Sotomayor gives business liberal dose of moderation

Employers vs. labor? Airlines vs. passengers? Investors vs. companies?

When it comes to business lawsuits, Supreme Court nominee Sonia Sotomayor can be hard to pigeonhole. Although Sotomayor’s opponents paint her as an activist with a liberal bent, many legal experts say her record is far from that of an ideologue on business issues.

In 1995, as a U.S. district judge, she favored the Major League Baseball players against the owners. Nine years later, then on an appeals court, she supported National Football League management in a dispute with a college football star.

After the 1996 crash of TWA flight 800 off Long Island, N.Y., the appeals court on which she served said the tragedy took place within U.S. territorial waters, enabling victims’ families to sue airline maker Boeing Co. and a parts manufacturer for damages.


But Sotomayor sided with the airline, saying the crash took place in international waters, which would have limited the damages. The decision “is clearly a legislative policy choice, which should not be made by the courts,” she wrote.

Stanford law professor Joseph Grundfest, a former Securities and Exchange Commission member, recalled two securities cases Sotomayor handled in which investors brought suits. She sided with the plaintiff in a class-action suit against Merrill Lynch.

But in the other case, he said, she rejected millions of investors’ claims to recoup money lost during the dot-com bust.

“She cannot be called pro-business or pro-plaintiff,” Grundfest said. “She doesn’t come into the case with any preconceived notions.”


If confirmed, Sotomayor would be a potential swing vote on the Supreme Court in business cases, he said.

Some mainstream business groups are leery.

Michael Greve, a senior fellow at the conservative American Enterprise Institute, said Sotomayor’s approach is not pro-business.

“If I was a business or a corporation, would I want to come up against her? No,” Greve said. “But she is not somebody who has animosity toward business.”

He cited a 2001 decision in which Sotomayor decided to let retailers bring a class action against Visa Inc. and MasterCard Inc. for the fees the card companies charged on their debit and credit cards.

The decision led to a massive class-action suit in which Visa and MasterCard paid out $3 billion, which was a staggering amount of money, Greve said. He said the case “opened the door” for more class-action suits. He doesn’t want to see similar decisions made by the Supreme Court.

The U.S. Chamber of Commerce has yet to take a stance on Sotomayor’s nomination and “is in the middle of its formal process to review Supreme Court nominees,” a group spokesman said.

Sotomayor’s professional life as a lawyer, judge and public servant has been tied inextricably to the business world.


As a lawyer, she specialized in intellectual property law and represented companies such as luxury handbag retailer Fendi and Italian sports car manufacturer Ferrari. She also served on the State of New York Mortgage Agency board.

Sotomayor, 55, addressed the importance of law in business transactions at Wednesday’s nomination hearings.

“In business, the predictability of law may be the most necessary, in the sense that people organize their business relationships by how they understand the courts interpret their contracts,” she said.

She currently sits on the bench on the U.S. 2nd Circuit Court of Appeals in New York, an appellate court that is flush with business cases.

Despite her record handling such a long list of business matters as a federal judge, most legal experts said they were hard-pressed to find ideological patterns in Sotomayor’s decisions. For the most part, they say, she has struck a moderate tone.

“It’s really hard to paint her stance on business with broad stokes,” said Thomas H. Dupree Jr., a Washington-based appellate lawyer with Gibson, Dunn & Crutcher, who has argued five cases in front of Sotomayor in the 2nd Circuit.

Punitive damages can have huge repercussions for businesses and corporations. These are instances in which defendants are tagged with high-dollar awards to not only pay plaintiffs back for their losses, but to deter defendants in the future.

Dupree said Sotomayor has tended to have more moderate rulings in such cases. She has not been as willing to hand out “excessive” awards, Dupree said.


“While she’ll side with the liberal bloc of justices on some social issues, she might not be as inclined on those involving business,” he said.

Sotomayor was nominated to replace retired Justice David H. Souter, who in many cases did not have a friendly ear for business, said Stephen Bainbridge, a UCLA law professor. “Business will find her to be an available vote, where Souter was not so available,” he said.

Sotomayor follows the law where it leads her and “does not let a personal policy agenda affect her decisions,” he said.

Bill Yeomans, legal director of the Alliance for Justice, said he sees “no overriding tendencies” in her judgments. The liberal legal advocacy group issued a report on Sotomayor’s handling of business-related cases as a lawyer and judge.

“Throughout her career,” Yeomans said, “there is a very balanced and fact-intensive approach.”