The Value at Risk: Chrysler Tests the Independence of the Supreme Court

We recall a certain first day of Consitutional Law class where the professor questioned us regarding the strength of the legislative, judicial, and executive branches of the federal government, relative to one another. We quickly reacted and, in idealistic fashion, proclaimed something along the lines of "The United States Constitution, in it's brilliance, created three separate yet equally powerful branches of Government. The wonderful document forced the implementation of a variety of checks and balances such that no one branch could act outside of it's legally proscribed bounds. Therefore, all three branches are of equal power!" That may technically be true, said our Professor, but in the end, the President commands every branch of federal law enforcement, in addition to the United States military. In contrast, he reminded us, each Justice of the Supreme Court is assigned a lone US Marshall, carrying a single handgun. If there ever erupted an actual struggle for power, he questioned, who do you all think would prevail?

Fortunately, branches of the federal government have never literally gone to arms against each other. However, based upon the example set during the Great Depression by Franklin Roosevelt, it is not impossible for politics to enter the decisions of the 9 Supreme Court Justices. As a refresher, Roosevelt was having trouble implementing every aspect of his New Deal. The trouble was, the Consitution only provided Congress the ability to pass laws based upon an explicit set of justifications. One of those justifications, the ability to regulate interstate commerce, was commonly cited as the basis for Roosevelt's New Deal measures. At the time however, the Supreme Court was a slightly conservative leaning body that in fact struck down several New Deal programs as being unconstitutional on the basis that they had nothing to do with interstate commerce. Roosevelt's plan: announce that he would like the Supreme Court to be a 12 person panel, with the additional three members arriving via Presidential appointment. The threat of vote dilution and embarassment was successful, as it prompted the current members of the Court to "behave" and not make things difficult for Mr.Roosevelt.

Today's "stay order" (below) is significant because it shows that the Supreme Court is at least considering whether it wants to behave as an independent body, as opposed to a rubber-stamping Kangaroo Court that would allow a sitting President to destroy decades of precedent regarding a creditor's rights in bankruptcy proceedings. The interesting thing about the stay order is the sheer indefiniteness of it; the Court has literally halted proceedings until further notice. With every day that passes however, the storyline gets increasingly compelling.

As we see it, the Court only has two choices: To follow the political will of a popular President, or to follow the law. To choose the former would be a complete repudiation of the Court's independence, in our most humble opinion.

In Police Pension v Chrysler