Topic: Constitution, the Law, and the Courts

New Bill Would Stop Eminent Domain Abuse Along the Border

President Trump’s proposed border wall would cut across nearly a thousand miles of privately owned land, so to build this project, the administration would need to use eminent domain to seize the land—something that the president is eager to do. Aside from the unpleasantness of taking people’s property without their consent, federal eminent domain use comes with it a particularly obnoxious component: the government can take the land but not provide just compensation until years later. New legislation would stop this practice.

As I wrote in 2017:

Right now, when Border Patrol wants to take someone’s land, they send them a letter offering them a nominal low sum of money for their land and threatening to file condemnation proceedings against them if they don’t accept it… . [But] under the eminent domain statute, the federal government can seize property almost as soon as it files a condemnation proceeding—as soon as the legal authority for the taking is established—then they can haggle over just compensation later.

It’s called “quick take.” Quick take eminent domain creates multiple perverse incentives for the government. 1) It can quickly take land, even when it doesn’t really need it, and 2) it has no real incentive to compromise or work with the land owner on compensation. The owner’s bargaining power is significantly diminished. The federal government already possesses the property. This means that for years, people who are subject to a border wall taking go without just compensation.

An NPR analysis of fence cases found that the resolved cases took more than 3 years to resolve. In many other cases, the process took more than a decade for a court to determine just compensation, and some cases are still pending more than 12 years later. Unfortunately, the Supreme Court has determined that this “quick take” eminent domain does not violate the 5th amendment requirement that no “private property be taken for public use, without just compensation.” The reasoning is that as long as the person will eventually get compensation, the taking is constitutional.

The awful component of this process is that, in order to challenge the taking, the property owner must not accept the offered payment. But the border wall will go up on their land just the same. Meanwhile, they have to fight in court without getting the compensation that they deserve. Many people cannot even afford to challenge the taking for this reason alone.

Today, Rep. Justin Amash (R-MI) introduced the Eminent Domain Just Compensation Act to deal with just this issue. “It is unjust for the government to seize someone’s property with a lowball offer and then put the burden on them to fight for what they’re still owed,” Rep. Amash said in a statement. “My bill will stop this practice by requiring that a property’s fair value be finalized before DHS takes ownership.”

It makes this reform by amending Section 103 of the Immigration and Nationality Act (8 U.S.C. 1103), which details the powers of the Secretary of Homeland Security.  Current law provides that:

The [Secretary of Homeland Security] may contract for or buy any interest in land, including temporary use rights, adjacent to or in the vicinity of an international land border when the [Secretary] deems the land essential to control and guard the boundaries and borders of the United States against any violation… When the [Secretary] and the lawful owner of an interest identified pursuant to paragraph (1) are unable to agree upon a reasonable price, the [Secretary] may commence condemnation proceedings pursuant to section 3113 of title 40.

The Eminent Domain Just Compensation Act would amend this provision by adding that: “the Government may not take any land prior to the issuance of a final judgment pursuant to the proceedings under section 3113 of such title.’’ This language forecloses the opportunity for the Trump administration to seize land quickly for the president’s unnecessary, ineffective, and costly border wall without first fully compensating the owners. 

Pushing Back Against ADA Shakedowns

Each year thousands of small and large businesses, non-profits, and organizations are hit with drive-by ADA claims, typically batch-produced affairs in which a complainant out of the blue claims to have found something not fully accessible to disabled users about the target’s operations and goes on to negotiate a settlement that includes ample attorneys’ fees. Because ADA requirements are both obscure and voluminous and even compliance experts do not agree among themselves how much accommodation counts as enough, potential violations can be found at most businesses. While the ADA is a national law, much of the mass filing of accessibility complaints goes on under state laws that piggyback or expand on the federal version, often with added features enhancing damages or attorney’s fee entitlements. 

It has been hard to get state-level relief from the depredations of the filing mills, since lawyers and disabled-rights activists can make for a formidable lobbying combination. But a piece of legislation just signed by Gov. John Kasich in Ohio, and an unrelated ruling in the California state courts, at least offer tiny rays of hope. 

Ohio’s HB 271 provides that in order to collect automatic attorneys’ fees under state accessibility law, a complainant must notify the business concerned, which then has 15 business days to respond and 60 days to remedy the violation.” The law, which goes into effect in March, is itself a bit of a compromise: it excludes housing discrimination claims, and provides that even a complaint filed without notice or opportunity to correct can still collect fees if a judge finds such payment appropriate. A similar bill on a national scale passed the U.S. House of Representatives last February but went nowhere in the U.S. Senate, and is likely to muster less support in the new House. 

In California, meanwhile, a state court has ruled that the distinctively harsh Unruh Act, which awards automatic damages in the thousands of dollars each to prevailing civil rights complainants whether or not they can prove any injury to themselves, does not apply as a matter of law to complaints against websites. Because of ongoing uncertainty about whether the ADA applies to websites, defendants across the country have been deluged with web accessibility lawsuits in recent years; if the ruling sticks, they will at least be spared the extra-high damages of the California version.  

Cato Sues SEC Over Gag Orders

Earlier today, Cato sued the Securities and Exchange Commission in federal court challenging the SEC’s policy of imposing perpetual gag orders on settling defendants in civil enforcement actions. The clear point of that policy is to prevent people with the best understanding of how the SEC uses its vast enforcement powers from sharing that knowledge with others. But silencing potential critics is not an appropriate use of government power and, as explained in Cato’s complaint, it plainly violates the First Amendment’s protections of free speech and a free press.

The case began when a well-known law professor introduced us to a former businessman who wanted to publish a memoir he had written about his experience being sued by the SEC and prosecuted by DOJ in connection with a business he created and ran for several years before the 2008 financial crisis. The memoir explains in compelling detail how both agencies fundamentally misconceived the author’s business model—absurdly accusing him of operating a Ponzi scheme and sticking with that theory even after it fell to pieces as the investigation unfolded—and ultimately coerced him into settling the SEC’s meritless civil suit and pleading guilty in DOJ’s baseless criminal prosecution after being threatened with life in prison if he refused.

The author now wants to tell his side of the story, and Cato wants to publish it as a book—but both are prevented from doing so by a provision in the SEC settlement agreement that forbids the author from “mak[ing] any public statement denying, directly or indirectly, any allegation in the [SEC’s] complaint or creating the impression that the complaint is without factual basis.” This provision appears to be standard not only in SEC settlements, but with the CFTC, the CFPB, and possibly other regulatory agencies as well. Thus, when the federal government unleashes its immense financial regulatory power in a civil enforcement action, the price of settling—as the vast majority of cases do—is a perpetual gag order that prohibits the defendant from ever telling his or her side of the story.

This is a wildly inappropriate use of government power, and it is directly contrary to the spirit of accountability and transparency that permeates our founding documents. Indeed, the Sixth Amendment guarantees the right to a speedy and public trial precisely to ensure that when the government accuses people of wrongdoing it must place its cards faceup on the table for all to see. Today, however, 97 percent of federal criminal convictions are obtained through plea bargains, and a similar percentage of SEC civil enforcement actions are settled instead of adjudicated. This means that, contrary to the constitutional prescription for a public airing of the government’s case, most enforcement actions—both civil and criminal—unfold behind closed doors and under the radar. And it is increasingly clear that the process by which the government extracts confessions, plea deals, and settlement agreements from defendants in those cases can be incredibly (and even unconstitutionally) coercive. It is at this coercive dynamic that a significant portion of Cato’s criminal justice work takes aim, in order to restore the system envisioned by the founders and enshrined in the Constitution.

Thus, the more adamant the government is about preventing us from knowing what tools and techniques are being brought to bear against those whom it accuses of misconduct, the more important it is for us to find out. Perpetual gag orders like the ones routinely imposed by the SEC, CFTC, and CFPB as a condition of settlement are utterly antithetical to principles of good government and, not coincidentally, to the First Amendment’s protections of free speech and a free press as well.

Accordingly, we at Cato have teamed up with our friends at the Institute for Justice, which represents Cato in its challenge to the SEC’s unconstitutional policy of demanding perpetual gag orders as a condition of settlement in civil enforcement actions. Together, we aim to strike down not only the specific gag order at issue in this case, but all perpetual gag orders in all existing civil settlements with federal agencies—and to terminate the government’s policy of silencing those whom it accuses of wrongdoing.

It is often said that sunlight is the best disinfectant. The SEC and its cohorts are about to get a healthy dose of each.

You Can’t Make This Up: A Speech Code that Investigates Students for Discussing the Freedom of Speech

Public university campuses, once bastions of free thought, have become increasingly hostile toward the freedom of speech. Although students greatly benefit from expressing and being exposed to a wide variety of ideas, administrators often prevent this from happening. An increasing number of universities have even instituted speech codes that subject students to burdensome investigations merely for exercising their First Amendment rights.

Two student organizations at the University of South Carolina ran afoul of campus speech codes when, in promoting a pro-free speech event, they displayed posters and handouts that referred to censorship at other colleges. Although the students obeyed the school’s regulations about handing out materials, several people filed harassment charges because they didn’t like what the handouts said. In a bizarre turn of events, the students were questioned and investigated by school officials—for talking about incidents where other students were likewise questioned and investigated for exercising their First Amendment rights. To make matters worse, the university refused to clarify its policies and essentially imposed a gag order on one student, forbidding him from discussing this incident with the faculty or student body.

The Supreme Court has held that the First Amendment allows the government to set reasonable restrictions on time, place, and manner of expression. But the Court has repeatedly said that the government can’t act in a way that discourages speech. Its policies and actions must survive strict judicial scrutiny—being narrowly tailored to achieve a compelling interest—to even investigate individuals for engaging in protected expression. Public universities, as government actors, are legally bound by this principle. And yet the U.S. Court of Appeals for the Fourth Circuit ruled for the University of South Carolina here.

An extensive inquisitorial process like the one here has a chilling effect on speech. That is, people are less likely to exercise their First Amendment rights due to fear of reprisal. It is the epitome of state censorship for people not to be free to discuss even the very concept of free speech without facing investigation. The process itself is a punishment; not only is it extensive and undefined, but it also leaves the door open for future persecution.

The purpose of education is to broaden one’s mind, testing the strength of ideas in the fire of adverse opinion. Far-reaching campus speech codes run counter to this objective. Instead of producing strong young minds capable of adapting to the challenges of the adult world, universities like the one here have insulated and infantilized students, doing both the students and the public at large a great disservice.

Cato thus joins the ACLU of South Carolina, DKT Liberty Project, and Reason Foundation in filing an amicus brief urging the Supreme Court to hear Abbott v. Pastides and supporting students’ right to express themselves in ways consistent with the First Amendment. The Court should remind universities that the merits of a speaker’s ideas are determined by each individual listener, not by school administrators, and that the reward or punishment for speech is found in the swaying of public opinion, not in retaliatory investigation processes or the absence thereof.

Supreme Court Shouldn’t Let Agencies Get Away with Animal House Rules

Businesses in regulated industries rely on the advice of the regulating agency when making decisions. But, with so many businesses asking the agency for advice, sometimes the agency will need its professional staff (rather than the commissioners or other principals) to help answering questions. If a staff member issues advice, should that be considered the agency’s advice? If not—and if it can neither be relied upon for legal purposes nor be subject to judicial review—isn’t it worse than not getting any advice at all?

Soundboard Association, an industry group representing call centers and others using new phone-dialing technology, wants to know the answer to those questions. In 2009, a Federal Trade Commission staff member sent a letter to a telemarketing company that used soundboard technology. The letter stated that soundboard technology was not subject to regulation under the Telemarketing Sales Rule, which prohibits, with some exceptions, making phone calls that deliver a pre-recorded message. Although soundboard technology does deliver pre-recorded messages, a live operator selects which audio file to play in response to the customer’s answers. The staff member said that, because this made calls using soundboard technology “virtually indistinguishable” from calls between two people, they were not subject to the rule.

In 2016, seven years after that letter, the same staff member sent another letter to the telemarketing company. This letter said that, because the FTC had received complaints about soundboard calls, the technology would now be subject to the Telemarketing Sales Rule. The letter demanded that companies cease using the technology until the technology improved. But if the FTC wants to change its mind on a rule, there’s a process for that—the scope of judicial deference to agency reinterpretations is a live legal debate—and regardless, regulatory determinations are supposed to be subject to judicial review, if they’re final.

The Supreme Court Really Needs to Start Defining the Scope of the Second Amendment

You can find just about any kind of restaurant imaginable in our nation’s capital, but what you won’t find, no matter how hard you look, is a gun store. D.C. residents who want to buy guns, like Tracey and Andrew Hanson, have to leave the district to get them. D.C. law specifically allows residents to buy firearms from outside the District.

So the Hansons visited Frederic Mance, a federally licensed gun dealer in Texas. D.C. law had no problem with the Hansons buying a gun from Mance, and the law of Texas allowed Mance to sell to the Hansons. The Hansons agreed to buy handguns from Mance in what would be an otherwise entirely lawful transaction, but there was a problem: the federal government (of course).

Federal law categorically forbids firearms dealers from selling handguns to anyone not a resident of the state in which the dealer does business. The purported justification for this restriction is that the government doesn’t believe licensed dealers can handle complying with the laws of the purchaser’s state—even though they are required to do just that should the customer want something like a bolt-action rifle, shotgun, or even (heavily restricted) machine guns.

Mance, the Hansons, and several others sued the federal government in Texas, arguing that the interstate handgun-transfer ban violated their Second Amendment right to bear arms and Fifth Amendment right to equal protection. The district court agreed that the law was unconstitutional, but when the case came to the U.S. Court of Appeals for the Fifth Circuit, a closely divided court found for the government, over strong dissent. The plaintiffs now appeal their case to the Supreme Court, hoping our nation’s highest court will finally step in and clarify how laws are to be evaluated under the Second Amendment—something the justices have avoided doing since declaring in D.C. v. Heller (2008) that there is indeed an individual right to keep and bear arms.

Federal law has put the national firearms market into an irrational state. Dealers are trusted to follow the law of multiple states when selling long guns, but are categorically forbidden from doing the same with the most common arms in the country. It regulates the interstate arms trade as if the Founders hadn’t been driven to war by embargoes on trading guns, and exclusively targets the arms which Americans—and the Supreme Court—have indicated are the most crucial for self-defense.

Because the right to armed self-defense is fundamental and should not be given “second class” treatment, Cato has filed an amicus brief urging the Supreme Court to hear the Mances’ case. In an area of the law where the circuits diverge substantially on how to treat an important civil right, the Court needs to step in and help set the course. This case is an ideal vehicle in which to do it, as its resolution would not directly disrupt the nation’s diverse tapestry of gun laws, but instead help equip lower courts with the tools they need to properly map the metes and bounds of the Second Amendment.

The Supreme Court will decide whether to take up Mance v. Whitaker later this winter.

The First Amendment Allows You to Draw Your Own Conclusion on Same-Sex Marriage

Earlier this year in Masterpiece Cakeshop, the Supreme Court contended with the issue of whether cake-baking is protected speech under the First Amendment, and thus whether a Christian baker could refuse to design a wedding cake for a same-sex ceremony. The Court ended up punting on the case’s major questions, but now the Arizona Supreme Court is facing a similar issue, this time with calligraphers instead of bakers.

Artists Joanna Duka and Breanna Koski are practicing Christians who own and operate Brush & Nib, an art studio in Phoenix, Arizona. In addition to designing wedding invitations using calligraphy, they produce recreations of wedding vows and other custom artistic works. Phoenix’s public accommodation law would require them to design invitations and vows for every ceremony—even those that conflict with their sincerely held faith. The city imposes draconian punishments for failing to comply with this law; Joanna and Breanna could face fines of $2,500 per day, or up to six months in jail. It seems that in Phoenix, Christian artists who oppose same-sex marriage must choose between practicing their faith and running a business if they want to avoid both bankruptcy and jail time.

Cato of course has a long history of supporting both gay rights and the First Amendment. We were the only organization in the entire country to have filed briefs supporting the petitioners in both Masterpiece Cakeshop and the marriage cases that ended in Obergefell v. Hodges (2015). Now, joined by professors Dale Carpenter and Eugene Volokh—who differed on Masterpiece Cakeshop because they consider cakemaking not sufficiently expressive for the First Amendment to apply—Cato has filed an amicus brief arguing that expressive small businesses (including calligraphers) are indeed protected from speech compulsions.

The First Amendment, in stark contrast to Phoenix’s public accommodation law, protects people from government-compelled expression. The Supreme Court in Wooley v. Maynard (1977) established that even forcing a driver to display a license plate with the motto “Live Free or Die” violated that person’s “individual freedom of mind.” It would surely violate someone’s conscience far more to be forced to design art or otherwise convey messages for a ceremony with which they disagree.

Besides, the Arizona Supreme Court previously held that tattoo design is art, and that both the design and sale of such art is protected by the First Amendment. According to the Arizona Court of Appeals in this case, however, calligraphy—unlike tattoo design—is not “inherently expressive.”

The lower court ignored all historical evidence proving that calligraphy is art. Not only is calligraphy considered a fine art in Chinese tradition, but it also has had a profound effect on American history. After all, our own Declaration of Independence is a masterpiece of calligraphy, designed by Timothy Matlack. If Matlack were forced to design royal proclamations declaring the colonists traitors, his freedom of conscience would have been severely violated—and the same applies to the Brush & Nib artists.

Wooley also provides an important limiting principle for protecting individual freedom of mind: it does not apply to all conduct, only First Amendment-protected expression. Far from the blanket discrimination that hoteliers and restauranteurs often leveled at African-Americans in the Jim Crow era, refusing to create a wedding invitation is simply refusing to speak in a way that would betray one’s faith or compromise one’s conscience. Just as the government cannot force a patriot like Timothy Matlack to denounce his fellows, or an atheist to endorse Scientology, the government cannot force orthodox Christians, Jews, and Muslims to design art for same-sex weddings.