Topic: Law and Civil Liberties

Ideas Have Consequences: The Neoconservatives

The New York Times has produced a useful video about the “super-predator” scare from the 1990s.  At that time, we were already waging a drug war, so we were advised to build more prisons–and so we did.  Then regrets.

You can watch the video here.

As it happens, we are also finding more scrutiny of neoconservative ideas at the movies. A new documentary film directed by Errol Morris looks at former Secretary of Defense, Donald Rumsfeld and the Iraq war.  Here is the film trailer:

For related Cato work, go here, here, and here.

Sixth Circuit: You’re Drunk, EEOC, Go Home

As my colleague Ilya Shapiro noted last fall in this space, the Cato Institute joined an amicus brief before the Sixth Circuit U.S. Court of Appeals in a case called EEOC v. Kaplan Higher Education. As Ilya summed up the underlying situation: 

Following several incidents of employee theft, Kaplan University did what any reasonable employer might do in similar circumstances: it instituted heightened screening procedures for new hires. This process included credit checks to filter out potential employees at greater risk of committing theft. These checks made no mention of any applicant’s race and Kaplan didn’t collect any race information from applicants, thus making the hiring process both race-neutral and race-ignorant. Nevertheless, the Equal Employment Opportunity Commission, which itself uses credit checks in hiring decisions, sued Kaplan under Title VII of the Civil Rights Act, claiming that the use of credit checks has an unlawfully disparate impact on African American applicants.

Because Kaplan doesn’t keep racial data for applicants, the EEOC had to come up with its own data to prove its case. The agency thus created a team of “race raters,” a group of seemingly random people who sorted Kaplan’s job applicants into racial categories based only on the applicant’s name and DMV photo. (You can’t make this stuff up!) Because of the unscientific and unreliable nature of this data, the EEOC was soundly rebuffed in the federal district court in Ohio where it brought its case.

Yesterday, in a slapdown that’s already the talk of the legal community, the Sixth Circuit panel rebuffed the federal agency and roundly backed Cato’s view of the case. The ruling is short and sweet – go read it here – but here are a few prime tidbits for those in a hurry: 

In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses. …

The district court considered every one of the Daubert factors [on expert witness admissibility] — and found that [EEOC expert Kevin] Murphy’s methodology flunked them all. …

The EEOC’s case goes downhill from there. …

We need not belabor the issue further. The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. 

The outcome is a triumph for Seyfarth Shaw attorney Gerald L. Maatman, Jr. a dean of the employment bar, and all the more impressive because one of the three judges on the opinion is liberal lion Damon Keith, about as sympathetic a judicial ear as the EEOC could normally hope for. It’s a sharp setback for the agency’s dubious “disparate impact” campaign against employer use of credit and criminal records in hiring. And it’s also part of a pattern of rebuffs and defeats the EEOC has been dealt by judges across the country since President Obama turned the agency on a sharp leftward course with his appointments. We’ll have more to say about that pattern in future commentaries. 

Police Misconduct — The Worst Case in March

Over at Cato’s Police Misconduct web site, we have identified the worst case for the month of March. It was the case of the soon-to-be-former Philadelphia police officer, Kevin Corcoran. Mr. Corcoran was driving the wrong way down a one-way street near a group of individuals when one of them pointed out that the officer had made an illegal turn. The officer got out and aggressively approached the individuals, who readied their cell phone cameras to capture the incident. The footage (warning: graphic language) shows Corcoran accosting one of the persons filming, an Iraq war veteran, and shouting “Don’t fucking touch me!” before slapping the vet’s phone out of his hand, throwing him up against his police vehicle, arresting him, and driving off. Another of the cameras showed the vet with his hands up in a defensive posture, retreating from the officer. When the vet asked why he had been arrested, Corcoran said it was for public intoxication. Corcoran later cooled-off and, after finding out the individual was a veteran, let him go without charges.

Civil suits over Corcoran’s abuse of authority have been settled out of court in the past, but thanks to the quick cameras of the individuals he encountered here, Corcoran faces charges of false imprisonment, obstructing the administration of law, and official oppression—along with a suspension with intent to dismiss.  This incident shows the importance of the right to film police behavior.

Readers help us to track police misconduct stories from around the country–so if you see an item in the news from your community, please take a moment and send it our way using this form.

The Fourth Amendment: Cars, Phones, and Keys?

Here’s a law-school hypothetical for you: Suppose a gang-banger is pulled over for having expired tags on his car. He has no driver’s license, and records show that he has repeatedly driven without a license. The protocol in such situations is to impound the car to prevent him from driving unlicensed again, and the impoundment search reveals that he has guns hidden in the car. He is arrested, patted down, and his possessions seized to secure officer safety during his transportation and booking.

Now suppose that police officers take the gang-banger’s car out of the impound yard and drive it around looking for his confederates and for more evidence against him. Can they use the car for this purpose?

If you’re like most people, you probably think the answer is: “No.” But can you say why?

School Choice Lawsuits and Legislation Roundup

We’re only at hump day but this week has already seen the filing of a new anti-school choice lawsuit, the dismissal of another, the potential resolution of a third, and the adoption of a new school choice program. [UPDATE: Plus the passage of a second school choice program. See below.]

Alabama: Yesterday, a federal judge dismissed the Southern Poverty Law Center’s ridiculous lawsuit against Alabama’s scholarship tax credit program which essentially claimed that the program unconstitutionally violated the Equal Protection clause since it did not solve all the problems facing education in Alabama. The SPLC argued that the law creates two classes of citizens: those who can afford decent schooling and those who cannot. In fact, those classes already exist, but the law moves some students from the latter category into the former, as the judge wisely recognized:

“The requested remedy is arguably mean: Withdraw benefits from those students who can afford to escape non-failing schools. The only remedy requested thus far would leave the plaintiffs in exactly the same situation to which they are currently subject, but with the company of their better-situated classmates. The equal protection requested is, in effect, equally bad treatment,” the judge said.

The scholarship program still faces a lawsuit from Alabama’s teachers union.

Georgia: Anti-school choice activists filed a lawsuit against Georgia’s scholarship tax credit program, alleging that it violates the state constitution’s ban on granting public funds to religious institutions. The lawsuit is longer and more complicated than similar suits in other states, and portions requesting that the government enforce certain accountability measures (e.g. - making sure that only eligible students are receiving scholarships) may actually have merit. However, the central claim that a private individual’s money becomes the government’s even before reaching the tax collector’s hand has been forcefully rejected by the U.S. Supreme Court and other state supreme courts with similar constitutional language.

Kansas: In the best school choice news of the week, as a part of its school finance legislation, Kansas lawmakers included both a scholarship tax credit program for low-income students and a personal-use tax credit. The former would grant corporations tax credits worth 70% of their donations to scholarship organizations that aid students from families earning up to 185% of the federal poverty line. The program is capped at $10 million. The personal-use tax credit grants $1,000 per child in tax credits against the family’s property tax liability up to $2,500 in total for any family without any students attending a government school. [UPDATE: The personal-use tax credit was not adopted in the final committee of conference report.]

Louisiana: A federal judge has mostly sided with the U.S. Department of Justice in its lawsuit demanding that Louisiana fork over data about students participating in the state’s school voucher program, including their race and the racial breakdown of both the government schools they are leaving and the private schools they want to attend. The DOJ wanted that data so that it can challenge individual vouchers if a student’s departure would leave a district “too white” or “too black” (no word yet on whether the DOJ will challenge families whose decision to move out of the district has the exact same impact). However, the judge required the state to provide the data to the DOJ only 10 days before issuing vouchers rather than 45 days beforehand, as the DOJ had requested. A study sponsored by the state of Louisiana determined that the voucher program has had a positive impact on racial integration.

Lawsuits against scholarship tax credit programs in New Hampshire, North Carolina, and Oklahoma are still pending. Parents for Educational Freedom in North Carolina released the following video announcing their efforts to fight the lawsuit:
http://www.youtube.com/watch?feature=player_embedded&v=YzEs1t6hDsA

UPDATE: 

Alaska: Last night, Alaska’s House of Representatives passed a scholarship tax credit program. The bill still has to go to the state senate and the governor.

IRS Shouldn’t Force Taxpayers Into Tax-Maximizing Transactions

While tax evasion is a crime, the Supreme Court has long recognized that taxpayers have a legal right to reduce how much they owe, or avoid taxes all together, through careful tax planning. Whether that planning takes the form of an employee’s deferring income into a pension plan, a couple’s filing a joint return, a homeowner’s spreading improvement projects over several years, or a business’s spinning-off subsidiaries, so long as the actions are otherwise lawful, the fact they were motivated by a desire to lessen one’s tax burden doesn’t render them illegitimate.

The major limitation that the Court (and, since 2010, Congress) has placed on tax planning is the “sham transaction” rule (also known as the “economic substance” doctrine), which, in its simplest form, provides that transaction solely intended to lessen a commercial entity’s tax burden, with no other valid business purpose, will be held to have no effect on that entity’s income-tax assessment. The classic sham transaction is a deal where a corporation structures a series of deals between its subsidiaries, producing an income-loss on paper that is then used to lower the parent company’s profits (and thus its tax bill) without reducing the value of the assets held by the commercial entity as a whole.

We might quibble with a rule that effectively nullifies perfectly legal transactions, but a recent decision by the U.S. Court of Appeals for the Eighth Circuit greatly expanded even the existing definition of “economic substance,” muddying the line between lawful tax planning and illicit tax evasion. At issue was Wells Fargo’s creation of a new non-banking subsidiary to take over certain unprofitable commercial leases. Because the new venture wasn’t a bank, it wasn’t subject to the same stringent regulations as its parent company. As a result, the holding company (WFC Holdings Corp.) was able to generate tens of millions of dollars in profits.

Another Campaign Restriction Falls Because First Amendment Strongly Protects Political Speech

Despite the 5-4 split among the justices, McCutcheon is an easy case if you apply well-settled law: Restrictions on the total amount an individual may donate to candidates and party committees—as opposed to how much he can donate to any one candidate—violate the First Amendment because they do not prevent quid pro quo corruption or the appearance thereof. That corruption-prevention rationale is the only government interest that the Supreme Court accepts as a valid one for restricting political-campaign activities. As Chief Justice Roberts wrote for the majority (and it is a majority because Justice Thomas concurs in the judgment): “Money in politics may at times seem repugnant to some, but so too does much of what the First Amendment vigorously protects. If the First Amendment protects flag burning, funeral protests, and Nazi parades—despite the profound offense such spectacles cause—it surely protects political campaign speech despite popular opposition.”

With Justice Thomas, however, I would go beyond that simple point and overrule Buckley v. Valeo (1976) altogether because “[c]ontributions and expenditures are simply ‘two sides of the same First Amendment coin’” and the Court’s “efforts to distinguish the two have produced mere ‘word games’ rather than any cognizable principle of constitutional law” (quoting Chief Justice Burger’s partial dissent in Buckley). Buckley rewrote the speech-restrictive post-Watergate campaign-finance law into something no Congress would’ve passed, also inventing legal standards such that one type of political speech has greater First Amendment protection than another. Nearly 20 years later, the Supreme Court rewrote another congressional attempt (McCain-Feingold) to “reform” the rules by which people run for office, shying away from striking down Buckley and producing a convoluted mish-mash opinion that serves nobody’s interest. Enough! The drip-drip of campaign-finance rulings over the last decade has shown, existing campaign-finance law is as unworkable as it is unconstitutional.

As Cato argued in its amicus brief, in a truly free society, people should be able to give whatever they want to whomever they choose, including candidates for public office. The Supreme Court today correctly struck down the biennial campaign contribution limits and gave those who contribute money to candidates and parties as much freedom as those who spend independently to promote campaigns and causes. But it should have gone further.