Cato: Terminating the INF Treaty Makes No Sense

President Trump’s announcement that he plans to withdraw from the Intermediate-Range Nuclear Forces (INF) Treaty is worrying news for U.S.-Russian relations and for the prospect of effective arms control moving forward.

The INF Treaty was negotiated by President Ronald Reagan and Soviet leader Mikhail Gorbachev. Each party agreed to eliminate their nuclear and conventional ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 km. It was a quite successful arms control agreement, at least until recently. In the last few years, Moscow has tested and deployed cruise missiles that appear to violate INF limits. 

This is the Trump administration’s rationale for terminating the agreement. And the reasoning has a powerful logic. If Russia isn’t going to fully comply with the treaty, why should the United States?

The problem is that simply withdrawing is the most extreme option available and robs us of viable diplomatic solutions while doing nothing to pressure Russia to get back into compliance. Indeed, terminating the agreement is probably the option most likely to generate a new arms race.

It is worth noting that the Russians claim we cheated first by deploying missile defense systems in Europe that, if used offensively, would violate the terms of the INF treaty. It’s a debatable accusation, but this mutual suspicion is resolvable over the negotiating table. Unfortunately, the Trump administration has barely made an effort to discuss it with Moscow.

Instead of pressuring Moscow to bring itself back into compliance with the treaty, Trump’s planned withdrawal – along with not-so-subtle hints that the administration plans to ramp up production of just the type of missiles the INF prohibits − merely gives the greenlight to Russia to expand their own capabilities in this area.

Read more at https://www.cato.org/blog/terminating-inf-treaty-makes-no-sense

Cato: The Jones Act Isn’t Working. Just Ask Its Supporters.

Although the Jones Act’s stated purpose is to ensure that the United States “shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency,” this plainly isn’t the case. But don’t take my word for it, just listen to ardent backers of the law such as Rep. John Garamendi (D-CA):

"Our military relies on privately-owned sealift capacity and highly trained and credentialed merchant mariners to transport and sustain our armed forces when deployed overseas during times of conflict. But the number of ocean-going U.S.-flag vessels has dropped from 249 in the 1980s, to 106 in 2012, to at most 81 today.

The consequences of this steep decline are not just theoretical. Our military has had to turn to foreign-flagged vessels for sustainment in times of war, and experience shows that can have dangerous consequences. In the 1991 Gulf War, our armed forces relied on 192 foreign-flagged ships to carry cargo to the war zone. The foreign crews on thirteen vessels mutinied, forcing those ships to abandon their military mission. Would foreign flag carriers be any more reliable today, especially for a long-term deployment into active war zones?

But the number of ships is not the only issue: The U.S. Transportation Command and Federal Maritime Administration estimate that our country is now at least 1,800 mariners short of the minimum required for adequate military sealift, even with the Jones Act firmly in place. Without the Jones Act, our nation would be wholly unprepared to meet the labor demands of rapid, large-scale force projection for national security."

The House Coast Guard and Maritime Transportation Subcommittee’s ranking member is absolutely correct about the sad state of the U.S. merchant fleet. Some of his numbers, however, are off the mark. The drop in the number of ocean-going U.S.-flag vessels is even more dramatic than what he states, declining from 737 in 1985 to a current figure of 180. Regarding the 1991 Gulf War, meanwhile, the actual number of foreign-flagged ships used as part of the U.S. sealift was 177 rather than 192. It’s also inaccurate to say that thirteen vessels were forced to abandon their military mission, with eight of those vessels ultimately delivering their cargo after initial hesitations.

Read more at https://www.cato.org/blog/jones-act-isnt-working-just-ask-its-supporters

Cato: Let’s Face It: US Policy in the Middle East Has Failed

The ongoing controversy surrounding the murder of a dissident Saudi journalist and Saudi Arabia’s brutal bombing campaign of a largely defenseless neighboring Yemen, which has come with an enormous human toll, have elicited increased scrutiny over the U.S.-Saudi alliance. The White House remains supportive of Riyadh, both diplomatically and with continued military aid. Republicans have offered mildly critical words for the Saudi regime, while an increasing number of Democrats are calling for a fundamental reassessment of the U.S.-Saudi relationship.

Such a reassessment is long overdue. Washington’s partnership with Riyadh has often been treated as sacrosanct, at least here in the nation’s capital. It should have been clear long ago that the Saudis are not good allies. In fact, they often act in ways that undermine U.S. interests. Backing one of the world’s most appallingly tyrannical regimes to the hilt has actually not been a net positive for U.S. national security or for stability in the region.

With any luck, the unfolding drama over the U.S.-Saudi partnership will extend beyond merely this troubled bilateral relationship to U.S. policy in the Middle East as a whole. The United States is deeply entangled in this region, with roughly 50,000 boots on the ground, dozens of permanent military bases and deployed assets, and a staggering sum of taxpayer dollars, essentially wasted. We are engaged in active combat operations in at least five countries across the Middle East and North Africa, bogged down in endless counter-insurgency campaigns, grisly counter-terrorism operations, and inglorious proxy wars. Washington also tasks Central Command with the responsibility of supporting, training, arming, and stabilizing various corrupt dictatorships, while we also try to put the squeeze on Iran.

Read more at https://www.cato.org/blog/lets-face-it-us-policy-middle-east-has-failed

Cato: Nonviolent Felons Shouldn’t Lose Their Second Amendment Rights

In 1989, Larry Hatfield fudged his employment records to get some extra money from the Railroad Retirement Board. He was caught and pled guilty to the federal crime of making a false statement, and was sentenced to a fine and (at the government’s recommendation) no prison time. Since then, Hatfield has lived his life without incident, incurring nary as much as a parking ticket. He doesn’t fight, do drugs, or cause problems. Hatfield has lived as a completely law-abiding citizen for decades.

Hatfield’s neighborhood, however, has changed for the worst, so he wants to own a firearm to defend himself in his home. But the intersection of an odd federal law—18 U.S.C. § 922(g)(1)—and the ever-expanding idea of what a “felony” is has seen his right to keep and bear arms stripped away. That old conviction for lying to the Retirement Board now restricts his right to armed self-defense. While his conduct in 1989 was not upstanding, permanently stripping Hatfield of his core Second Amendment right seems an excessive punishment—one that puts the government in the interesting position of having argued that Hatfield is both so non-dangerous so as to have been recommended zero days in prison, but so dangerous that he can never be trusted with a gun.

Read more at https://www.cato.org/blog/nonviolent-felons-shouldnt-lose-their-second-amendment-rights

Cato: Untangling At Last: Policymakers Take Aim at Ending Arms Sales to Saudi Arabia

Saudi Arabia has a big problem on its hands this week. Despite funneling significant resources into lobbying efforts and U.S. congressional campaigns, the kingdom has found itself in a pickle that it cannot seem to easily extricate itself from: the disappearance of Jamal Khashoggi.

For years, Saudi Arabia’s war in Yemen has drawn significant criticism for its strategy and tactics. The Saudi naval blockade has the kingdom’s smaller neighbor grappling with a devastating famine and a dearth of medical supplies and humanitarian aid. The Saudi air campaign has also proven deeply problematic—either from poor aim or amoral choices of target.

International critiques seemed to reach a crescendo last month after the Saudis mistakenly bombed a school bus full of children, killing 26 and injuring 19 Yemeni kids. European nations issued statements that they would halt weapons shipments to the kingdom for the foreseeable future because of the incident, but many of those nations (including Spain and Germany) did an abrupt U-turn later in the month and proceeded with the sales.

Some American policymakers have also tried to halt weapon sales to the nation over the past two years. There have been two outright votes on the matter led by bipartisan, bicameral coalitions, but both measures were narrowly defeated.

Read more at https://www.cato.org/blog/untangling-last-policymakers-take-aim-ending-arms-sales-saudi-arabia

Cato: States Can’t Make Up New Laws to Punish Old Conduct Just Because They Call Them “Civil”

Article I, Section 10 of the Constitution provides that “[n]o State shall … pass any … Ex Post Facto law.” The Ex Post Facto Clause was incorporated into the Constitution to prohibit states from enacting retrospective legislation, which the Framers believed to be inherently unfair and contrary to the principles of limited, constitutional government. Despite the Framers’ clear aversion to retrospective lawmaking, the Supreme Court has since adopted the view that states are uninhibited from enacting retroactive civil penalties. So long as a retrospective law contains a discernable legislative purpose and a “civil” label, retroactive application will not run afoul of the Ex Post Facto Clause. Consequently, states have imposed increasingly burdensome retroactive penalties on convicted sex offenders under the guise of civil regulatory laws. Even after offenders have paid their debts to society, they continue to face excessive registration requirements and other onerous civil penalties.

Back in 2004, 19-year-old Anthony Bethea was convicted of six counts of sexual activity arising from non-forcible, consensual intercourse with a 15-year-old girl. He pled guilty and agreed to be sentenced to up to 48 months of imprisonment, complete a sex offender treatment program, and register as a sex offender for 10 years. He successfully completed the treatment program in 2006 and his period of probation in 2007. Beginning in 2006, however, North Carolina drastically transformed its sex offender statute, adding a laundry list of additional burdens on previously convicted sex offenders. Today, Bethea is subject to numerous restrictions that did not exist at the time of his plea agreement, such as limitations on where he can go, where he can live, and what jobs he can hold. Perhaps worst of all, the new restrictions have prevented him from being a father to his children. Due to his continued registration, Bethea has been forced to miss his son’s graduation ceremonies, parent-teacher conferences, and school field trips. Bethea should have been off the registry four years ago, but North Carolina retroactively lengthened his registration period from 10 to 30 years.

In 2014, 10 years after he registered, Bethea petitioned the North Carolina courts to be removed from the registry. He argued that retroactively applying the statutory provisions enacted after Bethea’s conviction violated the Ex Post Facto Clause. Although the court found that Bethea was in no way a threat to public safety, his petition was denied. On appeal, the North Carolina Court of Appeals held that the state’s sex offender statute was civil, rather than punitive, and thus did not constitute a violation of the Ex Post Facto Clause. The North Carolina Supreme Court denied review and Bethea has asked the U.S. Supreme Court to take his case.

Read more at https://www.cato.org/blog/states-cant-make-new-laws-punish-old-conduct-just-because-they-call-them-civil

Cato: U.S. Whitewashes Saudi War Crimes

There are indications now that the Saudi Arabian government may have murdered a prominent Saudi journalist who advocated domestic reforms and opposed Crown Prince Mohammed bin Salman. A Turkish investigation concluded that a 15-member “preplanned murder team” killed Jamal Khashoggi when he was visiting the Saudi consulate in Istanbul. Not surprisingly, Riyadh has flatly denied Turkey’s allegation, but that denial seems to have even less credibility than most Saudi statements. Khashoggi has contributed articles to the Washington Post and numerous other prominent Western news outlets, and he has an abundance of influential friends in such circles. They do not seem inclined to let this incident fade away.

Khashoggi’s disappearance and apparent murder—as appalling as it may be–should be overshadowed, though, by Saudi Arabia’s far more extensive human-rights abuses and outright war crimes. That is especially true regarding the way it has conducted the war in Yemen. There is abundant evidence of multiple atrocities that Riyadh and its United Arab Emirates (UAE) junior partner have committed and continue to commit. The coalition’s war strategy has created a famine as well as a cholera epidemic. Among the many deliberate attacks on innocent Yemeni civilians was an August incident in which coalition aircraft attacked a school bus, killing 40 children.

Read more at https://www.cato.org/blog/us-whitewashes-saudi-war-crimes

Cato: Objecting to Compelled Speech Is More than Sour Grapes

Neither the government nor a private party may compel you to speak; nor may a private party masquerading as a government entity compel you to speak, even when it’s supposedly for your own good. In Delano Farms v. California Table Grape Commission, Cato, joined by the Reason Foundation, Institute for Justice, and DKT Liberty Project, is continuing to support a farm business’s challenge to a California state-established commission that compels grape growers to contribute money for government-endorsed advertisements. We had previously filed in the California Supreme Court, which was a losing battle, and are now asking the U.S. Supreme Court to take the case.

Now, governments are allowed to disseminate their own messages and can use tax revenue to do it under what’s called, simply enough, the “government-speech doctrine.” They can also tax industries specifically and earmark those funds to promote those particular industries; the Supreme Court has upheld several industry-advertising programs, including national campaigns for beef. In many of these targeted tax-and-advertise programs, the government requires taxes or “fees” from anyone doing business in the industry. One justification for these fees is that all producers benefit from such a “group advertisement.” If some were able to get the marketing benefit without paying, the system would suffer from “free riders.” For such a program to actually constitute government speech and thus avoid First Amendment problems, however, it is the government itself that must be speaking.

The California Table Grapes Commission has claimed that it is part of the government and that its speech is thus “government speech.” But the commission isn’t the group; it’s a commercial entity or trade group that uses compelled subsidies to fund speech. The commission’s generic advertisements for California grapes don’t really benefit the entire industry. Instead, they benefit some members of the industry by making it seem that all products are equally good. Furthermore the commission can’t be considered part of the government because it, unlike the actual government, can be disbanded based on a vote of the table grape producers.

Read more at https://www.cato.org/blog/objecting-compelled-speech-more-sour-grapes

Cato: Build a Wall Between the Branches of Government

The essence of the separation of powers is that Congress may not give another branch the power to do what it alone may do. In Animal Legal Defense Fund v. Department of Homeland Security, several California-based environmental groups are challenging a law allowing the department secretary to waive any and all laws to speed building of the southern border-wall. Denied in the lower courts, the groups filed a petition with the Supreme Court. Cato has filed an amicus brief supporting that petition and arguing that such unlimited discretion violates the separation of powers.

The Constitution vests “all legislative power” in Congress, while the executive branch enforces those laws (rather than making or un-making them). Courts from the early days of the republic have maintained this division by preventing the delegation of the legislative power to the executive. To enforce this non-delegation doctrine the Court established the “intelligible principle” test. For a law to pass, Congress must (1) designate an agent or actor, (2) clearly direct the purpose or goal of the law, and (3) set boundaries to the agent’s powers. But the modern Court has stopped applying this doctrine; the last time it struck down a law on non-delegation grounds was in 1935. Since then it has deferred to larger and larger grants of legislative power to executive agencies.

Read more at https://www.cato.org/blog/build-wall-between-branches-government

Cato: PragerU’s “A Nation of Immigrants” Video Has Serious Problems

Prager University (PragerU), founded by radio talk-show host Dennis Prager and Allen Estrin, is a non-profit that makes short videos on political, economic, cultural, and philosophical topics from a conservative perspective.  Last month, PragerU released a video called “A Nation of Immigration” narrated by Michelle Malkin, an individual most famously known for her defense of the internment of Japanese Americans during World War II.  The video is poorly framed, rife with errors and half-truths, leaves out a lot of relevant information, and comes to an anti-legal immigration conclusion that is unsupported by the evidence presented in the rest of the video.  Below are quotes and claims from the video followed by my responses.

"The United States still maintains the most generous [immigration] policies in the world.  Generous to a fault … "

There are two things wrong with the statement.  The first is framing around the word “generous” and the second is the claim that the U.S. has the freest immigration policy in the world. 

Using the word “generous” implies that allowing legal immigration is an act of charity by Americans and that we incur a net-cost from such openness.  On the contrary, the economic evidence is clear that Americans benefit considerably from immigration via higher wages, lower government deficits, more innovation, their greater entrepreneurship, housing prices, and higher returns to capital. 

Most immigrants come here for economic reasons.  In what sense is it generous or charitable on the part of Americans to allow an immigrant to come here voluntarily and to work for an American employer?  Not only do both the employer and the immigrant gain; the consumers, investors, and economy do as well.   

Second, the United States does not allow more legal immigrants to enter annually in comparison to other countries.  When controlling for the population size of the destination country (excluding Turkey), the annual flow of immigrants to the United States is the 25th most open among the OECD countries in 2016 (Figure 1).  Unlike other countries in the list, the OECD records the number of non-permanent migrants who entered the United States in 2016.  Adding together the permanent immigrants and non-permanent migrants for the United States only and then comparing that new number to the permanent immigrant inflows in other OECD countries, which I am only doing to give Malkin the benefit of the doubt, turns the United States into the 20th most “generous” OECD country. 

Read more at https://www.cato.org/blog/pragerus-nation-immigrants-video-has-serious-problems

Cato: Another Jones Act Absurdity

As North Carolina grapples with the aftermath of Hurricane Florence, transportation officials in the state are attempting to secure the use of a U.S. government-owned vessel, the Cape Ray, to transport supplies to the port of Wilmington. With the city temporarily transformed into an island by recent flooding, the roll-on, roll-off ship—or “ro-ro” in maritime parlance—will enable trucks filled with needed goods to drive aboard.

It’s a good thing the ship is government-owned—under private ownership the Cape Ray’s provision of relief supplies would be illegal. This absurd situation is due to a nearly 100-year-old law called the Jones Act. Passed in 1920, the law mandates that ships transporting goods between two points in the United States be U.S.-owned, crewed, flagged and built. The Cape Ray, however, was built in Japan.

Even if officials sought the private sector’s help and a Jones Act-compliant ro-ro ship to transport the trucks, none are available. According to data from the U.S. Maritime Administration (MARAD) there are only seven ro-ro ships in the entire Jones Act fleet. The closest one to North Carolina, the Delta Mariner, isn’t even an ocean-going vessel but rather operates on the Tennessee River. The other six vessels ply routes between the West Coast and Alaska or Hawaii.

The picture is little improved if Jones Act containerships and general cargo ships are also included, with a total of six such vessels currently on the East or Gulf Coasts (MARAD shows five but does not include the recently commissioned El Coquí). The closest one to the North Carolina flood victims is a 47-year-old general cargo ship, the Coastal Venture, which is currently moored near Charleston.

Read more at https://www.cato.org/blog/another-jones-act-absurdity

Cato: “Fort Trump” and Mounting U.S. Tensions with Russia

Washington’s relations with Russia have been deteriorating for years, but new U.S. actions could make matters considerably worse.  One major source of irritation for the Kremlin has been NATO’s military exercises in countries on Russia’s border.  Those war games have proliferated since the onset of the Ukraine crisis in 2014, when the United States and European Union countries helped demonstrators oust Ukraine’s elected, pro-Russian president, Viktor Yanukovych, and Russia responded by annexing Crimea.

Russian anger also has been directed at “rotational” U.S. military deployments in NATO’s easternmost members.  Those supposedly temporary assignments of American units have become nearly continuous.  Now there are indications that the Trump administration may dispense entirely with the diplomatic fiction that sequential rotational deployments do not constitute a permanent U.S. military presence.

During a state visit to Washington in mid-September, Poland’s president, Andrzej Duda, promised to provide $2 billion toward construction costs if the United States built a military base in his country.  In a transparent appeal to the U.S. president’s notorious vanity, Duda even offered to name the base “Fort Trump.”  Poland “is willing to make a very major contribution to the United States to come in and have a presence in Poland,” Trump said in the Oval Office. “If they’re willing to do that, it’s something we will certainly talk about.”  He added that the United States would take Duda’s proposal “very seriously.”

Read more at https://www.cato.org/blog/fort-trump-mounting-us-tensions-russia

Cato: Windy City’s Food-Truck Regulations Are Full of Hot Air

May a city both require certain business owners to forego their Fourth Amendment rights and also enforce regulations specifically designed to advantage competing businesses in a related industry? That’s the question to be answered by the Illinois Supreme Court in LMP Services v. Chicago. The City of Chicago enacted an ordinance requiring all food trucks to install GPS trackers, in part as a means of settling disputes as to whether these vicious vehicular vittle vendors are violating yet another ordinance by operating within 200 feet of any brick-and-mortar restaurant. The lower state courts have allowed these new rules to take effect, so Cato—along with the National Food Trucks Association and the Illinois Food Truck Owners Association—has filed a brief urging the state high court to use a different constitutional recipe.

In upholding these ordinances, the intermediate state appellate court ruled that the mandatory GPS placement was not actually a “search” under the Fourth Amendment, because there was no physical intrusion by the government and as a consequence of food trucks’ operating under a revocable license. Both rationales are mistaken. While the government hired a private company to install the GPS trackers, it has long been established that the government can’t avoid constitutional scrutiny by contracting out the state-directed action.

And regardless of whether the food truck industry is subject to business licensing, the GPS requirement cannot validly fall under the judicially created exception to the warrant requirement for administrative searches of closely regulated industries. The ordinance is both overly expansive—violating more privacy rights than is necessary—and its failure to limit official discretion. Indeed, it’s hard to conceive of a warrantless-search regime that does less to place proper restraints on official discretion than a mandate that food-truck owners constantly reveal their precise location as a condition of doing business.

Read more at https://www.cato.org/blog/windy-citys-food-truck-regulations-are-full-hot-air

Cato: The Jones Act Makes Little Sense in a Globalized World

Late last month that rarest of commodities, a new U.S.-built commercial transport ship, completed its maiden voyage by entering the harbor of San Juan, Puerto Rico to deliver its cargo. Called El Coquí, the vessel is among the world’s first hybrid roll-on/roll-off container vessels—a “ConRo” in industry parlance—that is powered by liquefied natural gas.

Supporters of the Jones Act, a protectionist law which mandates that ships transporting goods between U.S. ports be U.S.-owned, crewed, flagged, and built, have pointed to El Coquí as a symbol of the measure’s success. The President of the Shipbuilder’s Council of America cited “American skill and ingenuity, as well as critical laws like the Jones Act” in his remarks praising the new ship. A senior official with Crowley Maritime, which owns the ship, added that investments such as El Coquí “would not have been possible without the [Jones] Act.”

What El Coquí truly represents is the outdated thinking behind this law.

According to its supporters, the Jones Act helps ensure U.S. expertise in shipbuilding and a domestic capability that can be relied upon in times of war. But as El Coquí demonstrates, it’s unclear how much expertise the U.S. shipbuilding industry possesses or how purely American this capability really is. The vessel’s very DNA, for example, is more foreign than American, with design work largely performed by Finnish company Wärtsilä using a team mainly located in Poland and Norway. In addition, testing for a model of the ship took place at a facility in the Netherlands.

That’s not all. Its celebrated LNG propulsion system features engines from a German company, MAN Diesel & Turbo, that were produced in Japan. The actual LNG tanks were supplied by another German firm, TGE Marine Gas Engineering. No doubt a thorough inventory of the various components used to build the ship would reveal numerous other examples of sourcing from abroad.

Read more at https://www.cato.org/blog/jones-act-makes-little-sense-globalized-world

Cato: Lighthouses in Economics

Tuesday was National Lighthouse Day and social media was abuzz highlighting lighthouses’ beauty and their important role in navigation. On August 7, 1789, in one of its first actions, Congress approved an Act that established federal administration and support for lighthouses, beacons, buoys, and public piers. Interestingly, though the Act established tax funding for lighthouses in the United States, the history of lighthouses in the United Kingdom took a very different path and has been a source of debate about public goods and the proper role of government.

Public goods, according to economists, are commodities for which it is impossible (or at least difficult) to restrict consumption to those who pay. Such goods are said to exhibit the free-rider problem. Economists from John Stuart Mill to Paul Samuelson argued that lighthouses were a textbook example of a public good because a private operator would have difficulty collecting payment from passing ships that use the light as a navigational aid. A lighthouse cannot pick and choose which ships view its light. Thus, a privately-owned lighthouse would raise no revenue. If government didn’t provide them through taxation, then no one would.

In 1974, Nobel Prize winning economist Ronald Coase examined the history of lighthouses in Britain and argued that, contrary to the traditional view, the service provided by lighthouses is excludable: passing ships need to dock somewhere, and when they do they can be charged user fees for the lighthouses they passed before docking. Coase showed that there were many privately owned lighthouses in 18th and 19th century Britain that were supported by user fees.

Read more at https://www.cato.org/blog/lighthouses-economics-1

Cato: Legislators Can Commit Property Rights Violations, Too

The Constitution’s Taking Clause provides that government cannot conscript property to its own purposes without compensating the rightful owner for the value of what is taken. The most direct application of this principle is in cases of eminent domain, where the government takes title to a piece of land for some public purpose—or sometimes a not-so-public purpose. But the takings principle applies to other impositions on property rights as well, such as regulations that render a previously expensive piece of property valueless. Courts recognize that in these cases there is likewise an infringement on property rights in the name of the public good, and that such a public good should come at the expense of the public as a whole, not some particularly unlucky land owner.

The Supreme Court has repeatedly recognized the potential for these abuses and, in a series of cases beginning with 1987’s Nollan v. California Coastal Commission, it has demanded that permit requirements and development exactions bear some relationship to the actual impacts of the project. If one wishes to build an apartment building, its reasonable enough to say one should contribute to the public expense that creates when the municipality needs to build a new road to serve it. Requiring a landowner to pay for an unrelated project many miles away for the privilege of making perfectly legal improvements to their own property should be out of bounds.

But lower courts friendlier to acts of state extortion believe they have found a loophole: Nollan and its progeny dealt with specific ad hoc permitting requirements by local planning agencies. Where the legislature imposes the exaction as part of a general ordinance, however, these courts claim Nollan doesn’t apply. What principle of aggregation renders an act that is unconstitutional when applied to a specific person constitutional when applied to the public generally?

Read more at https://www.cato.org/blog/legislators-can-commit-property-rights-violations-too

Cato: Destroying Property Value by Regulation Is Just as Bad as Using Eminent Domain

Nearly a century has passed since Justice Oliver Wendell Holmes’s legendary proclamation that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” But that statement did little to actually clarify when the Fifth Amendment’s protections against uncompensated takings of property applies to government action that regulates away the use of land rather than physically taking it through eminent domain.

Attempting to clear up that confusion, the Supreme Court 40 years ago handed down the now infamous Penn Central decision (involving the historic qualities of NYC’s Penn Central Station). Penn Central requires courts to go through a balancing test based on (1) the economic impact of the regulation, (2) the extent to which the regulation interferes with reasonable investment-backed expectations, and (3) the nature or character of the government action. Unfortunately, that’s a lot of words to give very little direction, so property owners, regulators, lawyers, and lower courts have been clamoring for meaningful guidance on those fact-bound, ad-hoc inquiries ever since.

As the story of Simone and Lyder Johnson illustrates, the Supreme Court needs to provide true guiding principles on regulatory takings. The Johnsons were drawn to Ponce Inlet, Florida, where they bought land and made plans to construct their dream home. Sensing that the town may be able to benefit, Ponce Inlet persuaded the Johnsons to expand their plans into “a delightful mixed-use waterfront development.”

Over several years, the Johnsons bought additional parcels while working hand-in-hand with the town. They were amenable to providing everything the town asked for, like a nature preserve and boat slip. After millions of dollars were spent, the town changed its mind, halted all work, denied permits, and went so far as to pass legislation prohibiting all development on the Johnsons’ property.

Read more at https://www.cato.org/blog/destroying-property-value-regulation-just-bad-using-eminent-domain

Cato: Qualified Immunity Meets #MeToo: Prison Official Says Sexual Abuse Didn’t Violate “Clearly Established Law”

When Katie Sherman was nineteen years old, she was incarcerated at Trumbull County jail in Ohio, for about five months. During that time, Charles E. Drennen worked as a corrections officer in the female pod of the jail where she was housed. Several female inmates had filed complaints that they’d been harassed and threatened by Drennen, who had a reputation for glaring at the inmates while they were sleeping, but Drennen began focusing on Ms. Sherman in particular. He often made highly sexual comments to her, and on at least four or five occasions, ordered her to expose herself to him, and to touch herself sexually in front of him and other inmates. Ms. Sherman – again, then a nineteen-year-old girl – complied because she was intimidated by Drennen. She eventually attempted to file a complaint against him (even though complaints were not anonymous), but she was never given the complaint form she requested.

After she was released, Ms. Sherman - along with Michele Rafferty, her cellmate - filed a Section 1983 lawsuit, asserting (amongst many other claims) that Drennen’s sexual abuse violated her Eighth Amendment right to be free from cruel and unusual punishment. Drennen moved for summary judgment, arguing that this was “only” sexual harassment, and that because he did not physically touch Ms. Sherman himself, he hadn’t violated her constitutional rights. The district court correctly rejected this perverse “no touching” safe harbor for sexual abuse, and noted that “the facts, viewed in a light most favorable to Plaintiffs, demonstrate that Sherman only masturbated and revealed her breasts due to Drennen’s control over her.” The court likewise rejected Drennen’s claim for qualified immunity, holding that “[i]t is clearly established that sexual abuse is impermissible” and that “[a]ny reasonable prison official would understand that he has no authority to command an inmate to engage in sexual acts.”

Under normal principles of civil litigation, Ms. Sherman would then have been entitled to a jury trial on her civil rights claims. But the doctrine of qualified immunity gives defendants a one-side litigation advantage in the form of interlocutory appeals - that is, if a defendant is denied qualified immunity, they can immediately appeal that decision, before the case even goes to trial. Mr. Drennen has done exactly that, so the question of whether he should receive qualified immunity is now being briefed before the Sixth Circuit. The Cato Institute has therefore filed an amicus brief, urging the court to affirm the denial of immunity, but also to address the legal infirmities with the doctrine in general.

Read more at https://www.cato.org/blog/qualified-immunity-meets-metoo-prison-official-says-sexual-abuse-didnt-violate-clearly

Cato: Supreme Court Should End Class Actions that Don’t Help the Class

When a user clicks on a Google search result, the web browser transmits a “referral header” to the destination website, unless a user has disabled them. The referral header contains the URL of the search results page, which includes the user’s search terms. Websites use this information for editorial and marketing purposes.

In 2010, Paloma Gaos filed a class action in the Northern District of California, seeking damages for the disclosure of her search terms to third-party websites through referral headers, claiming fraud, invasion of privacy, and breach of contract, among others. She eventually settled with Google on behalf of an estimated class of 129 million people in return for an $8.5 million settlement fund and an agreement from Google to revise its FAQ webpage to explain referral headers. Attorneys’ fees of $2.125 million were awarded out of the settlement fund, amounting to 25 percent of the fund and more than double the amount estimated based on class counsel’s actual hours worked.

But no class members other than the named plaintiffs received any money! Instead, the remainder of the settlement fund was awarded to six organizations that “promote public awareness and education, and/or…support research, development, and initiatives, related to protecting privacy on the Internet.” Three of the recipients were alma maters of class counsel.

Read more at https://www.cato.org/blog/supreme-court-should-end-class-actions-dont-help-class

Cato: Navarro Misses the Boat on the Jones Act

In a recent Philadelphia Inquirer opinion piece White House economic advisor Peter Navarro hailed the christening of a new transport ship in the nearby Philly Shipyard as evidence of the “United States commercial shipbuilding industry’s rebirth.” As is typical of Navarro’s pronouncements, the reality is almost the exact opposite. In fact, a closer examination of the ship’s construction reveals it to be symptomatic not of a rebirth, but of the industry’s long downward slide.

Named after the late Senator Daniel K. Inouye of Hawaii, Navarro describes the 850-foot Aloha-class vessel as “massive” and notes that it is “the largest container ship ever built in the United States.” This, however, is somewhat akin to the tallest Liliputian. Although perhaps remarkble in a domestic context, by international standards the ship is a relative pipsqueak. Triple-E class ships produced by Daewoo Shipbuilding & Marine Engineering for Maersk Line, for example, are over 1,300 feet in length. While the Inouye’s cargo capacity is listed at 3,600 TEUs (twenty-foot equivalent units, roughly equivalent to a standardized shipping container), the Triple-E class can handle 18,000.

The only thing truly massive about the Inouye is its cost. The price tag for this vessel and another Aloha-class ship also under construction at the Philly Shipyard is $418 million, or $209 million each. The Triple-E vessels, purchased by Maersk Line, meanwhile, each cost $190 million. The South Korean-built ships, in other words, offer five times the cargo capacity for nearly $20 million dollars less.

But the story gets worse.

Read more at https://www.cato.org/blog/navarro-misses-boat-jones-act

Cato: CFPB Remains Unconstitutional

Just as no single person can be judge, jury, and executioner, no single bureaucratic agency head may create rules and enforce them, and do so without meaningful oversight from Congress or the president. In a case before the U.S. Court of Appeals to the Fifth Circuit, Cato has filed a brief arguing that the director of the Consumer Finance Protection Bureau has been granted both rule-making and rule-enforcing powers far beyond what is constitutionally permissible—and the vague and arbitrary way in which he’s been using them violates the due-process protections of the Fifth Amendment.

Because the structure of the Constitution is so important in preserving the checks and balances between branches of government, courts have looked harshly on schemes that “delegate” those powers away from where constitutional text places them. The president, for instance, may appoint someone to execute his powers over a certain area of law, such as the attorney general as head of the justice department. This doesn’t violate the “nondelegation” doctrine because the president maintains control; he can direct a general policy of prosecution or non-prosecution and he can fire the AG. So long as the president has the power to remove an officer, the power delegated remains ultimately in presidential hands.

Read more at https://www.cato.org/blog/cfpb-remains-unconstitutional

Cato: An Otter Travesty by the Administrative State

In the 1980s, there was concern regarding the endangered sea otter population in California, so Congress passed a law by which a group of otters would be relocated to an island off the coast where they might flourish. Congress was concerned, however, that the relocated otters might cause problems for the fishermen who made their living in those same waters, and so the legislation mandated that the agency in charge set up a management zone which would prevent the otters from damaging the fisheries. It also gave legal protection to well-meaning fishermen who accidentally caused the death of a sea otter—an accident which would otherwise have grave consequences under the Endangered Species Act.

The otters flourished, the fisheries were protected, and everything worked well enough for the next few decades—until some environmental groups convinced the federal government to remove the fisheries’ protections. Congress had balanced the interests at stake when crafting the legislation, but now the feds considered that balance inconvenient. The agency rescinded the fisheries’ regulation, yet left the otters in their new home. A number of groups that depend on the fisheries were nonplussed by this change, and filed a lawsuit.

Read more at https://www.cato.org/blog/otter-travesty-administrative-state

Cato: “Excessive” Fines Are Unconstitutional, Regardless of Their Target

Is an “excessive” fine constitutional if it’s levied against someone other than a human being? According to the Colorado Department of Labor and Employment, yes it is.

Mrs. Soon Pak manages Dami Hospitality, LLC, a company that runs hotels and motels in Colorado. Pak is a Korean immigrant with minimal proficiency in English. She relies on third-party professionals to assist her in maintaining compliance with the myriad of regulations that even native English speakers struggle to understand. Between 2006 and 2014, Dami’s insurance agent failed to renew the company’s worker’s compensation insurance, despite assuring Pak that Dami maintained full coverage.

In 2014, the Labor Department gave notice that Dami’s policy had lapsed, and Pak immediately secured coverage. A few weeks later, the Department imposed a fine of $841,200, including daily penalties the Department had allowed to accumulate for a full eight years before finally giving notice to the company. Put simply, the Department assessed nearly a million-dollar fine against a small corporation—which grosses less than a quarter of the total fine—for a violation that was solved immediately after notice was received, with no actual harm done to anyone. This fine is clearly excessive compared to Dami’s violation. To frame it in the worker’s comp context, if an employee is killed on a job, his dependent receives $250,000. That means the Department considers the results of Dami’s lazy insurance agent to be worse than three workplace fatalities.

We disagree. Unwilling to acquiesce to an attempt to justify excessive fines, Cato and the Independence Institute filed an amicus brief in support of Dami before the Colorado Supreme Court, to which the state had taken the case after the Colorado Court of Appeals set aside the fine as unconstitutionally excessive under the Eighth Amendment.

Read more at https://www.cato.org/blog/excessive-fines-are-unconstitutional-regardless-their-target

Cato: U.S. Maritime Sector Among the Jones Act’s Biggest Victims

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.

Read more at https://www.cato.org/blog/us-maritime-sector-among-jones-acts-biggest-victims

Cato: No, Janus Is Not A Death Knell for Unions

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.

Read more at https://www.cato.org/blog/no-janus-not-death-knell-unions

Cato: New Bill Would Ban Internet Bots (and Speech)

Sen. Dianne Feinstein has introduced the Bot Disclosure and Accountability Act, a proposal to regulate social media bots in a roundabout fashion. The bill has several shortcomings.

Automation of social media use exists on a continuum, from simple software that allows users to schedule posts throughout the day, to programs that scrape and share information about concert ticket availability, or automatically respond to climate change skeptics. Bots may provide useful services, or flood popular topics with nonsense statements in an effort to derail debate. They often behave differently across different social media platforms; Reddit bots serve different functions than Twitter bots. 

What level of automation renders a social media account a bot? Sen. Feinstein isn’t sure, so she’s relinquishing that responsibility to the Federal Trade Commission:

The term ‘‘automated software program or process intended to impersonate or replicate human activity online’’ has the meaning given the term by the [Federal Trade] Commission

If Congress wants to attempt to regulate Americans’ use of social media management software, they should do so themselves. Instead, they would hand the hard and controversial work of defining a bot to the FTC, dodging democratic accountability in the process. Moreover, the bill demands that the FTC define bots “broadly enough so that the definition is not limited to current technology”, virtually guaranteeing initial overbreadth.

Read more at https://www.cato.org/blog/new-bill-would-ban-internet-bots-speech

Cato: A First Amendment Win in a Case That Was NOT about Abortion

In a decision that many First Amendment faithful might find too good to be true, in NIFLA v. Becerra, the Court delivered a solid victory for freedom of speech and against government agents who would force people to speak state-approved messages. Despite the hype to the contrary – and activists from both sides on the courthouse steps – this was NOT an abortion case.  The Court was able to separate the First Amendment principles at stake from that fraught subject.

Reiterating its previous rulings on similar provisions controlling speech based on its content, the Court held that any content-based speech regulation – in this case a California law that compels delivery of particular scripts regarding the availability of abortion services (but that could equally be applied to speech about adoption and prenatal services) – is presumptively unconstitutional. To regulate the content of speech, the government must show that it has the most important of reasons for regulating the speech in question, and that it is only prohibiting or mandating speech to the extent necessary to achieve that highly important and specific purpose. California failed to show that “compelling” interest, namely why it was necessary to single out pro-life pregnancy centers and conscript them into delivering the state’s message about low-cost abortion services.

Read more at https://www.cato.org/blog/first-amendment-win-case-was-not-about-abortion

Cato: Supreme Court Ruling on Travel Ban Should Concern All Legal Immigrants

The Supreme Court upheld President Trump’s travel ban in a 5-4 decision. The travel ban undermines a core principle of the U.S. immigration system since 1965: that the law will not discriminate against immigrants based on nationality or place of birth. The president has rewritten our immigration laws as he sees fit based on the thinnest national security pretext, setting a dangerous precedent for the future.

The ban entirely lacks any reasonable basis in the facts. Nationals of the targeted countries have not carried out any deadly terrorist attacks in the United States, and they are also much less likely to commit other crimes in the United States. Nor are their governments less able or willing than others to share information or adopt certain identity management protocols.

Read more at https://www.cato.org/blog/supreme-court-ruling-travel-ban-should-concern-all-legal-immigrants

Cato: Travel Ban 3.0 Correctly Upheld Because Congress and Courts Give Wide Deference to President on National Security

It’s no surprise that the Supreme Court allowed Travel Ban 3.0 to remain in place, particularly given that the justices allowed Ban 2.0 to go into effect a year ago and this one last fall. This third version specifically carves out those with green cards, provides for waivers for those with special cases (family, medical emergencies, business ties, etc.), and also was tailored based on national-security considerations, to which the Court typically defers. One can disagree, as I do, with some of the policy judgments inherent in this executive action, but as a matter of law, the president – any president – gets a wide berth here.

The Court considered the president’s statements regarding this policy but ultimately had to apply a deferential standard; given the legitimate justifications explicitly set out in the “proclamation” announcing Travel Ban 3.0, the Court could not preference campaign rhetoric and tweets over legal documents in this context. “While we of course ‘do not defer to the Government’s reading of the First Amendment,’” Chief Justice John Roberts’s majority opinion says, citing Holder v. Humanitarian Law Project (2010), “the Executive’s evaluation of the underlying facts is entitled to appropriate weight, particularly in the context of litigation involving ‘sensitive and weighty interests of national security and foreign affairs.’”

Read more at https://www.cato.org/blog/travel-ban-30-correctly-upheld-because-congress-courts-give-wide-deference-president-national

Cato: Fighting Words and Free Speech

On a Saturday afternoon in Rochester, New Hampshire, Jehovah’s Witness Walter Chaplinsky addressed the City Marshal as “a God damned racketeer” and “a damned Fascist.” He was convicted of violating a state law that prohibited offensive words in public. The United States Supreme Court upheld the conviction and identified certain categories of speech that could be constitutionally restricted, including a class of speech called “fighting words.”

Writing for the Court, Justice Frank Murphy stated that “fighting words” are “no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived by them is clearly outweighed by the social interest in order and morality.” In Hate: Why We Should Resist It with Free Speech, Not Censorship, Strossen explains the ‘fighting words’ doctrine that grew from Chaplinsky:

“Fighting words” constitute a type of punishable incitement: when speakers intentionally incite imminent violence against themselves (in contrast with third parties), which is likely to happen immediately. In the fighting words situation the speaker hurls insulting language directly at another person, intending to instigate that person’s imminent violent reaction against the speaker himself/herself, and that violence is likely to occur immediately (64).

Read more at https://www.cato.org/blog/fighting-words-free-speech

Cato: Bumping the Constitution to Ban Bump Stocks

For years, the Justice Department’s Bureau of Alcohol, Tobacco, and Firearms has maintained that “bump stocks”—devices that allow a firearm to reciprocate slightly and assist in “bump firing”—are not “machineguns.” From 2007 to 2017, spanning multiple administrations (including the current one), the ATF issued 10 different opinion letters confirming that the devices were not “machineguns” or “machine gun conversions,” and thus did not fall under the purview of the National Firearms Act of 1934 and Gun Control Act of 1968, two federal laws which heavily regulate machine gun ownership.

Under federal law, a “machinegun” is a device “which shoots … automatically more than one shot … by a single function of the trigger.” With language so clear, the provision was never considered ambiguous by a reviewing court over 80 years of decisions—and the ATF’s interpretation remained consistent. It is for this reason that bump stocks, and crank-operated “Gatling guns,” while having a high rate of fire, have never been considered “machineguns.” (Yes, virtually anyone can own a Gatling gun under federal law.) What could change the state of such settled law, then? Political expediency.

Read more at https://www.cato.org/blog/bumping-constitution-ban-bump-stocks

Cato: High Court Reads and Applies Constitution

The Supreme Court issued a major separation-of-powers decision this morning, which may have more long-term ripple effects than the internet sales-tax case. In Lucia v. Securities and Exchange Commission, the Court rule 6.5-2.5 – I’ll explain shortly – that SEC administrative law judges are “officers of the United States” and thus must be appointed by the president or the “department head,” in this case the SEC itself (rather than being selected by commission staff). This is important because it makes ALJs, who make decisions with significant monetary and regulatory impact, more accountable to the political process – instead of being mere creatures of the bureaucratic blob.

It’s gratifying that the Supreme Court takes constitutional structure seriously, at least with respect to the president’s appointment of inferior officers. Justice Elena Kagan’s majority opinion powerfully and concisely explains what was clear all along: ALJs are powerful officers with significant discretionary powers rather than mere clerks. That power and discretion is what sets officers apart from mere employees, as the Supreme Court explained in Freytag v. Commissioner (1991). Accordingly, ALJs should indeed be part of the executive branch’s chain of command instead of a nebulous part of the “fourth branch” administrative agencies. This ruling will increase accountability for these executive officers even as they perform quasi-judicial tasks and often represent the last real chance for those caught in the SEC’s investigatory clutches to defend themselves.

Read more at https://www.cato.org/blog/high-court-reads-applies-constitution

Cato: South Dakota v. Wayfair: A Taxing Decision

Today, the Supreme Court handed the states a victory in their battle to collect taxes on online sales, but, in doing so, dealt a heavy loss to the national market, small businesses, and the people at large. South Dakota v. Wayfair’s focus was on whether to overturn Quill Corp. v. North Dakota, which held that states could not impose tax collection obligations on businesses with no physical presence in the state. In a bizarrely split 5-4 decision–with Justice Kennedy writing the majority joined by Thomas, Ginsburg, Alito, and Gorsuch and Chief Justice Roberts writing the dissent joined by Breyer, Sotomayor, and Kagan–the Court held that states can charge sales taxes on completely out-of-state businesses.

As the dissent rightly points out, the majority decided Wayfair with “an inexplicable sense of urgency,” asserting that “the passage of time is only increasing the need to take the extraordinary step of overruling” longstanding precedent. While wrongly decided cases need to be dealt with, Quill was not one of those decisions. As the chief justice correctly observes in his dissent: “E-commerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule. Any alteration to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress.” In fact, amicus briefs for various senators and members of Congress were submitted to the Court highlighting the ongoing efforts to fix the e-commerce sales-tax system, and three bills are currently pending. “By suddenly changing the ground rules,” the chief justice warns, “the Court may have waylaid Congress’s consideration of the issue. Armed with today’s decision, state officials can be expected to redirect their attention from working with Congress on a national solution, to securing new tax revenue from remote retailers.”

Read more at https://www.cato.org/blog/south-dakota-v-wayfair-taxing-decision

Cato: U.S. Withdrawal from the UN Human Rights Council: Right Decision, Bad Optics

Confirming rumors that had been circulating for weeks, the Trump administration announced that the United States will withdraw from the UN Human Rights Council. That body consists of 47 member states with rotating, staggered 3-year terms. It is tasked with protecting human rights as well as highlighting and condemning regimes that violate those rights. The Council has been controversial since its inception, especially among American conservatives. George W. Bush’s administration declined to make the United States a member when the UN General Assembly established the Council in 2006. President Obama reversed that decision in 2009.   

In announcing the U.S. withdrawal, Ambassador Nikki Haley blasted the organization as a “cesspool of political bias.” Vice President Mike Pence was equally caustic, stating that the United States was taking a stand “against some of the world’s worst human rights violators by withdrawing from the United Nations Human Rights Council. By elevating and protecting human rights violators and engaging in smear campaigns against democratic nations, the UNHRC makes a mockery of itself, its members, and the mission it was founded on. For years, the UNHRC has engaged in ever more virulent anti-American and anti-Israel invective and the days of U.S. participation are over.”

The decision has far more symbolic than substantive importance. For all of the publicity surrounding the UNHRC’s periodic condemnations of specific regimes, the body has no enforcement powers. Critics of Washington’s decision, though, see repudiating the UNHRC as another in a series of Trump administration moves to relinquish America’s “global leadership role” and retreat into an “America alone” foreign policy. They cite earlier examples such as Washington’s rejection of the Trans-Pacific Partnership (TPP), the withdrawal from the Paris agreement on climate change, and efforts to undermine the Iran nuclear agreement.

Read more at https://www.cato.org/blog/s-withdrawal-un-human-rights-council-right-decision-bad-optics

Cato: Openings in the Front in the Campaign Against Qualified Immunity

I’ve blogged several times now about Cato’s ongoing campaign to challenge the doctrine of qualified immunity. This judge-made doctrine – invented out of whole cloth, at odds with the text of Section 1983, and unsupported by the common-law history against which that statute was passed – shields public officials from liability for unlawful misconduct, unless the plaintiff can show that the misconduct violated “clearly established law.” This standard is incredibly difficult for civil rights plaintiffs to overcome, because courts generally require not just a clear legal rule, but a prior case on the books with functionally identical facts. Not only does this doctrine deny relief to victims whose rights have been violated, but at a structural level, it also erodes accountability for government agents (especially law enforcement).

I’m thrilled to report, however, that in the last 36 hours, we’ve had three promising developments in this front:

First, in a Section 1983 case in the Eastern District of New York, Judge Jack Weinstein denied qualified immunity to police officers alleged to have beaten up a man after he refused to allow them to enter his home without a warrant. His comprehensive opinion not only denied immunity in this case, but also discussed recent criticisms of the doctrine, both on legal and policy grounds, and suggested that the law “must return to a state where some effective remedy is available for serious infringement of constitutional rights.” Judge Weinstein thus joins other lower court judges, like Lynn Adelman of the Eastern District of Wisconsin and Jon O. Newman of the Second Circuit, who have criticized the Supreme Court’s qualified immunity jurisprudence. Lower court judges are, of course, obliged to follow Supreme Court precedent with direct application, but this is exactly the kind of criticism and commentary that can help explain to the Court why that precedent should be reconsidered.

Read more at https://www.cato.org/blog/openings-front-campaign-against-qualified-immunity

Cato: Legislative Presumption and Judicial Deference Trump the Contracts Clause

If you designate a beneficiary on a life insurance policy, should you expect your intent to be honored upon your death? You may not be able to if you live in Minnesota or more than half of the nation’s other states. So said the Supreme Court today—despite the plain language of Constitution’s Contracts Clause, which categorically prohibits states from passing “any … Law impairing the Obligations of Contracts.” The case was Sveen v. Melin. The decision was 8-1, Justice Elena Kagan writing for the Court. The dissent by Justice Neil Gorsuch goes to the heart of the matter. (For an overview of the Contracts Clause, see chapter 3 in Bob Levy and Chip Mellor’s The Dirty Dozen.)

The decision’s syllabus nicely summaries the facts:

Mark Sveen and respondent Kaye Melin were married in 1997. The next year, Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his two children from a prior marriage, petitioners Ashley and Antone Sveen, as contingent beneficiaries. The Sveen-Melin marriage ended in 2007, but the divorce decree made no mention of the insurance policy and Sveen took no action to revise his beneficiary designations. After Sveen passed away in 2011, Melin and the Sveen children made competing claims to the insurance proceeds. The Sveens argued that under Minnesota’s revocation-on-divorce law, their father’s divorce canceled Melin’s beneficiary designation, leaving them as the rightful recipients. Melin claimed that because the law did not exist when the policy was purchased and she was named as the primary beneficiary, applying the later-enacted law to the policy violates the Constitution’s Contracts Clause. The District Court awarded the insurance money to the Sveens, but the Eighth Circuit reversed, holding that the retroactive application of Minnesota’s law violates the Contracts Clause.

Read more at https://www.cato.org/blog/legislative-presumption-judicial-deference-trump-contracts-clause

Cato: “Hate Speech” Laws Undermine Free Speech and Equality

Having no specific legal definition, “hate speech” is a vague term. It is generally understood to mean speech that expresses hateful or bigoted views about certain groups that historically have been subject to discrimination. Concerned by the impact of hate speech on vulnerable populations, social justice advocates see sense in restricting this type of speech.

However, these types of laws often fall hardest on the very people they are intended to protect. Nadine Strossen explores this idea in her new book, Hate Speech: Why We Should Resist It with Free Speech, Not Censorship. (Hereafter all page citations are to this book).

Strossen draws attention to the fact that prohibitions of “hate speech” are characterized by unavoidable vagueness and overbreadth.  A law is “unduly vague” (and unconstitutional) when people “of common intelligence must necessarily guess at its meaning.” “Hate speech” laws are inherently subjective and ambiguous in their language, with the use of words like “insulting,” “abusive,” and “outrageous.” Specific to laws about speech, vagueness “inevitably deters people from engaging in constitutionally protected speech” (69).

One person’s “hate speech” is another’s anti-“hate speech.” Strossen cites many examples in which certain religious views are assailed as “hate speech” against LGBT individuals, while critiques of those religious views are attacked as anti-religious “hate speech.”

This issue is also prevalent on campus, exemplified by a situation at Harvard University in which a group of students hung a confederate flag from their dorm room. In response, other students hung swastikas from their windows.

Read more at https://www.cato.org/blog/hate-speech-laws-undermine-free-speech-equality

Cato: Masterpiece Cakeshop Ruling Tastes Good, But Is Empty Calories

Today’s exceedingly narrow decision in Masterpiece Cakeshop kicks all the big questions down the road. While it’s gratifying that, by a 7-2 vote, the Supreme Court reversed Colorado’s persecution of Jack Phillips – the baker who was happy to serve gay people but would not make a cake for a same-sex wedding – it did so only on the basis that the state commission charged with enforcing antidiscrimination law itself displayed anti-religious animus. That’s an unusual circumstance that’s not necessarily in play in the other wedding-vendor cases that periodically arise. Indeed, the petition of the Washington florist, Arlene’s Flowers v. Washington, is currently pending before the Court; with today’s narrow ruling, the justices can’t simply send that case back to the state supreme court for reevaluation – because, again, today’s rule of decision is case-specific rather than some clarifying First Amendment principle.

Although most of the briefing and commentary surrounding Masterpiece (mine included) focused on the free-speech aspect – Phillips’s main argument was that he was being forced to convey a message he didn’t agree with – the way this ruling ultimately came down wasn’t unexpected given the way that argument went. Indeed, Justice Anthony Kennedy, whom everybody assumed (correctly) was the key to this case, showed flashes of anger at the attitudes shown by certain members of the Colorado Civil Rights Commission. And so, Kennedy concludes in his short opinion (18 pages, most of which is basic recitation of factual and procedural background) that “the Commission’s treatment of Phillips’ case violated the State’s duty under the First Amendment not to base laws or regulations on hostility to a religion or religious viewpoint.”

That holding is joined not just by the so-called conservative justices (John Roberts, Clarence Thomas, Samuel Alito, and Neil Gorsuch), but two of the so-called liberals (Stephen Breyer and Elena Kagan). The other two justices (Ruth Bader Ginsburg and Sonia Sotomayor) disagreed, finding the commissioners’ anti-religious statements irrelevant to the ultimate application of the law.

Read more at https://www.cato.org/blog/masterpiece-cakeshop-ruling-tastes-good-empty-calories

Cato: Challenging Qualified Immunity for Prison Officials Who Kept a Man in Solitary for No Reason

Our primary federal civil rights statute, colloquially called “Section 1983,” says that any state actor who violates someone’s constitutional rights may be sued in federal court. This remedy is crucial not just to secure relief for individuals whose rights are violated, but also to ensure accountability for government agents. Yet the Supreme Court has crippled the functioning of this statute through the judge-made doctrine of “qualified immunity.” This doctrine — at odds with both the text of the statute and the common law principles against which it was passed — immunizes public officials who commit illegal misconduct, unless they violated “clearly established law.” That standard is incredibly difficult for civil rights plaintiffs to overcome, because courts generally require not just a clear legal rule, but a prior case on the books with functionally identical facts.

In Allah v. Milling, 876 F.3d 48 (2d Cir. 2017), the Second Circuit used qualified immunity to shield prison officials who kept an inmate, named Almighty Supreme Born Allah, in dungeon-like, solitary confinement conditions for seven months — all because Mr. Allah had once asked a question about why prison inmates were being denied access to commissary. For this “offense,” Mr. Allah was placed in “Administration Segregation” for over a year, most of which he spent in solitary confinement. He spent 23 hours a day alone in his cell, was handcuffed and shackled anytime he was removed from his cell, and forced to shower in leg irons and wet underwear. To make matters worse, Mr. Allah was, at this time, merely a pretrial detainee who had yet to be convicted of a crime.

Read more at https://www.cato.org/blog/challenging-qualified-immunity-prison-officials-who-kept-man-solitary-no-reason

Cato: Mandatory E-Verify will Increase Identity Theft

Nancy Berryhill, an Acting Commissioner of Social Security, recently testified in front of the House Subcommittee on Social Security on the widespread use of Social Security Numbers (SSNs) beyond their intended function.  Most of her testimony concerned the history of SSNs, past security procedures, and proposed future ones.  In a bizarre sentence that contradicts much of the rest of her testimony, Berryhill stated that, “Mandatory use of E-Verify by employers would help reduce the incidence of fraudulent use of SSNs.”  That is exactly backward.  Mandatory E-Verify will greatly expand the fraudulent use of SSNs.

E-Verify is an electronic employment eligibility verification system run by the federal government that is supposed to check the identity information of new hires against government databases to verify that they are legally eligible to work.  Congress created E-Verify to deny employment to illegal immigrants and reduce the incentive for them to come and remain in the United States.  E-Verify is not yet mandated nationwide but several states have mandated its use, to various degrees, and many large employers currently use it.

E-Verify builds on the current rudimentary employment verification known as the I-9 form that every new employee must fill out thanks to the 1986 Immigration Reform and Control Act (IRCA).  An E-Verify mandate would add another layer on top of the I-9 whereby employers, after collecting I-9 forms, would enter the information on them into a government website.  The E-Verify system then compares that I-9 information with information held in the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases.  The employee is work authorized if the databases decide that the information is valid.  A flag raised by either database returns a “tentative non-confirmation,” requiring the employee and employer to sort out whatever error has been flagged.  If the employee and employer cannot sort out the errors then the employer must terminate the new employee through a “final non-confirmation.”  The I-9 form and E-Verify have serious problems, including the encouragement of rampant identity theft, but those problems would only grow with an E-Verify mandate.

Read more at https://www.cato.org/blog/mandatory-e-verify-will-increase-identity-theft

Cato: Epic Systems v. Lewis: It’s OK To Calm Down About Arbitration

Yesterday’s 5-4 Supreme Court decision upholding agreements to individually arbitrate wage-and-hour claims was neither surprising nor novel as a legal matter. Nor – notwithstanding the variously breathless, furious, and apocalyptic reactions it has drawn from stage Left – is it objectionable as a matter of policy, or “anti-worker.” It is pro-liberty, pro-contract, and pro-respect for private ordering.

On a practical level, the decision in Epic Systems v. Lewis and two companion cases leaves in place (rather than changing) a by now familiar business practice. Not until 2012 did the National Labor Relations Board embrace the notion that the National Labor Relations Act bans arbitration agreements requiring individual rather than class-action pursuit of wage claims, and that Obama-era position has not been able to maintain the assent even of the full federal government (the current Department of Justice disagrees, and filed against the agency’s position).

At the level of legal precedent, this is by one count the seventh major Court decision since 1983 confirming (in each case over liberal dissents) that the Arbitration Act’s broad federal policy favoring arbitration agreements is compatible with, rather than ousted by, some other federal law. In fact, in one of those decisions, 1991’s Gilmer v. Interstate/Johnson Lane Corp., the Court had already implied (in interpreting a parallel statutory scheme) that the federal statute directly governing wage and hour suits, the Fair Labor Standards Act (FLSA), does not ban this kind of arbitration agreement.  That foray having yielded nought, advocates came back with a “bank shot” (Justice Neil Gorsuch’s phrase) theory that even if the FLSA doesn’t forestall individualized arbitration of FLSA claims, the National Labor Relations Act does, under a miscellaneous clause that extends federal legal protection to some “concerted” activity by employees that does not consist of union action. But although some labor movement advocates have hoped to use this catchall language as the future engine by which the NLRB would gain power to impose major new regulatory requirements at non-union workplaces – all sorts of on- and off-job interactions between colleagues might be interpreted as concerted activity if you squint at them the right way – it was always doubtful that the current Court would go along with a very broad reading on that.

Read more at https://www.cato.org/blog/apocalypse-not-arbitration-survives-epic-systems-v-lewis

Cato: Victory for Defendant Autonomy and the Criminal Jury Trial in McCoy v. Louisiana

Robert McCoy was charged with the murder of three of his family members in Bossier City, Louisiana. The state brought capital charges against him, but McCoy maintained his innocence—claiming he was not even in the state at the time of the murders—and demanded a jury trial. But in light of the evidence against him, McCoy’s lawyer thought the best trial strategy would be to admit guilt to the jury and hope for leniency in sentencing. McCoy adamantly opposed this plan, but his lawyer pursued it anyway and told the jury that McCoy was guilty. The jury returned three murder convictions and sentenced McCoy to death.

Today, the Supreme Court held that it violated the Sixth Amendment for McCoy’s lawyer to admit his guilt over his express objection, and it ordered the state of Louisiana to grant McCoy a new trial. The majority opinion by Justice Ginsburg accords with the principle of defendant autonomy, and the long-standing maxim that the Sixth Amendment guarantees the right to a personal defense. While a defendant is, of course, guaranteed the “Assistance of Counsel,” the defendant himself remains master of the defense and is entitled to make fundamental decisions in his own case. The heart of the Court’s analysis closely follows the framework (and language) articulated in Cato’s amicus brief, which emphasized that defendant autonomy—not ineffective assistance of counsel—was the proper lens through which to view this case:

Read more at https://www.cato.org/blog/victory-defendant-autonomy-criminal-jury-trial-mccoy-v-louisiana

Cato: Federalism Wins Supreme Court Jackpot

The smart money was always on the Supreme Court to make the kind of ruling it did today, strike down a federal law that purported to tell states whether they could legalize sports betting. That doesn’t make it any less exciting or refreshing—and it’s deliciously apt as both the Washington Capitals and Vegas Golden Knights remain in the hunt for the Stanley Cup.

In the first “anti-commandeering” case in more than 20 years, the Court resoundingly (7-2) reaffirmed a principle that should be obvious: the federal government can’t force states to pursue federal policy. That there were seven votes for that proposition underlines the renewed interest in federalism that’s spreading across the country.

Read more at https://www.cato.org/blog/federalism-wins-supreme-court-jackpot

Cato: Another Case for Taking the Second Amendment Seriously

Over a decade ago, Rickey Kanter’s company, Dr. Comfort, shipped diabetic shoe inserts to a podiatrist in Florida. Dr. Comfort sold the inserts as being Medicare-approved, but they were not. Because of these events, Kanter, to this day, cannot legally own a gun.

U.S. and Wisconsin law prohibit anyone convicted of a crime “punishable by imprisonment for a term exceeding one year” from possessing any firearm or ammunition. In 2011, Kanter pled guilty to a single count of mail fraud for Dr. Comfort’s 2006 delivery of non-compliant shoe inserts to a podiatrist. Kanter has no other criminal convictions, is not under indictment, or a fugitive from justice, or an unlawful user of any controlled substance. He has not been judged mentally defective, been dishonorably discharged from the armed forces, renounced his citizenship, or been the subject of a restraining order relating to an intimate partner. In fact, Kanter has no history of any violent behavior at all.

So he brought suit in federal court, arguing that the categorical prohibition of firearms possession by felons was unconstitutional as applied to him: a non-violent, one-time offender. The district court sided with the government, which argued that a permanent revocation of Second Amendment rights for all felonies—no matter how serious or remote in time—passes constitutional muster. The court paid lip service to Kanter’s Second Amendment rights, finding that the commission of any felony shows that he “clearly disrespected important laws in the past,” which justifies completely stripping him of his rights. Kanter appealed to the U.S. Court of Appeals for the Seventh Circuit.

Read more at https://www.cato.org/blog/another-case-taking-second-amendment-seriously

Cato: Justice Kennedy’s Retirement Leaves Big Gap, Heralds Major Shift at Supreme Court

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.

Read more at https://www.cato.org/blog/justice-kennedys-retirement-leaves-big-gap-heralds-major-shift-supreme-court

Cato: Supreme Court Has Opportunity to Shut Down Federal Land Grab

hab·i·tat ˈhabəˌtat/ noun: The natural environment of an organism, the place that is natural for the life and growth of an organism; the natural home or environment of an animal, plant, or other organism.

Seems straightforward, right? Unless, of course, you’re the U.S. Fish and Wildlife Service (FWS), which in its role administering the Endangered Species Act (ESA) classified land where a species doesn’t live and can’t survive as “critical habitat” that is “essential” to the survival of that species. Yes, FWS redefined basic terms in the English language and designated a parcel of land in Louisiana as critical habitat for the “dusky gopher frog,” despite the parcel’s utter unsuitably for sustaining the frog’s life cycles.

When the Weyerhaeuser company challenged the FWS designation, first the district court and then the U.S. Court of Appeals for the Fifth Circuit applied Chevron—the doctrine whereby courts give hands-off treatment to agencies when they interpret statutes—and deferred to the agency’s rule. This, even though Chevron itself doesn’t allow “arbitrary and capricious” interpretations.

Read more at https://www.cato.org/blog/supreme-court-has-opportunity-shut-down-federal-land-grab

Cato: Wisconsin’s Butter Scheme Is Udderly Cheesy

Minerva Dairy, based in Ohio, is America’s oldest family-owned cheese and butter dairy. It has been producing artisanal, slow-churned butter in small batches since 1935. They have gotten along by selling via their website and regional distributers in several states. This model has worked fine everywhere except Wisconsin, which requires butter manufacturers to jump through a series of cumbersome and expensive hoops to sell butter inside the state.

Of course, Wisconsin is America’s Dairyland, with many large dairy producers who naturally want to limit their competition. At the behest of these large producers, the state requires every batch of butter sold in the state to be “graded” by a specifically state-licensed grader—all of whom live in Wisconsin, except for a handful in neighboring Illinois—who must taste-test every single batch. Because Minerva’s butter is produced in multiple small batches over the course of each day, the law would effectively require the dairy to keep a licensed tester on-site at all times, which is cost-prohibitive. The state admits that the grading scheme has nothing to do with public health or nutrition, but claims that its grades—based largely on taste—inform consumers.

Read more at https://www.cato.org/blog/wisconsins-butter-scheme-udderly-cheesy

Cato: Democrats Ask Trump Administration to Block Consumer Protections

In a recent letter to the Trump administration, leading congressional Democrats ask the administration not to allow protections for enrollees in short-term health plans.

Yes, you read that right. Dated April 12, the letter comes from Sens. Patty Murray (WA) and Ron Wyden (OR), as well as Reps. Frank Pallone (NJ), Bobby Scott (VA), and Richard Neal (MA), each the top Democrat on a different congressional committee with jurisdiction over health care. They ask the administration to withdraw in its entirety a proposed rule that, if implemented, would offer significant protections to enrollees in so-called “short-term limited duration plans.”

The administration has proposed lengthening the maximum term for such plans from 3 months to 12 months, which had been the limit for nearly two decades before the Obama administration shortened it. The administration has also asked for public comments (due April 23) on whether it should allow insurers to offer short-term plans with “renewal guarantees”—a consumer protection that allows enrollees who develop expensive illnesses to continue paying low, healthy-person premiums.

The letter asks the administration to “withdraw the proposed rule in its entirety,” which would block those consumer protections. These Democrats literally want to prevent short-term plans from giving consumers the peace of mind from knowing they will be covered for an entire year. Worse, these Democrats want to prohibit short-term plans from offering a consumer protection that protects the sick from premium spikes.

Read more at https://www.cato.org/blog/top-democrats-ask-trump-administration-block-consumer-protections

Cato: South Dakota Is Taxing the Constitution

Despite over a century of Supreme Court decisions holding that a state cannot force wholly out-of-state entities to collect taxes for them, South Dakota wants to do just that. In 2017, South Dakota passed Senate Bill 106, which attempts to force out-of-state sellers that ship to South Dakota residents to collect and remit South Dakota’s sales tax. The law is in direct contravention to the 1992 case of Quill Corp. v. North Dakota, which held that states could not compel any entity to collect taxes unless the entity has a physical presence within the state. South Dakota sued Wayfair, a popular home goods vendor, among other retailers, in an attempt to enforce their law and overturn Quill in the process.

South Dakota’s law is at odds with the Constitution. Quill’s physical-presence requirement stemmed from decades of developments in tax law that struck an important balance between due process and the Commerce Clause of our Constitution. Due process requires some definite link—some minimum contacts—between the state and any person, property, or transaction that a state seeks to tax or regulate. Wayfair does not own property in South Dakota, elects no representatives in South Dakota, and was afforded no protection by South Dakota’s police. South Dakota’s only justification for binding a foreign entity to its law is that some of Wayfair’s many customers happen to live there. To allow South Dakota to compel Wayfair’s collection of its state taxes raises serious concerns of taxation without representation. If states can directly compel people who live outside state boundaries to adhere to state standards—standards the people had no chance to influence—the concept of statehood itself is undermined.

Read more at https://www.cato.org/blog/south-dakota-taxing-constitution

Cato: This Blogpost Isn’t Authorized by the Supreme Court

Can the government force private parties to speak against their own interests and disparage the products they offer? The answer is yes when potential consumer harms are significant (think tobacco labels and other safety warnings) or there’s informational asymmetry (securities offerings)—and indeed fraudulent offerings (the prototypical snake oil) are prohibited altogether. But mandated disclosure regimes are proliferating far past these sorts of traditional disclosures, stretching the First Amendment to the breaking point regarding commercial speech.

A recent example of this phenomenon involves Nationwide Biweekly Administration, whose business is saving customers a significant amount on their mortgages by structuring smaller biweekly payments in place of traditional monthly payments—allowing for an extra reduction of principal each year. To market its services, Nationwide uses public information to send potential customers mailers illustrating how much they might save over the life of their loans. Despite front-and-center statements that Nationwide is “not affiliated, connected, or associated with, sponsored, or approved by the lender listed above,” California decided that this information was insufficient to guarantee that consumers wouldn’t be confused. The state required the company to state on solicitations that they are “not authorized by the lender.”

Read more at https://www.cato.org/blog/blogpost-isnt-authorized-supreme-court

Cato: The IRS Took the Road Less Traveled By, Yet Judges Still Made All the Deference

In 1984, George Orwell famously defined “doublethink” as “holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.” But even Orwell would blush at claims made by the Internal Revenue Service that one can somehow both follow the law and violate it with the same activity. Amazingly, this seems to be the exact argument employed against Duquesne Light Holdings and subsequently upheld by the U.S. Court of Appeals for the Third Circuit.

In the early 2000s, Duquesne filed a series of consolidated tax returns along with its wholly owned subsidiary AquaSource. Despite initially declining to challenge the company’s deductions in a 2004 audit, the IRS later determined that the losses claimed constituted a double deduction. Even though the company painstakingly followed the tax code and regulations to the letter, the IRS relied on a strained interpretation of an 80-year-old case, Charles Ilfeld Co. v. Hernandez (1934), to disallow $199 million in losses, demanding a $36.9 million payment.

The Third Circuit’s endorsement of this odd use of Ilfeld creates a broad new view of federal agency power. Rather than understanding Ilfeld as a background presumption for evaluating ambiguous agency rules, this new doctrine allows agencies to override their own regulations to penalize those who violate some unarticulated, uncodified policy principle. Duquesne followed the rules, which did not prohibit the deductions it claimed. But rather than allowing deductions that were legally authorized, the court imposed a “triple-authorization requirement” mandating an additional okay, specifically stating that the deductions may be taken together. In other words, the court said that it isn’t enough for the law to say “you may take deduction A” and elsewhere “you may take deduction B”; the law must then also explicitly say “you may take deduction A and deduction B at the same time.”

The court’s decision continues the long march toward unrestrained administrative power via judicial abdication. First came Chevron deference, whereby courts must defer to the statutory interpretation of the agency that enforces the relevant statute. Then came Auer deference, requiring that courts defer to an agency’s interpretation of its own ambiguous regulations. But the Third Circuit has now gone a step further, ruling that an agency can reinterpret its own unambiguous regulations to mean whatever it wants. If Auer deference is a jurisprudential black eye, then the Third Court’s decision here is an ocular enucleation.

Read more at https://www.cato.org/blog/irs-took-road-less-traveled-yet-judges-still-made-all-deference

Cato: Ominous Trends in China

On March 11, China’s National People’s Congress made official what had been rumored for more than two weeks, voting to abolish the two-term limit on the presidency. Current president Xi Jinping is now able to serve in that post indefinitely. That decision is merely the latest in a series of ominous developments that have occurred since Xi took office in 2013.

Ending term limits significantly alters China’s political system. Deng Xiaoping, the architect of the country’s radical economic reforms beginning in the late 1970s, also implemented that crucial political reform. He and his followers did so to guard against a repeat of the horrid abuses committed during the long, tyrannical rule of Mao Zedong. And the restriction did achieve a limited success. China hardly became a democratic state, but within the context of a one-party system, Deng’s successors served more like chief executive officers, with other members of the party elite acting as a board of directors that could, and did, serve as a check on the president’s power. Removing the limit on presidential terms means that an incumbent now has abundant time to accumulate more and more personal power. The threat of strongman rule, with all its potential abuses, has returned.

As I point out in a recent article in Aspenia Online, Xi was exhibiting troubling behavior even before pushing through the legislation ending term limits. Under the guise of combatting corruption (admittedly a very real problem in China), he systematically purged officials who showed signs of independent views. There has been a troubling hardline ideological aspect to his rule as well. Xi initiated a campaign to revitalize the Party, aiming at achieving a renewed commitment to Maoist principles. Even pro-market academics felt the chill of the new political environment, with crackdowns directed against several prominent reformers, including economist Mao Yushi, the 2012 recipient of the Cato Institute’s Milton Friedman Prize for Advancing Liberty.

Read more at https://www.cato.org/blog/ominous-trends-china

Cato: Won’t You Save Me First Amendment Grief, San Francisco?

San Francisco bans signage advertising “off-premises” activity, but not “on-premises” advertising. That is, if you own a liquor store, you can advertise the beers you have for sale, but not the upcoming beer festival you’re sponsoring across town.

But advertising is a form of speech protected by the First Amendment, and if the government wants to places limits on that speech, it must adhere to the constitutional limits on its own power. A company called Contest Promotions has challenged this law. The U.S. Court of Appeals for the Ninth Circuit ruled in the city’s favor, so now the company asks the Supreme Court to take its case.

At the core of the First Amendment is a principle of non-discrimination. That is, the government can place certain limits on speech in public places, but it may not preference some speakers over others based on the speech’s content or viewpoint. The content-based distinction San Francisco makes is precisely the sort of discrimination the constitution doesn’t abide. Unfortunately, the Supreme Court has made something of a muddle in this area. In Central Hudson v. Public Service Commission (1980), it set forth a special test for what is “commercial” speech, such as advertising, which it deemed less protected than other speech. It did this presumably to be able to better police fraud—which isn’t protected regardless—but that led to an unworkable standard and a litigation mess that lower courts have been unable to clean up.

Read more at https://www.cato.org/blog/wont-you-save-me-first-amendment-grief-san-francisco