High Court Anxiety


ENVIRONMENTAL "TAKINGS." Besides tort reform, the other issue that could swing against Corporate America if the fundamentalist camp grows is federal preemption. This is the doctrine that companies use when they want to protect themselves against a tough state law. For example, after Beneficial National Bank, a division of HSBC (HBC ) Holdings PLC, was sued for violating Alabama's laws against usury, the bank responded by asserting that it was in compliance with the National Bank Act -- the federal law it claimed was the sole authority on consumer interest rates. In a decision released on June 2, seven judges agreed.

The two dissenters? Scalia and Thomas. The majority's holding "represents a sharp break from our long tradition of respect for the autonomy and authority of state courts," Scalia complained.

This isn't to say that originalist judges are always bad news for companies. Far from it. There are plenty of issues where their thinking is more in tune with the business community than the court's liberal wing. Scalia, Thomas, and others in their mold are passiona


American Apparel's Future
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