19. Big Business Corrupts The Judicial System by “Buying a Clean Record”

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Source: MULTINATIONAL MONITOR, Date: July/August 1993, Title: “Justice for Sale,” Author: Holley Knaus

SSU Censored Researcher: Gerald Austin

SYNOPSIS: While big corpora­tions have, for years, pressured all areas of government to limit the corporate sector’s level of responsi­bility for wrongdoing, they have developed a new practice that goes beyond simply stalling the legal process. Rather than denying the plaintiff an opportunity to be heard in court by costly long delays and pre-trial bluster, corporations are now using the dubious legal process of vacatur.

The vacatur process not only allows corporations to appear squeaky clean but more seriously undermines the fundamental issue of precedential law. Despite the sig­nificant impact that a vacatur ruling can have, the process seems remarkably simple. According to an editorial in Multinational Monitor, “Justice for Sale,” it is a little-publi­cized but growing phenomenon in corporate lawsuits.

Basically the vacatur process allows a corporation found guilty in a lower court action to make a set­tlement with the plaintiff so that the case will not be appealed to a higher court. Both plaintiff and defendant request that the pre­siding appeals judge “vacate” the decision and strike the previous finding from the record, ultimately eliminating the precedential value of the ruling.

A May 1992 settlement between U.S. Philips, a manufacturer of rotary electric shavers, and Windmere, a U.S. distributor for the Japanese firm Izumi, also a manufacturer of rotary shavers, illustrates how easy it is for pow­erful business groups to corrupt the judicial system. Locked in a battle over patent infringement and anti­trust violations, the court awarded Philips $6,500 in damages for the patent complaint. However, in a counter-suit charging anti-trust violations, a jury found in Windmere’s favor and awarded Windmere $89 million on the antitrust claim. Faced with an appeal that might confirm Philips’ wrongdoing, Philips struck a deal with Windmere.

The deal was for Philips to give Windmere an additional $57 mil­lion-on one condition: Windmere was required to join with Philips in requesting a federal appeals court to vacate the lower court jury’s verdict. Philips’ motivation was made clear in the agreement which said, “Windmere’s anti-trust claim will be of no force and effect and shall have no precedential or other value.”

Not satisfied that Philips was able to buy a clean record, Izumi filed suit in the Supreme Court raising the issue of whether a corpo­ration can justifiably erase wrong­doing by simply paying off the plaintiff. Supporting Izumi’s appli­cation for review of the decision to grant vacatur, the Washington, D.C.-based Trial Lawyers for Public Justice (TLPJ) has clearly outlined areas of real concern.

The amicus curiae filed by TLPJ notes that the granting of vacatur undermines the legal process, “It reduces respect for the judiciary by permitting a judicial decision to be bought and sold.” The brief notes that the process favors wealthy cor­porate interests, particularly those that often land in court. “Certain types of litigation, including prod­ucts liability, illegal toxic dumping cases, and employment discrimina­tion claims, frequently pit an indi­vidual  plaintiff with limited litigation experience … against an institutional defendant with repeated exposure to the litigation process. The defendants in these cases have both the reason and the resources to `roll the dice’ and then, if the gamble fails to pay off, to buy out unfavorable decisions. The plaintiffs do not.”

COMMENTS: Holley Knaus, author of the Multinational Monitor editorial, said the issue of corporate manipulation of the Judi­cial system does not receive the media exposure it deserves. “I learned about the subject from a very good article that ran in the Legal Times,” Knaus said, “but I am unaware of any other coverage in the mainstream media.

“Part of the problem is that the large papers and the networks tend to cover `events’ rather than exposing and examining on-going institutional problems. And I sup­pose a challenge to a legal process (even before the Supreme Court) does not qualify as an event in the minds of the corporate media shapers.”

Given that corporations are using the vacatur process to erase prior offenses and shape U.S. case law, Knaus feels that the “general public needs to know about a process that is undermining the public value of court decisions and rulings.” She assumes that most of the public would agree that corpo­rations have no place in shaping the law in any manner.

“Corporations are the only ones benefiting from the limited cov­erage given this issue,” Knaus said. “As with so many other issues, cor­porations are benefiting not from any active form of information sup­pression, but from mass media’s failures to point out and analyze systemic problems.”