The Corporate Court

Kia Franklin has a post on two new cases that make successful securities litigation more difficult. A few additional notes about the Tellabs case, which came down this week:

• The case created a standard for surviving a motion to dismiss — that in inference of illegal action should “at least as likely as any plausible opposing inference” — that is unusually difficult. Despite this, Alito concurred to claim that the standard was still too lenient. The corporate donors certainly got what they paid for.
• Having said that, the problem here is not just about Alito and Roberts. This decision, after all, was 8-1. As I mentioned last week, what we think of as “liberals” on the Court are really more Rockefeller Republicans and DLC Democrats. They seem like liberals compared to Thomas and Alito — especially on the kinds of cultural issues that dominate coverage of the Court — but business cases make it clear that there’s no Douglas or Marshall on the current Court. (If if you’re response is that Ruth Bader Ginsburg is a crazeee liberal, you don’t know what you’re talking about.)
• And in this particular case, the primary blame (or, if you own a business engaged in potentially shady securities activities, credit) belongs to the Republican Congress. The most interesting part of the case to me is this from Stevens’s dissent: “[Congress] implicitly delegated significant lawmaking authority to the Judiciary in determining how that standard should operate in practice.” Congress does, in fact, do this all the time, but it’s rare for this to be acknowledged openly. And as Stevens points out (and unlike Ledbetter), none of the standards advanced in this case are illogical readings of the statute. Congress wanted to create a tougher standard, and it didn’t specify how much tougher, so any of the three broad standards advanced in this case could plausibly fit the statute. That the Court would fill in a moderately conservative standard isn’t terribly surprising.