201-896-4100

U.S. Supreme Court Vacancy Causing Business Uncertainty


July 11, 2016

How is the U.S. Supreme Court vacancy affecting business?

Supreme Court Vacancy

The U.S. Supreme Court has been shorthanded since the death of Justice Antonin Scalia in February. With just eight justices on the bench dealing with this Supreme Court vacancy, the Court has split 4-4 in several key cases and issued narrow rulings in several others after being unable to achieve a consensus.

Merrick Garland nomination

In response to the vacancy, President Barack Obama has nominated Merrick Garland, the Chief Judge of the United States Court of Appeals for the District of Columbia. However, Republicans have refused to act on the nomination, arguing that the task of nominating a new Supreme Court justice should be left to the next President after the November election. However, even if the new President makes a nomination upon entering office in January, the Senate confirmation process and the Court’s schedule are likely to lead to result in the Supreme Court not deciding cases with nine justices until the fall of 2018.

Letter from general counsels

Recently, the general counsels of 44 major U.S. companies wrote a letter urging the U.S. Senate to consider Merrick Garland’s nomination. Signatories included the GCs of 3M Corp., Nike Inc., Qualcomm Inc., International Paper, Reddit, Sony Music Entertainment, and SanDisk Corporation, among other leading corporations. In their letter to members of the Senate Judiciary Committee, the GCs characterized Garland as a supremely qualified nominee. Garland’s “intellect, legal experience and judicial temperament render him exceptionally well-qualified,” they wrote.

The letter also raised concerns about the impact of a lengthy Supreme Court vacancy on the country’s highest court, stating “the business community has a great interest in avoiding the legal uncertainty that could result if the vacancy remains unfilled for an extended period of time.” The GCs further wrote:

These companies depend on the certainty of timely judicial decisions to help us advise our management teams and employees and to provide clarity to our shareholders and the markets.  The Supreme Court plays a vital role in this regard, frequently granting certiorari in cases involving important business issues such as intellectual property rights, labor and employment law, administrative law, securities law, and many other areas of great importance to those engaged in commercial activity.  While these types of issues can sometimes be decided by a majority from among eight sitting justices, we are concerned about the uncertainties and delays to the impartial administration of justice that could arise if the Court is left without a tie-breaking ninth vote for an extended period of time.

Supreme Court Vacancy

In conclusion

The letter highlights that the business community is being impacted by the Supreme Court vacancy and the resulting potential for a 4-4 tie, such as just occurred regarding immigration law. For companies that operate in multiple states, existing circuit splits on issues like insider trading, create uncertainty and can lead to compliance headaches when determining which rules apply.

We will be closely tracking the Supreme Court nomination and encourage readers to check back for updates. You can also find information about the Supreme Court’s most recent decisions on the Scarinci Hollenbeck Constitutional Law Blog.

Any comments or questions, please feel free to contact us with the form below.