Supreme Court and the States: Business Wins, Voting Rights Lose, and a Mixed Bag on Criminal Justice

As the Supreme Court marches to the Right, corporate interests continue to thrive at the expense of state regulatory powers.  "This has been a very successful year for the business community," said Miguel Estrada, a Washington appellate lawyer who represents many key corporate interests before courts in Washington, D.C."  This session at the U.S. Supreme Court, as this Dispatch will highlight, had an almost uniform tilt towards business versus state regulatory authority.  In other areas like election law, the tilt was against poor voters who faced restrictions on their right to vote, though the term was a more mixed bag on criminal justice and other issues before the Court.


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Business Interests Win Big Against State Regulation

In almost every Supreme Court decision decided this term, state regulation lost out against business claims of federal preemption of state powers.

Consumers Lose in Medical Device Liability Case: As we highlighted in February, Riegel v. Medtronic is potentially one of the most dangerous decisions undercutting state consumer protection laws in decades.  Essentially, the court declared that once the Federal Food and Drug Administration (FDA) approves a medical device, however careless or politicized the decision, the companies are then immune to lawsuits under state consumer protection laws authorized by the 1976 Medical Device Amendments.  What made this decision especially appalling is that sponsors of that federal law, such as Sen. Edward Kennedy, point out that no such preemption of state law was ever intended, so the Supreme Court created this attack on state powers completely on its own authority.  Legislation to reverse this decision has already been introduced into Congress.

Making the decision especially dangerous is its likely expansion to consumer suits over defective prescription drugs.  A decision on that exact issue, Warner-Lambert v. Kent, deadlocked 4-4 only because Chief Justice Roberts recused himself because of substantial stock holdings in the drug company involved in the suit.  There is the likelihood, though, of Roberts be a deciding vote next term in a similar case about state consumer laws.

Court Compels States to Fund Union Busting by Government Contractors:  In one of the most anti-labor decisions in decades, and one of the most bizarre ones, the Supreme Court in Chamber of Commerce v. Brown struck down a California law that prevented government contractors from diverting money meant for health care or other public services to paying union-busting lawyers.  Many federal laws, including Head Start and the Workforce Investment Act, prohibit use of federal money for anti-union activities, so it is especially odd that states are helpless to stop public money from being misused for anti-union purposes when the federal government reserves the right to prevent such misuse of its own funds.   Despite claims that federal labor law preempts the California law, as Justice Breyer wrote in dissent, legislatures have "broad authority to decide how to spend the People's money." If Californians do not want their tax money used to block unionization, "why should they be conscripted into paying?"
Beyond these two blockbuster decisions, corporate interests won in a series of other cases:

  • States Can't Stop Mail Order Cigarette Sales to Minors:  In Rowe v. NH Motor Transport Association, the Court found that the Federal Aviation Administration Authorization Act of 1994 preempts a Maine statute requiring tobacco shippers to use delivery companies that verify the age of the customer.
  • Arbitration Clauses Void Right to State Administrative Appeals:  In its ongoing gutting of state labor laws, the Court declared in Preston v. Ferrer that a California state law requiring an administrative hearing in talent agency disputes was overridden by the Federal Arbitration Act if an arbitration clause had been signed.
  • Corporations Win Tax Rulings Against States: In both CSX v. GA Board of Equalization and Meadwestvaco v. Illinois Department of Revenue, state methodologies for taxing the corporation plaintiffs were struck down as preempted by federal law or constitutional rules, in each case likely handing the plaintiff companies a large tax decrease.
  • Punitive Damages Owed by Corporations Slashed: While focusing on federal maritime law in its details, numerous legal experts expect the Court's Exxon v. Baker decision - which slashed punitive damages owed to the Alaskan victims of Exxon's Valdez oil spill to no more than actual damages - will spill over into state courts, the primary venue for punitive damages against companies.

The one major corporate case involving state regulation that had even a mixed result was Morgan Stanley Capital Group, Inc. v. Public Utility District No. 1, which made a strongly pro-corporate legal argument that predatory utility contracts will generally be upheld no matter how unreasonable the rates for consumers, but that in the narrow case of unlawful manipulation of the power market, there might be cause for overturning the power contract.




Election Law Decisions: Burdening Voting Rights, Upholding Voting Systems and Opposing Campaign Finance Fairness

If the Court was eager to override state laws for the benefit of corporate interests, it bent over backwards in deference to state law when the issue was Indiana's photo ID law gutting the rights of our nation's poorest voters in Crawford v. Marion City Election Board.   As we detailed when the decision came down in May, the Court ignored clear evidence that a large majority of voters without ID who came to the polls would be prevented from having their votes counted-- and that the financial and time costs of obtaining a photo ID for many of them would be prohibitive, far more than poll taxes previously struck down as unconstitutional, as Justice Breyer noted in dissent.  

Upholding Primary Systems: In two other decisions, the Court deferred to unusual state primary systems:

  • In Washington State Grange v. Washington State Republican Party et al., the Court upheld Washington's new ballot system that allows candidates from all parties to compete in a single primary together, with the top two vote-getters going on to a runoff. The court ignored concerns that it violated the parties' associational rights that candidates could identify themselves with a party on the ballot and even advance to the runoff, despite the possibility of that candidate not being the choice of voting members of that party.
  • In NY Board of Elections v. Lopez Torre, the Court approved New York state's system of nominating lower court judges at party conventions, rather than through direct elections.

Implications of Davis for State Public Financing Laws? While not directly effecting a state law, the majority in Davis v. Federal Election Commission, struck down the federal "Millionaire's Amendment" which allowed candidates facing self-funding candidates exceeding a certain level of spending to receiving larger campaign contributions to level the playing field. Given clear legal differences, state public financing laws in states like Arizona which increase state funding for candidates facing high-spending opponents should survive challenge, but the animosity by the Court majority to the goal of levelling the electoral playing field between those with and without wealth in our democracy is a general threat to such state campaign finance laws.




A Mixed Term on Criminal Justice Issues

In terms of both justice and protection of state authority on criminal justice issues, the term was an extremely mixed bag. 

  • In Baze v. Rees, the Court upheld Kentucky's use of lethal injection for its death penalty.
  • In Danforth v. Minnesota, the Court upheld Minnesota's decision to extend stronger retroactive relief for violations of Federal Constitutional rights than even federal courts might grant themselves, since "[f]ederal law sets certain minimal requirements that states must meet but may exceed in providing appropriate relief."
  • In Kennedy v. Louisiana, the Court struck down Louisiana's law imposing the death penalty for the rape of a child as violating the Eighth Amendment.
  • In Snyder v. Louisiana, the Court tightened scrutiny of state courts that allow government prosecutors to use preemptory strikes against black jurors in a discriminatory manner.
  • In Indiana v. Edwards, the Court said that states may require defendants found competent enough to stand trial, but whose mental illnesses may prevent them from representing themselves, to be represented by counsel.
  • In Medellin v. Texas, the Court ruled that the President does not have the authority to order a state to follow a World Court decision finding a state had violating an international treaty, in this case Texas denying an immigrant defendant access to his embassy council as required under a treaty signed by the United States.  The court essentially made international law and U.S. treaties irrelevant for state governments unless Congress passes a separate law implementing them.

Implications of Heller for State Gun Laws:  While the District of Columbia v. Heller decision creating a personal right to own a gun under the Second Amendment could have major implications for striking down state and local gun control laws, it is worth noting that the decision, written by Justice Scalia, stated that many existing gun law restrictions are still valid, including those limiting the kinds of weapons people may own, limiting ownership by felons and the mentally ill, limiting possession in schools and government buildings, and regulations on commercial sales.  And it's not even clear, since this case was about a District of Columbia law and thus implicates only 2nd Amendment rights versus federal authority, that state gun laws will be restricted at all under the doctrine, a point Justice Scalia made in a footnote where he noted that a number of past Supreme Court cases had "reaffirmed that the Second Amendment applies only to the Federal Government."




Other Miscellaneous Cases Upholding State Powers

A few other decisions had important implications for state authority:

  • State leaders breathed a sigh of relief when the Court in Department of Revenue of KY v. Davis upheld the right of states to offer tax free gains under state law as an incentive for investments in municipal bond funding state and locally-authorized projects without running afoul of the federal Commerce Clause. 
  • In Kentucky Retirement System v. EEOC, the Court ruled that Kentucky’s pension system, which treats more generously some retired workers who became disabled before rather than after retirement agent, does not violate the Age Discrimination in Employment Act.

The Court's Hostility to Public Employee Rights: Engquist v. Oregon Department of Agriculture was a notable case in emphasizing the double standard of the Court in regards to public employees' constitutional rights.  Having in past cases allowed property owners and others effected by state government actions to bring equal protection claims, under the doctrine of a "class-of-one," against arbitrary, vindictive, and malicious treatment, the Court in Engquist denied state employees the right to bring the same kind of constitutional claims when facing similar treatment.  In dissent, Justice Stevens noted that this case was following the recent trend of the Court systematically excluding public employees from First Amendment and civil rights protections.




Conclusion: The Need for Justices Who Respect Collaborative Federalism

Two things are increasingly clear looking at the trends at the Supreme Court.  First, there is almost no consistency in doctrine in regard to federalism and respect for state authority, other than a nearly complete tilt towards business interests trumping state authority.  Secondly, this bias towards sacrificing state regulatory power in favor of business interests is not limited to the rightwing bloc of Justices, who are in too many cases joined by some if not all of the "liberal" Justices.  The liberal Justices may define themselves in opposition to the conservative justices on issues like voting rights and criminal justice issues, but they unfortunately lack any consistency in standing up for state regulations trying to rein in corporate excesses. 

As we look towards a new Presidential administration that may well appoint two or even three Justices in the next few years, state leaders should be raising their voices to demand appointees to the Supreme Court who understand that the federal system is a collaborative one where states' role in protecting consumer interests and reining in corporate abuses should be respected.