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Friday, May 29, 2009

Is "Business Litigation" a "Background in Business Law?"

Note: The initial version of this post mistakenly attributed the post I discuss below to Brian Tamanaha rather than to Bernard Harcourt.  My apologies!  I've revised it accordingly.

Anent the Sotomayor nomination, natch, Bernard Harcourt has an interesting and impassioned post at Balkinization taking David Frum to task for arguing that Sotomayor has only an "abstract and academic" experience of business law.  Frum describes Sotomayor (and other Justices) as having a background only in "academia and government," and laments this as the general state of the current Supreme Court's experience.  Harcourt points out that Sotomayor spent eight years as a business litigator.  Frum's response to this, apparently, was that "Sotomayor's private-sector work was very far from business counseling of the kind that I described. She worked mostly on enforcing trademarks against counterfeiters."  Harcourt considers this an inadequate response, and believes Frum's remarks about Sotomayor were simply dishonest.


I have three responses to this.  
First, I find it difficult to quarrel with Harcourt's bottom line that describing someone who spent eight years as a private litigator as having only had experience in "academia and government" is highly disingenuous -- and that the fact that Frum apparently knows about Sotomayor's private litigation experience but sticks by his remarks tends to push this beyond mere forgivable error.  Second, and this is just a side-note, although Frum is now willing to criticize Sotomayor for what he apparently views as a lack of business experience, I wonder whether he was as public about criticizing Chief Justice Roberts and Justice Alito as nominees on the same grounds.  If Frum is willing to insist on a distinction between counsel work and litigation, then surely he must also take the view that Roberts's experience as a private appellate litigator also resulted in only an "abstract and academic" experience of business law.  Alito had no private experience after law school.  Was Frum equally public in lamenting Alito's nomination -- or more so, since Alito didn't even have the degree of private-sector experience that Sotomayor had?

That having been said, my third point is that the fact that Frum is disingenuous or dishonest does not mean that he is completely mistaken.  Harcourt is, I think, too quick to equate experience as a private litigator with "business law experience."  Of course, being a litigator in private practice exposes you to business law in certain respects, and may give you something of an education about business practice.  But there is indeed a significant distinction between being a private litigator for business and bring a corporate practitioner, whether in-house (especially in-house) or at a big firm.  Litigators come along after the mess has been made, and take the law as a tool in resolving a dispute; they do not work on planning to avoid messes as such.  The nature of their exposure to business, and to business law, is very different from the kind of experience of business one has as a transactional or in-house lawyer, and it is quite possible -- I know! -- to work for many years as a litigator, working for some of the nation's largest businesses, without having a tremendously well-developed sense of the business environment, of what businesses need to do to flourish, or even of significant aspects of business law that are part of the planning rather than the litigation stage of corporate life.  (Indeed, a great litigator may well know far more about, say, civil procedure and federal courts practice than she does about core issues of corporate law.) 

I do not want to give too much credit to Frum, since I do not think his comments were totally honest (or, depending on what he had to say about Roberts and Alito at the time, totally consistent), but I think he is right that private-sector litigation is indeed quite different from business counseling, and that private-side litigation experience is not necessarily the best grounding in "business."  His criticism may have been opportunistic, but that does not mean it was wholly invalid.  

Of course, in another way, Frum is also being short-sighted.  Simply describing Sotomayor as having worked in "government," without parsing out the different aspects of her public service, means that he apparently thinks you learn nothing about business after almost two decades of experience on the bench in our nation's largest commercial center, on district and then appellate courts in which significant developments in business and business law are addressed every day -- in a quite fact-oriented way at the district court level.  Nor does Frum give due justice to the business relevance of Sotomayor's experience on the New York State Mortgage Board or her board experience at Princeton University.  By talking disingenuously about "academia and government," Frum seems to have let these aspects of her experience drop out of sight.       

Posted by Paul Horwitz on May 29, 2009 at 01:37 PM in Paul Horwitz | Permalink

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Posted by: sam | Nov 6, 2009 6:45:28 AM

I don't agree with Frum's main point, but I don't think it's fair to accuse him of hypocrisy for apparently not raising the lack of business experience in 2005 with respect to Alito and Roberts. Simply put, 2009 ain't 2005. We now live in a brave new world. I don't think anyone in 2005 believed that in 4 years the US Government would own 70 percent of GM, something like TARP would be enacted, Congress would propose taxing bonuses at 90%,e tc.

Posted by: Spittle | Jun 2, 2009 3:04:10 PM

IMHO, the least important area of the law a SCOTUS nominee might have is business law.

It takes a back seat, way back, to other substantitive areas, including criminal law and constitutional law. Perhaps it is in front of tort law, but not by much.

That is not to say that business law is unimportant to the world. Just that business law experience matters little to a SCOTUS nominee.

Posted by: Allan | Jun 1, 2009 9:42:16 AM

Prof. Horwitz writes:----
Second, and this is just a side-note, although Frum is now willing to criticize Sotomayor for what he apparently views as a lack of business experience, I wonder whether he was as public about criticizing Chief Justice Roberts and Justice Alito as nominees on the same grounds. If Frum is willing to insist on a distinction between counsel work and litigation, then surely he must also take the view that Roberts's experience as a private appellate litigator also resulted in only an "abstract and academic" experience of business law. Alito had no private experience after law school. Was Frum equally public in lamenting Alito's nomination -- or more so, since Alito didn't even have the degree of private-sector experience that Sotomayor had?
----end quote---

I don't know what Frum had to say in 2005, but in both of the stories to which Harcourt links, Frum makes precisely that point

---begin quote from Marketplace broadcast---
Yet the current court justices have strikingly little experience as business lawyers. Chief Justice John Roberts has worked for business clients, but always as an appellate litigator -- that is, as a kind of after-the-fact freelance pleader, not a counselor who navigates a company's way through the tangles of existing law. Only one justice, John Paul Stevens, has done much advising of business clients -- half a century ago. And Stevens is the most senior member of the court, aged almost 90.
---end quote---

---begin quote from Frum's blog---
I did a broadcast yesterday about Sotomayor for "Marketplace."

Main point: Sonia Sotomayor reaffirms the Supreme Court's 8 to 1 bias against lawyers with a background in business law. Only John Paul Stevens has any extensive record as an adviser to firms. (Back in the 1950s and 1960s, he was an eminent defendant-side antitrust lawyer.) John Roberts did appellate work for business clients, but was not a counselor. Anthony Kennedy was a lawyer-lobbyist in Sacramento for a very few years in the middle 1960s. Otherwise: all have backgrounds in academia and government. Now one more.
---end quote---

I agree that Mr. Frum should probably elaborate on why he views Sotomayor's background as "abstract and academic." The criticism of his comments seems otherwise over the top and a bit hysterical.

Again, I don't know what he said in 2005. If people want to play that game, then I should ask where all of the empathy-mongers were when the liberals were trashing Miguel Estrada.

Posted by: krs | May 31, 2009 4:03:37 PM

Alkali, the complaint isn't that Sotomayor's lack of business-law experience makes her less qualified than the other justices, but rather that this is a general deficiency on the Court which ought to be remedied when there are openings such as this one.

It's bizarre to think about evening wanting to put a transactional attorney on the Court, though. Whatever is gained in first-hand understanding of the corporate world would be more than offset by the fact that transactional attorneys don't really do "law" in the way that litigators do.

Posted by: joe. | May 30, 2009 5:05:12 PM

W/r/t Alkali's question, the closest I can come (which is not that close) is that Zoe Baird (who might have been a plausible S Ct nominee if the AG thing had worked out) was GC of Aetna and Larry Silberman of the D.C. Circuit (rumored in some circles to have been on the short list for what turned out to be the Souter nomination) had pre-judicial experience as GC of a bank. I recall a long-ago conversation w/ Judge Silberman in which he indicated that that experience had given him what he considered a valuable perspective that a more typical pre-judicial career as a successful litigator might not have provided. Maybe a more important question is how many of the currently sitting federal circuit judges (probably over 200, at least if you include senior judges) have meaningful transactional or in-house experience and if that percentage seems too low what "cultural" changes in the judicial selection process might increase it.

Posted by: J. W. Brewer | May 30, 2009 4:24:47 PM

Query:

1) Has any lawyer with substantial in-house or transactional experience been nominated, or considered for nomination, to the U.S. Supreme Court within recent memory? (The closest I can think of is Justice Thomas, who was in-house at Monsanto for three years in the late 1970s as a young lawyer working on environmental and regulatory issues. Justices Lewis Powell and Byron White did both transactional and litigation work back in the days when lawyers at top firm could be generalists in that way, but that is pushing the limits of "nominated within recent memory.")

2) If the answer is no, isn't it odd to suggest that Judge Sotomayor might be deficient in not having such experience?

Posted by: alkali | May 29, 2009 5:01:50 PM

I beg to differ with the, as usual, muddle headed Mr. Frum.

MBA students study business cases. The case study method is supposed to be a great way to learn about business. No MBA case study is as thorough or as in depth as the case study called business litigation. In any significant case, you get deep into why the deal was done and why it failed, and you spend a lot of time interviewing and preparing for depositions the business decision makers.

Then there is settlement. Almost all cases settle, and many cases reach a creative business settlement rather than a pure split the risk money settlement. Litigation lawyers are deeply involved in crafting and evaluating those settlements.

As for business counseling, it's overrated. It's so easy to walk into a room, bloviate and opine, and walk out without ever really taking ownership or responsibility for what happens next.

My background: ten years of litigation, ten years of being a CEO. Business litigation was great preparation for the business role.

Posted by: anonymous | May 29, 2009 4:03:57 PM

Having been both a litigator and an in-house lawyer, I'd say Frum has a point on the nature of business litigation experience, although he overstates it. I found that business counseling is an entirely different thing from representing business in litigation but that litigation was a far better preparation for it than most people would imagine. I've got my own set of questions about Judge Sotomayor but I don't know that lack of business experience is one of them.

As a side question, how many recent members of the Court have business counseling experience? I can think of Justice Blackmun. I guess I don't know enough about the private practice experience of others, but I'd guess that most have not had that experience.

Posted by: Rick Esenberg | May 29, 2009 1:58:55 PM

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