Constitution, the Law, and the Courts

August 3, 2020 9:54AM

Occupational Licensing Reform Moves Forward

By Michael D. Tanner and Kelly Lester

With an unemployment rate currently over 10 percent and many businesses permanently closing due to the pandemic, policymakers should make it as easy as possible for unemployed workers to find new opportunities.

State policymakers have tools at their disposal that could help put the unemployed back to work by eliminating barriers that prevent workers from moving between careers. Despite a wave of deregulation early in the COVID-19 crisis, many states still have occupational licensing requirements on the books that are hindering economic recovery by choking off access to new jobs, hindering interstate mobility for workers, and increasing costs for consumers.

The often lengthy and costly process involved in getting a license to practice hair‐​braiding, nail care and many other trades represent a significant barrier to would‐​be small business owners who cannot afford the time or expense involved. Nearly two million jobs are lost annually due to licensing requirements — a burden that falls hardest on low‐​income communities.

Despite claims by licensing proponents, studies looking at a wide variety of professions have found that the licensing process does not significantly protect public health and safety. Some research has even found that licensing has a slightly negative effect on quality. But, while quality remains unchanged, prices to consumers increase. According to economist Morris Kleiner, licensing can raise prices anywhere from 5 to 33 percent depending on the type of occupation and location. It is estimated that consumers pay, in total, $200 billion annually in extra costs due to licensing.

And forget easily moving your business from one state to another. Most states will not recognize an occupational license from another state, requiring entrepreneurs to go through the costly hassle all over again.

As a result, both the current and previous administrations have called for licensing deregulation. Licensing reform is one of the major aspects of President Trump’s Governors’ Initiative on Regulatory Innovation.

States have slowly begun to act. In signing legislation that allows his state to recognize licenses from other states, Missouri Governor Mike Parson said, “Eliminating governmental barriers to employment and allowing citizens to become licensed faster is an impactful, commonsense step that we believe will have a positive impact in the lives of a lot of Missourians.”

Arizona enacted similar reforms last year. Iowa has also created a universal licensing system with hopes of increasing migration into the state. Several more states, including California, Florida, and Missouri, have made it easier for people with criminal records to receive licenses. Florida has loosened other licensing requirements as well, as has South Dakota.

While those reforms are a good first step, all states can and should go further, reviewing all current occupational licensing requirements with an eye toward standardizing requirements, reducing costs, and eliminating restrictions that are not related to public safety.

The pandemic has created a unique window of opportunity for reform, forcing states to reevaluate the impact of regulations on jobs and poverty. States should seize on this opportunity to expand the freedom to work.

July 31, 2020 2:38PM

How Strict Would “Strict Scrutiny” Be Online?

My last post set out the case that the International Covenant on Civil and Political Rights (ICCPR) offered strong protections to online speech on social media. Let's turn now to assessing that case. That case depended on Article 19 of the ICCPR which established both a broad right to free speech and a tripartite test for restrictions on speech by governments. Some have argued that the vagueness prong of the tripartite test would invalidate many “hate speech” restrictions. Let’s imagine social media companies adopt ICCPR in total. Would Article 19’s tripartite test in fact invalidate restrictions on speech rights online?

The “would” in my question reflects a subjunctive mood. I am assuming that ICCPR is not in fact now applied to speech on social media. But that may be a false assumption.

In 2019, the U.N.’s Special Rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression argued that social media companies should apply international human rights on their platform including the tripartite test. David Kaye, the Special Rapporteur in question, has extensive knowledge of social media content moderation; he has published a well-regarded book on the topic. His normative call for action to the companies suggests they have not in fact adopted the tripartite test in their internal moderation. The experience of social media cannot tell us much about the empirical success or failure of the tripartite test.

The Special Rapporteur also notes the tripartite test obligates states that ratified the ICCPR. Accordingly, governments should have extensive experience applying the tripartite test. Apparently they lack such experience since the Special Rapporteur and the UN Human Rights Committee continue to note failures by national governments to abide by international human rights. Indeed the Special Rapporteur and the UN Human Rights Committee evaluate how well governments follow international human rights law. But they are not courts enforcing rights against recalcitrant as well as compliant malefactors.

Perhaps we can find something similar to the tripartite test in an individual nation. The test does look somewhat like the “strict scrutiny” test in American constitutional law. Courts apply “strict scrutiny” when the government restricts speech based on its content. Such restrictions may be valid only if they further a “compelling government interest” and are narrowly tailored to achieve that end. Is that a stringent test? The renowned law professor Gerald Gunther once claimed strict scrutiny was “strict in theory, fatal in fact.” In other words, when judges applied the test, they had in effect decided to strike down a government law or action. Was Gunther right?

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July 31, 2020 11:18AM

“Delay the Election???”

As if America 2020 didn’t already have enough of a banana‐​republic feel to it, lately President Trump has seemed unusually focused on adding to the lingering pall of dysfunctional authoritarianism. First there was his attempt in Portland to use federal law enforcement as a sort of ad hoc internal security force. Now there’s yesterday’s suggestion—on Twitter, naturally—that maybe we should “Delay the Election until people can properly, securely, and safely vote???” I recall a lot of paranoid chatter on the Right a few years back about President Obama building a “civilian national security force” and refusing to leave office; over the last two weeks, Trump’s flirted with both ideas more than Obama did over two terms. 

There he goes again

Because the phrasing’s cute enough for plausible deniability, it’s not clear from Trump’s tweet if he’s suggesting he could postpone the November elections himself via executive edict. What is clear, as Walter Olson noted yesterday, is that the president has no such power. Under the Constitution, Congress sets the date for presidential elections; unless Congress changes the law, that election will be held this November 3rd, “whether the president likes it or not.”

During similarly paranoid times 16 years ago, in the run‐​up to the first post‐​9/​11 presidential vote, the Congressional Research Service examined the question of “Executive Branch Power to Postpone Elections,” concluding there was none. Even the broadest possible use—or abuse—of presidential emergency powers “would not appear to have the legal effect of delaying an election, nor would it vest the Executive Branch with the authority to reschedule the election.” And since, per the 20th Amendment, Trump’s term ends at noon on the 20th of January, even if he somehow managed to cancel the election entirely, at that point, under the Presidential Succession Act, Speaker Nancy Pelosi would take the helm. It’s possible Trump hasn’t really thought this through.

In any event, if Trump’s tweet was a veiled threat to postpone the election, it joins a long list of crackpot authoritarian fancies he’s let fly since his inauguration. In just the last two years, this president has (an incomplete list):

Of course, Trump never followed through on any of those threats. Likewise, it’s a pretty sure bet “Delay[ing] the Election???” will never make the transition from idiotic tweet to nefarious plan. (I might, however, put even money on a presidential self‐​pardon attempt before January 20.)

The fact that the 45th president lacks the competence, self‐​discipline, and functional attention span to bring his worst autocratic impulses to fruition is, I suppose, something of a blessing. That doesn’t mean Trump’s authoritarian bluster is harmless. When half of the political class feels driven by partisan loyalty to defend or downplay the president’s open contempt for constitutional limits, it’s likely to make genuine assaults on those limits by future presidents that much easier to execute.

We’ll no doubt hear from the president’s allies that it’s just a tweet, he didn’t mean what you thought he meant, and/​or he was just being “sarcastic.” Trump doesn’t think he misspoke: look at what’s now his “pinned tweet,” with pride of place atop his feed. The guy’s an attention vampire, and all press is good press.

It’s tiresome, if not exhausting. Joe Biden has come in for a fair amount of criticism over his “invisible campaign,” but being unseen and rarely heard may turn out to be a welcome contrast and a campaign strategy with the broadest possible appeal.

July 30, 2020 11:37AM

The U.S. Presidential Election Will Take Place on November 3, Whether The President Likes It Or Not

This morning President Donald Trump tweeted this:

To state what should be obvious, especially to someone who has taken an oath to preserve, protect, and defend the Constitution of the United States:

  • Under Section 1 of the Twentieth Amendment to the U.S. Constitution, the President’s term ends at noon on January 20, 2021. The President cannot himself extend this term, nor may Congress by legislation extend it. “Emergency” doesn’t matter.
  • Under the Constitution, Congress can set the date of the election by law. It has chosen to set it on the Tuesday following the first Monday in November. Changing this to, say, the equivalent date in December would require legislation to which both Houses of Congress, including the Democratic House, would have to agree.
  • Unless Congress chooses to prescribe through legislation the details of questions like mail‐​in balloting, states are broadly free to set their own procedures. Any national mandate of this sort would require legislation to which both Houses of Congress, including the Democratic House, would have to agree.

Neither the Constitution nor federal law confers on the President any power to suspend these provisions, and in fact the Constitution imposes on the President a duty to “take care that the laws be faithfully executed.”

Short of the enactment of a constitutional amendment between now and then, the term of office for which Trump was elected will expire on January 20, and unless he has won an election occurring between now and then, he will cease to be President. Short of legislation with bipartisan support, the date of the election will remain November 3rd, and states will be in charge of setting election procedures on topics on which Congress has not spoken. 

The United States held a national campaign and election during the deadly 1918–19 flu pandemic, a more lethal one than we face currently. 

And we will be having an election on November 3, 2020 to decide whether President Donald Trump is to have a second term, whether he likes it or not. 

July 22, 2020 3:48PM

You Should Be Able to Challenge the IRS in Court

Although the Internal Revenue Service is responsible for collecting taxes, the power to write tax law is a legislative one, held by Congress. In certain cases, however, Congress has delegated to the IRS limited authority to fill in the gaps of tax laws through regulation. The Administrative Procedure Act (APA) lays out the processes that agencies like the IRS must follow when promulgating regulations, such as allowing for a period of public comment on proposed regulations. Unfortunately, the IRS has habitually refused to comply with the APA absent the intervention of the courts. The APA provides a remedy for such situations: pre‐​enforcement judicial review. This process allows an individual or entity to challenge the validity of a regulation that could affect it in court without having to first violate the regulation and risk the often severe consequences that would follow.

CIC Services, which advises taxpayers on certain types of complex transactions, is using pre‐​enforcement judicial review to challenge the validity of an IRS reporting requirement that it claims is invalid because the IRS evaded the regulatory procedures required by the APA. In response, the IRS invoked the Tax Anti‐​Injunction Act (AIA) to block the challenge and prevent CIC’s legal arguments from even being heard.

The AIA prohibits challenges to a tax before the tax has been collected. In most instances, a person challenging a tax assessment must first pay the tax and then file a claim for a refund. But CIC’s challenge is not to any tax but to the validity of the regulatory rule (and burden) passed by the IRS.

The IRS narrowly prevailed before the U.S. Court of Appeals for the Sixth Circuit when two of the three judges on the panel held that the penalty triggered by failing to follow the new reporting requirement was itself a tax, thus subjecting the lawsuit to the AIA. In doing so, the court widened an existing circuit split. (Cato had filed an earlier brief in support of a petition seeking review of a similar D.C. Circuit case, but the Supreme Court declined to take it up). Under the Sixth Circuit’s reasoning, the only recourse against defective Treasury regulations is to purposely violate the regulation and incur penalties and interest while waiting for a subsequent enforcement proceeding in which the regulation’s validity can be challenged.

CIC petitioned the Supreme Court to review that ruling, supported by a Cato brief, and the Supreme Court agreed to hear the case. Cato has now joined the National Federation of Independent Business and five other organizations in filing an amicus brief supporting CIC on the merits. We argue that an examination of existing exceptions to the AIA support the conclusion that the statute focuses on lawsuits that restrain assessment or collection, not pre‐​enforcement challenges. With the context provided by these built‐​in exceptions, the AIA looks less like one intended to pre‐​empt all suits affecting taxation and more like one that can exist comfortably alongside the APA and challenges to the validity of agency rulemaking.

Moreover, the Sixth Circuit’s interpretation creates an unnecessary conflict between the AIA and the APA. The APA contains a “strong presumption” of judicial review prior to enforcement of substantive regulations like the one at issue here. Congress intended that all agencies’ substantive regulations would be subject to such review under the APA, and it certainly didn’t intend for the IRS to be almost immune from accountability before federal courts. People have a right to be sure of a regulation’s meaning before engaging in costly compliance efforts, and that’s exactly what pre‐​enforcement judicial review provides.

The APA contains stringent procedural requirements for how regulations are to be promulgated. The IRS frequently ignores these requirements and must be reined in. The Supreme Court should hold that the AIA doesn’t deny CIC the right to its day in court.

July 22, 2020 1:43PM

Federal Cops Without Badges, Coming Soon To a City Near You?

The federal Department of Homeland Security has sent Border Patrol agents to act as police in Portland, Oregon in recent days. By what authority? And have its agents behaved there in a way consistent with the law, the Constitution, and good police practice? I took a first look at those questions in a Monday piece at The Bulwark. Since then the situation has changed, and not for the better. [see update below — W.O.]

When I wrote, DHS was being careful to ground its actions in one of the narrowest and most widely accepted of the federal government’s law enforcement powers, that of defending its own installations from attack. (The Portland federal courthouse has come under recurring nightly siege for weeks, which has included arson attempts and physical assaults on officers.) This week, however, President Trump suggested that he would also send federal law enforcers into “Chicago, Detroit, Philadelphia” and other cities.

This is plainly a pivot into something else. Have you seen reports that courthouses or other federal property are under siege in most of these cities? I haven’t. In some of them, it has been weeks since the last widespread public unrest related to the George Floyd protests. Some of the cities are indeed known for alarming rates of homicide and gang violence, but those do not constitute an imminent threat to federal buildings, let alone some sort of Whiskey Rebellion‐​style insurrection against the feds’ political authority. As has been widely discussed in recent weeks, Trump could assert the authority to deploy actual military units to riot zones were he to invoke something called the Insurrection Act of 1807, but such an invocation would be deeply controversial, and almost ludicrous in the case of cities where there is plainly no insurrection going on.

If Trump follows through, and the administration begins to insert itself more broadly into local policing, expect it to seek out untested and unfamiliar legal authorities as justification. (For an example of how this worked in last month’s Washington, D.C. protests, involving a stretchy and loophole‐​ish excuse for putting state national guard units under federal direction, check out this Lawfare piece by Steve Vladeck).

In the mean time, the hands‐​on problems of the Portland deployment are coming into sharper focus. DHS is taking the defiant position that its agents will not wear badges with their own names, period — it says they’ll instead wear numerical “identifiers,” so at least it will have a hope of knowing which ones misbehaved. Its camouflage‐​wearing agents are clothed with enough ambiguity — bearing hard‐​to‐​spot agency patches, for example, together with generic “POLICE” rectangles — to threaten confusion over whether they are indeed genuine Federales or just rowdy freelancers making believe.

As for the arrests of persons bundled into vans, DHS has already essentially conceded that one was a case of mistaken identity, while another, analyzed here by Harvard Law criminal procedure specialist Andrew Crespo, appears to have lacked the probable cause required under constitutional standards. It’s hard to picture a defense of the federal agents’ conduct in the latter case that does not come back to the excuse that they were put on the street with training too skimpy for them to grasp the constitutional standards that apply to arrest.

That’s not a defense we should find satisfactory — especially if this federal policing campaign is to roll out to more cities.

UPDATE: Wednesday afternoon, after the above appeared, President Trump held a press conference announcing that he was assigning “surge” federal law enforcement to Chicago and Albuquerque, modeled after a pilot effort in Kansas City. From the initial coverage, my quick reading is that despite the talk of Portland Everywhere, this may be a pivot to a much less provocative (if still objectionable) kind of federal role. In particular, the U.S. Attorney in Kansas City said the federal participants “won’t be patrolling the streets,” “won’t replace or usurp the authority of local officers,” and, should they participate in arrests, to quote AP, “will be clearly identifiable when making arrests, unlike what has been seen in Portland.” Moreover, they appear in each case to have negotiated cooperation agreements with the cities involved — the feds are sweetening that with money. I see much talk of using the federal presence against gang shooters, rather than against demonstrating mobs, statue‐​topplers, etc.

In other words, it looks at a glance not like a roll‐​out of the Portland adventure but like a separate “crime wave surge assistance” program that would be new in almost no way — the feds already cooperate with cities on a lot of this — and would mostly involve FBI, DEA, and other conventional federal law enforcers rather than repurposed Border Patrol agents and the like. There is talk of deferring to local priorities, and no talk of getting anywhere near street policing or crowd control, while the numbers of feds involved are too small to suggest a big role in that anyway. In short, sound and flash but not actually a major assertion of new federal policing power as had been feared.

It is worth remembering, however, that just as this administration has sometimes followed highly aggressive announcements with relatively innocuous policy rollouts, so it has also sometimes done the reverse. And note that (in common with earlier administrations) this one continues to neglect to distinguish the constitutional distinction between its role in fighting federal crimes from a wider and more constitutionally irregular ambition of fighting local violence prosecuted under state law. “Indeed,” as Chief Justice Rehnquist wrote for the U.S. Supreme Court in U.S. v. Morrison (2000), “we can think of no better example of the police power, which the Founders denied the National Government and reposed in the States, than the suppression of violent crime and vindication of its victims.”

July 20, 2020 9:49AM

On Trump’s Regulatory Agenda, Look Past the Props

In a Rose Garden event last Thursday, President Trump orchestrated quite a scene to promote his regulatory agenda. He stood between two massive pickup trucks. To the left, a blue truck sank under an immense load of weights situated in its bed—meant to symbolize the regulatory burden on the American economy. On the other side, a red truck stood tall, because the stress of the weights in its bed was being relieved by a large crane, which flew a banner that read: “Trump Administration.” 

This was the second time the president resorted to props to draw attention to his regulatory work.

During his first December in office, the White House held a similarly themed press conference in the Roosevelt Room, where Trump held a pair of scissors in front of two piles of paper bound by red tape. On one side, five towering stacks were marked with a sign reading “TODAY”; the other paper pile was miniscule in comparison, bedecked simply “1960.”

For both photo ops, Trump’s speeches focused on how his administration had far exceeded his campaign promise to cut at least two rules for every new one. Yet there’s less than meets the eye when it comes to the president’s signature (de)regulatory reform. Rather than reflecting some sort of breakthrough, these slogans (“two‐​for‐​one”!) are simply Trump‐​style branding for routine presidential practice.

All Trump is doing is rethinking the previous administration’s policies, which is what every president does every time there’s a party switch in the Oval Office. When a Democrat follows a Republican, the process entails re‐​regulation; when the roles are reversed, it’s time for deregulation. This wholesale ping‐​ponging of national policy is among the regrettable drawbacks to the vast lawmaking power that Congress has delegated to regulatory agencies since the dawn of the modern administrative state.

But just because the president is selling the sizzle, it doesn’t mean there’s no steak! Indeed, away from the limelight, his administration is preparing a juicy feast of meaningful regulatory reform. In recent pieces for the Washington Examiner, The Regulatory Review, and Real Clear Policy, I discuss this important, yet unheralded, work. Highlights include:

  • Ending a major judicial doctrine that had abetted the rise of the administrative state;
  • Compelling regulatory agencies to publicize their enforcement guidance, so regulated entities know the rules of the game; and,
  • Allowing more public participation and scrutiny for “major” regulations that cost hundreds of millions of dollars.

These structural measures have nothing to do with any particular policy; instead, they improve how regulations are made, as a general matter. Although the president is almost certainly unaware of these reforms, he’s responsible for them. By making regulatory policy a first‐​term priority, he created opportunities for reform‐​minded public servants within his administration, who then proceeded apace.