Four Corporate Power-Grabs That Got the Thumbs Up from Federal Courts

Continued from previous page

The dividing lines on secular corporations claiming religious rights are now being drawn. With two federal district courts saying yes to these claims—and two saying no—it’s only a matter of time before this question arrives at the U.S. Supreme Court.

2. Secret Courts For Consumer Products?

If you thought that secret court proceedings only belonged in the cloak-and-dagger world of national security, you would be wrong. In mid-October, a federal district court judge in Maryland issued a ruling that read like a CIA document from the Cold War: lines and paragraphs were blacked out to hide the identity of an anonymous company that sued the federal Consumer Products Safety Commission after the CPSC included a complaint about that firm’s products in its online consumer complaint database.

The case, Doe v. Tanenbaum, was decided in the anonymous company’s favor “after nine months of proceedings conducted out of public view and without opportunity for public participation,” said an October press release from Public Citizen, Consumer Federation of America and Consumer’s Union, all of whom vowed to appeal. Trade associations, such as this one representing sport equipment makers, cheered, saying consumer complaints made to the CPSC database could be fabricated, vindictive and harm their reputations.

“The challenged report is materially inaccurate, injurious to Plaintiff’s reputation, and risks harm to Plaintiff’s economic interests. To obviate such harm, Plaintiff sought, and successfully obtained, an injunction evermore enjoining the report’s publication,” wrote Judge Alexander Williams, Jr., in a July 31 decision that was released on October 22.

The consumer groups said that contrary to the judge’s opinion, the public has a right to know what company was involved and on what basis the court found that a complaint filed with the CPSC was groundless. But beyond those issues, Scott Michelman, the Public Citizen attorney representing the consumer groups, said that potential economic impacts have never been a basis for censoring federal court records.

“A granting of a motion to seal based on harm to [for-profit] corporate reputation—it’s not just rare; it has never been done,” said Michelman. “The public has a right under the First Amendment to access judicial records. That interest yields to the most compeling of interests from the other side, even national security. I.e., the Pentagon Papers… I’m not sure corporate reputation has ever been a sufficient interest to seal judicial records.”

The business lobby has long complained about frivolous lawsuits and has sought to cap court damage awards, especially in medical malpractice cases. That has lead to the third area where for-profit corporations are gaining legal clout at the public’s expense: the growing use of arbitration agreements to block access to suing in court.

3. Denied: Your Day In Court

This week, the U.S. Supreme Court slapped down a ruling by the Oklahoma Supreme Court where that state’s highest court tried to undo an employee-employer arbitration agreement because it concluded it was unfair and poor public policy. The U.S. Supreme Court found the Oklahoma court “ignored a basic tenet” of the Federal Arbitration Act and declared, “The decision must be vacated.”

That was the third time this year the U.S. Supreme Court bluntly overturned a state court on arbitration, which is a non-judicial process where contract disputes must be settled out of court. The other cases involved a medical malpractice lawsuit against a West Virginia nursing home, and Florida investors who were ripped off by Bernie Madoff and sued KPMG, the large accounting firm that audited Madoff’s activities.

“They’re really counting on people either to do nothing, give up, or do the arbitration and lose,” said Thomas Ferguson, a University of Massachusetts political scientist specializing in politics and economics. “The whole of American business is beginning to act like the investment sector, which has been using arbitration agreements for years.”