Sotomayor’s unpredictability is bad news for struggling economy

Much has been made of Sonia Sotomayor’s rejection of the idea of empathy during her confirmation hearings, when she said: “I wouldn’t approach the issue of judging in the way the president does.” We would take comfort if it didn’t represent such a big shift from her earlier statements. Instead it simply underscores our concerns that she will continue to make unpredictable decisions from the bench.

The most disturbing statement of Sotomayor’s judicial philosophy comes from her 1996 article in the Suffolk University Law Review. In it she defended this statement from legal theorist Jerome Frank: “Law must be more or less impermanent, experimental and not nicely calculable.”

Any businessman will tell you that there is more than enough unpredictability to deal with in the economy without having an overlay of legal uncertainty. Our free-market system depends, in fact, on the stability and calculability of the rule of law.

The basic rules of the road should be as stable and predictable as possible. And during a time of wildly unpredictable swings in economic policy from Congress and the administration, the last thing we need is an experimentally inclined judiciary.

Her past unpredictable decisions have been largely corrected by the Supreme Court. If her nomination is approved, then her decisions (provided she can convince four colleagues, of course) will be the final word.

She ignored clear language in the Securities Litigation Uniform Standards Act of 1998 in Dabit v. Merrill Lynch in order to permit a state law contracts claim that was specifically preempted by the federal law. The Supreme Court slapped that down with a unanimous decision.

In Riverkeeper v EPA, she sided with radical environmental groups and ordered the EPA to steeply increase regulatory burdens on power plants. Her decision would have forced the EPA to enact regulations mandating extremely expensive technology and dramatically increasing the price of electricity — with serious economic implications. The Supreme Court reversed her in a 6-3 decision.

On class action cases, she can’t seem to make up her mind. She wrote the opinion in In re Visa Check/Mastermoney in 2006, holding that class actions can be certified and businesses forced to spend money defending them even if there is no merit to the actual case.

That decision was correctly overturned by the Second Circuit in In re IPO in 2006, with Sotomayor joining the majority and overturning her own decision. She got it right, eventually, but score one for big-time unpredictability.

Judge Sotomayor’s incalculable moods also have guided her when it comes to contracts cases. In Bolt Electric v City of New York in 1994 she granted the city permission to break its contract with a construction vendor, because parts of the contract violated the state’s administrative code, even though noncompliance with the code does not invalidate a contract under New York law. She was overturned by the Second Circuit.

The bottom line is that Judge Sotomayor’s utter — indeed, intentional — unpredictability is likely to undermine business confidence. Her experimental approach to business cases is bad economic news at a time we can least afford it.

Tim Phillips is the president and Phil Kerpen is the director of policy for Americans for Prosperity.