Tag: SCOTUS

The Force Against Hawaii’s Unconstitutional Election Awakens

After the Supreme Court blocked Hawaii’s race-based election pending appeal, its organizers—a government contractor named Na’i Aupuni—canceled it and decided instead to seat all the candidates as delegates to a special constitutional convention for the purported new nation of “native Hawaiians.” The plaintiffs have asked the Supreme Court to find the election/convention organizers in contempt of its earlier order. Meanwhile, the appeal of the district court’s earlier denial of an injunction proceeds in the U.S. Court of Appeals for the Ninth Circuit. Cato has joined the American Civil Rights Union on a brief supporting the challengers. We point out that this is the second time that Hawaii has attempted to conduct a discriminatory voter-registration procedure to facilitate a racially exclusionary election. The first time this occurred, the Supreme Court held that such elections violate the Constitution. Rice v. Cayetano (2000). Things are no different this time. The voter qualification requirements here again make eligibility contingent on ancestry and bloodlines, which are nothing more than proxies for race. (There’s a further requirement that voters affirm a belief in the “unrelinquished sovereignty of the Native Hawaiian people,” which is an ahistorical assertion.) Such a discriminatory scheme is per se unconstitutional under the Fifteenth Amendment.

Government Can’t Censor Digital Expression Just Because Someone Somewhere Might Use It for Unlawful Purposes

It’s alas old news when the government couples an imposition on liberty with an exercise in futility—security theater, anyone?—but it’s still finding inventive ways to do so in a nifty case that combines the First Amendment, the Second Amendment, and 3D printing.

Defense Distributed, a nonprofit organization that promotes popular access to constitutionally protected firearms, generates and disseminates information over the Internet for a variety of scientific, artistic, and political reasons. The State Department has ordered the company to stop online publication of certain CAD (Computer-Aided Drafting) files—complex three-dimensional printing specifications with no intellectual-property protection—even domestically. These files can be used to 3D-print the Liberator, a single-shot handgun. The government believes that the files that could be used to print the Liberator are subject to the International Trafficking in Arms Regulations, because they could be downloaded by foreigners and thus are “exports” of arms information that could cause unlawful acts.

Court Denies Insider Trading Appeal

This week the New York Times reports that the Supreme Court has refused to review the ruling of the Second Circuit Court of Appeals in the case United States v Newman. The Second Circuit, in December, overturned the insider trading conviction of a pair of hedge fund managers because nothing of value was exchanged in return for the information and thus the managers could not have known that the information they received was improperly disclosed to them by the information source.  The Supreme Court decision would seem to block insider trading prosecutions in the absence of clear financial gains to those who leak the information.

This, in turn, has energized some members of Congress to introduce legislation to make it illegal to trade on insider information regardless of how one obtains it. This standard would define insider trading far more broadly than the standard laid out in Newman, or, for that matter, even before Newman based on the precedent in Dirks v SEC.

In his article in the current issue of Regulation, Villanova University law professor Richard Booth explores the Newman ruling.  He argues that ordinary diversified investors neither lose nor gain from insider trading because they own all stocks and don’t trade very often.  The only investors who have an interest in the prosecution of insider trading are “activist investors – hedge funds and corporate raiders – who stand to benefit from slower reaction times as they buy up as many shares as possible before anyone notices.”  “… [H]edge fund managers have a distinct interest in seeing other hedge fund managers prosecuted for insider trading.”  They rather than ordinary investors are the beneficiaries of insider-trading prosecutions.  Thus ordinary investors should applaud the Newman ruling and oppose the attempts by Congress to adopt a European-style law against all insider trading.

For more Cato work on insider trading, see these links.

Research assistant Nick Zaiac contributed to this post.

 

Statement on Supreme Court Granting Cert in King v. Burwell

I applaud the Supreme Court’s decision to grant certiorari in King v. Burwell.

Since January, the Obama administration has been spending billions of unauthorized federal dollars, and subjecting nearly 60 million Americans to unauthorized taxes, all to hide the full cost of the Patient Protection and Affordable Care Act, or ObamaCare. The administration’s actions have not only violated the law and caused massive economic disruption, they have also subverted the democratic process. The plaintiffs in Pruitt v. BurwellHalbig v. Burwell, King v. Burwell, and Indiana v. IRS seek to put an end to those unlawful taxes and spending.

The Supreme Court’s decision is a rebuke to the Obama administration and its defenders, who dismissed as frivolous the plaintiffs’ efforts to defend their right not to be taxed without congressional authorization.

It is essential that these cases receive expedited resolution, if only to eliminate the uncertainty currently facing states, employers, insurers, and taxpayers.

Most important, these cases deserve expedited consideration because only they can bring an end to the greatest domestic-policy scandal of this administration.

Click here for reference materials on these cases, including all court filings and judicial opinions. Click here for news and opinion coverage of these cases.

Unanimous Supreme Court Slaps Down President Obama on Recess Appointments, Should’ve Gone Further

For the 12th time since January 2012, the Obama Justice Department has lost unanimously at the Supreme Court. This time it was over recess appointments, with all justices agreeing with that the Senate gets to determine when it’s not in session – which triggers the president’s power to appoint federal officials without Senate confirmation. (Indeed, that’s what we argued in the brief we filed). And that’s no surprise: based on oral argument, everyone was expecting the government to lose NLRB v. Noel Canning and lose big. For example, my colleague Nicholas Quinn Rosenkranz predicted a unanimous ruling at a Cato debate in January.

Unfortunately, the conventional wisdom about a narrow ruling was also proven correct. The only “rule” that emerges from Justice Breyer’s controlling opinion is that a three-day recess, the longest the Senate can adjourn without the House’s consent, isn’t long enough to enable recess appointments. That’s a very pragmatic decision and seems to confirm executive practice prior to recent years. It also happens to lack any connection to constitutional text (as Justice Scalia points out for four justices in concurrence), whose best reading indicates that only recesses between Senate sessions – not when, e.g., the Senate takes two weeks off around Christmas – count for purposes of activating the recess-appointment power. Moreover, that power is only textually justified to fill vacancies that arise during the recess itself, not for openings that the president didn’t happen to fill while the Senate was sitting. In other words, Justice Breyer’s unprincipled opinion, while limiting recent presidential practice, cements a much more expansive reading of that power than the Constitution allows. For practical purposes, we’ll see many more “pro forma” Senate sessions and also the empowerment of those who control the House – because, again, the Senate can’t recess without the House’s consent. Speaker Boehner, call your office.

To be sure, this ruling is a strong rebuke to this administration in this case, but the most that can be said for it more broadly is what Justice Scalia did in reading his concurrence from the bench this morning: “The Court’s decision will be cited in diverse contexts, including those presently unimagined, and will have the effect of aggrandizing the Presidency beyond its constitutional bounds and undermining respect for the separation of powers.”

Predicting the Supreme Court

Josh Blackman, my sometimes co-author, who is the president of the Harlan Institute (with which I too am associated) and czar – his title, not mine – of FantasySCOTUS.net, has co-authored a fascinating article that analyzes an information market he created to predict Supreme Court cases.

During the October 2009 Supreme Court term (last year), the 5,000 members of FantasySCOTUS.net made over 11,000 predictions for the 81 cases decided. Based on this data, FantasySCOTUS accurately predicted a majority of the cases and the top-ranked experts predicted over 75% of the cases correctly. FantasySCOTUS even has a Prediction Tracker to provide real-time predictions as to how the Supreme Court will decide.

Josh’s article is an absolute must-read for anyone who follows the Court closely and tries to figure out what “The Nine” will do.  While I myself haven’t had the time to participate in FantasySCOTUS, perhaps I should go there every now and again to be better able to answer (the very common) media questions of how cases turn out.

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