Another Brick in the Wall: Supreme Court Shields Corporations From the Law (As Usual)
Brick by brick, a wall of protection is being erected around large, powerful corporations to ensure that they never have to be held accountable for their actions or inconvenienced by the legal system that governs the rest of us. For the Roberts Supreme Court, this is the corporations' world; we just live in it.
Even as the public anxiously awaits the outcome of the "big four" civil rights cases still pending before the Court, another case was decided on Thursday that will have far-reaching implications for every American and for the future of the rule of law itself.
In American Express v. Italian Colors, a five-justice conservative majority continued its relentless effort to shield corporations from any accountability for alleged violations of federal laws. Although the case, involving American Express' use of its monopoly power to overcharge small businesses in credit card swipe fees, may sound esoteric, the decision has sweeping implications for the enforcement of a whole host of federal rights.
The decision dealt with the forced arbitration clauses that are included in the agreements between American Express and small businesses that take the company's charge and credit cards, and are in the same vein as those forced on consumers in the ubiquitous small-print contracts that are increasingly a part of daily life. In this instance, the language of the agreements prohibits businesses (in this case a restaurant called Italian Colors) from joining together with other similar businesses to challenge AmEx through class arbitration for what they believe to be illegal practices.
The problem is that no one can effectively challenge this kind of widespread and complex misbehavior without undertaking research that would cost far more than any single small company can afford or could collect if it eventually won the case. The only way the challenge could meaningfully go forward is if numerous small businesses that felt similarly aggrieved could pool their resources and go up against AmEx together.
The Court ruled that the agreement between AmEx and the restaurant says there can be no class arbitrations and that's all there is to it, even though federal antitrust laws govern the principles that are in dispute. For the conservative majority, the ban on class actions, which was written by the corporation into the agreement, trumps any interest in enforcing longstanding antitrust laws -- and presumably, any other bedrock consumer protection, civil rights, or labor law. It's a shame, they say, the system is rigged so that you can't possibly win the case, but that's the way the cookie crumbles.
The Court established a legal Catch-22. You are allowed to challenge the powerful corporation through arbitration, but you have to do it on an individual basis. But an individual challenge can never succeed because the cost of making the case is so high no one can afford to undertake it on their own. Voila! A process to resolve disputes has been established that effectively can never be used. How convenient for American Express!
As Justice Elena Kagan wrote in her blistering dissent: "And here is the nutshell version of today's opinion, admirably flaunted rather than camouflaged: Too darn bad."
The Italian Colors ruling is not an isolated event, nor was the holding mandated by the text of the Federal Arbitration Act. The conservative majority continued its trend of reaching, often beyond the bounds of reason, to grant powerful interests an ever-increasing shield against the rest of the country. What's more, this wall of immunity has been built quietly, in cases that rewrite statutory and procedural rules to make it harder for Americans to ever have their claims heard in court.
In Iqbal v. Twombly, for example, the Supreme Court altered federal pleading standards, which has led to an increase in the number of civil rights claims dismissed before even reaching trial. In AT&T Mobility v. Concepcion, another forced arbitration case, the Court gave AT&T a license to steal millions of dollars from its customers in illegally collected fees. In Wal-Mart v. Dukes, a conservative majority made it significantly more difficult for victims of employment discrimination to band together as a class and hold corporations accountable for widespread malfeasance.
We are rapidly approaching a time when there is a private set of laws for big corporations, created and enforced by and for themselves and separate from the system that governs the rest of us. These rules, codified in the myriad contracts and agreements that govern countless everyday commercial transactions, have effectively relegated our laws and Constitutional guarantees to secondary status. By saying that the provisions of these agreements override rights well established in federal law, five justices have engaged in an astonishing abdication of their traditional role of protecting the rule of law.
Fortunately, Congress can -- and must -- act to restore the ability of Americans to hold powerful defendants accountable in federal court. The Arbitration Fairness Act, introduced by Rep. Hank Johnson and Sen. Al Franken, would prevent civil rights, consumer, employment, and antitrust claims from being forced into arbitration. Alliance for Justice strongly supports this legislation, and all efforts to tear down the wall of protection and corporate privilege erected by this Court and ensure that all Americans are able to stand up for their rights.