Topic: Law and Civil Liberties

Sheldon Silver and the Price of Doing Science

Rumors of ethics problems have long swirled around long-time New York assembly speaker Sheldon Silver, many of them connected with his role as a private lawyer associated with a personal-injury firm whose interests extend to many government- and policy-related matters. This morning, according to multiple reports, the FBI took Silver into custody following a corruption investigation. 

The complaint (courtesy WSJ, more here and here) alleges improprieties with Silver’s income both from a real estate law firm patronized by developers and from asbestos-injury legal work. On the latter, it alleges that Silver directed hundreds of thousands of dollars in state research money to a university doctor in Manhattan, and that the doctor referred lucrative cases over asbestos-related mesothelioma to Silver’s law firm. The doctor is described as a “well-known expert” who “conducts mesothelioma research” at a center at his university dedicated to that purpose. The unnamed “Doctor-1” “has entered into an agreement with the USAO SDNY [U.S. Attorney’s Office for the Southern District of New York] under which he will not be prosecuted for the conduct described herein, and that obligates him to provide truthful information to and cooperate with the government.” [pp. 24-25]

As science has grown more dependent on government funding, libertarians have warned that the money isn’t really free. Whatever the stated intentions at first, legislators come to scrutinize science budgets with an eye toward what’s in it for them: promoting a favored policy initiative, catering to the whims of some constituent or family member, employing the right people in the right districts. And how deeply embarrassing it must be – assuming the truth of the prosecutors’ allegations, which of course are at this stage unproven – to support one’s work through state grants for medical research while quietly referring patients to the assembly speaker’s law firm. According to the complaint, the state paid $500,000 to the research center, while the asbestos-suit referrals brought Silver more than $3 million.

There must be a better way to fund scientific inquiry, and maybe that way involves less appropriation of tax moneys and more voluntary action. [adapted in part from a post at Overlawyered]

Obama’s SOTU: Opportunity Lost

In tonight’s SOTU address, President Obama plans to push policies aimed at “helping middle-class Americans.”

Why is that a sensible goal for policy?  Where are goals like liberty or economic efficiency?

What about scaling back excessive regulation, simplifying our byzantine tax code, or slowing the growth of unsustainable entitlements?

What about the huge range of policies that might encourage economic growth?

The President’s proposals–increased taxes on the rich, more handouts for the middle class–are about redistributing the economic pie; and they will shrink rather than grow that pie by distorting economic incentives.

None of this is likely to matter, of course; the Republican Congress will presumably block most of the President’s proposals.

But it’s sad that a lame-duck president with nothing to lose will not endorse something valuable and historic, like legalizing drugs, vastly expanding legal immigration, or withdrawing all our troops from the Middle East.

Alas, the Republicans would presumably block these policies as well, since Republicans, like Democrats, worry more about pandering to their constituents than promoting freedom or economic growth.

But taking a stand for liberty is a first step; on this score the President’s approach fails miserably.

Judges Shouldn’t Tell Businesses Which Products to Make and Market

New York State is standing athwart medical progress yelling “STOP!” In a move straight from the pages of Atlas Shrugged, the state sued Forest Laboratories, the subsidiary of pharmaceutical giant Actavis that makes the Alzheimer’s drug Namenda IR, to force the company to continue making the drug, which was being phased out in favor of the new Namenda XR (which, among other improvements, need only be taken once a day rather than twice—a not insignificant plus when dealing with Alzheimer’s patients!).

Why would New York’s attorney general want to interfere with medical progress and the development of a better drug that would improve the lives of potentially millions of Americans? Perhaps to reduce state drug costs—maybe the state feels that the marginal benefit from switching to XR isn’t worth the marginal cost—or to provide a competitive advantage to the generic pharmaceutical industry (under New York law, when a patent expires—as IR’s will in a few months—the remaining prescriptions automatically switch to generics).

The state’s claim relies on some very dubious antitrust law and seeks to force Forest Labs to keep producing and offering IR under the same “terms and conditions” as before XR came out. Not only would this keep patients using an older, inferior drug, it would effectively compel Forest to support its competitors’ business strategy. The generics were already set to benefit from the hundreds of millions of R&D dollars Forest Labs spent developing IR, but now they get free advertising too.

Maybe the state doesn’t like the incentives created by the interplay of patent and antitrust law and FDA regulations—drug companies constantly develop and promote new drugs that monetize new patents—but no possible legal reason justifies the injunction that the state sought, which a federal district court recently granted! Even worse, the injunction is breathtakingly vague; in responding to Forest Labs’ motion for clarification, the judge acknowledged the vagueness but didn’t change his order, wishing the company “good luck”!

Setting aside the policy and ethical considerations underlying New York’s maneuver, the injunction order is a legal travesty. Cato has thus filed a brief supporting Forest Labs before the U.S. Court of Appeals for the Second Circuit. We argue that the order is impermissibly vague, that the doctrine of constitutional avoidance requires interpreting the order as not actually compelling Forest Labs to engage in speech that is protected by the First Amendment, and that to construe the order as actually imposing speech obligations would render the order unconstitutional.

The First Amendment does more than just limit the government’s power to prevent people from speaking, after all: it also prohibits the government from telling people—including companies—what they must say. That is especially the case when, as here, the speech being compelled goes against the speaker’s self-interest and sincerely held beliefs on how best to treat Alzheimer’s. If the district court below actually believes the injunction passes jurisprudential muster, well, “good luck.”

The Second Circuit will hear argument in New York v. Actavis later this month.

Cato legal associate Julio Colomba contributed to this blogpost.

Did Supreme Court Telegraph Its Ultimate Ruling on Gay Marriage?

That’s the question I pose in my latest Forbes piece. Here’s a taste:

As any good lawyer knows, framing the question you ask a court is just as important — often more important — than providing a well-argued answer that helps your client. Well, when the Supreme Court, as expected, decided to take up gay marriage, it unexpectedly reframed the “questions presented” in the four cases it took up and consolidated for argument. Instead of accepting any of the formulations presented in the four petitions for review, it asked the parties to brief these two questions:

  1. Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex?
  2. Does the Fourteenth Amendment require a state to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state?

This was unusual; typically the justices simply decide whether to take a case based on the petitioners’ articulation. That’s why first-year legal-writing classes spend so much time working on those “questions presented.”

So what does this mean? UC-Irvine law professor Rick Hasen found the first question “odd” because it focused on state powers and obligations rather than individual rights, which ”perhaps keeps the court from getting into questions about heightened scrutiny for sexual orientation discrimination.” Harvard law professor Larry Tribe suggested that the reframed questions “technically leave open a middle path along which the court would prevent states from discriminating against same-sex couples lawfully married in their home states without requiring any state to take the affirmative step of issuing its own marriage licenses to same-sex couples.” (In my initial reaction to the cert grant, I speculated on the same compromise possibility but ultimately concluded that this was less likely than a clean win for the challengers on both questions.)

Read the whole thing. And I also recorded a podcast reacting to the Court’s decision to take up these cases.

Harvard Study of CBO Reports Says Nothing New or Interesting about King v. Burwell

Vox’s Sarah Kliff reports that Harvard University’s Theda Skocpol has produced a study purporting to show Congress intended for the Patient Protection and Affordable Care Act (PPACA) to authorize health-insurance subsidies through exchanges established by the federal government—even though the statute expressly and repeatedly says those subsidies are available only “through an Exchange established by the State.” Whether the PPACA authorizes those subsidies in the 36 states with federal exchanges is the question presented in King v. Burwell. The Supreme Court will hear oral arguments in King on March 4, with a ruling expected by June. Unfortunately for the administration and its supporters, Skocpol offers nothing either new or that supports the notion that Congress intended something other than what it expressly said in the statute.

What evidence does Skocpol claim to have found in support of her counter-textual interpretation of congressional intent? She combs through 68 analyses issued by the Congressional Budget Office during 2009 and 2010. She finds that in none of those reports did the CBO entertain the idea that the PPACA’s exchange subsidies might be available in some states but not others. She interprets this as both “excellent evidence” and “the best objective evidence we have that no one in Congress considered premium subsidies restricted to certain states to be either possible or desirable.”

Yeah, about that.

An alert Vox reader already informed Kliff that the claim that CBO never considered the possibility of exchange subsidies in some states but not others isn’t exactly true. The comprehensive health care bill approved by Democrats on the Senate’s Health, Education, Labor, and Pensions (HELP) Committee in 2009 (S. 1679) would have given states four years to establish exchanges themselves, after which point the federal government would establish an exchange. As my partner-in-crime-fighting Jonathan Adler and I write in an amicus brief filed with the Supreme Court in King:

S. 1679 asked each state to adopt certain health insurance regulations, and either establish an Exchange itself or ask the federal government to establish one “in” the state… S. 1679 withheld Exchange subsidies, as well as many of its insurance regulations, for up to four years until the state complied.

The CBO scored S. 1679 assuming that some states would establish exchanges early and some would not. Thus the agency’s cost projections assumed that exchange subsidies would be available in some states but not in others. So we’ve already got a problem with Skocpol’s analysis.

Supreme Court Decrees That June Is a Good Month for Marriage

As widely expected—and widely requested in myriad legal filings—the Supreme Court has agreed to review state laws that deny marriage licenses to same-sex couples, as well as those that deny recognition of such marriages formed in sister states. While the high court ducked these issues in October, at that time there was not yet a “circuit split”: all federal appellate courts to have ruled on the issue had struck down the state laws. When the Cincinnati-based Sixth Circuit went the other way in November, today’s “decision to decide” was assured.

Moreover, based on the firm briefing schedule that the court has established, it’s clear that the justices intend to hear argument this term—meaning that we can expect a final ruling the last week of June. (This puts paid to my prediction that the Court would grant the case but delay argument till the first week of next term, in October.)

So how will the Court rule? Assuming that Justice Anthony Kennedy is the swing vote—a pretty safe assumption—it’s hard to see him giving full victory to the states. It would be odd indeed if the author of the landmark gay-rights opinions in Romer v. Evans (1996), Lawrence v. Texas (2003), and United States v. Windsor (2013) suddenly shied from taking the final logical step in that direction. At the same time, it’s at least conceivable that a strong federalist like Kennedy, perhaps joined by Roberts, could find himself in the moderate (and therefore legally controlling) position of striking down the non-recognition of out-of-state marriages while not requiring the issuance of marriage licenses themselves. Maybe. The smart money is still on a 5-4 ruling establishing that this Fourth of July everyone throughout the land will be able to marry without regard to sexual orientation.

While the Supreme Court isn’t a political institution in the conventional sense, the justices don’t live in a vacuum and so are rarely caught too far ahead or behind popular opinion. As Americans’ views on same-sex marriage have shifted dramatically in the last decade, it quickly became just a matter time before the Court found itself with a case it had to take on an issue that can only be decided one way. This eventual ruling—hopefully on equal-protection grounds rather than some nebulous results-oriented hand-waving—will undoubtedly create not insignificant controversy, but the writing has long been on the wall.

Justice Department Announces Partial Forfeiture Reform

The Washington Post has just reported that Attorney General Eric Holder today announced that, without evidence that a crime occurred, the Justice Department will end its practice of “adopting” civil asset forfeiture cases brought to the department by state and local enforcement agencies. The usual motive for such “equitable sharing” is to help local police departments to circumvent state restrictions aimed at stopping abuses, which arise because once the property is seized, on mere suspicion that it may have “facilitated” a crime, the local police departments keep it.

Such abuses, brought about by those perverse incentives, have led many states to require that any property so seized be turned over to the state’s general treasury. To get around that, state and local police departments ask the Justice Department to “adopt” the case, after which the assets are then split between the Justice Department and the local police department. Without evidence that a crime occurred, that is the practice that will end.

There are deeper problems with American civil asset forfeiture law, however, starting with the very practice of seizing property on the mere suspicion that it may have “facilitated” a crime. A crime does not have to be proven because it is the property that is said to be “guilty” under this bizarre area of our law, its roots in the Middle Ages. Thus, Volusia County, Florida, police stop motorists going south on I-95 and seize any cash they’re carrying in excess of $100 on suspicion that it’s money to buy drugs. New York City police make DUI arrests and then seize drivers’ cars. District of Columbia police seize a grandmother’s home after her grandson comes from next door and makes a call from the home to consummate a drug deal. Officials seize a home used for prostitution and the previous owner, who took back a second mortgage when he sold the home, loses the mortgage. No crime is ever proven. No prosecution is even begun.

In 1995 Cato published the late Rep. Henry J. Hyde’s book about these abuses, which led to partial reforms of federal law in 2000. But the core of the law remained. And abuses continued under state law. Today’s announcement is an important step toward limiting some of those abuses, but more needs to be done. See here and here for more on this subject.

Pages