Powell Memo Blueprint: Impact on Judicial and Legal Action

Page - September 2, 2011
Lewis Powell saw that corporate interests could gain greatly by using the judicial system to their advantage, yet to make the judiciary more sympathetic to business interests, he knew corporations would have to plan and engage in a long-term, multi-dimensional strategy.

The Powell Memo on Judicial Influence:

"[T]he judiciary may be the most important instrument for social, economic and political change. [...] This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds. As with respect to scholars and speakers, the Chamber would need a highly competent staff of lawyers. In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exercised in selecting the cases in which to participate, or the suits to institute. But the opportunity merits the necessary effort."

(Direct link to this quote in the Powell Memo)

The big business reaction to Lewis Powell’s judicial and legal strategy was swift. Within a few years, nearly a dozen corporate-funded legal foundations were created. The Pacific Legal Foundation (PLF) was formed in California in 1973 to counter public-interest law firms and represent the interests of business and private property holders against environmental regulations. PLF’s prospectus quoted the Powell memo at length. (Kim Phillips-Fein, “Invisible Hands,” p. 162).

When asked for his opinion of the “most critical” area of public interest law, PLF’s then-executive legal director replied, “environmental law,” citing the firm’s support for the use of DDT, the construction of a dam and reservoir project, the use of herbicides in national forests and the use of public grazing lands without environmental impact review. The early cases established a clear pattern for PLF and its followers at the Mountain States Legal Foundation and other regionally named corporate defenders. Environmental cases would be a priority and the foundations’ positions in such cases would invariably be those of their business benefactors, including Monsanto, Weyerhaeuser, Gulf Oil, ARCO, Ford and other companies (Houck, "With Charity for All," pp. 1461-1462). The work of these groups also supported the Wise Use movement; radical property rights activists and corporate front groups that attacked environmental laws and regulations on behalf of landowners, ranchers and the oil industry (Helvarg, The War Against the Greens).

The conservative backlash against alleged liberal influence over the law went well beyond the corporate agenda that grew directly out of Powell’s analysis, but there were also tensions between the two. Corporate legal campaigns were primarily self-interested, practical and designed to get both immediate and longer-term results. The conservative legal movement that got its start in the 1970s was more ideologically driven; its greatest successes would take decades, and sometimes came about through indirect means (Teles, The Rise of the Conservative Legal Movement).

At the juncture between these two was the “law and economics” school, with leading proponents such as Richard Posner at the University of Chicago and George Mason University’s Henry Manne. Manne organized seminars for federal judges through his Law and Economics Center, with support from the Olin Foundation, which also backed some of the leading “second generation” conservative public policy law firms, like the Center for Individual Rights. The foundation’s chairman, John M Olin, was inspired by Powell’s memo to write to William Baroody at the American Enterprise Institute: “The Powell Memorandum gives a reason for a well organized effort to re-establish the validity and importance of the American free enterprise system.” (“Invisible Hands,” Kim Phillips-Fein)

For its part, the U.S. Chamber of Commerce also eventually followed Powell’s advice by creating two legal groups that have carried out a multi-decade legal strategy -- the National Chamber Litigation Center (NCLC) and the Institute for Legal Reform (ILR). NCLC served as the Chamber’s law firm, using aggressive and strategic litigation to challenge regulations and laws. Entering 134 new cases of significance to the business community in 2009, for example, the NCLC helped to secure 52 victories.

The Institute for Legal Reform (ILR) coordinated one of the Chamber’s flagship priorities in the post-Powell era -- the push for “tort reform.” The tort 'reform' campaign was so successful that by 2006, the American Lawyer proclaimed, “It’s Over,” explaining that “the power of the plaintiffs bar is on the wane in this country, and will be for a long time to come.” ILR, along with the American Tort Reform Association (funded by the tobacco, chemical and drug industries, along with the American Medical Association), created a “public relations masterpiece” that demonized trial lawyers, replaced state judges hostile to business interests, and mobilized popular support for business-friendly laws. (See Frankel, “It’s Over”) The campaign erected a variety of judicial and regulatory barriers against plaintiff attorneys and their clients – i.e., the victims of corporate crime and malfeasance -- including caps on punitive and non-economic damages, the abolition of “joint and several liability,” and limits on class action lawsuits.

This push for tort 'reform' has also been a legal priority for various industries. According to a document produced by one corporate law firm, for instance, the tobacco industry’s tort reform budget for 1995 alone was $21.8 million (see Covington & Burling Tort Reform Project Budget).

The U.S. Chamber has used the momentum built by decades of successful tort reform to brazenly argue for policies that would shield corporations from having to pay when they are responsible for cases of massive damage. For instance, after the 2010 BP Horizon disaster the Chamber argued that the $75 million liability cap should not be lifted retroactively to make BP pay for damages from the oil gusher. This position drew criticism from a variety of expert observers, including Ken Feinberg, the manager of BP’s oil spill compensation fund.

Some of the landmark changes in the law that have come about through support from business and conservative interests in recent decades have been used to bolster other strategies outlined by Powell in his memo. An example is the dismantling of the Fairness Doctrine for media, which was introduced to ensure public interest voices would balance commercial interests as part of the bargain for corporate broadcasters' free license to use the People’s airwaves.

Another significant shift in the law since Powell’s memo was circulated has been the gradual expansion of corporate constitutional rights (referred to by some business groups as “business civil liberties”), especially in the realms of commercial and political speech. The most infamous example is the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission. In the commercial sphere, companies have similarly used corporate speech doctrines to challenge various restrictions on corporate advertising (e.g. direct-to-consumer advertising of prescription drugs for off-label uses), limits on media ownership, and product safety labeling requirements (e.g. cigarettes and genetically modified foods).

Corporate constitutional rights are regularly claimed (with the implicit threat of litigation) in opposition to new or proposed regulations. One recent example came during recent attacks on regulations created by the Dodd-Frank financial reform package, which contained a provision requiring that companies report their use of tin, gold and other minerals that can be traced back to the conflict-ridden Democratic Republic of the Congo. In its comments to the SEC, Tiffany & Co. claimed the SEC rules would “compel speech in a manner that violates the First Amendment.”

References and More Information:

Nan Aron, “Justice for Sale: Shortchanging The Public Interest for Private Gain.” Washington, DC: Alliance for Justice, 1993. Available at: http://www.afj.org/assets/resources/resources2/Justice-for-Sale.pdf.

Oliver A. Houck, “With Charity for All,” Yale Law Journal, Volume 93, No. 8, July 1984. More information available at: http://research.greenpeaceusa.org/?a=view&d=6000.

Steven M. Teles, The Rise of the Conservative Legal Movement: The Battle for Control of the Law. Princeton University Press, 2008. More information available at: http://books.google.com/books/about/The_Rise_of_the_Conservative_Legal_Movem.html?id=MTps-NK20jAC.

Alison Frankel, “It’s Over: Tort reformers, business interests, and plaintiffs lawyers themselves have helped kill the mass torts bonanza.” The American Lawyer, December 1, 2006. Available at: http://www.law.com/jsp/PubArticle.jsp?id=1165320496651.

Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan. New York: Norton, 2009. More information available at: http://books.google.com/books/about/Invisible_hands.html?id=CcU7z9jLqXcC.

David Helvarg, The War Against the Greens. San Francisco: Sierra Club Books, 1994. More information available at: http://www.amazon.com/War-Against-Greens-Wise-Use-Movement/dp/1555663281.

Covington & Burling Tort Reform Project Budget, Budget, October 3, 1995, available in the Tobacco Legacy Documents’ online archive at: http://legacy.library.ucsf.edu/tid/khu28d00.

Robert Weissman, “First Amendment Follies,” Multinational Monitor, May, 1998. Available at: http://www.multinationalmonitor.org/mm1998/98may/corp3.html.

Patrick Dorsey, Sr. VP and General Counsel of Tiffany & Co., comments to the SEC, dated February 22, 2011. Available at: http://www.sec.gov/comments/df-title-xv/specialized-disclosures/specializeddisclosures-17.pdf.

Robert L Kerr, The Rights of Corporate Speech: Mobil Oil and the Legal Development of the Voice of Big Business, LFB Scholarly Publishing, 2005. More information available at: http://www.amazon.com/Rights-Corporate-Speech-Development-Scholarship/dp/1593320701.

Robert L Kerr, The Corporate Free-Speech Movement: Cognitive Feudalism and the Endangered Marketplace of Ideas, LFB Scholarly Publishing, 2008. More information available at: http://www.amazon.com/Corporate-Free-speech-Movement-Endangered-Marketplace/dp/1593322933.

Stephanie Mencimer, Blocking the Courthouse Door: How the Republican Party and Its Corporate Allies are Taking Away Your Right to Sue. NY: Free Press, 2011. More information available at: http://www.amazon.com/Blocking-Courthouse-Door-Republican-Corporate/dp/0743277007.

Chris Young, "Corporations, pro-business nonprofits foot bill for judicial seminars," Center for Public Integrity, March 28, 2013.

People for the American Way, "The Rise of the Corporate Court." (2010)

Community Rights Counsel, "Using Federal Courts to Attack Community and Environmental Protections"

Commonweal Institute:  "Conservative Movement" web site.

The American Constitution Society  and the Alliance for Justice are two groups that organize lawyers, students and others to push back against the pro-corporate conservative legal movement that has undermined community and environmental rights. Be sure to read Senator Elizabeth Warren (D-MA) speech to the ACS 2013 annual convention, "Corporate Capture of The Federal Courts

To understand how far the courts have moved away from environmental protections, we recommend Christopher's Stone's book "Should Trees Have Standing" or the law review it is based upon, which was cited by Justice William O. Douglas in his famous dissenting opinion in the Mineral King decision -- Sierra Club v. Morton 405 U.S. 727. Douglas argued that natural resources ought to have standing to pursue their own protection.