2019-03-25

Cato: A Rose by Another Name Still Merits First Amendment Protection

Barronelle Stutzman owns and operates Arlene’s Flowers, where she designs floral arrangements for a variety of occasions, including weddings. Mrs. Stutzman is also a practicing Christian; she believes that marriage is a spiritual union between a man and a woman and will not create floral arrangements for same-sex ceremonies. For this reason, when long-time clients Robert Ingersoll and Curt Freed asked Mrs. Stutzman to create floral arrangements for their wedding, she respectfully declined and referred them to several nearby florists.

To be clear, Mrs. Stutzman serves everyone. She gladly created Valentine’s Day and anniversary floral arrangements for Messrs. Ingersoll and Freed for nearly a decade before this litigation, all the while knowing they were a same-sex couple. She just has a sincere religious objection to creating her expressive floral works for same-sex weddings.

Nevertheless Ingersoll and Freed sued Stutzman, which suit was later consolidated with another one brought by the state of Washington. The state trial court ruled against Arlene’s Flowers and the state supreme court affirmed, holding that floral design did not constitute First Amendment-protected artistic expression. Stutzman took her case to the U.S. Supreme Court, which held it pending its decision in the factually similar Masterpiece Cakeshop case last year. The Supreme Court then remanded Arlene’s Flowers v. Washington back to the Washington Supreme Court for reconsideration. As it has in previous stages of this litigation, Cato has filed an amicus brief supporting Arlene’s Flowers, urging the Washington Supreme Court to revise its earlier ruling and hold that floral design is constitutionally protected expression.

Read more at https://www.cato.org/blog/rose-another-name-still-merits-first-amendment-protection

2019-03-24

Cato: Trump Administration Proposes to Check Itself in Remarkable Kisor Brief

On Monday, the Solicitor General filed an extraordinary brief in Kisor v. Wilkie, a case in which the Supreme Court is reconsidering “Auer deference,” or binding judicial respect for an agency’s interpretation of its own regulation. The brief is remarkable, perhaps even unprecedented, because it reflects the evident desire of the president to cede significant power to another branch of government.

Under Auer’s canonical formulation, an agency’s regulatory interpretation is “controlling unless plainly erroneous or inconsistent with the regulation.” The problem is that, in practice, Auer allows agencies to bind the public with putatively nonbinding advisories, and thereby evade procedural safeguards.

Astonishingly, the government’s brief recognizes the harms engendered by Auer. In a forthright section titled “Overly broad deference to agency interpretations can have harmful practical consequences,” the Solicitor General concedes that “[Auer] deference can discourage agencies from engaging in notice-and-comment rulemaking.” More importantly, the government proposes to mitigate these concerns by narrowing the doctrine.

To this end, the brief argues that Auer deference is appropriate only if the regulatory text involves a “genuine ambiguity.” While this may seem obvious, reasonable minds often disagree about “how clear is clear?” The Solicitor General intimates that courts have been too quick to defer–that is, they’ve been too easily satisfied the regulatory text is ambiguous–when the brief claims that “[a] rigorous application of the tools of construction would obviate any need for [Auer] deference in many cases.” Here, the government borrowed from the late Justice Scalia, who made the same point about judicial deference to an agency’s statutory interpretations.

Even if the regulatory text is genuinely ambiguous, the government argues that “the agency’s interpretation should be given [Auer] deference only if certain threshold requirements are satisfied.”

Read more at https://www.cato.org/blog/trump-administration-proposes-check-itself-remarkable-kisor-brief

2019-03-23

Cato: Media Misses: Worrisome International Flashpoints

It is no secret that Americans tend to focus more on domestic news stories than on the coverage of international affairs.  Media priorities also reflect the perception that, unless the United States is about to enter a major war or is already mired in one, readers and viewers care primarily about issues at home. Unfortunately, that situation can cause Americans to be blindsided by dangerous overseas developments. 

While recent coverage has focused on such issues as the fight over President Trump’s border wall and Michael Cohen’s testimony before the House Oversight Committee, two worrisome foreign crises are brewing.  One is a clash between Pakistani and Indian warplanes that led to the loss of two Indian aircraft, and the capture of one pilot.  It was the most serious military incident between the two countries since their full-scale war in 1971.  The escalation of tensions involving two nuclear-armed powers is—or at least should be—a matter of grave concern to the entire world.

Yet most American media outlets seem to be paying, at most, modest attention.  For example, the top five items in the February 27 “Post Most”—the Washington’s Post daily summary of the most popular and important articles in its pages—were about Cohen’s impending testimony.  The armed clash between India and Pakistan was only the sixth item listed.  Such treatment suggests questionable priorities by both the Post’s editors and readers.

The other international flashpoint is the alarming deterioration of relations between Taiwan and Mainland China.  As I discuss in a new article in China-U.S. Focus, that situation has been worsening for the past two years.  The latest incident is an effort by Taiwanese hardliners under the banner of the Formosa Alliance to push President Tsai Ing-wen’s government to hold a referendum on formal independence.  Chinese leaders have made it clear on several occasions that any move toward the goal of independence is unacceptable and would cross a clear red line.  Even some long-time pro-Taiwan partisans are cautioning Tsai not to go down that path.

Read more at https://www.cato.org/blog/media-misses-worrisome-international-flashpoints

2019-03-22

Cato: Judicial Sanity on Occupational Licensing and the First Amendment

States often impose costly licensing restrictions on professionals who want to engage in certain businesses. Mississippi, however, has taken this practice to an absurd level in an attempt to regulate not only a profession, but also the definition of a commonly used word. A Magnolia State statute prevents anyone from using the term “engineer” commercially unless licensed by the state as an engineer.

Express Oil Change and Tire Engineers, a business that provides tire repair, maintenance, and replacement services, has a long-standing trademark on the term “Tire Engineers.” Express has refused to change the term, arguing that the First Amendment protects its use. Much is at stake for Express: the penalties for violating the statute include severe punishments like imprisonment, all for “misusing” a phrase that it had trademarked. Mississippi sued Express and won in district court, before losing last week before the U.S. Court of Appeals for the Fifth Circuit. The case is Express Oil Change v. Mississippi Board of Licensure for Professional Engineers & Surveyors.

The First Amendment guarantees that speech—even when done for money—is constitutionally protected. But such speech is subject to government regulation, the contours of which were defined by the U.S. Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission (1980). First, the speech itself “must concern lawful activity and not be misleading” to receive protection. To justify regulating the speech, a court asks if “the asserted governmental interest is substantial.” Finally, a court must establish “whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.”

Read more at https://www.cato.org/blog/judicial-sanity-occupational-licensing-first-amendment

2019-03-21

Cato: Unanimous Supreme Court Upholds Right to Be Free of Excessive Fines

It’s gratifying that the Supreme Court unanimously agreed that the Eighth Amendment’s Excessive Fines Clause applies to the states, meaning that states can’t fine you in a way that’s wholly disproportionate to the offense you commit. As one of the long-established natural rights in the Anglo-American legal tradition, there’s no reason it wouldn’t be and the debates over the Fourteenth Amendment’s ratification support this conclusion. (Here’s Cato’s brief in Timbs v. Indiana.)

At the same time, it’s disappointing that Justices Neil Gorsuch and Clarence Thomas were the only ones who explained, in separate concurrences, that the Fourteenth Amendment’s Privileges or Immunities Clause is the more constitutionally faithful way of extending rights as against state infringement. (Justice Ruth Bader Ginsburg’s majority opinion, joined by all but Justice Thomas, used the Due Process Clause.)

We’ll have to wait for some more difficult/less clear case to see if anyone else joins that originalist refrain. For practical purposes, it may not matter which clause of the Fourteenth Amendment provides the mechanism by which the Excessive Fines Clause is applied to the states. But it certainly matters for unenumerated rights (those not listed in the Bill of Rights), the jurisprudence regarding is confusing and controversial. If the Fourteenth Amendment ratification debates elucidate which such rights are covered under which clause, that would be important.

Read more at https://www.cato.org/blog/unanimous-supreme-court-upholds-right-be-free-excessive-fines

2019-03-09

Cato: States Can’t Engage in Protectionism by Labeling It Environmentalism

The Commerce Clause was designed not only to give Congress the authority to regulate interstate commerce, but also to ensure that states don’t disrupt the flow of goods and services over state lines. States cannot prefer in-state producers, sellers, or buyers over out-of-state ones, or regulate conduct outside the state. This is a fundamental principle of federalism that prevents states from gaining advantage over others when it comes to trade.

Despite that anti-protectionist mechanism, Oregon enacted its Low Carbon Fuel Standard, which caps emissions not just from the use of fuels, but also from their production and transportation. It uses a methodology called “life cycle analysis” to include these factors. But a life cycle analysis that includes transportation penalizes out-of-state producers—who often have to travel much further than in-state producers—forcing them to buy credits, while allowing Oregon producers to generate credits much more easily.

The U.S. Court of Appeals for the Ninth Circuit upheld an identical California law in Rocky Mountain Farmers Union v. Corey(2013). No doubt Oregon saw Rocky Mountain as a green light to enact its policy, and a Ninth Circuit panel here likewise upheld the Oregon law.

Read more at https://www.cato.org/blog/states-cant-engage-protectionism-labeling-it-environmentalism

2019-03-08

Cato: Testing the Effects of Auer Deference

Libertarians are no fans of the administrative state. It consists of agencies with the power to generate rules that are binding on citizens. Congress, the branch of government that our founders anticipated would “necessarily predominate” in a republican form of government, first arrogated to itself vast powers beyond their contemplation, and then delegated these powers to the executive branch. The courts have, through a series of key cases, abided this abdication of responsibility. Moreover, the courts have derelicted their own duty to dispositively rule on the acceptable interpretations of an agency’s authorizing statute, a doctrine known as Chevron deference. So too have courts allowed agencies to interpret their own formal rules, a doctrine known as Auer deference. While this latter practice dates to a 1945 case (Bowles v. Seminole Rock), it was not explicitly condoned until the Auer case in 1997. (For a very good summary of Auer and a compelling argument as to why it should be overturned, please see my Cato colleagues’ amicus brief).

These two doctrines allow for administrative agencies to exercise considerable discretion within the ambiguity – intentional or otherwise – of a statutory or regulatory text. An agency has maximum interpretive latitude when it is acting pursuant to a vaguely worded statute, but it is up to Congress to give it this long leash. Yet an agency does control the specificity of the rules which it promulgates via APA-mandated notice-and-comment procedures. In order to maximize their subsequent room to maneuver, agencies might seek to craft rules that capaciously allow for creative construal down the road. But their willingness to do so is constrained by their expectation that their interpretation will be challenged, and potentially overturned, in court. Auer, alleges it critics, gives agencies a green light to “self-delegate” via promulgating vague rules with the foreknowledge that subsequent interpretations will not be overturned by the courts.

Read more at https://www.cato.org/blog/testing-effects-auer-deference

2019-03-07

Cato: Is That an Alchemist’s License in Your Pocket or Are You Just Happy to See Me?

Everyone knows the government can’t ban political speech, but what about putting conditions on it? The Supreme Court has (for better or for worse) upheld noise ordinances and restrictions on the time, place, and manner of speech, but what if a state banned political speech with an exception for those who could successfully turn lead into gold? Would this be a complete ban? Or would the impossible alchemists’ exception mean it could somehow be squared with the First Amendment?

That hypothetical might sound absurd, but is effectively how California currently treats handguns. California’s Crime Gun Identification Act of 2007 was the first piece of legislation to require firearms in the United States to contain “microstamping” technology. It requires that any new semiautomatic handgun sold in California must stamp each fired casing in two locations with “a microscopic array of characters that identify the make, model, and serial number of the pistol.”

There are a number of problems with this law, but one stood out to us: the technology to do what California demands does not exist. While a patent exists and prototypes were tested, the concept remains “unreliable, easily defeated and simply impossible to implement.” Because of this, no gunmaker has been able to introduce a new firearm to California since 2013.

Read more at https://www.cato.org/blog/alchemists-license-pocket-or-are-you-just-happy-see-me

2019-03-06

Cato: Courts Must Reassert Control Over Administrative Agencies

Those who hold the reins of political power will not always be benevolent, self-restrained public servants—and the procedural safeguards that seem frustrating and counterproductive in one instance may very well be necessary bulwarks in another. Those safeguards are undermined by the Supreme Court’s requirement that courts give deference to a regulatory agency’s interpretation of its own rules. Under this principle, most recently enunciated in Auer v. Robbins (1997), agencies can change their minds on how to enforce the law without so much as giving the public notice.

Consider James Kisor, a Vietnam veteran whose claim for disability benefits hinged on the interpretation of the term “relevant” in the Board of Veterans Appeals rules of procedure. The Department of Veterans Affairs last amended its rules in a more formal notice-and-comment proceeding in the mid-2000s. During such a process, agencies seek input from the public on proposed rules. During that rulemaking, the VA could have defined evidentiary “relevance,” but it declined to do so. Only when the board denied Kisor’s full claim—eight years later—did the agency announce its interpretation unprompted and without having been briefed on the matter. Obviously, Kisor was given no advance notice of the new “rule”—which was really just a new semantic wrinkle—much less the opportunity to participate in the formulation of regulations that ultimately would curtail his rights.

Read more at https://www.cato.org/blog/courts-must-reassert-control-over-administrative-agencies

2019-03-05

Cato: Fences Made Crossings Deadlier—Asylum Made Them Much Less So

Following the deaths of two children in Border Patrol custody, President Trump made his pitch on how to solve the humanitarian crisis at the U.S.-Mexico border. He spoke about “the dangerous trek up through Mexico” and pledged to end “the cycle of human suffering” at the border. His solutions were a border wall and ending the chance to apply for asylum, which he called a “loophole.” Yet the evidence indicates that border fences have made the journey far more dangerous—even deadly—and that asylum made the border safer.

In fact, asylum and other humanitarian relief programs appear to have already saved about 1,300 lives along the border since 2013. By contrast, increased enforcement—including the fence—appears to have resulted in about 4,600 more deaths from 1999 to 2019.

The Rise of Border Deaths

Border Patrol reports the number of dead bodies and other deaths of migrants that it finds along the border. Overall, Border Patrol has recorded 7,529 deaths from FY 1998 to FY 2019. This death count excludes hundreds of people who local authorities discover, according to separate investigations by CNN and the Arizona Republic. This means that overall Border Patrol figures are undercounts, but the general trends up or down from year to year are still useful to determine whether more migrants are dying in the harsh conditions along the border.

Figure 1 shows the official number of deaths identified by Border Patrol each year. The grey bars show total deaths, and the black line shows the number of deaths per 100,000 apprehensions—a proxy measure for how likely any particular crosser was to die crossing the border in that year. The absolute number of deaths increased from 263 to a peak of 492 in 2005, and it remained at about that level until 2013, after which it fell back to the lowest levels since the 1990s. The rate of death per 100,000 apprehensions, however, underwent an even greater eight-fold increase from 17.3 in 1998 to 132 in 2012 before dropping back to just 25.5 so far in FY 2019—the lowest level since 2000.

Read more at https://www.cato.org/blog/fences-made-crossings-deadlier-asylum-made-them-much-less-so

Cato: Pay for Federal Government Workers

With the backdrop of the shutdown and federal workers going unpaid, the New York Times published a backgrounder last week on federal compensation. It was a fair and balanced piece and highlighted themes discussed in this study on government workers.

The NYT charts government and private sector wage growth. Average federal wages soared during the 1990s and 2000s but have grown more slowly this decade. However, overall federal compensation including benefits has grown briskly in recent years, as I chart below.

Read more at https://www.cato.org/blog/pay-federal-government-workers

2019-03-04

Cato: Senate GOP Bill Doesn’t Extend TPS. It Guts It

President Trump announced on Saturday that he had a new plan to open government that includes “a three-year extension of temporary protected status or TPS.” But as in the case of DACA—for reasons I explained here—the actual legislation that Senate Majority Leader Mitch McConnell introduced to implement his proposal does not extend TPS. Rather, it ends it as it exists now, and replaces with an entirely different program with much more restrictive criteria.

Temporary protective status, or TPS, is granted to nationals of country where the government feels it could not, at one time or another, send people back to due to a crisis in those countries, such as a war or natural disaster. Cribbing a lot from what I’ve already written about the DACA provisions of this bill, here is a list of the changes to TPS in the bill:

1 - Ends TPS for 5 of the 9 TPS countries: Under President Trump, the government has terminated TPS for Nepal, Sierre Leone, Liberia, Guinea, Sudan, El Salvador, Haiti, Honduras, and Nicaragua. Yet only the last four nationalities will benefit from this bill at all (p. 1256). To treat this bill as if it reverses Trump’s decisions is incorrect. It maintains the majority of them—notably for Africans who President Trump denigrated in a White House meeting last year.

2 - TPS recipients will lose their jobs: TPS extensions of work authorization are automatically extended but p. 1271 of this bill requires TPS recipients to apply for an entirely new work authorization (p. 1277), meaning that unless courts protect them, there will be a major gap in work eligibility. This is especially true because the government can take a year to enact this new program, virtually guaranteeing that everyone with TPS right now will lose their jobs.

3 - TPS recipients must reapply for initial status: When the government extends TPS, renewals of status are free. But this legislation requires a fee to apply to continue in status (p. 1265). Reapplying for initial status also requires that they reprove their eligibility, which is a costly process and often requires hiring an attorney.

4 - Much higher evidentiary burden: Reapplying will become even more onerous because p. 1256 increases the evidentiary standard to prove eligibility to receive TPS from a “preponderance of the evidence” to “clear and convincing.” The only higher standard of proof in the law is “beyond a reasonable doubt.” People win multi-million judgments based on the preponderance of the evidence standard. Clear and convincing is often used for cases like withdrawing life support. In the immigration context, USCIS explains that preponderance of the evidence is usually the standard—meaning that “even if the director has some doubt as to the truth,” he should approve “if the petitioner submits relevant, probative, and credible evidence that leads the director to believe that the claim is ‘probably true’ or ‘more likely than not.’” Clear and convincing is used rarely for cases like “to rebut the presumption of a prior fraudulent marriage” (i.e. for applicants the government has reason to be suspicious of). TPS recipients proving that they entered before 2011 or that they resided continuously, for example, just became much more difficult under this legislation.

5 - Massively Increases TPS Application Cost: P. 1243 contains a fine or penalty but rebrands it as a $500 “security fee” to pay for Trump’s “wall.” This is despite the fact that many TPS recipients entered legally and were stranded after hurricanes or earthquakes hit their home countries. This fine comes on top of the normal fees for processing the application, and it essentially increases the cost of the $50 application for TPS status by tenfold. It basically doubles the $495 cost of an extension of TPS work authorization.

Read more at https://www.cato.org/blog/senate-gop-bill-doesnt-extend-tps-it-guts-it

Cato: Senate GOP Bill Doesn’t Extend DACA. It Guts It

This weekend, President Trump promised to an “extension” of DACA for the “700,000 DACA recipients brought here unlawfully by their parents at a young age many years ago.” But the Senate bill that Senate Majority Leader Mitch McConnell introduced to implement his deal does not extend DACA but rather replaces it with a totally different program that will exclude untold thousands of Dreamers who would have been eligible under DACA. It is important to remember that all of these requirements are for less than 3 years of relief from deportation and work authorization, not a pathway to citizenship.

Here is a list of some of the changes:

1 - Requires Dreamers to reapply: P. 1235 requires Dreamers already in good standing in DACA to reapply for status, even though DACA would have allowed them simply to renew their status without refiling all of their paperwork and evidence. This requirement is a substantial burden, and most applicants will end up having to hire immigration attorneys to fulfill it.

2 - Much higher evidentiary burden: P. 1235 increases the evidentiary standard for Dreamers to prove their eligibility to receive DACA from a “preponderance of the evidence” to “clear and convincing.” The only higher standard of proof in the law is “beyond a reasonable doubt.” People win multi-million judgments based on the preponderance of the evidence standard. Clear and convincing is often used for cases like withdrawing life support. In the immigration context, USCIS explains that preponderance of the evidence is usually the standard—meaning that “even if the director has some doubt as to the truth,” he should approve “if the petitioner submits relevant, probative, and credible evidence that leads the director to believe that the claim is ‘probably true’ or ‘more likely than not.’” Clear and convincing is used rarely for cases like “to rebut the presumption of a prior fraudulent marriage” (i.e. for applicants the government has reason to be suspicious of). Dreamers proving that they entered before June 2007 or that they resided continuously, for example, just became much more difficult under this legislation.

3 - Imposes a Monetary Fine/Doubles Application Cost: DACA, the Dream Act, and other proposals to legalize Dreamers have usually left off the monetary fine for being in the country illegally that proposals to legalize other immigrants have customarily had. This is because no one—including Trump—blames Dreamers for being in the country illegally. They were brought here as children. Yet this bill does contain a fine or penalty but rebrands it as a $500 “security fee” (p. 1243). This fine comes on top of the normal fees for processing the application, and it essentially doubles the cost of the currently $495 application. According to the Migration Policy Institute’s analysis of why eligible Dreamers didn’t apply for DACA, not having $500 cash was the number 1 reason. Anecdotes from Dreamers themselves support this.

4 - “Public charge” rule: P. 1238 applies the public charge ground of inadmissibility in INA 212(a)(4) to Dreamers—something DACA did not require. While DACA recipients are currently ineligible, and would remain ineligible under this bill, for almost all federal benefits, the Trump administration’s pending public charge rule would ban anyone who is even 5 percent dependent on any level of government, even state or local aid, from receiving legal status. This could include numerous Dreamers in states such as California and New York, which offer state benefits to Dreamers. Dreamers in DACA have grown up in America since a very young age and have lived in the country for over a decade. They are Americans. Treating them as if they are new immigrants does not represent the view of most Americans.

5 - Minimum income requirement: P. 1239 would further require that Dreamers prove—again by clear and convincing evidence—that, unless they are a student, they can maintain an income of at least 125 percent of the poverty level during their time in the United States. DACA had no such requirement, and it would result in banning numerous Dreamers currently in DACA.

Read more at https://www.cato.org/blog/senate-gop-bill-doesnt-extend-daca-it-guts-it

2019-03-03

Cato: Supreme Court Finally Takes Up Second Amendment Case

Yesterday morning, the Supreme Court agreed to hear New York State Rifle & Pistol Association v. New York City, which challenges the city’s ban on transferring even licensed, unloaded guns anywhere outside the city – including to weekend homes or shooting ranges.

Finally! In the decade since the Supreme Court ruled in D.C. v. Heller that the Second Amendment protects an individual right to keep and bear arms, it has declined to take any cases regarding the scope of that right – until now. Matt Larosiere and I made the case a few weeks ago in the pages of the Wall Street Journal that the Court was neglecting its duty to say what the law is by abdicating its responsibility to resolve important controversies regarding various gun regulations. “The federal circuits can’t even agree on how to evaluate Second Amendment challenges, let alone what the result should be.”

Read more at https://www.cato.org/blog/supreme-court-finally-takes-second-amendment-case

Cato: What’s That Buzzing Overhead? It’s An OSHA Drone

“That buzzing noise over a construction site could be an OSHA drone searching for safety violations,” notes Littler Mendelson lawyer Tammy McCutchen in a piece for the Federalist Society. Quoting a U.S. Department of Labor memorandum from May of last year obtained by Bloomberg Law, McCutchen writes that “your friendly neighborhood OSHA inspector is now authorized by the Labor Department ‘to use camera-carrying drones as part of their inspections of outdoor workplaces.’”

What about the Fourth Amendment, you may ask? Well, court review is unlikely because current procedures call for the agency to obtain employer consent before sending the spycams aloft. Which makes everything okay, right?

Not really. As McCutchen writes, employers who refuse such consent “risk the ire of the DOL, with serious consequences. Nothing is more likely to put a target on an employer’s back for multiple and frequent future investigations than sending a DOL investigator away from your doors. Refusing consent will label you at the DOL as a bad faith employer that deserves closer scrutiny. This I know through experience practicing before DOL and as a former Administrator of DOL’s Wage & Hour Division.”

Read more at https://www.cato.org/blog/look-overhead-its-osha-drone

2019-03-02

Cato: The ATF Attempts to Deny Non-Binary and Trans Americans Guns

At the end of January, someone at the National Shooting Sports Federation asked the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) about non-binary people purchasing firearms. The ATF responded that, despite gender non-binary licenses being acceptable identification, the individual must still select either “male” or “female” on the standard firearm transfer form 4473.

The ATF’s rigid, unreasoned response makes it clear there’s a huge disconnect between the purpose of the form, and the ATF’s interpretation. Form 4473, which everyone must fill out when they purchase a firearm from a federally licensed dealer, is intended to identify the purchaser of the firearm, have them confirm they are legally eligible to receive the firearm, and give enough identifying information to run a background check.

How can forcing a prospective gun owner to select “male” or “female” make any difference in identifying them when they have already provided a driver’s license, a home address, place of birth, full name, and even social security number? When a form has so much information, it’s clear that someone’s sex adds little to its ability to properly identify them. Even in the odd situation where completely filling out the form would still yield multiple results, the ATF offers the creation of Unique Personal Identification Numbers (UPIN’s). Still, even with all these avenues of precisely identifying a person, the ATF insists that dealers may not transfer a firearm to a purchaser who refuses to “check the box.”

Read more at https://www.cato.org/blog/atf-attempts-deny-non-binary-trans-americans-guns

Cato: Cato Sues SEC Over Gag Orders

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

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

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

Read more at https://www.cato.org/blog/cato-sues-sec-over-gag-orders

2019-03-01

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

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

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

Read more at https://www.cato.org/blog/you-cant-make-speech-code-investigates-students-discussing-freedom-speech

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

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

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

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

Read more at https://www.cato.org/blog/supreme-court-shouldnt-let-agencies-get-away-animal-house-rules