Justice and the Liberal Media

supreme-court.gifby Tom Hall —

Let us think about activist judges and the liberal media. You know what activist judges are. They are those men who use their judicial offices to impose their will on the country, ignoring the will of the people and sometimes ignoring the law.

The liberal media are those crass charlatans who let activist judges get away with it, with nary a comment. Now we have an interesting convergence of activism by five Republican “justices” on the Supreme Court and the “liberal media” which won’t tell the story.

You may have seen some news articles about how inflation is coming back into our economy. Or you may have just wandered into the grocery store and seen how prices are rising. Maybe you’ve gone off to buy clothes or other supplies for the new school year, and discovered a new market reality. The “liberal media” explains this by telling us: That corn prices are skyrocketing; or, Oil prices are rising because we aren’t raping the Alaskan wilderness or gooping-up our shorelines.

Even the evil Chinese workers are beginning to get some blame. It turns out that they are no longer interested in working as slave labor. Now they want to be paid decent wages and are even demanding healthcare! And schools for their children! Who do they think they are!? How dare they demand things that American workers don’t demand for themselves?

The “liberal media” will tell you about those things, but not about Dr. Miles Medical Co. and Leegin Creative Leather, and the five activist Republican “justices” who said that higher prices are good for the poor.

Back in 1911, Dr. Miles Medical Company decided it would make bigger profits if it could fix the prices for its goods at a high level. Some stores were selling Dr. Miles products at a discount. Dr. Miles decided to punish the stores that sold its products at a discount. The stores sued Dr. Miles and the case went all the way to the Supreme Court.

Back in 1911, Republicans believed in free enterprise. They believed that businesses thrived and became stronger with competition on quality and price. And the justices on the 1911 U.S. Supreme Court ruled that price fixing was illegal. They said that once Dr. Miles Medical Co. sold its products to a dealer, they couldn’t control how the dealer priced them. The justices relied on a law passed by Congress.

During the next century, businesses tried over and over to change the law. During the 1960s, while civil rights and anti-war activists organized in the streets, conservatives filled Congress (those were the days when Jesse Helms and Strom Thurmond were still “Democrats”!) The conservative Congress passed legislation reducing consumer protections and letting businesses do some price fixing. With the candor which corporate conservatives use so often, they labeled the price-fixing bill the “Fair Trade Law.”

But by 1975, corporate price-fixing abuses had gotten so bad that even Congress couldn’t stomach it anymore. Congress repealed the “Fair Trade Law” and made businesses go back to competing with each other again. But just passing a law didn’t stop the corporations. So in 1980 the U.S. Supreme Court once again ruled that price-fixing was illegal. Again, the justices decided they had to follow the law written by Congress.

So where are the activist judges in all of this? You have to wait until 2007 to find them. In 2007, five U.S. Supreme Court justices ruled that price-fixing is O.K. Justice Kennedy wrote the opinion, and was joined by Alito, Roberts, Scalia and Thomas.

No, Congress hadn’t changed the law. Not even the Republican Congress of the Bush years had been so directly hostile to consumers as to allow price-fixing. But five Republican “justices” on the Supreme Court decided that it was O.K. to simply change the law on their own. They wanted corporations to have more profits and less restriction. They wanted to help corporations escape from the burdens of free enterprise and price competition.

After all, the Republican President had done away with competitive bidding for war contracts, so why should we have competitive pricing in other parts of the economy? Justice Kennedy even wrote that higher prices could be good for the poor. Justice Kennedy is one of those corporate conservatives who remembers the horrible news stories of the Reagan years, about old people having to buy cans of cat food to eat. Justice Kennedy knows that cat food isn’t the right nutrition for old people. So he wants to raise prices to a level where old people can’t buy it. Better that they starve than eat the wrong food. Activist “justice” Kennedy actually wrote that higher prices are better for the poor.

The decision was made in a case involving the Leegin Creative Leather company. Leegin makes fancy hand bags for women, and it wants to be able to extract the highest possible price and profit margin. So it cut off shipments to a store which sold the handbags at a discount.

The store sued Leegin. And five Republicans on the U.S. Supreme Court sided with Leegin. They said price fixing was O.K. They said higher prices are good for the poor (and I guess for the middle class too). They didn’t care about the law passed by Congress, or the will of the people who want free enterprise and price competition.

It’s not just about leather handbags. The company that owns Avis started forcing its franchise operators to charge inflated prices. So some of the franchisees sued. The trial Court threw out the suit, because of the Leegin case. The trial Court said it had no choice, because the Supreme Court had ruled that price-fixing is legal.

Now, when you travel, the “liberal media” tells you that your expenses are higher because jet fuel costs more and food in the restaurants costs more. But the “liberal media” doesn’t tell you about five activist Republican judges who ruled that Avis and every other rental car company can agree on fixing higher prices.

It’s been just over a year since the Leegin decision. In that year, prices have soared. We’re supposed to believe that energy prices, competition from China, or disruption in Nigerian oil pipelines are responsible. We’re not supposed to know that 100 years (OK, only 97) of law has been thrown out, to make price-fixing legal.

John McCain keeps saying that he likes judges like Scalia, Alito, and Roberts. He wants to appoint more of them. But he also says he doesn’t want activist judges. Why has no one in the “liberal media” asked him any questions about activist judges allowing price-fixing, even though congress tried to outlaw it?

tom_hall_2.jpgDuring a presidential campaign, we all like to talk about the “main event”, the “top of the ticket.” But this year, shouldn’t we be asking “conservatives” like David Drier how they feel about activist judges allowing corporations to fix prices and charge us more for everyday items? The next President, whether it’s Obama or McCheney, will not pass new anti-price-fixing legislation. Shouldn’t we be working to elect to congress people who will work to rein in the Republican activist “justices,” before they ignore more laws and give more legal benefits to corporations?

by Tom Hall

Tom Hall is a family law attorney. He is originally from Boston, where he grew up in the Cambridge Friends Meeting (Quakers), thinking that religion was a progressive force. During the Vietnam War, he organized draft counseling centers and worked with groups training people to participate in highly disciplined nonviolent demonstrations (real disciplined nonviolence is just plain maddening to police forces who count on demonstrators giving them reason to get ‘messy’ during public demonstrations). After the war, he became just another yuppie working to make himself a comfortable life. The Bush administration has shocked him back into social concerns. Tom can be reached at ProgBlog@aol.com

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  1. Phil says

    National Antitrust policy concerning resale price maintenance aka VERTICAL PRICE FIXING (returning the US economy back to the days of Fair Trade Laws) should NOT be determined by five Supreme Court Justices. The U S Congress should at the very least bring the “Discount Pricing Consumer Protection Act” (S.2261 bill to restore the “per se” rule to VERTICAL PRICE FIXING) to a vote. If the five Justices got it right then Congress will have no problem affirming the decision. The FACTS of the decades of Fair Trade Laws are well documented. In States that allowed Fair Trade Laws (really UNFAIR MANUFACTURER PRICE FIXING LAWS) business failures were 50% HIGHER, sales volumes were 50% LOWER, and of course prices to the American Consumer were 19% to 27% HIGHER. How does anyone possibly defend the horrific results of the days of Fair Trade Laws. The last time Congress took up this RPM issue was “The Consumer Goods Pricing Act of 1975” which was passed by a vote of 380 to 11 to put an end to Fair Trade Laws. Let’s have Congress vote AGAIN and put this issue in a TRASH BAG where it belongs!!!

  2. Tom Hall says

    Dear In-awe:

    It will surprise most of the ABA to learn that they are not in the pocket of big business. There has been some progress in recent decades, but the ABA was the creation of business lawyers, and has always put the good of the corporate community ahead of mere people.

    The sophistry you recite about vertical price-fixing is exactly what the Court attempted to do to hide the facts. But it fails on two grounds:

    First, anyway it is considered, it was judicial activism – right wing judges saying that they didn’t like the law and changing it, rather than leaving it for the congress to change, if the voters demanded a change;

    Second, the Avis rent-a-car decision disclosed that there is nothing vertical about the decision. Avis agents wanted to compete against Budget agents. But the parent company wouldn’t let them. That’s two competing entities (yes, both are owned by the same parent corporation) like Fox and Warner Bros. But their owner wouldn’t let them compete, because, as the Court said, price-fixing was OK.

    Those small Avis franchisees wanted to make a fair return, but the parent company denied them the opportunity. That’s not supporting small business.

    That’s not handbags. And NO! No worker benefits from being forced to pay a higher price in the open market simply because a company wants to increase its earnings and uses price-fixing to do it.

    No amount of corporate sophistry will change that truth.


  3. in_awe says

    The ABA (not generally seen to be in the pocket of conservatives or big business) filed an amicus brief on behalf of 24 economists in favor of allowing vertical minimum resale price policies to be judged by a “rule of reason” analysis under the Sherman Act rather than the “per se” approach.

    There has been a distinction between “per se” violations (typically horizontal price fixing or territory restrictions)that are egregiously harmful and are banned, and other forms of behavior or agreements that might be harmful that are subject to a review based on the “rule of reason”.

    “In recent years, the Supreme Court has consistently moved into a direction of economic rationality. In my view, if the Supreme Court continues with that trend, then the per se rule should not apply,” said Joseph Angland, chair of the American Bar Associations’s section of anti-trust law, who filed the amicus brief on behalf of 24 economists. “The per se rule is not rooted in coherent economic analysis.”

    In filing the brief, the group urged the Supreme Court to replace the blanket prohibition under the per se rule with a more “intelligent” approach by rule of reason.

    Angland added that a resale price maintenance can, in fact, enhance competition in instances where new products are introduced to the market that require the retailer’s sales efforts to help consumers understand the virtue of the product.”

    Doesn’t support of small businesses attempting to achieve a satisfactory economic return allow them to continue to employ workers? Don’t those workers benefit from having a paying job? Was the product at hand a life-sustaining drug or medical aid? No, it was a purse. Are the “poor” somehow worse off because they were unable to buy the purse at an elevated price?

    The Rule of Reason provides that behavior still can be banned by the courts if economic harm is proven. In this case no substantive harm to consumers was shown.

  4. Phil says

    The Democrats have already taken action to reverse this ANTI-CONSUMER decision by the Supreme Court. Senator Herb Kohl (whose family started the Kohl’s department stores) has introduced a Senate Bill S.2261 titled “Discount Pricing Consumer Protection Act” to reverse this Supreme Court decision. The Senate Bill is co-sponsored by Senator Hillary Clinton and Senator Joe Biden. Now that Senator Biden is on the Obama ticket for the White House this deserves national attention. The Wall Street Journal front page story (August 18, 2008) describes how harmful this decision is to the American Consumer. The Supreme Court’s decision to change the law has returned this great Nation to the dark days of Fair Trade Laws (really UNFAIR manufactuer price fixing laws). In 1975 President Ford signed the Consumer Goods Pricing Act of 1975 that ended Fair Trade Laws. Upon signing the act into law (overwhelming passed by congress by 380 to 11), President Ford’s said “I am today signing into law H.R. 6971 (Consumer Goods Pricing Act of 1975) which will make it ILLEGAL FOR MANUFACTURERS TO FIX THE PRICES OF CONSUMER PRODUCTS SOLD BY RETAILERS. What more did the Supreme Court need to understand CONGRESSIONAL INTENT. President Ford clearly understood what he was signing. Senator Biden needs to address this issue in the upcoming debates so ALL AMERICANS know who is going to fix this. Recently, 35 state Attorney Generals wrote a letter to Congress to quickly pass the “Discount Pricing Consumer Protection Act” to protect the American Consumer from the HIGHER PRICES caused by this Supreme Court decision. This whole issue must be addressed in the upcoming debates.


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