Despite the ongoing delay in bringing us “Let’s Destroy the Great Society Day,” there was, alas, a major Supreme Court decision yesterday. Scalia’s majority opinion in American Express v. Italian Colors was an embarrassment that Kagan shredded like the Republican heroes working for the Houston office of Arthur Andersen in 2001:
The majority’s opinion creates a Catch-22. Antitrust law makes it illegal to use monopoly power to exploit customers—but corporations can use their monopoly power to compel customers to waive their right to bring an antitrust challenge. This is exactly the kind of perverse outcome the effective vindication rule was intended to prevent.
This absurd result is not well-defended by Scalia’s shoddy opinion, although in fairness, the argument was probably defended about as well as it could be. (As Kagan observes, “[t]he majority is quite sure that the effective-vindication rule does not apply here, but has precious little to say about why.”) Scalia’s argument essentially boils down to the proposition that effective vindication does not really require an effective vindication—the formal existence of a remedy is sufficient even if it would be practically impossible to obtain redress in practice. “[T]he antitrust laws,” Scalia asserts, “do not guarantee an affordable procedural path to the vindication of every claim.”
The most remarkable part of the majority opinion is its claim that the Court’s 2011 “decision in AT&T Mobility all but resolves this case.” AT&T Mobility v. Concepcion is certainly instructive as an example of the sometimes ludicrous pro-corporate bias of the Roberts Court, as it used a transparently erroenous reading of federal law to prevent consumers who had been prevented from suing the companies that stole from them in court. But, as Kagan notes, it is far from clear how the holding in the prior case could possibly compel any outcome in Thursday’s case. AT&T Mobility was about whether federal law preempted a state law that made requirements to waive class-action suits illegal. Italian Colors concerns federal statutory rights, making the pre-emption holding of Concepcion irrelevant. Moreover, AT&T Mobility also had nothing to say about the effective vindication rule today’s case turns on. As Kagan acidly notes, “[h]ere is a tip-off: AT&T Mobility nowhere cited our effective-vindication precedents.”
And yet, Scalia’s invocation of AT&T Mobility as controlling the outcome of today’s case reflects admirable candor. Granted, the technical holdings of the 2011 case are of little relevance to Thursday’s ruling. But, in a sense, both cases were indeed decided by the same rule: “if there is a dispute between a corporations and its customers, the corporation wins.”
In theory, since it’s a statutory interpretation case Congress can respond by amending the Federal Arbitration Act to correct the Supreme Court turning it into the Corporations Can Do Whatever They Want And You’ll Like It Act, but as long as Republicans control any veto point this is a non-starter.
As I also note, while I think my concerns were reasonable based on what was publicly known at the time, I have to concede that nominating Kagan has worked out very well. But read the whole etc.