Weekly Roundup 5/31/2011

After Combat, the Unexpected Perils of Coming Home
James Dao, The New York Times, May 29, 2011

Synopsis: The New York Times chronicled the yearlong deployment of the First Battalion, 87th Infantry Regiment, in Afghanistan in a series of articles and in an interactive, multimedia feature on The Times’ website. In the final installment, national correspondent James Dao, who covers military and veterans’ affairs, explains, as the headline put it, “the unexpected perils of coming home.” Dao’s overview is worth quoting in full:

“For a year, they had navigated minefields and ducked bullets, endured tedium inside barbed-wired outposts and stitched together the frayed seams of long-distance relationships. One would think that going home would be the easiest thing troops could do.

“But it is not so simple. The final weeks in a war zone are often the most dangerous, as weary troops get sloppy or unfocused. Once they arrive home, alcohol abuse, traffic accidents and other measures of mayhem typically rise as they blow off steam.

“Weeks later, as the joy of return subsides, deep-seated emotional or psychological problems can begin to show. The sleeplessness, anxiety and irritability of post-traumatic stress disorder, for instance, often take months to emerge as combat veterans confront the tensions of home and the recurring memories of war.

“In their new normal, troops must reconnect with children, adjust to more independent spouses and dial back the hypervigilance that served them well in combat — but that can alienate them from civilians.

“ ‘The hardest part for me is, I guess, not being on edge,’ said Staff Sgt. Francisco Narewski, a father of three who just completed his second deployment. ‘I feel like I need to do something, like I need to go on mission or I need to check my soldiers. And I’m not.’”

For background, see these CQ Researcher reports (subscription required): Peter Katel, “America at War: Update,” Aug. 13, 2010; Thomas J. Billitteri, “Afghanistan Dilemma,” Aug. 7, 2009; Roland Flamini, “Afghanistan on the Brink,” CQ Global Researcher, June 2007. See also Peter Katel, “Caring for Veterans,” CQ Researcher, April 23, 2010.

--Kenneth Jost, Associate Editor


Could Conjoined Twins Share a Mind?
Susan Dominus, The New York Times Magazine, May 29, 2011


Krista and Tatiana Hogan, 4-year-old twins in British Columbia, are connected at their heads, their skulls merged under shaggy brown bangs. “The girls run and play and go down their backyard slide,” writes Susan Dominus, “but whatever they do, they do together, their heads forever inclined toward each other’s, their neck muscles strong and sinuous from a never-ending workout.”


Conjoined twins are a rarity, of course. But what makes good-natured Tatiana and Krista truly extraordinary is the link between their two brains, or what their neurosurgeon calls a thalamic bridge. “The girls’ doctors believe it is entirely possible that the sensory input that one girl receives could somehow cross that bridge into the brain of the other,” Dominus writes. “One girl drinks, another girl feels it.”

--Thomas J. Colin, Contributing Editor


The Secret Sharer
Jane Mayer, The New Yorker, May 23, 2011

In a piece that received considerable attention as soon as it hit the Web, Jane Mayer dissects the investigation and prosecution of a National Security Agency (NSA) employee who faces 35 years in prison for his dealings with a reporter for the Baltimore Sun who was writing about apparent mismanagement at the agency. Mayer, in turn, uses the case of ex-NSA staffer Thomas Drake to examine the Obama administration’s treatment of employees who leak information to expose wrongdoing. These so-called “whistle-blowers” were praised by Obama – when he was new to his job. His administration seems either to have forgotten that attitude, or to have changed it, civil libertarians -- and some conservative commentators -- told Mayer.

For background, see Alex Kingsbury, "Government Secrecy," CQ Researcher, Feb. 11, 2011. (Subscription required.)

--Peter Katel, Staff Writer


Spies, Meet Shakespeare: Intel Geeks Build Metaphor Motherlode
Lena Groeger, Wired blogs, May 25, 2011

Synopsis: Computers meet poetry in a new project by the government’s Intelligence Advanced Research Projects Activity, the agency that chases cutting-edge ideas to improve U.S. intelligence operations. IARPA personnel hope to train computers to search for, identify and categorize common metaphors for certain “target concepts” in many languages and, presumably, use the results to better understand the hidden truths beneath what potential allies and enemies write and say.

Takeaway: “The first step is to identify and collect all those metaphors….That means analyzing loads of textual data, identifying all the metaphors (‘his life took a left turn’; ‘you must find your own way’), mapping them onto a conceptual metaphor (‘life is a journey’) and then … well, after that, it’s not completely clear,” writes Groeger.

For related stories, see Patrick Marshall, “Artificial Intelligence,” CQ Researcher, April 22, 2011; Kenneth Jost, “Interrogating the CIA,” CQ Researcher, Sept. 25, 2009. (Subscription required.)

--Marcia Clemmitt, Staff Writer

Justices Uphold Arizona Employer-Sanctions Law

By Kenneth Jost
Supreme Court Editor, CQ Press

States are free to use licensing laws to penalize employers or even put them out of business for hiring illegal aliens, the Supreme Court ruled on Thursday.

The 5-3 decision upholds an Arizona law enacted in 2007 out of frustration with the federal government’s lagging enforcement record under the employer- sanctions provision enacted as part of a 1986 immigration law. The Arizona law requires the state to revoke the license of any business found guilty a second time of intentionally hiring an unauthorized immigrant worker.

At least eight other states have passed laws with provisions that go beyond the terms of the federal law, known as the Immigration Reform and Control Act or IRCA.

The case is separate from a challenge pending in lower federal courts to an Arizona law enacted in April 2010 that makes it a state crime to be in the country illegally. A federal judge in Arizona has blocked the law from going into effect, and the Ninth U.S. Circuit Court of Appeals upheld the injunction pending further proceedings.

The Arizona employer-sanctions law had been challenged by business groups led by the U.S. Chamber of Commerce, by civil rights and immigrant-rights organizations and by the Obama administration. In legal terms, they argued that the federal statute preempted Arizona’s law. In effect, they said, Arizona could not go beyond what the federal law provides.

In practical terms, business groups argued that the Arizona law would burden employers by subjecting them to overlapping, potentially conflicting federal and state enforcement schemes. The civil rights groups and the Obama administration warned that the stiff penalties imposed by the Arizona law would likely lead to discrimination against workers who look or sound “foreign.”

Justices in the majority in Thursday’s decision, Chamber of Commerce v. Whiting, 09-115, gave little weight to those policy concerns. Instead, the court held that the federal law expressly permits states to use licensing laws to penalize employers for hiring undocumented workers and that Arizona’s statute does not conflict with the federal scheme.

“Arizona’s licensing law falls well within the confines of the authority Congress chose to leave to the States,” Chief Justice John G. Roberts Jr. wrote, “and therefore is not expressly preempted.”

The ruling pitted the court’s conservative majority against its liberal bloc. Justices Antonin Scalia, Anthony M. Kennedy and Samuel A. Alito Jr. joined all of Roberts’ opinion; Justice Clarence Thomas joined most of it. Liberal justices Stephen G. Breyer, Ruth Bader Ginsburg and Sonia Sotomayor dissented. Justice Elena Kagan was recused because she was solicitor general during earlier proceedings.

The case turned on a provision in IRCA that bars “any State or local law imposing civil or criminal sanctions” against employers for hiring unauthorized aliens “other than through licensing and similar laws.” Summarizing the ruling from the bench, Roberts underscored the exception for licensing laws as an “important” phrase. He went on to conclude that the exception authorizes a state to go so far as to revoke a company’s corporate charter or license to operate within the state.

The ruling also upheld a second provision that requires Arizona employers to use the federal government’s pilot Internet-based system known as “E-verify” to verify the work status of job applicants before they are hired. In setting up the program in 1996, Congress made participation voluntary. The business and civil rights groups – but not the federal government – say the program has too many bugs for employers to be required to use it to avoid liability for hiring an undocumented worker.

In his dissent, Breyer argued that Congress did not intend the broad reading that the majority gave to the exemption for state licensing laws. The ruling, he said, risked “undermining Congress’s efforts (1) to protect lawful workers from national-origin-based discrimination and (2) to protect lawful employers against erroneous prosecution or punishment.” Ginsburg joined his opinion.

Separately, Sotomayor argued that the federal law should be read to require a federal adjudication of an employer’s liability for hiring illegal aliens before any state penalties could kick in. In a footnote, Roberts chided the dissenters for failing to agree on a single rationale for striking down the Arizona law.

The Chamber of Commerce said it was "disappointed" with Thursday’s ruling, but said the decision does not give state and local governments "a blank check to pass any and every immigration law." Separately, the American Civil Liberties Union also voiced disappointment, but emphasized that the ruling did not directly bear on the other Arizona law -- known as SB 1070 -- being challenged in lower federal courts.

Arizona's employer-sanctions measure was signed into law by the state's Democratic governor, Janet Napolitano, who is now the Obama administration's secretary for Homeland Security, and vigorously defended by her Republican successor, Jan Brewer. In signing the law in 2007, Napolitano said the state had to act because Congress was "incapable of coping with the comprehensive immigration reforms” the country needed.

For background, see Alan Greenblatt, “Immigration Debate: Update,” [subscription required] CQ Researcher, Dec. 10, 2010; Kenneth Jost, “States and Federalism,” [subscription required] CQ Researcher, Oct. 15, 2010.

Calif. Must Reduce Prison Crowding: High Court

By Kenneth Jost
Supreme Court Editor, CQ Press
      The U.S. Supreme Court on Monday upheld a sweeping prison-overcrowding order that may force the state of California to reduce its inmate population by up to 46,000 over the next five years.
      The 5-4 ruling cited what the high court called “serious constitutional violations” in California’s prison system in upholding a decision issued by a three-judge federal court in August 2009 to reduce the state’s inmate population by nearly one-third. The state’s prisons held about 156,000 inmates when the case was argued in December, according to the court, nearly double the stated capacity of the 33 facilities.
      Dissenting justices called the ruling “radical” and warned it would have “a major and deleterious effect on public safety.”
      Writing for the majority, Justice Anthony M. Kennedy, a Californian, said that “serious and pervasive overcrowding” in the state’s prisons has resulted in medical and mental-health care “below the standard of decency” required by the Eighth Amendment. The amendment, part of the Bill of Rights, prohibits “cruel and unusual punishments.”
      The ruling in a case now called Brown v. Plata came in two consolidated class action suits by California inmates, one filed in 1990 challenging care provided to inmates with mental-health problems and the other filed in 2001 challenging general medical care. Despite a series of court orders to improve care, Kennedy said the constitutional violations “remain uncorrected.”
      The decision pitted Kennedy and the court’s four Democratic-appointed liberal justices against four Republican-appointed conservatives: Chief Justice John G. Roberts Jr. and associate justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr. Kennedy spent an unusually long time, about 10 minutes, summarizing his opinion in a forceful if understated monotone. “It’s a long opinion,” Kennedy said as he lost his place at one point.
      Scalia followed with a summary nearly as long of the dissenting opinion he wrote for himself and Thomas. Scalia called the lower court order that the majority was affirming “perhaps the most radical injunction issued by a court in our nation’s history.”
      Separately, Alito, joined by Roberts, said the majority was “gambling with the safety of the people of California.” During oral arguments, Alito challenged the lawyer representing the inmates by pointing to a federal court’s prisoner-release order in Philadelphia years earlier that he said had resulted in a crime wave by the newly freed inmates.
      “I fear that today’s decision, like prior prisoner release orders, will lead to a grim roster of victims,” Alito wrote at the end of his dissent. “I hope that I am wrong.”
      The ruling comes at a time when prisons around the country are grappling with overcrowding, though no other state has seen the kind of crisis or faced such protracted litigation as California. But a spokesman for the American Civil Liberties Union said the ruling “crystallizes the need for states across the country” to reduce prison crowding through improved parole and rehabilitative programs.
      In his opinion, Kennedy said that the ruling would not force California state to reduce overcrowding “in an indiscriminate manner.” In sending the case back for further proceedings, Kennedy said the state could ask the three-judge court to extend the deadline or modify its order. Scalia called the passage “a bizarre coda” that he expected the lower court to ignore.
      The litigation has spanned the tenure of five California governors. Corrections officials have taken some steps to reduce overcrowding through prisoner releases, but court-appointed special masters overseeing the litigation found the moves inadequate.
      While in office, Republican Gov. Arnold Schwarzenegger asked for funds to build more prisons, but the legislature, beset by a multibillion-dollar fiscal crisis, balked. In his opinion, Kennedy noted that experts had testified that there was “no realistic possibility” that the state could “build itself out” of the overcrowding.
      The case reached the Supreme Court under the name Schwarzenegger v. Plata, 09-1233. The name was changed after Gov. Edmund G. Brown Jr., a Democrat, took office in January.

      For background, see Peter Katel, “Downsizing Prisons,” CQ Researcher, March 11, 2011; Kenneth Jost, “States and Federalism,” CQ Researcher, Oct. 15, 2010.

Weekly Roundup 5/23/2011

Can Mainstream Media Match WikiLeaks?
Peter Scheer, Huffington Post, May 16, 2011

Synopsis: Mainstream media outlets clearly wish they could bypass cranky Rebels With a Transparency Cause like WikiLeaks founder Julian Assange by enticing whistleblowers to leak government and corporate documents directly to them. The Wall Street Journal, for example, recently launched its “SafeHouse” website to do just that. But the efforts will fail because media companies won’t and can’t offer leakers blanket anonymity, says the executive director of the nonprofit First Amendment Coalition.

Takeaway: “If the Journal receives a subpoena demanding copies of documents that you submitted confidentially … don't expect Journal editors to pay fines or go to jail to keep them secret,” writes Sheer. “Don't even expect the Journal to give you a heads up about a subpoena; it may turn over your documents and tell you after the fact (or not at all)…. The Journal can't ignore a subpoena or court order…. Although they might choose to go to the mat in a particular case, they certainly can't commit in advance to do so for a source they don't know, offering government records they've never seen. The best they can do (or, that the lawyers will let them do) is leave open the door to possible negotiations…. WikiLeaks, on the other hand, needn't deter [whistleblowers] with legalese. Court orders against WikiLeaks, for all practicable purposes, are unenforceable.”

-Marcia Clemmitt, Staff Writer


“Is the biggest threat to Speaker of the House John Boehner the ‘Young Guns’ in his own party?
Michael Leahy, WP Magazine (Washington Post), May 22, 2011

Synopsis: Political reporter Leahy combines a personality profile with insightful reportage and analysis to delineate the political challenges facing House Speaker Boehner. Boehner’s challenges come, Leahy says, not so much from President Obama and congressional Democrats but from three rising stars from his own GOP ranks: Virginia’s Eric Cantor, majority leader; California’s Kevin McCarthy, majority whip; and Wisconsin’s Paul Ryan, chairman of the House Budget Committee.

Takeaway: “Boehner’s detractors still doubt his bond to conservative values,” Leahy writes. “Any serious miscalculation,” he adds, “might incite a challenge from a key lieutenant or insurgent.”

-Kenneth Jost, Associate Editor


Durango’s Killing Fields
Tim Padgett, Time, May 21, 2011

In a short but vivid on-scene report from northern Mexico, a veteran correspondent chronicles the latest atrocity to surface in the catastrophic drug war that is raging through Mexico’s border region with the United States. The report focuses on the latest discovery of a mass grave – the seventh so far. All in all, they contained 218 bodies. Violence that began as warfare between rival drug gangs still seems unstoppable. The Time account notes that the mass graves are reminiscent of massacres in the Balkans, Central America and South America in recent decades.

-Peter Katel, Staff Writer

Can clean-energy sources compete?

To follow is an excerpt from the CQ Researcher report "Energy Policy" by Jennifer Weeks on May 20, 2011.


Although renewable energy provides less than 8 percent of
total U.S. energy today, experts say that share could grow substantially over the next several decades. Some renewable fuels are more advanced and affordable than others, but many types are competitive now with conventional energy at good sites — that is, places that are sunny enough to generate significant solar power, breezy enough to generate substantial wind power or rich in some other renewable resource.

“Wind, biomass power, and geothermal energy are used worldwide,” says Bobi Garrett, senior vice preside
nt at the U.S. Department of Energy's National Renewable Energy Laboratory in Colorado. “Wind is the fastest-growing renewable and can compete economically with conventional sources in many markets.” Electricity from solar power costs about four times as much as other sources, but in February the Energy Department announced an initiative called SunShot, which seeks to make solar power competitive by 2020.

“That's a stretch goal and a grand challenge, but it's not unreasonable,” says Garrett. “There's been a lot of investment in the underlying science in recent years, and we can draw on it to make new breakthroughs.” And, she points out, solar power is already cost-effective in some areas, such as the Southwest, where peak sunlight hours match up with peak electricity demand periods (for example, on hot summer afternoons).

But skeptics argue that solar and wind power and other clean technologies cannot compete without federal support. “Renewables basically rely on subsidies,” says the American Enterprise Institute's Green. “Without supports, they just don't get built.”

Estimates of the value of government energy measures vary widely. According to one study, from the early 1970s through 2003 solar, wind, biomass and geothermal energy received more than $38 billion in broadly defined federal support. [Footnote 15] The Environmental Law Institute, a research and education group in Washington that works to strengthen environmental protection, calculates that from fiscal 2002 through 2008, renewable fuels received $29 billion in more narrowly defined federal subsidies — that is, direct spending or tax breaks. [Footnote 16]

However, the federal government spends much more money on fossil fuels and nuclear power than on renewables. From the early 1970s through 2003, oil received more than $302 billion in federal support, followed by coal ($80 billion) and nuclear power ($63 billion). [Footnote 17] From 2002 through 2008, the Environmental Law Institute estimates that traditional fossil fuels received more than $70 billion in federal subsidies. [Footnote 18]

Clean-power advocates argue that these subsidies to large, mature industries make it hard for new, cleaner sources to compete. “Subsidies can help young industries that are growing and developing overcome certain cost barriers,” says Hendricks of the Center for American Progress. “They can also be very destructive when they give windfall profits to mature industries. Renewable energy is receiving subsidies to drive its costs down and make it more competitive. Most producers agree that as technology matures, that support should sunset. On a truly level playing field without subsidies, renewables would do quite well.”

Oil and gas producers argue, however, that the tax breaks their industry receives are not subsidies at all. “They are cost-recovery mechanisms, similar to what other industries get,” says Vincent, at the Independent Petroleum Association of America. “A subsidy is designed to help something become commercially competitive in a market where it otherwise wouldn't be.”

Programs such as SunShot seek to help companies in new industries grow from early pilot operations to large-scale commercial operations that can attract funding from major private investors. Advocates say that helping new technologies scale up in this way is smart policy. “Under our last major research grant from the Department of Energy, we commercialized six major innovations within a three-year contract, including high-efficiency panels and high-efficiency photovoltaic cells,” says Julie Blunden, executive vice president at SunPower, a San Jose, Calif., company that designs and manufactures solar-energy systems. “That's a great return on federal dollars.”

In April SunPower and a partner company opened a jointly operated plant in Milpitas, Calif., that will manufacture 75 megawatts of highly efficient solar panels for homes and power plants annually. At the plant opening, Democratic Gov. Jerry Brown signed a bill expanding California's renewable electricity standard, which now requires utilities to generate one-third of their power from renewable sources. [Footnote 19]

Earlier this year SunPower won a contract to generate and deliver more than 700 megawatts of solar power to Southern California Edison, one of California's largest utilities, for resale to the utility's customers. “We came in at a price that was competitive with a new natural gas plant,” Blunden says. “That's something we could never have achieved if we hadn't been able to scale up our manufacturing and if we hadn't had California's renewable electricity standard driving demand.”

Based partly on SunPower's recent successes, the popular Motley Fool investment website rated the company as a “Rising Star.” Motley Fool's report noted that renewable energy companies still depend heavily on government support and are fairly risky investments. Still, it argued, “the market for alternative energy won't go away…. There are myriad reasons why so many people all over the globe are looking for better, cleaner, cheaper alternatives to fossil fuels.” [Footnote 20]

The Issues:

  • Is a shift away from fossil fuels necessary?
  • Can clean-energy sources compete?
  • Is the United States in a global clean-energy race?

Click here for more information on the CQ Researcher report on "Energy Policy" [subscription required] or purchase the PDF.



[15] Roger H. Bezdek and Robert M. Wending, “A Half Century of U.S. Federal Government Energy Incentives: Value: Distribution, and Policy Implications,” International Journal of Global Energy Issues, vol. 27, no. 1 (2007), p. 43. This figure includes spending for geothermal energy ($5.7 billion), which the article counts separately from other renewable fuels ($32.6 billion).

[16] “Estimating U.S. Government Subsidies to Energy Sources: 2002-2008,” Environmental Law Institute, September 2009, www.eli.org/Program_Areas/innovation_governance_energy.cfm.

[17] Bezdek and Wending, op. cit., p. 43.

[18] Environmental Law Institute, op. cit., p. 3.

[19] Ian Bauer, “Governor Dedicates Solar Plant,” San Jose Mercury-News, April 13, 2011.

[20] Alyce Lomax, “Rising Star Buy: SunPower,” Fool.com , Jan. 11, 2011, www.fool.com/investing/general/2011/01/11/rising-star-buy-sunpower.aspx.

Will Greece Suffer Without Strauss-Kahn at IMF Helm?

No one really knows what effect the resignation of IMF head Dominique Strauss-Kahn following his shocking arrest on sex charges will have on the fate of debt-ridden Greece.

So far, everyone involved in the Brussels crisis talks this week has been acting out their expected roles: Germany has insisted that Greece should get no more help unless it does something in return (like selling off its public companies and land, which it’s been loathe to do), while the European Central Bank adamantly resists talk of a default.

Yet many experts expect their ceremonial dance to end with Greece defaulting on its debts — even if it’s called by another name. The latest euphemism to surface: “reprofiling” or a “soft restructuring.” According to the latest iteration (subscription to Financial Times required), bondholders of Greek debt would have to wait longer than originally promised for their bonds to mature.

The alternative would be “a drip-feed” of endless loans to Greece -- something that’s “hard to imagine Europe’s taxpayers accepting,” the Economist magazine said last week. In an editorial, it called for the IMF, experienced with restructuring governments’ debt, to unite with Germany against the Central Bank in demanding an extension on the maturity date of Greek government bonds -- a move that would protect German banks, which are big holders of Greek government bonds.

Strauss-Kahn -- or DSK, as he’s known -- was an old hand at persuading governments to do this sort of thing and was considered instrumental in negotiating the bailouts within the past year not only of Greece, but also of Ireland and Portugal. But he was just as insistent as the central bankers that countries like Greece adhere to what now looks like a failing policy: drastic austerity plans coupled with loans from the EU/IMF at interest rates considered punitive by the bailed out countries.

While many have said this past week that Strauss-Kahn was responsible for reviving the IMF, others are not so sanguine. American Enterprise Institute scholar Desmond Lachman says in the Financial Times (subscription to Financial Times required) that Strauss-Kahn will be remembered as the man who put the IMF “on the road to decline by his misguided handling of the eurozone crisis.” The failures of the bailouts in both Greece and Ireland, Lachman says, risk blackening the IMF’s reputation in Europe in the same way as its similar policies in Asia and Latin America “rendered the fund a pariah in the 1990s.”

With the leadership of the IMF in doubt, will Greece fare better or worse?

Better, speculated one trader in the Financial Times’ Alphaville blog on Monday. The IMF will be more lenient toward Greece, and maybe Ireland, which also wants a reduced interest rate, because of the “black eye” it received from the weekend’s arrest.

Worse, other experts predicted, because it will shift the IMF’s focus away from Europe, where DSK had it firmly fixed.

Some think that’s a major risk, particularly if Asian and Latin European members succeed in getting a non-European appointed as head of the institution, which traditionally has been headed by a European. British bookmaker William Hill was putting the best odds May 18 on Kemal Davis, former Turkish Finance Minister, for IMF successor. Davis is from an “emerging” economy, still European but perhaps more sympathetic with other countries on Europe’s so called “periphery,” such as Greece and Ireland.

French Finance Minister Christine Lagarde had been near the bottom of the bookies’ lists with 14 to 1 odds. By this morning, she was the front-runner. The latest odds showed Agustin Carstens, governor of the Bank of Mexico, at the bottom with 25 to 1 odds against him.

But then again, maybe a Latin American would know what it felt like to be Greece, deep in a hole, with the IMF seemingly asking for impossible cutbacks.

-Sarah Glazer, author, “Future of the Euro,” CQ Global Researcher, May 17, 2011

Will the Supreme Court approve the Wal-Mart case?

To follow is an excerpt from the CQ Researcher report "Class Action Lawsuits" by Kenneth Jost on May 13, 2011.


Betty Dukes went to work for the local Wal-Mart in Pittsburg, Calif., in 1994, as a part-time cashier earning $5 an hour. Seventeen years later, she has advanced no further than store “greeter,” making $15.23 an hour.

The outcome may also send lower federal courts an important signal on how strictly to apply the procedural rules governing class actions -- the controversial form of mass litigation used by discontented workers, defrauded investors and disgruntled customers and assailed by businesses and critics of runaway civil litigation.

So far, two lower federal courts have ruled that the case can proceed as a class action on behalf of 500,000 or more women who have worked for the company’s Wal-Mart or Sam’s Club stores in the United States since 1998.

The case could just as likely peter out if the U.S. Supreme Court decides that the decade-long litigation cannot go forward as a class action. The justices heard arguments on March 29 on the question of whether to certify as a class action the suit filed in 2001 on behalf of Dukes and five other named plaintiffs. The court’s answer to that seemingly technical question likely holds the key to the outcome. “These kinds of cases settle if they’re certified,” says Michael Selmi, a professor at George Washington University Law School in Washington, D.C., who has studied employment discrimination cases for more than a decade.

Class actions are, in the words of fellow George Washington law professor Roger Trangsrud, “the most controversial” form of civil litigation today. A class action allows plaintiffs with similar claims to consolidate claims too small to litigate individually into a suit big enough for a lawyer to take on and too big for a corporate defendant to brush off.

Civil rights organizations and investor- and consumer-protection groups view class actions as an indispensable legal tool against corporate wrongdoing. “There’s often widely dispersed harm from a defendant’s unlawful conduct,” says Scott Nelson, an attorney with the nonprofit Public Citizen Litigation Group in Washington. “If a company cheats 10 million people out of $30, that’s $300 million. That’s a lot of money.”

A class action, Nelson says, is often “the only way” to pursue such claims to compensate the victims. At the same time, he notes, attorneys for the class can seek a declaratory judgment or injunction to put a stop to the alleged wrongdoing in the future.

Business groups acknowledge some role for class actions, which can benefit a company by resolving a multitude of potential claims in one “global” settlement. But they also say that class actions can coerce a company into settling a dubious case to limit litigation expenses and avoid the risk of an even larger judgment. “Some companies are just devastated by class actions,” says Matt Cairns, a lawyer in Concord, N.H., and current president of the Chicago-based organization DRI -- The Voice of the Defense Bar.

Cairns says class actions sometimes also operate to plaintiffs’ detriment, as in consumer-suit settlements that provide class members with discount or reduced-price coupons for the defendant’s product or service. Cairns and other critics say the coupons often go unused while lawyers get to pocket six- or seven-figure attorney-fee awards.

Various forms of “aggregate litigation” can be found as far back as medieval England and the 19th-century United States. Today, class actions are governed in federal court by Rule 23 of the Federal Rules of Civil Procedure, which sets out requirements for certifying a suit as a class action. In short, the claims to be consolidated must be numerous and generally similar (“common”) and the named plaintiffs typical of and an adequate representative for the potential class.

If those criteria are met, a judge can then certify the case with an additional finding that a classwide injunction would be “appropriate” or that the common questions “predominate” over different issues, and class action is the “superior” method of adjudication.

The federal judiciary, exercising rulemaking authority granted by Congress, adopted Rule 23 in 1966, in the heady days of civil and consumer rights. In recent years, federal courts have come to apply the rule more strictly than before, making it somewhat harder for plaintiffs to get suits certified as class actions. In addition, Congress passed laws in the 1990s to tighten the rules for securities class actions and another measure in 2005 to shift nationwide class actions from state courts into what business groups viewed as a more favorable forum: federal courts.

Plaintiffs’ groups are downbeat about the trend. “Class actions right now have a ‘sell’ recommendation,” says John Vail, vice president and senior litigation counsel of the Center for Constitutional Litigation in Washington. The center is an arm of the American Association for Justice (AAJ), formerly the Association of Trial Lawyers of America.

Business groups and their allies, on the other hand, approve of the changes. “The trend is generally good,” says Richard Samp, chief counsel at the pro-business Washington Legal Foundation.

Employment-discrimination cases are one of the categories of class actions affected by the changed judicial climate. “There are a lot of hurdles for class actions,” says Rebecca Hamburg, program director of the San Francisco-based National Employment Lawyers Association, a plaintiffs’ group.

Thus far, the Wal-Mart case has defied that trend. A federal judge in San Francisco and a 6-5 majority of judges on the Ninth U.S. Circuit Court of Appeals have certified the case as a class action despite all-out opposition by the Bentonville, Ark.-headquartered company buttressed by several business and conservative groups at the appellate stage.

Dukes, now 61, brought her complaint of discrimination to the Impact Fund, a nonprofit law firm in Berkeley, Calif., in early 2001. Frustrated by several years of no advancement, Dukes felt unfairly treated when she was demoted for what she described as a common practice at the store: asking another cashier to open a cash register with a one-cent sale to make change she needed for a purchase.

Brad Seligman, the fund’s founder and senior counsel, combined Dukes’ complaint with others to file the original suit in federal court in San Francisco later that year. As evidence to support the certification of the case as a class action, Seligman and his colleagues compiled statistics showing an underrepresentation of women in managerial positions at Wal-Mart and a 5 percent to 15 percent pay gap for women in all 41 of Wal-Mart’s U.S. regions. The lawyers also introduced affidavits from 120 women documenting what they depicted as a pervasive atmosphere of sexism and gender stereotyping.

Wal-Mart sharply disputed the statistics and the thrust of the anecdotal evidence. It also argued that class certification was unwarranted because a class of as many as 1.5 million women had too many differences to satisfy the federal rule’s requirements of “commonality” and “typicality.” Nevertheless, U.S. District Judge Martin Jenkins certified the class in an 84-page order on June 21, 2004. The Ninth Circuit, the appeals court for California and eight other Western states, affirmed the ruling on April 26, 2010.

The Supreme Court agreed on Dec. 6 to hear Wal-Mart’s appeal of the ruling. By then, the justices had already put two other class action cases on their calendar for the term, which ends in late June, and were to add one more on Jan. 7. “The law of class actions is currently in flux,” says Alexandra Lahav, a professor at the University of Connecticut School of Law in Storrs who helped write a friend-of-the-court brief in support of the plaintiffs at the Supreme Court.

In the only ruling issued so far, the court gave business groups a major victory on April 27 by upholding companies’ ability to enforce clauses commonly seen in consumer contracts that bar class actions in arbitration. The 5-4 ruling in AT&T Mobility LLC. v. Concepcion rejected on federal preemption grounds a California rule treating waivers of classwide arbitration as generally unenforceable.

The Issues:

  • Do class actions provide effective remedies to plaintiffs?
  • Are class actions fair to defendants?
  • Are class actions too big for courts to manage?

Click here for more information on the CQ Researcher report on "Class Action Lawsuits" [subscription required] or purchase the PDF.

Weekly Roundup 5/16/2011

Million-Dollar Wasteland: A failed promise of better public housing

Debbie Cenziper and Jonathan Mummolo, The Washington Post, May 15, 2011

Synopsis: “The federal government’s largest housing construction program for the poor has squandered hundreds of millions of dollars on stalled or abandoned projects and routinely failed to crack down on derelict developers or the local housing agencies that funded them.” That’s the dramatic lead of the first in a multi-story series based on a yearlong investigation into housing projects funded by the federal Department of Housing and Urban Development (HUD). Out of 5,100 open projects, reporter Cenziper and Mummolo found that 700 – about one out of seven – “have been idling for years,” some as long as a decade. The open projects have been awarded $400 million in federal funds.

Takeaway: The program is “dysfunctional,” the reporters write, with few rules or safeguards to ensure that the federal funds are well spent.

--Kenneth Jost, Associate Editor


In Prison Reform, Money Trumps Civil Rights
Michelle Alexander, The New York Times, May 14, 2011

A critic of U.S. criminal justice takes issue with many of the politicians now arguing for less incarceration. Alexander, author of a 2010 book that characterizes the penal system as an updated form of Jim Crow, argues that Newt Gingrich and other conservatives who now criticize mass incarceration are ignoring the racial and human-rights dimensions of the issue. Instead, they focus on the rising costs of imprisonment at a time of financial crisis for state governments. That argument won’t suffice to rally public opinion to the cause of overhauling the penal system, Alexander maintains.

--Peter Katel, Staff Writer

For background, see Peter Katel, “Downsizing Prisons,” CQ Researcher, March 11, 2011.


Wall Street and the Financial Crisis: Anatomy of a Financial Collapse
Senate Permanent Subcommittee on Investigations, April 13, 2011

Synopsis: Based on a two-year investigation, the majority and minority staffs of a Senate committee headed by Chairman Carl Levin, D-Mich, and ranking member Tom Coburn, R-Okla., conclude that the financial-market meltdown of 2008 stemmed from high-risk lending, regulatory failure, inflated financial-institution credit ratings by ratings agencies including Moody’s and Standard & Poor’s, and a bevy of flagrant misbehaviors including multiple severe conflicts of interest and outright fraud on the part of large investment banks.

Takeaway: “The investigation found that, the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street,” the bipartisan analysis concludes.

--Marcia Clemmitt, Staff Writer

For background, see Marcia Clemmitt, “Financial Industry Overhaul,” CQ Researcher, July 30, 2010; Thomas J. Billitteri, “Financial Bailout,” CQ Researcher, Oct. 24, 2008, updated July 30, 2010; and Kenneth Jost, “Financial Crisis,” CQ Researcher, May 9, 2008.


People Have Been Looking for Gold for 100 Years
Gary Wolf, The New York Times Magazine, May 15, 2011

Synopsis: Once again, dear reader, I’m going to do you a favor and skip all the depressing things I read this weekend – the head of the IMF getting arrested on sexual-assault charges, the secret mercenary force created for the rulers of the United Arab Emirates by Erik Prince, the billionaire founder of Blackwater Worldwide. Instead, I’m going to put you on to such a compelling (and relatively happy) story that you’ll get whiplash turning the pages (and forgive me if I’ve used that metaphor before, but having appropriated it once, it just seems wasteful to use it only once.) The story is about modern-day gold prospector Shawn Ryan (a former mushroom hunter) and the new hunt for gold he kicked off in Canada’s Yukon Territory. (Think Klondike gold rush redux.) Anyway, Ryan and his partner, Cathy Wood, now own more than 35,000 gold claims (an area bigger than Luxembourg)…and no longer live in a rustic cabin without electricity where the temperatures hit 50 degrees below zero.

Takeaway: Just when you think you’ve heard it all, a story comes along to restore your faith in the human spirit, not to mention the possibilities for adventure and fabulous riches.

--Tom Colin, Contributing Editor

Weekly Roundup 5/9/2011

"President Obama on the mission to kill bin Laden"
CBS News, 60 Minutes, May 8, 2011

"Trail to bin Laden began with phone call"
Bob Woodward, The Washington Post, May 6, 2011

Synopsis: In his first interview since the death of Osama bin Laden, President Obama tells “60 Minutes” correspondent Steve Kroft that he made the difficult decision to order the mission despite disagreements among his advisers and only a “55-45” likelihood of success. In the Washington Post, Bob Woodward recounts how U.S. intelligence agencies tracked bin Laden to his hideout in Abbottabad, Pakistan, and gives some details on the deliberations before Obama’s go-ahead order.

Takeaway: “I said to myself,” Obama told Kroft, “that if we have a good chance of not completely defeating but badly disabling al Qaeda, then it was worth both the political risks, as well as the risks to our men.”

--Kenneth Jost, Associate Editor


"What Happened to Air France Flight 447?"
Wil S. Hylton, The New York Times Magazine, May 8, 2011

Synopsis: In June 2009, an Airbus A330 vanished about halfway between South America and Africa. Three search teams looked unsuccessfully for the wreckage on the ocean floor, but a fourth attempt, carrying sophisticated unmanned submarines, succeeded, finding not only the wreckage but also the plane’s black boxes.

Takeaway: After the data recorders inside the black boxes are analyzed, investigators may be able to solve the mysterious crash. Meanwhile, some aviation experts think the plane’s air speed indicators may have malfunctioned, ultimately sending the plane into a dive from which the pilots could not recover.

--Thomas J. Colin, Contributing Editor


"The Destruction of Economic Facts"
Hernando de Soto, Bloomberg Businessweek, Apr. 28, 2011

Synopsis: Many economists and politicians argue strongly against increased government regulation of business and finance, saying that, left to themselves, markets are the best means of supplying society with virtually everything it needs, from health care to home ownership. But Peruvian economist Hernando de Soto says that much of the world economy now operates in the form of “shadow markets” cloaked in dangerous secrecy that leaves would-be buyers in near-total ignorance of the value of what’s for sale. To prevent repeated financial chaos, governments must enforce transparency and standardization in all markets, he says.

Takeaway: Over the past 30 years, “governments have allowed shadow markets to develop and reach a size beyond comprehension,” writes de Soto. “Mortgages have been granted and recorded with such inattention that homeowners and banks often don't know and can't prove who owns their homes. In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.”

--Marcia Clemmitt, Staff Writer

Do businesses have ethical obligations beyond what the law and shareholders require?

To follow is an excerpt from the CQ Researcher report "Business Ethics" by Maryann Haggerty on May 6, 2011.


Among the most frequently cited articles on business ethics is “The Social Responsibility of Business is to Increase Its Profits,” written in 1970 by Nobel Prize-winning economist Milton Friedman, a strong free-market advocate. [Footnote 13]

“In a free-enterprise, private-property system,” Friedman wrote, “a corporate executive is an employee of the owners of a business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom.”

In this view, going beyond those basic requirements — for instance, as Friedman wrote, spending more to reduce pollution than “the amount that is in the best interests of the corporation or that is required by law” — amounts to improperly spending money that belongs to the shareholders.

The U.S. concept of free-market capitalism is not, of course, universally accepted. Karl Marx, the intellectual father of communism, saw profit as the result of capitalist exploitation of workers. Socialist and communist systems assert that some or all of business profits rightfully belong to society.

But among those who embrace capitalism, many say ethical obligations go well beyond simply making a profit.

A survey of business executives from around the world by consulting firm McKinsey & Co. found that only a minority wholeheartedly embraced Friedman's view. Sixteen percent of respondents agreed that business should “focus solely on providing the highest possible returns to investors while obeying all laws and regulations.” But 84 percent said the role of large corporations should be to “generate high returns to investors but balance [that] with contributions to the broader public good.” [Footnote 14]

“There's always the prevailing responsibility to make sure that you're creating shareholder value if you're a publicly traded organization, or to be making high-quality products or delivering high-quality services,” says Patricia Harned, president of the Arlington, Va.-based Ethics Resource Center, which regularly convenes ethics experts from business, academia and elsewhere. “But most businesses that have very effective … ethics and compliance programs will also say we have an obligation to not just make money but to make sure that we're doing it with the highest integrity.”

That means, she says, treating employees with respect, supporting customers and clients, not breaking the law or engaging in unethical behavior and “being as transparent as we can be about how we do our business.

“It goes well beyond the minimum standard” of not breaking the law, Harned adds.

One of the most widely taught approaches to business ethics holds that businesses have responsibilities not only to shareholders but also to “stakeholders” — employees, customers, suppliers, the surrounding community and others. “Stakeholder theory is the idea that each one of these groups is important to the success of a business, and figuring out where their interests go in the same direction is what the managerial task and the entrepreneurial task is all about,” said R. Edward Freeman, a professor of business administration at the University of Virginia's Darden School of Business and a pioneer of the stakeholder discipline.

“Stakeholder theory says if you just focus on financiers, you miss what makes capitalism tick,” he said. “What makes capitalism tick is that shareholders and financiers, customers, suppliers, employees, communities can together create something that no one of them can create alone.” [Footnote 15]

Since 2006, all students at the Thunderbird School of Global Management, a respected international business school in Glendale, Ariz., have been invited to voluntarily sign a Professional Oath of Honor. In part, it reads: “I will strive to act with honesty and integrity, I will respect the rights and dignity of all people, I will strive to create sustainable prosperity worldwide, I will oppose all forms of corruption and exploitation, and I will take responsibility for my actions.”

A separate oath promoted to business students worldwide by leaders of Thunderbird and other top schools reads in part: “My purpose is to lead people and manage resources to create value that no single individual can create alone; my decisions affect the well-being of individuals inside and outside my enterprise, today and tomorrow.” The “Oath Project” is an effort to create a “sort of gold standard” on how professional managers should execute their responsibilities, says Gregory Unruh, director of the Lincoln Center for Ethics in Global Management at Thunderbird.

Aside from being good people, corporate executives should look out for stakeholders — including non-shareholders — because it's good for business, says New York University's Berenbeim. “The sustainability of the business depends on a lot more than your earnings per share,” he says. It “depends on a high level of satisfaction of all the stakeholders.” After all, he says, a business with unhappy customers might not be profitable for long.

Stakeholders can hold businesses accountable in a variety of ways. For instance, the University of Toronto's MacDonald says, “the most straightforward” is with purchasing and investment decisions. Other “mechanisms of civil society,” such as protests and bad publicity on Twitter, also are available, he notes.

Websites set up by customers complaining about companies are ubiquitous, as are government sites where customers can complain. SaferProducts.gov, which went live this spring, lets consumers contribute to a federal government database listing possibly dangerous products. Business groups, including the National Association of Manufacturers, complain that if the site is poorly monitored, it could unfairly damage companies' reputations. [Footnote 16]

Such stakeholder pressure can make a difference, though. MacDonald notes that beginning about 20 years ago, Nike, the athletic-shoe maker, was increasingly criticized for its use of overseas sweatshop labor. It gradually reformed its practices and now is regarded as an industry leader against abusive labor practices.

Freeman acknowledged that his theories and Friedman's may seem opposed, but really aren't. “I actually think if Milton Friedman were alive today …, he would be a stakeholder theorist,” Freeman wrote. “He would understand that the only way to create value for shareholders in today's world is to pay attention to customers, suppliers, employees, communities and shareholders at the same time.

“What Friedman was against was the idea of social responsibility that doesn't have anything to do with business. [Footnote 17] I'm against that too. I think stakeholder theory is a theory about business, but community and civil society is absolutely central to business. We need corporate stakeholder responsibility. If we have that, there's no conflict between shareholders and stakeholders.” [Footnote 18]

The Issues:

  • Do businesses have ethical obligations beyond what the law and shareholders require?
  • Do education and training improve business ethics?
  • Can laws and regulations make businesses act more ethically?
Click here for more information on the CQ Researcher report on "Business Ethics" [subscription required] or purchase the PDF.

[13] Milton Friedman, “The Social Responsibility of Business,” The New York Times Magazine, Sept. 13, 1970.

[14] “The McKinsey Global Survey of Business Executives: Business and Society,” January 2006, www.mckinseyquarterly.com/The_McKinsey_Global_Survey_of_Business_Executives__Business_and_Society_1741.

[15] R. Edward Freeman “What is Stakeholder Theory?” Business Roundtable Institute for Corporate Ethics, available at www.youtube.com/watch?v=bIRUaLcvPe8.

[16] National Association of Manufacturers, “Focus: CPSC to Roll Out Product Safety Database,” Capitol Briefing, Jan. 13, 2011, www.nam.org/Communications/Publications/Capital-Briefing/Archive/011311.aspx.

[17] For background, see Tom Price, “Corporate Social Responsibility,” CQ Researcher, Aug. 3, 2007, pp. 649-672; and Kathy Koch, “The New Corporate Philanthropy,” CQ Researcher, Feb. 27, 1998, pp. 169-192.

[18] R. Edward Freeman, “Shareholders vs. Stakeholders — Friedman vs. Freeman Debate,” Business Roundtable Institute for Corporate Ethics, www.youtube.com/watch?v=_sNKIEzYM7M&NR=1.

Weekly Roundup 5/2/2011

Why being a foodie isn’t elitist
Eric Schlosser, The Washington Post, May 1, 2011

Synopsis: The president of the American Farm Bureau Federation has attacked critics of large-scale industrial agriculture in the United States as “self-appointed food elitists.” Eric Schlosser, one of the most prominent of those critics and author of “Fast Food Nation” (2001), says the name-calling is “an attempt to evade a serious debate about U.S. agricultural policies.” Current agricultural practices and food marketing, he says, short-change farmers and ranchers and contribute to obesity and food-borne illnesses.

Takeaway: Schlosser will be one of more than 30 speakers from industry, government, academia and advocacy groups at a day-long Washington Post Live conference, “The Future of Food,” to be streamed live beginning at 9 a.m. on Wednesday, May 4 (washingtonpostlive.com). Among the other speakers is the Prince of Wales, identified as a lifelong environmentalist and an organic farmer.

For background, see Peter Katel, “Food Safety,” [subscription required] CQ Researcher, Dec. 17, 2010.

--Kenneth Jost, Associate Editor


A Beast in the Heart of Every Fighting Man
Luke Mogelson, The New York Times Magazine, April 27, 2011

Synopsis: Mogelson delves into the possible reasons behind the murders of three civilians in Afghanistan by young U.S. soldiers.

Takeaway: After talking with experts, he finds that extreme dysfunction in the soldiers’ unit may have been a factor. “Ten years into an unconventional war whose end does not appear imminent, the murder of civilians by troops that are supposed to be defending them might reveal more than the deviance of a few young soldiers in a combat zone,” the author says.

--Tom Colin, Contributing Editor


What’s Left of the Left
Benjamin Wallace-Wells, The New York Times, April 24, 2011

Synopsis: Paul Krugman, the Nobel-Prize winning Princeton University economist and New York Times columnist and blogger, argues for economic policies much more liberal than those embraced by the Obama administration. In response, some of his critics, such as Larry Summers, former director of Obama’s Council of Economic Advisers, call him a bomb-thrower.

Takeaway: “Krugman’s purism is partly tactical, his way of correcting for the inevitable dilutions of legislative negotiation,” writes Wallace-Wells. “You want to have a pretty clear vision of what it is you want even though you know what you’re going to get is only a small fraction of that,” says Krugman.

"Sendak, Picturing Mortality
Amy S. Rosenberg, Philadelphia Inquirer, April. 24, 2011

Synopsis: Sometimes criticized for depicting too many harsh truths in his books for children, Where the Wild Things Are author/illustrator Maurice Sendak regrets a personal truth he didn’t share. Sendak, age 82, never told his parents he was gay. “I wish I had…trusted them more,” he says.

Takeaway: Adult critics may not understand this, but children understand darkness, mortality and pain, Sendak says. His books’ persistent success with generations of youngsters comes from the fact that "I take kids seriously. They have a lot of things wrong. They protect their parents. Children are brave little creatures."

--Marcia Clemmitt, Staff Writer


The Trinity Six, Charles Cumming, St. Martin’s Press, 2011

In a field crowded with entries that amount to comic books without the pictures, spy fiction has also always enjoyed a few practitioners who rise to the literary heights. John le CarrĂ© is the classic example. Now, a younger British author shows he may soon reach the pinnacle. An editor who, like le CarrĂ©, has some spook experience delivers an ingeniously plotted and believable novel that manages to connect Britain’s best-known spy scandal with contemporary events. One offstage but important character sounds a lot like a leader of a very important country. A great read – with the bonus of describing how personal technology has affected espionage.

--Peter Katel, Staff Writer