Congress Targets Court’s Pro-Biz Rulings

Posted July 3, 2008 at 4:30pm

With the Bush administration beginning its long goodbyes, Congressional Democrats are turning their attention to a more entrenched foe: an increasingly business-friendly Supreme Court.

On a host of fronts, the majority party — with the backing of trial lawyers and consumer groups — is pushing targeted legislation aimed at reversing recent high court decisions limiting corporate liability.

The effort so far appears uncoordinated, with bills in various stages of development in both chambers. But lawmakers and legal experts say that as Democrats strengthen their grip on Congress, they are moving to flex their legislative muscle to check pro- business decisions flowing from the other side of First Street.

“There are decisions being handed down that undercut the original intent of the law,” said Rep. Howard Berman (D-Calif.), a senior member of the Judiciary Committee. “Our role in many cases is to make clearer what that intent was.”

The institutional struggle is shaping up against the backdrop of a Supreme Court that has handed the business community landmark victories in its effort to curtail lawsuits. Over the last two terms, the National Chamber Litigation Center, the legal arm of the U.S. Chamber of Commerce, filed briefs in 30 cases — and its side won 21 of them.

Those rulings are not sitting well with the new Democratic Congress.

“You have a court that is handing down decisions that from a policy standpoint is not where the majority party is,” said Andrew Pincus, a lobbyist and lawyer at Mayer Brown who has argued before the Supreme Court. The two branches, he said, now hold “more strikingly different views than you’ve had at any time recently.”

For Democrats and their backers, it’s not just the number of business wins, but their sweep. David Arkush, director of the Congress Watch division of Public Citizen, said based on inquiries for this story, his outfit is launching a survey of consumer groups to determine how much of their legislative agenda is being driven by Supreme Court cases.

They argue that while rulings such as those on detainees at Guantanamo Bay and the D.C. gun ban have dominated headlines, the decisions favoring corporate interests have at least as great an impact on average Americans.

“I recognize that the Supreme Court’s rulings tend to receive national notice when they involve divisive cultural issues,” Senate Judiciary Chairman Patrick Leahy (D-Vt.) said last month in a speech to the American Constitution Society. “Lately, however, many of us have noticed that business interests have been the big winners, often at the expense of ordinary Americans.”

For Leahy and others aiming to roll back the impact of recent Supreme Court rulings, a top concern is the decision effectively barring patients injured by medical devices from suing the manufacturer. In that case, Riegel v. Medtronic, the court found federal approval of the device pre-empted a patient from challenging it under state law.

Before leaving town for the July Fourth recess, Reps. Henry Waxman (D-Calif.) and Frank Pallone (D-N.J.) introduced a bill to restore the right of patients to sue. Leahy and Sen. Edward Kennedy (D-Mass.) have announced they will drop a companion bill.

The legal underpinning of that case — federal pre-emption of state law — is expected to be front and center again in the fall when the court hears arguments in a similar suit, this one against pharmaceutical manufacturer Wyeth. Anticipating the Supreme Court will use similar logic to find in favor of the drug maker, Congressional Democrats are already moving to enhance the rights of patients to sue.

Waxman, who chairs the House Oversight and Government Reform Committee, in May called a hearing to examine the issue. Among those testifying was actor Dennis Quaid, who is suing the maker of the blood-thinner heparin after his infant twin children were administered an overdose of the drug.

Lawmakers are working to challenge other recent decisions. Berman teamed up with Republican Sen. Chuck Grassley (Iowa) last year to introduce a measure that would clarify that government subcontractors should receive the same whistle-blower protections that cover those working for primary contractors. The measure cleared the Senate Judiciary Committee in April but appeared stuck in the House. Then, last month, the Supreme Court ruled that subcontractors in fact are not protected under the whistle-blower statute. The next week, Berman’s measure got a hearing before a joint subcommittee.

In the highest profile case to date, Democrats have been pushing a response to last year’s ruling that went against a woman suing her employer over discriminatory pay because the statute of limitations had run out. The measure, named the Lilly Ledbetter Fair Pay Act after the plaintiff, would refresh the 180-day statute of limitations every time the plaintiff receives a discriminatory paycheck. The legislation passed the House but has been bogged down in the Senate.

Senate Democratic leaders made political hay out of the issue this spring, scheduling the April vote to coincide with Equal Pay Day, set up by civil rights advocates to highlight the wage gap between men and women.

Democratic Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.), at the time duking it out for their party’s presidential nod, returned to Washington to give speeches on the Senate floor in favor of the bill and vote for it. But Republicans successfully filibustered.

With the legislative clock running out on the year, and little legislation moving as lawmakers transition into campaign mode, it looks increasingly unlikely that the legislative responses to the court decisions will make it into law this year. But those pushing the measures said they are serving as markers for next year, when tensions between Congress and the Supreme Court could be thrown into sharper relief.

The extent to which that dynamic develops relies on the outcome of the November elections. If the Democratic margin in the Senate expands, they will find it easier to approve measures backed by trial lawyers and consumer groups but opposed by business interests. And if Obama, the presumptive Democratic nominee, wins the White House, he could be more likely to sign those bills than presumptive Republican nominee Sen. John McCain (Ariz.) — and Obama also would end eight years of GOP rule at executive agencies.

The election appears to be affecting lawmakers’ thinking about legislative responses to recent court decisions. The Supreme Court in January handed a major victory to investment banks, accountants and other vendors by finding that shareholders can’t sue those who help another company falsely inflate its profits. The ruling, in Stoneridge Investment Partners v. Scientific-Atlanta Inc., prompted rumors that House Financial Services Chairman Barney Frank (D-Mass.) would soon start crafting legislation to restore the ability of shareholders to sue participants in securities fraud. But Frank, who with House Judiciary Chairman John Conyers (D-Mich.) filed a brief in support of the investors, has not introduced a bill. In a recent interview, he said he would only push such a measure “if we get a Democratic president. There is certainly no point in trying it with Bush.”

Lobbyists on both sides of the debate are bracing for a firefight. “This is a trend, and this is something that Congress will continue to do if they feel they’re unhappy with the opinions that come down out of the Supreme Court,” said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform. “We are fully anticipating a big push next year by the trial bar and others to move Congressional legislation to overturn or modify all these decisions.”

The trial bar is already pushing. Linda Lipsen, senior vice president of public affairs for the American Association for Justice, the trial lawyers’ lobby, called the last two sessions of the Supreme Court “the most pro-business court in the history of this country.” She listed the pre-emption issue — on medical devices, drugs and for other products going forward — as a top-line priority her group is asking lawmakers to address. It is also monitoring the Ledbetter bill and any legislative response to the Stoneridge ruling.

Lipsen sounded an optimistic note about the ability of lawmakers to challenge the court. “I’m always hopeful that the Supreme Court will rule in a way that is protective of consumers and will hold wrongdoers accountable,” she said. “But in the event that the Supreme Court continues along this vein, there will be Congressional action so consumers are protected and wrongdoers are held accountable.”

With the end of the Bush administration, she said she hoped her group and others will be able to reframe their issues to garner bipartisan support.

Rickard acknowledged the rocky political terrain ahead. “We’ve got a really challenging environment this year, and it will be equally if not more challenging next Congress,” she said. “We want to make sure that people who are aggrieved have redress. But you don’t want to expand liability to the point it lines the pockets of trial lawyers while it hurts small businesses and investors.”

Business interests cheered by recent rulings can rely on one advantage — under most circumstances, the Supreme Court can hand down decisions faster than Congress can pass laws addressing them. But Berman said, “It’s a little like the tortoise and the hare. If we keep pushing, we can catch up.”