Tag: amicus briefs

You Can’t Patent Thoughts

Doctors and researchers regularly perform blood tests to determine the effectiveness of various drugs. The resulting correlations between the test results and patient health have recently become the subject of numerous “process” patents. That these patents have been upheld by the U.S. Court of Appeals for the Federal Circuit represents a dangerous expansion of traditional patent law.

This expansion threatens to stifle free markets and infringe on individual liberty. In Mayo v. Prometheus, the Court will address the important question of whether someone can patent the process of observing correlations between blood test results and patient health. The primary legal issue here is whether naturally occurring correlations are patentable as “process” patents simply because the methods used to administer prescription drugs and test blood may involve “transformations” of body chemistry.

On Friday, Cato filed an amicus brief, joined by the Reason Foundation and the Competitive Enterprise Institute, arguing that these patents are not “processes” as the term was originally understood in the Patent Act of 1952. We liken medical-diagnostic patents to other abstract-process patents—such as software and business-method patents—that have resulted in financial losses for firms and discouraged innovation, and argue that enforcing these patents “will only serve to further slow the economy, retard technological innovation, distort the free market, and place human health at risk.”

Moreover, upholding the patents at issue will impermissibly restrict public-domain activity because the final step in a medical-diagnostic patent is an entirely mental one that will be violated whenever a doctor performs a previously public-domain medical test after learning about the patented correlation. Our brief thus closes by arguing that the Court should also consider the profound First Amendment implications in allowing processes whose final step is entirely mental to be patented.* “The Court has repeatedly recognized that the First Amendment protects freedom of thought as well as freedom of speech.” Unlike copyrights, patents lack traditional free-speech safeguards (such as exceptions for “fair use”) and, therefore, the Court should reject medical-diagnostic patents as impermissibly restricting the freedom of thought.

Mayo v. Prometheus will be argued late this year or in early 2012.  Here again is Cato’s brief.


*Recall Judge Gladys Kessler of the D.C. federal district court, who found Obamacare’s individual mandate constitutional under the Commerce Clause because it regulates “mental activity.”  Combining this theory with the theory of patentability at issue here, federal courts could sustain lawsuits based on a defendant’s making the same “patented” decision (or non-decision) as a plaintiff.

Another Judicial Takings Case Reaches the Supreme Court

For over a century, Montana citizens have used non-navigable streambeds along their properties for various purposes without objection from the state government.  The hydroelectric energy company PPL Montana and thousands of other private parties exercised their rights over these non-navigable stretches that the state never claimed. 

Last year, however, the Montana Supreme Court overturned well-settled state property law by effectively converting the title in hundreds of miles of riverbeds to state ownership. The majority of the court ruled that the entirety of the Missouri, Clark Fork, and Madison rivers were navigable at the time of Montana’s statehood, producing a broad holding that eradicates the right to use rivers and riverbanks that Montanans had enjoyed for over a century.

PPL Montana thus asked the U.S. Supreme Court to review the state court’s decision; Cato filed an amicus brief supporting that request, which the Court granted.  Now that the case is before the Court, Cato has joined the Montana Farm Bureau Federation, American Farm Bureau Federation, and National Federation of Independent Business on a brief supporting the property owners.

We are chiefly concerned with two parts of the Montana Supreme Court’s ruling:  First, the court incorrectly evaluated navigability for the purpose of establishing title – finding the entirety of the rivers at issue navigable (and thus belonging to the state) because portions of them are – contravening the legal standard established by the U.S. Supreme Court in United States v. Utah (which analyzed the riverbeds section-by-section to achieve a “precise” assessment of navigability).  Second, the court effectively transferred a substantial quantity of land from private owners to the state – a judicial taking that violates either the Fifth or Fourteenth Amendments (as the Court described in the recent Stop the Beach Renourishment case, in which Cato also filed a brief).  

In short, the Court should reaffirm the Utah standard for navigability in the context of establishing title and protect private property owners against judicial takings.  By doing so, it would send a strong message to state courts across the nation that judicial usurpations of property rights are just as unconstitutional as those undertaken by other branches of government.

The Court will hear the case of PPL Montana, LLC v. Montana late this year or in early 2012.  Again, you can find Cato’s brief here.

Constitutional Structure Matters: A Response to Larry Tribe

SCOTUSblog’s symposium on the constitutionality of Obamacare – to which I contributed, as did Bob Levy – provides a glimpse at the astonishing views of the law’s supporters.  It particularly shows how divorced the legal academy’s leading lights are not only from basic constitutional text and structure, but from jurisprudential reality.

Most prominently, in responding to the Eleventh Circuit’s decision striking down the individual mandate (and to Richard Epstein’s symposium essay), storied Harvard professor Laurence H. Tribe criticizes the court for “reflecting what appears to be a widely held public sentiment” that Congress cannot “mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”  That sentiment is a problem, according to Tribe, because it elevates form over substance.  That is, just as it has done with Social Security, Congress could (under modern jurisprudence, which is wrong as a matter of first principle but not at issue in the Obamacare lawsuits) levy another income or payroll tax and use that revenue to provide health insurance and/or care for otherwise uninsured individuals:

Put otherwise, Congress may undoubtedly use its taxing power to mandate that individuals pay for coverage supplied by private insurers, so long as it acts in two steps: step 1, impose a tax, and step 2, use the proceeds of the tax to fund privately provided health insurance for each individual. If Congress may accomplish this objective in two steps, why not in one? No federalism or liberty-related concern, whether the dignity of the states or that of individuals, is served by denying Congress that authority.

Tribe’s reasoning echoes Justice Breyer’s reason (in dissent) for rejecting the notion that the Takings Clause applies when the Government orders an individual to pay another individual, in the case of Eastern Enterprises v. Apfel:

The dearth of Takings Clause author­ity is not surprising, for application of the Takings Clause here bristles with conceptual difficul­ties. If the Clause applies when the government simply orders A to pay B, why does it not apply when the government simply orders A to pay the government, i.e., when it assesses a tax?

But there is a very good reason why courts should deny Congress the power to compel individuals to purchase products from private parties or, for that matter, the power to order A to pay B – even if a similar result could be accomplished through the taxing power: political accountability. As Georgetown law professor (and Cato senior fellow) Randy Barnett explains:

Like mandates on states, economic mandates undermine political accountability, though in a different way. The public is acutely aware of tax increases. Rather than incur the political cost of imposing a general tax on the public using its tax powers, economic mandates allow Congress and the President to escape accountability for tax increases by compelling citizens to make payments directly to private companies.

Indeed, scholars as diverse as Richard Epstein and Cass Sunstein have argued that the Takings Clause requires just compensation precisely to preserve political accountability in the provision of public goods. As Justice Scalia explained in the case of Pennell v. City of San Jose:

The politically attractive feature of regulation is not that it permits wealth transfers to be achieved that could not be achieved otherwise; but rather that it permits them to be achieved “off budget,” with relative invisibility and thus relative immunity from normal democratic processes.

Under modern jurisprudence, essentially the only check on Congress’s taxing and spending powers under the General Welfare Clause (as opposed to its regulatory power under the Commerce Clause) is political.  So yes, Professor Tribe, there is a constitutional reason for depriving Congress of the power to do in one step what it could surely do in two other steps: to maintain that remaining constitutional qua political check. Indeed, the very reason why Congress adopted the individual mandate was because it lacked the political will – it feared political accountability too much – to impose single-payer universal coverage, where the government would first impose a tax on everyone and then provide health care (at this point it’s no longer “insurance”) to everyone.

To accomplish the same result without having to impose significant new taxes – as President Obama famously promised there would not be – Congress tried to evade political accountability through the individual-mandate mechanism. That’s why the Eleventh Circuit wisely declined to grant Congress the power to move a significant part of its spending “off budget” and “mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”

Cato legal associate Chaim Gordon co-authored this blogpost.

Supreme Court Should Review Obamacare Case Now

I’m glad Trevor Burrus took the laboring oar in pointing out highlights from an Eleventh Circuit opinion that, as he put it, “is not only exhaustive, it is convincing.”  I’ve been swamped with editing the Cato Supreme Court Review and preparing for our Constitution Day conference, so have had little time to put words on paper (or even on screen) after my initial statement.

I did put together one op-ed, however, that ran today in Politico.  Here’s an excerpt:

By [striking down the individual mandate], the court — including, for the first time, a judge appointed by a Democratic president — reaffirmed that the Constitution places principled limits on federal power. It rejected the government’s argument for a situational limit on Congress’s regulatory authority based on the idea that health care is “unique,” and somehow different both from other products that everyone consumes (like food, clothing and shelter) and other types of insurance against unpredictable events (like death, disability and natural disasters).

The government’s position failed to sway the court because it did not suggest a constitutional interpretation of the commerce power. Indeed, factors like the inevitability and unpredictability of treatment, the requirement that hospitals treat people with emergency medical conditions and the high cost of advanced care “speak more to the complexity of the problem being regulated than the regulated decision’s relation to interstate commerce. They are not limiting principles, but limiting circumstances.”

I conclude that now that we have two thorough circuit court opinions going in opposite directions, there’s no reason to wait any further:  The government should file for, and the Supreme Court should grant, a petition for certiorari (review).  Any delay by the government would be base political strategery, an attempt to push the eventual Court decision – whatever it is – past the November 2012 presidential election.

Court Says Punishing Political Speech Violates First Amendment

With its last opinion on the last day of the term, the Supreme Court brought things back to constitutional basics by striking down a state law that punished political speech. Whatever the motivations behind Arizona’s so-called Clean Elections Act, giving a publicly funded candidate more taxpayer-provided money every time his privately funded opponent—or his supporters—have “spoken too much” clearly chills speech. In elections, where there is no effective speech without spending money, matching funds provisions triggered by speech fail First Amendment scrutiny.

And this result should’ve been obvious to the entire Court, not just a five-justice majority, in the wake of the Davis v. FEC “Millionaires’ Amendment” case from 2008. Davis struck down the part of McCain-Feingold in which spending by individually wealthy candidates triggered increased contribution limits for their opponents. If the mere possibility of your opponent getting more money is unconstitutional, then the guarantee that your opponent will get more money—as was the case under the Arizona law—is even more so.

Allowing the government to burden political speech in this fashion not only diminishes the quality of political debate, but ignores the fundamental principle upon which the First Amendment is premised: that the government cannot be trusted to regulate political speech for the public benefit. Moreover, the state cannot condition the exercise of the right to speak on the promotion of a viewpoint contrary to the speaker’s.

Here’s Cato’s brief in the case, Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett.

Court Extends Commercial Speech Protections

In an important but little-noted First Amendment case decided Thursday, Sorrell v. IMS Health Inc., the Supreme Court correctly invalidated a particular regulation of commercial speech but unfortunately left intact the general doctrine that distinguishes and privileges noncommercial speech.  Justice Kennedy authored the 6-3 decision (joined not just by the “conservatives” but also Justice Sotomayor) that struck down a Vermont law prohibiting the sale of information about doctors’ prescription histories as making viewpoint-based speech restrictions in violation of the First Amendment. 

In so ruling, the Court effectively affirmed a Second Circuit decision (involving a similar Connecticut law) I discussed previously.  Cato filed amicus briefs in both the Second Circuit and Supreme Court.

The Supreme Court first found that Vermont’s law is subject to heightened scrutiny—not simply the “intermediate” scrutiny typically applied to restrictions on commercial speech—because, on its face, it enacts content- and speaker-based burdens on protected expression.  It then rejected the two justifications for the statute the state had asserted: (1) that it is necessary to protect medical privacy, including physician confidentiality, avoidance of harassment, and the integrity of the doctor-patient relationship; and (2) that it is integral to the achievement of policy objectives—namely, improved public health and reduced healthcare costs.

That’s fine as far as it goes, but it leaves open the possibility for broader restrictions on speech, such as if a state wanted to prohibit all prescription-related speech, not just that by data-mining companies to pharmaceutical companies who would use it to tailor their marketing efforts.  Our Supreme Court brief, in contrast, argued that the Court should abandon the unworkable distinction between commercial and noncommercial speech established in the 1980 case of Central Hudson Gas & Electric v. Public Service Commission

The Central Hudson rule should be abandoned in favor of strict scrutiny of all speech restrictions because innovative and valuable commercial expression deserves full First Amendment protection.  For more on our preferred approach, see this blogpost.

Still, even as Sorrell v. IMS Health doesn’t entirely eliminate the commercial speech doctrine, the Court does make clear that information—even commercial information sold for commercial purposes—is more than a mere commodity (Vemont had likened it to beef jerky).  Commercial speech provides valuable information to the marketplace; by definition, the more such information consumers receive, the better-informed decisions they can make.

I could end my analysis there, but one amusing postscript is that the dissent, written by Justice Breyer and joined by Justices Ginsburg and Kagan, resorts to argument ad Lochneram.  That is, just as one should discount any political argument invoking Hitler and Nazis, a legal argument invoking the alleged horrors of the Lochner era (striking down regulations on economic liberty grounds) is inherently suspect.  Indeed, Justice Kennedy dismisses Breyer’s concern by noting that while the enactment of “Mr. Herbert Spencer’s Social Statics” is not at issue—alluding to Oliver Wendell Holmes’s Lochner dissent—the duly binding First Amendment is.

In any event, the battle line between the majority and dissent is clear—and it is telling that Justices Sotomayor and Kagan are on opposite sides.  (Recall that the scope of First Amendment protection was an issue in Justice Kagan’s confirmation hearings.)  If indeed Justice Breyer’s prediction that this decision “opens a Pandora’s Box of First Amendment challenges to many ordinary regulatory practices that may only incidentally affect a commercial message,” this case may have revealed not the views of Justice Kennedy—who is strongly libertarian on speech issues—but the true First Amendment colors of President Obama’s two appointees.

Thanks to Cato legal associate Caitlyn Walsh McCarthy for her help with our briefing and this blogpost.

Obamacare’s Platonic Guardians

As followers of this blog recognize, Obamacare has more constitutional defects than just the individual mandate or even the coercive use of Medicaid funds.  One issue that is getting increasing attention (see the Weekly Standard, National Review, and George Will) is this weird new entity called the Independent Payment Advisory Board.

IPAB, which Sarah Palin famously labeled a “death panel,” will exercise virtually unchecked power to set Medicare reimbursement rates—without political or legal oversight by any branch of government.  It’s reminiscent of the Public Company Accounting Oversight Board, the part of the Sarbanes-Oxley financial regulation law that the Supreme Court found partially unconstitutional last year.  Except it has the power of life and death and is insulated even from repeal!

That is, IPAB creates “recommendations” for cutting Medicare spending, which then acquire the force of law.  Congress is specifically barred from reversing or modifying these “recommendations”; the only thing it can do is add further cuts.  It can also abolish IPAB, but only by passing a curious “resolution” that must be introduced between Jan. 3 and Feb. 1. 2017, and must be passed by 3/5 of all members of both houses by Aug. 15 of that same year.  Otherwise, Congress loses even its power to add further Medicare cuts and IPAB becomes a permanent fixture of of our health care world.

Suffice it to say, Congress cannot delegate its legislative authority to any such independent, everlasting institution.  One Congress can’t even bind its successors!

Pacific Legal Foundation principal attorney and Cato adjunct scholar Timothy Sandefur unearthed this great nugget by someone defending Obamacare:

Amazingly, Timothy Jost, one of Obamacare’s most vocal advocates, has proudly proclaimed that IPAB will act like:

A board of “Platonic Guardians” to govern the health care system or some aspects of it. The cost of health care is spinning dangerously out of control…. [O]ur traditional political institutions—Congress and the executive administrative agencies—are too driven by special interest politics and too limited in their expertise and vision to control costs. Enter the Platonic guardians…an impartial, independent board of experts who could make evidence-based policy determinations based purely on the basis of effectiveness and perhaps efficiency.

Think about that for a second. Plato’s “Guardians” (also known as philosopher kings) were a group of “godlike” officials (that’s Plato’s word) who would wield undemocratic power to form the perfect utopian state without oversight. According to The Republic, the Guardians would, among their other things, enforce:

by law…such an art of medicine…[which] will care for the bodies and souls of such of your citizens as are truly wellborn, but those who are not, such as are defective in body, they will suffer to die, and those who are evil-natured and incurable in soul they will themselves put to death. This certainly…has been shown to be the best thing for the sufferers themselves and for the state.

America’s constitutional democracy was created in direct contradiction to such authoritarian ideas.

Luckily, our friends at the Goldwater Institute have a lawsuit pending against IPAB, Coons v. Geithner (here’s the case page).  You’ll be hearing a lot more about this case regardless of the final result of the individual mandate lawsuits.  Here’s PLF’s amicus brief on the important “non-delegation doctrine” issue at its heart.