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No one predicts anything but bloodshed over the Bush administration’s forthcoming judicial appointments, especially to the Supreme Court. Active, energetic business support for embattled, highly qualified nominees would help stiffen wavering senators’ backs and break the sure-to-come filibusters. Even so, businessmen continue to maintain their traditional standoffishness on judicial appointments. They haven’t realized–yet–that this is nothing less than a gentle form of corporate suicide.
Business sat out the battles over the Robert Bork and Clarence Thomas nominations. Its record in recent brawls over appellate judges has been equally lackluster. Judge William Pryor, the former attorney general of Alabama, worked miracles to beat the trial bar in that state by mobilizing support for legislative tort reform and helping get sensible judges elected. He also took a courageous stand against an Alabama Supreme Court chief justice’s insistence on defying federal law governing the display of religious symbols on government property. Religious groups nonetheless strongly supported Pryor’s recess appointment to the Eleventh Circuit Court of Appeals–while business groups did not lift a finger.
The reason for their reluctance to get involved is that corporate leaders seem to think that federal judicial appointments are principally about abortion (which the Fortune 500 don’t do) or racial quotas (which they like). Commercial cases, on the other hand, are less morally and politically controversial, and often pit firms or industries against one another. Companies, therefore, often have no way of knowing whether they will find themselves on the “conservative” or “liberal” side in future disputes, which implies that they have a stake in the nominees’ competence but not their ideology. Businessmen may also believe that anything that needs fixing can be fixed by Congress or an administrative agency–a myth that their poorly monitored Beltway lobbyists happily perpetuate.
To illustrate the threats posed by these misperceptions, consider the doctrine of federal preemption, where debate centers on whether federal regulatory statutes trump state law. State tort-law claims–for example, for fraud, alleged product defects, or a failure to warn consumers–often put corporations at the mercy of local judges and juries. The argument that federal law preempts such claims accordingly emerges as the only viable defense. Hence, arcane preemption doctrines have become Ground Zero in the war between the plaintiffs’ bar and corporate defendants. The last four Supreme Court appointees have all proven far more hostile than their predecessors to federal preemption. As a result, preemption doctrines have been greatly weakened, and may be on the verge of a fateful collapse–one potentially dangerous for corporations.
An additional danger is an emerging coalition of liberal, pro-regulatory judges and conservative “states’ rights” enthusiasts who erroneously associate state tort law, trial lawyers, and New York attorney general Eliot Spitzer with “federalism.” Spitzer has often, and proudly, painted his attempts to regulate the nation’s financial markets in accordance with his own business model as pristine exercises of federalism. “The whole new federalism approach vaunted by the Bush administration and the Reagan administration was designed to empower state securities regulators,” he has claimed. “That’s what I’m doing.” Similarly, trial lawyers insist that class actions with millions of plaintiffs across the country, against multinational corporations, are the inalienable prerogative of some state judge and local jury. Why? Because, they say, tort law is “the traditional province of the states.”
Constitutionally, this is nuts. Rightly understood, federalism means that states must be free to govern their own affairs–which in turn means that they must refrain from elbowing their way into other states’ affairs. (Spitzer’s perceived authority to regulate securities firms and transactions in all 50 states is as intellectually coherent as an individual “right” to mutual aggression.) The Founders were fearful to the point of obsession over parochial state interferences with the national economy and with sister states’ interests, and they wrote a Constitution to forestall such state-on-state aggression.
And yet, many respectable conservative jurists–including many of the justices who have carried out the Rehnquist Court’s so-called federalism revolution–have somehow persuaded themselves that anything the states want to do is, ipso facto , “federalism.” (A few such jurists wear their willingness to enforce this false federalism–even at considerable cost to the economy–as a badge of constitutional integrity.) This attitude has contributed greatly to the federal judiciary’s crabbed commercial jurisprudence: its failure to enforce the constitutional protections against the extraterritorial exercise of state power; a great reluctance to guarantee corporate, out-of-state defendants an unbiased federal forum instead of the plaintiff bar’s hand-picked state hellholes; and an unduly restrictive view of federal preemption. And so, trial lawyers and state AGs get to run the national economy. The defense bar’s palpable alarm over that trend is a poor substitute for corporate America’s failure to pay attention at the front end, when federal judges are nominated and confirmed.
What, then, should business look for in a judge or justice? The first priority is to think “principle” and to support first-rate candidates who actually comprehend the Constitution–who will enforce the rules that are in the document and reject the snazzy rights that are not. While serious constitutionalism does not invariably guarantee “pro-business” results, it would be silly to deny the correlation. As the Supreme Court has demonstrated, justices who rely on international law to invent homosexual rights will soon deploy that body of “law” against corporations. Serious constitutionalists will do neither.
Beyond that, the Supreme Court, business, and the country would all benefit from the appointment of justices who are aware of both the importance and the realities of business litigation. The sitting justices have resolutely refused to tackle the inconsistencies and absurdities that, after decades of neglect, afflict nearly every area of commercial litigation.
On the vital question of class actions, for example, highly restrictive doctrines have made multistate class actions an endangered species in the Seventh Circuit Court of Appeals, which covers Wisconsin, Indiana, and Illinois. In contrast, the Second Circuit–which comprises New York, Connecticut, and Vermont–has become a notorious class-action mecca. After years of unsuccessful Supreme Court petitions, most appellate lawyers have abandoned all hope of persuading the Court to bring order to the field. Perhaps the justices will always prefer sexy constitutional questions to seemingly humdrum business questions. But the persistent failure to raise those questions in the course of judicial-nomination battles sends a powerful signal both to the appointees and to sitting justices that nothing is expected of them in that arena. Small wonder they behave accordingly.
Judicial indifference has been accompanied by a dismaying ignorance about the real-world practice of law. In Clinton v. Jones (1997), the Court held that a sitting president lacks immunity from civil suits and dismissed the president’s concerns over vexatious and burdensome litigation, essentially on the grounds that even the busiest officeholder could surely find time for a few depositions. As Justice Breyer noted in a powerful but characteristically lone concurrence, the Clinton opinion betrays an utter incomprehension of the purposes, contours, and dynamics of modern litigation. That same incomprehension has produced atrocious decisions on matters from asbestos to international antitrust disputes.
Practical knowledge of commercial litigation and constitutional seriousness–including an appreciation of the need to protect the national economy from parochial state interference–by no means translate into flabbiness on social issues. Judge Michael McConnell, for example, is widely recognized as one of the finest constitutional scholars of his generation. Prior to his appointment to the Tenth Circuit Court of Appeals in 2002, he made an illustrious career as a law professor and business lawyer, and unquestionably possesses the expertise required to bring coherence and sense to the Supreme Court’s religion decisions.
Conversely, not every social conservative is acceptable to business. Another “states’ rights” votary, especially one without practical experience in business litigation, would at best spell continued inattention to the wretched state of our commercial Constitution. At worst, he would turn federal law into a trial-lawyers’ bill of rights. Business has every incentive to express opposition to such candidates, and every right to lobby for nominees whose views reflect the full range of conservative principles. The White House and the GOP leadership have every reason to listen. Without active business engagement, and without some implicit bargaining and cooperation between social and economic constituencies, the upcoming battles may end badly for both.
The text of this essay is available to National Review subscribers at www.nationalreview.com.
Michael S. Greve directs the Federalism Project and the Liability Project at AEI.
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