DAILY TRIFECTA: Corporate People v. The United States
Big business's benchwarmers deliver the goods
TITLE: What the Gradual Corporate Capture of the Supreme Court Means For Democracy
https://lithub.com/what-the-gradual-corporate-capture-of-the-supreme-court-means-for-democracy/
EXCERPT: We have all become used to corporations having immense, even controlling, power in our democracy. Corporate power today dominates my workplace, the Congress. But the Constitution offers no reason that corporations should have any role at all in our politics. The Framers did their best to guard their novel experiment against forces that could corrupt the levers of power and frustrate their efforts at popular self-governance. But they failed to anticipate the role that corporations would claim—and be granted—in American political life.
In the Framers’ defense, at the time the Constitution was ratified, corporations were usually chartered for what we think of today as an infrastructure project, like building a road or a canal. State legislatures had the power to revoke their charters if they exceeded their mandate or harmed the local community. When the purpose of the corporation was achieved—the road completed, the canal constructed, the debts paid—the corporation would dissolve.
But things changed. In time, corporate charters permitted a company to operate for any purpose and in perpetuity—and corporate power exploded.
At first, federal courts were wary. As early as 1853, the Supreme Court saw that “to subject the state governments to the combined capital of wealthy corporations [could] produce universal corruption,” and warned of “the power and influence” of “the combined wealth wielded by corporations in almost every State.” This concern about corporate power and influence was true to Blackstone’s warning about “the encroachments of the more powerful and wealthy citizens,” now including corporate citizens, and true to the role of courts and juries to protect against these encroachments. (In the Founding Era, Blackstone’s Commentaries were more likely to be on a lawyer’s shelf than any other book except the Bible, so Blackstone is a trustworthy window into the views of our Founders.)
As corporate influence continued to grow, so did popular concern. In 1888, President Grover Cleveland alerted Congress in his State of the Union Address: “Corporations, which should be carefully restrained creatures of law and the servants of people, are fast becoming the people’s masters.” Nearly two decades later, President Teddy Roosevelt’s own address to Congress warned that “[t]he fortunes amassed through corporate organization are now so large, and vest such power in those that wield them, as to make it a matter of necessity to give to the sovereign—that is, to the Government, which represents the people as a whole—some effective power of supervision over their corporate use.” A few years later, Roosevelt sounded the alarm again: “[T]he United States must effectively control the mighty commercial forces[.]…The absence of effective State, and especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power.”
In 1901, the Great Dissenter, Justice Harlan, warned of a “kind of slavery sought to be fastened on the American people; namely, the slavery that would result from aggregations of capital in the hands of a few individuals and corporations controlling, for their own profit and advantage exclusively, the entire business of the country.” Thirty years later, Justice Brandeis spoke of the “insidious menace inherent in large aggregations of capital, particularly when held by corporations.” That was then.
As we consider “those that wield” corporate power now in our democracy, remember this: corporate political power was created not by the Constitution but by the Supreme Court, it was created recently, and it was created by Republican appointees to the Court. Remember too that an “influencer class,” out to use its power and wealth to gain more power and wealth, is always with us. In that ancient contest between the elite influencer class and the general population that has been its prey since biblical times, the influencers want the Court.
TITLE: Overturning Chevron shifts regulatory power, experts say
https://www.upi.com/Top_News/US/2024/07/22/supreme-court-loper-chevron-regulations/4671721414391/
EXCERPT: Experts in government regulations and public policy have forecasted the Supreme Court striking down Chevron for some time.
"It was not operating effectively for a long time and we knew this was coming," Sarah Sorscher, director of regulatory affairs at the Center for Science in the Public Interest, said. "It's possible not to rely on Chevron because the court can find the statute ambiguous. Another way to avoid using Chevron is, it only applies in situations when an agency has gone through the whole rulemaking process."
Rena Steinzor, Edward M. Robertson, professor of law at the University of Maryland, wrote about it about six years ago. She told UPI that the Federalist Society has targeted Chevron for many years.
The Federalist Society is an influential conservative organization focused on law and public policy. Supreme Court Justices Samuel Alito and Clarence Thomas are strongly tied to the organization, as are the three Supreme Court appointees named by former President Donald Trump: Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett.
Chief Justice John Roberts disputes that he was ever a member.
Steinzor also observed that the Supreme Court has been setting the stage for a new standard for rulemaking: the major questions doctrine. In the court's 2022 decision in West Virginia vs. EPA, the court ruled that if a regulation is likely to have a major economic or social impact it requires specific instructions from Congress to be adopted.
"The major questions doctrine is totally unclear and classic of this court," Steinzor said. "If it's a question of great social and economic importance then everything is."
The major questions doctrine, it seems, shifts authority toward the courts while striking down Chevron weakens the authority of federal agencies. What Steinzor expects to come next is federal agencies going through an even more arduous process to adopt rules while seeking greater direction from Congress.
"An agency will spend years in the future wringing their hands over old rules and not getting much new done," she said. "They will have to open up the rule for a comment period. Comments will be filed mostly by industry lobbyists because public interest groups don't have the resources to keep up with all this. They'll read and summarize the comments and decide with great trepidation if a rule will remain in place."
TITLE: The End of Chevron Deference Is a ‘Power Shift’ for Investors
https://www.nerdwallet.com/article/investing/chevron-deference-investors
EXCERPT: Chevron deference was a load-bearing legal principle in many federal regulations, and its disappearance has the potential to roll back a variety of financial rules.
Jeff Sovern, a professor of consumer law at the University of Maryland Carey School of Law, says that the full impact of Loper Bright on financial regulations is unclear. Some agencies, such as the Consumer Financial Protection Bureau (CFPB), have congressionally defined powers to make “appropriate” rules, and those rules might still hold up in court post-Loper Bright.
But that might not always be the case. For example, a federal judge in Texas has already referenced Loper Bright in an order that could potentially overturn the Federal Trade Commission's recent ban on noncompete agreements
According to Alex Alben, a professor at the UCLA School of Law and former chief privacy officer for the state of Washington, cryptocurrency is another area of financial regulation that could see a lot of changes because of Loper Bright.
“In cases such as the regulation of cryptocurrencies, where there are very few laws, and there are even very few agency interpretations — in those fields, we’ve definitely seen a power shift from the agencies to the courts,” Alben says.
Congress has passed laws regarding the taxation of cryptocurrency, and it has debated several bills that would explicitly define a regulatory framework for digital assets.
But most crypto regulation today consists of agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) enforcing rules based on their interpretations of their broad jurisdiction over financial markets. Without Chevron deference, many of those rules may not survive legal challenges.
Some cryptocurrency experts say that crypto can still be regulated post-Loper Bright; Congress just has to pass laws clearly defining those regulations.
“It creates an obligation for Congress to create actual rules that apply to this industry and pass new laws for a new technology. So it makes it more of a political issue than a bureaucratic one,” says Alexander Blume, CEO of Two Prime, a digital asset-focused registered investment advisor.
Blume says that in the short term, Loper Bright may turn the tide in favor of crypto companies in certain regulatory situations. For example, Uniswap, a developer of decentralized crypto exchange software, is facing legal action from the SEC, which regards it as an unregistered securities exchange and broker that may be violating federal securities laws.
The SEC has indicated that it may press charges against Uniswap, which has been the subject of class action lawsuits by investors who have lost money buying scam tokens on its software.
But last week, Uniswap’s legal counsel sent an open letter to the agency questioning its jurisdiction in the matter, in light of Loper Bright and the lack of clear laws that apply securities regulations to cryptocurrency
“I see positives and negatives of this ruling, with respect to financial markets. I think we will have more innovation and more creativity in financial markets,” Alben says.
Many crypto investors are anticipating the approval of Ethereum exchange-traded funds (ETFs) as soon as this month. Blume says Loper Bright could mean that staking (an interest-like reward system by which Ethereum holders earn new Ether coins over time) could be added to crypto ETFs "sooner rather than later," although the current crop of Ethereum ETF candidates doesn't have staking features for SEC compliance reasons.
The end of Chevron deference is “an anti-regulation ruling by the court,” Alben says. Less regulation may give investors more choice in what kinds of investments they can buy — but it also may leave investors more vulnerable to losing their money on potentially fraudulent or otherwise inadvisable investments.
“We’re probably going to have riskier environments for investors, who will need to educate themselves about the levels of risk that they’re taking, and do their homework before they make any kind of speculative investment,” Alben says.