Archives: 03/2012

Supreme Court: No Privacy Act Liability for Mental and Emotional Distress

Back in July of last year, I wrote about a case in the Supreme Court called FAA v. Cooper. In that Privacy Act case, a victim of a government privacy invasion had alleged “actual damages” based on evidence of mental and emotional distress.

Cooper, a recreational pilot who was HIV-positive, had chosen to conceal his health status generally, but revealed it to the Social Security Administration for the purposes of pursuing disability payments. When the SSA revealed that he was HIV-positive to the Department of Transportation, which was investigating pilot’s licenses in the hands of the medically unfit, the SSA violated the Privacy Act. Cooper claimed that he suffered mental and emotional distress at learning of the disclosure of his health status and inferentially his sexual orientation, which he had kept private.

The question before the Court was whether the Privacy Act’s grant of compensation for “actual damages” included damages for mental and emotional distress. This week the Court held … distressingly … [sorry, I had to] … NO. Under the doctrine of sovereign immunity, the Privacy Act has to be explicit about providing compensation for mental and emotional distress. Justice Alito wrote for a Court divided 5-3 along traditional ideological lines (Justice Kagan not participating).

The decision itself is a nice example of two sides contesting how statutory language should be interpreted. My preference would have been for the Court to hold that the Privacy Act recognizes mental and emotional distress. After all, a privacy violation is the loss of confident control over information, which, depending on the sensitivity and circumstances, can be very concerning and even devastating.

The existence of harm is a big elephant in the privacy room. Many advocates seem to be trying to lower the bar in terms of what constitutes harm, arguing that the creation of a risk is a harm or that worrisome information practices are harmful. But I think harm rises above doing things someone might find “worrisome.” Harm may occur, as in this case, when one’s (hidden) HIV status and thus sexual orientation is revealed. Harm has occurred when one records and uploads to the Internet another’s sexual activity. But I don’t think it’s harmful if a web site or ad network gathers from your web surfing that you’ve got an interest in outdoor sports.

The upshot of Cooper is this: Congress can and should amend the Privacy Act so that the damages it must compensate when it has harmed someone include real and proven mental and emotional distress.

Celebrate Human Achievement Saturday Night

Environmentalist groups and celebrities are celebrating “Earth Hour” Saturday night. They ask that you turn your lights out for an hour, to call attention to global warming.

Folks at the Competitive Enterprise Institute suggest that “this sends the wrong message—to plunge us all into darkness as a rejection of technology and human achievement.” In fact, they point out that it’s Earth Hour every night in North Korea, where people lack basic freedoms, as well as affordable, reliable access to many human achievements, such as electricity. Check out this famous photo of environmentally conscious North Koreans observing Earth Hour all night, every night.

CEI rejects the rejection of technology. They have declared the hour between 8:30 and 9:30 on Saturday, March 31, to be “Human Achievement Hour.” To join the celebration, just turn your lights on and enjoy the human achievement of light when we want it.

I’ll be celebrating Human Achievement Saturday night. However, I do expect the lights to go out all over Louisville about 8:30 on Saturday night, as the Kentucky Wildcats shred the Louisville Cardinals in the Final Four.

How Not to Make the Case for Terminating Federal Programs

Republican presidential front-runner Mitt Romney recently gave the following response to a reporter’s question on what programs he would cut:

Of course you get rid of Obamacare, that’s the easy one, but there are others: Planned Parenthood, we’re gonna get rid of that. The subsidy for Amtrak, I would eliminate that. The National Endowment for the Arts, the National Endowment for the Humanities, both excellent programs, but we can’t afford to borrow money to pay for these things.

It’s good that Romney can actually name federal programs that he would terminate (even if they’re relatively small programs). But how on earth does he expect to garner support from Congress to terminate the NEA and NEH after having called them “excellent programs”? Sorry, but the “federal government is broke” argument won’t get the job done. In fact, it’s just a cop out that Republican politicians often use to avoid having to provide a coherent, principled justification for spending cuts.

Last year, I criticized the Boehner Republicans in the House for making a similarly weak case for spending cuts:

The Boehner Republicans argue that they did terminate dozens of federal programs. In a rebuttal to critics, Boehner stated that the “agreement terminates more than 40 ineffective programs at the U.S. Department of Education alone.” Unfortunately, the combined savings from these terminations don’t appear to trim even a billion dollars from an agency that will spend over $70 billion this year.

Notice also that Boehner soft-peddles the education terminations by labeling them “ineffective programs.” The entire Department of Education is an unconstitutional, costly failure. Sadly, the man who wrote No Child Left Behind with the departed Sen. Ted Kennedy felt compelled to convey a message to the public that the GOP is only interested in axing spare parts that even Beltway bureaucrats agree aren’t needed.

With the exception of more military spending for purposes of policing the world and defending wealthy allies, it’s hard to discern a coherent philosophy behind the GOP’s cuts. Yes, the House Republican leadership says that it’s committed to repealing “Obamacare.” Unfortunately, the charge is being mounted by individuals who helped ram through George W. Bush’s Medicare prescription drug liability.

Yes, we should cut spending instead of going deeper into debt. Yes, a program’s ineffectiveness is a reason to cut it. But even if the federal government was running budget surpluses and a particular program wasn’t a complete disaster, there’s a darn good chance that the program in question should still be terminated.

That’s why we created Downsizing Government. Give it a look, Mitt.

Where Are You on the Global Pay Scale?

Many of my well-to-do friends in Washington, D.C. have been sympathetic to the Occupy movement and the “We Are the 99 Percent” campaign. Indeed, everyone should be outraged when politically connected banks and businesses rob the U.S. taxpayer. But everyone should also recognize that most wealthy people in the United States have made their money by producing goods and services that make us all better off.

But, just to put things in a proper perspective, let us remember that many of those people who belong to the 99 percent in America are also very rich by global standards. Here is a very cool new feature from the BBC’s website that allows you to compare your income with that in the rest of the world. So if you are on an average individual income in Washington, D.C. ($42,078 per year or $3,507 per month before taxes), your income is 237% of the global average (adjusted for PPP, of course!).

EMTALA and the Good Samaritan

A final thought in this “Obamacare-at-the-Court” week: Does the Emergency Medical Treatment and Active Labor Act (EMTALA) make something like Obamacare’s mandate not only inevitable but legitimate? Enacted in 1986, EMTALA requires hospitals to provide care to anyone needing emergency treatment regardless of citizenship, legal status, or ability to pay. It’s often cited as the very reason we have to have Obamacare’s individual mandate, to cover the costs of providing for the uninsured indigent. As the Washington Post editorialized this morning, “If you end up in the emergency room, you will be cared for, as federal law demands. The government, already deeply involved in regulating the health-care market, has a legitimate interest in encouraging you to prepare for such an eventuality.”

Fair enough, but it must do so by constitutional means, and that’s just the problem here. Not every means that would solve a problem is authorized by our Constitution for limited government. In truth, however, the constitutional problem begins with EMTALA itself: neither the taxing nor the commerce power, if understood as the pre-New Deal Court understood it, authorizes Congress to compel hospitals to be Good Samaritans. In a free society, health care is no different than any other product or service: If you need or want it, you pay for it, failing which you don’t get it.

But the Constitution aside, that’s not how, “as a society,” we decided to go about things in 1986. (See here for a better way to serve the indigent.) We imposed the burden of providing such services on hospitals, which in turn shifted the costs mainly to those of us who do pay for the services we receive. To that complex system of “private” socialization Obamacare would add yet another layer of even more complex “public” socialization, the individual mandate being only one element in the mix. Needless to say, under neither arrangement is efficiency or the wise use of resources the goal.

So let’s go back to EMTALA and the Good Samaritan to see if there might be a better way. Traditional Anglo-American law has never compelled anyone to come to the aid of another unrelated person. We’re free to be Good Samaritans—that’s virtuous—but we don’t have to be. If we do aid another, however, we cannot then turn around and charge that person for the “service” we provided, however much it might be “decent” in turn for that person to compensate us for our troubles and losses. But here, we as a society are compelling hospitals to be “Good Samaritans.” In other words, we, not the hospitals, are the “virtuous” ones. Well if that’s the case, then we can’t really ask the hospitals to bear the costs of “our” virtue; nor, for the same reason, is it proper for the hospitals to shift the costs to only those who already pay for their services. Rather, if we, “as a society,” want to be virtuous in this way, then we, as a whole society, should bear the costs.

Much as with the Fifth Amendment’s Takings Clause, if we want lovely views or wildlife habitat that can be had only by restricting the property rights of certain private owners, we should be prepared to bear, as a society, the losses those owners suffer in the value of their property, which we can do by taxing ourselves—on budget—and compensating those owners accordingly. Here too, if we don’t want indigent people turned away at the emergency room door, then we have to be prepared to compensate the hospitals for the losses they incur as a result. At the least, “we” can then monitor those costs directly to determine whether we’re getting our money’s worth and, if not, address that through the political system, at least in principle, which is not possible now under our complex cost-shifting arrangements.

In fact, the way it’s done now is massively inefficient. Not that providing for indigent care through general taxation would be a model of efficiency either, as compared, in all likelihood, to private charity; but at least it would more equitably distribute the costs, and it would surely be more efficient than the inscrutable arrangements Obamacare would impose on our already far too complex health care payment system.

Interestingly, evidence for a more efficient (and equitable) system was put forward by no less than the judges in the 11th Circuit whose decision found its way to the Supreme Court this week. For it turns out that the uninsured cost-shifting problem—the basic rationale for Obamacare—has been vastly overstated. In 2008, the court reported, the uninsured paid on average 46 percent of their healthcare costs. Third parties paid another 26 percent of those costs. That’s 72 percent. In fact, what we’re talking about here amounts to a paltry 1.7 percent of our total healthcare expenditures. To address that, Obamacare would federalize the entire health care system. If we’re not prepared to leave that small amount to charity—the best solution—far better would it be to pick up the tab “as a society,” through taxes, and leave the rest of us free to buy health care like we buy any other product or service, in the market, whether with or without insurance, as we wish. Why throw all of us in the common pot when a far simpler solution is readily at hand? Only those who love power could think otherwise.

Conservatives Shift on Gay Marriage

On the front page of the Washington Post a four-column headline reads

Britain’s Conservatives push for gay marriage

This change in Conservative direction was foreshadowed in a widely reported speech at the Cato Institute in February 2010 by Nick Herbert, then the Conservatives’ shadow environment secretary and now Minister of State for Policing and Criminal Justice in David Cameron’s government. Watch the video of Herbert’s speech, with sharp responses from Andrew Sullivan and Maggie Gallagher:

The Post reports

Americans watching the latest push for social change in Britain might feel as if they had stepped into an alternate political universe: Here, the Conservatives are leading the charge for same-sex marriage.

Gay couples in Britain won the right to civil partnerships in 2004, which granted them nearly the same legal status as married heterosexual couples while avoiding the controversial use of the word “marriage.” But Prime Minister David Cameron and his Conservative-led coalition have launched a historic drive to grant gay men and lesbians the option of also entering into civil marriages, touching off a surprisingly fierce uproar in largely progressive Britain and fueling a rebellion on the right as the party comes under heavy fire from traditional allies in the British clergy.

Yet challenging tradition appears to be exactly Cameron’s point. The proposal, put forward this month despite the lack of a strong clamor for marriage within Britain’s gay community, is nevertheless emerging as the cornerstone of a bid by the 45-year-old prime minister and other young leaders on the right here to redefine what it means to be a modern Conservative.

And why this change? Well, no doubt, as both Herbert and Cameron said, they believe deeply in the institution of marriage and the ancient British principle of equal freedom under law. But the Post does suggest some political motives as well:

[S]trategists see Cameron’s decision to champion the gay marriage cause as an attempt to seize the mantle of progressive change from the left and broaden the Conservative Party’s appeal among an increasingly key voting group: young urbanites…

What prompted the shift? “We lost three elections, in 1997, 2001 and 2005,” said Margot James, former vice chairman of the Conservative Party and an openly gay member of Parliament.

“The electorate was not seeing us as a viable alternative in a modern world. But David Cameron came along and changed all that. This is a different Conservative Party now, one that is fully in favor of equal rights. I think the Republicans could learn a lot from us in how to appeal to the center, without whose votes a party cannot hope to win.”

And maybe the Republicans are learning. Politico has a lead story today on the striking lack of interest in the gay marriage issue among House Republicans. I joined a number of other observers at Politico Arena today in commenting on the story. I noted that Republicans too know that “young urbanites” are overwhelmingly supportive of marriage equality, and they don’t want to lose a whole generation. And just to confirm Politico’s report about Republican silence, none of Politico’s usual conservative bloggers have chimed in yet.

But for now I’m just noting, as I’ve done on other issues, that you could have heard it here first—or at least the foreshadowing of it.

Are Individual Mandate Critics Showing ‘Bad Faith’?

Paul Krugman is the latest to suggest that advocates of personal Social Security accounts are guilty of hypocrisy in criticizing the constitutionality of Obamacare’s individual insurance mandate.  After all, they contend, are not personal account supporters arguing in favor of a federal government mandate that individuals purchase a specific commercial  product (i.e., stocks, bonds, mutual funds, or whatever)?

No doubt, there is a superficial similarity.  But the analogy significantly misses what personal account proponents are calling for. If there was no current Social Security program and the government were simply to mandate that individuals purchase some form of commercial retirement savings product, that would indeed be analogous to the health insurance mandate, and would be unconstitutional for the same reasons. However, Americans are currently paying a Social Security payroll tax. What personal account advocates propose is simply a tax credit against that tax if individuals contribute to a personal account. That the credit would be equal to the size of the contribution is structurally irrelevant.

The government uses credits to incentivize behavior all the time. For example, it offers a tax credit for the purchase of the Chevy Volt. That may be bad policy, but it is generally agreed to be constitutionally permissible. It is, however, very different from a mandate that every American buy a Volt. Similarly, Congress would have been on much stronger constitutional ground if it had imposed a tax on all Americans to fund uncompensated care, and then offered a credit to anyone who obtained insurance. The same individuals would end up paying the penalty/tax as under Obamacare, but the structure would have been less offensive to the Constitution. The federal government clearly has the power to tax, and it can offer tax credits and deductions. Congress chose not to do it that way for political reasons—they didn’t want to be accused of raising taxes. But political expediency does not justify an unprecedented expansion of federal power.

And, while on the subject of Social Security, it should be noted that several individual mandate defenders—including Justice Ginsburg—have likened it to Social Security, saying that if the government can make us participate in Social Security, why can’t it make us buy health insurance? But in the case of Helvering v. Davis, the Supreme Court ruled that Social Security was constitutional precisely because it was not insurance and did not require citizens to buy a product. Rather, the Court held that the Social Security tax was simply a tax, authorized by the Constitution’s taxing power. Social Security benefits are simply a government spending program, authorized under the General Welfare clause, and unrelated to the tax itself. As the Court pointed out, “The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.”  One may disagree with the Court’s expansive interpretation of the General Welfare clause in this case, but it clearly distinguishes Social Security (and Medicare or even a single-payer health care system) from the individual mandate constitutionally.

Some might say that these distinctions are just quibbles or nit-picking. But how government does things matters. Constitutional limits are there for a reason. We are, after all, a government of laws, not of men.