justices appear to have the feeling that “something is wrong with patent law,” says Franklin. “They don’t know exactly what it is and they don’t know exactly how to fix it, but they’re looking for the right case to do it in.”

Congress should have stepped in and taken care of the problem, but did not, says Harvard University law professor Charles Fried, the solicitor general in the Reagan administration. In patent law disputes, “it’s corporations on both sides. It’s very bad for productivity. It’s just a most unsatisfactory situation,” he says.

Some of the biggest companies are watching a battle between two biotech businesses, Genentech and MedImmune, over a childhood respiratory drug. The outcome will be significant for companies engaged in cutting-edge technology.

Corporations that are major patent holders are backing Genentech Inc. of California against the smaller MedImmune of Frederick, Maryland. Genentech says creating a unilateral right for a licensee like MedImmune to challenge a licensed patent will destabilize thousands of existing patent settlements and license agreements.

Associated Press writer Mark Sherman contributed to this report.