Tag: amicus briefs

The Supreme Court Takes up Old-Timey Property Rights

In the 19th Century, when railroads were being built across the West, the federal government granted significant land and benefits to railroad companies. The Great Railroad Right-of-Way Act of 1875 empowered the government to grant railroad companies right-of-way easements to build tracks across others’ land to facilitate the expansion of the nation’s railways – that is, railroads were granted a right to use sections of another’s property for railroad purposes without owning title to the land underneath. In 1976, the government sold the Brandt family a parcel of land in Wyoming which was crossed by one of these railroad easements.

In 2001, the railroad that owned the easement formally abandoned all claims to it.  Typically, when this happens, the easement is simply extinguished and the owner of the land may then use the former easement however he or she wishes. But the federal government had different plans for the thin strip running through the Brandts’ land. In 2006, the government sued for title to the land lying under the former easement on the theory that it had retained a “reversionary interest” in the land when granting the railroad the right of way easement, even though it never actually set aside any interests when granting the easement.  The government thus claimed that after the railroad abandoned the easement (after only ever owning an easement and never full title to the land), full title to the land “reverted” back to the federal government. The Brandts argue that under the basic principles of the common law of property, the government had no such right, and that even if any legislative act allowed the government to somehow acquire their land, such an act would require payment of just compensation under the Fifth Amendment’s Takings Clause.

Although this may seem like a small, unique problem, the scope of the Old West’s railway system was huge and those old easements criss-cross the land of thousands of property owners. In 1983, Congress amended the National Trails System Act to allow the government to take abandoned railroad easements and turn them into land for public recreation and “railroad banking.” Landowners have been fighting the taking of their property under the Trails Act ever since, claiming, as here, that the government’s original grant to the railroads contained no residual right of possession for the government.

After the trial court rejected the government’s radical claims, the U.S. Court of Appeals for the Tenth Circuit split with the Seventh and Federal Circuit courts (and ignored some of its own precedent on the way) and held that the government did indeed have a reversionary interest in the land, even though it never actually carved itself an exception, as the law requires. The Brandts, faced with the uncompensated government confiscation of a strip of land cutting their property in two, have now brought their case to the Supreme Court in an attempt to keep the government’s hands off their land and off the land of thousands of other landowners in their same position.

After supporting the Brandts’ request for Supreme Court review, Cato, along with four other groups and several property law professors – including Richard Epstein – has now filed a brief supporting the Brandts’ fight against the government’s poorly justified land-grab. We argue that the Tenth Circuit’s decision threatens to unsettle longstanding presumptions of property law because it willfully ignores basic differences between easements and “fee estates” in land and other basic principles of property law like the “strip and gore” doctrine (which holds, for example, that land under a right-of-way is split down the center and owned by those who own the land on either side of the easement).

This case is important, because there are many thousands of miles of old railroad rights-of-way crossing the countryside that would be potentially subject to uncompensated government confiscation if the Court were to follow the Tenth Circuit’s approach.  In addition, some 3,000 to 4,000 miles of old railroad easements are abandoned every year. It’s not entirely surprising that the government would go full throttle on such a shoddy legal argument for the chance to be able to snatch this land back without having to pay for it. The surprising thing is that the Tenth Circuit green-lighted it. We urge the Supreme Court to switch tracks.

The Court will hear argument in Brandt v. United States on January 14.

Cato legal associate Julio Colombo co-authored this blogpost.

Supreme Court Should End Advertiser’s Kafkaesque Nightmare

Douglas Walburg faces potential liability of $16-48 million. What heinous acts caused such astronomical damages? A violation of 47 C.F.R. § 16.1200(a)(3)(iv), an FCC regulation that enables lawsuits against senders of unsolicited faxes.

Walburg, however, never sent any unsolicited faxes; he was sued under the regulation by a class of plaintiffs for failing to include opt-out language in faxes sent to those who expressly authorized Walburg to send them the faxes. 

The district court ruled for Walburg, holding that the regulation should be narrowly interpreted so as to require opt-out notices only for unsolicited faxes. But on appeal, the Federal Communications Commission, not previously party to the case, filed an amicus brief explaining that its regulation applies to previously authorized faxes too. Walburg argued that the FCC lacked statutory authority to regulate authorized advertisements. In response, the FCC filed another brief, arguing that the Hobbs Act prevents federal courts from considering challenges to the validity of FCC regulations when raised as a defense in a private lawsuit. Although the U.S. Court of Appeals for the Eighth Circuit recognized that Walburg’s argument may have merit, it declined to hear it and ruled that the Hobbs Act indeed prevents judicial review of administrative regulations except on appeal from prior agency review. 

In this case, however, Walburg couldn’t have raised his challenge in an administrative setting because the regulation at issue outsources enforcement to private parties in civil suits! Moreover, having not been charged until the period for agency review lapsed, he has no plausible way to defend himself from the ruinous liability he will be subject to if not permitted to challenge the regulation’s validity. Rather than face those odds, Walburg has petitioned the Supreme Court to hear his case, arguing that the Eighth Circuit was wrong to deny him the right to judicial review without having to initiate a separate (and impossible) administrative review. 

Cato agrees, and has joined the National Federation of Independent Business on an amicus brief supporting Walburg’s petition. We argue that the Supreme Court should hear the case because the Eighth Circuit’s ruling permits administrative agencies to insulate themselves from judicial review while denying those harmed by their regulations the basic due-process right to meaningfully defend themselves. The Court should hear the case because it offers the opportunity to resolve lower-court disputes about when the right to judicial review arises and whether a defendant can be forced to bear the burden of establishing a court’s jurisdiction.

These are important due-process implications raised in this case, and the Court would do well to adopt a rule consistent with the Eleventh Circuit’s holding on this issue—one that protects the right to immediately and meaningfully defend oneself from unlawful regulations. Otherwise, more and more Americans will end up finding themselves at the bad end of obscene regulatory penalties by unaccountable government agencies, with no real means to defend themselves.

The Court will decide whether to take Walburg v. Nack early in the new year.

Even Little Platoons Have First Amendment Rights

Nathan Worley and three friends hold a weekly political discussion group in their hometown of Sarasota, Florida. In 2010, a ballot initiative for a proposed amendment to the Florida constitution prompted the group to pull together $600 and exercise their First Amendment rights. They soon found, however, that doing so wasn’t going to be quite so easy.

Under Florida’s campaign finance law, it’s illegal for two or more people to join together and spend more than $500 supporting or opposing a state ballot issue. Instead, the state forces even small groups like Worley’s to register and speak through a political committee, which is then subject to a vast catalog of vague, inscrutable regulations that are enforced by thousands of dollars in fines. To speak publicly about the ballot issue, Worley’s informal coterie would have to hire a specialized lawyer and accountant and include “disclosures” in their planned radio ads that would take up about 20 percent of the airtime.

Instead of remaining silent like most small groups do when faced with this type of prohibitive regime, the Worley crew joined with the Institute for Justice to challenge Florida’s laws and vindicate their right to free political speech in federal court. Despite the obvious speech-chilling effect of the regulations, however, the lower courts failed to rigorously scrutinize Florida’s laws. The U.S. Court of Appeals for the Eleventh Circuit in particular abdicated its judicial role in two ways.

First, instead of applying “strict scrutiny,” the court chose the more deferential “exacting” scrutiny, based on the notion that so-called “disclosure” requirements like Florida’s don’t prevent people from speaking. Second, the court hardly even applied the “exacting” standard — deciding, on its own, to all but ignore the facts of the case by analyzing it as a challenge to the entire campaign-finance regime rather than simply as-applied to small groups like Worley’s.

In light of the Eleventh Circuit’s refusal to meaningfully scrutinize Florida’s speech-restrictive laws, Worley and IJ have petitioned the Supreme Court to hear their case. Cato and the Center for Competitive Politics have filed a brief supporting that petition because rulings like the lower courts’ here demonstrate a clear need for the Supreme Court to clarify the correct standards to apply when evaluating campaign finance regimes like Florida’s.

Courts shouldn’t be able to get by without judging just because a state calls its speech regulation “disclosure,” or because the courts decide on their own to recharecterize the case as a “facial” challenge. A Supreme Court hearing would put needed pressure on the federal judiciary to actually scrutinize these types of speech regulations and hopefully prevent them from continuing to silence small groups with little funding — because even little platoons of politically interested citizens have First Amendment rights.

The Supreme Court will decide later this fall whether to hear Worley v. Florida Secretary of State.

This blogpost was co-authored by Cato legal associate Julio Colomba.

Government Racism on Trial: Schuette and EEOC v. Kaplan

Today the Supreme Court hears argument in the Schuette case, regarding the constitutionality of Michigan voters’ decision to ban racial discrimination and preferences in public university admissions (the equivalent bans for public employment and contracting haven’t been legally challenged). In no conceivable world can the Equal Protection Clause – the constitutional provision that bans racial discrimination – prohibit a state law that bans racial discrimination. The Supreme Court should and almost certainly reverse the lower court’s ridiculous judgment to the contrary, and will likely do so with a great degree of unanimity on the “political structure” aspect of the case.

Coinciding with that oral argument, Cato is getting involved in a lower-court case called EEOC v. Kaplan Higher Education Corp. Here’s the situation: Following several incidents of employee theft, Kaplan University did what any reasonable employer might do in similar circumstances: it instituted heightened screening procedures for new hires. This process included credit checks to filter out potential employees at greater risk of committing theft. These checks made no mention of any applicant’s race and Kaplan didn’t collect any race information from applicants, thus making the hiring process both race-neutral and race-ignorant. Nevertheless, the Equal Employment Opportunity Commission, which itself uses credit checks in hiring decisions, sued Kaplan under Title VII of the Civil Rights Act, claiming that the use of credit checks has an unlawfully disparate impact on African American applicants.

Because Kaplan doesn’t keep racial data for applicants, the EEOC had to come up with its own data to prove its case. The agency thus created a team of “race raters,” a group of seemingly random people who sorted Kaplan’s job applicants into racial categories based only on the applicant’s name and DMV photo. (You can’t make this stuff up!) Because of the unscientific and unreliable nature of this data, the EEOC was soundly rebuffed in the federal district court in Ohio where it brought its case.

Now before the U.S. Court of Appeals for the Sixth Circuit, the EEOC is continuing its awkward crusade against employers’ use of credit checks. Cato, joining the Pacific Legal Foundation, the Center for Equal Opportunity, the Competitive Enterprise Institute, and Project 21, has filed a brief supporting Kaplan and arguing that the EEOC’s use of “race raters” and its incautious application of disparate-impact theory violate the Fifth Amendment’s equal protection guarantee.

Classifying people into racial categories based on their name and physical features is a demeaning violation of the Constitution’s mandate that individuals be treated as individuals and not reduced to mere members of a racial class. We also argue that the EEOC’s irresponsible use of disparate-impact theory to attack reasonable business practices contradicts the spirit of equal protection by forcing employers to consider race for all of their business-related decisions in order to avoid bureaucratic entanglement.

When combined with the ongoing Fisher v. UT-Austin saga, we see that while Jim Crow is dead, various government actors continue to offer massive resistance to the ideal of a colorblind society.

Luxury Mobile-Home Parks Don’t Need Rent Control

Contempo Marin isn’t your stereotypical mobile-home park. The park sits two miles from San Francisco Bay and offers tenants a pool, spa, clubhouse, and lagoon. Because of the location and amenities, these mobile homes—some of which offer vaulted ceilings, gas fireplaces, walk-in closets, and jetted tubs—can sell for over $300,000. That’s what makes the rent- and vacancy-control ordinance imposed on the park by the City of San Rafael in the name of “affordable housing” so outrageous.

The ordinance caps the amount that MHC Financing, the owner of Contempo Marin, may charge its tenants—who own their mobile homes but rent the land underneath—and mandates that the land be rented at the same price to each homeowner. The result isn’t lower costs for incoming tenants, but a redistribution of the value from the below-market rent directly to the mobile-home owners, whose homes now sell at a premium of nearly $100,000 above their pre-existing value. Thus far, the ordinance has transferred more than $95 million from MHC to its tenants.

MHC challenged the ordinance in federal court as an unconstitutional taking. The district court ruled in MHC’s favor, finding that the alleged public purpose of the ordinance—“affordable housing”—was merely a pretext, such that the ordinance violated the Fifth Amendment’s mandate that property only be taken for a “public use.” As Justice Kennedy clarified in Kelo v. City of New London (2005), “transfers intended to confer benefits on particular, favored private entities and with only incidental or pretextual public benefits, are forbidden by the Public Use Clause.”

The U.S. Court of Appeals for the Ninth Circuit, however, reversed the district court, holding that rent control generally, rather than the specific rent-control scheme at issue here, is “rationally related to a conceivable public purpose” and thus automatically meets the public-use requirement. MHC is now asking the Supreme Court to review that ruling and Cato has filed a supporting amicus brief, encouraging the Court to clarify the standard of review applied to pretextual takings claims and to confirm that the Takings Clause isn’t rendered inoperative when property is transferred.

The Ninth Circuit’s approach essentially bars future pretextual takings claims; any regulatory scheme viewed at its broadest theoretical level could have some “conceivable public purpose.” This evisceration of the Public Use Clause leaves the appropriate standard for determining if a government’s public-use justification is mere pretext in desperate need of Supreme Court clarification. The Ninth Circuit also undermined the Fifth Amendment by finding that no taking had even occurred because MHC had bought Contempo Marin after the rent- and vacancy-control provision had been enacted and therefore could have no investment-backed expectation as to the property value taken by the city. This decision directly conflicts with Palazzolo v. Rhode Island (2001), in which the Supreme Court held that buying property with knowledge of a regulation doesn’t preclude a takings challenge. The Ninth Circuit ignored the same precedent in Guggenheim v. City of Goleta in 2011—a case in which Cato also filed a brief supporting a petition for review—and the lower court’s continued misapplication of the law here reiterates the need for the Supreme Court to reaffirm that the Takings Clause has no “expiration date.” 

The Court will decide whether to take the case of MHC Financing LP v. City of San Rafael later this fall.

This blogpost was co-authored by Cato legal associate Lauren Barlow.

Protecting the Rights of Workers Against Forced Association

The Labor Management Relations Act (a.k.a. the Taft-Hartley Act) was passed in 1947 in order to curb the tide of unfair labor practices that had arisen since the National Labor Relations Act (NLRA) was passed in 1935. The NLRA established a legal regime that was friendly to unions and unfriendly to the rights of workers who dissented from attempts to unionize workplaces. Unions have many tools at their disposal to ease the path to unionization, but the government should not prefer the rights of those who wish to be unionized at the expense of those who do not.

One part of Taft-Hartley, Section 302, addresses the problem of corruption between unions and employers by prohibiting employers from giving “any money or thing of value” to a union seeking to represent its employees. Martin Mulhall is a 40-year employee for the Mardi Gras greyhound racetrack and casino in Hollywood, Florida, and he opposes the efforts of Local 355 to unionize Mardi Gras’s employees. Mr. Mulhall’s desire not to be unionized is no less valid or constitutionally protected than those who push for unionization, and thus he is a perfect example of an employee for whom the Taft-Hartley Act passed to protect.

Mr. Mulhall alleges that, in violation of Section 302, Local 355 and Mardi Gras exchanged “things of value” in order to smooth the path to unionization. In exchange for the union agreeing not to picket, boycott, or strike against Mardi Gras, as well as for financially supporting a ballot initiative that legalized slot machine gambling, Mardi Gras agreed to support Local 355’s efforts to organize its employees. Specifically, Mardi Gras gave the union access to employee records and to its facilities in order to engage in organizing efforts during non-working hours. Additionally, and most crucially, Mardi Gras agreed to waive its right to a secret-ballot election supervised by the National Labor Relations Board as well as its right to contest any unfair labor practices committed by the union during the process of organizing the workers.

Defending the Right to Public Presence

The essential distinction between “private” and “public” property is the egalitarian nature of the latter. There’s no true equality in private property: its owners are free to set whatever restrictions on its use they wish.

On the other hand, public property, especially public fora such as sidewalks, parks, and roads—which have traditionally been available for public speeches, protests, and rallies—is entirely different. Just as we’re all equal in a court of law, or at the ballot box, we’re all supposed to be equal in our freedom to use and enjoy public spaces.

In 2008, however, Massachusetts turned this understanding on its head, declaring that in certain public spaces, some people are more equal than others. The state passed a law making it a crime to physically come within 35 feet of abortion clinics unless you’re a clinic patient, staff member, or government agent, or are using a public road or sidewalk to travel past the clinic. By the state’s own admission, the law was designed to prevent anti-abortion advocates from engaging in “sidewalk counseling.”

When a group of peaceful anti-abortion advocates challenged the law as a violation of their free speech rights, the district and circuit courts accepted the state’s argument that the law was valid as a content-neutral regulation of the time, place, and manner in which the public may engage in free speech. The Supreme Court has now taken up the case, and the petitioners argue that a law designed to target one type of speech, in one type of location, cannot be considered content- or viewpoint-neutral.

While this is indeed an important test-case for the First Amendment, Cato filed an amicus brief in support of the petitioners to present a separate point. The Fourteenth Amendment’s Due Process Clause protects certain fundamental rights against government infringement: rights that are essential to the enjoyment of the freedoms protected by the Bill of Rights, or that are part of the meaning of “ordered liberty,” or that are part of America’s history and traditions.Regardless of your preferred formulation for these protected rights, we argue that one of them is the right to public presence: the right to peacefully use public property in any manner that doesn’t harm others or unreasonably restrict their freedom to use that same public space.