Topic: Constitution, the Law, and the Courts

Supreme Court Toasts Economic Liberty in Tennessee Wine Case - Cheers!

This morning, in a win for wine-drinkers and freedom-lovers alike (but I repeat myself), the Supreme Court struck down a heavily restrictive Tennessee law that prevented anyone but longtime state residents from getting liquor licenses. The provisions required applicants for an initial license to have lived in the state for two years and for a renewal of that to reside for 10 years, and prevented corporations from getting licenses unless all stockholders were residents. This hurt both would-be small business owners and large distributors like Total Wine & More (one of the parties; full disclosure: I have reserve status in its loyalty program).

It’s terrific that a lopsided majority of justices (7-2) thus preserved economic liberty and interstate commerce, as against a flawed claim that the 21st Amendment (which repealed prohibition and gave states the power to regulate the importation of alcohol) somehow gives states the power to impose otherwise unconstitutional business regulations. As Justice Samuel Alito put it in his majority opinion, Section 2 of the 21st Amendment “is not a license to impose all manner of protectionist restrictions on commerce in alcoholic beverages.”

To put a finer point on it, states’ power to regulate alcohol doesn’t include the power to protect established businesses against newcomers that want to serve Volunteer State consumers. When a state law discriminates against interstate commerce or favors in-state economic interests over out-of-state interests, the Supreme Court has generally struck down the statute without further inquiry. This fundamental rule stems from the Framers’ concern that, left unchecked, states would enact commercial regulations favoring their own residents at the expense of non-residents. To prevent that type of differential treatment between state residents and non-residents, the Framers adopted both the Commerce Clause and the Privileges and Immunities Clause. As the Court has recognized, the clauses have a “mutually reinforcing relationship” that ensure citizens of their right to access the markets of other states on equal terms.

In legal terms, the negative or “dormant” Commerce Clause means that, just as Congress has the power to regulate (“make regular”) interstate commerce, states can’t interfere with that commerce. Now, Justice Neil Gorsuch (here joined by Justice Clarence Thomas) has other views, being skeptical of this unwritten or implied constitutional doctrine – and actually that’s the only constitutional jurisprudence on which I’ve ever found myself in disagreement with him. (Here Gorsuch adds a special solicitude for alcohol, given state practice after ratification of the 21st Amendment.)

In any case, the justices can now have a gulp of wine ahead of tomorrow’s climactic end to an otherwise low-key term. I, meanwhile, am off to Total Wine, which coincidentally just sent me a marketing email.

The case is Tennessee Wine & Spirit Retailers v. Thomas. See here for more background and to read Cato’s brief.

As American Lawyers Battle Over Speech Codes, Ontario Lawyers May Lead the Way

As I noted last year, the American Bar Association in 2016 adopted as a recommendation its Model Rule 8.4 (g),

which makes it “professional misconduct” for an attorney to engage in “conduct,” including verbal “conduct,” that “the lawyer knows or reasonably should know is harassment or discrimination on the basis of race, sex, religion, national origin, ethnicity, disability, age, sexual orientation, gender identity, marital status or socioeconomic status in conduct related to the practice of law.” …

UCLA law professor Eugene Volokh has argued that the ABA rule’s scope “is broad and vague enough to potentially apply to a wide range of political speech, and thus violate the First Amendment.”

The rule would invite charges of professional misconduct against lawyers who express or circulate opinions, jokes, or graphics that they should have known would make a listener uncomfortable based on one or another protected class membership. It would apply in an extremely wide range of contexts “related to the practice of law”, as listed in these April comments:

Activities that seem to fall within the extremely broad scope of proposed Rule of Professional Conduct 8.4(g) include:

* presenting CLE courses;
* participating in panel discussions that touch on controversial political, religious, and social viewpoints;
* teaching law school classes as faculty, adjunct faculty, or guest lecturers;
* writing law review articles, op-eds, blogposts, or tweets;
* giving media interviews;
* serving on the board of one’s religious congregation, K-12 school, or college;
* providing pro bono legal advice to nonprofits;
* serving at legal aid clinics;
* lobbying on various legal issues;
* testifying before a legislative body;
* writing comment letters to government agencies;
* sitting on the board of a fraternity or sorority;
* volunteering for political parties; and
* advocating through social justice organizations.

While some state codes of lawyer conduct already ban bias and harassment, these have generally been drafted much more narrowly. In Maine, for example, up to now the missteps have to have been committed “knowingly,” in the course of representing a client, and in a manner “prejudicial to the administration of justice” — all three important safeguards against overbreadth.

Model Rule 8.4 (g) has faced rough sledding around the states since it was proposed. According to these comments in October, “seven states have rejected the rule: Arizona, Illinois, Minnesota, Montana, Nevada, South Carolina, and Tennessee have rejected the proposal. The Attorneys General of four states have concluded that adopting the rule would violate the First Amendment: Louisiana, South Carolina, Tennessee, and Texas. Only Vermont has adopted the model rule in its entirety.”

As Vermont goes, so goes Maine: the Pine Tree State’s highest court has now adopted a version of the rule, although narrowed in several respects. In particular, the Maine version defines “the practice of law” in a less broad (though still quite broad) way that covers fewer purely social activities; it removes socioeconomic status and marital status from the list of protected classes; and it tries at least to define what sorts of speech it will deem to be bias or harassment. Its definition is still quite unclear in its contours, however, and far broader than the standard approved by the U.S. Supreme Court as to harassment law and speech liability in workplace and university settings.

Let’s hope other states don’t follow Maine’s example: even as narrowed, the rules curtail important rights.

In the mean time, however, there is heartening news from Ontario, Canada, where (as I reported last year) the Law Society had gone all in on rules that go much further than the ABA’s, requiring all lawyers on eventual pain of discipline to draft and submit sign a personal Statement of Principles (SOP) avowing a dedication to principles of diversity, equality, and inclusion. The Society rejected a proposal “to create an exemption to the new mandatory Statement of Principles for persons who believe the requirement violates their freedom of conscience.”

But its membership revolted. Attorney Lisa Bildy and other SOP objectors led a campaign that, in a seeming miracle, elected 22 of its supporters to the 40 lawyer seats among the benchers (governors) at the Law Society. While the newly elected are not a majority because of the other seats on the body reserved for lay benchers and paralegals, the message was unmistakable (more on the campaign from Bruce PardyMurray KlippensteinTeng Rong, and Dylan McGuinty). Now, in the face of a determined campaign of abuse directed at the incoming benchers (sidelight), the Law Society of Ontario’s governing Convocation will meet June 27 to begin considering whether to repeal, render optional, otherwise change, or retain the Statement of Principles requirements.

The June 27 Law Society meeting, and what follows, deserve a close watch by all of us concerned about the rise of speech codes and forced expression in the professions.

Supreme Court Does Well to Strike Down Trademark-Office Censorship

In a replay of the Slants case Matal v. Tam from two years ago, the Supreme Court was right to strike down the ban on “scandalous” or “immoral” trademarks because government officials shouldn’t be making those kinds of values judgments. While the outcome was only ever in doubt becuase of an an unusually contentious oral argument, the majority, in a typically evocative opinion by Justice Elena Kagan, did well to show how similar the cases were.

This case illustrates a bedrock principle of First Amendment law. As Kagan puts it, “The government may not discriminate against speech based on the ideas or opinions it conveys.” The problem here is that “the Lanham Act [the federal trademark statute] allows registration of marks when their messages accord with, but not when their messages defy, society’s sense of decency or propriety.” You could register anti-drug marks (“Say No to Drugs”) but not pro-drug ones “Marijuana Cola.” You could register pro-religion marks (“Praise the Lord”) but not religious marks for commercial products (“Agnus Dei” safes or “Madonna” wine). That just won’t fly. 

While three justices (John Roberts, Stephen Breyer, and Sonia Sotomayor), adopting the government’s argument, would’ve narrowed the statute to ban only obscene or vulgar epithets, that would be an improper use of the judicial power. As Kagan says, “To cut the statute off where the Government urges is not to interpret the statute Congress enacted, but to fashion a new one.” As Justice Samuel Alito writes in his concurrence, “we are not legislators and cannot substitute a new statute for the one now in force.”

Moreover, Justice Kagan drops a footnote to point out that the majority may yet be open to a new statute “limited to lewd, sexually explicit, and profane marks.” Alito echoes that in suggesting to Congress a statute focusing on “vulgar terms that play no real part in the expression of ideas.”

I’m not so sure about that, but regardless local time, place, and manner restrictions are still available to cover, say, a billboard with a swear word outside a school. There are also viewpoint-neutral trademark rules that may take care of whatever problems the justices are thinking about. In any event, as Cato has long argued, it’s simply not the government’s role to tell people what’s “scandalous” – whether in the trademark context or anywhere else. 

See here for more background and to read the “funny brief” that we filed in this case.

Emergency Exit Strategy

His brand is crisis, so it can be hard to keep abreast of the various calamities President Trump stumbles into or deliberately courts. Now that tensions with Iran seem to have momentarily cooled, another recent episode of Trumpian brinksmanship, closer to home, deserves some attention before we lurch forward into new dangers. 

As you’ve surely heard, but may have already forgotten amid the fog of near-war, three weeks ago, President Trump threatened to declare yet another national emergency at the southern border. If Mexico didn’t sufficiently crack down on cross-border migration, Trump warned, he’d use “the authorities granted to me by the International Emergency Economic Powers Act” to hammer our third largest trading partner—and U.S. consumers—with a series of escalating tariffs on Mexican goods, rising to 25 percent across the board. 

Fortunately, on June 7, three days before the deadline he’d set, President Trump called off the trade war. But, Trump warned, he “can always go back” to raising tariffs if he’s not happy.

The notion that the president can, with the stroke of a pen, upend peaceful trade relations and implement a massive tax hike ought to sound the alarm about Trump’s expansive view of presidential emergency powers. Are they as vast as the president claims, and, if so, what can Congress do to rein them in? 

As I argued in Reason magazine recently, our latest Imperial President has aggressively exploited the powers he inherited, but hasn’t been much of an innovator in terms of devising genuinely new schemes for the expansion of executive power. Trump’s use of emergency authorities is the glaring exception to that pattern, the key area in which the “CEO president” has been menacingly entrepreneurial.

We saw this first in February, when President Trump declared a national emergency in order to “build the wall” on the U.S.-Mexico border. The statute Trump invoked, 10 USC § 2808, allows the president to divert funds to “military construction projects” supporting the use of U.S. armed forces in a military emergency. It had been used only twice before, by George H.W. Bush in the run-up to the Gulf War, and by his son in the aftermath of the 9/11 attacks—the sort of circumstances it was clearly designed to address. Though past presidents had used emergency powers liberally, before Trump, it apparently hadn’t occurred to anyone that you could use them to snatch funding for a pet project that Congress had repeatedly refused to support. 

Supreme Court Returns Constitutional Patent Case to Sender

On June 10, the Supreme Court issued its latest decision involving a dispute over the meaning of America Invents Act (AIA)—a 2011 statute that radically reworked the patent system for the first time in half a century.

The case, Return Mail v. U.S. Postal Service, involved a dispute over whether the federal government is a “person” within the meaning of the AIA. The AIA permits “any person” to petition the Patent Office to conduct another round of review (in a form of a quasi-trial) on an already-issued patent. If the Court were to find that the federal government is a “person” then any government agency would be able to take advantage of these processes.

Conversely, if the government isn’t a person, it would be limited to defending itself against patent infringement in the U.S. Court of Federal Claims. While on the surface it appeared that the resolution of this question would be interesting only to patent attorneys, there were significant constitutional overtones that may be important in many subsequent cases.

The case arrived at the Supreme Court after an owner of a patent on methods of sorting and rerouting undeliverable mail attempted to license his invention to the Post Office, but was rebuffed. The patent owner then sued the Postal Service for royalties. (Because Return Mail was suing the federal government, the law limited it solely to money damages and foreclosed injunctive relief, which is a remedy available in patent suits between private parties). Instead of litigating the matter, the Postal Service turned to the Patent Office and requested that the patent be invalidated. The PTO agreed and cancelled Return Mail’s patent, which action the U.S. Court of Appeals for the Federal Circuit affirmed. In its petition to the Supreme Court, Return Mail argued that the Postal Service wasn’t authorized to seek Patent Office’s intervention because it wasn’t a “person” under the AIA. The justices ultimately agreed in a 6-3 decision by Justice Sonia Sotomayor. (Justices Stephen Breyer, joined by Justices Ruth Bader Ginsburg and Elena Kagan dissented).

The Right Call on Iran, But It Shouldn’t Be Trump’s Call

It says something about the way we go to war now that one almost feels like thanking President Trump for deciding, at the last minute, not to kill (at least) 150 people—and risk catastrophic conflict with Iran—in order to avenge one unmanned Northrop Grumman RQ-4 Global Hawk drone, downed by an Iranian missile. It wouldn’t be “proportionate,” he said, and he’s right—though that apparently didn’t bother National Security Adviser John Bolton, Secretary of State Mike Pompeo, and CIA Director Gina Haspel.

While you’d never call the man cautious, much less squeamish about foreign casualties, it’s not the first time Donald Trump has appeared that way compared to the putative “adults in the room” advising him. There are several such stories in Bob Woodward’s 2018 book Fear: Trump in the White House. In April 2017, for example, after Trump becomes enraged by video of Syrian children dying from a sarin gas attack, the Joint Chiefs present him with a range of airstrike options that includes a 200-missile attack aimed at taking out the bulk of the Syrian Air Force (and almost certainly killing large numbers of Russian advisers) Trump does the smarter thing and bombs an empty runway. The night of the strike, he calls a National Security Council meeting. Woodward writes that Trump was “unusually focused on the details…. What happens if a missile goes off course?” Trump’s so concerned about it, he demands that Mattis get him a secure line to the captains of both guided missile destroyers “are your guys the best at programming the missiles?” Have we got this right? 

True, Woodward recounts scenes that have you wishing someone would steal the nuclear launch codes off Trump’s desk, but more than once, the president appears more restrained and less bloodthirsty than the people advising him, like Sen. Lindsey Graham (R-SC), who urges Trump to hit North Korea, saying “If a million people are going to die, they’re going to die over there, not here.” “ That’s pretty cold,” was Trump’s response.

And while it’s nice that President Trump periodically steps back from the brink, it’s insane and appalling that we’ve staked so much on the instincts and whims of one eminently fallible human being. That is not the way it was supposed to work: “This system will not hurry us into war,” James Wilson told delegates to the Pennsylvania ratifying convention in 1787, “it is calculated to guard against it. It will not be in the power of a single man, or a single body of men, to involve us in such distress, for the important power of declaring war is vested in the legislature at large.”

From the Cold War through the Forever War on Terror, we’ve watched the emergence of a radically different regime, in which going to war is easy, frequent, and rarely debated. Lately, there are encouraging signs of resistance to that dynamic on Capitol Hill: yesterday’s Senate votes to rescind military assistance to Saudi Arabia’s murderous war on Yemen, Wednesday’s House vote to repeal the 2001 Authorization for the Use of Military Force, that the administration seems to think empowers the president to go to war with Iran, nearly 18 years later. But much more needs to be done to restore democratic, constitutional checks on U.S. military power, before it’s too late.

A Case at the Intersection of the Taxing Power and the Second Amendment

Several years ago, Nick Bronsozian was charged with possession of an unregistered machinegun under a tax law statute. The provision in question, 26 U.S.C. § 5861(d), says that in order to have a machinegun registered, a tax must be paid on it. Simple enough, right? Bronsozian didn’t pay his tax. Case closed. That’s what the government argued anyway, but the situation is more complicated than that.

A subsequently enacted law, 18 U.S.C. § 922(o), prevents the government from registering and accepting tax payments on new machineguns. So Bronsozian was charged and convicted of a felony for not paying a tax that the government would not allow him to pay. If that strikes you as odd, it’s probably because you’ve read the Constitution.

Our federal government is one of enumerated and therefore limited powers. When the government passes a law under its taxing power, it must pass a tax. A series of Supreme Court decisions tells us, quite reasonably, that in order for the government to pass a law as a tax, it must actually be a tax, as opposed to a penalty for conduct (recall the debate over Obamacare’s individual mandate/penalty/”tax”). An essential feature of a tax is that it generates revenue, and the tax Bronsozian was convicted of not paying has been forbidden by law from generating any revenue for more than 30 years. Yet the government still wants to lock people in federal prison for failing to pay it.

Bronsozian moved to dismiss his charge, arguing that § 5861(d) was not a constitutional tax, that charging him for nonpayment of a tax that was impossible to pay was a violation of his due-process rights, and other claims. The district court found for the government, citing a flawed circuit precedent that made a 180-degree reversal from established tax law. He is now appealing to the U.S. Court of Appeals for the Ninth Circuit, hoping to set the record straight.

Because the taxing power gives the government the authority to tax, not ban whatever conduct it sees fit, Cato, joined by Firearms Policy Coalition, has filed an amicus brief supporting Bronsozian. We argue that, as the Supreme Court has repeatedly found, that a tax must be a tax. For a government of enumerated powers to function, those powers must be clearly defined. The fact that a case involves guns—even unpopular guns—is not a reason to smudge the taxing power into a grant to do whatever the government wants.

We also point out what we perceive to be a concerning departure from jurisprudence regarding Americans’ rights more broadly. By refusing to present an analysis of why the machineguns are beyond the scope of the Second Amendment, the courts are glazing over an important constitutional question. If a class of arms can be regulated nearly to the point of a categorical ban—which machineguns may well be—the American people deserve to at least know the constitutional justification.

The case is United States v. Bronsozian