Tag: Supreme Court

We Support Gay Marriage but Oppose Forcing People to Support It

Elane Photography, a Christian-identified business in Albuquerque, N.M., declined to photograph Vanessa Willock’s same-sex commitment ceremony based on the business owners’ personal beliefs. New Mexico law prohibits any refusal to render business services because of sexual orientation, however, so Willock filed a claim with the New Mexico Human Rights Commission.  She argued that Elane Photography is a “public accommodation,” akin to a hotel or restaurant, that is subject to the state’s anti-discrimination law.

The commission found against Elane and ordered it to pay $6,600 in attorney fees.  Elane Photography’s owners appealed the ruling, arguing that they are being denied their First Amendment right to the free exercise of religion (and a similar provision in the state constitution).  Furthermore, New Mexico’s Religious Freedom Restoration Act defines “free exercise” as “an act or a refusal to act that is substantially motivated by religious belief” and forbids government from abridging that right except to “further a compelling government interest.”

The state trial and appellate courts affirmed the commission’s order.  Elane Photography v. Willock is now before the New Mexico Supreme Court, where Cato has joined UCLA law professor Eugene Volokh and University of Minnesota law professor Dale Carpenter—who, like Cato, support gay marriage—in filing an amicus brief siding with Elane Photography on free speech grounds.

Our brief explains that photography is an art form protected by the First Amendment because clients seek out the photographer’s method of staging, posing, lighting, and editing.  Photography is thus a form of expression subject to the First Amendment’s protection, unlike many other wedding-related businesses (e.g., caterers, hotels, limousine drivers).

The U.S. Supreme Court has already ruled in Wooly v. Maynard that photography is protected speech—even if it’s not political and even if the photos are used for commercial value—and that speech compulsions (forcing people to speak) are just as unconstitutional as speech restrictions.  The First Amendment “includes both the right to speak freely and the right to refrain from speaking at all.”  Moreover, unlike true cases of public accommodation, there are abundant opportunities to choose other photographers in the same area.

The New Mexico Supreme Court should thus reverse the lower court’s ruling and allow Elane Photography to be free to choose the work it desires.

Lawyers Can’t Game the Class-Action System at the Expense of Would-Be Plaintiffs

To discourage plaintiffs’ lawyers from trying to keep class-action lawsuits in state courts that have a reputation for trial awards and settlements that benefit those same lawyers, Congress passed the Class Action Fairness Act of 2005.

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 The Standard Fire Insurance Co. v. Knowles, the named plaintiff in a putative insurance-recovery class action in Arkansas state court tried to avoid that removal to federal court by stipulating that his not-yet-certified 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.  Treating this stipulation as “binding,” however, implicates the Fifth Amendment due process rights of the would-be class members who are thus far absent from and unaware of the lawsuit.

After the lower federal courts denied removal, the Supreme Court took the case to determine whether a plaintiff in a class action may indeed defeat a defendant’s statutory right to federal removal under CAFA simply by stipulating to a limit on the amount in controversy.  On Monday, Cato filed an amicus brief arguing that the plaintiff and his attorneys are violating the due process rights of absent class members who would be bound by the judgment in a lawsuit that, if allowed to proceed, would end their right to sue over the same claims while simultaneously limiting their compensation under those claims.

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.

The Supreme Court will hear the case in early 2013.

‘The Obamacare Cases Keep Coming’

Jonathan Adler at National Review Online:

During oral arguments in the Supreme Court challenge to the individual mandate, NFIB v. Sebelius, the plaintiff’s lawyer Paul Clement warned the justices not to make the same mistake they made in the 1970s with Buckley v. Valeo. In Buckley, the Court upheld portions of the post-Watergate campaign-finance reforms while invalidating others. The result was a muddled statute that Congress and the courts would repeatedly revisit for years to come. Repeating this approach with the Patient Protection and Affordable Care Act, Clement cautioned, could produce similar undesirable results. It’s too soon to know how quickly Congress will revisit the PPACA, but Clement’s warning already seems to be coming true in the courts…

More than three months after the Court’s decision, over three dozen legal challenges to the PPACA or its implementation are pending in federal courts, and more are sure to come.

At a Cato briefing on Capitol Hill this Wednesday, Adler and I will be speaking about one of those cases.

You Shouldn’t Have to Give Up Your Health Insurance When You Take Social Security

This blogpost and the amicus brief it references were co-authored by Trevor Burrus and Kathleen Hunker.

When Brian Hall, former House Majority Leader Dick Armey, and other over-65 retirees requested to opt out of Medicare’s hospital insurance coverage (because they preferred their existing private coverage), the Social Security Administration didn’t thank them for saving taxpayers’ money. Instead, the SSA explained that, because of a guideline in its “Program Operations Manual System”—essentially a manual that explains how to operate the Social Security system—anyone who declined Medicare benefits would lose Social Security.

That is, Hall and the others could disclaim their Medicare hospital insurance coverage, but only if they forfeited all of their future claims to Social Security and repaid whatever benefits they already had received — roughly $280,000 altogether. The plaintiffs challenged the linking of Social Security and Medicare as being beyond the SSA’s statutory authority. Neither the Social Security Act nor the Medicare Act allows administrative agencies to precondition benefits under one program on acceptance of benefits from other. Instead, the plain language of both statutes states that petitioners are “entitled” to benefits, which according to legal and general usage describes someone who is “legally qualified” and thus has the option of claiming benefits.

The district court disagreed and the U.S. Court of Appeals for the D.C. Circuit, in a split decision, affirmed the trial court’s result but declined to grant the POMS rules deference. The court then unanimously denied a petition for rehearing. Recognizing that the D.C. Circuit ruling, if left in place, could encourage future encroachments on congressional power by administrative agencies, Cato filed an amicus brief supporting Hall’s request that the Supreme Court take the case and enforce the statute as it was written.

We note that administrative agencies have no powers not granted to them by Congress and that regulations must be anchored in the operative statute—as well as the agency’s fair and considered judgment—in order to warrant judicial deference. The POMS regulation fails this standard because Congress’s use of the word “entitled” was clear and unambiguous. Combined with the fiscal irresponsibility of forcing citizens to accept costly benefits in an economic recession, the POMS rule appears to be an arbitrary power grab rather than a faithful effort to implement the will of Congress. We conclude by reminding the Court that agency overreach imperils the separation of powers and therefore liberty.

When Congress fails to counter an unauthorized expansion of power by an administrative agency, the judiciary has a duty to uphold the Constitution by enforcing the relevant statute as written.

The Supreme Court will decide later this fall whether to take the case of Hall v. Sebelius.

Is the Federal Government Bound by the Agreements It Makes With States?

The Interstate Agreement on Detainers, a compact authorized by federal statute, provides a simple procedure for transferring custody of prisoners between states. Because the federal government annually seeks to prosecute thousands of prisoners already in state custody, it joined the IAD in 1970 to get the benefit of this unified procedure. When it joined, it did so as a “state” for purposes of the agreement, and exempted itself from only two provisions (which aren’t relevant here). One of the provisions that the federal government decided not to exempt itself from, Article IV(a), allows the governor of the sending state to deny any request made by a receiving state to transfer a prisoner.

In September of 2010, Jason Pleau offered to plead guilty to robbery and murder charges in Rhode Island in exchange for life in prison without parole, the harshest sentence that state’s law allows. Pleau’s crimes also allegedly violated federal law, however, and the U.S. government wanted to prosecute Pleau itself in order to seek the death penalty. The federal government thus sought custody through the IAD by filing for the little-known writ of habeas corpus ad prosequendum (“show me the body for prosecution”).

The governor of Rhode Island, Lincoln Chafee, disapproves of the death penalty and used his authority under the IAD’s Article IV(a) to deny the federal request. A federal district court, later affirmed by the U.S. Court of Appeals for the First Circuit, overruled Chafee’s denial, stating that the Supremacy Clause prevented the governor from interfering with the federal government’s wishes.

The First Circuit found that the compact’s specific text and the normal canons of statutory construction were “all beside the point.” According to the court, what was important was that Congress could not possibly have meant to grant state governors the power to deny federal transfer requests—and thus the IAD didn’t affect the balance of power between the federal government and the states. The First Circuit thus granted the writ, and Pleau is now in federal custody.

The question presented here, whether the Supremacy Clause trumps a governor’s right to deny a request for transfer of custody under the IAD, raises two important issues: First, if the First Circuit is right, then the federal government may reap the benefit of interstate bargains without having to fulfill its own obligations under them. Second, the First Circuit’s opinion effectively treats the state courts as inferior to the federal courts, which upsets the system of concurrent sovereignty that the Founders designed.

Cato has joined the Independence Institute to file an amicus brief urging the U.S. Supreme Court to hear this case, with a focus on the second issue. We argue that the U.S. legal system has always recognized the dual sovereignty of federal and state courts, dating back to Chief Justice John Marshall. As Chief Justice Marshall explained, that dual system requires that state courts not be considered inferior to federal courts, and thus federal courts have no independent authority to order prisoners under state jurisdiction to be transferred to the federal system.

Furthermore, when abrogating state sovereignty via the Supremacy Clause, Congress must demonstrate its intent to do so with “unmistakably clear language”—and none of the statutes applicable here contain any such language. Finally, we argue that the First Circuit has misinterpreted relevant Supreme Court precedent and that a proper reading of the relevant case law would establish that a state is well within its rights to treat the federal government like any other state under the IAD and deny its request to transfer a prisoner into federal custody.

The Supreme Court will decide whether to take up the case of Chafee v. United States and Pleau v. United States later this fall.

Oklahoma Challenges Obama’s Illegal Employer Tax

Yesterday, the attorney general of Oklahoma amended that state’s ObamaCare lawsuit. The amended complaint asks a federal court to clarify the Supreme Court’s ruling in NFIB v. Sebelius, but it also challenges an IRS rule that imposes ObamaCare’s employer mandate where the statute does not authorize it: on employers in the 30 to 40 states that decline to implement a health insurance “exchange.”

Here are a few excerpts from Oklahoma’s amended complaint:

The Final Rule was issued in contravention of the procedural and substantive requirements of the Administrative Procedures Act…; has no basis in any law of the United States; and directly conflicts with the unambiguous language of the very provision of the Internal Revenue Code it purports to interpret…

Under Defendants’ Interpretation, [this rule] expand[s] the circumstances under which an Applicable Large Employer must make an Assessable Payment…with the result that an employer may be required to make an Assessable Payment under circumstances not provided for in any statute and explicitly ruled out by unambiguous language in the Affordable Care Act.

Plaintiff believes…that subjecting the State of Oklahoma in its capacity as an employer to the employer mandate would cause the Affordable Care Act to exceed Congress’s legislative authority; to violate the Tenth Amendment; to impermissibly interfere with the residual sovereignty of the State of Oklahoma; and to violate Constitutional norms relating to the relationship between the states, including the State of Oklahoma, and the Federal Government.

As for the latest claim to be made in defense of the IRS rule – that an Exchange  established by the federal government under Section 1321 is an Exchange “established by the state under Section 1311” – the complaint says this:

If the Act provides or is interpreted to provide that an Exchange established by HHS under Section 1321(c) of the Act is a form of what the Act refers to as “an Exchange established by a State under Section 1311 of [the Act],” then Section 1321(c) is unconstitutional because it commandeers state governmental authority with respect to State Exchanges, permits HHS to exercise a State’s legislative and/or executive power, and otherwise causes the Exchange-related provisions of the Act…to exceed Congress’s legislative authority; to violate the Tenth Amendment; to infringe on the residual sovereignty of the States under the Constitution; and to violate Constitutional norms relating to the relationship between the states, including the State of Oklahoma, and the Federal Government.

Oklahoma does not yet list any private-sector employers as co-plaintiffs, but that may change.

Since this IRS rule also unlawfully taxes 250,000 Oklahomans under the individual mandate – a tax that in 2016 will reach $2,085 for a family of four earning $24,000 – the attorney general has an awful lot of individual Oklahomans that he could add to its plaintiff roster.

Jonathan Adler and I first wrote about President Obama’s illegal taxes on employers in the Wall Street Journal and again in the USA Today. Since parts of those opeds have been overtaken by events, I recommend reading our forthcoming Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.” Yes, all 82 pages of it.

The President Can’t Expand Federal Power by Signing a Treaty

This blogpost was co-authored by Cato legal associate Trevor Burrus.

In 2010, the Supreme Court decided United States v. Bond, a case that seems right out of a soap opera. 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 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 she reserved the right to appeal 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.

She won the first part of that appeal process: The Supreme Court unanimously accepted the argument offered in an amicus brief by Cato and the Center for Constitutional Jurisprudence that there’s no reason in constitutional structure or history that someone can’t use the Tenth Amendment to challenge the constitutionality of the statute under which she was convicted.

On remand to the Philadelphia-based U.S Court of Appeals for the Third Circuit, Bond (now with standing to challenge that law) raised the argument that Congress’s limited and enumerated powers cannot be increased by treaties. We again filed in that case in support of Bond. The Third Circuit disagreed, however—if reluctantly—based on one sentence by Justice Oliver Wendell Holmes in Missouri v. Holland (1920) that has been interpreted to mean that Congress’s constitutional powers can indeed be expanded by treaties.

Writing separately, Judge Ambro agreed that Holland clearly addressed the issue but “urge[d] the Supreme Court to provide a clarifying explanation of its statement” regarding the treaty power. Bond has thus brought her case back to the Supreme Court, asking the Court to clarify and cabin Holland.

In this, our third brief in the case, we are joined again by the Center for Constitutional Jurisprudence in arguing—again based on the work of Georgetown law professor and Cato senior fellow Nicholas Quinn Rosenkranz—that allowing Congress to broaden its powers via treaties is an astounding manner in which to interpret a document that creates a federal government of limited powers. Not only would this mean that the Executive has the ability to expand federal power by signing a treaty, but it would mean that foreign governments could change federal power by abrogating a previously valid treaty—thus removing the constitutional authority from certain laws.

We also point out how the most influential argument supporting Holland is based on a clear misreading of constitutional history that has been repeated without question and that the ruling is in deep tension with other cases. We’re in a constitutional quagmire with respect to the treaty power that can only be escaped by limiting or overturning Missouri v. Holland.

The Court will decide this fall whether to Bond v. United States.