Topic: Regulatory Studies

Watch On The Rinds: The FDA’s Mimolette Ban

Mimolette is a beloved French cheese produced for hundreds of years around the city of Lille. It looks somewhat like a ripe cantaloupe and tastes not unlike classic Dutch Gouda, to which it is related. Its distinctively pitted rind and hard-to-pin-down taste both arise from the action of microscopic cheese mites that are deliberately introduced to its surface as part of its production. Mimolette has been imported to specialty cheese shops in the United States for many years without incident, but now it’s come to the attention of the federal Food and Drug Administration (FDA), which is afraid that someone might have an allergic reaction to lingering remnants of the insect helpers (which are mostly removed in processing before final shipment). Now a large quantity of the expensive cheese is sitting in a warehouse in New Jersey, legally frozen, while its American fanciers prepare to go without. 

Jill Erber, who with her husband runs two cheese shops in the Virginia suburbs of Washington, D.C., has organized a consumer protest and talks to Cato’s Caleb Brown in this new video. ”You mess with people’s food, they don’t like that,” she says. “They like to be able to make their own choices.”

After watching the video, you may wonder: could this be the most useless allocation of FDA resources yet? It just mite.

Federal Judge to Kentucky Bureaucrats: Stop Prohibiting Free Competition

Last Thursday, a federal district court judge issued an injunction blocking the Kentucky Transportation Cabinet – the genteel name given the Bluegrass State’s department of transportation – from enforcing the state’s anti-competitive licensing law for movers.

In Bruner v. Zawacki, which is being litigated by Cato adjunct scholar Timothy Sandefur and our other friends at the Pacific Legal Foundation, small business owner Raleigh Bruner argues that the licensing laws, which allow existing moving companies to file “protests” to block new companies from opening, create a “Competitor’s Veto” that has no rational basis. Judge Danny Reeves ordered the state not to enforce those laws, at least until he has the opportunity to issue a complete opinion – but he strongly indicated that he already thinks those laws are unconstitutional:

The Sixth Circuit has held that “protecting a discrete interest group from economic competition is not a legitimate governmental purpose.” And it appears that the notice, protest, and hearing procedure in the statutes – both facially and as applied – operate solely to protect existing moving companies from outside economic competition. The defendants have admitted that they know of no instance where, upon a protest by an existing moving company, a new applicant has been granted a certificate … .  [O]ver the past five years, no protest filed has been regarding an applicant’s safety record. Likewise, no applications have been denied on the grounds that the applicant was a danger to public health, safety, or welfare.

You can read more about the case at PLF’s Liberty Blog.

Michael Carvin on Halbig v. Sebelius

Michael Carvin is the lead attorney in Halbig v. Sebelius, a legal challenge that various media report “could tear down major pieces of ObamaCare” or even “sink ObamaCare.”

Carvin will be discussing Halbig at a Cato policy forum on the case this coming Monday, June 17. Register to attend here.

Here he is discussing the case on Cavuto last month:

Justice Thomas Shows Again that the Federal Emperor Has No Constitutional Clothes

Yesterday’s unanimous Supreme Court opinion in American Trucking Associations v. City of Los Angeles is a run-of-the-mill federal preemption case, not inviting much attention. But the interesting bit isn’t Justice Kagan’s majority opinion. It’s Justice Thomas’s short concurrence. Thomas agrees that federal law trumps conflicting state/local law regarding certain regulations related to the Port of Los Angeles, but seizes on the plain language of the preempting statute to take a shot at the massive expansion of federal authority under a misreading of the Commerce Clause.

Justice Thomas focuses on a section of the relevant statute (the Federal Aviation Administration Authorization Act, or FAAAA–don’t ask why this covers ports) titled “Federal authority over intrastate transportation.” He denies that Congress possesses this authority: the Commerce Clause, part of Article I, section 8, only gives Congress the power to regulate commerce “among the several States.” Thomas can’t believe that Congress could have been granted power to legislate something so local as where trucks park once they leave the port (one of the regulations at issue in American Trucking):

Congress cannot pre-empt a state law merely by promulgating a conflicting statute–the preempting statute must also be constitutional, both on its face and as applied. As relevant here, if Congress lacks authority to enact a law regulating a particular intrastate activity, it follows that Congress also lacks authority to pre-empt state laws regulating that activity

The reason that Justice Thomas nevertheless concurs in the judgment here, however, is that Los Angeles waived any constitutional claims against the FAAAA, instead relying solely on statutory arguments (which correctly lost 9-0).

This isn’t the first time that Thomas upheld a federal law but noted federalism concerns that, as here, the plaintiffs didn’t raise (or didn’t preserve on appeal). In Gonzales v. Carhart, for example, Thomas concurred with a majority decision that sustained the federal Partial-Birth Abortion Ban Act against a challenge based on Roe v. Wade and Planned Parenthood v. Casey but noted that the issue of whether a federal abortion regulation “constitutes a permissible exercise of Congress’ power under the Commerce Clause is not before the Court. The parties did not raise or brief that issue; it is outside the question presented; and the lower courts did not address it.”

Justice Thomas’s opinions in these sorts of cases illustrate the misuse of the Commerce Clause given the Constitution’s careful enumeration of congressional powers. These brief, pointed concurrences show that our imperial government isn’t clothed in constitutional authority.

And they also have a direct use for legal practitioners. I wasn’t a “real” lawyer for that long before joining Cato, but here’s an easy practice tip: Don’t just assume that the federal government has the power to pass the law you don’t want applied to your client.

Plaintiffs Ask Court to Block IRS’s Illegal ObamaCare Taxes this Year

I have blogged about the Internal Revenue Service’s attempt to tax, borrow, and spend $800 billion contrary to the clear language of ObamaCare, and how both Oklahoma (in Pruitt v. Sebelius) and a group of individuals and small businesses (in Halbig v. Sebelius) have filed suit to block this raw power grab. The Congressional Research Service writes that these challenges “could be a major obstacle to the implementation of [ObamaCare].” George Mason University law professor Michael Greve writes:

This is huge: all of Obamacare hangs on the outcome…If successful…[either] case will bring Obamacare’s Exchange engine to a screeching halt…In short, this is for all the marbles.

Last week, the Halbig plaintiffs asked the U.S. district court for the District of Columbia to speed things up. Though the IRS doesn’t have to respond to the Halbig complaint until July, the plaintiffs filed a motion for summary judgment asking the court to rule on the case before the end of 2013. According to the plaintiffs:

Plaintiffs need a determination on the merits far enough in advance of January 1, 2014, to allow them to conform their behavior to the law. Because the validity of the regulation turns on a purely legal question and the administrative record is closed, Plaintiffs are moving for summary judgment now, and hope thereby to avoid the need to litigate a motion for preliminary injunction or temporary restraining order at the eleventh hour.

The plaintiff’s motion for summary judgment cites my paper (with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”

On June 17, one week from today, Cato will host a policy forum on Halbig v. Sebelius featuring plaintiffs’ counsel Michael Carvin and other luminaries. Register here.

Government’s Legal Arguments Shrivel on the Vine

Yet again the unanimous Supreme Court has slapped down a government attempt to deprive property owners of their civil rights.  What was at stake in Horne v. Dept. of Agriculture wasn’t even the property – raisins! – but the mere ability to challenge the government’s desire to take that property without meaningful judicial review.

Nobody should have to suffer a needless, Rube Goldberg-style litigation process to vindicate their constitutional rights. Yet that’s exactly what the U.S. Department of Agriculture sought to impose on raisin farmers Marvin and Laura Horne when they protested the enforcement of a USDA “marketing order” that demanded that the Hornes turn over 47% of their crop without compensation.

These New Deal-era regulations are bad enough – forcing raisin “handlers” to turn over some of their crop to the government so it can control raisin supply and price – but here the government kept throwing up obstacles to the Hornes’ attempts to assert that they shouldn’t legally be subject to them.  The government demanded about $650,000 from the Hornes and didn’t want to give them a day in court until they paid the money and jumped through assorted administrative hoops.

The Supreme Court correctly rejected that absurd position and reversed the California-based U.S. Court of Appeals for the Ninth Circuit that upheld it, reinforcing the line drawn by five other circuit courts.  “In the case of an administrative enforcement proceeding,” Justice Thomas wrote on all his colleagues’ behalf, “when a party raises a constitutional defense to an assessed fine, it would make little sense to require the party to pay the fine in one proceeding and then turn around and sue for recovery of that same money in another.”

Indeed, there’s no reason to treat Fifth Amendment takings claims any differently than lawsuits against government violations of other constitutional provisions.

Here’s more background on the case and Cato’s amicus brief.

National Journal: Top Obama Advisers Admit IRS Could Have Been Asked to Suppress Political Dissidents

I have already blogged about Ron Fournier’s remarkable National Journal column on how President Obama’s many scandals make it hard to support big government. But there’s an item buried in that column that bears highlighting:

If investigators uncover even a single email or conversation between conservative-targeting IRS agents and either the White House or Obama’s campaign, incompetence will be the least of the president’s problems.

Team Obama has publicly denied any knowledge of (or involvement in) the targeting. Privately, top advisers admit that they don’t know if the denials are true, because a thorough investigation has yet to be conducted. No emails have been subpoenaed. No Obama aides put under oath.

It seems Fournier has multiple sources close to the president who have basically said, “Did someone in the administration tell the IRS to suppress our opponents? Ehh, maybe.”

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