Super Precedent or Too Big to Lose

July 18, 2017

It was difficult to sit through all the sanctimonious claims of doing law by adhering to precedent by a succession of Supreme Court nominees and then read its decision in BNSF R. CO. v. Tyrrell in which the Court overruled International Shoe v. State of Washington. Senators have been grilling the nominees for years about adherence to precedent. We heard about ordinary precedent, long standing precedent, and precedent that has been used and cited numerous times.

International Shoe was decided in 1945 by legendary justices. Chief Justice Harlan Fiske Stone wrote the opinion. He was joined by Justices Douglas and Frankfurter, as well as justices Reed, Murphy, Rutledge and Burton who are less well known to the general public. There were no dissents. Justice Hugo Black concurred on the ground that the attack on the jurisdiction of the State of Washington was so frivolous it should have been dismissed out of hand. Justice Jackson was a member of the Court but recused himself and took no part. Effectively it was unanimous.

If ever a case was used and relied on it was International Shoe. Lexis, a legal database reported that International Shoe had been cited by nearly 22,000 judicial decisions at all levels of the American legal system, plus some 13,000 other sources. It showed no negative treatment.

International Shoe provided that companies could be sued either where the claim arose or where they did sufficient business to make it fair to sue them there.

Montana’s Supreme Court held that the defendant corporation could be sued in Montana “because it has over 2,000 miles of railroad track and employs more than 2,000 workers in Montana.” It other words, the company is quite busy in Montana. But the U.S. Supreme Court held that the corporation could only be sued at its home office.

In their freshman year, law students are drilled on International Shoe. Endless pages in textbooks are devoted to International Shoe. A pretty important decision indeed. But the Roberts Court didn’t like it.

Justice Sotomayor, as she often does, explained:

The majority’s approach grants a jurisdictional windfall to large multistate or multinational corporations that operate across many jurisdictions. Under its reasoning, it is virtually inconceivable that such corporations will ever be subject to general jurisdiction in any location other than their principal places of business or of incorporation. Foreign businesses with principal places of business outside the United States may never be subject to general jurisdiction in this country even though they have continuous and systematic contacts within the United States. … What was once a holistic, nuanced contacts analysis backed by considerations of fairness and reasonableness has now effectively been replaced by the rote identification of a corporation’s principal place of business or place of incorporation.  The result? It is individual plaintiffs, harmed by the actions of a farflung foreign corporation, who will bear the brunt of the majority’s approach and be forced to sue in distant jurisdictions with which they have no contacts or connection.

In other words, these companies are too big to lose. The more places a company does business, the further it can make plaintiffs travel. Even if plaintiffs can get to court over the hurdles placed by this Court, they will have to sue far away in unfamliar places. No barrier is strong enough to protect those companies which are already wealthy enough to give back to the society that protects them.

These cases have been decided under the Due Process Clause of the Fourteenth Amendments. The word “due” means appropriate. It is an invitation to craft a jurisprudence that maximizes fairness to the parties. But the Court has been going the other way, grounding judicial power on happenstance, not fairness.

The Roberts Court is not doing law. Instead it has its own economic policy. It doesn’t seem to have noticed that voters in both parties have been demanding populism in economic policy. But who elected the Roberts Court?

— This commentary was broadcast on WAMC Northeast Report, July 18, 2017.

 

 


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