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First Monday

Corporate America's Favorite Court Is Back in Session

SOURCE: AP/Stephan Savoia

Chief Justice John Roberts's Court has championed corporate interests at ordinary Americans’ expense. This term presents the justices with a few opportunities to correct past mistakes.

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Today marks an important landmark in the Supreme Court’s history. For the first time, the Court convenes with three women as members. But while the Court’s membership has taken another step into the 21st century its majority remains unchanged.

Recently confirmed Justice Elena Kagan adds much-needed diversity, but five conservative, pro-corporate justices still dominate the Court. That means wealthy corporate interests have a great deal to gain—and workers and consumers have a great deal to lose—in the Court’s new term. Here’s a rundown of the business, consumer, and workplace cases the Court will hear this fall and their possible consequences.

The workplace

The Roberts Court has not been kind to working Americans. In the Roberts majority’s first full term together it handed down the egregious Ledbetter v. Goodyear Tire and Rubber Co. decision in 2007, cutting off many women’s access to equal pay for equal work until Congress corrected the Court’s error in 2009.

The conservative justices followed up with a 5–4 decision in Gross v. FBL Financial Services rather than reacting to this congressional spanking with appropriate humility. Gross shields many employers who discriminate against their older workers.

This term presents the Court with a new opportunity to decide whether workers will continue to be protected against discrimination in the workplace. Many employers use a two-tier management structure to make personnel decisions. Individual workers may be supervised by a junior manager, but the actual power to fire a worker rests with someone more senior.

It is clearly illegal for a senior manager to fire a worker because of the worker’s race, gender, or because the worker serves in the military reserves—among other reasons. But what happens if the junior manager, motivated entirely by illegal prejudices, badmouths the worker to the senior manager until the worker is fired? Most lower courts agree that it is illegal for a prejudiced supervisor to shape a firing decision even if the final decision is made by someone whose motives are clean.

In Staub v. Proctor Hospital the justices will decide just how much protection the law affords victims of this kind of manipulation. If they limit these protections it could leave many victims of discrimination with no recourse since it is very common for senior managers to rely on their subordinates for advice on personnel decisions.

This term also presents two important cases on the right of workers to be free from unlawful retaliation in the workplace. In Thompson v. North American Stainless the Court will decide whether an employer can strike back at a worker who complains about discrimination by firing the worker’s fiancée. Additionally, in Kasten v. Saint-Gobain Performance Plastics Corp. the Court will decide whether employees who verbally complain that their right to a fair wage is being violated are protected against illegal retaliation or whether they must put these complaints into writing.

Preemption of state laws

Corporations have also sought broad immunity from state laws through a doctrine known as “preemption.” Because the Constitution provides that federal law “shall be the supreme law of the land” Congress unquestionably has the power to “preempt” state laws it wishes to render inactive. Recently, however, corporate interests have pushed the Supreme Court to aggressively preempt state tort law even when Congress showed little if any intention to preempt.

The high-water mark of these efforts was the Court’s bizarre 2000 decision in Geier v. American Honda Motor Co. That case addressed the question of whether federal auto safety regulations immunized vehicle manufacturers from state tort suits that held those manufacturers to a higher standard than the federal regulations required. The 5–4 Court decided that if vehicle manufacturers comply with federal law they are exempted from liability under state common law, despite an Act of Congress providing that “[c]ompliance with” these federal regulations “does not exempt any person from any liability under common law.”

Since Geier, the Court has stepped back slightly from the brink. In three more recent decisions, Altria v. Good, Wyeth v. Levine, and Cuomo v. Clearinghouse, the Court rejected claims by the tobacco, pharmaceutical, and banking industries that they should have sweeping immunity from state laws even when Congress showed very little desire to preempt.

The Court’s decision to hear Williamson v. Mazda Motor of America, a case which is nearly identical to Geier, may be a hopeful sign. It is always dangerous to predict that the Roberts Court will declare that corporations have less immunity from the law—and certainly Chief Justice Roberts won’t let Geier go down without a fight—but it is difficult to reconcile the Court’s more recent decisions with its wrongful decision in Geier.

Additionally, this term presents one case where the justices rightfully should side in favor of preemption. In Chamber of Commerce v. Whiting, the Court will decide whether Arizona has the power to enact an immigration law that is more stringent than federal immigration policy.

Here, the Supreme Court should embrace its longstanding recognition that immigration policy is inherently federal and should not be left to the many states. In a 1941 case, Hines v. Davidowitz, the Supreme Court struck down a Pennsylvania law requiring “every alien 18 years or over” to register annually with the state. The Court explained that state laws that intrude on immigration policy can have grave consequences for U.S. foreign policy:

One of the most important and delicate of all international relationships, recognized immemorially as a responsibility of government, has to do with the protection of the just rights of a country’s own nationals when those nationals are in another country. Experience has shown that international controversies of the gravest moment, sometimes even leading to war, may arise from real or imagined wrongs to another’s subjects inflicted, or permitted, by a government.

As Hines establishes, “the supremacy of the national power in the general field of foreign affairs, including power over immigration, naturalization and deportation, is made clear by the Constitution.” This is because a single rogue state’s decision to engage in abusive behavior toward immigrants reflects upon the United States as a whole. The Constitution thus gives the national government sole authority over immigration policy because Americans who live in the other 49 states should not be forced to pay for one state’s bad decision. A uniform national immigration policy also ensures that individual states cannot destabilize interstate commercial activity by establishing separate restrictions on who can or can not be employed in or travel to a state.

Forced arbitration

One of corporate America’s most common and abusive assaults on workers and consumers is a practice known as “forced arbitration.” Before many banks, cell phone companies, employers, or even nursing homes will do business with a consumer, worker, or patient they force that individual to sign away their right to sue the company in a real court. Instead, they require that any disputes be brought in a secretive, privatized arbitration system that overwhelming favors corporate parties.

The Supreme Court expanded this corporate-owned judicial system to include suits involving ordinary consumers in the 1980s, and a 2001 decision, Circuit City v. Adams, removed any doubt that a worker’s basic right to be free from discrimination could be left in the hands of a privatized arbitrator. Since then the justices have continued to enhance corporate America’s power to shift lawsuits into the privatized judiciary.

This term, the justices could permit forced arbitration agreements that are even more lopsided in favor of corporations than agreements the Court already endorsed. In AT&T Mobility v. Concepcion the Court will decide whether corporations can also force consumers to sign away their right to bring a class-action lawsuit before the arbitrator in addition to forcing consumers into a privatized justice system.

Class-action lawsuits are especially important in cases like Concepcion, where the amount of money at stake is very small—in this case only about $30. If a company cheats one person out of $30,000 that person is likely to sue and the company is likely to be held accountable for its actions. If the company cheats 1,000 people out of $30, however, most of these individuals will decide that the small loss is not worth a lawsuit—and the company will get off nearly scot free.

Class-action lawsuits enable many people with small dollar losses to join together in a single suit, and they make sure that corporate America cannot continuously break the law a few dollars at a time. Yet Concepcion could allow corporations to force consumers to sign both a forced arbitration agreement and a no-class-action agreement—a step that would further erode ordinary Americans’ power to hold big-moneyed interests accountable for lawbreaking.

Conclusion

John Roberts’ Supreme Court is the Court of Citizens United (which ruled that corporations are permitted to spend unlimited amounts of money on independent political advertising in U.S. elections), Ledbetter, and forced arbitration. Barring a few exceptions the Court has championed corporate interests at ordinary Americans’ expense. This term presents the justices with a few opportunities to correct past mistakes, but it also provides them far more opportunities to further shield corporations from the law.

Ian Millhiser is a Policy Analyst with American Progress.

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