corporate court

Today's Supreme Court: Not Since the Gilded Age

There was once a Monty Python sketch about Dennis Moore, a confused Robin Hood wannabe who steals from the poor and gives to the rich. Minus the laugh track, that more and more seems to be the mission of the Corporate Court. The Washington Post's E.J. Dionne has a terrific column on this: "The Supreme Court's Continuing Defense of the Powerful."

The United States Supreme Court now sees its central task as comforting the already comfortable and afflicting those already afflicted.

If you are a large corporation or a political candidate backed by lots of private money, be assured that the court's conservative majority will be there for you, solicitous of your needs and ready to swat away those pesky little people who dare to contest your power.

After discussing some of the outrages of the arch-conservative majority, Dionne writes:

[P]ay heed to how this conservative court majority bristles at nearly every effort to give the less wealthy and less powerful an opportunity to prevail, whether at the ballot box or in the courtroom. Not since the Gilded Age has a Supreme Court been so determined to strengthen the hand of corporations and the wealthy.

People For the American Way Foundation recently submitted testimony to the Senate Judiciary Committee analyzing the ominous pro-corporate tilt of the Roberts Court in the term that just ended.

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Chamber's Influence on Corporate Court Examined

In the term that ended Monday, the Roberts Court continued its disturbing trend of removing the legal protections that are often the only way that individuals can avoid becoming victimized by giant corporations that dwarf them in size, wealth, and power. The Chamber of Commerce not only has been working to make this development happen, it has taken credit for it. As reported in Roll Call:

The liberal Constitutional Accountability Center released a report Tuesday pointing out the increasing philosophical alignment between the chamber and the Supreme Court.

The current court, led by Chief Justice John Roberts, has sided with the chamber's position on business cases 65 percent of the time, more than it did under any previous chief justice.

"The chamber is having a great deal of success in helping to shape the docket of cases that the Supreme Court hears and then having a lot of success in winning the cases," said Doug Kendall, a lead author of the report.

...

[T]he chamber has encouraged the notion that it is somehow influencing justices.

On the [Chamber's] litigation center's website, the group highlights a quote from Carter G. Phillips, a partner at Sidley Austin who often represents the chamber in the Supreme Court.

"Except for the solicitor general representing the United States, no single entity has more influence on what cases the Supreme Court decides and how it decides them than the National Chamber Litigation Center," he said.

You can read more about the Constitutional Accountability Center's report here.

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Senate Judiciary Committee Exposes the Corporate Court

The Senate Judiciary Committee held an important hearing this morning looking into the disturbing trend of the Roberts Court to shut down people’s access to justice when they go to court to vindicate their rights against large corporations.

The hearing was on Barriers to Justice and Accountability: How the Supreme Court's Recent Rulings Will Affect Corporate Behavior. Chairman Leahy opened the hearing discussing how recent Supreme Court cases are making it harder for working Americans to get their day in court. He expressed particular concern about three cases:

  • Wal-Mart v. Dukes, which will make it harder to hold big companies accountable when they violate civil rights laws;
  • Janus Capital Group v. First Derivative Traders, which shielded from accountability those who knowingly committed securities fraud; and
  • AT&T Mobility v. Concepcion, which prevents victims of consumer fraud from the protections of jury trials and class actions.

The committee invited four distinguished people to address the issue: Betty Dukes (plaintiff in the sex discrimination case against Wal-Mart) was the one panelist who was also a party to one of the cases being discussed. She spoke poignantly about her experience at Wal-Mart and the fear that so many women have of going against their employer, especially one as powerful as Wal-Mart. She promised to continue her fight, but knows that without a national class action, many women will be intimidated into not litigating.

Andrew J. Pincus (a Washington lawyer who has argued many cases before the Court) and Robert Alt (from the Heritage Foundation) denied that the Court was tilting unfairly to favor corporations, argued that the cases were decided rightly, and stated that the Court was simply upholding existing law. In contrast, Melissa Hart (law professor at the University of Colorado) and James Cox (law professor at Duke) took the position that the Court is wrongly shielding wrongdoers from accountability.

Professor Hart correctly characterized as a policy decision the Roberts Court's tendency to interpret procedural law so restrictively, despite congressional intent otherwise, so that Americans become unable to present their case to an impartial court.

Senator Whitehouse discussed the critical role juries play in American government. He noted that juries are mentioned three times in the Constitution, and that they remain a government institution that Big Business cannot corrupt. For years, the far right has been denigrating "trial lawyers" and "runaway juries" in an effort to keep Americans from being able to hold the powerful accountable. Whitehouse argued that the Roberts Court is acting consistently with that pattern.

People For the American Way Foundation submitted testimony to the committee on how the Roberts Court has removed substantive and procedural protections that are the only way that individuals can avoid becoming victimized by giant corporations that dwarf them in size, wealth, and power. These decisions often provide road maps to corporate interests in how to avoid accountability for harm that they do. The constitutional design empowering individuals to consolidate their power against corporations is slowly being eroded by a fiercely ideological Court. Today's hearing is part of an effort to expose the harm that is being done.

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Court Lets Corporations Off the Hook For Failing to Warn of Their Dangerous Drugs

The second of the two business-friendly decisions issued by the Corporate Court today was PLIVA v. Mensing, a case involving a woman seriously injured by the generic drugs she took. Since the manufacturer knew that the risks were much greater than had been believed at the time the FDA approved its labeling, she sued in state court over its failure to warn of those risks. Today, the five conservatives ruled that she has no right to file such a lawsuit.

All prescription drugs must have warning labels that are approved by the FDA. Under a recent precedent, if a brand-name drug manufacturer fails to warn consumers of a known risk not on the label, it cannot avoid being sued in state court simply by saying its label was okayed by the FDA. Today's case was similar, except in this case it was a generic drug maker, calling into play a separate federal law that requires generics to use the same warning labels as brand-names.

Gladys Mensing developed a severe and irreversible neurological disorder as a result of her long-term use of a generic drug. At the time, the label indicated that the risk of a disorder of the type she developed was about one in 500 patients. However, according to Mensing, it turned out that the actual incidence was much higher, perhaps as high as one in five patients. Despite mounting evidence that the label greatly understated the risks, none of the companies that manufactured the drug proposed that the FDA modify the warning label.

According to the majority opinion, written by Justice Thomas, the generic drug maker cannot be sued in state court for failing to warn consumers because that state law is preempted by the federal "same label" law. They claimed that the company could not have changed its label without violating federal law. But further than that, they had no obligation to ask the FDA to update the label for the drug (a change that, if adopted, would have applied to the brand name and then, by extension, to the generic). Even if the generic drug maker had gone to the FDA, it could not have changed the label itself until granted permission by the federal government, so Ms. Mensing could not have been warned as required by state law. Compliance with both state and federal law is impossible, according to the majority, so the federal law must preempt the state one under the Supremacy Clause of the United States Constitution.

Justice Sotomayor's dissent (joined by Ginsburg, Breyer, and Kagan) harshly criticized Justice Thomas's reasoning. We do not know if it would really have been impossible for the generic drug manufacturer to have complied with state law by getting the FDA to approve a label change in a timely manner, because it did not even try. Justice Sotomayor writes:

We have traditionally held defendants claiming impossibility to a demanding standard: Until today, the mere possibility of impossibility had not been enough to establish pre-emption.

...

The Court strains to reach [its] conclusion. It invents new principles of pre-emption law out of thin air to justify its dilution of the impossibility standard. It effectively rewrites our [2009] decision in Wyeth v. Levine, which holds that federal law does not pre-empt failure-to-warn claims against brand-name drug manufacturers.

So as of today, the ability of a victim to collect under state law for failure to warn of a prescription drug's dangers depends on happenstance: whether the pharmacist happened to fill the prescription with a brand name or a generic.

Congress has acted over the years to make low-cost generics more widely available to the American people. Surely a result like today's was not its intent.

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Roberts Court Strikes Down Medical Privacy Law in Gift to Pharmaceutical Companies

A divided Supreme Court issued two business-friendly decisions today that demonstrate why, under Chief Justice Roberts, it is frequently called the Corporate Court.

In the first of these, Sorrell v. IMS Health, a 6-3 Court (the five usual suspects joined by Justice Sotomayor) struck down a common-sense medical privacy law passed by Vermont. As part of its comprehensive regulation of pharmaceuticals, the state requires pharmacies to retain certain information about prescriptions and the doctors that order them. Knowing that the drug companies would love to take advantage of this information in order to target doctors to sell more of their product, Vermont protected medical privacy by prohibiting the sale to or use of this data by drug companies without the prescribing doctor's authorization.

According to the Roberts Court, the law allows anyone else to use the data for any other purpose and therefore cannot be defended as protecting medical privacy. It therefore characterizes the law as targeting speech based on the identity of the speaker and the content of the message, thereby triggering heightened First Amendment scrutiny (which – surprise, surprise – the privacy protection law fails to meet).

Justice Breyer's dissent recognizes the Vermont law as the standard, commonplace regulation of a commercial enterprise. It doesn't prohibit or require anyone to say anything, to engage in any form of symbolic speech, or to endorse any particular point of view. It simply addresses a problematic abuse of the prescription data. As the dissenters point out, the federal and state governments routinely limit the use of information that is collected in areas subject to their regulation, as pharmaceuticals have been for over 100 years. Surely heightened First Amendment scrutiny should not be triggered by a law that, for instance, prohibits a car dealer from using credit scores it gets for one purpose (to determine if customer is credit-worthy) for another (to search for new customers).

The dissent states that the Court has never before subjected standard, everyday regulation of this sort to heightened First Amendment scrutiny. Yet this is not the first time that arch-conservative ideologues have taken everyday economic regulation and struck it down on the basis of freedoms enumerated in the Bill of Rights. In fact, the dissenters specifically warn of a return to

the bygone era of Lochner v. New York, in which it was common practice for this Court to strike down economic regulations adopted by a State based on the Court's own notions of the most appropriate means for the State to implement its considered policies.

With Lochner, ideologues routinely struck down consumer and worker protection laws as violating the Due Process Clause so they could impose their own policy preferences. Simply replacing Due Process with Free Speech does not suddenly make this radicalism valid.

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Wal-Mart, Class Action, and Rules Without Remedies

One of the daunting realities of modern life is that we as individuals are confronted by far more powerful corporations. When we want to buy a product, get a job, or seek to hold a large corporation accountable for its misdeeds, our negotiating power is limited by the fact that we are individuals. In contrast, due to its eternal life, its being composed of thousands or even millions of people, and its many state-granted benefits such as limited liability, corporations have consolidated vast resources that would be impossible for any living person attain.

So when that corporation does wrong against individuals – when it engages in a pattern of illegal discrimination, sells defective products, or cheats its customers – the victims often are powerless to hold the corporation accountable unless they, too, can consolidate their resources.

That’s why class actions are so important – and why Big Business keeps asking the Roberts Court to sabotage people’s ability to band together in class actions. Earlier this term, the Corporate Court undercut class actions against consumer fraud in AT&T v. Concepcion. And Monday, it struck out against women employees seeing to hold Wal-Mart accountable for illegal employment discrimination.

Wal-Mart is the nation’s largest private employer. Several women sued the corporate giant on behalf of themselves and similarly situated women around the country - anywhere from 500,000 to 1.5 million employees. To sue as a class, they would have to show that they have claims typical of the whole group.

So that’s what they did. As Justice Ginsburg’s dissent pointed out, the district court that had certified them as a class had identified systems for promoting in-store employees that were sufficiently similar across regions and stores to conclude that the manner in which these systems affect the class raises issues that are common to all class members. The women showed that Wal-Mart has a national corporate climate infused with invidious bias against women. Wal-Mart’s policy is to have personnel decisions made by local managers, all of whom are products of that toxic corporate climate.

But the conservative majority’s 5-4 opinion, authored by Justice Scalia, went out of its way to overlook that obvious commonality, focusing instead on the differences that will inevitably be present when a corporate giant targets so many people. The Roberts Court accepted Wal-Mart's assertion that the women cannot be designated a class because the representative plaintiffs do not have claims typical of the whole group.

What this 5-4 opinion states is that Wal-Mart is so large – and the discrimination it has allegedly engaged in is so great – that its victims cannot unify as one class to hold the company accountable. Individuals or small groups are much less likely to have the resources to seek justice.

Large corporations may be licking their chops at the opportunities the Roberts Court has opened to them to violate the law. They realize that a rule without a remedy is no rule at all.

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This Time, the Roberts Court Keeps the Courthouse Doors Open

The Roberts Court is notorious for too often seeking excuses to close the courthouse door and keep individuals from vindicating their rights. So yesterday’s unanimous opinions in Bond v. US and Smith v. Bayer were refreshing.

In Bond, the Court ruled that an individual has standing to challenge a federal criminal conviction that she claims violates the Tenth Amendment. That Amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Cited by many Tea Partiers as part of their efforts to diminish federal authority, it goes to the federal structure of our country and the rights of states; it does not directly address the rights of individuals. However, that does not bar individuals from standing to argue that they have been harmed by a congressional act that violates the Tenth Amendment.

Yesterday’s Supreme Court decision completely and correctly bypassed the substantive issue and remanded it to the lower courts. But regardless of the merits of Bond’s argument, she has the right to make it as someone whose freedom or imprisonment rests on whether the law she is challenging is constitutional.

Smith v. Bayer was similarly a breath of fresh air. The case asked if a federal court that has denied class certification can prohibit a separate West Virginia state court lawsuit seeking class certification in a case that is brought by people who had not been part of the federal lawsuit, but who would have belonged to the federal class had it gone through. A federal law called the Anti-Injunction Act authorizes a federal court to shut down state litigation of a claim or issue that was already presented to and decided by the federal court.

In an opinion authored by Justice Kagan, the Supreme Court unanimously pointed out that the federal rules on when you can validly form a class are not necessarily the same as West Virginia’s rules. So the state court was addressing a new legal question, not the one that the federal court had already addressed. In addition, eight of the Justices (all but Justice Thomas) agreed that because the federal class status was denied, Smith was by definition not a party to the federal claim and cannot be bound by it.

While the Supreme Court kept the courthouse doors open in these two cases, there are still cases pending like Wal-Mart where the Corporate Court can do significant damage to people’s ability to hold corporations accountable.

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The Corporate Court Strikes Again: By 5-4, Supreme Court Undermines Class Action Consumer Protection Suits

Yesterday at the Supreme Court, the five conservative Justices on the Corporate Court handed corporate interests even greater control than before over Americans' daily lives. In AT&T v. Concepcion, a narrow 5-4 majority used a federal arbitration law in a way wholly alien to its intent: to undermine state consumer protection laws across the country. Even worse, under yesterday’s precedent, employers may now be able to easily cut off anti-discrimination enforcement through class action lawsuits – often the only way to address employment discrimination – by simply refusing to hire anyone who does not agree to resolve future conflicts through arbitration clauses that contain a ban on class action.

This case started when AT&T allegedly scammed thousands of customers by offering a "free" second phone, then charging them for the taxes on the undiscounted price of the phone. One of its victims brought a class action suit against the company. However, AT&T had a service contract where consumers had to agree to resolve any future claims against the cell phone company through arbitration, rather than the courts. In addition, customers had to agree not to participate in any class action against the telecommunications giant. So AT&T asked the court to enforce the agreement it had imposed upon the Concepcions by throwing out the class action suit and forcing them into arbitration, one lone family against AT&T suing for a few dollars without the protections of courts of law or neutral judges.

Under California law, the contractual prohibition against class action is so outrageous as to be illegal. California recognizes that such provisions effectively protect companies from being held liable for their transgressions and that they are able to force them upon consumers only because of the corporations’ vastly superior bargaining position.

But the Roberts Court said this state protection of consumers is preempted by the Federal Arbitration Act, which generally encourages courts to compel arbitration in accordance with the terms of arbitration agreements.

Many of us have gotten incomprehensible bills from giant telecom companies with relatively small charges for services never ordered, or mysterious taxes or fees that the company should not be charging. Unfortunately, the vast majority of consumers who are cheated in these situations don't even realize it. Moreover, because the amounts at issue are relatively small, there is little incentive for consumers to undertake the significant expenses of recovering their loss. Even when the company pays out to the tiny percentage of defrauded customers who go to the trouble to engage in lone arbitration against the company, the overall scheme remains profitable.

That is why class actions are so important. They allow the entire universe of cheated consumers to recoup their losses, making possible the deterrent effect of a potentially significant financial loss to the deceptive corporation. In ruling for AT&T, the Roberts Court has devastated state-level consumer protections like California’s and essentially given corporations an instruction manual on how to commit rampant fraud against consumers. Beyond that, using the same interpretation of the Federal Arbitration Act, employers may be able to evade class-action discrimination lawsuits as well, putting all workers at risk.

Fortunately, unlike Citizens United, this Corporate Court gift to Big Business rests on an interpretation of a statute, not the Constitution. In other words, Congress can fix this problem with a simple bill. Senate Judiciary Committee Chairman Patrick Leahy has already called on Congress to do just that.

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Corporate Personhood Debunked (This Time)

It's not often these days when you can't get even one of the conservative Justices on the Supreme Court to ignore precedent, twist the facts, ignore logic, or do whatever else it takes to help Big Business consolidate the already substantial power it exercises over ordinary Americans. Today is such a day.

In FCC v. AT&T, the giant telecom corporation, backed by supportive amicus briefs from numerous corporate interests, argued that inanimate corporations have "personal privacy" for the purposes of the Freedom of Information Act (FOIA).

Several years ago, the FCC investigated alleged overcharges by AT&T. After the investigation, AT&T's competitors filed a FOIA request to get the FCC to release documents on what they had found. The FCC said it would not disclose confidential commercial information about AT&T, pursuant to a specific exemption in the FOIA statute. However, the company argued that certain additional material would cause the company embarrassment and therefore fell into a separate statutory FOIA exemption allowing government agencies not to disclose material compiled for law enforcement purposes that would "constitute an unwarranted invasion of personal privacy."

The Third Circuit Court of Appeals had ruled for AT&T, holding that FOIA's statutory language "unambiguously" indicates that a corporation may have a personal privacy interest within the meaning of this FOIA exemption. The court said that: (1) FOIA defines "person" to include a corporation; and (2) the term "personal" is derived from the word "person" and is simply the adjectival form of the word.

Aside from leading to a bizarre definition of "personal," Big Business's idea of corporate personhood would significantly weaken the ability of news organizations and government watchdogs to examine government records containing vital information about corporate behavior affecting public health and safety – records that would otherwise remain hidden from the American people.

Fortunately, this assertion of corporate personhood was too much even for the Corporate Court that gave us Citizens United. A unanimous Court noted that in common conversation, the term "personal" is often used as the opposite of "business-related." Moreover, a simple look at a dictionary suggests that the word "personal" does not relate to artificial entities like corporations.

The U.S. Chamber of Commerce submitted an amicus brief in support of AT&T. Its extremism has reached the point that not even one Justice on the Supreme Court was willing to accept its view. Keep that in mind the next time the Chamber purports to represent mainstream values as it seeks to weaken Americans' efforts to impose reasonable regulations on businesses and hold them accountable when they do wrong.

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Cue the Violins: Inanimate Corporations Have Feelings, Too

On Wednesday, in a case involving the Freedom of Information Act (FOIA), the nation's corporate giants are asking the Supreme Court to rule that they have a right to "personal privacy" just as people do. If the Corporate Court ignores the ordinary meaning of the term "personal privacy" and grants corporations their wish to have the same rights as people, as in Citizens United, corporations will be able to block the news media and government watchdogs from accessing important government records that corporations would prefer remain hidden.

The case started several years ago, when the FCC investigated alleged overcharges by AT&T. After the investigation, AT&T's competitors filed a FOIA request to get the FCC to release documents on what they had found. The FCC said it would not disclose confidential commercial information about AT&T, pursuant to a specific exemption in the FOIA statute. However, the company argued that certain additional material would cause the company embarrassment and therefore fell into a separate statutory FOIA exemption - Exemption 7(C) - allowing government agencies not to disclose material compiled for law enforcement purposes that would "constitute an unwarranted invasion of personal privacy."

The FCC ruled that Exemption 7(C) does not cover a corporation's "privacy interest," noting that a corporation's interests are of necessity business interests, not privacy ones.

However, the agency was overruled by the Third Circuit Court of Appeals, which held that FOIA's statutory language "unambiguously" indicates that a corporation may have a personal privacy interest within the meaning of this FOIA exemption. The court said that:

  • FOIA defines "person" to include a corporation; and
  • the term "personal" is derived from the word "person" and is simply the adjectival form of the word.

Therefore, the court reasoned, corporations have personal privacy under the FOIA exemption. And because this interpretation was unambiguous, the court said statutory purpose, legislative history, and contrary case law from other circuits were not relevant.

Nevertheless, it did devote a footnote apiece to these three factors and claimed they were not inconsistent with its interpretation. For instance:

Finally, the [DC Circuit Court of Appeals] in Washington Post noted that Exemption 7(C) concerns only "intimate" details, including "marital status, legitimacy of children, identity of fathers of children, medical condition, welfare payments, alcoholic consumption, family fights, and reputation." But a corporation, too, has a strong interest in protecting its reputation.

Cue the violins: Inanimate corporations have feelings, too.

Numerous corporate interests, including the Chamber of Commerce, have filed amicus briefs in support of AT&T, arguing that inanimate corporations have "personal privacy."

If the Roberts Court - with Justice Kagan recused - rules in favor of AT&T, it will significantly weaken the ability of news organizations and government watchdogs to examine government records containing vital information about corporate behavior affecting public health and safety – records that would otherwise remain hidden from the American people. In addition, the Court may seize the opportunity to lay the legal groundwork for treating inanimate corporations like people in other respects.

At least before Pinocchio became human, he had to prove himself truthful and unselfish. Here, in contrast, we have profit-seeking entities asking for humanity so they can hide their embarrassing conduct.

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Thomas and Scalia, the Commerce Clause, and the Healthcare Law

Justices Clarence Thomas, joined by Justice Antonin Scalia, issued an interesting dissent yesterday to the Supreme Court's decision not to hear a challenge to a federal law making it a federal crime for a convicted felon to buy, own, or possess body armor (such as a bullet-proof vest) that had ever been sold in interstate or international commerce, even if the felon himself did not obtain it through interstate or international commerce. Congress passed the law as an exercise of the power granted it by the Constitution's Commerce Clause.

The rejected challenge in Alderman v. U.S. asserted that Congress had gone beyond the power granted to it by the Commerce Clause - the same argument that opponents of the landmark healthcare reform legislation have made. Since the constitutionality of the healthcare law under the Commerce Clause will likely be decided by the Supreme Court, Thomas and Scalia's dissent in this case may be a window into how they will rule in that case.

The Los Angeles Times gives one interpretation of the Court's decision:

The Supreme Court may not be so anxious to rein in Congress' broad power to pass regulatory laws under the Constitution's commerce clause, the key point of dispute in the pending court battles over President Obama's health insurance law. ...

The majority's decision, rendered without comment, could make it more difficult for those challenging health insurance reform to win court orders overturning parts of the new law. ...

Thomas referred to a pair of decisions, beginning in 1995, in which the court's conservatives, led by Chief Justice William H. Rehnquist, sought to put clearer limits on Congress' power. ...

But since Chief Justice John G. Roberts Jr. arrived in 2005, the court has not moved to restrain federal power.

A Justice can have any number of reasons for not wanting to hear a case — perhaps the Justice agrees with the lower court, or the issue is not important enough, or the facts of the case make it an inconvenient vehicle to discuss the legal issue, or there has not yet been enough debate among the circuit courts. As in this case, the public rarely knows why the Court voted not to grant cert.

For any of the Justices to voice their disagreement when cert is denied is unusual, and it suggests that they feel strongly about the issue at stake. In the body armor case, Justices Thomas and Scalia wrote:

Today the Court tacitly accepts the nullification of our recent Commerce Clause jurisprudence. Joining other Circuits, the Court of Appeals for the Ninth Circuit [uses reasoning that] threatens the proper limits on Congress' commerce power and may allow Congress to exercise police powers that our Constitution reserves to the States. ...

[The lower courts’ interpretation of the Commerce Clause] seems to permit Congress to regulate or ban possession of any item that has ever been offered for sale or crossed state lines. Congress arguably could outlaw the theft of a Hershey kiss from a corner store in Youngstown, Ohio, by a neighborhood juvenile on the basis that the candy once traveled to the store from Hershey, Pennsylvania.

Such an expansion of federal authority would trespass on traditional state police powers. We always have rejected readings of the Commerce Clause and the scope of federal power that would permit Congress to exercise a police power.

While the dissent addresses this case alone, the fact that they issued it may reflect a strong desire to limit the scope of the Commerce Clause across the board. That would likely have an impact on the healthcare case when it reaches the Supreme Court. It may also signal their willingness to strike down acts of Congress that would unquestionably have been found constitutional in the past.

Historically, the Commerce Clause has been one of the most powerful tools that the American people have to impose reasonable regulations on giant corporations — and to hold them accountable when they do wrong. Justices Thomas and Scalia have been reliable supporters of Big Business on the Corporate Court. Any narrowing of the scope of the Commerce Clause needs to be viewed with caution.

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NY Times Analyzes the Corporate Court

As the latest example of the evolving media narrative of the Roberts Court, Sunday's New York Times had an extensive article accurately titled "Justices Offer Receptive Ear to Business Interests." The Times article discusses the successful long-term efforts of the U.S. Chamber of Commerce to get the Court to focus on the rights of Big Business, which come at the cost of the rights of consumers, workers, governments elected by the people, and anyone else who tries to hold corporate giants accountable.

Almost 40 years ago, a Virginia lawyer named Lewis F. Powell Jr. warned that the nation's free enterprise system was under attack. He urged the U.S. Chamber of Commerce to assemble "a highly competent staff of lawyers" and retain outside counsel "of national standing and reputation" to appear before the Supreme Court and advance the interests of American business.

"Under our constitutional system, especially with an activist-minded Supreme Court," he wrote, "the judiciary may be the most important instrument for social, economic and political change."

Mr. Powell ... got his wish - and never more so than with the court led by Chief Justice John G. Roberts Jr.

The Roberts Court's favoritism toward Big Business has become so blatant as to prompt the Times to commission an in-depth study analyzing Supreme Court cases going back more than half a century. The article finds that:

The Roberts court, which has completed five terms, ruled for business interests 61 percent of the time, compared with 46 percent in the last five years of the court led by Chief Justice William H. Rehnquist, who died in 2005, and 42 percent by all courts since 1953. ...

In the first five terms of the Roberts court, the corresponding bloc of five more conservative justices voted for the [U.S. Chamber of Commerce's] position 74 percent of the time, and the four more liberal justices 43 percent of the time.

Unfortunately, the "social, economic, and political change" the U.S. Chamber is so actively working for involves snuffing out the rights of everyday Americans. As made clear from the amicus briefs it has filed this term, the Chamber's values include letting businesses fire family members of any employee who dares assert their rights, devastating state-level consumer protections against fraud, and severely restricting states' ability to take action against corporations' dangerous pollutants. Last term, the Chamber supported the activist Citizens United decision, which has had devastating consequences for American democracy and generated unusual criticism from former Justices O'Connor and Stevens.

When activist pro-business Justices regularly give a sympathetic ear to a national Chamber of Commerce that is hostile to basic American values, the resulting tilt in favor of Big Business is not good for our country.

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Justice Alito Confronted at GOP-Related Fundraiser

ThinkProgress’s Lee Fang went out to a high-profile, high-price fundraiser for the right-wing magazine the American Spectator last night, and confronted one of the gala’s distinguished guests: Supreme Court Justice Samuel Alito.

The Spectator is more than merely an ideological outlet. Spectator publisher Al Regnery helps lead a secretive group of conservatives called the “Conservative Action Project,” formed after President Obama’s election, to help lobby for conservative legislative priorities, elect Republicans (the Conservative Action Project helped campaign against Democrat Bill Owens in NY-23), and block President Obama’s judicial appointments. The Spectator’s gala last night, with ticket prices/sponsorship levels ranging from $250 to $25,000, featured prominent Republicans like RNC chairman Michael Steele, hedge fund billionaire Paul Singer (a major donor to Republican campaign committees and attack ad groups), and U.S. Chamber of Commerce board member and former Allied Capital CEO William Walton. Among the attendees toasting Rep. Michele Bachmann (R-MN), the keynote speaker for the event, was Supreme Court Justice Sam Alito.

It’s not the first time Alito has attended the Spectator dinner. In 2008, Alito headlined the Spectator’s annual gala, helping to raise tens of thousands of dollars for the political magazine. According to Jay Homnick, a conservative who attended the 2008 Spectator gala, Alito spent much of his speech ripping then Vice President-elect Joe Biden as a serial plagiarizer.

As Alito entered the event last night, I approached the Justice and asked him why he thought it appropriate to attend a highly political fundraiser with the chairman of the Republican Party, given Alito’s position on the court. Alito appeared baffled, and replied, “it’s not important that I’m here.” “But,” I said, “you also helped headline this same event two years ago, obviously helping to raise political money as the keynote.” Alito replied curtly, “it’s not important,” before walking away from me.

This is hardly the first time that Justices on the Court’s far-right majority have been caught in ethically questionable hobnobbing with GOP political figures. Last month, it was reported that Justices Scalia and Thomas had attended a meeting with GOP officials arranged by the Tea Party-funding billionaire Koch brothers. The Huffington Post’s Sam Stein discussed the ethical implications of the Justices’ attendance:

"There is nothing to prevent Supreme Court justices from hanging out with people who have political philosophies," said Steven Lubet, a professor of law at Northwestern University who teaches courses on Legal Ethics.

But the Koch event appears more political than, say, the Aspen Ideas festival. In its own invitation, it was described as a "twice a year" gathering "to review strategies for combating the multitude of public policies that threaten to destroy America as we know it." In addition, it's not entirely clear what the two Justices did at the Koch event. A copy of the invitation that served as the basis for the Times's report was posted by the liberal blog Think Progress. It provided no additional clues. A call to the Supreme Court and an email to a Koch Industries spokesperson meanwhile were not immediately returned.

What complicates the report, as Gillers notes, is that the Supreme Court, very recently, handed down a major decision on campaign finance law that Koch Industries quickly utilized. Citizens United overturned existing law by ruling that corporations could spend unlimited amounts of money on federal elections. Koch has always been an active political and philanthropic giver. And its checks have been sent to Democrats as well as Republicans (though weighted more heavily to the latter). This cycle, however, the company has become one of the premier bankrollers of conservative causes, and earned the enmity of Democrats for doing so.

Perhaps what’s even more troubling than Supreme Court justices’ participation in overtly political strategizing and fundraising events is that they don’t seem to see why anyone would find their participation problematic. When Alito told Fang, “It’s not important that I’m here,” he probably believed what he was saying. From someone who exercises judgment for a living, that’s downright baffling.

Maybe the problem with the Corporate Court is not that they’ve allowed their views to be swayed by right-wing and corporate interests…but that they’ve never seen those interests as anything outside of the mainstream.
 

PFAW

Supreme Court Considers Class Action Ban

Corporate interests already exercise an inordinate level of control over Americans' daily lives. This morning, in AT&T Mobility v. Concepcion, the Supreme Court heard oral arguments in a case that threatens to give yet another advantage to powerful corporations over individual Americans. AT&T is essentially asking the Court to take a wrecking ball to state consumer protection laws.

At issue is whether states have the right to protect consumers from contracts that are so unfair as to be unconscionable - where one party has so much bargaining power over the other that the weaker one has little choice but to agree to highly disadvantageous terms.

This case started when AT&T offered phone purchasers a "free" second phone, then charged the consumers for the taxes on the undiscounted price of the "free" phone. AT&T allegedly pulled this scam on thousands of its customers. One of its victims, the Concepcions, brought a class action suit against AT&T. However, AT&T had a service contract where consumers had to agree to resolve any future claims against the cell phone company through arbitration, rather than the courts. In addition, customers had to agree not to participate in any class action against AT&T. So AT&T asked the court to enforce the agreement it had imposed upon the Concepcions by throwing out the class action suit and forcing them into arbitration, one lone family against AT&T without the protections of courts of law or neutral judges.

However, the court denied AT&T's motion, determining that the "no class action" contractual provision was unconscionable under California law and, therefore, not enforceable. Moreover, the court rejected AT&T's claim that the Federal Arbitration Act preempts state law in this case, making the contract fully enforceable against the Concepcions. (The Federal Arbitration Act generally encourages courts to compel arbitration in accordance with the terms of arbitration agreements.) The Ninth Circuit upheld the lower court decision. However, hoping to get a different result from the corporate-friendly Roberts Court, AT&T appealed.

As countless Americans can attest, it is not at all uncommon for a giant telecommunications service provider to provide extremely complex monthly bills that are nearly impossible for the average person to understand. It is certainly not unheard of for such bills to hide relatively small charges for services never ordered, or mysterious taxes or fees that the company should not be charging. Unfortunately, the vast majority of consumers who are cheated in these situations don't even realize it. Moreover, because the amounts at issue are relatively little, there is little incentive for consumers to undertake the significant expenses of recovering their loss. Even when the company pays out to the tiny percentage of defrauded customers who go to the trouble to engage in lone arbitration against the company, the overall scheme remains profitable.

Class actions are a tool that allows the entire universe of cheated consumers to recoup their losses, making possible a potentially significant financial loss to the company that sets out to defraud its customers. If the Supreme Court rules for AT&T, it will devastate state-level consumer protections and essentially grant a permission slip for rampant corporate fraud against consumers.

As the Alliance For Justice points out in its excellent analysis of this case, it is not only consumer protections that are at risk should AT&T win this case. Class action suits have often been the only way for employees experiencing illegal discrimination to contest it without spending vast amounts of money and risking retaliation. Depending on how the Roberts Court rules, it may enable employers to easily cut off this avenue of anti-discrimination enforcement by simply refusing to hire anyone who does not agree to resolve future conflicts through arbitration, with a ban on class action.

As described in People For the American Way Foundation’s Rise of the Corporate Court report, the Roberts Court has not been shy in twisting the law in order to rule in favor of corporations and against average Americans. AT&T Mobility v. Concepcion may turn out to be another gift of power to the already-powerful.

PFAW

Timothy Egan Calls Out the Corporate Court

A classic claim of pro-corporate shills regarding Citizens United is that campaign finance reform is the equivalent to banning books and government censorship. As Chief Justice Roberts said, “we don’t put our First Amendment rights in the hands of FEC bureaucrats.”

But what Americans are experiencing this election year is the emergence of political organizations with secret sources of funding, an increase in corporate “Astroturfing” through front groups, and an avalanche of money to run misleading advertisements across the country.

In the New York Times, Timothy Egan points out how the astronomical amount of money poured into this election is actually drowning-out the voices of citizens and distorting the democratic process. Egan writes that the Court’s decision in Citizens United “will go down in infamy” for giving corporations the right to easily and secretly fund political groups “to bludgeon the electorate” by flooding the airways with deceptive ads:

Here’s what’s happened: Spending by interest groups in this fall’s senate races has gone up 91 percent from the same period in 2008, according to the Wesleyan Media Project. At the same time, spending by political parties has fallen 61 percent.

So corporations, whose sole purpose is to return money to shareholders, were given the legal right to be “natural persons” in our elections and are now overwhelming them. But political parties, which exist to promote ideas and governing principles, have seen their voices sharply diminished.

If the hell of Colorado’s current election season is what those isolated, black-robed kingmakers on the high court had in mind, you certainly didn’t see it in the nonsense of their decision.

“We should celebrate rather than condemn the addition of this speech to the public debate,” wrote Justice Antonin Scalia in his concurrence of Citizens.

I can’t find any celebrating in Colorado, except by broadcasters cashing the checks of big special interest groups. Republicans and Democrats, conservatives and liberals, by a large majority in the polls, agree on this: outside groups should not be allowed to dominate election spending.

The court missed the reality of what would happen once the floodgates were opened to the deepest pockets of the biggest players. They turned back a century of fine-tuning the democracy, dating to Teddy Roosevelt’s 1907 curbs, through the Tillman Act, against Gilded Age dominance of elections. They focused on a fantasy.

“The First Amendment protects more than just the individual on a soapbox or the lonely pamphleteer,” wrote Justice Roberts.

Come to Colorado, your honor. You will see that those iconic individuals don’t have a prayer in the post-Citizens-United world, let alone some broadcast time for the soapbox.

Here was the court’s prediction: “The appearance of influence or access will not cause the electorate to lose faith in our democracy.” Really? Perhaps the top complaint this year about the barrage of outside attack ads is that nobody knows who is behind them, which promotes the exact opposite of what the Roberts court predicted.

Celebrating yet? Get used to it. Though Republican-leaning special interests are currently outspending the other side by a 9-to-1 ratio, Democrats will soon follow Karl Rove’s lead and learn to bundle and hide wealthy contributors.

As ugly as 2010 has been, the next election cycle, for president in 2012, will bring us a John Roberts’s America that will make this year look like a town hall meeting from a Rockwell painting.
PFAW

Survey Shows Obstacles to Justice in U.S. Courts

Dan Froomkin is reporting on a depressing new report that paints a frightening picture of just how difficult it is for ordinary Americans to receive justice in our courts. He discusses:

the finding[s] of a world-wide survey unveiled Thursday morning that ranks the United States lowest among 11 developed nations when it comes to providing access to justice to its citizens -- and lower than some third-world nations in some categories.

The results are from the World Justice Project's new "Rule of Law Index", which assesses how laws are implemented and enforced in practice around the globe. Countries are rated on such factors as whether government officials are accountable, whether legal institutions protect fundamental rights, and how ordinary people fare in the system. ...

But the most striking findings related to access to justice for ordinary people. ...

[The study] found a significant gap between the rich and the poor in terms of their use and satisfaction with the civil courts system.

Froomkin quotes from a World Justice Project news release:

[O]nly 40% of low-income respondents who used the court system in the past three years reported that the process was fair, compared to 71% of wealthy respondents. This 31% gap between poor and rich litigants in the USA is the widest among all developed countries sampled. In France this gap is only 5%, in South Korea it is 4% and in Spain it is nonexistent.

Unfortunately, it is no surprise that the wealthy and powerful are happier with our court system than are the rest of the American people. This is consistent with the analysis contained in a People For the American Way Foundation report released earlier this year. Citing Citizens United and numerous other cases, The Rise of the Corporate Court: How the Supreme Court is Putting Business First exposed the undue deference the Supreme Court has too often paid to corporations at the expense of the legal rights of individuals.

Making it even harder for average Americans victimized by powerful corporations to seek justice, one in eight seats on the federal bench is vacant. In fact, the Administrative Office of the U.S. Courts has declared judicial emergencies in numerous circuits and districts where the vacancies have reached the crisis point. Yet Senate Republicans refuse to allow floor votes on qualified and unopposed judicial nominees to help relieve the overburdened federal judiciary.

The integrity of the entire judicial branch of the United States government is at risk.

PFAW

New Term for the Supreme Court, New Opportunities for Corporations

As detailed in PFAW Foundation’s report Rise of the Corporate Court, the Roberts Court has been routinely and consistently bending the law and the Constitution to elevate the rights of corporations over the rights of individuals. To borrow a metaphor from Chief Justice Roberts, when corporate power over employees, consumers, and the American population at large is at risk, the umpire is biased. Corporations win, people lose.

In January, this judicial tilting of the scales of justice to favor corporate America reached a new height with Citizens United.

So what’s in store for the Supreme Court term that begins next Monday? While we will not know for sure until the opinions are issued, we are beginning to see some of the cases that may become important. For instance, the Court earlier today added a number of new cases to its docket, including three focusing on the rights of corporations in what the New York Times characterizes as “unusual settings.”

In two of the cases, the justices will consider how the state secrets privilege, which can allow the government to shut down litigation by invoking national security, applies in a contract dispute between the Navy and military contractors hired to create a stealth aircraft.

In the third case, the justices agreed to decide whether corporations have privacy rights for purposes of the Freedom of Information Act. ...

The privacy case [FCC v. AT&T] will consider whether a provision of the Freedom of Information Act concerning "personal privacy" applies to corporations. ...

AT&T seeks to block the release of documents it provided to the FCC, which conducted an investigation into claims of overcharges by the company in a program to provide equipment and services to schools. The documents were sought under the freedom of information law by a trade association representing some of AT&T's competitors.

AT&T relied on an exemption to the law for law enforcement records that could "constitute an unwarranted invasion of personal privacy." ...

The federal government, represented by Solicitor General Kagan, urged the Supreme Court to reject the argument that the exemption "protects the so-called 'privacy' of inanimate corporate entities."

This case will turn on the language and legislative history of the FOIA statute, as well as prior Court rulings. Court watchers will be looking out for any efforts by the Roberts Court to use this case, as it did in Citizens United, to aggrandize corporate power far beyond anything contemplated by the law or even the parties themselves.

PFAW

The Price of Justice

The Brennan Center for Justice, Justice at Stake, and the National Institute on Money in State Politics released a startling report today on the skyrocketing cost of state Supreme Court elections. The amount of money spent on state judicial races in the 38 states that have them has more than doubled in the 2000-2009 decade compared to the decade before, the report finds—and most of it has come from big spenders with big agendas, such as the Chamber of Commerce and trial lawyers’ groups.

The sway of big money over judicial elections, the report argues, is only likely to intensify in the post-Citizens United world, where big spenders will be able to pour more money into judicial races while “using shell organizations to keep their role out of the public eye.”

Take the case of Louis Butler, a Wisconsin Supreme Court justice who was nominated to fill a vacancy in the court in 2004, and four years later ran for a full term. Shortly after losing the election in 2008, Butler described his experience in a panel discussion at Georgetown. NPR reports:

"Wisconsin Manufacturers and Commerce decided at that point that: 'OK, we've had this court for all these years, we never had to worry about how the court voted. We get this new guy on the court, and all of a sudden we lose these three cases,' " Butler said. " 'He's gotta go.' "

And go he did, with the help of ads that tried to portray Butler, a former public defender, as soft on crime. One ad sponsored by the manufacturers and commerce group, the state's largest business lobby, began this way: "When our children go to school, they need to be safe. In our homes and neighborhoods, we need to be safe. Our sheriffs and district attorneys are on the front lines, protecting us. And you know what? Our judges need to know they also must protect us."

Executives at Wisconsin Manufacturers and Commerce, the state's largest business advocacy group, say they were only protecting themselves when they spent $1 million on television ads against Butler. James Buchen, an executive at Wisconsin Manufacturers, said the court under Butler had ruled to expand punitive damage awards and malpractice claims under a fragile 4 to 3 majority.

President Obama has since twice nominated Butler to a federal judgeship—and Senate Republicans have twice sent his nomination back.

Corporate courts—whether elected or appointed—don’t happen by accident. And after Citizens United, the fight to keep courts from having pro-corporate biases has become even harder.
 

PFAW

Cardin Supports Kagan - and the American People

In support of Elena Kagan's nomination, Sen. Ben Cardin just did an excellent job of listing a few of the examples of how the Roberts Court has gone out of its way to rule against ordinary Americans and in favor of the powerful corporations who victimize them. In addition to the Citizens United and the Ledbetter cases, he mentioned the Gross case, where a 5-4 majority overruled precedent to limit the ability of victims of age discrimination to have their day in court.

Through their elected representatives in Congress, the American people have frequently acted to protect people from abuses of power - abuses that get people fired from their jobs, that poison the air we breathe and water we drink, and that take our elections away from us. Yet the Roberts Court is dedicated to twisting the law in order to strike down these efforts. Corporations win, people lose.

Take a look at our Foundation's Corporate Court report to read what Sen. Cardin is talking about.

Elena Kagan recognizes the role of the Court is protecting Americans from the abuse of power.

PFAW

Come to our Netroots Nation Panel: Undoing Citizens United

Will you be in Las Vegas next week for Netroots Nation? If so, join us on Saturday for a discussion of corporate influence in elections and what we can do about it. We’ve put together a great panel of experts and activists to discuss the Citizens United decision and its aftermath—including Reps. Donna Edwards and Alan Grayson, People For’s Marge Baker, Public Citizen’s Robert Weissman, and Lisa Graves of the Center for Media and Democracy.


For details, visit the Netroots Nation page on the panel: Undoing Citizens United: A Comprehensive Plan to Prevent Corporations from Buying Elections.


And, if you’re an overachiever looking to do some background reading, take a look at our recent poll showing overwhelming opposition to the Citizens United ruling and our report on the Rise of the Corporate Court.
 

PFAW