What do the Exxon Valdez oil spill and the Enron and Worldcom scandals have in common? Corporate greed run amok? Lax government oversight? How about a Supreme Court that has shifted dangerously to the right and is now the most pro-business Court since the monopoly greasing "Lochner-era" Court of the late 19th Century?
Today, the Senate Judiciary Committee will hold a hearing on recent Supreme Court decisions that favor corporate rights and interests over the fundamental rights and liberties of individuals. At issue is whether the courts should be protecting us or corporations. Unfortunately, it's clear that the Court has an increasingly pro-business tilt that will continue to favor business over individuals until the American people and Congress push back.
In the last Supreme Court term alone, the Court ruled against individual rights in three significant cases involving corporate accountability, the environment and binding mandatory arbitration. In each of these cases--which are the subject of today's hearing-- the Court rolled back the rights of regular Americans to favor corporations. According to testimony released today by the progressive think tank the Constitutional Accountability Center , these recent decisions demonstrate that the Supreme Court has departed from the text and history of the Constitution. This is significant for a Court that supposedly prides itself on taking its mandate from the text of the Constitution.
In the corporate accountability case, Stoneridge Investment Partners, LLC v. Scientific-Atlanta, the Supreme Court held that victims of securities fraud can no longer recover damages against accountants, lawyers, financial advisors or other businesses responsible for inflating stock prices and defrauding them. The decision, considered the most important securities case in a generation, spells doom for the shareholders who owned stock in Enron, and tens of thousands of investors across the nation who may no longer recover damages from those who participated in a scheme to defraud them.
The environmental case is Exxon Shipping Co. v. Baker. We're all too familiar with the Exxon Valdez, the supertanker steered by a drunk captain straight into the Bligh Reef, spilling 11 million gallons of oil into the previously-pristine Prince William Sound.
The Senate Judiciary Committee has invited Alaska fisherwoman Osa Schultz to recount her experience. At the time of the spill, Ms. Schultz lived in a quiet fishing town called Cordova at the head of Price William Sound. Ms. Schultz watched as the spill devastated the local herring population, destroying the foundation of the local economy. Almost twenty years later, the spill continues to affect her family, her business, and her community. You can hear her tell her story here.
An Anchorage jury ordered Exxon to pay $5 billion in punitive damages to the 32,000 fisherpeople like Ms. Schultz whose lives were ruined by Exxon's brazen recklessness. On appeal, the award was slashed to $2.5 billion.
Exxon is the single most profitable company in the world. Last year, Exxon made $40.6 billion in profit, over $10 billion per quarter. The Supreme Court ruled last month that even the smaller award was excessive, and further reduced Exxon's fine to around $500 million, saying that punitive damages should not exceed actual damages. The fine will cost Exxon approximately four days worth of profit.
The last case involves the growing dominance of mandatory arbitration and is perhaps the most damaging to our system of justice. Over the past decade the Supreme Court has interpreted the Federal Arbitration Act in a way that has gradually eroded people's right to their day in court. The most recent such case is Preston v. Ferrer in which the Court held that any questions related to a contract with an arbitration clause must be decided by an arbitrator, not a court of law or state agency, even if one of the parties asserts that the contract is void or challenges the propriety of arbitration.
According to Tort Deform, the problem with mandatory arbitration extends far and wide because on a regular basis, we inadvertently sign away our right to go to a court and have a trial by our peers. Often found nestled in a small section of a contract for things like a credit card or software package, arbitration agreements have become widespread and are closing the courthouse doors to millions of Americans.
Consider the story of Tracy Barker, a former Halliburton employee who was sexually assaulted by her co-workers, only to see her case against them thrown out of court because of a mandatory arbitration agreement. Indeed, in about 94% of the arbitrations involving employment disputes, the employers win, and the employee is forced to pay the arbitrator for the privilege of hearing their claims, as well the employer's legal expenses.
According to Robin Conrad, executive vice president of the U.S. Chamber of Commerce's public policy law firm, the National Chamber Litigation Center, the first Roberts term was "... our best Supreme Court term in 30 years. We submitted filings in more cases than ever this term, and we won more cases than ever." In fact, the Supreme Court ruled in favor of the Chamber of Commerce in 21 of 30 (70%) of the cases they filed a brief in over the first two terms of the Roberts Court.
There are efforts underway to restore individual rights in the face of the Court's rightward shift away from protecting Americans. Today's hearing is one such effort to expose--on the record-- the impact of the Court's agenda. In addition to shining a light on these developments through hearings, Congress is considering legislation to address some of the issues raised by the Court's recent round of decisions, including the Arbitration Fairness Act and the Civil Rights Act of 2008, and may soon consider fixing the Exxon ruling.
Unfortunately, the work of the Court doesn't receive much attention. The hearings today are an important step toward getting all of us to watch what the Court is doing and to push back, so that the decisions of the Court will value and protect all of us and our rights.