Topic: Constitution, the Law, and the Courts

Punishing Housing Providers for Racial Imbalances They Didn’t Cause Will Only Lead to More Racial Bias

The federal Fair Housing Act (“FHA”) makes it unlawful to discriminate based on race (among other categories) in the sale, rental, and financing of housing. Four years ago, in a case called Texas Department of Housing v. Inclusive Communities Project, the Supreme Court determined that the FHA allows certain claims based on “disparate impact”—meaning that tenants don’t need to prove discriminatory intent behind housing policies, only an adverse effect on members of their protected class, even if it was the unintended result of an otherwise neutral policy.

Enter Waples Mobile Home Park in Fairfax County, Virginia. Waples rents primarily to Hispanic tenants, but, to avoid violating federal immigration policy, it requires all community residents to provide their social security numbers or otherwise show proof of legal immigration status. Several current and former tenants filed an FHA complaint against Waples, alleging that this policy has a racially disparate impact. Why? Because most undocumented people in Fairfax County are Hispanic.

Although the trial court threw out the lawsuit, the U.S. Court of Appeals for the Fourth Circuit resurrected it. According to the court, a mere showing of statistical disparity is enough to establish a valid claim. But, as the Supreme Court in Inclusive Communities emphasized, “[w]ithout adequate safeguards … disparate-impact liability might cause race to be used and considered in a pervasive way and ‘would almost inexorably lead’ governmental or private entities to use ‘numerical quotas,’ and serious constitutional questions then could arise.” One of those important safeguards, called the “robust causality” requirement, makes sure that housing providers aren’t punished for racial imbalances they didn’t cause. 

Waples is not, and cannot, be responsible the geographic distribution of undocumented individuals within the United States. It simply isn’t the park’s fault that most undocumented people in Fairfax County happen to be Hispanic. Its policy of requiring tenants to provide proof of immigration status thus could not have “caused” a disparate impact. Allowing FHA claims based on this sort of coincidence would destroy the Inclusive Communities safeguards and shift the burden to housing providers to prove the absence of discrimination. Doing so will only undermine the core purpose of the FHA—to decrease racial bias in housing decisions—by encouraging more race-based decision-making among housing providers for fear of being sued. 

To Become an American, Prove You Haven’t Smoked Pot

One requirement for immigrants to naturalize and receive U.S. citizenship is that they affirmatively demonstrate “good moral character.” America’s nanny staters have decided that consuming marijuana in any form is, well, immoral. The Trump administration decided this week to clarify further that it is still immoral to use, share, sell, or manufacture marijuana that is legal at the state level. The updated guidance states:

An applicant cannot establish good moral character (GMC) if he or she has violated any controlled substance-related federal or state law or regulation of the United States or law or regulation of any foreign country during the statutory period… . Classification of marijuana as a Schedule I controlled substance under federal law means that certain conduct involving marijuana, which is in violation of the CSA, continues to constitute a conditional bar to GMC for naturalization eligibility, even where such activity is not a criminal offense under state law.

For example, possession of marijuana for recreational or medical purposes or employment in the marijuana industry may constitute conduct that violates federal controlled substance laws. Depending on the specific facts of the case, these activities, whether established by a conviction or an admission by the applicant, may preclude a finding of GMC for the applicant during the statutory period.

The new guidance goes even further:

Note that even if an applicant does not have a conviction or make a valid admission to a marijuana-related offense, he or she may be unable to meet the burden of proof to show that he or she has not committed such an offense.

In other words, even if an immigrant attempting to become an American has never been convicted of using marijuana and won’t admit doing so, they could still be denied U.S. citizenship. It is important, you understand, that immigrants learn about American traditions. Obviously, those traditions do not include smoking marijuana—despite one of the highest use rates in the world—while they do include Kafka-esque bureaucracy.

Don’t Assume That Gay Couples Face Mortgage Discrimination

A study by Iowa State researchers that has gotten some media attention at places like NBC News finds that mortgage lending to same-sex applicant pairs is associated with higher rates of loan rejection and slightly higher interest rates. The study is already being cited in support of the Equality Act, a bill that, among many other provisions expanding the scope of federal law, would extend the federal Fair Housing Act to cover sexual orientation. 
 
There are reasons, however, to approach the findings with caution. To begin with, lenders currently have an economic incentive to underwrite loans correctly and compete for all profitable business. Beyond that, studies that find positive (even if thin) evidence of discrimination tend to get reported and amplified heavily, while those with null results get ignored.
 
The first point to get on the table here is that same-sex couples are decidedly *not* distributed randomly across all sorts of neighborhoods. In particular, in common observation, male couples have long tended to be overrepresented in neighborhoods that are undergoing various stages of renovation, often associated with upward movement of real estate values. Some of these neighborhoods are run-down or even crime-ridden when the same-sex couples start moving in. Some have finished the process of “arriving” and have become pricey and desirable (although the gay couples might choose to move on at or before that point). 
 
There are at least two possible mechanisms by which these neighborhoods could have higher mortgage denial rates for reasons unrelated to any animus on the part of lenders: they might include more marginal/troubled neighborhoods in the early stages of comeback (which will have higher default rates for multiple reasons). Separately, renovators have different needs in the mortgage market than those who buy new (or buy fully renovated).  Loans in comeback neighborhoods might be exposed to the complications of renovation by being, for example, hybrid construction loans, multi-family, residential-plus-commercial, or lacking in conventional amenities such as off-street parking. 
 
One transaction I know about from firsthand experience, for example, was nonconforming in several of these ways: it was a construction loan premised on the idea that a large chunk of cash was going to fix up the old house, it was a two-unit, and one of the units was commercial. Such a loan is often hard to place in the conventional mortgage market, which is geared toward standard servicing and packaging for resale into predictable secondary markets, as favored by mass lenders and mortgage servicers. The alternative, as in the case I know about firsthand, can mean turning to an individualized deal on slightly less favorable (but still fair and competitive) terms.  
 
Sure enough, if you turn to the write-up at Iowa State, you find that it reaches quite a significant conclusion that goes unmentioned in the more popular NBC report:  
 
“What they found was somewhat surprising. In neighborhoods with more same-sex couples, both same-sex and different-sex borrowers seem to experience more unfavorable lending outcomes overall. The researchers say the findings should raise enough concern to warrant further investigation.”
 
In other words, the study itself leaves gay couples’ higher turn-down rate looking like something of an artifact: the observable result was linked instead to the neighborhoods where they take out mortgages. Incidentally, the researchers were able to control for some variables such as types of mortgage, which did allow them to take into account some of the differences that could be observed and quantified. But just as surely, especially working with data sets gathered for other purposes, they could not control for all the ways one neighborhood (or for that matter one individual loan) differs from another. 
 
These are not findings on which one would want to premise any new legislation restricting liberty of contract. 

Montana Can’t Use a 150-Year-Old Anti-Catholic Law to Discriminate Against Religious Schools

Blaine Amendments—adopted by many states starting in the late 1800s as an anti-Catholic measure—prevent states from using public funding for religious education. Thirty-seven states currently have the amendments, and some courts have interpreted them excluding religious options from state school-choice programs—that is, preventing access to otherwise publicly available benefits purely on the basis of religion. In other words, Blaine Amendments let some states practice religious discrimination.

Montana created a program where people who donated to private-school funding organizations received tax credits. The program both encouraged school choice and allowed people to spend their own money how they saw fit. However, the Montana Department of Revenue used the state’s Blaine Amendment to exclude those donors whose money found its way to religious private schools, and, at the same time, it allowed non-religious private-school donors to benefit. During the ensuing legal challenge, the Montana Supreme Court not only ruled against the religious families that challenged the discrimination, it struck down the entire program, meaning both religious and non-religious donors wouldn’t receive tax credits.

Our friends at the Institute for Justice have petitioned the United States Supreme Court to hear the case, and Cato has filed a brief in support. Both Cato’s Center for Educational Freedom and the Robert A. Levy Center for Constitutional Studies have an interest in this case, so we teamed up to cover both the constitutional and policy angles of the issue. We argue that the Court should correct the Montana Supreme Court’s flawed reading of the First Amendment’s religion clauses and reaffirm that states cannot erode the Free Exercise Clause in the guise of strengthening the Establishment Clause. The Religion Clauses work together to help protect the freedom of conscience, not to prohibit school-choice programs that help both religious and non-religious schools.

The First Amendment’s Establishment and Free Exercise Clauses prohibit laws “respecting an establishment of religion, or prohibiting the free exercise thereof.” As Cato explained in a recent brief, the two clauses work together to protect individual freedom of conscience. However, states like Montana often use the Establishment Clause to justify the existence of Blaine Amendments. They argue that Blaine Amendments are necessary to prevent “an establishment of religion” by strengthening the wall of separation between church and state. But in the modern world, where government is so involved in giving public benefits like tax credits, it is impossible to maintain a complete wall of separation without discriminating against religion (as Blaine Amendments do), which is not what the Framers intended. Instead, the government must remain neutral toward religion and not disfavor religious people or organizations. In this sense, the Establishment Clause is a shield protecting the people from state religion, not a sword enabling government to discriminate against religious faith.

At the same time, school-choice programs help prevent the forced ideological conformity that is inevitable in public schools. Tax-credit programs like Montana’s allow parents to select schools that share their values, reducing the need to impose those values on others. In so doing, they improve our nation’s social and political cohesion and reduce conflict. Cato’s Public Schooling Battle Map tracks how public schools create conflict by forcing uniformity onto ideological diversity. Blaine Amendments merely fan the flames of the ideological conflicts that currently engulf public education.

Despite all these considerations, the Montana Supreme Court declined to properly consider the First Amendment implications of the state’s Blaine Amendment. Instead, it gave the Montana Department of Revenue a slap on the wrist for exceeding its procedural authority and destroyed the entire tax credit program rather than contend with the unconstitutional discrimination inherent in Montana’s Blaine Amendment. As school choice becomes more popular around the country, the question of religious discrimination and Blaine Amendments will become more salient. The Montana decision was just the latest in a series of federal and state courts decisions that are divided on the issue. That divide will continue without guidance from the Supreme Court. The Court should take this case to clarify that the Constitution requires religious neutrality, not discrimination.

Supreme Court Argument in the “Scandalous Trademarks” Case Wasn’t So Funny

FUCT may be f … Well, you get the idea. Two years ago in the Tam case, the Supreme Court struck down the Lanham Act’s “disparaging trademarks” provision, but the justices seem less likely to erase the “scandalous trademarks” prohibition now – at least as far as one can tell from this morning’s argument in Iancu v. Brunetti.

That’s because racial slurs and other offensive phrases necessarily have a viewpoint – on the basis of which the First Amendment doesn’t allow the government to discriminate – but swear words can be just a “mode of expression.” At the same time, the “scandalous” mark restriction is so broad that the government is asking the Court to either accept its benevolent assurances or narrow the statute. There were echoes of the government’s assurances not to prosecute certain kinds of speech in Citizens United there, and indeed the same deputy solicitor general, Malcolm Stewart, initially argued that case – leading to the Court’s setting it for re-argument and blowing up the relevant statute.

The most telling series of questions involved the regulation of bus advertising, and that example should indeed decide the case: you should be able to register trademarks that come short of obscenity (which is generally pictures or sentences, rather than single words), but both registered and unregistered trademarks are still properly subject to time, place, and manner restrictions. And that includes “limited public forums” like the sides of municipal buses, public park benches, and the like.

One other note: none of George Carlin’s seven dirty words were used during the argument (though the late comedian’s formulation was invoked several times). Stewart described FUCT’s “scandalous” homonym as the “past participle of paradigmatic profanity,” while Chief Justice John Roberts at one point asked (page 58): “I take it that the – a correct spelling of the vulgar word at the heart of the case, that can’t be trademarked, right?”

We’ll know by the end of June whether edgy marks are up Schitt’s Creek.

I previously wrote about the background of Brunetti – in which Cato filed its latest “funny” (more “vulgar”) brief.


Editor’s note: This post originally misstated the chief justice’s question.

Cato Files Brief Challenging Qualified Immunity for Warrantless Strip Search of 4-Year-Old

For over a year, Cato has been leading the charge to challenge the doctrine of qualified immunity: an atextual, ahistorical doctrine invented by the Supreme Court in the 1960s, which shields government agents from liability for misconduct – even when they break the law. Today marks a huge milestone in that ongoing campaign, as Cato has just filed an amicus brief in support of a new cert petition calling on the Court to reconsider this doctrine. So has a diverse, cross-ideological alliance of over a dozen prominent public interest groups, as well a group of leading qualified immunity scholars. In the words of Wyatt Earp: “You called down the thunder. Well, now you’ve got it!

The case at issue is I.B. and Doe v. Woodard. When I.B. was a four-year-old girl, she was strip searched and photographed at her preschool by April Woodard, a state caseworker. Woodard had neither a warrant, nor the consent of the girl or her mother, nor were there any exigent circumstances requiring such an invasive search. All she had were unfounded abuse allegations (specifically, of a few marks and bruises on I.B.) which easily could have been checked and disproven through a non-invasive search. After I.B. complained to her mother about what happened, Woodard denied having performed a search at all, and continued to lie about that fact for several weeks, until finally admitting what she had done. I.B. suffered severe and ongoing emotional trauma as a result of being strip-searched and photographed against her will.

I.B. and her mother filed a Section 1983 against Woodard (and others), alleging violations of I.B.’s Fourth Amendment rights. But a divided panel of the Tenth Circuit held that the defendants were entitled to qualified immunity, because Woodard’s strip search did not violate “clearly established law.” The court failed to even address the Fourth Amendment claims on the merits, noting only that (1) there was a circuit split on whether a warrant was necessary under these circumstances, and (2) assuming a warrant wasn’t necessary, it was still not “clearly established” whether this sort of strip search was permissible. This latter holding is particular shocking, because the Supreme Court itself recently addressed this exact subject matter (warrantless strip searches of children in schools) in Safford Unified School District No. 1 v. Redding. In Safford, the Court even said it was seeking “to make it clear” that an intrusive strip search of a child was justifiable only with “specific suspicions” that evidence of danger or wrongdoing will be found in the area searched. For this reason, Judge Briscoe dissented in part from the Tenth Circuit’s decision, and would have held that I.B.’s strip search violated “clearly established law,” as stated in Safford. 

The Tenth Circuit’s decision exemplifies everything that is perverse and unjust about qualified immunity. I.B. had her constitutional rights violated in an egregious manner, yet she was left without a remedy because of a fictitious doctrine, with no grounding in the text or history of Section 1983. The Tenth Circuit refused to even decide whether her constitutional rights were violated in the first place, and it applied the “clearly established law” test so strictly that a seemingly on-point Supreme Court case concerning nearly identical circumstances was still insufficient to overcome qualified immunity. 

I.B. and her mother are now represented by Scott Keller, chair of Supreme Court practice at Baker Botts, and they’ve filed a powerful cert petition, asking the Supreme Court both to resolve the Fourth Amendment questions at issue here, but also to reconsider the doctrine of qualified immunity itself. Today, Cato filed an amicus brief in support of that petition, arguing that qualified immunity lacks any proper legal or historical basis, and that it is not entitled to respect under the doctrine of stare decisis. Specifically, we explain how (1) the “clearly established law” standard is so malleable and indefinite that it has failed to create the kind of stability and predictability that justify respect for precedent in the first place; (2) that the Supreme Court itself has already made major modifications to qualified immunity over the years, and therefore should have no qualms about reconsidering the doctrine now (but this time to bring it line with the statute Congress actually passed); and (3) that allowing the status quo to continue severely undermines public accountability and effectively subjects citizens to ongoing constitutional violations.

Ours is far from the only brief being filed today, however – we’ve also helped coordinate the drafting and filing of two additional amicus briefs. The first is on behalf of a group of leading qualified immunity scholars, who discuss the academic consensus that the Court’s qualified immunity doctrine is in serious need of correction. The second is on behalf of a diverse array of groups from across the ideological and professional spectrum, who nevertheless all share a common interest in ensuring that government officials are held accountable for their misconduct. This brief was joined by all of the following groups: the ACLU, Alliance Defending Freedom, American Association for Justice, Americans for Prosperity, Due Process Institute, Institute for Justice, Law Enforcement Action Partnership, MacArthur Justice Center, NAACP Legal Defense Fund, National Association of Criminal Defense Lawyers, Public Justice, R Street Institute, Reason, and the Second Amendment Foundation. Take a moment and consider just how egregiously misguided a Supreme Court doctrine has to be to unite all of these organizations in opposition, on a single brief. (Note also that several other groups have filed additional amicus briefs asking the Court to take the case, although we weren’t specifically involved with those.)

All in all, this case represents one of the most promising opportunities in the ongoing fight against qualified immunity. It highlights the sort of gross injustice that the doctrine regularly permits, demonstrates just how much cross-ideological consensus there is on this issue, and presents the Court with an ideal vehicle for restoring Section 1983 to its proper stature. We can only hope the Court answers the call. 

Sen. Warren Calls for Imprisoning Executives Over Negligent Harm

Presidential candidate and Sen. Elizabeth Warren (D-Massachusetts) wants to see more business people behind bars, and she’s not fussy about how to make that happen. In a Washington Post op-ed last week she unveiled a new Corporate Executive Accountability Act, which in her words would expand “criminal liability to any corporate executive who negligently oversees a giant company causing severe harm to U.S. families.” She says she wants top executives to know that they can be (again in her own words) “hauled out in handcuffs for failing to reasonably oversee the companies they run.”

Under longstanding legal protections in the Anglo-American legal system, before convicting you of most crimes prosecutors must ordinarily show that you had mens rea, a guilty state of mind. Occasionally one or another law relaxes the standard of guilt to “willful blindness” or gross negligence. More rarely, as under a controversial doctrine in FDA law, courts have permitted convictions on a theory of what amounts to vicarious criminal liability, as of a drug executive whose underlings commit certain offenses even absent proof that the higher-up knew of, encouraged, or was willfully blind toward the offenses. I criticized that “responsible corporate officer” doctrine in the FDA setting in this space two years ago, as well as in the chapter on white-collar prosecution in the Cato Handbook for Policymakers. Warren explicitly states that her proposal “builds on” it as the basis for her proposals for what should happen to executives generally.

Cato has been sounding the alarm about decay in mens rea standards for years, even as some civil libertarians have chosen to stay on the sidelines. But you don’t have to be libertarian to find what Warren is proposing a “very bad idea,” one based on “dangerous” arguments and propelled by “political rhetoric that is designed to inflame voters’ sense of injustice and righteous indignation.” Writing in Slate, law professors Carissa Byrne Hessick and Benjamin Levin observe:

Negligence is an incredibly low standard for criminal punishment. A person who is acting negligently does not know that what she is doing (or failing to do) is wrong or risky. Negligence means that a “reasonable person” in that position would have realized that there was a risk of harm. Prosecutors are likely to think that defendants should have known that there were risks simply because something bad occurred—not because they necessarily would have recognized the risks themselves if they’d been in that situation.

Warren backs her call for a simple negligence standard for criminality with what Hessick and Levin call a “highly misleading” example in which hypothetical executives are aware that their conduct might break the law but are willing to count on a low risk of being held personally to account. But that’s not a case of simple negligence, but of “recklessness or ‘willful blindness’ —mental states that are both more serious and more difficult to prove than the negligence standard she proposes.” In other words, Warren demands a broad dragnet while inveighing against conduct that could have been addressed with a much narrower prohibition. Is the senator’s slipshod manner of argument merely negligent? Or should we interpret it as reckless or perhaps even as deliberate misconduct?

One of Warren’s most dangerous arguments for relaxing the law’s standards for knowingness and requisite mental state is that prosecutors often find it difficult to prove higher and more exacting standards. The effect, note Hessick and Levin, is “to water down the law simply to make it easier to punish people.” Some may imagine that prosecutors will use the broader powers only against defendants who did something that is worse but harder to prove. Hessick and Levin call that argument “very dangerous”: 

We should not change the law to include conduct we don’t actually want to punish in order to make it easier for prosecutors to punish people we think do bad things that are hard to prove. Overly broad laws essentially delegate the content of the criminal law to prosecutors. And prosecutors will decide what is worthy of punishment using criteria that the public doesn’t know about and that can change from case to case and defendant to defendant. Prosecutors can even enforce the law as written—to cover truly accidental behavior—and there is nothing potential defendants can do about it. 

We should be clear about who will be at risk if Sen. Warren passes her law. The civil courts already hear many thousands of cases seeking damages over claims that serious harm arose from industry conduct that falls short of being reckless or deliberately wrongful. Not infrequently – as with claims over supposed “sudden acceleration” in cars, cancer from Roundup, and autoimmune disease from silicone breast implants – large sums get paid even when science finds no basis for concluding the products caused the harms alleged, such is our legal system’s tendency to tilt against business defendants as unsympathetic. Under the Warren standard, complaints that driverless cars have gotten into avoidable accidents or vaccines have caused side effects – maybe even that cheeseburgers, supersize sodas, and margaritas have worsened the harms of obesity – will put business people at risk for long prison terms. To her backers, will this count as a bug? Or a feature?

 

Pages