Scalia's Pro-Business Legacy

Justice Antonin Scalia took his seat on the bench in 1986, during one of the greatest bull markets and the heyday of corporate mergers and acquisitions. In the three decades he served on the high court, he helped raise barriers for employees and consumers and he helped strike down limits on corporate political spending in the U.S. democracy. He will be remembered for his intellect and personality, but he should also be remembered for increasing the power of business in society.

For example, in Walmart Stores, Inc. v. Dukes, the Supreme Court denied 1.5 million women the ability to bring a class action against Walmart for unequal pay or promotions on the basis of sex. A class action would have allowed all of the women to join together in one gender discrimination lawsuit, brought by one set of lawyers who would be paid out of any recovery from the suit. These plaintiffs might not otherwise be able to surmount the logistical and economic obstacles to bring 1.5 million individual suits against one of the world’s largest companies. Without the class action, they might not even be aware of their own claims or the patterns of discrimination.

The Court split 5-4, and the majority opinion written by Scalia rejected the certification of the class of women plaintiffs, reasoning that their claims did not have enough in common. According to Scalia, there was not enough “glue” holding together the alleged reasons for the employment decisions. “Merely showing that Walmart’s policy of discretion has produced an overall sex-based disparity does not suffice.” The women could not proceed as a class when they could not show that they would receive “a common answer to the crucial question, why was I disfavored?”

Walmart was not the only case in which Scalia weakened the ability of individuals to band together as a class to challenge corporate misconduct. In AT&T Mobility v. Concepcion, a couple signed up for the company’s service with the advertised promise of “free” cell phones, but discovered a $30 charge on their bill for sales tax based on the phones’ retail value. In defending itself against a class action, AT&T pointed to the standard form contract the plaintiffs had signed, which required the arbitration of all disputes and barred class arbitration. The district court and the Ninth Circuit Court of Appeals refused to enforce this provision, recognizing that under California contract law it was unconscionable. Not so, according to Scalia’s majority opinion, which ruled that the Federal Arbitration Act preempted state contract law on this point. If consumers wanted to bring a claim against AT&T, they had to do so individually and through arbitration.

Scalia’s corporate legacy extends beyond his jurisprudence that weakened the class action and tilted the balance of power against workers and consumers.  Of course, not all of his opinions favored corporations and business interests, but like the Roberts Court generally, his track record was on the whole pro-business. He has been ranked one of the top 10 most pro-business justices in modern U.S. history.

Just last year, for example, in Michigan v. Environmental Protection Agency, a group of states and trade groups representing the electric power and coal mining industry challenged the EPA’s approach to implementing the Clean Air Act’s section on hazardous air pollutants. The EPA had interpreted its mandate as allowing it to make an initial determination that regulating power plant emissions was appropriate and necessary to protect public health and the environment, and then to consider costs when calculating the emissions standards to impose. Writing for a 5-4 majority, Scalia ruled that the EPA unreasonably delayed its cost-benefit analysis—costs to the power plants must be taken into account at the outset of the regulatory process.

Perhaps the case that will be most remembered in Scalia’s corporate legacy is Citizens United v. Federal Election Commission. Scalia joined the 5-4 majority, overturning previous campaign-finance precedents and holding that under the First Amendment corporations could make unlimited independent political expenditures. Super-PACs and a new era of politics were born. Citizens United represented a major expansion of the rights of corporations.

Scalia concurred, writing separately to battle with Justice John Paul Stevens’ 90-page dissent. Scalia criticized the “corporation-hating quotations the dissent has dredged up,” and argued that the text of the First Amendment “is written in terms of ‘speech,’ not speakers.” It “offers no foothold for excluding any category of speaker, from single individuals to partnerships of individuals, to unincorporated associations of individuals, to incorporated associations of individuals”—in other words, corporations.

“Indeed, to exclude or impede corporate speech,” wrote Scalia, “is to muzzle the principal agents of the modern free economy.” He concluded, “We should celebrate rather than condemn the addition of this speech to the public debate.”

By contrast, in his Citizens United dissent, Stevens stressed that no principle required the Court to overrule two major campaign-finance precedents. “The only relevant thing that has changed since” those cases, “is the composition of this Court.”

Without doubt, Scalia will be remembered for his sharp intellect and for profoundly shaping the law and the legal profession. But Stevens was surely right that the composition of the Court matters. It matters that for 30 years Scalia tended to be more sympathetic to the concerns of the employers instead of the employees, the power plants instead of the planet, and the corporations instead of the citizens. His legacy lives on in the super PAC ads that Americans will watch this political season and in the fine print of everyday contracts that protect corporations from complaints of abuse.