Tag: Supreme Court

This Is What Political Judging Looks Like

Today, as I predicted six months ago, the Supreme Court summarily reversed the Montana Supreme Court’s attempt to nullify the controversial 2010 decision of Citizens United v. FEC. The Montana Supreme Court had essentially ruled that Citizens United is a decision based on facts rather than law—that is, that Montana’s situation of corporate corruption in elections was factually unique, thus exempting the state from compliance with Citizens United. In an admirable dissent, Justice James C. Nelson explained precisely where the court went wrong:

Unquestionably, Montana has its own unique history.  No doubt Montana also has compelling interests in preserving the integrity of its electoral process and in encouraging the full participation of its electorate.  And Montana may indeed be more vulnerable than other states to corporate domination of the political process.  But the notion argued by the Attorney General and adopted by the Court—that these characteristics entitle Montana to a special “no peeing” zone in the First Amendment swimming pool—is simply untenable under Citizens United.

Admittedly, I have never had to write a more frustrating dissent.  I agree, at least in principle, with much of the Court’s discussion and with the arguments of the Attorney General.   More to the point, I thoroughly disagree with the Supreme Court’s decision in Citizens United.  I  agree, rather,  with the eloquent and, in my view, better-reasoned dissent of Justice Stevens.  As a result, I find myself in the distasteful position of having to defend the applicability of a controlling precedent with which I profoundly disagree.

That said, this case is ultimately not about my agreement or disagreement with the Attorney General or our satisfaction or dissatisfaction with the Citizens United decision. Whether we agree  with the Supreme Court’s interpretation of the First Amendment is irrelevant.  In accordance with our federal system of government, our obligations here are to acknowledge that the Supreme Court’s interpretation of the United States Constitution is, for better or for worse, binding on this Court and on the officers of this state, and to apply the law faithful to the Supreme Court’s ruling.

Unfortunately, the Supreme Court’s reliably liberal justices did not take the same admirable position as Justice Nelson. In a situation when they should have unanimously asserted the Supreme Court’s position as the final expositor the Constitution and chastised the Montana Supreme Court for its temerity, justices Kagan, Breyer, Sotomayor, and Ginsberg instead decided to re-visit their opposition to Citizens United. All four justices re-registered their dissent with Citizens United, but they did not go so far as to vote to re-hear the case. And given that only four votes are required to grant certiorari, re-hearing the case was an option available to them. It’s good they did not go this far. However, while I am a believer in registering principled dissents, this was not the time to do so. In addition to being constitutionally incorrect, overturning Citizens United after just two years on the books would have severely impaired the legitimacy of the Court.

This is what political judging looks like. While it has become de rigueur to refer to the five conservative justices as being mere pawns of their political opinions, such attacks are hardly ever leveled against the four reliable liberal justices. Here, however, they were driven by their political opinions rather than their duties as Supreme Court justices bound to ensure that the Constitution applies equally in every state.

My colleague John Samples has more here.

Supreme Court: Immigration Reform Needs to Come from Congress

Everyone will find something to quibble with in today’s highly technical ruling in Arizona v. United States, which is not an indication of some baby-splitting grand compromise but rather that this is a really complex area of law.  The Court, in an opinion by Justice Kennedy and joined by four other justices including Chief Justice Roberts, upheld (at least against facial challenge) Section 2(B) of Arizona’s SB 1070, which requires law enforcement officers to inquire into the immigration status of those they’ve lawfully detained if they have reasonable suspicion that the person is in the country illegally.  The Court found, however, that federal law trumped (“preempted”) three other provisions: Section 3, which makes it a state crime to violate federal alien registration laws (because Congress so comprehensively “occupied the field” of alien registration); Section 5(C), which makes it a state crime for an illegal immigrant to “knowingly apply for work, solicit work in a public place or perform work as an employee or independent contractor” (because it conflicts with the method of enforcement chosen by Congress – regulating employers rather than employees); and Section 6, which allows law enforcement officers to arrest someone they have probable cause to believe has committed a deportable offense (because questions of removability are entrusted to federal discretion).  Justices Scalia and Thomas wrote partial dissents to say they would’ve upheld the entire law.  Justice Alito also wrote separately to say he would’ve only found Section 3 preempted.

My own view most closely aligns with Judge Alito’s—I would uphold three of the four provisions, though for me 5(C) is the problematic one—but more important than the legal weeds are the two policy guides the Supreme Court has given:

  1. The federal government has significant, near-exclusive powers to regulate immigration and even state laws that merely “mirror” federal immigration laws are on shaky legal ground;*
  2. Although federal lawmaking trumps state lawmaking, federal policymaking does not.  Prosecutorial discretion, resource allocation decisions, and other policy processes do not preempt duly enacted state law.

In short, immigration policy by either state action or executive whim won’t cut it. The federal government—Congress and the president, working out that grand compromise—needs to fix our broken immigration system.

* Note that most of SB 1070 has been in effect since July 2010.  The federal government only challenged six of its provisions, and two (regarding transporting/harboring illegal aliens) were upheld by the district court, without further appeal by the government.  In other words, state laws dealing purely with state prerogatives (such as crime or business regulation) are on much firmer legal ground.

The IRS’s Illegal Employer Tax

With all eyes on the Supreme Court, whose ruling on ObamaCare’s individual mandate could come as early as today, almost no one noticed that last month the IRS imposed an illegal tax on employers of up to $3,000 per worker.

Jonathan Adler and I explain in today’s USA Today that this illegal tax is the indirect but very real result of the IRS offering ObamaCare’s tax credits and subsidies in health insurance “exchanges” created by the federal government, even though ObamaCare restricts those entitlements – explicitly, laboriously, and unambiguously – to Exchanges established by states.

That illegal action has the effect of imposing ObamaCare’s $2,000-$3,000 per worker tax (i.e., the “employer mandate”) on employers who otherwise would be exempt (i.e., employers in states that do not create an Exchange). Perhaps President Obama thought “taxation without representation” would be a winning campaign slogan.

If the Supreme Court fails to strike down ObamaCare’s employer mandate, Exchanges, and health insurance tax credits and subsidies, this thoroughly unconstitutional IRS rule will begin illegally taxing employers in 2014.

Reps. Scott DesJarlais (R-TN) and Phil Roe (R-TN) have introduced a resolution under the Congressional Review Act that would block the rule. Barring that, expect more angry employers to haul ObamaCare into federal court.

Adler discusses the IRS rule here:

Adler on How the IRS Is Rewriting ObamaCare to Tax Employers

Jonathan H. Adler is the Johan Verheij Memorial Professor of Law and director of the Center for Business Law and Regulation at Case Western Reserve University.  In this new Cato Institute video, Adler explains how a recently finalized IRS rule implementing ObamaCare taxes employers without any statutory authority.

For more, see this previous Cato video, “States Should Flatly Reject ObamaCare Exchanges”:

See also our November 2011 op-ed on this IRS rule that appeared in the Wall Street Journal.

NRO Op-ed: IPAB, ObamaCare’s Super-Legislature

Yesterday, Cato released “The Independent Payment Advisory Board: PPACA’s Anti-Constitutional and Authoritarian Super-Legislature,” by the Goldwater Institute’s Diane Cohen and me.

Today, National Review Online publishes our op-ed based on that study. An excerpt:

[U]nder the statute as written, if Congress fails to repeal IPAB in 2017, the secretary must implement IPAB’s edicts even if Congress votes to block them. Nancy Pelosi was right: We needed to pass ObamaCare to find out what was in it. We’re still finding out.

ObamaCare is so unconstitutional, it’s absurd. It delegates legislative powers that Congress cannot delegate. It creates a permanent super-legislature to supplement—and when conflicts arise, to supplant—Congress. It tries to amend the Constitution via statute rather than the amendment procedure of Article V.

ObamaCare proves economist Friedrich Hayek’s axiom that government direction of the economy threatens both democracy and freedom. After decades of failing to deliver high-quality, low-cost health care through Medicare, Congress struck upon the “solution” of creating a permanent super-legislature—or worse, an economic dictator—with the power to impose taxes and other laws that the people would reject.

Fortunately, one Congress cannot bind future Congresses by statute. If the Supreme Court fails to strike down ObamaCare, Congress should exercise its power to repeal IPAB—and the rest of ObamaCare with it.

Cohen is also the lead attorney for the plaintiffs in Coons v. Geithner, which challenges the constitutionality of IPAB and which a federal court has put on hold pending the Supreme Court’s ruling in the individual-mandate and Medicaid-mandate cases.

Cato Study: Heretofore Unreported ObamaCare ‘Bug’ Puts IPAB Completely beyond Congress’ Reach

Today, the Cato Institute releases a new study by Diane Cohen and me titled, “The Independent Payment Advisory Board: PPACA’s Anti-Constitutional and Authoritarian Super-Legislature.” Cohen is a senior attorney at the Goldwater Institute and lead counsel in the Coons v. Geithner lawsuit challenging IPAB and other aspects of the Patient Protection and Affordable Care Act of 2010, a.k.a. ObamaCare.

From the executive summary:

When the unelected government officials on this board submit a legislative proposal to Congress, it automatically becomes law: PPACA requires the Secretary of Health and Human Services to implement it. Blocking an IPAB “proposal” requires at a minimum that the House and the Senate and the president agree on a substitute. The Board’s edicts therefore can become law without congressional action, congressional approval, meaningful congressional oversight, or being subject to a presidential veto. Citizens will have no power to challenge IPAB’s edicts in court.

Worse, PPACA forbids Congress from repealing IPAB outside of a seven-month window in the year 2017, and even then requires a three-fifths majority in both chambers…

IPAB’s unelected members will have effectively unfettered power to impose taxes and ration care for all Americans, whether the government pays their medical bills or not. In some circumstances, just one political party or even one individual would have full command of IPAB’s lawmaking powers. IPAB truly is independent, but in the worst sense of the word. It wields power independent of Congress, independent of the president, independent of the judiciary, and independent of the will of the people.

The creation of IPAB is an admission that the federal government’s efforts to plan America’s health care sector have failed. It is proof of the axiom that government control of the economy threatens democracy.

Importantly, this study reveals a heretofore unreported feature that makes this super-legislature even more authoritarian and unconstitutional:

[I]f Congress misses that repeal window, PPACA prohibits Congress from ever altering an IPAB “proposal.”

You read that right.

The Congressional Research Service and others have reported that even if Congress fails to repeal this super-legislature in 2017, Congress will still be able to use the weak tools that ObamaCare allows for restraining IPAB. Unfortunately, that interpretation rests on a misreading of a crucial part of the law. These experts thought they saw the word “or” where the statute actually says “and.”

How much difference can one little conjunction make?

Under the statute as written, if Congress fails to repeal IPAB in 2017, then as of 2020 Congress will have absolutely zero ability to block or amend the laws that IPAB writes, and zero power to affect the Secretary’s implementation of those laws. IPAB will become a permanent super-legislature, with the Secretary as its executive. And if the president fails to appoint any IPAB members, the Secretary will unilaterally wield all of IPAB’s legislative and executive powers, including the power to appropriate funds for her own department. It’s completely nutty, yet completely consistent with the desire of ObamaCare’s authors to protect IPAB from congressional interference.

It’s also completely consistent with Friedrich Hayek’s prediction that government planning of the economy paves the way for authoritarianism.

Can the Government Destroy Propety Values ‘Temporarily’ Without Compensation?

This blogpost was co-authored by Trevor Burrus.

A seemingly complicated legal case that has caught Cato’s attention, CCA Associates v. United States, boils down to a simple constitutional question: If the government reneges on a contract and forces a property owner to rent apartments at below-market rates for longer than originally agreed, does it constitute a taking under the Fifth Amendment (which would require the government to pay just compensation)?

In 1961, Congress amended the National Housing Act to create incentives for private builders to supply housing to low- and moderate-income families. Builders were given below-market mortgages backed by the federal government and, in return, the owners agreed to certain restrictions from the Department of Housing and Urban Development, the most relevant being limitations on raising rent. Owners were also given the right to pre-pay the 40-year mortgage after 20 years, however, freeing them at that time from their rent-control obligations.

In 1990, as one 20-year period came to a close, Congress took away the owners’ right to pre-pay their mortgages. In 1996, however, Congress returned the property owners’ right to pre-pay. Therefore, between 1991 (when the original 20-year period would have lapsed) and 1996, the property owners were forced to rent at below-market rates.

CCA Associates is one of many similarly situated property owners who are suing the federal government for its clear act of duplicity. CCA Associates’ case, among many others, has been bouncing back and forth between the Court of Federal Claims and the Federal Circuit for many years.

One of the key questions is how to determine the degree to which the government’s actions economically affected CCA Associates’ property. One view is that there was substantial economic impact during the five-year period between when Congress eliminated and then restored the pre-pay right – CCA Associates lost approximately 81% of the property’s possible value during those five years. Another view looks at the impact during the five-year period as fraction of the entire life of the property, not just the diminished value during the five-year period. Under this calculation, CCA Associates only lost 18% of the total value of the property.

The Federal Circuit adopted the latter formula and held that 18% is not a substantial enough economic impact to constitute a Fifth Amendment taking. Cato has joined the National Federation of Independent Business, the Center for Constitutional Jurisprudence, and Professor Steven Eagle of George Mason University Law School on an amicus brief urging the Supreme Court to take CCA Associates’ case.

We argue that adopting the Federal Circuit’s answer to the so-called “denominator question” – that is, whether the denominator in the “economic impact” fraction should be the entire life of the property or the shorter (here five-year) period during which the government temporarily took the owners’ right to rent at the market price – could preclude all possible claims that the government committed a “temporary taking.” By choosing a big-enough denominator, courts can always characterize an economic impact as being below the constitutional threshold.

We also argue that, in applying the Supreme Court’s factors in the famous 1978 Penn Central case (which set up the analytical framework for regulatory takings), the Federal Circuit incorrectly treated the factors as a magic formula and ignored other relevant factors. Finally, we point out how courts are obviously confused about the proper standards to apply in these cases, thus creating a perfect time for the Supreme Court’s guidance.

The Court will decide this fall whether to hear CCA Associates v. United States.