United States: Some Observations On The Impact Of Justice Scalia's Death On Pending Business Cases

Justice Antonin Scalia's recent passing leaves the United States Supreme Court with eight active members. The timetable for the nomination and confirmation of his successor is unknown and currently the subject of a political dispute and intensive media coverage. There has been extensive reporting on the potential impact of Justice Scalia's death on major cases involving social issues, but less discussion of the potential impact of his death on business cases. In at least one recent case, however, a corporate defendant cited the uncertainty following Justice Scalia's death in connection with a decision to settle. Speculation about what the Supreme Court might do in a particular case is inherently unreliable (and perhaps even more so in business cases than in cases involving social issues or criminal law). We thought it would be useful, however, to identify business cases of potential interest to our business clients and offer some analysis of potential impact.

The Relevant Procedure

In any case that has been argued but not decided, Justice Scalia's vote in the Court's pre-opinion conference is void. If Justice Scalia was a member of a five-justice majority, then the Court may either: (a) affirm the lower court ruling by an equally divided Court, without opinion, creating no national precedent; or (b) direct that the case be reargued when a new justice is in place. Any opinions already assigned to Justice Scalia will be reassigned. As for cases scheduled to be argued after Justice Scalia's death, some may be set for reargument in the 2016 or 2017 Terms.

The Potential Impact of Justice Scalia's Absence and the Current Status of the Court

Historic voting patterns, over all types of cases, show that the remaining active justices tend to vote in two groups. Chief Justice John G. Roberts, Jr., and Justices Clarence Thomas and Samuel Alito, Jr. vote together often. Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor, and Elena Kagan also tend to vote together. Justice Kennedy, now Senior Associate Justice, votes with the Chief Justice and Justices Thomas and Alito marginally more often than with Justices Ginsburg, Breyer, Sotomayor and Kagan. But such patterns are not necessarily valid predictors of how the justices may vote in specific business cases concerning diverse legal issues. We provide below thoughts regarding the potential impact of Justice Scalia's death, and the Court's current status, on some major pending business cases of interest, in various key legal areas.

Insider Trading: Salman v. United States

  • In Salman v. United States, the Court will consider "[w]hether the personal benefit to the insider that is necessary to establish insider trading under Dirks v. SEC requires proof of 'an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature' as the Second Circuit held in United States v. Newman—or whether it is enough that the insider and the tippee shared a close family relationship, as the Ninth Circuit held in this case."
  • Justice Scalia could have been a vote in favor of the Newman approach. In a short opinion regarding the Court's denial of certiorari in Whitman v. United States, an insider trading case, Justice Scalia (joined by Justice Thomas) noted that "[a] court owes no deference to the prosecution's interpretation of a criminal law," and that "[t]he rule of lenity requires interpreters to resolve ambiguity in criminal laws in favor of defendants." Furthermore, one study has observed that, in securities cases, Justice Scalia voted for a pro-management outcome more than half the time.1 He backed Justice Thomas's opinion concurring in the judgment in Halliburton Co. v. Erica P. John Fund, Inc., in which Justice Thomas advocated overruling the Court's seminal opinion in Basic v. Levinson.
  • Without Justice Scalia's influence, there may not be a sufficient number of justices that will approach the government's position with skepticism given historical voting patterns. It seems relatively likely that the Supreme Court will affirm the conviction based on tipping between brothers (as close family members), but whether a majority of the Court would go further to address other types of relationships is uncertain.

Class Actions: Tyson Foods, Inc. v. Bouaphakeo; Spokeo, Inc. v. Robin; Microsoft Corp. v. Baker

  • Three cases currently pending before the Court—Tyson Foods, Inc. v. Bouaphakeo; Spokeo, Inc. v. Robin; and Microsoft Corp. v. Baker—have been viewed as raising significant class action procedural issues. Justice Scalia previously wrote for a five-justice majority in Wal-Mart Stores, Inc. v. Dukes; Comcast Corp. v. Behrend; and American Express Co. v. Italian Colors Restaurant, three cases that are regarded as restricting federal court class actions. It is not clear, however, to what extent any of the three currently pending cases will be decided based on class action-specific jurisprudence.
  • Tyson Foods, Inc. v. Bouaphakeo is a case commenced by hourly workers who won class certification in the district court for wage/hour claims arising out of Tyson's alleged underpayment for time spent donning and doffing protective equipment and walking to work sites. Tyson argued that the class had been improperly certified based on the sort of statistical approach disapproved by Wal-Mart and Comcast. During the November 2015 oral argument, however, questioning by Justices Sotamayor, Kagan, Kennedy and Breyer indicated that they did not see the case as controlled by class action rules and procedures. Chief Justice Roberts and Justice Alito appeared to disagree. While drawing conclusions from oral argument is ordinarily unreliable, it appears that there may be a majority for deciding Tyson outside the reach of Wal-Mart and Comcast, so that Justice Scalia's absence from the Court may not impact the outcome of this case.
  • On a related note, on February 26, Dow Chemical announced that it has entered into a settlement agreement to resolve the In re Urethanes Class Action litigation—agreeing to pay the plaintiff class $835 million, conditioned on (in addition to the approval of the class settlement) the Supreme Court agreeing to hold in abeyance Dow's certiorari petition, which currently is being held by the Court, pending a decision in Tyson Foods, which has a common class action issue. Dow stated that it "continues to believe strongly in its legal position as expressed in its petition" but that "[g]rowing political uncertainties due to recent events within the Supreme Court and increased likelihood for unfavorable outcomes for business involved in class action suits have changed Dow's risk assessment of the situation."
  • In Spokeo, Inc. v. Robin, the plaintiff-respondent commenced a class action based on the Fair Credit Reporting Act because Spokeo allegedly published a false credit report about him on the Internet. Spokeo argued that the plaintiff had suffered no injury and consequently lacked standing. Justice Scalia has emphasized the importance of standing—in, for example, Lujan v. Defenders of Wildlife, for which he wrote the majority opinion noting that standing requires a concrete and particularized, actual or imminent invasion of a legally protected interest. At oral argument in Spokeo, Chief Justice Roberts and Justices Scalia and Alito appeared to accept Spokeo's argument that the plaintiff lacked standing, indicating (with Justice Thomas as a likely fourth vote) a consensus, while Justices Ginsburg, Sotamayor, Breyer and Kagan appeared to be more inclined to agree with the plaintiff. Justice Kennedy thus appears pivotal to a majority, but with Justice Scalia's absence, the Court could easily be evenly divided.
  • The Ninth Circuit ruled in Microsoft Corp. v. Baker that it had appellate jurisdiction to review an order striking class action allegations after the named plaintiffs voluntarily dismissed their claims with prejudice. Microsoft has argued that the circuits are divided about whether federal appellate courts have jurisdiction in such cases, which it characterizes as inconsistent with the Court's 1978 ruling in Coopers & Lybrand v. Livesay. In Coopers & Lybrand, the Court ruled that orders denying class certification are not appealable as final orders pursuant to 28 U.S.C. § 1291. It is difficult to predict how the justices will line up in this case once it is briefed and argued. Assuming that the justices typically referred to as "conservative" are more likely to favor strict statutory limits on appellate jurisdiction, and that the justices typically referred to as "liberal" will not, this case could see an equally divided Court in Justice Scalia's absence.

Patents: Cuozzo Speed Technologies, LLC v. Lee and Halo Electronics, Inc. v. Pulse Electronics

  • The Court's docket also includes two potentially important patent cases, Cuozzo Speed Technologies, LLC v. Lee and Halo Electronics, Inc. v. Pulse Electronics. Cuozzo involves the inter partes review process whereby the Patent Trial and Appeal Board of the US Patent and Trademark Office reviews the validity of a previously awarded patent being challenged by a third party. The US Court of Appeals for the Federal Circuit held that it lacked authority to review the Board's decision and that the Board may give claims their "broadest reasonable interpretation" rather than their plain and ordinary meaning. Halo, consolidated with Stryker Corp. v. Zimmer, Inc., involves determining what constitutes willful infringement of a patent for the purposes of enhancing patent infringement damages. We believe that Justice Scalia's absence is unlikely to make a difference in the outcome, given that the majority of recent intellectual property cases heard by the Supreme Court have been decided by a unanimous or near unanimous court.

RICO: RJR Nabisco v. European Community

  • The Court will review the Second Circuit's decision in RJR Nabisco v. European Community to determine whether, or to what extent, the Racketeer Influenced and Corrupt Organizations Act ("RICO") applies extraterritorially. Justice Scalia's absence is unlikely to affect the outcome of the case, given the Supreme Court's unanimous rulings in both Morrison v. National Australian Bank and Kiobel v. Royal Dutch Petroleum Co., which broadened the presumption against extraterritoriality and found, respectively, that Section 10(b) of the Exchange Act and the Alien Tort Statute did not apply extraterritorially.

Jurisdiction as to Securities Exchange Act: Merrill Lynch, Pierce, Fenner & Smith, Inc. et al. v. Manning

  • In December 2015, the Court heard argument in Merrill Lynch, Pierce, Fenner & Smith, Inc. et al. v. Manning and was poised to resolve the circuit split whether § 27 of the Securities Exchange Act of 1934 provides exclusive federal jurisdiction over cases conceptually enforcing duties under the Exchange Act when claims are pleaded in state courts solely based on state laws. At oral argument, the justices seemed skeptical of the position that the Exchange Act precludes litigation of state law claims in state court, even if the allegedly unlawful conduct also would be actionable under the Exchange Act. Justice Scalia expressed concern that the petitioner's approach would impose "quite an onerous task" on federal judges to "sift through the complaint to see if any of the claimed causes of action under State law mirror a cause of action that happens to exist under Federal law, without even the hint that they mention the Federal statute." The questions and comments of Chief Justice Roberts and Justices Sotomayor and Ginsburg indicate that Justice Scalia's death may not affect the outcome and that a majority may be coalescing behind allowing such claims to proceed in state court.

Bankruptcy: Husky International Electronics, Inc. v. Ritz

  • In Husky International Electronics, Inc. v. Ritz, the Court will address whether the "actual fraud" bar to discharge under Bankruptcy Code § 523(a)(2)(A) applies only when the debtor has made a false representation, or whether it also applies when the debtor has deliberately obtained money through a fraudulent-transfer scheme that was actually intended to cheat a creditor.
  • There is no recent Supreme Court jurisprudence on this issue, but older cases suggest that bankruptcy decisions dealing with fraud tend to be close to unanimous and protective of the creditor.
  • In light of relevant precedent, it does not appear that Justice Scalia's absence will affect the result. The cases relied on by the parties in their certiorari briefs were all decided by a unanimous Court or wide majorities:

    • Cohen v. de la Cruz, 523 U.S. 213 (1998) (unanimous holding that "§ 523(a)(2)(A) prevents the discharge of all liability arising from fraud, and that an award of treble damages therefore falls within the scope of the exception").
    • Kawaauhau v. Geiger, 523 U.S. 57 (1998) (unanimous holding that "a medical malpractice judgment attributable to negligent or reckless conduct does not fall within the § 523(a)(6) exception, the debt is dischargeable in bankruptcy").
    • Harris v. Viegelahn, 135 S. Ct. 1829 (2015) (unanimous holding that a "debtor who converts to Chapter 7 is entitled to return of any postpetition wages not yet distributed by the Chapter 13 trustee").
    • Field v. Mans, 516 U.S. 59 (1995). In this case, the debtor had written letters to petitioners on which they relied in continuing to extend credit to a corporation controlled by the debtor. The case turned on whether the creditors needed to show they reasonably relied on the fraudulent letters or if the standard of justifiable reliance applied. Justice Souter, writing for seven members of the Court, determined that the standard is justifiable reliance. Justices Scalia and Breyer dissented.

Employment: Green v. Brennan

  • The issue in Green v. Brennan is whether, under federal employment discrimination law, the filing period for a constructive discharge claim begins to run when an employee resigns, as five circuits have held, or at the time of an employer's last allegedly discriminatory act giving rise to the resignation, as the Tenth Circuit held in this case (and two other circuits have held as well).
  • A review of recent Supreme Court jurisprudence suggests that, in the voting patterns for constructive discharge claims, Justices Scalia, Alito, Thomas, Kennedy and Chief Justice Roberts tend to issue decisions in favor of the employer. For example, in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), those Justices and Chief Justice Roberts held that each paycheck received by Ledbetter did not constitute a discrete discriminatory act for the Title VII time limit, even if affected by prior discrimination.
  • However, Justice Thomas wrote the majority opinion in Nat'l R.R. Passenger Corp. v. Morgan, in which the Court held that a Title VII plaintiff raising claims of discrete discriminatory or retaliatory acts must file his charge within the appropriate 180- or 300-day period, but that a charge alleging a hostile work environment will not be time barred if all acts constituting the claim are part of the same unlawful practice and at least one act falls within the filing period.
  • Comments and questions from the justices at oral argument do not give any clear indication of the potential result, although Chief Justice Roberts and Justices Sotamayor, Ginsburg, Breyer, Kagan and Kennedy seemed to suggest some support for the idea that a claim for constructive discharge cannot run from the last discriminatory act because the claim is not complete until the plaintiff quits. There may be a consensus to reverse the Tenth Circuit, such that Justice Scalia's absence will not affect the outcome.

Diversity Jurisdiction: Americold Realty Trust v. ConAgra Foods

  • In Americold Realty Trust v. ConAgra Foods, the Court will review a Tenth Circuit decision, regarding whether, for diversity jurisdiction purposes, the citizenship of a real estate investment trust is based on the citizenship of the trustees, the trust beneficiaries or some combination of both. The Court's holding could be of particular import to numerous cases in which pension plans are plaintiffs.
  • In Carden v. Arkoma Associates, 494 U.S. 185 (1990) (5-4 with Scalia writing for the majority), the Court ruled that the citizenship of a limited partnership for purposes of diversity jurisdiction is based on the citizenship of the limited partners. The court "reject[ed] the contention that to determine, for diversity purposes, the citizenship of an artificial entity, the court may consult the citizenship of less than all of the entity's members."
  • The justices' questions at oral argument suggest that most of the justices seem disinclined to accept Americold's argument that the citizenship of the trustees controls, and to favor adoption of a Carden-like rule.


1 John C. Coates, Securities Litigation in the Roberts Court: An Early Assessment, 57 Ariz. L. Rev. 1 (2015).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.