From the Dispatch

Supreme Court 2009-2010: Pro-Corporate, But Continued Trend Towards Deferral to State Authority

Nathan Newman — Tue, 29 Jun 2010 11:26:57 -0400

Yesterday, the Supreme Court ended its term with a bang with a ruling in McDonald v. City of Chicago that state gun control regulations can be struck down by federal courts based on the Second Amendment. While the number and scale of blockbuster decisions was not so high this session, the singular impact of the Citizens United case earlier in the term unleashing unregulated corporate money on elections, combined with the dangerous implications of the Rent-A-Center, West v. Jackson arbitration decision, emphasizes the pro-corporate bias the Supreme Court has increasingly exercised in recent years.

As detailed below, other decisions on public university governance of student groups, property rights challenges to beach restoration programs and regulation of ballot initiative processes, did continue the trend in recent terms of the Supreme Court deferring to state authority in major cases. And criminal justice cases continued to be a mixed bag of protecting individual rights versus upholding state discretion.

Table of Contents:
- Citizens United and the Supreme Court’s Pro-Corporate Bias
- Supreme Court’s Deferral to State Authority
- Criminal Justice
- Conclusion

Citizens United and the Supreme Court’s Pro-Corporate Bias

There is little question that Citizens United will be one of the major cases that defines this year’s term—and in many ways will frame the legacy of the rise of Chief Justice John Roberts and Justice Samuel Alito whose presence on the court has led to the dismemberment of campaign finance regulation.

"A Massive New Threat of Corruption and Corporate Control": With Citizens United, the Supreme court has given corporations the same free speech rights as individuals and allowed unlimited election spending by corporations when not coordinated with candidates.

U.S. Senator Sheldon Whitehouse of Rhode Island said recently,

The Citizens United decision -- yet another 5-4 decision [opens] our democratic system to a massive new threat of corruption and corporate control. There is an unmistakable pattern. For all the talk of umpires and balls and strikes at the Supreme Court, the strike zone for corporations gets better every day.

To emphasize its hostility to restrictions on the power of the wealthy over our elections, the Supreme Court ordered a freeze of Arizona's public financing matching funds system which gives candidates participating in public financing additional funds when opponents spend above benchmarked levels of spending. This means that publicly-financed candidates will be eligible to receive only one-third of the money to which they'd otherwise be entitled.

Letting Corporate Arbitrators Decide if Their Own Decisions are Unfair: In Rent-A-Center, West v. Jackson, the Supreme Court - by the same pro-corporate 5-4 vote lineup of Justices - further closed the courthouse door for individuals abused by their employers. The Court held that employees cannot only be forced to have complaints about racial discrimination or other employer abuses decided by private arbitrators (a reality decided in previous terms), but also that where an employee feels the terms of the arbitration agreement are unfair and unconscionable, it is up to the corporate-chosen arbitrator to decide if the arbitration agreement is unfair. In this case, for example, the arbitration agreement limited claims an employee might bring against the employer, while exempting those claims that Rent-a-Center might raise, and restricted an employee’s ability to gather evidence.

Instead of allowing a judge to decide whether the agreement to arbitrate could be enforced, the Supreme Court majority leaves it to the arbitrator chosen by the agreement alleged to be unfair to decide the issue, cutting off access to the courts even for the most basic threshold issue of whether these arbitrators and the rules imposed are a fair substitute for a day in court.

Privatizing Democracy: So just as corporations now have unlimited rein to use their money without regulation to dominate elections, those same corporations now have de facto have authority to run private courts to decide the legal rights of their own employees without little or no judicial restraint.

Supreme Court’s Deferral to State Authority

However, beyond these pro-corporate decisions, the Supreme Court, often with surprising configurations of majorities, continued its trend in recent years of deferral to state authority in more cases where core corporate interests are not at stake.

States and the Second Amendment: The exception to the trend this year was McDonald v. City of Chicago, which extended the Second Amendment to restrict state gun regulations. But even in that case, the majority went out of its way to affirm that many traditional gun control regulations will still be upheld even where an individual right to keep firearms for self-defense in the home is protected. Since most states have their own constitutional and statutory reasonableness test for gun regulations, the practical effects of McDonald may end up being relatively limited.

Rejecting “Takings” Doctrine: While right-wing constitutional lawyers for years hoped to create a majority to limit most local government land regulations as illegal “takings” under the Constitution, the Court in Stop the Beach Renourishment v. Florida Department of Environmental Protection not only rejected a property rights challenge to a state beach-erosion statute, but Justice Anthony Kennedy refused to even give a fifth vote to the proposition that a court ruling could ever constitute a “taking” of private property, a sign that most reasonable land use regulations will be protected from federal judicial second-guessing in the future.

Universities and Groups Excluding Gay Students: In Christian Legal Society v. Martinez, state universities retained their authority to deny funding to student groups that exclude certain students, such as gay and lesbian students, from membership. The Court upheld the University of California-Hastings' policy of requiring student groups to take on "all comers" as a prerequisite to official school recognition as a reasonable and viewpoint neutral restriction.

Public Disclosure of Ballot Initiative Signers: Given increasing use of fraud by those promoting right-wing ballot initiatives, progressives won an important victory in Doe v. Reed, in which the Court held that disclosure of signers of political ballot initiatives did not generally violate the First Amendment (although they might be able to in the future argue that specific harms could lead to some restriction on disclosure in a future case). In a strong argument for respecting state regulation of ballot initiatives, Justices Sotomayor, Stevens and Ginsburg wrote:

These mechanisms of direct democracy are not compelled by the Federal Constitution. It is instead up to the people of each State, acting in their sovereign capacity, to decide whether and how to permit legislation by popular action. States enjoy “considerable leeway” to choose the subjects that are eligible for placement on the ballot and to specify the requirements for obtaining ballot access (e.g., the number of signatures required, the time for submission, and the method of verification).

Reviewing Public Employee Text Messages: In a slightly idiosyncratic case, the Court in City of Ontario v. Quon unanimously held that a police department’s decision to review the text messages of employees who exceeded the monthly limit on their office pagers in order to determine whether the monthly limit should be raised was reasonable under the Fourth Amendment.

Criminal Justice

Criminal justice decisions by the Supreme Court invariably combine a combination of invocation of individual rights, discussions of state authority and obscure procedural explorations. While cases this term had few singular disruptions of previous principles, they had a number of clear incremental changes effecting state criminal proceedings. (See this ACLU writeup for an extended list of additional cases).

State Convictions and Immigration: Of import for current debates on the role of states in immigration policy, the court ruled in two cases that courts had to carefully weigh how state criminal statutes interact with federal deportation rules:

In Padilla v. Kentucky, the Court held that attorneys have an obligation to carefully advise their clients of the immigration consequences of pleading guilty. In this case, the defendant– a lawful permanent resident for 40 years who pled guilty to drug trafficking – was incorrectly advised by his lawyer that he was unlikely to face deportation because of his long stay in the United States.
In Carchuri-Rosendo v. Holder, a unanimous Court ruled that defendant’s conviction for possession of a single Xanax tablet without prescription, following an earlier state court conviction for possession of less than two ounces of marijuana, could not qualify as an aggravated felony under federal immigration law, and thus did not render the petitioner ineligible for potential discretionary relief from deportation.

Restricting Miranda: The Court significantly limited restrictions the Miranda “right to remain silent” in a series of cases limiting the Miranda ruling:

In the most critical case, in Berghuis, Warden v . Thompkins, a 5-4 decision of the Supreme Court affirmed that a suspect did not properly invoke his right to remain silent, so statements were properly admitted in court. Justice Sotomayor, writing for four dissenters said, “the Court today creates an unworkable and conflicting set of presumptions that will undermine Miranda’s goal.”
In Florida v. Powell, the Court held that police warnings that a suspect had a right “to talk to a lawyer before answering any questions” adequately complied with Miranda, since the right does not require a particular set of words for police compliance.
In a 6-3 Graham v. Florida decision authored by Justice Kennedy, the Supreme Court found a Florida law unconstitutional under the Cruel and Unusual Punishments Clause where juvenile offenders could be sentenced to life in prison without parole for a non-murder.
In Maryland v. Shatzer, the Court held that police did not violate the law by collecting incriminating statements from a person who had invoked his Miranda rights two and a half years earlier, and that the right against interrogation lasts only 14 days after invocation.

In other key decisions effecting state proceedings:

In Bobby v. Van Hook, Wong v. Belmontes and Porter v. McCollum, the court created a series of new standards for when counsel is so ineffective as to warrant a new trial.
In Presley v. Georgia, the Court concluded that a defendant’s Sixth Amendment right to a public trial had been violated when the public was excluded from the jury voir dire proceedings.
In Holland v. Florida, a 7-2 decision authored by Justice Breyer, the Court agreed that an attorney could harm his client so badly that the defendant’s time to seek habeas must be extended.

Conclusion

Elana Kagan’s likely replacement of Justice Stevens on the Court is unlikely to change the broader trends on the Court and states will continue to face the challenge of reining in the corporate election spending unleashed by Citizens United and protecting access to justice in the courts eroded by the Rent-a-Center case. As People for the American Way wrote in a recent report, Rise of the Corporate Court: How the Supreme Court is Putting Businesses First, “the conservative-tilting Court has reached out to enshrine and elevate the power of business corporations.”

While deferral to state authority has emerged as an increasing consensus among the Justices on a number of issues, lurking in the dissents of the most conservative Justices are even more extreme pro-corporate and right-wing views that with one more ally could push legal doctrine in ways that would completely erode democratic decision-making over economic and social policy. So even the more positive trends on the Court warrant only partial relief, since small changes in personnel in the future could readily enable the more activist impulses of the block of the four most right-wing members of the Court.

Resources:
Progressive States Network - The Supreme Court and the States 2008-2009: Trend Defending State Authority Emerges this Term
Scotusblog - Everything you read about the Supreme Court is wrong
ACLU - ACLU Summary of the 2009 Supreme Court Term
People for the American Way - Rise of the Corporate Court: How the Supreme Court is Putting Businesses First
Alliance for Justice - The Corporate Court

Arbitration: "Set up to squeeze small sums of money out of desperately poor people"

Nathan Newman — Thu, 12 Jun 2008 09:10:00 -0400

The headline above is a quote from former West Virginia Supreme Court Justice Richard Neely, describing what his role was as an arbitrator at the National Arbitration Forum (NAF), a for-profit company hired to enforce mandatory arbitration clauses for credit card consumer loans. "NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality," says Richard Neely.

In a devastating expose by BusinessWeek, Neely and other former arbitrators describe an arbitration system stacked completely against consumers-- a system where creditors win 99.8% of all disputes involving companies ranging from Bank of America to Sears to Citgroup. Arbitration clauses buried in the fine print of credit card offers means consumers lose the right to have disputes decided in an independent court and instead are forced into corporation-selected arbitration firms.

Elizabeth Bartholet, a Harvard Law School professor and an NAF arbitrator in 2003 and 2004 stated in a deposition that NAF ran "an unfair, biased process." Dennis J. Herrera, San Francisco's city attorney, has sued the firm in California state court: "NAF has done an end run around the law to strip consumers of their right to a fair collection process," Herrera said in an interview with BusinessWeek. And made a healthy profit doing so-- in 2006, NAF had a net income of $10 million, a 26% profit margin on revenue of $39 million.

What's shocking is that it's not just critics who describe arbitration as a way for industry to gain at the expense of consumers-- it's actually NAF's pitch to corporate clients. A confidiential September, 2007 NAF presentation aimed at creditors promised "marked increase in recovery rates over existing collection methods" and celebrated the fact that 93.7% of arbitrations are decided without consumers even getting to participate in the process. And if a consumer does respond and files a response, NAF promoted the fact that creditors can use delays and dismissals to manipulate arbitration cases.

As we described in a Dispatch in March, the use of mandatory arbitration clauses are increasingly being used by large corporations to deny consumers and employees any access to justice in the courts. While federal law makes it hard for states to ban mandatory arbitration altogether, they do have the power to stop the kind of the abuses of arbitration that companies like NAF promote. There are a series of key model state laws states can enact to preserve consumer rights, force arbitration companies to disclose the results of arbitration decisions, and limit any fees imposed on consumers by the process The kinds of abuses outlined in the .BusinessWeek expose should be a rallying cry for reform of arbitration in every statehouse.

More Resources

Corporate Influence on State Supreme Courts Show Need for Reform

Nathan Newman — Thu, 22 May 2008 08:52:00 -0400

Over the past decade, elections for state high court seats have gone from sleepy, mildly partisan affairs to major political battles with huge campaign spending, millions in independent special interest advertising, and misleading and negative attacks in the forefront. TV advertising is now apart of virtually all (91%) contested state supreme court elections, up from about one in five elections in 2000. And in 2006 business groups were the source of more than 90% of those ads. Business groups are also the source of almost half of all campaign contributions in these races.

The amount of money now entering these races is staggering. Between 1999 and 2007 candidates for state supreme courts raised over $165 million dollars. This is a situation which troubles Americans greatly, even at the beginning of the decade 84 percent of voters and 79 percent of judges hd concern about special interest groups influencing judicial elections.

Wisconsin Business Groups Spend Millions to Hijack the State's Supreme Court: After corporate defeat in consumer safety litigation, business groups in Wisconsin have poured millions in the past two election cycles to defeat two members of the Wisconsin Supreme Court and replace them with pro-business jurists. The court has now been switched from having a majority of pro-consumer jurists to a majority that supports corporate interests over those of individuals.

Both races have seen more third party spending than that spent by the candidates themselves and have been marked by particularly harsh and deceptive advertisements. The first of the two brutal and exceedingly expensive campaigns led the entire supreme court to issue a letter last year supporting public financing of supreme court elections -- even signed by the member recently elected with the help of massive business lobby spending. Soon after her election that justice, Annette Ziegler, paid fines and was recommended for censure for previously hearing cases involving a company her husband helped manage.

West Virginia's Chief Justice Taken Down by Influence Scandal: West Virginia Chief Justice Elliott Maynard recently lost his re-election bid after a scandal erupted over pictures of him vacationing in Monte Carlo with the CEO of Massey Energy at the same time the company was appealing a $240 million jury verdict to the high court. The chief justice originally refused to recuse himself from the case, but finally relented after the petitioners obtained a rehearing. Massey Energy is a controversial, union busting coal company with considerable power in the state.

Systematically Driving Corporate Policy Through the Courts: As we highlighted in a Dispatch last year, starting in the late 1990s, Karl Rove worked with politically-aligned business interests to begin a systematic takeover of state courts to undermine consumer rights and limit corporate liability for harm to consumers. In 2004, for example, business groups spent $21.5 million on state supreme court elections, eclipsing the amount spent by plaintiffs' attorneys and their allies, with courts including Texas and Alabama shifting to the corporate defendants' side. In 2005-2006 business groups contributed twice as much, $15.2 million, directly to supreme court candidates than lawyers did.

Strategies for Protecting the Judiciary: Many states have avoided problems like those is Wisconsin and West Virginia by implementing basic reforms to insulate the Judiciary from corporate special interest spending:

Public Financing: North Carolina and New Mexico now have full public financing of high court campaigns. New Mexico's system is brand new, but in North Carolina public financing has had a transformative effect on judicial elections. Special interest and attorney contributions have been driven out of the process, from 73% of non-family funds in 2002 to 14% in 2004. Over two-thirds of judicial candidates now run for office under public financing. The North Carolina system is immensely popular with the public, a year after it was implemented 78% of voters approved of maintaining the practice. Public financing is also supported by the American Bar Association, which adopted it as an official policy in 2002.
Merit Selection: Many states have an independent merit selection process for appointing justices combined with retention elections. This so-called "Missouri plan" insulates the judiciary from special-interest dominated election campaigns while still allowing for voters to exert some democratic control over the judiciary. Such systems have almost uniformly been free of expensive campaign spending and politicized campaigns and theses systems instill confidence in the public. In Missouri, 68 percent of voters trust the Missouri Supreme Court to adhere to the letter of the law rather than their own political beliefs.
Recusal Standards: Establishing better standards for when a justice should or must recuse themselves is another way to help limit the influence of big donors. It also reduces the incentive for special interests to insert themselves in judicial campaigns because their favored justice won't be in a position to support them in any dispute before the court.

With corporate special interest money increasingly seeking to control judicial outcomes, states with elected courts have a number of options for helping to reduce the avenues for money-dominated elections to distort justice.

More Resources

Expanding Access to Justice in the Courts

Nathan Newman — Mon, 17 Mar 2008 10:00:09 -0400

James Madison, one of the main drafters of the Constitution and the fourth President, wrote that, "Trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." Yet, today, consumers, employees and victims of corporate negligence are increasingly being denied access to justice through the courts.

Mandatory arbitration agreements prevent cases from going to court, secret settlements hide evidence of corporate wrongdoing, and the costs of court proceedings put justice out of reach for low-income and working families. As the Brennan Center for Justice argued in a recent white paper:

[F]eatures of meaningful access to the courts are increasingly absent...the gap between America's promise of equal justice and the reality of justice on the ground is substantial, and growing.

This failure of equal justice stems from a combination of decisions by right-wing federal court appointees, new corporate strategies to undermine civil justice for employees and consumers, and diminished funding to support access to justice for low-income and working families.

Still, as this Dispatch will detail, a number of states have taken action to reverse this tide, highlighting the need for more states to step up to restore the promise of "liberty and justice for all."

More Resources

Restricting the Harm of Mandatory Arbitration

Most consumers and employees believe that when companies violate the law, they can be brought to justice in a court of law. But increasingly, consumers and employees are required to sign "mandatory arbitration" clauses, often buried in long boilerplate contracts, which dictate that their cases be judged by corporate-dominated private arbitrators. These private arbitrators often ignore the law, yet the consumer or employee has little recourse since the decisions are mostly not appealable.

A once obscure 1925 federal law, the Federal Arbitration Act, overrides both federal and state legal rights and, in the words of the employee rights advocate, Workplace Fairness, creates "a process that can include excessive filing fees and arbitration costs, limits on the discovery necessary to build a case against the employer and the types of damages which may be awarded."

The Costs of Arbitration: While arbitration is often sold publicly as a "more efficient" and less costly alternative to court trials, a recent report by Public Citizen, The Costs of Arbitration, found that arbitration is almost always more expensive than the cost of bringing a lawsuit in traditional court. In fact, because it uses costly private arbitrators, the overall costs of arbitration can be up to five thousand percent higher than in court litigation for individuals. And because many arbitration agreements prohibit collective actions, consumers and employees can't cut their costs by combining their efforts into a combined lawsuit. Since arbitrators have been shown to have a bias towards "repeat players" who hire them -- i.e. major corporations -- consumers and employees are at a massive disadvantage and, as the Brennan Center emphasizes, they are rarely able to appeal a decision despite that likely bias.

What States Can Do: While the Federal Arbitration Act bars states from blocking mandatory arbitration altogether, they do have discretion to define what kinds of agreements are acceptable. The National Consumer Law Center h as developed a number of key model state laws to preserve individual rights and limit abusive mandatory arbitration, including:

Preservation of Legal Rights -- preserves consumer and employee access to class actions, recovery of attorneys fees, punitive damages, and other equitable remedies.
Limits on Arbitration in Insurance Transactions -- provides protection against arbitration clauses in insurance contracts.
Cost Disclosures in Arbitration Agreements -- requires disclosure of filing fees, costs of arbitrators, any other arbitration costs, and the share of the costs that each party must pay.
Limits on Consumer Arbitration -- limits mandatory arbitration generally to the extent allowed by federal law.
Regulation of Arbitration Service Providers -- requires arbitration services to disclose information about individual cases and their outcomes (such as how frequently particular businesses use that service provider), to exempt low-income participants from filing fees and to prohibit consumers and employees from being saddled with a company's legal fees.

More Resources

Stopping Secret Settlements that Hide Corporate Malfeasance

Aside from delivering individual justice, one other key purpose of our court system is to reveal evidence of dangers to public safety and health so that they are eliminated and other victims are quickly compensated. Unfortunately, mandatory arbitration and other "alternative dispute resolution" too often bury information about corporate malfeasance in secret settlements, thereby increasing damage to other victims for years, even decades.

For example, the first asbestos case was brought and settled in 1933, compensating eleven clients to the tune of $30,000 ($450,000 in today's dollars), but because the settlements were kept secret, the asbestos manufacturers were able to continue exposing employees and the public to the dangerous substance for additional decades. Similarly, when Goodyear tires initially led to blowouts with the Ford Explorer in the early 1990s, evidence was buried in secret settlements for a number of years before being publicly discovered in later court decisions.

Sunshine on Secret Settlements: A number of states, however, have passed laws and rules prohibiting secret settlements when they involve information about public health or safety. In 1989, the Texas Legislature ordered their state courts to develop guidelines for restricting secret settlements. The resulting Rule 76a of the Texas Rules of Civil Procedure creates a "presumption of openness" affirming public access to all court records. Similarly, Florida in 1991 passed its "Sunshine in Litigation Act" to ban settlements that conceal information about "public hazards." In fact, Goodyear Tires sought to evade Florida's law during litigation over its secret settlements, but the law was upheld.

Other states have laws or state rules that restrict secret settlements to a greater or lesser extent, including:

Louisiana's Civil Procedure Code Article 1426(D) prohibits similar secrecy orders and agreements unless they involve "trade secret or other confidential research, development, or commercial information."
Arkansas Code 16-55-122 voids any agreement that restricts "any person's right to disclose the existence or harmfulness of an environmental hazard..."
A New Jersey superior court ruled that confidential malpractice settlements between physicians and plaintiffs must be disclosed to the public. The state was ordered to disclose to the public all notices it received in the last 5 years from insurance companies that have made medical malpractice payments on behalf of physicians.

Opponents of sunshine laws argue that they will somehow "chill" settlements and drive up legal costs, but concealing public hazards has resulted in even greater costs to the public over the decades. Despite this, we still have even greater litigation costs in the long-term because other litigants have had to retry the same case over and over again to attain the same information in discovery. In fact, banning secret settlements makes access to justice possible for lower-income plaintiffs who are then able to seek individual justice with evidence revealed in litigation by others with deeper pockets.

More Resources

Making Legal Representation Affordable

While a number of civil rights, environmental and other laws award attorney's fees to a plaintiff prevailing in a lawsuit, it is still impossible for some individuals to find a lawyer willing to take the financial risk of representing them when only smaller sums are at stake. Two reforms -- expanding state funding for legal services for low-income families and expanding the use of small claims courts -- would make the courts more accessible to low-income and working families.

Funding Legal Services: According to Access to Justice: Opening the Courtroom Door by the Brennan Center, federal funding for legal services in real dollars has declined dramatically over the last twenty-five years. In 2004, federally-funded programs turned away at least one person seeking help for each person served, leading to approximately one million cases per year being turned away due to lack of funding.

States are increasingly stepping up to help fill this need. For example, after the State Bar of Wisconsin published a scathing report, Bridging the Justice Gap: Wisconsin's Unmet Legal Needs, Wisconsin legislators stepped up with an additional $1 million in funding. While this amount proved not enough for all unmet needs, it did remove Wisconsin from the company of the remaining five states (Alabama, Alaska, Idaho, South Dakota and Wyoming) that provide no funding for legal services. A number of states have also increased funding from so-called IOLTA accounts -- lawyers' accounts whose interest is used to fund low-income legal services -- by requiring that banks provide competitive interest rates.

Because of Congressional restrictions, legal services organizations are unable to represent many legal immigrants, file class action lawsuits, support union organizing rights, or collect attorneys fees from losing defendant companies. So state funding is crucial in expanding the tools legal services organizations can use to effectively help their clients. And if state-funded legal services groups can collect attorney's fees, they can then use those fees to help additional clients.

Expanding Small Claims Courts: While states can also reform legal services to make it more accessible to "near poor" working families needing representation, a crucial additional need is expanding the jurisdiction of small claims courts where individuals can represent themselves in seeking compensation for employment, consumer and other violations.

HALT, an organization dedicated to legal reform, has been working to promote broad small claims court reforms. The goal is to allow lawsuits up to $20,000 to be heard in these streamlined courts, give small claims court judges the right to offer not only monetary damages but also injunctive relief such as "cease and desist" orders, encourage simplified procedures to make it easier for individuals to represent themselves, and provide weekend and night court hours to accommodate the needs of working families.

Just in the last few years, South Dakota raised its small claim limit to $12,000 (HB 1122), Oregon increased its limit to $7500 (HB 2316) and Illinois raised its limit to $10,000 in 2006. Tennessee and Georgia have the highest limits, allowing small claims cases of up to $15,000.

More Resources

Conclusion

The best consumer, employment and civil rights laws on the books don't matter if individuals can't access the courts to enforce them. Even as the promise of justice has receded into dark holes of private arbitration fraught with secret settlements and litigation too costly for average Americans, many states are moving forward to protect access to justice for individuals. Reforming mandatory arbitration rules, prohibiting secret settlements that endanger public health and safety, and making the courts more accessible are all key state reforms that can help make the promise of justice in our court system a reality.

More Resources

States Barred from Protecting Consumers Hurt by Faulty Medical Devices, Says Supreme Court

Nathan Newman — Thu, 21 Feb 2008 08:42:00 -0500

In one more example of lax federal agencies being empowered to block tougher state protection of consumers, the Supreme Court ruled yesterday that states are barred from protecting consumers from faulty medical devices, such as breast implants, if the Federal Food and Drug Administration (FDA) has already approved those devices.

These means that a federal agency like the FDA, politicized by a right-wing President and dominated by industry-funded advisors, can unilaterally override laws in all fifty states that hold companies liable for harm to consumers. This, despite the fact that, as the New York Times described:

The Institute of Medicine, the Government Accountability Office and the FDA's own science board have all issued reports concluding that poor management and scientific inadequacies have made the agency incapable of protecting the country against unsafe drugs, medical devices and food.

Subverting Pro-Consumer Laws: Because it is impossible for any agency to find all problems with products during the approval process, states have long held medical device makers liable for harm to consumers. However, in 2004, the Bush Administration retroactively reinterpreted the 1976 Medical Device Amendments law to preempt state damages against devices approved by the FDA. But as the sole Senate sponsor of that 1976 law, Sen. Edward Kennedy condemned that interpretation of a law meant to protect the public, not protect industry:

In enacting legislation on medical devices, Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices. Congress obviously needs to correct the court's decision. Otherwise, FDA approval will become a green light for shoddy practices by manufacturers.

A Dangerous Trend: We are seeing a cascade of federal agency decisions, backed by federal courts, that are gutting state law protections for consumers and workers. As we described last year, the sub-prime mortgage meltdown might have been averted if courts had not allowed a federal banking agency to preempt state laws that sought to rein in predatory lending practices in the home mortgage industry. This is part of a dangerous trend of industry using federal preemption to limit state government regulation of corporate abuses. It also illustrates the hypocrisy of a conservative ideology that claims to represent limits on federal power, but readily abuses that federal power to sacrifice the rights of consumers and workers for the sake of monied interests.

More Resources