Monday, April 12, 2010

Forget Kagan and Clinton. Rakoff for Supreme Court.

Given the somewhat tortured background of these cases and the difficulties the motion presents, the Court is tempted to quote the great American philosopher Yogi Berra: “I wish I had an answer to that because I’m getting tired of answering that question.” Judge Rakoff in SEC vs. Bank of America

In what may prove to be a case of affirmative action run amok, media reports suggest that the short list of potential Supreme Court Nominees (replacing retiring Justice Stevens) includes Elena Kagan and Hillary Clinton.

While Mrs. Clinton seems an able politician (damning with faint praise) her record as a Judge (or even as clerk to a Federal Judge) is non-existent.

Ms. Kagan, by contrast, has a record. She clerked for, inter alios, Supreme Court Justice Thurgood Marshall.

As President Obama's Solicitor General, she lost the case of Citizens United vs. F.E.C., which cleared the way for corporations to stand on equal footing as citizens in the rights to political speech. 

While it seems to me this may have been a lost cause from the start given the current "bent" of the court, it may be that Ms. Kagan failed to anticipate the proper grounds for argument as Justice Stevens noted in his dissent, in particular, this view:  In the context of election to public office, the distinction between corporate and human speakers is significant. Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure,and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process.

A subtle mind, in my view, is needed in the Supreme Court, if the intent is battle with Financial Concentration.

Enter Judge Rakoff. While the main qualification media reports suggest as supportive of Ms. Kagan's Nomination is "non-ideological", Judge Rakoff is a man of opinions. He loves baseball, and thinks the banks have gone too far. (Batting 1000 so far)

In SEC vs. Bank of America, the Judge demonstrates to me a subtle mind, waiting for (indeed begging for, and presenting clues thereof) the right arguments to be presented. To wit: An even more fundamental problem, however, is that a fine assessed against the Bank, taken by itself, penalizes the shareholders for what was, in effect if not in intent, a fraud by management on the shareholders. This was among the major reasons the Court rejected the earlier proposed settlement. Where management deceives its own shareholders, a fine most directly serves its deterrent purposes if it is assessed against the persons responsible for the deception. If such persons acted out of negligence, rather than bad faith, that should be a mitigating factor, but not a reason to have the shareholder victims pay the fine instead.

I don't have a say in the matter (besides this opinion) but if I did, I'd bench the starters and get Rakoff in relief (of us all).