McCain Promises SCOTUS Will Be More Enron-Friendly and Anti-Worker

It has been widely reported that Sen. John McCain has promised to appoint Supreme Court Justices in the model of John Roberts (see right) and Samuel Alito (see left). Of course this sends a signal that Roe v. Wade is again under attack, and that other medical procedures, genetic research and biomedical research will be curtailed. He proposes a conservative-leaning “Justice Advisory Committee.” The group will be chaired by former solicitor general Ted Olson and Kansas Sen. Sam Brownback and will include Robert P. George, a Princeton University professor who is a member of the President’s Council on Bioethics known for his pro-life movement activities. But Alito and Roberts are also pro-business and anti-worker activists, so this promise is welcome code to both the family values and the corporate wings of the Republican coalition.

We pointed out in a Monday comment that Roberts and Alito joined in the decision to uphold Indiana’s restrictive voter ID law that takes away the right to easily vote from thousands of elderly, disabled, young, working-class and minority voters and forces them to wait and sue later in “as applied” challenges. This shift undermines voting rights.

Also of long-range significance is the tilt towards big business and against workers’ rights and other remedial laws which have emerged from the Roberts/Alito court.

A recent NYT Magazine piece by Jeff Rosen traces how special interests have worked hard to get pro-corporate judges on the federal courts. The nominations of Roberts and Alito were major victories for the Chamber of Commerce seeking to stack the courts. The lobbying was successful in the Clinton choice of appointees, Breyer and Ginsberg. The Clinton Justices and dozens of lower federal court judges are generally sympathetic to business interests as well, while more moderate on some social and environmental issues which rarely abridge business interests. Rosen writes:

"***[T]he 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."

Throwing out Claims against the Enron/Investment Banks and Other Business Schemers.

Under Roberts , SCOTUS has shut out shareholder claims, even when supported by the Securities and Exchange Commission. In Stoneridge Investment Partners v. Scientific-Atlanta Inc. and Motorola Inc., Stoneridge claimed that Scientific-Atlanta and Motorola (suppliers) had engaged in a scheme involving a sham transaction with Charter Communication, a cable company, knowing that Charter would use the transaction to inflate revenues to deceive Wall Street analysts and investors.

The suppliers had not made public fraudulent statements of their own. SCOTUS ruled against investors because they did not rely on any fraudulent claims made by the those participants in the scheme. Stoneridge lets a whole class of corporate wrongdoers (accountants, lawyers, suppliers and others who enable the scheme) off the hook. It greatly changes the rules of the marketplace. The Bush administration sided with big business against investors (such as pension funds) despite the recommendation of the SEC to defend the defrauded investors. In contrast, the attorneys general from 30 states tried to support shareholders (but not the Attorney General of Oregon). While the Stonridge case may seem obscure, it paved the way for SCOTUS to let the investment banks who aided and abetted Enron escape suit this January.

The Stoneridge result was entirely predicable because the same types of claims were raised by investors after the Enron collapse, so the issue was politically sensitive for the Bush administration. In the Enron cases investors brought fraud claims against the investment banks which enabled some of the Enron schemes. In separate suits, Enron investors claimed that investment banks colluded with Enron by entering into bogus partnerships and transactions that concealed certain Enron liabilities from disclosure, and Enron recorded revenue from the deals when it was actually incurring debt. Enron’s collapse wiped out thousands of jobs, $60 billion+ in market value and more than $2 billion in pension plans (many state PERS investors, and the plans of Portland General Electric union workers and some retired executives).

But the legal theory of a fraudulent scheme by the investment banks was thrown out by the conservative lower courts in the 5th Circuit (the level below SCOTUS) and SCOTUS refused to hear the appeals. In those cases the investors had indeed relied on Enron’s glowing descriptions of its business, but were unaware of the actual deceptive conduct by the investment banks, so they did not claim to “rely” on anything the banks said publicly, Instead, these investors claimed they were misled by the scheme between Enron and the banks. The bottom line, investors, pension funds, retirees, are out of court.

Taking Away Basic Rights to Fair Treatment in the Workplace.

Alito was the author of the May 2007 opinion that ruled against Lilly Ledbetter’s right to challenge the pay discrimination she faced at her job. Ledbetter found out that over the years, her male co-workers had been paid more for performing work just like hers. SCOTUS said she should have sued within 180 days of the first pay disparity (which of course she could not have known about at the time). Roberts joined that opinion, which fundamentally changed the way workers could access the courts.

Iin June 2007, Roberts and Alito joined the other pro-business justices in a decision that prevented home care workers from getting a minimum wage or overtime pay. In Island Care at Home v. Coke, the Roberts Court ruled home care workers are not protected by the federal Fair Labor Standards Act (FLSA). More than 1 million workers lost out on fair pay and working conditions.

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