The Wall Street Journal is criticizing the Supreme Court's recent securities class action decision that refused to overrule 25 years of precedent because of the "mischief" of successful investor class actions, even though the Court adopted a compromise that the Journal had previously advocated for.
On June 23, the Supreme Court ruled in Halliburton v. Erica P. John Fund that investors who had been harmed by corporate fraud could continue to rely on the "fraud on the market" theory to pursue class action lawsuits. That theory, first outlined in Basic v. Levinson in 1988, recognizes that in a relatively efficient regulated market, publicly available information about a corporation will be reflected in its stock price, including fraudulent statements or disclosures made by corporate officers. "Fraud on the market" allows a subsequent lawsuit on the presumption that when making investment decisions, shareholders are relying on the assurance that the stock price is not distorted by a corporation's fraud.
As the Journal knew, Halliburton had the potential to gut this well-established precedent for investor class actions, which allow institutional investors -- like union pension funds -- to protect their investments from fraud, because it would be nearly impossible to litigate individualized reliance on the fraudulent information before buying or selling stock. Often, these misrepresentations are buried in thousands of pages of financial disclosure documents, but nevertheless are incorporated into and impact the overall price of a company's stock. Rather than accept Halliburton's invitation to reject both its own case law and subsequent federal legislation that affirmed the "fraud on the market" theory, the Court instead adopted a version of a "midway compromise" discussed at oral arguments. The Court held that corporate defendants can now introduce studies at the class certification stage (before the class action commences) that show that the price of the stock was not affected by material misstatements made by corporate officers, evidence that has typically been evaluated later at trial.
But the Journal is upset at this turn of events -- even though it had previously lobbied the Court to "require some evidence of price movement resulting from a misstatement before a class is formed," because securities class action lawsuits are supposedly "economically destructive." The Journal is no great fan of class actions in any form, despite the fact they are often the most efficient and economical way for groups of injured people to access justice and obtain legal relief. In its coverage of Halliburton, the editorial board has parroted right-wing myths propagated by the U.S. Chamber of Commerce, calling class actions "frivolous" and not much more than a "windfall" for plaintiffs' lawyers.
The Wall Street Journal is celebrating a recent Supreme Court ruling that will allow an anti-choice activist group to challenge the constitutionality of an Ohio law that bans false statements in election campaigns, a state statute that is opposed by free speech advocates across the political spectrum. But the WSJ went on to erroneously argue that the false statement at issue in the case -- that the Affordable Care Act (ACA) funds abortions -- is actually true, because contraceptives are actually "abortifacients."
On June 16, the Supreme Court unanimously ruled that the group, Susan B. Anthony List, had standing to sue over the Ohio statute. Susan B. Anthony List, which is "dedicated to electing candidates and pursuing policies that will reduce and ultimately end abortion," ran into trouble when it tried to take out a billboard calling Ohio congressman Steve Driehaus' vote for the ACA a vote for "taxpayer funded abortion." Driehaus filed a complaint against Susan B. Anthony under the Ohio statute, but ultimately withdrew it after he lost his election. Nonetheless, the organization challenged the constitutionality of the false statement law, claiming that it violated their First Amendment rights.
The Court's decision did not address the merits of Susan B. Anthony's claim. But that didn't stop some right-wing media outlets from calling the ruling "a big win ... for the pro-life movement." The Wall Street Journal evidently agreed with this analysis and added that the decision is "a rebuke to politicians who don't want to be criticized" in a June 16 editorial. The WSJ went on to argue that the billboard at issue had been "vindicated" because the ACA forces "religious groups to finance abortifacents."
From the editorial:
Monday's decision concerned whether Susan B. Anthony was able to sue. The Sixth Circuit Court of Appeals had said it could not because Mr. Driehaus withdrew his complaint after he lost. But Justice Clarence Thomas wrote for the Court that this decision improperly minimized the burden on groups whose speech is chilled for fear that they could be sanctioned or sued. Lower courts will now revisit the constitutional challenge.
As it happens, Susan B. Anthony's billboard claim has been vindicated by the Obama Administration's rule forcing religious groups to finance abortifacients in their health-care policies for employees. In a democracy, voters rather than a priesthood of regulators are obliged to sort out the truth or falsity of political claims. Congrats to Susan B. Anthony, and perhaps the Sixth Circuit will seek out some remedial First Amendment education.
A new Delaware law that would restore the rights of stockholders to bring class action lawsuits without fear of having to pay legal costs if they don't win every single part of their legal claim is being slammed by the U.S. Chamber of Commerce and its affiliate, the Institute for Legal Reform (ILR). But even right-wing media outlet Forbes isn't sold on their arguments.
In May, the Delaware Supreme Court surprisingly ruled in ATP Tour v. Deutscher Tennis Bund that corporations were allowed to unilaterally add bylaws forcing the loser in shareholder litigation to pay all the associated legal fees. These sorts of "loser pays" provisions are atypical in the U.S. but have been promoted by conservative organizations like the Chamber and the ILR under the guise of ending "frivolous lawsuits." Ultimately, though, such provisions have the effect of deterring or outright blocking many meritorious class action lawsuits brought by victims of corporate malfeasance.
In response to the state supreme court's holding in ATP Tour, Delaware legislators have proposed SB 236, a bill that would reinstate the normal prohibition on "loser pays" bylaws. The ILR is already registering its vocal opposition to the bill, arguing that it will leave corporations vulnerable to "abusive litigation."
Usually, right-wing media can be counted on to recycle the Chamber and ILR's pro-business talking points, in particular The Wall Street Journal editorial board. This time, however, even Forbes' Daniel Fisher questioned ILR's arguments. According to Fisher, who has supported anti-consumer provisions like forced arbitration clauses in the past, "opponents of SB 236 may be pushing too far" by promoting a loser pays system:
The bill's sponsor, Democratic Sen. Bryan Townsend, said he will set the bill aside for a while amid vocal opposition by the U.S. Chamber Institute for Legal Reform, according to the Wilmington News Journal.
The bill seems to restore the status quo by affirming the limited liability nature of corporations, where shareholders can only lose money to the extent of their investment. But the ILR said the proposed law -- passed, it noted, on "an extraordinarily expedited basis" -- would reverse a decision that "gives corporations a way to protect their shareholders" against the costs of "abusive litigation."
By pushing to retain the option implied by the ATP Tour decision, opponents of SB 236 may be pushing too far. Delaware courts have granted them ample tools to deal with shareholder litigation and chipping away at limited liability might be a cure that is worse than the disease.
Fisher's skepticism of ILR's issues with the bill are well-founded. According to Paul Bland, executive director of Public Justice, the Delaware Supreme Court's decision not only runs afoul of the basic concepts of contract law by allowing corporations to unilaterally change the rules of the game on their investors, it makes it "far easier for corporations to insulate themselves from accountability if they cheat shareholders or break the law. By contrast, the vast majority of courts in the U.S. disapprove of this kind of loser-pays provision."
It's not just states like Delaware that are threatening the viability of investor class action lawsuits, one of the best ways for defrauded stakeholders to get legal relief from the corporation who harmed them. Any day now, the Supreme Court will issue its decision in Halliburton v. Erica P. John Fund, a case that could make it nearly impossible for investors who have been the victims of corporate fraud to join together as a class and sue. Watch Bland explain in two minutes how Halliburton could be yet another in a long line of pro-business decisions from the conservative majority at the Court:
Media outlets are starting to report on the reintroduction of "post-abortion syndrome" (PAS) and similar junk science that claims a causal link between abortion and mental illness, which is being used in a coordinated attempt to defend restrictive state abortion laws in court. Witnesses claiming abortion leads to mental trauma are being organized by the discredited psychotherapist Vincent Rue, whose theories about PAS were debunked by reporters and experts years ago.
Right-wing media outlets like Fox News and National Review Online have pushed the myth of "post-abortion syndrome," the idea that choosing to have an abortion causes subsequent mental illness. The concept of "post-abortion syndrome" was developed by discredited psychotherapist and anti-abortion activist Vincent Rue, and is at the center of numerous current legal challenges to statewide abortion restrictions.
Both Wisconsin and Alabama have passed highly restrictive abortion laws, known as TRAP laws, that target abortion providers under the pretext of protecting women's health. These laws require abortion providers to obtain unusual admitting privileges at local hospitals, even though such privileges are difficult to obtain and keep. Providers are now challenging these laws in federal court, arguing that the regulations are unnecessary because abortion procedures are exceedingly safe. Moreover, the admitting privileges requirement is so burdensome that it will force clinics in each state to close down, and will increase wait times at the remaining clinics.
State officials in Wisconsin and Alabama defending these laws in court are relying on expert witnesses who have been coached by Rue to testify that "depression could be a complication of abortion," but media in the states where Rue has offered his "expertise" are starting to report on his unreliable theories. As explained by Isthmus, an alternative weekly newspaper in Madison, WI, "post-abortion syndrome" has not been recognized by either the American Psychological Association or the American Psychiatric Association. Not only that, but Rue's expert testimony has been thrown out twice by federal appellate judges because of his "limited clinical and research experience. In Planned Parenthood v. Casey the judge also wrote that Rue's 'admitted personal opposition to abortion, even in cases of rape and incest, suggests a possible personal bias.'"
Yet faulty hypotheses like Rue's have been repeatedly championed by conservative media in support of the closure of dozens of clinics across the country. Fox News shows like Hannity and The Five have explicitly linked abortion with mental illness and depression, and have questioned the mental health of women who choose to terminate their pregnancies. National Review Online has similarly argued that there is a "substantial body of academic research which has linked abortion to a variety of mental-health problems, including depression, anxiety, sleep disturbances, substance abuse, and suicide."
But there is no evidence of a causal link between abortion and subsequent mental health problems. In 2008, the American Psychological Association "formed the Task Force on Mental Health and Abortion to examine the scientific research addressing mental health factors associated with abortion, including the psychological responses following abortion." According to its analysis, there is "no evidence that having a single abortion causes mental health problems":
The Task Force concluded that there is no credible evidence that a single elective abortion of an unwanted pregnancy in and of itself causes mental health problems for adult women. The research consistently found that the backgrounds and circumstances of the women who seek abortions vary. The Task Force found some studies that indicate that some women do experience sadness, grief and feelings of loss following an abortion and some experience "clinically significant disorders, including depression and anxiety." The evidence regarding the relative mental health risks associated with multiple abortions is more uncertain.
Print media outlets in Wisconsin and Alabama have begun reporting on the discredited theories of anti-choice advocate Vincent Rue, who is being used by state officials to coordinate an attack on reproductive rights in federal court. As these cases progress, media should be aware of Rue's affiliation with the national anti-abortion movement as well as his questionable track record as an "expert."
In May, doctors in Wisconsin and Alabama went to federal court to challenge unnecessarily restrictive laws introduced in both states that require abortion providers to obtain unusual hospital admitting privileges -- a mandate that could force some of the state's clinics to close because the doctors there lack those privileges at local hospitals. These kinds of laws -- known as Targeted Regulations of Abortion Providers, or TRAP laws -- have become increasingly common throughout the country as a way to block access to abortions under the guise of women's health. Admitting privileges are not only extremely difficult to obtain and maintain, many medical professionals believe they are unnecessary for these types of clinics because abortions are generally safe, safer than other medical procedures that don't require such privileges, and patients rarely need to be admitted to the hospital due to complications.
Providers in the Wisconsin case -- Planned Parenthood of Wisconsin v. Van Hollen -- have argued that if the law stands, they would be forced to close down essential clinics throughout the state, placing a significant burden on the remaining providers, and putting women's health and safety at greater risk. Planned Parenthood has argued that such closures could increase wait times from three to four weeks to eight to ten weeks at its Milwaukee clinic. In Planned Parenthood Southeast v. Strange, doctors are challenging a similar law in Alabama, arguing that abortion clinics there are also at risk of shutting down due to the stringent, and unnecessary, admitting privileges requirement.
However, state officials in Wisconsin and Alabama are still defending these laws in court, claiming that admitting privileges are necessary to promote the health and safety of women. To prove this point, each states' attorneys general have called on "expert witnesses" -- specifically pro-life doctors -- who have testified in support of admitting privileges. But only two local outlets appear to have reported the connection between these "expert witnesses" and Vincent Rue, an unreliable psychotherapist who "coined the term 'post-abortion syndrome,' which purports a link between abortion and mental health issues," who has been behind the coordination and coaching effort of these witnesses in multiple states.
In a 2000 interview with the Elliot Institute -- an anti-reproductive choice organization that has been criticized for "building a literature to be used in efforts to restrict access to abortion," Rue supported his study on "post-abortion syndrome" by saying: "Since ambivalence is a good predictor of postabortion problems, it is likely that many of these women are having post-abortion symptoms that simply fall short of full-blown PAS."
Outlets such as the Milwaukee Journal-Sentinel and the Wisconsin State Journal covered the trial in Wisconsin, highlighting pro-life physician Dr. James Linn's testimony that he had patients "abandoned" by their doctors when traumatic complications arose. But they did not mention that Linn, as well as pro-life physician Dr. James Anderson, had been coached by Rue. According to Isthmus, an alternative weekly newspaper in Madison, Anderson testified in open court that he joined the case after he was contacted by Rue, "who helped him with 'wordsmithing' his report to the court."
As Isthmus reported, Linn's testimony was called into question by lawyers representing abortion providers because Rue's "post-abortion syndrome" diagnosis "had been discredited":
First proposed in the early 1980s, the condition is not recognized by the American Psychological Association or the American Psychiatric Association. Researchers at Johns Hopkins University, who conducted a comprehensive review of the scientific literature in 2008, also rejected the hypothesis.
According to an online bio, Rue is currently the director of the Institute for Pregnancy Loss in Jacksonville, Fla., described as an "independent nonprofit research and treatment center." Rue notes that he has treated "numerous women and men who have been traumatized by their abortion experience" and that he serves as a "litigation consultant" for numerous offices of state attorneys general in abortion-related lawsuits.
According to documents obtained by Isthmus, the Wisconsin Department of Justice expects to pay Rue $47,362.50 for his work as an "expert consultant" on the admitting-privileges lawsuit.
In Alabama, where officials are also fighting to severely restrict women's access to abortion, the state's largest papers have mostly relied on wire stories from the Associated Press (which also have not mentioned Rue) to report on the legal challenge to Alabama's TRAP law. But the Montgomery Advertiser, a daily newspaper in Alabama, was one of the few newspapers in the state to both cover the trial and highlight Rue's connection to the witnesses. According to the Advertiser, Anderson, who gave testimony in Wisconsin, also testified in support of Alabama's admitting privileges law in May after being prepped by Rue:
[Attorneys for the abortion providers] challenged Anderson's connection with Vincent Rue, a pro-life activist who has suggested links between abortion and subsequent mental illness in women, an idea that has been twice rejected by the American Psychological Association; Rue assisted Anderson in preparation of his expert statements. Griffith asked Anderson if he knew that Rue had been "discredited" in other trials; Anderson, who earlier testified that depression could be a complication of abortion, said he did not. Griffith also noted that Rue's degree was from the University of North Carolina's School of Home Economics.
Judge Thompson also questioned Anderson about his relationship with Rue, asking if Anderson had any knowledge of where Rue worked or his professional credentials. Anderson said he did not, a response that seemed to surprise Thompson.
"You don't know his employment or any organization he belongs to?" Thompson asked. "Why do you trust him?"
Anderson said he had worked with Rue on other abortion cases, and found him reliable.
As both cases are still pending, it will give media outlets in those states the opportunity to ensure their reporting begins or continues to shine a light on Rue's sketchy science and his coordination of state's witnesses in defense of these TRAP laws -- especially since a similar "post-abortion syndrome" rationale has already been alluded to in Supreme Court opinions limiting women's access to safe abortion procedures. Writing for the majority in 2007, Justice Anthony Kennedy concluded that "it seems unexceptionable to conclude that some women come to regret their choice to abort the infant life they once created and sustained" and that "severe depression and loss of esteem can follow." The conservative majority subsequently ignored reproductive rights precedent and upheld the Partial Birth Abortion Ban Act, a George W. Bush-era law that criminalizes late-term abortions.
Right-wing media figures incorrectly described President Obama's signing statement attached to a law involving what type of Congressional notification is required before Guantanamo detainees are freed, avoiding the substantive question of whether or not a Commander-in-Chief had the responsibility and authority to rescue Sgt. Bowe Bergdahl, a captured American soldier. In fact, signing statements are a common practice of the modern presidency, the President has used these pronouncements far less frequently than his predecessors, and bipartisan legal experts are validating the administration's legal arguments.
Right-wing media are disappointed that the Supreme Court decided to rule narrowly in a domestic criminal case that nonetheless had big implications for the United States' standing in the global community, rejecting a conservative legal challenge to Congress' long-standing powers under the U.S. Constitution to enforce ratified international treaties.
The Supreme Court recently ruled in Bond v. United States, holding that federal prosecutors had overreached when they charged the defendant, Carol Anne Bond, with violating the Chemical Weapons Convention Implementation Act of 1988, a statute enacted by Congress to fulfill the international obligations of the United States. Local authorities in Bond's home state of Pennsylvania declined to prosecute her assault of her husband's mistress -- she had "spread harmful chemicals on [her] friend's car, mailbox and doorknob" -- because her activities didn't result in any injuries worse than a burnt thumb. Nevertheless, Bond was prosecuted in federal court for violating the international Convention on Chemical Weapons, a treaty that was ratified by the United States in 1997 and codified into federal law by Congress in 1998. Bond argued (in part) that her conviction should be overturned because Congress has no constitutional authority to enact legislation that would help implement ratified treaties like the Convention on Chemical Weapons. This extreme and ahistorical argument was concocted by the libertarian Cato Institute, and contradicts not only the Framers' clear intent to transcend the dysfunctional Articles of Confederation that hampered early America on the global stage, but also hundred-year-old precedent of the Supreme Court.
The Court ultimately avoided that result by reading the statute and reasonably concluding that Congress never intended a treaty guarding against the mass slaughter of modern warfare to be applied to what has been described as nothing more than a "sad soap opera" that nevertheless "caught the attention of a group of conservative lawyers, who saw in her shabby act of domestic vengeance a chance to further an agenda centuries in the making." Writing for the unanimous Court, Chief Justice John Roberts held that federal prosecutors should not have gone after Bond because federal law "does not cover the unremarkable local offense at issue here."
Right-wing media outlets like The Wall Street Journal and National Review Online were clearly upset that the Court refused to adopt the radical concurring opinions of conservative Justices Scalia, Thomas, and Alito. Scalia and Thomas, for their part, "uncritically embraced" the outlandish constitutional argument put forth by Cato that "Congress lacks any specific power to pass legislation necessary and proper to ensure that the United States abides by its treaty commitments."
Ta-Nehisi Coates' much-praised essay, "The Case for Reparations," that recently appeared in The Atlantic has given right-wing media a fresh opportunity to argue that the best way to address racially discriminatory laws or policies -- such as housing segregation -- is to never speak of them, let alone litigate them under civil rights law.
In Coates' essay, which ultimately calls for a congressional study on the long-term effects of the treatment of African-Americans in the United States, he explores the country's history of racism and oppression, from slavery to the Jim Crow laws to the present. Although right-wing media have been known to erroneously claim that racism is no longer a problem, the systemic effect of state and federal laws that favored whites and oppressed people of color is still felt today. As Coates explains, institutionalized oppression of black people was often sanctioned by the federal government, either through legislation that inadequately addressed racial discrimination or by agencies that propagated biased policies rooted in federal law. For example, agencies like the Fair Housing Administration often refused to insure mortgages in neighborhoods that they deemed unsuitable, perpetuating systematic housing segregation that in turn fueled other disparate racial impacts that continue today, such as separate and unequal schools. Despite the fact that redlining was outlawed in 1968 with the passage of the Fair Housing Act, the housing market is still hostile to black buyers and renters, even in neighborhoods that have taken steps to improve residential housing segregation.
Ultimately, Coates argues that the best way to even begin to evaluate how whether the government owes a debt for the generations of stolen wealth and opportunity it sanctioned would be to allow Rep. John Conyers' (D-MI) bill, HR 40, also known as the Commission to Study Reparations Proposals for African Americans Act, to proceed. The bill calls "for a congressional study of slavery and its lingering effects as well as recommendations for 'appropriate remedies.'" Conyers has introduced this bill -- which does not actually authorize the disbursement of any funds -- every year for the last 25 years, but it has never proceeded to the House floor. For Coates, HR 40 represents an opportunity to finally study the impact state-sanctioned discrimination has had and continues to have on black communities, and provide a vehicle for a "a serious discussion and debate ... we stand to discover much about ourselves in such a discussion."
But yet again, members of right-wing media have no interest in such a discussion.
The Wall Street Journal continued its crusade against clean air, calling on the Supreme Court to put an end to centuries-old state lawsuits that hold polluters accountable for the "smoke, dust, poisonous chemicals, and noxious odors" they dump on their neighbors, despite previously arguing for state-level solutions to air pollution.
The WSJ has a long history of blanket opposition to class action lawsuits, regardless of the merits of the case. It has called class actions nothing more than a "windfall" for plaintiffs lawyers despite the fact that such lawsuits are often the only avenue for legal redress for many consumers. Class actions are often the most effective tool to punish corporate plaintiffs whose behavior cause Americans injury or harm, yet the WSJ has falsely accused federal judges (like conservative Seventh Circuit Court of Appeals Judge Richard Posner) of not following and having "disdain for" Supreme Court precedent, just for allowing class action lawsuits to proceed.
In its most recent editorial on the subject, the WSJ complained that the Supreme Court should "polish off" a new series of class action lawsuits that seek relief for injury caused by air pollution or the physical effects of climate change caused by such pollution. Based on long-established state common law -- judge created doctrine as opposed to legislatively-enacted law -- that redresses personal injury caused by nuisance, trespass, or negligence, these suits allow landowners to bring civil claims against factories and power plants whose air pollution has negatively interfered with their property rights.
In 2011, the Court ruled that federal common law does not provide for civil nuisance claims seeking injunctions against polluters because the federal Clean Air Act (CAA) displaced such litigation, but the question of whether the CAA applies to state common law was explicitly left unanswered. Although the 2011 case sought a court order to stop pollution that caused global warming, other lawsuits based on the state version of common law only seek damages for the air pollution itself, regardless of its contribution to climate change. But the WSJ complained that allowing these more traditional class actions to go forward would "lead to a state-by-state chopped salad of pollution controls," even though it has previously argued that managing pollution should be largely left to the states rather than the federal government.