Topic: Constitution, the Law, and the Courts

Congress Can’t Create an Independent and Unaccountable New Branch of Government

The Founding Fathers crafted a system of government in which legislative, executive, and judicial authority were each entrusted to different entities. Their purpose in choosing this design was to prevent the consolidation of power in any one individual or group of individuals. The Framers anticipated—and attempted to guard against—a bureaucracy that could serve multiple governmental functions and remain unaccountable to the citizenry. In Federalist No. 47, James Madison recognized that when legislative, executive, and judicial power rest in one entity, individual liberty suffers. Likewise, Justice Anthony Kennedy declared in his concurrence in the 1998 case of Clinton v. New York, which struck down the presidential line-item veto, “Liberty is always at stake when one or more of the branches seek to transgress the separation of powers.” 

In passing the Dodd-Frank Wall Street Reform and Consumer Protection Act, however, Congress circumvented constitutional design and violated the separation of powers doctrine. Among its multifarious failings, Dodd-Frank created the Consumer Financial Protection Bureau (CFPB), controlled by a single director who has the unilateral power to enact, enforce, and adjudicate regulations. The director is not accountable to any internal structure, is exempt from congressional oversight, and cannot be removed by the president for policy reasons. Since its inception, the CFPB has issued 19 federal consumer protection rules, affecting everything from student loans to banking practices, all without checks, balances, or accountability to voters. Essentially, Congress assigned a vast amount of authority to a bureau that answers to no one.

When a challenge to Congress’s unconstitutional delegation went before the U.S. Court of Appeals for the D.C. Circuit, the court refused to consider the impact that the CFPB’s actions have on individual liberty. However, the Supreme Court, in Commodity Futures Trading Commission v. Schor (1986), reminded us that the separation of powers protects “primarily personal, rather than structural, interests.” In other words, substantive freedom, rather than simply procedural rights, is most at risk when checks and balances fail. And so the CFPB, going far beyond simply contravening checks and balances, regulates areas such as home finance and credit cards. These sectors are essential to individual economic activity, so the D.C. Circuit was wrong to hold that the CFPB’s infringements upon these liberties were irrelevant.

The State National Bank of Big Spring, based in west Texas, filed a petition asking the Supreme Court to review the D.C. Circuit’s erroneous decision. Cato has joined the Southeastern Legal Foundation and National Federation of Independent Business on a brief supporting this petition. We argue that the separation of powers, as our Founding Fathers correctly recognized, is a bulwark of our individual liberties. If we allow Congress to delegate authority in a blatantly unconstitutional fashion, our republican system of government will be eroded by powerful bureaucracies with unchecked authority.

The Supreme Court will decide whether to take up State National Bank of Big Spring v. Mnuchin later this fall.

Objecting to Compelled Speech Is More than Sour Grapes

Neither the government nor a private party may compel you to speak; nor may a private party masquerading as a government entity compel you to speak, even when it’s supposedly for your own good. In Delano Farms v. California Table Grape Commission, Cato, joined by the Reason Foundation, Institute for Justice, and DKT Liberty Project, is continuing to support a farm business’s challenge to a California state-established commission that compels grape growers to contribute money for government-endorsed advertisements. We had previously filed in the California Supreme Court, which was a losing battle, and are now asking the U.S. Supreme Court to take the case.

Now, governments are allowed to disseminate their own messages and can use tax revenue to do it under what’s called, simply enough, the “government-speech doctrine.” They can also tax industries specifically and earmark those funds to promote those particular industries; the Supreme Court has upheld several industry-advertising programs, including national campaigns for beef. In many of these targeted tax-and-advertise programs, the government requires taxes or “fees” from anyone doing business in the industry. One justification for these fees is that all producers benefit from such a “group advertisement.” If some were able to get the marketing benefit without paying, the system would suffer from “free riders.” For such a program to actually constitute government speech and thus avoid First Amendment problems, however, it is the government itself that must be speaking.

The California Table Grapes Commission has claimed that it is part of the government and that its speech is thus “government speech.” But the commission isn’t the government; it’s a commercial entity or trade group that uses compelled subsidies to fund speech. The commission’s generic advertisements for California grapes don’t really benefit the entire industry. Instead, they benefit some members of the industry by making it seem that all products are equally good. Furthermore the commission can’t be considered part of the government because it, unlike the actual government, can be disbanded based on a vote of the table grape producers.

Put another way, no person employed by the California government has ever written, produced, or even reviewed the speech the commission compels. In all other cases where the government programs were held constitutional, the government took direct control of the message and maintained oversight of a regulatory entity. None of that is true here. The commission here is a private entity, with the power to exact fees from members who have no choice but to pay for whatever message it ends up promoting.

In our brief, we argue that the Supreme Court should take this case and treat forced subsidies for generic advertising the same way it treats other such subsidies: as violations of the First Amendment freedoms of speech and association. The California courts relied on a decision recently overturned in the Supreme Court’s Janus holding this past June, in which compelled association and speech in union representation was deemed a violation of the First Amendment. The Court should continue with this line of reasoning here: no one should be compelled to support a non-government message. 

Judge Brett Kavanaugh Confirmed for the Supreme Court

Congratulations to Judge Brett Kavanaugh, whose nomination to the Supreme Court was confirmed by the Senate today by a vote of 50 to 48. This evening at the Supreme Court, Chief Justice John Roberts administered the constitutional oath and retired Justice Anthony Kennedy, for whom Judge Kavanaugh clerked, administered the judicial oath. Now-Justice Kavanaugh will take his seat when the Court sits again on Tuesday. 

Judge Kavanaugh survived one of the most acrimonious judicial confirmation processes in the Senate Judiciary Committee’s history. The reasons for that are many, as I wrote in an op-ed in TIME magazine last week. But in one way or another, the divisions that so divide us today all come down to fundamental misunderstandings of the Constitution and, accordingly, to an expectation among so many Americans that the Court will solve the many problems that today afflict the nation. The Court, now back to full strength, may make a dent in those problems, but their roots are much deeper. Still, the Senate’s vote today is a start.

Feds: We’re Not Going To Stand For Asbestos-Bankruptcy Fraud

For well over a decade it’s been apparent that the distinctive arrangements by which asbestos plaintiff’s lawyers acquire control of the bankrupt remains of defendant corporations they’ve sued, and then exercise control over those firms’ claims, disbursements, and general management, is fraught with self-dealing and sometimes fraud, ranging from the charging of unnaturally high fees to the concealment of double- and triple-dipping by claimants. Business interests have pursued a campaign in the states and Congress to require more transparency and better judicial oversight of asbestos bankruptcy trusts. Now they may have a powerful ally indeed in the federal government, which has weighed in with an early statement of interest in one such bankruptcy to insist on better controls against fraud and abuse. Its standing for such an intervention arises in part from its role as Medicare and Medicaid payor (entitled by law to recoup some health-related outlays) rather than merely from any interest it might have in heading off fraud generally. Daniel Fisher at Forbes:

In the Trump administration, at least, the government will no longer look the other way as asbestos lawyers negotiate lenient terms that make it easy for their current clients to get money at the expense of future claimants and federal entitlement programs….

The government’s unusually blunt statement of interest in the Kaiser Gypsum bankruptcy, long before any plan of reorganization has been approved, warns lawyers against including terms that make it hard to ferret out fraud and abuse, including confidentiality requirements that make it impossible to determine how much claimants have been paid and the basis for their claims….

The Justice Department also warned it will be looking for excessive fees and may not allow claimants to deduct those fees from reimbursement due the government for Medicare and Medicaid expenses.

[cross-posted, slightly adapted, from Overlawyered]

Build a Wall Between the Branches of Government

The essence of the separation of powers is that Congress may not give another branch the power to do what it alone may do. In Animal Legal Defense Fund v. Department of Homeland Security, several California-based environmental groups are challenging a law allowing the department secretary to waive any and all laws to speed building of the southern border-wall. Denied in the lower courts, the groups filed a petition with the Supreme Court. Cato has filed an amicus brief supporting that petition and arguing that such unlimited discretion violates the separation of powers.

The Constitution vests “all legislative power” in Congress, while the executive branch enforces those laws (rather than making or un-making them). Courts from the early days of the republic have maintained this division by preventing the delegation of the legislative power to the executive. To enforce this non-delegation doctrine the Court established the “intelligible principle” test. For a law to pass, Congress must (1) designate an agent or actor, (2) clearly direct the purpose or goal of the law, and (3) set boundaries to the agent’s powers. But the modern Court has stopped applying this doctrine; the last time it struck down a law on non-delegation grounds was in 1935. Since then it has deferred to larger and larger grants of legislative power to executive agencies.

The weakness of the intelligible-principle test lies in the third prong of imposing boundaries for the delegated powers. There is no definite line for how much discretion or power is “too much.” Even James Madison acknowledged the line between permitted and prohibited sharing of power can get blurry. The Court has long recognized that the branches can coordinate for efficiency, but has declined to find any practical limit to the powers Congress can delegate. The result is that executive agencies are making increasingly complex and restrictive laws, completely insulated from and un-accountable to the people.
In our brief, we argue that the Court must re-establish the non-delegation doctrine, either by refining or reforming the intelligible-principle test. It must make it more than an unenforceable truism. The ability to suspend laws at the secretary’s discretion is tantamount to the ability to enforce or repeal laws at will: an essentially legislative power. Unlimited discretion prevents the Court from having any standard by which it can measure abuses of power. The Court need not adopt a stringent test that would require abolishing years of precedent and many bureaucratic agencies, but if the non-delegation doctrine means anything at all, it must at least mean that unlimited discretion to suspend laws is too much.

“The Difference between Justice for the Masses and Justice for the Few”

In today’s New York Times, Brooklyn public defender Scott Hechinger makes a very strong case that criminal defendants in American courts face a two-tiered system of justice, and most defendants get the worse of it.

Mr. Trump assailed the practice of pretrial detention as “tough” when Paul Manafort had his bail revoked before his trial began. He then bemoaned the “very unfair” power that prosecutors wield to force people in the system “to break” in the wake of the Michael Cohen plea and the Manafort jury conviction and subsequent guilty plea. He lamented the devastating collateral consequences that arise from “a mere allegation” when Rob Porter was forced to resign after being accused of domestic violence; raged about the late-night, “no knock” raids of Mr. Cohen’s properties; and expressed outrage that the government, in its investigation of Carter Page, was able to overcome the protections of the Fourth Amendment to obtain a FISA warrant with “no hearings,” while also endorsing the idea, raised by the writer Andrew McCarthy, that they should be “looking at the judges who signed off on this stuff.”

[…]

I understand President Trump’s outrage. It is remarkable that people, presumed innocent, are locked up before being convicted of any crime. It is deeply unfair that mere accusations can lead to devastating, lifelong consequences. It is alarming that, in a system theoretically built around transparency and truth seeking, police and prosecutors have such outsize power to surveil, search, detain, bully, coerce and nearly destroy a person without producing evidence sufficient to secure a conviction. (emphasis in original.)

But it’s important to note how these defendants were actually treated as they work their way through the system, and how it differs from most everyone else.

Take Mr. Manafort’s experience with pretrial detention. Despite the seriousness of the allegations and his clear ability to flee, he was not in jail for a majority of his case pretrial. He and his attorneys were able to arrange an intricate bail package that was tailored to his financial circumstances, including $10 million bond and the surrender of his passport. This is how bail is supposed to work — not as punishment to lock someone up before a conviction, but as a way to guarantee that the accused will return to court while at liberty. Mr. Manafort was detained pretrial only after the presiding judge found evidence of witness tampering, following nearly two weeks of motion practice and then oral argument while Mr. Manafort continued to sleep in his own bed.

This kind of accommodation is unheard-of for the roughly quarter million people, my clients included, in jail for no reason other than their inability to pay bail. In the real world, despite the constitutional prohibition on excessive bail, decisions to detain people happen in a matter of seconds, with little to no consideration of an individual’s ability to pay. In just the past month alone, prosecutors requested and judges set bail totaling over $200,000 on clients of mine who, collectively, could not have afforded one one-thousandth of that.

Hechinger is also correct when he writes that the treatment of these high-profile defendants should not be resented: rather, it’s the double-standard for the privileged that should be eliminated. A meaningful presumption of innocence and the other rights afforded to Manafort et al. should be replicated and applied to the accused throughout the state and federal justice systems because they reflect constitutional protections intended to curb the coercive power of government.

The piece is worth reading in full here.

If Someone Disputes Racism in the Criminal Justice System, Show Them This

At his Washington Post blog, Cato alumnus Radley Balko has cultivated a running list of data-driven reports that show persistent, measurable, widespread, and common racial disparities in criminal justice enforcement. In police stops, sentencing, pretrial detention, the death penalty, and a host of other areas, enforcement disproportionately affects African Americans and Latinos. For those who study or work in criminal justice for a living, the racial disparities are glaring and the quantitative research supports our policy prescriptions. But most people aren’t criminal justice wonks, and what Radley has created is a great public education resource about what our system is doing all around the nation. 

The abundance of evidence Radley collected shows that our criminal justice system harasses and punishes racial minorities more harshly than whites. These findings are important because so many critics of justice reform and of activist groups like Black Lives Matter deny that many of these disparities exist. The denial of these problems—which have been well-known or, at least, strongly suspected in many American minority communities for all of living memory—precludes the identification of any potential remedies. This clearinghouse of peer-reviewed academic papers, government reports, and books that measure racial disparities marks a new starting point for individuals who want to understand our criminal justice system.

Read the whole thing here.

Thank you, Radley.