ACSBlog: The Blog of the American Constitution Society

by John Weaver, Editor-At-Large

University administrators are closely watching developments in Robertson v. Princeton University, a New Jersey case concerning a $35 million donation given to Princeton in 1961 for its Woodrow Wilson School of Public and International Affairs by Marie Robertson. The donation created the Robertson Foundation, which Princeton operates through university-appointed trustees to fund the school.

In their lawsuit, Robertson’s heirs assert the gift was intended to prepare students for work in the federal government, the Wilson School is not doing so, and that Princeton has used the money for other ends. Princeton argues the terms of the donation do not require students to prepare for government careers, rather that its terms state students "may prepare" for government careers. The university also points to graduates like Anthony Lake, a former national security adviser to President Bill Clinton, and General David Petraeus, who have entered public service.

The Robertsons filed suit in 2002, alleging Princeton misused $200 million of the Foundation's money, which would have generated $400 million had it had been invested in the Wilson School.. The trial will decide whether the Robertson Foundation's Princeton-designated trustees will continue in their roles and whether Princeton must compensate the Foundation for misuse of its funds. The family is seeking the nearly $900 million endowment be removed from Princeton’s control, as well as $600 million in damages. Superior Court Judge Neil Shuster declared that the Robertson Foundation would only be removed from the university under “the most egregious and nefarious of circumstances.”

Higher education currently receives more donations than ever before – $28 billion in 2006 – and university administrators are concerned about the implications for the terms and conditions of gifts. Some hope this lawsuit will result in universities being more responsive to donor needs. However, John Lippincott of the Council for Advancement and Support of Education argues that major gifts are already predicated upon “long-term relationships built on trust and mutual interest.”

Others worry that a major decision against Princeton will adversely affect the growth of higher education. Joseph Nye, a former dean of Harvard’s Kennedy School of Government, said that “If the heirs of donors are allowed to micromanage an academic institution a generation after a gift has been given, it will seriously curtail the creativity and initiative that has marked the recent administration of the Wilson school as well as set a bad precedent for other academic institutions.”

The U.S. Supreme Court will hear argument in five cases this week. Video of ACS' Preview of the 2007-2008 Supreme Court Term is available in ACS' Multimedia Library.

Monday, Oct. 29

• Klein v. Bd. Of Trade (commodities futures trading market)
• Ali v. Fed. Bureau of Prisons (scope of FTCA waiver of sovereign immunity)

 Tuesday, Oct. 30

• U.S. v. Williams (validity of anti-simulated child pornography pandering law)
• Logan v. U.S. (whether action counts towards sentence enhancement)

 Wednesday, Oct. 31

• Danforth v. Minnesota (whether state courts may apply broader retroactivity standards than the supreme court)

 Questions Presented are below the fold.

by Kate Kendell Esq., Executive Director of National Center for Lesbian Rights

I am concerned that the deletion of express protection against discrimination based on gender identity from Employment Non-discrimination Act (ENDA) would result in a law that does not fully protect lesbians, gay men, and bisexual people in addition to leaving transgender people unprotected.  We are joined in this view by all of the other principal LGBT legal organizations, including the ACLU LGBT Project, Gay & Lesbian Advocates & Defenders, Lambda Legal and the Transgender Law Center. Collectively, our organizations have litigated more cases on behalf of lesbian, gay, bisexual, and transgender people in the United States than anyone else, including handling scores of employment discrimination cases over the past three decades.

Many have been working for the day when the federal government makes the workplace discrimination LGBT people face illegal since the first such proposal was introduced in Congress in 1976. But as much as we wish that day had already arrived, it will not do much good if all we get is a bill that would not protect the LGBT community’s basic rights. While the first version of ENDA introduced this year would have protected the LGBT community, the version introduced last week would not.

I see three significant problems with this weakened version of the bill:

1. Protections for transgender people were removed.
2. Definitions of who is protected by the bill leave gaping loopholes so that no one will be fully protected against discrimination.
3. The blanket exemption for religious employers is broader than the exemptions in other civil rights laws and leaves many workers with no legal protections.

ACS released an issue brief entitled "Anchoring the Clean Water Act: Congress' Constitutional Source of Power to Protect the Nation's Waters," by Jay Austin and D. Bruce Myers, Jr., senior attorneys at the Environmental Law Institute. Austin and Myers identify the constitutional powers Congress can draw upon to protect waters nationwide, including identifying and explaining the effect of several U.S. Supreme Court rulings.

ACS released an issue brief entitled "The Citizen's Advocate: A Perspective on the Historical and Continuing Role of State Attorneys General" by Peggy A. Lautenschlager, former Wisconsin Attorney General, and Daniel P. Bach, former Wisconsin Deputy Attorney General.

The brief explains that state attorneys general who have sometimes been accused of "activism" are in fact exercising their legitimate authority in areas traditionally reserved to the states or where concurrent federal/state enforcement authority exists to serve the citizenry they represent.

by Kent Greenfield, Professor of Law at Boston College and Distinguished Faculty Fellow at the Center on Corporations, Law & Society, Seattle University School of Law

The Supreme Court will hear arguments today (Tuesday, October 9) in what some are calling the most important business case to come before the Court in a decade -- Stoneridge Investment Partners v. Scientific-Atlanta Inc. The facts pertain to the financial shenanigans of a cable television company, but the Court’s decision could have wide ranging implications for law firms, accounting firms, and banks, among others, and – depending on which side you listen to – could either damage the nation’s international financial competitiveness or leave millions of investors underprotected from fraudulent schemes.

The case arose from an alleged fraudulent scheme initiated by Charter Communications, one of the nation’s largest cable companies. In the summer of 2000, it became clear to Charter executives that it would not meet Wall Street’s expectations for annual cash flow and revenue. (Of course, the fact that companies have to focus increasingly on the short-term to the detriment of the long-term health of the company, much less society, is the root of many evils.) Charter asked two of its suppliers, Scientific-Atlanta and Motorola, to help out by inflating the prices it charged Charter for set-top boxes. The suppliers also had to produce private documents lying about the reason and the timing of the increase.

The suppliers agreed to pay back to Charter the same amount of money – $17 million in total – for advertising, which was really free. This “wash transaction” was done to mislead Charter’s external auditor and thus the market. The amounts paid for the set-top boxes were accounted for as capital expenses, appearing on the books over several years. The advertising “revenue” was reported in a lump sum, which made it appear to the auditor and investors that Charter had met its financial targets, which bolstered the stock price. When the fraud came to light two years later, Charter stock plummeted from $26 to 78 cents, costing shareholders millions.

by John Weaver, Editor-At-Large

Last month, Margaret Spellings, the Secretary of Education, released a “Dear Colleague” letter on the topic of college loans. In it, she asks colleges and universities to protect the borrower’s choice of lenders and base lists of preferred or recommended lenders solely on the best interests of the borrowers. This has been necessitated by a college loan scandal that hit news wires earlier this year, in which a number of school financial aid officers accepted gifts or favors from college loan providers in return for preferential business treatment.

She also references pending changes to 20 C.F.R. 682 et al. that will take effect on July 1, 2008. In theory, these new regulations – in conjunction with pending legislation like H.R. 890 and the S. 486 – will curtail the practices of some lenders and schools regarding prohibited inducements. Where the current code and regulations state generally that lenders and guarantors may not offer inducements to schools to secure loans, the pending code and regulations specifically state actions that are prohibited or that will be considered prohibited inducements. Additionally, H.R. 890 requires that every school participating in federal student loan programs have a code of conduct that prohibits school employees from engaging in activities with lenders and guarantors that constitute a conflict of interest or the appearance of a conflict of interest. This attempts to make law many of the requests Spellings has made in her “Dear Colleague” letter from last month.

The greater question, though, is how needed are these changes?

A three-judge panel on the U.S. Court of Appeals for the Ninth Circuit took the unusual step of granting summary judgment against Experian Information Solutions, holding that the credit reporting agency violated a federal law that requires credit agencies to take reasonable steps to verify the accuracy of credit reports and review reports that have been challenged, and directed the district court to calculate damages and attorney's fees, the Los Angeles Times and San Francisco Chronicle reported. The company had placed an erroneous filing on Jason Dennis' credit report and refused to change it.

In his opinion, Judge Kozinski wrote "This case illustrates how important it is for Experian, a company that traffics in the reputations of ordinary people, to train its employees to understand the legal significance of the documents they rely on." The court additionally held that Dennis is entitled to a trial on the claim that Experian failed to adopt reasonable procedures to ensure accuracy.

American Rights at Work has published their third annual Labor Day List: Partnerships that Work, which celebrates partnerships between employers and their employees’ unions that both meet the needs of workers and fulfill business objectives in the global economy.

According to Public Citizen, a lawsuit filed in the 9th Circuit seeks to stop an Administration-backed pilot program that would allow Mexican-domiciled trucks to gain access to U.S. roadways and thus violate U.S. law while also raising safety and environmental concerns.

An article by Chris Mondics of The Philadelphia Inquirer reports U.S. Solicitor General Paul Clement sees a "business tilt on top court."

U.S. Solicitor General Paul D. Clement said in Philadelphia yesterday that the Supreme Court under Chief Justice John G. Roberts Jr. had taken a pronounced pro-business approach, and suggested that it could carry over into the next term.

Clement, the government's chief legal advocate before the Supreme Court, said decisions limiting punitive-damage awards against corporate defendants and imposing restrictions on antitrust lawsuits suggested a distinct tilt in favor of business.

"The business docket is a very rich part of the docket and one in which the Roberts court to date has proven very sympathetic to the concerns of corporate defendants," Clement said in an hour-long address about the Supreme Court's recently completed term.

New Hampshire Governor John Lynch (D) signed legislation today which limits employers' opportunities to retaliate against pro-union workers.  The new law is similar to the Employee Free Choice Act, currently pending before Congress.

In addition to the school racial desegregation cases, the Supreme Court also ruled in a major antitrust case earlier today.  In Leegin Creative Leather Products v. PSKS, the Court by a 5-4 vote overruled Dr. Miles v. Park, a 96 year-old case holding resale price maintenance agreements – through which manufacturers or distributors specify minimum prices below which retailers are not permitted to offer goods – per se illegal.  Justice Kennedy's majority opinion replaced the per se rule with a case-by-case "rule of reason" analysis, on the ground that "[m]inimum resale price maintenance . . . . has the potential to give consumers more options so that they can choose among low-price, low-service brands; high-price, high-service brands; and brands that fall in between."

In dissent, Justice Breyer, joined by Justices Ginsburg, Souter and Stevens, criticized the majority's willingness to overturn a longstanding precedent.  According to Justice Breyer, "The Court justifies its departure from ordinary considerations of stare decisis by pointing to a set of arguments well known in the antitrust literature for close to half a century. Congress has repeatedly found in these arguments insufficient grounds for overturning the per se rule." 

The Associated Press discussed the case's significance in the context of both long-term and emerging doctrinal trends in antitrust law, reporting that Leegin Creative "is the fourth antitrust ruling by the Court in the last four months. In each instance, the Court sided with defendants that were sued for anticompetitive conduct . . . . In recent decades, the Supreme Court has chipped away at what many economists traditionally regarded as vital consumer protections against anticompetitive conduct. For example, exclusive dealer territories and setting price ceilings are no longer automatically unlawful."

A vote today on the Employee Free Choice Act (EFCA) was blocked by a Senate filibuster.  The final vote was 51-48 in favor of the bill.  60 votes are required to defeat a filibuster.

In a recent ACS Issue Brief, Neutrality Agreements and Card Check Recognition: Prospects for Changing Labor Relations Paradigms, Professor James Brudney argues that current labor law hinders unionization:

The stark inequality between employer "incumbents" and union "challengers" regarding rights of access to, or speech aimed at, the voters would be unthinkable in a political election setting. Individual employees attending sophisticated captive audience speeches, or participating in one-on-one encounters with their immediate supervisors, understandably may feel intimidated if not coerced by repeated oral, written, and electronic communications linking "union presence" to layoffs, plant closings, and permanent replacement during a lawful economic strike. Even if an employer does not immediately follow through on such predictions, their repeated expression is likely to affect employees as they contemplate the range of subtler deprivations that union supporters may face in the future. . . .

Opponents of neutrality often counter that if employees cannot hear from the employer, they will not be able to make a suitably informed and reasoned choice. That contention invites doubt on two grounds. One is that the employer already has the opportunity and motive to present arguments against unionization before a union appears, and is likely to have done so over months, if not years. A second is that the optimal time for informed choice about union representation will occur during contract negotiations, when employees can see how a collectively bargained workplace actually would look.

Supporters of elections also worry that individuals sign cards without giving the matter enough thought, or from fear of criticism by fellow employees. It is not at all clear that workers succumb so readily to indifference or peer pressure. Assuming they do, however, a union seems unlikely to retain employees' backing in negotiations unless it can persuade them that its bargaining proposals deserve majority support and even application of group pressure if warranted.

EFCA would have addressed many of Professor Brudney's concerns by providing a streamlined "card check" process for worker unionization.

In National Association of Home Builders v. Defenders of Wildlife, the Court on Monday held 5-4 in an opinion by Justice Alito that a federal agency required by law to take a certain action need not also satisfy Section 7 of the Endangered Species Act (ESA), which requires an agency to ensure that its action will not threaten endangered and threatened species.  In this case, the Clean Water Act obligated the EPA to transfer to the administration of local water pollution permits to the State of Arizona in the wake of the State's completion of nine statutory criteria.  While the application of the ESA provision at issue to discretionary agency actions remains non-controversial, the ruling held that statutory mandates are not subject to limitation by the ESA. 

Justice Stevens' argued in dissent that the ESA applies to all agency actions, whether imposed by statute or delegated to its authority, relying on the decision in TVA v. Hill that Section 7 of the ESA "admits of no exception."  Justice Breyer dissented separately, also citing TVA v. Hill for the proposition that "the Endangered Species Act changed the regulatory landscape, 'indicat[ing] beyond doubt that Congress intended endangered species to be afforded the highest of priorities.' "

The Senate will vote this week on the Employee Free Choice Act, a bill which will reduce management's opportunities to intimidate workers who wish to unionize.  Senator Edward Kennedy (D-MA) recently provided data on the advantages of opening union membership to more workers:

* It’s little wonder that most Americans want a voice at work in these insecure times.  In a recent survey, 58 percent of Americans indicated they would join a union if they could, a record number.
 
The freedom to choose a union is vital to restoring the American Dream, especially for the most vulnerable Americans.  
 
* Unions help American workers get their fair share – union wages are almost 30% higher than non-union wages.  Unions are also a cure for rising inequality because they raise wages more for low- and middle-wage workers than for higher-wage workers.
 
•    Union cashiers earn 46% more than non-union cashiers.
•    Union food preparation workers earn nearly 50% more than non-union workers.
•    Union maids and housekeepers earn 31% more than their non-union counterparts.

* The freedom to join a union is a women’s issue and a civil rights issue.  Union women earn 31 percent more than women workers who don’t have a union.  African American union members earn 36 percent more, and Latino workers earn 46 percent more.
 
* Union workers are almost twice as likely to have employer-sponsored health benefits and a pension at work.  They are more than four times more likely to have a secure, defined-benefit pension plan than non-union workers.  
 
* Protecting the freedom to choose a union benefits all Americans, whether or not they have a union at work.  In industries and occupations where many workplaces are unionized, non-union employers will frequently meet union standards or otherwise improve compensation.  A high school graduate in a non-union workplace whose industry is 25 percent unionized gets paid 5 percent more than similar workers in less unionized industries.

In a recent ACS Issue Brief, Neutrality Agreements and Card Check Recognition: Prospects for Changing Labor Relations Paradigms, Professor James Brudney explains how current labor law hinders unionization:

The stark inequality between employer "incumbents" and union "challengers" regarding rights of access to, or speech aimed at, the voters would be unthinkable in a political election setting. Individual employees attending sophisticated captive audience speeches, or participating in one-on-one encounters with their immediate supervisors, understandably may feel intimidated if not coerced by repeated oral, written, and electronic communications linking "union presence" to layoffs, plant closings, and permanent replacement during a lawful economic strike. Even if an employer does not immediately follow through on such predictions, their repeated expression is likely to affect employees as they contemplate the range of subtler deprivations that union supporters may face in the future. . . .

Opponents of neutrality often counter that if employees cannot hear from the employer, they will not be able to make a suitably informed and reasoned choice. That contention invites doubt on two grounds. One is that the employer already has the opportunity and motive to present arguments against unionization before a union appears, and is likely to have done so over months, if not years. A second is that the optimal time for informed choice about union representation will occur during contract negotiations, when employees can see how a collectively bargained workplace actually would look.

Supporters of elections also worry that individuals sign cards without giving the matter enough thought, or from fear of criticism by fellow employees. It is not at all clear that workers succumb so readily to indifference or peer pressure. Assuming they do, however, a union seems unlikely to retain employees' backing in negotiations unless it can persuade them that its bargaining proposals deserve majority support and even application of group pressure if warranted.

The House Committee on Education and Labor held a hearing today to consider restoring anti-discrimination protections for workers which were removed by the Supreme Court's recent decision in Ledbetter v. Goodyear Tire.  In testimony before the Committee, the Leadership Conference on Civil Rights' Wade Henderson made the case against Ledbetter:

Goodyear argued that Ms. Ledbetter filed her complaint too late and, by a 5-4 margin, the Supreme Court agreed. Title VII requires employees to file within 180 days of "the alleged unlawful employment practice."  The court calculated the deadline from the day Goodyear first started to pay Ms. Ledbetter differently, rather than – as many courts had previously held -- from the day she received her last discriminatory paycheck.  As a result, Ms. Ledbetter was unable to challenge or receive compensation for any of Goodyear's salary discrimination, even though the discrimination continued unabated for more than 15 years.

In this decision, the Court got it wrong.  A narrow majority, led by Justice Alito, set aside the clear intent of Congress in favor of its own policy preferences.  

The outcome in Ledbetter is fundamentally unfair to victims of pay discrimination.  By immunizing employers from accountability for their discrimination once 180 days have passed from the initial pay decision, the Supreme Court has taken away victims' recourse against continuing discrimination. 

Moreover, the Court's decision in Ledbetter ignores the realities of the workplace.  Employees typically don't know much about what their co-workers earn, or how pay decisions are made, making it difficult to satisfy the Court's new rule. 

As Justice Ginsberg pointedly emphasized in her dissent, pay discrimination is a hidden discrimination that is particularly dangerous due to the silence surrounding salary information in the United States.  It is common practice for many employers to withhold comparative pay information from employees.  One-third of private sector employers have adopted specific rules prohibiting employees from discussing their wages with co-workers, and a significant number of other employers have more informal expectations that employees do not discuss their salaries.  Only one in ten employers has adopted a pay openness policy.  

Workers know immediately when they are fired, refused employment, or denied a promotion or transfer, but norms of secrecy and confidentiality prevent employees from obtaining compensation information.   As Justice Ginsberg's dissent points out, it is not unusual for businesses to decline to publish employee pay levels, or for employees to keep private their own salaries.

The reality is that every time an employee receives a paycheck that is lessened by discrimination, it is an act of discrimination by the employer.  The harm is ongoing; the remedy should be too.

Eric Turkewitz, a New York personal injury attorney, offers ten pieces of advice to the authors of a "error-riddled Complaint" alleging Judge Bork is entitled to $1,000,000 plus punitive damages and attorneys fees after he slipped and fell during a speaking engagement.  Here's a taste:

2. Do not make a claim for future lost speaking fees, unless they are huge. If you do, your prior writings and statements on tort reform may become relevant to show that your stock as a speaker to conservative groups has been devalued as a result of the appearance of hypocrisy in filing a suit with some meritless claims thrown in to the mix. The man-on-the-street may well remember you as a SCOTUS nominee, but they surely don't know of what you have written. You don't want them to know either, because some of the claims in your federal complaint can't be justified under any legal theory. And that makes you, as a former big-shot judge, look bad. And you are not in a position to simply blame your lawyers for having made so many errors.

Judge Robert Bork, one of the fathers of the modern judicial conservative movement whose nomination to the Supreme Court was rejected by the Senate, is seeking $1,000,000 in compensatory damages, plus punitive damages, after he slipped and fell at the Yale Club of New York City.  Judge Bork was scheduled to give a speech at the club, but he fell when mounting the dais, and injured his head and left leg.  He alleges that the Yale Club is liable for the $1m plus punitive damages because they "wantonly, willfully, and recklessly" failed to provide staging which he could climb safely.

Judge Bork has been a leading advocate of restricting plaintiffs' ability to recover through tort law.  In a 2002 article published in the Harvard Journal of Law & Public Policy--the official journal of the Federalist Society--Bork argued that frivolous claims and excessive punitive damage awards have caused the Constitution to evolve into a document which would allow Congress to enact tort reforms that would have been unconstitutional at the framing:

State tort law today is different in kind from the state tort law known to the generation of the Framers. The present tort system poses dangers to interstate commerce not unlike those faced under the Articles of Confederation. Even if Congress would not, in 1789, have had the power to displace state tort law, the nature of the problem has changed so dramatically as to bring the problem within the scope of the power granted to Congress. Accordingly, proposals, such as placing limits or caps on punitive damages, or eliminating joint or strict liability, which may once have been clearly understood as beyond Congress's power, may now be constitutionally appropriate.

Ted Frank, another leading proponent of tort reform, questions the merits of Judge Bork's claims:

I sympathize with Judge Bork's serious injuries, but it's beyond me what his lawyers are thinking in asking for punitive damages. And if any danger is open and obvious such that there is an assumption of the risk, surely the absence of stairs to reach a lectern on a dais is—especially if the dais is of the "unreasonable" height that the complaint alleges it to be.

ACSBlog wishes Judge Bork a swift recovery from his injuries.

Writing in the American Prospect, Simon Lazarus and Rochelle Bobroff discuss the impact of last Tuesday's decision in Ledbetter v. Goodyear Tire:

The Court's interpretation effectively neuters Title VII as a safeguard against discriminatory pay practices. In the real world, many employees, Ledbetter included, only learn what their colleagues earn by happenstance over long periods of time. Typically, most employees would try other, less confrontational options before resorting to litigation and risking the effective end of their career with that employer. Indeed, sensible public policy considerations should encourage such informal, career-preserving resolutions rather than pressuring discrimination victims to race to court to preserve their legal options. Indeed, as Justice Ginsburg pointed out, an act of pay discrimination might not only be initially invisible to the employee, but might well be impossible to prove in court until its incremental effects build up through years of unequal paychecks. So Tuesday's decision turns the Civil Rights Act into Catch-22 -- out of court if you file fast, and out of court if you wait.

Of course, the Congress that passed the 1964 Civil Rights Act hardly intended a result so puny and absurd. To get this common-sense message through, the Congress that developed the 1991 "fix" clarified in a committee report that "Where, as was alleged in [the 1989 case overturned by the new law], an employer adopts a rule or decision with an unlawful discriminatory motive, each application of that rule or decision is a new violation of the law" [emphasis added] -- i.e., the last paycheck tainted by the original abuse counts and the 180 day statute of limitation does not bar the victim from her day in court.

Increasingly, the actions of the Roberts Court are making clear that a critical priority for this Democratic Congressional majority -- and any subsequent Democratic majorities -- must be to reclaim and protect such landmarks as the Civil Rights Act. Members of Congress need to get mad and get even -- this time around, using tamper-proof legislative "fixes" and some displays of institutional anger and saber-rattling. These activist justices will have to be disabused of the skepticism, evident in this case and others, that Congress has the political will or capacity to get its way or defend its constitutional turf. The instant pledges of Senator Hillary Clinton and others to introduce legislation to undo Ledbetter is a promising sign and a step in the right direction.

In the meantime, they can expect more opinions in this vein from the Roberts Court. Justice Alito's solicitude for employers is not new. Before joining the Supreme Court in February 2006, as an appellate judge on the Third Circuit Court of Appeals, he repeatedly pressed legal theories or factual interpretations, usually in dissent, designed to keep juries from hearing employment discrimination claims. In one such case, the majority opinion observed that his position "would immunize an employer" even if he or she were motivated by "conscious racial bias." In another, the majority noted that if his approach represented the law, "few if any [discrimination] cases would survive."

In moving his campaign against worker protections to the Supreme Court, Alito and his fellow zealots have drifted far from a recognizably conservative vision of their role. Their message to working citizens like Lilly Ledbetter is clear enough: you may play by the rules, but we will use our life-tenured authority to keep Congress from applying those rules to your boss. So much for equal justice, the rule of law, or respect for Congress.

The Supreme Court today, in a 5-4 decision, limited the ability of victims of employment discrimination to hold their employers accountable.  ACSBlog recently examined this case in its "State of the SCOTUS Term" feature:

Gender, Race and the Wage Gap

In Ledbetter v. Goodyear Tire & Rubber, the Court considers to what extent employers may pay lower wages to women and minorities under federal anti-discrimination law.  At issue in this case is when the clock begins ticking on the statute of limitations for pay discrimination claims.  Lilly Ledbetter alleges that each time she was paid less than her male co-workers for doing the same job, her employer engaged in a new act of discrimination which can be challenged under federal law.  The employer says that, once the decision to underpay an employee has been made, the clock starts ticking, and no suits may be brought after the statute of limitations runs out—even if the employee continues to be underpaid in future paychecks.

 

Duke Law Professor Catherine Fisk argues that a judgment for the employer may prevent many victims of wage discrimination from holding their employers accountable:

A ruling for the employer in Ledbetter will make it difficult for many employees to challenge illegal pay discrimination. The 180-day time for filing claims under Title VII is relatively short, it is difficult for many employees to learn whether they are being paid less than their co-workers, and even those who suspect that they are may be reluctant to sue their employers while still employed at the firm. Moreover, because in many pay schemes, salaries are increased annually by a percentage over the past year's salary, a rule that prevents challenges to past discrimination in salary allows an employer to grant annual raises that are discriminatory in dollar amount so long as the percentage increase is nondiscriminatory. Thus, an employee whose starting salary is set discriminatorily low but who later receives the same five percent annual raise as other employees will forever receive smaller raises than co-workers.

Four Members of Congress are taking the "food stamp challenge," and living this week only on the $21 worth of groceries which are rationed to people living on food stamps.  Congressmen Tim Ryan (D-OH) and Jim McGovern (D-MA) have also set up blogs documenting the experience.  Congressman McGovern explains the reason for the challenge:

I am taking this Food Stamp Challenge as a way of saying that as Americans, we need to do more to eliminate hunger and poverty in this country. One in nine U.S. households, nearly 36 million Americans, does not consistently have enough food to feed themselves or their families according to the U.S. Department of Agriculture. There is no excuse for this.

   In the wealthiest country on earth, it is not about finding the resources. It is about mustering the political will.

   Established in 1939, the food stamp program helps families in need buy food so that they do not have to make difficult choices, such as choosing between paying a utility bill, addressing health care needs or buying food. It truly is the safety net for America's hungry.

   Despite what some critics like to say, the food stamp program is not a government handout, but it is a true safety net program that provides access to food for people who cannot afford to choose between rent, medicine, child care and transportation. Gone are the days of the inefficient program ravaged by fraud, waste and abuse. In fact, National Journal recently named the food stamp program as one of the government's top successes. And the GAO has repeatedly reported on the successes of this important program.

   Mr. Speaker, let me take a moment to share with you who benefits from the food stamp program. According to USDA, over 26 million people benefited from the food stamp program last year, including 452,000 individuals from my State of Massachusetts. Over 80 percent of food stamp benefits go to families with children. One in five food stamp households has an elderly family member, and one in four has a disabled member. Increasingly, working families must rely on food stamps to supplement their wages in low-paying jobs.

   Some may question the motives of elected officials taking this 1-week challenge. These critics, Mr. Speaker, are missing the point. It's time for a much greater public debate to take place around this issue. It is time to end hunger in America, and we can do so starting by focusing on the food stamp program.

Ed’s Note: This is the third part of ACSBlog’s series on the Supreme Court cases awaiting decision this Term.  Previous installments of this series are available here and here.

Access to Lawyers

Under federal law, a prevailing plaintiff may collect fees for their attorney from the defendant in certain civil rights claims.  According to a unanimous Supreme Court in Newman v. Piggie Park Enterprises this rule allows Congress to ensure the enforcement of laws it views as especially important, even when a potential plaintiff lacks the money to hire an attorney.  In the Court’s own words, when a civil rights plaintiff seeks an injunction,

Quoting one of the framers of this law, Justice Ginsburg argued that it is particularly important to provide civil rights plaintiffs with attorneys fees because such plaintiffs are often too poor to vindicate their rights without such assistance.  “Because a vast majority of the victims of civil rights violations cannot afford legal counsel, they are unable to present their cases to the courts . . . .”  Justice Ginsburg explained.  “[This statute] is designed to give such persons effective access to the judicial process . . . .”

At the Music and Intellectual Property Policy Day co-sponsored by ACS and the Future of Music Coalition earlier this month, Congressman Mike Doyle (D-PA) proposed an innovative program to "encourage the creation of new and different music" by "find[ing] some way to make a career in music more viable economically." 

Noting that "even small amounts of money could allow many artists to . . . build[] a fan base, spreading new music across the country and entertaining more people," he cited the NEA as offering attractive examples of similar programs.  Rep. Doyle also discussed a Canadian program "to promote and develop modern music" that has "created a vibrant cultural renaissance in Montreal," as well as "a cultural center that's driving new investment and new jobs."  Finally, he specifically welcomed feedback from listeners. 

An excerpt of his comments appears below.  Further video from Music and IP Policy Day is also available.

Speaking at an event today co-sponsored by ACS and the Future of Music Coalition, Congressman Mike Doyle (D-PA), Vice Chair of the House Subcommittee on Telecommunications and the Internet, spoke out against media consolidation and in favor of net neutrality:

One disturbing product of the Telecom Act of 1996 has been the rapid consolidation of the ownership of television and radio stations across the country.

This is disturbing on a number of levels.

There’s obvious concern that a radio stationed programmed out of Denver won’t provide much timely local news for residents of, say, Pittsburgh.

That can, at worst, have serious public safety implications, as many have pointed out.

But even on a more mundane level, this process squeezes out all but the most mainstream voices in communities large and small.

I ask you: Could WKRP’s commitment to local news and Jonny Fever’s musical vision have survived in today’s consolidated media market?

On a more commercial and artistic level, there’s real concern – which I share – about the homogenization of the content that these broadcasters provide.

It’s clear that the media consolidation we’ve experienced over the last 10 years has reduced the diversity and independence of TV and radio broadcasts dramatically.

Much has been said about the XM/Sirius merger, and I don’t need to add to it.

Except to wonder if both are at full capacity right now, what artists and what music is going to be cut to make room for Howard Stern on XM and baseball on Sirius. Now I’m a baseball fan, as you already know, but it’s a question that musicians and artists should be asking.

That said, I can still hear Steely Dan and the Doobies on the generic oldies stations that clutter up the dial, but I believe that this stifling of new and different music frustrates many American listeners and prevents many up-and-coming artists from getting the exposure they deserve.

On the subject of net neutrality, Congressman Doyle added:

net neutrality certainly ranks at the top of the list in terms of issues affecting musicians and webcasters.

Without net neutrality, smaller content providers face the prospect of prohibitive costs or service quality so poor it discourages consumers from accessing their content.

Today thousands of people are calling and writing Congress – demanding that we preserve an open and free Internet.

Not a free Internet like a free lunch.

But a free Internet like the first amendment guarantees free speech.

A free Internet on which no matter who you are, what you have to say can be heard loud and clear by whoever wants to hear it.

Without a net neutrality fix, a researcher at Pitt—or kids in a dorm room at Carnegie Mellon might not get venture capitalist approval for their big idea.

Not when the first line of their business plan reads -- “Get approval from the telephone and cable company.”

Congress and the courts are currently grappling with this issue.

There are a number of ways in which the federal government could define net neutrality.

The recent ATT/Bell South decision defines net neutrality in a way that appears to be acceptable to internet innovators as well as the largest last-mile Internet provider in the country, for example.

In my opinion, the net neutrality advocates are on the side of the angels in this debate.

A full transcript of Congressman Doyle's prepared remarks is available at this link.  Streaming video will be available shortly at ACS' website.

Jill at Feministe has posted a roundup of ACS' recent conference on "Progressive Family Values," held at Yale Law School:

Among the most compelling themes of the conference were economic. Families often operate as economic units, and caregiving is expensive, whether in rearing children or in supporting adult dependents. And the costs compound. Dependents require expense and attention and the caregivers forfeit economically productive activity to care for others, leaving themselves dependent for their own financial support.

Many panelists identified interdependentness as linking much of these economic concerns. The conservative view of family emphasizes self-reliance and autonomy. Encouraging work and self-reliance are important goals shared by progressives. But where health or other uncontrollable factors are at issue, no amount of personal responsibility can guarantee protection from catastrophic economic loss for ones self or for their family.

Especially poignant were figures from panelist Jacob S. Hacker’s book “The Great Shift,” which explains that half of the nearly one million bankruptcies in the United States each year are the result of families’ unexpected medical or financial crisis. Placing the burden of risk on families, the conservative free market approach, undermines families stability and success. Many argued that to ensure that families thrive, society must recognize limitations of the market model and find ways for society to share in the risks that families now bear.

More at Feministe.

By agreement of the two parties, the Court will dismiss BCI Coca-Cola v. EEOC.

by Helen Norton, Visiting Assistant Professor of Law, University of Maryland School of Law

In BCI Coca-Cola Bottling Co. of Los Angeles v. Equal Employment Opportunity Commission, the Supreme Court will wrestle with the following question:  Is an employer’s decision to fire a worker illegally discriminatory when the decisionmaker honestly believes that the worker engaged in misconduct, but when that belief is based on a lower-level supervisor’s racially biased report?  This case requires the Court to confront the reality that many important employment decisions in today’s workplace involve multiple players – some, but not necessarily all, of whom may harbor racial bias. 

The EEOC brought this race discrimination suit on behalf of Stephen Peters, an African-American who worked for BCI at its Albuquerque facility.  The human resources officials who ultimately made the decision to fire Mr. Peters did not know his race at the time, and thus could not have been motivated by racial bias against him.  Their decision was based on a report of insubordination by a lower-level supervisor responsible for monitoring and evaluating the performance of Mr. Peters and other workers.  The EEOC offered evidence that this supervisor treated black employees less favorably than workers of other races, that he made race-based comments in the workplace, and that he declined to report non-black employees for possible discipline in circumstances similar to that of Mr. Peters.  The EEOC argued that this supervisor acted with a racially discriminatory motive in reporting false information about Mr. Peters, and that that racially biased report caused the human resources officials to fire Mr. Peters.

            In an opinion written by Bush appointee Judge Michael McConnell, the 10^th Circuit Court of Appeals sided with the EEOC, ruling that a plaintiff can establish illegal discrimination if he or she can show that the biased report caused the firing decision.

On April 5, ACS hosted a national press briefing on BCI Coca- Cola Bottling Co. of Los Angeles v. EEOC, a case the Supreme Court will hear on April 18. In this case, the Court considers the circumstances in which an employer may be held liable under federal anti-discrimination laws when a supervisor, who harbors racial or other discriminatory bias toward a subordinate, influences the decision to fire that employee, though the decision is made by a more senior supervisor who harbors no such bias himself. The civil rights and business communities agree that the outcome of this case will have a significant impact on the workplace but disagree on what standard the Court should adopt. Representatives of both sides presented their perspectives. Video is available in Windows Media and Real formats and is available for each of the panelists

by Kent Greenfield, Professor of Law and Law Fund Research Scholar, Boston College Law School & Distinguished Faculty Fellow, Center on Corporations, Law & Society, Seattle University School of Law

News from the world of science: a symptom of a certain kind of brain injury is that the victims end up thinking like economists.

Let me back up for a moment.

One of the most welcome developments in the legal academy over the last decade or so has been the decline of the law-and-economics movement.  Undoubtedly one of the most influential “law and” movements over the last quarter century, its first popularizers were heavily embedded in the neoclassical school of economics, which bases its predictions on the so-called “rational actor” theory of human behavior.  Humans are assumed to make choices based on a cost/benefit analysis, maximizing their own utility.  Adherents to law-and-economics theory have applied that assumption in crafting rules in areas as diverse as criminal law, corporate law, and family law. 

One of the paradigmatic “tests” that behavioralists use is the so-called ultimatum game, where one person is given an amount of money and told to propose a split with a partner.  If the partner rejects the proposed split as too low, neither person gets any money.  The economically “rational” thing for the partner to do is to accept any proposed split, since getting something is better than nothing.  But as it turns out, most partners reject deals they consider too unfair – they would rather get nothing than let the other person get an unfair amount.  These games have been tried throughout the world – I have tried them in my own classroom – and the results are remarkably consistent.

Another test that behaviorists use is to ask people to imagine their behavior is a range of hypotheticals.  One set asks about a runaway boxcar about to hit a group of five workers.  When asked whether they would flip a switch to divert the train onto another spur, killing just one worker, most people say that they would.  But when asked if they would push someone in front of the train to stop it from killing the five workers, most people say no.  The two are identical from a strict utilitarian point of view, but most human beings (me included) see a difference.

In this context, two recent New York Times articles caught my eye.  Both go beyond psychology to the actual physiology of the brain.  Jeffrey Rosen’s March 11 Times Magazine piece on “Neurolaw” referenced a “remarkable technique” called transcranial magnetic stimulation (TMS), which can stimulate or inhibit certain sections of the brain, temporarily altering what people think and feel.  Experimenters at the University of Zurich had people participate in ultimatum games, while TMS disrupted portions of their prefrontal cortex.  Subjects whose prefrontal cortexes were disrupted tended to accept low offers, while those subjects whose brain activity was not disrupted tended to reject them as insulting (as is typical).  The subjects whose brain activity was disrupted “were able to suppress their indignation and to pursue the selfishly rational conclusion that a low offer is better than nothing.”

Even more fascinating was Benedict Carey’s March 22 article “Brain Injury Said to Affect Moral Choices.”  Scientists studying people who have suffered brain damage to a part of the prefrontal cortex have found that they make decisions with less compassion and with more utilitarian “rationality.”  The scientists asked the subjects questions such as the runaway boxcar hypothetical.  Those with the injuries were twice as likely as those with undamaged brains to push someone in front of the train.  The damaged area of the brain, the scientists hypothesize, “put a finger on the brain’s conscious, cost-benefit scale weighing moral dilemmas.”  Those without proper brain function in that area end up making decisions with a more “utilitarian cost-benefit analysis.”

These findings are almost too sweet for those of us who rail against the constrained view of human nature contained in the mainstream law-and-economics literature.  Those humans who think and act like economists predict are those who suffer from brain damage, or those for whom brain damage can be temporarily simulated.  To be fully human is to act with spite, compassion, confusion, love.  Economists may not understand this, but the rest of us do.  

The Supreme Court held today in Massachusetts v. EPA that the EPA was wrong to assert that federal law does not give it the power to regulate greenhouse emissions.  The Court also ordered the EPA to reexamine the link between greenhouse emissions and global warming.

ACSBlog's preview of this case, by Doug Kendall of the Community Rights Counsel, is available here.

by Austin Evers, Editor at Large

Recently, more than 300 people were aggressively rounded up by immigration agents in a raid of a Massachusetts factory and summarily transferred to detention centers in Texas—including an infant United States citizen who was hospitalized for dehydration suffered while in detention.

This incident arose in the context of a broader debate over immigration policy, and while Congress did not pass comprehensive reform last year, immigration is reemerging as a hot button issue.  The reemerging debate is forming along familiar lines with politicians and think tanks once again advocating border security and various citizenship options. 

According to recent report released by the nonpartisan Drum Major Institute (DMI), many of these prescriptions are probably best understood as attempts to address the underlying economic and social insecurities at the heart of the debate.  To ensure that these insecurities are actually addressed, DMI advocates putting American middle class interests first, which they argue does not include mass deportations, an armed border, or formalizing an immigrant underclass of workers.

DMI approaches possible immigration reforms from an understanding that immigration policy should focus on ensuring that America will not be stripped of the benefits it receives from its foreign workforce and on addressing immigrant exploitation by guaranteeing foreign workers the labor protections enjoyed by all Americans.  If achieved, they argue that these goals have the potential to touch the lives of every American by strengthening the middle of the economy, conforming to the ideals of fairness and welcomeness, abandoning xenophobia, and reducing the likelihood of another raid like the one in Massachusetts.

By Pete Barile, Axinn, Veltrop & Harkrider LLP

Editor’s Note: The Supreme Court will hear oral arguments in Leegin Creative Leather Products, Inc. v. PSKS, Inc., No. 06-480, this Monday, March 26.  Mr. Barile is author of the amicus brief submitted in support of Respondents by the Consumer Federation of America.

A fundamental rule of our free-market system is at stake in Leegin v. PSKS: the rule that manufacturers may not prevent retail discounting by colluding with dealers to fix the prices at which their products are sold at retail.  The question presented is whether such minimum resale price maintenance (“RPM”) agreements should continue to be per se illegal or, rather, should be evaluated under a very lenient standard, which in antitrust parlance is called the “rule of reason.” 

When employed, RPM prevents consumers from “shopping around” for the best price because it prevents retailers from putting on sale any and all types of products, including not only large purchases, but also everyday purchases—from groceries to gasoline. Because of the per se rule against RPM, consumers have saved hundreds of billions of dollars over the years, while the retailing industry has progressed from small shops to department stores to discount warehouses to, most recently, online commerce. Abandoning the per se rule in favor of rule of reason would provide cold comfort to American consumers; for it is widely recognized that to accord RPM a rule of reason treatment would effectively make RPM legal. 

For nearly a century, since the Court decided Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911), it has been a per se illegal “restraint of trade” under Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, for manufacturers and retailers to agree to fix a minimum retail price.  During that time, the per se rule against RPM has safeguarded low consumer prices and an abundance of consumer choice, witnessing an unparalleled period of dynamic innovation in retailing by fostering competition at the retail and manufacturing levels. By preventing RPM, which is designed to discourage price cutting, the per se rule has set the stage for innovative retailers to continually enter the market, offering new and lower priced alternatives to consumers. By encouraging such entry, the per se rule has enhanced “intertype competition,” that is, competition among different kinds of retailers, such as boutiques, department stores, superstores, and online sellers—providing substantial benefits to consumers.

There is no good reason to abandon the venerable Dr. Miles rule.

Materials Released by Department as Part of Investigation of U.S. Attorney Firings Suggest Possible Legal Violation

By Debra L. Ness, President, National Partnership for Women & Families

When the Justice Department releases 1,500 pages of material, I guess you can expect some surprises.  But we weren’t expecting this.  Late last year, an official of the Justice Department reportedly told Senator Pryor and the media that they didn’t appoint a female first assistant U.S. Attorney as interim U.S. Attorney for the Eastern District of Arkansas because she was on maternity leave.  If that’s true, the Justice Department has some explaining to do.
 
Justice Department officials should know better.  Pregnancy is never a legal, valid or appropriate reason to deny anyone an appointment or promotion; and singling out maternity leave as a reason to deny a woman a job sends a terrible message to employers. 
 
Pregnancy discrimination has been illegal in this country for more than 40 years, but that doesn’t mean we’ve stopped it.  In fact, it’s on the rise.  Our study a few years ago found that pregnancy discrimination complaints filed with the EEOC rose by 39 percent from FY 1992 to FY 2003.  We hear about more cases every day.
 
We need to re-establish that discrimination is wrong and will have consequences.  So we’re asking the Inspector General to review all Justice Department practices to ensure that no employee is penalized for being pregnant or taking parental leave.  And we’re asking the Administration to vigorously enforce anti-discrimination laws – and to follow the law itself.  It’s the very least we should expect.

Debra L. Ness is President of the National Partnership for Women & Families. The National Partnership for Women & Families is a non-profit, non-partisan advocacy group dedicated to promoting fairness in the workplace, access to quality health care and policies that help women and men balance work and family responsibilities. More information is available at www.nationalpartnership.org.

"Service Pays: Creating Opportunities by Linking College with Public Service," an article by Professors Elizabeth Warren of Harvard Law School and Sandy Baum of Skidmore College, as well as Harvard law student Ganesh Sitaraman, appears in the inaugural edition of the Harvard Law & Policy Review.  The authors identify rising financial barriers to college education, as well as various ways in which they constrain the career options of young people and facilitate distributive injustice, before offering a policy proposal to address these issues.

Specifically, they propose "Service Pays," a policy through which "[t]he government would forgive students one year of college expenses for each year the student worked in public service after college." The authors suggest that such an approach would "significantly diminish the burden of educational debt and keep open the option of public service . . . jobs for graduates," while also providing resources for a number of pressing national needs, such as disaster relief; education; state administrative functions; community development; and international service in the Peace Corps, Foreign Service, military or intelligence services.  The article also explores the benefits of public service to young people, in terms of encouraging civic engagement, and also exposing graduates to other "[p]articipants from rural, suburban, and urban areas, different regions of the country, and diverse ethnic, religious, and socioeconomic backgrounds . . . ."

Writing in the Harvard Law & Policy Review, ACS' official journal, Yale Professor Jacob Hacker argues that conservative policies which rest on the premise that "we can be free to pursue the opportunities in our lives only if we do not share risks with others," have created a "Great Risk Shift," where ordinary Americans live in constant fear of catastrophic loss of income.  Citing studies which show 18% of Americans will experience a 50% or higher loss of income, as compared to only 7% less than 40 years ago, Hacker argues that America should reject policies such as Social Security privatization and Health Savings Accounts because they place too much risk of unmanageable loss on the individual.  As an alternative, Hacker proposes that we base our domestic policy on ensuring a basic level of security for all Americans:

A Washington Post editorial today raises two arguments commonly asserted by management interests opposing the Employee Free Choice Act (EFCA):

The so-called card-check arrangement would give labor too much power to spring unions on employers . Employers who don't want to see their workers organize deserve a chance to make that case to employees in advance of the decision.

In addition, employees who are skeptical of or opposed to bringing a union into the workplace deserve the protections of a secret-ballot election rather than having to face pressures from colleagues pushing them to sign unionization cards.

In a recent ACS Issue Brief, Neutrality Agreements and Card Check Recognition: Prospects for Changing Labor Relations Paradigms, Professor James Brudney provides a counterpoint to these management arguments:

The stark inequality between employer "incumbents" and union "challengers" regarding rights of access to, or speech aimed at, the voters would be unthinkable in a political election setting. Individual employees attending sophisticated captive audience speeches, or participating in one-on-one encounters with their immediate supervisors, understandably may feel intimidated if not coerced by repeated oral, written, and electronic communications linking "union presence" to layoffs, plant closings, and permanent replacement during a lawful economic strike. Even if an employer does not immediately follow through on such predictions, their repeated expression is likely to affect employees as they contemplate the range of subtler deprivations that union supporters may face in the future. . . .

Opponents of neutrality often counter that if employees cannot hear from the employer, they will not be able to make a suitably informed and reasoned choice. That contention invites doubt on two grounds. One is that the employer already has the opportunity and motive to present arguments against unionization before a union appears, and is likely to have done so over months, if not years. A second is that the optimal time for informed choice about union representation will occur during contract negotiations, when employees can see how a collectively bargained workplace actually would look.

Supporters of elections also worry that individuals sign cards without giving the matter enough thought, or from fear of criticism by fellow employees. It is not at all clear that workers succumb so readily to indifference or peer pressure. Assuming they do, however, a union seems unlikely to retain employees' backing in negotiations unless it can persuade them that its bargaining proposals deserve majority support and even application of group pressure if warranted.

Nathan Newman compares corporate corruption records to the relatively clean record of unions, noting that even the union raised up as the historic example of a corrupt organization better served its constituents than many corporate managers:

There is little question that organized crime had their hands in the Teamsters Central States Pension Fund for a number of decades. But here's the kicker, there's little evidence that union members were ripped off due to the mob helping themselves to loans that they couldn't have secured from more legitimate banking sources. As the New York Times detailed in 2004:

In the 1970's, the fund's assets grew by as much as 10 percent a year, according to some media reports from that period...Thus, the fund made better returns on its unorthodox real estate portfolio than it would have on a conventional mix of investments...

By the time Hoffa disappeared in 1975, the Central States pension fund had loaned an estimated $600 million to people connected with organized crime, according to Mr. Stier, who resigned his union appointment in April after questioning the union's ongoing commitment to rooting out corruption. But many of the loans did serve their intended purpose, making money to pay for Teamsters' retirement benefits. The hotels, casinos and other real estate projects, not all of which were connected to organized crime, were generally profitable, according to Mr. Stier, and before his disappearance Hoffa saw to it that his loans were repaid.

Now, this misuse of Teamsters pension fund money was the largest example in the history of the union movement-- and it still pales in comparison to the trillions of dollars honestly invested over the years on behalf of union members.

Not only did Teamsters do well even under Jimmy Hoffa's "corrupt" leadership, but here's the kicker. In 1982, the federal government forced the Teamsters to turn management of the Central States Pension Fund over to professional Wall Street firms. The result:

[I]n these expert hands, the aging fund has fallen into greater financial peril than when James R. Hoffa, who built the Teamsters into a national power, used it as a slush fund...the kinds of investments that make sense for [a pension] fund - like long-term bonds that will mature as members enter retirement - are not attractive to most money managers, because they generate few fees...

Money managers promised pension funds big returns, and to get the big returns they began to add riskier assets to pension portfolios than pension funds had used before. Sleepy bond portfolios were livened up with stocks. Venture capital, junk bonds, securities of companies in developing countries and other exotica began to appear in pension funds...When the stock market crashed in 2000, the Central States pension fund had big bets on technology and telecommunication stocks, energy trading companies and foreign stocks. Some of these stocks became nearly worthless.

So who was more corrupt? Jimmy Hoffa getting good returns for his members investing in real estate and profitable casinos or the Wall Street managers collecting big fat fees admidst the insider-deals of the dotcom boom and bust?

In a separate post, Newman argues that corporations could begin to approach the virtuousness of organized labor if they were forced to adopt the same transparency which regulations impose on unions:

One reason unions have very little corruption is that they are some of the most financially transparent institutions in the country, far more than corporations or even other non-profit organizations. Unions have to disclose the salaries of EVERY individual employee and disbursements to every person or organization they do business with. (Go to the DOL's Internet Disclosure page for more)

Corporations, on the other hand, don't even have to disclose details of taxes they pay to the government, much less what they pay their employees or the details of who they do business with.

Newman also argues that a Montana bill which would force corporations to disclose their corporate taxes is a step in the right direction.

by John Weaver, Editor at Large

Following last fall’s Commission on the Future of Higher Education report that stated one of the biggest problems with American postsecondary education is the lack of funding for college grant programs like Pell grants, the White House last month proposed boosting the annual Pell grant by $550, to a maximum of $4,600, which, unlike student loans, does not have to be paid back. “As costs skyrocket, it becomes increasingly difficult for middle-class families to afford college,” Education Secretary Margaret Spellings said. “And for low-income, mostly minority students, college is becoming virtually unattainable. States, institutions and the federal government – we all must increase need-based aid.” The President’s plan would continue to increase size of the maximum award by $1,350 over the next five years.

Pell grants are given every year to students whose families have incomes of less than $40,000. According to the American Council of Education, in the 2002-03 school year there were more than 4.7 million recipients. At the time, a maximum Pell grant paid for 41% of the annual cost of a public four-year institution and 16% of the annual cost of a private four-year institution.  However, that those percentages have dropped significantly over the last three decades.  In the 1979-80 school year, for example, a maximum Pell grant paid for 77% of a public four-year college and 36% of a private four-year college.

The Commission was aware of that drop, as it proposed to increase the value of a Pell grant over the next five years so that it would cover 70 percent of the average in-state tuition at a public four-year college.  There is significant support for that idea. Former North Carolina Governor Jim Hunt, who served on the Commission, said that the Pell grant is “the most important thing… And that’s the federal government’s responsibility.”  Senators Susan Collins, Ted Kennedy, Norm Coleman, and Russ Feingold sent a letter last fall to Rob Portman, the director of the Office of Management and Budget, asking him to “include funding to provide a significant increase in the maximum Pell grant award. Such an increase would ensure that the door to higher education, and the future it offers, remains open for thousands of needy college students next year.”

Given that letter, it was surprising last month that in its own budget proposal the Senate lowered the amount of money dedicated to Pell grants, making the maximum grant $4,310, not $4,600. The Senate’s budget proposal represents a change in direction for Pell grant proposals, as the White House’s Pell grant increase came after the House of Representatives proposed increasing Pell grants by $260. It is unclear if further budget negotiations will result in more or less aid to lower income college students.

by Kent Greenfield, Professor of Law and Law Fund Research Scholar, Boston College Law School

Editor's Note: To read more of Professor Greenfield's progressive view of corporate law, see his book, The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities.

Last Tuesday, I returned from my 75-minute Corporations class to find that the stock market had plummeted by over 200 points while I was teaching.  Its loss for the day was over 400 points, 3% of the market’s value.  As of this writing two days later, the market seems to have stabilized a bit, but not before many on Wall Street refilled their prescriptions of anti-anxiety meds.

Market watchers rushed to explain the drop.  While some theories posit that it was caused by increasing fear of recession, most analysts seem to be saying that this drop was brought about more by the panic of the herd than by anything in the underlying economic fundamentals.  According to the Wall Street Journal, many investors have been putting their money in increasingly risky investments, with the concomitant increase in nervousness.  In such a situation, any sign of market retreat will cause a rush to sell, adding momentum to any panic.  That, at least in part, was what apparently happened on Tuesday.

Does such volatility really matter?  Most people in America make money through wages rather than stocks, of course, so the day-to-day market volatility is mostly a concern of the well-to-do. Over thirty percent of the stock market is owned by the richest one-half of one percent of Americans; the bottom 80% of us own less than 6% of the market, if you don’t count pensions.  Even those of us with pensions and 401(k) plans arguably aren’t hurt that much from the kind of blip that happened on Tuesday, since we are holding those investments for the long term.

Section 230 of the Communications Decency Act provides that "[no] provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider," and that "[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section."  A recent decision of the First Circuit has reaffirmed the broad protection this statute provides to bloggers and message board administrators.

In Universal Communication Systems v. Lycos, a company who had allegedly been victimized by defamatory statements on a message board regarding the value of its stock sued Lycos, which operated the board.  The message board allowed users to post comments with minimal moderation, and no one from Lycos was responsible for the allegedly defamatory statements.

Examining the impact of Sec. 230 on this case, the court noted that "Congress intended that, within broad limits, message board operators would not be held responsible for the postings made by others on that board," adding that allowing bloggers and message board operators to be sued for the statements of commenters on their sites would have an "obvious chilling effect" on speech.  Accordingly, the court dismissed the complaint against Lycos.

(hat tip: Bashman)

A federal judge in Austin, Texas has temporarily enjoined a plan by Texas Governor Rick Perry to allow a power company to quickly build 11 coal burning power plans before Congress can change the law to restrict greenhouse gas emissions.  Under Governor Perry's plan, power company TXU would be granted expedited permits to build the 11 greenhouse emissions producing plants.  Texas currently produces more greenhouse gases than any other state, and these 11 plants would double that state's current CO2 emissions.

Houston Attorney Steve Susman, who is representing the plants' opponents pro bono said that he is doing so because "I do believe the greatest threat to mankind, not just for our grandchildren but for us, is climate change.''  Susman may have a long fight ahead of him, however. Governor Perry vowed to fight for TXU, saying that "a single liberal Austin judge'' should not be allowed to make the final decision in this case.

ACS is pleased to release Neutrality Agreements and Card Check Recognition: Prospects for Changing Labor Relations Paradigms, an ACS Issue Brief by Ohio State law professor James J. Brudney.  Under existing law, employers who oppose allowing their workers to unionize may demand a prolonged NLRB election process to decide whether or not the workers shall organize.  Although this election process is often understood to vindicate employee choice by ensuring that a decision to unionize reflects the informed will of the workers, Professor Brudney argues that NLRB elections, which give employers disproportionate power to influence and intimidate workers against supporting unionization, should not be viewed as the best basis for protecting employee choice:

Preliminarily, there is the unc