Monday of this week marked the Day of the Seafarer, an occasion meant to recognize the critical role played by mariners in the global economy. American seafarers, however, increasingly find little to celebrate. A large source of their travails is the Jones Act. Signed into law 98 years ago this month, the law mandates that cargo transported between two domestic ports be carried on ships that are U.S.-built, U.S.-owned, U.S.-flagged, and U.S.-crewed. The harm caused by this law is well documented. By reducing competition from foreign shipping options and mandating the use of domestically built ships that are vastly more expensive than those constructed elsewhere, the Jones Act has raised transportation costs and served as a de facto tax on the economy. Too often overlooked is that the Jones Act has also presided over the decimation of the U.S. maritime sector, the very industry whose fortunes it was meant to promote (an age-old story in the annals of protectionism). The numbers speak for themselves. Since 2000 the number of oceangoing vessels of at least 1,000 tons which meet the Jones Act’s requirements has shrunk from 193 to 99. A mere three U.S. shipyards are capable of producing oceangoing vessels for commercial shipping, and one of them, the Philly Shipyard, is facing a possible shutdown. Europe, in contrast, has roughly 60 major shipyards capable of building vessels of at least 150 meters in length, while the United States has a total of seven such shipyards when those producing military vessels are included. Both the declining number of Jones Act ships and the struggles of the shipyards that build them are in large part explained by the vastly inflated cost of ships constructed in the United States. According to the Congressional Research Service, American-built coastal and feeder ships—the types of ships commonly used in domestic sea transport—cost between $190 and $250 million, whereas similar vessels constructed in a foreign shipyard cost about $30 million. One unsurprising consequence of such stratospheric costs is a reluctance on the part of domestic shipping firms to invest in new ships, with U.S. seafarers forced to work aboard vessels that are significantly older than those found in other countries. Excluding tankers (these vessels were subject to a requirement in the wake of the Exxon Valdez oil spill that they be double-hulled by 2015, thus encouraging the purchase of new ships and decreasing their average age), the Jones Act fleet averages 30 years of age—fully 11 years older than the average age of a ship in the merchant fleet of other developed countries. For context, the maximum economic life of a ship in the world market is typically 20 years. International comparisons of specific ship types are even more eye-opening. Jones Act containerships, for example, average more than 30 years old. The international average is 11.5. The only two bulk ships in the Jones Act fleet average 38 years old, while the international average is 8.8. General cargo ships average 34 years of age compared to an international average of 25.2. Struggling shipyards, a dwindling fleet of old ships, and fewer jobs are now the order of the day in the maritime sector. As Mark H. Buzby, head of the U.S. Maritime Administration, testified before Congress earlier this year, “over the last few decades, the U.S. maritime industry has suffered losses as companies, ships, and jobs moved overseas.” Also addressing members of Congress, one senior union official admitted that “the pool of licensed and unlicensed mariners has shrunk to a critical level.” This is not a new story. During Operations Desert Shield and Desert Storm, the United States was so desperate for civilian mariners to crew transport vessels that it enlisted the services of two octogenarians and one 92-year-old. Its search for ships was equally frantic, resulting in two requests to borrow a ship from the Soviet Union—and two rejections. Notably, during this conflict a much larger share of U.S. military equipment and supplies was carried by foreign-flagged vessels (26.6 percent) than U.S.-flagged commercial vessels (12.7 percent). Supporters of the Jones Act often claim the law is vital to assure a strong merchant marine capable of answering the country’s call in times of war or national emergency. Should the Jones Act be repealed, they warn that the maritime industry will enter a dangerous downward spiral. But the record clearly shows that their nightmare scenario, in fact, describes the status quo. It’s time for this law to go, or be significantly reformed. Toward that end the Cato Institute has unveiled its Project on Jones Act Reform, which will feature a series of policy papers exposing the fallacies and realities of this archaic law. This first of these policy analyses, The Jones Act: A Burden America Can No Longer Bear, is now available and provides an overview of the law, its history, and myriad shortcomings. More such policy analyses will follow both this year and next, along with other commentary pieces about this failed law, so be sure to check back for the latest updates. 

On closer inspection of yesterday’s Janus v. AFSCME decision, the Supreme Court looks to have updated and clarified its decisional framework for addressing the age-old matter of stare decisis – deference to old precedents — a framework that largely mirrored Cato’s amicus brief in this landmark case. Properly understood, stare decisis doesn’t demand that courts blindly follow decisions that are no longer viable, but instead imposes a special duty to overturn faulty precedents in constitutional cases. The Janus majority both recognized and embraced this weighty responsibility.

Justice Samuel Alito’s decision set forth five important factors to consider when deciding whether to follow precedent: 1) “the quality of Abood’s reasoning”; 2) “the workability of the rule it established”; 3) “its consistency with other related decisions”; 4) “developments since the decision was handed down”; and 5) “reliance on the decision.” Although both owe much to Chief Justice John Roberts’s pithy concurrence in Citizens United, the similarities between the Janus factors and those laid out in Cato’s brief are striking.

Abood v. Detroit Board of Education (1977) was so poorly reasoned that, as the Court observed, proponents of upholding the case “implicitly acknowledge[d] its weaknesses by forwarding alternative justifications.” Chief among these justifications was the attempt to borrow legal rationales from Pickering, a case completely unrelated to Abood’s original reasoning. The Court found there to be “no good reason, at this late date, to try to shoehorn Abood into the Pickering framework,” and that “[e]ven if that were attempted, the shoe would be a painful fit.” But defenders of agency fees had little choice but to make this argument, since the two cases that Abood was actually supposed to be based on (Hanson and Street) both managed to avoid rendering a decision on First Amendment grounds. Cato’s brief conspicuously made these points, and the Court detected these same inherent flaws when deciding the case.

The Abood standard has also proven to be unworkable, with the distinction between chargeable and nonchargeable expenditures presenting the thorniest issue. Chargeable expenditures are those supposedly nonpolitical expenses that nonmembers could be validly forced to pay for under Abood, but in the context of public-sector unions, collective bargaining and political action are practically indistinguishable. Again the proponents of state-union compulsions advanced a self-defeating argument, with the Court observing that “[n]ot even the parties defending agency fees support the line that it has taken this Court over 40 years to draw.”

Next, what Cato’s brief recognized as one consideration the Court’s decision split into two, first considering the factual developments since Abood and then moving onto the case’s legal inconsistency with the overall body of First Amendment jurisprudence. As for the former, the Court took notice that Abood was decided “against a very different legal and economic backdrop” when “[p]ublic-sector unionism was a relatively new phenomenon.” Such considerations were again advanced by Cato, arguing that the Court should “look back on the period of time since the precedent was established and inquire ‘whether facts have so changed … as to have robbed the old rule of significant application or justification.’”

And regarding Abood’s place within the First Amendment canon, the Court once again found the decision to be “an anomaly,” commenting that it “particularly sticks out when viewed against our cases holding that public employees generally may not be required to support a political party.” While Cato’s brief instead chose to focus on the weakness of the labor peace rationale in justifying an infringement on individual’s free speech rights, the overall conclusion remained the same; as the great legal thinker Big Bird would have observed, “one of these things is not like the others.”

Finally, the Court paralleled Cato’s brief in adjudging that any reliance interests in Abood were insufficient to prevent the case from being overturned. While Cato argued both that there could be no valid reliance interests in the deprivation of First Amendment rights and that overruling Abood would impose no special hardship on labor contracts, the Court went even farther. It summarized the litany of holes in the counterargument thus: “the uncertain status of Abood, the lack of clarity it provides, the short-term nature of collective-bargaining agreements, and the ability of unions to protect themselves if an agency-fee provision was crucial to its bargain all work to undermine the force of reliance as a factor supporting Abood.”

As the Court has recognized for decades, stare decisis – at least in principle — “promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.” Far from constituting a hindrance, the newly elucidated Janus framework has the potential to advance these noble objectives by providing both judges and practitioners with a stable, logical system for determining when adherence to the Constitution mandates abandoning erroneous precedent.

This was the first full term with the Court back at its “full strength” of nine justices, so all eyes were on Justice Neil Gorsuch to see how he would fit in — and how the Court’s internal dynamic and voting patterns would shift from what they were before Justice Antonin Scalia’s death in February 2016. While early reports, based on what turns out now to be unsubstantiated speculation, spoke of tensions between the newest justice and several of his colleagues, he quickly settled in and ended up writing many thoughtful opinions, including being assigned to write for the majority in several important cases (a rarity for a junior justice).

Cato filed in 15 merits cases on important issues ranging from free speech to separation of powers to criminal procedure. One of those got dismissed along the way because of legislative developments (United States v. Microsoft), leaving 14 opinions. (I’m including in that count two briefs filed by our project on criminal justice but not counting the one filed in Trump v. Hawaii because it was an immigration-policy brief which no Cato lawyers signed.) 

Improving on last year’s 9–4 performance, Cato achieved an 11–3 showing. Perhaps most importantly, we handily beat our biggest rivals, the federal government, which amassed an 11–15 record. (It’s an apples-and-oranges comparison, i know, because the government typically appears as a party, not simply amicus, and always participates in oral argument.)

Cato also effectively drew votes from across the judicial spectrum, winning 13 votes from Chief Justice John Roberts, 12 from Justice Elena Kagan, 11 from Justices Anthony Kennedy and Gorsuch, 9 from Justices Clarence Thomas, Stephen Breyer, Samuel Alito, and 7 each from Justices Ruth Bader Ginsburg and Sonia Sotomayor.

Here’s the breakdown, in the order the opinions arrived:

Winning side (11): Masterpiece Cakeshop v. Colorado Civil Rights Commission; Carpenter v. United States; Murphy v. NCAA; Collins v. Virginia; NIFLA v. Becerra; Digital Realty Trust v. Somers; Minnesota Voters Alliance v. Mansky; Janus v. AFSCME Council 31; McCoy v. Louisiana; Lozman v. City of Riviera Beach; and Lucia v. SEC.

Losing side (3): Oil States Energy Services v. Greene’s Energy Group; Currier v. Virginia; and South Dakota v. Wayfair.

Next term doesn’t yet look like as exciting as this one was — though recall that several high-profile cases, including Masterpiece Cakeshop and the partisan-gerrymandering lawsuits — ended in fizzles. But still, come this fall we’ll see important cases on property rights, separation of powers, the nondelegation doctrine (!), and more. But of course before we get to next term, the summer will be occupied with the battle over the successor to Justice Kennedy, who announced his retirement hours after the Court announced its final opinions. 

I’ll have more to say on all this in future commentary, but if you’d like to learn more about these cases/​trends and the views of Cato-friendly scholars and lawyers, register for our 17th Annual Constitution Day Symposium, which will be held September 17. That’s also when we’ll be releasing the latest volume of the Cato Supreme Court Review, the editing of which will consume the parts of the summer not spent analyzing Kennedy, his possible successors, and the eventual nominee.

The Supreme Court upheld the legality and constitutionality of President Trump’s travel ban this week, but it had already allowed the ban to go fully into effect on December 4, pending its final decision. We now have five full months of data from the State Department to see how the ban has affected immigration and travel from the countries that the ban targeted. Overall, we have seen a dramatic decline in visa approvals, affecting most notably Iranians and Yemenis.

Figure 1 shows the difference in the average monthly visa issuances for temporary visitors (i.e. nonimmigrants) and immigrants (i.e. permanent residents) for the seven countries affected by the final travel ban order for fiscal year 2016 compared to the first five months of calendar year 2018 (after the ban took effect). Figure 1 doesn’t include Venezuela because the order exempted all Venezuelans except for a few government officials. Chadians are included, although their restrictions were lifted on April 11, 2018. There was an 86 percent decline in the average monthly approvals for temporary visitors from the seven countries, and a 93 percent decline in the average monthly approvals for new permanent residents.

86% Fewer Visas for Temporary Workers, Tourists, and Students

Figure 2 shows the monthly issuances for temporary (i.e. “nonimmigrant”) visas for the seven nationalities singled out by the final order from March 2017 through May 2018, with the monthly averages for the first five months of fiscal year 2017 and the average monthly issuances for fiscal year 2016 (monthly figures are unavailable prior to March 2017). As it shows, the Supreme Court’s decision to lift the injunction in December led to a massive decline in visas, particularly for Iranians.

Table 1 shows the monthly averages for each nationality covered under the final travel ban. All nationalities saw visa issuances decline 86 percent. Iranians saw the biggest decline of 91 percent. There were 1,631 fewer temporary visas issued for Iranians on average during the months in 2018 than during 2016. This accounted for 62.7 percent of the total decline in temporary visas for all of the travel ban countries.

93 Percent Fewer Visas for Permanent Immigrants

Figure 3 shows the monthly issuances for immigrant (i.e. permanent) visas for the seven countries singled out in the final travel ban order. Like Figure 2, it shows sharp declines following the Supreme Court decision in December 2017 to allow the ban to go into full effect before its final decision this week.

Table 2 provides the monthly averages for each nationality covered under the final travel ban. All nationalities saw immigrant visa issuances decline 93 percent. Yemenis saw the biggest percentage decline of 98 percent, and the largest absolute decline of more than 1,000 fewer visas per month in 2018. Yemenis accounted for more than half the decline in immigrant visas issued to nationals of the travel ban from 2016 to 2018.

https://infogram.com/table‑2–1h7g6ke5kxkj6oy

Overall, the travel ban has had significant effects on immigration and travel from the affected countries. As I’ve noted before, however, the travel ban fits into a larger swathe of policies intended to reduce Muslim immigration and travel to the United States. These policies have worked. Muslim immigration, travel, and refugee admissions to the United States have plummeted under this administration. With the Supreme Court having approved this policy approach, it is likely that similar policies will appear in the future.

Today’s big win at the Supreme Court for free speech in the public-sector union context, which Ilya summarizes below and Wally expands on, has implications beyond protecting public employees from having to pay “agency fees” to support union activities they may oppose. Writing for the Court in Janus v. AFSCME, Justice Alito touches on that when he notes that the ascendance of public-sector unions, which originated in Wisconsin in 1959, “has been marked by a parallel increase in public spending.” While “not all of that increase can be attributed to public-sector unions,” he continues, “the mounting costs of public-employee wages, benefits, and pensions undoubtedly played a substantial role.” And he adds, citing the brief for the state of Michigan, that “unsustainable collective-bargaining agreements have also been blamed for multiple municipal bankruptcies.” Detroit comes to mind, of course.

The connection, such as it has been, between public-sector unionization and increased public spending is nicely summarized by Cato adjunct scholar Richard Epstein in a piece he wrote just before oral argument in the Janus case. Unlike private-sector unions, he writes, pubic-sector unions operate in a context free from market discipline. For the services those unions offer state and municipal employees,

the state usually operates as the sole supplier. Hence the corresponding power of the union is extraordinary, and it is made even more powerful because legislators elected with strong union support let powerful union forces sit on both sides of the bargaining table. The effort to limit union power by forbidding strikes and compulsory arbitration offers no solution to the problem: Unions can still demand top dollar and unsustainably large pensions, which helps explain why so many state and local pension funds are in such desperate shape. A decision that lets dissident workers out from under the union thumb is an important counterweight to these dangerous manifestations of union power.

It’s no accident, therefore, that a state like Illinois, from which Janus came to the Court, has a bond rating just above junk status—with no way in sight to address the parlous state of its finances. It’s too early to tell just how today’s decision will impact public-sector unions—Justice Alito notes that they continue to thrive in the 28 states that now prohibit union fees. But as recent experience in a state like Wisconsin suggests, union membership will likely drop, along with union funds. And the need to attract dues-paying members may discipline union demands.

Justice Anthony Kennedy’s retirement announcement was not unexpected but is still major news in the direction and leadership of the country.

Kennedy spent more than 30 years on the Court and for much of that time, particularly the last decade, has been the deciding or “swing” vote on so many controversies, ranging from campaign finance to gay marriage, the Second Amendment to abortion. Throughout that time, his judicial philosophy couldn’t be pigeonholed as “conservative” or “liberal,” and indeed is hard to describe in conventional terms. Most terms he agreed with Cato’s position more than any other justice and so he’s also sometimes known as the Court’s “libertarian” justice. There’s some truth to that, even though he often reached results that libertarians liked for reasons that sounded in dignity and civility rather than classical-liberal or natural-rights theory.

Kennedy was the strongest defender of the First Amendment that the Court has probably ever seen, whether in the context of political or artistic expression made by students, workers, or any citizens. He was also a careful guarantor of the Constitution’s structural protections for liberty. Whether federalism, the separation of powers, or any of the other “less sexy” parts of constitutional design, he recognized that they were there as a means to protect and secure our liberties, not as a dry technical exercise.

By retiring now, Kennedy hands President Trump a golden opportunity to put his stamp on the Court. All of the people on the White House list of 25 potentials could be considered more reliably conservative than he has been—which means that Chief Justice John Roberts will become the median justice. Given that the Democrats pushed the Republicans to eliminate the filibuster, any Trump nominee should be able to be confirmed without too much fuss (assuming the most moderate GOP senators approve). That will have a significant impact on all the sorts of cases where Kennedy joined the more liberal justices to form a 5–4 majority—of which there were actually none this term.

In short, it was a momentous term that was made all the more momentous by this announcement.

In her dissent on behalf of the four liberals in today’s Janus v. AFSCME Council 31, Justice Elena Kagan outlined the so-called free-rider problem that has been said to justify requiring public employees to pay union fees [citation to 1991 paper omitted]:

Employees (including those who love the union) realize that they can get the same benefits even if they let their memberships expire. And as more and more stop paying dues, those left must take up the financial slack (and anyway, begin to feel like suckers)—so they too quit the union. And when the vicious cycle finally ends, chances are that the union will lack the resources to effectively perform the responsibilities of an exclusive representative—or, in the worst case, to perform them at all. The result is to frustrate the interests of every government entity that thinks a strong exclusive-representation scheme will promote stable labor relations. 

The free-rider argument is a weak one on its own terms, even if you leave aside Justice Samuel Alito’s observation for the majority that free-rider economic arguments are ordinarily not expected to override First Amendment concerns. To begin with, unions not only still exist in the U.S. states (a majority) that have enacted “right to work” laws curbing agency fees, but sometimes wield much political clout. Janus does not spell a death knell for public unions that provide their members with value. 

Moreover, as Cato scholars Trevor Burrus and Reilly Stephens have pointed out, European unions have developed along somewhat different institutional lines: they rely less on models of exclusive bargaining representation and more on collective social representation and solidarity (often linked to direct involvement in provision of fringe benefits and other valued services). Far from being weakened by their departure from the “American” model of exclusive collective representation, they seem to be in many ways more formidable than are American unions.

Expect state and local governments that are closely allied with the political interests of unions to scramble now to enact measures meant to evade Janus. Here is a description of what just happened in California, from Joel Fox at the political site Fox and Hounds: 

SB 866 would cement union control over access to individual employee decisions on whether to continue paying union dues, should mandatory agency fees be deemed unconstitutional. …Key elements of the bill include:

• Requiring for any school teacher, state firefighter, college professor, prison guard, environmental regulator, or any of the hundreds of other classes of state and school employees who may wish to reduce or eliminate their mandatory union dues, that they make this request exclusively to the union rather than to their employer.
• Unions would not be required to provide the actual authorizations for dues deduction to the school board or State Controller, but instead would merely certify to the public agency’s payroll department as to who is or is not paying union dues. Public employers must rely on the unions’ representations regarding dues deductions.
• Unions would indemnify public employers over claims made by individual employees for deductions made in reliance on union representations.
• Employees would be prohibited from contacting their employer directly regarding union dues deductions.
• A public employer may not send mail or email to its employees, or provide an oral presentation, about their right to join or refrain from joining a union, unless the employer facilitates delivery of similar messages from the union.
• Government employee unions currently have access to orientation sessions for new employees. This bill would limit disclosure of the date, time and place of these sessions to the employees and unions only. Members of the public and taxpayers would be kept in the dark about meetings of public officials.

If signed by Governor Brown, the measure would take effect immediately.

The California bill was rushed through both houses in quickstep fashion as a budget trailer bill and was enrolled June 19.