Topic: Regulatory Studies

U.S. Can’t Use Supreme Court’s Property Rights Ruling to Rewrite Takings Law

By
Ilya Shapiro

The Supreme Court ruled in December that a taking occurs when a government action gives rise to “a direct and immediate interference with the enjoyment and use of land,” thus allowing the Arkansas Game & Fish Commission to proceed with claims relating to the damage caused by government-induced flooding of a state wildlife management area. (The lower court had bizarrely held that while temporary physical invasions and permanent floods were subject to takings analysis, temporary flooding, even if repeated, was not.  For more background and links to Cato’s amicus briefs before the Supreme Court, see Roger Pilon’s commentary.)

On remand to the U.S. Court of Appeals for the Federal Circuit, however, the United States, relying on a single passage from the opinion, contends that the Supreme Court created a new multi-factor test applicable to all regulatory and temporary physical takings claims. Cato has now joined the Pacific Legal Foundation, National Federation of Independent Business, and National Association of Home Builders on a brief supporting the Commission and arguing that the passage upon which the government relies is both non-binding (“dicta” in legal terms) and in any event cannot be read to upset the distinction between regulatory and physical takings that the Court has consistently asserted.

It is well established in the Supreme Court’s takings jurisprudence that government intrusions on private property that permanently deprive the owner of a valuable property interest are to be subjected to the same test, regardless of whether the invasions are permanent or temporary. Under that test, courts are to consider the duration of the government intrusion, along with other information, to determine (1) whether the invasion is the direct cause of injury to the property and (2) whether the injury is substantial enough to subtract from the owner’s full enjoyment of the property and limit his exploitation thereof. If the injury to the property is substantial, it doesn’t matter whether the it was caused by an invasion of limited duration; once it is shown that the government invasion directly and substantially interfered with an owner’s property right, the government has a categorical duty to pay compensation.

In this case, the government’s intrusion permanently damaged significant property — valuable timber, from the destruction of trees — and is thus a compensable taking. The Supreme Court’s decision in Arkansas Game & Fish Commission didn’t modify or overturn the well-settled test for adjudicating physical takings claims, which remains distinct from the test that controls regulatory takings claims.

The Federal Circuit will hear argument in the case later this spring.

Topics: 
Law and Civil Liberties, Regulatory Studies

This Month at Cato Unbound: What Keeps Money Out of Politics?

By
Jason Kuznicki

It’s called the Tullock Paradox: if you run the numbers, the expected returns to lobbying commonly appear much larger than they ought to be. Bad behavior pays really well, and yet corporations and interest groups routinely pass on what would seem, from a coldly amoral stance, to be easy money. Rational economic actors ought to bid up the price of government favor—and thus bid down the rate of return—but real-world actors don’t do so.

Why don’t we see even more money in politics? That’s the question we ask in the April, 2013 issue of Cato Unbound.

To answer that question, we have invited Fred L. Smith, founder and chairman of the Competitive Enterprise Institute, a man who has spent much of his career pondering just this question, and who benefits from an insider’s view of political advocacy. His lead essay suggests that there is a widespread distaste for political activity among people who would otherwise turn to lobbying, and often that’s with good reason.

To discuss with him the potential pitfalls of public choice modeling, we have invited a panel of distinguished academics: Professors Stephen Ansolabehere of Harvard University, Francesco Parisi of the University of Minnesota School of Law, and Raymond J. La Raja of the University of Massachusetts at Amherst.

As always, Cato Unbound readers are encouraged to take up our themes and enter into the conversation on their own websites and blogs, or on other venues. We also welcome your letters. Send them to jkuznicki at cato dot org. Selections may be published at the editors’ option.

Topics: 
Cato Publications, Regulatory Studies

Casket Case Shows Economic Liberty to Be Alive and Well

By
Ilya Shapiro

Last week, the Institute for Justice scored a resounding victory for the right to earn an honest living in an unlikely case that pitted woodworking monks against the Louisiana State Board of Embalmers and Funeral Directors.  The New Orleans-based U.S. Court of Appeals for the Fifth Circuit – where I clerked – ruled in a final, unanimous decision (including one Obama-appointed judge) that Louisiana violated the St. Joseph Abbey monks’ economic liberty when it forbade them from selling the caskets they make to support their religious order.

Significantly, the court ruled that the Constitution doesn’t allow the government to enact laws simply to shield industry cartels from honest competition.  Although IJ was already assured of victory, given that Fifth Circuit had issued a divided preliminary opinion in October, that ruling left open some tricky questions that this latest decision definitively settled.  

Last Wednesday’s ruling makes clear that laws having no purpose but to enrich certain protected interests are unconstitutional, using reasoning that should be a model for courts across the country.  

Louisiana now has 90 days to seek review in the U.S. Supreme Court – which supporters of economic liberty should welcome because IJ’s previous litigation created a split in the federal lower courts that can only be resolved, for the nation as a whole, by the Supreme Court. 

For more on St. Joseph Abbey v. Castille, see IJ’s case page and this Wall Street Journal op-ed by IJ’s Chip Mellor and Jeff Rowes. And if you’re a law student interested in using your legal skills to promote liberty this summer, you should apply to IJ’s epic public interest boot camp (of which I’m a graduate, though in my day there wasn’t any skydiving or aikido).

Topics: 
Law and Civil Liberties, Regulatory Studies

Three Cheers for Autonomy

By
Trevor Burrus

In today’s New York Times, philosopher Sarah Conly gives “Three Cheers for the Nanny State,” specifically, NYC’s famed big soda ban. Invoking aspects of the theory of “nudge,” made popular in a book by Richard H. Thaler and Cass R. Sunstein, Conly argues that, sometimes, the government can rightfully save us from ourselves.

The popularity of “nudge theory” is closely tied to the recent spate of popular science books on the foibles of the human brain. Books such as Predictably Irrational and A Mind of Its Own are part of a new self-help fad: the idea that scientists studying the error-prone human brain can help us understand why we are unable to quit smoking, lose weight, and many other common problems.

It was only a matter of time until government regulators and their champions embraced this new science in order to put a fresh spin on an old impulse—their never-ending desire to save us from ourselves. But despite the valid insights of cognitive neuroscience, both nudge theory and Conly’s editorial are no more defensible than any other paternalism. We should not be deceived into believing that there is any new wine in those old wineskins.

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Topics: 
Law and Civil Liberties, Regulatory Studies

Striking Down Bloomberg’s Soda Ban: A Matter of Law, Not Activism

By
Walter Olson

Much legal commentary at Slate follows a pat formula: judicial activism is a genuine menace, but not from left or liberal jurists. It’s those awful judges on the conservative and libertarian side who engage in the real activism when they strike down laws and government initiatives, or as in the case of ObamaCare, come close to striking them down. To observe the formula at its most mechanical, check out Emily Bazelon’s Slate article last Wednesday portraying a judge’s striking down of Mayor Bloomberg’s ban on big soda sizes as a venture in “conservative judicial activism.”

Never mind that none of the readily available biographical information about jurist Milton A. Tingling seems to justify describing him, as Bazelon does, as a “conservative judge.”  (Elected in Manhattan on the Democratic line, Judge Tingling appears to have fit his judicial career comfortably into the framework of Charles-Rangel-era Harlem politics, as David Bernstein mentions at Volokh Conspiracy. In a couple of earlier notable cases, Judge Tingling did rule against police and public-order interests, but we don’t ordinarily regard that sort of civil-libertarian streak as distinctively “conservative.”) 

Bazelon assails Judge Tingling for supposedly substituting his own judgment for that of Bloomberg’s Department of Public Health on the merits of the drinks ban. But everyone agrees the question properly before the court was not whether the judge agreed with the ban. It was instead whether the ban could pass muster under the relevant New York precedent, a 1987 case called Boreali v. Axelrod in which New York’s highest court (to quote the case summary) ruled that the state Public Health Council “overstepped the boundaries of its lawfully delegated authority when it promulgated a comprehensive code to govern tobacco smoking in areas that are open to the public.” Boreali is a distinctive New York case, and creates a test for impermissible delegation that differs from what courts do when applying federal law.

Prof. Aaron Saiger, a specialist in local government law at Fordham Law School in Manhattan, had this to say the other day at Concurring Opinions about the drinks ruling: 

… Judge Tingling is right that New York State’s nondelegation doctrine – the doctrine that administrative law professors who teach only federal cases tell their students is a dead letter – prohibits the rule. The foundational case, Boreali v Axelrod, is nearly on all fours with this case. Health departments, pursuant only to sweeping language giving them authority over public health, cannot in New York State limit trade in legal markets over which the legislature has given them no explicit authority. If the City is to win its promised appeal, it is going to need to argue that Boreali should be overruled or limited.

The problem with that is that Boreali is right. Nondelegation is an important constitutional principle and should not be sidelined out of existence. … I think it’s not just reasonable, but better politics, better civics, and better constitutional law to require those shoves [i.e., paternalistic “nudges”] to come from a legislative, rather than an executive and bureaucratic, process.

Saiger’s commentary is all the more pertinent because he’s anything but a fan of the decision’s craftsmanship. Unlike Judge Tingling, he doesn’t think the ban was arbitrary or capricious; he doesn’t believe the city’s charter should be read to limit the Health Department’s decree powers to those responding to imminent or emergency health threats; and he’s not averse in principle, he says, to what the Mayor was trying to do. 

So what does Bazelon think about Boreali v. Axelrod? Does she think it should be overruled or can somehow be distinguished from the beverages case? It’s hard to tell, because her article never mentions Boreali at all, though Judge Tingling had laid it out at great length as the precedent on which he was basing his decision. 

Judges shouldn’t – and Judge Tingling didn’t – breeze right by the relevant case law in the course of reaching a foreordained conclusion. If only all legal commentators were as careful.

Topics: 
Law and Civil Liberties, Regulatory Studies

Guns and the Commerce Clause: On the Way to the Supreme Court?

By
Ilya Shapiro

Nearly two years ago, I wrote about an intriguing Commerce Clause case involving the Montana Firearms Freedom Act.  To wit, Montana enacted a regulatory regime to cover guns manufactured and kept wholly within state lines that was less restrictive than federal law.  The Montana Shooting Sports Association filed a claim for declaratory judgment to ensure that Montanans could enjoy the benefits of this state legislation without threat of federal prosecution.  The federal district court ruled against the MSSA.

On appeal to the Ninth Circuit, Cato joined the Goldwater Institute on an amicus brief, arguing that federal law doesn’t preempt Montana’s ability to exercise its sovereign police powers to facilitate the exercise of individual rights protected by the Second and Ninth Amendments. More specifically, for federal law to trump the MFFA, the government must claim that the Commerce and Necessary and Proper Clauses give it the power to regulate wholly intrastate manufacture, sale, and possession of guns, which is a state-specific market distinct from any related national one.

The lawsuit’s importance is not limited to Montana; a majority of states have either passed or introduced such legislation. The goal here is to reinforce state regulatory authority over commerce that is by definition intrastate, to take back some of the ground occupied by modern Commerce Clause jurisprudence.

Well, after much delay – in part due to the Ninth Circuit’s waiting for Supreme Court instruction on the Commerce Clause in the Obamacare litigation – MSSA v. Holder finally saw oral argument two weeks ago.  The Goldwater Institute’s Nick Dranias, who was the principal author of our joint brief, was able to get 10 minutes of argument time and sent me this report afterwards, which I reprint with his permission:

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Topics: 
Law and Civil Liberties, Regulatory Studies

Unlike Policymakers, Consumers Use Logic to Avoid Horsemeat

By
K. William Watson

A scandal has recently erupted in Europe after it was discovered that horsemeat was being sold to consumers in processed foods claiming to be 100% beef. This is, of course, already blatantly illegal, but that hasn’t stopped regulators from trying to figure out how to increase their oversight of Europe’s already highly regulated food market.

Unfortunately, some policymakers have used this scandal to push for increased trade barriers within the European Union. Their preferred barrier is the increased use of mandatory country of origin labels. This policy ignores the fact that horsemeat can be passed off as beef in any country and that doing so is illegal in all of them.

Nevertheless, this call for labels reveals a justified concern that complex supply chains obscure relevant information from consumers. But, consumers don’t need protectionist mandates to solve their problems; a little common sense will do just fine. The Scottish Farmer, an advocacy group for Scottish agriculture, reports that 92% of local butcher shops in Scotland have reported increased patronage since the horsemeat scandal broke.

If complex supply chains are perceived as unreliable, consumers will forego the price benefits of frozen packaged food and choose to buy meat from a simpler and more transparent source. Such rational consumer behavior will likely do more to improve the quality of international supply chains than any tweak in complex regulatory oversight.

Topics: 
General, Regulatory Studies, Trade and Immigration

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