What Might Judge Alito on the Supreme Court Mean to Pharma?
Pharma’s Cutting Edge
Vol. 3 Number 12 - December 2005
What Might Judge Alito on the Supreme Court Mean to Pharma?
When U.S. Supreme Court Chief Justice John Roberts was nominated to the position he now holds, I wondered the same question I will address here. Unfortunately, Judge Roberts didn’t have enough history of rulings to allow legal experts to agree on his likely positions of relevance to pharma. With Judge Alito, the situation is better. According to the database service, asksam.com, Judge Alito has rendered roughly 350 opinions while serving on the U.S. Court of Appeals Third Circuit (since 1990). That’s enough opinions for many legal scholars to comment on aspects of Judge Alito’s legal reasoning and his likely positions as a Justice. For those of us specifically interested in pharmaceuticals and biotechnology, however, there is less to rely on. I briefly reviewed cases decided by Judge Alito involving pharmaceutical and other health care industry firms. Most of these cases involved a dispute alleging employee discrimination, fraud or contractual breach. There were no Alito opinions available for cases specifically concerning pharmaceutical patent protection, antitrust (e.g. innovator-generic deals) or product liability. These types of cases have the largest potential financial impact on pharmaceutical firms, so it would have been useful to have some specific precedents to consider. Failing that, I have abstracted some public comments on Judge Alito’s opinions in these areas, when available, that involved non-pharma/biotech firms. I’ll leave it to you to draw your own conclusions.
*****************************
This is the last issue of PCE this year. I really enjoyed expanding the newsletter from a quarterly to a monthly and posting it online in blog format. It’s much more accessible to readers and commentators this way. I hope you enjoy reading it. I appreciate all of the positive feedback you’ve given me. As long as I think it’s useful to someone besides me, I’ll keep writing it. If there are topics you’d like to see covered in future issues of PCE, just drop me a note.
Next month, I will kick off 2006 by reviewing my 2005 industry predictions and making some bold new ones for 2006. May you have a peaceful and joyous holiday season and a prosperous new year.
Fred
******************************
Judge Alito on Product Liability
From news.com:
Technology companies are likely to find Alito an appealing nominee because for the most part he’s “business-friendly,” said David Bernstein, a law professor at George Mason University. “He’s generally skeptical of open-ended liability, and seems to be inclined to strictly construe contracts, including contracts that dictate where and under what law a dispute will be resolved.”
Judge Alito on Intellectual Property
From news.com:
Alito’s strict view on the kinds of inventions that merit copyright protection should also be a comfort to high-tech businesses, said William Patry, a partner at Thelen Reid & Priest and author of The Patry Copyright Blog. Alito demonstrated this strict approach in 2004 when he denied Southco, a manufacturer of screws and industrial fasteners, copyright protection for its part numbers. Alito said the part numbers, which Southco alleged that its rival Kanebridge copied, lacked the originality and creativity required for copyright protection.
Judge Alito on Free Speech (relevant to advertising and promotion)
From news.com:
On free speech topics, the First Amendment Center said in a report, Alito is “fairly strong.” Alito wrote the opinion in a 2001 case that said a school’s “anti-harassment” policy amounted to an unconstitutional speech code: “There is also no question that the free speech clause protects a wide variety of speech that listeners may consider deeply offensive.” [wrote Alito]
Judge Alito on Business
From Bloomberg News
“It’s nice to see his sensitivity to the risks of overburdening businesses with regulations,” said Larry E. Ribstein, a professor at the University of Illinois College of Law in Champaign who specializes in corporate and securities law. “He seems to be aware of the kinds of problems these regulations cause out there in the real world.”
With business disputes constituting about a third of the Supreme Court’s caseload, the U.S. Chamber of Commerce and the National Association of Manufacturers are considering endorsing Alito’s nomination. Both trade groups supported Roberts’s nomination earlier this year.
From lawprof
The cases cited do not reveal a pro-business bias or a pro-”little people” bias either. They demonstrate a judge wedded to the notion that courts apply exiting rules and rarely make new ones. In an important sense, this approach is pro-business, not because businesses are more likely to win, but because businesses thrive when legal uncertainty is controlled and minimized. Legal certainty enhances business planning and reduces business risk, encouraging capital investment. It is the predictability he will add to Supreme Court business opinions that is pro-business.
From contractsprof
There’s reason to be dubious [of his knowledge of business generally] — he’s a career government employee, with stints as a deputy solicitor general, deputy attorney general, and U.S. Attorney. That’s all fine, perhaps, if you need to figure out whether, say, lap dancing is “speech” for purposes of the first amendment, but it’s not going to be of much use in interpreting the Carriage of Goods by Sea Act or the CISG.
He also seems to have authored remarkably few contract opinions in his fifteen years on the bench - only half a dozen or so where the predominant issue is contractual.
Judge Alito on Investor Lawsuits
From Bloomberg News
In a 1997 case against Burlington Coat Factory Warehouse Corp. based in Burlington, New Jersey, he wrote a majority opinion that tightened the so-called pleading standards for investor lawsuits. Although that ruling gave investors a chance to file an amended complaint against Burlington, it made it easier for companies to win dismissal of future lawsuits. “Particularly with securities class actions, he will not let class actions go forward lightly,” Conrad said.
Judge Alito on Antitrust Laws
From Bloomberg News
In 2003, Alito sought to limit the federal antitrust laws, voting to strike down a $68 million award against St. Paul, Minnesota-based 3M Co., the maker of Scotch tape, for monopolizing tape sales at the expense of a smaller rival. Alito joined a dissenting opinion that said 3M’s conduct was legal because the company didn’t price its products below cost.
The Alliance for Justice, a Washington advocacy group that opposes Alito’s confirmation, said in a report on his rulings that his position in the 3M case “would have made it easier for large corporations to engage in practices designed to eliminate competition from smaller businesses.”
From The American Antitrust Institute
The American Antitrust Institute requested Michael J. Freed, one of its Advisory Board members, to look into the record of Judge Samuel Alito with respect to antitrust. He found no relevant articles by Judge Alito, but identified a small group of cases in which Alito sat as judge where antitrust issues arose. While one must to some extent read between the lines in order to find the outlines of a position, it appears that Judge Alito is not favorably disposed toward the private enforcement of the antitrust laws.
The one case in which he seemed most friendly to an antitrust claim was decided over fourteen years ago. Mr. Freed concluded from this research that “Judge Alito is not likely to be a supporter of antitrust enforcement.”
Judge Alito on Punitive Damages
From Bloomberg News
Business lawyers are optimistic on the one major issue on which Alito hasn’t ruled — punitive damages. The issue has split the court’s conservatives, with O’Connor, Justice Anthony Kennedy and the late Chief Justice William H. Rehnquist supporting constitutional limits on awards and Justices Antonin Scalia and Clarence Thomas opposing.
“My sense is his approach would put him closer to Justice O’Connor and Chief Justice Rehnquist,” said Theodore Boutrous Jr., a Los Angeles appellate lawyer with Gibson, Dunn & Crutcher. He has represented DaimlerChrysler AG, based in Stuttgart, Germany, and Dearborn, Michigan-based Ford Motor Co. in punitive-damages cases. That “would put him on the side of restricting unpredictable and unfair punitive damages,” Boutrous said.
Judge Alito on Environmental Protections
Judge Alito has made very few rulings on environmental matters directly, so environmental activists are studying his broader judicial philosophy.
From Alternet
“What’s most important is what a justice believes on constitutional grounds,” said Glenn Sugameli, Earthjustice senior legislative counsel. Take, for instance, Chittister v. Department of Community and Economic Development, in which Alito argued that the 11th Amendment prohibits state employees from suing a state government in federal court for damages under the federal Family and Medical Leave Act. (The Supreme Court later ruled that employees could sue under a related provision of the act.) “It’s more evidence that Alito may not believe the Constitution adequately empowers Congress to allow average Americans to go to court, protect their rights, and ensure that environmental and other laws are enforced,” said Sugameli.
The most troubling skeleton in Alito’s judicial closet, according to Sierra Club senior attorney David Bookbinder, is the dissent he wrote in U.S. v. Rybar in 1996. Alito advocated striking down a federal law banning possession of machine guns on the grounds that, in some instances, it exceeds congressional power under the Constitution’s Commerce Clause. He argued that, as in-state machine-gun possession is not interstate economic activity, such authority should be conferred to state governments alone. This kind of reasoning strikes fear in the hearts of enviros, as the Commerce Clause is the basis for nearly every major federal environmental law in the U.S. “If he is willing to find that Congress doesn’t have that sort of authority over possession of machine guns, it makes you very concerned he will apply the same logic to Congress’s authority over interstate pollutants,” said Bookbinder.
