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The Most Underreported Loser from a Tied SCOTUS: Businesses

In what should have been a much more widely reported news story, considering it was a $835 million settlement, Dow Chemical chose to settle a class-action suit rather than face the prospect of a tied court– or even worse, a potential 5-4 liberal ruling under the next full SCOTUS.

Recent trends in the conservative court have been to limit class-action suits, but this has not been without detractors.

Tyson Foods got a very skeptical reception at its November 2015 SCOTUS oral argument, signaling that their case might have been already lost in the full court, but is almost certainly lost in the now tied court.

Other big companies are taking notice, and weighing their options.

If the court stays potentially tied, lower judgments will stand, creating a political jockeying match where proceeding with cases may be based solely on how appellate courts ruled on the case.

Walmart has a potentially disastrous case pending review on the outcome of the Tyson case, and there could be a serious trickle-down effect in the business sector over the next 10 months in a tied court upholding large appellate court rulings.

Politically, this is a nightmare for the conservative establishment.

Politically, this is a nightmare for the conservative establishment.

If the court stays tied, businesses are going to lose big on class action suits. If the court swings even more liberal under the next president, a fundamental paradigm shift will happen in business law.

The key question for Senate leaders is one of strategy, with three possible outcomes: they could force Obama to nominate a moderate, they could hope for a conservative tap from a winning Republican president, or be crushed by an even more liberal tap from a winning Democrat.

This uncertainty has businesses on edge, and it is likely that the cases under consideration will at least consider settling rather than the prospect of losing big at the high court.

Though the cases being heard this term will be in jeopardy of the 4-4 split, it is unlikely that the business sector will pressure the Senate to act. A moderate doesn’t gain them much more security than a liberal replacement for Scalia. But there is a huge twist to this: what if the Democrats retake the Senate as predicted by many political analysts?

If this happens, a split or moderate court could be an unavoidable inevitability for the 2017 term, regardless of whether a Republican takes the presidency.

In the end, the split court is going to hurt anyone hoping for a conservative reversal to an appellate ruling, but putting all their eggs of hope in the one basket of November’s election might not be the best strategy to employ.

Because with both the presidency and Senate in a state of potential flux, no one can possibly guess at this point what the nature of the next court will be.

Photo Credit: trekandshoot / shutterstock.com