Tag: individual rights

Standard Fire: SCOTUS Foils an Artful Class Action Dodge

With Justice Breyer writing, a unanimous Supreme Court in Standard Fire Insurance Co. v. Knowles (opinion PDF, background SCOTUSBlog) has struck down as invalid a dodge used by some plaintiff’s lawyers to evade the provisions of the Class Action Fairness Act of 2005 (CAFA). As we wrote in October when Cato filed its amicus brief: 

In relevant part, CAFA provides defendants with the right to move class actions to federal court where the claim for damages against them exceeds $5 million. But can clever lawyers keep these cases out of federal court by simply “stipulating” that potential damages are less than $5 million — and before the named plaintiff is even authorized to represent the alleged class? In this case, Greg Knowles is the named plaintiff in a putative insurance-recovery class action against Standard Fire Insurance in Arkansas state court. Before the court certified the class, Knowles tried to avoid that removal to federal court by stipulating that his class would not seek more than $5 million in damages at trial. Notably, the stipulation is worded in such a way that it will not apply if the class definition is later altered. … CAFA was enacted specifically to discourage attorneys from “forum shopping” (seeking friendlier courts) and attempting to keep cases out of federal court. Lawyers who game the system by agreeing to cap damages in an effort to keep cases in more favorable state courts violate the federal due process rights of absent would-be class members, thereby flouting CAFA. 

In his opinion for the unanimous Court, Justice Breyer found that the named class representative lacked a right to limit absent class members’ claims in such a way. Individual litigants remain free to avoid federal jurisdiction through the use of damage stipulations, but that is a decision they are entitled to make only for themselves. That’s very much consistent with the principles Cato urged, and with the importance of individual rights as the fundamental basis for legal action, rather than as mere ingredients to be aggregated by lawyers seeking settlement advantage. Thanks again to the ever-brilliant David B. Rivkin, Jr., Andrew M. Grossman and colleagues at Baker & Hostetler for their work on the Cato brief.

Published: So What If Corporations Aren’t People?

Six months ago, I wrote about a law review article I had just co-authored with former Cato legal associate Caitlyn McCarthy regarding corporate rights post-Citizens United.  Well, now it’s officially published, in The John Marshall Law Review.  Here’s the abstract:

Corporate participation in public discourse has long been a controversial issue, one that was reignited by the Supreme Court’s decision in Citizens United v. FEC, 130 S. Ct. 876 (2010). Much of the criticism of Citizens United stems from the claim that the Constitution does not protect corporations because they are not “real” people. While it’s true that corporations aren’t human beings, that truism is constitutionally irrelevant because corporations are formed by individuals as a means of exercising their constitutionally protected rights. When individuals pool their resources and speak under the legal fiction of a corporation, they do not lose their rights. It cannot be any other way; in a world where corporations are not entitled to constitutional protections, the police would be free to storm office buildings and seize computers or documents. The mayor of New York City could exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there. Moreover, the government would be able to censor all corporate speech, including that of so-called media corporations. In short, rights-bearing individuals do not forfeit those rights when they associate in groups. This essay will demonstrate why the common argument that corporations lack rights because they aren’t people demonstrates a fundamental misunderstanding of both the nature of corporations and the First Amendment.

Go here to download “So What If Corporations Aren’t People?”

How Judges Protect Liberty

In my Encyclopedia Britannica column this week, I take a look at “the responsibility of judges to strike down laws, regulations, and executive and legislative actions that exceed the authorized powers of government, violate individual rights, or fail to adhere to the rules of due process.”

Certainly they don’t always live up to those expectations, as Robert A. Levy and William Mellor wrote in The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom

The column might have been more timely last summer, when Judge Andrew Napolitano concluded one of his Freedom Watch programs on the Fox Business Channel by hailing four federal judges who had courageously and correctly struck down state and federal laws:

  • Judge Martin L. C. Feldman, who blocked President Obama’s moratorium on oil drilling in the Gulf of Mexico;
  • Judge Susan Bolton, who blocked Arizona’s restrictive immigration law;
  • Judge Henry Hudson, who refused to dismiss Virginia’s challenge to the health care mandate; and
  • Judge Vaughn Walker, who struck down California’s Proposition 8 banning gay marriage.

That was a good summer for judicial protection of liberty. But as I note, there have been more examples this year, reminding us of James Madison’s predictions that independent judges would be “an impenetrable bulwark against every assumption of power in the legislative or executive.”

So What If Corporations Aren’t People?

As Julian Sanchez detailed yesterday, those who complain about fewer restrictions on corporate political speech but celebrate the freeing of restrictions on corporate videogame speech are in a bit of a logical pretzel.  But ultimately both those who think corporations have speech rights and those who don’t miss the larger point: it’s not about corporate rights but the rights of the individuals who freely associate and thus pool their speech via the corporate legal form.

That is, it really doesn’t matter that “corporations aren’t people.”  Of course they’re not living, breathing human beings, and their ”personhood” for legal purposes is just that: a convenient legal fiction.

To elaborate on these ideas, Cato legal associate Caitlyn Walsh McCarthy and I have  written a law review article titled “So What If Corporations Aren’t People?”  Here’s the abstract:

Corporate participation in public discourse has long been a controversial issue, one that was reignited by the Supreme Court’s decision in Citizens United v. FEC, 130 S. Ct. 876 (2010). Much of the criticism of Citizens United stems from the claim that the Constitution does not protect corporations because they are not “real” people. While it’s true that corporations aren’t human beings, that truism is constitutionally irrelevant because corporations are formed by individuals as a means of exercising their constitutionally protected rights. When individuals pool their resources and speak under the legal fiction of a corporation, they do not lose their rights. It cannot be any other way; in a world where corporations are not entitled to constitutional protections, the police would be free to storm office buildings and seize computers or documents. The mayor of New York City could exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there. Moreover, the government would be able to censor all corporate speech, including that of so-called media corporations. In short, rights-bearing individuals do not forfeit those rights when they associate in groups. This essay will demonstrate why the common argument that corporations lack rights because they aren’t people demonstrates a fundamental misunderstanding of both the nature of corporations and the First Amendment.

This article is still being edited – it won’t appear in the John Marshall Law Review till the fall – so comments are welcome.  Thanks to Eugene Volokh for making suggestions on an earlier version.

Update: Larry Solum has “recommended” our article on the Legal Theory Blog.  Thanks!

Robert Nozick and the Value of Liberty

Stephen Metcalf’s prolix takedown of Robert Nozick demands response, not because Metcalf has advanced a novel and Rawls-esque so-interesting-and-powerful-it-must-be-addressed argument, but because he precisely has not. Nozick is, justifiably, a hero of libertarianism (and liberty), and his terrific book, Anarchy, State, and Utopia, as well as libertarianism in general, deserve better than Metcalf’s excoriation.

My colleague Jason Kuznicki started things off admirably. At the risk of beating what ought to be a dead horse, I’d like to add a word or two of my own. I’ll avoid what Jason’s already covered.

Let’s start with Metcalf’s very odd characterization of Nozick’s view of liberty as the primary value. He writes, “Nozick is arguing that liberty is the sole value, and to put forward any other value is to submit individuals to coercion.” Metcalf adds that, according to Nozick and modern libertarians, “Every other value, meanwhile, represents someone else’s deranged will-to-power.”

This claim evinces a common confusion about libertarianism, one that continues throughout the remainder of Metcalf’s article: libertarians don’t believe that liberty is the primary value, we believe that liberty is the primary political value. Like so many critics of libertarianism, Metcalf does not understand the scope of the libertarian argument.

I value liberty, yes, but I also value my health, my daughter’s happiness, and films staring William Powell and Myrna Loy. In fact, libertarians, progressives, and even Robert Nozick value quite a lot of things. The libertarian argument is simply that a state that attempts to directly maximize any value besides liberty—by, say, coercively taxing in order to pay for more Thin Man films—violates individual rights. What’s more, if the state does remain limited to protecting only liberty, we’ll get more health, happiness, and great movies.

According to Nozick and most other libertarians, it is for the protection of liberty that we organize a state—and a state that violates its citizens’ liberty (beyond, arguably, certain “night watchman” duties) commits a moral wrong. Metcalf gets that much right. But this is not because liberty is the only value. Rather, it is because liberty is the only value the state should concern itself with. All the other values—of which there are a great many, not all shared equally by all individuals—are the exclusive concern of civil society.

Nozick argues that it’s wrong for all of us to look in moral horror at Wilt Chamberlain’s earnings, band together into a government, and send in armed tax collectors because we think Wilt’s money could be more valuably used somewhere other than Wilt’s pockets. Nozick’s parable is about the morality of politics while saying nothing about what Wilt ought to voluntarily do with his money. He might choose to spend it all on caviar and rare basketball cards, in which case the rest of us might even be justified in looking down our noses at such “wasteful” behavior. But Wilt might also give a portion of his money to fund homeless shelters, free medical clinics, and scholarships for poor children (as many people in his position in fact do). Or he might use it to launch a new business, employing many of his fellow citizens at decent wages to teach his basketball skills to willing consumers.

Liberty is not the only value. It is the only value within the scope of politics. Liberty is also the value that allows all the other actually-held values to flourish.

Which brings me to this odd bit of Metcalf’s reasoning: “Even in 1975,” he writes, “it took a pretty narrow view of history to think all capital is human capital, and that philosophy professors, even the especially bright ones, would thrive in the free market.” Doesn’t Nozick recognize, he asks, that the very university system he took advantage of to pay his bills while writing his defense of free markets was made possible only by massive government transfer payments? Without a hugely interventionist state, Nozick wouldn’t even be able to pay his rent with his philosophy knowledge, let alone revitalize an intellectual movement.

In effect, Metcalf is saying that Nozick is dumb to support markets because markets wouldn’t support Nozick. If liberty is the only value (of the state), then the talent of philosophy wouldn’t be sufficiently valued (by the market) to allow a fellow like Robert Nozick to do philosophy.

And Metcalf may be right. But if he is, it’s unclear why we shouldn’t also extend his argument to all other talents. A great many mystery novelists, for instance, would love to have academic appointments while they pen new adventures for their detectives. But instead they have to compete in the free market, hoping an audience will value their work enough to pay for it. Last I checked, even in this unforgiving environment, there are a great many mystery novels on shelves.

The fact of the matter is that not all talents are valued, which is why Nozick chose a basketball player to build his case around instead of, say, a teenager who can name every Pokémon from memory. If we are going to create a world in which everything valuable (to Metcalf) is given financial support, we need to organize it such that people are not free to choose their own values. The beauty of the free market is not that it specifically supports basketball playing or philosophy writing, but that it rewards those who have talents that are actually and voluntarily valued by the rest of us. Arriving at an array of values this way seems a good deal better than the alternative, at least. For if we aren’t to leave “value” to the market, we have to leave it to someone. Which means substituting that person’s (or committee’s) particular, uniform conception of value for the variegated bramble that is a free society.

The beauty of liberty is that it allows each of us to pursue our own ends and strive for whatever we value. The curse of liberty is that our striving takes place among a great many fellow strivers, many of who are headed in directions we find elitist or prole, dangerous or dull, distasteful or uninspired. The difference between Nozick’s vision and Metcalf’s is that Nozick embraces that wonderful chaos, provided it happens within a framework of respected rights. Metcalf would strike down choice and replace it with state-endorsed value. He would force all of us or none of us to watch Wilt play, placing the decision to be a spectator or an abstainer not with free individuals but with Stephen Metcalf.

Robin Hood and the Tea Party Haters

What is it with modern American liberals and taxes? Apparently they don’t just see taxes as a necessary evil, they actually like ‘em; they think, as Gail Collins puts it in the New York Times, that in a better world “little kids would dream of growing up to be really big taxpayers.” But you really see liberals’ taxophilia coming out when you read the reviews of the new movie Robin Hood, starring Russell Crowe. If liberals don’t love taxes, they sure do hate tax protesters.

Carlo Rotella, director of American Studies at Boston College, writes in the Boston Globe that this Robin Hood is A big angry baby [who] fights back against taxes” and that the movie is “hamstrung by a shrill political agenda — endless fake-populist harping on the evils of taxation.” You wonder what Professor Rotella teaches his students about America, a country whose fundamental ideology has been described as “antistatism, laissez-faire, individualism, populism, and egalitarianism.”

At the Village Voice, Karina Longworth dismisses the movie as “a rousing love letter to the Tea Party movement” in which “Instead of robbing from the rich to give to the poor, this Robin Hood preaches about ‘liberty’ and the rights of the individual as he wanders a countryside populated chiefly by Englishpersons bled dry by government greed.” Gotta love those scare quotes around “liberty.” Uptown at the New York Times, A. O. Scott is sadly disappointed that “this Robin is no socialist bandit practicing freelance wealth redistribution, but rather a manly libertarian rebel striking out against high taxes and a big government scheme to trample the ancient liberties of property owners and provincial nobles. Don’t tread on him!” The movie, she laments, is “one big medieval tea party.”

Moving on down the East Coast establishment, again with the Tea Party hatin’ in Michael O’Sullivan’s Washington Post review:

Ridley Scott’s “Robin Hood” is less about a band of merry men than a whole country of really angry ones. At times, it feels like a political attack ad paid for by the tea party movement, circa 1199. Set in an England that has been bankrupted by years of war in the Middle East – in this case, the Crusades – it’s the story of a people who are being taxed to death by a corrupt government, under an upstart ruler who’s running the country into the ground.

Man, these liberals really don’t like Tea Parties, complaints about lost liberty, and Hollywood movies that don’t toe the ideological line. As Cathy Young notes at Reason:

Whatever one may think of Scott’s newest incarnation of the Robin Hood legend, it is more than a little troubling to see alleged liberals speak of liberty and individual rights in a tone of sarcastic dismissal. This is especially ironic since the Robin Hood of myth and folklore probably has much more in common with the “libertarian rebel” played by Russell Crowe than with the medieval socialist of the “rob from the rich, give to the poor” cliché. At heart, the noble-outlaw legend that has captured the human imagination for centuries is about freedom, not wealth redistribution….The Sheriff of Nottingham is Robin’s chief opponent; at the time, it was the sheriffs’ role as tax collectors in particular that made them objects of loathing by peasants and commoners. [In other books and movies] Robin Hood is also frequently shown helping men who face barbaric punishments for hunting in the royal forests, a pursuit permitted to nobles and strictly forbidden to the lower classes in medieval England; in other words, he is opposing privilege bestowed by political power, not earned wealth.

The reviewers are indeed tapping into a real theme of this Robin Hood, which is a prequel to the usual Robin Hood story; it imagines Robin’s life before he went into the forest. Marian tells the sheriff, “You have stripped our wealth to pay for foreign adventures.” (A version of the script can be found on Google Books and at Amazon, where Marian is called Marion.)  Robin tells the king the people want a charter to guarantee that every man be “safe from eviction without cause or prison without charge” and free “to work, eat, and live merry as he may on the sweat of his own brow.” The evil King John’s man Godfrey promises to “have merchants and landowners fill your coffers or their coffins….Loyalty means paying your share in the defense of the realm.” And Robin Hood tells the king, in the spirit of Braveheart’s William Wallace, “What we ask for is liberty, by law.”

Dangerous sentiments indeed. You can see what horrifies the liberal reviewers. If this sort of talk catches on, we might become a country based on antistatism, laissez-faire, individualism, populism, and egalitarianism and governed by a Constitution.

Libertarianism Hits the Big Time

Michael Crowley, late of the New Republic and now with Time magazine, writes thoughtfully about Ron Paul, Rand Paul, and libertarianism. Crowley notes that Rand Paul, “more politically flexible than his father,” has plenty of unlibertarian positions. But both of them are tapping into a real strain in contemporary politics:

But he, like his father, also knows well that a genuine libertarian impulse is astir in America…. polls show an uptick in both social permissiveness and skepticism of government intervention….[Ron Paul] has already waited a long time — and it appears the country is moving his way.

This is a current trend, but it’s also deeply rooted in the American political culture. As David Kirby and I wrote in “The Libertarian Vote”:

It’s no surprise that many Americans hold libertarian attitudes since America is, after all, a country fundamentally shaped by libertarian values and attitudes. In their book It Didn’t Happen Here: Why Socialism Failed in the United States, Seymour Martin Lipset and Gary Marx write, “The American ideology, stemming from the [American] Revolution, can be subsumed in five words: antistatism, laissez-faire, individualism, populism, and egalitarianism.”… Richard Hofstadter wrote: “The fierceness of the political struggles in American history has often been misleading; for the range of vision embraced by the primary contestants in the major parties has always been bounded by the horizons of property and enterprise. However much at odds on specific issues, the major political traditions have shared a belief in the rights of property, the philosophy of economic individualism, the values of competition; they have accepted the economic virtues of capitalist culture.”… McClosky and Zaller sum up a key theme of the American ethos in classic libertarian language: “The principle here is that every person is free to act as he pleases, so long as his exercise of freedom does not violate the equal rights of others.”…

Some people recognize but bemoan our libertarian ethos. Professors Cass Sunstein and Stephen Holmes complain that libertarian ideas are “astonishingly widespread in American culture.”

Much political change in America occurs within those guiding principles. Even our radicals, Lipset and Marks note, have tended to be libertarian rather than collectivist. America is a “country of classical liberalism, antistatism, libertarianism, and loose class structure,” which helps to explain the failure of class-conscious politics in the United States. McClosky and Zaller argue that many of the changes of the 1960s involved “efforts to extend certain values of the traditionalethos to new groups and new contexts”—such as equal rights for women, blacks, and gays; anti-war and free speech protests; and the “do your own thing” ethosof the so-called counterculture, which may in fact have had more in common with the individualist American culture than was recognized at the time.

In a broadly libertarian country most voters and movements have agreed on the fundamentals of classical liberalism or libertarianism: free speech, religious freedom, equality before the law, private property, free markets, limited government, and individual rights. The broad acceptance of those values means that American liberals and conservatives are fighting within a libertarian consensus. We sometimes forget just how libertarian the American political culture is.

And of course American politics and policy deviate a great deal from those fundamental principles, which leaves libertarians feeling frustrated, even angry, and seeming extreme or radical to journalists and others. But as Conor Friedersdorf just wrote in Time’s longtime rival, Newsweek, the media have a bias toward the status quo and establishment politicians, even when current policies and the proposals of elected officials are at least as extreme as libertarian ideas:

If returning to the gold standard is unthinkable, is it not just as extreme that President Obama claims an unchecked power to assassinate, without due process, any American living abroad whom he designates as an enemy combatant? Or that Joe Lieberman wants to strip Americans of their citizenship not when they are convicted of terrorist activities, but upon their being accused and designated as enemy combatants? In domestic politics, policy experts scoff at ethanol subsidies, the home-mortgage-interest tax deduction, and rent control, but the mainstream politicians who advocate those policies are treated as perfectly serious people.

And Fareed Zakaria, the editor of Newsweek International, made the point a dozen years ago in a review of Charles Murray’s book What It Means to Be a Libertarian (in the Public Interest, not online)

The reason that libertarians seem extreme and odd is not that they are a furious minority, angry at a world that seems to have passed them by, but rather the opposite. They are heirs to a tradition that has changed the world. Consider what classical liberalism stood for in the beginning of the nineteenth century. It was against the power of the church and for the power of the market; it was against the privileges of kings and aristocracies and for dignity of the middle class; it was against a society dominated by status and land and in favor of one based on markets and merit; it was opposed to religion and custom and in favor of science and secularism; it was for national self-determination and against empires; it was for freedom of speech and against censorship; it was for free trade and against mercantilism. Above all, it was for the rights of the individual and against the power of the church and the state….

The reason that libertarianism seems narrow and naive is that having won 80 percent of the struggles it has fought over the last two centuries, it is now forced to define itself wholly in terms of the last 20 percent. Extremism in the defense of liberty is no vice if you were in Prussia in the 1850s, but in America in the 1960s? Libertarianism has become extreme because the world has left it no recourse.

Now, I don’t feel furious, angry, or extreme. I think that libertarianism is the philosophy of the American revolution, the basic ideology of America, and indeed the foundation of Western civilization. The concept of personal and economic freedom – giving people more power to pursue happiness in their own way by restricting the size, scope, and power of government – is not extreme. Nor is it reactionary. In fact, it is the direction in which civilization has been heading, with many digressions and blind alleys, since the liberal revolution of the 17th century. I am a progressive. I believe that the simple, timeless principles of the American Revolution – individual liberty, limited government, and free markets – are even more powerful and more important in the world of instant communication, global markets, and unprecedented access to information than Jefferson or Madison could have imagined.  Libertarianism is not just a framework for utopia, it is the indispensable framework for the future.