Corporate Governance

LaRue v. DeWolff and a Result Oriented Use of "Plain" Language

By J. Robert Brown

Yesterday, the Supreme Court decided LaRue v. DeWolff, a case addressing whether individual account holders in 401(k) plans have a right to bring an action indvidually.  The Court agreed unanimously that they did.  Beneath the unanimity, however, was a five to four division on the Court, with five justices joining a majority opinion written by Justice Kennedy and the other four Justices concurring, one in an opinion written by the Chief and another in an opinion written by Justice Thomas.

We only want to point out two interesting aspects of the opinion.  First, the fifth vote for the opinion by Justice Stevens was not Justice Kennedy (who sided with the Chief) but Justice Alito.  While Justice Alito has been a disappointment on some cases (read Stoneridge), it is fairly apparent from his lower court opinions that he is less ideological than the other three conservatives (assuming one would put Kennedy in the center).  There is some hope that he will more often than the other three be able to set aside ideology and actually decide the case on the merits.

The other thing was the opinion by Justices Thomas and Scalia.  They lectured the majority for failing to base the decision entirely on the language of the statute, the "plain text" as he put it.  These are the same two Justices who, in Stoneridge, entirely disregarded the language of the statute (Section 10(b)) essentially because they did not like the private right of action under Rule 10b-5.  In other words, Justices Thomas and Scalia use the "plain language" argument when it suits them and disregard it when it does not. 

Full post as published by The Race to the Bottom on February 21, 2008 (boomark / email).