The Personal Finances of United States Supreme Court Justices and Decision-making in Economic Litigation

What explains probusiness judicial decision-making? Existing scholarship focuses on federal judges acting strategically or ideologically, but this represents only some factors affecting judicial behavior. Our objective is to develop a theory of judicial decision-making in economic litigation based on judges’ personal finances. We test this approach by considering how Supreme Court justices’ investments impact decision-making in cases involving businesses. While ethical standards suggest that judges should recuse themselves from cases whose outcomes affect them financially, research implies that judges make strategic choices regarding ethical conflicts. If judges participate in cases that implicate their personal finances, does this affect their votes? We marshal evidence from Supreme Court justices’ financial disclosures and argue that in business litigation, judges vote to promote the economic well-being of industries in which they invest. We find justices are more likely to decide for business litigants when personally invested in firms from industries affected by the litigation’s outcome.