Tag: standing

Fourth Circuit’s Liberty Ruling Deals a Hidden Blow to Obamacare

Obamacare had a rough day in court yesterday. In Liberty University v. Lew, the Court of Appeals for the Fourth Circuit ruled against Liberty University’s challenge to various aspects of the law. One might think, as SCOTUSblog reported, this was a victory for the Obama administration. 

In the process, however, the Fourth Circuit undercut three arguments the administration hopes will derail two lawsuits that pose an even greater threat to Obamacare’s survival, Pruitt v. Sebelius and Halbig v. Sebelius

The plaintiffs in both Pruitt and Halbig claim, correctly, that Obamacare forbids the administration to issue the law’s “premium assistance tax credits” in the 34 states that have refused to establish a health insurance “exchange.” The Pruitt and Halbig plaintiffs further claim that the administration’s plans to issue those tax credits in those 34 states anyway, contrary to the statute, injures them in a number of ways. One of those injuries is that the illegal tax credits would subject the employer-plaintiffs to penalties under Obamacare’s employer mandate, from which they should be exempt. (The event that triggers penalties against an employer is when one of its workers receives a tax credit. If there are no tax credits, there can be no penalties. Therefore, under the statute, when those 34 states opted not to establish exchanges, they effectively exempted their employers from those penalties.)

The Obama administration has moved to dismiss Pruitt and Halbig on a number of grounds. First, it argues that those penalties are a tax, and the Anti-Injunction Act (AIA) prevents taxpayers from challenging the imposition of a tax before it is assessed. Second, the administration argues that the injuries claimed by the employer-plaintiffs are too speculative to establish standing. Third, shortly after announcing it would effectively repeal the employer penalties until 2015, the administration wrote the Liberty, Pruitt, and Halbig courts to argue that the delay should (at the very least) delay the courts’ consideration of those cases. In Liberty, the Fourth Circuit rejected all of those claims.

In discussing whether the “assessible payment” that the employer mandate imposes on non-compliant employers falls under the AIA, the court writes:

In Global Warming Case, Supreme Court Reaches Correct Result But Leaves Room for Mischievous Litigation

In the important global warming case decided today, American Electric Power Co. v. Connecticut, the Supreme Court unanimously reached the correct result but one that still leaves room for plenty of mischievous litigation.  While it’s clearly true that, as the Court said, the Clean Air Act and the EPA exist to deal with the claims the plaintiffs made here—that the defendants’ carbon dioxide emissions are pollutants that cause global warming—the Court left open the possibility of claims on state common-law grounds such as nuisance.  And it unfortunately said nothing about whether any such disputes, whether challenging EPA action or suing under state law, are properly “cases and controversies” ripe for judicial resolution.

The judiciary was not meant to be the sole method for resolving grievances with the government, even if everything looks like a nail to lawyers who only have a hammer.  This case is the perfect example of a “political question” best left to the political branches: The science and politics of global warming is so complex and nuanced that there simply isn’t a judicial role to be had.

As Cato’s amicus brief argued, the chain of causation between the defendants’ carbon emissions and the alleged harm caused by global warming is so attenuated that it resembles the famed “butterfly effect.” Just as butterflies should not be sued for causing tsunamis, a handful of utility companies in the Northeastern United States should not be sued for the complex (and disputed) harms of global warming. Even if plaintiffs (here or in a future case) can demonstrate causation, it is unconstitutional for courts to make nuanced policy decisions that should be left to the legislature.  Just as it’s improper for a legislature to pass a statute punishing a particular person (bill of attainder), it’s beyond courts’ constitutional authority to determine wide-ranging policies in which numerous considerations must be weighed in anything but an adversarial litigation process.

If a court were to adjudicate claims like those at issue in American Electric Power and issue an order dictating emissions standards, two things will happen: 1) the elected branches will be encouraged to abdicate to the courts their responsibilities for addressing complex and controversial policy issues, and 2) an already difficult situation would become nearly intractable as regulatory agencies and legislative actors butt heads with court orders issued across the country in quickly multiplying global warming cases. These inevitable outcomes are precisely why the standing and political question doctrines exist.

Dissatisfaction with the decisions and pace of government does not give someone the right to sue over anything. Or, as Chief Justice Marshall once said, “If the judicial power extended to every question under the laws of the United States … [t]he division of power [among the branches of government] could exist no longer, and the other departments would be swallowed up by the judiciary.”

Of Course Defendants Can Challenge the Constitutionality of Laws Under Which They’re Prosecuted

Hard cases make bad law, the saying goes.  Well, a bizarre case that the Supreme Court decided unanimously today has set a good precedent for the enforcement of residual Tenth Amendment powers. 

As I described in December when Cato filed a brief in Bond v. United States:

Carol Anne Bond learned that her best friend was having an affair with her husband, so she spread toxic chemicals on the woman’s car and mailbox. Postal inspectors discovered this plot after they caught Bond on film stealing from the woman’s mailbox. Rather than leave this caper to local law enforcement authorities to resolve, however, a federal prosecutor charged Bond with violating a statute that implements U.S. treaty obligations under the 1993 Chemical Weapons Convention.

Bond pled guilty and was sentenced but now appeals her conviction on the ground that the statute at issue violates the Tenth Amendment – in that her offense was local in nature and not properly subject to federal prosecution. The Third Circuit declined to reach the constitutional question, holding that Bond did not have standing to raise a Tenth Amendment challenge and that, following Supreme Court precedent, a state actor must be a party to the suit in order to challenge the federal government for impinging on state sovereignty. Bond now seeks Supreme Court review on the ground that the statute, as applied to her, is beyond the federal government’s enumerated powers.

Our brief argued that a defendant clearly has standing to challenge the constitutionality of the statute under which she was convicted, but also that lower courts are wrong in assuming that both the president’s power to make treaties and Congress’s power to make laws executing those treaties are unconstrained by the Constitution.  That is, many judges seem to erroneously think that treaties can give the federal government powers it doesn’t otherwise have under the Constitution.

The Court’s ruling today, in a tight opinion by Justice Kennedy, makes clear that individuals can indeed raise Tenth Amendment claims that the federal government has overstepped its enumerated powers.  The Court took no position on the merits of Bond’s constitutional argument – relating to the expansion of federal criminal law via the Treaty Power into areas that should be handled at the state and local levels – but this non-decision is in itself a positive development because it signals that the underlying issue is in dispute.

The Third Circuit is now charged with determining in the first instance whether the law implementing the chemical weapons treaty is “necessary and proper for carrying into execution” the Treaty Power, including whether it’s overbroad if it snares people like Bond.

Even if Bond loses on the merits in the Third Circuit and/or the Supreme Court, however, her case has confirmed the idea that someone directly and particularly harmed by a federal law can challenge that law’s constitutionality.  As Justice Ginsburg said in her concurrence,

a court has no “prudential” license todecline to consider whether the statute under which the defendant has been charged lacks constitutional application to her conduct. And that is so even where the constitutional provision that would render the conviction void is directed at protecting a party not before the Court. ….

In short, a law “beyond the power of Congress,” for any reason, is “no law at all.” Nigro v. United States, 276 U. S. 332, 341 (1928). The validity of Bond’s conviction depends upon whether the Constitution permits Congress to enact §229.  Her claim that it does not must be considered and decided on the merits.

For more on the proper scope of the Treaty Power, I recommend Georgetown law professor Nicholas Quinn Rosenkranz’s “Executing the Treaty Power.”

Update:

Josh Blackman parses Justice Kennedy’s opinion and shows how it tracks the approach that Randy Barnett and Cato have been taking in our Obamacare briefs.

Does Virginia Even Have Standing to Challenge Obamacare?

As I described yesterday in the context of Cato’s latest brief, Virginia’s challenge to the constitutionality of the individual mandate is now on appeal before the Fourth Circuit (the federal appellate court that covers Maryland, Virgnia, and the Carolinas).   Before the court even considers the constitutional merits, however, it must confirm that the state has standing to bring the lawsuit in the first place. 

Indeed, two amicus briefs filed by some law professors argue that the state does not have the legal power to challenge the constitutionality of Obamacare.  But Pacific Legal Foundation attorney and Cato adjunct scholar Timothy Sandefur filed a brief responding to those briefs and arguing that Virginia does have standing to bring the case.

Here’s the issue:  Article III of the Constitution only lets federal courts hear “cases and controversies,” which means that a plaintiff – whether an individual, a state, a corporation, or any other entity – must have been actually harmed in a way that courts can address.  For example, courts can’t review abstract political arguments or give advisory opinions.  Here, Virginia argues that it’s been injured because it passed a Health Care Freedom Act that prevents citizens from being forced to buy health insurance – which is obviously in conflict with the individual mandate.

The professors say, in contrast, that states can’t pass laws that conflict with federal law as a means of getting in court and challenging the constitutionality of the federal law.  They point to Massachusetts v. Mellon, a 1923 decision that said states don’t have the “duty or power to enforce … [citizens’] … rights in respect of their relations with the Federal Government.  In that field it is the United States, and not the State, which represents them as parens patriae….”  They argue that the “the state’s interest in enforcing its legal code must necessarily give way to federal law whenever a conflict arises,” and that “[m]anufacturing a conflict with federal law cannot of itself create an interest sufficient to support standing.”

PLF’s brief explains, however, that states have had the power to do precisely that since at least McCulloch v. Maryland, the 1819 case that upheld the constitutionality of the national bank (and which is central to the Necessary and Proper Clause analysis at the heart of the larger constitutional debate over Obamacare).  In McCulloch, Maryland passed a law taxing the bank simply to give it the ability to challenge the bank’s creation in the Supreme Court.  Although the Court found the bank constitutionally kosher, it never denied that the state couldn’t raise its claims.  And the Supreme Court has allowed states in many other cases to challenge federal laws that intrude on their constitutionally retained sovereignty.

In South Dakota v. Dole (1987), for instance, the Court allowed the state to challenge the constitutionality of laws that infringed on the power to regulate alcohol consumption (by tying federal highway funds to states’ raising their drinking age to 21) – a power that the Twenty-First Amendment leaves to states.  If states can defend powers retained by the Twenty-First Amendment, why can’t they defend powers retained by the Tenth Amendment? 

And states should have the power to bring these lawsuits, because the Founders intended for states to serve as a check against Congress going beyond its constitutional authority.  In Federalist 46, for example, Madison assured skeptics that states would have “means of opposition” against federal overreaching, and those means would include “the embarrassments created by legislative devices.”  States are supposed to defend their turf in the federal constitutional scheme.  As for cases like Mellon, PLF argues that these cases involved “political questions” and so were not rulings about standing: in those cases the states weren’t really exercising their sovereign powers.  But in this case, Virginia has clearly exercised its sovereignty by passing the Health Care Freedom Act.

Interestingly, one reason PLF argues that states should have standing to bring these cases is because there’s some question whether individual citizens are allowed to bring Tenth Amendment challenges.  That question will be resolved this term in Bond v. United States, a case in which Cato filed an amicus brief in December.  If individuals are hard-pressed to defend the federalist structure, then states certainly should be able to.

In short, PLF’s brief (which was also filed on behalf of Americans for Free Choice in Medicine and Matt Sissel, PLF’s client in a different Obamacare case) makes a complicated but crucial argument supporting states’ ability to defend federalism by challenging the constitutionality of federal overreaching.  More at PLF’s blog.

Supreme Court Should Tell Courts to Stay Out of Global Warming Cases

The Supreme Court is finally starting to put some interesting non-First Amendment cases on this term’s docket.

Today, the Court agreed to review American Electric Power Co., Inc. v. Connecticut, in which eight states, some non-profits, and New York City are suing a number of energy companies and utilities for harms they allegedly caused by contributing to global warming.  This is the third major lawsuit to push global warming into the courts (another being Comer v. Murphy Oil USA, in which Cato also filed a brief).  It’s America, after all, where we sue to solve our problems – even apparently, taking to court the proverbial butterfly that caused a tsunami.

Mind you, you can sue your neighbor for leaking toxic water onto your land. Courts are well positioned to adjudicate such disputes because they involve only two parties and have limited (if any) effects on others. But it is a different case when, using the same legal theory by which Jones sues Smith for his toxic dumping (called “nuisance”), plaintiffs selectively sue a few targeted defendants for a (quite literally) global problem.  As I discussed with reference to a previous such case, global warming is the type of issue that should be decided by the political branches. The Second Circuit ruled, however, that this suit could go forward. (Justice Sotomayor was involved in the case at that stage and so will be recused going forward.)  

The Supreme Court has always recognized that not all problems can or should be solved in the courtroom. Thus, the issue in AEP v. Connecticut – which the Court will now decide – is whether the states meet the legal requirements necessary to have their suit heard in court, what lawyers call “standing.” Historically, issues of policy have been decided by the legislative and executive branches while “cases and controversies” have been decided by courts. Therefore, when litigants have asked courts determine matters of broad-ranging policy, the Court has often termed the cases “political questions” and dismissed them. The reasoning is that, not only do unelected courts lack the political authority to determine such questions, they also lack any meaningful standards by which the case could be decided (called “justiciability”).

Indeed, even if the plaintiffs can demonstrate causation, it is unconstitutional for courts to make complex policy decisions — and this is true regardless of the science regarding global warming. Just as it’s unconstitutional for a legislature to pass a statute punishing a particular person (bill of attainder), it’s unconstitutional — under the “political question doctrine” — for courts to determine wide-ranging policies in which numerous considerations must be weighed against each other in anything but a bilateral way.  

We pointed out in our brief supporting the defendants’ request for Supreme Court review – and will again in the brief we plan to file at this next stage – that resolving this case while avoiding those comprehensive and far-reaching implications is impossible and that the Constitution prohibits the judicial usurpation of roles assigned to the other, co-equal branches of government.   After all, global warming is a global problem purportedly caused by innumerable actors, ranging from cows to Camrys. This fact not only underscores the political nature of the question, but it has constitutional significance: In order to sue someone, your injury must be “fairly traceable” to the defendant’s actions. Suits based on “butterfly effect” reasoning should not be allowed to move forward.

Perhaps surprisingly, the federal government –which is involved because one of the defendants is the Tennessee Valley Authority – agrees with Cato . The administration aptly played its role in our constitutional system by asserting that global warming policy was a matter for the executive and legislative branches to resolve, not the judiciary. 

Hmmm, Cato and Obama on the same side in a global warming dispute… but I still won’t be holding my breath awaiting an invite to the White House Christmas party.

Big Global Warming Case Hinges on Weird Procedural Technicality

Nearly two weeks ago, I blogged about some strange procedural developments in the big global warming case coming out of the Gulf Coast, Comer v. Murphy Oil USA.  On the eve of final briefing deadlines before the en banc Fifth Circuit, an eighth judge of that court recused from the case (we don’t know the reason, but the previous seven recusals were presumably due to stock ownership) and so the court was faced with an unprecedented situation: losing an en banc quorum after previously having had enough of one to vacate the panel decision and grant en banc rehearing in the first place.  We were all set to file our brief when the Clerk of the Fifth Circuit issued an order notifying the parties of the lost quorum and canceling the scheduled hearing — and nothing more.  Out of an abundance of caution, we decided to go ahead with filing late last week.

Again, here’s the situation: Mississippi homeowners sued 34 energy companies and utilities operating in the Gulf Coast for damage sustained to their property during Hurricane Katrina. The homeowners alleged that the defendants had emitted greenhouse gases, which increased the concentration of greenhouse gases in the atmosphere, which contributed to global warming, which accelerated the melting of glaciers, which raised the global sea level, which increased the frequency and severity of hurricanes, which caused the destructive force of Hurricane Katrina. The district court concluded that it lacked the authority to resolve the public debate over global warming and dismissed the case. A Fifth Circuit panel reversed this dismissal, holding that the homeowners have standing to raise some of their claims and that those claims are appropriate for resolution by the federal courts. The Fifth Circuit then granted rehearing en banc.

Cato filed an amicus brief on the energy companies’ behalf, arguing that homeowners lack standing to bring their suit and that the case raises a nonjusticiable political question. Our brief asserts that the homeowners’ claim does not provide a clear causal connection between the harm suffered and any particular conduct by the energy companies, and that the money damages the homeowners requested would not remedy the environmental harm alleged. More importantly, we maintain that political questions such as those surrounding climate change must be resolved by Congress, not the federal courts. Put simply, the Constitution prohibits federal courts from resolving highly technical social and economic policy debates. Permitting plaintiffs to achieve “regulation by litigation” would not only contradict settled Supreme Court precedent, but would betray the separation of powers principles embodied in the Constitution.

The Clerk has since directed the parties to brief the procedural issues surrounding the apparent lost quorum, which letter-briefs came in this week (as a mere amicus, we did not file on this).  I’ll spare you the technical details, but there are three possible ways in which the Fifth Circuit could now rule: 1) the court actually does have a quorum and thus oral argument is resecheduled; 2) the panel decision is reinstated (with an ensuing cert petition appealing that decision to the Supreme Court); and 3) the district court is affirmed without opinion (the same result as when an appellate court vote is tied).  Stay tuned — this is a truly weird denouement to a hugely important case.

Of Butterflies, Tsunamis, and Draconian Recusal Standards

Last October, I blogged about Comer v. Murphy Oil USA, a lawsuit in Mississippi alleging that the defendant oil, coal, utility, and chemical companies emit carbon dioxide, which causes global warming, which exacerbated Hurricane Katrina, which damaged the plaintiffs’ property.  Mass tort litigation specialist Russell Jackson called the case “the litigator’s equivalent to the game ‘Six Degrees of Kevin Bacon.’”  In a brief that Cato was due to file this week, I framed the operative question as, “When a butterfly flaps its wings, can it be sued for the damage any subsequent tsunami causes?”

The plaintiffs asserted a variety of theories under Mississippi common law, but the main issue at this stage was whether the plaintiffs had standing, or whether they could demonstrate that their injuries were “fairly traceable” to the defendants’ actions.  The federal district court dismissed the case but a dream panel (for the plaintiffs) of the Fifth Circuit Court of Appeals held that the plaintiffs could indeed proceed with claims regarding public and private nuisance, trespass, and negligence. 

In my blog post, I predicted that the Fifth Circuit would take up the case en banc (meaning before all the judges on the court, in this case 17) and reverse the panel.  And this was all set to happen – even though eight judges recused themselves, presumably because they owned shares of defendant companies – with en banc argument slated for May 24.  I was planning to head down to New Orleans for it, in part because the judge I clerked for, E. Grady Jolly, was going to preside over the hearing (the only two more senior active judges being recused).

But a funny thing happened on the way to legal sanity.  On Friday, not half an hour after I had finished editing Cato’s brief, the court clerk issued a notice informing the parties that one more judge had recused and, therefore, the en banc court lacked a quorum.  As of this writing, I still don’t know who this judge is and what circumstances had changed since the granting of the en banc rehearing to cause the recusal.  And indeed, by all accounts the Fifth Circuit is still figuring out what to do in this unusual (and, as far as I know, unprecedented) situation where a court loses a quorum it initially had – having already vacated the panel decision.

In short, the court could decide that the vacatur stands and either remand to a (now-confused) district court or rehear the case in a new random panel assignment.  More likely, however, the court will now reinstate the terrible, horrible, no good, very bad panel decision – and we’ll tweak our brief to make into one that supports the defendants’ inevitable cert petition.

All in all, an illustration of the absurdity both of litigating climate change politics in the courts and of forcing judges (including Supreme Court justices) to withdraw from cases for owning a few hundred dollars’ worth of stock.  If that’s all it takes to corrupt federal judges, we have bigger problems than trial lawyers run amok!