It is hard to imagine a list of the top ten craziest 5-4 cases in a single Supreme Court yearlong term. But imagination is no longer needed because crazy is off the charts. There are actually more than ten crazy pure partisan cases from the first full Supreme Court term with Neil Gorsuch* on the bench under the particular criteria here:
TO MAKE THIS LIST, each case must be from the 2017 term, October 2017 through September 2018. Each case must also be split by a perfectly partisan 5-4 vote. All Republican appointees — John Roberts, Jr., Anthony Kennedy, Clarence Thomas, Samuel Alito and Neil Gorsuch* — together decided all of these cases. All Democratic appointees — Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan — dissented together.
“Swing voter” Anthony Kennedy did not swing. Every time the other eight lined up on partisan sides, Kennedy went with the Republicans. Given such pure partisanship, probably every one of these cases would have come out the other way with Merrick Garland. Neil Gorsuch* is having a major impact on “what the law is.”
LIST OF TEN CRAZIEST PURE PARTISAN 5-4 CASES LAST TERM
This report covers the ten craziest 5-4 pure partisan cases of the year, ordered roughly by importance in our lives. For readers’ convenience, summaries of cases are in brown text, finer details in regular color. The top six each singularly could change America. Combined, this is all unprecedented.
- Credit card companies secretly extract America’s profits by censoring price information.
- Workers must go alone to private one-on-one arbitration against the company.
- Donald Trump may hide selected official government documents from court.
- Mandatory government free health clinic notices banned for violating free speech.
- States may purge voting rights of millions just for skipping elections.
- Unions are forced to service all workers, even those who refuse to pay dues.
- Executive powers tread upon individual religious rights.
- Activist Court injects itself early to protect gerrymandering.
- There is no right to an attorney on criminal appeal, even a death penalty case.
- Broad dictionary definitions stretch job titles to deny New Deal overtime pay.
DETAILS OF TEN CRAZIEST PURE PARTISAN 5-4 CASES LAST TERM
1. CREDIT CARD COMPANIES SECRETLY EXTRACT AMERICA’S PROFITS. (Ohio v. American Express).
Basic economics: When price goes up, quantity demanded goes down. With transaction processors like credit card companies, consumers choose the card but merchants pay the fees. The purchaser does not pay the fee, so the usual pricing rule is distorted. Merchants who actually pay fees wanted to suggest consumers use lower fee cards, but contract secrecy gagged them. Fees went up, but quantity demanded did not fall. [1-1]
In this antitrust lawsuit, the 5-4 Supreme Court widened the definition of “relevant market” to hide the anticompetitive effects of price secrecy, and allowed the practice. As online purchasing increases, fees like these will cover more transactions and take more money from merchant profits, placing upward pressure on prices for all products — that’s what makes this number one crazy for the 2017 term.
FACTS: American Express (AMEX) contracted with merchants to process transaction payments. The contract censored merchants from “steering” consumers to lower fee cards. Then AMEX raised fees 20 times in five years but lost no business at all. Discover Card tried to lower fees but gained no business. Finally, Discover wound up increasing fees too. Ohio sued AMEX under the Sherman Antitrust Act for hiding higher fees from consumers to reduce competition. General rule: All parties agreed that where there is a “substantial anticompetitive effect that harms consumers in the relevant market,” then antitrust is violated.
LOWER COURT: The lower court defined the “relevant market” in credit card purchases as fee prices. With secret fees, consumers could not adjust to price changes. The market was anticompetitive because price changes did not affect transaction quantities. To protect AMEX, the Supreme Court needed to do something drastic — redefining and expanding the “relevant market.”
COURT: A 5-4 Supreme Court opinion by Justice Clarence Thomas widened the “relevant market” and created “two-sided” transaction analysis to combine the merchant-side with the consumer-side. [1-2] He then assumed consumers chose a card based on the “substantial value” of consumer promotions — in this case, the AMEX “rewards” program.
Dissenting Justice Stephen Breyer inquired, “What is it about the economic relationship between merchant-related and shopper-related services that would justify the majority’s novel approach to market definition?” Apparently nothing, as AMEX did not “increase benefits (or cut credit-card prices) to American Express cardholders.” But Clarence Thomas ignored this fact to produce the desired result, protecting AMEX. [1-3]
Finally, the Economics is all upside down. Under familiar ‘conservative’ economics that Republicans such as the five who decided this case usually promote, ‘rational man acts in his own best interest.’ If true, no consumer would give up substantial value of rewards just because some merchant asks. Ironically, ‘conservative’ Justices ignored their own ideology to produce a result that protects AMEX and keeps consumers uninformed. In the future, this precedent will be applied to the growing online market of “two-sided” transactions. Banks and financial companies will secretly absorb more of both merchant profits and consumer value, making this case number one crazy of the 2017 term.
2. WORKERS MUST GO ALONE TO PRIVATE ONE-ON-ONE ARBITRATION AGAINST THE COMPANY. (Epic Systems v. Lewis).
Most people need work to earn a living. Employers usually have the upper hand in the relationship. Employment contracts block workers from courts, and increasingly, force each worker to submit to private arbitration to resolve disputes. Each worker stands alone against the company. Under an ever-expanding activist interpretation of a 1925 law, any sort of joint action by workers may be banned — discrimination actions, dangerous work conditions, wage law violations, you name it. From now on, workers with common claims may only rely upon a sympathetic government or a union to protect rights — but see number 6 below on cutting union powers too.
FACTS: Workers in three cases with three companies claimed they were not paid overtime in violation of the 1938 Fair Labor Standards Act (FLSA). Workers sued. Employers responded that workers were required to take these claims to arbitration under the employment contract, each individually. The consolidated cases arrived at the Supreme Court with all three businesses arguing together that workers must each go to arbitration separately.
ARBITRATION LAW: In 1925, the federal government passed the 1925 “Federal Arbitration Act” (FAA) because courts were refusing to enforce arbitration clauses in commercial contracts — contracts between businesses. The FAA ordered arbitration clauses be on “equal footing” to other contract terms. The FAA’s “saving clause” preserved the right to sue “upon such grounds as exist at law or in equity for the revocation of any contract.” LABOR LAW: The 1935 National Labor Relations Act (NLRA or “Board”) guaranteed workers unions, collective bargaining, and “other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”
HISTORY: The first time the FAA was reviewed in 1953, a 7-2 Supreme Court found that The FAA could not override rights in the 1933 Securities Act. A few years later, the Court said the FAA did not apply to state cases. But more recently, activist courts rewrote the FAA as a “strong endorsement” to and a “liberal policy of promoting arbitration.” Since then, the Court extended the FAA to override federal laws, state laws, and applied it to both commercial and consumer contracts. Early decisions were eventually overturned. All recent cases have upheld arbitration clauses, many in 5-4 opinions.
COURT: The 5-4 Supreme Court opinion by Justice Neil Gorsuch* said employers may block all joint legal actions by workers and make each worker go to one-on-one arbitration. In 2018, generations after these laws were passed, Neil Gorsuch* both (1) overwrote the 1935 NLRA guarantee of “concerted activities” and “mutual aid” narrowing it to union activities only, and (2) eliminated remaining force in the 1925 FAA “saving clause” that once preserved some court actions. Neil Gorsuch* rendered parts of both laws meaningless to achieve his ends, all the while insisting arrogantly that he was interpreting law, not making policy. [2-1]
Neil Gorsuch* touted a 2010 counsel memorandum saying FAA overrides NLRA, then decried a 2012 Board holding that one-on-one arbitration contracts were unlawful. Dissenting Justice Ruth Bader Ginsburg replied that the 2010 “memorandum did not bind the Board, and the Board never adopted” it. The 2012 ruling “simply applied its precedents.” She listed example cases going back to 1942. Outraged Neil Gorsuch ignored all this history.
Thanks to creeping judicial activism, the 1925 FAA that once demanded “equal footing” is now a super contract blocking workers’ rights to joint legal action against mass wrong doing. The FAA not only has been extended to employment relationships, but anywhere a contract may be written.
3. DONALD TRUMP MAY HIDE SELECTED OFFICIAL DOCUMENTS FROM COURT. (In re United States).
Generally, when people sue the government, it has to release all related official information. Not anymore. In an emergency appeal of the DACA case, the 5-4 Court issued an unsigned and unexplained Order permitting the Donald Trump administration to hide official government documents from the court case. Donald Trump and the agency got to cherry-pick and censor the documents. Dissenting Justice Stephen Breyer issued a warning: “judicial review cannot function if the agency is permitted to decide unilaterally what documents it submits to the reviewing court as the administrative record.” A precedent like this may be expanded to hide government documents in all sorts of cases, eliminating government transparency in many areas.
4. MANDATORY GOVERNMENT NOTICES BANNED FOR VIOLATING FREE SPEECH. (NIFLA v. Becerra).
Abortion is always an emotional issue. California mandated a general notice posted at certain small clinics including “crisis pregnancy centers” that steer women away from abortion. The centerpiece of the case was the wall notice itself (although there were many smaller issues with the exact details of the notice). The Court said essentially that any targeted wall notice informing women of free full service health clinics violated First Amendment free speech. This case cuts a small slice out of abortion rights, but the free speech precedent may go a long way to censor government information generally, including targeted warning notices.
This 5-4 Supreme Court opinion by Justice Clarence Thomas was extra loaded with crazy:
- INFORMED CONSENT: Health care practitioners may be required to provide patients with “informed consent” notices, Clarence Thomas said the wall notice did not qualify as informed consent because ideological crisis centers were “not tied to a procedure at all.” Dissenting Justice Stephen Breyer countered that a woman “carrying a child to term and giving birth” would need medical procedures as surely as one wanting an abortion.
- CONTENT NEUTRAL: A state notice may violate free speech if not “content-neutral.” The wall notice law “targeted” anti-abortion facilities, and was therefore unconstitutional. This particular application of content neutrality is absurd for two reasons; first, the citizen being directed to one ideological perspective should be informed of choices; and second, the choices offered are free and full services, not pressure to abort.
- ATTENTION: Invoking the 2010 Citizens United 5-4 opinion that enthroned corporations with unlimited corporate election spending, Clarence Thomas boldly declared, “An unlicensed facility must call attention to the notice, instead of its own message.” Funny thing: this was exactly the problem with unlimited corporate electioneering — that it would “call attention” to the speech of the deep pockets “instead of” messages by everyone else.
- NAZIS AND COMMIES: Here comes Godwin’s Law. Clarence Thomas worried about “state power to suppress minorities” by invoking communism and “Nazi Germany.” Somehow, a quiet wall notice informing pregnant women that full health services are available free is Third Reich level oppression. [4-1]
Consider: Many have worried that overturning Roe v. Wade would send the abortion issue back to the states. Actually, based on the fact that the Supreme Court has already upheld a national abortion ban, the entire United States could be denied the right by extending federal bans.
Synthesis: Three of the top four craziest cases endorse hiding information from the general public: transaction fee price information, official government information in court cases, and free health clinic information. The American people cannot be trusted to know things.
5. STATES MAY PURGE VOTING RIGHTS OF MILLIONS JUST FOR SKIPPING ELECTIONS. (Husted v. A. Phillip Randolph Institute).
The National Voting Rights Act makes it illegal to revoke registrations for “failure to vote,” except under two conditions: First, the state “may” use “change-of-address information” from the postal service to “meet the requirement” of an indication that a voter actually moved before purging a voter, “and” second, the state must send a certain type of notice giving the citizen a last chance to contest the purge.
The 5-4 Supreme Court opinion by Justice Samuel Alito contorted the “and” quoted above into “or” even after specifically corrected on it. He applied only the second part — thereby allowing states to send purge notices to everyone who ‘failed to vote,’ the exact thing prohibited. As it turned out, most citizens did not return the notices, probably because notice cards looked like confusing junk mail. Voting is the most basic and important right in a representative democracy. But now millions are purged nationwide every year.
6. UNIONS ARE FORCED TO SERVICE ALL WORKERS EVEN THOSE WHO REFUSE TO PAY DUES. (Janus v. AFSCME).
Unions form and select leaders through democratic elections. Unions protect workers by collecting dues called “agency fees.” Overruling a 41-year precedent, the Court lets workers opt out of paying dues even while unions may not opt out of providing services to workers. Now, some workers will opt out of union dues and become “free riders.” To cover costs, unions will then have to raise dues on the rest of workers. More will opt out. The cycle continues until unions are busted. This unbalanced Court ruling engineers what the five ideologues on the Supreme Court want: unions collapse and hard-fought workers’ rights are reduced.
HISTORY: In 1977, a 7-2 Supreme Court issued a balanced ruling where unions could require workers to pay “agency fees,” but could not require dues for other things like politics. Under existing law, all workers were already guaranteed union representation. The case was called Abood.
COURT: This 5-4 Court opinion by Justice Samuel Alito blatantly overruled the 1977 case, finding a free speech right for workers to opt out of all union dues, including dues necessary to operate basic functions.
The reversal of precedent was orchestrated in two recent 5-4 opinions, each written by Samuel Alito and joined by Roberts, Scalia, Thomas, and Kennedy, inviting anti-union ideologues to send up a case for reversal: “The Abood Court’s analysis is questionable.” [6-1] This new opinion swapped Neil Gorsuch for Antonin Scalia and finished the job.
Under precedent or stare decisis, the Supreme Court does not overturn established rulings — until it does. Dissenting Justice Elena Kagan summarized, “Today, the Court succeeds in its 6-year campaign to reverse Abood… Rarely if ever has the Court overruled a decision — let alone one of this import — with so little regard for the usual principles of stare decisis.” The simple fact that the slimmest 5-4 Court majority overturned basic union rules itself proves contempt for precedent.
Compare: One-person-one vote creates unions and elects leaders. Corporations are run by a small minority with the most stock. Nevertheless, in 2010, the 5-4 Republican Supreme Court gave corporate boards and CEOs unlimited spending rights out of the general funds, without say from small stockholders, workers, or even the consumers who created the money pot. Democratic unions receive no such special treatment.
7. EXECUTIVE POWERS TREAD UPON INDIVIDUAL RELIGIOUS RIGHTS. (Trump v. Hawaii).
Donald Trump ordered a “Muslim ban” to block everyone from certain predominantly Muslim-populated nations from entering the United States. Before the ban, potential entrants were “vetted” on an individual basis. Now, entire classes of people are automatically banned, even those who can be individually vetted — banned collectively because they might practice the disfavored religion.
HISTORY: Donald Trump campaigned for election on a “Muslim ban.” His administration’s early bans were struck down in courts. He moderated his rhetoric and tinkered with the formula to create a presidential “Proclamation” that might survive court challenges. But a lower court struck it down again.
COURT: The 5-4 Court opinion by Chief Justice John Roberts, Jr., reversed the lower court, overrode individual vetting with class-based rules to “deny entry from those countries across the board,” rubber-stamped dubious waiver exceptions, ignored ongoing religious animosity, relied upon a crony agency review, weakened freedom of religion, and handed Donald Trump more executive power.
- CLASS DISCRIMINATION: John Roberts complained that banned nations failed to provide data to vet entry applicants. Without this cooperation, those nations “may thwart” review. John Roberts did not seem to notice the implication of his own words because it follows necessarily that lack of cooperation may not thwart review, thus no excuse for the blanket ban. Dissenting Justice Sonia Sotomayor noted systems were already in place to vet applicants. Blanket bans on everyone from Muslim-majority nations was purely class-based.
- WAIVERS: The Proclamation provided that individuals could apply for waivers of the ban, but dissenting Justice Stephen Breyer reviewed actual statistics to show waivers were rarely applied. To explain why, an officer swore to a statement they were not “allowed” to exercise waiver discretion and waivers were “window dressing.”
- ANIMOSITY: John Roberts would not “probe” Donald Trump’s “animus” toward religion because the Proclamation was “facially neutral,” and because “many” of his statements were made before inauguration. But many were not: Dissenting Justice Sonia Sotomayor listed ongoing hostile statements. Donald Trump even touted the Proclamation as a “watered down” and “politically correct” version of the Muslim ban.
- AGENCY REVIEW: John Roberts also relied on a 17-page “worldwide review process undertaken by multiple Cabinet officials and their agencies.” The review was actually performed by Donald Trump cronies. Sonia Sotomayor noted that a short 17-page document could not possibly analyze “vetting practices of hundreds of countries” anyway.
- RELIGION ANALYSIS: John Roberts replaced the usual First Amendment religious test of “heightened scrutiny” with the watered-down test of “rational basis scrutiny,” a test that favors government regulation.
- EXECUTIVE POWERS: Ultimately, John Roberts threw out religious rights for vague national “security” reasons, handing Donald Trump more ‘unitary’ power.
Compare: Just weeks earlier, a 7-2 Supreme Court found that a state agency exhibited “animosity to religion” in its process of deciding a dispute. For that, the Court permitted discrimination by a baker against a gay patron rather than deciding the actual case, which would have notified the state of the correct standard. In the Muslim ban case, Sonia Sotomayor noticed this hypocrisy that John Roberts ignored.
Synthesis: Twice on the list the 5-4 Supreme Court protected Donald Trump directly, letting him hide documents from court, and upholding his “Muslim ban.”
8. ACTIVIST COURT INJECTS ITSELF EARLY TO PROTECT GERRYMANDERING. (Abbott v. Perez).
The Supreme Court has always struggled with gerrymandering cases. Texas redistricting after the 2010 census was no exception, with illegal gerrymandering affecting every election since 2012. In this long-running case, the latest court decision found four illegal gerrymanders in election districts in Texas. The lower court then asked the Texas legislature if it was going to redraw maps, providing three days to answer. The court did not issue an order or an injunction, which would require Texas to do something more than just answering a question from the court. Normally, a case cannot be appealed until a lower court issues an order or injunction. But Texas appealed anyway.
COURT: Justice Samuel Alito and the 5-4 Court expanded the reach of direct appeals law 28 U.S.C. §1253, which permits appeals after orders or injunctions, to grab the case early and decide the substance of it. He found only one district illegally gerrymandered. But even for that one district, the Court permitted Texas to run with it for another election. [8-1]
APPEALS LAW §1253: Samuel Alito spent nine pages justifying acceptance of this appeal. (12-20) He cited cases including: denial of a consent decree, granting of a temporary retraining order, and a “stay pending arbitration.” These cases were appealable because they each had the “practical effect” of an injunction, regardless of “label.” But all these cases affected rights outside of court and none were decided under §1253.
Dissenting Justice Sonia Sotomayor slammed the Court because its “practical effect” reasoning had “no application here.” Never before was §1253 used to appeal without an injunction. Samuel Alito engaged “jurisdictional overreach” far beyond “strict construction.” The lower court merely asked a question before considering a remedy. Sonia Sotomayor found it “worrisome” that all kinds of appeals would come to clog the Supreme Court “even where the district court is clear that no injunction has issued.” [8-2]
Consider: This case was decided upon racial gerrymandering. The Supreme Court also heard several cases of ‘extreme partisan gerrymandering‘ last term, never actually finding a solution. Unprecedented and unchecked advanced computer-aided gerrymandering will persist through the 2018 election, most of it to benefit Republicans.
Synthesis: Supreme Court twists voting rights law for massive purging and rushes to end gerrymandering case. Both happen to help Republicans at the polls.
9. THERE IS NO RIGHT TO AN ATTORNEY ON A CRIMINAL APPEAL. (Davila v. Davis).
A person goes to state court to defend against a criminal charge. A constitutional right is violated. The person is convicted. Such a case may involve murder or even death penalty. The case winds its way through the state system; but, for some reason, the constitutional issue is never decided. Often, the failure involves “ineffective assistance of counsel” — the attorney made a mistake or missed a deadline. With state remedies “exhausted,” the defendant files a writ of habeas corpus in federal court to look at the constitutional violation.
In this case, the “ineffective assistance” took place at the appeals level. The 5-4 Court opinion by Clarence Thomas said quite simply, “a prisoner does not have a constitutional right to counsel in state postconviction proceedings.” There is no right to an attorney.
Clarence Thomas detailed street gang member Erick Davila’s attack. While aiming for a “rival,” he shot up a birthday party, killing a grandmother and a little girl and injuring others who were “eating cake and ice cream” — a truly vile crime. Davila admitted to police that he was aiming for “guys on the porch.”
This was a death penalty case. If Davila intended to kill more than one person, he would get the death penalty. The judge issued a jury instruction that confused the death penalty rule. The attorney objected but the judge overruled the objection, and the jury ordered death. A different attorney forgot to appeal the objection. Clarence Thomas paraded the specific horrific details of this case, but those little facts were irrelevant to the sweeping decision: generally, there is no right to an attorney on criminal appeal regardless of the Constitutional violation.
Note: The history of American habeas corpus is convoluted, sometimes more expansive (when Democrats controlled the Supreme Court in the 50’s and 60’s), and sometimes narrower (when Republicans controlled the Court ever since). For a discussion of all six Guantanamo Bay cases, see this special report.
10. BROAD DICTIONARY DEFINITIONS STRETCH JOB TITLES TO DENY OVERTIME PAY. (Encino Motorcars v. Navarro)
Service advisor workers at automobile dealerships sued for overtime pay. Service advisors work 55 regular hours a week. The law exempts salesmen, partsmen, and mechanics from overtime — not service advisors. Despite the Department of Labor’s occupation list providing “service advisors” as a separate job title from the other three, the Court played with words to expand the exemption and block overtime. The Court stealthily overturned a 50-year rule interpreting overtime exceptions narrowly — to make it easier to squeeze out more overtime exceptions from now on.
HISTORY: Overtime with ‘time-and-a-half’ wage rates became the law in the 1938 Fair Labor Standards Act (FLSA), part of the FDR New Deal. Automobile dealers were exempt. In 1966, dealers became covered, except “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” The Department of Labor’s (DOL) occupation handbook at the time listed 12 dealership job titles. “Service advisor” was considered a different job from the other three. DOL said the new law did not exempt “service advisors” from overtime. Early lower court cases disagreed. DOL “acquiesced” to those rulings for decades. “In 2011, however, the Department reversed course.” It issued a rule that interpreted ‘salesman’ to exclude service advisors. Workers sued again. Finally, the issue reached the Supreme Court.
COURT: A 5-4 Supreme Court opinion by Justice Clarence Thomas threw out the DOL occupation handbook. Instead, he boiled the controversy down to paraphrase: Were ‘service advisors salesmen primarily engaged in servicing automobiles’? He used a “distributive canon,” mixing and matching terms so any combination of job titles “or” descriptions would be exempt from overtime. [10-1] SALESMEN: The dictionary says people who sell services are salesmen. [10-2] SERVICING: The dictionary says servicing means “maintaining or repairing” or “providing a service.” A service advisor does both. He is “primarily engaged in servicing” because he is “integral” to servicing and the customer thinks he does the work. Service advisors need not “spend most of their time under the hood” because “partsmen” who are specifically exempt from the law do not. [10-3]
DISSENT: As usual in recent 5-4 cases, the two sides disagreed on nearly everything. Justice Ruth Bader Ginsburg said the phrase ‘primarily engaged in servicing’ was added to make sure that employers would not try to rename job titles to avoid the law — not to expand the exemption. [10-4] Also, service advisors fail the Court’s dictionary test because they “neither sell nor repair automobiles” just like dental receptionists do not perform dental work. But both were “integral” to servicing. Partsmen, on the other hand, actually work together with “mechanics” and “get their hands dirty” on servicing cars.
This opinion alone will not affect many workers because only the lowest paid service advisors would be entitled to overtime: “those earning less than $10.88 per hour” due to other overtime exceptions as Ruth Bader Ginsburg notes. However, something bigger is hidden in the case. After generations of interpreting overtime exemptions narrowly, the Court changed the rule. From now on, overtime exemptions get a so-called “fair reading” as opposed to a “narrow” reading — like here where a title specifically left off the list of exemptions gets squeezed onto the list. [10-5]
Synthesis: Only two of the cases, free health clinic notices and union agency fees, are based directly upon the Constitution. The others may be reversed by changing federal law.
Those were the ten craziest cases from this narrow universe — pure partisan, 5-4, 2017 term. In other words, there is much more crazy going on. Keep watching as Brett Kavanaugh begins to participate. Things will only get crazier. (Footnotes below)
*Neil Gorsuch was judicially activated to Supreme Court after the Senate decided for the first time in American history to delay all “advice and consent” for a candidate nominated by a popular president before the next election. Then, Mitch McConnell changed Senate rules so that it no longer required 60 Senators to vote on the nomination. Donald Trump nominee Neil Gorsuch was confirmed 55-45 on mostly partisan lines. More recently, Brett Kavanaugh was confirmed on a meager 50-48 vote.
[1-1] Theoretically, it is possible for competition to develop through new transaction processing services. But to have any chance, new companies would have to start out with large numbers of merchants accepting their cards or services. Only those who have huge amounts of capital could enter the field. Clarence Thomas admitted this implicitly in a footnote:
Discover entered the credit-card market several years after Amex, Visa, and MasterCard. It nonetheless managed to gain a foothold because Sears marketed Discover to its already significant base of private-label cardholders.
In any case, as the Court weakens antitrust, such companies would buy out each other and reduce competition again.
[1-2] Clarence Thomas crushed his entire “two-sided” transaction analysis with his own contradiction:
When merchants steer cardholders away from Amex at the point of sale, it undermines the cardholder’s expectation of “welcome acceptance”–the promise of a frictionless transaction. A lack of welcome acceptance at one merchant makes a cardholder less likely to use Amex at all other merchants. This externality endangers the viability of the entire Amex network. And it undermines the investments that Amex has made to encourage increased cardholder spending, which discourages investments in rewards and ultimately harms both cardholders and merchants. (Citation omitted)
Externalities are costs or benefits that affect unrelated third parties. A merchant can’t be both unrelated and related — an unrelated externality discussing fees and also a related party in a “two-sided” transaction. Further, he put the effect before the cause — a contract causes externalities, but here, the externality comes before the contract.
[1-3] Clarence Thomas paraded his bias favoring the big bank’s “business model” here:
Amex competes with Visa and MasterCard by using a different business model. While Visa and MasterCard earn half of their revenue by collecting interest from their cardholders, Amex does not. Amex instead earns most of its revenue from merchant fees. Amex’s business model thus focuses on cardholder spending rather than cardholder lending. To encourage cardholder spending, Amex provides better rewards than other networks. Due to its superior rewards, Amex tends to attract cardholders who are wealthier and spend more money. Merchants place a higher value on these cardholders, and Amex uses this advantage to recruit merchants.
This is such complete nonsense and unbecoming of a Supreme Court opinion:
- If AMEX provides significant “better rewards,” then consumers would not use a different card just because some merchant asks.
- AMEX may attract “wealthier” customers, but those same “higher value” customers also have Visa or Master Card to engage in the same transactions anyway. Those customers would come, AMEX or not.
- If providing fee information to consumers is enough to risk the AMEX “business model,” then maybe it is time for a better model.
[2-1]Neil Gorsuch* confused precedents and relied upon earlier Court activism to issue an ideological challenge:
You might wonder if the balance Congress struck in 1925 between arbitration and litigation should be revisited in light of more contemporary developments. You might even ask if the Act was good policy when enacted. But all the same you might find it difficult to see how to avoid the statute’s application…
He answered himself to his own satisfaction with a long list of cases, albeit deceptive on the history:
In fact, this Court has rejected every such effort to date (save one temporary exception since overruled), with statutes ranging from the Sherman and Clayton Acts to the Age Discrimination in Employment Act, the Credit Repair Organizations Act, the Securities Act of 1933, the Securities Exchange Act of 1934, and the Racketeer Influenced and Corrupt Organizations Act. Italian Colors, 570 U.S. 228; Gilmer, 500 U.S. 20; CompuCredit Corp. v. Greenwood, 565 U.S. 95 (2012); Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (1989) (overruling Wilko v. Swan, 346 U.S. 427 (1953)); Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987).
Note the parenthetical, “save one temporary exception.” Violating legal writing and citation rules, Neil Gorsuch* did not bother to cite the case directly. Rather, he confused it with a parenthetical sub-citation in another citation. That “exception,” Wilko v. Swan, was the leading case, the general rule, and the first Supreme Court interpretation in 1953, after both the FAA and the NLRA had been around for many years. In Wilko, the Court found that violations of the 1933 Securities Act could not be forced to arbitration because Congress:
enacted the Securities Act to protect the rights of investors and has forbidden a waiver of any of those rights. Recognizing the advantages that prior agreements for arbitration may provide for the solution of commercial controversies, we decide that the intention of Congress concerning the sale of securities is better carried out by holding invalid such an agreement for arbitration of issues arising under the Act.
There was a second case in 1956, Bernhardt v. Polygraphic. In that 6-3 case, Justices agreed 8-1 that the FAA did not apply to state employment actions. Both Wilko and Bernhardt came decades after the FAA, but both were later overturned. Despite Neil Gorsuch* complaining that “the dissent retreats to policy arguments,” earlier activist courts already began rewriting policy of the FAA long ago.
[4-1] Clarence Thomas compared a quiet health services wall notice to Nazis and communists:
In the 1930s, the Soviet government expedited completion of a construction project on the Siberian railroad by ordering doctors to both reject requests for medical leave from work and conceal this government order from their patients. In Nazi Germany, the Third Reich systematically violated the separation between state ideology and medical discourse. German physicians were taught that they owed a higher duty to the ‘health of the Volk’ than to the health of individual patients.
[6-1] One case inviting a challenge to Abood was Knox v. SEIU. In that case, the Court decided 7-2 that unions could not take dues for political activities unless workers “opted in” first. The portion of the opinion that invited a challenge to Abood was 5-4. At that time, dissenting Justice Sonia Sotomayor said:
I cannot agree with the majority’s decision to address unnecessarily significant constitutional issues well outside the scope of the questions presented and briefing. By doing so, the majority breaks our own rules and, more importantly, disregards principles of judicial restraint that define the Court’s proper role in our system of separated powers.
Nevertheless, in the current case, Samuel Alito moved forward to reverse the precedent:
In Abood, the Court upheld the constitutionality of an agency-shop arrangement like the one now before us, but in more recent cases we have recognized that this holding is “something of an anomaly,” and that Abood’s “analysis is questionable on several grounds,” We have therefore refused to extend Abood to situations where it does not squarely control, while leaving for another day the question whether Abood should be overruled. We now address that question. (Citations omitted)
[8-1] Number 8 on the list covers the very basics of the case, then emphasizes the important change in the appeals rule. For more substantive details on the gerrymandering issue itself, read the article linked.
[8-2] Dissenting, Justice Sonia Sotomayor explained how the Court used judicial activism to stretch appeals law:
Simple is thus the name of the game when it comes to jurisdictional rules. The rule in the majority opinion is anything but. Although the majority claims that a mere “finding on liability cannot be appealed unless an injunction is granted or denied,” the rule it embraces today makes it hard to understand when a finding on liability would not be read, as the majority does here, as having the “practical effect” of an injunction. It is a worrisome prospect that, after today, whenever a three-judge district court expresses that a statutory or constitutional violation must be remedied, the party held liable will straightaway file an appeal in this Court …
The majority guarantees that there is “no reason to fear such a flood” of appeals from three-judge district court orders because “appeals from [orders expressly enjoining redistricting plans] have not overwhelmed our docket.” But of course, its jurisdictional ruling applies to all §1253 cases, not just those involving redistricting. (brackets in original, citations omitted)
[10-1] Clarence Thomas listed three reasons the “distributive canon” adds service advisors in the overtime exemption:
The text of the exemption covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements.” The exemption uses the word “or” to connect all of its nouns and gerunds, and “or” is “almost always disjunctive.” Thus, the use of “or” to join “selling” and “servicing” suggests that the exemption covers a salesman primarily engaged in either activity.
Unsurprisingly, statutory context can overcome the ordinary, disjunctive meaning of “or.” …
But here, context favors the ordinary disjunctive meaning of “or” for at least three reasons. First, the distributive canon has the most force when the statute allows for one-to-one matching. But here, the distributive canon would mix and match some of three nouns—”salesman, partsman, or mechanic”—with one of two gerunds—”selling or servicing.” We doubt that a legislative drafter would leave it to the reader to figure out the precise combinations.
The “precise combination” is easy: Salesmen sell, while partsmen and mechanics service.
Second, the distributive canon has the most force when an ordinary, disjunctive reading is linguistically impossible. But as explained above, the phrase “salesman … primarily engaged in … servicing automobiles” not only makes sense; it is an apt description of a service advisor.
No, as explained in the main text of this article.
Third, a narrow distributive phrasing is an unnatural fit here because the entire exemption bespeaks breadth. It begins with the word “any.” And it uses the disjunctive word “or” three times. In fact, all agree that the third list in the exemption–“automobiles, trucks, or farm implements”–modifies every other noun and gerund. But it would be odd to read the exemption as starting with a distributive phrasing and then, halfway through and without warning, switching to a disjunctive phrasing–all the while using the same word (“or”) to signal both meanings. The more natural reading is that the exemption covers any combination of its nouns, gerunds, and objects. (All citations omitted)
Actually, it is clear when trying combinations that “any combination” does not work. Some fail. A partsman does not primarily sell vehicles. Likewise a salesman does not primarily service vehicles. It is also clear that the last three items form a separate list of objects in the category of vehicles.
[10-2] Clarence Thomas broke out the dictionary to analyze the word “salesman”:
A service advisor is obviously a “salesman.” The term “salesman” is not defined in the statute, so “we give the term its ordinary meaning.” The ordinary meaning of “salesman” is someone who sells goods or services. See 14 Oxford English Dictionary … (Partial citation)
As we all probably know, a job title is a term-of-art describing something very specific, not every use of the word that may be found in a dictionary.
[10-3] Clarence Thomas hit the dictionary again for the word “servicing”:
Service advisors are also “primarily engaged in . . . servicing automobiles.” The word “servicing” in this context can mean either “the action of maintaining or repairing a motor vehicle” or “[t]he action of providing a service.” Service advisors satisfy both definitions. Service advisors are integral to the servicing process… If you ask the average customer who services his car, the primary, and perhaps only, person he is likely to identify is his service advisor.(Brackets in original, citations omitted)
[10-4] Dissenting Ruth Bader Ginsburg explains “primarily engaged in selling or servicing”:
I note, furthermore, that limiting the exemption to the three delineated jobs–salesman, partsman, and mechanic–does not leave the phrase “primarily engaged in selling or servicing,” §213(b)(10)(A), without utility. Congress included that language to ensure that only employees who actually perform the tasks commonly associated with the enumerated positions would be covered. Otherwise, for example, a worker who acts as a “salesman” in name only could lose the FLSA’s protections merely because of the formal title listed on the employer’s payroll records.
[10-5] In what appears to be a last-second footnote addition, Dissenting Ruth Bader Ginsburg noted this key point:
This Court has long held that FLSA “exemptions are to be narrowly construed against the employers seeking to assert them and their application limited to those [cases] plainly and unmistakably within their terms and spirit.” … In a single paragraph, the Court “reject[s]” this longstanding principle as applied to the FLSA, ante, at 9, without even acknowledging that it unsettles more than half a century of our precedent. (Brackets in original)
Ruth Bader Ginburg cited cases to support the history. The “single paragraph” she described is on page 9 of the Court opinion:
The Ninth Circuit also invoked the principle that exemptions to the FLSA should be construed narrowly. We reject this principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.” … But the FLSA has over two dozen exemptions in §213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. We thus have no license to give the exemption anything but a fair reading. (Brackets in original, citations omitted)
Clarence Thomas misapplied the purpose of a long list of exceptions — so many carefully detailed precise exceptions indicate narrowness, not breadth.