Tag: amicus briefs

Obamacare’s Footnote Four

This post was co-authored by Cato legal associate Chaim Gordon.

Freedom-loving lawyers everywhere recoil in horror at the mere mention of “footnote four.” In that infamous citation in the 1938 case of Carolene Products, the Supreme Court officially renounced judicial review of laws that infringe on economic liberty. This week, in his dissent from the D.C. Circuit opinion that upheld the individual mandate on Commerce Clause grounds, Judge Brett Kavanaugh added his own dubious “footnote four.”

Judge Kavanaugh’s 65-page dissent was devoted to his parsimonious reading of various provisions in the Internal Revenue Code, culminating in the conclusion that the Anti-Injunction Act robbed federal courts of jurisdiction to hear the case until the mandate penalty is actually enforced. As Judge Kavanaugh noted, “the Tax Code is never a walk in the park.” But the Tax Code is even more grueling when you are given lousy legal advice. And that is why footnote four – in which Judge Kavanaugh inexplicably decides to publicly thank former IRS commissioners Mortimer Caplin and Sheldon Cohen and their counsel for their amicus brief – is so troubling. Here is his footnote four:

Both sides before us want this case decided now and contend that the Anti-Injunction Act does not bar this suit. The amicus brief of former IRS Commissioners Mortimer Caplin and Sheldon Cohen, submitted by able counsel Alan Morrison, cogently argued the opposite position. The Court is grateful to amici and counsel for their assistance.

But it is entirely unclear why Commissioners Caplin and Cohen and Counsel Morrison deserve the court’s thanks. For starters, the Caplin and Cohen brief was not advocating either of Judge Kavanaugh’s nuanced readings – be they correct or not – of various provisions in the Internal Revenue Code. (It did, however, make one of Kavanaugh’s main arguments in response to one of the government’s arguments toards the end of the brief.) Rather, the Caplin and Cohen brief broadly asserts that the AIA “prevents courts from reviewing all claims involving payments under the Code, not just those labeled taxes.”

The problem is that, in support of this broad, sweeping assertion, the Caplin and Cohen brief misleadingly cites cases that do not support its claim. That is, almost all the cases cited by the Caplin and Cohen brief specifically relied upon the fact that the penalties at issue were found in chapter 68 of the IRC or were part of a larger taxing scheme (as in the Mobile Republican case). But you would not know that from reading the Caplin and Cohen brief.

Take, for example, the Caplin and Cohen brief’s citation to Shaw v. United States and Botta v. Scanlon as “perhaps the best illustration of the breadth of the applicability of” the AIA. What the Caplin and Cohen brief does not say is that both of these cases specifically rely upon provisions in the IRC that define the penalty at issue in those cases (under section 6672) as taxes for the purposes of the AIA. Those provisions, by their own terms, only apply to penalties under chapter 68 of the Code, and the penalty for violating the individual mandate is in chapter 48.

This is really green-eyshade stuff, we know, but that’s what this litigation has come to – and it’s why tax lawyers are not suffering the higher rates of unemployment of their peers in other specialties.

To make matters worse, Caplin and Cohen filed essentially the same amicus brief with the Supreme Court in one of the cases that the Court will take up at its cert petition conference this week. This is especially alarming because the government has urged the Court to appoint an amicus counsel to argue for the position that the AIA applies to the penalty for violating the individual mandate (even though the government now agrees with the mandate’s challengers that the AIA does not apply).

We think the justices’ clerks are fully capable of advising their bosses on the pro-AIA arguments, which in any event does not apply to the 26 state plaintiffs in the Eleventh Circuit case.  Plus the Court has the Fourth Circuit’s and now Judge Kavanaugh’s thorough “briefs.” If the Court does decide to appoint an amicus to argue that issue, however, let’s hope that it receives better legal advice than the D.C. Circuit got from Caplin and Cohen.

The Longhorn Mismatch: Too Much Racial Preference, Too Little Success

Last week the Supreme Court asked the University of Texas to respond to a cert petition raising an issue that in any non-Obamacare year would be the most explosive part of the Court’s docket: racial preferences in higher education.  (UT had for some inexplicable reason failed even to file a waiver, which is customary in cases where the respondent feels no need to file an actual brief.)

The case was brought by Abigail Fisher, a white Texan denied admission to UT-Austin even though her academic credentials exceeded those of admitted minority students.  The district court granted summary judgment to the university and the Fifth Circuit panel affirmed because a divided Supreme Court in the 2003 case of Grutter v. Bollinger (the University of Michigan case) found narrowly tailored racial preferences to be constitutionally justified for the sake of diversity.  Judge Emilio Garza wrote an electrifying concurrence – starting at page 58 here – agreeing that the ruling was correct under Grutter but that Grutter itself, and the regime of “soft” racial preferences (i.e., not quotas) it created, is incompatible with the Equal Protection Clause. 

The Fifth Circuit then denied en banc rehearing by a vote of 7-9, over a sharp dissent by Chief Judge Edith Jones.  (Full disclosure: The judge I clerked for lo those years ago, E. Grady Jolly, joined Chief Judge Jones’s dissent.)

Fisher’s cert petition objects to the wide discretion the Fifth Circuit would grant UT in administrating its racially preferential admissions paradigm, arguing that affording deference to the university extends Grutter and cannot be consistent with the “strict scrutiny” Grutter requires. Indeed, rather than working to phase out public university race preferences consistent with the expectations the Court articulated in Grutter – Justice O’Connor famously wrote that the diversity rationale would only suffice for about 25 years – the Fifth Circuit provides a veritable roadmap for discriminatory state action.

Now, it would be ideal if all nine justices were courageous enough to uphold constitutional protections for all citizens by refusing to legitimize racially discriminatory state action, regardless of the good-faith motives or other political atmospherics surrounding that action. Progressive legal theory being what it is, however, such a result, where people are judged on the content of their character/qualifications rather than the color of their skin, is unfortunately still a dream. There is, however, an argument that might sway even those members of the Court who support affirmative action as a policy matter: race preferences hurt those they are intended to help.

As highlighted in Richard Sander and Stuart Taylor’s amicus brief, a growing body of research suggests that when the capabilities of a student’s peers exceed their own, the student performs worse than when surrounded by peers with objectively similar capacities. Sander (a UCLA economist and law professor) and Taylor (a lawyer and journalist who has long covered civil rights issues) utilize this “mismatch theory” to discredit the assumption underlying race preference programs – that they benefit minorities – and demonstrate that the opposite is true. They further point out that racial preferences have failed to have their intended effects; namely, preventing racial balancing, fostering diversity, and making universities more attractive to minorities.

Three U.S. Civil Rights Commissioners also filed an amicus brief presenting evidence that racial preferences produce the opposite of their intended effect; they discourage rather than facilitate the entry of minorities into prestigious careers by incentivizing elite public universities to admit students they would not admit if admissions were race-blind. They argue that racial preferences place students in environments that do not optimize to their learning. Citing robust statistics, they conclude that this effect actually discourages minorities from entering science and engineering careers and becoming college professors, and decreases the number of minority students accepted to law schools who actually earn JDs and pass the bar exam.

The well-intentioned advocates of race-conscious public university admissions got it wrong under the Constitution. These briefs further illustrate the detriment everyone in society suffers when state action based on race rather than merit dictates the paths of young Americans.

Under the Court’s request for a response, the university has until the end of the month to file, unless it asks for and is granted an extension.  If the university’s response arrives by January, the case – if the Supreme Court takes it – should be on schedule for argument and decision this term.  For more on Fisher v. University of Texas, see the case’s SCOTUSblog page.

Thanks to Cato legal associate (and UT alumna) Anna Mackin for help with this blogpost.

D.C. Circuit Paves Way for Supreme Court Consideration of Obamacare

Today the D.C. Circuit ruled that the individual mandate is a constitutional exercise of federal power under the Commerce Clause.  Senior Judge Laurence Silberman (Reagan appointee) wrote the opinion, which was joined by Senior Judge  Harry Edwards (Carter appointee).  Judge Brett Kavanaugh (George W. Bush appointee) dissented on jurisdictional grounds without reaching the merits, finding that the Anti-Injunction Act barred the suit until the individual mandate/penalty/tax goes into effect.  (The case is Seven-Sky v. Holder; see Cato’s amicus brief and a quick breakdown by Tim Sandefur.)

Sure, this is a loss for our side but it’s not a big deal. Every development in the Obamacare litigation has been anticlimactic since the Eleventh Circuit split with the Sixth, guaranteeing that the Supreme Court would take the case.  Today’s ruling, therefore, is notable not so much for its result – upholding the individual mandate – as for the reluctance with which it reached it.  

After acknowledging the novelty of the power Congress is asserting, the court expressed concern at “the Government’s failure to advance any clear doctrinal principles limiting congressional mandates that any American purchase any product or service in interstate commerce.”  In other words, the majority saw itself bound by the Supreme Court’s broad reading of federal power under the Commerce Clause but felt “discomfort” at reaching a result that seemingly had no bounds.  

Indeed, the government has yet to tell any court in any of the cases what it cannot do under the guise of regulating interstate commerce.  But rest assured that the Supreme Court will ask again, and soon – it considers the myriad cert petitions later this week.  And if the high court is as unsatisfied with the government’s jurisprudential non-theory as the D.C. Circuit was, it will not hesitate to strike down this expansion of federal power. 

“Federalism is more than an exercise in setting the boundary between different institutions of government for their own integrity,” wrote Justice Kennedy for a unanimous Court last term (United States v. Bond).  “Federalism secures the freedom of the individual.” 

I am confident that the Supreme Court will not allow this unprecedented invasion of individual liberty.

There’s No Drug War Exception to the Constitution

Florida is so zealous in pursuing the war on drugs that its laws classify the possession, sale, and delivery of controlled substances as crimes not requiring the state to prove that the defendant knew he had possessed, sold, or delivered those substances.

In Florida Dept. of Corrections v. Shelton, state prosecutors convicted Mackie Shelton of transporting cocaine under one of these “strict liability” statutes, the trial judge having instructed the jury that the state only needed to prove that Shelton delivered a substance and that the substance was cocaine. Shelton successfully challenged the constitutionality of that state law in federal court, where the district judge overturned the conviction and noted that “Florida stands alone in its express elimination of mens rea as an element of a drug offense.”

Florida appealed that ruling to the U.S. Court of Appeals for the Eleventh Circuit. Cato has joined the National Association of Criminal Defense Lawyers, Florida Association of Criminal Defense Lawyers, ACLU, Drug Policy Alliance, Calvert Institute for Policy Research, and 38 law professors on an amicus brief supporting Shelton’s position.

The Supreme Court has recognized only limited exceptions to the general rule that criminal culpability requires mens rea (a guilty mind). These “strict liability” crimes fall under the rubric of “public welfare offenses” and are typically what most people would not consider “serious,” such as traffic violations and selling alcohol to minors. Policymakers justify dispensing with mens rea requirements in such contexts by citing the need to deter businesses from imposing costs on society at large, or the burden that having to prove mens rea in these sorts of cases would overwhelm courts, or that the penalties are relatively small and carry little social stigma.

Florida’s legislature, however, went well beyond the normal boundaries of public welfare offenses in imposing strict liability for drug crimes that can carry significant prison terms — and thus violated the due process of law and traditional notions of fundamental fairness. As an alternative argument purporting to save its drug laws, Florida points to the availability of affirmative defenses, that these defenses (e.g., “I didn’t know it was cocaine”) to a presumption of guilty intent take the statute out of the (constitutionally dubious) strict liability category.

But a state may not simply presume the mens rea element of a crime: In Patterson v. New York (1977), for example, the Supreme Court held that prosecutors cannot reallocate the burden of proof by forcing a defendant to prove an affirmative defense. In requiring defendants to prove that they are “blameless” in these sorts of drug crimes, Florida’s statutes fail constitutional muster.

We urge the Eleventh Circuit to affirm the district court’s ruling that the offending state law unconstitutional.

Obamacare Litigation Update: All the Briefs the Supreme Court Needs to Take the Case Are In

In the last week, we’ve seen another slew of Supreme Court filings regarding the various Obamacare lawsuits.  Most notably, the private plaintiffs in the Florida/Eleventh Circuit case (the NFIB and two individuals)—represented by Mike Carvin and Randy Barnett, among others—filed their response to the government’s cert petition last Friday, two weeks before it was due! 

So, as with the cert petitions themselves at the end of September, the private plaintiffs initiated a “filing cascade” (my phrase, not a legal term of art) and forced the government’s hand.  The government then filed its consolidated response (to both the private and state plaintiff petitions) on Wednesday, and the (26) state plaintiffs—represented by former solicitor general Paul Clement—also filed their response to the government’s petition.

Got all that?  It basically means that all the necessary filings are in and the case is “ready for distribution” to the justices’ chambers for consideration of the cert petitions, which could happen as early as the Court’s November 10 conference. That means we could see an order about which case(s)/issue(s) the Court is taking as early as November 14.

So that’s the timing.  A brief note on substance: As you may recall, the Eleventh Circuit plaintiffs want the Court to review the following issues: whether the individual mandate exceeds federal power, the new Medicaid regulations/expansion as coercing the states, the mandate that states provide health insurance in their roles as employers, and severability.  The government, for its part, wants the Court to review the individual mandate, whether the Anti-Injunction Act makes the suits unripe (it argues that the AIA doesn’t apply but still, oddly, wants the Court to weigh in), and severability.  On this last point, the government has reiterated its position that if the individual mandate falls, the guaranteed-issue and community-rating provisions must fall with it—a position that garnered some media attention but is both consistent with its previous arguments and honest lawyering.  (It’s disingenuous as a matter of basic economics to argue that the overall reform can survive without the individual mandate, even if that’s the incongruous position that the Eleventh Circuit took rejecting the government’s “concession” on severability.)  Of course, the government is also hoping that the idea that striking the individual mandate also means striking the provision requiring coverage of pre-existing conditions will make the Court hesitant to do so.

Note that the government also filed its response to the Liberty University petition and still has time to file a response to Virginia’s cert petition (on the state standing issue), both out of the Fourth Circuit.  It argues, as do the Eleventh Circuit plaintiffs, that the Court should hold these petitions (as well as the Thomas More Legal Center’s out of the Sixth Circuit) pending resolution of the Eleventh Circuit case.   Finally, the D.C. Circuit has yet to issue its opinion in the Obamacare case argued there a month ago.

For more on both the timing and which issues the Court is likely to take, see Lyle Denniston’s excellent analysis at SCOTUSblog.

Should You Need a License to Hang Curtains?

The latest example of liberty-reducing occupational licensing schemes comes to us from Florida, where a law restricts the practice of interior design to people the state has licensed. Those wishing to pursue this occupation must first undergo an onerous process ostensibly in the name of “public safety.”

In reality, the law serves as an anti-competition measure that protects Florida’s current cohort of interior designers. Our friends at the Institute for Justice have pursued a lawsuit against the law but lost their appeal in the Eleventh Circuit.

Cato has now joined the Pacific Legal Foundation on an amicus brief asking the Supreme Court to review that ruling. The lower court got it wrong not just with respect to the right to earn a living, however, but also on First Amendment grounds.

That is, interior design, as a form of artistic expression, is historically protected by the First Amendment. Indeed, interior designers are measured primarily on the value of their aesthetic expression, not for any technical knowledge or expertise. This type of artistry is a matter of taste, and the designer and client usually arrive at the end result through collaboration and according to personal preferences. Thus, the designer-client relationship has little in common with traditionally regulated professions such as medicine, law and finance, where bad advice can have real and far-reaching consequences—but even then, the Supreme Court has emphasized the First Amendment implications of placing “prior restraints” on expression through burdensome licensing schemes.

Instead of following that precedent, however, the circuit court carved out a constitutionally unprotected exception for “direct personalized speech with clients.” Florida’s “public safety” justification is similarly weak, given that the state has presented no evidence of any bona fide concerns that substantiate a burdensome licensing scheme that includes six years of higher education and a painstaking exam—instead relying on cursory allegations that, for example, licensed designers are more adept at ensuring that fixture placements do not violate building codes.

Finally, the Eleventh Circuit’s ruling disregarded the infinite array of auxiliary occupations the Florida law subjects to possible criminal sanctions: wedding planners, branding consultants, sellers of retail display racks, retail business consultants, corporate art consultants, and even theater-set designers could all get swept in. The state has already taken enforcement actions against a wide spectrum of people who are not interior designers, including office furniture dealers, restaurant equipment suppliers, flooring companies, wall covering companies, fabric vendors, builders, real estate developers, remodelers, accessories retailers, antique dealers, drafting services, lighting companies, kitchen designers, workrooms, carpet companies, art dealers, stagers, yacht designers, and even a florist. This dragnet effect also suggests that the law is too broad to survive constitutional scrutiny.

The Court will likely decide by the end of the year (or early 2012) whether to take this case of Locke v. Shore.

Race-Based Tax Exemptions Are Unconstitutional

Hawaii continues to think that it’s not quite part of the United States and thus not fully subject to U.S. law.

In the 2000 case of Rice v. Cayetano, the Supreme Court struck down race-based voting requirements for certain Hawaii state officers because government schemes that distinguish between “native Hawaiian” and “Hawaiian” are racial classifications that must pass “strict scrutiny” to be deemed constitutional; they must be narrowly tailored to achieve a truly “compelling” purpose (a standard nearly impossible to meet). Yet that exact same category of “native Hawaiian” — whose frighteningly archaic definition is “any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778” — was used in the Hawaii Homes Commission Act to distinguish those who can hold certain leases that are subject to little or no property tax.

A group of Hawaiians who do not meet the state’s definition of “native Hawaiian” and therefore suffer under the explicitly race-based law decided to challenge these property-tax exemptions. After paying their taxes, these plaintiffs sought refunds on the grounds that the classification scheme violates the Fourteenth Amendment’s Equal Protection Clause.

The Supreme Court of Hawaii, however, ruled that they didn’t have standing — a legal doctrine that determines who can bring a claim — to challenge the taxes on the ground that they had not yet asked for the leases (for which they were indisputably ineligible due to not having enough “blood of the races” flowing through their veins). A lower state court had even ruled that the classification was not race-based—that it merely distinguishes leaseholders and non-leaseholders, even though Hawaiians without the sufficient “blood quantum” cannot be leaseholders!

The group of taxpayers now seek review in the U.S. Supreme Court. Cato, joined by the Pacific Legal Foundation, the Grassroot Institute of Hawaii, the Goldwater Institute, and Professor Paul M. Sullivan, filed a brief urging the Court to take the case and rectify Hawaii’s explicitly unconstitutional taxation scheme. We argue that, after Hawaii’s state judiciary refused to address the issue of racial discrimination head-on, only the U.S. Supreme Court is in a position to guarantee the constitutional protections that Hawaiians have lived under for over a century (since Hawaii became a territory). Only by taking this case and overturning the racially charged definition can the Court continue to ensure that Hawaii is a state that “neither knows nor tolerates classes among citizens.”

The Supreme Court will likely decide by the end of the year (or in early 2012) whether to hear this case, Corboy v. Louie.