[Ramesh Ponnuru ] Ponnuru: High court should be pro-business

The idea that the Supreme Court is too pro-business is rapidly becoming the central liberal critique of the institution. During last year’s confirmation hearings for Justice Elena Kagan, Democrats made their theme the need to counter pro-business activism by the conservatives on the court.

After the court ended its latest term last week, Senate Judiciary Committee Chairman Pat Leahy, a Vermont Democrat, held a hearing on the court’s favoritism toward corporations. Press coverage has mostly echoed the Democrats. At term’s end, Reuters ran the headline, “Big business scores key Supreme Court wins.”

But look carefully at this court’s decisions and it’s clear that it is not, in fact, pro-business. And that’s a shame: The protection of commerce should be among its primary aims.

The claim that the Roberts court is pro-business rests on three legs. First, the court has ruled in favor of corporate litigants in some high-profile cases such as the Wal-Mart class action. Second, when the U.S. Chamber of Commerce has gotten involved in Supreme Court cases, it has won a bigger percentage during the past dozen years. Third, a much-cited academic study has found that in the past few decades the court has issued an increasing percentage of pro-business rulings.

All of these measures are flawed. Conservatives have defended the court from the charge of pro-business bias by pointing to many cases, high-profile and low-profile, that corporations lost.

In Massachusetts vs. EPA, in 2007, the court ruled that the Clean Air Act gave the Environmental Protection Agency the authority to regulate greenhouse gases without any new action by Congress. In Wyeth vs. Levine, in 2009, the court denied that compliance with federal regulation protected pharmaceutical companies from lawsuits in state courts. Just weeks ago, the court upheld an Arizona law that suspends the business licenses of firms that employ illegal immigrants. The losing plaintiff? The Chamber of Commerce.

That organization’s increasing winning percentage tells us little because it could reflect more cautious choices on its part about which cases to push. The academic study, meanwhile, has two blind spots. It doesn’t account for the possibility that companies have been winning cases more often as the decades have passed because governments have been implementing more constitutionally questionable regulations. And it doesn’t weigh the relative importance of the decisions.

The EPA case, for example, came a month after a controversial decision limiting sex-discrimination claims against businesses. The prospect of carbon-emission caps is much more alarming to business than an increase in sex-discrimination lawsuits. And the discrimination decision was largely undone by a subsequent act of Congress, while undoing the EPA decision is going to be much harder if not impossible. Simply scoring these two decisions as a .500 average for business obscures more than it reveals.

Look beyond the statistics, and a lot of the court’s pro-business decisions seem like holding actions. The Wal-Mart lawsuit would have classed roughly 1.5 million female employees as plaintiffs on the theory that by giving its store managers discretion over personnel, the company had exposed all of them to potential discrimination. Letting the case go forward ― and thus letting similar cases begin ― would have created a powerful incentive for firms to centralize their decisions even at the cost of efficiency. In contrast, none of the pro-business decisions have shut down established lines of litigation.

Corporate America could win 60 percent of the cases testing new theories for suing them and still steadily lose ground.

The caricature of conservatives on the court doing the bidding of business is wrong for another reason. In many cases, liberals on the court have sided with business litigants and conservatives have voted against them. The conservatives voted to uphold the Arizona immigration law, for example. Justices Antonin Scalia and Clarence Thomas, generally considered the two most conservative members of the court, have denied that the Constitution imposes limits on punitive damage awards. Justice Stephen Breyer and former Justice David Souter, both liberals, wrote decisions favorable to Philip Morris and Exxon, respectively.

The problem with the conservative defense of the Roberts court is that it’s too defensive. The court ought to be pro-business. It shouldn’t twist the law to serve the interests of corporations. But there’s no getting around the fact that the promotion of commerce ― and particularly its protection from politicians in the states who would exploit or block it ― was a major reason we replaced the Articles of Confederation with the Constitution in the first place.

The Constitution erects all kinds of barriers to interference with commerce. States can’t levy “duties of tonnage.” They can’t impair contractual obligations. They have to get congressional approval before they can join with other states in any regulatory compact. For much of its history, the enforcement of this “commercial constitution” was the main part of the Supreme Court’s business. It was John Marshall’s court, for example, that ruled in 1824 that the power of Congress to regulate commerce among the states implies that the federal courts can stop state governments from attempting to regulate it.

That commercial constitution has fallen into disrepair in recent decades. Companies now have to deal with multiple conflicting regulators, liability in hellhole jurisdictions and pervasive legal uncertainty. None of the justices, the conservatives included, have done much to tackle these problems. Thomas has even cast doubt on that 1824 ruling. In 2003, the court had a chance to rule that the constitutional command that states give other states’ acts “full faith and credit” prevents tort litigation that favors the most lawsuit-happy states. It unanimously declined.

The real answer to whether we have a pro-business court, then, is no ― and more’s the pity. 

By Ramesh Ponnuru

Ramesh Ponnuru is a senior editor at National Review and a Bloomberg View columnist. The opinions expressed are his own. ― Ed.

(Bloomberg)