When President Donald Trump announced Brett Kavanaugh as his nominee for the Supreme Court to replace Justice Anthony Kennedy when he retires at the end of July, liberal commentators sounded the alarm about what his service could mean for controversial topics including abortion and health care. Add one more topic to the list: consumer rights.
“There’s a lot to dislike about Brett Kavanaugh’s record — including his hostility to consumers,” Senator Elizabeth Warren, a Democrat from Massachusetts who largely created the Consumer Financial Protection Bureau as part of Dodd-Frank reforms in 2010, wrote on Twitter TWTR, +2.48% on July 10.
“Judge Kavanaugh has been a reckless and partisan jurist who has always seemed more interested in pleasing Wall Street and the conservative political establishment than he has in defending the Constitution,” wrote Karl Frisch, the executive director of the left-leaning consumer advocacy organization Allied Progress, in a statement. “He would be a disaster for consumers and the CFPB if confirmed to the Supreme Court.”
Kavanaugh has support within the business communityOthers disagree. The National Federation of Independent Business, a nonprofit based in Nashville, released a statement cheering his nomination on July 9. “Judge Kavanaugh has a proven record of interpreting the U.S. Constitution according to its original meaning and has ruled consistently against regulatory agencies whose interpretation of the law exceeds its statutory authority,” wrote Juanita Duggan, chief executive and president of the National Federation of Independent Business.
Kavanaugh will cement a “reliably conservative majority” on the Supreme Court, which has already shown some signs of ruling in favor of businesses, including a recent decision in favor of American Express AXP, +0.82% said Isaac Boltansky, director of policy research at Compass Point, a research and trading firm with offices in New York, Boston and D.C.
Here’s why consumer advocates take issue with Kavanaugh as Trump’s nominee:
PHH Corporation v. Consumer Financial Protection BureauCritics fear Kavanaugh will weaken the country’s most prominent consumer watchdog. In 2017, a three-judge panel for the District of Columbia Circuit ruled against the structure of the Consumer Financial Protection Bureau, in a case called PHH Corp. v. Consumer Financial Protection Bureau. Kavanaugh was the lead author of that decision, which said the current structure of the CFPB, with just one director, violates the Constitution.
The director could only be removed for specific reasons: Inefficiency, neglect of duty or “malfeasance,” or wrongdoing. In contrast, the president has the power to remove the head of most other agencies at will. Kavanaugh proposed giving that power to the U.S. president, making it possible to remove the CFPB’s director. Consumer advocates feared that would hurt the bureau, especially as the Trump administration had already expressed desire to weaken it.
Kavanaugh and the CFPBKavanaugh has spent 12 years on the U.S. Court of Appeals for the District of Columbia Circuit. In January 2018, the entire D.C. Circuit Court upheld the rule that the president can only fire the head of the CFPB for those specific causes. That case will not go to the Supreme Court, according to the National Law Review, but there are several other cases pending that relate to the CFPB’s constitutionality that could.
“Payday lenders and their allies in Congress have consistently tried to weaken CFPB’s authority for meritless and political reasons,” said Debbie Goldstein, the executive vice president of the Center for Responsible Lending, in a statement. “Brett Kavanaugh is someone who’s made common cause with that effort.”
“Having a judge confirmed to the U.S. Supreme Court who is anti-consumer and believes that the CFPB structure is unconstitutional is alarming and should concern consumers across the country,” she added. Members of the Trump administration and other members of the House have also made suggestions including getting rid of its public complaint database.
U.S. v. AnthemKavanaugh has consistently ruled before in favor of corporations, said Linda Jun, senior policy counsel at Americans for Financial Reform, a nonprofit made up of civil rights and consumer groups that supports a “strong” CFPB. The Supreme Court nominee’s record is “disconcerting,” she added. She cited the 2017 antitrust case of U.S. v. Anthem in which Kavanaugh sided with Anthem ANTM, +0.46% and Cigna CI, +0.37% two health insurers that planned to merge.
The merger would be beneficial to customers who get their insurance from Anthem and Cigna, Kavanaugh argued. But consumer advocates argued that it would lead to less competition and, ultimately, higher costs. Ultimately, the three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit did not allow Anthem to acquire Cigna, on antitrust grounds.
The two insurers subsequently sued one another in Delaware state court. Anthem wanted to prevent Cigna from terminating their deal — trying to salvage the merger after the court’s decision — but a Delaware judge denied that request, saying the chances of saving the merger were remote. Cigna was, therefore, free to walk away from the deal.
Cablevision Systems Corp. v. the FCCIn the case of Cablevision Systems Corp. v. the Federal Communications Commission in 2010, Kavanaugh sided with Cablevision and said the First Amendment applies to modern communication as it did “to the publishers, pamphleteers and newspapers of the founding era.” The FCC wanted to ban exclusive contracts between cable operators and their affiliated video programming networks. But Cablevision and other operators did not want the government to interfere in their programming decisions. The court ruled in favor of Cablevision.
United States Telecom Association v. FCCUnited States Telecom Association v. FCC in 2017 decided whether Internet service providers have First Amendment rights, allowing them to choose what content to carry. Kavanaugh dissented by arguing that net neutrality is unlawful, partly because Congress did not clearly authorize the FCC to issue it. He also said it violated the First Amendment.
A panel upheld the FCC’s 2015 Open Internet Order, commonly known as the “net neutrality” rule. Net neutrality makes Internet providers supply their services like utilities, giving equal Internet speed and no interference in what content is available or not. (The Republican-run FCC voted in December to roll back most of the Obama-era net neutrality rules.)
Venetian Casino Resort v. National Labor Relations BoardKavanaugh sided with Venetian in the 2015 case, Venetian Casino Resort v. National Labor Relations Board. Venetian management asked police officers to give criminal citations to union demonstrators who were on the resort’s property. The National Labor Relations Board unsuccessfully claimed the resort committed an unfair labor practice by asking for those arrests. (The police officers attended the demonstration, but did not arrest protesters.)
President Trump’s administration, meanwhile, sees Kavanaugh’s all of these decisions as pro-business and a net positive for both employers, workers and consumers. Earlier this week, the White House sent a letter to industry trade groups, asking for support for Kavanaugh. “Judge Kavanaugh protects American businesses from illegal job-killing regulation,” the White House said. Kavanaugh is good for business and is against “overregulation,” the letter said.
