Neil Proto on How Five Law Students Challenged Corporate Power

In 1972, Neil Thomas Proto was a law student at George Washington University. He had signed up for a course with Professor John Banzhaf that allowed a real-life project in lieu of a final exam.

Proto and his four fellow students start a group project targeting the corporate power of the nation’s railroads, and the failure of the government to protect the environment and challenge the nation’s oldest regulatory agency, the Interstate Commerce Commission. They want compliance with a new law – the National Environmental Policy Act – and its application to freight rates, asserting that the nation’s railroads discouraged the collection and use of recyclable materials and encouraged the unnecessary mining and exploitation of natural resources.

The group’s name: Students Challenging Regulatory Agency Procedures, or SCRAP, and in the Spring 1972, they sued the United States. 

As success emerged, their adversaries stymied, the critical legal question remained: Does SCRAP have “standing to sue,” or the right to be in court at all? That question reached the United States Supreme Court.

In To A High Court: Five Bold Law Students Challenge Corporate Greed and Change the Law (50th Anniversary Edition June 2023), Neil Thomas Proto, then SCRAP’s chair, provides a first-person account of when he and his classmates dared to take on one of the most powerful industries in America, as well as the federal government, and won one of the most expansive decisions on standing in Supreme Court history.

Describe the scene at GWU Law School fifty years ago when you attended.

“At the time, there was a radical transformation of how law was being taught,” Proto told Corporate Crime Reporter in an interview last month.  “It was very contentious and controversial. Despite powerful faculty and alumni opposition, we were very fortunate to have one teacher who was prepared to create an opportunity for students to challenge corporate power.” 

“It was a class called Unfair Trade Practices. It focused on corporate wrongdoing throughout the nation. We had to read the textbook, participate in class and take the final exam, or read the textbook, participate in class and do a practical group project. I took the course for that reason.” 

“It was contentious and controversial because the year before, Professor John Banzaf was denied tenure because he was teaching the law and allowing students to do things no law professor in the country was allowing students to do. And alumni didn’t like it because the students were going after their clients.”

“I took the course to do the practical group project. We came together. We tossed out four or five different ideas. But the goal was to go after corporate wrongdoing. And in the United States, corporate wrongdoing was easy to find. You just have to figure out what you can do about it.”

“We focused on the Interstate Commerce Commission, the nation’s railroads, the newly enacted National Environmental Policy Act and the harm that was caused – the unnecessary exploitation of natural resources – timber, mining.”

“And this was encouraged by railroad freight rates. And what they discouraged was the use of recyclable materials. And that did enormous harm. That is what the story is about.”

Banzhaf was denied tenure and there was this student protest against that decision. What was the result?

“He created the course. And he personally campaigned against smoking and he filed his own lawsuit as an individual and prevailed before he came to GWU Law School. He had a history of this type of action and he brought that into his classroom. He was not the supervisor. We had the freedom to make a choice of what we wanted to do, how we wanted to go about it, the obligation was on us to do all of the work and to make these choices. He was available if you wanted to talk to him to get guidance or ideas. But he did not supervise.” 

“There were four or five groups in our class who did projects like we did. He let them fail or succeed on their own. But he did it with the admonition that if you are going to do it, you have to be serious about it. There is too much at stake. He said – be serious, be thoughtful, but the burden is on you to do the work.” 

“That was radically different from what had occurred before in law schools. And frankly, it has not occurred since.”

The railroads were raising freight rates and SCRAP intervened with the Interstate Commerce Commission to stop them?

“We learned that the railroads were going to make their request for a rate increase on a Monday morning,” Proto said. “We wrote out these petitions, we typed them, we prepared packets. We mailed them to hundreds of parties. We did all of that and we prepared a press release.”

“About ten minutes after noon on a Sunday, Professor Banzhaf comes up, he drives us over in his car to the Commission. It’s right across the street from the Smithsonian. We had been there as students to do our research. We walked up the steps. We knocked on the door. A guard comes out. He looks at the filing. We had long hair. He was a guard. He was gentle and thoughtful. He took our documents. We had a certificate of service, which he signed.”

“We walked out of there. We then split up, each with a packet of materials for various news outlets – every media source we could think of. We delivered them. And then the following morning, the New York Times wrote an article. There it was in the New York Times even before the railroads got the petition.”

“One of the students went to the New York Times. He knocked on the door and met a reporter, Juan Vasquez. He gave him the papers and went on to the next news outlet.”

The next day the railroad filed their request?

“Yes. And then the ICC received an opposition to our filing from a committee of lawyers from throughout the United States. All of these elite, white shoe law firms from San Francisco, Chicago and Washington and around the country. And they weighed in opposition to what we had filed. And it turned out that our estimate of a billion dollar refund was low. They claimed it was $2.5 billion. We got a massive response from these lawyers.” 

“But the ICC admitted our group into the proceeding. We called our group Students Challenging Regulatory Agency Procedures (SCRAP). The ICC admitted SCRAP into the proceedings. But they then denied the request to reconsider what they had done and they also denied the refund of what turned out to be $2.5 billion.”

“We began participating in opposition to the new rate increase that the railroads had submitted. That went on for a good four months or so until finally we decided to sue.”

“By this point we were down from five students to three. We crafted two lawsuits. The first lawsuit is related to the proceeding we were just talking about. And then we filed another lawsuit on the new rate increase.”

“We filed the lawsuits in the District Court for the District of Columbia. The second lawsuit went to the Supreme Court. Congress enacted a special law dealing with the ICC. You had to start with a single District Court judge. He had to review it and decide whether it should be transferred to the Chief Judge for the U.S. Court of Appeals who then would establish a three member District Court. If that court issued an injunction, you had the right to go to the Supreme Court. Congress wanted the Supreme Court to weigh in on these decisions in a formal way anytime there was an injunction.”

When you first got together with the other students to do this project, did you have a sense that you would end up in the Supreme Court?

“The short answer is no. We filed the petitions in December 1971. We knew that standing was going to be an issue. We recognize that early in the process. We identified the harms that railroads were creating to the environment.”

“We made the decision in early January 1972. The semester was over. Two of the students didn’t want to continue. When the three of us made a decision to continue the case, we examined what the effects would be if we filed a lawsuit. We researched the process Congress laid out in the Interstate Commerce Act. In January, we were fully aware that this could end up in the Supreme Court. And we didn’t file the lawsuit until April or May.”

Had any of Banzhaf’s previous students got that far?

“No. To my knowledge, none of them ended up in court.” 

“So we went to court. One of the judges was Judge J. Skelly Wright. He had been a powerful advocate for his entire life, first for civil rights and then for the environment. He was conscious of the issues involved. And he was quite taken by the arrogance of the ICC that they had no obligation to do anything. When we got the hearing in the District Court, I was there with one of my fellow students. We sat at counsel table. And the argument was made by Banzhaf and another student who was a year ahead of us – he had just passed the bar and it was his very first case. They shared the argument.”

“They argued before Judge Charles Richey who decided that this was worthy of him going to talk to the chief judge. Which he did. And then a three judge panel was created and Judge J. Skelly Wright was the chief of that panel. It was abundantly clear that we were going to win. It was clear at that point that we were going to the Supreme Court. And we did.”

The case reached the Supreme Court in February 1973 – fifty years ago.

“Yes. The railroads and the Commission requested that the Chief Justice of the Supreme Court – Warren Burger – stay the injunction that was at issue and was costing the railroads millions of dollars a month. I’m still at the law school.”

“I’m getting ready to graduate and take the bar exam. Me and another student – George Biondi – worked on the opposition to the railroads and ICC motion. George was a second year student. At the oral argument before the Supreme Court, we all sit together at the Supreme Court to listen to the oral argument.”

The key issue is whether you as law students had standing to sue?

“Yes. And that decision was based on the complaint that we filed in May 1972. That’s the complaint the court looked at to make its decision. Justice Potter Stewart wrote the Court’s decision. And he slammed the lawyers for the railroad, Covington & Burling, for never challenging in court our standing to sue. They complained about it. We were ready to be subpoenaed, to be questioned. But it never happened. They never did it.”

The Court decides five to three that you had standing to sue. Who didn’t vote?

“Lewis Powell. He represented railroads in litigation before he went to the Supreme Court. Before he was selected to serve on the Court, Powell wrote a now famous memo to the U.S. Chamber of Commerce that no one at the time knew about. He attacked people who were critical of corporate interest. And he focused on ways of dealing with it in academia and the courts. He encouraged corporate America to spend a lot of money to counterattack – and the money was spent.” 

“But after the SCRAP decision came down, Powell led the effort to undo it. And the effort was driven by – how do I help these corporate lawyers win on standing to sue? Change the rules governing standing. And that happens beginning with Powell.”

Is the SCRAP decision still standing?

“Yes in a lingering way. Justice Scalia did a law review article that attacked what he called The SCRAP Era. It wasn’t just SCRAP as a decision. It was SCRAP as a model for law students. Justice Roberts really disliked the decision and said so. SCRAP lingers in the Supreme Court and it lingers in law school. Law schools don’t allow this kind of freedom. And they rarely allow students to go after corporate interests.”

Have you seen anything in the country where law students overtly went after corporate interests?

“No. Maybe it exists, but I haven’t found it. Where are the law students? When it comes to challenging corporate interests independent of their faculty or their alumni, they are nowhere to be found. Where are the law students?”

[For the complete q/a format Interview with Neil Proto, see 37 Corporate Crime Reporter 19(13), May 15, 2022, print edition only.]

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