More work needed to implement Ginsburg’s vision of social and economic justice

Supreme Court Justice Ruth Bader Ginsburg is being justly celebrated for advancing constitutional equality and being a wonderful role model for women. But she also should be remembered for several significant opinions she wrote that made corporate law more responsive to contemporary needs. 

Issues in that legal area which are mostly decided under state law usually don’t make it to the U.S. Supreme Court unless they arise under the federal securities laws. Yet in two cases there, Justice Ginsburg made prosecution of corporate corruption easier. One of them expanded the scope of insider trading to safeguard the integrity of our securities markets. Because of her opinion in U.S. v. O’Hagan it is now a crime not just for corporate officials to use significant non-public information to buy or sell stock but for anyone else who misappropriates it.   

And thanks to another High Court decision that Justice Ginsburg wrote, it is easier for victims of securities fraud to remedy that injustice. Writing for the court in Tellabs, Inc. v. Makor Issues and Rights, Ltd., she held that shareholders who plead cogent evidence of such wrongdoing should be allowed to maintain civil suits against those who have cheated them.    

The justice began that opinion with this strong endorsement of those legal actions, stating that they not only give redress to those wronged by such dishonest activity but also serve to deter it. “The court has long recognized that meritorious private actions to enforce federal antifraud securities laws are an essential supplement to criminal prosecutions and civil enforcement actions brought respectively by the Department of Justice and the Securities and Exchange Commission.”

But the most important contribution that Justice Ginsburg made to the development of corporate law came in her dissent in Hobby Lobby, a case that was notorious but in quite a different way than that adjective has been used to describe the justice herself.  There, all the shares of a corporation with thousands of employees were owned by the members of one family. They challenged the Affordable Care Act’s mandate that their firm had to provide its workers with health care that included certain types of birth control because it violated their religious beliefs.

Hobby Lobby came before the court just several years after Citizens United, a case that struck down a law prohibiting political contributions by corporations because it violated their First Amendment rights to free speech. Justice Ginsburg had dissented there as well, finding no intent in the Constitution to give corporations free speech rights. Her objections in Hobby Lobby, however, were even more pronounced. As she began her opinion, “In a decision of startling breadth, the Court holds that commercial enterprises, including corporations…can opt out of any law…they judge incompatible with their sincerely held religious beliefs.”

She then summed up Congress’s reasoning for requiring companies to include birth control in their health plans with these comments that reflected her strong commitment to gender equality, “The ability of women to participate equally in the economic and social life of the Nation has been facilitated by their ability to control their reproductive lives.” She went on to articulate a much broader view of the corporation than the one the majority sustained, where all its participants, such as its employees, should have their interests taken in account in its governance. 

Corporate leaders have recently come, at least in theory, to recognize the wisdom of the justice’s views. In August, 2019 the Business Roundtable issued a statement that the purpose of corporations should not just be to make money for their shareholders but to serve the needs of their stakeholders as well. But commentators have found that the actions of many of those companies during the pandemic belied their aspirations such as laying off workers or skimping on protections for their health and safety.  

Much more needs to be done to implement Justice Ginsburg’s admirable vision of social and economic justice. Yet we were fortunate to have her as a pathfinder there during her marvelous tenure on the High Court.

Daniel J. Morrissey is a professor and former dean at Gonzaga University Law School.