Topic: Constitution, the Law, and the Courts

Apple v. Pepper: A Chip Off the Old Illinois Brick?

In yesterday’s decision in Apple v. Pepper, Justice Brett Kavanaugh joined the four liberal Justices to rule that class action lawyers can sue Apple on behalf of consumers who allegedly paid uncompetitively high prices for iPhone apps, even though the consumers bought the apps not from Apple itself but from third-party developers who were paying a commission to the tech giant. The majority rejected Apple’s defense under the so-called Illinois Brick doctrine, under which only direct purchasers of a good or service, but not purchasers further down the distribution chain, can sue over monopoly pricing (everyone agrees that current law empowers the developers themselves to sue Apple for alleged monopolistic behavior). Kavanaugh, on behalf of the majority, said Apple lost the benefit of the Illinois Brick defense when it inserted itself into the supply chain as a retailer through its Apple Store, thus making itself in practice an intermediary even if it was not itself the party deciding what to charge app buyers. 

The significance of yesterday’s ruling is probably not in its proximate consequences for the iPhone supply chain, which are still uncertain (the ruling allows the plaintiffs to proceed, but doesn’t mean they’ll win). As Justice Neil Gorsuch observed in dissent, the Court’s mini-rule is “pointless and easily evaded”: 

To evade the Court’s test, all Apple must do is amend its contracts. Instead of collecting payments for apps sold in the App Store and remitting the balance (less its commission) to developers, Apple can simply specify that consumers’ payments will flow the other way: directly to the developers, who will then remit commissions to Apple. No antitrust reason exists to treat these contractual arrangements differently, and doing so will only induce firms to abandon their preferred—and presumably more efficient—distribution arrangements in favor of less efficient ones, all so they might avoid an arbitrary legal rule.

The wider worry, as Gorsuch points out, is that the majority (significantly joined by Kavanaugh) did not merely resolve a technical puzzle about how the law’s language applies to an unusually designed supply chain, but seemed inclined along the way to adopt an ungenerous and narrow reading of Illinois Brick. And that is significant because in the overall scheme of antitrust law, Illinois Brick serves as a major check against runaway litigation (aside from its own logic, it restrains multiple and duplicative suits over the same behavior). For that reason, the antitrust plaintiff’s bar has long sought to knock down the defense. Yesterday’s outcome gives it a passing chip at most, but will bear watching as a harbinger. 

Ballot Initiatives Can’t Be Corrupted and Won’t Love You Back

When voters want to change how they’re being governed, the existing legal framework should make it easy for them to do so—or at least not get in their way. That’s what a group of concerned citizens from three cities in Washington state believed when they set out to reform unions. They tried to place their proposal on three municipal ballots, which involved collecting signatures from the relevant communities and filing them alongside the initiative.

State law seemed to require the cities to place these measures on the ballot or adopt them outright. None of the city councils did either of those things, so the citizens sued, arguing that the cities’ actions were illegal. The nonprofit Freedom Foundation represented them pro bono (free of charge), but they were unsuccessful: there were ultimately no campaigns for the ballot initiatives. Despite that legal failure and no election, unions filed a complaint against the Freedom Foundation for failing to disclose its pro bono legal work as a “campaign expenditure.”

The problem with labeling non-campaign legal work as a campaign expenditure is fairly clear: there can be no campaign-finance violation if there’s no campaign. Citizens were never asked to vote on anything, nor did anyone try to influence their votes. But the issue goes even deeper: When a law tries to make lawyers disclose work undertaken free of charge, it opens them up to harassment and political attack, and makes it more difficult for citizens to find legal representation, discouraging political speech for both.

New Rights For Crime Victims? The Trouble With “Marsy’s Law”

Advocates have successfully pushed in several states for the passage of state constitutional amendments promoted as a bill of rights for crime victims, under the banner of “Marsy’s Law.” I’ve got a new piece at Real Clear Policy pointing out some of the problems with that:

For example: In the name of protecting their privacy, and especially shielding them from fear of possible intimidation, the measures restrict dissemination of personal information about crime victims. While the impulse involved is understandable, and there have long been legitimate ways of accommodating it, it is also essential that accused persons have access to evidence they need to prepare the case in their defense….

Meanwhile, the laws can deprive the public of information about crime that is legitimately important to them, as when, for example, a murder occurs in their neighborhood. …

Underlying several of these problems is a point made by [one commentator]: “In many cases whether the accuser is a ‘victim’ is only decided after a trial.” To be accorded rights before that point may presume the outcome, and can also give a complainant or accuser valuable leverage.

Consider, for example, the phenomenon by which cops have employed the laws to conceal their identities from the public after shooting civilians who were then charged with having assaulted the officer [as discussed by] my Cato colleague Jonathan Blanks in a recent Cato Daily Podcast. … Blanks “notes that police officers wear their names on their uniform and act in the name of the public in public. ‘That information, by nature, must be public’.”

Whole thing here, including a mention of Cato scholar Roger Pilon’s testimony against a similar constitutional proposal more than two decades ago. And much more at Overlawyered on how, to quote Radley Balko, “Laws named after crime victims and dead people are usually a bad idea.”

Be Like Bernie Sanders. Support Arbitration Clauses.

Bernie App language requiring arbitration of claims

 

“Read this section carefully. It requires you to waive your right to a jury trial and arbitrate certain disputes and claims and prohibits class and representative actions or arbitrations.” — from the “Bernie App.” (illustration via @NC_CyberLaw on Twitter). 

That’s right. The campaign-ready “Bernie app” released this week requires its users to agree to submit to arbitration in case of dispute, in place of lawsuits and especially class actions. As Ted Frank observes, “Even Bernie Sanders recognizes the importance and value of arbitration in navigating a legal system designed to benefit lawyers over the interests of consumers and businesses.”

The thing is, the Vermont senator has been railing for years against this sort of contractually-provided-for arbitration. A year ago he denounced the Supreme Court’s Epic Systems decision, which allowed employers to do what his app does and use arbitration language to fend off possible class actions. Just two weeks ago the former Burlington mayor said he was introducing a bill to outlaw contractually specified arbitration for many workplace disputes. As in the case of the flap over how the inveigher against millionaires has made good money as a book author, wouldn’t it be nice if he began preaching what he practices?

Sanders is hardly the only one for whom a gap can be observed on this matter between words and deeds. Take the New York Times, which has heatedly editorialized against arbitration clauses in the context of credit cards and insurance contracts while using them itself. Or the lawyers who took a challenge to cellphone-contract arbitration to the Supreme Court in AT&T v. Concepcion — what’s in the contract they offer their own clients? You guessed it.

When arranging their own dealings with clients, customers, and even campaign supporters, all these actors recognize that arbitration offers many advantages over no-holds-barred litigation and especially over class actions and similar devices, under which ambitious lawyers can step in and manage the grievance process for their own benefit while magnifying stakes through mechanical damages multiplication.

In last week’s decision in Lamps Plus v. Varela, the Supreme Court ruled that courts should not read class grievance mechanisms into arbitration agreements that are silent or ambiguous on the subject. Like many in the Court’s seemingly endless string of cases on arbitration, mostly arising from statutory interpretation rather than constitutional law, it was decided by a 5-4 split along liberal-conservative lines.

In Lamps Plus, the long-term stakes were less than usual for this line of cases. Why? Because had the Court adopted the liberal Justices’ view, the practical effect would have been to set off a rush to insert language into all existing agreements so as to make the exclusion of class relief explicit and unambiguous, exactly as the Bernie app does. When the dust settled, the actual distribution of rights between the two contracting sides would have reverted to where it started, while lawyers would have made a ton of money both drafting the new language and litigating the stray cases where the language did not change fast enough. But at least there would have been a chance for some hand-waving about helping out the little guy.

The Mueller Report: FAQs

1.  Did Trump collude with Russians who tried to influence the 2016 presidential election?

            No. In Volume 1 of his report, Mueller didn’t mention “collusion,” which is not a legal term.  He did, however, find that there was no evidence of a conspiracy, and he therefore exonerated Trump on that count.  Still, Mueller concluded that the Russians did interfere, Trump was aware of the interference, he benefited from and encouraged the interference – e.g., Don, Jr. was eager to get and use information on Hillary Clinton – and he didn’t report the interference to the FBI.  So, there was no crime and maybe no impeachable offense, but Mueller’s findings will likely inform voters regarding Trump’s fitness for office.

2.  Did Trump obstruct justice by impeding either Comey’s or Mueller’s investigations?

            Maybe.  In Volume 2, Mueller cited numerous acts that could have frustrated both investigations. Trump fired Comey, tried to fire Mueller – but didn’t succeed because White House counsel Don McGahn refused to follow instructions – discouraged testimony, encouraged lying, and dangled (but didn’t actually offer) pardons.  Given the evidence, Mueller concluded that he could not exonerate Trump from an obstruction charge.  Nonetheless, Mueller would not say whether there was an indictable crime because of a written Justice Department policy that a sitting president cannot be indicted.  It would be unfair to charge the president without affording him an opportunity to defend himself at trial.  In other words, there may or may not have been sufficient evidence of a crime or impeachable offense; but there was clearly too much evidence to exonerate.  Mueller left the criminal charge up to Attorney General Barr; and he left impeachment up to Congress.

3.  Since the FBI director serves at the pleasure of the president, could Trump fire Comey at will?

            Yes.  There are no statutory conditions on the president’s authority to remove the FBI director.  He or she serves at the will of the president.  But if the president acts with “corrupt intent” – e.g., to impede an investigation into his own conduct – then he can be charged with obstruction of justice. In this instance, by Trump’s own words, hefired Comey because of “this Russian thing.”  

What Happens When the Government Goes Too Far Investigating Child Abuse?

N.B.: This post contains descriptions of medical examinations stemming from allegations of sexual abuse of a small child.

Over at Reason, Robby Soave reports a horrifying story out of Albuquerque. A kindergarten teacher alleged one of her students—pseudonymously “Becca,” age 4— had been sexually abused by both her father, Adam Lowther, and her seven-year-old brother, “Charlie.” With the aid of the police, the New Mexico Children, Youth, and Families Department (CYFD) removed the children from their parents and set off a course of events that traumatized the Lowther family and Becca in particular.

After the better part of a year, the prosecutor declined to prosecute Adam and he was reunited with his children—but after his career was derailed and his reputation in tatters after being accused of one of the most detestable crimes against his own child. Becca had been subjected to examinations and photographs of her genitals and anus without her parents present, and her family reports that she is now terrified of doctors. The Lowthers are suing all the individuals and organizations involved in the separation and investigation.

Certainly, government agencies have the responsibility to investigate claims of sexual and other abuse of children. But such investigations must be handled with the utmost care and prudence lest the investigation itself traumatize (or re-traumatize) the children involved.

According to the Reason report and the lawsuit, the authorities in Albuquerque acted in haste, with zeal, and disregard for the welfare of the Lowther children:

“The forensic interviews and physical examinations were conducted without a warrant or court oversight. CYFD, who was the guardian of the children, acted with indifference to the trauma caused by the forensic interviews and examinations. Indeed, the removal decision was made in furtherance of the criminal investigation—not to keep the children safe from harm. This itself was contrary to the children’s interests and violative of their constitutional rights.”

In a perverse and bitter irony, careless and overzealous government actors can inflict the sexual trauma they are charged with preventing.

Criminal Obstruction vs. Impeachable Obstruction

Earlier this month, the effort to impeach President Trump looked like a #Resistance fantasy. The release of the Mueller Report seems to have shifted the debate dramatically. This week, Democratic presidential contenders Sen. Kamala Harris and Sen. Elizabeth Warren called on the House to impeach Trump for obstruction of justice.  

Is obstruction of justice an impeachable offense? Yes. It’s one of the few offenses where we have presidential precedent. Obstruction charges played a central role in two of the three serious presidential impeachment cases in American history, forming the basis for Article I of the charges against Richard Nixon, and Article II  against Bill Clinton. 

Should President Trump be impeached for obstruction of justice? I’m not going to answer that question here; like the cagey Mayor Pete, I’m “going to leave it to the House and Senate to figure that out.” Instead, I want to stress something that should be obvious, but tends to get lost amid the statutory exegesis in Mueller Vol. II: whether the president is guilty of criminal obstruction and whether he’s guilty of impeachable obstruction are different questions. 

Summing up Article I of the case against Nixon, the 1974 House Judiciary Committee report explained that

President Nixon’s actions…. were contrary to his trust as President and unmindful of the solemn duties of his high office. It was this serious violation of Richard M. Nixon’s constitutional obligations as president, and not the fact that violations of Federal criminal statutes occurred, that lies at the heart of Article I [emphasis added].

The Judiciary Committee report on the Clinton impeachment echoed that analysis a quarter-century later: “the actions of President Clinton do not have to rise to the level of violating the federal statute regarding obstruction of justice in order to justify impeachment.” 

The standards are different because impeachment and the criminal law serve distinct ends and have very different consequences. “The purpose of impeachment is not personal punishment,” the Judiciary Committee emphasized in its 1974 staff report on “Constitutional Grounds for Presidential Impeachment”; instead, impeachment’s function “is primarily to maintain constitutional government.” And where the criminal law deprives the convicted party of liberty, a successful impeachment mainly puts him out of a job

I’ve complained before about “the overcriminalization of impeachment,” the widespread tendency to confuse impeachment with a criminal process. Congress has contributed to that confusion by offloading much of its responsibility for policing executive misconduct to special prosecutors. Mueller wasn’t tasked with looking into “high Crimes and Misdemeanors”; his brief was to probe “federal crimes committed in the course of, and with intent to interfere with, the Special Counsel’s investigation.” Naturally, then, the report speaks in the language of the criminal law.

But impeachment aims at fundamental breaches of the public trust, and therefore, as Alexander Hamilton put it, “can never be tied down by such strict rules” as operate in the criminal law. In an impeachment proceeding, the key question isn’t whether the president technically violated one or more of the federal obstruction statutes. It’s whether his transgressions are serious enough to justify removal from office. 

That sort of inquiry is, in many ways, less forgiving than the criminal law approach. Though the Constitution nowhere specifies a particular burden of proof for impeachment, “criminal prosecutions require that the government prove guilt beyond a reasonable doubt in a proceeding in which the defendant enjoys many significant procedural protections.” As Michael Rappaport has observed, “a criminal prosecution model underenforces against executive misconduct, because it ignores noncriminal misconduct that may justify dismissing an executive official,” such as “‘high Crimes and Misdemeanors,’ which need not constitute violations of criminal or civil law.”

A prosecutor needs to prove every element of a statutory offense: a generalized showing of contempt for the rule of law won’t suffice. It’s fair game in impeachment, however. “Unlike a criminal case,” the Nixon Inquiry Report explains, “the cause for the removal of a President may be based on his entire course of conduct in office. In particular situations, it may be a course of conduct more than individual acts that has a tendency to subvert constitutional government.”  

In other important respects, however, an impeachment inquiry can be more lenient toward the accused. “Not all presidential misconduct is sufficient to constitute grounds for impeachment,” the Nixon Inquiry Report emphasizes: “There is a further requirement—substantiality.” Impeachment should “be predicated only upon conduct seriously incompatible with either the constitutional form and principles of our government or the proper performance of constitutional duties of the presidential office.” Even provable, criminal obstruction will not meet the standard of “high Crimes and Misdemeanors” in every case.

For instance, when viewed through the lens of the criminal law, the case against Bill Clinton was quite strong. Here’s Judge Richard Posner’s assessment, from his 1999 book on the Clinton impeachment, An Affair of State:

To summarize, it is clear beyond a reasonable doubt, on the basis of the public record as it exists today, that President Clinton obstructed justice, in violation of federal criminal law, by (1) perjuring himself repeatedly in his deposition in the Paula Jones case, in his testimony before the grand jury, and in his responses to the questions put to him by the House Judiciary Committee; (2) tampering with witness Lewinsky by encouraging her to file a false affidavit in lieu of having to be deposed, … and (3) suborning perjury by suggesting to Lewinsky that she include in her affidavit a false explanation for the reason that she had been transferred from the White House to the Pentagon.

After the Senate trial, however, multiple senators explained their votes to acquit in terms of substantiality: that although obstruction could, under certain circumstances, merit removal, the offense in this case wasn’t grave enough to justify that penalty. There’s no “it was about sex” defense to a charge of criminal obstruction, but in an impeachment trial, what—if anything—the president was trying to cover up matters.

In Trump’s case, the Mueller Report outlines a (lackluster and inept) cover-up without an underlying crime. As the Report reminds us, “proof of such a crime is not an element of an obstruction offense”—for the purposes of a criminal conviction, it doesn’t matter whether there’s an underlying crime. But for the purposes of an impeachment, arguably, it should. 

On the other hand, what’s in the Mueller Report is only part of the picture. As a group of prominent conservative attorneys and academics put it in a public statement released Tuesday: 

The report’s details add to an existing body of information already in the public domain documenting the President’s violations of his oath, including but not limited to his denigration of the free press, verbal attacks on members of the judiciary, encouragement of law enforcement officers to violate the law, and incessant lying to the American people.  We believe the framers of the Constitution would have viewed the totality of this conduct as evidence of high crimes and misdemeanors. 

 An inquest based on the president’s “entire course of conduct in office” could be a lot less forgiving.