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Insight: Chamber of Commerce turns to small courts for big wins

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Chamber of Commerce has long used a small team of lawyers on the U.S. Supreme Court, seeing the top court as a key battleground for business interests.

Now the Chamber's lawyers are increasingly looking beyond Washington D.C. by taking on more cases that might never reach the Supreme Court, but can affect business over wide swaths of the nation.

So far this year, the trade group's growing litigation arm has taken part in 84 cases, mostly by filing friend-of-the-court briefs, but also by launching direct challenges to government regulations. At the same point last year, the group had been involved in 63 cases and in 2011 it was 58.

The expansion can be traced mainly to actions in state courts and federal appeals courts, an analysis of the Chamber's court filings shows.

"Most cases in this country are not resolved by the U.S. Supreme Court," said Rachel Brand, a senior lawyer with the Chamber's litigation group, the National Chamber Litigation Center. "If you really want to expand your influence you have to be in other courts. A lot of law is made by state courts in particular."

Take a dispute over nasty odors in South Carolina, for example.

The Chamber filed a friend-of-the-court brief in March, arguing that a landfill operator should not have to pay certain damages to nearby residents for the irritating or offensive odors the facility produced.

In August, the court issued a ruling in line with what the Chambers was seeking, which will likely lead to a reduction in the $2.3 million jury verdict against operator Lee County Landfill LLC.

"The view of the Chamber was certainly embodied in the decision," Gary Poliakoff, one of the resident's lawyers, said in an interview.

Moreover, the ruling has implications beyond the landfill case because it "reduces damages available to citizens" in similar disputes, he added.

Poliakoff is not the only Chamber adversary to acknowledge its effectiveness.

Doug Kendall, president of the Constitutional Accountability Center, which opposes the Chamber on issues, including campaign finance, said groups like his would need to respond if the Chamber expands its influence beyond the high court.

"You can't help but notice how successful the National Chamber Litigation Center has been before the Supreme Court," Kendall said. "It certainly requires organizations that support appropriate regulations of businesses and the free market system to take notice and respond appropriately."

NATIONAL SCOPE

State appeals courts play a key role in interpreting state law, and the 13 federal circuit courts of appeal set precedents that lower courts must follow, sometimes for decades, unless the Supreme Court intervenes. The Supreme Court hears less than one percent of the petitions that are filed.

The litigation center has shown a willingness to participate in cases throughout the country. This year, it has filed briefs in cases before the high courts in Texas, Minnesota and Tennessee.

It has filed six friend-of-the-court briefs in the California Supreme Court this year, compared with five such briefs for all of 2012, and three in New York's highest court, the Court of Appeals, compared with none in 2012.

Typically, the Chamber takes on precedent-setting cases to oppose government regulation and class actions suits, which it believes drive up the cost of business

In one high-profile example, the Chamber joined other business groups to challenge New York City's partial ban on large soda drinks and other sugary beverages. In July, the New York Supreme Court, Appellate Division, upheld a lower court ruling that invalidated the ban.

The Chamber also seeks to make it easier for companies to do business. Recently it filed in a Minnesota Supreme Court case between hard-disk drive manufacturers Western Digital Corp and Seagate Technology LLC. Taking no stand on the substance of the litigation, the Chamber, which generally favors arbitration over costly litigation, said that, if the court did not reverse the lower court ruling, it would, "diminish the attractiveness of arbitration as an alternative to litigation."

KEY ROLE

Friend-of-the-court briefs filed by prominent groups such as the Chamber can help influence outcomes by fleshing out broader legal issues and making it clear to judges what the implications of a particular ruling would be in future cases.

Andrew Pincus, a lawyer with the Mayer Brown firm, who has filed briefs on behalf of the Chamber, said that simply showing up helps since, "their presence informs the court that this case has important implications for the business community."

The not-for-profit Chamber's membership includes thousands of businesses ranging from mom and pop shops to Fortune 500 companies. Its 2011 revenue was just over $147 million, according to the most recent available tax filing. The Chamber's litigation center, which is run as an affiliate, had revenue of just over $4 million, according to its 2011 tax filing. The litigation center is funded by the Chamber and by individual donors, a spokeswoman said.

Recently, the Chamber's legal team grew to six lawyers. Brand and Kate Comerford Todd, both veterans of the George W. Bush administration, joined in 2011 and now run the day-to-day operations.

The pace of Supreme Court work has picked up even as the chamber has expanded outside of Washington. This year, it has already filed briefs in 28 cases, one less than in all of 2012. Overall, the Chamber has filed briefs on the winning side in 74 out of 105 cases since 2006, according to an analysis by the left-leaning Constitutional Accountability Center.

One of the new cases marks another development for the Chamber's litigation center. It is the first time it has directly represented a company, rather than filing a friend-of-the-court brief or representing the Chamber, in a Supreme Court case.

The justices will decide whether appointments President Barack Obama made to the National Labor Relations Board were invalid. A ruling in favor of the litigation center's client, Noel Canning Corp, would knock out hundreds of labor relations board decisions and require them to be reconsidered. The Chamber says the labor board's decisions were invalid because some of its members were improperly appointed

For the Constitutional Accountability Center's Kendall, the Chamber's role in the case is a further sign of its aggressive legal strategy. By attacking the Obama appointments, the Chamber is "striking at the heart of the regulatory state," he added.

(Reporting by Lawrence Hurley; Editing by Howard Goller, Amy Stevens, Peter Henderson and Andre Grenon)

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