Post by Bozur on Mar 19, 2008 12:17:32 GMT -5
Supreme Court Inc.
Andy Friedman
By JEFFREY ROSEN
Published: March 16, 2008
I.
The headquarters of the U.S. Chamber of Commerce, located across from Lafayette Park in Washington, is a limestone structure that looks almost as majestic as the Supreme Court. The similarity is no coincidence: both buildings were designed by the same architect, Cass Gilbert. Lately, however, the affinities between the court and the chamber, a lavishly financed business-advocacy organization, seem to be more than just architectural. The Supreme Court term that ended last June was, by all measures, exceptionally good for American business. The chamber’s litigation center filed briefs in 15 cases and its side won in 13 of them — the highest percentage of victories in the center’s 30-year history. The current term, which ends this summer, has also been shaping up nicely for business interests.
I visited the chamber recently to talk with Robin Conrad, who heads the litigation effort, about her recent triumphs. Conrad, an appealing, soft-spoken woman, lives with her family on a horse farm in Maryland, where she rides with a fox-chasing club called the Howard County-Iron Bridge Hounds. Her office, playfully adorned by action figures of women like Xena the Warrior Princess and Hillary Rodham Clinton, has one of the most impressive views in Washington. “You can see the White House through the trees,” she said as we peered through a window overlooking the park. “In the old days, you could actually see people bathing in the fountain. Homeless people.”
Conrad was in an understandably cheerful mood. Though the current Supreme Court has a well-earned reputation for divisiveness, it has been surprisingly united in cases affecting business interests. Of the 30 business cases last term, 22 were decided unanimously, or with only one or two dissenting votes. Conrad said she was especially pleased that several of the most important decisions were written by liberal justices, speaking for liberal and conservative colleagues alike. In opinions last term, Ruth Bader Ginsburg, Stephen Breyer and David Souter each went out of his or her way to question the use of lawsuits to challenge corporate wrongdoing — a strategy championed by progressive groups like Public Citizen but routinely denounced by conservatives as “regulation by litigation.” Conrad reeled off some of her favorite moments: “Justice Ginsburg talked about how ‘private-securities fraud actions, if not adequately contained, can be employed abusively.’ Justice Breyer had a wonderful quote about how Congress was trying to ‘weed out unmeritorious securities lawsuits.’ Justice Souter talked about how the threat of litigation ‘will push cost-conscious defendants to settle.’ ”
Examples like these point to an ideological sea change on the Supreme Court. A generation ago, progressive and consumer groups petitioning the court could count on favorable majority opinions written by justices who viewed big business with skepticism — or even outright prejudice. An economic populist like William O. Douglas, the former New Deal crusader who served on the court from 1939 to 1975, once unapologetically announced that he was “ready to bend the law in favor of the environment and against the corporations.”
Today, however, there are no economic populists on the court, even on the liberal wing. And ever since John Roberts was appointed chief justice in 2005, the court has seemed only more receptive to business concerns. Forty percent of the cases the court heard last term involved business interests, up from around 30 percent in recent years. While the Rehnquist Court heard less than one antitrust decision a year, on average, between 1988 and 2003, the Roberts Court has heard seven in its first two terms — and all of them were decided in favor of the corporate defendants.
Business cases at the Supreme Court typically receive less attention than cases concerning issues like affirmative action, abortion or the death penalty. The disputes tend to be harder to follow: the legal arguments are more technical, the underlying stories less emotional. But these cases — which include shareholder suits, antitrust challenges to corporate mergers, patent disputes and efforts to reduce punitive-damage awards and prevent product-liability suits — are no less important. They involve billions of dollars, have huge consequences for the economy and can have a greater effect on people’s daily lives than the often symbolic battles of the culture wars. In the current Supreme Court term, the justices have already blocked a liability suit against Medtronic, the manufacturer of a heart catheter, and rejected a type of shareholder suit that includes a claim against Enron. In the coming months, the court will decide whether to reduce the largest punitive-damage award in American history, which resulted from the Exxon Valdez oil spill in 1989.
What should we make of the Supreme Court’s transformation? Throughout its history, the court has tended to issue opinions, in areas from free speech to gender equality, that reflect or consolidate a social consensus. With their pro-business jurisprudence, the justices may be capturing an emerging spirit of agreement among liberal and conservative elites about the value of free markets. Among the professional classes, many Democrats and Republicans, whatever their other disagreements, have come to share a relatively laissez-faire, technocratic vision of the economy and are suspicious of excessive regulation and reflexive efforts to vilify big business. Judges, lawyers and law professors (such as myself) drilled in cost-benefit analysis over the past three decades, are no exception. It should come as little surprise that John Roberts and Stephen Breyer, both of whom studied the economic analysis of law at Harvard, have similar instincts in business cases.
This elite consensus, however, is not necessarily shared by the country as a whole. If anything, America may be entering something of a populist moment. If you combine the groups of Americans in a recent Pew survey who lean toward some strain of economic populism — from disaffected and conservative Democrats to traditional liberals to social and big-government conservatives — at least two-thirds of all voters arguably feel sympathy for government intervention in the economy. Could it be, then, that the court is reflecting an elite consensus while contravening the sentiments of most Americans? Only history will ultimately make this clear. One thing, however, is certain already: the transformation of the court was no accident. It represents the culmination of a carefully planned, behind-the-scenes campaign over several decades to change not only the courts but also the country’s political culture.
II.
The origins of the business community’s campaign to transform the Supreme Court can be traced back precisely to Aug. 23, 1971. That was the day when Lewis F. Powell Jr., a corporate lawyer in Richmond, Va., wrote a memo to his friend Eugene B. Snydor, then the head of the education committee of the U.S. Chamber of Commerce. In the memo, Powell expressed his concern that the American economic system was “under broad attack.” He identified several aggressors: the New Left, the liberal media, rebellious students on college campuses and, most important, Ralph Nader. Earlier that year, Nader founded Public Citizen to advocate for consumer rights, bring antitrust actions when the Justice Department did not and sue federal agencies when they failed to adopt health and safety regulations.
Powell claimed that this attack on the economic system was “quite new in the history of America.” Ever since 1937, when President Franklin D. Roosevelt threatened to pack a conservative Supreme Court with more progressive justices, the court had largely deferred to federal and state economic regulations. And by the ’60s, the Supreme Court under Chief Justice Earl Warren had embraced a form of economic populism, often favoring the interests of small business over big business, even at the expense of consumers. But what Powell saw in the work of Nader and others was altogether more extreme: a radical campaign that was “broadly based and consistently pursued.”
To counter the growing influence of public-interest litigation groups like Public Citizen, Powell urged the Chamber of Commerce to begin a multifront lobbying campaign on behalf of business interests, including hiring top business lawyers to bring cases before the Supreme Court. “The judiciary,” Powell predicted, “may be the most important instrument for social, economic and political change.” Two months after he wrote the memo, Powell was appointed by Richard Nixon to the Supreme Court. And six years later, in 1977, after steadily expanding its lobbying efforts, the chamber established the National Chamber Litigation Center to file cases and briefs on behalf of business interests in federal and state courts.
Today, the Chamber of Commerce is an imposing lobbying force. To fulfill its mission of serving “the unified interests of American business,” it collects membership dues from more than three million businesses and related organizations; last year, according to the Center for Responsive Politics, the chamber spent more than $21 million lobbying the White House, Congress and regulatory agencies on legal matters. But its battle against the forces of Naderism got off to a slow start. In 1983, when Robin Conrad arrived at the chamber, the Supreme Court was handing Nader and his allies significant victories. That year, for example, the court held that President Reagan’s secretary of transportation, Andrew L. Lewis Jr., acted capriciously when he repealed a regulation, inspired by Nader’s advocacy, that required automakers to install passive restraints like air bags. In 1986, the chamber supported a challenge to the Environmental Protection Agency’s aerial surveillance of a Dow Chemical plant. The chamber’s side lost, 5-4.
But eventually, things began to change. The chamber started winning cases in part by refining its strategy. With Conrad’s help, the chamber’s Supreme Court litigation program began to offer practice moot-court arguments for lawyers scheduled to argue important cases. The chamber also began hiring the most-respected Democratic and Republican Supreme Court advocates to persuade the court to hear more business cases. Although many of the businesses that belong to the Chamber of Commerce have their own in-house lawyers, they would have the chamber file “friend of the court” briefs on their behalf. The chamber would decide which of the many cases brought to its attention were in the long-term strategic interest of American business and then hire the leading business lawyers to write supporting briefs or argue the case.
Until the mid-’80s, there wasn’t an organized group of law firms that specialized in arguing business cases before the Supreme Court. But in 1985, Rex Lee, the solicitor general under Reagan, left the government to start a Supreme Court appellate practice at the firm Sidley Austin. Lee’s goal was to offer business clients the same level of expert representation before the Supreme Court that the solicitor general’s office provides to federal agencies. Lee’s success prompted other law firms to hire former Supreme Court clerks and former members of the solicitor general’s office to start business practices. The Chamber of Commerce, for its part, began to coordinate the strategy of these lawyers in the most important business cases.
At times, the strategic calculations can be quite personal. Because Supreme Court clerks have tremendous influence in making recommendations about what cases the court should hear, Conrad told me, having well-known former clerks involved in submitting a brief can be especially important. “When Justice O’Connor was on the bench and we knew her vote was very important, we had a case where the opposition had her favorite clerk on the brief, so we retained her next-favorite clerk,” she said with a laugh. “We won.”
In our conversation, Conrad was especially enthusiastic about Maureen Mahoney, a former clerk for Chief Justice Rehnquist and one of the top Supreme Court litigators who coordinate strategy with the chamber. When Mahoney agreed in 2005 to represent an appeal by the disgraced accounting firm Arthur Andersen, which was convicted in 2002 of obstructing justice by shredding documents related to the audit of Enron, few people thought the Supreme Court would take the case. “The climate was very anti-Enron,” Mahoney told me, “and it was viewed as a doomed petition.”
Mahoney rehearsed her Supreme Court argument in a moot court sponsored by the chamber. (“She was absolutely dazzling,” Conrad recalls.) On April 27, 2005, Mahoney stood calmly before the justices and delivered one of the best oral arguments I’ve ever seen at the Supreme Court. She argued that because Arthur Andersen’s accountants had followed a standard document-destruction procedure before receiving the government’s subpoena, they couldn’t be guilty of a crime; they weren’t aware what they were doing was criminal. The Supreme Court unanimously agreed and reversed the conviction, 9-0.
The Arthur Andersen case is a good example of how significantly the Supreme Court has changed its attitude about cases involving securities fraud — and business cases more generally — from the Warren to the Roberts era. In a case in 1964, the court ruled that aggrieved investors and consumers could file private lawsuits to enforce the securities laws, even in cases in which Congress hadn’t explicitly created a right to sue. In the mid-1990s, however, Congress substantially cut back on these citizen suits, and the court today has shown little patience for them. Mahoney says she sees her victory in the Arthur Andersen case as significant because it applied the same principle in criminal cases involving corporate wrongdoing that the court had already been recognizing in civil cases: namely, “refusing to create greater damage remedies or criminal penalties than Congress has explicitly specified.” She describes the case as “a very important win for business.”
This term, the Supreme Court has continued to cut back on consumer suits. In a ruling in January, the court refused to allow a shareholder suit against the suppliers to Charter Communications, one of the country’s largest cable companies. The suppliers were alleged to have “aided and abetted” Charter’s efforts to inflate its earnings, but the court held that Charter’s investors had to show that they had relied on the deceptive acts committed by the suppliers before the suit could proceed. A week later, the court invoked the same principle when it refused to hear an appeal in a case related to Enron, in which investors are trying to recover $40 billion from Wall Street banks that they claim aided and abetted Enron’s fraud. As a result, the shareholder suit against the banks may be dead.
III.
In addition to litigating cases before the court, the Chamber of Commerce also lobbies Congress and the White House in an effort to change the composition of the court itself. (Unlike many other government officials, the justices themselves are not, of course, subject to direct corporate lobbying.) The chamber’s efforts in this area were inspired by Robert Bork’s thwarted nomination to the court in 1987. Business groups were enthusiastic about Bork — not because of his conservative social views but because of his skepticism of vigorous antitrust enforcement. “In reaction to the Bork nomination, it struck us that we didn’t even have a process in place to be a player,” Conrad said.
So the chamber set up a formal process for endorsing candidates after their nominations. The process was designed to be bipartisan; and the chamber has encouraged Democratic as well as Republican presidents to appoint justices. Nominees are evaluated solely through the prism of their views about business. “We’re very surgical in our analysis,” Conrad said.
After the election of Bill Clinton, for example, the chamber endorsed Ruth Bader Ginsburg, who in addition to her pioneering achievements as the head of the women’s rights project at the A.C.L.U. had specialized, as a law professor, in the procedural rules in complex civil cases and was comfortable with the finer points of business litigation. The chamber was especially enthusiastic about Clinton’s second nominee, Stephen Breyer, who made his name building a bipartisan consensus for airline deregulation as a special counsel on the judiciary committee; and who, as a Harvard Law professor, advocated an influential and moderate view on antitrust enforcement.
During Breyer’s confirmation hearings his sharpest critic was Ralph Nader, who testified that his pro-business rulings were “extraordinarily one-sided.” Another critic, Senator Howard Metzenbaum of Ohio, said that the fact that the chamber was the first organization to endorse Breyer indicated that “large corporations are very pleased with this nomination” and “the fact that Ralph Nader is opposed to it indicated that the average American has a reason to have some concern.” The chamber’s imprimatur helped reassure Republicans about Breyer, and he was confirmed with a vote of 87 to 9. “Frankly, we didn’t feel like we had anyone on the court since Justice Powell who truly understood business issues,” Conrad told me. “Justice Breyer came close to that.”
The Breyer and Ginsburg nominations also came at a time when liberal as well as conservative judges and academics were gravitating in increasing numbers to an economic approach to the law, originally developed at the University of Chicago. The law-and-economics movement sought to evaluate the efficiency of legal rules based on their costs and benefits for society as a whole. Although originally conservative in its orientation, the movement also attracted prominent moderate and liberal scholars and judges like Breyer, who before his nomination wrote two books on regulation, arguing that government health-and-safety spending is distorted by sensational media reports of disasters that affect relatively few citizens.
Since joining the Supreme Court, Breyer has also been an intellectual leader in antitrust and patent disputes, which often pit business against business, rather than business against consumers. In those cases, many liberal scholars sympathetic to economic analysis have applauded the court for favoring competition rather than existing competitors, innovation rather than particular innovators. “The court deserves credit for trying to rationalize a totally irrational patent system, benefiting smaller new competitors rather than existing big ones,” says Lawrence Lessig, an intellectual-property scholar at Stanford.
Clinton’s nominations of Ginsburg and Breyer may have been welcomed by the chamber, but with the election of George W. Bush, the chamber faced a dilemma. Ever since the Reagan administration, there had been a divide on the right wing of the court between pragmatic free-market conservatives, who tended to favor business interests, and ideological states-rights conservatives. In some business cases, these two strands of conservatism diverged, leading the most staunch states-rights conservatives on the court, Antonin Scalia and Clarence Thomas, to rule against business interests. Scalia and Thomas were reluctant to second-guess large punitive-damage verdicts by state juries, for example, or to hold that federally regulated cigarette manufacturers could not be sued in state court. As a result, under Conrad’s leadership, the chamber began a vigorous campaign to urge the Bush administration to appoint pro-business conservatives.
When it came time to replace Chief Justice William Rehnquist and Justice Sandra Day O’Connor, the candidate most enthusiastically supported by states-rights conservatives, Judge Michael Luttig, had a record on the Court of Appeals for the Fourth Circuit that some corporate interests feared might make him unpredictable in business cases. (“One of my constant refrains is that being conservative doesn’t necessarily mean being pro-business,” Conrad told me.) The chamber and other business groups enthusiastically supported John Roberts, who had been hired by the chamber to write briefs in two Supreme Court cases in 2001 and 2002. At the time of Roberts’s nomination, Thomas Goldstein, a prominent Supreme Court litigator, described him as “the go-to lawyer for the business community,” adding “of all the candidates, he is the one they knew best.” When Roberts was nominated, business groups lobbied senators as part of the campaign for his confirmation.
The business community was also enthusiastic about Samuel Alito, whose 15-year record as an appellate judge showed a consistent skepticism of claims against large corporations. Ted Frank of the American Enterprise Institute predicted at the time of the nomination that if Alito replaced O’Connor, he and Roberts would bring about a rise in business cases before the Supreme Court. Frank’s prediction was soon vindicated.
“There wasn’t a great deal of interest in classic business cases in the last few years of the Rehnquist Court,” Carter Phillips, a partner at Sidley Austin and a leading Supreme Court business advocate, told me. In 2004, Judge Richard Posner, a founder of the law-and-economics movement, argued that the Rehnquist Court’s emphasis on headline-grabbing constitutional cases had politicized it, and called on the court to hear more business cases. The Roberts court has unambiguously answered the call. As Phillips told me, Roberts “is more interested in those issues and understands them better than his predecessor did.”
IV.
Exactly how successful has the Chamber of Commerce been at the Supreme Court? Although the court is currently accepting less than 2 percent of the 10,000 petitions it receives each year, the Chamber of Commerce’s petitions between 2004 and 2007 were granted at a rate of 26 percent, according to Scotusblog. And persuading the Supreme Court to hear a case is more than half the battle: Richard Lazarus, a law professor at Georgetown who also represents environmental clients before the court, recently ran the numbers and found that the court reverses the lower court in 65 percent of the cases it agrees to hear; and when the petitioner is represented by the elite Supreme Court advocates routinely hired by the chamber, the success rate rises to 75 percent.
Faced with these daunting numbers, the progressive antagonists of big business are understandably feeling beleaguered and outgunned. “The fight before the court is generally not an even one,” said David Vladeck, who once worked for the Public Citizen Litigation Group and now teaches law at Georgetown. “There’s us on one side, with a brief or two, and industry on the other side, with a well-coordinated campaign of 10 or 12 briefs, with each one written by a member of the elite Supreme Court bar that address an issue in enormous depth.” He added, ruefully, “You admire their handiwork, but it’s frustrating as hell to deal with.”
To gauge the degree of the frustration, I recently paid a visit to Ralph Nader, a few weeks before he announced his most recent campaign for president of the United States. It was a surprise to find that his office, the Center for Study of Responsive Law, shares an address in a grand building with the Carnegie Institution for Science. But the office itself, reassuringly, is buried on the ground floor, where Nader received me at a conference table surrounded by file cabinets stuffed with faded back issues of Mother Jones and The Nation.
Nader was uncontrite about his 2000 run against Al Gore — which is often credited with helping George W. Bush win the presidency — and he insisted that because Clinton appointed justices like Breyer, Gore would have done the same. “Breyer hasn’t been worse than I feared, because I had real concern when he was nominated,” Nader told me. He conceded that, like Breyer, Democratic justices appointed by President John Kerry would presumably have been better on civil rights and liberties than John Roberts and Samuel Alito. Nevertheless, he disparaged Breyer as a “deregulation quasi-ideologue” who was able to weave a “tapestry of illusion” in his arguments by dealing in abstractions.
The main casualty of the 2000 run, Nader said, is that he is no longer collaborating with America’s trial lawyers. They would ordinarily be his natural allies in representing consumer interests, but they donated heavily to Gore’s campaign. After 2000, the trial lawyers “have been vitriolic,” Nader explained. He blames them for not using their money to help counteract the influence of the Chamber of Commerce and other business groups before the federal courts. In part as a result of their stinginess, he said, his colleagues at Public Citizen are underfinanced and worn down. “There were some lawyers who left Public Citizen because they got tired of losing,” he said. “Everyone is desperately trying to hold on to whatever issues are left, and then they become demoralized and discouraged.”
cont
Andy Friedman
By JEFFREY ROSEN
Published: March 16, 2008
I.
The headquarters of the U.S. Chamber of Commerce, located across from Lafayette Park in Washington, is a limestone structure that looks almost as majestic as the Supreme Court. The similarity is no coincidence: both buildings were designed by the same architect, Cass Gilbert. Lately, however, the affinities between the court and the chamber, a lavishly financed business-advocacy organization, seem to be more than just architectural. The Supreme Court term that ended last June was, by all measures, exceptionally good for American business. The chamber’s litigation center filed briefs in 15 cases and its side won in 13 of them — the highest percentage of victories in the center’s 30-year history. The current term, which ends this summer, has also been shaping up nicely for business interests.
I visited the chamber recently to talk with Robin Conrad, who heads the litigation effort, about her recent triumphs. Conrad, an appealing, soft-spoken woman, lives with her family on a horse farm in Maryland, where she rides with a fox-chasing club called the Howard County-Iron Bridge Hounds. Her office, playfully adorned by action figures of women like Xena the Warrior Princess and Hillary Rodham Clinton, has one of the most impressive views in Washington. “You can see the White House through the trees,” she said as we peered through a window overlooking the park. “In the old days, you could actually see people bathing in the fountain. Homeless people.”
Conrad was in an understandably cheerful mood. Though the current Supreme Court has a well-earned reputation for divisiveness, it has been surprisingly united in cases affecting business interests. Of the 30 business cases last term, 22 were decided unanimously, or with only one or two dissenting votes. Conrad said she was especially pleased that several of the most important decisions were written by liberal justices, speaking for liberal and conservative colleagues alike. In opinions last term, Ruth Bader Ginsburg, Stephen Breyer and David Souter each went out of his or her way to question the use of lawsuits to challenge corporate wrongdoing — a strategy championed by progressive groups like Public Citizen but routinely denounced by conservatives as “regulation by litigation.” Conrad reeled off some of her favorite moments: “Justice Ginsburg talked about how ‘private-securities fraud actions, if not adequately contained, can be employed abusively.’ Justice Breyer had a wonderful quote about how Congress was trying to ‘weed out unmeritorious securities lawsuits.’ Justice Souter talked about how the threat of litigation ‘will push cost-conscious defendants to settle.’ ”
Examples like these point to an ideological sea change on the Supreme Court. A generation ago, progressive and consumer groups petitioning the court could count on favorable majority opinions written by justices who viewed big business with skepticism — or even outright prejudice. An economic populist like William O. Douglas, the former New Deal crusader who served on the court from 1939 to 1975, once unapologetically announced that he was “ready to bend the law in favor of the environment and against the corporations.”
Today, however, there are no economic populists on the court, even on the liberal wing. And ever since John Roberts was appointed chief justice in 2005, the court has seemed only more receptive to business concerns. Forty percent of the cases the court heard last term involved business interests, up from around 30 percent in recent years. While the Rehnquist Court heard less than one antitrust decision a year, on average, between 1988 and 2003, the Roberts Court has heard seven in its first two terms — and all of them were decided in favor of the corporate defendants.
Business cases at the Supreme Court typically receive less attention than cases concerning issues like affirmative action, abortion or the death penalty. The disputes tend to be harder to follow: the legal arguments are more technical, the underlying stories less emotional. But these cases — which include shareholder suits, antitrust challenges to corporate mergers, patent disputes and efforts to reduce punitive-damage awards and prevent product-liability suits — are no less important. They involve billions of dollars, have huge consequences for the economy and can have a greater effect on people’s daily lives than the often symbolic battles of the culture wars. In the current Supreme Court term, the justices have already blocked a liability suit against Medtronic, the manufacturer of a heart catheter, and rejected a type of shareholder suit that includes a claim against Enron. In the coming months, the court will decide whether to reduce the largest punitive-damage award in American history, which resulted from the Exxon Valdez oil spill in 1989.
What should we make of the Supreme Court’s transformation? Throughout its history, the court has tended to issue opinions, in areas from free speech to gender equality, that reflect or consolidate a social consensus. With their pro-business jurisprudence, the justices may be capturing an emerging spirit of agreement among liberal and conservative elites about the value of free markets. Among the professional classes, many Democrats and Republicans, whatever their other disagreements, have come to share a relatively laissez-faire, technocratic vision of the economy and are suspicious of excessive regulation and reflexive efforts to vilify big business. Judges, lawyers and law professors (such as myself) drilled in cost-benefit analysis over the past three decades, are no exception. It should come as little surprise that John Roberts and Stephen Breyer, both of whom studied the economic analysis of law at Harvard, have similar instincts in business cases.
This elite consensus, however, is not necessarily shared by the country as a whole. If anything, America may be entering something of a populist moment. If you combine the groups of Americans in a recent Pew survey who lean toward some strain of economic populism — from disaffected and conservative Democrats to traditional liberals to social and big-government conservatives — at least two-thirds of all voters arguably feel sympathy for government intervention in the economy. Could it be, then, that the court is reflecting an elite consensus while contravening the sentiments of most Americans? Only history will ultimately make this clear. One thing, however, is certain already: the transformation of the court was no accident. It represents the culmination of a carefully planned, behind-the-scenes campaign over several decades to change not only the courts but also the country’s political culture.
II.
The origins of the business community’s campaign to transform the Supreme Court can be traced back precisely to Aug. 23, 1971. That was the day when Lewis F. Powell Jr., a corporate lawyer in Richmond, Va., wrote a memo to his friend Eugene B. Snydor, then the head of the education committee of the U.S. Chamber of Commerce. In the memo, Powell expressed his concern that the American economic system was “under broad attack.” He identified several aggressors: the New Left, the liberal media, rebellious students on college campuses and, most important, Ralph Nader. Earlier that year, Nader founded Public Citizen to advocate for consumer rights, bring antitrust actions when the Justice Department did not and sue federal agencies when they failed to adopt health and safety regulations.
Powell claimed that this attack on the economic system was “quite new in the history of America.” Ever since 1937, when President Franklin D. Roosevelt threatened to pack a conservative Supreme Court with more progressive justices, the court had largely deferred to federal and state economic regulations. And by the ’60s, the Supreme Court under Chief Justice Earl Warren had embraced a form of economic populism, often favoring the interests of small business over big business, even at the expense of consumers. But what Powell saw in the work of Nader and others was altogether more extreme: a radical campaign that was “broadly based and consistently pursued.”
To counter the growing influence of public-interest litigation groups like Public Citizen, Powell urged the Chamber of Commerce to begin a multifront lobbying campaign on behalf of business interests, including hiring top business lawyers to bring cases before the Supreme Court. “The judiciary,” Powell predicted, “may be the most important instrument for social, economic and political change.” Two months after he wrote the memo, Powell was appointed by Richard Nixon to the Supreme Court. And six years later, in 1977, after steadily expanding its lobbying efforts, the chamber established the National Chamber Litigation Center to file cases and briefs on behalf of business interests in federal and state courts.
Today, the Chamber of Commerce is an imposing lobbying force. To fulfill its mission of serving “the unified interests of American business,” it collects membership dues from more than three million businesses and related organizations; last year, according to the Center for Responsive Politics, the chamber spent more than $21 million lobbying the White House, Congress and regulatory agencies on legal matters. But its battle against the forces of Naderism got off to a slow start. In 1983, when Robin Conrad arrived at the chamber, the Supreme Court was handing Nader and his allies significant victories. That year, for example, the court held that President Reagan’s secretary of transportation, Andrew L. Lewis Jr., acted capriciously when he repealed a regulation, inspired by Nader’s advocacy, that required automakers to install passive restraints like air bags. In 1986, the chamber supported a challenge to the Environmental Protection Agency’s aerial surveillance of a Dow Chemical plant. The chamber’s side lost, 5-4.
But eventually, things began to change. The chamber started winning cases in part by refining its strategy. With Conrad’s help, the chamber’s Supreme Court litigation program began to offer practice moot-court arguments for lawyers scheduled to argue important cases. The chamber also began hiring the most-respected Democratic and Republican Supreme Court advocates to persuade the court to hear more business cases. Although many of the businesses that belong to the Chamber of Commerce have their own in-house lawyers, they would have the chamber file “friend of the court” briefs on their behalf. The chamber would decide which of the many cases brought to its attention were in the long-term strategic interest of American business and then hire the leading business lawyers to write supporting briefs or argue the case.
Until the mid-’80s, there wasn’t an organized group of law firms that specialized in arguing business cases before the Supreme Court. But in 1985, Rex Lee, the solicitor general under Reagan, left the government to start a Supreme Court appellate practice at the firm Sidley Austin. Lee’s goal was to offer business clients the same level of expert representation before the Supreme Court that the solicitor general’s office provides to federal agencies. Lee’s success prompted other law firms to hire former Supreme Court clerks and former members of the solicitor general’s office to start business practices. The Chamber of Commerce, for its part, began to coordinate the strategy of these lawyers in the most important business cases.
At times, the strategic calculations can be quite personal. Because Supreme Court clerks have tremendous influence in making recommendations about what cases the court should hear, Conrad told me, having well-known former clerks involved in submitting a brief can be especially important. “When Justice O’Connor was on the bench and we knew her vote was very important, we had a case where the opposition had her favorite clerk on the brief, so we retained her next-favorite clerk,” she said with a laugh. “We won.”
In our conversation, Conrad was especially enthusiastic about Maureen Mahoney, a former clerk for Chief Justice Rehnquist and one of the top Supreme Court litigators who coordinate strategy with the chamber. When Mahoney agreed in 2005 to represent an appeal by the disgraced accounting firm Arthur Andersen, which was convicted in 2002 of obstructing justice by shredding documents related to the audit of Enron, few people thought the Supreme Court would take the case. “The climate was very anti-Enron,” Mahoney told me, “and it was viewed as a doomed petition.”
Mahoney rehearsed her Supreme Court argument in a moot court sponsored by the chamber. (“She was absolutely dazzling,” Conrad recalls.) On April 27, 2005, Mahoney stood calmly before the justices and delivered one of the best oral arguments I’ve ever seen at the Supreme Court. She argued that because Arthur Andersen’s accountants had followed a standard document-destruction procedure before receiving the government’s subpoena, they couldn’t be guilty of a crime; they weren’t aware what they were doing was criminal. The Supreme Court unanimously agreed and reversed the conviction, 9-0.
The Arthur Andersen case is a good example of how significantly the Supreme Court has changed its attitude about cases involving securities fraud — and business cases more generally — from the Warren to the Roberts era. In a case in 1964, the court ruled that aggrieved investors and consumers could file private lawsuits to enforce the securities laws, even in cases in which Congress hadn’t explicitly created a right to sue. In the mid-1990s, however, Congress substantially cut back on these citizen suits, and the court today has shown little patience for them. Mahoney says she sees her victory in the Arthur Andersen case as significant because it applied the same principle in criminal cases involving corporate wrongdoing that the court had already been recognizing in civil cases: namely, “refusing to create greater damage remedies or criminal penalties than Congress has explicitly specified.” She describes the case as “a very important win for business.”
This term, the Supreme Court has continued to cut back on consumer suits. In a ruling in January, the court refused to allow a shareholder suit against the suppliers to Charter Communications, one of the country’s largest cable companies. The suppliers were alleged to have “aided and abetted” Charter’s efforts to inflate its earnings, but the court held that Charter’s investors had to show that they had relied on the deceptive acts committed by the suppliers before the suit could proceed. A week later, the court invoked the same principle when it refused to hear an appeal in a case related to Enron, in which investors are trying to recover $40 billion from Wall Street banks that they claim aided and abetted Enron’s fraud. As a result, the shareholder suit against the banks may be dead.
III.
In addition to litigating cases before the court, the Chamber of Commerce also lobbies Congress and the White House in an effort to change the composition of the court itself. (Unlike many other government officials, the justices themselves are not, of course, subject to direct corporate lobbying.) The chamber’s efforts in this area were inspired by Robert Bork’s thwarted nomination to the court in 1987. Business groups were enthusiastic about Bork — not because of his conservative social views but because of his skepticism of vigorous antitrust enforcement. “In reaction to the Bork nomination, it struck us that we didn’t even have a process in place to be a player,” Conrad said.
So the chamber set up a formal process for endorsing candidates after their nominations. The process was designed to be bipartisan; and the chamber has encouraged Democratic as well as Republican presidents to appoint justices. Nominees are evaluated solely through the prism of their views about business. “We’re very surgical in our analysis,” Conrad said.
After the election of Bill Clinton, for example, the chamber endorsed Ruth Bader Ginsburg, who in addition to her pioneering achievements as the head of the women’s rights project at the A.C.L.U. had specialized, as a law professor, in the procedural rules in complex civil cases and was comfortable with the finer points of business litigation. The chamber was especially enthusiastic about Clinton’s second nominee, Stephen Breyer, who made his name building a bipartisan consensus for airline deregulation as a special counsel on the judiciary committee; and who, as a Harvard Law professor, advocated an influential and moderate view on antitrust enforcement.
During Breyer’s confirmation hearings his sharpest critic was Ralph Nader, who testified that his pro-business rulings were “extraordinarily one-sided.” Another critic, Senator Howard Metzenbaum of Ohio, said that the fact that the chamber was the first organization to endorse Breyer indicated that “large corporations are very pleased with this nomination” and “the fact that Ralph Nader is opposed to it indicated that the average American has a reason to have some concern.” The chamber’s imprimatur helped reassure Republicans about Breyer, and he was confirmed with a vote of 87 to 9. “Frankly, we didn’t feel like we had anyone on the court since Justice Powell who truly understood business issues,” Conrad told me. “Justice Breyer came close to that.”
The Breyer and Ginsburg nominations also came at a time when liberal as well as conservative judges and academics were gravitating in increasing numbers to an economic approach to the law, originally developed at the University of Chicago. The law-and-economics movement sought to evaluate the efficiency of legal rules based on their costs and benefits for society as a whole. Although originally conservative in its orientation, the movement also attracted prominent moderate and liberal scholars and judges like Breyer, who before his nomination wrote two books on regulation, arguing that government health-and-safety spending is distorted by sensational media reports of disasters that affect relatively few citizens.
Since joining the Supreme Court, Breyer has also been an intellectual leader in antitrust and patent disputes, which often pit business against business, rather than business against consumers. In those cases, many liberal scholars sympathetic to economic analysis have applauded the court for favoring competition rather than existing competitors, innovation rather than particular innovators. “The court deserves credit for trying to rationalize a totally irrational patent system, benefiting smaller new competitors rather than existing big ones,” says Lawrence Lessig, an intellectual-property scholar at Stanford.
Clinton’s nominations of Ginsburg and Breyer may have been welcomed by the chamber, but with the election of George W. Bush, the chamber faced a dilemma. Ever since the Reagan administration, there had been a divide on the right wing of the court between pragmatic free-market conservatives, who tended to favor business interests, and ideological states-rights conservatives. In some business cases, these two strands of conservatism diverged, leading the most staunch states-rights conservatives on the court, Antonin Scalia and Clarence Thomas, to rule against business interests. Scalia and Thomas were reluctant to second-guess large punitive-damage verdicts by state juries, for example, or to hold that federally regulated cigarette manufacturers could not be sued in state court. As a result, under Conrad’s leadership, the chamber began a vigorous campaign to urge the Bush administration to appoint pro-business conservatives.
When it came time to replace Chief Justice William Rehnquist and Justice Sandra Day O’Connor, the candidate most enthusiastically supported by states-rights conservatives, Judge Michael Luttig, had a record on the Court of Appeals for the Fourth Circuit that some corporate interests feared might make him unpredictable in business cases. (“One of my constant refrains is that being conservative doesn’t necessarily mean being pro-business,” Conrad told me.) The chamber and other business groups enthusiastically supported John Roberts, who had been hired by the chamber to write briefs in two Supreme Court cases in 2001 and 2002. At the time of Roberts’s nomination, Thomas Goldstein, a prominent Supreme Court litigator, described him as “the go-to lawyer for the business community,” adding “of all the candidates, he is the one they knew best.” When Roberts was nominated, business groups lobbied senators as part of the campaign for his confirmation.
The business community was also enthusiastic about Samuel Alito, whose 15-year record as an appellate judge showed a consistent skepticism of claims against large corporations. Ted Frank of the American Enterprise Institute predicted at the time of the nomination that if Alito replaced O’Connor, he and Roberts would bring about a rise in business cases before the Supreme Court. Frank’s prediction was soon vindicated.
“There wasn’t a great deal of interest in classic business cases in the last few years of the Rehnquist Court,” Carter Phillips, a partner at Sidley Austin and a leading Supreme Court business advocate, told me. In 2004, Judge Richard Posner, a founder of the law-and-economics movement, argued that the Rehnquist Court’s emphasis on headline-grabbing constitutional cases had politicized it, and called on the court to hear more business cases. The Roberts court has unambiguously answered the call. As Phillips told me, Roberts “is more interested in those issues and understands them better than his predecessor did.”
IV.
Exactly how successful has the Chamber of Commerce been at the Supreme Court? Although the court is currently accepting less than 2 percent of the 10,000 petitions it receives each year, the Chamber of Commerce’s petitions between 2004 and 2007 were granted at a rate of 26 percent, according to Scotusblog. And persuading the Supreme Court to hear a case is more than half the battle: Richard Lazarus, a law professor at Georgetown who also represents environmental clients before the court, recently ran the numbers and found that the court reverses the lower court in 65 percent of the cases it agrees to hear; and when the petitioner is represented by the elite Supreme Court advocates routinely hired by the chamber, the success rate rises to 75 percent.
Faced with these daunting numbers, the progressive antagonists of big business are understandably feeling beleaguered and outgunned. “The fight before the court is generally not an even one,” said David Vladeck, who once worked for the Public Citizen Litigation Group and now teaches law at Georgetown. “There’s us on one side, with a brief or two, and industry on the other side, with a well-coordinated campaign of 10 or 12 briefs, with each one written by a member of the elite Supreme Court bar that address an issue in enormous depth.” He added, ruefully, “You admire their handiwork, but it’s frustrating as hell to deal with.”
To gauge the degree of the frustration, I recently paid a visit to Ralph Nader, a few weeks before he announced his most recent campaign for president of the United States. It was a surprise to find that his office, the Center for Study of Responsive Law, shares an address in a grand building with the Carnegie Institution for Science. But the office itself, reassuringly, is buried on the ground floor, where Nader received me at a conference table surrounded by file cabinets stuffed with faded back issues of Mother Jones and The Nation.
Nader was uncontrite about his 2000 run against Al Gore — which is often credited with helping George W. Bush win the presidency — and he insisted that because Clinton appointed justices like Breyer, Gore would have done the same. “Breyer hasn’t been worse than I feared, because I had real concern when he was nominated,” Nader told me. He conceded that, like Breyer, Democratic justices appointed by President John Kerry would presumably have been better on civil rights and liberties than John Roberts and Samuel Alito. Nevertheless, he disparaged Breyer as a “deregulation quasi-ideologue” who was able to weave a “tapestry of illusion” in his arguments by dealing in abstractions.
The main casualty of the 2000 run, Nader said, is that he is no longer collaborating with America’s trial lawyers. They would ordinarily be his natural allies in representing consumer interests, but they donated heavily to Gore’s campaign. After 2000, the trial lawyers “have been vitriolic,” Nader explained. He blames them for not using their money to help counteract the influence of the Chamber of Commerce and other business groups before the federal courts. In part as a result of their stinginess, he said, his colleagues at Public Citizen are underfinanced and worn down. “There were some lawyers who left Public Citizen because they got tired of losing,” he said. “Everyone is desperately trying to hold on to whatever issues are left, and then they become demoralized and discouraged.”
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