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Corporations have a friend in Judge Kavanaugh

Anna Moneymaker

The Republican line on Supreme Court nominee Brett Kavanaugh stresses his dispassion. A typical example comes from Sen. John Thune (R-S.D.), who hails Kavanaugh as a judge who does “not rewrite the rules of the game” and “who call[s] balls and strikes.”

But if judges are in any significant way like umpires, Kavanaugh is hardly a clear-eyed, neutral one when big businesses are at bat. If he makes it to the Supreme Court, regular Americans should expect Justice Kavanaugh to grant corporations more power over our lives.

Take for example, the call Kavanaugh made when the giant health insurance company Anthem wanted to buy out rival insurer Cigna.

In 2017, the Department of Justice blocked the deal in district court, which found that it likely would harm consumers. Subsequently, Anthem appealed to a three-judge panel on which Kavanaugh served.

The other two judges ruled to block the deal, and their reasoning was consistent with facts well-established by previous health insurance mergers.

When Aetna and Prudential merged in 1999, for example, the combined company was able to reduce payments to doctors and other providers and used its increased market power to raise the premiums it charged customers.

But despite the many studies showing that health insurance mergers lead to higher consumer prices, Kavanaugh voted to allow the merger because he believed that the merged entity would squeeze providers and share these cost savings with consumers.

The two-judge majority stated that Kavanaugh failed to engage with the facts and “offer[ed] a series of bald conclusions.”

When large corporations are at the plate, umpire Kavanaugh is also likely to bend or ignore the rules of the game. In the Anthem case, Kavanaugh asserted that the majority’s ruling was out of step with “modern antitrust analysis.”

In support of this claim, he cited the work of right-wing legal scholars and irrelevant judicial decisions. Writing a separate opinion against the merger, D.C. Circuit Judge Patricia Millett was unusually pointed.

She reminded Kavanaugh of the limits on their authority, noting it “is not a lower court’s role to ignore on-point precedent so as to adhere to what might someday become Supreme Court precedent.”

Similarly, in the case of FTC v. Whole Foods Market, Inc., Kavanaugh simply discarded a key Supreme Court precedent, disparaging it as a “1960s-era relic” and from a time “when mergers were viewed with suspicion regardless of their economic benefits.”

He felt free to ignore this decision because his preferred economic theory held that corporate mergers generate consumer benefits.

Kavanaugh’s pro-big business bias has extended beyond antitrust cases. For example, in his concurring opinion in Comcast Cable Communications, LLC v. FCC, Kavanaugh effectively rewrote the 1992 Cable Act.

Congress passed that law to prevent cable companies from engaging in unfair discrimination against independent television channels. If the majority had adopted Kavanaugh’s interpretation, cable companies would have more freedom to marginalize independent channels by not carrying them or relegating them to unpopular subscription packages. 

In another case, Kavanaugh even sought to establish “free speech rights” for broadband providers. In a 2017 dissent, he wrote that the Federal Communications Commission’s (now-repealed) net neutrality rule, which prohibited broadband providers from blocking or throttling internet content, violates the First Amendment rights of Comcast, Verizon and other telecom companies.

As two of his peers on the D.C. Circuit noted in the same case, Kavanaugh’s reading of the First Amendment was not rooted in any existing Supreme Court decisions. Further, his opinion concocted a constitutional right for broadband providers to engage in bait-and-switch marketing.

As the two other judges noted, under Kavanaugh’s interpretation, a broadband company, for example, “could hold itself out to consumers as affording them neutral, indiscriminate access to all websites, but then, once they subscribe, materially degrade their ability to use Netflix for watching video — or even prevent their access to Netflix altogether.” 

Kavanaugh also manufactured facts and invented constitutional principles out of whole cloth to hobble the Consumer Financial Protection Bureau (CFPB) and thereby protect abusive credit card issuers, discriminatory auto lenders and other bad actors in finance.

Citing its funding source (the Federal Reserve Board) and leadership structure (single director removable by the president only “for cause”), Kavanaugh ruled in 2016 that the CFPB was unconstitutional.

He asserted that the CFPB is unprecedented in its power and that “other than the President, the Director of the CFPB is the single most powerful official in the entire United States Government, at least when measured in terms of unilateral power.” 

In later overturning Kavanaugh’s decision concerning the CFPB, a majority of the full D.C. Circuit exposed the fictions in his ruling. Writing for the majority, Judge Nina Pillard observed that the CFPB shares institutional features and powers with many federal agencies.

Indeed, the CFPB is structurally indistinguishable from the Office of the Comptroller of the Currency, a bank regulator that Congress created in 1863. The court rejected Kavanaugh’s novel theory for neutering the CFPB, finding it has no basis in existing constitutional law.

Far from being a mythical impartial umpire, Kavanaugh is a judicial activist who plays for large corporations. At a time of growing public and political alarm about monopoly and corporate power, Supreme Court Justice Kavanaugh would be certain to help big business tighten its grip on our economy and democracy. 

Sandeep Vaheesan is policy counsel at the Open Markets Institute and was formerly an attorney-advisor with the Consumer Financial Protection Bureau.

Tags anticompetitive antitrust Brett Kavanaugh Consumer Financial Protection Bureau Corporate welfare John Thune monopolies Supreme Court of the United States United States United States Court of Appeals for the District of Columbia Circuit Yale University

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