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June 21, 2013 1:10 PM Too Darn Bad

By Ed Kilgore

As the chattering classes drifted away from SCOTUSblog after it became apparent yesterday that the same-sex marriage and affirmative action and voting rights decisions weren’t coming down, a lot of us missed the significance of what did happen. Yeah, some attention was paid to the Arizona case involving proof of citizenship requirements for those attempting to register to vote via the federal Motor Voter law. But as MoJo’s Stephanie Mencimer points out, another decision could have a more widespread, and baleful, influence, if only as another sign of the growing power of the already-powerful:

In a little-known case called American Express v. Italian Colors Restaurant, the Supreme Court today issued yet another decision making it easier for big corporations to use their market power to screw over consumers and small businesses. Thursday’s 5-3 decision affirmed the right of big corporations to use mandatory arbitration clauses in contracts to force small businesses to challenge monopolistic practices in private arbitration rather than through class actions in court. The case shows once again that the conservative majority, led by Chief Justice John Roberts, has no problem with judicial activism when it comes to bolstering corporate power.

The 5-3 decision (with the majority opinion written by Justice Scalia) basically cuts off access to class-action litigation when corporations have the foresight to include private arbitration clauses in standards contracts, which they most certainly will do now in every case where the individual contractee lacks the market power to resist or counter (e.g., consumers and small businesses). The implications were made plain in a dissent by Justice Kagan:

Kagan was blunt: “If the arbitration clause is enforceable, Amex has insulated itself from antitrust liability—even if it has in fact violated the law. The monopolist gets to use its monopoly power to insist on a contract effectively depriving its victims of all legal recourse. And here is the nutshell version of today’s opinion, admirably flaunted rather than camouflaged: Too darn bad.”

For those who think the main problem in the U.S. economy is the hamstringing of the Big Boys by laws and regulations, it was a fine decision. For the rest of us, it is indeed “too darn bad.”

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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