Tag: Supreme Court

Delaying the Employer Mandate Requires Delaying All of Obamacare

The IRS has announced it will postpone the start date of Obamacare’s “employer mandate” from 2014 to 2015. Most of the reaction has focused on how this move is an implicit acknowledgement that Obamacare is harmful, cannot work, and will prove a liability for Democrats going into the November 2014 elections. The Washington Post called the decision a “fresh setback” and a “significant interruption” to the law’s implementation. John McDonough, a prominent supporter of the law, observes, “You’ve given the employer community a sense of confidence that maybe they can kill this. If I were an employer, I would smell blood in the water.” When a die-hard Obamacare supporter like Ezra Klein says the employer mandate should be repealed, clearly things are not going well.

While all of this is true, it misses the two most significant implications of this momentous development:

First, the IRS’s unilateral decision to delay the employer mandate is the latest indication that we do not live under a Rule of Law, but under a Rule of Rulers who write and rewrite laws at whim, without legitimate authority, and otherwise compel behavior to suit their ends. Congress gave neither the IRS nor the president any authority to delay the imposition of the Patient Protection and Affordable Care Act’s employer mandate. In the section of the law creating that mandate, Congress included several provisions indicating the mandate will take effect in 2014. In case those provisions were not clear enough, Section 4980H further clarifies:

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to months beginning after December 31, 2013.

It is hard to see how the will of the people’s elected representatives – including President Obama, who signed that effective date into law – could have been expressed more clearly, or how it could be clearer that the IRS has no legitimate power to delay the mandate. Again, Ezra Klein: “This is a regulatory end-run of the legislative process. The law says the mandate goes into effect in 2014, but the administration has decided to give it until 2015 by simply refusing to enforce the penalties.”

The Fifth and Sixth Amendments Protect the Right to Counsel of Choice During Criminal Trials

Federal criminal defendants must fight a battle against the largest and most powerful organization in history, the U.S. government. At the very least, hopefully, they have a trusted attorney to fight with them.

That right of criminal defendants to choose their own lawyers is guaranteed by the Sixth Amendment and ensures the integrity of the adversarial justice process. Yet prosecutors are increasingly using a procedure called “asset forfeiture”—which freezes assets suspected of being tied to crime—to deny defendants the funds they need to retain the lawyer of their choice.

In January 2005, Kerri Kaley, then a sales representative with a New York-based medical device company, was informed that she was the target of a grand jury investigation in Miami. She was suspected of stealing prescription medical devices from hospitals and selling them on the black market. Kerri and her husband Brian (also under investigation) hired counsel to represent them in what turned out to be a two-year investigation. During that period, their lawyers interviewed witnesses, reviewed countless documents, researched legal issues, and conferred with the prosecutors.

To pay their attorneys, the Kaleys took a home equity line of credit on their house and bought a certificate of deposit. In 2007, the grand jury returned indictments, accompanied by asset forfeiture orders restraining the Kaleys’ money. Because they had been indicted, the money was said to be criminally “tainted.” These asset-restraining orders were obtained without the Kaleys’ lawyers present (called an ex parte hearing).

The Kaleys challenged the freezing of their assets, arguing that, under the Due Process Clause of the Fifth Amendment, they were entitled to a pretrial adversarial (not ex parte) hearing where they could contest the charges against them. They argued that their constitutional claim is particularly strong because the seized money was necessary to retain their chosen lawyers.

The lower courts disagreed, however, holding that the only adversarial hearing the Kaleys were entitled to was their trial—the same trial for which where they can’t afford the long-serving counsel of their choice. Now at the Supreme Court, the Kaleys hope to vindicate the right to retain counsel of choice. Indeed, the U.S. Court of Appeals for the Eleventh Circuit is an outlier from the overwhelming majority of federal appellate courts, which use a more demanding test for such claims.

Supporting the Kaleys, Cato has filed a brief arguing that the stringent test developed in a 1976 case called Mathews v. Eldridge should be used to determine the scope of the Kaleys’ hearing. Under Mathews, where the government seeks to restrain contested assets that would otherwise be used to retain counsel of choice, an adversarial hearing is required in which defendants can challenge the indictment used to support forfeiture.

Because the expansion of forfeiture has given rise to well-documented abuses, the risk of error is great and the individual interests at stake are highly compelling. Ex parte hearings are insufficient to reduce the probability of error and the countervailing government interests are insufficient to tip the balance. 

Ultimately, the right to counsel of choice preserves the integrity of the legal process by ensuring that the defendant, not the government, controls whom he trusts with his case.

The Supreme Court will hear Kaley v. United States this fall.

A Legal Blow to Cities That Want to Take Your Property

As Roger Pilon has previously noted, on Tuesday, June 25, the Supreme Court issued a decision that helps protect people’s property rights from greedy municipalities. On Thursday, the New York Times published an op-ed critical of that decision by Vermont Law School Professor John Echeverria, who considers it a blow to “sustainable development,” whatever that means. 

In the case, a Florida property owner named Coy Koontz Sr. wanted to fill and develop 3.7 acres of wetlands. To mitigate the wetland fill, Koontz offered to put 11 acres of his property (75 percent of the total) under a conservation easement. But the St. Johns River Water Management District denied the permit, saying it wanted either 13.9 acres of Koontz’s land (leaving him less than an acre, or just 5 percent of the total, for development) or for Koontz to spend a bunch of his money helping the district restore wetlands elsewhere.

Koontz sued, citing the Supreme Court’s Nollan and Dolan decisions. (Cato and the Institute for Justice filed an amicus brief supporting Koontz.) In the Nollan/Dolan cases, permits were granted on the condition that the property owners give some of their land to the public. The Supreme Court had held that such conditions were an unconstitutional taking of private property.

The Florida Supreme Court rejected Koontz’s argument, saying that there was a big difference between his situation and the Nollan/Dolan cases. In the latter cases, the permits were granted conditional upon the property owners giving up land. In Koontz’s case, the permit was denied unless he gave up land or money.

Echeverria considers these differences to be so clear and obvious that he is amazed that five Supreme Court justices were bamboozled into overturning the Florida court’s decision. After all, granting a permit conditional on giving up your land is completely different form denying a permit unless you are willing to give up your land. Moreover, giving you a choice between giving up your money or property is completely different from simply demanding that you give up your land.

A Great Year for Cato at the Supreme Court

The Supreme Court’s term is over, with 75 cases having been argued and decided. It’s safe to say that the most significant ones were those decided this week, on the politically fraught subjects of affirmative action, the Voting Rights Act and gay marriage. I’m extremely proud that Cato was on the winning side of each of these issues. In fact, we were the only organization to file briefs supporting the challengers on each one (Fisher v. UT-AustinShelby County v. Holder, Windsor v. United States Perry v. Hollingsworth).

That says a lot. Not that the Supreme Court always takes its guidance from us – would that it were so! – but that we’re consistent in embracing the Constitution’s structural and rights-based protections for individual freedom and self-governance. It’s gratifying that the Supreme Court saw it our way in those “big” cases, even if Fisher was an extremely narrow decision and the others were all 5-4.

But that’s not all. After finishing my commentary on Windsor and Perry last night, I was curious to see how we did overall, beyond the high-profile cases. It turns out that we went 15-3 on the year. That is, looking purely at briefs we filed on the merits – you can see our record on briefs supporting cert petitions here – the Supreme Court ruled our way 15 times and against us three (and I can assure you that we don’t pick cases strategically to inflate our winning percentage. (I don’t count Perry in either column, by the way. While we ended up with a favorable result, Prop 8 struck down, the Court decided the case on standing grounds, incorrectly in my view).

Again, I’m not claiming that the Court was heavily influenced by briefs with Cato’s (or my) name on them – there’s just no way to know, and even briefs that are cited may be less influential than others – but many, many of these decisions track our thinking. That’s also gratifying, regardless of how the justices reached their conclusions.  

For the record, here’s the list of cases in which we filed this term (in order of argument):

Winning side (15): Kiobel v. Royal Dutch PetroleumArkansas Game & Fish Commission v. United States, Fisher v. UT-Austin, Florida v. Jardines, Bailey v. United States, Comcast v. Behrend, The Standard Fire Insurance Co. v. Knowles, Gabelli v. SEC, Koontz v. St. Johns River Water Management DistrictPPL Corp. v. IRSShelby County v. Holder, Horne v. U.S. Dept. of Agriculture, Windsor v. United StatesAID v. AOSISekhar v. United States

Losing side (3): City of Arlington v. FCCSalinas v. TexasUnited States v. Kebodeaux

My colleague Walter Olson has already compared our record to the greatest sports teams of all time, as well as what I consider to be the most dominate year by a baseball player, Sandy Koufax in 1963 (who went 25-5 and was the regular season and World Series MVP). I just wish that The Man With the Golden Arm could have had as long a career as Cato’s amicus brief program.

The Court Trims The Indian-Adoption Law. Enough To Make It Constitutional?

Today, in Adoptive Couple v. Baby Girl, the Supreme Court dodged the constitutional flaws of the Indian Child Welfare Act, instead choosing to rely on statutory interpretation to reverse a lower court’s troubling decision. The very first sentence of Justice Alito’s majority opinion hints at one of the underlying constitutional difficulties with ICWA, its assignment of family-law entitlements by race: “This case is about a little girl (Baby Girl) who is classified as an Indian because she is 1.2% (3/256) Cherokee.” Justice Thomas’s important concurrence points to another reason to doubt the statute’s constitutionality—its ouster of state courts from their traditional supremacy in family law, based on sources of federal authority (such as the Indian Commerce Clause) that have never been recognized as supporting such ouster.

Justice Sotomayor’s dissent has some force in arguing that the majority is departing from the most natural reading of ICWA’s text, as well as Congress’s likely intent, and in particular that it may be casting doubt on some rights of biological, noncustodial Indian fathers that Congress may have intended the law to protect. As Justice Thomas rightly argues, however, today’s ruling makes sense in light of the doctrine of constitutional avoidance, in which the Court construes doubtful laws so as to avoid possible unconstitutionality. Eventually, if not in this case, ICWA’s constitutional difficulties will be back before the Court in a form it can’t evade. My April coverage of the case in Reason is here; background at SCOTUSBlog, Overlawyered, and RadioLab.

Supreme Court Restores Constitutional Order, Strikes Down Outdated Voting Rights Act Provision

In striking down Section 4 of the Voting Rights Act, the Supreme Court restored a measure of constitutional order to America. Based on 40-year-old data showing racial disparities in voting that no longer exist, this provision subjected a now-random assortment of states and localities to onerous burdens and unusual federal oversight. Recognizing that the nation has changed, the Court aptly ended the extraordinary intrusion in state sovereignty that can no longer be justified by the facts on the ground.

“If Congress had started from scratch,” Chief Justice Roberts wrote for the majority, “it plainly could not have enacted the present coverage formula. It would have been irrational for Congress to distinguish between States in such a fundamental way.” And so this law must fall.

Of course, the Court really should’ve gone further, as Justice Thomas pointed out in a concurring opinion. The Court’s explanation of Section 4’s anachronism applies equally to Section 5. In practice, however, Congress will be hard-pressed to enact any new coverage formula because the pervasive, systemic discrimination in voting that justified such an exceptional intrusion into the normal constitutional order is now gone.

And that’s a good thing. Today’s ruling underlines, belatedly, that Jim Crow is dead.

New Hampshire Court’s School Choice Decision Was Flawed and Unprecedented

Last week, a New Hampshire trial court declared that the state’s nascent scholarship tax credit (STC) program could not fund students attending religious schools. The Granite State’s STC program grants tax credits to corporations worth 85 percent of their contributions to nonprofit scholarship organizations that aid low- and middle-income students attending the schools of their choice.

Writing on the Washington Post’s Answer Sheet blog, Professor Kevin Welner of the University of Colorado at Boulder mocked supporters of the program who criticized the decision. Welner argues that school choice advocates should have expected this decision, declaring that it was “unsurprising” that the court should find the program (partially) unconstitutional. But what Welner calls unsurprising is actually unprecedented.

Only toward the bottom of his post does Welner reveal that the only high courts to address the issue thus far—the U.S. Supreme Court and the Arizona supreme court—have ruled STC programs constitutional in their entirety. Indeed, though all but two of the remaining ten states with STC programs have similar “Blaine Amendment” provisions in their state constitutions, opponents haven’t even bothered to challenge their constitutionality. Additionally, other state courts have ruled on the question of whether tax credits constitute “public money” in a manner consistent with the previous STC cases, demonstrating that the courts’ rulings were not the aberrations that Welner imagines them to be.

If school choice supporters had a reason not to be surprised, it was because the ACLU and Americans United for Separation of Church and State shrewdly went judge shopping. That’s why they brought their lawsuit in Strafford County instead of Merrimack County, where the state capital is located. Their strategy seemed to pay off, as the judge’s decision relies heavily on the dissenting opinions in the U.S. Supreme Court and Arizona supreme court decisions, and misapplies the limited precedent from New Hampshire. Nevertheless, the final decision rests with the New Hampshire supreme court. As I detail below, logic and precedent suggest that they should overturn the lower court’s decision.