Topic: Law and Civil Liberties

On the Poverty of Constitutional Debate

In last night’s third and final presidential debate we were treated, finally, to a brief discussion of what should have been a central issue in these debates—the meaning of the Constitution and the role of the Supreme Court under it. Unfortunately, the discussion got off on the wrong foot right from the start when moderator Chris Wallace asked Secretary Clinton, “Where do you want to see the Court take the country?”

It’s not the role of the Court, of course, to take the country anywhere. Its role, rather, is to correctly read the law—constitutional, statutory, or regulatory—and apply it to the cases that come before it, period. Wallace quickly recovered, however, by asking how the Constitution should be interpreted—by reading the Founders words for what they say, or by reading it as a living document to be applied flexibly according to changing circumstances? That’s been the great jurisprudential question since Progressives prevailed on the New Deal Court to follow the second course, resulting in the Leviathan that surrounds us today.

Ever the Progressive, Clinton answered that “the Supreme Court needs to stand on the side of the American people, not on the side of the powerful corporations and the wealthy.” Read our basic legal document as carefully as you wish, you will find no such opposition between the people and the powerful. Clinton’s populist appeal was a prelude, of course, to her attack on the Court’s 2010 Citizens United decision, which upheld the First Amendment right of corporations and labor unions to make independent political expenditures—in that case, let’s remember, the right of a nonprofit corporation to advertise “Hillary: The Movie” in broadcasts within 30 days of the 2008 Democratic primaries. It’s personal.

For his part, Trump rambled, as usual, but when he finally got to the point, he at least called it correctly, promising that the judges he would “appoint” (the president nominates, not appoints; and Trump can hardly promise for others) “will interpret the Constitution the way the Founders wanted it interpreted.” Unfortunately, the discussion that followed—warring arguments over guns and abortion—was more politics than law, as doubtless is to be expected at this point in our constitutional history, when even extended judicial confirmation hearings reflect politics more than law, to say nothing of the Court’s Obamacare opinions, among others. We’re far removed from the Federalist Papers.

Courts Should Stop Approving Unfair Class Action Settlements

Class actions play a vital role in our legal system. These lawsuits are often the only vehicle for injured plaintiffs to receive compensation when a defendant’s wrongs are widely disbursed and it would be impractical for a single individual to sue.

Yet the process of settling these suits is subject to perverse incentives on the part of the lawyers representing the injured parties. Class counsel often will seek the largest portion of the settlement award for themselves—structuring the settlement to maximize attorney fees—at the expense of class members.

Sadly, this sort self-dealing on the part of class counsel is exactly what happened in Blackman v. Gascho. The case centers on a consumer class action filed against Global Fitness Holdings LLC, alleging that the between 2006 and 2012, the company sold gym memberships and incorrectly charged fees pertaining to cancellation, facility maintenance, and personal-training contracts. A group of plaintiffs sued Global Fitness over the fees, and the parties entered into a “claims-made” settlement.

This type of settlement allows the defendant to make a large amount of money “available” to class members, but in order for the members to collect, they must jump through the hoops of correctly filing claims. Because of the low response rate in such settlements, the defendants will end up paying much less than the funds made available. Indeed, of the $8.5 million made available to the class members, Global Fitness only paid $1.6 million—a payout of approximately 10 percent of the settlement funds. Despite this low payout to plaintiffs, class counsel are still paid a certain rate based on the funds that were made available—not the funds that were actually paid out—in some instances giving them attorney fees larger than the class members’ damages award!

The class counsel here were paid $2.4 million, nearly $1 million more than the class members collected. Josh Blackman, also a Cato adjunct scholar, just happened to be one of the class members. He challenged the settlement, arguing that the agreement was giving the class attorneys preferential treatment over the class members who did not collect. The district court approved the settlement, however, and the U.S. Court of Appeals for the Sixth Circuit agreed with the district court by a 2-1 vote.

Cato has now filed an amicus brief urging the Supreme Court to review the case. Federal Rule of Civil Procedure 23(e)(2)—and fundamental tenets of due process—require that a settlement that binds class members be “fair, reasonable, and adequate.” In this case, the Sixth Circuit upheld approval of a settlement that provided zero compensation for over 90 percent of class members, and in the process broke with the Third, Seventh, and Ninth Circuits. 

The Supreme Court will likely decide by the end of the year whether to take up Blackman v. Gascho.

Every 25 Seconds: Human Rights Watch and the ACLU Document More Harms from Drug Prohibition

A new report from the ACLU and Human Rights Watch details many of the harms associated with the criminalization of drug possession. The most striking finding from the report is that police in the United States arrest more people for marijuana offenses than for all violent crimes combined. The title of the report, “Every 25 Seconds,” refers to how often police arrest someone for drug possession in this country.

The full report can be found here, but other key findings include:

  • More than one out of every nine state-level arrests are for drug possession, amounting to 1.25 million arrests per year.
  • Nearly half of those arrests for marijuana possession.
  • While drug usage rates are roughly the same across racial lines, black adults are more than two-and-a-half times as likely as white adults to be arrested for possession.
  • More than 99% of drug possession convictions were the result of guilty pleas, rather than trial verdicts. The authors of the report describe this as “rendering the right to a jury trial effectively meaningless.”
  • The average bail amount for drug possession defendants was $24,000, meaning that poor defendants typically remained incarcerated while awaiting trial and had a strong incentive to plead guilty even if they believed they were innocent.
  • Defendants often did not understand the multitude of collateral consequences of a drug conviction.

When it comes to actual policy recommendations, the report urges legislators, judges, prosecutors, and police officers to de-emphasize the policing and prosecution of drug possession crimes, effectively calling for decriminalization of drug possession across the board.

While the authors stop short of recommending full legalization, even the decriminalization recommendation would be a positive step. We know this because in 2000, Portugal decriminalized all drugs. Despite predictions from critics that decriminalizing drug use would lead to massive spikes in addiction and prove a disaster, a 2009 Cato study by Glenn Greenwald put that speculation to rest. Decriminalization in Portugal has been a success, and there is no substantial movement today to return the country to prohibition.

Similarly, state experiments with legalized recreational marijuana in the U.S. are proceeding well. And the tide in favor of ending marijuana prohibition continues to grow. Next month, five more states (Arizona, California, Nevada, Maine, and Massachusetts) will vote on whether to legalize marijuana. Those states would join Alaska, Colorado, Oregon, Washington state, and Washington D.C. as jurisdictions that have renounced prohibition for marijuana.

Last month, a U.S. federal judge declared that the “principle casualty” of the war on drugs has been the U.S. Constitution. The ACLU/HRW report sheds new light on the truth of that declaration. It’s well past time to admit the failure of the drug war, allow the police to focus on actual crimes, ease the mounting tensions in over-policed communities, and restore our individual liberty.

Texas Wisely Concedes Economic Liberty Case

Last month, I wrote about a case challenging medical-licensing rules that prevented an innovative health-services company, Teladoc, from using advanced technology to provide care to hard-to-reach patients. The Texas Medical Board, which isn’t supervised by any branch of state government, oversaw the restrictions, which a district court threw out on antitrust grounds. After the board appealed, Cato filed a brief supporting Teladoc. And we weren’t alone; the range of briefing was impressive, particularly for a case that hadn’t yet reached the Supreme Court.

Well, today the Texas attorney general’s office filed an unopposed motion to dismiss the state’s own appeal. That should be the end of this case. Although I’m sure Teladoc and its fellow plaintiffs would’ve loved to finish litigating the appeal and get a favorable Fifth Circuit ruling, it’ll take this win all the way to the economic-liberty bank.

It’s always hard to know what impact an amicus brief has – even when you’re cited, it might be for a tangential point, or indeed to counter your argument – and this case illustrates that lesson: there’s not even a court ruling here, but the quality of amicus briefs certainly contributed to Texas’s decision to abandon the medical board’s appeal.

Congrats to Teladoc, its counsel, and the people of Texas!

A Constitutional Amendment to Re-Empower the States

When the Framers designed our federalist system, they assumed that the federal government would be limited to those powers actually enumerated in the Constitution and that it would exercise those powers only when authorized by statute. Further, to give the states some say in the drafting of these statutes, one half of the federal Congress—the Senate—was elected by the state legislatures themselves and designed to reflect the interests of the state governments.

Today, none of these elements of our original design remain. The Supreme Court has allowed the federal government to control nearly limitless activities, supposedly as an exercise of its power to regulate interstate commerce. The executive branch acts as its own de facto legislative branch, “interpreting” statutes through executive actions and agency rulemaking to unilaterally give itself the powers it wishes to exercise. And after the passage of the Seventeenth Amendment, senators are now elected by popular vote, meaning there is no longer any direct link between the state and federal governments. The result of these three changes is that states have less power than ever – and there’s not much they can do about it.

To solve that problem, Representatives Rob Bishop (R-UT) and Cathy McMorris Rodgers (R-WA) recently introduced the “Re-Empowerment of the States Amendment,” a proposal that would allow two thirds of the state legislatures to repeal any “Presidential Executive order, rule, regulation, other regulatory action, or administrative ruling issued by a department, agency, or instrumentality of the United States.”

Importantly, this amendment would not allow states to repeal the text of statutes that have duly passed both houses of Congress. This isn’t an amendment to change the system of bicameralism that the Framers designed; instead, it’s an amendment to restore the checks on the executive branch that existed before the massive expansion of the administrative state. As the amendment’s creator David Hemingway has explained, “The practical result would be to enhance the power of Congress since it would encourage the president to work with Congress rather than govern by issuing executive orders.”

The Internet Beats the DEA Over Kratom

Many libertarians believe that technology helps protect our freedoms from excessive government.  That seems to have worked in this case:

The Drug Enforcement Administration is reversing a widely criticized decision that would have banned the use of kratom, a plant that researchers say could help mitigate the effects of the opioid epidemic.

Citing the public outcry and a need to obtain more research, the DEA is withdrawing its notice of intent to ban the drug, according to a preliminary document that will be posted to the Federal Register Thursday.

The move is “shocking,” according to John Hudak, who studies drug policy at the Brookings Institution. “The DEA is not one to second-guess itself, no matter what the facts are.”

And if the DEA has really found new religion, it should admit it does not have sufficient research to ban marijuana, heroin, or any other substance!

There’s No Constitutional Right to a Taxi Monopoly

On Friday, the U.S. Court of Appeals for the Seventh Circuit handed down a pair of rulings rejecting the argument that taxi companies somehow have a protected property right in their monopolies. The opinions—both penned by Judge Richard Posner—are perhaps the courts’ strongest rebuke yet of taxi cartels’ desperate attempts to stay relevant in an Uber world, with Posner describing their claims as having “no merit” and “border[ing] on the absurd.” It’s nice to know that—in the Seventh Circuit at least—losing your monopolistic cartel due to technological disruption is not considered to be a constitutional violation.

In one case, Illinois Transportation Trade Association v. City of Chicago, incumbent taxi companies sued Chicago for allowing app-based ridesharing companies such as Uber and Lyft to operate, asserting that the city’s decision to allow such companies to enter the market without being subject to the same regulations covering traditional taxis constituted an unconstitutional taking of their property without just compensation (and also somehow violated the Fourteenth Amendment’s Equal Protection Clause).

In the other case, Joe Sanfelippo Cabs, Inc. v. City of Milwaukee, taxi companies sued Milwaukee for eliminating the hard cap on the number of taxi medallions in circulation, opening the market up to any applicant who met the requirements. Like in the Chicago case, the plaintiffs argued that the loosening of regulations to allow new market entrants violated the Takings Clause.

In both cases, the plaintiffs’ arguments more-or-less boiled down to: “We made a deal with the city years ago where we were promised monopoly control over this market. The government’s failure to protect that monopoly constitutes an eminent domain-style taking.” This is, of course, as the court described, an absurd argument. “‘Property’ does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening.” No one is entitled to a government grant of monopoly power.