Topic: Law and Civil Liberties

The Angel and Jennifer Mendez Case

The Supreme Court issued a ruling this week in the case of County of Los Angeles v. Mendez.  The case involved a police shooting and the ruling involves some technical legal analysis regarding the proper application of prior Supreme Court precedents.  In this post I want to take a step back from the technical legal discussion and highlight the facts of the case, which are quite sad.

In October 2010, Angel Mendez and his then pregnant girlfriend, Jennifer Garcia, were dirt poor.  They lived in a one room shack, made of plywood, in the backyard of a home owned by Paula Hughes in Lancaster, California.  On the awful day in question, the couple were not bothering anyone.  They were actually napping in their tiny shack when their world was suddenly shattered.

Without any announcement at all, a police officer entered the shack.  Startled, Angel got up and grabbed a BB gun that he kept in the shack to kill rodents and other pests.  The deputy then yelled “Gun!” to alert his fellow officers of potential danger.  In a moment, several police officers entered and opened fire, discharging a total of 15 rounds.  Both Angel Mendez and Jennifer Garcia were shot “multiple times and suffered severe injuries.”  Mr. Mendez’s right leg had to be amputated below the knee.

Two people minding their own business and in just a few moments, the police are shooting at them.  The police did not accuse them of violating any law. They were totally innocent.

To Be Liable for Fraud, You Have to Have Actually Defrauded Someone

Stream Energy is a retail gas and electrical energy provider whose business model allows prospective salesmen to purchase the right to sell its products and to recruit new salesmen. In 2014, some former salesmen brought a class-action lawsuit against Stream for fraud, alleging that the company’s business model constituted an illegal pyramid scheme.

But unusually for a fraud claim, the plaintiffs argued that they didn’t need to identify any specific misrepresentations made by Stream that might have convinced particular class members to become salesmen. Instead, the plaintiffs claimed that simply offering membership in an illegally structured business would be fraud in and of itself, even if people joined with full knowledge of all risks and benefits.

A federal district court in Texas certified the class, so Stream appealed that decision to the U.S. Court of Appeals for the Fifth Circuit. A three-judge panel reversed the district court, holding that a class could not be certified because each plaintiff must individually prove that he was subject to a misrepresentation. But the entire Fifth Circuit then reheard the appeal and ruled for the plaintiffs. The court didn’t rule on whether Stream was in fact engaged in an illegal pyramid scheme, but did affirm the class certification, accepting the plaintiff’s theory that a single proof of illegal structuring would prove a fraud against every one of Stream’s salespeople.

Stream has asked the Supreme Court to review this last question, and Cato has filed an amicus brief supporting that petition. In our brief, we explain why it is dangerous to hold that someone can be liable for fraud without ever having made a misrepresentation. Reasonable judicial limitations on liability are essential to protecting the personal autonomy of all parties in a case.

In the fraud context, the key inquiry has always been whether the alleged fraudster made a specific misrepresentation on which someone actually relied to her detriment. To be liable for someone else’s losses, not only must a particular misrepresentation have been made, but it must have been the direct or “proximate” cause of those losses. By abandoning this proximate-cause rule and holding that misrepresentation isn’t necessary for potential fraud liability, the Fifth Circuit removed an important check on liability.

If individual reliance on a misrepresentation need not be proven, savvy investors may search out multi-level marketing programs, knowingly put their money in such risky ventures, and then sue for fraud if their investment doesn’t yield a profit. This significantly increases the likelihood of improper class-action lawsuits—potentially subjecting undeserving defendants to crushing liability.

Instead of that uncertainty, businesses should instead be secure in the simple legal rule that has worked for centuries: if you don’t want to be liable for fraud, don’t lie about what you’re selling.

The Supreme Court should take the case of SGE Management v. Torres and ultimately reverse the Fifth Circuit.

Courts Shouldn’t Join the #Resistance

Last week’s travel-ban ruling by the U.S. Court of Appeals for the Fourth Circuit is a travesty. Not because the underlying policy is anything to write home about. As I wrote when the second executive order came out in March, “[r]efugees generally aren’t a security threat, for example, and it’s unclear whether vetting or visa-issuing procedures in the six remaining targeted countries represent the biggest weakness in our border defenses or ability to prevent terrorism on American soil.” But the judiciary simply can’t substitute its own policy judgment for that of our elected representatives, no matter how well-informed judges may be or how misguided they think our political leaders may be.

Indeed, what’s going on here isn’t a sober legal analysis – incredibly, the majority opinion contains no discussion of the relevant statutory text, or of the scope of executive power in light of congressional policy (the so-called Youngstown Steel analysis) – but a wholesale rejection of Donald Trump. Essentially, the court ruled that anything the current president does, at least in the areas of immigration and national security, is de facto (and therefore de jure) illegitimate. The judiciary has joined the #resistance.

Of course, even a court engaged in civil disobedience has to clothe its willfulness in legal trappings. Here’s how that fig leaf looks here:

  1. Find “snowflake standing” to bring the lawsuit for individuals who haven’t personally been harmed but are experiencing “feelings of disparagement and exclusion.”
  2. As other courts have done, bypass the more technical analysis regarding statutory authorizations and restrictions on the executive power over immigration in order to pontificate on sexier constitutional claims (the opposite of the standard “constitutional avoidance” that courts practice).
  3. Privilege various statements made by Donald Trump on the election trail, as well as media interviews by the president and his surrogates, over official determinations by the Departments of Justice and Homeland Security and the text of the revised executive order itself. Ignore the admissions of plaintiffs’ counsel that another president, one not burdened by the “forever taint” of Trump’s supposed bad faith, could lawfully execute the same order.
  4. Indeed, ignore the revisions to the executive order, even though they fix the problems that the first order’s hasty rollout created by, for example, providing exemptions not just to those with green cards and other valid visas, but also people with significant contacts to United States, students, children, urgent medical cases, and other special circumstances – as well as detailing reasons for the remaining restrictions.
  5. Find that the order violates the Establishment Clause by cherry-picking irrelevant precedents even though our immigration laws routinely classify would-be refugees and immigrants on religious grounds and the order only affects six of the 50 Muslim-majority countries, which contain but 13 percent of Muslims worldwide.

With no due respect, that’s not law. It’s another dog’s breakfast of a legal ruling which I won’t dignify with a full fisking. (Josh Blackman is a better man than I because he’s in the midst of a multi-part series that does unpack the opinions, and I also recommend the work of Peter Margulies, a progressive immigration and national-security expert who actually believes in the rule of law.) 

Appeals Court Relies Heavily on Cato Work Against the Immigration Ban

Yesterday, in IRAP v. Trump, the Federal Court of Appeals for the Fourth Circuit—which handles appeals from district courts in Maryland, Virginia, West Virginia, North Carolina, and South Carolina—upheld a preliminary injunction against portions of President Trump’s Executive Order banning entry of individuals from six African and Middle Eastern countries. On critical points, the court’s opinion and the concurring opinions cite or rely upon Cato’s work about the order.

Ten of the 13 judges found that the plaintiffs were likely to succeed in showing that the order violates the Establishment Clause of the Constitution. The court’s opinion cites Cato’s amicus brief to resolve a preliminary matter: whether the executive order—it calls it “EO-2”—“injured” any of the individual plaintiffs. The plaintiffs argued that one man in particular would be separated from his wife due to the order’s ban on visas. The government admitted that this would constitute an injury, but argued that the injury would not be “imminent” because he has offered no reason to believe that the ban on entry “will delay the issuance of [his wife’s] visa.” To this, the court responded (p. 35):

But this ignores that Section 2(c) appears to operate by design to delay the issuance of visas to foreign nationals. Section 2(c)’s “short pause” on entry effectively halts the issuance of visas for ninety days—as the Government acknowledges, it “would be pointless to issue a visa to an alien who the consular officer already knows is barred from entering the country.” Appellants’ Br. 32; see also Brief for Cato Institute as Amicus Curiae Supporting Appellees 25–28, ECF No. 185 (arguing that Section 2(c) operates as a ban on visa issuance).

Indeed, that is exactly what we argued: The executive order was designed to discriminate in the issuance of immigrant visas based on nationality, and it would at the very least delay their ability to travel to the country.

Cities Notice Decline in Latino Crime Reporting Post-Trump

Sir Robert Peel

Effective policing requires that crime witnesses and victims contact the police and that citizens trust law enforcement. Without such trust and communication crimes go unsolved, criminals run free, and victims live in fear. Sadly, it looks as if the Trump administration’s immigration rhetoric could have prompted a chilling effect on Latino crime reporting. 

The father of modern policing, the British statesman Sir Robert Peel, understood how important public approval of the police is in order for police officers to effectively do their jobs. Peel founded London’s Metropolitan Police Force in 1829. The force issued new officers with copies of “General Instructions,” which included the “Peelian Principles” of effective policing.* The second Peelian principle urges officers

To recognise always that the power of the police to fulfil their functions and duties is dependent on public approval of their existence, actions and behaviour and on their ability to secure and maintain public respect. 

Although written for officers in London, the Peelian Principles migrated to the states, where now former New York Police Department Commissioner William J. Bratton featured them on his blog and they continue to be favorably cited by law enforcement and public safety officials.

The Renew Act of 2017

The old saying goes, “If you do the crime, you should to do the time.” In reality, however, many ex-offenders find out they’re effectively still being punished after they have served their sentence and have been told they paid their debt to society. These “collateral consequences” of arrest and incarceration include restrictions on potential jobs, housing, and benefits that help people get back on their feet. There are literally tens of thousands of restrictions at the federal, state, and local levels.

One way to alleviate some of these collateral consequences is called expungement. Expungement is a process by which a criminal conviction is effectively erased someone’s record, provided they meet certain criteria. There is already a law that allows first-time, non-violent federal drug possession offenders under the age of 21 to serve one year of probation and have the charges expunged after successful completion.

Today, Rep. Hakeem Jeffries (D-NY) and Rep. Trey Gowdy (R-SC) introduced H.R. 2617, “The Renew Act of 2017,” which expands the same expungement eligibility age from 21 to 25 years old.

Expungement expansion could make a big difference in the lives of young adults who make a mistake. Under current laws and practices, the effects of a criminal conviction can burden someone long after they’ve completed their sentence. As I’ve written before, it is simply unfair to expect ex-offenders to become productive members of society and impede their success at the same time. 

For more details, please check out this post by John Malcolm and John-Michael Seibler of the Heritage Foundation. 

Pushing Back on an Anti-Social Network

Power Ventures, Inc. offers a service to amalgamate various social-media platforms into one system; each user gives the company his usernames and passwords, including for Facebook. Facebook objected to Power Ventures’ use of Facebook in this manner and sent a cease-and-desist letter. When Power Ventures refused to comply, Facebook sued under the Computer Fraud and Abuse Act (“CFAA”).

The CFAA was designed to prevent hackers from accessing a computer system “without authorization” and has criminal penalties of up to five years in prison. The district court found that Power Ventures had indeed accessed Facebook without authorization and the U.S. Court of Appeals for the Ninth Circuit affirmed that decision. Power Ventures has petitioned the Supreme Court to review the case; Cato has filed an amicus brief supporting that petition.

We explain that there’s a split among the circuit courts as to the legal basis for an entry to be “authorized” under the CFAA. The Fifth and Seventh Circuits use agency law (scope of employer permission), the First and Eleventh Circuits use contract law (established policies), and the Second, Fourth, and Ninth Circuits use property law (the common law of trespass). The ideal resolution would involve an analogy to physical trespass, which various members of Congress involved in drafting the CFAA used to discuss the computer crimes that the law was designed to prevent.

In applying trespass law here, the facts begin to look like a landlord-tenant dispute over a third-party guest. A landlord typically can’t prevent a tenant from inviting guests to access the tenants’ property by using the common areas of the building, without a limitation in the lease. Here, Facebook’s users own the data (information, pictures, etc.) they put on the social network, as Facebook acknowledges, and there’s no guest-access restriction in the terms of service.

Many people share social-network, email, or other passwords without considering such actions to be criminal and the common law is presumed to conform to the customs of the people unless there’s explicit statutory text to the contrary. Otherwise millions of people could unwittingly be made criminals.

This is also the reason why the “rule of lenity” applies in Power Ventures’ favor, because an (at best) ambiguous statute cannot be used to punish someone.

The final reason that the Supreme Court should take the case is its importance to the online economy. Power Ventures is trying to compete with Facebook and Facebook’s ban prevents the market from being able to determine who has the better product. Many other companies, including Google, use a method of automated access similar to that which Power Ventures uses and could be imperiled by the lower court’s ruling. Internet companies need clear legal rules so they know what they can do nationwide without the threat of civil liability or criminal prosecution.

The Supreme Court may decide whether to take Power Ventures v. Facebook before it breaks for its summer recess at the end of June, or it could hold the decision over till the start of the next term in the fall.