New Business Cases Await High Court

By BRENT KENDALL

Little-noticed amid the fanfare over last week's decisions on health care and immigration, the Supreme Court added several new business cases to its docket for the fall that will offer the court more opportunities to cement its generally pro-business reputation.

Though he angered some leading business groups with his decisive vote upholding President Barack Obama's health-care law, Chief Justice John Roberts has led a high court that often sides with corporations.

Enlarge Image

Close

Associated Press

Comcast says a subscriber suit shouldn't proceed as a class action.

Last year, the court's five conservatives justices, including Chief Justice Roberts, outvoted its four liberals to throw out a sweeping gender-discrimination lawsuit against Wal-Mart Stores Inc., the nation's No. 1 retailer, saying the million-plus female employees seeking to sue the retailer didn't have enough in common to pool their claims into a single class action.

The high court in its just-completed 2011-12 term ruled 5-4 along the same ideological lines to side with GlaxoSmithKline PLC in denying overtime pay to pharmaceutical sales representatives, a case that drug makers said could have cost them billions of dollars had it gone the other way. The court also unanimously rejected the arguments of the Environmental Protection Agency, a frequent target of criticism by business, in a battle with an Idaho landowner who accused the agency of overbearing regulation.

In their 2012-13 term beginning in October, the justices will consider a follow-up to the Wal-Mart ruling, involving cable operator Comcast Corp.

Philadelphia-area subscribers allege in a lawsuit that they pay too much for cable television because they say Comcast has an anticompetitive grip on the region. A federal appeals court ruled last year that the suit could proceed as a class action.

The lawsuit, which dates back to 2003, alleges the company gained a dominant position in the Philadelphia market by buying up other cable providers and by swapping geographic territories with competitors. Comcast, which disputes the allegations, says plaintiffs are seeking more than $875 million on behalf of more than two million past and present subscribers.  

 Comcast, seeking to benefit from the Wal-Mart precedent, argues that plaintiffs in the Philadelphia-area market, which includes subscribers in Pennsylvania, Delaware and New Jersey, can't proceed together in one large lawsuit because they can't all make the same claims for monetary damages.

In its brief seeking Supreme Court review, Comcast said the lower-court ruling, if upheld, would "have far-reaching implications for antitrust litigation." Citing an earlier ruling, the company said: "Given the potential damages at issue, class certification creates insurmountable pressure on defendants to settle, regardless of the merits."

The justices teed up a second antitrust case at the request of federal regulators, one that could boost efforts by the Federal Trade Commission to block hospital mergers that allegedly dominate local markets.

The FTC is trying to challenge a Georgia hospital deal, but lower courts ruled federal antitrust laws didn't apply in the case because the acquiring party was a government body, in this case a local hospital board. A nonprofit corporation called Phoebe Putney Health System that was created by the hospital board bought the hospital, which had been a competitor, from for-profit hospital company HCA Holdings Inc.

The FTC alleges that Phoebe Putney was concerned about the anticompetitive nature of the merger and conducted the deal through the hospital board in an attempt to evade antitrust laws. Phoebe Putney said it wanted to buy the Albany, Ga., hospital because it needed to grow to meet the needs of the community, and the acquisition was cheaper than building new facilities.

Legal observers have said the case could clarify when government bodies are exempt from antitrust scrutiny in a variety of industries, such as electricity and cable television.

In a timber-industry case, environmentalists concerned about storm-water runoff from logging roads are seeking to force timber companies to obtain Clean Water Act permits before operating them. They prevailed at the San Francisco-based Ninth U.S. Circuit Court of Appeals last year.

 The environmentalists, challenging logging activities in Oregon, say storm water channeled from the roads can deposit significant amounts of sediment in rivers and streams, harming wildlife there. The EPA is largely aligned with the industry in the case because of a long-standing agency policy saying permits aren't needed.

Atlanta-based paper maker Georgia-Pacific and the American Forest and Paper Association are among those that appealed the case to the Supreme Court, saying the lower court ruling "threatens economic and regulatory havoc" because "roads servicing the nation's 423 million acres of privately owned forestland would require countless permits."

Write to Brent Kendall at brent.kendall@dowjones.com

A version of this article appeared July 2, 2012, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: High Court Agrees to Hear New Crop of Business Cases.