The Supreme Boardroom

The Supreme Boardroom

Lee Drutman

TomPaine.com

July 15, 2005

Lee Drutman is the co-author of The People’s Business: Controlling Corporations and Restoring Democracy.

In 1971, soon-to-be Supreme Court Justice and then prominent corporate lawyer Lewis Powell F. Powell Jr. offered the following words of advice in a confidential memo to the Chamber of Commerce: “The judiciary may be the most important instrument for social, economic, and political change.”

While the words themselves are a good reminder of what’s at stake in the impending Supreme Court nomination, what matters most is their context. Powell’s memo is widely seen as the impetus behind a business-funded mass legal movement that has over the last 30 years worked to shape the country’s jurisprudence. The result is that with each passing year, the Courts seem to be more and more enthralled with the ideas of “free enterprise” and less and less friendly to the idea of holding corporations accountable.

Led by organizations like the National Chamber Litigation Center, the Washington Legal Foundation and about two dozen other “Free Enterprise” legal groups, big business has worked aggressively to expand its legal rights on numerous fronts: strengthening First Amendment rights for the unfettered spread of advertising; undermining government regulation by pushing arguments that regulation can amount to unconstitutional “takings” under the Fifth Amendment; weakening the ability of victims of corporate wrongdoing to hold companies accountable; and generally doing away with any notion that business might actually be legally obligated to do anything more than make more money for shareholders.

But with the resignation of Sandra Day O’Connor, big business is losing perhaps its best friend on the Supreme Court. That’s why business groups like the Chamber of Commerce and the National Association of Manufacturers (NAM) are reportedly planning to pull out all the stops when it comes to getting the judge they want, including promises to spend an $18 million war chest.

What makes this potentially tricky, however, is that the type of judge that big business wants is not necessarily the kind of judge that religious and social conservatives want. The kind of ideological purity that makes a James Dobson type salivate over a Scalia/Thomas clone makes business nervous. Such ideological purity doesn’t wash well with business’s needs for a flexible interpretation of the Constitution, where the important thing is not so much adhering to legal principle but making sure that the decision is good for business. As Quentin Riegel, spokesman for the NAM put it, “it’s helpful to have someone who understands the business implications.”

Sometimes, a limited federal government is needed. But the belief in states rights that endears Scalia and Thomas to social conservatives doesn’t always make sense for business. Business tends to prefer the consistency of federal regulation over a patchwork of 50 state regulations and 50 state regulators (easier to avoid Eliot Spitzer types that way). As the Chamber of Commerce put it in a press release on O’Connor’s resignation, “The importance of a unified regulatory structure in fostering a free enterprise system that encourages market innovation cannot be ignored.”

In his most recent column, Chamber President Tom Donahue described six legal battlegrounds for business: “civil rights [By which he likely also means “business civil rights”], insurance, federal jurisdiction/federal preemption, employment, workplace injury, and other liability issues.” He goes on to note what should be the obvious: “The breadth of these issues is immense and clearly indicates that the impact of the Supreme Court on our free enterprise system cannot be ignored -- anymore than we can ignore the other two branches of the federal government.” Progressives should take note.

Unfortunately, progressive activists have so far largely ignored the economic implications and instead focused primarily on the social issues, casting O’Connor as a moderate in the process. As the Alliance for Justice’s Nan Aron put it on her organization’s website, “Justice O’Connor has been a swing vote in significant cases involving voting rights, race and sex discrimination, privacy and reproductive rights, and criminal justice, and Congressional authority to protect us all, to name a few. With her replacement, individual rights and freedoms hang in the balance.”

Obviously, these are important, crucial issues. But let’s also not forget that roughly 40 percent of Supreme Court cases now involve business. And at stake in a nominee is also the idea of a regulatory state that properly constrains the ability of businesses to pollute the environment, exploit workers, and engage in reckless consumer abuse without fear of legal accountability.

One of the consequences of progressive groups focusing primarily on the social issues is that it allows a potential nominee like Alberto Gonzales to come out looking like a compromise choice, even earning the endorsement of leading Dems like Minority Leader Harry Reid (D-Nev.). Yet, while social conservatives have made clear that they don’t trust Gonzales on their litmus test of abortion, economic conservatives must be quietly salivating at the prospect of Gonzales, who slavishly found in favor of businesses all the time as a Texas Supreme Court justice. There, he supported rulings that weakened safety standards for manufacturers of children’s products, weakened incentives for safe workplaces, and made it more difficult for victims of corporate wrongdoing to file class-action lawsuits, among other pro-business rulings.

Looking at President Bush’s history of reconciling the often incongruous twin GOP bases of social and business conservatives, one can observe a pattern of words and deeds. While the President frequently speaks the language of social conservatives and champions their causes in public statements, he actually delivers on the business agenda (consider the passage of the bankruptcy and class-action lawsuit bills this year). But by calling attention to the social and religious issues, Bush both satisfies his own base and draws the attention and energies of many progressive activists, creating a distracting bugaboo that makes it easier to do favors for big business.

In the case of the battle to replace O’Connor, the anti-abortion, pro-prayer, anti-gay right-wing groups may be doing the distracting for Bush, drawing progressives into a battle over social and religious issues. Such a limited battle, however, ignores the many crucial business issues at stake and makes it that much easier for big business to continue to push jurisprudence further and further away from anything resembling corporate accountability.

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