Disorder in the Court

I went to law school in a less cynical age, back when justice was a cause, lawyers were respected for their commitment to that cause, and courts were hallowed institutions where, unlike the halls of Congress, might did not make right.

In July 1974, I was just a few weeks away from starting my first year at Georgetown Law when the U.S. Supreme Court issued its momentous decision on whether President Richard Nixon had to turn over secret Oval Office tape recordings to a special prosecutor, who Nixon had reluctantly appointed to investigate crimes committed by Republican political operatives – the infamous break-in at Democratic Party offices at the Watergate Hotel.

Nixon had turned over some of the tapes, but claimed executive privilege for the rest. Whatever was in the tapes was assumed to be a threat to his presidency. But Nixon had campaigned on a platform to move the Supreme Court in a more conservative direction, and by the time the case got to the high court, he had appointed four of its nine members, including Justice William Rehnquist, who later became Chief Justice. Nixon hoped his conservative appointees would protect his presidency with a favorable ruling. But the Court voted 8-0 to require him to hand over the tapes. Rehnquist properly abstained because he had worked for Nixon. In one of the recordings, Nixon could be heard ordering the CIA to stop the FBI from investigating the burglary. Impeachment proceedings, conducted with great dignity and on a bi-partisan basis, now seemed certain to lead to a conviction. A few weeks later, Nixon became the first president to resign his office. It was a cloudy, humid day in D.C., and I was working on Capitol Hill. I will never forget the sight, nearly thirty-seven years ago to the day, of the President Nixon's helicopter lifting up into the cloudy, humid skies for one last ride that August.

The key figures in this unprecedented moment in American history were all lawyers. For a young and idealistic soon-to-be-student of the law, it was a majestic and inspiring example of the power and wisdom behind our democratic form of government, and a victory for the rule of law.

Those days are long gone. Powerful corporate interests have waged a decades long campaign to vilify lawyers who go to court to defend consumer or civil rights. The lure of big money – and the weight of law school debts – has led the best and the brightest graduates to a corporate law career. And the courts, deliberately populated with judges appointed for their ideological views, have become politicized and, all too often, ideological.

This dangerous development is on display at the very top, where the United States Supreme Court has drawn down a deep reservoir of public trust in the integrity and independence of the judiciary.

The Court unilaterally intervened in Florida’s vote counting process and made George Bush President in 2000. In two arcane procedural decisions over the last decade that were well under the radar of the American people, the Court erected unprecedented new barriers to the ability of plaintiffs to bring a lawsuit in federal courts.

In April, the Court ruled that corporations can require courts to enforce “arbitration clauses” buried in the fine print of AT&T’s cell phone contract, which most people never see, at least until after they sign up for service, and to which there is no alternative. Consumers suing to block nickel and dime rip-offs by big corporations are going to find themselves tossed out of court on their hind parts unless they can prove that they cannot possibly vindicate their legal rights before private arbitration judges ultimately paid by the defendants themselves.

And then there is the infamous Citizens United case, in which the Supreme Court ruled that restrictions on the right of corporations to spend unlimited amounts of money to elect candidates violates the corporations’ free speech rights. By granting these artificial entities the same exact First Amendment protections as human beings, the Supreme Court majority nullified the average American’s right to speak up.

In a thoughtful essay in a legal newspaper, Daniel Purcell, a San Francisco lawyer who typically represents corporations, writes that several of the decisions,

…put more arrows than ever before in the quivers of attorneys like me, who tend to represent defendants. We have more opportunities to end, or dramatically reduce the scope of, litigation before it really begins. But it does not reflect well on our society that our rules favor institutions to the extent they currently do. Throughout our history, when the balance of power has shifted too heavily in one direction, societal forces have corrected the imbalance by changing the procedural ground rules. Time will tell if any counterweight to institutional power still exists in modern America. I have my doubts.

With public respect for the legislative and executive branches at record low levels, the erosion of confidence in the judicial branch is deeply disturbing – reinforcing the impression of many Americans that they have no real power in our democracy; that our governmental institutions protect and placate only the wealthy and powerful.

There is a perceptible and growing sense that the United States Supreme Court has exceeded its rightful authority to interpret the law. Ralph Nader has called for the impeachment of five of the nine Supreme Court Justice – Scalia, Thomas, Roberts, Alito and Kennedy – who have formed the majority in support of these highly controversial decisions. Others are calling for a constitutional amendment specifying that the right of free speech belongs to human beings, not corporations.

With Wall Street and Washington locked in a distasteful and destructive embrace, the Supreme Court could become an issue that joins all elements of the political spectrum.

Feds Unsettle Foreclosure Abuses

Wall Street is apparently about to win another round as federal regulators prepare to sign off on a “slap on the wrist” settlement stemming from widespread abuses in the foreclosure process.

The settlement continues the federal policy of relying entirely on the banks’ voluntary compliance, despite repeated examples of banks using fraudulent and forged documents to foreclosure on homeowners. The settlement apparently imposes no fines.

“Judges don’t tell burglars to go design their own plan to stop breaking into people’s homes and report back in 30 days,” said Rev. Lucy Kolin of the PICO National Network in response to the settlement, which is supposed to be announced later this week. “A judge would get laughed off the bench if they did this, and yet this is exactly what the Fed, OCC and FDIC have chosen to do.”

At Credit Slips, Georgetown Law prof Adam Levitin first labels the proposed settlement “Potempkin regulation,” then decides the better analogy for where we are on bank regulation is the “inmates running the asylum.”

The Obama administration’s lack of enthusiasm for holding the big banks accountable doesn’t exactly come as a surprise. Dog bites man.
They were supposed to working with the 50 state attorneys general to investigate the extent and impact of the foreclosure problems, but the attorneys general and the Fed have yet to conduct an investigation worthy of the name, as if they were investigating violations of law, which they should be. If the Feds and the AG's insist on negotiations with the banks, negotiation without robust investigation is a recipe for disaster.

What’s left unclear by reports of the proposed settlement is whether the state AGs are now free to pursue investigations and remedies on their own or whether the settlement will undercut them.

That’s especially relevant in places like California, where the state’s new attorney general, Kamala Harris, ran a strong election campaign promising to protect homeowners from foreclosure abuses and to hold banks accountable. During the “negotiations”, Harris hasn’t had much, if anything, to say. Her office hasn’t been returning my calls.

Now that the Feds have once again caved in to the big banks, Harris will have the opportunity to keep her campaign promises and enforce the law equally. Homeowners will be counting on her.