Tag: IJ

Customers Don’t Need Protection from Low Prices

Some things seem obvious: Puppies are cute. Freedom is good. Paying less for something is better than paying more.

Unless you live in the Tampa area and work for the Hillsborough County Public Transportation Commission (PTC). The PTC was created, ironically, to protect Tampa’s transportation customers. Apparently, that means protecting those customers from low prices.

This is not one of those stories about unintended consequences or safety regulations that, in the long run, result in higher prices and therefore unsafe practices. The PTC left the agencies that impose those sorts of economics-challenged agencies in its dust. Instead, the PTC actually passed a rule requiring Tampa’s sedan and limo drivers to overcharge their customers. The rule mandates that all drivers must charge at least $50 per ride – no matter how short the ride, and even when the driver is willing to charge much less.

Let me repeat: The PTC is expressly protecting customers from low prices.  What’s next for the PTC?  Protecting us from pillows that are too soft or food that’s too tasty? (Don’t give Michael Bloomberg any ideas.) There are many good things in this world that undoubtedly must be stopped, so the PTC is going to be quite busy.

Food Trucks Unwelcome in Arlington, Virginia

Libertarian arguments about the importance of economic liberty so often fall on deaf ears, but then you come across government abuses in this area that are so ridiculous that maybe even progressives can see the folly.  Here’s an excerpt from an email I just got from the Institute for Justice:

For those of you who follow IJ’s National Street Vending Initiative, you most likely know that cities across the country pass arbitrary and anti-competitive laws that make it practically impossible for food trucks and other vendors to succeed.  An opportunity to fight against one such law has presented itself in Arlington, Virginia.

Arlington County has a law in place that prevents food trucks from operating in one place for more than 60 minutes.  A local food truck named Seoul Food received a notice for violating this rule.  According to the owner of the truck, he informed the police officer that he did move from one parking spot to another within the allotted time.  The police officer still cited Seoul Food, however, because in the officer’s view the truck had not moved “far enough.”  It is important to note that the County Code does not specify any minimum distance a truck must move; it states only that “the vehicle must remain stopped for … no longer than sixty (60) minutes.”  Arlington Code Section 30-9(B).

The penalty for violating Section 30-9 is severe.  The Arlington County Code classifies a violation of the sixty-minute rule as a Class 1 misdemeanor, which is punishable by “confinement in jail for not more than twelve months and a fine of not more than $2,500.”  Thus, Arlington considers selling food to willing customers from a legal parking space to be as serious as  Reckless Driving, DUI, and Assault & Battery.

You can’t make this stuff up!

I followed up with one of IJ’s lawyers, who also noted that every police officer who Seoul Food’s owners interacted with has given them a different distance that the food truck purportedly has to move.  One said they just needed to move to an adjacent spot, while another said they had to go around the block. 

Alas, because the case is in criminal proceedings (!), IJ can’t represent Seoul Food.  Any Virginia-licensed lawyers with experience in criminal defense work who might want to help out pro bono – or media/others seeking more information on the case – please contact Krissy Keys, kkeys -at- ij.org.

Free Speech Trumps First Amendment

If you watch HBO’s “Newsroom,” you may have seen Cato, IJ and others get a quick namedrop in relation to the Citizens United Supreme Court case. Actor Jeff Daniels misstates the holding of the case, claiming that Citizens United “allowed corporations to donate unlimited amounts of money to any political candidate without anyone knowing where the money was coming from.”

But, you see, this just shows Aaron Sorkin’s unwavering commitment to realism in his shows. Reporters regularly get the holding of Citizens United wrong. After all, if reporters were crystal clear that Citizens United cleared the way for all manner of groups to use “corporate treasury funds” to fund broad and overtly political statements about candidates, they would inevitably conclude that their own right to make those kinds of statements would be jeopardized by much of the campaign finance regulation on the books prior to Citizens United. And it’s hard to demonize libertarians when they’re fighting for the rights of everyone, including reporters and entertainers who work for subsidiaries of Time Warner (CNN, HBO), Viacom (CBS), Disney (ABC), Comcast (NBC, MSNBC), General Electric (NBC, MSNBC), News Corp. (FOX, Fox News), etc.

If you’d like to know more about the facts of Citizens United, watch this:

As to the claims about secrecy in political speech, Cato Institute senior fellow Nat Hentoff has a few thoughts on disclosure and the jurisprudence of Clarence Thomas.

Suing the IRS for Fun and Liberty

This blogpost was coauthored by Cato legal associate Chaim Gordon.

On Tuesday, the Institute for Justice brought a lawsuit to stop recent IRS regulations that require independent tax return preparers to pay a yearly registration fee, take a competency exam, complete 15 hours of IRS-approved continuing education every year, and possibly subject themselves to mandatory fingerprinting. Our colleague Dan Mitchell observed two years ago that these regulations appear to be the result of “regulatory capture.” As the Wall Street Journal explained:

Cheering the new regulations are big tax preparers like H&R Block, who are only too happy to see the feds swoop in to put their mom-and-pop seasonal competitors out of business.

Indeed, as others have already noted, one of the architects of this licensing scheme is Mark Ernst, former CEO of H&R Block. These protectionist regulations were even cited by UBS as a reason to buy H&R Block stock, on the grounds that they will “add barriers to entry (or continuation) for small preparers.”

In defending the need for these regulations, IRS Commissioner Douglas Shulman’s most insightful explanation was that “in most states you need a license to cut someone’s hair.” This statement undoubtedly caught IJ’s attention because that “merry band of litigators” has devoted itself to fighting such senseless and corrupt regulations (including in hair salons).

But these regulations are not just misguided and corrupt.  They are, as IJ’s complaint contends, simply beyond the IRS’s regulatory authority. The IRS claims the power to regulate tax return preparers under 31 U.S.C. § 330. But that statute only authorizes the IRS to regulate “the practice of representatives of persons,” and tax return preparers do not represent persons before the IRS and do not “practice” in the sense that lawyers do when they appear before a court. Taxpayers are only “represented” when they authorize someone to act on their behalf before the IRS in an exam, controversy, or litigation setting. This is especially clear in light of the statute’s plain purpose, which is to ensure that such representatives have the “competency to advise and assist persons in presenting their cases” (emphasis added).

Moreover, under the IRS’s expansive reading of the law, which puts under the agency’s purvey “all matters” connected with a “presentation” to the IRS, anyone who advises another about the tax aspects of a particular transaction could theoretically be guilty of unauthorized practice before the IRS. Congress clearly meant no such thing. In fact, Congress specifically amended 31 U.S.C. § 330 to allow the IRS to regulate the provision of written advice that the IRS “determines as having a potential for tax avoidance or evasion.” Such additional authority would be unnecessary under the IRS’s broad reading of the original statute.

IJ had previously warned the IRS that its then-proposed regulations were unfair to mom-and-pop tax return preparers and exceeded its statutory authority, but the IRS neither altered its plan nor explained why it thinks that it has the authority to regulate tax return preparers in the first instance. Now the IRS will have to explain its power grab to a federal judge.

Watch IJ’s excellent case launch video.  IJ attorney Dan Alban explains the case in an editorial here and in an interview here.

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.

Boxing Gym Scores Knockout Blow for Property Rights

Last month, I wrote about a major eminent domain struggle in National City, California.  City officials had decided to declare almost seven hundred properties blighted even before conducting any sort of blight study, which eventually turned out to be riddled with errors. 

At the center of the fight is a private, nonprofit boxing gym that has helped keep hundreds of at-risk kids in school and off the streets.  The city wanted to bulldoze the center so a wealthy developer can build luxury condos and stores. 

In 2007, the Institute for Justice teamed up with the gym and filed suit to stop the city from taking the property, and here’s video about their legal fight:

Four years later, IJ scored a knockout blow against eminent domain abuse:  Last Thursday, the Superior Court of California struck National City’s entire 692-property eminent domain zone and found that National City lacked a legal basis for its blight declaration.  

This is a major victory for California property owners, and the first case to apply the property reforms that the state enacted to counter the 2005 Kelo decision.  Learn more about the victory here.

I previously wrote about eminent domain shenanigans here and you can read more from Cato on property rights here.

Judges Should Judge

I am pleased to pass on word from our friends at the Institute for Justice that they have established a new Center for Judicial Engagement.  The center is dedicated to reinvigorating the judicial branch to stand up and perform its constitutional role instead of showing the deference so many courts now give to the political branches of state and federal government.

As much lip service that has been paid to the bogeyman of “judicial activism,” the reality is that the courts have been all-too-reluctant to sacrifice constitutional questions to acquiesce to the supposed wisdom of political actors.  Veteran IJ lawyer and friend of Cato Clark Neily will be heading the center, and had this to say about its mission:

We need judges to judge.  What we see too often now is judges who ignore evidence, invent facts, and accept implausible explanations for government regulations.  That amounts to judicial abdication.  Judges should engage the facts of every case, including constitutional cases, and require the government to justify its actions with real reasons backed by real evidence.

As outlined by IJ in a press release, the basic principles of judicial engagement include:

1.  The Constitution limits both the means and ends of government action.

The Framers wrote the Constitution to constrain government power.  The Constitution explicitly defines a limited set of powers belonging to the federal government; government actions outside the scope of those powers are illegitimate and unconstitutional.  The Constitution also demands that even legitimate powers of government be exercised fairly and without discrimination.

2.  The Constitution guarantees a broad array of individual rights.

While the powers granted to government by the Constitution are few and limited, the rights guaranteed to individuals are many and broad.  Some of those rights are specifically listed in the Constitution, and some are not.  But all rights are entitled to meaningful judicial protection, regardless of their source.  There are no “second-class” constitutional rights.

3.  The job of judges is to enforce the Constitution.

Judicial review has been a vital part of our system of government for more than 200 years, and it remains a key bulwark against government tyranny and abuse of power.  It is the duty of judges to strike down government actions that assume powers not granted by the Constitution or that violate individual rights.  It is not “judicial activism” to strike down unconstitutional laws or government actions; it is judicial engagement—taking the Constitution seriously and applying it consistently in all cases.  Refusing to strike down unconstitutional acts is not admirable “judicial restraint,” it is judicial abdication—judges literally failing to do their jobs.

4.  The government should not have a leg up on citizens challenging government actions.

Laws are not entitled to judicial “deference” simply because they result from a democratic political process.  To the contrary, the Framers were deeply concerned about interest-group politics and majority tyranny, and they designed the Constitution to protect individual rights from those dangers.  Enforcing a presumption of government power over individual liberty, as courts typically do today, gets this design exactly backwards.

5.  Facts matter.

It is impossible to determine the constitutionality of any regulation without determining the government’s actual objectives in enforcing it.  But courts often ignore that question altogether, and will accept even the most ridiculous explanations at face value or, when necessary, simply invent justifications of their own in order to uphold government action against constitutional challenge.  This is profoundly mistaken.  Judges must carefully weigh the facts of each constitutional case, just as they would in any other case, and meaningfully evaluate the government’s action.  Ignoring evidence, inventing justifications and rubber-stamping the exercise of government power—which have come to be the norm in the vast majority of constitutional cases—represents abdication, not judgment.

We fully agree – and applaud IJ for adding innovative programming such as this new center to its continuing litigation against the government Leviathan.  Please check out the new center’s homepage here and its inaugural declaration here.