Category: Courts

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SCOTUS Sustains Assault on Contractual Freedom

The Supreme Court continues to reject freedom of contract and the power of contracting and state contract law in favor of its national policy favoring arbitration.  Most recently, in a per curium opinion in Nitro-Lift v. Howard, it said Oklahoma is not allowed to apply its own contract law to evaluate the validity of classic contract terms (here covenants not to compete). Instead, due to SCOTUS takes on a federal law and the presence of an arbitration clause in the contract, arbitrators make that decision.

The Court’s opinion stresses its conception of a national policy favoring arbitration, which it has found in recent decades in a century-old statute, the Federal Arbitration Act.  That emphasis on this “national policy” marks a retreat from the false pretenses that infect the Court’s precedents on the subject, which pretend to be engaged in the application of contract law.

Despite that improvement in the Court’s honesty, it remains the case that the Court’s approach to this subject diminishes traditional principles of contract laws and the value of contracts.  People are held to bargains they did not make or that are recognized by contract law as illegal.  But the Court insists that no court is allowed to consider these questions, thanks to its statement of national policy.

In numerous past SCOTUS cases, dissenting opinions were routinely filed exposing the flaws in the Court’s jurisprudence. The recent per curium opinion may signal capitulation, indicating that there are no longer any Justices prepared to object to these mistakes. That defeat means it is clearly time for Congress to rein the Court in. It should make it clear that state courts are responsible for developing and applying state contract law, not SCOTUS, federal courts or private arbitrators.

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Calling Liberal Pro-Business Judges

Andrew Cuomo, New York’s Democratic Governor, will have the responsibility of making two appointments to the state’s highest court, after the recent death of Judge Theodore T. Jones Jr. and the planned year-end retirement of Judge Carmen B. Ciparick (reaching the court’s mandatory retirement age of 70).  A screening commission will submit a list of names to the Governor from which to choose.

Since selection of judicial nominees is the prerogative of the chief executive, few could rebuke Cuomo for seeking judges in his own likeness. The Governor may prefer to appoint judges with liberal political, religious or social views without regard to other factors, such as a judge’s attitudes toward business.

Yet selections should be guided by the public interest, which may mean using broader criteria. As an extreme example, Mario Cuomo, when he was New York’s governor, deliberately appointed both Democratic and Republican judges to the court on the grounds that quality and balance were more important than quantity and ideology. Given New York’s role as a leading center of international commerce, however, there is a good case that the public interest calls for judges who understand the needs, values and realities of business.

When business people make contracts in New York, they want to know that the courts will uphold them as written and not rewrite them based on a judge’s notions of what is good for the parties. When corporations are formed in the state, entrepreneurs need flexibility and deference without the fear that courts will second-guess how they organized their companies or their business judgments. Judges who understand such business realities reinforce New York’s appeal as a commercial center and may be classified as “pro-business.”

Critics of the Supreme Court have politicized the concept by associating it with conservative thought: Republican justices are portrayed as pro-business, Democrats anti-business. Such an environment begs the question whether there is such a thing as a liberal judge who is also pro-business.

There is not necessarily anything conservative or liberal about being pro-business. True, two justices on the far left, William Brennan and Thurgood Marshall, showed a strong anti-business ideology. But other Democrats, including John Paul Stevens and Byron White, are not so readily classified, and Stephen Breyer’s opinions are quite business-friendly. Furthermore, many Republican justices, such as Sandra Day O’Connor and Potter Stewart, were not invariably pro-business.

The same has been true among judges on the New York Court of Appeals. Leading examples are former Chief Judges Stanley Fuld and Judith Kaye. Fuld was a progressive with Dewey-Republican leanings; Kaye is a Democrat with practicality and common sense. Fuld wrote an influential opinion (Walkovsky) upholding limited liability for corporate shareholders even when a business was structured for that sole purpose. Kaye wrote the important opinion (Levandusky)  that applied the deferential business judgment rule to decisions made by the boards of co-operative homeowners’ associations.

The screening commission and the Governor would do well to look at a class of jurists: experienced business lawyers. Alas, other than Robert S. Smith, the judges on New York’s Court of Appeals lack such experience.  Governor Cuomo has a chance to correct that deficiency, even while appointing judges who share his Democratic values.

Co-Op readers can help by leaving suggested nominees on the Comments section below!

Hat Tips: Stephen Bainbridge, Lester Brickman, Stephanie Cuba, Jeffrey Manns, John McGinnis and Stewart Sterk.

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Stanford Law Review Online: Pulling the Plug on the Virtual Jury

Stanford Law Review

The Stanford Law Review Online has just published a Note by Nicolas L. Martinez entitled Pulling the Plug on the Virtual Jury. Martinez takes issue with Judge William Young’s proposal that Khalid Sheikh Mohammed be tried via videoconference from Guantanamo Bay by a jury sitting in New York:

Most people probably figured that the debate over where to try alleged 9/11 mastermind Khalid Sheikh Mohammed (“KSM”) had ended. Indeed, it has been well over a year since Congress forced Attorney General Eric Holder to reluctantly announce that KSM’s prosecution would be referred to the Department of Defense for trial before a Guantanamo military commission. But a provocative proposal put forth recently by Judge William G. Young of the District of Massachusetts has revitalized one of the most contentious legal debates of the post-9/11 era. In a nutshell, Judge Young proposes that an Article III court try KSM at Guantanamo, but with one major twist: the jury would remain in New York City.

He concludes:

Perhaps unwilling to refight the battles of two years ago, Congress has shown no inclination to retreat from its apparent view that KSM may only be tried by a military commission at Guantanamo. As a result, following through on Judge Young’s plan, which could be viewed as an attempt to circumvent the will of Congress, might lead some legislators to harden their stance on civilian trials for alleged terrorists and propose even more disagreeable legislation to that end. This is not to say that creative solutions aimed at fortifying the rule of law in a post-9/11 world should be held hostage to the proclivities of intransigent voting blocs in Congress. Quite the opposite, in fact. But the likely political ramifications of Judge Young’s proposal cannot be ignored, especially in an election year when few members of Congress may be willing to spend their political capital defending the need to hold KSM’s trial in federal court.

Even though Judge Young’s provocative suggestion should not be adopted in its current form, he has moved the conversation in the right direction. Continuing to think imaginatively about ways to preserve our rule of law tradition from external threats is immensely important, particularly in the context of national security crises. For it is when the rule of law can be so easily discarded that it must be most doggedly defended.

Read the full article, Pulling the Plug on the Virtual Jury at the Stanford Law Review Online.

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The Legitimacy Crisis in Federal Law Clerk Hiring

This week, law professors are encouraged to call federal judges and ask them to pull from an enormous pile of clerkship candidates particular students whose merits might be otherwise obscured.  (Applications were delivered Tuesday to those Judges who are still “on plan“, and interviewing calls are supposed to go out Friday.) Unfortunately, the plan has entirely fallen apart, as wealthy law schools now are more than willing to package applications in the spring and summer.  This unravelling, long-predicted in some quarters, has two pernicious consequences – apart from encouraging judges to take applicants earlier in their law school careers, and consequently increasing the importance of first-year grades.

  1. A re-emphasis on the importance of private and expensive networks of information about what judges are up to. When judges hire at different dates, it becomes crucially important to have sources inside the courthouse who know the scoop – former clerks, for example. This will tend to make it harder for applicants from poorer and less established law schools to break into the clerkship market.  (Indirectly, this becomes yet another subsidy for wealthy schools.)
  2. Because some judges don’t particularly enjoy the competitive scrum, the death of the plan will accelerate the trend to hire either permanent clerks or clerks from practice. This is,variously:
    • Bad for current law students;
    • Good for associates in practice who want to make a move;
    • Good for researchers who will be able to collect more expansive data about law clerk influence;
    • Bad for those who fear that law clerks already have too much influence – the more experienced the clerk, the more likely that his or her views are influencing the judge’s decision;
    • Bad for the budget, as more experienced clerks are more expensive.  (Federal judges clearly don’t directly bear the costs of hiring more expensive clerks.)

The class, race, and gender effects insular hiring networks are well-known in general.  Basically: when it’s all-but-impossible to figure out how to get a job, only people who don’t need the job get it.

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Stanford Law Review Online: Politicizing the Supreme Court

Stanford Law Review

The Stanford Law Review Online has just published a Note by Eric Hamilton entitled Politicizing the Supreme Court. Hamilton writes that the Framers carefully constructed a Supreme Court independent from the political branches of government:

To state the obvious, Americans do not trust the federal government, and that includes the Supreme Court. Americans believe politics played “too great a role” in the recent health care cases by a greater than two-to-one margin. Only thirty-seven percent of Americans express more than some confidence in the Supreme Court. Academics continue to debate how much politics actually influences the Court, but Americans are excessively skeptical. They do not know that almost half of the cases this Term were decided unanimously, and the Justices’ voting pattern split by the political party of the president to whom they owe their appointment in fewer than seven percent of cases. Why the mistrust? When the Court is front-page, above-the-fold news after the rare landmark decision or during infrequent U.S. Senate confirmation proceedings, political rhetoric from the President and Congress drowns out the Court. Public perceptions of the Court are shaped by politicians’ arguments “for” or “against” the ruling or the nominee, which usually fall along partisan lines and sometimes are based on misleading premises that ignore the Court’s special, nonpolitical responsibilities.

He concludes:

The health care law’s closely watched journey through the three branches of government concluded in the Supreme Court, a rare opportunity in the sun for the Court. What would have been a shining moment for the Constitution in a vacuum was instead validation of the Framers’ apprehensions. Our Constitution is the longest-lasting in the world because of Americans’ enduring reverence for it. But when elected officials exploit Americans’ patriotism to score political points, they jeopardize the Framers’ carefully constructed balance of power. Instead, honest public discourse on the Constitution and the Court is the surest security for our government.

Read the full article, Politicizing the Supreme Court by Eric Hamilton, at the Stanford Law Review Online.

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The Partisan Foundations of Judicial Campaign Finance

The Center for American Progress has just issued a report on judicial campaign finance that documents the increasing costs of campaigning in judicial elections and raises alarm that “[i]nstead of serving as a last resort for Americans seeking justice, judges are bending the law to satisfy the concerns of their corporate donors.”  Jeffrey Toobin followed up in the New Yorker that “the last thing you want to worry about is whether the judge is more accountable to a campaign contributor or an ideological group than to the law. . . . [b]ut it’s clear now that in many states you should worry—a lot.”

My colleague Joanna Shepherd and I study judicial campaign finance and argue that what is regularly missed in this simple narrative is the crucial role of the major parties.  In our empirical work, we find a very real relationship between contributions to judges and judicial decisions favorable to contributors, but the intuitive narrative of direct exchanges of money for decisions between individual contributors and judges is too simplistic to describe the larger realities of modern judicial elections.  The Republican and Democratic Parties broker connections between contributors and their candidates, and we argue that parties, not elections, seem to be the key to money’s influence on judges.

In a new paper still in progress, The Partisan Foundations of Judicial Campaign Finance, we identify broad left- and right-leaning political coalitions, allied with the Democratic and Republican Parties, whose collective contributions exercise systematic influence across the range of decisions by judges who receive their money.  The parties appear to coordinate judicial campaign finance under partisan elections where their investment and involvement is greatest, and what is more, we find that the robust relationship between money and judicial decisions largely disappeared in our data for judges elected in nonpartisan elections where parties are relatively less involved.

In addition, we go on to find a striking partisan asymmetry between Republicans and Democrats in judicial campaign finance.  Money from conservative groups in the Republican coalition, as well as from the party itself, is associated with more conservative judicial decisionmaking by Republican judges, even controlling for individual ideology.  However, decisionmaking by Republican judges is not responsive to money from liberal sources.  Decisionmaking by Democratic judges, by contrast, is influenced by campaign support from both liberal and conservative sources and thus cross pressured in opposite directions.  The result is that judicial campaign finance reinforces party cohesion for Republicans while undermining it for Democrats.  Campaign finance thus predicts judicial decisionmaking by judges from both parties in some sense, but is much more successful in serving partisan ends for Republicans, netting out in a conservative direction between the two parties.

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Stanford Law Review, 64.6 (2012)

Stanford Law Review

Volume 64 • Issue 6 • June 2012

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Volume 59, Issue 5 (June 2012)

Volume 59, Issue 5 (June 2012)


Articles

Implicit Bias in the Courtroom Jerry Kang et al. 1124
The Supreme Court’s Regulation of Civil Procedure: Lessons From Administrative Law Lumen N. Mulligan & Glen Staszewski 1188


Comments

Techniques for Mitigating Cognitive Biases in Fingerprint Identification Elizabeth J. Reese 1252
Credit CARD Act II: Expanding Credit Card Reform by Targeting Behavioral Biases Jonathan Slowik 1292
Shocking the Conscience: What Police Tasers and Weapon Technology Reveal About Excessive Force Law Aaron Sussman 1342
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Stanford Law Review, 64.5 (2012)

Stanford Law Review

Volume 64 • Issue 5 • May 2012

Articles
The City and the Private Right of Action
Paul A. Diller
64 Stan. L. Rev. 1109

Securities Class Actions Against Foreign Issuers
Merritt B. Fox
64 Stan. L. Rev. 1173

How Much Should Judges Be Paid?
An Empirical Study on the Effect of Judicial Pay on the State Bench

James M. Anderson & Eric Helland
64 Stan. L. Rev. 1277

Note
How Congress Could Reduce Job Discrimination by Promoting Anonymous Hiring
David Hausman
64 Stan. L. Rev. 1343

4

Spitzer’s Loose Public Talk and Private Emails

The angry Eliot Spitzer, former New York attorney general and quick-term governor, continues to have the habit of loose talk, bordering on the defamatory.

A court last week ordered New York’s current A.G., Eric Schneiderman, to find and disclose email files Spitzer created using a private account while working as a state employee. Such files, if they exist, are covered by the state’s freedom of information law, the court held.

The files are sought by a defendant, Howard Smith of AIG, in a civil prosecution Spitzer launched 7 years ago while A.G.   The emails, which Spitzer says do not exist, are rumored to contain characteristic loose talk that could prove embarrassing to Spitzer and compromise cases he brought.  As I am researching and writing about AIG, my work would benefit greatly from seeing any such emails.

Spitzer is not likely to cooperate. He blasted Schneiderman this week over his handling of the matter.  He also took pot shots at Smith, as well as Hank Greenberg, former head of AIG, that appear libelous, in much the way Spitzer last year drew a defamation lawsuit for comments about other people he targeted as A.G.

Here are excerpts from a report published by the New York Law Journal (requires subscription).  Read More