The Supreme Court: Business-friendly or not?

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Is the current U.S. Supreme Court — or more accurately, a slim majority of justices — pro-business?

Some decisions from the just-finished court term led to the “pro-business” label being hurled in an accusatory tone. A recent New York Times analysis quoted Lisa S. Blatt, who served in the solicitor general’s office for 13 years, saying, “They’re fearless. … This is a business court. Now it’s the era of the corporation and the interests of business.”

I’m tempted to say at least one branch of the federal government is pro-business, given the hostility spewed at free enterprise by the Obama administration and Congress.

But the Supreme Court is not supposed to be about looking out for the interests of business, consumers, environmentalists, politicians, or any other group. The court is supposed to be pro-U.S. Constitution, and pro-rule of law. That is, justices shouldn’t manipulate laws and the Constitution to fit their own political preferences. Instead, they should apply the laws and Constitution as written, informed by the intentions and understanding of the authors.

This philosophy of “judicial restraint” contrasts sharply with “judicial activism,” whereby justices actually take it upon themselves to alter the meaning of laws and the Constitution, often creating entirely new “constitutional rights” out of thin air.

The current court is deeply divided. Justices Stephen Breyer, Ruth Bader Ginsburg, and Sonia Sotomayor are entrenched activists, while Antonin Scalia, Clarence Thomas, Samuel Alito Jr., and Chief Justice John Roberts lean much more towards judicial restraint, though to varying degrees. John Paul Stevens, who just retired, was activism personified, and no reason exists to expect anything different from Elena Kagan, nominated to replace Stevens. That leaves a 4-4 split, with Anthony Kennedy, who occasionally flashes allegiance to the law and Constitution, the swing vote.

Understanding this background, it’s difficult to legitimately call the majority pro-business. Instead, it’s more accurate to label the court’s activists as anti-business.

Consider the two most controversial decisions of this term.

In January, the Court’s 5-to-4 decision in Citizens United v. Federal Election Commission made clear that the First Amendment protects political speech by corporations. This stirred outrage on the political Left, including from President Obama. The decision was characterized as an ominous threat to democracy. While the business community clearly benefited from the decision, it was not a nefarious favor to corporate America. Instead, the decision clearly was directed at the First Amendment’s protection that “Congress shall make no law … abridging the freedom of speech.” Pretty straightforward.

Later, in late June, came the Court’s decision in McDonald v. Chicago. The Court ruled in 2008 that the Second Amendment right “to keep and bear arms” was violated under the District of Columbia’s draconian gun control laws. The 5-to-4 majority last month simply made clear that Second Amendment rights naturally extended to the states as well.

After the decision was announced, the stock prices of U.S. gun manufacturers got a bump up. But the decision was not about gun makers. Nor was it a case of conservative activism. Rather, it was a plain and obvious case of upholding the Second Amendment.

In each decision, the Court’s activist minority, along with assorted liberal politicians and commentators, were left arguing against the clear meanings of the First and Second Amendments to the U.S. Constitution that conflicted with their own desires.

Another case decided in June interested the business community. In Free Enterprise Fund v. Public Company Accounting Oversight Board, the 2002 Sarbanes-Oxley Act came under scrutiny. Sarbanes granted extensive regulatory powers to the quasi-governmental PCAOB. Another 5-to-4 majority found that the president’s authority to manage the executive branch had been violated, and that the Securities Exchange Commission must have the ability to remove PCAOD members “at will.” It was a decision in favor of enhanced accountability, but hardly a major win for business, which would have preferred the entire law overturned.

Finally, it’s worth noting what happens when activism rules the court.

Five years ago, the court issued a 5-to-4 decision — the majority opinion written by Justice Stevens — allowing government to use its power of eminent domain to seize property from one private owner in order to hand it over to another private entity. That clearly violates the Fifth Amendment’s protection that eminent domain be invoked only for a “public use.” The court simply changed to meaning of “public use” to “public purpose,” and allowed politicians to define “public purpose” as they choose. It was a blow against property rights, with individuals and small businesses at greatest risk given their relative lack of political power.

The latest example of the fallout from this decision came late last month in New York. The state’s highest court allowed the use of eminent domain to seize property from owners of four warehouses and two gas stations in Harlem, and to hand the parcels over to Columbia University.

The nation’s founders obviously would be aghast at such an egregious violation of individual rights and trampling of the Constitution. Quite frankly, though, judicial activists could care less about the founders’ intentions, what the Constitution actually says, or private property rights, especially the rights of business. That is the legacy of activist justices like John Paul Stevens.

Keating is chief economist for the Small Business and Entrepreneurship Council. He can be reached at