Class actions

by, Rochelle Bobroff, Director of the Access to Courts Program, Constitutional Accountability Center. This analysis is cross-posted at CAC’s Text & History Blog.

While both big businesses and small investors exhorted the Court to resolve the dispute in Amgen v. Connecticut Retirement Plans and Trust Funds based on policy preferences, the Court hewed instead to text and history in its 6-3 ruling on February 27, allowing the securities fraud case to proceed as a class action. The Court’s opinion, written by Justice Ginsburg (and joined by Chief Justice Roberts and Justices Breyer, Alito, Sotomayor and Kagan), remained true to the text of the Federal Rules of Civil Procedure governing class certification and left policy decisions to Congress, citing relevant legislative history.

The plaintiff-investors in Amgen claimed that misleading statements by the defendant pharmaceutical company regarding the safety and efficacy of its flagship drugs led to an inflated price for the company’s stock. When the truth came to light, they alleged, the price of the stock plummeted, causing financial harm to investors who had purchased the stock at the inflated price. The company countered that its alleged misrepresentations were immaterial. The Court took up the question of whether the district court should have required the investors to prove the materiality of the alleged false statements prior to certifying a class action.

by Jeremy Leaming

The Roberts Court is a tool of corporate America. At least that’s the gist of a new film from Alliance for Justice, called “Unequal Justice: The Relentless Rise of the 1% Court.”

This of course is not news to those who pay attention to what the Supreme Court does, nor is it agreed upon. For instance the American Enterprise Institute, the Heritage Foundation, and the Chamber of Commerce likely see the Roberts Court as a protector of American capitalism – the place where almost anyone can lift themselves up by their bootstraps to become superrich.

“The Roberts Court is basically a pro-business court,” Stanford Law School Professor and ACS Board member Pamela Karlan, says in the AFJ film. “They don’t have a desire to really open the federal courts up to suits by average Americans, either workers or consumers, or people who are injured by various products; it’s a pro-business court.” (Watch the film here or view below.)

The film reminds us of the Court’s opinions that shut down a class action gender discrimination lawsuit against the retail giant Wal-Mart, overturned a woman’s lower court verdict against a company for years of gender discrimination, and found that corporate America has even more power to spend boatloads of money to sway elections.

“The Citizens United’s impact has been dramatic,” says former U.S. Senator Russ Feingold and founder of Progressives United. “And since then our system is in the worst free-fall it’s been in since the Gilded Age, probably worse.”

Even former Sen. John McCain (R-Ariz.), a rightwing policymaker, weighed in on blasting Citizens United as one of the most “misguided, naïve, uniformed, egregious decisions of the United States Supreme Court, I think in the 21st Century.”

Katrina vanden Heuvel, editor and publisher of The Nation and narrator of the 20-minute film, said individuals have been shut out of the justice system by today’s Supreme Court, which “has decided that when everyday people run up against powerful corporate interests, the big corporations almost always win.”

Some of the women behind the class action lawsuit against Wal-Mart explain their efforts to advance equality and deal with a stinging defeat.

“The women of Wal-Mart brought the case to stand up for their right to be treated equally, but they never got that far,” Heuvel said. “The decision turned on whether their claims had enough in common. The conservative majority raised the hurdle for class actions, and made it harder to prove discrimination.”