On behalf of Wolf Popper LLP
President Trump recently nominated federal appellate judge Neil Gorsuch to fill the U.S. Supreme Court seat made vacant by the death of Justice Antonin Scalia. Gorsuch's confirmation is bound to be tied up with a certain amount of political opposition, though it remains to be seen how far Democrats will go to oppose the appointment.
Opponents of Judge Gorsuch's appointment argue, among other things, that he is extremely conservative on social issues, citing his opinion regarding religious freedom and access to contraception in the Hobby Lobby case. Opponents also claim that he is pro-business based on the opinions he wrote as a judge in the 10th U.S. Circuit Court of Appeals in Denver in which he comes off as critical of regulators and anxious to limit investor lawsuits.
With regard to regulators, Judge Gorsuch apparently disagrees with the Chevron doctrine, which holds that states must defer to federal agencies' interpretation of ambiguous statutes. If the Chevron doctrine were to be struck down or undermined, businesses would have an easier time challenging federal agency actions. However, businesses that have benefited from regulatory review or pre-marketing approval may face increased collateral attacks in the Court.
When it comes to investor lawsuits, commentators say that Judge Gorsuch's opinions show he believes the current legal framework makes it too easy for investors to bring claims for securities fraud, and that this has caused a flood of securities litigation. For instance, Judge Gorsuch delivered an opinion that tightened up the rules for investors to bring securities cases based on misleading statements from issuers. While in private practice, Gorsuch also filed briefs on behalf of the U.S. Chamber of Commerce advocating changes to make it harder to file securities class actions.
In our next post, we'll continue looking at this topic and what it might mean for businesses, and especially for investors and shareholders, going forward.