Corporate Governance

Mind Your Peas and Queues at the Supreme Court: Reconciling Rent-a-Center with Citizens United, Part III

By Jennifer S. Taub

'He brought this challenge to the delegation provision too late, and we will not consider it,' wrote Justice Scalia at the end of the majority opinion in Rent-a-Center, West, Inc.  v. Jackson . What is astonishing about that last piece of the opinion is the poor short-term memory of these same five justices.  Just five months ago, in Citizens United  vs.  Federal Election Commission, in which the Court expanded First Amendment rights for corporate persons, the majority on its own initiative decided to rule on the question of whether federal law was invalid on its face. The majority claimed to have no choice but to consider a facial challenge to the McCain-Feingold law.

And these very same justices in Citizens United, also asserted that based on precedent, they were permitted to tackle a question not brought before them by the parties.  However, the cases the majority cited in support of this right (Lebron v. Amtrak, 513 U.S. 374 (1995) and its predecessor, U.S. v. Williams, 504 U.S. 36 (1991)) were not perfectly on point. The Court claimed Lebron stood for the proposition that 'our practice permits review of an issue not [pressed] below so long as it has been passed upon.'  Yet in Citizens, this was an issue not brought up by either the petitioner or respondent. And, in fact, the petitioner only wanted the court to rule that the federal law was invalid as applied.  In Lebron, the petitioner had actually raised a new issue as late as its merits brief and wanted the Court to address it.  In contrast, the petitioner in Citizens did not want the issue addressed.

One has to wonder why it is that the five justices felt comfortable relying on the Lebron case in a sua sponte striking down of a federal law in Citizens. However, in Mr. Jackson's case, they refused to do so? Notably, Mr. Jackson's Respondent's brief cited Lebron for the proposition that "once a federal claim is proprely presented, a party can make any argument in support of that claim; parties are not limited to the precise arguments they made below."  Additionally, even using the Lebron precedent for the proposition cited by the Citizen's majority, should have resulted in it not being "too late" for Mr. Jackson. This is because the 9^th Circuit decision in Rent-a-Center revealed that the question had been passed upon by the district court. The 9^th Circuit wrote that: 'The court found that the Agreement to Arbitrate ‘clearly and unmistakably provides the arbitrator with the exclusive authority to decide whether the Agreement to Arbitrate is enforceable.'' This is a clear reference to the delegation provision.

But why confuse this majority with the facts or the law. The distortions of the Prima Paint arbitration case precedent coupled with this claim that it was too late to bring up the delegation provision, ignoring both Citizens and Lebron,  invite the question of what motivates this majority. Is it just that it doesn't like distasteful  things like peas or powerless people and will build arguments to suit its palate – rather, its political preferences?

Full post as published by The Race to the Bottom on June 30, 2010 (boomark / email).