High Court Has Been Good For Business
A dozen rulings in the last year have been a boon to corporations by making it harder to sue them or limiting lawsuit damages.
WASHINGTON — The Bush administration and corporate lobbyists long have sought sweeping “tort reform” to limit lawsuits and massive jury awards — without much success. But in the last year, they quietly have been winning much of what they’ve wanted on a case-by-case basis in the Supreme Court.
With a week to go in their term, the justices have handed down a dozen rulings that sharply limit the damages that can be won in lawsuits or make it harder to sue corporations.
“The Roberts court is even better for business” than the court led for two decades by the late Chief Justice William H. Rehnquist, said Washington attorney Maureen E. Mahoney, who is a longtime friend of Chief Justice John G. Roberts Jr. and a former clerk for Rehnquist. “There is unquestionably a greater number of business cases before the court, and [the justices] are quite willing to limit damage remedies.”
In February, for example, the court threw out an $80-million punitive damage verdict against cigarette maker Philip Morris, ruling that juries cannot use a single victim’s suit to punish a company for harm done by its products to thousands of others.
Last month, in a similar decision, the court set aside a California jury’s $55-million verdict against Ford Motor Co. arising from a rollover accident involving its Ford Explorer.
Two weeks ago, the court shielded the insurance industry from paying millions of dollars in damages for not notifying customers when they check their credit ratings.
A few days before that, the court protected employers from being sued over pay discrimination against women and minorities that occurred in past years. The 5-4 decision overturned a verdict in favor of a female supervisor at a Goodyear Tire plant, saying she had failed to point to discrimination in the 180 days prior to filing her suit — a strict statute of limitations set in the Civil Rights Act of 1964.
On Monday, the court threw out a massive suit alleging “an epic Wall Street conspiracy” among the nation’s leading investment bankers to fix the prices of new stock offerings during the Internet boom of the late 1990s. It was the third decision this year to restrict the reach of antitrust laws.
None of these pro-business decisions came as a huge surprise. But lawyers who practice regularly before the high court say it is noteworthy that business has been winning so consistently.
It is “a very business-friendly court,” said Beth S. Brinkmann, a Washington lawyer who served in the Clinton administration. The justices have made it harder to sue business on many fronts, she said.
Corporate lawyers say that suing companies should not be too easy because that encourages frivolous suits, and defending against them — even when the claim is ultimately rejected — can cost millions of dollars.
Last month, in the case of Bell Atlantic vs. Twombly, the Supreme Court made it easier for companies to win a quick dismissal of some claims.
Five years ago, a group of plaintiffs’ lawyers alleged the “Baby Bell” companies that provide local phone service had secretly conspired not to compete with each other. If this were true, these companies had violated antitrust laws and were subject to damages that could run into the billions. The lawyers claimed to represent every American who had phone service or subscribed to a high-speed Internet line.
Two years ago, a federal appeals court in New York cleared the suit to go forward. But on May 21, the Supreme Court threw it out. It was not enough to say a conspiracy was possible, Justice David H. Souter said in an opinion for a 7-2 majority. Rather, the plaintiffs must show real evidence of a “plausible” conspiracy at the start, he said.
This seemingly technical tweak is likely to have a broad effect, legal experts say, because it set a higher hurdle for civil suits. It will also encourage more trial judges to dismiss claims at the earliest stages, they said.
The ruling strikes “a blow to the plaintiffs’ bar, which has used such bare assertions to extort money from businesses operating legitimately,” said Robin S. Conrad, a lawyer and vice president of the U.S. Chamber of Commerce. “Frivolous lawsuits have huge costs to consumers, workers and the overall economy.”
But a lawyer who represents consumers and accident victims in the high court said business advocates are celebrating too soon.
“I think it’s a premature to say this a pro-business court,” said Robert S. Peck, president of the Center for Constitutional Litigation. “The court takes on these issues one at a time, and in some of the cases, they are taking baby steps. Business is not always getting the victory they asked for.”
Peck represented the family of the deceased smoker in the punitive-damages case involving Philip Morris. He noted the Supreme Court did not set a hard-and-fast rule for limiting such verdicts, but rather told the Oregon courts to reconsider the $80-million award in this case. “It’s not clear they will change the award at all,” he said, referring to the Oregon judges.
Consumer advocates say it is especially important that victims of corporate wrongdoing have the option of going to court, partly because the federal government for years has been scaling back its regulation of business.
“It is only in the courtroom where an individual consumer stands on an equal footing with a powerful corporation. It is there they can have their day in court before a jury,” Peck said. “If it is all decided in the halls of power, the corporations are going to have their way.”
The high court is due to issue more decisions today and release its final rulings of the term next week.
One closely watched case will decide whether to protect companies from suits alleging securities fraud. Business lawyers want to make it harder to sue companies for fraud after a sharp drop in the stock price. They say plaintiffs need real evidence of fraud and deceit, not just rosy predictions for the future that did not come true. A ruling on this issue is due in Tellabs vs. Makor.
The justices also have yet to decide a business case that could affect how much shoppers pay for products ranging from watches and handbags to golf clubs and tennis rackets. For nearly a century, it has been illegal under antitrust laws for manufacturers to set a minimum retail price for their products.
That rule is being challenged this year by a Los Angeles maker of women’s handbags. Mahoney predicted the court is likely to strike down the long-standing rule.
“This court subscribes to the Chicago school of law and economics,” she said, referring to the free-market theories associated with the University of Chicago that cast a skeptical eye on nearly all regulation of business.
© 2007 The Los Angeles Times
Thats ok let the corporations have their way. I have already stopped supporting and buying shit services/products from most of these corporations. I tell everyone that mentions going to a mcdonalds how wrong and nasty it is. Soon
I will be growing a large portion of my own food. I can make my own furniture to a certain point of course and try to do as much else that can be done
The message to the corporations.
WE DON’T NEED YOU. WE ARE SICK OF THE LIES YOU TELL US AND THE CRAP PRODUCTS YOU SELL US. FUCK OFF YOUR TIME IS ALMOST OVER.
Way to go, Oneguy!
Stop feeding the beast. Stop consuming. Move to within walking/biking distance of work. Better yet, begin providing a locally needed product or service *from* your home. Turn your lawn into a garden. Shop at thrift stores.
The only way to stop the system is to get out of the system. This is a two-edged sword: not only will you not have the karma on your soul for being a part of the problem, but if (when) the whole thing collapses, you’ll be a valuable person in your community, as they begin the painful process of re-learning frugality and sustainability.
Starve the beast!
Yes, get out of the system. It is completely rigged in favor of big business. The Constitution is no longer a tool of the people to keep government in line. The Constitution is now an instrument for corporations to rape the American middle-class consumer. The United States of Everything even markets products to the unborn. Time to get out “Step Right Up” by Tom Waits.
Hoa binh
The system has ALWAYS been rigged. The Constitution is the result of fear on the part of the ruling elite. Jefferson spoke harshly against it and only stopped speaking with a statement that, in a democracy, such things could happen, but that the tide would turn again. That is, he assumed the Constitution to be TEMPORARY and a mistake. The Federalist Papers read like a scare campaign any modern government would use to push through measures to restrain democracy and that is, in fact, what they were. After the Revolutionary War, bankers were foreclosing on the veterans who had not been able to service their mortgages while engaged in the war. A rebellion broke out. Though it was quelled, the legislatures reacted in fear and passed moratoriums on foreclosures. James Madison was deeply effected by these events, filled with a fear of the power of unrestrained democracy. He did not see in it an action of justice, nor note that the bankers were not taken out and shot for turning out the very people who had won the nation, but that there was virtually no limit to the power of the people. Even though the people acted with restraint, Madison realized this did not HAVE to be the case and he sought an institutional barrier to this TYRANNY of the MAJORITY. The Constitution is a protection of the minority, as you will read in many accounts, and, given our modern context, protecting minorities always seems like a good idea. But, in this case, it is more than protection, it is the delivering of the reins of power and, further, the particular minority protected happens to be the ruling class. While reading the Federalist Papers will open up this campaign of fear, it is simple enough to look at the language on representation in the Constitution. Note that there is a minimum number of people set to have a representative. It is significant because, at the time, many people realized that representation, as Tom Paine told us, is the first step toward evil in a government. Citizens regularly appeared at meetings of government bodies and were free to do so, as well as to speak their minds on the floor. Madison, Jay, and Hamilton seek to limit this inclusive behavior and ensure that the likeliest person chosen to represent a given people will be a WEALTHY person. The larger the group of voters, the more likely the best known name will carry the day and the more difficult for a common individual to appeal to the voters. Of course, the ratio of individuals per representative is much worse today. How many of you have ever met your representatives face to face? How many have ever had more than a handshake and a meaningless word?
If we are to CHANGE this democracy, it is important that we understand WHAT we are changing. Reaching back to the Constitution is hardly going to remedy the ills we face today. It is, in fact, the cause. It is time to put aside a two hundred year old document of the ruling class and write a new Constitution based on the realities of modern life. A constitution that does not shield the wealthy minority from the will of the people.
Strange that this article should appear today. I wrote a post on my blog last night about the particular case of the baby bells and the attack on the Sherman Anti Trust Act. You can read the whole entry at www.unknown-arts.org/politics I will summarize some of the more salient features here.
It is tremendously important that we NOT limit punitive damages paid out in court cases. The Court calls these awards frivolous and uses the same word for most cases brought against Corporations. They paint the corporations as VICTIMS of we ravenous wolves, looking for a free dinner from the body of a healthy, hardworking, organization of capitalism. But one would do well to read A Civil Action (not the movie, but the book) and get an idea of what goes into fighting a corporation that is, beyond doubt, guilty of poisoning an entire community. The struggle is endless, expensive and made more difficult at every turn by judges who do not see merit in using courts to tame Corporate Goliaths. Quite simply, judges are of the ruling class and it is no surprise that they fail to have sympathy for plaintiffs in such cases. This is why we have JURIES and why JURIES decide DAMAGES. Because juries are our PEERS, not our rulers and they are more likely to understand the frustration and suffering of the victim. They are likely to see that this corporation has no heart and that it is only in the pocket book that they feel pain. I have, in a previous post, compared the punishment given to an individual criminal to that of a corporation and there is no doubt that, in individual cases, we seek to make the perpetrator suffer. But in corporate cases, we cannot jail the entire organization. We cannot put the whole organization behind bars until it learns its lessen about civility and responsibility. What we can do is to hurt them financially so that it is deemed UNPROFITABLE to commit the same harmful acts again. And, in the worst cases, it should be within the power of the jury to award a sum sufficient to break the corporation entirely. We who have a death penalty for a single killer committing a single act of murder would preserve a CORPORATION that has committed multiple murders, and often with significantly more suffering on the part of the victim. Consider the suffering of a parent whose child has autism because the vaccine industry continues to use MERCURY in vaccines!!! Knowingly causing countless cases of autism and wrecking the lives of families, destroying a CHILD before they have a chance to live, taking away that comfort of being held by their parents…it is an action inhuman. What is the proper penalty for such an action?
The Supreme Court has been viewed as our last hope in an unresponsive democracy. A place where rule and logic prevail, if not humanity. But, as with ALL members of the Bush administration, we do not have intelligent and thoughtful people leading our Court. We have interested parties in the service of wealth. Nothing else. These MEN appointed by Bush do not care about LAW and the RULE OF LAW any more than his administration. When we look at the recent actions of Alberto Gonzales and the arrogance of their insistence that they can get away with tremendous breaches of ethics, it is sad to realize that this same fever of power has consumed the highest court in the United States. Reading the statement of both the majority and minority in the baby bell case mentioned in the article will make matters clear enough. Justice Stevens, seeking to uphold the rules of the Court and to follow the intentions of the Anti-Trust laws, makes a lucid, compelling argument based on precedent and history. The majority opinion is vague, often using “common sense” philosophy of the Chicago School of economics instead of LAW. It is as if we were to let our Courts be run by folk wisdom from the steps of the local general store, except that our venerable old citizen has been replaced by a power hungry maniac. Justice Souter does not go into depth in his decision. Nor does he fully address the Rules he is subverting. His history is vague, leaving out parts to make it appear as though he is operating within the bounds of previous Law. This is not the case.
The Court is perhaps the most reactionary branch of our government, today, and that is truly saying something. There is no dignity in the court. There is no LAW in the court. They are the shield to horrific corporate behavior, making sure that citizens can not get relief from suffering at the hands of MONEY. They support monopoly, they support power and they support a reckless disregard for the well-being of the PEOPLE who support their privileged lifestyle. The damage Bush has done this country is unthinkable. And to imagine that it is done by a man un-elected. In fact, his office is a GIFT of this same, immoral court. Rulers choosing Rulers. We are losing even the veneer of democracy. We need to press to have these Justices removed on the grounds that they were appointed by an illegal executive. Of the many dangerous things Bush has done, his damage to the Court may have the most lasting impact. Let us not be silent in our dissent.
While we’re going at the Supreme Court and the Constitution, I think we’re missing the main problem: the public. As long at the public believes that government regulation of business is a bad thing — and most people do seem to believe that — then the government is going to have an EPA that doesn’t enforce environment regulations, an OSHA that doesn’t enforce safety regulations, a Supreme Court….
Progressives are losing the battle over peoples’ minds — the battle of ideas — to those who think the goal of society is to provide cheaper handbags. That’s what we have to turn around.
http://ibrakefortrees.wordpress.com
i appreciate the “get off the grid” comments of the first posts, but think they are unrealistic for about 85% of the population. tough shit for them? mighty progressive.
SCOTUS seems to be a mirror image of POTUS: they throw some meat to the rabid base w/their “partial-birth” abortion nonsense, totally ignoring medicine and science, but you see their real concerns in their rulings about business.
To all of those saying that there’s a difference between the Democrats and Republicans, here’s yet another data point to tell you that there is no difference.
Remember, all of these Bush appointees are on the court with the approval and blessing of the Democrats in the Senate. The Democrats could have blocked any of them with a fillibuster. But they didn’t. When someone has the option to stop something and decides not to, then they are basically in approval of this.
A pro-corporate SCOTUS… brought to you with the blessings and approval of the Democratic Party.
As to the battle of ideas, remember there’s only been one voice in this country for the last 27 years. It was a Democratic President name Clinton who was giving speaches saying “the era of big government is over.”
And to me, Katrina provided the perfect opportunity to attack the core of the Republican platform. This notion of everyone takes care of themselves leads too all of us eventually up on a roof with a sign saying “rescue me”! And no hope of help coming.
The very fact that the Democrats refuse to challenge the core Republican philosophy even when given an absolutely golden opportunity to do so tells you a LOT about the fact that the Democratic Party embraces the Republican agenda.
Its the fact that the Democrats back the same message, and refuse to make the counter case for collective action that leads to the public eventually buying the Republican message. Its the only thing they hear.
Health Care is another beautiful case study. The most efficient system that provides the best care to people is a national single payer system like the more intelligent parts of the world use. But every single major Democratic leader will go to great pains to tell us we can’t have this just like every singble Republican. So again, of course the people believe this because its all they hear.
This goes on in issue after issue after issue. To stop this, the first thing to do is to reject the Democratic Party. Treat them like the Republican B-team that they are. If you want anything different in this country than the same old same old we’ve gotten through the Reagan-Bush-Clinton\Gore-Bus years, then we have to stop accepting this.
The reason we are in the spot we are today is that each branch of government and both political parties are in the hands of shortsighted wealthy people and corporations.
The Congress and Courts do not even protect their political turf against Bu$h the inferior because of the money. Nixon’s own party members in Congress told him it was over and he had to resign. I don’t see a movement so far by Congress to stand up for themselves, their branch of government, the Constitution, or their own reputation.
COmarc and Shakker: Good points as per fairness R’ not U.S.
The foundation for Corporate Super Citizenship resides on the foundation of a LIE. Corporations have no legal right to participate in our politics at any level: State; Local; or Federal. Therefore: they have no legal right to buy our entire political class in wholesale lots and thus, get a Supreme Court more right wing than Plessy.
The LIE was worked in Santa Clara v S.P. Railroad 1886. Language was inserted in the Header of the case by a revolving door President from Eastern Railroad named Davis acting as Clerk of the Court. The Header has no legal standing. The Header has no connection to the decision of the Court. The language Davis inserted into the Header could have been a chili recipe or a love sonnet to his concubine for all it’s legal standing.
That Header has been used with a wink and a nod by corrupt judges and lawyers at every level of the Court System to give by stealth what had no legal basis under Law.
What value is stare decisis when the founding “decision” is demonstrated to be a LIE? What validity does a criminal verdict have when decades later that conviction is proved to be a LIE?
How would your world look if corporations had no “Right” to poison, maim, and murder you, the land, the air, and the water for their profits? You might wish to recall at this point that those profits are transferred at a 15% tax rate overwhelmingly to the top 1% of households. Does that sound like a criminal system of rapacious theft based on a LIE?
LIES can be exposed. Tag, you’re it! Pass it on.
Peace.