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Elena Kagan, the Absent Supreme Court Justice


She has disqualified herself from more than half the court's docket, which may mean many 4-4 decisions in business cases

Elena Kagan may make her mark in her first U.S. Supreme Court term less by her presence than by her absence.

Kagan has disqualified herself in 20 of the 38 cases on the court's calendar this term because she took part in the litigation as U.S. Solicitor General. The 20 include some of the most important business cases: a fight over sanctions on employers for hiring illegal aliens, a clash between manufacturers and discount stores over the multibillion-dollar trade in imported "gray market goods," and disputes over consumer suits against automakers and drug companies.

In each case, Kagan's absence creates the prospect of an evenly divided court, an outcome that would leave the lower court ruling intact without setting a nationwide precedent. "You could have a 4-4 affirmance that will be satisfying to no one," says Roy Englert, who represents Costco Wholesale (COST) in the import case.

That may hurt the U.S. Chamber of Commerce's bid to overturn an Arizona law that threatens businesses with revoking their corporate charters if they hire illegal aliens. A federal appeals court upheld the measure, which labor and civil rights groups are also challenging. They say the law infringes on Congress' exclusive authority to regulate immigration. "I'm still hoping that our argument is strong enough that it won't split 4-4, but losing Kagan complicates the case," says Carter Phillips, who will argue the case on behalf of the law's challengers.

Should the court muster a five-justice majority, the case could affect alien employment laws in dozens of states and the Arizona law that requires police to detain undocumented immigrants.

In the drug and auto cases, Kagan's absence may work to the advantage of business, depriving consumers of the fifth vote they need to revive their suits. In each case, a lower court said federal law insulates manufacturers from product liability suits. The drug case involves two parents seeking to sue Pfizer's (PFZ) Wyeth unit over a vaccine they blame for their daughter's seizure disorder and mental impairment. In the auto case, the family of an accident victim claims Mazda Motor should have installed a better seat belt in a 1993 minivan. Consumer advocates hope Kagan will follow the lead of her predecessor, retired Justice John Paul Stevens, who tended to reject arguments that federal law preempted such liability suits. "I'd rather have her there," says Public Citizen's Allison Zieve, speaking about the vaccine case. "That's one where we expect she'll be missed."

As for the import case, retailers may be better off without Kagan, though they will need five votes to overturn a lower court ruling favoring manufacturers. The dispute turns on efforts by discounters to exploit lower overseas prices by buying products abroad and importing them for sale in U.S. stores. As Solicitor General, Kagan defended a ruling letting manufacturers use copyrights on their products to block the discount chains.

Kagan probably will take part in more cases next year during the second half of the nine-month term, says Tom Goldstein, whose Scotusblog website tracks the court. And even when her recusal causes a 4-4 split, she might be able to consider the issue—and resolve the divide—in a later case. "In the sort of broad arc, it's not that big a deal," Englert says. Still, on a court that often cleaves down the center, with Justice Anthony Kennedy casting the deciding vote, Kagan's empty chair will be significant in the coming months. "Not having Kagan shifts the middle of the court from Kennedy to who knows," Phillips says. "That can make a huge difference in some cases."

When Kagan Will Participate

Immigration: Can Arizona enforce a law that puts businesses at risk of losing their corporate charters for hiring illegal aliens? The case could have implications for the U.S.'s challenge of a separate Arizona law that requires police to detain people without documents. Argument in Chamber of Commerce v. Whiting is Dec. 8.

Kagan won't participate.

Auto Safety: Can accident victims sue automakers for not installing safety devices beyond those required by federal law? Williamson v. Mazda Motor of America concerns a claim that Mazda should have installed a safer seat belt in a 1993 MPV minivan. Argument is Nov. 3.

Kagan won't participate.

Gray Market Goods: Can manufacturers use copyright laws to keep their own foreign-made products off the shelves of U.S. discount stores? Costco Wholesale Corp. v. Omega SA might reshape the multibillion-dollar "gray market," in which goods bought overseas are sold in the U.S. at discount, bypassing a company's authorized distribution channel. Argument is Nov. 8.

Kagan won't participate.

Video Games: Is a California ban on the sale of violent video games to minors constitutional? A lower court said the ban infringed on free speech rights. Argument for Schwarzenegger v. Entertainment Merchants Assn. is Nov. 2.

Kagan will participate.

The bottom line: Kagan's absence raises the prospect of an evenly divided court on several cases important to business.

Stohr is a reporter for Bloomberg News.

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