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1.1: The Supreme Court Sets Policy that Affects Business

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  • The Supreme Court as a Policy Maker

    In order to understand the importance of business law cases it is important to understand the role of the Supreme Court in settting policy. The Supreme Court’s role as a policymaker derives from the fact that it interprets the law. Public policy issues come before the Court in the form of legal disputes that must be resolved.

    By Steve Petteway, Collection of the Supreme Court of the United States (Roberts Court (2010-) – The Oyez Project) [Public domain], via Wikimedia Commons

    An excellent example may be found in the area of racial equality. In the late 1880s many states enacted laws requiring the separation of African Americans and whites in public facilities. In 1890, for instance, Louisiana enacted a law requiring separate but equal railroad accommodations for African Americans and whites. A challenge came two years later. Homer Plessy, who was one-eighth black, protested against the Louisiana law by refusing to move from a seat in the white car of a train traveling from New Orleans to Covington, Louisiana. Arrested and charged with violating the statute, Plessy contended that the law was unconstitutional. The U.S. Supreme Court, in Plessy v. Ferguson (1896), upheld the Louisiana statute. Thus the Court established the “separate-but-equal” policy that was to reign for about 60 years. During this period many states required that the races sit in different areas of buses, trains, terminals, and theaters; use different restrooms; and drink from different water fountains. African Americans were sometimes excluded from restaurants and public libraries. Perhaps most important, African American students often had to attend inferior schools.

    Separation of the races in public schools was contested in the famous case Brown v. Board of Education (1954). Parents of African American schoolchildren claimed that state laws requiring or permitting segregation deprived them of equal protection of the laws under the Fourteenth Amendment. The Supreme Court ruled that separate educational facilities are inherently unequal and, therefore, segregation constitutes a denial of equal protection. In the Brown decision the Court laid to rest the separate-but-equal doctrine and established a policy of desegregated public schools.

    In an average year the Court decides, with signed opinions, between 80 and 90 cases. Thousands of other cases are disposed of with less than the full treatment. Thus the Court deals at length with a very select set of policy issues that have varied throughout the Court’s history. In a democracy, broad matters of public policy are presumed to be left to the elected representatives of the people — not to judicial appointees with life terms. Thus, in principle U.S. judges are not supposed to make policy. However, in practice judges cannot help but make policy to some extent.

    The Supreme Court, however, differs from legislative and executive policy makers. Especially important is the fact that the Court has no self-starting device. The justices must wait for problems to be brought to them; there can be no judicial policy making.