The Roberts Court’s Business Rulings are Keeping Congress Busy

by Xan White,  Research & Special Projects Associate, Constitutional Accountability Center

Last week, CAC released an issue brief called Citizens United Redux?, previewing several potential end-of-Term blockbusters that could affect consumers and the regulatory agencies that protect them. A companion report, The Roberts Court and Corporations: The Numbers Tell the Story, offers a statistical look at the Chamber of Commerce’s high success rate since Justice Alito joined the Court.  As that report documents, a cohesive five‐Justice majority on the Court has produced victories for the Chamber’s side in 64% of cases overall, and 71% of closely divided cases.

The story not told by the statistical summary is what happens after the Supreme Court rules.   Supreme Court decisions aren’t necessarily the final word on a number of issues – especially in business cases, which often involve statutory interpretation. A constant dialogue exists between the Supreme Court and Congress – when the Supreme Court interprets a statute in a way that majorities in Congress did not intend, Congress can pass a new law and correct the misunderstanding. The Lilly Ledbetter Fair Pay Act of 2009, the very first bill signed into law by President Barack Obama, offers an example of such a law; the Supreme Court narrowly interpreted a statute of limitations for reporting gender-based and other discriminatory pay disparities, and Congress passed a bill ensuring that employees could file complaints upon discovering unequal pay. Even when the Supreme Court holds that a piece of legislation is unconstitutional, as it did in Citizens United, Congress often retains some options. The DISCLOSE Act, discussed below, represents Congress’ attempt to preserve fair elections without running afoul of the Court’s ruling in Citizens United by strengthening disclosure rules and requiring corporations to account for the money they spend on elections.

But the Lilly Ledbetter Act and the Disclose Act are only two of many ongoing efforts by Congress to respond to recent rulings by the Roberts Court in business cases, and this broader effort has not gotten the attention it deserves.   Senator Patrick Leahy and the Judiciary Committee he chairs have been particularly busy. A number of pieces of legislation aimed at Supreme Court decisions either originate from or are referred to this Committee, and Senator  Leahy has chaired several hearings on the effects of and possible legislative remedies for pro-corporate decisions by the Roberts Court.

In the interest of pulling together in one place and shining some light on congressional efforts to overturn or push back on the pro-corporate rulings from the Roberts Court, we’re providing a list of the Supreme Court’s recent business decisions that have sparked a response from Congress:

  • Ledbetter v. Goodyear: The Court held 5-4 that the 180-day window during which an employee could file a formal pay discrimination complaint was open only after the original occurrence of the discrimination, and that employees who discovered longstanding pay discrepancies after months or years (as often happens) had no legal recourse. In response, Congress passed the Lilly Ledbetter Fair Pay Act of 2009. The law instructs the courts that every discriminatorily unequal paycheck opens a new window during which a complaint can be filed under Title VII of the Civil Rights Act of 1964 and other civil rights statutes.  In addition, the Senate Judiciary Committee held a hearing entitled “Barriers to Justice: Examining Equal Pay for Equal Work,” featuring testimony by Lilly Ledbetter herself.
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  • Gross v. FBL Financial Services: By a 5-4 margin, the Court made it much more difficult for employees to prove age discrimination in employment. In dissent, Justice Stevens pointed to Congress’ rejection of the standard that the Court had adopted. In response to the Court’s ruling, Senator Tom Harkin and 23 others have co-sponsored the Protecting Older American Workers Act in order to restore the original standards of proof and limit the Supreme Court’s ability to override them.   Also, the Senate Judiciary Committee held a hearing called “Workplace Fairness: Has the Supreme Court Misinterpreted Laws Designed To Protect American Workers?”  at which Jack Gross, the plaintiff in Gross v. FBL, testified.
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  • Exxon v. Baker: The Court’s 5-3 decision in Exxon slashed the punitive damages arising from the Exxon Valdez oil spill by about 80%, establishing an arbitrary 1:1 ratio between compensatory and punitive damages. The Big Oil Polluter Pays Act introduced by Senator Sheldon Whitehouse would eliminate that 1:1 cap, allowing juries to once again make just and informed decisions about punitive damages awards. At the hearing “Courting Big Business? The Supreme Court’s Recent Decisions on Corporate Misconduct and Laws Regulating Corporations,” Exxon plaintiff Osa Schultz testified about the impact of the Court’s ruling on her livelihood in Prince William Sound.
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  • Stoneridge Investment Partners v. Scientific-Atlanta:  In Stoneridge, the Court restricted the ability of investors to sue for fraud.  As he did in Gross, Justice Stevens dissented and accused the Court of replacing Congress’ judgment with its own. The Liability for Aiding and Abetting Securities Violations Act of 2009, introduced by Senator Arlen Specter, would ensure that anyone who helps defraud investors can be held liable in court.
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  • Federal Arbitration Act Rulings:  In a series of rulings that includes the recently decided case of Stolt-Nielsen S.A. v. AnimalFeeds International Corp., the Supreme Court has interpreted the Federal Arbitration Act of 1925 far beyond the wildest dreams (or nightmares) of the Act’s Gilded Age framers.  The Act has been read to permit corporations to force employees into arbitration proceedings, which are often unfairly stacked in favor of business. Several Judiciary Committee hearings have addressed arbitration, including the aforementioned “Workplace Fairness” and “Courting Big Business?” At the “Workplace Fairness” hearing, Jamie Leigh Jones – who was gang-raped by co-workers in Iraq, detained for nearly 24 hours in a shipping container, and denied access to court by her employer, Halliburton – testified about her experiences. Senator Al Franken successfully attached an amendment to the defense appropriations bill, signed into law in December 2009, barring companies from receiving government contracts if their employment agreements include forced arbitration clauses like the one that kept Jaime Leigh Jones out of court.  “Courting Big Business?” featured testimony by Harvard Law Professor Elizabeth Bartholet, who was fired from her part-time work as an arbitrator after she ruled against a credit card company in a dispute with a consumer.
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  • Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly: These two cases are among several Roberts Court decisions that limit Americans’ access to courts by forcing judges to dismiss cases against corporations and government officials. Senator Arlen Specter’s Notice Pleading Restoration Act would restore the standard for bringing cases to the status quo that existed before the Roberts Court rulings.   Chairman Leahy held a hearing on the issue called, “Has the Supreme Court Limited Americans’ Access to Courts?”
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  • Citizens United v. FEC: In this case, the Supreme Court granted corporations the same right to spend money on elections as ordinary Americans, overturning large portions of the bipartisan McCain-Feingold campaign finance reform act. Members of Congress have responded by introducing the Democracy Is Strengthened by Casting Light On Spending in Elections (DISCLOSE) Act. The Act would ensure that foreign nationals cannot spend money to influence American elections (a possibility under the Court’s Citizens United ruling) and would strengthen disclosure requirements for lobbyists and corporations in order to ensure that voters can be aware of the source of “electioneering communications.” CAC’s President Doug Kendall testified at the Senate Judiciary Committee’s contentious post-Citizens United hearing, entitled “We the People? Corporate Spending In American Elections After Citizens United.

This list could grow even longer after the Court’s end-of-Term rulings, as our report on upcoming decisions reveals. Specifically, the Supreme Court seems poised, based on oral argument, to make employees even more powerless against forced arbitration with its upcoming ruling in Rent-a-Center v. Jackson. Such a ruling would bring more urgency to Senator Russ Feingold’s “Arbitration Fairness Act,” which would ensure that employees and consumers can bring civil rights claims to court. An adverse ruling in Free Enterprise Fund v. PCAOB could force Congress to act in order to restore the power of independent regulators over large corporations.  And rulings in Black v. United States, Skilling v. United States, and Weyrauch v. United States could make it more difficult to punish white-collar criminals.

Congress should not be forced to spend so much of its time responding to the Court, and the President and Senator Leahy are right to complain about rulings that reach out to decide issues that are not clearly before the Court and that badly misinterpret the Constitution and the laws passed by Congress.  But President Obama and Senator Leahy are also right to do something about these rulings when they have the power to, and the passage of the Lilly Ledbetter Fair Pay Act and the Franken Amendment shows that the Administration and Congress, in appropriate instances, can successfully use the legislative process to respond to judicial overreaching by the Roberts Court.