Private: Recent Supreme Court Decisions Erode Corporate Accountability, Experts Testify

by Jeremy Leaming

The Senate Judiciary Committee heard testimony today on how several recent Supreme Court decisions are undermining corporate accountability and limiting individuals’ abiilty to seek justice through the courts.

The hearing focused on three cases: Wal-Mart v. Dukes, which blocked some 1.6 million women alleging discrimination by Wal-Mart from asserting their claims as a class, AT&T v. Concepcion, which upheld an arbitration clause banning consumers from disputing an AT&T charge as a class, and Janus Capital Group v. First Derivative Traders, which halted a lawsuit by investors alleging that Janus Capital knowingly made misleading statements.

“In my view, each of these decisions gives corporations additional power to act in their own self-interest and limits the ability of Americans to have their day in court,” said Senate Judiciary Chairman Patrick Leahy at the start of the hearing.

University of Colorado law professor Melissa Hart, who authored an ACS Issue Brief on state elimination of equal opportunity programs, echoed these concerns in her testimony about Wal-Mart and Conception, lamenting the court’s “hostility” toward the class action device.

“Because the class action is the only way to reach many kinds of systemic misconduct, the erosion of this tool insulates companies from any serious risk of litigation from many kinds of potentially illegal behavior,” Hart said.

She also noted that Wal-Mart and Concepcion are part of a trend in Supreme Court jurisprudence over the past few years of reinterpreting procedural rules “in ways that limit the likelihood that the substantive case will ever be heard by a decision-maker.”

Mayer Brown Partner Andrew Pincus, who represented AT&T in its case against Concepcion, countered that businesses lost this term just as often as they won. Pincus, an ACS Board Member, said he looked at all the decisions from the Supreme Court's most recent term in which private plaintiffs sought damages from businesses, and found that there were nine wins and nine losses.

Duke University law professor James D. Cox focused on Janus Capital and two other recent securities litigation decisions, Stoneridge Investment Partners v. Scientific-Atlanta, and Central Bank of Denver v. First Interstate Bank of Denver, concluding that the result of these three precedents is that “we give the fraudster a pass.”

“This leads to all kinds of perverse results,” he explained, one of which is that “we never hold the individuals responsible who should be responsible.”

Betty Dukes, the named plaintiff in Wal-Mart v. Dukes, took the opportunity in her testimony to speak out on behalf of the many other women who have alleged gender discrimination by Wal-Mart:

"It is not easy to take on your own employer. It is even more difficult when that employer is the biggest company in the world," she said. "In this country, there are many Betty Dukes who want their voices to be heard when they are denied equal pay and equal promotion. For many of these women, I am afraid that the court’s ruling will leave them without having their due day in court."

Watch video of the hearing here.

To learn more about how corporations are faring in the courts, visit a new ACS Web Page, Corporations and the Courts, with resources that include two ACS Issue Briefs, “Why Does Business (Usually) Win in the Roberts Court?,” “Judicial Hostility to Litigation and How it Impairs Accountability for Corporations and Other Defendants,” and a recent article in the official ACS Journal, the Harvard Law & Policy Review, entitled “Class Action at the Crossroads: An Answer to Wal-Mart v. Dukes.”

Access to Justice, Arbitration, Civil rights, Class actions, Constitutional Interpretation, Equality and Liberty, Procedural Barriers to Court, Supreme Court, Women's rights