Tag: Supreme Court

Are the Caps Really Underdogs? The Economics of Sports Books in the Wake of Murphy v. NCAA

Washington Capitals fans (including this writer) were overjoyed last Thursday night when the team defeated the Tampa Bay Lightning to move onto the National Hockey League’s Stanley Cup Final. But for some Caps fans, that joy soured a bit the next morning when they discovered that Las Vegas oddsmakers have made Washington the underdog in the championship series against the Vegas Golden Knights (VGK).

The VGK have odds of 10/13 to win the series, meaning gamblers would have to bet $13 on the Knights to win $10 (plus the return of their original wager) if the Knights win the series. The Caps are $11/10, meaning a $10 bet would yield $11 if Washington captain Alex Ovechkin hoists Lord Stanley’s Cup. The numbers against the Capitals aren’t lopsided, but they’re a decided nod to the VGK.

Caps fans are a notoriously gloomy, self-afflicted lot given the team’s playoff history, so it’s not surprising they quickly found the cloud surrounding Thursday’s silver lining. Betting odds—basically, futures—are commonly thought to represent the collective intelligence of the marketplace and that wisdom apparently says the Caps’ history of playoff heartbreak will continue.

Or maybe not.

In an article in the forthcoming summer issue of my journal Regulation, economist Ike Brannon discusses bookmaking (the art of setting betting lines)—both legal and illegal—in light of the recent Supreme Court decision striking down a federal law prohibiting most states from legalizing sports gambling. (The article will be available at www.cato.org/regulation in a few weeks.) Borrowing from the work of Wake Forest University economist Koleman Strumpf, who has studied illegal sports gambling extensively, Brannon points out some features of bookmaking that should encourage Caps fans—and should interest anyone who is intrigued by this market-driven process.

Introducing “Checkpoint: America”

Today, the Cato Institute is launching a new online initiative: Checkpoint America: Monitoring the Constitution-Free Zone.

For over 60 years, the executive branch has, through regulatory fiat, imposed a “border zone” that extends as much as 100 miles into the United States. Within this area–which, according to the ACLU, encompasses two-thirds of the U.S. population–are a series of Soviet-style internal checkpoints run by the Department of Homeland Security’s Customs and Border Protection (CBP) service. The majority of these stretch across the southwestern United States from southern Calfornia to the Texas Gulf Coast. As outlined below, CBP agents operating these checkpoints routinely violate the constitutional rights of citizens and other who are forced to pass through them to get to work, go to the store, or make it to a vacation destination in the American Southwest.

Because these checkpoints can be either fixed or mobile, research for this project involved the use of multiple data sources to help provide precise geolocational data and detailed physical descriptions of a given fixed checkpoint, or, where captured on overhead imagery, a temporary checkpoint. In particular, prior reports by the Government Accountability Office (2009 and 2017), as well as Google Earth and the Streetview functionality in Google Maps, were critical in helping pinpoint existing checkpoints and making possible relatively precise physical descriptions of the facilities and equipment present at each. The ACLU, including it’s Arizona chapter, also provided valuable data.

The need for this project, and for greater scrutiny of these checkpoints, is more pressing than ever.

ICE To Track License Plates

Immigration and Customs Enforcement (ICE) has access to billions of license plate images that allow for the agency to engage in near real-time tracking of its targets. This surveillance capability should instill a sense of unease in us all, even if we aren’t in ICE’s crosshairs. 

Vigilant Solutions, the private company that reportedly collects the data ICE will query, owns a database with more than 2 billion license plate photos that produces 100 million hits a month. These photos come from toll roads, parking lots, vehicle possession agencies, as well as local law enforcement. According to ICE’s privacy impact assessment for the license plate tracking program, Vigilant Solutions’ data includes images from 24 of the US’ top 30 most populous metropolitan areas. ICE does not contribute license plate images to the database.

ICE policy does provide some privacy protections, but they fall far short of what the agency should impose on itself. ICE may only query the database for license plate numbers in order to find information about vehicles that are part of “investigatory or enforcement activities.” Given that ICE has been increasing the number of noncriminal undocumented immigrants it arrests, it’s safe to assume that ICE’s use of the license plate database will extend beyond investigations into undocumented immigrants who are wanted for violent crimes. 

ICE’s privacy impact assessment states that investigators with ICE’s Enforcement and Removal Operations, the agency responsible for deportations, will be able to access five years worth of license plate location data.

Those who believe that ICE should be dedicating significant resources to deporting non-violent undocumented immigrants may applaud the use of license plate location data. What they should consider is that they could be the targets of identical surveillance in the future. The federal government has conducted surveillance on a wide range of targets, and surveillance tools won’t change just because the target will.

The Constitution provides little protection when it comes to long-term warrantless tracking. In 2012, the Supreme Court unanimously held that the warrantless 28-day GPS tracking of a car violated the Fourth Amendment. However, the opinion of the Court, written by Justice Scalia and joined by his colleagues Chief Justice Roberts and Justices Kennedy, Thomas, and Sotomayor, is grounded in the physical intrusion of the GPS locator on the car rather than the GPS tracking violating the driver’s expectation of privacy.

Supreme Court Continues Its Gun-Shy Ways

Over a decade ago, James Hamilton was convicted of a felony in Virginia, for which he served no jail time. Since then, the state of Virginia has restored all of his civil rights, including the right to possess firearms. In the years since then, Hamilton has worked as an armed guard, firearms instructor, and protective officer for the Department of Homeland Security. Despite never exhibiting any violent tendencies and leading a stable family, the state of Maryland, where Hamilton now resides, forbids him from possessing firearms because of that decade-old Virginia conviction.

Hamilton challenged Maryland’s absolute prohibition on the possession of firearms by felons as applied to him, arguing that, while there may be reasons for forbidding some felons from owning firearms, the prohibition made no sense when applied to him, a person who committed a non-violent felony over a decade ago. The Fourth Circuit, however, decided that Hamilton was not eligible to bring an as-applied challenge to Maryland’s law, leaving states in the Fourth Circuit wide latitude to abuse the constitutional rights of a huge class of citizens and leaving those citizens with no way to vindicate their rights.

The World of Financial Regulation Gets Weird…Again

There’s yet more strangeness afoot in the world of financial regulation.  No, it’s not the CFPB this time.  It’s the generally more staid Securities and Exchange Commission (SEC).  Earlier this week, the Department of Justice weighed in on Lucia v. SEC, a case challenging the constitutionality of the SEC’s in-house judges, known as Administrative Law Judges (ALJs).  What is strange is that the DOJ sided with Raymond Lucia and against the SEC.  Seemingly in response, the SEC took action and ratified the appointment of its ALJs, a move it had been resisting for some time. 

The case is currently with the Supreme Court where the Court is considering whether it will hear and decide the matter.  The question is whether ALJs are “mere employees” or are instead “inferior officers.”  If the latter, their appointment is subject to the appointments clause in the Constitution, which permits Congress to “vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments.”  Since the process for appointing ALJs has (until recently) not been done by any of these, if they are indeed inferior officers, their appointment would be unconstitutional. 

Cato has filed an amicus brief in support of Lucia.  Given the great discretion that ALJs wield – hearing and ruling on both the admissibility and credibility of evidence, presiding over hearings, and issuing opinions – it is strange to say they are not inferior officers.  Resting on the finality of the decisions alone seems insufficient.  And indeed in another case arguing the same issue, whether SEC ALJs are inferior officers, a federal appeals court in Colorado ruled that they are.  Since there is now a circuit split, with appeals courts in two circuits issuing opposite rulings, it seems likely the Supreme Court will hear the case to decide the issue.

The appeal to the Supreme Court is of a decision by the federal court of appeals in D.C., which ruled that, because ALJs’ opinions are not final and can be reviewed by the SEC commissioners, the ALJs are not in fact inferior officers.

The problem for the D.C. Circuit Court of Appeals is that it already ruled on this question.  In Landry v. FDIC, the D.C. Circuit found that ALJs at the FDIC are not inferior officers because their opinions are not final.  This is the case on which the D.C. Circuit relied in Lucia.  Landry was also appealed to the Supreme Court, but the Court did not take it up. 

Speaking of Landry. When Landry was pending before the Supreme Court, just as Lucia is now, the Department of Justice weighed in on that case, just as it did recently in Lucia.  But that time, the DOJ sided with the FDIC, arguing that the lack of finality in ALJ decisions makes them mere employees and not inferior officers.  Exactly the opposite of what DOJ is now arguing in Lucia.

Another Bleak Day for Property Owners

Property owners have long suffered under the Supreme Court’s erratic rulings. It got worse today. In Murr v. Wisconsin, the Court ruled against the owners, 5-3, with Justice Kennedy writing for the majority, Chief Justice Roberts writing a dissent, joined by Justices Thomas and Alito, Thomas writing a separate dissent, and Justice Gorsuch taking no part. The problem isn’t simply with the majority’s holding and opinion, it’s with the dissent as well. Only Thomas points in the right direction.

This was a regulatory takings case arising under the Fifth Amendment’s Takings Clause, which prohibits government from taking private property for public use without just compensation. In separate conveyances in 1994 and 1995, the Murrs, four siblings, inherited two contiguous lots on the St. Croix River that their parents had purchased in 1960 and 1963. The parents had built an ancestral home on the first lot. They bought the second for investment purposes.

The trouble began in 2004 when the Murrs sought to sell the second lot, valued at $410,000, and use the proceeds to upgrade the ancestral home. But they were blocked by a 1975 local zoning ordinance that treated the two lots as one, even though they had long been deeded and taxed separately. Under the ordinance they had to sell the lots together or not at all. Out $410,000, the Murrs sued, claiming that the ordinance had deprived them of their right to sell their property.

Big Goings-On at Supreme Court as We Race to the End of Term

The Supreme Court today came down with opinions in two cases in which Cato filed a brief. First, in Murr v. Wisconsin, it unfortunately ruled against property owners in an important regulatory-takings case. Then, in Lee v. United States, it correctly found that a criminal defendant who had virtually no chance to win at trial—absent jury nullifcation, which was our focus—was still prejudiced by (and entitled to a new trial due to) his counsel’s wrong advice that he wouldn’t be deported if he pled guilty.

Murr: Whenever you see a court invoke a “multifactor balancing test,” you know it’s just making stuff up. Alas that’s what happened in Murr v. Wisconsin, where a family was deprived of significant use of its property—not to mention economic benefits—because of an unfortunate operation of local law. The Supreme Court compounded that harm by essentially deferring to state determinations of property owners’ rights, and did so by applying that “multifactor” standard that allows it to reach whatever result it wants. This ruling shows that in the grander scheme, as Justice Thomas noted in his dissent, the Supreme Court needs to reevaluate its regulatory-takings jurisprudence altogether. (For more, see Cato’s amicus brief.)

Lee: The Court was correct to give even seemingly hopeless criminal defendants the right to adequate legal repreentation. Jae Lee only took a plea deal because his lawyer repeatedly assured him that he wouldn’t face deportation. The fact that going to trial, where he had no legal leg to stand on, would’ve almost certainly resulted in a longer prison sentence is immaterial. It’s clear that for Lee, who was brought to the United States from South Korea as a child, the risk of being forced to leave the only country he knows was much more important than a longer prison sentence. Lurking under this case was the controversial doctrine-that-must-not-be-named of jury nullification, which was essentially Lee’s only chance for acquittal. (For more, see Cato’s amicus brief.)

Stay tuned Monday for the Supreme Court’s final opinions of the term (especially Trinity Lutheran), as well as decisions on whether to take up the travel-ban case, Masterpiece Bakery (vendors for same-sex weddings), and Peruta (Second Amendment right to carry). And maybe, just maybe, Justice Anthony Kennedy will announce his retirement—though if I had to bet, I’d say he sticks around another year.

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