Legal Briefs

U.S. Dep't of Health & Human Services v. Florida, February 10, 2012 (PDF, 202 KB)
Cato's third Supreme Court brief in the Obamacare litigation concerns the issue of whether the Anti-Injunction Act prevents federal courts from timely reviewing Congress's most egregious attempt to exceed its power to regulate interstate commerce. The AIA bars courts from enjoining "any tax" before that tax is assessed or collected. One would think that such a law would have no application to the penalty that enforces the individual health insurance mandate, which is not a tax but rather a punishment for not complying with the mandate. Accordingly, most of the courts to consider the issue have found the AIA to be inapplicable to individual mandate challenges. Moreover, the government itself has long conceded that the AIA does not bar these suits. A Fourth Circuit majority and the dissenting Judge Brett Kavanaugh in the D.C. Circuit, however, reached a contrary conclusion, reasoning that the AIA applies to all exactions assessed under the Internal Revenue Code, including "penalties." Out of an abundance of caution, and because the AIA may be a jurisdictional bar, the Supreme Court appointed an amicus curiae to argue for the position that the AIA bars these suits. The plaintiffs here — the 26 states, the National Federation of Independent Business, and several individuals — have advanced several strong arguments for why the AIA doesn't apply. Cato's brief expands on one of those arguments: that the words "any tax" in the AIA do not include "penalties" simply because they may be codified in the Code. First, we demonstrate that the Supreme Court has always held that "taxes" and "penalties" are not interchangeable for AIA purposes. Second, we show that, with one exception, all of the cases cited in the amicus briefs filed by two former IRS commissioners, Mortimer Caplin and Sheldon Cohen — which appear to have heavily influenced the Fourth Circuit and Judge Kavanaugh — concerned penalties that were statutorily defined as taxes. This refutes the commissioners' erroneous claim that those cases concerned penalties that were not defined as taxes. As we say in our brief, "the influence of Amici Caplin & Cohen's [D.C. Circuit] brief is surpassed only by its misdirection." The one exception is the Mobile Republican case (Eleventh Circuit 2003), which we explain is properly understood as applying the AIA to penalties that enforce substantive tax provisions. In short, the AIA cannot bar suits to enjoin the individual mandate penalty because that penalty neither is defined as a tax nor enforces a substantive tax provision.

Kiobel v. Royal Dutch Petroleum, February 3, 2012 (PDF, 195 KB)
One of our oldest laws, the Alien Tort Statute (1789), grants federal courts jurisdiction over lawsuits brought by aliens for actions “in violation of the law of nations.” Courts have differed in their method of interpreting this “law of nations”—an old way of saying “international law”—and thus in their decisions on what behavior violates it and the types of defendants who may be liable. Recent ATS litigation has thus ignited a debate over the role of judges in applying international law. Kiobel v. Royal Dutch Petroleum presents the question of whether, under the ATS, the law of nations can be applied against an entity that is not a natural person: a corporation. In this case, 12 Nigerians sued Royal Dutch and its Shell subsidiaries, alleging that Nigerian soldiers committed human rights abuses on the companies’ behalf between 1992 and 1995, purportedly in response to demonstrations against oil exploration. The district court dismissed most of the claims but let certain others proceed. The Second Circuit dismissed the case entirely, holding that the ATS's jurisdictional grant does not extend to cases against corporations, which are not liable for crimes under the law of nations. The Supreme Court agreed to review the case. Cato has now filed a brief arguing that the ATS must be interpreted in a manner consistent with Congress’s original jurisdictional grant. This interpretation, supporting the Second Circuit’s ruling, maintains the Constitution’s separation of powers—which gives Congress the power to determine the scope of federal courts’ jurisdiction. Allowing courts to expand their jurisdiction without Congress’s consent would create a “democracy gap” that would be particularly serious here, where the case involves issues of foreign affairs that are appropriately the province of the political branches. The Supreme Court made clear in Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. (1999) that evolving methods of interpreting international law do not inform the ATS’s jurisdictional reach, which has not changed since 1789. Nonetheless, lower courts are split on whether corporations may be liable for the sorts of violations at issue here, largely due to their varied interpretive methods. In our brief, we urge the Court to clarify the proper method of interpreting the law of nations under the ATS. We argue that Judge José Cabranes, a leading international law jurist (and Justice Sonia Sotomayor’s mentor) who authored the Second Circuit’s Kiobel decision, set out the correct interpretive method in an earlier case, Flores v. Southern Peru Copper Corp. (2003). Judge Cabranes’s reasoning in Flores embodied both the guidance that the Supreme Court would give in Sosa v. Alvarez-Machain (2004) and the teachings of classical theorists like Grotius, by defining customary international law as “composed only of those rules that States [countries] universally abide by, or accede to, out of a sense of legal obligation and mutual concern.” Judge Cabranes used as relevant evidence the States’ formal lawmaking actions, such as international conventions that “establish[] rules expressly recognized by the contesting states” and international custom where the States adhere “out of a sense of legal obligation.” He further acknowledged that the method used in 1789 to interpret what comprised the law of nations defined both the claims and the parties cognizable under international law. By looking to the proper sources, Judge Cabranes correctly concluded that corporations cannot be held liable for violations of international law for ATS purposes, and in so doing recognized the constitutional checks that prevent courts from expanding their own jurisdiction.

Morgan v. Swanson, January 26, 2012 (PDF, 88 KB)
If the First Amendment means anything, it is that school officials may not prohibit students from handing out gifts with Christmas messages due to the religious content of those messages. Nonetheless, the Fifth Circuit held en banc that student speech rights are not "clearly established," and that therefore two Plano, Texas officials could invoke qualified immunity to shield themselves from liability for doing so. The Cato Institute filed an amicus brief supporting the students' request that the Supreme Court hear their case — our third brief in this long-running saga. We argue that educators have fair warning that viewpoint-based discrimination against student speech violates the First Amendment and thus may not invoke qualified immunity. While the Fifth Circuit held that a constitutional right must have previously been defined with a "high degree of particularity" in a case that is "specific[ally] and factually analogous" to be clearly established, the Supreme Court has repeatedly said that neither "fundamentally similar" nor "materially similar" cases are required and that general statements of law can give fair warning. Indeed, if the Fifth Circuit's qualified-immunity standard is upheld, it will be so difficult to establish fair warning for unconstitutional actions that qualified immunity will cease to be "qualified." Student speech rights were clearly established by the foundational student-rights case of Tinker v. Des Moines School District (1969), wherein the Court held that student speech cannot be suppressed unless the speech will "materially and substantially disrupt the work and discipline of the school," subject to limited exceptions. Such exceptions include lewd or vulgar speech, or speech that may reasonably be viewed as advocating unlawful drug use. Certainly the student speech at issue here, which included Christmas greetings written on candy-canes, and pencils and other small gifts with messages like "Jesus loves me, this I know, for the Bible tells me so," does not fall under those exceptions. We further argue that the same standard for determining whether a law is clearly established should determine whether a court can look to non-binding precedent; if Supreme Court and relevant-circuit precedent is on point, courts should not look to authority from other jurisdictions. These standards maintain the proper balance between providing officials with fair notice of behavior that could result in civil liability and ensuring that individuals have legal recourse when their rights are violated.

Florida v. U.S. Dep't of Health & Human Services, January 17, 2012 (PDF, 177 KB)
Cato's second Supreme Court amicus brief in the Obamacare litigation concerns the issue of whether the health care law's Medicaid expansion is a proper exercise of the Constitution's Spending Clause. That is, states must now accept a comprehensive reorganization of Medicaid or forfeit all federal Medicaid funding—even though the spending power is circumscribed to preserve a distinction between what is local and what is national. If Congress is allowed to attach conditions to spending that the states cannot refuse in order to achieve an objective it could not outright mandate, the local/national distinction that is so central to federalism will be erased. Joining the Center for Constitutional Jurisprudence, Pacific Legal Foundation, Rep. Denny Rehberg (chairman of the House Appropriations Subcommittee on Labor, Health & Human Services, Education, and Related Agencies), and Kansas Lt. Gov. Jeffrey Colyer (also a practicing physician), we argue that, in requiring states to accept onerous conditions on federal funds that it could not impose directly, the government has exceeded its enumerated powers and violated basic principles of federalism. California is at risk of losing $25.6 billion in annual federal funding, for example, and together the states stand to lose more than a quarter trillion dollars annually. On average, states would have to increase their general revenue budgets by almost 40% in order to maintain their current level of Medicaid funding. The 1987 case of South Dakota v. Dole, however, prohibits such a coercive use of the spending power and recognizes that "in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which 'pressure turns into compulsion.'" Indeed, the states' obligations, should they "choose" to accept federal funding and thus commit themselves to doing the government's bidding, are far more substantial than those the Supreme Court invalidated in New York v. United States and Printz v. United States (which prohibit federal "commandeering" of state officials). Moreover, the Congress that enacted the original Social Security Act, to which Medicare and Medicaid were added in the 1960s, recognized that social safety has always been the prerogative of the states and should continue to be done under state discretion. Medicaid itself was narrowly tailored to serve particularly needy groups. In short, if Obamacare does not cross the line from valid "inducement" to unconstitutional "coercion," nothing ever will. Just as the Commerce Clause is not an open-ended grant of power, the Spending Clause too has limits that must be enforced.

National Federation of Independent Business v. Sebelius, January 6, 2012 (PDF, 427 KB)
The Obamacare litigation has arrived on the big stage: the Supreme Court. The first opportunity for those opposing the legislation to weigh in comes on the issue that will be the last one the Court considers, "severability." That is, if the individual mandate is struck down as unconstitutional, what (if any) of the rest of the law must fall with it? On one hand, even in the absence of a severability clause, the Court should avoid striking down an entire law when only one small part is declared unconstitutional, particularly if the remainder of the law is unrelated to the defective bit (imagine an omnibus spending bill). On the other, the Court cannot go provision-by-provision and execute some sort of judicial line-item veto (creating a new law completely unrecognizable from what Congress enacted). Many think that the rules in this area are unclear, but the analysis boils down to two questions: (1) Can the remainder "fully operate as law"? and (2) Would Congress have passed the remainder? In our brief, joined by the Texas Public Policy Foundation and co-authored by Prof. Richard Epstein, we examine these questions with a focus on Titles I and II of the law, which contain all the key provisions relating to Obamacare's fundamental transformation of the national health care system: the requirement that insurers cover people with preexisting conditions ("guaranteed issue"), the requirement that premiums be assessed by a "community rating" formula, the creation of state insurance exchanges, Medicaid expansion, premium supports, etc. Put simply, knocking out the individual mandate renders this whole package inoperable; the brave new health care world would not work as a matter of basic economic principle. As policy experiments in various states have proven, without an individual mandate, guaranteed-issue and community-rating provisions foster a "death spiral" because healthy people wait until they get sick or injured before buying under-priced insurance that they cannot then be refused, causing premiums to increase and costs to explode. The individual mandate is thus so interwoven with other crucial provisions that it cannot be excised without destroying the entire Obamacare structure. Appreciating this mechanism, the government has conceded that guaranteed-issue and community-rating are indeed inextricably tied to the individual mandate—it has to given its constitutional claim that the mandate is a necessary means of implementing a lawful regulation of interstate commerce—but a close analysis of the law reveals that the interoperability goes much further. And Congress knew this; there is no way it would have otherwise passed this law. Thus, to aid the plaintiffs' arguments regarding broader non-severability, our brief shows that the individual mandate is so central to the overall legislation that if it falls, those key Titles I and II must go with it.

Harris v. Quinn, January 4, 2012 (PDF, 117 KB)
Over the past decade, more than a dozen states have forced independent contractors who are paid through Medicaid to join public-sector unions. In 2003, Illinois unionized home healthcare workers and imbued the Service Employees International Union with the right to collect compulsory fees from the workers' paychecks. Democracy is thus being turned on its head: the elected representatives for the people of Illinois have chosen a sub-representative for some of the people and given that sub-representative a taxing power. In so doing, they have severely impaired home healthcare workers' First Amendment right of association and the right to petition the government for a redress of grievances. Without limits on government's ability to forcibly unionize people who indirectly receive government-funded compensation (an increasingly large group), more and more citizens will have to interact with their representatives through a government-designated intermediary (a union); our democracy will become even more dominated by special interests than it is now. Cato, joined by the National Federation of Independent Business and the Mackinac Center, filed a brief urging the Supreme Court to address this issue and vindicate the First Amendment freedoms upon which a thriving democracy depends. We argue that the forcible unionization of home healthcare workers serves none of the compelling purposes for public-sector unionization that have been articulated by the Supreme Court. Because the Court has long recognized that unionization impinges certain constitutional rights, it has limited public-sector collective bargaining to those situations which advance the aims of promoting "labor peace" and eliminating "free riders." Labor peace is promoted by limiting competing workplace interests from bargaining over the conditions of employment — for example, two unions at the same workplace representing different colleagues. Free riders are non-union employees who enjoy the benefits of union-achieved gains without paying into the union's war chest. But neither aim is promoted by a system, such as Illinois's, in which employees work in different locations and in which the customer — the disabled person paying the homecare worker through a Medicaid disbursal — still controls every crucial aspect of the employment relationship, including hiring and firing. This last fact is most telling: the Illinois law only allows collective bargaining for higher wages and more generous benefits. That is, the law is only about speech — petitioning the government for higher wages and benefits — and does not address workplace conditions at all. As more and more states push to unionize more workers who indirectly receive government money — campaigns that, in face o dwindling private-sector union membership, have been called "labor's biggest victory in over sixty years" — it is vital that the Supreme Court articulate a limiting principle on this practice. Otherwise, more and more of us will be forced to interact with our representatives only through government — appointed bodies.

Magner v. Gallagher, December 29, 2011 (PDF, 195 KB)
The federal Fair Housing Act makes it unlawful "[t]o refuse to sell or rent after the making of a bona fide offer ... or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin." Magner v. Gallagher addresses the question of whether the FHA's ban on racial discrimination can be violated by someone who does not actually engage in racial discrimination: Owners of rental properties in St. Paul, Minnesota brought this suit claiming that the city's enforcement of its housing code — ensuring that rental units were safe and otherwise habitable — violated the FHA because the repairs and maintenance necessary to comply with the code would increase rents and price out many of their African-American tenants. Unable to show that the housing code intentionally discriminated based on race, however, the owners argued — and the Eight Circuit Court of Appeals accepted — a "disparate impact" theory under which a plaintiff need only show that an otherwise neutral practice has a disproportionate effect on some racial group. Cato has now joined the Pacific Legal Foundation, the Center for Equal Opportunity, and the Competitive Enterprise Institute on an amicus brief supporting the city's request for Supreme Court review and arguing that the statutory language and congressional intent of the FHA preclude disparate impact claims. We argue that extending such claims to the FHA "would deeply intrude on the authority of state and local governments, and render much of their housing policies illegal," and "would inappropriately alter the federal-state balance in far-reaching ways." Indeed, disparate impact claims would preclude all institutions subject to the FHA — public and private — from implementing many practical policies. For example, "because [the FHA] applies to financial institutions, banks and mortgage companies would be pressured to provide loans to unqualified applicants in order to avoid disparate impact liability. Similar actions played a key role in triggering the mortgage crisis of 2007-2008." Moreover, the disparate impact doctrine directly conflicts with the Fourteenth Amendment's equal protection guarantees by forcing government agencies "to engage in unconstitutional race-conscious decisionmaking" in order to avoid liability under the Act. In short, allowing disparate impact claims under the FHA would both lead to adverse economic consequences and create new constitutional tensions.

Perry v. Perez, December 28, 2011 (PDF, 208 KB)
The decennial redrawing of electoral districts consistently produces extensive litigation. The most notable cases this cycle come, as they often have, from Texas. A number of activist groups challenged the Texas legislature's maps for state house, state senate, and congressional districts, alleging racial discrimination under Section 2 of the Voting Rights Act in a special three-judge federal district court in San Antonio. At the same time, Texas is seeking in another three-judge district court in D.C. the "preclearance" of its maps that it needs to implement them under the VRA's Section 5. Enacted in 1965 to combat pervasive discrimination against black voters in the South, the VRA has exceeded expectations in excising that shameful phenomenon. Its application now, however, stymies the orderly implementation of free and fair elections, particularly in jurisdictions subject not only to the general prohibition on race-based voter discrimination, but also the Section 5 preclearance requirement. Originally conceived as a check on states where discrimination was prevalent in the 1960s, preclearance requires certain jurisdictions to obtain federal approval before changing any election laws. (The Section 5 list is bizarre: six of the eleven states of the Old Confederacy — and certain counties in three others — plus Alaska, Arizona, and some counties or townships in five other states as diverse as New Hampshire and South Dakota. Curiously, (only) three New York counties are covered, all boroughs in New York City. What is going on in the Bronx, Brooklyn, and Manhattan that is not in Queens or Staten Island?) To obtain preclearance, proposed changes may not result in "retrogression," a reduction in minority voters' ability to elect their "preferred" candidates. Section 5 was originally a valuable tool in the fight against systemic disenfranchisement, but now facilitates the very discrimination it was designed to prevent. Indeed, the prohibition on retrogression effectively requires districting that assures that minority voters are the majority in a set number of districts — an inherently race-conscious mandate. The law, most recently renewed in 2006 for another 25 years, is based on deeply flawed assumptions and outdated statistical triggers, and flies in the face of the Fifteenth Amendment's requirement that all voters be treated equally. In any event, because the D.C. court here had not yet ruled on preclearance, the San Antonio court felt obligated to draw "interim" maps for use pending final adjudication of both the Section 2 and 5 cases. Texas filed an emergency appeal with the Supreme Court, arguing that the lower court insufficiently deferred to the Texas legislature's maps. Now on an expedited briefing and argument schedule, Cato filed an amicus brief supporting neither side and arguing that this case demonstrates all that is wrong with the VRA as it currently exists — highlighting the tension between the VRA and the Constitution and the practical difficulties that conflict engenders for election administration. Put simply, the VRA's success has undermined its continuing viability; courts and legislatures struggle mightily and often fruitlessly to satisfy both the VRA's race-based mandate and the Fifteenth Amendment's equal treatment guarantee. We also point out that Section 5's selective applicability precludes the establishment of nationwide districting standards, confounding lower courts and producing different, often contradictory, treatment of voting rights in different states — in large part because Sections 2 and 5 themselves conflict with each other. We note that regardless of the outcome of this litigation, it is unlikely that Texas will have fully legal electoral maps in time to administer the 2012 elections in a fair and efficient manner. These difficulties — constitutional, statutory, and practical — disadvantage candidates, voters, legislatures, and courts, and undermine the VRA's great legacy of vindicating the voting rights of all citizens. The Court should thus schedule this case for broader reargument on the constitutionality of the Voting Rights Act as presently conceived.

United States v. Home Concrete & Supply, December 22, 2011 (PDF, 180 KB)
Since the foundational administrative law case of Chevron v. Natural Resources Defense Council (1984), courts have given significant deference to executive agency interpretations of federal law. United States v. Home Concrete & Supply tests whether there are any meaningful limits on such deference. The case involves a group of taxpayers who initiated a number of transactions designed to reduce their tax liability by allowing a financial entity they created, Home Concrete, to increase its tax basis and reduce its taxable gain from the sale of certain assets. In June 2003, the IRS ruled that the taxpayers' use of Home Concrete in this way was improper and issued an adjustment to their tax return (requiring payment of back-taxes). Having missed the standard three-year limit for such actions, however, the IRS argued that the adjustment was timely under a tax-code provision that extends the statute of limitations to six years if the taxpayer "omits from gross income an amount properly includible therein which is in excess of 25 percent of the amount of gross income stated in the return." Despite the Supreme Court's having long ago held otherwise, Colony v. Commissioner of Internal Revenue (1956), the IRS argues that an overstatement of basis qualifies as an omission under that tax provision. Further, during the course of this litigation, the Treasury Department issued a new regulation "clarifying" the provision in a way that supported the IRS's argument. The IRS now argues that this new regulation is controlling and should be retroactively applied to Home Concrete's 1999 returns. After (mostly) winning at the district court, the IRS lost before the Fourth Circuit and asked the Supreme Court to review the case—which involves one of many similar applications of the relevant tax provisions. The Court took the case and now Cato has joined the National Federation of Independent Business on a brief supporting the taxpayers, arguing that sanctioning this sort of ad hoc rule-making would undermine the rule of law and the separation of powers. We note that "[t]he government's position is that this regulation is due judicial deference" but the Supreme Court has "consistently held that where a statute has an unambiguous meaning, an agency's contrary interpretation is not entitled to deference." As Judge J. Harvie Wilkinson noted in his Fourth Circuit concurrence, "agencies are not a law unto themselves" and the government's position in this case "seems to [be] something of an inversion of the universe and to pass the point where the beneficial application of agency expertise gives way to a lack of accountability and a risk of arbitrariness." In deciding Chevron, the Supreme Court surely never intended to undermine the very structure of the Republic and unleash an administrative state wholly a law unto itself.

Arkansas Game & Fish Commission v. United States, December 15, 2011 (PDF, 113 KB)
The Arkansas Game & Fish Commission owns and operates 23,000 acres of land as a wildlife refuge and recreational preserve; the preserve's trees are essential to its use for these purposes. Clearwater Dam, a federal flood control project, lies 115 miles upstream. Water is released from the dam in quantities governed by a pre-approved "management plan" that considers agricultural, recreational, and other effects downstream. Between 1993 and 2000, the government released more water than authorized under the plan. AGFC repeatedly objected that these excessive releases flooded the preserve during its growing season, which significantly damaged and eventually decimated tree populations. In 2001, the government acknowledged the havoc its flooding had wreaked on AGFC's land and ceased plan deviations. By then, however, the preserve and its trees were severely damaged, so AGFC sued the government, claiming damages under the Fifth Amendment's Takings Clause. The district court awarded $5.8 million in lost timber and reforestation costs based on the substantiality of the government's flooding and the foreseeability of the damage it caused. The Federal Circuit reversed that decision, holding that the flooding of private land can never be a taking unless that flooding is permanent. It further held that, in determining whether the government's intrusion on AGFC's land was permanent or temporary, courts must focus on the character of the policy behind the intrusion rather the effects of the intrusion itself. A taking cannot have occurred here because each deviation from the plan constituted a "temporary" policy, the court concluded, so AGFC had no constitutional remedy. AGFC is asking the Supreme Court to review its case; the Court itself has recognized that something less than a permanent invasion of land can constitute a compensable taking. Cato joined the Pacific Legal Foundation on an amicus brief urging the Court to hear the case and uphold the Fifth Amendment rights of property owners whose land is destroyed by the federal government. Our brief highlights the conflict between the Federal Circuit's decision and both Supreme Court and lower court precedent. First, an invasion of land by flooding is no different from an invasion of land by any other means. Second, the government's self-professed "intent" that a possible taking be "temporary" should have no bearing on whether a Fifth Amendment remedy exists when that taking has, in fact, occurred. Instead, the relevant inquiry should be whether the government caused permanent damage and, if so, how much. The Federal Circuit's new rule — that, so long as it might be "temporary," no government flooding can be remedied under the Fifth Amendment — runs afoul of the letter and spirit of a constitutional provision meant to compensate property owners for government intrusions on their land. We urge the court to grant AGFC's petition and maintain constitutional protections for private property.

Kansas City Premier Apts. v. Missouri Real Estate Commission, November 30, 2011 (PDF, 138 KB)
This case is quite similar to the occupational licensing case of Locke v. Shore, in which Cato also filed a brief, except that the speech-licensing regulation here concerns not artistic expression but rather the dissemination of consumer-demanded commercial information — specifically, rental property listings that are free to the public. The Missouri Real Estate Commission, acting on a complaint by a licensed realtor, decided that Kansas City Premier Apartments, which provides local rental listings, was acting as an unlicensed real estate broker and was therefore subject to fine and even criminal prosecution. (Before KCPA began operations, it had asked the Commission whether it needed a license and did not receive a clear answer other than that it was a "grey area" of law.) KCPA challenged the Commission's decision on First Amendment grounds, but the trial court found it to be constitutional without giving a reason for its conclusion. The Missouri Supreme Court affirmed the trial court after simply presuming the constitutionality of the speech restriction — contrary to the U.S. Supreme Court holding in Bolger v. Youngs Drug Products Corp. that "[t]he party seeking to uphold a restriction on commercial speech carries the burden of justifying it" — and placing the burden of proving unconstitutionality on KCPA. Cato has now joined the Pacific Legal Foundation on a brief supporting KCPA's request that the U.S. Supreme Court hear the case. Our brief notes that "this case combines the nationally important commercial speech issue with the equally nationally important question of the extent to which the Constitution tolerates occupational licensing." We explain the difficulties that the Court's "commercial speech doctrine" has caused and argue for a movement toward greater protection for collective and commercial speech, and away from a confusing four-part test established in a 1980 case called Central Hudson. As in Locke, this latest case raises the question of whether occupational licensing schemes that have an effect on speech are constitutional. Also as in Locke, an infinite array of professionals and ordinary people could get caught up in this regulation, including even a friend helping another friend find an apartment. Beyond the technical legal points, the case implicates broader policy issues such as the right to earn a living and the impact that speech monopolies have on consumers. Indeed, the consumer impact may be even more apparent here than in other occupational licensing cases because so many people struggle to find affordable apartments and other rentals in this economy — not to mention over the course of their lives.

Florida v. Adkins, November 28, 2011 (PDF, 6 MB)
Challenges to Florida's unconstitutional drug law scheme continue to gain momentum. Following a successful federal district court challenge to the constitutionality of laws lacking a mens rea (mental culpability, rather than, for example, incidental possession) requirement, people convicted under them have come forward en masse to ask state courts to reexamine their convictions. As described in the background to a previous brief, the district court held that these sorts of laws offend the constitutional guarantee of due process. Florida's Supreme Court has consolidated over 40 appeals resulting from that federal court decision (which itself is now on appeal). Cato has once again joined the National Association of Criminal Defense Lawyers, Florida Association of Criminal Defense Lawyers, ACLU, Drug Policy Alliance, Calvert Institute for Policy Research, Libertarian Law Council and 38 law professors on a brief supporting the rights of persons convicted under the "strict liability" statutes. We urge the Florida Supreme Court to follow the federal district court's lead and strike down laws prohibiting the sale, possession, or delivery of illicit substances without requiring mental culpability. That court now has the opportunity to reverse these unwarranted convictions and purge a nationally singular stain on civil liberties.

Harmon v. Kimmel, November 21, 2011 (PDF, 131 KB)
Rent control is literally a textbook example of bad economic policy. Economics textbooks often use it as an example of how price ceilings create shortages, poor quality goods, and under-the-table dealings. A 1992 survey revealed that 93% of economists believe that rent control laws reduce both the quality and quantity of housing. As expected, therefore, New York City's Rent Stabilization Law — the most (in)famous in the country — has led to precisely these effects: housing is scarce, apartment buildings are dilapidated because owners can't charge enough to fix them, and housing costs have only increased (in part because costs are transferred to non-rent mechanisms such as "non-refundable deposits"). Yet the RSL persists, benefiting those grandfathered individuals who rent at lower rates but hurting the city as a whole. Harmon v. Kimmel challenges New York's law on the grounds that it is an arbitrary and unsupportable regulation amounting to an uncompensated taking that violates the Fifth Amendment. Jim Harmon's family owns and lives in a five-story brownstone in the Central Park West Historical District. The Harmons inherited the building — and along with it three rent-controlled tenants. Those tenants have occupied apartments in the building for a combined total of 91 years at a rate 59% below market. In their lawsuit, however, the Harmons face many unfriendly precedents that have given states free reign to regulate property, to the point that it is occupied on an essentially permanent basis while surviving Fifth Amendment scrutiny. One way to challenge some laws is to argue they are so arbitrary and poorly justified that they violate the Fourteenth Amendment's Due Process Clause. Because this is an especially difficult type of challenge to bring, Cato joined the Pacific Legal Foundation and the Small Property Owners of San Francisco Institute on a brief supporting the Harmons' request that the Supreme Court review lower-court rulings against them. Although the Court has ruled that the Takings Clause does not permit challenges based on claims that the alleged taking fails to "substantially advance legitimate state interests," the Due Process Clause is an independent textual provision. We thus clarify the relationship between property rights and due process, arguing that a law which advances no legitimate governmental purpose can be challenged under the Due Process Clause. To hold otherwise would be to deny property owners any meaningful avenue for defending their property from onerous and irrational regulations.

FCC v. Fox Television Stations, November 10, 2011 (PDF, 268 KB)
Who controls the content of TV and radio broadcasts, parents or the FCC? In the 1978 case of FCC v. Pacifica Foundation, the Supreme Court held that, because over-the-air broadcast media is like an "unwanted intruder" in the home that is uniquely accessible to children, the FCC has a role in maintaining the cleanliness of the transmissions. Because of these unique characteristics, the regulation of broadcast media was held to a lesser constitutional standard than other types of media. That ruling was largely based on the technology of the time: three channels, little cable, and no VCRs, much less Internet, DVDs, and satellite TV. Since that time, the FCC has regulated broadcasts under that lower constitutional standard, including fining stations for so-called "fleeting expletives" uttered by celebrities on live awards shows, the infraction from which this case springs (it was Bono, then Cher, then Paris Hilton and Nicole Richie). This case is visiting the Supreme Court for the second time. In 2009, the Court ruled that an FCC rule against "fleeting expletives" was not an unlawful under administrative law, the law governing executive agencies' power. On remand, the Second Circuit struck down the rule on First Amendment grounds, largely on the reasoning that Pacifica had been obviated by technological change. Cato has joined forces on an amicus brief with a wide range of groups advocating freedom in technology policy — the Electronic Frontier Foundation, the Center for Democracy & Technology, Public Knowledge, and TechFreedom — to underscore for the Court just how different the world is today from 1978. While the groups joining the brief do not necessarily agree with each other all the time, we agree on this fundamental truth: broadcast media (the most prominent way we become informed) should not receive watered-down First Amendment protection. We point out how the existence of Video-On-Demand services like Netflix, DVRs, Internet sites like Hulu, as well as massive access to DVDs, has radically transformed how we consume media. Broadcast media is no longer an "unwanted intruder," but more like an invited guest. Moreover, with the existence of parental control mechanisms like the V-Chip, parental locks included in cable and satellite boxes, and even services like "TV Guardian" — which filters live TV based on the closed-captioning signal — parents have all the tools at their disposal to ensure that children aren't exposed to fleeting expletives or anything else unwanted. So why does the FCC need a vague and overbroad rule that could not pass heightened scrutiny and can only survive under a watered-down First Amendment standard? We live in a world that few could have imagined in 1978. It's time for a new rule that gives broadcast media the same level of speech protection as any other kind.

Florida Dept. of Corrections v. Shelton, November 2, 2011 (PDF, 342 KB)
Florida is so zealous in pursuing the war on drugs that its laws classify the possession, sale, and delivery of controlled substances as offenses not requiring the state to prove that the defendant knew he had possessed, sold, or delivered those substances. In the current case, state prosecutors convicted Mackie Shelton of transporting cocaine under one of these "strict liability" statutes, the trial judge having instructed the jury that the state only needed to prove that Shelton delivered a substance and that the substance was cocaine. Shelton successfully challenged the constitutionality of that state law in federal court, where the district judge overturned the conviction and noted that "Florida stands alone in its express elimination of mens rea as an element of a drug offense." Florida appealed that ruling to the U.S. Court of Appeals for the Eleventh Circuit. Cato has joined the National Association of Criminal Defense Lawyers, Florida Association of Criminal Defense Lawyers, ACLU, Drug Policy Alliance, Calvert Institute for Policy Research, and 38 law professors in a brief supporting Shelton's position. The Supreme Court has recognized only limited exceptions to the general rule that criminal culpability requires mens rea (a guilty mind). These "strict liability" crimes fall under the rubric of "public welfare offenses" and are typically what most people would not consider "serious," such as traffic violations and selling alcohol to minors. Policymakers justify dispensing with mens rea requirements in such contexts by citing the need to deter businesses from imposing costs on society at large, or the burden that having to prove mens rea in these sorts of cases would overwhelm courts, or that the penalties are relatively small and carry little social stigma. Florida's legislature, however, went well beyond the normal boundaries of public welfare offenses in imposing strict liability for drug crimes that can carry significant prison terms — and thus violated the due process of law and traditional notions of fundamental fairness. As an alternative argument purporting to save its drug laws, Florida points to the availability of affirmative defenses, that these defenses (e.g., "I didn't know it was cocaine") to a presumption of guilty intent take the statute out of the (constitutionally dubious) strict liability category. But a state may not simply presume the mens rea element of a crime: In Patterson v. New York (1977), for example, the Court held that prosecutors cannot reallocate the burden of proof by forcing a defendant to prove an affirmative defense. In requiring defendants to prove that they are "blameless" in these sorts of drug crimes, Florida's statutes fail constitutional muster. We urge the Eleventh Circuit to affirm the district court and declare the offending state law unconstitutional.

Standard Investment Chartered, Inc. v. National Assoc. of Securities Dealers, October 26, 2011 (PDF, 255 KB)
As protestors across America condemn Wall Street for its greed and corruption, the Supreme Court has an opportunity to examine a ruling that holds some of Wall Street's biggest regulators immune from suit. In 2006, the National Association of Securities Dealers and the regulatory arm of the New York Stock Exchange consolidated to form the Financial Industry Regulatory Authority (FINRA). NASD and FINRA are "self-regulatory organizations" (SROs), because the Securities and Exchange Commission charges them with regulating their own members — a set-up that is supposed to protect investors and the public. But NASD officers may have achieved the consolidation (and thereby received huge bonuses) by misstating material facts on a proxy solicitation, which induced member firms to give up some of their voting powers in exchange for a payout. Remarkably, the Second Circuit held that a lawsuit against NASD for the alleged fraud could not proceed because the defendants had sovereign immunity. Yes, SROs should be immune for their actions as quasi-government regulators. For example, immunity is appropriate for government actors like judges, who must have some protection from private suit to do their jobs properly. But judges are not immune for things they do in their private lives — they can be sued just like anyone else. The Second Circuit, however, held that SROs, which have expansive and varied powers, enjoy absolute immunity even for actions that are merely "incident to" their regulatory duties. That is, suits involving private corporate actions cannot proceed if they are incident to actions taken in a governmental capacity. In this case, the court found that the voting-rights changes were "incident to" FINRA's regulatory activities because they were part of a plan to make a larger entity that would also have regulatory duties. This case raises serious constitutional issues about the role the judiciary plays in ensuring that SROs remain faithful to their delegated duties of protecting investors and the public. Because SROs are quasi-private actors, they have incentives to act in their own best interests — rather than in the public interest — and they do not have to be as transparent as fully public agencies. Further, the executive branch, including the SEC, has failed to hold SROs accountable for their self-serving behaviors. As we see from this case, the judiciary provides the sole opportunity for SRO accountability. Cato, joined by the Competitive Enterprise Institute, has now filed a brief urging the Supreme Court to review Standard Investment Chartered, Inc. v. NASD. Accountability among branches of government — the separation of powers and checks-and-balances — is a central tenet of our constitutional structure, and is especially important for SROs, which exercise great power over financial markets. Our brief argues that the judiciary remains the last check on SROs' unbridled power and that the Second Circuit erred in failing to hold these SROs accountable.

Locke v. Shore, October 20, 2011 (PDF, 181 KB)
The latest example of liberty-reducing occupational licensing schemes comes to us from Florida, where a law restricts the practice of interior design to people the state has licensed. Those wishing to pursue this occupation must first undergo an onerous process ostensibly in the name of "public safety." In reality, the law serves as an anti-competition measure that protects Florida's current cohort of interior designers. Our friends at the Institute for Justice have pursued a lawsuit against the law but lost their appeal in the Eleventh Circuit. Cato has now joined the Pacific Legal Foundation on a brief asking the Supreme Court to review that ruling. The lower court got it wrong not just with respect to the right to earn a living, however, but also on First Amendment grounds. That is, interior design, as a form of artistic expression, is historically protected by the First Amendment. Indeed, interior designers are measured primarily on the value of their aesthetic expression, not for any technical knowledge or expertise. This type of artistry is a matter of taste, and the designer and client usually arrive at the end result through collaboration and according to personal preferences. Thus, the designer-client relationship has little in common with traditionally regulated professions such as medicine, law and finance, where bad advice can have real and far-reaching consequences — but even then, the Supreme Court has emphasized the First Amendment implications of placing "prior restraints" on expression through burdensome licensing schemes. Instead of following that precedent, however, the circuit court carved out a constitutionally unprotected exception for "direct personalized speech with clients." Florida's "public safety" justification is similarly weak, given that the state has presented no evidence of any bona fide concerns that substantiate a burdensome licensing scheme that includes six years of higher education and a painstaking exam — instead relying on cursory allegations that, for example, licensed designers are more adept at ensuring that fixture placements do not violate building codes. Finally, the Eleventh Circuit's ruling disregarded the infinite array of auxiliary occupations the Florida law subjects to possible criminal sanctions: wedding planners, branding consultants, sellers of retail display racks, retail business consultants, corporate art consultants, and even theater-set designers could all get swept in. The state has already taken enforcement actions against a wide spectrum of people who are not interior designers, including office furniture dealers, restaurant equipment suppliers, flooring companies, wall covering companies, fabric vendors, builders, real estate developers, remodelers, accessories retailers, antique dealers, drafting services, lighting companies, kitchen designers, workrooms, carpet companies, art dealers, stagers, yacht designers, and even a florist. This dragnet effect also suggests that the law is too broad to survive constitutional scrutiny.

Corboy v. Louie, October 17, 2011 (PDF, 158 KB)
Hawaii continues to think that it's not quite part of the United States and thus not fully subject to U.S. law. In the 2000 case of Rice v. Cayetano, the Supreme Court struck down race-based voting requirements for certain state officers because government schemes that distinguish between "native Hawaiian" and "Hawaiian" are racial classifications that must pass "strict scrutiny" to be deemed constitutional; they must be narrowly tailored to achieve a truly "compelling" purpose (a standard nearly impossible to meet). Yet that exact same category of "native Hawaiian" — whose frighteningly archaic definition is "any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778" — was used in the Hawaii Homes Commission Act to distinguish those who can hold certain leases that are subject to little or no property tax. A group of Hawaiians who do not meet the state's definition of "native Hawaiian" and therefore suffer under the explicitly race-based law decided to challenge these property-tax exemptions. After paying their taxes, these plaintiffs sought refunds on the grounds that the classification scheme violates the Fourteenth Amendment's Equal Protection Clause. The Supreme Court of Hawaii, however, ruled that they didn't have standing — a legal doctrine that determines who can bring a claim — to challenge the taxes on the ground that they had not yet asked for the leases (for which they were indisputably ineligible due to not having enough "blood of the races" flowing through their veins). A lower state court had even ruled that the classification was not race-based — that it merely distinguishes leaseholders and non-leaseholders, even though Hawaiians without the sufficient "blood quantum" cannot be leaseholders! The group of taxpayers now seek review in the U.S. Supreme Court. Cato, joined by the Pacific Legal Foundation, the Grassroot Institute of Hawaii, the Goldwater Institute, and Professor Paul M. Sullivan, filed a brief urging the Court to take the case and rectify Hawaii's explicitly unconstitutional taxation scheme. We argue that, after Hawaii's state judiciary refused to address the issue of racial discrimination head-on, only the U.S. Supreme Court is in a position to guarantee the constitutional protections that Hawaiians have lived under for over a century (since Hawaii became a territory). Only by taking this case and overturning the racially charged definition can the Court continue to ensure that Hawaii is a state that "neither knows nor tolerates classes among citizens."

United States v. Jones, October 3, 2011 (PDF, 191 KB)
As technology advances — and law enforcement adapts these advancements to police work — courts will be asked to apply the Fourth Amendment's protections against unreasonable searches and seizures in new and varied situations. In 2004, the FBI, as part of a joint task force, suspected Antoine Jones of dealing drugs. To verify their suspicions, agents secured a warrant allowing them to attach a GPS tracking device to Jones's car (but then attached it after the warrant had expired, and in Maryland rather than the warrant's operative jurisdiction of D.C.). The FBI used this device to monitor and record the car's every movement for nearly a month before finally arresting Jones. The U.S. Court of Appeals for the D.C. Circuit found that the FBI's action was unconstitutional because it violated Jones's "reasonable expectation of privacy" — the two-part Fourth Amendment standard developed in the landmark case of Katz v. United States. The "reasonable expectation of privacy" doctrine holds that if a person has an actual (subjective) expectation of privacy and that expectation is one society is prepared to accept, then the Fourth Amendment protects the object of that expectation. The court found that the long-term round-the-clock GPS surveillance, even of a vehicle always on public roads and in locations readily observable by a cop on the street, was qualitatively different than a temporary stakeout or other conventional surveillance. The government successfully petitioned the Supreme Court to review the case, and the Court added the issue of whether installing the GPS device was itself a Fourth Amendment violation, quite apart from the monitoring. Cato filed a brief supporting Jones and arguing that the Court should take this opportunity to strengthen Fourth Amendment protections by finding unconstitutional the government's continuous and long-term tracking of someone's vehicle without a valid warrant. This case affords the Court an opportunity to revisit the "reasonable expectation of privacy" standard — which has dominated this area of law for over 40 years but is a misinterpretation of Katz that has proven unworkable. Standing alone, the "reasonable expectation" test reverses the original meaning of the Fourth Amendment by putting the onus on citizens to prove the reasonableness of their expectations instead of examining the reasonableness of government action. By measuring the actions an individual takes to shield his information against the reasonableness of the government's actions in piercing that shield, the Court can simplify this area of law from one measuring esoteric "expectations" to one examining a straightforward factual question. Moreover, the government's conversion of Jones's property — his car — into a surveillance device acted as an unreasonable seizure for Fourth Amendment purposes because it deprived Jones of a valuable property right, the right to exclude others from his property. Similarly, using his car then to collect information and track Jones then became an unreasonable search. Thus, even if the Court continues to adhere to the "reasonable expectations of privacy" test, it should recognize the sanctity of Jones's property and find the warrantless GPS-attachment and -surveillance unconstitutional.

United States v. Bond, September 23, 2011 (PDF, 105 KB)
A lost episode of Jerry Springer found its way into the Supreme Court's 2010-11 term in the case of United States v. Bond. Mrs. Bond, upset by the pregnancy that resulted from an affair between her husband and her erstwhile best friend, decided to take revenge. A trained microbiologist working at a chemical manufacturer, Mrs. Bond tried to poison her husband's mistress by dusting her door knobs, mailbox, and car handles with dangerous, possibly lethal chemicals. Upon being caught by (federal) postal inspectors, Mrs. Bond was charged with violating the law Congress passed to implement an international chemical weapons treaty. (There are no generally applicable federal attempted murder statutes, so prosecutors had to get creative to remain in federal court.) But if general criminal statues are beyond Congress's powers, as even the most ardent federal-power activist must acknowledge, how did Congress have the power to pass the law that ensnared Mrs. Bond? — who, whatever her character flaws, was not selling chemical weapons to terrorists (the treaty's target). Mrs. Bond thus hoped to challenge her conviction by arguing that Congress did not have the power to pass the law in question. The Third Circuit, however, ruled that she did not have standing — a legal doctrine defining who has the right to bring a claim — to challenge the law on federalism grounds. Cato filed a Supreme Court brief supporting Mrs. Bond's position and arguing that it makes no sense to deny standing to someone challenging a law under which she is being prosecuted. The Court unanimously agreed and remanded the case back to the Third Circuit, to finally hear arguments over whether the statute is beyond congressional power. Cato has now reentered the fray, in a brief authored by Georgetown law professor Nicholas Quinn Rosenkranz and joined by the Center for Constitutional Jurisprudence. We again support Mrs. Bond's claim that the law under which she was charged is beyond Congress's enumerated powers. The main obstacle to this argument is the 1920 case Missouri v. Holland, a short and not completely clear opinion by Justice Oliver Wendell Holmes that has been interpreted to mean that Congress can expand its enumerated powers via the Treaty Clause. In other words, even though Congress does not have the power to pass, for example, general criminal statutes, if Congress ratifies a treaty calling for such statutes, its power increases beyond constitutional limits. We argue that this is an astounding manner in which to interpret a Constitution that creates a federal government of limited powers. Not only would this mean that the Executive has the ability to expand congressional power by signing a treaty, but it would mean that foreign governments could change congressional power by abrogating a previously valid treaty — thus removing the constitutional authority from certain laws. We also point out how the most influential argument supporting Missouri v. Holland is based on a clear misreading of constitutional history and that the ruling is in deep tension with other cases. We're in a constitutional quagmire that can only be escaped by limiting or overturning Missouri v. Holland.

Knox v. SEIU Local 1000, September 15, 2011 (PDF, 275 KB)
As recent events in Wisconsin have demonstrated, public-sector unions are powerful political constituencies that can shape government to their ends. The Service Employees International Union, for example, the defendant in this case, has been ranked by OpenSecrets.org as the fifth biggest "heavy hitter" in federal politics in terms of campaign spending. In 2005, the SEIU initiated a mid-year campaign against two California ballot measures, one that would cap state spending and another that would restrict the use of union dues for political purposes. In states such as California that do not have "right to work" laws, unions are allowed to take dues from non-union workers to finance collective-bargaining activities that, arguably, benefit all employees. Since 1977, however, unions have not been allowed to take dues from non-union members to pay for pure political advocacy without adequate protections for possible dissenters. In order to distinguish political money from collective-bargaining money, the Supreme Court requires that a "Hudson notice" be given to all non-union workers. This notice gives non-members the opportunity to challenge political expenditures. But when the SEIU began garnishing 25-33% more wages to fight the California ballot initiatives, it issued no new Hudson notice, effectively forcing 28,000 non-member employees to finance its political speech. As Judge J. Clifford Wallace wrote in dissent from the Ninth Circuit's ruling in favor of the SEIU, "it is undeniably unusual for a government agency to give a private entity the power, in essence, to tax government employees." Now before the Supreme Court, Cato joined the Pacific Legal Foundation, the Center for Constitutional Jurisprudence, and the Mountain States Legal Foundation, on a brief supporting the non-union workers and arguing that the Court should focus not on the extent of the burden Hudson places on unions (as the Ninth Circuit did) but on the paramount reasons why the notice requirements exist in the first place: to ensure that an individual's right to speak or remain quiet receives the protection it deserves. As Judge Wallace put it, "the union has no legitimate interest ... in collecting agency fees from nonmembers to fill its political war-chest." We also highlight the numerous unscrupulous tactics that unions have used over the years that violate the rights of dissenting workers—the same kind of rights that the Ninth Circuit treated with indifference. Finally, in light of the extreme political power that unions enjoy, the Court should find that the only way to adequately protect the rights of dissenting workers is to require that all non-union members must "opt-in" to any garnishment of wages for political purposes.

Colony Cove Properties v. City of Carson, September 14, 2011 (PDF, 197 KB)
When state and local governments violate federal constitutional rights (e.g., First Amendment free speech), they can be sued in federal court — except when that government action violates the Fifth Amendment's protections for property rights. Under the Supreme Court's decision in Williamson County v. Hamilton Bank, individuals and businesses alleging unconstitutional takings by state or local governments are required to exhaust state review procedures — seeking redress from the very officials who harmed them — before turning to federal courts. This constitutional anomaly is evident in Colony Cove v. Carson, where the operators of a rental property in California alleged an unconstitutional taking when the local rent control board refused to approve an increase in rent to allow their business to operate profitably. California law forecloses judicial review of the findings of rent control boards, so municipal governments have an unchecked license to determine whether such businesses may operate: A property owner's sole recourse is to appeal to the very rent control board who forbade her from charging a profitable rent in the first place. These "review" procedures, like some others across the nation, are wildly insufficient. Even more significantly, once a takings claim has been fully heard in state proceedings per Williamson County's command, it is usually barred from federal review based on various prudential doctrines. The result is the indiscriminate exclusion of takings claims from federal courts, a situation that invites opportunist states to usurp private property rights. Seeking to afford citizens across the nation the opportunity to assert Takings Clause claims in parity with other constitutional rights, Cato joined the New England Legal Foundation, National Federation of Independent Business, Institute for Justice, Goldwater Institute, and Professors James Ely and Richard Epstein in filing an amicus brief supporting the California property owners' petition for Supreme Court review of the Ninth Circuit's ruling against them. We argue that Williamson County should be overruled because it relegates takings claims to second-class status despite the constitutional first principle that uniform protection of individual rights is vital to our system of government. At the very least, the Court should require federal reprieve when state procedures for rectifying a taking are futile — as they were here. Finally, we argue that the Court should correct lower courts' misinterpretation of Williamson County, which puts property rights jurisprudence at odds with Section 1983 of the Civil Rights Act of 1871 (a statute that gives people access to federal courts when a state denies them their constitutional rights).

Mayo v. Prometheus Labs, September 9, 2011 (PDF, 218 KB)
Doctors and researchers regularly perform blood tests to determine the effectiveness of various drugs. The resulting correlations between the test results and patient health have recently become the subject of numerous "process" patents. That these patents have been upheld by the U.S. Court of Appeals for the Federal Circuit represents a dangerous expansion of traditional patent law. This expansion threatens to stifle free markets and infringe on individual liberty. In Mayo v. Prometheus, the Court will address the important question of whether someone can patent the process of observing correlations between blood test results and patient health. The primary legal issue here is whether naturally occurring correlations are patentable as "process" patents simply because the methods used to administer prescription drugs and test blood may involve "transformations" of body chemistry. Cato's amicus brief, joined by the Reason Foundation and the Competitive Enterprise Institute, argues that these patents are not "processes" as the term was originally understood in the Patent Act of 1952. We liken medical-diagnostic patents to other abstract-process patents — such as software and business-method patents — that have resulted in financial losses for firms and discouraged innovation, and argue that enforcing these patents "will only serve to further slow the economy, retard technological innovation, distort the free market, and place human health at risk." Moreover, upholding the patents at issue will impermissibly restrict public-domain activity because the final step in a medical-diagnostic patent is an entirely mental one that will be violated whenever a doctor performs a previously public-domain medical test after learning about the patented correlation. Our brief thus closes by arguing that the Court should also consider the profound First Amendment implications in allowing processes whose final step is entirely mental to be patented. "The Court has repeatedly recognized that the First Amendment protects freedom of thought as well as freedom of speech." Unlike copyrights, patents lack traditional free-speech safeguards (such as exceptions for "fair use") and, therefore, the Court should reject medical-diagnostic patents as impermissibly restricting the freedom of thought.

PPL Montana, LLC v Montana, September 7, 2011 (PDF, 269 KB)
For over a century, Montana citizens have used non-navigable streambeds along their properties for various purposes without objection from the state government. The hydroelectric energy company PPL Montana and thousands of other private parties exercised their rights over these non-navigable stretches that the state never claimed. Last year, however, the Montana Supreme Court overturned well-settled state property law by effectively converting the title in hundreds of miles of riverbeds to state ownership. The majority of the court ruled that the entirety of the Missouri, Clark Fork, and Madison rivers were navigable at the time of Montana's statehood, producing a broad holding that eradicates the right to use rivers and riverbanks that Montanans had enjoyed for over a century. PPL Montana thus asked the U.S. Supreme Court to review the state court's decision; Cato filed an amicus brief supporting that request, which the Court granted. Now that the case is before the Court, Cato has joined the Montana Farm Bureau Federation, American Farm Bureau Federation, and National Federation of Independent Business on a brief supporting the property owners. We are chiefly concerned with two parts of the Montana Supreme Court's ruling: First, the court incorrectly evaluated navigability for the purpose of establishing title — finding the entirety of the rivers at issue navigable (and thus belonging to the state) because portions of them are — contravening the legal standard established by the U.S. Supreme Court in United States v. Utah (which analyzed the riverbeds section-by-section to achieve a "precise" assessment of navigability). Second, the court effectively transferred a substantial quantity of land from private owners to the state — a judicial taking that violates either the Fifth or Fourteenth Amendments (as the Court described in the recent Stop the Beach Renourishment case, in which Cato also filed a brief). In short, the Court should reaffirm the Utah standard for navigability in the context of establishing title and protect private property owners against judicial takings. By doing so, it would send a strong message to state courts across the nation that judicial usurpations of property rights are just as unconstitutional as those undertaken by other branches of government.

Stewart & Jasper Orchards v. Salazar, July 25, 2011 (PDF, 158 KB)
The federal government is currently engaged in a misguided attempt to use a noneconomic statute—the Endangered Species Act—to regulate under its Commerce Clause authority a noneconomic activity, the potential "take" of the noncommercial, wholly intrastate delta smelt. Acting under this purported authority, the U.S. Fish and Wildlife Service issued an opinion in 2008 that requires a reduction of critical water deliveries in California for the alleged benefit of the threatened delta smelt species. The delta smelt-based water cutbacks have resulted in substantial hardship to farmers and other water users in Southern California and the San Joaquin Valley. In 2009, the Pacific Legal Foundation filed a lawsuit contending that regulation of the delta smelt is not a valid exercise of the Commerce Clause. The district court and the Ninth Circuit Court of Appeals disagreed. Cato joined Chapman University's Center for Constitutional Jurisprudence and former attorney general Edwin Meese in filing a brief that supports PLF's request for Supreme Court review. We argue that the Court should take this case in order to delineate the constitutional distinction between federal and state power and protect the states' exclusive police power to regulate and advance the health, safety, and welfare of the people. Specifically, our brief argues: (1) that the federal government's regulation of a wholly intrastate, noncommercial species exceeds Congress's powers under the Commerce Clause; (2) the expansive application of the ESA to the delta smelt, because it is noncommercial species that doesn't travel across state lines, intrudes on the core police powers reserved to the states; and (3) that the Supreme Court should repudiate the aggregation principle of Wickard v. Filburn. Striking down the expanded interpretation of the ESA at issue here is not enough. If left untouched, the Ninth Circuit decision opens the door to unlimited and abusive assertions of power by an assortment of federal agencies. The Court needs to reinforce and rebuild the limits of the Commerce Clause and to reign in a federal government that continues to believe that the Constitution sets no bounds on its power.

Golan v. Holder, June 20, 2011 (PDF, 202 KB)
In 1920, the Supreme Court decided an obscure case concerning the implementation of a treaty between the United States and Canada regarding migratory birds. Tucked into Justice Oliver Wendell Holmes's five-page decision in Missouri v. Holland was a sentence that expressed a truly startling idea: that Congress can transcend its enumerated powers via the power to implement treaties. That is, although Congress has no enumerated power to pass, say, general criminal laws, if a ratified treaty with France demands that we pass such laws, then Congress's power expands to allow for such legislation. Thus, foreign nations and the executive branch are given the power to change, almost at will, one of the most hotly debated and carefully crafted sections of the Constitution, the scope of Article I congressional power. Now an equally obscure case relating to copyrights gives the Court an opportunity to revisit Missouri v. Holland's starkly erroneous proposition and reaffirm the Framers' vision of Congress's powers as "few and defined." Golan v. Holder concerns a law Congress passed after the president signed and the Senate duly ratified the "Uruguay Round" general trade agreement, which in part amended the 1971 Berne Convention on intellectual property. This new law reinstated copyright protection to works that were previously in the public domain. A number of orchestra conductors, educators, performers, film archivists, and motion picture distributors who depend on the public domain for their livelihood challenged the law on two grounds: 1) that it violates the "promote progress in Science and the Useful arts" limitation on the congressional power to pass copyright laws (the Copyright Clause), and 2) it violates the First Amendment. Cato and Georgetown law professor Nicholas Quinn Rosenkranz filed a brief that supported this challenge by highlighting the problems with an expansive interpretation of the treaty power. We argue that, as a matter of constitutional structure, history, and logic, a treaty cannot increase Congress's legislative powers. Not only is the power to "make treaties" distinct from the power to execute treaties already made, but such an expansive interpretation of the treaty power would allow Congress and the Executive to circumvent the Article V amendment process and, even more shockingly, allow foreign governments to have control over the scope of congressional power. We further argue that Missouri v. Holland is a structural and doctrinal anomaly in tension with other precedent and based on a misreading of constitutional history. It should be overruled.

Montana Shooting Sports Association v. Holder, June 13, 2011 (PDF, 67 KB)
On October 1, 2009, Montana passed the Montana Firearms Freedom Act, the purpose of which was to regulate guns manufactured and kept within Montana state lines under a less restrictive regulatory regime than federal law provides. That same day, to ensure that Montanans could enjoy the benefits of this less restrictive state regulation, the Montana Shooting Sports Association filed a declaratory judgment claim in federal court. The lawsuit's importance is not limited to Montana, as seven other states have passed laws similar to the MFFA and 20 states have 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. The district court granted the government's motion to dismiss, however, and MSSA appealed to the Ninth Circuit. Now on appeal, Cato has joined the Goldwater Institute to file an amicus brief supporting the MSSA and arguing that federal power does not 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 MSSA argues is a state-specific market distinct from any related national one. Our brief argues that federal preemption would violate the "letter and spirit of the Constitution" and that heightened judicial scrutiny is required whenever the federal government invokes an implied power to override state sovereignty. The MFFA should not be preempted because: (1) principles of state sovereignty limit federal power; (2) preemption would violate the federalism framework established in National League of Cities v. Usery; and (3) preemption would not allow state sovereignty to serve its role as a proper check of federal power. The Supreme Court has made clear that Congress is not the sole venue for states and individuals to seek protection from federal overreach and so this case is fundamentally a dispute over federalism — which should allow for state regulation of local matters to flourish in concert with federal power over "truly national" concerns. Allowing preemption here would have the perverse effect of allowing the federal government to regulate "states as states" while impairing states' ability to operate in areas of traditional governmental functions. The Ninth Circuit should thus find that district court committed reversible error in dismissing the lawsuit and, as a result, MSSA should be allowed to pursue its case beyond the pleadings stage.

Maples v. Thomas, May 25, 2011 (PDF, 172 KB)
The representation of prisoners accused of capital crimes is unique in its difficulty and in the consequences when that representation is inadequate. This case exposes some of the serious cracks in the system charged with representing indigent defendants in such cases. Cato takes no position on the merits of the death penalty other than that the Constitution does not prohibit it and that our justice system is responsible for, at the very least, ensuring that prisoners receive fair notice of orders on which their lives depend. Both the courts and counsel failed Cory Maples here. Maples was convicted of capital murder and sentenced to death for killing two companions. After a series of state court appeals which affirmed his conviction, Maples filed a petition for post-conviction relief, which was ultimately dismissed. Maples never received notice of this deadline-triggering order because his pro bono lawyers left their big-firm jobs and a court clerk did nothing when the letter containing the order was consequently returned unopened. Because Maples did not receive notice of the deadline, he did not timely file an appeal and his claims were procedurally defaulted. The Eleventh Circuit affirmed the district court's denial of Maples's subsequent federal habeas petition because Maples "cannot establish cause for his default because there is no right to post-conviction counsel." Now before the Supreme Court, Cato joined The Constitution Project to file an amicus brief supporting Maples and arguing that the Court should excuse his default because the state failed to notify him of an order that could result in his death. Moreover, if the default is not excused, the state's inaction will deny Maples his constitutional right of meaningful access to the courts. The Eleventh Circuit relied on the rule that because "there is no constitutional right to an attorney in state post-conviction proceedings, a petitioner cannot claim constitutionally ineffective counsel in such proceedings." But Maples's habeas claim does not involve the ineffectiveness of his post-conviction counsel; his underlying claim is that his trial counsel provided ineffective assistance. Indeed, his post-conviction counsel provided no assistance whatsoever when it was time to appeal. And finally, there is cause to excuse Maples's default because this case is ultimately governed by principles of equity and basic fairness. Few if any reasonable observers would conclude that it is fair or equitable to put a man to death without allowing the least consideration of appellate claims that could save his life simply because his lawyers left their jobs, a firm mailroom returned letters to them unopened, and the court clerk's office did nothing when it discovered that crucial notice was never received.

Seven-Sky v. Holder, May 23, 2011 (PDF, 122 KB)
This is Cato's sixth brief supporting the various legal challenges to Obamacare, this time in our own backyard, the D.C. Circuit. In February, Judge Gladys Kessler of the D.C. district court granted Congress the power to regulate "mental activity" in a decision that flippantly disregarded the core distinction between action and inaction: "Making a choice is an affirmative action, whether one decides to do something or not do something." The frightening scope of that opinion has proven more harmful than helpful to the government, which has shifted its focus away from Kessler's sweeping language by describing the mandate as merely a requirement that people pre-pay for the health care they will inevitably use. Our latest brief deals more directly with that added nuance — even more so than the brief Cato filed two weeks ago. Due to a local circuit rule requiring amici with similar arguments to file jointly, Cato coordinated a brief involving six other organizations — Mountain States Legal Foundation, Pacific Legal Foundation, Competitive Enterprise Institute, Goldwater Institute, Revere America, and Idaho Freedom Foundation — as well as Prof. Randy Barnett. Using Cato's previous brief as a starting point, amici worked together to adjust our arguments in light of new ideas coming from both the government and academia. The core argument, however, remains the same: regardless of any linguistic contortions, the non-purchase of health care is fundamentally a non-economic inactivity that Congress cannot reach under the Commerce and Necessary and Proper Clauses. Allowing Congress the power to conscript citizens into economic transactions not only goes beyond current precedent, but would give Congress a general and limitless police power to do whatever it thinks best, checked only by politics. In addition to the doctrinal arguments we presented in previous briefs, here we remind the court that limiting Congress's power is the explicit purpose of Article I of the Constitution and address the relationship of the individual mandate to United States v. Comstock, the most recent interpretation of the limits on federal power under the Necessary and Proper Clause (a case in which Cato also filed a brief and that was later covered by Ilya Somin in our Supreme Court Review and by Ilya Shapiro and Trevor Burrus in a recent law review article). Given the state of litigation around the country, we will likely not be filing another Obamacare brief before the action reaches the Supreme Court — which it's expected to later this year, after the first few circuit courts issue their rulings.

Florida v. U.S. Dep't of Health & Human Services, May 11, 2011 (PDF, 104 KB)
Obamacare is moving towards its inevitable date with the Supreme Court; although the pace may be aggravating, attorneys on both sides are strengthening their arguments and clarifying the issues presented. Cato's latest brief, filed today in the Eleventh Circuit in support of 26 states and the National Federation of Independent Business, sharpens the position we already expressed in briefs filed in the Fourth Circuit and the Sixth Circuit. Our focus remains the question of whether the Constitution authorizes Congress to mandate that individuals purchase health insurance or suffer a fine. The government has subtly shifted its thinking at this stage, however, to argue that the individual mandate does not so much compel "inactive" citizens to act but merely regulates when and how health care is purchased. Everyone will eventually purchase health care, the argument goes, and the mandate requires that people pre-pay for that care so they don't shift the costs onto others. We point out how this argument is a spurious misdirection, an attempt to recharacterize the individual mandate in terms that are directly contrary to the purpose and function of the overall statute. Obamacare explicitly regulates the status of being uninsured — and not just those who seek to shift health care costs to the future or slough them onto taxpayers (indeed, the politically uncomfortable truth is that those most likely to incur health care expenses they cannot pay, the poor, are exempt from the mandate). We argue that, regardless of the spin that the government places on it, the individual mandate "regulates" inactivity, something that not even modern constitutional doctrine allows. The status of being uninsured cannot be transformed into economic activity via semantic prestidigitation; no matter how artfully articulated, a decision not to purchase insurance, or to do nothing, or to self-insure, is not a federally regulable action. The outermost bounds of Congress's power under the Commerce Clause, as exercised via the Necessary and Proper Clause, reach certain classes of intrastate economic activity that substantially affects interstate commerce. But Congress cannot reach inactivity even if it purports to act pursuant to a broader regulatory scheme. Allowing Congress to conscript citizens into economic transactions would not only be unprecedented — as government-friendly the precedent is — but would fundamentally alter the relationship between the sovereign people and their supposed "public servants." The individual mandate "commandeers the people" into the federal government's brave new health care world.

CRV Enterprises v. United States, April 20, 2011 (PDF, 148 KB)
Just a decade ago in Palazzolo v. Rhode Island, the Supreme Court rejected the idea that those who buy property subject to burdensome regulations lose the right the seller otherwise has to challenge those regulations. The Court ruled that the Takings Clause does not have an "expiration date." Sadly, not all government authorities or courts took Palazzolo to heart. In 2000, after the EPA issued a Record of Decision concerning limiting access to a "slough" (a narrow strip of navigable water) on its Superfund National Priorities List, CRV Enterprises began negotiations to buy a parcel of land next to the slough across from a site once occupied by a wood-preserving plant. CRV hoped to develop that parcel and others it already controlled into a mixed-use development, including a marina, boat slips, restaurants, lodging, storage, sales, and service facilities. The company eventually bought the land with notice of the EPA's ROD but the EPA later installed a "sand cap" and "log boom" that obstructed CRV's access to the slough. CRV sued the United States in the Court of Federal Claims, which dismissed the case for lack of standing. The Federal Circuit affirmed, finding that CRV's claim "is barred because [the company] did not own a valid property interest at the time of the alleged regulatory taking." The Federal Circuit thus turned two Supreme Court precedents on their head and put that "expiration date" on the Takings Clause. It did so despite the fact that multiple federal courts have upheld Palazzolo's rule and that longstanding California common law recognizes that a littoral (next to water) owner's access to the shore adjacent to his property is a property right. Cato, joined by Reason Foundation, the Center for Constitutional Jurisprudence, and the National Federation of Independent Business, filed an amicus brief supporting CRV's request that the Supreme Court review the Federal Circuit's decision and reaffirm Palazzolo. We argue the following: (1) when post-enactment purchasers are per se denied standing to challenge regulation, government power expands at the expense of private property rights; (2) a rule under which pre-enactment owners have superior rights to subsequent title-holders threatens to disrupt real estate markets; (3) the Federal Circuit abrogated the rule of Palazzolo; and (4) this case — viewed in the context of other courts' rulings — indicates the need for the Supreme Court to settle the spreading confusion about Palazzolo. Otherwise, the existence of a "post-enactment" rule will create a "massive uncompensated taking" from small developers and investors that would preserve and enhance the rights of large corporations. Palazzolo put to rest "once and for all the notion that title to property is altered when it changes hands." The ability of property owners to challenge government interference with their property is essential to a proper understanding of the Fifth Amendment; the Court must reestablish the principle that transfer of title does not diminish property rights. Significantly, the Federal Circuit isn't alone in its misapplication of Palazzolo; the Ninth Circuit in Guggenheim v. City of Goleta (in which Cato also filed a brief) also recently issued an opinion severely narrowing Palazzolo's scope and deepening a circuit split.

Morgan v. Swanson, April 15, 2011 (PDF, 57 KB)
Everyone knows that students have First Amendment rights, that the Constitution proverbially doesn't stop at the schoolhouse door. Yet students in the Plano Independent School District in Texas (against whose speech code Cato previously filed a brief) were prohibited from handing out pencils with messages such as "Jesus is the reason for the season" and "Jesus loves me, this I know, for the Bible tells me so," or sending holiday cards to retirement homes that said "Merry Christmas." The students, through their parents, sued the district on First Amendment grounds, and were successful through a Fifth Circuit panel ruling that "qualified immunity," a doctrine that prevents government officials from being held personally liable for violating constitutional rights, did not apply in this case. The panel's holding is as important as it is unremarkable: School officials have fair warning that viewpoint-based discrimination against student speech during non-curricular activities violates the First Amendment. The government certainly cannot do so simply because speech happens to be religious. The Fifth Circuit en banc (as a whole) vacated the panel's decision, however, and decided to rehear the case. Cato filed a brief supporting the students and their parents; not only is it settled law that students have the right to free speech in public schools, but school officials should be held liable for violating those rights on the basis of the content of that speech. Indeed, if the First Amendment means anything, it is that the government cannot suppress speech based solely on its content. More specifically, when an area of the law is "clearly established," officials cannot escape liability under the doctrine of qualified immunity. Qualified immunity simply doesn't apply to public school officials who suppress speech in a non-curricular setting merely because the school district points to some legal disagreement in a dissent, concurrence, or other non-binding judicial opinion that disagrees with settled doctrine regarding viewpoint-based discrimination against student speech.

Guggenheim v. City of Goleta, April 13, 2011 (PDF, 152 KB)
Just a decade ago in Palazzolo v. Rhode Island, the Supreme Court rejected the idea that those who buy property subject to burdensome regulations lose the right the seller otherwise has to challenge those regulations. The Court ruled that the Takings Clause does not have an "expiration date." Sadly, not all government authorities or courts took Palazzolo to heart. In 1997, Daniel and Susan Guggenheim bought a mobile home park which, at the time of purchase, was in "unincorporated territory" of Santa Barbara County, California. The Guggenheims did not challenge the county's 1979 rent control ordinance but instead challenged the 2002 adoption of that ordinance by the City of Goleta when the city incorporated the Guggenheims' land. The Ninth Circuit essentially limited Palazzolo to its particular facts and circumstances, deciding to convert the established three-factor test for regulatory takings (Penn Central) into a one-factor test focused solely on "investment-backed expectations." The court did this largely on the premise that the Guggenheims did not present an "as-applied" challenge — as Palazzolo did — to the ordinance's application to their mobile home park, but instead filed a facial challenge to the constitutionality of the ordinance itself. As a result, the Ninth Circuit turned two Supreme Court precedents on their head and put that "expiration date" on the Takings Clause in this case. Significantly, the Ninth Circuit isn't alone in its misapplication of Palazzolo; the Federal Circuit in CRV Enterprises v. United States (in which Cato will also be filing a brief) also recently issued an opinion severely narrowing Palazzolo's scope and deepening a circuit split. Cato filed an amicus brief supporting the Guggenheims' request that the Supreme Court review the Ninth Circuit decision and reaffirm its decision in Palazzolo. The brief argues the Supreme Court should review the case because: (1) a rule that allows the transfer of title to immunize government regulation from constitutional or other legal challenge expands government power and diminishes property rights; (2) the Ninth Circuit "flouts" the rule of Palazzolo; and (3) this case — as well as CRV Enterprises — indicates the need for the Supreme Court to settle the spreading confusion about Palazzolo. Otherwise, the existence of a "post-enactment" rule will create a "massive uncompensated taking" from small developers and investors that would preserve and enhance the rights of large corporations. The ability of property owners to challenge government interference with their property is essential to a proper understanding of the Fifth Amendment; the Court must reestablish the principle that transfer of title does not diminish property rights.

Barnes v. Zaccari, April 11, 2011 (PDF, 259 KB)
Few could imagine a more troubling free speech and due process case than that of Hayden Barnes. Barnes, a student at Valdosta State University in Georgia, peacefully protested the planned construction of a $30 million campus parking garage that was the pet project of university president Ronald Zaccari. A "personally embarrassed" Zaccari did not take kindly to that criticism and endeavored to retaliate against Barnes — ignoring longstanding legal precedent, the Valdosta State University Student Handbook (a legally binding contract), and the counsel of fellow administrators. Zaccari even ordered staff to look into Barnes's academic records, his medical history, his religion, and his registration with the VSU Access Office. The district court found that Barnes's due process rights had indeed been violated and denied Zaccari qualified immunity from liability for his actions. Now on appeal, Cato joined a brief filed by the Foundation for Individual Rights in Education on behalf of 15 organizations arguing that qualified immunity is inappropriate here given Zaccari's brazen violation of Barnes's constitutional rights to free speech and due process. As stated in the brief, the "desire of some administrators to censor unwanted, unpopular, or merely inconvenient speech on campus is matched by a willingness to seize upon developments in the law that grant them greater leeway to do so." The brief thus asks the Eleventh Circuit to affirm the denial of qualified immunity on both First Amendment and due process grounds. First, the immense importance of constitutional rights on public university campus is due in no small part to the reluctance of school administrators to abide by clearly established law protecting student rights. Second, Zaccari knew or should have known that his actions violated Barnes' rights and were illegal retaliation against constitutionally protected speech. Qualified immunity is intended to protect public officials who sincerely believe their actions are reasonable and constitutional, not those who willfully and maliciously ignore well known law in a determined effort to deprive another of constitutional rights. A denial of qualified immunity here would vindicate those rights and reinforce school administrators' obligation to protect and abide by them.

Virginia v. Sebelius, April 4, 2011 (PDF, 89 KB)
While two lower courts have struck down Obamacare in whole or in part, three others have ruled it constitutional, including a D.C. District Court opinion that claimed for the federal government the right to regulate the "mental activity" of decision-making. As litigation progresses to the appellate level, this latter decision has proven to be more a hindrance to Obamacare's supporters than a help, its Orwellian pronouncement being hard to ignore while the government downplays the significance of the power Congress is asserting. Nevertheless, Obamacare's constitutionality — with a focus on the individual health insurance mandate — remains an open question until ruled upon by the Supreme Court. Cato's latest amicus brief is in the Fourth Circuit, in the case brought by Virginia Attorney General Ken Cuccinelli. In this case, unlike in the Sixth Circuit (in which we also filed a brief), it is the federal government that appealed an adverse district court decision that struck down the individual mandate. In our brief, joined by the Competitive Enterprise Institute and Prof. Randy Barnett (the "intellectual godfather" of the Obamacare legal challenges), we argue that the outermost bounds of existing Commerce Clause jurisprudence prevent Congress from reaching intrastate non-economic activity regardless of whether it substantially affects interstate commerce. Nor under existing law can Congress reach inactivity even if it purports to act pursuant to a broader regulatory scheme. Allowing Congress to conscript citizens into economic transactions is not only contrary to existing Commerce and Necessary and Proper Clause doctrine — as broad as that doctrine is — but it would fundamentally alter the relationship between the sovereign people and their supposed "public servants." The individual mandate "commandeers the people" into Congress's brave new health care world. If Obamacare is allowed to stand, the only limit on federal power will be Congress's own discretion.

Sorrell v. IMS Health, March 25, 2011 (PDF, 198 KB)
Vermont passed a law prohibiting the exchange of a variety of socially important information. Most notably, the law outlaws the transfer of doctors' prescription history to facilitate drug companies' one-on-one marketing — a practice known as "detailing" — because it believes detailing drives up brand-name drug sales and, in turn, health care costs. The state knew that the First Amendment prevented it from banning detailing itself, so it made the practice more difficult indirectly. Yet data collection and transfer is protected speech — think academic research, or the phone book — and government efforts to regulate this type of speech also runs afoul of the First Amendment. See, e.g., Solveig Singleton, Cato Policy Analysis No. 295, "Privacy as Censorship: A Skeptical View of Proposals to Regulate Privacy in the Private Sector" (January 22, 1998). The First Circuit had earlier upheld a similar New Hampshire law, somehow finding that the statute regulates conduct rather than speech and that, in any event, the judiciary should defer to the legislative branch's judgment. When the Supreme Court declined to review that case (which cert petition Cato supported), Cato joined Pacific Legal Foundation, the Progress & Freedom Foundation, and two trade associations on a brief asking the Second Circuit to split with its First Circuit brethren and reject this dangerous narrowing of protection for free expression. The Second Circuit did just that and ruled that statutes restricting commercial speech about prescription drug-related data gathering are unconstitutional. The court emphasized that the First Amendment protects "[e]ven dry information, devoid of advocacy, political relevance, or artistic expression." Vermont filed a petition asking the Supreme Court to review the case, which their adversaries supported in order to more quickly resolve the circuit split. Cato, again joining PLF, filed a brief supporting the respondents, two companies that collect and sell health information and analysis. Our brief argues that the Second Circuit should be affirmed and the Court should abandon the unworkable Central Hudson distinction between commercial and noncommercial speech. Specifically, we contend that the Central Hudson approach to commercial speech veers into viewpoint discrimination and should be abandoned in favor of strict scrutiny because innovative and valuable commercial expression deserves full First Amendment protection.

National Corn Growers Assoc. v. EPA, March 18, 2011 (PDF, 129 KB)
There is a growing trend among federal agencies and courts to incrementally expand the government's enforcement power by adopting statutory interpretations that go beyond their plain meaning and intent. This case exemplifies such government overreach. Under the Federal Food, Drug, and Cosmetic Act, the Environmental Protection Agency establishes limits, or "tolerances," for pesticide residues on food. If a pesticide residue exceeds an established tolerance it is deemed "unsafe" and the product is removed from interstate commerce — effectively banned from use. The EPA must modify or revoke a tolerance it deems unsafe through a "notice and comment" process. Both the FFDCA and its implementing regulations require the EPA to hold a public evidentiary hearing if any objections raise a "material issue of fact." In the current case, the pesticide carbofuran was registered for use in 1969 by the EPA and has been safely used for pest control for a variety of crops for more than 40 years. Recently, however, the EPA overlooked "material issues of fact" raised by the National Corn Growers and revoked all tolerances for carbofuran without a public hearing. In a decision that gives sole discretion to the EPA to determine the fate of hundreds of thousands of products already in the market, the D.C. Circuit held that courts must defer to the agency. The court declared that differences in scientific studies are insufficient for judicial review, essentially writing "material issue of fact" out of the Act. Cato joined the Pacific Legal Foundation in filing a brief arguing that Supreme Court review is warranted because the D.C. Circuit undermined the legal requirement for a public hearing under the FFDCA. Moreover, because this case sets a precedent for other regulated products and allows government agencies to unlawfully deprive citizens of their property without adequate access to court review, we argue that the Supreme Court should take this case to: (1) establish the proper standard for review under the FFDCA for a public hearing; (2) curtail abuse of the administrative process; and (3) establish that complete deference is not compatible with a summary-judgment-type proceeding. The right not to be deprived of one's property without fair process is a bedrock principle of American jurisprudence. The Court should reinforce this principle and ensure that statutory safeguards intended to protect this right are not ignored.

FLFMC, LLC v. Wham-O, Inc., February 28, 2011 (PDF, 168 KB)
Recognizing an opportunity to make quick and easy money, private attorneys have been suing companies under the False Marking Statute, 35 U.S.C. § 292. This law allows any person to sue to enforce a federal criminal statute that prohibits anyone from labeling an unpatented product with a patent number or to advertise a product with a patent number that is not actually patented. The penalty for violating this law is $500 per offense, which has been interpreted to mean each and every product falsely marked. For instance, if a business is charged with falsely marking 100,000 products, it could be liable for $50,000,000. Private attorneys suing under this statute seek massive amounts in damages and then try to settle with the defendant for a fraction of that cost (still a large amount of money). Companies often settle even if the case against them has little merit because they do not want to risk such a massive amount in damages. The longtime toy manufacturer Wham-O, however, successfully defended such a lawsuit in court, provoking the plaintiffs' lawyers to appeal to the Federal Circuit (the only appellate court below the Supreme Court that can hear patent cases). Cato, along with our senior fellow Walter Olson — who has studied these patent marking cases — filed an amicus brief supporting Wham-O on constitutional grounds. We argue that the False Marking Statute fails to give the executive branch, through the attorney general, control over the enforcement actions brought at its behest. By allowing any person to sue and then receive half of the damages, the law abrogates the executive power to enforce the law and places it in the exclusive hands of the private attorney. In the 1988 case of Morrison v. Olson, the Supreme Court upheld the independent counsel statute because it gave the Attorney General "sufficient control" over the independent counsel's hiring, firing, and the scope of their investigation. Other courts have held that for a private person to prosecute what is called a "qui tam" action under the False Claims Act — essentially stepping into the shoes of the government — the government must maintain "sufficient control" over the litigation. The False Marking Statute does not provide sufficient control, or any control, and therefore violates Article II's "Take Care Clause," the font of the executive branch's enforcement duties. Ultimately, the separation of powers, the foundation for the governmental structure created by the Framers, ensures that laws are enforced by someone accountable to the people, the Executive. The False Marking Statute divests the president of this authority, so the Federal Circuit should strike it down as violating the Constitution's separation-of-powers structure.

American Electric Power Co. v. Connecticut, February 7, 2011 (PDF, 262 KB)
As Congress debates cap-and-trade, new fuel standards, and subsidies for "green" companies, some still feel that political solutions to global warming are not moving fast enough. In the present case, eight states and New York City sued several public utilities (including the federal Tennessee Valley Authority), alleging that their carbon dioxide emissions contribute to global warming. This is the third major lawsuit to push global warming into the courts (another being Comer v. Murphy Oil USA, in which Cato also filed a brief). All of these suits try to use the common law doctrine of nuisance — which, for example, lets you sue your neighbor if his contaminated water flows onto your land and kills your lawn — to attack carbon emitters. None of them had gotten very far until the Second Circuit vacated a lower-court ruling and allowed the claims here to proceed. But the judiciary was not meant to be the sole method for resolving grievances with the government — even if everything looks like a nail to lawyers who only have a hammer. After all, there are two other co-equal branches, the legislative and executive, which are constitutionally committed to unique roles in our system of separation of powers. The doctrine of "standing" exists in part to ensure that the judiciary is not used to solve issues that properly belong to those other branches. Toward this end, the Constitution allows courts to hear only actual "cases or controversies" that can feasibly be resolved by a court. Cato thus filed a brief supporting the defendant utilities' successful request for Supreme Court review, and has now filed another brief supporting their position before the Court. Cato's latest brief first argues that no judicial solution is possible here because the chain of causation between the defendants' carbon emissions and the alleged harm caused by global warming is so attenuated that it resembles the famed "butterfly effect." Just as butterflies should not be sued for causing tsunamis, a handful of utility companies in the Northeastern United States should not be sued for the complex (and disputed) harms of global warming. Second, we contend that, even if the plaintiffs can demonstrate causation, it is unconstitutional for courts to make nuanced policy decisions that should be left to the legislature — and this is true regardless of the science of global warming. Just as it's improper for a legislature to pass a statute punishing a particular person (bill of attainder), it's beyond courts' constitutional authority — under the "political question doctrine" — to determine wide-ranging policies in which numerous considerations must be weighed in anything but an adversarial litigation process. If a court were to adjudicate the claims here and issue an order dictating emissions standards, two things will happen: 1) the elected branches will be encouraged to abdicate to the courts their responsibilities for addressing complex and controversial policy issues, and 2) an already difficult situation would become nearly intractable as regulatory agencies and legislative actors butt heads with court orders issued across the country in quickly multiplying global warming cases. These inevitable outcomes are precisely why the standing and political question doctrines exist. Dissatisfaction with the decisions and pace of government does not give someone the right to sue over anything. Or, as Chief Justice Marshall once said, "If the judicial power extended to every question under the laws of the United States ... [t]he division of power [among the branches of government] could exist no longer, and the other departments would be swallowed up by the judiciary."

McComish v. Bennett, January 20, 2011 (PDF, 163 KB)
The Supreme Court agreed to hear a challenge to Arizona's Clean Elections Act — brought by our friends at the Institute for Justice and the Goldwater Institute and supported by our brief at the cert petition stage — which law hoped to "clean up" state politics by creating a system for publicly funding campaigns. Recall that participation in the public funding is not mandatory, however, and those who do not participate are subject to rules that match their "excess" private funds with disbursals to their opponent from the public fund. That is, if a privately funded candidate spends more than their publicly funded opponent, then the publicly funded candidate receives public "matching funds." Whatever the motivations behind the Act, the effects have been to significantly chill political speech: privately funded candidates changed their spending — and thus their speaking — as a result of the matching funds provisions. In elections, where there is no effective speech without spending money, matching funds provisions such as those at issue here diminish the quality and quantity of political speech. In 2008, however, the Supreme Court struck down a similar part of the federal McCain-Feingold law in which individually wealthy candidates were penalized for spending their own money by triggering increased contribution limits for their opponents (Davis v. FEC, in which Cato also filed a brief). Even this modest opportunity for opponents to raise more money was found to be an unconstitutional burden on political speech. Cato's latest brief thus asks the following question: Whether Arizona may give a publicly funded candidate extra money because a privately funded opponent or his supporters have, in the state's judgment, spoken too much. We highlight Davis and numerous other cases that point to a clear answer: if the mere possibility of your opponent getting more money is unconstitutional then the guarantee that your opponent will get more money is even more so. Allowing the government to abridge political speech in this fashion not only diminishes the quality of political debate, but ignores the fundamental principle upon which the First Amendment is premised: that the government cannot be trusted to regulate political speech for the public benefit. Moreover, the state cannot condition the exercise of the right to speak on the promotion of a viewpoint contrary to the speaker's.

Fox v. Vice, December 30, 2010 (PDF, 86 KB)
Private lawsuits challenging government violation of civil rights are notoriously difficult and expensive to bring and win. To address such impediments to the vindication of civil rights, Congress passed a law that, among other things, awards attorneys' fees to the prevailing parties in certain cases. As noted by the House Judiciary Committee, this was necessary because "a vast majority of the victims of civil rights violations cannot afford legal counsel, they are unable to present their cases to the courts .... [the law at issue, 42 U.S.C. § 1988] is designed to give such persons effective access to the judicial process." Congress thus harnessed market principles, creating an economic incentive for citizens to vindicate their civil rights directly rather than relying exclusively on enforcement actions by the federal government itself. In the case of Fox v. Vice, however, the Fifth Circuit ruled that an unsuccessful result on a threshold or procedural matter relating to part of a lawsuit could justify a court order requiring the plaintiff to pay all of the defendants' attorney's fees — even those expended to address other, meritorious claims. Such a rule departs from the market-oriented legal structure Congress designed and, if allowed to stand, would significantly harm the ability of plaintiffs to bring private civil rights claims. Cato, joining the Liberty Institute, the Independence Law Center, the Institute for Justice, and the James Madison Center for Free Speech, filed a brief supporting a request that the Supreme Court reverse the Fifth Circuit and making three points: First, by awarding the defendant fees for the entire suit based on the dismissal of one claim, the Fifth Circuit's decision imposes prohibitive costs on the enforcement of civil rights. Second, the exceptional timing of the fee award in this case — before resolution of the plaintiff's related state-law claims — creates a dangerous precedent that threatens to derail civil rights actions. By prematurely deeming a plaintiff's suit frivolous and ordering the plaintiff to pay the defendant's fees before the conclusion of the litigation, the Fifth Circuit's rule imposes financial penalties that would shut down legitimate lawsuits midstream. Third, the Court should not permit fee awards in situations where a plaintiff dismisses a federal claim in order to secure a remand of related state-law claims to state court. Otherwise, the threat of a fee award will improperly burden the plaintiff's decision to bring a federal claim in state court at all — contrary to the law's purpose here. In addition to reversing the judgment below, the Court should reinforce that a mid-litigation fee award is improper when a plaintiff voluntarily drops a federal claim in order to return to state court.

Thomas More Law Center v. Obama, December 22, 2010 (PDF, 97 KB)
The legal battle against Obamacare has hit the appellate court level. In October, a district court in Detroit granted the government's motion to dismiss a lawsuit brought by the Thomas More Law Center and four individuals. The judge there endorsed the government's theory that federal power under the Commerce Clause could reach the decision not to buy health insurance because that decision had a substantial effect on interstate commerce. The plaintiffs have appealed that ruling to the U.S. Court of Appeals for the Sixth Circuit, and Cato, joined by Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a brief supporting that appeal. We argue that the outermost bounds of existing Commerce Clause jurisprudence — the "substantial effects doctrine" — prevent Congress from reaching intrastate non-economic activity regardless of whether it substantially affects interstate commerce. Nor under existing law can Congress reach inactivity even if it purports to act pursuant to a broader regulatory scheme. Even the district court recognized that "in every Commerce Clause case presented thus far, there has been some sort of activity. In this regard, the Health Care Reform Act arguably presents an issue of first impression." What Congress is attempting to do here is quite literally unprecedented. "The government has never required people to buy any good or service as a condition of lawful residence in the United States." Cong. Budget Office, The Budgetary Treatment of an Individual Mandate to Buy Health Insurance 1 (1994). Nor has it ever said that people face civil penalties for declining to participate in the marketplace. Even in the seminal New Deal case of Wickard v. Filburn, the federal government claimed "merely" the power to regulate what farmers grew, not to mandate that people become farmers, much less to force people to purchase farm products. Finally, even if not purchasing health insurance is considered an "economic activity" — which of course would mean that every aspect of human life is economic activity — there is no legal basis for Congress to require individuals to enter the marketplace to buy a particular good or service. It is no more "proper" under the Necessary and Proper Clause for the federal government to "commandeer" individuals than to "commandeer" state officials.

Bond v. United States, December 10, 2010 (PDF, 179 KB)
Carol Anne Bond learned that her best friend was having an affair with her husband, so she spread toxic chemicals on the woman's car and mailbox. Postal inspectors discovered this plot after they caught Bond on film stealing from the woman's mailbox. Rather than leave this caper to local law enforcement authorities to resolve, however, a federal prosecutor charged Bond with violating a statute that implements U.S. treaty obligations under the 1993 Chemical Weapons Convention. Bond pled guilty and was sentenced but now appeals her conviction on the ground that the statute at issue violates the Tenth Amendment — in that her offense was local in nature and not properly subject to federal prosecution. The Third Circuit declined to reach the constitutional question, holding that Bond did not have standing to raise a Tenth Amendment challenge and that, following Supreme Court precedent, a state actor must be a party to the suit in order to challenge the federal government for impinging on state sovereignty. Bond now seeks Supreme Court review on the ground that the statute, as applied to her, is beyond the federal government's enumerated powers. Cato joined the Center for Constitutional Jurisprudence in filing a brief supporting Bond's request. We argue not only that a defendant clearly has standing to challenge the constitutionality of the statute under which she was convicted, but that lower courts' assumption that both the power to make treaties and Congress's power to make laws executing those treaties are unconstrained by the Constitution. This assumption is premised on a perfunctory acceptance of an overly broad interpretation of Missouri v. Holland, 252 U.S. 416 (1920). That reading of Missouri v. Holland, however, is contrary to precedent, has been undermined by subsequent Court decisions, and if allowed to stand, will seriously undermine the notion that the federal government is one of only limited, enumerated powers. The Court's recognition that the constitutional issues Bond raises warrant serious review will begin the process of reconsidering the meaning of Missouri v. Holland and its progeny. Beyond the obviously erroneous ruling on standing here, this case offers the opportunity to reinforce limits on the expansion of federal criminal law into areas that should be handled at the state and local levels.

Tuck-It-Away, Inc. v. New York State Urban Development Corp., October 25, 2010 (PDF, 128 KB)
Five years ago, in the landmark property rights case of Kelo v. New London, the Supreme Court upheld the forced transfer of land from various homeowners by finding that "economic development" qualifies as a public purpose for purposes of satisfying the Fifth Amendment's Takings Clause. In doing so, however, the Court reaffirmed that the government may not "take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit." State and federal courts have since applied that pretext standard in widely differing ways while identifying four factors as indicators of pretext: evidence of pretextual intent, benefits that flow predominantly to a private party, haphazard planning, and a readily identifiable beneficiary. Moreover, since Kelo, 43 states have passed eminent domain reform laws that constrain or forbid "economic development" condemnations. While many of these laws are strong enough to curtail abuse, in at least 19 states the restrictions are undercut by nearly unlimited definitions of "blight." The State of New York has seen perhaps the most egregious examples of eminent-domain abuse in the post-Kelo era, and now provides the example of Columbia University's collusion with several government agencies to have large swaths of Manhattan declared blighted and literally pave the way for the university's expansion project. In this brazen example of eminent-domain abuse, the New York Court of Appeals (the highest state court) reversed a decision of the New York Appellate Division that relied extensively on Kelo's pretext analysis and thus favored the small businessowners challenging the Columbia-driven condemnations. The Court of Appeals failed even to cite Kelo and ignored all four pretext considerations, instead defining pretext so narrowly that even the most abusive forms of favoritism will escape judicial scrutiny. Cato joined the Institute for Justice and the Becket Fund for Religious Liberty in a brief supporting the condemnees' request that the Supreme Court review the case and address the widespread confusion about Kelo's meaning in the context of pretextual takings. Our brief highlights the need for the Court to establish and enforce safeguards to protect citizens from takings effected for private purposes. We argue that this case is an excellent vehicle for the Court to define what qualifies a taking as "pretextual" and consider the weight to be accorded to each of the four criteria developed by the lower and state courts.

Maunalua Bay Beach Ohana 28 v. Hawaii, October 13, 2010 (PDF, 138 KB)
Throughout history, people have fought over beaches. In this case, a state has once again redefined property rights to take possession of highly-valued beachfront property. In 2003, Hawaii passed Act 73, which took past and future title to accretions (the slow build-up of sediment on beaches) from landowners and gave it to the State, changing a 120-year-old rule. While waterlines are unpredictable, the original rule — common to most waterfront jurisdictions — helped establish legal consistency. Indeed, without such a rule, beachfront property becomes beachview property in just a few years. In response to Act 73, homeowners sued the state, claiming that the law violated the Takings Clause of the Fifth Amendment or, in the alternative, the Due Process Clauses of the Fifth and Fourteenth Amendments. The state appellate court held that compensation was owed only for the accretions that had accumulated before Act 73's enactment because the right to subsequent accretions had not "vested" (the legal term for when an expectation becomes an actual property right). Hawaii's Supreme Court declined to review that ruling, so the property owners asked the U.S. Supreme Court to do so. Cato, joined by the Pacific Legal Foundation, filed a brief supporting that petition and argues that the appellate court's decision was contrary to long-standing definitions of waterfront property rights. Our brief highlights the increasing need for the Court to establish and enforce a judicial takings doctrine. More and more states are using backdoor tricks — like legislative "guidelines" and judicial creativity — to take property in violation of constitutional rights: This Hawaii case is distressingly similar to last term's Stop the Beach (in which Cato also filed a brief). In that case, Florida took property by adding sand to the beach and then laying claim to the newly created land — in essence asserting that property that was defined by contact with the water (in technical terms, "littoral" or "riparian") had no right to contact the water. The Court ruled that while Florida's actions did not rise to the level of a judicial taking, a large enough departure from established common-law rules could constitute a constitutional violation. In this latest brief, we highlight both the largeness of Hawaii's departure from established law and the spate of such actions in recent years — which circumstance calls out for Supreme Court review.

Virginia v. Sebelius, October 1, 2010 (PDF, 71 KB)
The legal battle against Obamacare continues. In June, a district court in Richmond denied the government's motion to dismiss Virginia's lawsuit (in opposition to which Cato filed a brief). Despite catcalls from congressmen and commentators alike, it seems that there is, after all, a cogent argument that Obamacare is unconstitutional! Having survived dismissal, both sides filed cross motions for summary judgment — meaning that no material facts are in dispute and each side believes it should win on the law. Supporting Virginia's motion and opposing the government's, Cato, joined by the Competitive Enterprise Institute and Georgetown law professor (and Cato senior fellow) Randy Barnett, expands in a new brief its argument that Congress has gone beyond its delegated powers in requiring that individuals purchase health insurance. Even the cases that have previously upheld expansive federal power do not justify the ability to mandate that individuals buy a product from a private business. Those cases still involved people that were doing something — growing wheat, running a hotel, cultivating medical marijuana. The individual mandate, however, asserts authority over citizens that have done nothing; they're merely declining to purchase health insurance. This regulation of inactivity cannot find a constitutional warrant in either the Commerce Clause, the Necessary and Proper Clause, or Congress's taxing power. Such legislation is not "necessary" to regulating interstate commerce in that it violates the Supreme Court's distinction between economic activity (which often falls under congressional power as currently interpreted) and non-economic activity (which, to date, never has), it is not "proper" in that it commandeers citizens into an undesired economic transaction. Finally, the taxing power claim is a red herring: (a) neither the mandate nor the penalty for not complying with the mandate is a tax, and is not described as such anywhere in the legislation; (b) even if deemed a tax, it's an unconstitutional one because it's neither apportioned (if a direct tax) nor uniform (if an excise); (c) Congress cannot use the taxing power to enforce a regulation of commerce that is not authorized elsewhere in the Constitution.

Schwarzenegger v. Entertainment Merchants Association, September 17, 2010 (PDF, 274 KB)
"These kids today and their violent [blank]...." This refrain has been around for as long as there have been kids — and elders to shake their fists at them. In the 19th century, dime novels and "penny dreadfuls" were blamed for social ills and juvenile delinquency. In the 1950s, psychologist Fredric Wertham's attack on comic books — in his bluntly titled book Seduction of the Innocent — so ignited the national ire that Congress held hearings on the cartoon menace. In response, the comic book industry voluntarily adopted a ratings system. Similarly, backlash against the movie industry and the music industry (e.g., Tipper Gore's attack on gangsta rap) caused those respective industries to also adopt voluntary ratings systems. And the videogame industry too adopted an effective and responsive ratings system after congressional hearings in the early '90s. Thinking this ratings system ineffective, however, California passed a violent videogame law, which prohibits minors from purchasing games that are deemed "deviant," "patently offensive," and lacking in artistic or literary merit. The gaming industry challenged the California law and the Ninth Circuit struck it down on First Amendment grounds. California now seeks to overturn the lower court's ruling by arguing that violent videogames deserve an exemption from First Amendment protection. Cato's brief highlights not only the oft-repeated and oft-overblown stories of the "seduction of the innocent," but the less-repeated stories of the effectiveness and preferability of industry self-regulation. We show that not only does self-regulation avoid touchy First Amendment issues but that entertainment industries take self-regulation very seriously. Moreover, evidence from the Federal Trade Commission shows that the existing videogame ratings system works more effectively than any other regulatory method. Adding a level of governmental control, even if were constitutional, would be counterproductive.

McComish v. Bennett, September 16, 2010 (PDF, 163 KB)
In 1998, after years of scandals ranging from governors being indicted to legislators taking bribes, Arizona passed the Citizens Clean Elections Act. This law hoped to "clean up" state politics by creating a system for publicly funding campaigns. Participation in the public funding is not mandatory, however, and those who do not participate are subject to rules that match their "excess" private funds with disbursals to their opponent from the public fund. In short, if a privately funded candidate spends more than their publicly funded opponent, then the publicly funded candidate receives public "matching funds." Whatever the motivations behind the Act, the effects have been to significantly chill political speech. Indeed, ample evidence introduced at trial in a lawsuit challenging the Act showed that privately funded candidates changed their spending — and thus their speaking — as a result of the matching funds provisions. In elections, where there is no effective speech without spending money, the matching funds provision of the Clean Elections Act diminishes the quality and quantity of political speech. In 2008, however, the Supreme Court in Davis v. FEC struck down a similar provision in the federal McCain-Feingold law in which individually wealthy candidates were penalized for spending their own money by triggering increased contribution limits for their opponents. Even this modest opportunity for opponents to raise more money was found to be an unconstitutional burden on political speech. Cato has thus filed a brief supporting a request that the Supreme Court review the lower court's decision upholding the Clean Elections Act. We highlight Davis (in which Cato also filed a brief) and numerous other cases that point to a clear conclusion: if the mere possibility of your opponent getting more money is unconstitutional then the guarantee that your opponent will get more money (Arizona's Act automatically disburses matching funds) is even more so. Allowing the government to abridge political speech in this fashion not only diminishes the quality of our political debate, but it ignores the fundamental principle upon which the First Amendment is premised: that the government cannot be trusted to regulate political speech for the public benefit.

PPL Montana, LLC v. Montana, September 15, 2010 (PDF, 231 KB)
The Montana Supreme Court overturned more than 100 years of state property law concerning navigable waters by effectively converting the title in hundreds of miles of riverbeds to the State. The majority of that court ruled that the entirety of the Missouri, Clark Fork, and Madison rivers were navigable at the time of Montana's statehood, producing a broad holding that eradicates property rights to the rivers and riverbanks that Montanans had enjoyed for over a century. Before this case, the hydroelectric energy company PPL Montana and thousands of other private parties exercised their property rights over these non-navigable stretches that the state never claimed. Cato joined a brief filed by the Montana Farm Bureau Federation supporting the PPL Montana's request that the U.S. Supreme Court review the Montana high court's ruling for possible Takings Clause violations under the Fifth Amendment. We argue two main points. First, that the Court should adhere to its standard for navigability rights set out in Utah v. U.S. in 1933. Unlike the approach taken by the Montana Supreme Court's majority — that entire rivers were navigable simply because certain reaches of the river were navigable — the U.S. Supreme Court in Utah used an approach of meticulously analyzing the rivers at issue section-by-section. Second, we argue that this arbitrary ruling against rights long protected by Montana law amounts to a "judicial taking," as explained last term Stop the Beach Renourishment v. Florida Dept. of Environmental Protection (in which Cato also filed a brief). There, a plurality of the Court held that there is no "textual justification" for limiting takings claims deriving from executive or legislative action, thereby extending it to a judicial action of the same nature (and two other members of the Court found potential relief in the Fourteenth Amendment's Due Process Clause). Here, the Montana court did exactly that, violating due process rights that the Montana legislature could not and further violating the procedural due process rights of the thousands harmed by the decision in not affording them notice or a hearing. The U.S. Supreme Court should thus review the case to reinforce its Utah precedent and ensure that arbitrary judicial takings of this sort cannot continue.

American Electric Power Co. v. Connecticut, September 3, 2010 (PDF, 162 KB)
At a time when the international community is holding climate change conferences and Congress debates on cap-and-trade, new fuel standards, and subsidies for "green" companies, some still feel that political solutions to global warming are not moving fast enough. In the present case, a group of eight states and New York City sued several public utilities companies, alleging that their carbon dioxide emissions contribute to global warming. This is the third major lawsuit to push global warming into the courts (another being Comer v. Murphy Oil USA, in which Cato also filed a brief). All of these suits try to use the common law doctrine of nuisance — the same thing that lets you sue your neighbor if his contaminated water flows onto your land and kills your lawn — to attack carbon emitters. Cato's brief argues that the chain of causation between the utility companies' carbon emissions and the alleged harm caused by global warming is so attenuated that it resembles the famed "butterfly effect." Just as butterflies should not be sued for causing monsoons, six utility companies in the Northeastern United States should not be sued for the complex (and disputed) harms of global warming. In legal terms, the plaintiffs here lack standing to bring such claims. Second, we contend that, even if causation is demonstrable, it is unconstitutional for courts to make complex policy decisions that should be left to the legislature — and this is true regardless of the science regarding global warming. Just as it's unconstitutional for a legislature to pass a statute punishing a particular person (bill of attainder), it's unconstitutional — under the "political question doctrine" — for courts to determine wide-ranging policies in which numerous considerations must be weighed against each other in anything but a bilateral way. Nevertheless, the Second Circuit allowed the suit to proceed because the plaintiffs did not ask the court "to fashion a comprehensive and far-reaching solution to global climate change." We point out that resolving this case while avoiding those comprehensive and far-reaching implications is impossible and that the Constitution prohibits the judicial usurpation of roles assigned to the other, co-equal branches of government.

Connick v. Thompson, August 13, 2010 (PDF, 184 KB)
If a man is wrongfully convicted and held on death row for 18 years — 14 in solitary confinement — because prosecutors withheld exculpatory evidence in his case, is there any reason that courts should keep him from recovering damages simply because the local government had not established a pattern of constitutional violations? Eighteen years after John Thompson was convicted of murder and kept from testifying at his trial due to a previous armed robbery conviction, investigators found exculpatory evidence from the armed robbery that prosecutors had failed to turn over to Thompson's defense team. After being acquitted of the murder charge, Thompson sued the parish district attorney for violating his civil rights and was awarded $14 million in damages. The parish appealed the case all the way to the Supreme Court, arguing that a single violation of civil rights does not give rise to government liability without showing a pattern of violations or without demonstrating a direct connection between the inability to train attorneys and the constitutional violation. Cato, joined by the Alliance Defense Fund, argues that not only is the parish's claim based on a misreading of the central precedent, Monell v. New York City Department of Social Services, but interpreting civil liability for local governments in such a narrow fashion contravenes long-established rules of responsdeat superior — the doctrine that makes employers liable for employees' wrongdoings. The drafters of 42 U.S.C. § 1983 (the governing civil rights law) showed no indication that they intended local government liability to exclude the doctrine of respondeat superior. For reasons not justified by policy, history, or clearly established law, the Court has created different rules under which a person can recover damages from local governments. Although Monell rightly extended liability to local governments, the idea that this liability is different from historically rooted employer liability should no longer be sanctioned by the Supreme Court.

Arizona Christian School Tuition Organization v. Winn, August 4, 2010 (PDF, 201 KB)
Arizona grants income tax credits for contributions made to school tuition organizations ("STOs"). STOs must use these donations for scholarships that allow students to attend private schools. This statutory scheme broadens the educational opportunities for thousands of students by enabling them to attend schools they would otherwise lack the means to attend. Although the Ninth Circuit acknowledged that increasing educational opportunities is a valid secular purpose for a legislative act, it found that the tax credit program nonetheless violates the Establishment Clause because many of the STOs — as it happens, a decreasing majority — provide scholarships for students to attend parochial schools. Cato, in a brief joined by four education reform groups, urges the Supreme Court to overturn the Ninth Circuit's decision because it was based on faulty reasoning: It equated the private and voluntary choices of individuals who donate to religious STOs with state sponsorship of religion. The lower court also made the dubious assertion that Arizona parents feel pressured to accept scholarships to religious schools, in spite of the fact that the share of STO scholarships available for use at secular schools is almost twice as large as the share of families actually choosing secular schools. Moreover, the tax credit scheme is indistinguishable from similar charitable tax deduction programs that the Court has previously held to pass constitutional muster. We urge the Court to reaffirm its longstanding jurisprudence — especially the 2002 school-choice case, Zelman v. Simmons-Harris — whereby instances of "genuine and independent choice" are insulated from Establishment Clause challenge. Far from being an impediment to parental freedom, the autonomy Arizona grants to taxpayers and STOs is ultimately essential to it. More generally, should the lower court's opinion be allowed to stand, the progress made to broaden the educational opportunities of students across the country will be stifled.

Virginia v. Sebelius, June 17, 2010 (PDF, 130 KB)
Virginia's attorney general filed a lawsuit in federal court challenging the constitutionality of President Obama's health care overhaul, the Patient Protection and Affordable Care Act. Virginia's complaint alleges, in relevant part, that the PPACA's requirement that every individual purchase health insurance or pay a fine—the "individual mandate"—is unconstitutional because Congress lacks the power to enact it. The Government filed a motion to dismiss, claiming that Virginia lacked standing to bring this suit but also that the Commerce Clause, the Necessary and Proper Clause, and Congress' taxing power all justify the individual mandate. Virginia responded, in relevant part, that the Commerce Clause does not grant Congress unbridled authority to regulate inactivity and force every man, woman, and child to enter the marketplace or face a civil penalty. Cato, joined by the Competitive Enterprise Institute and Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a memorandum in the district court supporting Virginia's position and explaining that neither of the Government's fallback positions legitimizes the individual mandate either. We point out that the Necessary and Proper Clause is not an independent source of congressional power, but enables Congress to exercise its enumerated powers. Similarly, the taxing power does not authorize the individual mandate because the non-compliance penalty is a civil fine—and it would be unconstitutional even if it were a tax because it is neither apportioned (if a direct tax) nor uniform (if an excise tax). Moreover, Congress cannot use the taxing power as a backdoor means of regulating an activity unless such regulation is authorized elsewhere in the Constitution.

Comer v. Murphy Oil USA, May 7, 2010 (PDF, 432 KB)
Mississippi homeowners sued 34 energy companies and utilities operating in the Gulf Coast for damage sustained to their property during Hurricane Katrina. The homeowners alleged that the defendants had emitted greenhouse gases, which increased the concentration of greenhouse gases in the atmosphere, which contributed to global warming, which accelerated the melting of glaciers, which raised the global sea level, which increased the frequency and severity of hurricanes, which caused the destructive force of Hurricane Katrina. The district court concluded that it lacked the authority to resolve the public debate over global warming and dismissed the case. A Fifth Circuit panel reversed this dismissal, however, holding that the homeowners have standing to raise some of their claims and that those claims are appropriate for resolution by the federal courts. The Fifth Circuit granted the defendants' petition for rehearing en banc. Cato filed an amicus brief on the energy companies' behalf, arguing that homeowners lack standing to bring their suit and that the case raises a nonjusticiable political question. Our brief asserts that the homeowners' claim does not provide a clear causal connection between the harm suffered and any particular conduct by the energy companies, and that the money damages the homeowners requested would not remedy the environmental harm alleged. More importantly, we maintain that political questions such as those surrounding climate change must be resolved by Congress, not the federal courts. Put simply, the Constitution prohibits federal courts from resolving highly technical social and economic policy debates. Permitting plaintiffs to achieve "regulation by litigation" would not only contradict settled Supreme Court precedent, but would betray the separation of powers principles embodied in the Constitution.

Morgan v. Plano Independent School District, April 19, 2010 (PDF, 100 KB)
A northern Texas school district attempted to banish all religious expression from its schools by prohibiting virtually all non-verbal student speech in any school-related context. Officials used this broad policy to promote an anti-religious orthodoxy and root out any and all religious speech. The Supreme Court made clear, however, in its seminal school speech case, Tinker v. Des Moines Independent Community School District, that students enjoy First Amendment rights, and that core political and religious speech cannot be suppressed without showing that the speech will "materially and substantially disrupt" the educational process. Here, the Fifth Circuit upheld all of the district's regulations and found that Tinker did not supply the relevant legal standard. It instead applied the intermediate scrutiny "time, place, and manner" test of United States v. O'Brien. At issue is whether the school district's speech policy should be evaluated under Tinker's "substantial disruption" standard or under O'Brien's intermediate scrutiny. Cato, joined by three groups that promote religious liberty, filed a brief asking the Supreme Court to take up the case because the Fifth Circuit's approach permits schools to enforce sweeping speech codes by which virtually all speech may be prohibited. Permitting a wholesale content- and viewpoint-neutral ban on all speech or a form of speech as an alternative to the Tinker standard will result in the erosion and eventual elimination of student speech rights.

Arizona Christian School Tuition Organization v. Winn, March 22, 2010 (PDF, 170 KB)
Arizona grants income tax credits for contributions made to school tuition organizations ("STO"). These STOs must use these donations for scholarships that allow students to attend private schools. This statutory scheme broadens the educational opportunities for thousands of students by enabling them to attend schools they would otherwise lack the means to attend. The Ninth Circuit held that the tax credit program violated the Establishment Clause because many of the STOs—as it happens, a decreasing majority—provide scholarships for students to attend parochial schools. Counsel for the defendants, including the Institute for Justice, asked the Supreme Court to review the case—and indeed to summarily reverse the Ninth Circuit, based in part on a 2002 case (Zelman v. Simmons-Harris) rejecting a similar challenge to a school voucher program. Cato filed a brief, joined by the Foundation for Educational Choice and the American Federation for Children, supporting this request. Our brief argues that the funds received by STOs are the product of individual taxpayers' "genuine and independent choice"—the touchstone by which the Court judges the religious neutrality of statutes allowing for taxpayer money to fund religious education. Moreover, the tax credit scheme is indistinguishable from similar charitable tax deduction programs that the Court has previously held to pass constitutional muster. While the Ninth Circuit reasoned that Arizona parents feel pressured to send their kids to parochial schools due to limited scholarships available for secular schools, it failed to consider that the share of STO money available to secular schools was nearly twice as large as the share of families choosing to send their children to secular schools. Far from being an impediment to parental freedom, the autonomy Arizona grants to taxpayers and STOs is ultimately essential to it. More generally, should the lower court's opinion be allowed to stand, the progress made to broaden the educational opportunities of students across the country will be stifled.

Doe v. Reed, March 4, 2010 (PDF, 255 KB)
Under Washington's constitution, a popular vote must be ordered on any bill passed by the legislature if a specified percentage of state voters sign a petition for a referendum. Washington's Public Records Act (PRA) makes public records, including such referendum petitions, available for public inspection. In 2009, opponents of same-sex marriage used the referendum procedure to attempt to reverse a state law which expands the rights of state-registered domestic partners. Proponents of the law sought access to the petition and two of the petition signers sought a preliminary injunction to prevent disclosure of their personal information, arguing that the PRA violates their right to speak anonymously. The Ninth Circuit Court of Appeals held that the right to access trumps the right to anonymity. The Supreme Court granted certiorari to determine whether the First Amendment right to privacy in political speech, association, and belief requires strict scrutiny when a state compels the public release of identifying information about petition signers, and whether compelled disclosure of such information is narrowly tailored to a compelling government interest. Cato filed a brief supporting the petition signers, in which we argue that the Court should establish a bright-line rule prohibiting laws that mandate the full disclosure of petition signers' identities and contact information. Public disclosure carries significant burdens and unconstitutionally chills the exercise of First Amendment rights when no compelling government interest is at stake. If the Court finds that the state has a compelling interest in public disclosure, disclosure exemptions are constitutionally required. Failure to require exemptions would permit the government to suppress the expression of offensive or unpopular ideas and would discourage individuals from associating in the first place. Finally, our brief argues that even exemptions are not a substitute for strict scrutiny and provide inadequate protection where disclosure is not justified by compelling state interests. Exemption rules still chill speech, by their nature as an ad hoc process without fixed standards; the government is ill-suited to identify which groups should be exempt from disclosure, as is evidenced by their poor track record of erroneously suppressing controversial or unpopular speech.

Christian Legal Society v. Martinez, February 3, 2010 (PDF, 194 KB)
Hastings College of the Law, a public law school in California, has a policy prohibiting discrimination on the basis of "race, color, religion, national origin, ancestry, disabilities, age, sex or sexual orientation." In 2004, the Christian Legal Society, a religious student organization at the school, applied to become a "recognized student organization" — a designation that would have allowed CLS to receive a variety of benefits afforded to about 60 other Hastings groups. While all are welcome to attend CLS meetings, CLS's charter requires that its officers and voting members abide by key tenets of the Christian faith and comport themselves in ways consistent with its fundamental mission, which includes a prohibition on "unrepentant" sexual conduct outside of marriage between one man and one woman. Hastings denied CLS registration on the asserted ground that this charter conflicts with the school's nondiscrimination policy. CLS sued Hastings, asking for no different treatment than is given to any registered student group. The district court granted Hastings summary judgment and the Ninth Circuit affirmed. The Supreme Court granted certiorari to determine whether Hastings's refusal to grant CLS access to student organization benefits amounted to viewpoint discrimination, which is impermissible under the First Amendment. Cato filed an amicus brief supporting CLS, in which we argue that CLS's right to intimate and expressive association trump any purported state interest in enforcing a school nondiscrimination policy. While Hastings may impose reasonable restrictions on access to limited public forums, it should not be allowed to admit speakers with one point of view while excluding speakers who hold different views. Our brief also discredits Hastings's assertion that its ability to exclude the public at large from school premises renders their content-based speech restrictions constitutional. We urge the Court to safeguard public university students' right to form groups — which by definition exclude some people — free from government interference or censorship.

Skilling v. United States, December 17, 2009 (PDF, 211 KB)
Following Enron's downfall, the federal government charged company CEO Jeffrey Skilling with "honest services fraud" connected to the alleged manipulation of Enron's market value (and other securities irregularities). This charge — also at issue in two other cases before the Court this term — is based on a statute which states, in its entirety: "For the purposes of this chapter, the term 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services." Skilling was convicted, and his conviction was upheld by the Fifth Circuit. The Supreme Court agreed to review the application of the "honest services fraud" statute to Skilling (as well as the issue of potential jury bias stemming from pretrial publicity in Houston). Cato, joined by the Pacific Legal Foundation, filed an amicus brief supporting neither party, arguing simply that vague statutes such as the one at issue here offend due process. We take no position on whether the "honest services fraud" statute can be construed in a way that satisfies due process principles, or whether Skilling in particular violated that statute. Instead, we argue that the Court should clarify that the constitutional prohibition on vague laws protects sophisticated and unsophisticated defendants alike in the realm of economic regulation, as well as in criminal law. The due process requirements of fair warning and definiteness apply equally in the contexts of white collar business crimes, business torts, and civil regulations. Vague laws involve three basic dangers: First, they may harm the innocent by failing to warn of the offense. Second, they encourage arbitrary and discriminatory enforcement because vague laws delegate enforcement and statutory interpretation to individual government officials. Third, because citizens will take extra precautions to avoid violating the law, vague laws inhibit our individual freedom.

480.00 Acres of Land v. United States, November 23, 2009 (PDF, 155 KB)
In federal eminent domain cases, the "scope of the project" rule requires that in determining "just compensation" under the Fifth Amendment's Takings Clause, any increase or decrease in property value caused by the federal project be disregarded. Here, the federal government had discussed the idea of expanding Everglades National Park for over 30 years, and also induced the local government to enact tougher zoning standards that decreased the value of the property that was to be taken for this purpose. These federal actions forced Gilbert Fornatora to watch the value of his South Florida property decline until the federal government finally condemned it—and paid him much lower compensation than he would otherwise have received. Then, once condemnation proceedings began, the government manipulated the hearing schedule by front-loading ill-prepared owners who lacked counsel, thereby setting a low valuation precedent that would then be applied to the later parties with representation, like Fornatora. The Eleventh Circuit sided with the government, so Fornatora petitioned the Supreme Court to review the case. Cato filed an amicus brief supporting this petition, arguing that property owners have virtually no "scope of the project" protection if they must prove that the government's sole or primary purpose for pre-condemnation action was to depress property values for later eminent domain proceedings. A more workable test, consistent with due process, is merely to require evidence of a nexus between the government's actions and the depressed property value. The Court should also hear this case to ensure that just compensation proceedings comport with the due process, equal protection, and general fairness standards the government is required to follow in a variety of other settings.

McDonald v. City of Chicago, November 21, 2009 (PDF, 253 KB)
Last year, in District of Columbia v. Heller, the Supreme Court confirmed what most scholars and a substantial majority of Americans long believed: that the Second Amendment protects an individual right to keep and bear arms. Heller led to the current challenge to Chicago's handgun ban, which raises the question of whether the Fourteenth Amendment protects that right against infringement by state and local governments. The Seventh Circuit answered the question in the negative, finding itself foreclosed by 19th-century Supreme Court decisions. The Supreme Court has agreed to review the case and specifically consider whether the Fourteenth Amendment's Due Process Clause or its Privileges or Immunities Clause is the proper provision for incorporating the Second Amendment right to keep and bear arms as against the states. Cato, joined by the Pacific Legal Foundation, has filed a brief supporting those challenging the handgun ban—who are represented by Alan Gura, who successfully argued Heller—and calling for an overruling of the Slaughter-House Cases, which eviscerated the Privileges or Immunities Clause in 1873. Slaughter-House narrowly circumscribed the rights protected by the Privileges or Immunities Clause, contrary to the intentions of the Amendment's framers and in direct contradiction to the developments in legal theory that underlay its adoption. We also argue that in addition to ignoring the history surrounding the Fourteenth Amendment, the Slaughter-House majority violated basic rules of constitutional interpretation. Finally, restoring the Privileges or Immunities Clause would not result in the demise of substantive due process because the idea at the core of that doctrine—that the Due Process Clause imposes something more than mere procedural limits on government power—was widely accepted when the Fourteenth Amendment was enacted and its authors rightly believed that the Due Process and the Privileges or Immunities Clauses would provide separate but overlapping protections for individual rights.

Palmer v. Waxahachie Independent School District, November 5, 2009 (PDF, 131 KB)
School officials denied student Pete Palmer the right to wear a shirt supporting John Edwards's presidential campaign at his Dallas-area high school. They cited the district's dress code, which prohibited messages on student clothing except for those that supported school activities or district-approved organizations, clubs or teams. The Fifth Circuit agreed with the school district that this was a reasonable "time, place and manner" speech restriction. Applying the test from United States v. O'Brien, the court found that the dress code was content- and viewpoint-neutral, and served an important governmental purpose. Palmer now seeks Supreme Court review, citing seemingly contradictory precedents from the Second and Third Circuits and arguing that the regulation here flies in the face of the protection afforded to student speech by the famous case of Tinker v. Des Moines Independent Community School District. Cato, joined by the Institute for Justice, the Becket Fund for Religious Liberty, the Christian Legal Society, and the National Association of Evangelicals, filed an amicus brief supporting Palmer's petition and urging the continued use of Tinker. We argue that the Court should clarify its jurisprudence in this area to stop schools from applying broad restrictions in an attempt to avoid controversy and debate—and thereby threaten the very political and religious speech at the First Amendment's core. To prevent the chilling of student speech, the Court should solidify Tinker's central tenet, reaffirming that so long as speech doesn't "materially and substantially disrupt" the educational process, students do not "shed their constitutional rights to freedom of speech or expression at the schoolhouse gate."

United States v. Comstock, November 4, 2009 (PDF, 155 KB)
In 2006, Congress passed the Adam Walsh Child Protection and Safety Act, one provision of which authorizes the federal government to civilly commit anyone in the custody of the Bureau of Prisons whom the Attorney General certifies to be "sexually dangerous." The effect of such an action is to continue the certified person's confinement after the expiration of his prison term, without proof of a new criminal violation. Six days before the scheduled release of Graydon Comstock—who had been sentenced to 37 months in jail for receiving child pornography—the Attorney General certified Comstock as sexually dangerous. Three years later, Comstock thus remains confined in a medium security prison, as do more than 60 other similarly situated men in the Eastern District of North Carolina alone. He and several others challenged their confinements as going beyond Congress's constitutional authority and won in both the district and appellate courts. The United States successfully petitioned the Supreme Court to review the case. Cato, joined by Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a brief opposing the government. We argue that the use of federal power here is unconstitutional because it is not tied to any of Congress's limited and enumerated powers. The government's reliance on the Necessary and Proper Clause of Article I, Section 8, is misplaced because that clause grants no independent power but merely "carries into execution" the powers enumerated elsewhere in that section. The commitment of prisoners after their terms simply is not one of the enumerated powers. While the government justifies its actions by invoking its implied power "to establish a federal penal system"—itself a necessary and proper auxiliary to certain enumerated powers—civil commitment is unrelated to creating or maintaining a penal system (let alone any enumerated power). Nor can the law at issue fall under the Commerce Clause, because civil commitment involves non-economic intrastate activity. As the Supreme Court recognized almost 150 years ago in Ex Parte Milligan, "[n]o graver question was ever considered by this court, nor one which more nearly concerns the rights of the whole," than the government's unconstitutional assertion of power against its own citizens. In this spirit, the Court should affirm the Fourth Circuit's rejection of this blatant government overreach.

Indiana State Police Pension Trust v. Chrysler LLC, October 6, 2009 (PDF, 200 KB)
In January 2009, Chrysler stood on the brink of insolvency. Purporting to act under the Emergency Economic Stabilization Act, the Treasury extended Chrysler a $4 billion loan using funds from the Troubled Asset Relief Program (TARP). Still in a bad financial situation, Chrysler initially proposed an out-of-court reorganization plan that would fully repay all of Chrysler's secured debt. The Treasury rejected this proposal and instead insisted on a plan that would completely eradicate Chrysler's secured debt, hinging billions of dollars in additional TARP funding on Chrysler's acquiescence. When Chrysler's first lien lenders refused to waive their secured rights without full payment, the Treasury devised a scheme by which Chrysler, instead of reorganizing under a chapter 11 plan, would sell its assets free of all secured interests to a shell company, the New Chrysler. Chrysler was thus able to avoid the "absolute priority rule," which provides that a court should not approve a bankruptcy plan unless it is "fair and equitable" to all classes of creditors. Cato joined the Washington Legal Foundation, the Allied Educational Foundation, and George Mason law professor Todd Zywicki on a brief supporting the creditors' petition asking the Supreme Court to review the transaction's validity. We argue that the forced reorganization amounted to the Treasury redistributing value from senior, secured creditors to debtors and junior, unsecured creditors. The government should not be allowed, through its own self-dealing, to hand-pick certain creditors for favorable treatment at the expense of others who would otherwise enjoy first lien priority. Further, a lack of predictability and consistency with regard to creditors' expectations in bankruptcy will result in a destabilization of existing and future credit markets.

Independence Institute v. Buescher, October 5, 2009 (PDF, 139 KB)
Article XXVIII of the Colorado Constitution requires any group supporting or opposing a ballot initiative to register as an "issue committee" and comply with many regulations, such as disclosing the identity of anyone who has donated more than $20. Or, should the state find that a group of citizens has as its major purpose supporting or opposing such a ballot issue, state law imposes registration and compliance requirements, including contribution limits. In 2005, political opponents filed a complaint against the Independence Institute for not complying with such regulations when it spoke against a ballot initiative. Although the think tank eventually beat back this challenge, the litigation proved expensive and time-consuming—so the Institute decided to challenge the law as an unconstitutional abridgement of its free speech rights. The Colorado courts rejected those claims, and the Independence Institute, represented by the Institute for Justice, now wants the U.S. Supreme Court to review those decisions. Cato has joined the Wyoming Liberty Group, the Center for Competitive Politics, the Sam Adams Alliance, the Montana Policy Institute, and the Goldwater Institute on a brief supporting the Independence Institute. We argue that Colorado's ballot campaign regulations run roughshod over constitutional protections for political speech and association, which lie at the very heart of the First Amendment—particularly for think tanks and other organizations that regularly comment on public policy matters. Loss of these First Amendment protections will chill think tanks' future attempts to educate the public about issues that are the subject of ballot campaigns. The Court should thus review this case and ensure that citizens maintain their associational rights—including the right to remain anonymous when donating to non-profits—and associations their freedom of expression.

Pottawattamie County v. McGhee, September 18, 2009 (PDF, 4 MB)
In 1977, county attorney David Richter and assistant county attorney Joseph Hrvol worked side by side with police to investigate and "solve" the notorious murder of a former police officer in Pottawattamie County, Iowa. The prosecutors fabricated evidence and used it to charge and convict Curtis McGhee and Terry Harrington, sending them to prison for 25 years. After the convictions were overturned for prosecutorial misconduct, McGhee and Harrington sued the county and prosecutors. The defendants in that civil suit invoked the absolute immunity generally afforded prosecutors to try to escape liability. After the Eighth Circuit ruled against them, the Supreme Court agreed to review the case. Cato joined the National Association of Criminal Defense Lawyers and the ACLU on a brief supporting the men unjustly imprisoned. We argue that prosecutors should be responsible for their role in manufacturing a false "case," just as police officers would be under the same circumstances. As the Court has held, prosecutors enjoy absolute immunity only during the prosecutorial phase of a case, not its investigatory phase. Were prosecutors to receive absolute immunity here, citizens would have no protection from or recourse against prosecutors who frame the innocent by fabricating evidence and then using that evidence to convict them.

Graham v. Florida; Sullivan v. Florida, September 18, 2009 (PDF, 209 KB)
These two cases involve an Eighth Amendment challenge to juvenile sentences of life without parole. Taking no position on the constitutionality (or wisdom) of this type of sentence, Cato joined the Solidarity Center for Law and Justice, the Sovereignty Network, and 10 other groups to urge the Supreme Court not to consider non-binding provisions of international human rights treaties and customary international law in its analysis. Our brief argues that the Court should leave to the political branches the decision of whether to transform international norms into domestic law and only allow duly ratified international agreements to override domestic law -- in the way the Court has set out in cases such as Medellin v. Texas. It further contends that if the Court believes this is one of the rare cases where international norms are relevant, it should follow the test it laid out in Sosa v. Alvarez Machain, which addressed the (unrelated) Alien Tort Statute: The relevant norm must be widely accepted by the civilized world and as clearly defined as the historic "law of nations" norms regarding safe conduct permits, ambassadorial rights, and piracy on the high seas. The brief also cautions that reliance on non-binding and indefinite international norms will undermine the democratic process and rule of law, casting considerable uncertainty over many U.S. laws.

Jones v. Harris Associates, September 4, 2009 (PDF, 136 KB)
The Investment Company Act of 1940 places on investment advisers a fiduciary duty with respect to the compensation they receive for the services they provide their clients. In this case, shareholders in various mutual funds contend that their adviser's fees were excessive and violated the ICA. The Seventh Circuit affirmed the judgment of the district court that the fees were not excessive but also expressly disapproved of the Second Circuit's methodology for evaluating such claims. Judge Frank Easterbrook's opinion explains that the ICA creates a fiduciary duty but does not act as a rate regulator, and that judicial price-setting does not accompany fiduciary duties. Judge Richard Posner, writing for five judges, dissented from the denial of an en banc rehearing. The Supreme Court agreed to review case to settle the circuit split. Cato filed an amicus brief in support of the investment adviser. Our brief makes three arguments: 1) All persons have a fundamental human right to whatever compensation their contracting partners freely and honestly choose to pay them; 2) courts have no power to second-guess the reasonableness of any salary or compensation agreement honestly and freely signed by both contracting parties; and 3) the ICA's fiduciary duty requires only fair dealing, not any particular outcome.

Perdue v. Kenny A., August 31, 2009 (PDF, 137 KB)
In order to enforce civil rights guarantees, Congress had two choices: either to expand the Department of Justice to cover all civil rights cases, or privatize the system and allow free market principles to encourage private attorneys to prosecute violations. Congress chose the latter, creating a system of market incentives to encourage private attorneys to enforce civil rights and hold elected representatives responsible for the waste of taxpayer dollars lost in the defense of legitimate civil rights violations and repayment of "reasonable" attorney fees. Here a group of attorneys won an important case for foster children in Georgia, and the court awarded them $6 million in fees based on prevailing hourly rates — the "lodestar" method — and an additional $4.5 million enhancement for the exceptional quality of work and results achieved. At Georgia's request, the U.S. Supreme Court decided to review the case and determine whether quality of work and results are appropriately considered components of a reasonable fee. Cato, joining six other public interest legal organizations, filed an amicus brief supporting the attorneys. We argue that the enhancement in this case is necessary to preserve incentives in the privatized market. Not only does it encourage attorneys to pursue civil rights abuses, but it provides a powerful disincentive for governments to draw out litigation in the hopes that attorneys will no longer be able to afford pursue it. In addition, quality of performance and attained results are rightly considered as part of the attorney fee calculus. The enhancement here helps to promote the free market of privatized civil rights prosecutions and encourages governments to resolve civil rights cases quickly.

Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, August 19, 2009 (PDF, 153 KB)
Seeking to restore beaches damaged by hurricanes, the Florida Department of Environmental Protection began dredging sand from the Gulf of Mexico ocean floor and transporting it to Florida's gulf coast. The expanded area of the beach became state property, depriving beachfront landowners of their littoral rights. In reviewing the landowners' lawsuit against the state, the Florida Supreme Court departed from long-established state law principles protecting littoral property rights and held that littoral rights are an ancillary concept subsumed by the right of access. In so doing, the court discarded 100 years of property law and rewrote the definition of property. The U.S. Supreme Court agreed to review the case. The Court has never formally addressed whether state court rulings eliminating formerly established property rights can effect a taking, or violate an owner's due process rights, under the Fifth and Fourteenth Amendments to the U.S. Constitution. Cato joined the National Federation of Independent Business Small Business Legal Center and the Pacific Legal Foundation on a brief supporting the landowners. We argue that the realities of modern property law, including the authority of state courts to define background principles of property law, necessitate that property owners be protected, via the judicial takings doctrine, against state court decisions that abrogate constitutional rights. Without such protection, states are free to effect takings of private property without compensation by having their judiciaries redefine property rights and thus bypass long-established constitutional protections.

Alvarez v. Smith, August 4, 2009 (PDF, 182 KB)
The State of Illinois, like most states and the federal government, authorizes police officers to seize property involved in certain drug crimes. Illinois' forfeiture law allows the State to wait as long as six months before having to prove the legitimacy of the seizure, which proceeding may then be delayed indefinitely for "good cause." The six plaintiffs in this case — three of whom were never charged with a crime — had their cars or money seized without a warrant for months or years without any judicial hearing, and sued the state and city authorities for violating their rights to due process. The Seventh Circuit found the Illinois law to be unconstitutional because of the delay between the seizure and the forfeiture proceeding and ruled that the plaintiffs must be afforded an informal hearing to determine whether there is probable cause to detain the property. The Supreme Court agreed to review the case at the request of the Cook County State Attorney. Cato, joined by the Goldwater Institute and Reason Foundation, filed a brief supporting the individuals whose property was seized. Written by David B. Smith, who previously supervised all forfeiture litigation for the Department of Justice and is now the nation's leading authority on civil and criminal forfeiture, the brief makes three arguments: 1) Because the Illinois law, unlike the federal Civil Asset Forfeiture Reform Act of 2000, is stacked in favor of law enforcement agencies and lacks protections for innocent property owners, the Court should apply the due process analysis from Mathews v. Eldridge, rather than the more lenient test the State proposes; 2) What has become known as a Krimstock hearing has proven to be an effective and not overly burdensome means of preventing government delay and a meaningful opportunity to contest seizure; and 3) the State's comparison of the time limits in CAFRA with those in its own law is misleading.

Free Enterprise Fund v. PCAOB, August 4, 2009 (PDF, 186 KB)
Passed with scant deliberation amid a stock market panic, the Sarbanes-Oxley Act of 2002 vastly expanded the federal government's role in regulating corporate governance and the accounting industry. As part of that effort, Congress created a new agency to "audit the auditors." Known as the Public Company Accounting Oversight Board, the agency has broad rulemaking and enforcement powers to set accounting standards, investigate accounting firms, punish criminal violations, and make whatever rules "may be necessary or appropriate in the public interest or for the protection of investors." Remarkably, the PCAOB (pronounced "peek-a-boo") also has the power to fund its own budget by levying taxes on publicly traded companies. Despite giving the PCAOB all this power, however, Congress insulated it entirely from presidential oversight. Unlike with an ordinary "independent agency," the president has no power whatsoever to appoint or remove PCAOB officials. Those officials may be removed only "for cause" by the SEC, not the president; and SEC officials may themselves be removed only for cause. The Free Enterprise Fund challenged the constitutionality of the PCAOB and appealed to the Supreme Court. Cato's supporting brief focuses on the PCAOB's practical policy consequences, illustrating how the PCAOB's unconstitutional structure has created incentives for out-of-control spending, agency aggrandizement, and lack of coordination between regulators. Our brief also highlights the PCAOB's efforts to impose American accounting standards abroad, which has caused confusion and invited retaliation from foreign regulators.

Citizens United v. Federal Election Commission, July 31, 2009 (PDF, 155 KB)
At the March 24 argument in Citizens United v. Federal Election Commission, the U.S. government argued that Section 203 of the Bipartisan Campaign Reform Act of 2002 (otherwise known as McCain-Feingold) permits the FEC to ban corporations, including ideological nonprofits like Citizens United, from making independent expenditures on films, books, or even "a sign held up in Lafayette Park." The jurisprudential justification for this extraordinary and shockingly expansive view of the government's power to suppress political speech traces to the Supreme Court's 1990 decision in Austin v. Michigan Chamber of Commerce. In Austin, the Court held that Michigan had a compelling state interest in banning political speech funded with wealth accumulated using the corporate form. Though the Court contended that such speech, because it bears little correlation to public support for the political ideas expressed, constituted a "different type of corruption," in reality it upheld Michigan's statute as a "counterbalance" to the "distorting" and "unfair" influence corporate funds could have on the outcome of elections. This relative-equality rationale — suppressing disfavored speakers to enhance the voice of other government-favored speakers — is antithetical to core First Amendment protections and elsewhere has been expressly rejected by the Court (in Buckley v. Valeo and, more recently, in Davis v. FEC). Accordingly, to decide Citizens United's appeal, the Court ordered rebriefing and reargument on Austin's continuing validity. Cato's brief, the second it has filed in the case, argues that Austin, and the part of McConnell v. FEC that upheld Section 203's facial validity, are not entitled to stare decisis deference and should thus be overturned. These relatively recent decisions are poorly reasoned, have engendered no reliance interests (no one relies on less freedom of speech), and have spawned an unworkable and irrational campaign finance system in which the government rations different levels of permissible political speech to otherwise equally situated speakers. The case will be reargued September 9.

United States v. Stevens, July 28, 2009 (PDF, 175 KB)
Although many states have passed laws outlawing acts of animal cruelty, Congress in 1999 for the first time made it a federal crime simply to depict those acts. Under that statute, the government convicted Robert Stevens of selling documentary films containing footage of dog fighting—even though Stevens, a pit bull enthusiast, was opposed to dog fighting and had not engaged in it himself. Seeking to preserve its conviction against a First Amendment challenge, the government took a broad view in the Supreme Court of its power to suppress speech. The government maintained that the "strict scrutiny" test usually applied to content-based speech prohibitions need not apply where speech can be characterized as "unprotected." And although some narrow categories of speech have long been recognized as "unprotected" by the First Amendment (e.g., fighting words, incitement, defamation, obscenity), the government proposed a balancing test that would allow new categories of speech to be carved out from First Amendment protection any time the "societal costs" of the speech are deemed to outweigh its "value." Cato filed a brief supporting Stevens, arguing that the government's position was a dangerous and unprecedented encroachment on the freedom of speech. Our brief canvasses the Court's doctrine to show how inventing a new category of previously unrecognized "unprotected" speech would entail a radical shift in the Court's jurisprudence. Our brief also illustrates how the absence of a limiting principle in the government's proposed balancing test could be used in future cases to impose a host of new speech restrictions—from laws prohibiting "defamation" of religion and hate speech to laws prohibiting the depiction of drug use.

IMS Health v. Sorrell, July 14, 2009 (PDF, 234 KB)
Vermont passed a law prohibiting the exchange of a variety of socially important information. Most notably, the law outlaws the transfer of doctors' prescription history to facilitate drug companies' one-on-one marketing — a practice known as "detailing" — because it believes detailing drives up brand-name drug sales and, in turn, health care costs. The state knew that the First Amendment prevented it from banning detailing itself, so it made the practice more difficult indirectly. Yet data collection and transfer is protected speech — think academic research, or the phone book — and government efforts to regulate this type of speech also runs afoul of the First Amendment. See, e.g., Solveig Singleton, "Privacy as Censorship: A Skeptical View of Proposals to Regulate Privacy in the Private Sector". The First Circuit had earlier upheld a similar New Hampshire law, somehow finding that the statute regulates conduct rather than speech and that, in any event, the judiciary should defer to the legislative branch's judgment. When the Supreme Court declined to review that case (which cert petition Cato supported), Cato joined Pacific Legal Foundation, the Progress & Freedom Foundation, and two trade associations on a brief asking the Second Circuit to split with its First Circuit brethren and reject this dangerous narrowing of protection for free expression. Our brief argues that the Second Circuit should strike the Vermont law for three reasons: 1) the law regulates speech, not conduct, and thus is worthy of First Amendment protection; 2) the law abridges a range of expression that is not "commercial" speech — which, by Supreme Court precedent, is not fully protected; and 3) even if the law regulates "commercial" speech, that speech merits protection under the Court's Central Hudson test.

National Rifle Association v. City of Chicago; McDonald v. City of Chicago, July 6, 2009 (PDF, 135 KB)
Last summer, in District of Columbia v. Heller, the Supreme Court confirmed what the Framers, most scholars, and a substantial majority of Americans believe: that the Second Amendment protects an individual right to keep and bear arms. Heller led to lawsuits raising the question of whether the Fourteenth Amendment protects that right against infringement by state and local governments. In a consolidated case involving a challenge to Chicago's handgun ban, the Seventh Circuit answered that question in the negative, finding itself foreclosed by 19th-century Supreme Court decisions. Cato, joining with the Institute for Justice, filed an amicus brief supporting requests for the Supreme Court to review that line of precedent. We argue that the Court's initial encounters with the Fourteenth Amendment yielded a profound misreading of its Privileges or Immunities Clause that has haunted the Court's rights jurisprudence ever since. The Chicago petitions present the Court with an unprecedented opportunity to reach back to the very source of that misreading, the 1873 Slaughter-House Cases, and there are three compelling reasons why the Court should do so: 1) the only disagreement among circuit courts in the wake of Heller is whether they are bound by the Court's decisions refusing to apply the right to keep and bear arms against the states; 2) case law and scholarly commentary together form a kind of constitutional conversation, which has arrived at a clear consensus about Slaughter-House that merits the Court's consideration; and 3) the Constitution is not merely a blueprint for government, but a charter of liberty. Accurately placing the Fourteenth Amendment within that tradition would be a virtue in itself and would sharpen the national dialogue regarding the source, nature, and limits of our rights.

Boy Scouts of America v. Barnes-Wallace, May 5, 2009 (PDF, 135 KB)
The City of San Diego leases portions of Balboa Park and Fiesta Island to the San Diego Boy Scouts, which use the land to operate a camp and aquatic center. The Boy Scouts use the leased areas for their own events but otherwise keep them open to the general public — and have spent millions of dollars to improve and maintain facilities on the properties, eliminating the need for taxpayer funding. While the Boy Scouts' membership policies exclude homosexuals and agnostics, the Scouts have not erected any religious symbols and do not discriminate in any way in administering the leased parklands. Nevertheless, a lesbian couple with a son and an agnostic couple with a daughter challenged the leases under the establishment clauses of the U.S. and California Constitutions. Although none of the plaintiffs have ever tried to use the parklands or otherwise had any contact with the Boy Scouts, the Ninth Circuit found they had standing to proceed with their lawsuit because they were offended at the idea of having to contact Boy Scout representatives to gain access to the facilities. The court denied en banc review over a scathing dissent by Judge Diarmuid O'Scannlain. The Boy Scouts have asked the Supreme Court to review the case — whose outcome conflicts with other federal courts of appeal — and Cato joined the Individual Rights Foundation in filing a brief supporting that petition. Cato's brief argues that the Ninth Circuit's decision dangerously confers standing on anybody wishing to challenge the internal policies of expressive associations having any business with local government; chills public/private partnerships of all kinds for reasons disconnected from the beneficial services civic organizations provide the public; and generally represents a radical extension of standing jurisprudence — opening the courthouse doors to anyone claiming to be subjectively offended by any action and manufacturing litigation out of political debates.

IMS Health v. Ayotte, April 28, 2009 (PDF, 115 KB)
New Hampshire passed a law prohibiting the transfer of doctors' prescription history to facilitate drug companies' one-on-one marketing — a practice known as "detailing" — because it believes detailing drives up brand-name drug sales and, in turn, health care costs. The state knew that the First Amendment prevented it from banning detailing itself, so it made the practice more difficult indirectly. Yet data collection and transfer is protected speech — think academic research, or the phone book — and government efforts to regulate this type of speech also runs afoul of the First Amendment. See, e.g., Solveig Singleton, "Privacy as Censorship: A Skeptical View of Proposals to Regulate Privacy in the Private Sector" (Cato Institute Policy Analysis No. 295). New Hampshire also engages in gross viewpoint discrimination: it exempts insurers' efforts to persuade doctors to use generic drugs, and runs an "academic detailing" program to discourage brand-name drug use. Remarkably, the First Circuit reversed a district court ruling that had invalidated the statute as unconstitutional, somehow finding that the statute regulates conduct rather than speech and that, in any event, the judiciary should defer to the legislative branch's judgment. Two companies that collect and sell health information and analysis filed a petition asking the Supreme Court to review the case. Cato, joining Washington Legal Foundation, Reason Foundation, and a group of current and former state officials, has filed a brief supporting that petition. Our brief argues that the Supreme Court should grant review because: 1) the speech at issue is worthy of First Amendment protection; 2) this case is a good vehicle for examining First Amendment issues attending state attempts to control health care costs (other states have passed similar laws); and 3) the lower court's holding that a state may restrict speech to "level the playing field" conflicts with the Court's precedent regarding both commercial speech and campaign finance regulation.

Safford Unified School District No.1 v. Redding, April 2, 2009 (PDF, 2 MB)
A middle-school student who was caught red-handed with prescription-strength ibuprofen (in violation of the school's drug policy) implicated another 13-year-old girl, Savana Redding. On the sole basis of this accusation, school officials searched Savana's backpack, finding no evidence of drug use, drug possession, or any other illegal or improper conduct. They then took the girl to the nurse's office and ordered her to undress. Not finding any pills in Savana's pants or shirt, the officials ordered the girl to pull out her bra and panties and move them to the side. The observation of Savana's genital area and breasts also failed to reveal any contraband. Savana's mother, whom Savana had not been permitted to call before or during the strip search, sued the school district and officials for violating her daughter's Fourth Amendment rights to be protected from unreasonable search and seizure. The trial court and a panel of the Ninth Circuit ruled against her, but the en banc Ninth Circuit reversed, finding the search unjustified and unreasonable in scope, and therefore unconstitutional. The Supreme Court granted the school district's petition for review. Cato, joined by the Rutherford Institute and Goldwater Institute, filed a brief supporting the Reddings' suit, arguing that strip searches, particularly of students, are subject to a higher level of scrutiny than other kinds of searches. Such searches are reasonable only when school officials have highly credible evidence showing that (1) the student is in possession of objects posing a significant danger to the school and (2) the student has secreted the objects in a place only a strip search will uncover. In this case, there was insufficient factual basis for the strip search and the search was not reasonably related and disproportionate to the school officials' investigation. The Supreme Court should thus affirm the Ninth Circuit and establish that such searches may be undertaken only when compelling evidence suggests a strip search is necessary to preserve school safety and health.

McClung v. City of Sumner, April 1, 2009 (PDF, 179 KB)
When Daniel and Andrea McClung applied for a permit to build a small business on their property, the City of Sumner, Washington, charged them nearly $50,000 to pay for improvements to the City's entire storm drainage system. The McClungs sued the City under the Fifth Amendment to the Constitution, whose Takings Clause prohibits the government from "taking" private property for public use without just compensation. They argue that the City cannot force them to pay fees for off-site pipes absent proof that their development would have a specific detrimental effect on the existing drainage system—and without any evidence that the impact was worth $50,000. The Ninth Circuit ruled in favor of the City, reasoning that money is not property (so there could be no unconstitutional taking) and that because the fees were imposed by ordinance (so the City's determination that the pipes needed upgrading was justification enough for the fees). The McClungs have now asked the Supreme Court to review their case. Cato, joined by the Pacific Legal Foundation and the Building Industry Association of Washington, argues that this case is a perfect vehicle for the Court to revisit the scope of Fifth Amendment protections. Our brief highlights the deep divisions among state and federal courts over several important issues, such as whether the Takings Clause applies to legislative (as opposed to bureaucratic) exactions and whether it applies to monetary exactions (not just burdens on land use). The Court should take this case to ensure that the standard for reviewing development conditions is uniform across the country and make clear that property right protections do not depend on ill-defined distinctions such as the form of property demanded by the government or the manner in which a condition is imposed.

Empress Casino v. Giannoulias, February 27, 2009 (PDF, 151 KB)
In Empress Casino v. Giannoulias, the Illinois Supreme Court upheld a statute transferring money from private riverboat casinos to private horseracing tracks, finding that the Fifth Amendment's Takings Clause does not apply to exactions of money from private entities. The casinos are seeking review of that decision in the U.S. Supreme Court. Cato's brief argues that the Court should grant certiorari for yet another reason: The Illinois statute (which coincidentally appeared in the transcript of the Blagojevich sting) is in clear violation of the Takings Clause's "public use" requirement, impermissibly eroding protections for private property even under Kelo v. New London's (flawed) standard. The statute does nothing more than rob Peter to pay Paul, a result that cannot be squared with the Fifth Amendment, which permits government takings only for public use, and then only if just compensation is paid. It is instead a naked transfer of the casinos' revenues to the racetracks, with no meaningful restriction on how the racetracks use those funds — and does not remotely resemble any public use approved by the Supreme Court. Permitting such a statute to stand will only encourage federal, state, and local governments to exact funds from one private actor for the exclusive benefit of another, transgressing the property rights and economic liberties at the core of the Fifth Amendment.

Ricci v. DeStefano, February 25, 2009 (PDF, 80 KB)
In Ricci v. DeStefano, the City of New Haven, Connecticut developed an exam for firefighters seeking promotion to command positions. The City went out of its way to ensure that the exam was race-neutral and tested only relevant skills and abilities. When the exam results came down, however, white candidates had done better than their African-American and Hispanic peers. Given the few command positions available and the City's rule that the highest scorers on an exam be promoted first, few minority firefighters would thus have been eligible for promotion. After a series of meetings and political machinations, the City refused to certify the results of the exam and promote anyone. Several of the firefighters who would have been eligible for promotion filed a lawsuit, claiming racial discrimination under Title VII. The district court, affirmed by the court of appeals, granted summary judgment for the defendants, holding that the City's alleged fear of an adverse impact claim (a different type of racial discrimination claim under Title VII) -- based merely on the fact that the exam results yielded a racial disparity -- was a legitimate reason for its decision not to certify the exams. Cato's brief, joined by Reason Foundation and the Individual Rights Foundation, points out the absurd incentives at play: if the lower court's ruling stands, employers will throw out the results of exams (or other criteria) that produce racial disparity, even if those exams are race-neutral, entirely valid, and extremely important to the employer and (as in this case) the public.

Al-Marri v. Spagone, January 29, 2009 (PDF, 175 KB)
This case presents an important question concerning the scope of presidential or executive power. The Bush administration claims that once the president is satisfied that a person is a terrorist or is helping terrorists, the president can then issue an "enemy combatant" order to the Secretary of Defense�whereupon the suspect can then be seized and imprisoned in a military prison. The prisoner can then be held indefinitely without any trial in civilian court and denied access to family. Mr. Bush's lawyers have made it clear that these executive powers can be used against Americans and lawful permanent residents. This brief argues that the president may not use such military powers against citizens and lawful permanent residents in the United States. If the president comes to the conclusion that Americans are engaged in a terrorist plot, he should have them arrested and present the incriminating evidence to a civilian court.

Citizens United v. Federal Election Commission, January 14, 2009 (PDF, 207 KB)
Testing the bounds of the Supreme Court's landmark decision in Wisconsin Right to Life II (WRTL II), the Federal Election Commission recently sought to apply certain prohibitions and disclosure requirements of the Bipartisan Campaign Reform Act of 2002 to advocacy group Citizens United's political documentary, Hillary: The Movie, and to the group's broadcast advertisements for the film. Though the FEC conceded that the ads, at least, are not the functional equivalent of express campaign advocacy, as defined in WRTL II, it nevertheless determined that Citizens United must disclose the identities of its contributors. Cato's brief argues that BCRA violates the First Amendment freedom of association belonging to those contributors, which freedom includes the right to associate anonymously and to control the group's character and message free from government intervention. For groups engaging in political speech, compelled disclosure of contributors' identities infringes their freedom of private expressive association, a burden often no less severe than direct restraint of the group's speech. This type of government action must be subject to strict constitutional scrutiny—a level of scrutiny that in practice is almost always fatal. The district court failed to afford sufficient value to associational rights and so failed to scrutinize appropriately the BCRA disclosure provisions' unjustified infringement on those rights.

Hawaii v. Office of Hawaiian Affairs, December 11, 2008 (PDF, 232 KB)
In the 2000 case of Rice v. Cayetano, the Supreme Court held that a race-based scheme allowing only statutorily defined "Hawaiians" to vote for the Office of Hawaiian Affairs's trustees was unconstitutional. Despite Rice, and despite Justice John Marshall Harlan's dissenting statement in Plessy v. Ferguson 112 years ago that "[o]ur Constitution is color-blind, and neither knows nor tolerates classes among citizens," the OHA continues to view Hawaiian citizens through racial lenses. This practice has spawned numerous lawsuits, including the present legal crisis in which the state's sovereign authority to manage its land for the good of all of its citizens has been replaced with a court-imposed duty to hold the land for the benefit of one racial class. Specifically, the Hawaii Supreme Court blocked the sale of certain state lands based on a mistaken (and race-based) interpretation of a joint resolution that Congress passed in 1993 to apologize to Hawaiian people for the overthrow of the Kingdom of Hawaii�which was itself based on a slanted view of history. Cato's brief, joining with the Pacific Legal Foundation and the Center for Equal Opportunity, argues that race-based government is impermissible under the Fourteenth Amendment's Equal Protection Clause, that the Constitution's Indian Commerce Clause does not provide a basis for laws that grant preferences to "Native Hawaiians," and that the Apology Resolution neither amended nor rescinded the federal laws that gave the state of Hawaii full control over the disputed land.

Baylor v. United States, June 11, 2008 (PDF, 114 KB)
The Hobbs Act is an anti-racketeering law Congress passed in 1946 to allow federal prosecution of extortion and robbery that impedes the flow of commerce across state lines. Today, the Act is used to prosecute local robberies having no more than a de minimis effect on interstate commerce. In this case, for example, the defendant robbed a Cleveland-area pizzeria of $538. The Sixth Circuit held that the Commerce Clause permitted this prosecution because the pizzeria obtained its flour, sauce, and cheese from various states outside Ohio. Cato's brief, joined by the Center for Constitutional Jurisprudence and the Goldwater Institute, argues that it is unconstitutional to federally prosecute robberies with such an attenuated effect on interstate commerce. Doing so destroys the line between the States' power to punish violent crime and Congress's power to regulate interstate markets. In addition, this sweeping application of the Hobbs Act is inconsistent with congressional intent and contrary to constitutional clear-statement rules designed to protect federalism and avoid unnecessary constitutional adjudication.

Dupuy v. McEwen, March 11, 2008 (PDF, 150 KB)
For more than a decade, the Illinois Department of Child and Family Services has investigated parents based on anonymous tips of abuse or neglect, and deemed them "indicated" after a cursory investigation by state officials who have no effective check on their unilateral authority. Unlike actual child abuse cases, in which the State removes children from abusive situations with judicial approval, the State takes a different route with "indicated" parents � threatening them with what it calls a "Safety Plan." In so doing, the State demands that parents abandon their homes and families pending an investigation of unlimited duration. Frequently State officials will threaten to remove children immediately into foster care if the parents do not "consent" to the plans without counsel and without negotiation. According to the Seventh Circuit, parents are not allowed to challenge the plans in a judicial or administrative forum if they "consent" to the State's demands, even if they do so only after being threatened with the loss of their children. Cato's brief, which supports a class of parents petitioning the Supreme Court for review of these practices, argues that these "Safety Plans" violate the Due Process Clause because they infringe on fundamental family rights without affording any opportunity to challenge state action. They also vest unfettered discretion in state officials to infringe on parents' fundamental rights. Finally, they represent an unconstitutional condition that forces parents to make an agonizing choice between abandoning their children in the hope that the State's vague concerns would be mollified by subsequent investigation, or taking the risk that the State would make good on its threat to remove their children into foster care without a hearing.

Davis v. Federal Election Commission, February 27, 2008 (PDF, 223 KB)
The "Millionaires' Amendment," section 319 of the Bipartisan Campaign Finance Reform Act of 2002 ("BCRA," commonly known as McCain-Feingold), attempts to discourage candidates for election to Congress from spending more than $350,000 from their own personal funds. It effectively penalizes expenditures above that threshold by enhancing the political speech of the self-financing candidate's opponent through increased contribution limits and unlimited coordinated party expenditures. Cato's brief argues that this penalty unconstitutionally chills a self-financing candidate from engaging in protected political speech beyond that personal funds ceiling, and does so without serving any governmental interest recognized as compelling by the Supreme Court's campaign finance precedent. The penalty does not prevent actual or apparent corruption because there is no threat of a quid pro quo from a candidate's expenditure of her own funds. And the Supreme Court has expressly rejected the district court's rationale for upholding Section 319 � "leveling the playing field" of financial resources � as an interest sufficient to justify infringement of First Amendment rights.

District of Columbia v. Heller, February 13, 2008 (PDF, 141 KB)
The District of Columbia has the nation�s strictest gun-control laws. The D.C. Circuit held in 2007 that they violated the Second Amendment, and the Supreme Court is considering�for the first time�whether the Amendment secures an individual right, not dependent on militia service. Critical to the Amendment�s original meaning is the English right to arms before the Founding. Many claim that it was negligible or is irrelevant. Cato�s brief, joined by History Professor Joyce Lee Malcolm, demolishes such claims and shows that the English in the 1700s had a broadly applicable and robust individual right. The core was the right of ordinary people to �keep� firearms to defend their homes and families�precisely what the District tramples. The common law merely regulated the misuse and public carrying of arms. The brief also demonstrates the early consensus that the Second Amendment at least secured the right inherited from England. C. Kevin Marshall of Jones Day authored the brief. While an official in the Justice Department�s Office of Legal Counsel, he co-authored its landmark 2004 memorandum setting out the Executive Branch�s interpretation of the Amendment as securing an individual right.

Chamber of Commerce v. Brown, January 16, 2008 (PDF, 140 KB)
After intense lobbying by the AFL-CIO, California enacted a statute prohibiting employers receiving either a state grant or over $10,000 from a state program from using those funds to �assist, promote, or deter union organizing.� This prohibition even applies to the payment of salaries, speaking about unions to employees working on state contracts, and meeting with employees on state property to discuss union-related issues. The only significant exceptions all relate to employer speech favoring union activity. The law also imposes burdens on employers who wish to use funds not originating from state programs to continue speaking on union-related issues, such as the need to maintain segregated accounting and salary-payment systems. After several re-hearings, the Ninth Circuit upheld the statute on both labor law and constitutional grounds. Cato�s brief argues that 1) this case should be decided on labor law grounds because the National Labor Relations Act clearly prohibits state regulations of this kind; but 2) if the Supreme Court reaches the First Amendment issue, the statute should be struck down because it imposes an unconstitutional condition on the receipt of state funds and burdens private speech in an area unrelated to the programs for which the funds are given.

Boumediene v. Bush, August 29, 2007 (PDF, 139 KB)
This brief argues that the Military Commission Act, which purports to withdraw the jurisdiction of federal courts over certain habeas corpus petitions, is unconstitutional. By way of background, the Bush administration has argued that if it decides to house prisoners in facilities that are not on U.S. soil, such as the prison at Guantanamo Bay, Cuba, federal courts will lack jurisdiction to consider claims of wrongful imprisonment. This brief urges the Supreme Court to reject that argument. The habeas writ cannot be abrogated in the absence of a "rebellion" or "invasion." Since Congress has not invoked either of those exceptions to the general rule, the Military Commission Act is unconstitutional insofar as it attempts to revoke federal court jurisdiction over petitions for writs of habeas corpus.

Faith Center Church Evangelistic Ministries v. Glover, August 8, 2007 (PDF, 56 KB)
For decades the Supreme Court has repeatedly held that religious speech is, like other types of speech, protected by the Free Speech Clause; accordingly, the Court has also consistently held that the government may not silence such speech simply because it expresses a religious viewpoint. Despite this well-settled law, local officials in Contra Costa County, California, specifically barred religious speech from a forum that the county had opened broadly for expressive activities: while the county opened library meeting rooms for every manner of educational, cultural, or community-related meetings or programs, it expressly excluded from those forums any speech that amounted to a "religious service." Cato's brief, authored by a team of lawyers from Gibson, Dunn & Crutcher LLP, urges the Supreme Court to review a decision of the Ninth Circuit ratifying this blatant viewpoint discrimination. Cato's brief also highlights the need for the Supreme Court to clarify its public-forum doctrine, a doctrine that, although fundamental in a large swath of free-speech cases, has led to widespread confusion among the Courts of Appeals as to the amount of protection the Free Speech Clause provides when speech occurs on public property.

New York State Board of Elections v. Torres, May 7, 2007 (PDF, 198 KB)
In this misconceived case pitting political-party populists against political-party centralists, both seeking to have the government impose their preferred candidate-selection method (primary elections versus nominating conventions) on the party as a whole, Cato filed a brief in support of neither party, emphasizing that the private function of political parties selecting and endorsing their standard-bearers for political office should be disentangled from the public function of a state in regulating access to the ballot to bring order to the election process. The brief, written by frequent Cato amicus-brief writer Erik Jaffe, and joined by Reason Foundation and the Center for Competitive Politics, argued that the New York law compelling parties to use nominating conventions to select certain judicial candidates and the lower-court injunction striking that law and requiring the parties to hold primaries instead, both abridged the First Amendment right of freedom of association of the political parties as a whole as well as of their dissident members who preferred primaries. Although the political parties, through their leadership, preferred to hold conventions as required by the New York law, and the brief supported the parties' right to make such a choice for themselves, Cato opposed any government imposition of a specific nominating method upon the parties because the parties should be free to make such choices themselves, and should be accountable for the choices so made. Allowing the parties to hide behind a state compulsion to use conventions � even if they agreed with the state choice of method � insulates them from ordinary internal political responsibility for that choice and blocks other factions within the parties from seeking to change that choice internally. Freedom of association, however, requires that parties be both free and accountable to their members for their choices, without the state placing a thumb on the scale or providing political cover for one or another faction within a political party.

Federal Election Commission v. Wisconsin Right to Life, March 23, 2007 (PDF, 263 KB)
Returning for Round II of Wisconsin Right to Life�s defense of its First Amendment freedom to engage in grass-roots lobbying, Cato joined forces with the Center for Competitive Politics, the Institute for Justice, the Reason Foundation, and the Individual Rights Foundation to remind the Supreme Court of the core First Amendment quality of such grass-roots lobbying and to dissuade the Court from straying farther than it already has from fundamental First Amendment principles. Our brief in this second round at the Court, again written by Cato friend (and former Justice Thomas clerk) Erik Jaffe, emphasizes how federal restrictions on grass-roots lobbying that asks citizens to raise important issues with their elected representatives in Congress severely burdens free speech, freedom of association, and the right to petition the government, and acts in combination with other federal and state restrictions on political speech to choke off one of the few remaining avenues of effective political speech, particularly during the run-up to federal elections. The brief emphasizes that the government�s purported interest in preventing �circumvention� of other restrictions on political speech and association is nothing more than the embodiment of the slippery slope of regulation, repackaged as a faux �interest� that has no stopping point short of the complete suppression of political speech that might � perish the thought � influence citizens or politicians.

Davenport v. Washington Education Association, November 13, 2006 (PDF, 76 KB)
In the State of Washington, unions may negotiate an "agency shop" agreement with an employer, allowing union officials to collect agency fees from employees who aren't members of the union. Washington law permits the union to spend excess money collected on political activities that have nothing to do with the collective bargaining process. Until recently, the law placed the burden on nonmembers to object to this use of their money. Recognizing the unfairness of this arrangement, Washington voters adopted an initiative that forbids the union from using non-members' fees for political purposes without the nonmembers' affirmative consent. Perversely, unions sued, alleging this provision impinged on the union's First Amendment rights to "free association." In this brief, authored by former Thomas clerk and First Amendment expert Erik Jaffe, we argue that the unions have it exactly backwards: the real First Amendment rights at stake are those of persons who haven't joined a union and don't want to contribute to the union's political activities. Those persons have a clear constitutional right to remain silent and unassociated with union political activities, and the Washington initiative protects that right. By contrast, unions have no constitutional right whatsoever to assume, based on a fictitious "association" with nonmembers, that persons unaffiliated with the union automatically "consent" to the use of their hard earned money to promote union politicking. The Cato Institute is joined by the Reason Foundation and the Center for Individual Freedom.

Massachusetts v. Environmental Protection Agency, October 24, 2006 (PDF, 125 KB)
In 2003, the Environmental Protection Agency rejected a petition filed by a number of states, cities, and environmental groups, which asked the EPA to regulate vehicular emissions of greenhouse gases under the Clean Air Act. In Massachusetts v. EPA, the Supreme Court must decide whether the EPA properly denied this petition. Cato�s amicus brief, authored by law professor Jonathan Adler and joined by professors James L. Huffman and Andrew P. Morriss, makes two arguments on the EPA�s behalf: First, it argues that the states� and environmental groups� claims must be dismissed for lack of standing. Second, the brief demonstrates that, even if the Court were to adopt the plaintiffs� creative standing theories, the Clean Air Act simply doesn�t give the EPA any authority to regulate greenhouse gas emissions.

Gonzales v. Carhart, August 10, 2006 (PDF, 198 KB)
In Stenberg v. Carhart, the Supreme Court struck down a Nebraska law banning partial-birth abortions because the Nebraska statute lacked an exception in cases where a partial-birth abortion is necessary to the mother's health. Just three years later, Congress passed the Partial-Birth Abortion Ban Act, a law nearly identical to the Nebraska ban. Congress attempted to skirt the Supreme Court's holding in Stenberg by advancing its own factual findings that a health exception is medically unnecessary, based on a legislative determination that partial-birth abortions are never the safest method for performing an abortion. Cato's brief argues that the Supreme Court should not defer to congressional findings of fact because Congress cannot claim any special expertise regarding the regulation of medical judgment, an area that, by tradition and constitutional structure, is left largely to the province of the states. Indeed, if any legislative body deserves deference concerning the need for a health exception, it is state legislatures. By inviting deference to its fact-finding, Congress effectively invites the Court to make an end-run around the principles of separation of powers and federalism.

Philip Morris v. Williams, July 28, 2006 (PDF, 364 KB)
In this brief, co-authored by noted economists Steven Shavell and A. Mitchell Polinksy, Cato weighs in on the due process limits that the Fourteenth Amendment imposes on excessive, bet-the-company punitive damages. While trial lawyers often argue that the logic of deterrence requires large companies to pay more punitive damages than smaller companies, Cato�s brief demonstrates that the size and wealth of a company shouldn�t factor into the size of a punitive damages judgment. Because companies make judgments based on profits, large companies and small companies generally have every incentive to take precautions necessary to avoid harm to others when damages are equal to the harm they cause. Adjusting the damages upward because a company is large or wealthy does little to deter, spawning excessive litigation and creating a tax on corporate success.

Hamdan v. Rumsfeld, January 6, 2006 (PDF, 81 KB)
Salim Hamdan is a prisoner at the U.S. Naval base in Guantanamo Bay, Cuba. He was initially taken into custody by the U.S. military in Afghanistan and then flown to the naval base in June 2002. According to government officials, Hamdan was involved with the Al Qaeda terrorist network, but Hamdan denies that allegation. One year later, in July 2003, President Bush declared his intention to put Hamdan on trial before a military tribunal. Hamdan was then moved from the general inmate population to solitary confinement. The military lawyer that was assigned to defend Hamdan promptly challanged the legality of the military tribunal and that legal challenge reached the Supreme Court for a resolution. President Bush argues that he has the "inherent power" to set up a special military court and try any person that he believes to be involved in terrorism. In this friend-of-the-court brief, Timothy Lynch argues that if the president chooses to try a person for a war crime, an offense that typically carries a death sentence, he cannot deny the accused the benefit to trial by jury. The brief serves as a reminder that the U.S. Constitution is the supreme law of the land, both in times of peace and war.

Randall v. Sorrell, December 14, 2005 (PDF, 235 KB)
This brief, joined by the Center for Competitive Politics, the Goldwater Institute, the Institute for Justice, and the Reason Foundation, addresses Vermont's Act 64, the state's law restricting candidate's campaign expenditures. Vermont justifies the Act as a prop to ensure elected officials are responsive to voters. Without the Act, says Vermont, elected officials will waste time soliciting donations from wealthy organizations, time that could be used to listen to constituents. The argument makes no sense. Vermont's expenditure cap insulates incumbents from tough reelection fights and hence prevents the very ballot box competition necessary to ensure Vermont officials serve the general public.

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