Recent Developments

In a Made for TV Moment, President Trump Selects His Supreme Court Nominee: Judge Neil Gorsuch

It seems fitting that President Trump, as a former reality television star, would announce his pick for the Supreme Court during prime time with 33 million viewers tuning in. At 8:00 pm EST, a day after tweeting that he chose his nominee and would announce his selection on Tuesday evening, President Trump took to the lectern to introduce Judge Neil M. Gorsuch to the world.

Consistent with statements made during his campaign, President Trump's nominee, Judge Gorsuch, shares many similarities with Justice Antonin Scalia. Judge Gorsuch is a solid conservative with a flair for colorful writing who enjoys the outdoors and is an originalist (interpreting the Constitution consistently with how the founders understood it when enacting it).

While Judge Gorsuch shares a conservative judicial philosophy with the late jurist, he does not have Scalia's acerbic wit and caustic style. On the contrary, colleagues describe the Judge as unfailingly polite, diplomatic, and personable. Nonetheless, if Judge Gorsuch is confirmed, it would return the Supreme Court to familiar ideological grounds.

An Illustrious Background and No Stranger to Politics

Judge Gorsuch is a well-regarded, federal appeals court judge based in Denver, Colorado. At the age of 38, in 2006, he was appointed to the Tenth Circuit without Senate opposition. A fourth-generation Coloradan, Judge Gorsuch grew up in Denver. When he was a teenager, he moved to Washington, D.C., when his mother, Anne Gorsuch Burford, joined the Reagan administration to head the Environmental Protection Agency—the first woman to hold that position. Her time there was short-lived and fraught with controversy. Critics accused her of trying to dismantle the agency rather than protect the environment, which culminated with Congress launching an investigation into alleged mismanagement. Ms. Gorsuch Burford resigned after 22 months on the job.

Judge Gorsuch went on to attend Columbia University for college, followed by Harvard Law School. After law school, he attended Oxford University in England as a Marshall Scholar and graduated with a doctorate in legal philosophy.

Judge Gorsuch served as a law clerk to then-retired Supreme Court Justice, Byron White. Justice White shared his clerk with an active member of the court, Justice Anthony Kennedy. Prior to that, Judge Gorsuch began his legal career as a law clerk to Judge David B. Sentelle, a conservative member of the D.C. Circuit Court of Appeals. Following his clerkships, Judge Gorsuch joined a Washington, D.C., law firm where his practice focused on securities, antitrust, and class action litigation. He left private practice in 2005 and served as a Principal Deputy to the Associate Attorney General in the U.S. Department of Justice during the George W. Bush administration. He was soon thereafter appointed to the Tenth Circuit Court of Appeals in 2006.

Where He Stands on Securities Law Issues

As a former advocate for the U.S. Chamber of Commerce, Judge Gorsuch may not be a loyal protector of institutional investor rights. In 2005, while still in private practice, he commented on the pending securities class action, Dura Pharmaceuticals v. Broudo, in a Legal Times article in which he was a co-author. He criticized the Dura matter as baseless, noting that, "[t]he problem is that securities fraud litigation imposes an enormous toll on the economy, affecting virtually every public corporation in America at one time or another and costing businesses billions of dollars in settlements every year." In addition to penning the article, Judge Gorsuch filed an amicus brief in the Dura matter on behalf of his client, the U.S. Chamber of Commerce, when the matter was pending before the Supreme Court, advocating on behalf of stricter burdens for private securities litigation plaintiffs.

Judge Gorsuch's judicial record shows a keen legal mind and a jurist who gives deference to precedent and the fact-finding decisions of lower courts. He does, however, seem skeptical of regulatory power. In 2016, when considering an immigration matter in a case called Gutierrez-Brizuela v. Lynch, he questioned a doctrine that requires courts to defer to federal agencies' interpretation of ambiguous laws. If implemented, government agencies like the Securities and Exchange Commission would have less power, making it more difficult for them to address a wide variety of critical matters, including financial protection. At the same time, agency action would be subject to increased judicial review.

With this background, it comes as no surprise that on the Tenth Circuit, Judge Gorsuch has taken a narrow view of securities fraud liability. In 2014, he affirmed dismissal of a matter brought under Section 11 of the Securities Act of 1933, in MHC Mutual Conversion Fund v. Sandler O'Neill & Partners endorsing the standard that investors must show that defendants knew the opinions they expressed in public statements were false when they were made in order to show liability, rather than merely showing defendants lacked an objectively reasonable basis for the opinion. At the time, there was a circuit split on the issue, but a year later in 2015 the Supreme Court interpreted the statute in Omnicare v. Laborers District Council Construction Industry Pension Fund and adopted a similar standard to the one Judge Gorsuch endorsed. The Supreme Court held that Section 11 does not provide a basis for liability for an issuer's statement of opinion that is ultimately found incorrect if the speaker actually holds the stated belief.

Taken together, if confirmed, Judge Gorsuch will not likely be a champion for investor rights and robust financial regulation, nor for the class action process in general, on the Supreme Court.

Looking Ahead

Despite his impressive legal credentials and experience, Judge Gorsuch's path to confirmation is unlikely to be a smooth or speedy one. Democrats are considering similar obstructionist tactics that Republicans used to delay and deny a hearing for Mr. Obama's nominee, Judge Merrick Garland. On January 22, Senate Minority Leader Chuck Schumer vowed to block any nominee that was not bipartisan and mainstream. While Judge Gorsuch certainly does not meet Senator Schumer's definition, in these polarized times, it is fair to wonder if such a person exists.