Topic: Law and Civil Liberties

Cato Conference: “Pruitt, Halbig, King & Indiana: Is ObamaCare Once Again Headed to the Supreme Court?”

On October 30, the Cato Institute will host a conference featuring leading experts on four legal challenges that critics understandably yet mistakenly describe as “the most significant existential threat to the Affordable Care Act”:

PruittHalbigKing & Indiana: Is ObamaCare Once Again Headed to the Supreme Court?

Thursday, October 30, 2014, 9:00AM – 1:30PM. 

Luncheon to follow.

Featuring: Oklahoma Attorney General Scott Pruitt; Indiana Attorney General Greg ZoellerRobert BarnesThe Washington PostJonathan Adler, Case Western Reserve University School of Law; David Ziff, University of Washington School of Law; Brianne Gorod, Constitutional Accountability Center; James Blumstein, Vanderbilt University; Michael F. Cannon, Cato Institute; Len Nichols, George Mason University; Tom Miller, American Enterprise Institute; and Robert Laszewski, Health Policy and Strategy Associates, LLC.

In Pruitt v. Burwell and Halbig v. Burwell, federal courts have ruled that the Internal Revenue Service is misinterpreting the Patient Protection and Affordable Care Act, unlawfully paying billions of dollars to private health insurance companies, and unlawfully subjecting more than 50 million individuals and employers to the Act’s individual and employer mandates. In King v. Burwell, another federal court found the IRS’s interpretation is permissible. A fourth lawsuit, Indiana v. IRS, is due a ruling at any time.

While these cases attempt to uphold the ACA by challenging the Obama administration’s interpretation, supporters and critics agree they could have as large an impact on the law as any constitutional challenge. Is the IRS acting within the confines of the law? Is the ACA unworkable as written? Is it inevitable that the Supreme Court will hear one of these cases, or a similar challenge yet to be filed? What is the impact of the IRS’s (mis)interpretation? What impact would a ruling for the plaintiffs have on the health care sector and the ACA? Leading experts, including the attorneys general behind Pruitt v. Burwell and Indiana v. IRS, will discuss these and other dimensions of this litigation.

To register to attend this event, click here and then submit the form on the page that opens, or email events [at] cato [dot] org, or fax (202) 371-0841, or call (202) 789-5229 by 9:00 a.m. on Wednesday, October 29, 2014.

Supreme Court Declines to Review Another Important Case

It’s not just high-profile culture-war issues like same-sex marriage and the right to bear arms that the Supreme Court is avoiding like the plague. On issues ranging from federalism to property rights to criminal law, the justices increasingly decline to hear any case they don’t absolutely have to – no matter how important the issues presented – especially if there’s a threat of an irreconcilable split. Such is the brave new world of John Roberts’s minimalism/unanimity.

The latest such example came yesterday morning, in a criminal procedure case called Jones v. United States, in which Cato filed an amicus brief that I previously blogged about. The issue here is whether, pursuant to the Sixth Amendment, a judge can base a sentence on facts that the jury did not find beyond a reasonable doubt. (The Court ruled in a 2000 case called Apprendi v. New Jersey that judges can’t enhance sentences beyond statutory maximums based on facts, other than prior convictions, not decided by the jury – but in Jones the sentences in question, while seemingly harsh and unreasonable, were still within the sentencing guidelines.)

While normally we don’t know what the justices are thinking when they deny a cert petition, or even how the vote went (four votes are needed to grant), but in the Jones denial, Justice Antonin Scalia wrote a rare dissenting opinion, joined by Justices Clarence Thomas and Ruth Bader Ginsburg. Here’s the salient bit:

The Sixth Amendment, together with the Fifth Amendment’s Due Process Clause, “requires that each element of a crime” be either admitted by the defendant, or “proved to the jury beyond a reasonable doubt.” Any fact that increases the penalty to which a defendant is exposed constitutes an element of a crime, and “must be found by a jury, not a judge.” We have held that a substantively unreasonable penalty is illegal and must be set aside. It unavoidably follows that any fact necessary to prevent a sentence from being substantively unreasonable—thereby exposing the defendant to the longer sentence—is an element that must be either admitted by the defendant or found by the jury. It may not be found by a judge. [emphasis original; internal citations omitted.]

And so the petitioners came one vote short. The three dissenters may seem like an unusual grouping, but actually these justices are often together on issues relating criminal defendants’ jury-trial rights. (It’s sort of the left/right versus the center, or the principled versus the pragmatic.) They were in the Apprendi majority, for example, as well as in the majority for the case that struck down the mandatory nature of the sentencing guidelines, United States v. Booker (2005), and recent cases involving the right to confront witnesses against you. Alas, they were joined in those cases by Justices John Paul Stevens and David Souter, who have since been replaced by Justices Sonia Sotomayor and Elena Kagan, respectively. It’s not a big surprise that Kagan seems to have joined the “prgamatic” bloc for these purposes, but Sotomayor’s vote is disappointing. Some commentators point to her background as a prosecutor to explain such deference, but Justice Sotomayor is one of the most pro-defendant votes on Fourth Amendment and habeas corpus cases.

In any event, whatever the reason for the lack of a crucial fourth vote to grant, this was another opportunity lost by the Court, another responsibility shirked. For more commentary, see here, here, here, and here.

How The Supreme Court Can Stop Consumers From Getting Ripped Off

Today, the Supreme Court hears a case about whether dentists and other professions should be allowed to use state licensing boards to engage in anti-competitive behavior that would be illegal if not done under the auspices of state governments. The case is North Carolina State Board of Dental Examiners v. FTC, and involves actions taken by that state’s dental board to prevent non-dentists from providing teeth-whitening services.

In the University of Pennsylvania Law Review, Cato Institute adjunct scholars David Hyman and Shirley Svorny explain:

A majority of the courts of appeals gives state licensing boards and similar entities considerable latitude to engage in anticompetitive conduct, even when that conduct would be clearly unlawful were it undertaken individually by the licensed providers that typically dominate these licensing boards…

[T]he North Carolina Board of Dental Examiners (N.C. Board) became concerned that non-dentists were providing teeth whitening services. In North Carolina, teeth-whitening was available from dentists, either in-office or in take-home form; as an over-the-counter product; and from non-dentists in salons, malls, and other locations. The version provided by dentists was more powerful and required fewer treatments, but was significantly more expensive and less convenient. In response to complaints by dentists that non-dentists were providing lower-cost teeth-whitening services, the N.C. Board sent dozens of stern letters to non-dentists, asserting that the recipients were engaged in the unlicensed practice of dentistry, ordering them to cease and desist, and, in some of the letters, raising the prospect of criminal sanctions if they did not do so. The N.C. Board also sent letters to mall owners and operators, urging them not to lease space to non-dentist providers of teeth whitening services.

The Supreme Court will decide whether the North Carolina dental board should be able to claim a “state action” exemption to federal laws against anti-competitive conduct. Hyman and Svorny argue they should not, noting that doctors, lawyers, and other professions have used government licensing to stamp out competition, to the detriment of consumers:

Other occupations provide no shortage of similar examples, whether it is states requiring hair braiders to obtain cosmetology licenses (even though the requisite training has absolutely nothing to do with hair braiding), laws prohibiting anyone other than licensed funeral directors from selling coffins, states prohibiting anyone other than veterinarians from “floating” horse teeth, or ethics rules prohibiting client poaching by music teachers. 

“Antitrust has historically focused on private restraints on competition, but publicly imposed limitations can pose greater peril,” they write, “since they are likely to be both more effective and more durable.”

Hyman and Svorny make three further recommendations for the courts:

First, in reviewing the decisions of licensing boards, courts should presume that states were not actively supervising the boards, absent compelling evidence to the contrary. Second, defendant–licensing boards should be required to present persuasive evidence of actual harm that their proposed licensing restrictions or restraints will prevent and should be required to show that private market and non-regulatory forces (including brand names, private certification, credentialing, and liability) are insufficient to ensure that occupations maintain a requisite level of quality. Finally, we argue that legislators should take steps to roll back existing licensing regimes.

Hyman signed onto an amicus brief filed by antitrust scholars. (Here are two more amicus briefs filed by public-choice economists and the Cato Institute.) Svorny argues for the complete repeal of government licensing of medical professionals, and illustrates how the market for medical-malpractice liability insurance does more to promote health care quality than licensing

(Cross-posted at Darwin’s Fool.)

Greg Abbott Tells Fifth Circuit Court That Gay Marriage Won’t Stop Heterosexual Irresponsibility

In a brief filed to the Fifth Circuit Court of Appeals on Friday, Texas attorney general Greg Abbott says that the state’s gay marriage ban may help to reduce out-of-wedlock births:

Texas’s marriage laws are rationally related to the State’s interest in reducing unplanned out-of-wedlock births. By channeling procreative heterosexual intercourse into marriage, Texas’s marriage laws reduce unplanned out-of-wedlock births and the costs that those births impose on society. Recognizing same-sex marriage does not advance this interest because same-sex unions do not result in pregnancy.

As I’ve written before, this is a remarkably confused argument. There are costs to out-of-wedlock births. Too many children grow up without two parents and are less likely to graduate from high school, less likely to find stable jobs, and more likely to engage in crime and welfare dependency. All real problems. Which have nothing to do with bans on same-sex marriage. One thing gay couples are not doing is filling the world with fatherless children. Indeed, it’s hard to imagine that allowing more people to make the emotional and financial commitments of marriage could cause family breakdown or welfare spending.

The brief repeatedly says that “same-sex marriage fails to advance the State’s interest in reducing unplanned out-of-wedlock births.” Well, that may be true. But lots of state policies fail to advance that particular interest, from hunting licenses to corporate welfare. Presumably Abbott doesn’t oppose them because they don’t serve that particular purpose.

The brief does note that same-sex marriage may very well produce other societal benefits, such as increasing household wealth or providing a stable environment for children raised by same-sex couples [or] increasing adoptions.” But the attorney general wants to hang the state’s ten-gallon hat on the point that it won’t reduce out-of-wedlock births by opposite-sex couples.

In a previous case, Judge Richard Posner declared that the states of Indiana and Wisconsin had not produced any rational basis for banning gay marriage. Attorney General Abbott seems determined to prove him right.

Uncle Sam’s Vestigial Feudalism

In the feudal era, rulers funded their households by taking a share of the crops farmers in their territory produced. The lords called this tribute and the peasants would’ve called it extortion.

We like to think that we’ve come quite a ways since then. After all, taxes are now paid withmoney—or even a digital abstraction of money—and forms, not cartloads of grain. We can even feel good (well, sanguine) about paying taxes, because we know that we’re funding the government of our own choosing—a democratically elected leadership restrained by the Constitution—not just feeding the avarice of a local warlord.

Except if you’re a raisin farmer in California, a state responsible for 40% of the world’s and 99% of America’s raisins. If you’re a California serf raisin farmer, you’re required by federal law to hand over up to 47% of each year’s crop to the U.S. government so the government can control the supply and price of raisins under a New Deal-era regulatory scheme.

The Fifth Amendment says that “private property [shall not] be taken for public use, without just compensation,” however, so it’s hard to see how it would be constitutional for the government to take nearly half a farmer’s harvest without any payment—let alone “just compensation.” (To be clear, if you grow grapes for use in wine or juice, you’re fine. It’s only if you dry out those grapes that you have to watch your property rights evaporate.)

Yet the U.S. Court of Appeals for the Ninth Circuit has done just that, repeatedly. In 2012, the en banc court held that nobody could challenge this taking in federal court. The Supreme Court unanimously disagreed. (For more background and to read Cato’s merits brief in that case go here.)

Failing to take the hint, the Ninth Circuit has now held that the Fifth Amendment’s protection against state expropriation simply doesn’t apply to personal property (as opposed to real estate). To put it bluntly, that’s an arbitrary, unprecedented, and ahistorical distinction, so raisin farmers are once again forced to ask the Supreme Court to correct lower court’s failure to protect their rights.

Joined by the five other organizations, Cato has filed a brief urging the Court to take this case, thus insuring that the farmers’ constitutional rights aren’t left to wither on the vine. We argue that the Ninth Circuit’s distinction between real and personal property has no basis in the text and history of the Constitution, Supreme Court precedent, or a reasonable understanding of the English language.

The Fifth Amendment embodies the notion that property rights are central to a free people and a just government. It could not be more clear that property can’t be taken without “due process,” and that when it is taken, the government must pay “just compensation.” These guarantees reflect the many values inherent in private property, such as individual achievement, privacy, and autonomy from government intrusion.

By devaluing property rights of all sorts, the Ninth Circuit weakens the values of autonomy and reliance that undergird the Takings Clause and conflicts with the very foundations of our constitutional order.

Raisin farming ain’t easy; five pounds of grapes yield only one pound of raisins. Raisin farmers shouldn’t have to hand over half of that pound to the federal government.

The Supreme Court will decide whether to take Horne v. U.S. Dept. of Agriculture later this fall.

Cato legal associate Gabriel Latner co-authored this blogpost.

New York’s Crazy Gravity-Knife Law

Excellent article by Jon Campbell for the Village Voice about New York City’s zeal for arresting people on charges of possessing so-called “gravity knives” – knives whose blade can be opened without the assistance of a second hand, and then be secured in place for use. Used in countless trades and occupations, knives fitting this description are sold at hardware, sporting, and work-gear stores from coast to coast. But New York City routinely prosecutes persons in possession of them even in the absence of any indication that the holder was up to no good or knew they violated local law. Excerpt:

For years, New York’s gravity-knife law has been formally opposed by a broad swath of the legal community. Elected officials call the statute “flawed” and “unfair.” Defense attorneys call it “outrageous” and “ridiculous” – or worse. Labor unions, which have seen a parade of members arrested for tools they use on the job, say the law is woefully outdated. Even the Office of Court Administration – the official body of the New York State judiciary – says the law is unjustly enforced and needs to change. They’ve petitioned the legislature to do just that.

A move in Albany to revamp New York’s law to cover possession of such a knife only when accompanied by “unlawful intent” failed, due in part to opposition from some quarters in the law enforcement community, where collaring some poor guy walking home from the subway for a “GK” (gravity knife) is known as an easy way to boost arrest numbers:

A poster on Officer.com, a verified online message board for law enforcement officers, put it bluntly in 2013 when he advised a rookie to be on the lookout for “GKs”: “make sure they have a prior conviction so you can bump it up to that felony!!!”

New York’s controversial stop-and-frisk policies are one reason it has such a high number of knife charges:

Village Voice analysis of data from several sources suggests there have been as many as 60,000 gravity-knife prosecutions over the past decade, and that the rate has more than doubled in that time. If those estimates are correct, it’s enough to place gravity-knife offenses among the top 10 most prosecuted crimes in New York City.

More recently, Manhattan District Attorney Cyrus Vance in 2010 deployed the law as a municipal money-maker by charging Home Depot and other hardware and sports chains for selling what many of them had assumed were lawful knives, and extracting large “restitution” payments as part of the ensuing settlements.

In much of the rest of the country, fortunately, the law is on a sounder path as Arizona, New Hampshire, and other states revamp outdated laws to respect the peaceful ownership and carrying of knives. (The national group Knife Rights monitors and advances this progress.) Read the whole Voice piece here