Keeping Corporate Campaign Cash out of the Courtroom


Jeff Kubina
Engraved on the architrave of the Supreme Court: “EQUAL JUSTICE UNDER THE LAW.” Growing sums of corporate cash in judicial elections are eroding this Constitutional right, according to the author.

In Brief

Corporate interests are spending millions to elect judges who rule in a manner that benefits big business. The Center for American Progress examined rulings by the six state supreme courts that have seen the most campaign cash. From 1992-2010, these courts ruled in favor of corporations and against injured individuals in 75 percent of the cases in which an individual sued a business.

The courts studied overwhelmingly included those with partisan elections, where parties act as conduits for campaign cash. To curb this politicization, reformers suggest choosing judges through merit selection systems, in which an independent panel composes a list of potential nominees, based on their qualifications. Additionally, campaign finance disclosure rules can ensure that litigants know who spends money to elect judges. Legislatures should pass laws specifying when recusal is required due to campaign contributions or independent expenditures. Public financing programs can make small donors more relevant and limit the influence of campaign contributions.


Key Concepts

  • Corporate interests are spending millions to elect judges who rule in a manner that benefits big business.

  • From 1992-2010, the six state supreme courts that have seen the most campaign cash ruled in favor of corporations and against injured individuals in 75 percent of the cases in which an individual sued a business.

  • The courts studied overwhelmingly included those with partisan elections, where parties act as conduits for campaign cash. To curb this politicization, reformers suggest choosing judges through merit selection systems.

  • Campaign finance disclosure rules can also ensure that litigants know who is spending money to elect judges.

In state courts across the United States, corporate special interests are spending money to elect judges who interpret the law in a manner that benefits corporations, rather than citizens seeking justice. Yet, it is even more important for judges to be free of political pressure and obligations to wealthy campaign contributors than it is for members of the political branches of government. The decisions of courts directly impact the individuals involved in the lawsuits before them. If people are wronged, they should feel confident of finding impartial justice in the courts, where everyone—rich or poor, weak or powerful—is equal in the eyes of the law.

But with each passing judicial election, this principle of legal equality is being weakened. And when judges operate like politicians, people who lack political influence cannot expect to find fairness. Under these circumstances, ordinary Americans cannot expect to get the same access to justice as special interests that donate millions to judges’ campaigns.

America is the only country in the world that elects its judges, and this has allowed corporations to influence the law through judicial campaign contributions. In recent decades, spending on judicial campaigns has exploded. Between 2000 and 2009, state supreme court candidates raised more than $200 million—two and a half times more than in the previous decade. Spending on television ads reached a record $29.7 million in the 2012 election, according to groups that track judicial campaign spending.1

The U.S. Chamber of Commerce in particular has become a powerful player in judicial races. In 2006, the Chamber spent over a million dollars to aid the campaigns of two Ohio justices. In the 2010 high court election in Alabama, money donated by the state Chamber accounted for 40 percent of all campaign contributions. In 2006, pro-business interest groups paid for more than 90 percent of all special interest television ads.2,3 And in 2010, conservative groups contributed $8.9 million to high court elections, compared to just $2.5 million from progressive groups.4

The states where corporate contributions for judicial elections have been highest now have supreme courts that are dominated by pro-corporate judges. The Center for American Progress examined high court rulings from 1992 to 2010, involving individuals suing corporations in the six states with the highest judicial campaign contributions: Alabama, Texas, Ohio, Pennsylvania, Illinois, and Michigan. In 297 cases from 2000 to 2010, the courts ruled in favor of corporations 75 percent of the time. The high courts where campaign spending was highest were much more likely to rule in favor of big businesses and against people who were injured, scammed, or subjected to discrimination. With money playing such a large role in judicial elections, the interest groups with the most money were increasingly likely to have the greatest advantage.

The Alabama judiciary has become a crucial battleground in a political war between big business and consumers—and big business is winning. From 1999 to 2010, the Alabama Supreme Court ruled for corporate defendants in 57 of the 80 cases studied. The data include 25 rulings from 1998 to 2010 in which the court ruled on whether to compel arbitration. In 17 of those cases, the court sided with defendants seeking to compel arbitration.

At the Ohio Supreme Court, the surge in campaign cash was fueled by money from corporations and insurance companies. The insurance industry began giving generously to pro-corporate candidates after several rulings against the insurance companies, including a 1999 decision that expanded employers’ uninsured motorist coverage.5 In 2004, the insurance industry gave Ohio Supreme Court candidates more than $650,000. In 2003, the court overturned the 1999 decision on employer’s uninsured motorist coverage.6 The Ohio court is now a tough venue for injured plaintiffs. The Center examined 37 other cases from 2003 to 2010. Eighty-nine percent of the time, the Ohio Supreme Court ruled in favor of corporations.

In 2007, a defendant filed a lawsuit claiming that a birth control drug had caused blood clots. But the Ohio Supreme Court upheld a statute that limited the amount of compensation available to her by capping the damages. The 2005 statute was, in the court’s words, “similar in language and purpose” to previous laws that as recently as 1999 had been thrown out as unconstitutional.7 Justice Paul Pfeifer’s dissent implied that the decision favored “those with the most lobbying power.” He added: “Today is a day of fulfilled expectations for insurance companies and manufacturers of defective, dangerous, or toxic products that cause injury to someone in Ohio.”

But it is the Texas Supreme Court that perhaps favors corporations most evidently. In 78 percent of its cases, corporate defendants have prevailed. The Texas oil-and-gas industry, for instance, which is one of the state’s largest employers, is also one of the largest contributors to high court candidates. Many of its employees work in dangerous settings that are in close proximity to combustible materials. However, if they are injured, they are likely to have a hard time holding their employers accountable in a state supreme court with such close ties to oil companies. The Center for American Progress has compiled data on seven cases in which the defendant is an energy company. In all of those cases, the court ruled in favor of the companies.

If money continues to overwhelm judicial elections, Americans will continue to get judges who favor corporations over individuals. A 2010 poll from Justice at Stake a nonpartisan organization, found that 71 percent of the people surveyed believed that “campaign expenditures have a significant impact on courtroom decisions.”8 But it does not have to be this way—nor has it always been this way. When America was first founded, high court judges were not elected. In fact, federal judges have never been elected. Many polls have shown that Americans do not feel confident about judicial elections because of a lack of knowledge. Yet the idea of electing judges remains popular.9 Judicial elections seem to be here to stay, but there are steps that could make the system work for everyone, instead of just for wealthy special interests.

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Dawn Frary/dawnfrary.com
The political independence of judges is particularly important in settling conflicts between a Constitutional rule and a local statute on contentious issues like same-sex marriage, says the author.

Donor Disclosure

Campaign finance disclosure rules are crucial for judi¬cial elections because they determine whether voters and litigants can find out who is spending money on judicial campaigns. In a series of cases striking down campaign finance reform laws, federal courts have helped to open the door to unlimited political spending by ostensibly independent groups.10-12 In his dissent in the 2010 Citizens United case, former U.S. Supreme Court Justice John Paul Stevens said the majority’s decision concerning judicial elections “unleashes the floodgates of corporate and union general treasury spending.”

Without effective disclosure laws, the growing tide of unlimited, anonymous campaign cash is threatening to overwhelm judicial elections. In recent elections, state supreme court races have shattered spending records. In more and more states, judicial elections are being flooded by special interest money. According to the Michigan Campaign Finance Network, a mysterious group called the Law Enforcement Alliance of America spent nearly a million dollars attacking one particular judge in the 2010 elections. But the group never disclosed the source of its funding. Over the past 13 years, the Michigan Chamber of Commerce has purchased $8.3 million in ads for Michigan Supreme Court candidates. Under state law, none of it had to be disclosed.

Disclosure rules are crucial for judi¬cial elections because they determine whether voters can discover exactly who is spending money on campaigns. As Justice Stevens noted in Citizens United, litigants are allowed to argue that judges who receive contributions from their opponents in court should recuse themselves. But if that information is not made public, the right to an unbiased judge cannot be availed.

Yet many states have not adapted to the new campaign finance landscape. Most states still fail to regulate electioneering communications, which are ads that imply support for particular candidates but fall short of specifically advocating for them.13 Although the state of Michigan said it could not regulate these ads, it conceded that most of them “are campaign ads with¬out words of express advocacy.”14 As a result, the public is being left in the dark as millions of dollars from special interests influence the Michigan high court.

A few states have updated their disclosure rules since Citizens United unleashed unlimited corporate political spending. In Maryland, for example, an organization engaged in independent spending must either disclose its spending in reports to shareholders, members, or donors, or post a link on its website to its disclosure reports. Many states—including Arizona, Iowa, and Missouri—require corporations to report any political spending approved by their board of directors. In its Citizens United decision, the Supreme Court endorsed this type of disclosure: “Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

Any effective disclosure system must include a requirement that independent spenders disclose last-minute expenditures and contributions (i.e., those occurring after the last campaign finance report is filed). With the advent of electronic filing, many states now require that contributions and expenditures occurring in the final days before an election be reported within either 24 or 48 hours. Without prompt last-minute disclosure, citizens will have no idea who is funding independent ads until after the election.

With the Federal Election Commission paralyzed by partisan infighting, it falls to state agencies to take a tough approach to enforcing campaign finance disclosure laws.15

Merit Selection and Retention

To curb the influence of special interests on judges, many reform advocates have called for more states to choose judges through merit selection systems. These systems are currently used by two-thirds of the country’s states to select at least some of their judges. The process involves a nominating commission that composes a list of potential judges from which the governor chooses a nominee. The commissions use a wide range of criteria to assess applicants, such as “legal ability, competence, integrity, character and temperament.”16 These commissions can be structured to ensure transparency and prevent inappropriate partisanship. The state senate must confirm the choice in some states. Most merit selection systems require these appointed judges to run in unopposed retention elections that allow voters to decide whether to keep them on the bench.

These systems offer a far better alternative to contested elections because they foster judicial independence—and judges must be independent from political pressure in order to uphold Constitutional rights without fear of political backlash.17 This is crucial because it is only the judiciary that can remedy any Constitutional violations that other branches of government might impose.

Merit selection frees potential judges from political influence by focusing on their qualifications rather than their ability to cut deals with legislators or rake in campaign contributions. While they would still need to face retention elections, these would subject judges to much less political pressure than contested elections. Voters are not asked to replace a candidate with a specific alternative, and special interests cannot recruit a candidate they believe will serve their agenda.

Nevertheless, a few recent retention elections have, in fact, become politicized. For instance, in the 2010 Iowa Supreme Court race, three justices were voted off the bench after Christian conservative groups ran a campaign criticizing their decision to recognize the right of same-sex marriage. In 2012, conservative groups campaigned against Florida Supreme Court judges facing retention elections—though in those cases the justices held onto their seats. Similar 2012 campaigns never really got off the ground in Indiana and Arizona. Thus, opposition campaigns in retention elections have met with very limited success. Moreover, merit selection systems can provide the public with unbiased information about judges’ qualifications and records so that voters may focus on merit rather than on a few politicized, high-profile cases.

Judges often suffer the strongest political backlash when they settle conflicts between a Constitutional rule and a local statute or referendum. Often, these rulings involve the protection of the Constitutional rights of women, same-sex couples, religious minorities, or unpopular groups such as criminals. As defenders of constitutional principles, high court justices must be free to make unpopular decisions that protect these rights. Constitutions are composed of timeless principles that govern the relationship between a government and its citizens, so their provisions trump local ordinary statutes or referenda, which are approved by a simple majority of representatives or voters. For the judiciary—and unlike the other political branches of government—independence is more important than accountability.

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Karl Hassel/Flickr
One idea for limiting the power of special interests in the legal realm is through public financing laws, by which candidates raise a set amount of small contributions to qualify for public funds.

Constitutional rights that cannot be vindicated are meaningless. Since it is up to judges to define the boundaries of governmental authority, they must sometimes strike down statutes that violate individual rights, even if the laws are popular with voters. If the judiciary becomes another political branch responsive to political pressure, there will be no branch of government to check the power of legislatures or executives from infringing on the rights of individuals. In the Federalist Papers, Alexander Hamilton said citizens “of every description” should value judicial independence because “no man can be sure that he may not be tomorrow the victim of a spirit of injustice.”18 A judiciary that is able to protect our Constitutional rights without fear of political backlash guarantees freedom for all.

Keeping Partisan Politics Out of the Courts

Removing partisanship from judicial races could go a long way toward minimizing the role of campaign cash. The state supreme courts that have seen the most campaign cash are those whose judges are chosen in partisan elections.19 Only six states pick their high court judges this way: Alabama, Illinois, Louisiana, Pennsylvania, Texas, and West Virginia. Between 2000 and 2010, these states were among the top 10 in total judicial campaign contributions.2 In fact, four of the top six states held partisan elections and the other two—Ohio and Michigan—hold elections that are ostensibly nonpartisan but have partisan processes to nominate high court candidates.

Why are partisan judicial races so much more expensive? Potential campaign donors may find it easier to donate money in these races. State political parties provide a ready-built infrastructure for “bundling” donations. In partisan judicial races, the Democratic contributors usually include trial lawyers, while big business donors often give to Republican candidates. As a result, many of these state supreme courts, are now dominated by conservative judges who favor corporate defendants over individual plaintiffs. In fact, in the six states with partisan elections, Republican justices outnumber Democratic justices two to one.

In partisan races, donors can be much more certain of a candidate’s views prior to donating money. As Justice James Nelson of the Montana Supreme Court said, special interests want “their judge” on the bench. “In partisan elections,” he said, the special interests “have a leg up, as they already know the judge’s likely political philosophy.” He also said, “Each party wraps within its brand a number of different issues and ideologies.”

A recent study compared the correlation between campaign cash and judges’ voting in partisan and nonpartisan systems. The report found a significant correlation in the partisan high courts, but not in the nonpartisan courts. The authors state that, due to the “mediating role” of political parties, “partisan elections feature a more predictable connection between campaign contributions and subsequent judicial decisions consistent with the contributors’ interests.20

Partisan elections also create a different dynamic on the bench. When justices owe their offices to political parties and the interest groups backing them, they invariably feel pressured to toe the party line. When campaign costs rise, judges in both the liberal and the conservative factions tend to feel pressured to please the interest groups that fund their reelection campaigns.

The experience of the Michigan Supreme Court suggests most of the blame for divisiveness on the bench is the result of a partisan nominating process rather than of partisan general elections. Although its judicial elections are ostensibly nonpartisan, Michigan’s political party leaders choose their high court candidates at state party conventions. In the period between 1998 and 2008, pro-corporate justices gained a majority on the Michigan Supreme Court. Fifty particular cases involving individuals suing corporations highlight the partisan divide: in 64 percent, the vote was 5-2 in favor of the corporate defendant.19

Conservative scholars point out that identification of judges by party gives voters at least some basis on which to make an informed decision. But there are ways that states could provide voters with relevant information without relying on party identification. For instance, they could offer voter guides, judicial performance evaluations, and other useful information to help voters make their decisions.

Indeed, there are some high court justices who reject partisan politics. Chief Justice Wallace Jefferson of the Texas Supreme Court argues his state’s partisan system “permits politics to take precedence over merit.”21

Requiring Recusal for Campaign Cash

In recent years, a flood of judicial campaign contributions has flowed from corporations, interest groups, and lawyers seeking to influence the composition of state high courts and their rulings. This abundance of cash has led to some alarming conflicts of interest. The recusal rules in most states are vague and all too often, judges refuse to abstain in the face of glaring conflicts of interest.22 Unsurprisingly, this has caused the public to doubt the impartiality of judges. This is especially true since judges, unlike legislators, make decisions that impact specific individuals or entities. Therefore the avoidance of any kind of bias or partiality is critical.

Several recusal requests were directed towards Justice Lloyd Karmeier of the Illinois Supreme Court in a class action lawsuit involving a jury award of $1 billion in a verdict against insurer State Farm. Because State Farm’s employees had donated some $350,000 to Justice Karmeier’s campaign while the case was pending, the plaintiffs requested that he recuse himself. However, he declined, and in 2005, voted to overturn the original verdict.23 The plaintiffs later claimed that they discovered evidence that State Farm—through various political groups—“recruited Karmeier, directed his campaign, had developed a vast network of contributors, and funneled as much as $4 million to the campaign” to influence the outcome of the appeal.24

In 2009, the U.S. Supreme Court ruled that a judge’s refusal to recuse himself in the face of “extraordinary” campaign contributions from a corporate litigant violated the other party’s Due Process rights. In Caperton v. Massey Coal, the jury had awarded the plaintiff $50 million in a lawsuit by a coal company executive claiming that the much larger Massey Coal Company drove him out of business. While the appeal was pending at the West Virginia Supreme Court, a Massey executive donated $3 million to a Republican running for a slot on that court. The justice not only refused to recuse himself, but cast the deciding vote that overturned the verdict. In its ruling, the U.S. Supreme Court said, “Just as no man is allowed to be a judge in his own cause, similar fears of bias can arise when … a man chooses the judge in his own cause.” The Court said its decision “demarks only the outer boundaries” of recusal and states can employ stronger rules.25

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US Judge
Another mechanism for a fairer judicial system would be mandated recusal based on the type or threshold of contributions received by judges, according to the author.

In most states, high court judges write their own ethical rules and decide when recusal is appropriate. In recent years, some courts have weakened their recusal rules. In 2010, four conservative justices in Wisconsin adopted the recusal standards urged by pro-corporate associations that have donated millions to the justices’ campaigns. According to the new rule, campaign donations or independent spending by a litigant or an attorney are not allowed to be the sole basis for recusal. A dissenting judge criticized the court for adopting “word-for-word the script of special interests that may want to sway the results of future judicial campaigns.”26

In only five states are judges explicitly required to recuse themselves when campaign contributions reach a certain threshold.27 In California, judges cannot hear cases if they have received more than $1,500 from a party or a lawyer. In Alabama there is a similar law, but it has not been enforced. In 2010, Alabama Supreme Court candidates accepted dozens of contributions higher than the recusal threshold—some as large as tens of thousands of dollars. Because the recusal rule is unenforced, the justices can hear cases involving these contributors.

Since campaign cash is playing an increasingly crucial role in judicial elections, state legislatures should pass laws that specify when recusal is required due to contributions and independent expenditures. Some argue that mandatory recusal rules could give rise to abuse: attorneys could donate money to judges whom they do not want to hear their case. California addressed this critique by allowing the other party to waive the mandatory disqualification.28 And some judges have raised concerns that such rules would frustrate their ability to do their jobs, because campaign contributions from attorneys are so commonplace.29 Yet these potential problems could be addressed through the legislative process, and mandatory recusal rules would go a long way toward disabusing citizens of the notion that justice can be bought.

Amplifying the Impact of Small Donors

One way to drastically limit the opportunity for litigants and special interests to influence law through campaign contributions are public financing programs. In most public financing systems, candidates must qualify for public funds by raising a set amount of small contributions. The participating candidates must agree to spending limits and pledge to forgo additional private funds. North Carolina’s public financing program has been held out as a model for other states. Nevertheless, the 2012 election saw the system overwhelmed by independent spending. The state’s options for offering public funds were sharply limited by recent U.S. Supreme Court cases.

In 2012, conservative organizations spent around $2.5 million on the reelection campaign of Justice Paul Newby to the North Carolina Supreme Court. The largest single donation, by far, was nearly $1.2 million from the Republican State Leadership Committee (RSLC), which had helped the Republican state legislature draft its recent redistricting map.30 That map was challenged in a lawsuit by civil rights groups that accused the drafters of using race as a proxy for political party and disenfranchised minority voters. While this case was pending before the North Carolina Supreme Court, the same Republicans group contributed over a million dollars to reelect Justice Newby and keep a 4-3 conservative majority on the court. This conflict of interest did not stop the justice from ruling in the case.31 Before the 2012 election, North Carolina offered publicly financed candidates matching funds when their opponents and the groups supporting their opponents spent more than the amount permitted through the public subsidy. This type of system, however, was ruled unconstitutional under a 2011 U.S. Supreme Court case that held that distributing funds to candidates in response to an opponent’s spending is a “penalty” for the opponent’s speech.32 While this type of system is now unconstitutional, some states are considering “small donor matching” programs in which public funds multiply the impact of small donors.33

Some states are looking to New York City’s public financing system, which gives participating municipal candidates six dollars in matching funds for each dollar of the first $175 donated to a campaign. Thus, a $175 donation becomes a $1,225 donation. The system has had great success in making small donors much more important relative to large donors. Instead of relying solely on wealthy contributors, candidates receive most of their donations from middle-class and working-class donors whose contributions are matched by public funds. The Brennan Center for Justice said that this system has created a pool of campaign donors that is more diverse and more representative of the city’s population.34

As in North Carolina, the public financing system for appellate judges in New Mexico was undercut by the U.S. Supreme Court’s ruling to strike down traditional matching funds. But this year, legislators in New Mexico responded with a bill to implement a small-donor matching system. The bill would have matched each dollar of every donation less than $100 with four dollars in public funds. However, New Mexico’s Republican governor vetoed the bill, citing dubious concerns about its constitutionality.35

Given the explosive growth in judicial campaign cash, states must implement viable public financing programs. Given the unpredictable cost of judicial campaigns in this era of unlimited independent spending, a system of small donor matching funds offers candidates the flexibility they need. Small donor matching can provide challengers with a better chance at defeating incumbents. Most importantly, it would make judges beholden to the ordinary citizens making small donations, rather than to corporations and lawyers with huge amounts of money to donate. This would be an important step toward creating a justice system that works for all citizens—not just for those with money to spend influencing the law.