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home / ftcr / commentary

Apr 03, 2001

When Commerce Trumps the Constitution…

by Jamie Court
 
Until recently, the independent judiciary was the last branch of government where the average person could reasonably expect to prevail over the rich and powerful corporation. Just as winter turned to spring, the US Supreme Court took the perilous position that an individual's constitutionally protected legal rights, the very foundation of this nation, can be disregarded by a corporation's commercial needs. The highest court in the land ruled that companies can force workers into binding arbitration as a condition of employment.

That a corporate contract, particularly one as unavoidable as for employment, can now supercede the Seventh Amendment's right to trial shows that even the founding father's most cherished principles have succumb to the growing commercial needs of corporations to save money and to secrecy. These twin commercial priorities are the primary virtues of the private justice system that is mandatory binding arbitration. Because arbitrators depend on repeat business from corporate defendants, the justice they dole out is rarely as costly as a jury's. Since the public cannot see corporate crimes in the secret process, it cannot hold corporations accountable for them.

Discovery, the legal right of an injury party to obtain evidence by which a case can be proven, is not even a right in arbitration, merely in the discretion of the arbitrator. Individuals can be precluded from even asking for documents from a corporation that might prove their case. Since there can be no judicial review by a court of an arbitrator's legal errors, an individual can lawfully be denied other traditional legal protections, such as a decision based on legal precedent. All this helps a corporation's commercial prospects but would make the founding fathers turn over in their grave.

The right to trial was the only amendment to the United States constitution that was unanimously ratified by the states. It is a right, however, that has been vilified by a corporate public relations machine whose reach, apparently, extends to the highest court in the land.

The corporate lobby has decried "the litigation explosion" even while the number of civil lawsuits per capita has steadily decreased. Corporate stigmatization of the "frivolous lawsuit" has even scared many individuals away from exercising their constitutional legal rights. Amazingly, corporations have managed to turn Americans against the very justice system that keeps them free, and now to turn an entire branch of government against the constitutional rights it was charged with protecting.

The reasoning behind supporting forced arbitration is that it is more cost efficient and expeditious. The private justice system is certainly more cost-effective for the corporation, which does not have to face an angry jury. It is hardly so for the consumer, who has to pay for a $400 per hour arbitrator with a financial interest in keeping the clock running. Nor are prevailing plaintiffs entitled to recover their attorney fees in arbitration, as they are in court. There is much evidence that arbitration is less expeditious than court as well, particularly when the corporation wants it to be. Individuals lack leverage in the process against large corporations and their legions of defense attorneys. The real motive behind the judicial preference for forced arbitration appears to be economic, limiting the corporation's commercial costs. When commercial arguments trump constitutional protections, the individual and their rights are in grave danger.

Under the same commerce over the constitution reasoning:
  • Free speech would not include criticizing a corporation because damaging revelations could jeopardize its commerce, hurt corporate profits, send the company's stock plummeting, and threaten stock-dependent retirement nest eggs.

  • The California constitution's guarantee of a right to privacy would be voided because sharing personal financial and medical information about individuals allows corporations to provide people with greater commercial opportunities, which is most important.

  • Individuals would not have the freedom to associate for the purpose of collective bargaining. Unionization would be seen to conflict with the corporation's fundamental commercial needs to make new demands on workers for total loyalty and would impede the company's global competitiveness. Workers would only be allowed to associate with people sanctioned by the company in the manner the corporation sees fit.

  • The state's right to takeover power generation plants, such as under the right of eminent domain in the California constitution, would be invalidated. Corporate property would be sovereign soil not subject to US law since corporations are global entities competing in a global commercial market.
The coup de grace for the judicial branch will be when the Supreme Court actually privatizes itself out of existence. At least, then, when the corporate general counsels the justices pick to replace themselves render their rulings, we won't have to hear about them. Greatly expanded corporate secrecy laws will, no doubt, protect individuals from disclosure of any legal matter potentially impacting a corporation's bottom line.

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Jamie Court is executive director of the Foundation for Taxpayer and Consumer Rights. He is co-author of "Making a Killing: HMOs and the Threat to Your Health" (Common Courage Press, 1999). To respond, email To respond, email jamie@consumerwatchdog.org.


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