Tag: Supreme Court

Connecticut, Drunk on Power, Uses Bottle Bill to Steal Money

For nearly 30 years, Connecticut beverage distributors received the unclaimed refund value of recycled bottles as part of the state’s Bottle Bill, which set up a refund system for used bottles as an attempt to encourage recycling. As in other states, the law requires beverage dealers to pay refunds for every bottle turned in.

Fiscal troubles in 2008 prompted Connecticut to amend the law, however, to require a “deposit account” from which distributors were to pay the refunds. This requirement was intended to aid the state environmental agency to study the rates of deposit payments and returns. The following year, the fiscal situation worsened, and the Bottle Bill was again amended, this time to require the remaining funds in the deposit accounts (after returns were paid out) to be paid to the state—retroactively including any unpaid remainder funds since the accounts went into effect in 2008.

A. Gallo & Co. and other beverage distributors in Connecticut saw this as an uncompensated taking of their property and sued the state. They took their case through the state court system, but even the Connecticut Supreme Court turned a blind eye, holding that beverage distributors never had a property right in the remainder funds in the first place. The distributors have now asked the U.S. Supreme Court to hear their case, and Cato joined the New England Legal Foundation, the Southeastern Legal Foundation, and the National Federation of Independent Business on a brief supporting their petition.

We argue that Connecticut’s budgetary troubles are no excuse for violating a longstanding property right without compensation. Moreover, by twisting its statutory interpretation to satisfy political pressures, the Connecticut Supreme Court has made itself complicit in the uncompensated taking. It’s bad enough when strapped-for-cash legislatures unfairly force public burdens onto the shoulders of private parties to feed their spending addictions, but when all three government branches – including the one entrusted with soberly interpreting the law, especially in times of fiscal emergency – get drunk on power and deny even the existence of a property right, it’s time for a Supreme Court intervention.

The Supreme Court will decide by winter’s end whether to take the case of A. Gallo & Co. v. Esty.

Antidiscrimination Law Can’t Trump the Freedom of Speech

While Cato supports marriage equality, a commitment to equality under the law can’t justify the restriction of constitutionally protected fundamental rights like freedom of speech or association. Yet increasingly, legislation and judicial rulings sacrifice individual liberties at the altar of antidiscrimination law. Perhaps the most prominent current example of that trend is the case of the New Mexico wedding photographer.

Elane Photography, a Christian-identified business in Albuquerque, declined to photograph Vanessa Willock’s same-sex commitment ceremony based on the business owners’ personal opposition to gay marriage. 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. The state trial and appellate courts affirmed that order.

The case then went before the New Mexico Supreme Court, where Cato, along with same-sex-marriage-supporting law professors Eugene Volokh and Dale Carpenter, filed an amicus brief urging the court to reverse the court of appeals. Our brief explained that photography, unlike many other wedding-related businesses (e.g., caterers, hotels, limousine drivers), is an art form protected by the First Amendment—even if it’s not political and even if the photos are taken for commercial purposes. 

The U.S. Supreme Court ruled in Wooley v. Maynard—the 1977 “Live Free or Die” license plate case out of New Hampshire—that forcing people to speak is just as unconstitutional as preventing or censoring speech. 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.

Alas, the New Mexico Supreme Court also ruled against Elane Photography, holding that the First Amendment only prohibits compelling an individual to speak the government’s message, and that even if the state law did infringe on Elane Photography’s speech rights, those rights could not be vindicated because they conflicted with Willock’s right to equal access to public accommodations. Cato, again joined by professors Volokh and Carpenter, has again filed a brief, this time urging the U.S. Supreme Court to hear the case, because the New Mexico court’s reasoning is incorrect and incompatible with Wooley. 

The Supreme Court has never held that the compelled speech doctrine is only applicable when an individual is forced to serve as a courier for the message of another. Instead, the Court has said repeatedly that what the First Amendment protects is a “freedom of the individual mind,” which the government violates whenever it tells a person what she must or must not say. Forcing a photographer to create a unique piece of art violates that freedom of the mind.

Our brief also argues that the New Mexico Supreme Court was wrong to hold that the First Amendment can be abridged if a state law creates a “new right” that the constitutionally protected expression allegedly violates. The U.S. Supreme Court has never allowed such operation of state law, and allowing the New Mexico court’s reasoning to stand would send a dangerous message to state legislators and courts that the Bill of Rights is merely a suggestion, not a rule.

Vanessa Willock has until February 11 to file her opposing brief, and soon thereafter the Court will decide whether to take the case. If it does, Elane Photography v. Willock would likely be argued at the beginning of next term, in October, with an ultimate decision by June 2015.

Obamacare’s Top 10 Constitutional Violations

Two years ago this week, I published an op-ed called “President Obama’s Top 10 Constitutional Violations.” Although it didn’t go into depth about any particular issue, it struck a chord (note to aspiring pundits: readers and media bookers like lists, particularly at year’s end).

There’s so much material to choose from for an updated piece on which I’m long overdue, but in the meantime the House Judiciary Committee had an important hearing last week on the president’s constitutional duty “to take care that the laws be faithfully executed.” My colleagues Michael Cannon and Nicholas Quinn Rosenkranz testified, as did GW law professor Jonathan Turley (who voted for Obama in 2008 and is not known to be libertarian or conservative), and their devastating testimony is a collective tour de force regarding this administration’s incredible and unconstitutional power grab. (My friend and frequent sparring partner Simon Lazarus of the Constitutional Accountability Center also testified, on the other side, offering a valiant if ultimately insufficient defense.)

Given the state of current affairs, the hearing focused on Obamacare, whose problematic rollout should have come as no surprise to those who follow this blog. Quite apart from the healthcare.gov fiasco – incompetent, sure, but it’s not unconstitutional to have a bad website – you simply cannot require expansive health “insurance” for all without regard to preexisting conditions and expect insurers not to cancel nonconforming policies or increase premiums. (Forget never running a business or caring about the Constitution; has nobody in the White House ever taken an economics class?)

After watching snippets of the hearing and reading the written testimony, I thought maybe I should start my “top 10 constitutional violations” update with the Affordable Care Act alone. But it seems that I’m not the only one thinking along these lines. Hot off the presses, at 10am today, the office of Senator Ted Cruz (R-TX) released its second report on “The Obama Administration’s Attempts to Expand Federal Power” – the first was on the Supreme Court’s unanimous rejection of the Justice Department’s more outlandish positions, a trend I’ve written about as well – titled “The Administration’s Lawless Acts on Obamacare and Continued Court Challenges to Obamacare.”

Here are the seven items the new Cruz report highlights:

Category One: Implementation Contrary to Statutory Text

  1. Unilateral grant of a one-year delay on all Obamacare health insurance requirements.
  2. Unilateral delay of the employer mandate.
  3. Unilateral delay of out-pocket caps.
  4. Allowing congressional staff to continue on government-subsidized health care.

Category Two : Pending Court Challenges

  1. Violates the Origination Clause because it’s a revenue-raising bill that originated in the Senate.
  2. Contraception/abortifacient mandate violates religious liberties.
  3. Expansion of employer mandate’s penalty through IRS regulation.

Add to those the individual mandate (which the Supreme Court struck down before Chief Justice Roberts rewrote and upheld the provision as a tax), the coerced expansion of Medicaid (which the Court made voluntary), and the Independent Payment Advisory Board (litigation ongoing), and you’ve got an even ten. And that’s without straining to find the constitutional defects buried in thousands of pages of legislation and hundreds of thousands of pages of regulations.

Forget PPACA, ACA, and Obamacare; what people really ought to call the healthcare law is the “Constitutional Scholar Full Employment Act.”

Against Forced Unionization

The Supreme Court has long applied exacting scrutiny to limitations placed on the freedoms of speech and association. Unfortunately, the Court has not extended such protection to those forcibly unionized.

In Abood v. Detroit Board of Education (1977), the Court accepted that promoting “labor peace”—limiting the number of competing workplace interests that bargain over the conditions of employment—was an interest so compelling that a state may mandate its employees’ association with a labor union, forcing them to subsidize that union’s speech and submit to it as their exclusive representative for negotiating with the government regarding their employment. Since that time, more than a dozen states have forcibly unionized independent contractors who are paid through Medicaid.

In 2003, Illinois forced its home healthcare workers to join and pay dues to the Service Employees International Union as their sole representative before the state. Workers subject to this coerced association have challenged the law as a violation of their First Amendment rights and the case is now before the Supreme Court. Cato, joined by the National Federation of Independent Business, has filed an amicus brief in support. We argue that Abood was wrong when it was decided and should now be overturned. Abood simply assumed without analysis that the Supreme Court had already recognized “labor peace” as a “compelling interest.”

But the cases Abood relied on only regarded “labor peace” as justifying Congress’s exercise of its Commerce Clause authority to regulate labor relations, not as a basis to override workers’ First Amendment rights—and a Commerce Clause analysis is logically irrelevant to the First Amendment. Furthermore, Abood turns the logic of the First Amendment on its head: Unions are designated as the exclusive representatives of those employees that are compelled to support them for the sole purpose of suppressing the speech of dissenting employees, but under Abood it is exactly this suppression of speech that validates coerced association under the First Amendment. Such logic can’t be reconciled with the Court’s strict scrutiny of laws in other First Amendment contexts.

Even if the Court chooses to maintain Abood, it should reject the coercive programs at issue here because they’re unsupported by Abood’s rationale and serve no other compelling state interest. The homecare workers subject to the law aren’t employed by the state. Although they’re paid through a Medicaid disbursal, every crucial aspect of the employment relationship, including workplace conditions, hiring, and firing, is determined by the individual cared-for by the worker. The union is thus limited to petitioning the state for greater pay and benefits. Given this limited scope, there can be no serious claim that SEIU’s exclusive representation of some workers has freed Illinois from any great burden due to “conflicting demands” from other workers. Whatever Abood’s long-term vitality, that flawed case doesn’t support the compelled unionization of workers who are in no way managed by the state.

The Supreme Court will hear Harris v. Quinn on January 21.

This blogpost was co-authored by Cato legal associate Lauren Barlow.

President Obama Can’t Dictate Senate Rules

While much attention has focused on the Senate’s recent vote to eliminate the ability to filibuster judicial and executive nominations, another aspect of constitutonal separation of powers will come to the fore in January when the Supreme Court hears argument in NLRB v. Noel Canning.

The Recess Appointments Clause, which gives the president the power to “fill up Vacancies” in federal offices and judgeships that “may happen during the Recess of the Senate,” allows the president to fill vacancies without going through the normal requirements of obtaining the Senate’s “advice and consent.” The Framers understood that, particularly during the nation’s early days, the president and the rest of the executive branch would be the only members of the government in Washington for the entire year, so important offices may become vacant while the Senate was out of session. The Recess Appointments Clause would thus be an important but rarely used exception to the normal confirmation process.

For nearly 200 years, however, presidents have been whittling down the clause’s requirements. For the first three decades of the Constitution, the clause was interpreted to apply only to vacancies that occurred during a recess—perhaps because a cabinet member died—and didn’t apply at all to vacancies that existed while the Senate was in session. During the Monroe administration, the attorney general first authorized appointments to offices that were vacant during the previous recess.

The Supreme Court Takes up Old-Timey Property Rights

In the 19th Century, when railroads were being built across the West, the federal government granted significant land and benefits to railroad companies. The Great Railroad Right-of-Way Act of 1875 empowered the government to grant railroad companies right-of-way easements to build tracks across others’ land to facilitate the expansion of the nation’s railways – that is, railroads were granted a right to use sections of another’s property for railroad purposes without owning title to the land underneath. In 1976, the government sold the Brandt family a parcel of land in Wyoming which was crossed by one of these railroad easements.

In 2001, the railroad that owned the easement formally abandoned all claims to it.  Typically, when this happens, the easement is simply extinguished and the owner of the land may then use the former easement however he or she wishes. But the federal government had different plans for the thin strip running through the Brandts’ land. In 2006, the government sued for title to the land lying under the former easement on the theory that it had retained a “reversionary interest” in the land when granting the railroad the right of way easement, even though it never actually set aside any interests when granting the easement.  The government thus claimed that after the railroad abandoned the easement (after only ever owning an easement and never full title to the land), full title to the land “reverted” back to the federal government. The Brandts argue that under the basic principles of the common law of property, the government had no such right, and that even if any legislative act allowed the government to somehow acquire their land, such an act would require payment of just compensation under the Fifth Amendment’s Takings Clause.

Although this may seem like a small, unique problem, the scope of the Old West’s railway system was huge and those old easements criss-cross the land of thousands of property owners. In 1983, Congress amended the National Trails System Act to allow the government to take abandoned railroad easements and turn them into land for public recreation and “railroad banking.” Landowners have been fighting the taking of their property under the Trails Act ever since, claiming, as here, that the government’s original grant to the railroads contained no residual right of possession for the government.

After the trial court rejected the government’s radical claims, the U.S. Court of Appeals for the Tenth Circuit split with the Seventh and Federal Circuit courts (and ignored some of its own precedent on the way) and held that the government did indeed have a reversionary interest in the land, even though it never actually carved itself an exception, as the law requires. The Brandts, faced with the uncompensated government confiscation of a strip of land cutting their property in two, have now brought their case to the Supreme Court in an attempt to keep the government’s hands off their land and off the land of thousands of other landowners in their same position.

After supporting the Brandts’ request for Supreme Court review, Cato, along with four other groups and several property law professors – including Richard Epstein – has now filed a brief supporting the Brandts’ fight against the government’s poorly justified land-grab. We argue that the Tenth Circuit’s decision threatens to unsettle longstanding presumptions of property law because it willfully ignores basic differences between easements and “fee estates” in land and other basic principles of property law like the “strip and gore” doctrine (which holds, for example, that land under a right-of-way is split down the center and owned by those who own the land on either side of the easement).

This case is important, because there are many thousands of miles of old railroad rights-of-way crossing the countryside that would be potentially subject to uncompensated government confiscation if the Court were to follow the Tenth Circuit’s approach.  In addition, some 3,000 to 4,000 miles of old railroad easements are abandoned every year. It’s not entirely surprising that the government would go full throttle on such a shoddy legal argument for the chance to be able to snatch this land back without having to pay for it. The surprising thing is that the Tenth Circuit green-lighted it. We urge the Supreme Court to switch tracks.

The Court will hear argument in Brandt v. United States on January 14.

Cato legal associate Julio Colombo co-authored this blogpost.

Supreme Court Should End Advertiser’s Kafkaesque Nightmare

Douglas Walburg faces potential liability of $16-48 million. What heinous acts caused such astronomical damages? A violation of 47 C.F.R. § 16.1200(a)(3)(iv), an FCC regulation that enables lawsuits against senders of unsolicited faxes.

Walburg, however, never sent any unsolicited faxes; he was sued under the regulation by a class of plaintiffs for failing to include opt-out language in faxes sent to those who expressly authorized Walburg to send them the faxes. 

The district court ruled for Walburg, holding that the regulation should be narrowly interpreted so as to require opt-out notices only for unsolicited faxes. But on appeal, the Federal Communications Commission, not previously party to the case, filed an amicus brief explaining that its regulation applies to previously authorized faxes too. Walburg argued that the FCC lacked statutory authority to regulate authorized advertisements. In response, the FCC filed another brief, arguing that the Hobbs Act prevents federal courts from considering challenges to the validity of FCC regulations when raised as a defense in a private lawsuit. Although the U.S. Court of Appeals for the Eighth Circuit recognized that Walburg’s argument may have merit, it declined to hear it and ruled that the Hobbs Act indeed prevents judicial review of administrative regulations except on appeal from prior agency review. 

In this case, however, Walburg couldn’t have raised his challenge in an administrative setting because the regulation at issue outsources enforcement to private parties in civil suits! Moreover, having not been charged until the period for agency review lapsed, he has no plausible way to defend himself from the ruinous liability he will be subject to if not permitted to challenge the regulation’s validity. Rather than face those odds, Walburg has petitioned the Supreme Court to hear his case, arguing that the Eighth Circuit was wrong to deny him the right to judicial review without having to initiate a separate (and impossible) administrative review. 

Cato agrees, and has joined the National Federation of Independent Business on an amicus brief supporting Walburg’s petition. We argue that the Supreme Court should hear the case because the Eighth Circuit’s ruling permits administrative agencies to insulate themselves from judicial review while denying those harmed by their regulations the basic due-process right to meaningfully defend themselves. The Court should hear the case because it offers the opportunity to resolve lower-court disputes about when the right to judicial review arises and whether a defendant can be forced to bear the burden of establishing a court’s jurisdiction.

These are important due-process implications raised in this case, and the Court would do well to adopt a rule consistent with the Eleventh Circuit’s holding on this issue—one that protects the right to immediately and meaningfully defend oneself from unlawful regulations. Otherwise, more and more Americans will end up finding themselves at the bad end of obscene regulatory penalties by unaccountable government agencies, with no real means to defend themselves.

The Court will decide whether to take Walburg v. Nack early in the new year.