With Bush-appointed John Roberts and Sam Alito on the U.S. Supreme Court, the Court rendered a string of pro-business decisions in 2007. It just delivered a stunning pro-business decision worth several billions of dollars.

When a large company like Enron goes bankrupt, class action attorneys swarm the courthouses to sue everyone involved to recover on the loss in stock value. The investors eventually receive pennies on their lost dollars in investments, but attorneys receive billions for their lawsuits. Increasingly, these attorneys have pursued third parties other than the bankrupt company: accountants, suppliers, bankers, and anyone else who might have a deep pocket.

In the case of a drop in the stock value of Charter Communications, a cable company in the St. Louis area, class action attorneys sued its wealthy suppliers, Scientific-Atlanta and Motorola. The legal theory was that these suppliers provided Charter with digital cable converter (set top) boxes that Charter furnished to its customers, and that Charter arranged to overpay suppliers $20 for each set top box it purchased until the end of the year, with the understanding that the suppliers would return the overpayment by purchasing advertising from Charter. This inflated revenue misled investors, and the lawsuit attempted to hold the suppliers liable.

On January 15, 2008, the U.S. Supreme Court just said “no” and slammed the door against this type of class action lawsuit. News reports declared that this single ruling shut down billions of dollars-worth of lawsuits.

There are now five rock-solid pro-business votes on the High Court: Justice Anthony Kennedy, who wrote this opinion, Chief Justice Roberts, Justices Antonin Scalia, Clarence Thomas, and Sam Alito. The trial attorneys hurt their own gravy train by appealing this case to the Supreme Court.

In this case the Court of Appeals for the Second Circuit had ruled against this type of class action lawsuit. Rarely does the Supreme Court take a case simply to affirm it, unless the court wants to establish a nationwide precedent. It appears that the pro-business wing of the Supreme Court is increasingly confident that it can deliver the five votes needed to decide these issues, and is increasingly bold in granting certiorari to do exactly that for all of the nation.

In defense of the suppliers of Charter Justice Kennedy wrote: “Unconventional as the arrangement was, it took place in the marketplace for goods and services, not in the investment sphere. Charter was free to do as it chose in preparing its books, conferring with its auditor, and preparing and then issuing its financial statements.”

Justice Kennedy added that “the investors cannot be said to have relied upon any of [suppliers’] deceptive acts in the decision to purchase or sell securities” and that without investor reliance, suppliers “have no liability to petitioner under the implied right of action.” His holding was an example of judicial restraint, declaring that it “is consistent with the narrow dimensions we must give to a right of action Congress did not authorize.”