Corporate Law Consequences: Amy Coney Barrett Nomination

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 trumps 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 she aware of a time when the balance between labor and capital was not so badly skewed?

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18 comments

  1. Kris

    I have to admit my enthusiasm for reading Stoller’s book – or anything else – was severely dampened when he stated in a twitter response that he simply doesn’t believe the Princeton study showing that the U.S. is a plutocracy.

    Reply
  2. Upwithfiat

    And is aware of a time when the balance between labor and capital was not so badly skewed.

    Capital was always fated to win given government privileges for private credit creation because those with capital are inherently “credit worthy” – especially when their goal is to increase profits by eliminating and/or de-skilling jobs.

    The solution has ALWAYS included the need for ethical finance though that’s much more obvious now that the need for human labor is being curtailed.

    Reply
  3. flora

    Thanks for this post. The Dem estab has for some decades been as pro-business/anti-union as the GOP. They are opposing the ACB nomination (at least in appearance) on other grounds than her business rulings, just as they did with the Kavenaugh nomination.

    Reply
    1. Anonymous

      They are opposing the ACB nomination (at least in appearance) on other grounds than her business rulings, flora

      Yep, the old “mess of pottage” for stolen birthrights scam.

      Hard to feel sympathy for the victims though – except they might have been better except for previous birthright thefts.

      Also, we should remember that the Democrats used to be pro-slavery.

      Reply
  4. Susan the other

    All the favorable rulings in the world cannot bring back the dead. At this point in time liberal and conservative is almost a meaningless argument. A conservative judge. So what? Does she have a brain? Because that’s all that matters. She should be required to produce evidence, maybe an MRI scan. Corporate America is probably better served by a Green New Deal than a symbolic judge.

    Reply
  5. Ranger Rick

    On the copyright law front, a significant case is in front of the Supreme Court right now: Google v. Oracle. The outcome will dramatically transform how software is made. The new justice will likely be confirmed in time to have an influence on the decision.

    Reply
  6. Kirk Seidenbecker

    “ The Irishman….. is a surprisingly sympathetic treatment of the rise and demise of Jimmy Hoffa…”

    Here’s a different analysis of that film – “… Scorsese did something the 1% of 1950s and 1960s could only fantasize about: produce an unabashed hit piece on labor leader Jimmy Hoffa.”

    https://www.greanvillepost.com/2020/02/22/the-irishman-scorseses-pro-italian-identity-politics-trump-honoring-labor/

    Concerning the Barrett nomination, the Warren Buffett quote from 2005 is apt – “There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

    The design of the American flag is derived from the East India Company flag (logo)…. the U.S. has been one long corporate experiment from its inception.

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    1. Upwithfiat

      the U.S. has been one long corporate experiment from its inception. Kirk Seidenbecker

      What if EVERY corporation was equally owned by EVERY citizen? (Similar to ancient Israel where ALL the arable land was equally owned by all Hebrews.) Then the problems with them go away, right? If we believe in democracy?

      Then why do we have government privileges for private credit creation since those DECREASE the need for those with equity (e.g. corporations) to issue new shares in equity?

      So government privileges for private credit creation are ANTI-DEMOCRATIC.

      The following quote has it about right:

      “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…. I believe that banking institutions are more dangerous to our liberties than standing armies…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

      Not to say that banks should not be allowed to create deposits but certainly they should not be privileged by government…

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  7. Hubert Horan

    Jerri-Lynn
    Totally agree that fealty to corporate interests is the overwhelmingly most important issue in understanding the current Supreme Court nominee and the longstanding Republican Party/Federalist Society (et. al.) political program to remake the judiciary. Would also underscore Sirota’s point that the artificial creation of a pro-corporate judiciary is very much a bipartisan effort, which will explains why the current Democratic leadership will not make any substantive effort to block the current nomination.

    But I think you have got bits of the timeline and history wrong vis-à-vis “deregulation.” While (as you point out) Stephen Breyer’s role in the longer term political process deserves careful study, citing one of his 2003 decisions doesn’t help explain his role in mid-70s airline deregulation process. I recognize that you took a couple of his courses. In my career I came into direct contact with a wide range of deregulation activists. I worked at the US Railway Association, whose work reorganizing Penn Central included almost everyone critical to railroad deregulation. My advisor at Yale SOM was one of the fathers of trucking deregulation (also on Ford’s Council of Economic Advisors). Mike Levine, a boss of mine at Northwest (and also an SOM dean) worked for Breyer at the CAB and wrote a number of the academic journal articles that helped drive airline deregulation.

    The transportation deregulation movement of the 70s was a broad-based attempt to grapple with the fact that regulatory systems established in the 1880s (rail) and 1930s (trucks and planes) could not cope with massive technological and marketplace changes. Most of the movement originated on the railroad side where both the obsolescence of regulatory rules protecting a status quo that predated the widespread use of internal combustion engines (rural branch lines, firemen on diesels) and the imminent collapse of much of the industry (the Penn Central BK) was obvious to everyone. Absolutely nothing in the rail/trucking/airline deregulation efforts of the 70s and 80s had anything to do with laissez-faire ideological claims that regulatory oversight should be eliminated because markets could magicaly optimize industry efficiency. All efforts were designed to reform industry oversight. Reforms were discussed in terms of ways to increase consumer welfare, to reduce the artificial power of established incumbents and to increase competitive pressures to improve service and productivity.

    You’ve relied on Goldstein’s American prospect piece which wasn’t a serious examination of anything and badly mangles the history. Yes, unions were one of the artificially powerful incumbents that had figured out how to exploit obsolete regulatory processes, but these (secondary) issues were overwhelmingly on the rail and (especially) trucking side and had nothing to do with the airline deregulation issues that Breyer worked on. Yes, the Kennedy brothers didn’t like Jimmy Hoffa, but very few airline workers were Teamsters. Ted Kennedy supported airline deregulation because he (correctly) understood that eliminating 1930’s bans on competitive entry and price competition could unleash efficiency improvements that would produce (politically popular) increases in service and employment and lower fares. Henwood has improperly extrapolated awareness of Teamster trucking power to airlines; his claim that deregulation increased airline fares was incorrect for the first 20 years after deregulation. The vast majority of 1970s transportation deregulation advocates (including Breyer) were public service oriented liberal Democrats.

    While (as with any political process) transportation deregulation was far from perfect, it should be seen as hugely successful, because it directly led to major improvements in both consumer welfare and industry efficiency. What’s missing here is the subsequent process whereby the popularity of these successes were hijacked to justify a radically different, more destructive “deregulation” movement in finance and elsewhere.

    Henwood and (despite his broadly excellent and valuable anti-monopoly work) Stoller improperly conflate the recent anti-consumer/worker pro-corporate meaning of “deregulation” with the very different meaning it had in the narrow transportation industry context of 1975. The people who have worked in recent years to gut any forms of industry oversight designed in order to allow the interests of capital accumulators to trump any other competing economic interests are bad, therefore anyone in 1975 working to eliminate administrative oversight of what kind of meals United could serve on redeye flights, or working to prevent the ICC from holding up a Southern Pacific-Rock Island merger proposal for over a decade must not only be equally bad, and must have been motivated by the same pro-corporate power/laissez faire ideologies that you see 45 years later.

    The major political push for the evil version of deregulation did not begin until transportation deregulation was fully in place, but the liberal, bipartisan, pro-consumer worldview of the 1970s was on its deathbed by the late 80s and 90s. A lot has been documented about the huge expenditures and political efforts on the laissez-faire side, including their highly effective targeting of the judiciary. But next to nothing has been written about the total collapse/surrender of the liberal Democrats who had believed in the importance of industry deregulation but wanted to make it work better for consumers and the broader economy. People like Sirota and Stoller have usefully noted that many of the Democrats who first entered Congress in this era were quite economically illiterate and thus susceptible to the early pro-corporate propaganda. But I’m not aware of anyone who has really dug into the critical role these “liberal democrats” played in the eventual success of Koch-like agendas and the current bankruptcy of Democratic party leadership.

    A detailed examination of how the Stephen Breyer of 1975 morphed into the Stephen Breyer of 2003 would probably provide a useful piece of this story. But simply conflating worldviews and political contexts from 30 years apart will get major parts of the story badly wrong.

    Reply
    1. BillC

      Thanks for the historical review, Mr. Horan. Among other things, it shows just how crucial the sustained, consistent, and united neoliberal campaign, first(?) enunciated in the infamous Powell Memo, to “seed” the academic, judicial, and legislative elite throughout the non-Communist world has been to achieving their goals. As you indirectly show, it took ’em about 40 years to achieve total success.

      The real left must recognize that only an equally sustained, consistent, and united effort will roll that back, notwithstanding brief public awareness successes like Occupy Wall Street and Black Lives Matter. We need at least two things not currently in evidence to have any hope of making that happen: (1) a broad, inclusive declaration of objectives and methods (an “anti-Powell memo”), the main thrusts of which are vigorously supported by all who can honestly claim to be “left” and (2) a continued source of funding for cadre-building and public awareness.

      Where is the new Martin Luther King who could catalyze creation of the first? I recognize the dangers of strong leaders as targets and despots, but what pure grassroots effort has ever succeeded over space and time without them? As for the second … maybe a non-trivial portion of the PMC will finally become genuinely “woke” to what’s happened since the ’70s and form a sustained core of continuing donors. What if everyone offended by NPR and PBS corporate whoring and who has sworn off responding to their fund drives sent that money to a small number of activist organizations?

      Reply
      1. Clive

        Yes, I concur. I’m not sure about technological disruption to established business practices making de-regulation (or, alternatively, revised-regulation) a way out either. I’d even argue that following US v. Microsoft in 2001 https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp. even if regulators were to propose stiff anti-trust moves in response to a changing technological dynamic, courts (right up to the SCOTUS who refused to hear the case) would intervene to tie the hands of the regulatory bodies. Microsoft got a slap on the wrist and a do-little-or-nothing settlement and evaded breakup. Look at where Microsoft are today as a result.

        The judicial drift to pro-business rulings was clearly evident, even then (and this is / was a major point in the post) and even in a judiciary which was much more notionally “liberal” than the one we have today.

        Just because a court is willing to be an activist court (which I always believe is a high-risk thing anyway), it doesn’t necessarily follow that the bench is free from hopeless neoliberal types who’ll not thwart even the most progressive of regulatory — or even legislative — efforts.

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    2. flora

      Thanks for this comment and look back providing context.

      What’s missing here is the subsequent process whereby the popularity of these successes were hijacked to justify a radically different, more destructive “deregulation” movement in finance and elsewhere.

      I think there’s probably a lot hidden in this missing piece of the puzzle. How did the 1970’s bi-partisan deregulation efforts that were narrowly focused on the specific contexts of particular industry needs get hijacked by the Milton Friedman crowd into a simplistic, context free, binary: regulation bad, deregulation good ? And why did the young, incoming Dem pols go along with this context free approach to deregulation? Was it only due to their economic illiteracy?

      Reply
    1. Off The Street

      Sen. Whitehouse and his fellow senators can hardly wait for their own names to be cleared highlighted in investigations of dark money.

      Oh, wait. Maybe he’ll regret bringing up that buried topic and they’ll put him on timeout in the corner of the cloakroom. Start with the assumption that all Senators have dark money sloshing around, and see if they can open their kimonos to show that they don’t.

      Reply
  8. chuck roast

    So, Biden may pack the court. So what! He’ll simply appoint culture warriors that have long demonstrated their fealty to corporations. Sameo-sameo. Amy Coney Barrett? Wake me when it’s over.

    I collected signatures for a constitutional amendment to make corporations the second class citizens that they deserve to be. See Move to Amend. The people are hip. They know that corporations are criminals. IMO they simply haven’t really felt the lash yet. When they do, the corporate swine will be toast.

    Witness the Kavanaugh court confirmation process. The well known and widely admired “moderate” Sen. Susan Collins, who spent her entire senate career saying “moderate” things and always voting with the old white guys was finally exposed. For years she was the biggest and most accomplished bull$hit artist in Maine. When she voted for Kavanaugh all of her dirty laundry was exposed. Mainiacs finally got to see the real Susan Collins, and despite a weak opponent, in a matter of days she could be toast too. Replaced by another corporate shill.

    Reply
  9. run75441

    If you have not listened to the Senator Whitehouse (RI) ~30 minute presentation yesterday about the moneyed influences driving this nomination, you should. It opens open a new level of conversation concerning what is going on with Ms. Barrett. Today, Senator Whitehouse will be questions the SCOTUS Justice nominee.

    Reply
  10. Dick Swenson

    There is a fine book, “We the Corporations” by UCLA law professor Adam Winkler. It is a well written history of SCOTUS decisions supporting “corporatism.” It starts at the writing of the Constitution and ends with the “Citizens United” case.

    Winkler essentially tells a story of how the Court has systematically supported corporations, and points out that the CU decision does not define a corporation as a person, but as an association. Thus, like the NAACP, the ACLU, Rotary, etc it is eligible to support PACs.

    Reply

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