Corporate Law Consequences: Amy Coney Barrett Nomination

Corporate Law Consequences: Amy Coney Barrett Nomination 1

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

Yesterday was the kickoff for Amy Coney Barrett’s Supreme Court confirmation hearings. Barring some unforeseen and unprecedented event, the outcome is not in doubt. Republicans have the necessary votes to confirm her appointment to fill the seat previously held by Ruth Bader Ginsburg. And they are keen to do so. Some have suggested ways for Democrats to block the nomination. But they seem to lack the will – and necessary legislative skills – to do so.

Much media speculation has so far focused on what her appointment would mean for overturning or even more drastically circumscribing the Roe v. Wade decision, or in the event that the 2020 election ends up in the Supreme Court. I’m going to focus on a quick take on another key issue: what the consequences of her successful appointment would be for US corporate law.

Alas, I have yet to finish my broader review of her corporate law record – reading her published output takes time. But sometimes timeliness trump’s originality. This is one of them. So I will rely on the analysis of others whose work I trust as my first take on the question. And then I promise to share my later and I hope deeper and more nuanced thoughts with readers when I’ve finished my reading and have had time to do more thinking.

Let’s look at two sources. First up, Journalist and former senior adviser and speechwriter for the campaign of Bernie Sanders David Sirota highlights a key issue in a tweet.

Sirota expands on this argument in a column her wrote for The Guardian, The US supreme court may soon become plutocracy’s greatest defender. starting with the financial interests that are lined up behind the Barrett nomination:

To be sure, Barrett’s record on social issues is extreme and worthy of scrutiny, criticism and organized opposition, especially at a time when crucial precedents may be on the line. She signed an ad criticizing Roe v Wade and she has suggested that a more conservative court could accept state restrictions on abortion clinics. As a judge, she has also written dissenting opinions against limits on gun rights and in favor of a Trump administration rule to try to make it harder for low-income immigrants to enter the United States.

Those issues, however, are almost certainly not what is motivating big donors to funnel millions of dollars into groups like the Judicial Crisis Network, the oil magnate Charles Koch’s network and the US Chamber of Commerce in support of Barrett’s nomination. Those groups’ ads and lobbying campaigns may try to focus the public debate on religion and court precedent, but such enormous sums of cash flood into judicial campaigns with one underlying goal: enriching the corporations and plutocrats that are making the donations.

Sirota points to the precedent of the 2005 confirmation of John Roberts: Back to that Guardian column:

These organizations know the supreme court is the place to do exactly that – and they have been wildly successful in stacking the court since 2005.

That was the year that business interests engineered John Roberts’ ascension to supreme court chief justice. Back then, corporate groups launched what was their first sophisticated public campaign to install a new jurist on the court – and Roberts was the perfect pick. He had advised the Bush 2000 legal team, he represented corporate clients in private practice and he was considered “the go-to lawyer for the business community”.

Roberts’ business fealty was not the focus of his court confirmation hearings – and that omission is now standard practice. Indeed, other than the brief controversy over Neil Gorsuch’s ruling in a workers’ rights case, recent confirmation battles have rarely ever homed in on nominees’ views on corporate power.

And yet, the Roberts court has been defined by its allegiance to big business. According to the Constitutional Accountability Center, 70% of the Roberts court’s rulings in business cases have sided with the US Chamber – the pre-eminent business lobby group in Washington. That is the highest rate of corporate loyalty of any supreme court in 40 years, and it is a bipartisan affair: Republican-appointed judges are almost always siding with business interests, and in roughly half the cases, Democratic-appointed justices have been with them, too. [my emphasis.]

While Roberts’ break with conservatives on a few cases have led liberals to see him as a sensible moderate, he has presided over a radical court that has helped transform the economy. The court has limited unions’ political power, reduced workers’ bargaining rights, blocked class-action lawsuits against corporate wrongdoers, strengthened fossil fuel companies’ power and emboldened big money interests to buy elections. Even rulings that don’t seem to revolve around corporate power have ended up setting precedents that help strengthen commercial interests power over American society.

Sirota emphasizes an important point, which I have marked in boldface and I will return to in the latter part of this post but first I repeat it here:

That is the highest rate of corporate loyalty of any supreme court in 40 years, and it is a bipartisan affair: Republican-appointed judges are almost always siding with business interests, and in roughly half the cases, Democratic-appointed justices have been with them, too.

For the moment, however, we shall focus on the Barrett nomination. Over to Sirota in the Guardian again:

Barrett is no moderate on economics. An analysis from the watchdog group Accountable Us found that as a circuit court judge, she “faced at least 55 cases in which citizens took on corporate entities in front of her court and 76% of the time she sided with the corporations”.

Only a month before Barrett was nominated to the high court by Donald Trump, she delivered a ruling that could help corporations avoid paying overtime to gig workers. That ruling followed her other rulings limiting the enforcement of age-discrimination laws, restricting the government’s power to punish companies that mislead consumers and curtailing consumers’ rights against predatory debt collectors.

The UCLA law professor Adam Winkler said that if Barrett is confirmed, the consequences could reverberate for decades. “This would really push the court over the top,” said Winkler, the author of the book We the Corporations: How American Businesses Won Their Civil Rights. “You would have a very strong 6-3 conservative majority. And unlike previous times where conservatives had most of the seats on the court, none of the conservatives on [this] court really swing liberal on business or corporate power issues. John Roberts has swung liberal on a few cases in recent years to the celebration of many but his track record is pretty unambiguous and pretty consistently pro-business and anti-consumer.”

Now for a brief word from my second source. Antitrust expert Matt Stoller maintains that by confirming Barrett, the Trump administration would find it more difficult to pursue an effective campaign against monopoly power.


This is as good a place as any to put in a plug for Stoller’s excellent recent book, Goliath: The 100-Year War Between Monopoly Power and Democracy. Read it if you haven’t already. And check out (and bookmark), his Big website, covering the history and politics of monopoly power.I almost always learn something there and an added bonus is that Stoller writers so well – a quality in short supply when one is reading about economic or legal issues (or their intersection).

Deregulation: Rule of Stephen Breyer

Now a case that’s less well-known than it should be is the 2003 State Farm v Campbell. Sirota mentions blocking class action lawsuits, but provides no further details. And who joined the usual conservative suspects – Rehnquist, Stephens, O’Connor, and Souter in the majority? Why none less than Stephen Breyer, a 1994 appointee of Bill Clinton. State Farm is an important case, holding that punitive damages should be limited to no more than a single-digit multiplier of compensatory  damages. Along with further restrictions on class actions, including heightened pleading requirements, this case and its progeny are part of the reason plaintiffs find it more difficult to win big judgements and prevail in court.

Those of us who have long followed his career (which in my case included taking two of his administrative law courses while a student at Harvard Law School) know the seminal role he played in Jimmy Carter’s deregulation of the trucking and airline industries in the late ‘70s. This was effected through his role as a prominent advocate of deregulation and Kennedy protégé. Don’t believe me that Ted Kennedy wanted to stick it to the Teamsters? Recall the role Bobby Kennedy played in investigating unions in the 1950s before the JFK administration came to office. According to The American Prospect, Ted Kennedy, Deregulation, and the Mob.:

In the days since his death, Ted Kennedy has been hailed on the left as a friend to organized labor. Here at TAP, our own Harold Meyerson wrote that Kennedy was a lifelong defender of workers “unable to join unions” and an opponent of Jimmy Carter‘s agenda of “deregulating industries.” But Doug Henwood, editor and publisher of Left Business Observer, remembers Kennedy differently, as a supporter of deregulation in trucking and air travel. And sure enough, the conservative Washington Times editorial page hailed Kennedy as the leading congressional ally for Carter’s deregulation agenda. Last week Matt Yglesias wrote that Kennedy’s history as a deregulator should be lauded, since it increased competition and brought down prices for consumers. But as Henwood demonstrates — with charts! — since deregulation, truckers’ wages have declined and airline prices have inflated. Of course, breaking up these monopolies cut down on corruption and organized crime. The Kennedy family was no friends of the Teamsters; as a Senate investigator, Bobby Kennedy interrogated Jimmy Hoffa harshly on his ties to the Mafia, and in 1960 wrote a book, The Enemy Within, about crooked unions. Teddy was close to Bobby and likely internalized this vendetta. “Bobby Kennedy saw Hoffa as absolute evil,” historian Ronald Steelf has said. “And so he could elevate this struggle against Hoffa into some kind of titanic moral issue, which is why he became so dedicated to it.” Indeed, for a time after JFK‘s assassination, Teddy suspected Mafia involvement as a result of Bobby’s Hoffa investigation. Henwood though, sees something simpler, a back door between Kennedy’s staff and companies that made a profit busting unions. “What a remarkable achievement: a policy that has led to huge losses for both labor and capital,” Henwood writes. “And any tribute to Teddy Kennedy that omits his prominent role in this disaster is incomplete.”

What’s the Breyer connection? Then-Harvard Law Professor Breyer was called upon to advise the Senate in 1974 and became heavily involved in deregulatory efforts. He come to public attention after writing an article on regulatory reform. He then served as chief counsel to the Senate Judiciary Committee. During his Judiciary tenure, Breyer was a key author  of airline deregulation legislation.  In his administration’s waning days, despite the bitter nomination contest, Kennedy convinced Carter to nominate Breyer to the First Circuit Court of Appeals sitting in Boston.  Unconfirmed as of the 1980 landslide that elected Ronald Reagan, he became the only pending Carter nomination to be confirmed afterwards. Deregulation had profound consequences for corporate law and for adjusting the relative power balance between labor and capital., even though these  ultimate effects were not obvious at the time.

I lack space and time to consider the role played by Breyer in moving the Court to the right on business issues, but I promise to return to it at a later time. For the moment, however, I should return to the Barrett nomination. This is unfolding in a political universe radically diffrerent as to its hostility towards unions than the one I grew up with. i was reminded of that universe by Martin Scorsese’s film, The Irishman, which I viewed recently on Netflix. The film is a surprisingly sympathetic treatment of the rise and demise of Jimmy Hoffa. I remember when Hoffa disappeared and there were dark musings at the time of his Mob connections.

But I also remember my  first real job was a union job, a summer stint as a telephone operator. Where even a lowly recent high school graduate could earn above-minimum wage in decent working conditions.

In those pre-Reagan years. the prevailing narrative about unions was very different than the one prevailing today. And as the daughter of two public school teachers, I understood the role unions played in guaranteeing our family a decent income.

As another personal reflection on how that attitude has changed. I was  remindedanout 5 years ago by watching when I took Mom on a trip to Alaska to celebrate her 80th birthday. We took a bus journey up the highway that parallels part of the Alaskan pipeline  to a spot above the Arctic Circle. Seemed to be the sort of thing one should do on a trip to Alaska, so we did.

The highway is closed to ordinary traffic and on this late September day, I would not have wanted to drive anyway, as it was nasty weather – rainy, grey, cold. And the journey there and back took a long full day.

To occupy some of our attention, there was a video that lauded the skilled unionised workers that constructed the pipeline and also served as a history lesson the reminded me of things I had forgotten – or perhaps, never knew – that occurred during my teenage years.

Most striking was the positive point of view displayed about skilled, unionized workers. And it made me realize the shift that’s occurred since I was a teenager. I wonder whether Judge Barrett knows this history?  And is aware of a time when the balance between labor and capital was not so badly skewed

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