Topic: Law and Civil Liberties

“A Fundamental Lack of Faith That Our Legal System Is Working Properly”

I’ve got a new piece in City Journal analyzing the record of New York’s powerful, very left-wing Attorney General Eric Schneiderman. It ranges over topics that include his close ties to labor unions, his campaigns against AirBnB, Craigslist sellers, and herbal-supplement retailers, his role in overturning already-negotiated mortgage and banking settlements, and much more, including the unique role of state AGs in American politics. Very few businesses can resist the pressure a New York attorney general can bring to bear on them, with the sorts of troublesome results I explain in a sidebar

When New York attorney general Eric Schneiderman filed charges of unlawful redlining against two banks in the Rochester and Buffalo areas — they had concentrated their lending in the suburbs — he drew an unusual rebuke from Frank H. Hamlin III, CEO of another small upstate bank, Canandaigua National Bank and Trust, which had not been charged. In a letter to shareholders, Hamlin reassured them that his own bank’s relations with its regulators “are healthy. I am, however, extremely suspicious of the arbitrary and capricious manner in which various agencies (prosecutors) are abusing the legal system in order to further their own political and economic interests.” And he noted a foundational problem: “The regulations are vague in explaining what conduct is actually prohibited.” That gives enforcers plenty of discretion as to when to file complaints and against whom.

Hamlin went on to explain that one of the two banks that Schneiderman targeted “has chosen to merely fold while the other has chosen to fight. I can understand the decision to fold. The potential sanctions are severe on both corporate and personal fronts. One must decide whether to put the livelihood of their employees and potentially their own personal liberty on the line or merely cry ‘uncle’ and give the ‘people’ its pound of flesh and go on with life.

“Those who choose to fight are forced to depend upon a legal system that has mutated its focus from time-honored legal principle and justice to efficiency and political expediency,” he wrote. “I can assure you, there is no such thing as ‘efficient justice.’ ”

Finally, Hamlin warned against assuming that any decision to fold was an indicator of ultimate guilt. “The reason that 98 percent of prosecutions are settled instead of taken to trial is not the result of defendants saying, ‘Aw shucks, you caught me.’ It has to do with a fundamental and reasonable lack of faith that our legal system is working properly.”

When the letter began to attract press notice, the bank declined further comment, saying that the letter spoke for itself. Speaking out is all well and good, but in New York, it’s important not to rile up the authorities by doing so too loudly.

Read the whole thing here.

Is Birthright Citizenship Constitutionally Required?

Lord help me if I have to write about anything else Donald Trump says, but I do have a few thoughts on the birthright citizenship debate he’s launched. I’ll set aside the policy aspects, which have been covered in previous years in the Cato Journal, at a Cato Hill briefing, on this blog, by my colleague Alex Nowrasteh in a pithy oped, and I’m sure many other places on our website. (Alex also posted this week an extended analysis of Trump’s new position paper on immigration.) My main take-away on the policy side is that we don’t want to create a permanent state-less underclass like what exists in many countries.

Now, on the law – on the question of whether you would need a constitutional amendment to end birthright citizenship or could just do it by amending the relevant immigration statutes – the picture is actually less clear. The first thing that the Fourteenth Amendment says, before we get to privileges or immunities, due process, and equal protection, is the following: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” It’s that italicized “subject to the jurisdiction thereof” that’s at the heart of the debate.

Here’s the basic history: The common law at the time of the Founding gave birthright citizenship to all except slaves and Indians. The Supreme Court’s infamous ruling in Dred Scott (1857) confirmed the denial of citizenship to slaves, even if they were freed. The Fourteenth Amendment overturned Dred Scott with respect to blacks (and other non-white races), though Indians were still denied citizenship because they owed allegiance to their tribes, not to the United States. (Native Americans were granted citizenship by statute in 1924, though that allegiance/dual-loyalty paradox still clouds much of Indian law.) 

The proponents of the Fourteenth Amendment added “subject to the jurisdiction” to the Fourteenth Amendment in order to exclude from citizenship two groups beside Indians: the children of (1) foreign diplomats and (2) enemy forces engaged in hostile occupation. That understanding was affirmed by the Supreme Court in United States v. Wong Kim Ark (1898), when it recognized the U.S. citizenship of a man who was born in San Francisco to Chinese parents. Wong’s parents weren’t citizens, although they were legal residents. 

But what about illegal immigrants? Illegal aliens and their children are subject to our laws and can be prosecuted and convicted of violations – unlike diplomats, who enjoy certain immunities, and unlike foreign invaders, who are generally subject to the laws of war rather than domestic civil law. The illegal immigrants’ countries of origin can hardly make a “jurisidictional” claim on kids born in America (at least while they’re here). Thus, a natural reading of “subject to the jurisdiction” suggests that the children of illegals are citizens if born here.

On the other hand, the Fourteenth Amendment’s enactors probably didn’t intend birthright citizenship for illegal immigrants. At ratification in 1868, there were no illegal immigrants and no law had ever restricted immigration. “Subject to the jurisdiction” probably meant primary allegiance to the United States as a sovereign.

My sense of the constitutional question – again setting aside my policy view that more liberal immigration laws (accompanied by vigorous border control to prevent crime, terrorism, and public-health issues) would resolve much of the illegal-alien problem – is as follows.  

When the original public meaning of a legal text is unambiguous, you have to adopt that meaning unless it leads to absurd consequences. Here, the consequences may well be irrational and self-defeating: We prohibit unauthorized entry while offering an inducement, giving citizenship to the children of those who violate the law. So if Congress were to deny citizenship to children of illegal aliens, the Supreme Court might not declare that law unconstitutional. It’s a close call (read the strong arguments pro and con constitutional birthright citizenship by my friends Jim Ho and John Eastman, respectively).

Would the Court consider the consequences of a textual meaning that gives birthright citizenship to the children of illegal immigrants to be absurd?  If so, the intent or purpose of the Fourteenth Amendment’s enactors might trump the text. On the other hand, and being realistic, if Chief Justice John Roberts can find that a mandate is a tax and that a federal exchange was established by a state, there’s no way that the current Supreme Court would eliminate birthright citizenship for anyone.

So really, let’s debate some serious policy issues. It’s just not classy or luxurious to keep pressing this birthright-citizenship stuff.

Can Alaska’s Governor Implement ObamaCare’s Medicaid Expansion without the Legislature?

Alaska Gov. Bill Walker (I) initially asked the legislature to approve the state’s participation in ObamaCare’s Medicaid expansion. The legislature has thus far declined. Now, Walker is trying to implement it anyway, and the legislature appears to be taking him to court. According to Alaska Dispatch News:

The Alaska Legislature on Tuesday said it will sue Gov. Bill Walker to block his move last month to expand the public Medicaid health care program without lawmakers’ approval.

Following a private discussion Tuesday morning, a Republican-controlled House-Senate committee voted 10-1 to spend up to $450,000 on two law firms to represent the Legislature in a suit against the governor.

One, Bancroft PLLC, is based in Washington, D.C., and represented more than two dozen states in their U.S. Supreme Court challenge to the Affordable Care Act, or “Obamacare.” The second, Holmes, Weddle & Barcott, is based in Anchorage.

In a news conference after the committee vote, Republican leaders framed their decision to challenge the governor as a constitutional one. They’re seeking an injunction to stop Medicaid expansion from going into effect Sept. 1.

“This is not a policy issue — we’re not discussing whether we should or shouldn’t expand Medicaid,” said Senate President Kevin Meyer, R-Anchorage. “This is a question of authority and process and our constitution.”


The Legislature is challenging Walker’s move based on a provision in Alaska statute that requires legislative approval before Medicaid coverage can be offered to people whose care is not required under federal law.

The version of “Obamacare” passed by Congress required states to expand Medicaid to cover low-income Americans, who can otherwise face steep health care costs without the subsidies that the legislation offers to individuals with higher incomes.

As written, the law would have revoked all federal Medicaid funding for states that didn’t go through with the expansion. But the U.S. Supreme Court said in 2012 that the threat of revoking the money was unconstitutional and coercive.

The ruling created ambiguity for Alaskan policymakers and legal experts: If Medicaid expansion is technically required under the ACA, but the Supreme Court has ruled the federal government can’t enforce the requirement by revoking money from states that don’t comply, does that make the newly eligible people under Walker’s proposed expansion an optional group that requires legislative approval?

Walker, citing a memorandum from Attorney General Craig Richards, says no. The Republican lawmakers that support the lawsuit say yes and argue the governor is circumventing their authority.

An initial filing in the Legislature’s lawsuit is expected next week.

Read the whole thing here. For more, see these posts from the Foundation for Government Accountability.

Another Chance To Clean Up “Trial by Formula” Class Actions

The whole point of the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes was to put an end to “trial by formula” class actions that stack the deck against defendants. Lower courts, unfortunately, haven’t gotten the message. And that is a serious threat to defendants’ due process rights. Fortunately, the Supreme Court will return to the issue next term in Tyson Foods, Inc. v. Bouaphakeo.

There is a whiff of parody to the case. The plaintiff class consists of about 1,300 workers at Tyson’s Storm Lake, Iowa, pork-processing plant who say that Tyson failed to compensate them for the overtime that they spent putting on and taking off protective gear before and after their shifts. The class was certified as presenting “common” fact questions despite that the  plant has some 420 job classifications, each of which has different protective requirements, not to mention that Tyson provides additional gear that employees may choose to wear—so even workers in the same department or at the same position may wind up wearing different equipment.

Logically, one would expect the plaintiffs to present evidence of the amount of time that they each spent putting on and taking off gear, compare that to the work and pay records kept by Tyson, and then show that they weren’t properly compensated for any time they worked over 40 hours in a given week, which the Fair Labor Standards Act sets as the trigger for overtime. After all, that’s how it would work in an individual suit.

But that’s nothing like what happened here.

RICO Suits Hit Colorado Pot Dealers (and Landlords and Bankers)

I’ve been warning for years of the dangers of the federal Racketeering Influenced and Corrupt Organizations law and how it gives prosecutors and enterprising private lawyers leverage to target above-board businesses in search of punishment or profit. Since the law’s passage in 1970, RICO has seldom been used against violent organized crime. Instead, it has been aimed at a wide array of white-collar defendants, as William Anderson noted in Regulation six years ago, and especially at unpopular industries like gun and cigarette makers, as Cato’s Bob Levy noted in 2000. The latest fillip is Sen. Sheldon Whitehouse’s proposal to aim racketeering charges against groups that promote wrongful thinking on climate change. The civil side of the statute (“civil RICO”), which can be used in private litigation, is especially susceptible to tactical use by private lawyers who know that the vagueness of the law, the high cost of response, the triple-damages provisions, and the racketeering stigma especially are useful in forcing adversaries to the bargaining table. The more those adversaries value respectability, the more powerful the leverage. 

Now comes word that a Washington, D.C.-based tough-on-crime group calling itself the Safe Streets Alliance has filed suit seeking, in its words, “to hold those involved with Colorado’s recreational marijuana industry liable under federal racketeering statute and to have Colorado marijuana business licenses held invalid.” Its press release is at least honest enough to acknowledge that the targets include “the citizens of Colorado” for what it believes was their faulty decision to enact Amendment 64 in 2012. In one case SSA, representing a local Holiday Inn franchisee that didn’t care to have a medical marijuana shop near its business, succeeded in forcing owner Jerry Olson (no relation) out of business. A key tactic in the suit – one quite familiar to those of us who follow hardball civil litigation in general – was to name as racketeering co-defendants a variety of risk-averse, often respectable businesses that had in some way done business with the main target. Thus AP reports

…just last week, a bonding company in Des Moines, Iowa, paid $50,000 to get out of the lawsuit.

“We are out of the business of bonding marijuana businesses in Colorado and elsewhere until this is settled politically,” said Therese Wielage, spokeswoman for Merchants Bonding Company Mutual.

Thus does the litigation accomplish its goal whether or not it ultimately prevails before a judge:

“This lawsuit is meant more to have a chilling effect on others than it is to benefit the plaintiffs,” said Adam Wolf, Olson’s lawyer.

SSA lawyer Brian Barnes of Cooper & Kirk doesn’t seem to contradict that: 

“We’re putting a bounty on the heads of anyone doing business with the marijuana industry,” Barnes said.

I’m occasionally asked why I bother to worry about the legal woes of unpopular industries whose goods I don’t even care to consume. A different way to look at the question is that almost anyone’s line of business – whether it be soft drinks or accounting or putting up visitors in one’s home or charitable non-profit work or electioneering or employing entry-level workers at minimum wage – is one public-vilification campaign, or one round of lawsuits, away from becoming an unpopular industry. 

Should Prostitution Be Legalized?

Does three make a trend? I can’t recall hearing much discussion of legalizing prostitution in the recent past, and suddenly this week I’ve seen three significant reports in the media. Are they straws in the wind? Could the legalization of prostitution be the next social reform to come to the fore?

First, last Thursday the Telegraph reported on a new study from the venerable free-market think tank in London, the Institute for Economic Affairs:

The sex trade should be fully decriminalised because feminism has left modern men starved of sex, one of Baroness Thatcher’s favourirte think-tanks claims.

A controversial new paper published by the Institute of Economic Affairs (IEA) calls for Britain’s prostitution laws to be scrapped, insisting it is “inevitable” that men will resort to paying for sex as women become more empowered through participation in the workplace.

As IEA notes, the paper got plenty of publicity in the British media.

Then on Tuesday Amnesty International voted, as the New York Times put it, “to support a policy that calls for decriminalization of the sex trade, including prostitution, payment for sex and brothel ownership.” The full policy, which still requires final approval from the board, can be found here. The new policy

is based on the human rights principle that consensual sexual conduct between adults—which excludes acts that involve coercion, deception, threats, or violence—is entitled to protection from state interference (bearing in mind that legitimate restrictions may be imposed on sex work, as noted below).

And then today I see this in the Washington Post:

Bloomberg BNA Podcast on Legal Challenges to ObamaCare

In this Bloomberg BNA podcast, Supreme Court correspondent Kimberly Robinson and I discuss King v. BurwellSissel v. HHS (the Origination Clause case), and House of Representatives v. Burwell, (the House GOP’s lawsuit against the Obama administration’s efforts to exceed its powers under the Constitution and the Affordable Care Act).

Keep an eye out for my article on King v. Burwell with Jonathan Adler in the upcoming Cato Supreme Court Review.

Adler and I will be speaking about King at the Cato Institute’s 14th annual Constitution Day symposium on September 17, 2015. Register here.