Tag: amicus briefs

Cato’s Amicus Brief Helps Persuade Supreme Court to Protect Private Property Rights

This blogpost was co-authored by Cato legal associate Anna Mackin.

Today, the Supreme Court agreed to hear Arkansas Game & Fish Commission v. United States, the Fifth Amendment Takings Clause case whose cert petition Cato supported with an amicus brief. In that brief, we joined the Pacific Legal Foundation in urging the Court to preserve a remedy long-recognized in American courts: compensation for government destruction of private property.

Over a year ago, the Federal Circuit blithely ignored this constitutionally guaranteed protection, ruling that so long as it might be characterized as “temporary,” no government flooding of private land can constitute a Fifth Amendment violation. If upheld, this sweeping opinion could prevent recovery for the destruction of private property whenever the government characterizes its own actions as “temporary,” without any assurances of the length of this “temporary” loss.

Notable Supreme Court commentators saw the importance of this case early on, and our amicus brief was featured on SCOTUSblog’s “petition of the day” page. Many thanks to Brian Hodges at PLF for working with Cato on the brief – one of just four filed in the case. Congratulations also and especially to Matthew Miller & Julie Greathouse of Perkins & Trotter, who represent AGFC, for their successful legal strategy.

It is gratifying to see the Court snap up this opportunity to protect private property rights – it is more likely than not that it will reverse the lower court – implicitly validating the position Cato and PLF advanced in this case. We’ll now be filing a brief on the merits that will urge the Court to maintain constitutional protections against government intrusions on private property. The Court will hear the case next term, probably this fall, with a final decision expected by early 2013.

For more on AGFC v. United States, check the case’s SCOTUSBlog page or its Supreme Court docket page. Jonathan Adler also blogged about the case at the Volokh Conspiracy.

Administrative Agencies Are Not a Power Unto Themselves

Cato legal associate Trevor Burrus co-authored this blogpost.

Administrative agencies are accorded huge deference — too much deference — by the courts. Acting as police, prosecutor, judge, jury, and executioner, agencies increasingly act as a law unto themselves and do a majority of the federal government’s work.

Through this arrangement, Congress is put in a win-win situation: the government can delegate decision-making to agencies and avoid political accountability. Because of these concerns, it is vitally important that courts’ deference to agencies not go too far.

In Christopher v. SmithKline Beecham Corp., two former pharmaceutical sales representatives sued to recover overtime pay. The Fair Labor Standards Act, however, exempts “outside salesmen” from overtime requirements and for over 70 years a Department of Labor rule has broadly defined “outside salesman” to include those who perform any part of the work required to sell goods. Pharmaceutical companies, as well as many other businesses, have long organized their business practices around this rule.

When former pharmaceutical employees brought a similar suit in the Second Circuit, the Secretary of Labor filed an amicus brief explaining that the rule would be thereafter changed not to exclude pharmaceutical employees. The Second Circuit deferred to this ad hoc rule change and held for the plaintiffs.

In Christopher, however, the Ninth Circuit refused to defer to the Labor Department’s attempt to change a long-standing rule. Cato thus joined the Washington Legal Foundation and the Allied Educational Foundation on an amicus brief to advise the Court that the Ninth Circuit was, believe it or not, correct. As the Ninth Circuit said, an “about-face regulation, expressed only in ad hoc amicus filings” does not deserve even the broad deference already accorded to agencies. Moreover, we stress that, if such deference were allowed, it would encourage agencies to avoid the regular rulemaking procedures that allow affected parties to give “notice and comment” on the proposed changes.

Administrative agencies should not be allowed any more leeway to increase their often unreviewable power.

Obamacare Argument Post-Mortem

Now that I’ve woken from the first full night’s sleep since the Supreme Court’s three-day Obamacare marathon began, I can share my thoughts on how the argument went, in case you haven’t seen my first and second days’ reports for the Daily Caller:

  1. The Anti-Injunction Act: On an argument day that can best be described as the calm before the storm, it quickly became clear that the Supreme Court would reach the constitutional issues everyone cares about. That is, regardless of how the justices resolve the hyper-technical issue of whether the Anti-Injunction Act is “jurisdictional,” this law – which prevents people from challenging taxes before they’re assessed or collected – does not apply to the Obamacare litigation. There were also hints that the Court was skeptical of the government’s backup merits argument that the individual mandate was justified under the Constitution’s taxing power. Perhaps the only surprising aspect of the hearing was how “cold” the bench was; it’s rare for the justices to allow advocates to speak at length without interruption, but that’s what they generally did today. That’s yet another indication that the Court will get past the AIA appetizer to the constitutional entree.
  2. The individual mandate: From Justice Kennedy’s noting that the government is fundamentally transforming the relationship of the individual to the government, to Chief Justice Roberts’s concern that “all bets are off” if Congress can enact economic mandates, to Justice Alito’s invocation of a hypothetical burial-insurance mandate, to Justice Scalia’s focusing on the “proper” prong of the Necessary and Proper Clause – and grimacing throughout the solicitor general’s argument – it was a good day for those challenging the individual mandate.  Paul Clement and Mike Carvin, who argued for the plaintiffs, did a masterful job on that score, showing again and again the unprecedented and limitless nature of the government’s assertion of federal power.  The solicitor general meanwhile, had a shaky opening and never could quite articulate the limiting principle to the government’s theory that at least four justices (and presumably the silent Justice Thomas) were seeking.  While trying to predict Supreme Court decisions is a fool’s game, the wise should take note that if Tuesday’s argument is any indication, Obamacare is in constitutional trouble.
  3. Severability: The most likely ruling on severability is that all of Obamacare will fall along with its fatally flawed individual mandate.  While such a result would be legally correct, it would still be stunning.  Perhaps even more remarkable is that the severability argument proceeded under the general assumption that the mandate would indeed be struck down.  This was not a mere hypothetical situation about which the justices speculated, but rather a very real, even probable, event.  There’s still a possibility that a “third way” will develop between the government’s position (mandate plus “guaranteed issue” and “community rating”) and that of the challengers (the whole law) – perhaps Titles I and II, as Justices Breyer and Alito mused (and as Cato’s brief detailed) – but the only untenable position would be to sever the mandate completely from a national regulatory scheme that obviously wouldn’t work without it.
  4. Medicaid expansion/coercion: The justices don’t want to reach the factually complicated and legally thorny Medicaid issue.  That may be another marginal factor pushing one or more of them to strike down all of Obamacare under a straightforward severability analysis and leave the “spending clause coercion” issue for another day.  This was perhaps the most difficult of the four issues to predict, and having heard argument doesn’t really make that task easier.  A majority of the Court was troubled by the government’s “your money or your life” stance, but it’s not clear what standard can be applied to distinguish coercion from mere inducements.  Then again, if this isn’t federal coercion of the states, I’m not sure what is.

General post-argument reaction: All of my pre-argument intuitions were confirmed, and then some:  The Court will easily get past the AIA, probably strike down the individual mandate, more likely than not taking with it all or most of the rest of the law (including the Medicaid expansion).  Still, it was breathtaking to be in the courtroom to see the Chief Justice and Justices Scalia, Kennedy, and Alito all on the same page.  (For example, when Justice Kennedy’s first question during yesterday’s hearing was, “Can you create commerce in order to regulate it?” – a question hostile to the government – my heart began racing.)  Much as I’d love to think that my briefs helped get them there even a little bit, ultimately it’s the strength of the constitutional claims and the weakness of the government’s positions that prevailed – or will prevail if the opinions that come down in three months follow along the lines set by this week’s arguments.  They may not of course – trying to predict the Supreme Court isn’t a science—but I’m coming out of this week feeling very good.

Finally, for links to all of Cato’s briefs and my last series of op-eds on the Obamacare litigation, see Monday’s blog post.

Obamacare at the Supreme Court

As most readers are no doubt aware, the Supreme Court this week takes up six hours of argument in the Obamacare litigation.  Constitutional claims that were originally dismissed as “frivolous” and “easy” are now getting three days of hearings – unprecedented in the modern era. The Court has thus signaled what the American people have known all along, that the government’s breathtaking assertion of power goes beyond anything attempted in the history of the Republic.

Rather than repeat my previous writings on the subject, here’s a sketch of each of the four issues the Court will examine, along with a link to my recent op-ed on the subject (this month I’ve written on three of the four) and the relevant Cato amicus brief:

  1. Whether the challenge to the individual mandate is barred by the Anti-Injunction Act. –- 90 minutes on Monday – op-ed and brief.
  2. Whether Congress has the power to enact the individual mandate. –- 2 hours on Tuesday – op-ed and brief.
  3. Whether and to what extent the mandate, if unconstitutional, is severable from the rest of the law. –- 90 minutes – op-ed (with Richard Epstein and Mario Loyola) and brief.
  4. Whether the new conditions on all federal Medicaid funding (expanding eligibility, greater coverage, etc.) constitute an unconstitutional coercion of the states. – 1 hour – brief.

Are there any constitutional limits on what the federal government can do in the name of regulating interstate commerce? The government hasn’t offered any and we’ll see this week whether that’s good enough for the Supreme Court.

Here further is an analytical point-counterpoint I did with University of California-Irvine Law School dean Erwin Chemerinsky previewing the arguments, and here are a series of blogposts by Cato adjunct scholar Tim Sandefur doing the same.  Finally, you can view Cato’s recent conference on the subject here (individual mandate panel) and here (Medicaid expansion panel).

Let’s hope that the Court says that we have a government of laws rather than men, allowing Congress then to get back to the hard work of crafting a true national health reform that both improves the system and stays within constitutional bounds.

May the odds be ever in liberty’s favor!

Not Everything Can Be a Federal Crime

Cato legal associate Carl DeNigris co-authored this blogpost.

Over the last few decades, the number of federal crimes has exploded. The U.S. criminal code has grown so large and so expansive that no one is exactly sure how many federal crimes are actually on the books, with estimates ranging from 4,000 to 300,000. As Justice Scalia has noted, “It should be no surprise that as the volume increases, so do the number of imprecise laws.”

Many individuals and organizations from across the ideological spectrum have voiced concern over this growing trend, recognizing that broadly defined crimes lack the clarity traditionally required before depriving citizens of their liberty.

The expansion of 18 U.S.C § 1001, which criminalizes the knowing and willful making of materially false statements in “any matter within the jurisdiction of” the United States, exemplifies this broadening scope. Cory King was prosecuted under this statute for making a false statement to a state official wholly unconnected to any federal agency or investigation. Yet, the Ninth Circuit held that Mr. King violated § 1001 because the subject matter of his statement was one over which a federal government agency possessed regulatory authority.

King has now asked the Supreme Court to hear his case. Cato has joined the National Association of Criminal Defense Lawyers and the Texas Public Policy Foundation on a brief supporting him and arguing that the Ninth Circuit stretched § 1001 beyond its proper jurisdictional reach. Such an unbounded interpretation risks greater over criminalization and further misuse of the federal criminal code.

Moreover, since § 1001 is a “process crime” that focuses on offenses “not against the particular person or property, but against the machinery of justice itself,” an excessively broad construction would undermine the integrity of the criminal justice system. Wider application of such crimes facilitates pretextual prosecutions, in which “the operating philosophy seems to be that, if the government cannot prosecute what it wished to penalize, it will penalize what it can prosecute.”

Such an arbitrary and far-reaching application of the criminal code – the federal criminal code, at that – has no place in a free society.

The Court will decide whether to take up King v. United States sometime this spring.

Why Is Massachusetts Trying to Ban Truthful Information About Hedge Funds?

The Massachusetts Uniform Securities Act prohibits general solicitation and advertising by anyone offering unregistered securities, ostensibly for the purpose of furthering state and federal disclosure schemes. Yet this ban on public communications has been applied so broadly that it has undermined those purported disclosure goals.  For instance, the ban has prevented individuals who have no interest in investing in any security – such as journalists, academics, students, and others who are not wealthy or financially sophisticated – from receiving truthful, non-misleading information about hedge funds.

In Bulldog Investors v. Massachusetts, an investment company maintained an interactive website that provided information about its products. Because Bulldog was not registered in Massachusetts, however, the State filed an administrative action against the firm, demanding it take down its online content.

In response, Bulldog joined a group of other firms and individuals – including some who have no interest in investing but wish to read the website information – in a lawsuit claiming that the Massachusetts ban violates their First Amendment rights. The Supreme Judicial Court of Massachusetts upheld the ban, so the plaintiffs have asked the U.S. Supreme Court to take the case.

Cato, along with the Competitive Enterprise Institute and a group of journalists and academics, has now filed an amicus brief supporting that request and arguing that the Massachusetts law is an unconstitutional ban on free speech. We show that the state’s claim that the ban furthers a larger federal regulatory scheme ignores the judgment of many federal officials (from both parties) who have concluded that such bans undermine these goals.

The state’s alleged disclosure interest is just a pretext for coercing companies to register in Massachusetts, and is therefore an unconstitutional attempt at circumventing federal preemption. But even if the ban furthers a legitimate state interest, it is so broad that it is has substantially chilled both truthful, non-misleading commercial speech and noncommercial speech alike.

A law so repugnant to the First Amendment cannot stand.

Why Corporate Speech Rights But Not Corporate Liability for Violating the ‘Law of Nations’?

Yesterday the Supreme Court heard argument in Kiobel v. Royal Dutch Petroleum, the case (which I’ve discussed before and in which Cato filed a brief) that asks whether, under the Alien Tort Statute, the “law of nations” can be applied against an entity that is not a natural person: a corporation.  As the majority of the Court seemed to think, and as I wrote in the New York Times online, the answer is no because Congress never gave U.S. courts the power to entertain lawsuits alleging corporate malfeasance involving foreign actors abroad.

It seems like a discrete enough issue – does this statute contemplate corporate liability? – one that international law junkies and the “human rights” establishment are passionate about, but not one that should have much broader purchase.  Yet the blogosphere, not least the response to my Times piece, is up in arms about organizations like Cato saying that “corporations are people” when it gets them political speech rights (Citizens United) but not when it subjects them to liability for their dastardly deeds (Kiobel).

But to make this charge – whether labeled shilling for corporations or just plain hypocrisy – is to misunderstand both Citizens United and Kiobel.

Before explaining why, let me just reiterate that I agree with the keen point that corporations are not human beings.  But that brilliant observation is legally irrelevant.  Corporations are formed by individuals as a means of exercising their constitutionally protected rights.  Corporate personhood is simply a convenient legal fiction that we use to enable that rights-pooling for all sorts of purposes.  If using the word “person” in relation to an inanimate entity is confusing or offensive, you could try calling it something else (but then nobody you’re talking to would understand you, so we’re stuck with the word, for better or worse).  In any event, as I explain in my recent law review article – “So What If Corporations Aren’t People?” – none of this changes how the law treats corporations.

Now then, I’m not saying that corporate personhood is operative for purposes of political speech but not for purposes of liability for malfeasance.  Instead, I’m clarifying two areas of law as they relate to corporate actors.  First, the First Amendment guarantees that rights-bearing individuals don’t forfeit their rights (to speak about politics or anything else) when they associate in groups, whether in corporate form or otherwise.  Second, the Alien Tort Statute – a peculiar law by which Congress gave federal courts jurisdiction over ”law of nations” violations alleged by foreigners against other foreigners – doesn’t recognize corporations as a type of party that can in that manner be haled into our courts.  That is so because the “law of nations” doesn’t extend to corporate actions (for reasons explained in our brief and elsewhere that I won’t repeat here).  

Kiobel has nothing to do with corporate liability in general – e.g., liability for manufacturing defective products, dumping chemicals, etc., in violation of U.S. or even foreign law – but rather only concerns corporate liability for human rights abuses and other violations of the “law of nations” by foreign corporations in foreign countries.

The law can surely be “a ass,” but you have to understand what law you’re discussing to understand what type of ass it might be.