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Ortman and conservatives: hopelessly devoted to protecting corporations, not people

We’ve talked a lot over recent months about how conservative politicians have worked hard to tip the economic scales in favor of the wealthy and corporations through the budget process. 

What we haven’t focused on as much are the myriad of efforts conservatives are taking to make it practically impossible for individuals to hold corporations accountable via the legal system from product liability, fraud, employment discrimination, and any number of other issues.

Earlier this week, the U.S. Supreme Court handed down its decision in Walmart v. Dukes, what could well prove to be a landmark class action sexual discrimination case.  Filed in 2000, the case had yet to be heard on its merits, as a fierce legal battle had ensued over whether or not it was a valid class action lawsuit.

Here’s some quick background on the case:  The plaintiffs allege that there has been a history of sexual discrimination at Walmart stores going back over decades, impacting as much as 1.5 million women.  Some of the evidence amassed by the plaintiffs (and uncontested by Walmart) shows that while 72% of Walmart’s employees are women, only 33% of the managers are.  Walmart’s top 20 competitors, on the other hand, have a management workforce that is 56% women.  There are also allegations of lower pay for women in the same job with the same experience.  In legal terms, the plaintiffs were pursuing what is known as a “pattern and practice” case — that is to say, while it is difficult to prove individual cases of discrimination, the fact that the results Walmart achieved were significantly different from their overall workforce and the workforce at their competitors could only be explained by discrimination (even if unintentional).

Walmart, on the other hand, argued that the lawsuit could not be pursued as a class action lawsuit.  This was based on the fact that the company has an anti-discrimination policy and gives significant discretion to individual store managers to make hiring decisions.  Any instances of discrimination, the company argued, therefore had to be pursued on an individual employee versus individual store basis.

The thorny legal question in the case, which was decided on a 5-4 basis, dealt with whether or not the plaintiffs should be allowed to pursue their “pattern and practice” case.  The majority ruled in Walmart’s favor, ruling that the company’s argument about the decentralized hiring practices and anti-discrimination policy was persuasive and that women would either need to sue as individuals or in a smaller class-action lawsuit.  The Court’s decision overturns the finding of every lower federal court that heard the case.

This follows an earlier decision in the term, AT&T v Conception, where again the court ruled on a 5-4 basis that customers of AT&T had to pursue individual claims against the company over an erroneous $30 charge. 

The reason we allow class-action lawsuits is to make the legal process work more smoothly — if all 1.5 million (or even a substantial portion of them) were to pursue their claims individually, we would have courts tied up from coast to coast litigating these claims. 

It also prevents companies from engaging in the sort of large-scale but small dollar fraud accused in the AT&T case.  Few people are going to retain a lawyer and go to court to get their $30 back, but few would argue that any company should be able to get away scot-free from collecting $30 each from thousands of their customers that they aren’t entitled to.

Yet, it’s exactly these sorts of protections that conservatives — both in the Supreme Court and in legislatures across the country — are trying to destroy.  Here in Minnesota, State Senator Julianne Ortman (R-Chanhassen) has been at the forefront of the conservative judicial “reform” process.  This legislative session, Ortman introduced four bills designed to rectify problems perceived in the state’s legal system.

Three of the bills are relatively innocuous.  Two of them,  S.F. 506 (increasing the dollar limit on conciliation court) and S.F. 530 (changing how the interest rate on awards and judgments is calculated) are generally good reforms.  The third bill, S.F. 373, decreases the statute of limitations on several classes of legal action from six years to four years.  While I oppose such a move, it can at least be somewhat justified by pointing out that Minnesota tends to have longer statute of limitations than the national average.

The fourth bill, however, attempts to enshrine the sort of legal doctrine regarding lawsuits espoused by the Supreme Court into Minnesota law.  S.F. 149 would require anyone involved in certain types of lawsuits  to prove on an individual basis that they were harmed by the alleged behavior of the company being sued.  It’s going to significantly raise the bar for any plaintiff who is impacted — effectively reducing any class action to a series of individual claims.

Notable about all four of these bills is that they are all designed to make it more difficult to bring legal actions against corporations.  Ortman and other conservative groups claim that there is a problem with litigious individuals pursuing many frivolous lawsuits.  But is there really a problem that’s being solved here?  The data says no.

The number of civil lawsuits nationwide has been declining sharply over recent years.  In their last study, the U.S. Bureau of Justice Statistics found that the number of civil lawsuits had declined by 50% from 1992 to 2005.

There aren’t many comprehensive state records available to analyze lawsuit trends in the state, but we can reasonably rely on national studies that have looked at this issue.  A national study in 2004 showed that the total number of lawsuits filed by corporations outnumber lawsuits filed by individuals by a ratio of 4:1.  When you consider the fact that individuals out number corporations by about a 40:1 ratio, it means that a corporation is about 160 times more likely to initiate a lawsuit than an individual.

And just because a corporation initiates the lawsuit doesn’t mean that it’s any less frivolous or wasteful of the court’s time.  The same study found that corporations were sanctioned by the court 70% more often than plaintiffs in tort cases for bringing frivolous suits or motions.

So what is really being accomplished here?  It’s clear that these efforts aren’t about making common-sense reforms to fight frivolous lawsuits — rather, this is an extension of corporation-first, people-last policies that the GOP has committed itself to in recent years.  When it comes to corporations, the GOP wants to cut their taxes, remove their regulations, and make them immune from lawsuits.  It’s a love affair that seemingly knows no bounds.  If only someone was looking out for you or me with that kind of devotion…

(A summarized version of this post will be appearing at mn2020hindsight.org)

The Lost Decade

Jeff Rosenberg at MNPublius points out that today is the 10-year anniversary of the first round of Bush tax cuts.

The impact of these tax cuts on our economy has been profound.  They have played a major role in swinging what were then surpluses into deficits — and will continue to do so into the coming years if they are allowed to remain in place, as this analysis from the Center on Budget and Policy Priorities shows.

Making things even worse is that they haven’t delivered in terms of job creation and wage growth.  Today, there are fewer people employed by the private sector than 10 years ago — nationally and in Minnesota.  Nationally, it’s a loss of nearly 2 million jobs.  Here in Minnesota, a loss of about 60,000 jobs.

Effects on household income have been similarly disappointing.  The median household income in Minnesota — adjusted for inflation — has fallen 13% over the last decade!

There can be no clearer demonstration of how the choice to choose tax cuts over investment in critical priorities has failed the middle class.  It’s time to go back to what we know works.

A 3-Step Plan to Legislative Victory (and Public Ruin)

The legislative session thus far has been a disappointing display of short-sighted thinking. As we’ve seen for much of the last decade, many legislators have focused on a devotion to political ideology over real-world results. Instead of focusing on facts, they have taken to declaring their positions with little backing. It’s played out in a three-step process; let’s see how it works in the K-12 education arena…

Read the rest here at Minnesota 2020.

The Vikings in Arden Hills: Bad Ideas on Top of Bad Ideas

I’m pleased to announce that I am now working with the good folks at Minnesota 2020 as a Hindsight Community Fellow.  I’ll be participating periodically on their Hindsight blog, with analysis on public policy issues.  My first piece, on the Minnesota Vikings-Ramsey County stadium agreement, was posted today.

The Minnesota Vikings and Ramsey County announced an agreement yesterday to build a new stadium on the site of the Twin Cities Army Ammunitions Plant in Arden Hills. The $1.06 billion project would be financed with $407 million from the team, $350 million from Ramsey County (in the form of a half-cent sales tax increase) and $300 million from the state (a variety of sales taxes and a sports-themed lottery game).

The wisdom of spending time and effort on such a project in the Legislature while the budget still sits $5 billion out of balance can certainly be debated. However, if we look at the Arden Hills stadium project solely as a standalone proposal, there’s much not to like about the deal.

To find out why the Arden Hills site is a bad deal for the state, read the rest of the piece here.


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