Topic: Law and Civil Liberties

NIDA Director Has Misguided Views on Marijuana Legalization

Today’s Washington Post contains a Ruth Marcus interview of Nora Volkow, head of the National Institute on Drug Abuse.

Volkow opposes marijuana legalization; she believies it will generate a large increase in use, which will (allegedly) harm users and society.

No one knows how much use might increase under legalization; existing evidence suggests a modest change, but since few countries have fully repealed their drug (or alcohol) prohibitions, we do not have decisive evidence.

The fact Volkow ignores, however, is that if use increases substantially, this means many people perceive a significant benefit from increasing their use or from initiating use; that is a positive of legalization, not a negative!

Marijuana use can, of course, generate unwanted side effects, but Volkow exaggerates these enormously. And other goods, like alcohol, also generate negative spillovers; yet we keep them legal (in part) because they generate substantial benefits.

Volkow further ignores the fact that prohibition generates its own negatives, such as violence, corruption, poor quality control, civil liberties infringements, medical restrictions, enforcement costs, and foregone tax revenue (which forces other tax rates to be higher).

So even if legalization means far greater use, and even if this generates undesirable consequences, the sum of benefits for current and prospective users, combined with elimination of prohibition’s costs, makes legalization the right choice.

Unanimous Supreme Court Correctly Stops Police from Searching Peoples’ Entire Lives Willy-Nilly

In its ruling today in Riley v. California, the Supreme Court unanimously established a clear new rule for police-citizen interaction: The police can’t, without a warrant, search the digital information on cell phones they seize from people they arrest. This is a big deal because it means that being arrested for, say, not paying a speeding ticket, will no longer open you up to having your entire life examined by law enforcement. Unlike the satchels and billfolds of yore, people now carry essentially all their private documents with them at all times: address books, financial and medical records, photo albums, diaries, correspondence, and more. To allow police to review all of that information just because they happen to have arrested someone would violate the Fourth Amendment’s protection of personal papers and effects against unreasonable searches and seizures.

If the police have independent probable cause to access someone’s digital information, they can get a warrant. If they don’t, making an arrest shouldn’t give them license to go on a fishing expedition.

What’s really surprising about this ruling is that it’s both broad and unanimous. Sweeping rulings on high-profile subjects tend to split the Court, whether ideologically or, in criminal procedure cases like this one, between formalists and pragmatists. Unanimous rulings, meanwhile, tend to be cautious, splitting the baby in a way that doesn’t significantly change the law. Yet here we have a loud and unified “bright-line rule” that sets a major standard for the digital age. Kudos to the Court—and raspberries to the federal government, which has now had its expansive arguments rejected unanimously 11 times since January 2012.

Senseless in Seattle: The Minimum-Wage Follies

Meet the Marxist behind Seattle’s wage hike,” read the headline of the lead item at CNN Money late this morning. It seems that one Kshama Sawant, an immigrant from India who earned a Ph.D. in economics from North Carolina State University before taking a teaching position at Seattle Central Community College, is credited by the local press with being the political force behind the city council’s recent vote to raise the minimum wage there to $15 an hour, phased in for large businesses by 2017 and all businesses by 2021.

A self-described Marxist, Ms. Sawant went from Occupy Wall Street to occupying Seattle City Council, the story says, adding that she was “radicalized politically by the gaping inequality she observed upon arriving in the world’s richest country.” Thus, she ran for city council last year “under the banner of Socialist Alternative, an organization that calls for ‘international struggle’ against global capitalism.”

Say this for Ms. Sawant: Whatever she learned about economics in the course of getting her degree, at least she’s not hiding her views. But what can we say about the Seattle City Council, which passed her proposal unanimously? Perhaps there’s something in the coffee out there. Or perhaps they really believe, as Ms. Sawant does, that this measure will “transfer $3 billion from businesses to low-wage workers over the next decade.”

Well it turns out that you don’t need a Ph.D. in economics to understand that economies are not static. That elementary insight from Econ 101 was captured, in fact, in an earlier lead item at CNN Money, “Seattle $15 wage plan is unfair to me.” Quoting several small business owners on what’s in store for them—and their employees—here we find Subway franchise owner Matthew Hollek lamenting that, although he has only eight employees, he’ll have to start paying them 60 percent more by 2017—while the sandwich shop next door will be immune from the law for another four years. The reason? The law counts him as a large employer because he’s part of a national chain. It looks like these “gaping inequalities” are more difficult to close than Ms. Sawant seems to have realized.

Indeed, not only are economies dynamic and is Seattle not an island, but if the benefits of a minimum wage were as good as its advocates believe, then why stop at $15? Why not $20, or $30, or more? You never hear an answer to that because there is none. For a sampling from Cato of a more serious approach to the subject, see here, here, and here.

Resources for a Potential Ruling Today in Halbig v. Sebelius

The D.C. Circuit is due to rule any day now, quite possibly today, on Halbig v. Sebelius. For those who haven’t been watching the vigil I keep over at DarwinsFool.comNewsweek calls Halbigthe case that could topple ObamaCare.”

First a little background. The Patient Protection and Affordable Care Act offers refundable “premium-assistance tax credits” to qualified taxpayers who purchase health insurance “through an Exchange established by the State.” The PPACA contains no language authorizing tax credits through the 34 Exchanges established by the federal government in states that declined to establish one themselves, nor does it authorize the Internal Revenue Service to treat those federally established Exchanges as if they had been “established by the State.” Offering benefits only in compliant states was proposed by numerous Republicans and Democrats in 2009, for obvious reasons: Congress cannot force states to implement federal programs, but it can create incentives for states to act, such as by offering health-insurance subsidies to residents of compliant states.

Halbig is one of four cases challenging the IRS’s decision to rewrite the statute and offer tax credits in the 34 states with federal Exchanges. The plaintiffs are individuals and employers who are injured by the IRS’s overreach because, due to the PPACA’s many inter-locking pieces, issuing those illegal tax credits subjects them to illegal penalties.

Since a ruling may come today (or some Tuesday or Friday hence, as is the D.C. Circuit’s habit), here are some materials for those who want to hit the ground running.

Update: The D.C. Circuit has handed down rulings for today, and Halbig is not among them. Click here to check on the court’s most recent rulings.

How Far Can Congress Delegate Its Legislative Authority?

The Supreme Court this morning announced that in its next term it will hear oral argument in a case called Department of Transportation v. Association of American Railroads, which asks whether Congress, when it passed the Passenger Rail Investment and Improvement Act of 2008, unconstitutionally delegated its legislative power to a private entity—in this case, Amtrak. The non-delegation doctrine, grounded in the separation of powers, arises from the very first word of the Constitution, after the Preamble: “All legislative Powers herein granted shall be vested in a Congress of the United States ….” (emphasis added). Taken at face value, that clear a statement would seem to preclude much of the “lawmaking” that goes on every day in the 300 and more executive branch agencies to which Congress over the years has delegated vast regulatory authority. Unfortunately, the Court long ago held otherwise, unleashing the modern executive state, indulged no more assiduously that by President Obama with his resort to “pen and phone” as he wills his agencies to action, the will of Congress often notwithstanding.

This case, however, challenges the next step in undermining the constitutional doctrine: again, whether Congress can delegate its lawmaking authority to a private entity. In time, one hopes, the case may sow the seeds for the Court’s revisiting the main form of legislative delegation, if only by putting the issue in play. That was at least implicit in the opinion below from the D.C. Circuit, written by the irrepressible Judge Janice Rogers Brown and joined by Senior Judges Stephen Williams and David Sentelle, each of whom has been a presence at Cato. In fact, it was only three weeks ago that Judge Williams was here, commenting on Professor Philip Hamburger’s new book entitled, appropriately, Is Administrative Law Unlawful?—the broad question at issue here.

As with so many administrative law cases, DOT v. AAR involves a complex tangle of agencies and authorities that the reader will be taxed to untangle. But Judge Brown put the principle of the matter plainly: “While often phrased in terms of an affirmative prohibition [as with rights], Congress’s inability to delegate government power to private entities is really just a function of its constitutional authority not extending that far in the first place. In other words, rather than proscribing what Congress cannot do, the doctrine defines the limits on what Congress can do.” This is one to watch.

SCOTUS: Maybe We Broke Securities Law, But Don’t Ask Us To Fix It

Today the Supreme Court missed an opportunity to undo one of its worst corporate-law mistakes of modern times, its 1988 decision in Basic, Inc., v. Levinson that lawyers can file class-action suits on behalf of investors without proving class members’ actual reliance on allegedly fraudulent statements, by presuming the price of the stock was affected. (Colleague Andrew Grossman covered the oral argument in Halliburton v. Erica P. John Fund, Inc. in this space in March.)

In the narrower sense, the Court did unanimously grant relief to defendant Halliburton by recognizing its right to offer proof at an earlier stage that its claimed misstatement had not affected the price of its stock. That’s welcome, and shows that the Court recognizes – maybe even unanimously recognizes – that the current class-action mechanism operates unfairly to pressure defendants to settle at the certification stage, and needs procedural overhaul aimed at fixing that. 

Unfortunately, a six-member majority led by Chief Justice Roberts invoked the doctrine of stare decisis to reaffirm its general holding in Basic, reasoning that it will not inquire whether earlier precedents are wrong, just whether they are so extra-super-wrong as to stand out from the usual run of wrong precedent.  Chief Justice Roberts’s majority opinion makes much of the idea that securities law is statutory and that Congress could therefore alter matters if it chose.

But Justice Thomas, writing in concurrence for himself and Justices Scalia and Alito, has the better logic when he points out that Basic v. Levinson never emerged from an engagement with statutory text at all – it was a product of the Court’s now-discredited “implied private rights of action” period, in which Justices for a while took it upon themselves to invent new civil causes of action from whole cloth. And as with the so-called Pottery Barn rule in government (you break it, you own it) the Court might want to consider taking responsibility for undoing messes that are entirely of its own making.  

EPA’s Loss Is the Separation of Powers’ Gain

At the bottom of the Supreme Court’s decision today tossing out, in large part, the Obama Administration’s greenhouse gas emissions scheme is a stiff dose of constitutional common sense: “When an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism.”

Here, skepticism was certainly warranted. At issue was one of the Obama Administration’s earliest efforts to skirt Congress and achieve its major policy goals unilaterally through aggressive executive action.

A bit of background is necessary. The Clean Air Act’s 1970’s-era “Prevention of Significant Deterioration” and “Title V” programs are aimed at the few hundred largest industrial sources of pollution in the country and impose what the Court correctly identified as “heavy substantive and procedural burdens,” far beyond the red tape that most businesses are able to shoulder. To that end, the statute limits regulation to sources that emit more than 100 or 250 tons per year of certain “air pollutants.”

EPA’s trick was to redefine “air pollutant,” as used in those programs, to include carbon-dioxide emissions. Because carbon-dioxide is emitted in large quantities even by smaller sources, that interpretation expanded the number of sources subject to regulation from a few hundred to millions altogether. Regulations that had previously been confined to major power plants, chemical factories, and the like would now apply to retail stores, offices, apartment buildings, shopping centers, schools, and churches. To avoid what even EPA recognized to be an “absurd result,” the agency went on to claim authority to decide exactly which sources have to comply—in other words, the power to choose winners and losers by exempting the vast majority of sources from compliance, for the time being at least. It called this approach “tailoring.” 

The Court, in a lead opinion by Justice Scalia, called it “patently unreasonable—not to say outrageous.” EPA, it held, must abide by the statute: “An agency has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.” And if such tailoring is required to avoid a plainly “absurd result” at odds with congressional intentions, then obviously there is obviously something wrong with the agency’s interpretation of the statute. To hold otherwise, the Court recognized, “would deal a severe blow to the Constitution’s separation of powers” by allowing the executive to revise Congress’s handiwork.

The loss for the administration was not complete. The Court did allow that EPA can regulate greenhouse emissions by newly-built (or substantially modified) sources that would already be subject to PSD or Title V without taking into account their greenhouse gas emissions—known as “anyway sources.” But even this authority, the Court explained, is not “unbounded” and does not authorize to EPA to mandate any manner of efficiency gain.

The Court’s decision may be a prelude of more to come. Since the Obama Administration issued its first round of greenhouse gas regulations, it has become even more aggressive in wielding executive power so as to circumvent the need to work with Congress on legislation. That includes recent actions on such issues as immigration, welfare reform, and drug enforcement. It also includes new regulations for greenhouse gas emissions by power plants, proposed just this month, that go beyond traditional plant-level controls to include regulation of electricity usage and demand—that is, to convert EPA into a nationwide electricity regulator. Today’s decision—as well as one last month by the D.C. Circuit rejecting a nearly identical regulatory gambit by the Federal Energy Regulatory Commission—suggests that this won’t be the last court decision throwing out Obama Administration actions as incompatible with the law.