Archives: January, 2012

U.S. v. Jones: A Big Privacy Win

By
Jim Harper

The Supreme Court has delivered a big win for privacy in U.S. v. Jones. That’s the case in which government agents placed a GPS device on a car and used it to track a person round-the-clock for four weeks. The question before the Court was whether the government may do this in the absence of a valid warrant. All nine justices say No.

That’s big, important news. The Supreme Court will not allow developments in technology to outstrip constitutional protections the way it did in Olmstead.

Olmstead v. United States was a 1928 decision in which the Court held that there was no Fourth Amendment search or seizure involved in wiretapping because law enforcement made “no entry of the houses or offices of the defendants.” It took 39 years for the Court to revisit that restrictive, property-based ruling and find that Fourth Amendment interests exist outside of buildings. “[T]he Fourth Amendment protects people, not places” went the famous line from Katz v. United States (1967), which has been the lodestar ever since.

For its good outcome, though, Katz has not served the Fourth Amendment and privacy very well. The Cato Institute’s brief argued to the Court that the doctrine arising from Katz “is weak as a rule for deciding cases.” As developed since 1967, “the ‘reasonable expectation of privacy’ test reverses the inquiry required by the Fourth Amendment and biases Fourth Amendment doctrine against privacy.”

Without rejecting Katz and reasonable expectations, the Jones majority returned to property rights as a basis for Fourth Amendment protection. “The Government physically occupied private property for the purpose of obtaining information” when it attached a GPS device to a private vehicle and used it to gather information. This was a search that the government could not conduct without a valid warrant.

The property rationale for deciding the case had the support of five justices, led by Justice Scalia. The other four justices would have used “reasonable expectations” to decide the same way, so they concurred in the judgement but not the decision. They found many flaws in the use of property and “18th-century tort law” to decide the case.

Justice Sotomayor was explicit in supporting both rationales for protecting privacy. With Justice Scalia, she argued, “When the Government physically invades personal property to gather information, a search occurs.” This language—more clear, and using the legal term of art “personal property,” which Justica Scalia did not—would seem to encompass objects like cell phones, the crucial tool we use today to collect, maintain, and transport our digital effects. Justice Sotomayor emphasized in her separate concurrence that the majority did not reject Katz and “reasonable expectations” in using property as the grounds for this decision.

Justice Sotomayor also deserves special notice for mentioning the pernicious third-party doctrine. “[I]t may be necessary to reconsider the premise that an individual has no reasonable expectation of privacy in information voluntarily disclosed to third parties.” The third-party doctrine cuts against our Fourth Amendment interests in information we share with ISPs, email service providers, financial services providers, and so on. Reconsidering it is very necessary.

Justice Alito’s concurrence is no ringing endorsement of the “reasonable expectation of privacy” test. But he and the justices joining him see many problems with applying Justice Scalia’s property rationale as they interpreted it.

Along with the Scalia-authored Kyllo decision of 2001, Jones is a break from precedent. It may seem like a return to the past, but it is also a return to a foundation on which privacy can be more secure.

More commentary here in the coming days and weeks will explore the case’s meaning more fully. Hopefully, more Supreme Court cases in coming years and decades will clarify and improve Fourth Amendment doctrine.

Topics: 
Law and Civil Liberties, Telecom, Internet & Information Policy

WSJ Debate: Should the Government Require You to Purchase Health Insurance?

By
Michael F. Cannon

In today’s Wall Street Journal, I debate ObamaCare’s individual mandate. Here’s the teaser:

Should Everyone Be Required to Have Health Insurance?

Yes, says Karen Davenport of George Washington University, because it’s the key to making health care more affordable and accessible. No, says Michael F. Cannon from the Cato Institute, because it will make health care more costly and scarce.

I did not write that unfortunate title, which uses the passive voice to conceal who’s doing the requiring. Hint: we ain’t talking about your conscience. I like to say that if we banned the passive voice–e.g., doctors are paid on a fee-for-service basis–it would take two minutes to realize that government creates most of our health care problems, and we would repeal all subsidies, mandates, and regulations within two hours.

Davenport’s article makes one claim to which I was not able to respond: that under ObamaCare, “global payment approaches and other payment changes are designed [gaa! passive voice!] to improve care for patients with chronic illnesses.” Fortunately for humanity, I already dispatched that claim last week in a blog post titled, “Oops, Maybe ObamaCare’s Cost Controls Won’t Work after All.”

So here are your assignments for today. Read both articles. Don’t forget to take the quiz. Then, watch the related 2008 video I posted under the title, “Does Karen Davenport Owe Me $40?”, and decide for yourself whether Karen Davenport does indeed owe me $40. If you think yes, be sure to tell her so in an email to the address provided at the end of her article.

Topics: 
General, Government and Politics, Health Care

‘School Spending Predicted to Climb 50%’*

By
Andrew J. Coulson

*by 2005…

Defenders of the educational status quo have long argued that we don’t need wholesale reform because our state-run school system can be fixed. If we simply raise spending, shrink classes, hire more teachers, or wait for the latest government mandate to work, they’ve promised, our problems will be solved. Reformers have predicted the opposite: that pouring more resources into the public school monopoly will only make it more expensive, not better, and so we need to inject real parental choice, get rid of the red tape that hobbles educators, and unleash market incentives. Who’s right?

My colleagues and I at Cato’s Center for Educational Freedom normally answer that question with empirical research, but in honor of School Choice Week

we’re taking a different tack. We’re letting the status quo defenders and reformers speak for themselves, by dredging up their predictions of decades past to see who was a Nostradamus and who a Nostradumb—. To kick off this week-long series, here’s our first blast from the educational past:

“School Spending Predicted to Climb 50% by 2005” [Education Week, Sept. 22nd, 1994]

A report published by the American Legislative Exchange Council predicted that public school spending would climb “from nearly $262 billion in 1994 to $386 billion by 2005.” ALEC also warned that the new spending would do little to help children learn, because public schooling is a government-run monopoly and monopolies are notoriously wasteful and inefficient.

Not everyone agreed. The Ed. Week story cautioned that ALEC’s “projections do not square with [substantially lower] federal estimates, and school finance experts have questioned their methodology.”

Who was right? To find out, we first have to adjust ALEC’s prediction to account for inflation (their estimate of what spending would be in the year 2005 was, of necessity, made in 1994 dollars, which were worth a lot more than dollars in 2005). Using the BLS inflation calculator, we find that ALEC’s prediction amounts to $509 billion in 2005 dollars. That turns out to have been… too low. Real U.S. public school spending in 2005 was $529 billion, according to the 2008 federal Digest of Education Statistics.

As for student achievement, ALEC was right about that, too. Tested near the end of their k-12 schooling, students performed no better in 2005 than they did in 1994—or, for that matter, in 1970 (see chart below).

Topics: 
Education and Child Policy, General

How to End a Depression

By
David Boaz

Great article in the Sunday Washington Post by James Grant on the depression of 1920-21 and how after President Warren G. Harding’s response, “the unemployment rate fell from 15.6 percent to 9 percent (on its way to 3.2 percent in 1923), while constant-dollar output leapt by 16 percent. After which the 1920s proverbially roared.”

And how did the administration of Warren G. Harding, in conjunction with the Federal Reserve, produce these astonishing results? Why, by raising interest rates, reducing the public debt and balancing the federal budget.

Pundits often accuse Herbert Hoover of “doing nothing” to counter the depression of 1929. Boy, are they wrong. Grant thinks Harding doesn’t get his due:

When he wasn’t presiding over a macroeconomic miracle cure, Harding convened a world disarmament conference and overhauled the creaky machinery of federal budget-making. For his trouble, historians customarily place him last, or next to last, in their rankings of U.S. presidents. Incredibly, they consign him near the bottom even in the subcategory of economic management, about 40 places behind Franklin D. Roosevelt, who inherited a depression that he didn’t actually fix.

The Hoover-Roosevelt-Bush-Obama do-something-anything-everything approach to economic recovery seems to result in elongated depressions. Take a look:

 

Maybe we should try the Harding do-nothing approach – which isn’t actually do-nothing; he cut taxes and spending and balanced the budget.

Cato scholars have written about how Harding ended a depression here and here.

Topics: 
Finance, Banking & Monetary Policy, General, Tax and Budget Policy

Ron Paul, President of Twitter

By
David Boaz

Ron Paul didn’t do as well with Republican voters in South Carolina as he had done in Iowa and New Hampshire. But he’s still the king of Twitter. (And tweeters, of course, are the people who in one day faced down Hollywood and forced leading senators to withdraw their online-piracy bills.) Natalie Jennings of the Washington Post reports:

NBC’s Chuck Todd might have summed up Thursday’s events best with this tweet:

Books about this campaign will have chapters simply titled: “January 19th”

Mitt Romney faced mounting pressure to release his tax returns as reports surfaced Wednesday night he might have assets in bank accounts in the Cayman Islands.

The Des Moines Register declared that Rick Santorum actually got more votes than Romney in the Iowa caucuses.

Rick Perry announced he would suspend his campaign in a morning news conference.

Newt Gingrich’s second wife, Marianne, said in interviews with ABC and The Washington Post that the former speaker had asked her for an open marriage.

And Gingrich exploded at moderator John King within the first few minutes of the CNN debate that night.

And yet, through it all, Ron Paul maintained his lead on the@MentionMachine leaderboard this week. We measured tweets from Wednesday at 7 p.m. through Friday at 4 p.m.

Lots of Cato commentary on Ron Paul here. Some Mitt Romney analysis here. Some pretty sharp criticisms of Rick Santorum here. Aaaand my colleagues haven’t been too keen on Newt Gingrich and Barack Obama either. What kind of policies would we like to see a presidential candidate propose? Check out the Cato Handbook for Policymakers.

Topics: 
General, Government and Politics

FBI Reminds Us Government Already Has MegaPower to Take Down Websites

By
Julian Sanchez

Online activists were still busy celebrating a successful day of protest against proposed (and now shelved) Internet censorship legislation when the Justice Department pulled the popular cyberlocker site Megaupload offline Thursday, and indicted its owners on charges of criminal copyright infringement. It was a serendipitously timed demonstration of two important facts.

First, the U.S. legal system is perfectly capable of reaching criminal suspects overseas. Megaupload is incorporated in Hong Kong, and its CEO was arrested (along with three employees) in New Zealand. That’s significant because supporters of laws like the Stop Online Piracy Act (SOPA) and PROTECT-IP Act (PIPA) typically claim they’re helpless to do anything about overseas sites by more conventional means, necessitating aggressive new enforcement powers with streamlined hearings that give short shrift to due process. Now, if the people behind Megaupload are, in fact, guilty of criminal activity—and the indictment certainly looks damning—the government will have the opportunity to prove it beyond a reasonable doubt before a jury, which will also get to hear any exculpatory facts or arguments the defendants are able to offer. It can be a slow process, but it’s also how we’re supposed to do things in the United States: we don’t just issue orders branding people or sites as “rogues,” we convict them.

Second, if you’re worried about the government taking down U.S.-registered sites, which include any site in the .com and .org domains, wherever their servers might be located, then SOPA and PIPA aren’t really what you should be concerned about: the government already has that power under the PRO-IP Act of 2008. There are good reasons SOPA and PIPA attracted more attention: Instead of “seizing” domains directly at the registry, they would have imposed blocking and filtering obligations on thousands of ISPs and search engines, creating a whole host of technological and security problems. There was also the private right of action, which seemed more susceptible to abuse by overzealous copyright owners who were able to find a friendly judge. But the central power of the government to shut down web domains is already there in PRO-IP, and has been used to seize hundreds of sites already—wrongfully in at least some cases. Incidentally, those absurdly inflated phony statistics I wrote about earlier this month—the ones the Government Accountability Office has debunked, which even the content industries have finally stopped using—were heavily cited as evidence for why PRO-IP was needed, featuring prominently in press releases by the bill’s authors.

The owners of Megaupload don’t seem like particularly sympathetic characters, but the abrupt seizure of the domain before trial ought to give us a bit of pause. The site was plainly used to enable an enormous amount of copyright infringement—and judging by the indictment, the site’s operators appear to not only have known about this, but encouraged it in order to bolster their ad revenues. But that doesn’t mean that’s all the site was used for. Plenty of people made legitimate use of the site for cloud storage, or to (legally) share large files with friends, family, or colleagues. Indeed, no small number of major-label recording artists declared in song  that they used the site for just such purposes. Journalist Adam Penenberg tweeted this morning that he was in the habit of using the site to share recordings of his interviews with a transcription service. If you Google around, of course, you’ll mostly see evidence of the more illicit uses—but that’s because people don’t post a link publicly on the Internet when they’re trying to share a file in a more limited way. Taking the entire domain down has affected all those legitimate uses along with the illicit ones.

Civil forfeiture laws have, frankly, always been subject to abuse. But when a suspected drug dealer’s car is seized, the effects are at least limited to the suspect and his family. The de facto seizure of an entire online platform, by contrast, affects all the users of that site, including many thousands who were using it to engage in legitimate, protected speech. And precisely because the non-pirate uses are less likely to involve public links, it’s extremely hard to know in advance exactly how much collateral damage is inflicted on legitimate activity by the seizure. In this specific case, I’d wager the proportion of illicit to legitimate content was quite high, but I can guarantee there’s also a whole lot of copyright-infringing videos posted to YouTube at any given instant as well; most people, presumably, recognize that shutting down YouTube in order to disable access to those videos would not be worth the enormous cost to protected speech.

There are also some troubling arguments offered by the government in the indictment. They suggest, for instance, that Megaupload shouldn’t be eligible for “safe harbor” under the Digital Millennium Copyright Act because though the firm would disable specific URLs linking to “infringing content” upon notice by copyright owners, it did not remove the underlying file entirely. (Megaupload was designed, like many other cloud storage services, to only keep one underlying copy of a file that many different users had uploaded, though it would create a different virtual address for each user’s “own” instance of the file.)  This may sound like shameless flouting of the DMCA takedown process, but it’s a bit more complicated than that, because in reality “infringing content” is something of a misnomer. Content is content. It’s what you do with it that infringes copyright.

Just about everyone’s hard drive these days is full of copyrighted music in MP3 format.  But it isn’t necessarily “infringing content.” In my case, it’s music I’ve downloaded from legal venues like the iTunes store or ripped from CDs I purchased back when one still bought music in shiny-plastic-disc form. Many people will put their legal MP3 files in a private Dropbox folder, or some other cloud storage service, so they can access the music from the office as well as their home desktops, or from their networked mobile devices. Creating a public link to those files, and distributing them to anyone on the Internet who wants them, would clearly be copyright infringement.  But that doesn’t mean the files themselves are suddenly “infringing content,” and it doesn’t mean that every user should lose his own access to the same files because other users tried to publicly distribute them.

This is another reason the takedown-before-trial model is disturbing. Again, there’s strong evidence in the indictment that Megaupload’s conduct here was anything but innocent. But now imagine some other cloud storage site that comes under the crosshairs of the government or content industries. As I suggest above, they might have very good reason for only disabling specific, publicly distributed links to a copyrighted file in response to a takedown notice, rather than cutting off access to every user who has remotely stored the file, regardless of how they’re using it. At a trial, they’d get to explain that.  If the site is shut down before its operators have an opportunity to even make the argument … well, that doesn’t bode well for investment in innovative cloud services.

Topics: 
Law and Civil Liberties, Telecom, Internet & Information Policy

Commandeering the People to Avoid Taxation: A Reply to Barnett and Kerr

By
Trevor Burrus

Over at the Volokh Conspiracy, Randy Barnett and Orin Kerr are having another spirited, intelligent, and respectful back-and-forth over Obamacare and the individual mandate. Responding to a comment, Professor Kerr opines that he is concerned that an opinion striking down the individual mandate would be too partisan and it would again fail, like so many decisions before, to articulate a principled limit on the commerce power. In response, Professor Barnett reiterates the “anti-commandeering” principle that Cato has pushed in our briefs written in conjunction with Professor Barnett. The anti-commandeering argument focuses on the constitutional principle that the federal government cannot commandeer state officials to do its bidding. Similarly, Barnett argues, Congress is constitutionally precluded from commandeering the citizens to do its bidding; that is, to force them to purchase health insurance. Kerr responds with skepticism toward whether the anti-commandeering principle is a workable legal doctrine, particularly in the face of many constitutionally authorized instances of “commandeering” (e.g., the draft, paying taxes, registering for the census, etc.).

My thoughts: I believe Professor Barnett has the right of it, but I do acknowledge Professor Kerr’s concerns. I would like to add something to Professor Barnett’s argument: The individual mandate was passed to avoid the political liability that a taxation-driven scheme would have brought (if you doubt this, read Michael Cannon’s post here). This is constitutionally significant to the anti-commandeering argument.

Kerr writes that, “Under Randy’s theory, as I understand it, it seems that Congress is actually perfectly free to engage in economic commandeering as long as it does so through something formally called a tax. If economic commandeering is to be recognized as a core constitutional prohibition, it seems surprising that it could be so easily done under the tax power.” I disagree. The Taxing Power was acknowledged by nearly every member of the Constitutional Convention as both necessary and dangerous. Recall that under the Articles of Confederation revenue could only be collected through the voluntary payment of dues by state governments. Many states, if not most states, were severely behind in their payments and a debt crisis was on the horizon. The delegates thus knew that, somehow, the new government would have to be able to directly reach the people without going through the states if they wanted to collect the needed money.

But this was the generation of “no taxation without representation!,” and the fear of improper use of the taxing power was rampant. Thus, the delegates added the Origination Clause to Article I, Section 7 in order to guarantee that “All Bills for raising Revenue” would originate in the House of Representatives.

At that point in the Convention, the “Great Compromise” had been reached. This comprise helped assuage the delegates who threatened to leave over the purely proportional representation system that had been pushed by the Virginians and Pennsylvanians. The small states knew that a proportional representation system would minimize their voice in the new government. They thought of themselves as citizens of their states first and citizens of the “Union” second, much like members of the EU consider themselves now. They insisted that some semblance of this be preserved, that states be allowed a voice as states, and not just in a voice that was congruent with population.

Thus, they reached the “Great Compromise,” which established a bicameral legislature composed of two houses interacting with the constituent members of the country—the people and the states—in different ways. All states would have two senators chosen by the state legislatures, but the House’s membership would be directly tied to the people.

After the compromise had been reached, the discussions centered on which house should have which powers. This became nearly as divisive as the discussions about representation because the question of the scope of power is inexorably intertwined with representative justification. In the end, most Convention delegates insisted that all taxation must begin in the House because, in the words of Elbridge Gerry, “Taxation & representation are strongly associated in the minds of the people, and they will not agree that any but their immediate representatives shall meddle with their purses.” For more, you can read the debates from August 13.

So, what does this all have to do with the mandate? If the federal government is properly understood as resting on dual representative pillars—the people and the states—then either can be commandeered. Although our case law only discusses the impropriety of commandeering state governments, it is fully within a proper understanding of the Constitution that people are equally susceptible to unconstitutional commandeering. It is of no matter that they are commandeered at other times—e.g., jury duty, the draft, etc.—because states are likewise commandeered by the Constitution—e.g., rules on choosing senators, members of Congress, and electors, as well as the prohibitions in Article 1, Section 10. But since, at some fundamental level, commandeering is so repugnant to a limited government empowered by a free people, there has to be some way to determine unconstitutional commandeering.

In order to determine this, I propose that, because we are talking about the people and not the states, we must look to the ways in which commandeering is constitutionally allowed and see if those protections have been avoided in passing the individual mandate. Taxation is a dangerous power, but the Constitution requires that it be above the board so citizens are aware when forced wealth transfers are occurring. For similar reasons, Article 1, Section 9 requires that “a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” AsMichael Cannon’s post linked above shows, this type of accounting was intentionally avoided by Congress in passing PPACA.

So, I offer to Professor Kerr this principle of decision in the case: THIS IS NOT OKAY. Specifically, when looking to whether or not the people have been commandeered, we look to whether the protections in the Constitution that prevent commandeering have been avoided. One instance in which this would nearly always be the case: the forced purchase of a product from a private entity.

And although I sympathize with Professor Kerr’s concerns about the workability of a Commerce Clause limiting principle, I echo Professor Barnett in saying that this is how the law works. As I wrote to Professor Chemerinsky, limiting Congress’s commerce power will never be about discovering the limits of power, it will be about articulating and enforcing those limits. In some way this will always be arbitrary, but without an arbitrary line, there will be no limit and thus, in some sense, no Constitution to speak of.

Topics: 
Law and Civil Liberties, Political Philosophy

Pages