Topic: Law and Civil Liberties

Equality Run Amok—Women’s Soccer Version

The New York Times reports today that five key members of the US women’s national soccer team have filed a complaint with the Equal Employment Opportunity Commission charging U.S. Soccer, the private federation that oversees soccer in the United States, with wage discrimination. It seems that, on average (see the article for details), the federation pays women players considerably less than players on the men’s team, and that may be a problem under current law.

If Thomas Jefferson only knew what would follow from writing “All men are created equal.” What he meant, of course, was only that we all have equal rights to “life, liberty, and the pursuit of happiness,” and we’re free to pursue happiness however we think best. Most of us do that through voluntary association with others, which can result in all kinds of inequalities, yet violate the rights of no one. After all, whose rights are violated if Mia Hamm negotiates a salary with the team that is higher than a lesser player negotiates?

Big Win for MetLife and Other SIFIs

MetLife notched an important win this week, securing a ruling from a federal court that it is not a systemically important financial institution (SIFI) under Dodd-Frank. Like much of the Dodd-Frank Act, the SIFI designation has been controversial since its introduction in 2010. The designation is intended to help the Financial Stability Oversight Council (FSOC, another Dodd-Frank creation) to monitor companies whose demise could destabilize the country’s financial system. Putting aside the question of whether a group of regulators in Washington could see and stop a crisis more quickly than those in the trenches at the nation’s financial giants, the designation triggers a host of regulatory requirements that many companies would prefer to avoid. 

One of the most controversial aspects of the SIFI designation is its black box nature. There is no publicly available SIFI check-list. The rationale for following a more principles- than rules-based approach may be that the definition needs to remain flexible. Companies may be motivated to avoid the letter of such a rules-based approach without avoiding the spirit, leaving FSOC without the ability to monitor a company that, despite not triggering the SIFI designation, still poses a risk to the financial system. But this has left companies in a bind. The SIFI designation has real and substantial ramifications for any company that triggers it, but companies have been unable both to avoid designation and to challenge designation once applied.  It’s hard to argue that you don’t fit a certain definition if you don’t know what the definition is.

Of course, not all companies want to avoid SIFI status. Although some have argued that FSOC and other aspects of Dodd-Frank will prevent future bailouts, it seems naïve to think that the government could designate a company as a risk to the entire financial system and then sit idly by as it burns.  SIFI designation is a wink and a nod, all but assuring government support if the designated company founders in rocky times.

Department of Justice Resurrects the Equitable Sharing Program

Well, it was fun while it lasted.

Last December, civil liberties advocates cheered the Department of Justice’s announcement that it was indefinitely suspending its equitable sharing asset forfeiture program due to fiscal constraints.  This week, unfortunately, the Department of Justice lifted the suspension and resumed payments to local police departments.

Civil asset forfeiture allows the government to seize property and cash from Americans, without charge or trial, on the mere suspicion of wrongdoing. In most jurisdictions, the seizing agency gets to keep some or even all of the proceeds, creating a clear profit motive for the agencies to seize property.  

Equitable sharing is a federal program which allows state and local law enforcement to seize property under federal, rather than state, forfeiture law. Law enforcement agencies in states with more restrictive forfeiture laws are thus able to get around those state restrictions by participating in the federal program.

The equitable sharing program also provides an 80% kickback to the seizing local agency, which is a larger share of the proceeds than many states allow. As one might expect, the more a state restricts the use and abuse of civil asset forfeiture, the more state and local police tend to rely on the federal program instead.

In short, equitable sharing creates a federal incentive for law enforcement to sidestep state law and chase profits under federal law instead.

While then-Attorney General Eric Holder imposed some small rerforms on the equitable sharing program on his way out of office, the program still rakes in hundreds of millions of dollars a year.  Given this week’s announcement, the chances that the Obama Administration will take further steps to rein in forfeiture abuse in its final year seem slim.  

Nothing, however, prevents state governments from asserting their sovereignty by restricting their law enforcement agencies from participating in the federal program.

This morning I discussed the resumption of equitable sharing with Darpana Sheth of the Institute for Justice:

 

For more on civil asset forfeiture, check out the Institute for Justice’s exhaustive survey of forfeiture laws and abuses, Policing for Profit.

Also check out Cato’s explainer on civil asset forfeiture.

Public-Sector Unions Survive to Fight Another Day

This morning, the Supreme Court disappointingly, but expectedly, split 4-4 in Friedrichs v. California Teachers Association. With Justice Antonin Scalia’s untimely death, one of the likely blockbusters of the term turned into a terse, one-sentence opinion: “The judgment is affirmed by an equally divided Court.”

“The judgment” was the Ninth Circuit’s decision, which sided with the unions on the question of whether forced union dues for public-sector workers violate the First Amendment. At stake in Friedrichs was whether public-sector unions would continue to be permitted, under a 1977 case called Abood v. Detroit Board of Education, to take forced dues from non-members in order to fund the day-to-day activities of the union. In an alternate universe, one in which Scalia is still alive and sitting on the Court, Friedrichs would have almost assuredly overruled or severely limited Abood, essentially converting public-sector unions into “right to work” unions.  

The lack of a blockbuster decision in Friedrichs is one of the most significant immediate consequences of Scalia’s death. Few issues split the Court more starkly than unions, and there were clearly irreconcilable differences among the justices. Friedrichs was only argued on January 11, so the justices didn’t take too long to conclude that there was no way to decide the case with five justices in the majority, thus the thoroughly unsatisfying opinion today.

Friedrichs Decision Is a Blow Against Educational Excellence

Today, an evenly divided Supreme Court affirmed a lower court’s decision in Friedrichs v. California Teachers Association to permit unions to continue charging nonmembers “agency fees” to cover collective-bargaining activities that the union supposedly engages in on their behalf. About half the states require agency fees from public-sector workers who choose not to join a union.

Not only do agency fees violate the First Amendment rights of workers by forcing them to financially support inherently political activities with which they may disagree (as my colleague Ilya Shapiro and Jayme Weber explained), but the unions often negotiate contracts that work against the best interests of the workers whose money they’re taking. For example, union-supported “last-in, first-out” rules and seniority pay (as opposed to merit pay) work against talented, young teachers. Moreover, a teacher might prefer higher pay to tenure protections, or greater flexibility over rigid scheduling rules meant to “protect” them from supposedly capricious principals.

The Biggest Abuse of the False Claims Act Ever

The False Claims Act (FCA) allows a private individual with knowledge of past or present fraud on the federal government to bring a lawsuit against the defrauder. The statute allows for compensation to private whistleblowers—known as “relators”—when they bring a successful claim against a defendant on the government’s behalf.

If used properly, the FCA can be an important tool for uncovering fraud and abuse against taxpayer-funded programs. If abused, however, the law can destroy businesses and create perverse incentives that harm the market, innovation, and broader public policy.

In United States ex rel. Harman v. Trinity Industries, relator Josh Harman happens to be a competitor of Trinity Industries, which designs guardrails to protect vehicles when they crash on highways. In 2000, Trinity designed a guardrail safety device known as the “ET-Plus,” which was approved by the Federal Highway Administration (FHWA). In 2005, Trinity modified the ET-Plus without fully informing the FHWA of the changes it had made. Harman alleges that by not informing the FHWA of the design change, Trinity defrauded the government and should be held liable for damages under the FCA.

Perspective on Heroin Babies

According to a recent story on WBUR, the NPR radio affiliate in Boston,

Massachusetts hospitals are seeing evidence that the opioid epidemic is affecting the next generation, with an increasing number of babies being born exposed to drugs.

Is this cause for concern? Perhaps, but the “crack baby” scare of the 1980s suggests caution in jumping to conclusions.

In the mid-1980s, as crack use spread and garnered attention from law enforcement officials, the public health community, and the media, it seemed that crack use by pregnant mothers was generating horrific harms. For example, the New York Times reported in 1985 that

Cocaine use may be dangerous for pregnant women and their babies, causing spontaneous abortions, developmental disorders and life-threatening complications during birth, doctors reported today.

Similarly, a 1985 article in the New England Journal of Medicine concluded that

these preliminary observations suggest that cocaine influences the outcome of pregnancy as well as the neurologic behavior of the newborn.

And many media assessments  were extremely pessimistic; Charles Krauthammer, for example, wrote that 

the inner-city crack epidemic is now giving birth to the newest horror: a bio-underclass, a generation of physically damaged cocaine babies whose biological inferiority is stamped at birth.

Three decades later, however, with the benefit of calm reflection and better data, the assessment of crack’s impact is strikingly different.   In 2009, the New York Times wrote:

So far, these scientists say, the long-term effects of [crack] exposure on children’s brain development and behavior appear relatively small.