Repealing the 20th Century

When most Americans think about the Supreme Court's effect on the life of their nation, they think about such cultural hot-buttons as abortion, or due process for terrorists, or free speech and pornography. They don't think about the Court's effect on the issues that most directly affect the majority of them on a daily basis -- health and retirement security, workplace fairness and equal opportunity, consumer protection and product safety.

Since these pocketbook matters do not roil culture-war sensitivities or raise constitutional questions, the press, public, and politicians pay little or no heed when they come before the Court. Nor, with few exceptions, do liberal advocacy groups -- even though landmark laws they fought to enact are at risk, and even though constituencies they purport to represent have much reason to care about how those laws will fare in the hands of the Roberts Court. Indeed, while right-wing groups still make political hay by railing at "liberal activist" judges, progressive groups often pay scant attention to the conservative-activist threat to judicially repeal the economic protections that Congress and state legislatures have enacted since the New Deal.

The current Supreme Court term, however, could yield some historic decisions that do just that. For the past two decades the Rehnquist Court narrowed the scope of economic-security safeguards, insulated federal and state officials from accountability for maladministration of those laws, and obstructed citizens' access to legislatively guaranteed benefits and protections. Earlier this year, in its notorious May 2007 Ledbetter v. Goodyear Tire & Rubber decision, a 5-4 majority on the Roberts Court gutted the 1964 Civil Rights Act guarantee of equal pay opportunity. Now, cases to be decided during the Court's new term will provide clues as to whether the Roberts Court intends to launch an even more aggressive campaign to dismantle 20th-century progressive reforms and abort similar 21st-century initiatives.

The weightiest such items on the Court's 2007–2008 agenda are two cases affecting legal guarantees of health and retirement security. These cases, one already docketed and one the subject of an as-yet unanswered petition for review, will test whether the Roberts Court will expand Rehnquist Court doctrines that have stripped workers and retirees of remedies for abuse by employers, health maintenance organizations (HMOs), and entities that administer their health and retirement plans. These doctrines have provoked outrage from legions of scholars and lower-court federal judges, who have complained that they mandate unjust decisions and grotesquely misconstrue the landmark federal Employee Retirement and Income Security Act of 1974 (ERISA). This is not an abstract or isolated problem; over 130 million Americans currently count on employer-sponsored plans for retirement and health-care protection.

ERISA was enacted after more than a decade of congressional investigations into widespread abuses of employee-benefit plans by company and union administrators. ERISA mandated that plan administrators would be required as a matter of federal law to act "solely in the interest of the participants and beneficiaries for the exclusive purpose of providing benefits" to them, and to do so with "care, skill, prudence, and diligence." But over the past 30 years, principally in 1993 and 2002 decisions authored by Justice Antonin Scalia, the Supreme Court has turned these common-sense goals upside-down. According to the Court's mystifying doctrine, victims of unlawful abuse cannot secure "make whole" monetary relief from ERISA plan administrators who have violated their fiduciary duties.

As described by Edward Becker, the late 3rd Circuit U.S. Court of Appeals chief judge (and a Reagan appointee), the Court's decisions have converted ERISA "into a shield that insulates HMOs from liability for even the most egregious acts of dereliction committed against plan beneficiaries, a state of affairs directly contrary to the intent of Congress." The impact of this distortion of ERISA's remedial scheme is not limited to particular individual victims. The Court-contrived immunity from liability is so robust that it drives the industry to incorporate systematic stonewalling of claims into its business model. As Becker explained, the Court's de facto elimination of remedies creates "strong incentives for HMOs to deny claims in bad faith or otherwise ‘stiff' participants. Any rational HMO will recognize that if it acts in good faith, it will pay for far more procedures than if it acts otherwise." So, the judge concluded, "Not only is there an incentive for an HMO to deny any particular claim, but it creates a ‘race to the bottom' in which the most profitable HMOs will be those that deny claims most frequently."

This term the Supreme Court has two opportunities to revisit what Becker called this "unjust and increasingly tangled ERISA regime." In one of these cases, a pension plan negligently failed to act on a beneficiary's direction to invest funds from his account in a particular security. While this default flagrantly violated ERISA's fiduciary mandate for "diligent" service to beneficiaries, the Court's elimination of "make whole" monetary relief as a remedy leaves this innocent beneficiary holding the bag, and an empty one at that. In the second case, for which Supreme Court review has been requested but not yet granted, the defendant corporation -- AT&T -- induced employees to accept reassignment to an affiliate being spun off as a separate company by promising to reinstate them in the company pension plan if they had second thoughts and returned to the mother ship. But when, almost immediately, they did return, AT&T stonewalled their bids for reinstatement to the pension plan long enough so that their rights to restore their original pensions lapsed. This cynical maneuver flouted ERISA's prohibition against employer interference with employee access to earned benefits. But the Court of Appeals ruefully concluded that the only meaningful remedy -- compensation for the employees' lost benefits -- was barred by the Supreme Court's evisceration of ERISA's remedial provisions.

The Court's ERISA mischief is so widely condemned (most recently in an Oct. 18, 2007 5th Circuit opinion protesting that "facts scream out" for reversal of the Court's rule) that one might hope that Chief Justice John Roberts and Justice Samuel Alito, despite their pro-business propensities, would choose to use these two new cases to fix Scalia's mess. If, however, they and their fellow conservative justices continue to transmute ERISA into an ever more impenetrable shield for employers and HMOs, it will confirm the impression they've already made that they are gearing up for a new, aggressive drive to neutralize constraints on business, government, and large organizations charged with protecting employees, patients, pensioners, and consumers.

"FEDERALISM AS A TOOL OF DEREGULATION"

If the Roberts Court makes this shift to the right, it will reinstate the goals, though not the strategy or tactics, of its forbears of a century ago. The reactionary bloc of Supreme Court justices who dominated American law in the first third of the 20th century attacked the emerging regulatory state by playing the Court's ace: its unreviewable power to declare state and federal laws unconstitutional. The case that kicked off this long campaign was a 1905 decision called Lochner v. New York, and the era is known to lawyers as The Lochner Era. In the wake of the New Deal Court's flat repudiation of the old Court's constitutional jurisprudence, all that has survived is Justice Oliver Wendell Holmes' famous sound-bite dissent in the 1905 Lochner decision itself: "The Constitution," he said, "does not enact Mr. Herbert Spencer's Social Statics." The point of Holmes' quip was that the majority was reading into the Constitution a controversial ideology -- doctrinaire laissez-faire economics, of which Spencer was a leading exponent -- with no warrant in the text or history of the Constitution itself.

The new breed of conservative judicial activists has not sought expressly to exhume Lochner. For the most part -- at least so far -- they have discreetly avoided repeating the in-your-face strategy of invoking the Bill of Rights to strike down individuals' statutory economic protections. Instead, they have sought to throw sand in the gears of the regulatory state by proliferating obstructionist rules purporting to promote sound judicial procedure and the separation of powers. A perfect example is the Court's conversion of ERISA into a worthless font of rights without remedies. Another is this spring's Ledbetter ruling, which effectively if obliquely overturned the equal protections of the Civil Rights Act by barring discrimination victims from court unless they sue within 120 days of their employer's original discriminatory act -- despite the fact that, in real workplaces, evidence of such offenses rarely surfaces for years.

The principal vehicle for this new activism has been a schizophrenic approach to policing the boundaries between state and federal power -- venerated in judicial boilerplate as the "delicate balance" of federalism. On the one hand, the conservative bloc has sought to constrain Congress' power to enact -- and citizens' ability to enforce in court -- national legislation. On this side of their agenda, the justices have portrayed themselves as defenders of "states' rights." In the late 1990s and first years of this century, the so-called "Federalism Five" bloc of conservatives had pushed this gambit so far that a widely respected Reagan appointee, Judge John T. Noonan Jr. of the 9th Circuit, wrote that their decisions had "return[ed] the country to a pre–Civil War understanding of the Nation."

On the other hand, without missing a beat, the Court simultaneously developed doctrines to "preempt" -- that is to say, invalidate -- state laws that conflict with or "frustrate" federal laws. In the main, the Court's trigger-happy use of its preemption power has been used to strike down state regulatory laws at the behest of industries or businesses seeking regulatory relief.

Together, these mutually contradictory, vague, and elastic legal theories arm the Supreme Court -- that is, five life-tenured justices, or, often, one swing-justice, Anthony Kennedy -- to act as the decisive arbiter of what is acceptable state and federal regulation. Driving this two-faced regime, as professor Ernest Young of the University of Texas (a leading Federalist Society conservative) has noted, is a "libertarian vision" that "sees federalism as a tool of deregulation with the potential to keep both national and state governments within relatively narrow bounds." (Emphasis added.)

In other words, this new breed of activists has found another way to say that the Constitution does, after all, enact Mr. Herbert Spencer's Social Statics. Conservatives who claim fidelity to judicial restraint, as did Roberts during his September 2005 confirmation hearings, ritualistically condemn "Lochnerism" as one of the most egregious "activist" episodes in the Court's history (along with, for example, Roe v. Wade). What Roberts and his colleagues don't say is that in their hands "federalism" could readily turn out to be the Lochnerism of the 21st century.

The Court's ERISA jurisprudence is illustrative. However misguided, the perversion of ERISA by Scalia and his colleagues wouldn't be totally fatal to beneficiaries' chances of recouping unjust losses, so long as pre-existing state laws and other remedies remained available. But the Court has not only gutted ERISA itself. The Court has further declared that in passing ERISA, Congress meant to preempt traditional state remedies. Thus, as Justices Ruth Bader Ginsburg and Stephen Breyer have said of the Court's handiwork, "Virtually all state law remedies are preempted but very few federal substitutes are provided." In the 1993 case in which Justice Scalia started the Court down this road, Justice Byron White, dissenting for four colleagues, called Scalia's rule "perverse" for creating the "anomaly of leaving those Congress set out to protect -- the participants in ERISA-governed plans and their beneficiaries -- with less protection than they enjoyed before ERISA was enacted."

Federal preemption cases have long been a major preoccupation of the Court. During William Rehnquist's tenure as chief justice, from 1986 to 2004, preemption cases accounted for fully 8 percent of the Court's civil docket -- a proportion greater than that of many high-voltage constitutional issues. The bulk of these cases involved business challenges to state regulatory statutes or common-law tort remedies. And in preemption conflicts with private parties, businesses usually prevailed.

The preemption campaign by the Court has had large impacts on the availability of remedies for a wide variety of injuries and losses. The Court has ruled, for example, that federal regulations phasing in mandatory airbag requirements preempted state tort-law claims against auto manufacturers for failing to provide airbags earlier than the federal phase-in date; federal railroad regulations preempted state tort-law claims against railroads for failure to maintain adequate warning signals; federal employee-benefit rules preempted state tort-law claims against health-plan administrators for wrongful denials of coverage that led to physical injury; federal cigarette-labeling requirements preempted state cigarette-advertising restrictions; the Clean Air Act preempted state emission-related requirements for fleet automobile purchases; and, most recently, federal banking regulations preempted state predatory lending and other consumer protection laws.

BABY BOOMERS AND OTHER DISCRIMINATION TARGETS: BEWARE THE SUPREME RIGHT

Beyond the two pending ERISA cases, the Court's 2007–2008 agenda puts at risk numerous other state and federal laws that shift economic risks from individuals to businesses. One case will determine whether state product-liability law was preempted by a 1976 federal law requiring prescreening by the Food and Drug Administration of high-risk medical devices. Sen. Ted Kennedy and Rep. Henry Waxman, leading architects of the 1976 law, filed an amicus brief with the Court explaining that nothing could have been further from that Congress' intent than the notion that the legislation could invalidate the most effective deterrent -- the threat of state tort-law damages -- to negligent design practices by medical device manufacturers. Before June 2008 we will know how much respect Chief Justice Roberts and his colleagues give to that message.

Four cases will throw light on how far and how fast the conservative justices aim to go in dismantling meaningful remedies for discrimination victims, following up on their devastating Ledbetter decision last term. Two of these concern whether employees may sue for retaliation when employers punish them for complaining of discrimination based on race or age. Until now, protection against retaliation has long been accepted as an essential safeguard, most recently in the Court's 2005 decision in Jackson v. Birmingham Board of Education (though only by a 5-4 margin, with former Justice Sandra Day O'Connor providing the decisive vote).

A third case will examine whether plaintiffs in age-discrimination suits must show that discrimination was "arbitrary," that is, not based on any "rational" reason, such as shaving the employer's expenses. If the Court accepts the employer's interpretation of the Age Discrimination in Employment Act, employers could readily fabricate rationales for disadvantaging older workers in benefit, retirement, and other policies, leaving baby boomers and older workers without protections they have long counted on.

Still another case will address whether an employment-discrimination suit must be dismissed because the Equal Employment Opportunity Commission botched its responsibility to notify the employer and initiate statutory conciliation procedures after the complainant submitted to the commission a lengthy "intake questionnaire" detailing her grievance. Judgment for the employer will mean that bureaucratic ineptitude will not merely delay relief for discrimination victims, but let discriminating employers off the hook permanently.

It doesn't take a legal genius to forecast that a few more defeats for plaintiffs in cases like these will hollow out equal opportunity guarantees to the point where, in real-world workplaces, they neither constrain employers nor protect employees.

THE ENABLERS: CONGRESSIONAL GRIDLOCK AND LIBERAL MYOPIA

The positions of the newly reconstituted Court on these economic security issues are not yet quite set in stone. It is possible that members of the conservative bloc will think twice, and better, before signing on to an all-out pursuit of a libertarian deregulation crusade. But it would be unrealistic to expect self-discipline from the Court -- at least until and unless Congress demands it. By limiting congressional authority and subverting major federal statutes, the Court has long been picking a fight with Congress. Up to this point, Congress has for the most part turned the other cheek -- or failed to notice altogether.

To be sure, there have been some stirrings on Capitol Hill. During the Roberts confirmation hearings, members of both political parties -- in particular, Sens. Arlen Specter, Patrick Leahy, and Charles Schumer -- attacked the Court's federalism rulings as usurpations of congressional authority. But, other than a tough-talking July 2007 speech by Schumer to the American Constitution Society, there has been little follow-up to these protests against conservative judicial activism.

This spring, Congress initially reacted with commendable dispatch to the Court's May 2007 Ledbetter decision; the 5-4 majority in that case not only decimated equal pay guarantees in the 1964 Civil Rights Act, but flouted an earlier "fix" Congress enacted in 1991 to reverse a Rehnquist Court decision that gutted the 1964 act in substantially identical ways. Now, however, the Ledbetter fix legislation, which passed the House just before the summer recess, seems mired in the Senate.

The Ledbetter fix fizzle reflects a feature of Capitol Hill politics that could embolden the Court's conservatives to discount threats of congressional reversal or reprisal. Even if Democrats expand their House and Senate majorities in coming elections, congressional gridlock could continue to trump efforts to check runaway judicial activism. Efforts to overturn overbroad preemption decisions are likely to provoke fierce industry opposition. Given the contemporary de facto rule that 60 votes are needed to pass controversial legislation in the Senate, any well-financed and organized interest can hope to wield a veto. This paradigm -- of an aggressive Court well to the right of Congress, most state governments, and a majority of the national electorate, but unchecked because of chronic Capitol Hill gridlock -- could become a basic structural feature of the early 21st-century political environment.

But even if they lack the votes to overcome a filibuster, liberal and moderate members of Congress can still push back. They can make conservative judicial activism a much higher-profile concern, issuing rapid responses to important court decisions and holding hearings to spotlight the Court's flouting of precedent, congressional intent, and manifest public needs. Indeed, such responses are imperative: If Congress does not show that it is on the case, that it could get mad enough to get even, the Court's hard-liners are unlikely to cower before protests coming only from liberal editorialists and the occasionally disgruntled member.

Whether or not congressional jawboning dulls the Court's appetite for confrontation, it is manifestly in the political interests of Democrats, and Republican moderates, to focus the press and public on Court conservatives' hostility to economic-security protections. For the past quarter-century, decisions expressing this hostility have comprised a significant portion of the output of courts, but they have drawn surprisingly little attention. Liberal and moderate politicians have looked mainly to (because they have heard mainly from) progressive culture warriors for cues as to which court developments merit their attention and which judicial nominees merit their support or opposition. As, with only mild overstatement, New Yorker and CNN pundit Jeffrey Toobin observes in his new book, The Nine, in the past three decades, "there were two kinds of cases before the Supreme Court -- abortion cases -- and all the others."

"Abortion," he adds accurately, "dominated the nomination and confirmation process, [and] nearly delineated the difference between the national Democratic and Republican parties." As a result, liberal and moderate candidates for national office have probably been disadvantaged, and Democratic senators from red states (of which there are now 15) have often felt they had to put their political lives on the line in order to vote against a right-wing nominee for the federal bench.

Liberals, however, have not trained a political spotlight on those judicial issues that matter to most Americans in the course of their daily lives -- a mistake, like the Court's mutilation of ERISA, that "screams out" for correction. The work could begin by letting the public in on the secret that, the next time they are stiffed by their HMO, Justice Scalia and his colleagues should get their just share of the blame.

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