No one has benefited more from George W. Bush’s opportunity to appoint two Supreme Court justices than major corporations. In the first five years of the Roberts Court, the Chamber of Commerce’s win rate spiked 15 percent, and one of the Chamber’s top Supreme Court litigators admitted that “[e]xcept for the solicitor general representing the United States, no single entity has more influence on what cases the Supreme Court decides and how it decides them than the National Chamber Litigation Center.”
The Court’s profound empathy for corporate America’s concerns is unfortunate in no small part because wealthy and influential corporations already arrive in court with profound advantages. Wealthy companies hire elite attorneys — and they can hire armies of them — easily outgunning the solo practitioners and small-firm plaintiffs attorneys that most litigants depend on to assert their rights in court. Moreover, because big corporations are frequent litigants, they can act strategically — settling cases that are likely to produce precedents that hurt their bottom line while pressing forward with cases that will shift the law in their direction.
Historically, the law provided several mechanisms designed to level the playing field between Goliath corporations and David plaintiffs, and one of the most important is the class action. Class actions enable many individuals with similar legal claims to join together into a single lawsuit, and it is one of the most important mechanisms to ensure that relatively small dollar claims are actually vindicated in court. If a major corporation cheats a thousand of its workers out of a thousand dollars each, very few of them will decide it is worth the hassle and expense of a major lawsuit, and virtually no lawyer will be willing to take such a low dollar case on a contingency fee basis — meaning that the plaintiffs will have to pay more for legal counsel than they are likely to win in the end. If these thousand workers are able to join together into a class action, however, their million dollar claim suddenly becomes very attractive to top litigators — and the hassle of litigation will be virtually non-existent for most of the plaintiffs.
The single most significant development this term is a pair of 5-4 decisions that will effectively eliminate millions of consumers and workers ability to bring class actions in the future.
The more famous of these cases is also the less important of the two. In Wal-Mart v. Dukes, the Court’s five conservatives stripped more than one million women Walmart employees of their ability to bring a class action alleging systematic gender discrimination, despite widespread evidence that women were treated less favorably then men. As Justice Ginsburg explained in her partial dissent, “[w]omen fill 70 percent of the hourly jobs in the retailer’s stores but make up only ’33 percent of management employees,’” and “the higher one looks in the organization the lower the percentage of women.” (Justice Ginsburg also agreed with the majority that the women could not receive all of the remedies they sought in the court below, but her opinion clearly dissents from the core of the majority’s holding.)
The impact of Wal-Mart, despite the enormous class of women affected by it, will ultimately pale in comparison to the impact of another, much less famous case. In its 5-4 decision in AT&T Mobility v. Concepcion, the Court permitted corporations to refuse to do business with anyone who does not sign away their right to bring a class action lawsuit. As a result of this decision, Walmart need never worry about a class action again. They can simply tell all of their workers to sign away their rights or they’re fired. Likewise, cell phone companies, banks, credit card companies, nursing homes — indeed, anyone who requires you to sign an agreement before they will do business with you — can completely immunize themselves from class actions simply by adding a few magic words to the agreement.
Sadly, this assault on class actions is part of a much broader effort to tilt the legal playing field even further in favor of the wealthy and the powerful. Historically, the courts used punitive damages to drive up the cost of lawbreaking when ordinary remedies aren’t enough to make a company cease its illegal actions. Beginning in 1996, however, the Supreme Court started imposing constitutional limits on punitives. Moreover, the Supreme Court wholeheartedly embraces an abusive practice known as “forced arbitration,” allowing corporations to force their consumers, workers, and patients to sign away their right to sue the company in a real court — and shunting them into a privatized, corporate-owned arbitration system.
The upshot of all of these decisions is that it matters less and less what laws elected officials enact to protect ordinary Americans. Without class actions, punitive damages, access to real courts and other essential protections, many consumers and workers will be unable to actually enforce these laws.