The Making of the Corporate Judiciary

How big business is quietly funding a judicial revolution in the nation's courts

Like many of President Bush's lower-court nominees, William H. Pryor Jr. has had a hand in just about every legal social theory that drives Senate Democrats to outrage. As the attorney general of Alabama, he pushed for the execution of the mentally retarded, compared homosexuality to bestiality, defended the posting of Bible quotes at the courthouse door, and advocated rescinding a portion of the Voting Rights Act. He called Roe v. Wade "the worst abomination of constitutional law in our history."

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So when Pryor, a boyish 41-year-old, came before the Judiciary Committee in June wearing a carefully folded kerchief in his pin-striped suit, opposing senators clashed over whether such views disqualified him from the 11th Circuit Court of Appeals. Republicans, led by Utah Senator Orrin Hatch, praised Pryor's distinguished career, his numerous awards, and the hundreds of letters supporting his nomination. They tossed him softball questions about his "mainstream" approach to the law.

Democrats, by turn, hammered at Pryor's conservative social stands. Didn't it matter that he had once canceled a family vacation to Disney World to avoid a gay and lesbian event? Could someone who blamed the Supreme Court for "the slaughter of millions" fairly interpret the law? Did the only state attorney general to challenge the Violence Against Women Act deserve a lifetime appointment? "I don't understand, looking at your record, how one can conclude that you don't have an agenda," said Massachusetts Senator Edward Kennedy, leading the Democratic attack. It was a classic confrontation, one that has been repeated again and again with President Bush's judicial nominees.

But it also obscured the most important factor in Pryor's swift rise from Mobile, Alabama, to the national stage: his longtime courting of corporate America. "The business community must be engaged heavily in the election process as it affects legal and judicial offices," Pryor told business leaders in 1999, after refusing to join other attorneys general in lawsuits against the tobacco and gun industries. To facilitate that engagement, Pryor created a controversial group called the Republican Attorneys General Association, which skirted campaign-finance laws by allowing corporations to give unlimited checks anonymously to support the campaigns of Pryor and other "conservative and free market oriented Attorneys General."

With such activism, Pryor positioned himself in the vanguard of a stealth campaign by American business to change the way that state and federal law is interpreted. Since 1998, major corporations -- Home Depot, Wal-Mart, and the insurance giant AIG, to name a few -- have spent more than $100 million through front groups to remake courts that have long been a refuge for wronged consumers and employees. By targeting incumbent judges, they have tilted state supreme courts to pro-business majorities and ousted aggressive attorneys general. At the same time, corporate lobbyists have blitzed state legislators with tort-reform proposals, overseeing the passage of new laws in 24 states over the past year alone.

Now, with a sympathetic ear in the White House, corporate America is taking its legal agenda to the federal bench with a behind-the-scenes campaign of high-powered lobbying and interest-group advertising. Pryor is just one of the corporate stars. Several of President Bush's nominees to federal appeals and district courts -- and even White House Counsel Alberto Gonzales, a former Texas Supreme Court justice who now selects federal nominees for the president -- owe their careers to the support of the insurance, retail, and energy industries that got them elected on the state level.

The nominees' legal approaches have been nurtured by a string of corporate foundations that fund university programs and ideological groups like the Federalist Society. And their promotion to the federal bench coincides with an ambitious corporate legislative agenda, backed by more than 475 lobbyists, that seeks to force limits on jury awards and move lawsuits out of state courts, where judges historically have favored plaintiffs. In Congress, the House Majority Leader, Rep. Tom DeLay, has formed a working group on "judicial accountability" to push for the approval of the president's nominees and launch investigations of liberal federal judges. "What you have is a wholesale effort to hijack the federal judiciary," says Senator Richard Durbin, an Illinois Democrat and former corporate defense lawyer. "They clearly want to put in a more conservative judiciary and then start stacking the deck by removing more and more cases to the federal courts."

So far, the public debate has all but ignored this quiet corporate campaign. Unlike high-visibility battles over abortion, the death penalty, or gay rights, the legal fights over tort reform, regulatory powers, anti- trust law, and property rights do not lend themselves to easy explanations in news stories. In Beltway parlance, such issues "translate poorly" to voters -- a fact that has not been lost on conservative activists. "Because of the smoke and fire of the abortion issue, it is probably all anybody will talk about, but there is much more at stake," says Grover Norquist, president of Americans for Tax Reform. His group, which receives funding from corporate and conservative foundations, has organized resolutions in at least 10 state legislatures supporting Bush's judicial nominees. "The New York Times understands sex," he added. "It doesn't understand money."

Big money, however, cares a great deal about who sits on the nation's 13 federal circuit courts. "There is the hope on the part of the business community that their rulings will be more friendly," says Paul DeCamp, a Republican corporate lawyer who counts two nominees as personal friends. "The Supreme Court can't decide every case." In fact, circuit courts are the final venue for 99 percent of federal cases and most regulatory challenges. These courts, which operate in relative media obscurity, are not likely to make final decisions about high-profile social issues, such as gay marriage or the death penalty, which end up at the Supreme Court. Rather, they set precedent on issues affecting business such as media-ownership rules, sport-utility rollover lawsuits, or the rights of coal-mining companies to dump waste in thousands of miles of streambed in West Virginia. "There are many cases in which a circuit court nominee's views matter, but abortion is not one of them," says Alan Morrison, who leads Public Citizen's litigation group. "There are just a hundred different ways by which the courts of appeals judges can by little cuts kill plaintiffs."

Years of delaying President Clinton's nominees to these same courts left the Bush administration, and the business community, with a golden opportunity: All but two of the nation's 13 federal circuits -- evenly divided between Democratic and Republican appointees under Clinton -- could have Republican majorities by the next election. "With this four-year crop, it's really going to be a different judiciary than it is now," says Eldie Acheson, who led judge selection for Clinton's Justice Department.

The stated goal of many of these business groups is not a modest one: to chip away at more than 60 years of legal history, dismantle federal social services, and effectively erase the policies of the Franklin Roosevelt era. "We've been living since the New Deal with an essentially unconstitutional government," says Roger Pilon, director of the Cen- ter for Constitutional Studies at the Cato Institute. The new generation of young conservative and libertarian lawyers being elevated to federal courts, he adds, "are not afraid to say that."

PRYOR POSITIONED HIMSELF early to win the favor of the business community. As far back as 1998, he announced that Alabama would not join lawsuits against the tobacco and gun industries. He urged federal courts to roll back the Clean Water Act, testified before Congress against the Clean Air Act, and argued for gutting federal protections of disabled workers on constitutional grounds. Such views allowed him to rake in business contributions. Pryor's 2002 re-election campaign eventually received $100,000 of legally laundered cash from the Republican Attorneys General Association, a group that attracted companies as far-ranging as Microsoft, Eli Lilly, Anheuser-Busch, and Philip Morris. The money contributed to a 3 to 1 fundraising advantage Pryor built over his Democratic challenger, whom he defeated in a landslide.

Pryor never identified the source of this war chest. But recently leaked documents show he knew at the time that he was raising money from the same companies he refused to prosecute on behalf of Alabama's citizens. According to phone records, he personally solicited funds for the Republican Attorneys General Association from executives at R.J.Reynolds, Philip Morris, and other Fortune 500 companies. The National Rifle Association, clearly pleased by his refusal to sue gun makers, also contributed to the fund after Pryor called for a donation, the phone records show. The undisclosed checks for up to $25,000 got lobbyists invitations to shoot skeet, play golf, and enjoy a "stress-relief spa" with Republican attorneys general. The potential for ethical conflicts was too potent for several of Pryor's Republican peers. Betty Montgomery, Ohio's attorney general, went so far as to pull out of the organization, telling a local newspaper, "I raised some questions about who we were raising money from."

Pryor was not the pioneer of this kind of fundraising. The strategy of using vast amounts of campaign cash to shift the legal landscape was developed a decade earlier by a talented young Republican direct-mail consultant from Texas -- Karl Rove. Long before he took on the moniker of "Bush's brain," Rove realized he could energize the legal and medical establishments by targeting the once-sleepy Texas Supreme Court elections. "Karl has always had the requisite skills, but the proving ground came in the late 1980s and early 1990s," said Kim Ross, a former chief lobbyist for the Texas Medical Association, who worked closely with Rove. "Karl was talking about how business and medicine had to pull this together on the tort thing."

The conflicts this created were on full display in the case of Priscilla Owen, now a Bush nom- inee to the 5th Circuit Court of Appeals. When she first decided in the early 1990s that she wanted to run for a spot on the Texas Supreme Court, she called on Ralph Wayne, president of the Texas Civil Justice League, a trade group formed by the state's manufacturing, transportation, and energy industries. "I said, 'Have you talked to Karl Rove?'" Wayne remembers. "She said, 'No, but I think I should.'"

After Rove met with Wayne and Owen, he signed on, giving the candidate the seal of approval from the state's corporate establishment. The money followed. Owen raised $1.1 mil- lion for her successful 1994 state Supreme Court campaign, with a rec- ord 21 percent coming directly from the business community and much more coming from corporate defense lawyers. Judge Owen later repaid the favor, in part, by lending her endorsement to a Texas Civil Justice League fundraising appeal.

By the time Rove was done, the last Democrat had been purged from the Texas Supreme Court. "The cases all started getting decided anti-consumer, on the side of big business," says Phil Hardberger, a retired Texas appellate court judge who is a Democrat. Jury verdicts, once embraced by the Democratic court, were now overturned or reduced. By the 1997-98 term, defendants were winning 69 percent of the time, and insurance companies, doctors, and pharmaceutical firms were winning nearly every case. Owen consistently distinguished herself as one of the conservative court's most strident conservatives. In one decision, Owen argued unsuccessfully in support of a water-quality exemption tailored for an Austin land developer who had given $2,500 to her campaign. The court major-ity dismissed her contention as "nothing more than inflammatory rhetoric."

The success of the Texas campaign was contagious. Soon the business community in other states, and nationally, began to invest in judicial battles, shifting the ideological majorities in Idaho, Michigan, Pennsylvania, and Alabama. The U.S. Chamber of Commerce joined with the Business Roundtable to set up a complex network of front groups that anonymously filtered corporate money into often divisive local television ad campaigns. By 2000, campaign spending on state judicial races had risen to $45.6 million, a 61 percent increase over the previous peak in 1998 and twice as much as 1994. The Chamber claimed vic- tory in 21 of 24 judicial elections it worked on in eight states, as well as 11 attorneys general races. "I was an exporter of judicial terrorism," explains Ross of the Texas Medical Association. "We pioneered the techniques, but it eventually acquired a life of its own."

Those familiar with Rove's operation in Texas now see the same strategy at work in the White House's selection of federal judges. In addition to Owen and Pryor, Bush has nominated Ohio Supreme Court Justice Deborah Cook, who rose to prominence on the back of a statewide business campaign, which helped her raise $650,000 for her 2000 re-election. Other nominees have distinguished themselves as lawyers defending the rights and profits of corpo-rations. Carolyn B. Kuhl, who Bush nominated for the 9th Circuit, represented tobacco and gas companies before becoming a California state judge, arguing against employee-discrimination claims and the right of whistleblowers to sue corporations. John Roberts, a Bush nominee who recently won confirmation to the District of Co-lumbia Circuit Court, worked as an attorney to strike down new clean-air rules and filed a brief for the National Mining Association, arguing that federal courts could not stop mountaintop-removal mining in West Virginia. Business groups cheered the appointment of Jeffrey Sutton, a conservative activist, to the 6th Circuit because of his long record of opposing federal powers over the states, including a successful case that voided federal employee-discrimination laws. Another nominee, Victor Wolski, who was confirmed to the Court of Federal Claims, worked for years as an attorney at the Pacific Legal Foundation, an organization devoted to rolling back the "regulatory state." "Every single job I've taken since college has been ideologically oriented, trying to further my principles," Wolski told a reporter in 1999.

DAYS BEFORE PRYOR'S VOTE on the Senate floor in July, a benign-sounding group called the Committee for Justice began running print and radio advertisements accusing Democrats of blocking Pryor because he was Catholic. One pictured a courthouse door hung with a sign that read "Catholics Need Not Apply." Democrats sensed a pattern forming. A few months earlier, the committee had run television spots accusing liberal senators of being anti-Hispanic for blocking Miguel Estrada, another business-friendly nominee who later withdrew following a Democratic filibuster. "America is a monument to the willing, where we can dream and build, despite race, creed, or color," intoned the voice-over, as the ad showed a young Hispanic boy seeking a job at a bakery. "But there's still intolerance."

Voters could have been forgiven if they had mistaken the Committee for Justice as a civil-rights group founded to stamp out ethnic and religious bias. In fact, the group was formed by a chief lobbyist for the U.S. Chamber of Commerce, the president of the American Council of Life Insurers, and a half-dozen lobbyists for the energy, tobacco, technology, and pharmaceutical industries. "There has been increasing attention on the impact of judicial decisions on the ability to run a business," explains Jim Whittinghill, chief lobbyist for the American Trucking Associations, which sponsored a recent committee fundraiser. "We are in courts all the time." Federal Express co-sponsored the same event, owing to a "whole host of regulatory issues," ranging from airline regulations to the rights of private mail services. The committee has declined to disclose its list of donors.

Such a policy of anonymity positions the committee as the latest in a string of nonprofit groups funded by corporations and foundations that seek to influence legal thought. These groups range from the conservative law and economics programs at major universities, to nonprofits like the Washington Legal Foundation, to high-powered networking organizations like the Federalist Society. In recent years, major companies, including Shell and Exxon, have also sponsored lavish educational seminars for sitting federal judges, with opportunities for golf and horseback riding on the side. "The idea has been to educate judges on economic issues," says James Piereson, executive director of the conservative Olin Foundation, which has funded several of the seminars. "I've gone to a couple of those things, and the judges have taken me aside and told me that it has been very helpful."

Corporations have also funded local efforts to press legislators to approve the president's judicial picks. On a recent swing through his home state of Michigan, Democratic Senator Carl Levin was greeted by protesters with signs that declared "We Want a Vote" and "Set Them Free." This crowd was not concerned with voter disenfranchisement or overflowing jails -- it wanted to remake the federal appellate bench. "We need judges who respect the private sector and property rights," announced protest organizer Steve Williams, the local leader of Citizens for a Sound Economy.

Like the Committee for Justice, Citizens for a Sound Economy (CSE) is led by C. Boyden Gray, White House counsel under Bush's father, and was created to anonymously leverage corporate contributions into debates on public policy. In recent months, the group has repeatedly picketed Democratic senators and organized a letter-writing campaign demanding swift approval of the Bush nominees. Historically, companies as varied as General Motors, Unilever, and Anheuser-Busch have filled CSE's coffers. But the group won't say who is funding the protests against Levin, who is blocking several of Bush's nominees from Michigan.

Joe Carney, a union electrician who chairs the Livingston County Democratic Party, says he didn't understand what motivated the protesters who crashed the local event where Levin appeared. "I don't know what judges have to do with 'Citizens for a Sound Economy,'" said Carney, who has been out of work during the economic downturn and is furious about the latest round of tax cuts. "If you want to talk about the economy, then you should talk about it."

Meanwhile, Judge Owen's political mentor in Texas, Ralph Wayne, has been busy organizing a lobbying campaign against Democratic senators in 10 states who are blocking her nomination; he has enlisted leaders from the National Federation of Independent Businesses as well as organi-zations representing doctors and realtors. Their motives, says Wayne, are purely economic. "None of these people," he says, "had any social issues."

But as with so much in the behind-the-scenes battle for control of the federal judiciary, Wayne's work has escaped public attention. The corporate candidates he represents will reshape America's legal landscape for at least a generation, but their connections remain largely unnoticed. When Owen came before the Judiciary Committee for her own nomination hearing, she faced only a handful of questions about her corporate sponsors or pro-business agenda. The headline in the New York Times the next day read "Debate on Court Nominee Centers on Abortion."

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