Supreme Court After Ruth Bader Ginsburg

WASHINGTON POLICY | PUBLISHED BY RAYMOND JAMES & ASSOCIATES

Supreme Court After Ruth Bader Ginsburg: Market, Policy, and Political Impact The passing of Supreme Court Justice Ruth Bader Ginsburg leaves a late-presidential election-year Supreme Court vacancy and may significantly shift the electoral landscape 44 days out from the November elections.

In the attached slides, we provide an outline of how the process works, a deep-dive outline of the political battle ahead on the nomination/ confirmation of a new justice, the potential timing of the nomination, the impact on the Presidential/key Senate races, the impact on key upcoming cases including the Affordable Care Act case, and the potential future impact on the Supreme Court/Senate.

Our view on the near-term confirmation battle. President Trump is likely to nominate someone to fill the seat. We believe the Senate is likely to move forward with confirmation hearings, but will wait to vote until after the election in the “lame-duck” session. However, with the evolving nature of this, these views could change rapidly.

Impact on the Presidential race. The impact on the presidential race is unclear at this point and will take time to play out. The eventual Trump Supreme Court nominee, the hearing process, Democrats' response, and wild cards along the way will ultimately shape the political impact. We are within two months of Election Day and some votes have already been cast. Polls have shown a largely stable race, with Biden in the lead. We will be watching to see if this is a catalyst for some lean-Republican undecided voters to break towards Trump, or if this will further energize Democrats in both turn-out and fundraising. A first poll by Reuters shows 62% of Americans believe the seat should be filled by the winner of the presidential election, while 23% say it should be filled now, and 80% of Democrats and 50% of Republicans are in favor of a delay.

First take on the battle for the Senate. The immediate aftermath of Justice Ginsburg’s passing is a massive wave of pro-Democratic fundraising for Senate candidates. Arguably, the Senate seats in Republican-leaning states of GA, IA, MT, and SC could benefit from higher Republican turnout, funding advantages, and energized turnout among Democrats could also sway the elections. SC is interesting as Lindsay Graham is the Chairman of the Judiciary Committee and had previously vowed not to confirm a Supreme Court nominee in an election year, but has since said the rules have changed post-Kavanaugh’s process. The Democratic candidates in Colorado and Maine are likely to be beneficiaries of the new political dynamics in the weeks ahead. Conversely, Republican candidates in Texas, Iowa, and Montana could see a boost.

Future policy considerations. There are many developments ahead, but Democrats are beginning to outline options for reforms should they make significant gains in November. We view these as early negotiating tactics in a "nuclear option" scenario to impact the direction of President Trump's Supreme Court nominee. Some options floated over the weekend include an expansion of the Supreme Court bench, judicial term limits, a broader elimination of the filibuster, and statehood for DC/Puerto Rico.

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PREPARED BY: THE SUPREME COURT AFTER RUTH BADER Ed Mills GINSBURG: A DEEP DIVE INTO THE MARKET, [email protected]

POLICY, AND POLITICAL IMPACT Chris Meekins Raymond James Equity Research [email protected]

September 21, 2020

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Supreme Court Historic Impact on the Court

Ruth Bader Ginsburg was born in Brooklyn, New York, March 15, 1933. She married Martin D. Ginsburg in 1954, and has a daughter, Jane, and a son, James. She received her B.A. from Cornell University, attended Harvard Law School, and received her LL.B. from Columbia Law School. President Clinton nominated her as an Associate Justice of the Supreme Court, and she took her seat August 10, 1993.

Cultural Icon. Ruth Bader Ginsburg was commonly known by her initials – RBG or sometimes as “the notorious RBG” and had a significantly elevated presence in cultural and political life vs. other Supreme Court Justices. This status as cultural icon, especially among Democrats significantly impacts the debate around her replacement on the court, with some yet-to-be Source: United States Supreme Court determined political and policy ramifications.

Reliable Liberal Vote. RBG was a reliable liberal vote on the court, frequently joining Justices Breyer, Kagan, and Sotomayor. Landmark cases were swayed with the ability of convincing just one additional justice to join their side.

Source: Raymond James Research

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Timing Confirmation Fight Timing of Confirmation Fight Pres. Trump Timing of Nomination Our Take • 22 of the previous 44 presidents have put forward a President Trump is likely to nominate someone to fill the nominee in a presidential election year for a vacancy on the seat. We believe the Senate is likely to move forward Supreme Court – 29 times in total. None have failed to put with confirmation hearings, but will wait to vote until forward a nominee. after the election in the “lame-duck” session. However, • President Trump has stated he will put forward a nominee with the evolving nature of this, these views could before the election – likely within the next 10 days. change rapidly. Will the Senate Vote on Nomination Before the Election? Majority Leader McConnell has a tough decision to make regarding whether to push for a vote on the nomination before the election. He could move forward with a confirmation vote, but that likely negatively impacts the campaigns of Susan Collins and Cory Gardner. If he waits and Democrats sweep to power, it may be more difficult to confirm in the “lame-duck” session.

Arguments For Arguments Against

• Republicans could cement a conservative majority on the Supreme Court • Senators in tough reelections, like Susan Collins and Cory Gardner, are put for years if they fill the seat. in difficult positions and it could increase the likelihood they lose. • The justice will be in place before arguments in important cases like the • Republicans may not have the votes and if you lose the vote, the base is Affordable Care Act case. demoralized leading into the election. • The justice will be in place if the election is contested and the Supreme • If you confirm before the election, it could take away one of the reasons Court needs to weigh in. some voters would support President Trump. • If you wait on the nomination, it could discourage conservative voters. • If Democrats sweep the upcoming election, they could kill the filibuster and • If Democrats sweep to power, it may be more difficult to get Republican expand the size of the Court has retribution. votes to confirm in the lame-duck session. • If Mark Kelly wins the Arizona senate seat, he likely will be seated in November making it more difficult to get the votes.

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Who Are The Four? Who Are the Four? Senators to Watch

• Based on the current 53-47 makeup of the Senate, GOP Senators Opposed to Moving Forward Before the Election Republicans can lose the support of three Republicans for the nominee and with the Vice President breaking the tie, confirm Sen. Susan Collins the nominee to the Supreme Court. “Given the proximity of the presidential election, • Two senators, Collins and Murkoski have both stated they however, I do not believe that the Senate should vote on oppose moving forward with a nomination before the the nominee prior to the election…the decision on a election and believe the next President should get to pick the lifetime appointment to the Supreme Court should be nominee. made by the President who is election on November 3.” • Finding two other GOP senators to oppose the nomination Sen. Lisa Murkowski could prove difficult for Democrats. “I did not support taking up a nomination before the 2016 • If the vote on the nomination does not happen before the election to fill the vacancy created by the passing of election and Democrats sweep to power; it is possible some Justice Scalia, we are now even closer to the 2020 Republicans may oppose the nomination out of fear that election — less than two months out and I believe the Democrats could expand the Supreme Court. same standard must apply.” Source: United States Senate GOP Senators To Watch

Sen. Cory Gardner Sen. Mitt Romney Sen. Chuck Grassley Sen. Pat Roberts Sen. Shelley Moore Capito Sen. Pat Toomey Source: United States Senate

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Potential Nominees Leading Candidates to be Nominated by President Trump

Judge Barbara Lagoa Judge Amy Coney Barrett Other Potential Nominees

• Age: 52 • Age: 48 President Trump stated he would nominate a • Family: Married, 3 kids • Family: Married, 7 kids woman for the seat, so here are other • Education: Florida • Education: Rhodes College, International University, B.A.; B.A.; Notre Dame Law School, potential female nominees. Columbia University School of J.D. • Bridget Bade –9th Circuit Court Judge Law, J.D. • Position: Serves on the 7th • Allison Eid – 10th Circuit Court Judge • Current Position: Serves on Circuit Court of Appeals • Britt Grant – 11th Circuity Court Judge the 11th Circuit Court of (2017) th Sources: Florida Supreme Court • Joan Larsen – 6 Circuit Court Judge Appeals (2019) Sources: University of • Previous: Notre Dame Law • Martha Pacold – Federal District Court • Previous Experience: Briefly a Notre Dame Professor; Law Clerk to FL Supreme Court Justice Justice Scalia, Law Clerk to Judge (2019); Judge Silberman • Sarah Pitlyk – Federal District Court Judge Arguments in Favor Arguments in Favor • Allison Jones Rushing – 4th Circuit Court th • Conservative legal track record decreases • Received bipartisan confirmation vote to the 11 Judge Circuit (80-15) and would be more difficult for likelihood she will disappoint the President’s Democrats to oppose than other nominees. conservative base. • Margaret Ryan – Court of Appeals for • Likely helpful with swing voters – in particular • Established record as a federal judge and Armed Forces Judge assists with Cuban-American voters in FL. extensive legal writings. • Diane Sykes – 7th Circuit Court of Appeals Arguments Against • Difficult for GOP Senators to oppose since they • Kate Todd – Deputy WH Counsel to the • Very brief time as a federal judge supported her in 2017. Arguments Against President • Not as well known in conservative legal circles which could lead to backlash to her nomination • Less helpful with swing voters (think Harriet Miers) • Unlikely to receive bipartisan support. • Democrats will try to demonize her as “too extreme” as they did during her confirmation hearing.

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The Process What is the Process for Nomination and Confirmation?

President submits nomination to the US Senate

12 Republicans • Staff of Senate Judiciary Committee performs vetting process, including background checks 10 Democrats • Committee holds nomination hearing • Committee votes on nomination (negative Senate Committee vote does not block floor consideration)

53 Republicans 45 Democrats • Floor Debate, led by Chair of Judiciary Committee - Lindsay Graham (R-SC) 2 Independents • Simple Majority (51) needed for confirmation (Caucus with Dems) • VP can break 50-50 tie

• If confirmed, new associate justice serves lifetime appointment on Supreme Court

Source: Raymond James Research

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Data on Previous Nominations Data on Previous Nominations

Time from Nomination to Vote Nominations in Presidential Election Years

46: Forty-six Days until the election. Same Party Controlled Presidency and Senate Different Party Controlled Presidency and Senate

10: There have been 10 vacancies in an election year 68: Since 1975, it has taken on 19: Nineteen times between 1796 and 1968, presidents put forward a nominee to the or post-election when the presidency and senate were average sixty-eight days from Supreme Court vacancy in a presidential- controlled by different parties. nomination to confirmation of election year with their party in control of the Supreme Court Justices. Senate (note filibuster still existed then). 1: Only one of those nominees was confirmed before the election – Chief Justice Melville Fuller in 1888. Notable quicker confirmations 10: Ten of those nominations came before the include: Ruth Bader Ginsburg (42), election; nine of the ten were successful. Merrick Garland: President Obama nominated Merrick Garland under this same scenario in 2016 when Justice Sandra Day O’Connor (33) and John 9: Nine nominations came after the election Scalia unexpectedly passed away. The Republican- Paul Stevens (19). during the “lame-duck” session and all controlled Senate refused to vote on the nomination nominees joined the Court. because it was so close to the election.

3: Three of these Presidents had lost re-election when they made the nomination.

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Supreme Court Impact on Presidential Election

Unclear Impact. The impact on the Presidential race is unclear at this point and will take time to play out. The eventual Trump nominee, the hearing process, Democrats’ response, and wildcards along the way will ultimately shape the political impact. We are within two months of Election Day and some VS. votes have already been cast. Polls have shown a largely stable race, with Biden in the lead. We will be watching to see if this is a catalyst for some lean- Republican undecided voters to break towards Trump or if this will further energize Democrats in both turn-out and fundraising. A first poll by Reuters shows 62% of Americans believe the seat should be filled by the winner of the presidential election while 23% say it should be filled now, and 80% of In 2016 – Supreme Court Vacancy Democrats and 50% of Republicans are in favor of a delay. Aided Trump In your vote, were Pro-Trump Argument. President Trump has largely been pursuing a strategy of energizing his base to win reelection. An opening on the Supreme Court is a Supreme Court Appointments: core political issue for his base, especially among Pro-Life, evangelical votes. Trump has been lagging in the polls and he needs a catalyst to turnout his base/get new Trump-leaning voters to the polls. A Supreme Court opening, especially one that would deliver a perceived 6-3 conservative majority is one of Trump Clinton the few issues that could “bring home” some voters who were wavering in their support for his reelection/contemplating staying home. In 2016, exit polls Most Important 56% 41% showed that 26% of Trump voters who voting for him because of the Supreme Court. An Important Factor 46% 49% A Minor Factor 40% 49% Pro-Biden Argument. Loss is a far greater motivator and Democrats have more to lose by a conservative being confirmed to a life-long Supreme Court seat. Not A Factor at All 37% 55% The confirmation fight is sure to fully energize Biden’s base of support and increase his fundraising totals (Act Blue reports almost $100 million raised between Friday night and Sunday morning for Democratic Candidates). Young progressive female voters will likely be much more motivated. Republicans Source: CNN 2016 Exit Poll, Raymond James Research were very vocal on not confirming a Supreme Court pick in an election year in 2016 and could risk a rush to confirm as a power grab, moving/keeping moderate voters on the side of Biden.

Court Important, but Other Issues Dominate. An August poll by Morning Consult, showed the Supreme Court as 10th issue that voters rank as “very important,” behind the economy, health care, and the coronavirus. 57% of Democrats ranked it as “very important” vs. 53% for Republicans. This is very likely to shoot up the list of important factors, but the reality remains, that for many voters, the Supreme Court is just one factor that impacts their vote.

Pro-Life vs. Pro-Choice. Much of the confirmation fight for the next justice will center on abortion rights, as such it could sway voter opinions on November 3 (this is why we are including it). According to a recent Gallop Poll, the Americans are fairly evenly divided in describing themselves Pro-Life (46%) vs. Pro-Choice (48%). However, only 20% said that abortion should be illegal in all circumstances, with 50% saying it should be legal under certain circumstances, and 29% saying it should be legal under any circumstances. Bottom line: much like many issues in the current political environment, the country is fairly evenly divided, but there is risk for either party to be viewed as going too far in one direction on the topic.

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Supreme Court Impact on Senate Elections VS.

Senate Elections in the Spotlight. The Senate is the legislative body that confirms or rejects the President’s appointments, with recent rule changes now only requiring a simple majority for a confirmations (down from 60), with the Vice President eligible to break any tie. With the power to confirm or reject nominations, the potential roll an individual Senator may play in a Supreme Court confirmation can be an important factor for voters in deciding who to support. Republicans hold a 53-47 Senate Majority. There are 35 Senate seats on the ballot in 2020, with Republicans defending 23 and Democrats 12.

Republicans Traditionally Favored. Conventional wisdom in DC is that a Supreme Court fight traditionally benefits Republicans. In 2018, despite a “Blue Wave,” 5 out of 6 Senate seats outcomes had some tie to the nomination fight of Brett Kavanaugh. Democrats lost Senate seats in FL, IN, MO, and ND (all Trump states in 2016, where the incumbent Democratic Senator voted against Kavanaugh's confirmation). Two Democrats who won Trump states in 2018 were in WV (Manchin voted to confirm) and MT (Tester voted against). Incumbent senators in states where they are underperforming Trump (AZ, GA, IA, MT, and NC, GA, MT), likely benefit as it could result in more “straight-ticket” voting and bring some Trump voters back to support their candidacies.

Democrats Fighting Back. Democrats are playing offense in at least three states with Republican incumbents in states Joe Biden is well-positioned to win: AZ, CO, and ME. A race in NC is a toss-up on the Senate and Presidential level. The immediate aftermath of Justice Ginsburg’s passing is a massive wave of pro-Democratic fundraising for Senate candidates. Arguably, the Senate seats in Republican-leaning states of GA, IA, MT, and SC could benefit from higher Republican turnout, funding advantages and energized turnout among Democrats could also sway the elections. SC is interesting as Lindsay Graham is the Chairman of the Judiciary Committee and had previously vowed not to confirm a Supreme Court nominee in an election year, but has since said the rules have changed post-Kavanaugh’s process.

Likely Benefiting Democrat Likely Benefiting Republican Too Soon to Tell

Colorado Texas Arizona* Maine Iowa Georgia x2 Michigan Montana South Carolina Alabama Alaska

Source: Raymond James Research * If Mark Kelly win the Senate seat in November, he will be seated to replace Martha McSally (R-AZ) as soon as the election is certified, likely by the end of November.

McConnell: Kavanaugh fight was ‘adrenaline shot’ in Senate elections – Fox News 11/7/2018

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Upcoming Cases Impact on Upcoming Cases

• 2019-2020 Term showed how evenly divided the Court is: The Supreme Court has numerous cases it • 21% Between October 2019 and October 2020, 21% of total will hear before the end of the year, opinions (13) were decided 5-4. including many hotly contested cases like Noteworthy 5-4 cases included: the challenge to the constitutionality of • Future of DACA (Ginsburg voted with the outcome): Department of Homeland Security v. Regents of the the Affordable Care Act. University of California determined that the Trump • A vacant seat on the Court could lead to 4- Administration is not able to end the Deferred Action for 4 ties which would uphold the decisions of Childhood Arrivals program because it did not justify the lower courts. reasons for doing so under federal law. • • Abortion restrictions (Ginsburg voted with the outcome): After the 2000 election, the Supreme June Medical Services v. Gee decided that a Louisiana law Court was forced to weigh in on a case that required doctors who perform abortions to have related to the election. If the 2020 admitting privileges at hospitals created an undue burden election is contested, the Supreme Court on the right to abortion. • Native American territory (Ginsburg voted with the seat could become even more important. outcome): McGirt v. Oklahoma determined that parts of eastern Oklahoma constitute Native American territory, so they are subject to federal, rather than state, criminal law. Sources: Raymond James Research, US Supreme Court, BallotPedia, USA Today PAGE 11 OF 23

US RESEARCH WASHINGTON POLICY

Upcoming Cases SCHEDULED SUPREME COURT CASES NOW THROUGH THE END OF 2020 Case Description Grant of Certiorari Scheduled Court Date

Carney v. Adams James R. Adams is suing the governor of Delaware because the state only grants judicial positions to Democrats and Republicans, and Adams identifies as neither. December 6, 2019 October 5, 2020

This case aims to resolve conflicts about water rights in the Rio Grande, Colorado, New Mexico, and Texas and, with Congressional approval, sign the Rio Grande Compact. This Compact would require Colorado to send a specified amount of water to new Mexico each year and require New Mexico to send a certain amount of Texas v. New Mexico water to the Elephant Butte Reservoir. June 27, 1974 October 5, 2020

This case, initiated by Arkansas Attorney General Leslie Rutledge, serves to determine if the U.S. Court of Appeals was incorrect in holding that Arkansas' statute Rutledge v. Pharmaceutical Care regulating PBM reimbursement rates, similar to statutes in many other states, is pre-empted by the Employee Retirement Income Security Act of 1974, Management contravening a prior Supreme Court decision that EERISA does not pre-empt rate regulations. January 10, 2020 October 6, 2020

Tanzin v. Tanvir This case explores whether the Religious Freedom Act of 1933 allows lawsuits seeking money damages against individual federal employees. November 22, 2019 October 6, 2020

Ford Motor Company v. Montana Eighth Is the “arise out of or relate to” requirement for a state court to exercise specific personal jurisdiction over a nonresident defendant under Burger King Corp. v. Judicial District Court Rudzewicz met when none of the defendant’s forum contacts caused the plaintiff’s claims? January 17, 2020 October 7, 2020 (1) Does copyright protection extend to a software interface? (2) Does the petitioner’s use of a software interface in the context of creating a new computer Google LLC v. Oracle America, Inc. program constitute fair use? November 15, 2019 October 7, 2020 Does an entity that is passively retaining possession of property in which a bankruptcy estate has an interest have an affirmative obligation under the Bankruptcy Chicago v. Fulton Code's automatic stay, 11 U.S.C. § 362, to return that property to the debtor or trustee immediately upon the filing of the bankruptcy petition? December 18, 2019 October 13, 2020

United States v. Briggs Does the Uniform Code of Military Justice allow prosecution of rape committed between 1986 and 2006 if it was not discovered and charged within five years? November 15, 2019 October 13, 2020

Does a criminal conviction bar a noncitizen from applying for relief from removal when the record of conviction is merely ambiguous as to whether it corresponds to Pereida v. Barr an offense listed in the Immigration and Nationality Act? December 18, 2019 October 14, 2020 Torres v. Madrid Is an unsuccessful attempt to detain a suspect a "seizure" within the meaning of the Fourth Amendment? December 18, 2019 October 14, 2020

Salinas v. Railroad Retirement Board Is the Railroad Retirement Board’s denial of a request to reopen a prior benefits determination a “final decision” subject to judicial review? January 10, 2020 November 2, 2020 U.S. Fish and Wildlife Service v. Sierra Does exemption 5 of the Freedom of Information Act allow federal agencies to withhold draft documents prepared as part of a formal interagency consultation under Club the Endangered Species Act of 1973? March 2, 2020 November 2, 2020 Borden v. United States Does a crime whose mens rea is "recklessness" qualify as a 'violent felony' under the Armed Career Criminal Act of 1984? March 2, 2020 November 3, 2020

Jones v. Mississippi Does the Eighth Amendment require the sentencing authority to find that a juvenile is incorrigible before imposing a sentence of life without parole? March 9, 2020 November 3, 2020 (1) Can free exercise plaintiffs only succeed by proving a particular type of discrimination claim — namely that the government would allow the same conduct by someone who held different religious views — or must courts consider other evidence that a law is not neutral and generally applicable? (2) Should Employment Division v. Smith be revisited? (3) Does a government violate the First Amendment by conditioning a religious agency’s ability to participate in the foster care system Fulton v. Philadelphia on conduct that contradicts the agency’s religious beliefs? February 24, 2020 November 4, 2020 Brownback v. King Does a final judgment in favor of the United States under the Federal Tort Claims Act bar an identical claim under Bivens v. Six Unknown Named Agents? March 30, 2020 November 9, 2020 To serve notice in accordance with 8 U.S.C. § 1229(a) and trigger the stop-time rule, must the government serve a specific document that includes all the information Niz-Chavez v. Barr identified in section 1229(a), or may it serve that information over the course of as many documents and as much time as it chooses? June 8, 2020 November 9, 2020 California v. Texas Does the elimination of the Affordable Care Act's individual mandate with the passage of the Tax Cuts and Jobs Act of 2017 invalidate other parts of the law? March 2, 2020 November 10, 2020 Sources: Raymond James Research, US Supreme Court, BallotPedia

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Upcoming Cases KEY CASES REMAINING THIS YEAR

This case serves to determine if the U.S. Court of Appeals was incorrect Rutledge v. Pharmaceutical in holding that Arkansas' statute regulating PBM reimbursement rates, Care Management similar to statutes in many other states, is pre-empted by the Employee Retirement Income Security Act of 1974, contravening a prior Supreme Court decision that EERISA does not pre-empt rate regulations.

This case aims to determine: (1) Does copyright protection extend to a Google LLC v. Oracle software interface? (2) Does the petitioner’s use of a software interface America, Inc. in the context of creating a new computer program constitute fair use?

This case explores whether the elimination of the Affordable Care California v. Texas Act's individual mandate with the passage of the Tax Cuts and Jobs Act of 2017 invalidates other parts of the law.

Sources: Raymond James Research, US Supreme Court, BallotPedia

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Upcoming Cases Affordable Care Act Case

The ACA case will likely continue to be heard as scheduled on 11/10. The Court could delay Arguments before the it, but that is rare. If after they hear the case it is a tie, the lower court ruling stands. They Supreme Court could choose to rehear arguments on the case when the Court has all nine justices, but that is unlikely. With regard to timing, opinions (decisions) on cases heard in October and November 10, 2020 November 2020, especially if they are not unanimous decisions, can be released as late as June 2021.

The 5th Circuit ruled that the individual mandate was unconstitutional but that the lower district court needed to decide what parts of the law could be severed. That means if there Lower Court Ruling is a tie and 5th circuit decision therefore stands only the individual mandate is gone for now, not the whole law. As a reminder a recent study found the individual mandate being effectively gone (no penalty) hasn’t mattered much. The district court will then make a determination of what can be cut then that decision will go through the appeal process again

It is also worth noting that Democrats could theoretically increase the penalty for the mandate before the decision is released which could make it moot especially if they make it Potential Curveball retroactive. Even if it is not considered moot, it would only be unconstitutional if they do not have a penalty to the mandate so they could pass a new mandate with penalty and that would stand based on previous ruling.

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Contested Election PARTISAN DYNAMICS ON THE SUPREME COURT

• When legal voting disputes occur, challenges may make their way up to the Supreme Court for resolution.

• This occurred during the 2000 Bush v. Gore case, when the Supreme Court settled a dispute about Florida’s voting counts and George W. Bush became president.

• Although the Supreme Court is a nonpartisan branch of government, an election outcome dispute requires the Court to wade into the political process.

• The outcome of a contested election that requires the Supreme Court to weigh in would be viewed as influenced by the partisan makeup of the Court: currently a 5-4 advantage for Republican-appointed judges.

Current Supreme Court Composition by Party of Appointment 2000 Supreme Court Composition by Party of Appointment

R: 5* R: 7

D: 3 D: 2

SPLIT: R+2 (or 3) SPLIT: R+5

*6 if a replacement is confirmed Source: Raymond James Research

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Contested Election PARTISAN DYNAMICS ON THE SUPREME COURT– A SHAKY INDICATOR?

• Swing vote surprise. Although conservatives are in the majority on the Court, recent decisions have not consistently followed partisan divides as conservative Justices have crossed over to vote with the liberal minority on significant decisions.

• Chief Justice John Roberts has come under criticism from Republican lawmakers for a cross-over decision validating the legality of the Affordable Care Act’s individual mandate, a 2020 decision affirming abortion rights, and a 2020 decision preventing the Trump administration from ending the “Dreamers” pathway to citizenship for childhood immigrant arrivals. • Similarly, Justice Neil Gorsuch has come under conservative criticism for swing votes on immigration, workplace protections under the Civil Rights Act, and Indian country land rights.

• Kavanaugh’s Chaos Theory. Justice Kavanaugh recently made remarks on the Court which could become a guiding principal should voting results be challenged in 2020.

• In the Court’s recent faithless electoral decision, Kavanaugh revealed his view that the Court should limit election-related chaos. • Question becomes if electoral college and popular vote point to different preferences, what is the less “chaotic” option?

Justice Kavanaugh: “If it’s a close call or a tie-breaker, we shouldn’t facilitate or create chaos”

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Supreme Court Future Impact of Supreme Court Battle

“Let me be clear: if Leader McConnell and Senate Republicans move forward with this, then nothing is off the table for next year. Nothing is off the table.” – Senate Minority Leader Chuck Schumer (D-NY)

“We have our options. We have arrows in our quiver … not ruling anything out.” – House Speaker Nancy Pelosi (D-CA)

Dem options include Judicial, Legislative, and Electoral changes:

JUDICIAL LEGISLATIVE ELECTORAL

A Democratic Senate majority could expand the In the near-term, the House could initiate A Democratic Senate could pursue statehood for number of Justices on the Supreme Court from impeachment proceedings to attempt to force DC and Puerto Rico, affecting the balance of the current nine (“court packing”) or limit the Senate into a trial and vote. We view this as Senate representation. judicial terms. unlikely to derail the Senate process, but could be floated as a lame-duck delay tactic if The number of Court Justices is not Admission of Puerto Rico and DC a complex Democrats win back the Senate. constitutionally defined and has historically process that would not have immediate impact. fluctuated before settling at 9 in 1869. In 2021, Democrats could be more likely to end Puerto Rico voters will vote on U.S. statehood as the filibuster rule in order to fast-track a part of November 2020 general election. Expanding Justices would be the easier task, as broader set of legislative, electoral, and judicial term limits may require a constitutional reforms. Other electoral reforms aim to improve voter amendment depending on interpretation. participation via universal voter registration and an Election Day federal holiday. Recent proposals would expand Supreme Court bench to 13 or 15 Justices, and limit Judicial terms to 18 years. Source: Raymond James Research

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Analyst Information CONTACT INFORMATION

Chris Meekins Ed Mills Healthcare Policy Washington Policy [email protected] [email protected] 202.872.5937 202.872.5933

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PAGE 19 OF 23 US RESEARCH WASHINGTON POLICY and regulated by the Financial Conduct Authority (FCA). RJFI and RJIS are located at Ropemaker Place, 25 Ropemaker Street, London, England, EC2Y 9LY, +44 203 798 5600. This report is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in a locality, state, province, country, or other jurisdiction where such distribution, publication, availability, or use would be strictly prohibited or contrary to law or regulation. The securities discussed in this report may not be eligible for sale in some jurisdictions. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It is not investment advice and does not constitute a personal recommendation, nor does it take into account the particular investment objectives, financial situations, or needs of individual clients. 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Ratings and Definitions RJA (U.S.) Definitions: Strong Buy (SB1) The security is expected to appreciate, produce a total return of at least 15%, and outperform the S&P 500 over the next six to 12 months. For higher yielding and more conservative equities, such as REITs and certain MLPs, a total return of at least 15% is expected to be realized over the next 12 months. Outperform (MO2) The security is expected to appreciate or outperform the S&P 500 over the next 12-18 months. For higher yielding and more conservative equities, such as REITs and certain MLPs, an Outperform rating is used for securities where Raymond James is comfortable with the relative safety of the dividend and expects a total return modestly exceeding the dividend yield over the next 12-18 months. Market Perform (MP3) The security is expected to perform generally in line with the S&P 500 over the next 12 months and could potentially be used as a source of funds for more highly rated securities. Underperform (MU4) The security is expected to underperform the S&P 500 or its sector over the next six to 12 months and should be sold. Suspended (S) The security’s rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable or to comply with applicable regulations or firm policies in certain circumstances. When a security’s research coverage has been suspended, the previous rating and price target are no longer in effect for this security, and they should not be relied upon.

RJL (Canada) Definitions: Strong Buy (SB1) The security is expected to appreciate and produce a total return of at least 15% and outperform the S&P/TSX Composite Index over the next six to 12 months. Outperform (MO2) The security is expected to appreciate and outperform the S&P/ TSX Composite Index over the next 12-18 months. Market Perform (MP3) The security is expected to perform generally in line with the S&P/ TSX composite Index over the next 12 months and could potentially be used as a source of funds for more highly rated securities. Underperform (MU4) The security is expected to underperform the S&P/TSX Composite Index or its sector over the next six to 12 months and should be sold. Suspended (S) The security’s rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable or to comply with applicable regulations or firm policies in certain circumstances or may otherwise have a perceived conflict of interest. When a security’s research coverage has been suspended, the previous rating and price target are no longer in effect for this security, and they should not be relied upon.

Coverage Universe Rating Distribution* Investment Banking Relationships RJA RJL RJA RJL Strong Buy and Outperform (Buy) 57% 60% 20% 26% Market Perform (Hold) 39% 33% 14% 13% Underperform (Sell) 4% 6% 3% 0% *Columnsmaynotaddto100%duetorounding.

RJA Suitability Ratings (SR) Medium Risk/Income (M/INC) Lower to average risk equities of companies with sound financials, consistent earnings, and dividend yields above that of the S&P 500. Many securities in this category are structured with a focus on providing a consistent dividend or return of capital. Medium Risk/Growth (M/GRW) Lower to average risk equities of companies with sound financials, consistent earnings growth, the potential for long- term price appreciation, a potential dividend yield, and/or share repurchase program. High Risk/Income (H/INC) Medium to higher risk equities of companies that are structured with a focus on providing a meaningful dividend but may face less predictable earnings (or losses), more leveraged balance sheets, rapidly changing market dynamics, financial and competitive issues, higher price volatility (beta), and potential risk of principal. Securities of companies in this category may have a less predictable income stream from dividends or distributions of capital. High Risk/Growth (H/GRW) Medium to higher risk equities of companies in fast growing and competitive industries, with less predictable earnings (or losses), more leveraged balance sheets, rapidly changing market dynamics, financial or legal issues, higher price volatility (beta), and potential risk of principal. High Risk/Speculation (H/SPEC) High risk equities of companies with a short or unprofitable operating history, limited or less predictable revenues, very high risk associated with success, significant financial or legal issues, or a substantial risk/loss of principal.

RJL Suitability Ratings RJL has developed a proprietary algorithm for risk rating individual securities. The algorithm utilizes data from multiple vendors, and all data is refreshed at least monthly. Accordingly, suitability ratings are updated monthly. The suitability rating shown on this report is current as of the report's published date. In the event that a suitability rating changes after the published date, the new rating will not be reflected until the analyst publishes a subsequent report.

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International Disclosures For clients of RJA: Any foreign securities discussed in this report are generally not eligible for sale in the United States unless they are listed on a U.S. exchange. This report is being provided to you for informational purposes only and does not represent a solicitation for the purchase or sale of a security in any state where such a solicitation would be illegal. Investing in securities of issuers organized outside of the United States, including ADRs, may entail certain risks. The securities of non-U.S. issuers may not be registered with, nor be subject to, the reporting requirements of the U.S. Securities and Exchange Commission. There may be limited information available on such securities. Investors who have received this report may be prohibited in certain states or other jurisdictions from purchasing the securities mentioned in this report. Please ask your RJA financial advisor for additional details and to determine if a particular security is eligible for purchase in your state.

For clients of RJFS: This report was prepared and published by Raymond James and is being provided to you by RJFS solely for informative purposes. Any person receiving this report from RJFS should direct all questions and requests for additional information to their RJFS financial advisor.

For clients of RJL: In the case where there is Canadian analyst contribution, the report meets all applicable IIROC disclosure requirements. RJL is a member of the Canadian Investor Protection Fund.

For clients of RJFI: This report is prepared for and distributed by RJFI, and any investment to which this report relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in the FCA rules or persons described in Articles 19(5) (Investment professionals) or 49(2) (High net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or any other person to whom this promotion may lawfully be directed. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is, therefore, not intended for private individuals or those who would be classified as retail clients.

For clients of RJIS: This report is prepared for and distributed by RJIS, and is for the use of professional investment advisers and managers and is not intended for use by retail clients. For purposes of the FCA requirements, this report is classified as independent with respect to conflict of interest management. RJFI and RJIS are authorised and regulated by the FCA.

For clients of RJEE: This report is prepared for and distributed by RJEE, and any investment to which this report relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in "Code Monetaire et Financier" and Reglement General de l'Autorite des Marches Financiers. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is, therefore, not intended for private individuals or those who would be classified as retail clients.

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The investments analyzed in this report may not be offered or sold to the public in Brazil. Accordingly, the investments in this report have not been and will not be registered with the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários, the “CVM”), nor have they been submitted to the foregoing agency for approval. Documents relating to the investments in this report, as well as the information contained therein, may not be: (i) supplied to the public in Brazil, as the offering of investment products is not a public offering of securities in Brazil; nor (ii) used in connection with any offer for subscription or sale of securities to the public in Brazil.

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For clients in New Zealand: In New Zealand, this report is prepared for and may only be distributed by RJFI to persons who are wholesale clients

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