Topic: Constitution, the Law, and the Courts

Wisconsin’s Butter Grading Law Is Udderly Ridiculous

Minerva Dairy, based in Ohio, is America’s oldest family-owned cheese and butter dairy. It has been producing artisanal, slow-churned butter in small batches since 1935. It has sustained its business through their website and by selling to regional distributers in several states. This model has worked well everywhere except Wisconsin, which requires butter manufacturers to jump through a series of cumbersome and expensive hoops to sell their product.

Of course, Wisconsin is America’s Dairyland, with many large producers who (big surprise) have an interest in limiting competition. At the behest of these companies, the state requires every batch of butter to be “graded” by a specifically state-licensed grader—all of whom live in Wisconsin, except for a half-dozen in neighboring Illinois and a handful around the country that have been licensed only in the last year—who must taste-test every single batch. Because Minerva’s butter is produced in multiple small batches over the course of each day, the law would effectively require the dairy to keep a licensed tester on-site at all times, which is cost-prohibitive. The state admits that the grading scheme has nothing to do with public health or nutrition, but claims that its grades, based largely on taste, inform consumers.

The fact that Wisconsin is trying to shape the taste of butter isn’t even the most absurd part of this story. The criteria used to grade the butter are a ludicrous mad-lib of meaningless jargon not even the state’s experts understand. The law purports to identify such flavor characteristics as “flat,” “ragged-boring,” and “utensil.” (All commonplace terms spoken by consumers in dairy aisles across the nation, no doubt.) The terminology hearkens to a freshmanic—not even sophomoric—term paper on the semiotics of postmodern agrarian literature. To claim that a grade calculated with reference to udder nonsense serves the purpose of informing anyone illustrates the danger inherent in judges’ deferring to government rationales for silly laws that burden people who are just trying to make an honest living.

Our friends at the Pacific Legal Foundation represent Minerva in a lawsuit that challenges the butter-grading law on the grounds that it burdens interstate commerce in violation of the Commerce Clause, and also hurts small dairies’ Fourteenth Amendment rights to due process and equal protection of law. Minerva lost at the district court when the judge applied a toothless, cheesy “rational basis” test to the law in question, giving little weight to the serious concerns described above, then again in the Seventh Circuit (where Cato filed an amicus brief).

Tireless in its pursuit of reasonable review of this silly law, Minerva has asked the Supreme Court to take its case. Because laws that abrogate constitutional rights warrant meaningful judicial oversight, Cato has again filed an amicus brief supporting Minerva’s petition.

Wisconsin’s law directly burdens the right to participate in the state’s butter market, and thus their economic liberty, for no sane or “rational” reason. There are simply no benefits to consumers that come from forcing producers to pay considerable sums to have an arbitrary process deposit a random letter on product packaging. It curdles the mind to argue otherwise.

The Supreme Court will decide before it breaks for the summer whether to take up Minerva Dairy v. Pfaff.

Cato’s Latest “Funny” Brief

“Fuct” is a clothing brand with, shall we say, a colorful name. It doesn’t take much imagination to figure out what they’re going for, and of course those who brazenly wear the clothing are fully aware of the signal it sends. Nevertheless, the U.S. Patent and Trademark Office (PTO) decided that the American public’s fragile sensibilities should be protected from this brand, at least in some way, by denying federal trademark registration on the grounds that the brand name is “scandalous.” The PTO also has fainting couches on hand for those who need further assistance.

Here we go again. Remember “The Slants,” the Asian-American rock band who were denied a trademark based on their band name being “disparaging”? Simon Tam, the group’s lead singer, brought his case to the Supreme Court in 2017 and had the anti-disparaging law struck down unanimously. (That also resolved the PTO’s fight with the Washington Redskins.)

In Matal v. Tam, Cato and a basket of deplorable people and organizations, including political satirist P.J. O’Rourke and former ACLU president Nadine Strossen, filed a brief supporting the Slants and arguing that disparaging speech serves a valuable purpose, especially in rock music. Where would the world be without disparagingly named bands like N.W.A. or the Queers? Most importantly, the government can’t be trusted to decide what’s a slur.

Well, we’ve gotten the band back together for this case, so to speak—including especially former Cato legal associate Tommy Berry, who will soon be taking his legal-satire skills to clerk on the Fifth Circuit for the same judge Ilya clerked for 15 years ago, the incomparable E. Grady Jolly.  We’re once again telling the Court, that scandalous speech is valuable to society and that there’s no way, consistent with the First Amendment, for a government office (the Ministry of Nice Talk?) to be trusted to decide what’s “scandalous.”

And we wouldn’t want them to. Vulgar and scandalous language helps us express ourselves better. The PTO goes overboard in communing with the spirit of William Bowdler, eponymous Bowdlerizer of Shakespeare, who sought to cleanse the Bard of all vulgarities. The trademark examiners err in thinking that ol’ Bill wouldn’t object to “Out, damned spot!” being transmogrified into “Out, crimson spot!”? It says basically the same thing, after all.

Ah, but even if a rose by another name smells as sweet, it doesn’t have the same visceral effect. And those of us who are new parents know that the bedtime bestseller “Go the Fuck to Sleep” wouldn’t be quite as memorable if you replaced the key word with “frig.”

Thankfully, the U.S. Court of Appeals for the Federal Circuit, as it did in the Tam case, struck down the Scandalous Marks Clause, but now the PTO has appealed to the Supreme Court.

Although the government isn’t stopping Fuct from using its name—it’s only declining to register the trademark, which brings real benefits—there’s something extremely distasteful and, well, scandalous about allowing federal officials to make such arbitrary classifications. So yet again a bunch of offensive people have banded together to tell the court, in an amicus brief, that the PTO’s mission of preventing “scandalous” trademarks is all fuct up.

The Supreme Court hears oral argument in Iancu v. Brunetti on April 15.

Preview of Oral Arguments in Kisor v. Wilkie

On Wednesday morning, the Supreme Court will hear oral arguments in Kisor v. Wilkie, an important administrative law case in which the Court is reconsidering the Auer doctrine, or controlling deference to an agency’s regulatory interpretations.

The immediate controversy pertains to James Kisor, a Vietnam veteran whose claim for disability benefits hinged on the interpretation of the term “relevant” in the Board of Veterans Appeals rules of procedure. Only when the board denied Mr. Kisor’s claim did the agency announce its interpretation unprompted and without having been briefed on the matter. Obviously, Mr. Kisor was given no advance notice of the new “rule” — which was really just a new interpretation of the word. Mr. Kisor appealed the denial of his claim to the Veterans Court, which sided with the government. He then sought review of the Veterans Court’s decision before the U.S. Court of Appeals for the Federal Circuit, which, again, sided with the government. The three-judge panel determined that the term “relevant” was ambiguous, and that both parties had advanced reasonable interpretations. Nevertheless, the appellate court sided with the agency, based on the aforementioned Auer doctrine.

In December 2018, the Supreme Court granted Mr. Kisor’s petition for certiorari, but instead of limiting the case to the meaning of the agency’s rules, the Court chose to reconsider wholesale the Auer principle.

The problems with Auer deference are set forth in a brief supporting Mr. Kisor filed by Cato, joined by Professors Jonathan H. Adler, Richard A. Epstein, and Michael W. McConnell, as well as the Cause of Action Institute. We argue that Auer, by concentrating lawmaking and law-interpretation in regulatory agencies, both offends separation of powers principles and facilitates procedural shortcuts. Auer deprives regulated entities of fair notice, which is fundamental to the integrity of the law, and also robs administrative policymaking of legitimacy by allowing agencies to avoid public participation in the formulation of their rules. Finally, despite some predictions that overturning Auer will wreak havoc in administrative agencies, we point out that independent judicial assessment will change the outcome in only a small minority of cases. In sum, overturning Auer is an important step towards reining in the administrative state.

A Win on Student Speech in Rhode Island

The government can’t force people to promote messages they disagree with, even when – particularly when – the government actors are public university professors and the speaker is a student who needs to pass certain classes to get a degree.

William Felkner, a self-identified “conservative libertarian,” studied social work at Rhode Island College, a state school. His views unsurprisingly clashed with those of his professors, who consider the social work course – and the profession itself – to be “devoted to the value of social and economic justice.” In keeping with this philosophy, one of his professors assigned him to lobby the state legislature for a progressive bill.

Felkner refused to speak against his beliefs by lobbying in favor of progressive legislation. His term paper instead reflected his honest opinion of the bill. As a result, his professor gave him a failing grade and Felkner ultimately never completed the program.

That incident, in addition to a long string of events in which professors disparaged Felkner’s politics and tried to stifle his opinions, led him to sue the college. He argued, among several claims, that the school infringed on his right to free speech, compelled him to speak against his conscience, and placed unconstitutional conditions on his earning his degree.

Conservatives and libertarians are often pushed out of progressive academic circles by faculty or administrators. For private universities, such behavior is alarming and worth counteracting, but mostly comes down to academic freedom. Public institutions like Rhode Island College are government actors, however, and must afford students the rights guaranteed to them by the Constitution, especially the freedom of speech. The U.S. Supreme Court has long understood that the First Amendment prohibits the government from compelling an individual to express an opinion that violates his or her conscience.

Nevertheless, the lower state court was not convinced that the school compelled Felkner to speak and found that the school’s actions did not violate his constitutional rights. On appeal to the Rhode Island Supreme Court, Cato filed an amicus brief, arguing that students don’t shed their free speech rights at the schoolhouse door.

In a decision released on Monday, the state supreme court agreed, reversing the lower court’s grant of summary judgment for the school on several claims and allowing the case to go to trial. Citing the U.S. Supreme Court’s decision in Hazelwood School District v. Kuhlmeier (1988), the Rhode Island Supreme Court explained that schools and teachers have broad authority to exercise “editorial control” over student speech “so long as their actions are reasonably related to legitimate pedagogical concerns.” However, a teacher can’t limit student speech as a punishment for a student’s political views. The court held that Felkner raised legitimate issues of material fact – meaning that a jury will get to decide whether in fact the professors’ and administrators’ actions were appropriate (unless the college now decides to settle with Mr. Felkner, which is what I would advise if I were its lawyer).

Proponents of free speech should regard this as a win for students’ First Amendment rights on college campuses. The court’s decision here comes not a moment too soon, as schools increasingly attempt to silence students and regulate their speech. As a procedural matter, it also bodes well that state supreme courts still adhere to the “material facts in dispute” standard for summary judgment.

In sum, no person in a public university, whether a student or a teacher, should be forced to say something that they find objectionable, and the case of Felkner v. Rhode Island College stands in recognition of that important principle. 

On Asbestos Blame, Supreme Court is Still At Sea

With Justices Kavanaugh and Roberts crossing over to join the liberals, the Supreme Court ruled 6-3 today in Air & Liquid Systems v. DeVries that federal maritime law permits seafarers claiming asbestos-related ailments to sue manufacturers of ship components such as boilers and turbines that contained no asbestos, on the grounds that they knew that the mineral would be used in conjunction with their product later in such forms as insulation or connective gaskets. Justice Neil Gorsuch, dissenting on behalf of himself and Justices Thomas and Alito, had the better argument: doing so requires stretching traditional bounds of tort liability in a way that imposes unreasonable duties to warn. By requiring makers of components to pay for damages they did not cause in the name of warnings that the U.S. Navy almost certainly would not have heeded, the Court yields to an impulse to round up deep pockets lest a sympathetic set of litigants otherwise go uncompensated.

I wrote about the case in December and quoted libertarian law professor Richard Epstein, who criticized the use of legal doctrine here “to serve as surrogate (and extremely costly) social insurance: ‘the bankruptcy of parties that should be liable [i.e., primary asbestos manufacturers] is no reason to impose onerous liability on parties that should not be liable.’” At the same time I noted the argument, which plaintiffs relied on heavily and seems to have influenced today’s outcome, “that [federal] maritime law takes a particular interest in the welfare of seafarers, and a rule that permits them to win more lawsuits advances their welfare.”

In today’s majority opinion, Justice Kavanaugh purports to steer a middle path between the liberal “foreseeability” rule announced by the Third Circuit below (if the maker of the “bare-metal” component could have foreseen the asbestos use, it had an obligation to warn) and the traditional tort rule (you don’t have to warn of the dangers of other people’s products) by attaching an additional restriction: the integration of the other, dangerous product must be “required” if the overall assembly is to function as intended. In his dissent, Gorsuch points out that this new complication not only has no evident grounding in existing tort doctrine but is not in fact easy to apply or predict. Can we know that asbestos was required when, especially in recent years, other insulation materials were available but were spurned by the Navy as too expensive or inconvenient? Many parts of ships, or other complex systems, can be deemed “required” for the whole. If a type of vehicle is known to flip over too easily, are we sure the victims could not sue the makers of the windshield wipers for not warning of that, even though the wipers did not in any way cause the rollovers?

But it seems almost quaint to ask whether a newly announced legal standard can readily be applied and predicted in the context of asbestos law, a sui generis creation in which the courts regularly extract vast sums from defendants on the basis of legal standards assuredly not recognized in law at the time those defendants acted in the 1950s, 1960s, and 1970s. The implications of assigning retrospective liability to actions lawful at the time loom large and disturbing over continuing expansions of liability like the one announced in today’s case. 

Government Can’t Team Up with Your Competitors to Deny You Just Compensation

In the late 1970s, Congress passed the Wright Amendment to encourage the development of Dallas/Fort Worth Airport by restricting a nearby airport, Love Field, to servicing final destinations only in Texas and four contiguous states. Over time, pressure began mounting to “Free Love Field” and allow more interstate air travel. Love Terminal Partners (“LTP”) owned a lease of 26.8 acres of Love Field that gave it access to the runways and the ability to offer air passenger service. In 2000, LTP built a six-gate terminal on its acreage near Lemmon Avenue. Although it could not operate profitably due to the Wright Amendment, LTP invested tens of millions of dollars in this terminal on the reasonable view that that the restrictions would eventually be lifted and cause the terminal’s value to increase significantly.

But in 2006, five interested parties—Dallas (which owned Love Field), Fort Worth, Southwest Airlines, American Airlines, and the Dallas-Fort Worth Airport Authority—joined with the federal government to rewrite the Wright Amendment and wipe out LTP as a viable competitor. Under their “Five Party Agreement,” the parties sought to reduce the total number of gates at Love Field, six of which would be removed from the Lemmon Avenue terminal. Dallas also agreed to acquire and demolish LTP’s terminal. This arrangement was codified in federal law through the Wright Amendment Reform Act (“WARA”), after which LTP stopped paying rent and the City of Dallas evicted the company and demolished its terminal.

LTP brought a takings claim against the United States in the Court of Federal Claims, alleging that WARA resulted in a regulatory taking of its valuable property rights and a physical taking of the Lemmon Avenue terminal. The court found that Dallas’s acquisition and demolition of the Lemmon Avenue terminal constituted a physical taking under the Fifth Amendment. Moreover, it found a regulatory taking under both the Lucas and Penn Central tests—derived from cases in 1991 and 1978, respectively—because WARA limited LTP’s use of its lease such that it rendered it without economic value. The court awarded LTP $133.5 million in just compensation for these takings. The U.S. Court of Appeals for the Federal Circuit reversed that decision, finding that the gates had no economic value before the passage of WARA and thus had lost no value after they were shut down. The court insisted that no compensation was required because LTP could not prove that the gates had any market value before their destruction, even though the lower court found that LTP’s long-term lease was valuable given that the Wright Amendment restrictions on Love Field were unsustainable.

LTP is now petitioning the Supreme Court to review the Federal Circuit’s misguided decision. Cato has joined the National Federation of Independent Business and four other organizations on an amicus brief in support of LTP. We argue that the Court should clarify that courts should consider a property’s prospective economic value when evaluating the just compensation due from regulatory takings.

House Passes Political-Omnibus Bill H.R. 1

H.R. 1, the political regulation omnibus bill, contains “provisions that unconstitutionally infringe the freedoms of speech and association,” and which “will have the effect of harming our public discourse by silencing necessary voices that would otherwise speak out about the public issues of the day.” Don’t just take my word for it; that’s the view of the American Civil Liberties Union, expressed in this March 1 letter (more). For example, the bill would apply speech-chilling new restrictions to issue ads by cause organizations, should they happen to mention individual lawmakers.

The House of Representatives nonetheless voted Friday along party lines to pass the bill, which was sponsored by Rep. John Sarbanes (D-MD). For now, it has no prospect of passage in the Senate.

The issues raised in the ACLU letter aside, H.R. 1 contains many other provisions that likely are unconstitutional, unwise, or both.  Colleagues Ilya Shapiro and Nathan Harvey enumerate some of them (“If ever adopted, [HR1] would give power to one slice of Washington’s elite at the expense of American democracy’s carefully crafted checks and balances”). More criticism: Brad Smith on the bill’s restrictions on discussion and coordination of expenditures on speech; David A. French (“At its essence, the bill federalizes control over elections to an unprecedented scale, expands government power over political speech, mandates increased disclosures of private citizens’ personal information (down to name and address), places conditions on citizen contact with legislators that inhibits citizens’ freedom of expression, and then places enforcement of most of these measures in the hands of a revamped Federal Election Commission that is far more responsive to presidential influence.”) 

On gerrymandering, an issue on which the Constitution does grant Congress a power to prescribe standards which I’ve argued it should consider using more vigorously, the bill takes the heavy-handed approach of requiring all states to create a commission of a certain format. Whatever the comparative virtues of one format or another, that would likely run into the Supreme Court’s doctrine against federal “commandeering” of state government resources. Electoral-process reform is an issue deserving of attention, but given its numerous infringements of individual rights and poorly thought out elements, this package doesn’t work even as a first negotiating position. [adapted from Overlawyered]