A legal eagle friend writes in:

There's been a lot of good blog coverage of the Supreme Court's Ricci/discrimination decision and its effect on the Sotomayor nomination. Perhaps it would be worth pointing to the blog posts of National Journal's Stuart Taylor, who points out that Sotomayor's analysis for the Second Circuit was completely rejected by all nine Supreme Court justices.

Sotomayor's proponents (first and foremost, Supreme Court litigator Tom Goldstein) already are arguing that the nominee should not be asked any questions about the Ricci case, because it's theoretically possible that collateral issues arising from the case (e.g., the remedy that the firefighters should receive for the injury they've suffered) could return to the Second Circuit. But the Judicial Canons of Ethics require no such thing:

First, the Senators can limit questions to the issues decided by the Supreme Court and therefore not subject to renewed review by the Second Circuit.

Second, and more obviously, Sotomayor can simply agree in advance to recuse herself from any subsequent Second Circuit review of the case. That's a perfectly reasonable compromise. As of right now, there's no reason to think that her participation is necessary in a three-judge (or full-court) review of yet another trial court decision in that case. Second, even in the unlikely event that she is called to participate in a Second Circuit decision, the importance of the Ricci case to review of her qualifications for a lifetime appointment to the Supreme Court certainly outweighs the cost to a single piece of litigation.