Friday, September 28, 2012
Jeff Greenfield: From Lower Manhattan — the center of the financial world — this is Money Talking from WNYC. Good morning, I’m Jeff Greenfield joined today by our contributor Joe Nocera of the New York Times and by Emily Bazelon with Slate.
The Supreme Court begins a new session this Monday, and while the headlines are usually dominated by cases about abortion or gay marriage or campaign finance, the docket this term is filled with cases the business community is paying very close attention to. How and when can class action lawsuits be filed, when does the clock start ticking before the Securities and Exchange Commission runs out of time to file charges of securities fraud, how immune is the government from paying damages when its conduct costs people money?
Emily, you’ve been looking at this docket, what cases jump out at you?
Emily Bazelon: I want to talk about the affirmative action case that the court will hear on October 10. We usually think of this as a case that's about education because it's about affirmative action rules in public colleges and universities, but there's a really important business component here. In 2003, which is the last time the court ruled on affirmative action, upholding affirmative action as long as there's no quotas, Sandra Day O'Connor, who was writing for the court, relied on the interest of a lot of business groups in upholding affirmative action. They were saying look, we need diverse colleges so that people can be trained as future employees and leaders to deal with lots of different kinds of people. This time around, the businesses are back and they're saying the exact same thing only louder. There's a brief from Fortune 100 companies that talks about affirmative action and a business and economic imperative, and there's a similar brief from small business owners around the country.
Jeff Greenfield: Joe, we talked about the Supreme Court on Money Talking right before it ruled on the healthcare case. And back then, you cited a study that the court's become more pro-business over time. So, if that trend continues this term and you look at some of the upcoming cases, what’s the prospective outlook here?
Joe Nocera: The thing that I've been noticing is that there are two big class action lawsuits on the docket. Last year, there's was the big Wal-Mart case, the employment discrimination case that the court basically said you cannot have a class here because everybody's interests are too diverse. So, again, here we go. There's a Comcast case and there's an Amgen case. One revolves around the share price of Amgen and whether they did something wrong. The other revolves around whether Comcast is a monopoly fixing prices in Philadelphia. In both cases, if there Supreme Court rules for the companies, it will become harder, and harder and harder to file class actions, which, by the way, is one series of cases that do break down along conservative and liberal lines. The liberals have been losing these cases 5-to-4 consistently.
Jeff Greenfield: Emily, when a lot of people look at the Supreme Court, they look at the lineup and they think, five conservatives and four liberals. That was Bush versus Gore. That was Citizens United. It was almost the healthcare case. When it comes to business decisions, is liberal-conservative 5-4 split really an accurate way to size the court up?
Emily Bazelon: It's really not. When you look at the business docket more broadly, you see that the vast majority of cases are decided in a much more lopsided way, and you have liberal and moderate justices joining the conservatives, meaning that this is a more pro-business court than we've had in the past. And the other thing that's important is that the U.S. Chamber of Commerce has had increasing success in getting on to the docket the cases it cares about, the cases it wants the Supreme Court to hear, and that's a big deal because the court only takes about 50 odd cases a year these days.
Jeff Greenfield: Yeah, and that's a very significant point because we do tend to think of the court often as just another political branch that can be analyzed almost by voting records. But to get specific, and I think I alluded to this at the outset Joe, the court just this week agreed to hear an appeal from a fund manager who says the SEC waited too long to bring a case against him. Now, if he wins, what does that tell us about the power of the SEC to look into suspicious Wall Street activities?
Joe Nocera: Well, the SEC has been getting its head handed to it regularly in the D.C. Court of Appeals, which has ruled three, four, five different times against various rulings or things that the SEC has wanted to do. So, if the fund manager wins at the Supreme Court level, I think the SEC has really got a problem where the courts are consistently clipping its wings and it has less and less wiggle room to go after people.
Emily Bazelon: Right, and this is particularly about whether the SEC acted fast enough. They say they only found out about the fraud in this case in 2003, even though it had happened earlier. And the district court agreed with them. They said, look, the statute of limitations, the time limits only start when the investigators discover the fraud, because this kind of fraud is often concealed.
Joe Nocera: You know Jeff, one very quick thing: The class action lawsuits that the court is looking at this term. One of them was first filed in 2003 and the other was filed in 2004, and that's how long sometime these cases take to wend their way to the Supreme Court.
Jeff Greenfield: Finally, as always, we look ahead to next week. With me again are Emily Bazelon with Slate and Joe Nocera of the New York Times. Emily, what are you checking out?
Emily Bazelon: I am looking at the prospect that bacon prices are going to rise. The reason I'm worried about this is that the National Pig Association of the United Kingdom, and I really love that there's a group out there called that, put out a scare release this week saying three was going to be a worldwide bacon shortage. The internet went crazy, and it turns out this wasn't really true. There will be bacon, but the bacon's going to cost more because what's really going on is corn prices have risen because of the drought, and so eventually we'll see that take more of our pockets when we're buying bacon.
Jeff Greenfield: I'm looking forward to that movie: "There Will Be Bacon." It sounds like Hollywood's got something cooking. Joe, what's on your screen?
Joe Nocera: Like many Americans, I'm looking forward to a weekend of football with real referees.
Jeff Greenfield: Now, for those of you who say, what in heaven's name does that have to do with Money Talking, the call at the end of the game Monday night that gave the game to Seattle probably cost bettors somewhere in the hundreds of millions of dollars.
Joe Nocera: Yes, but I wasn't really thinking about that. I was thinking more about unions and how unions have declined precipitously over the last quarter century, except sports unions. And the reason sports unions have done so well is because they have irreplaceable talent. So, you can't fire all the baseball players and you can't fire all of the football players. Who knew that refs were irreplaceable, and that's what we found out last weekend, and that's why it was settled so quickly after the Monday night fiasco.
Emily Bazelon: This was a dangerous experiment to run.
Jeff Greenfield: Well, we’ll be watching those stories, a lot of football and all the week’s financial news at wnyc.org/business. You can also take this program with you as a podcast, available for free on iTunes. I’m Jeff Greenfield. This is Money Talking from WNYC. Thanks for listening.