Cato: SCOTUS Needs To Check the Long Arm Of State Court Jurisdiction

Many of the problems with litigation under our federal system, as I’ve noted before, arise when state courts can reach out to project their power onto litigants and disputes outside their borders. Public choice economics suggests that when courts are answerable to the political and legal classes of a single state only–say, California or Montana–they might not be ideally responsive to the interests and due process rights of out-of-state parties who have been compelled by force to show up and defend a lawsuit. Even if state judges and juries manage to avoid the temptation of “home cooking”–dishing out tastier outcomes to down-home litigants and lawyers than to outsiders–the remains the wider problem of forum-shopping, in which–even if no forum intends to act other than impartially–lawyers can bring an action in whichever of multiple available forums is most gainful for their side and unwelcome for their opponent.

A great deal, therefore, hangs on when state courts can compel absent parties to show up and defend a lawsuit. When may a state assert jurisdiction over a distant party even though it lacks one of the relatively uncontroversial grounds for doing so, such as that the events being sued over happened within its borders?

And here there has been good news to report in recent years. Our system relies largely on the federal judiciary to police overreaching by state courts in their jurisdictional claims, and after decades of irresolution, the U.S. Supreme Court has lately been getting much more serious and confident about drawing the right sorts of lines. Importantly, it has done so with support from both liberal and conservative wings of the Court. In the most significant recent case, Daimler AG v. Bauman (2014), Justice Ruth Bader Ginsburg wrote for a unanimous Court, with only Justice Sotomayor writing a separate concurrence. (The case dealt with an international as distinct from interstate claim of jurisdiction, but made precedent for both).

Read more at https://www.cato.org/blog/scotus-needs-keep-close-rein-state-court-jurisdiction

Cato: Supreme Court Reaffirms the Presumption of Innocence

On Wednesday, the Supreme Court decided a relatively small but important case out of my home state of Colorado. Colorado, like many states, imposes certain monetary penalties and costs on convicted defendants. Those can include court costs, docket fees, and payments into victim restitution funds. What happens, however, if a defendant’s conviction is later overturned, either by a higher court or on a re-trial? Can the once-convicted defendants easily get their money back, as would seem to be only fair? Not in Colorado, which is (was) unique in requiring that exonerated defendants go to court again to prove their innocence by clear and convincing evidence before they could get their money back. Thankfully, the Supreme Court, in a 7-1 opinion (Justice Gorsuch only began participating in cases in the last two weeks), held that Colorado’s “Exoneration Act” violates the due process guarantee of the Fourteenth Amendment.

Nelson v. Colorado is a combination of two different cases. One concerned Shannon Nelson, who was convicted by a jury of two felonies and three misdemeanors arising from the alleged sexual and physical abuse of her four children. Nelson conviction was reversed on appeal, however, and on retrial she was acquitted of all charges. In the course of her ordeal, Nelson paid $8,192.50 in costs and fees.

Louis Madden, the petitioner in the other case, was convicted of patronizing a child prostitute and third-degree sexual assault. His conviction was later overturned by the Colorado Supreme Court, and the state declined to retry the case. Madden paid the state $1,977.75 in the course of his legal troubles.

Read more at https://www.cato.org/blog/supreme-court-reaffirms-presumption-innocence

Cato: Adult Rights for Adult Businesses

An ordinance of the City of Sandy Springs, Georgia, prohibits the sale of sex toys. Businesses and individuals have challenged this statute as unconstitutional under the Fourteenth Amendment’s Due Process Clause in controlling their consensual, sexual behavior in the privacy of their homes. The district court and a panel of the U.S. Court of Appeals for the Eleventh Circuit upheld the ordinance given the Eleventh Circuit precedent of Williams v. Attorney General (2004), which upheld an Alabama sex-toy-sales ban.

Cato has now joined the DKT Liberty Project on a brief to the entire (en banc) Eleventh Circuit asking it to overturn Williams, which is inconsistent with more recent Supreme Court precedent in United States v. Windsor (2013) and Obergefell v. Hodges (2015) (the DOMA and same-sex marriage cases, respectively). Williams had relied on Washington v. Glucksberg (1997), where the Supreme Court declared that for a right to be protected under the Fourteenth Amendment, its specific articulation must be “deeply rooted in our history and traditions” or “fundamental to our concept of constitutionally ordered liberty.”

Read more at https://www.cato.org/blog/adult-rights-adult-businesses

Cato: Legislative Takings Are Still Takings

The Fifth Amendment’s Takings Clause states that the government may take no property for public use without just compensation. Unfortunately, local governments often see the Takings Clause not as a fundamental safeguard of liberty so much as an inconvenient obstacle getting in the way of preferred policy outcomes.

One way cities have devised to avoid their obligations to provide just compensation is to condition issuance of land-use permits on landowners’ surrendering property rights the government would otherwise have had to pay for (what’s a little extortion between friends). That’s exactly what the City of West Hollywood is attempting to do with a zoning ordinance that requires developers who build multi-unit housing to either (1) sell or rent a percentage of that housing at below-market prices or (2) pay an “in lieu” fee that the city calculates using a formula created by statute.

Shelah and Jonathan Lehrer-Graiwer sought a permit to build an 11-unit development and elected to pay the in-lieu fee under protest, later challenging it as an unconstitutional taking. The trial court, following binding state-court precedent, found in favor of the city, and the California Court of Appeals affirmed. Now the property owners seek U.S. Supreme Court review.

Read more at https://www.cato.org/blog/legislative-takings-are-still-takings

Cato: Government Can’t Shut Down Public Recording That Doesn’t Interfere with Law Enforcement

A group called People Helping People heard of potential civil rights abuses and harassment occurring at Border Patrol checkpoints in Arizona—interior ones, not right at the border—so started a campaign to monitor such activity. The Border Patrol then decided to prohibit any recording within 150 feet of their location, which includes the public roadside.

A federal district court found that the new rule was a valid time, place, or manner restriction on First Amendment-protected activity. Cato, with the assistance of the UCLA Law School First Amendment Clinic and noted scholar Eugene Volokh, has filed an amicus brief asking the U.S. Court of Appeals for the Ninth Circuit to reverse that ruling.

Recording of law enforcement officers engaged in the public performance of their duties promotes the free discussion of government affairs. The roadside in this case is a “traditional public forum” of the sort that the Supreme Court has held to be required to be open to First Amendment-protected activities. The Border Patrol even got a permit that requires that the facilities be “maintained in a manner that will not interfere with the reasonable use of the public right-of-way.” The government cannot choose to shut down such a forum when it is still being used as a public thoroughfare.

Read more at https://www.cato.org/blog/government-cant-shut-down-public-recording-doesnt-interfere-law-enforcement

Cato: Mulvaney’s Plan to Reform the Government

President Trump’s Office of Management and Budget (OMB) has released a “Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce.” The 14-page memo from OMB director Mick Mulvaney creates a process for executive branch leaders to produce a detailed plan to cut the government. The final plan will be included in the fiscal year 2019 budget a year from now.

The core of the process is that the president is requiring federal agencies to prepare Agency Reform Plans by this September, with draft plans due June 30. Agencies must come up with downsizing “proposals in four categories: eliminate activities, restructure or merge, improve organizational efficiency and effectiveness, and workforce management.” Agencies “should focus on fundamental scoping questions (i.e. analyzing whether activities should or should not be performed by the agency).”

Some of the factors that agencies should consider when doing their “fundamental scoping” are whether activities are nonessential, whether they violate federalism, and whether they would flunk a cost-benefit test. Agencies should propose eliminating activities that do not pass muster on these and other criteria.

Director Mulvaney is trying to get federal bureaucracies to reconsider all of their activities in a bottom-up manner. The downsizing process he has launched will include actions that the president and agencies can take administratively, and reforms that will need legislation passed by Congress.

Read more at https://www.cato.org/blog/mulvaneys-plan-reform-government

Cato: April 8, 1952: President Truman Seizes The Steel Mills

This week marks the 65th anniversary of what was to become a turning point in constitutional history, President Harry S. Truman’s order seizing the nation’s steel mills during a labor dispute. Allen Pusey has an article on the episode at the ABA Journal.

The case was to result in the Supreme Court’s 6-3 decision later the same year in Youngstown Sheet & Tube v. Sawyer, rebuking Truman for his lawless action. It was one of American history’s key wins for the successful assertion of a Constitutional rule of law that binds the executive branch as against claims of inherent emergency power.

But Truman’s audacious behavior was itself based on the adventures in Caesarism of earlier presidents going back at least to Woodrow Wilson, and especially those of his immediate predecessor, Franklin D. Roosevelt. Among other wartime acts of seizure defended on national security rationales, Roosevelt had sent in armed troops on Dec. 27, 1944 to seize (on grounds of defiance of war labor advisories) the Chicago-based catalog and retail company Montgomery Ward. Known for its clothes and household items, Montgomery Ward was almost no one’s idea of a vital war industry. But its head, businessman Sewell Avery, had made himself a leading thorn in FDR’s side in opposition to the President’s New Deal policies. A famous photo showed Sewell Avery being carried bodily out on the street by military men while sitting in his executive chair.

Read more at https://www.cato.org/blog/april-8-1952-president-truman-seizes-steel-mills

Cato: Jeff Sessions Continues to Hint at Escalating the Drug War

As a candidate, Donald Trump held a relatively moderate line on drug prohibition, often arguing that issues like marijuana legalization should be left to state governments. His selection of Jeff Sessions as Attorney General, however, sent an entirely different message. Sessions is a long-time champion of the federal drug war, and since taking over the Justice Department he has continued to make statements that hint at a return to a much harsher federal approach to drug prohibition.

The Washington Post ran a story this weekend detailing some of the shifts taking place at the Department of Justice, including a green light for federal prosecutors to step up prosecutions for low-level offenses and to rely on heavy mandatory minimums to leverage plea deals.

Read more at https://www.cato.org/blog/jeff-sessions-gets-it-wrong-drug-war

Cato: Syria and the Danger of Elite Consensus

There was near consensus in Washington, D.C. last week in support of the U.S. strike on Syria. Voices from the left supporting Trump’s action include Hillary Clinton, most of America’s European allies, Tom Friedman, and a large number of former Obama officials. On the right, the usual suspects like Senators John McCain and Lindsey Graham supported the attack, as did most Republican members of Congress, including some like Majority Leader Senator Mitch McConnell who opposed exactly such an action when President Obama was considering in back in 2013. Even the mainstream media appear to have decided it was time to strike Assad, at least to judge from much of the breathless “journalism” we’ve seen so far.

On first blush one might imagine that this consensus is a good thing, coming as it does during what has otherwise been an incredibly polarized first few months of Trump’s presidency. Finally, you might say, we agree on something. And all this agreement among the people we elect and pay to run U.S. foreign policy might also give you confidence that Trump did the right thing.

That confidence, sadly, would be misplaced. The truth is that the elite consensus on Syria, like Trump’s missile strike, is premature and ultimately dangerous to American national security.

The fundamental danger of elite consensus is that it undermines the marketplace of ideas. A democracy’s primary strength in foreign policy making is the ability to weigh competing policy proposals in the news media. Debate and deliberation reveal the evidence and logic behind competing claims and helps the public and political leaders assess the implications of different courses of action. This process, in theory, helps the United States avoid poor decisions.

Read more at https://www.cato.org/blog/syria-danger-elite-consensus

Cato: Trump Budget: A Good Start on Domestic Cuts

The White House released President Donald Trump’s first budget today. In the opening message, the president says, “Our Budget Blueprint insists on $54 billion in reductions to non-defense programs. We are going to do more with less, and make the government lean and accountable to the people.”

I would rather that the government do less with a lot less, but I appreciate that Trump is proposing to fully offset to his defense spending increases. His Republican predecessor in office pushed for large increases in defense, education, health care, and other spending without sufficient offsets, thus putting us on our current path of endless deficits and rising debt.

Read more at https://www.cato.org/blog/trump-budget-good-start-domestic-cuts

Cato: Poor Defendants Should Get to Choose Their Lawyers Too

Americans may take for granted that if they’re ever accused of a crime, they can choose their own attorney to represent them. The Supreme Court has ruled that Americans have a right to counsel in serious criminal cases, and nobody seriously argues that the government should make that important decision for us.

Yet that is exactly what happens across the country when defendants are too poor to hire their own attorneys.  While other countries such as the United Kingdom have long allowed indigent defendants to choose their own lawyers, American jurisdictions historically restrict that choice to either a court-appointed lawyer or an assigned public defender.

In 2010, the Cato Institute published a study, Reforming Indigent Defense, which proposed a client choice model where poor persons accused of crimes would be able to choose their own attorney to represent them in court. If the accused opted for the public defender, he could make that choice, but if he wanted to explore other options, he could do that also.  The Texas Indigent Defense Commission became aware of the Cato report and decided to give it a try with a pilot program in Comal County, near San Antonio. The program went into operation in 2015.

Today, the Justice Management Institute released an evaluation based on two years of data from the Comal Client Choice program.  The report, called The Power of Choice: The Implications of a System Where Indigent Defendants Choose Their Own Counsel, suggests that the program is working as well or better than the old system across a variety of metrics.

Read more at https://www.cato.org/blog/poor-defendants-should-get-choose-their-lawyers-too

Cato: Dire Fears of Trump Deregulation

Four decades ago, the United States began a dramatic change in domestic policy, repealing swaths of economic regulation and abolishing whole agencies charged with managing sectors of the U.S. economy.

 If you mention this “deregulation” today, most people think it refers to wild Reagan administration efforts to undo environmental, health, and safety protections. In fact, the deregulation movement predated Ronald Reagan’s presidency, had broad bipartisan support, and had little to do with health, safety, or environmental policy. Rather, deregulation targeted regulations that directed business operations in different sectors of the American economy: which airlines could service which routes, what railroads could charge what amounts for their services, how telephone service would be billed and what technologies would be used, how the power industry was organized, and much more.

 For decades, policy researchers had compiled evidence that those regulations harmed consumers and stunted economic growth by suppressing competition and innovation. With America mired in the stagflation of the 1970s, policymakers decided to stop sheltering (some) U.S. businesses from the demands of consumers and the competition of upstart and foreign rivals.

Read more at https://www.cato.org/blog/dire-fears-trump-deregulation

Cato: Puerto Rico Continues to Ignore Congress

Puerto Rico came to Congress last year because it desperately needed some sort of help: after a decade of deficit financing, it is now $72 billion in the hole. It owes much of that money to traditional individual investors and savers across the United States, who have lent it money over the last decade, and even more to current and future pensioners.

The law that Speaker Ryan pushed through Congress, PROMESA, was meant to be that help. It provided the island’s government with breathing room to get its fiscal act together and authorized an Oversight Board to oversee its finances and–crucially–give it the political cover to make difficult decisions and negotiate with its many creditors.

Unfortunately, neither the government nor the Oversight Board have followed the law and, as a result, it looks destined to fall short of meeting its goals of restoring fiscal responsibility on the island and returning Puerto Rico to the capital markets.

To date, neither the Board nor the Puerto Rican government has had discussions with its creditors on the either the development of the fiscal plan or any process for debt negotiations. Instead, their activities have culminated in the Oversight Board certifying a fiscal plan from the Commonwealth that falls short of–or outright ignores–requirements in PROMESA. The plan does relatively little to reform what’s broken in the Puerto Rico government, including wayward spending and bloated pension system, and instead achieves short-run fiscal solvency via significant haircuts for the creditors that, in violation of the statute, do not comport with the lawful or constitutional priority of Puerto Rico’s obligations.

In response, a group of creditors that owns over $13 billion of the island’s debt recently sent a letter to the members of the island’s Oversight Board asking it to reject the government’s fiscal plan. The signees are a diverse group, including general obligation bondholders, COFINA bondholders, a bond insurer, and others who do not always share the same perspective. However, they all agree that the plan is so flawed it cannot be considered a serious starting place for debt negotiations. Key among their objections is that the fiscal plan clearly violates PROMESA by both ignoring the law’s explicit call that it “respect the lawful priorities or lawful liens” that exist. The plan does this both by making debt subordinate to every single other government expense and by muddying the clear seniority of the various different creditor groups.

Read more at https://www.cato.org/blog/puerto-rico-continues-ignore-congress

Cato: Please Stop the Tyranny

While the newest federal agency, the Consumer Financial Protection Bureau (CFPB), has been controversial for many reasons, its most troubling feature may simply be its unconstitutional structure. Its sole director reports to no one but himself, and, under the terms of Dodd-Frank, can be removed by the president only for cause. And it receives its funding not through Congress, but through the Federal Reserve. Not even the Fed has the authority to challenge its spending, however. Instead, the law says the Fed “shall” give the CFPB the funds it requests, up to 12 percent of the Fed’s total operating expenses. As of 2015, that meant the CFPB could demand up to $443 million in one year.

Last year, a federal appeals court, ruling against the agency, issued a stinging indictment of this structure in PHH v. CFPB. The CFPB, however, sought a rehearing en banc. In a typical federal appeals case, a three-judge panel will hear and rule on the matter. The losing party can request that the entire court—in this case, the 11 active judges of the D.C. Circuit Court of Appeals—to hear and rule on the case again. The courts rarely grant such requests, except when the matter is one of particular importance. In this case, the request was granted and the court will hear argument again on May 24, 2017.

Read more at https://www.cato.org/blog/please-stop-tyranny

Cato: An Important but Limited Victory for Free Speech

On Thursday, the Supreme Court ruled in Expressions Hair Design v. Schneiderman that imposing restrictions on how merchants inform buyers about the prices they charge triggers First Amendment scrutiny. This would seem to be an obvious conclusion, but the decision is an important, although limited, victory for those who want to convey honest information to their customers, and for those who have a right to receive that information.

The case dealt with New York Business Law § 518, which prohibits merchants from imposing a “surcharge” on customers who use credit cards, but allows for a “cash discount.” To put it simply: the law allows stores to advertise “discounts” for paying cash, but makes it a crime to advertise an economically equivalent “surcharge” for paying with plastic.

Expressions Hair Design, along with several other merchants, sued the state, arguing that the law was vague and a violation of their First Amendment right to convey information to their customers. The federal district court agreed, but the U.S. Court of Appeals for the Second Circuit reversed that decision. The circuit court’s ruling held that the First Amendment wasn’t implicated because the law didn’t regulate speech but merely regulated prices. The Supreme Court granted review to determine two issues: The threshold question of whether the law regulated speech rather than conduct and, if so, whether the law violated the First Amendment.

Read more at https://www.cato.org/blog/important-limited-victory-free-speech

Cato: Several House Republicans Introduce a Bill to Legalize Young Immigrants

Eleven House Republicans are pushing new legislation to provide a pathway to legal status for young immigrants who entered the United States as children—commonly known as “Dreamers.”* Congressman Carlos Curbelo (R-FL) and ten other Republican members introduced Recognizing America’s Children (RAC) Act today (PDF). The bill will benefit the United States economy and provide certainty for a group of young people who are deserving of a humane approach.

The bill would grant conditional legal permanent status to immigrants who have arrived before the age of 16, have been in the United States since January 1, 2012, have graduated high school, and have either been accepted into college or vocational school, applies to enlist in the military, or works with an existing valid work authorization. The conditional status will be cancelled if they become dependent on government, are dishonorably discharged from the military, or are unemployed for more than a year. The conditional status woudl become permanent after 5 years if they graduate from college or vocational school, are honorably discharged from the military or has served for 3 years, or have been employed for at least 48 months.

Read more at https://www.cato.org/blog/several-house-republicans-introduce-bill-legalize-young-immigrants

Cato: Ending the Reign of the Administrative Law Judge

The system of checks and balances that the Constitution established is an essential safeguard against government overreach. Yet, the ever growing administrative state often undermines fundamental checks and balances. “Fourth branch” agencies frequently take on legislative, executive, and judicial roles simultaneously. And to make matters worse, administrative officials are much less accountable to the people than their counterparts in the traditional three branches.

One especially alarming example of the breakdown of essential separation of powers within the administrative state is the Securities and Exchange Commission’s use of administrative law judges (ALJs). ALJs adjudicate most of the SEC’s enforcement actions. They have the authority to impose significant civil penalties and can bar respondents from working in the securities industry.

The SEC’s use of ALJs to decide important cases violates the Constitutional principle of an independent judiciary. ALJs are housed within the same agency that initiates the proceedings they adjudicate. While notionally independent, the lack of distance between ALJs and the SEC’s enforcement counsel may serve as a source of bias and conflict of interest. The SEC selects the ALJs that hear cases, even though the Supreme Court has deemed it problematic when “a man chooses the judge in his own cause.”

There is also the risk that ALJs may feel pressure, whether explicit or implicit, to support their employer agency.  The SEC’s win rate is better in cases heard by ALJs than cases brought to federal court.  While there may be some selection bias at play, the optics are not good and, in matters of justice, the appearance of injustice can be harmful in itself.

In addition to these separation of powers and due process issues, ALJs are insulated from public accountability, meaning there is very little any elected official can do to check instances of bias or overreach. Cato recently filed an amicus brief in Lucia v. SEC, a case regarding ALJs’ lack of accountability to the public.

The SEC classifies its ALJs as employees rather than officers. Under the Constitution’s appointments clause, federal government officials are divided into two primary categories, officers and employees. All officers in the executive branch are subject to presidential removal power. The president’s power to remove officers that fail to preform their duties is essential for his ability to faithfully execute the law. Presidential removal power is also necessary in order for officers to be held accountable to the public.

Read more at https://www.cato.org/blog/ending-reign-administrative-law-judge

Cato: Court Says Regulation of In-State, Noncommercial Activity Is Valid Regulation of Interstate Commerce. Somehow.

Once again, a court has refused to recognize any meaningful limit to Congress’s authority to regulate Americans’ private lives through the Commerce Clause. On Wednesday, after a long delay in considering the case, the U.S. Court of Appeals for the Tenth Circuit reversed a district court order that had declared the U.S. Fish and Wildlife Service (FWS)’s regulations prohibiting the “taking” of the Utah prairie dog (effectively, anything that may disrupt its habitat) unconstitutional. (This is a case in which Cato had filed a brief nearly two years ago.)

The court held that, since Congress had a rational basis to believe that protecting the prairie dog “constituted an essential part of a comprehensive regulatory scheme that, in the aggregate, substantially affects interstate commerce,” the FWS regulations are authorized under Article I, section 8. This, despite acknowledging that “taking” the prairie dogs—which exist solely within the borders of Utah and have no economic value—is a “noncommercial, purely intrastate activity.”

The case was brought by People for the Ethical Treatment of Property Owners (PETPO), a nonprofit organization formed by Utah residents and property owners to protect their interests in the face of FWS’s burdensome regulations. Its members have been prevented from building homes, starting small businesses, and even from protecting local parks and cemetery grounds. Finally, enough was enough and PETPO brought suit against the FWS on the grounds that neither the Commerce Clause nor the Necessary and Proper Clause authorizes Congress to regulate this rodent on nonfederal land. Such is the bizarre dreamscape in which the Tenth Circuit exists: where the power to regulate interstate commerce somehow covers activities that are neither interstate nor commercial.

Read more at https://www.cato.org/blog/court-says-regulation-state-noncommercial-activity-valid-regulation-interstate-commerce-somehow

Cato: The House GOP Leadership’s Health Care Bill Is ObamaCare-Lite — Or Worse

During the presidential campaign, Donald Trump promised legislation that “fully repeals ObamaCare.” Monday night, the Republican leadership of the House of Representatives released legislation it claims would repeal and replace ObamaCare. Tuesday afternoon, Vice President Mike Pence will travel to Capitol Hill to pressure members of Congress to support the bill. On Wednesday, two House Committees will begin to mark-up the legislation. House and Senate leaders are hoping for quick consideration and a signing ceremony, maybe by May, so they can move on to other things, like tax reform and confirming Supreme Court nominee Judge Neil Gorsuch.

Everyone needs to take a step back. This bill is a train wreck waiting to happen.

The House leadership bill isn’t even a repeal bill. Not by a long shot. It would repeal far less of ObamaCare than the bill Republicans sent to President Obama one year ago. The ObamaCare regulations it retains are already causing insurance markets to collapse. It would allow that collapse to continue, and even accelerate the collapse. Republicans would then own whatever damage ObamaCare causes, such as when the law leaves seriously ill patients with no coverage at all. Congress would have to revisit ObamaCare again and again to address problems they failed to fix the first time around. ObamaCare would consume the rest of Congress’ and President Trump’s agenda. Delaying or dooming other priorities like tax reform, infrastructure spending, and Gorsuch. The fallout could dog Republicans all the way into 2018 and 2020, when it could lead to a Democratic wave election like the one we saw in 2008. Only then, Democrats won’t have ObamaCare on their mind but single-payer.

Read more at https://www.cato.org/blog/house-gop-leaderships-health-care-bill-obamacare-lite-or-worse

Cato: Against Ideological Litmus Tests at State-Funded Professional Schools

Craig Keefe was expelled from his state-funded nursing college in Minnesota because something he said was deemed unprofessional. He didn’t break any laws with what he said—there were no threats or anything like that—and wasn’t even on campus at the time. He just made a handful of rude comments on his personal Facebook page, unrelated to any curricular project.

Nevertheless, the school had adopted the American Nurses Association’s code of professional ethics, which forbids behavior “unbecoming of the profession” or that “transgresses personal boundaries,” into its student handbook, so the federal district court rejected Keefe’s challenge to his expulsion. The U.S. Court of Appeals for the Eighth Circuit affirmed that ruling, effectively holding that that any punishment of speech under the nursing code is effectively free from First Amendment review.

So now Mr. Keefe, represented by Cato adjunct scholar Robert Corn-Revere, is asking the Supreme Court to take his case. Cato, joined by the Electronic Frontier Foundation, National Coalition Against Censorship, and Student Press Law Center, and with the help of Prof. Eugene Volokh and the UCLA First Amendment Clinic, has filed a brief supporting that request.

Read more at https://www.cato.org/blog/against-ideological-litmus-tests-state-funded-professional-schools

Cato: Ending the SEC’s Antique Prosecutions

Since at least the days of ancient Athens—which Demosthenes tells us had a five-year statute of limitations for nearly all cases—governments have limited the time period within which punishment or compensation may be sought. Statutes of limitations exist to protect defendants from vindictive or arbitrary lawsuits and prosecutions brought long after their memories have faded and records that might have been used to rebut a claim lost. They ensure that we need not spend our lives constantly anxious about the possibility of the distant past coming back to haunt us over half-forgotten slights.

These are the basic animating purposes behind 28 U.S.C. § 2462, which imposes on the federal government a five-year limitations period for any “action, suit, or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise,” and the Supreme Court’s unanimous 2013 opinion in Gabelli v. SEC (in which Cato also filed a brief) finding no valid justification for the Securities and Exchange Commission to pursue enforcement actions seeking civil penalties more than five years after the relevant conduct had occurred.

Unfortunately, the SEC didn’t learn its lesson and has consistently attempted to circumvent and subvert Gabelli by arguing that the relief it seeks in its years-overdue enforcement actions—monetary disgorgement, injunctions requiring defendants to obey the law, and declaratory judgments that laws were violated—is actually “equitable” and not a form of civil penalty covered under § 2462. Disgorgement—requiring a defendant to return their ill-gotten gains—has indeed traditionally been a way to remedy unjust enrichment rather than a punishment, but the SEC’s use of it has been anything but equitable.

Read more at https://www.cato.org/blog/ending-secs-antique-prosecutions

Cato: How Strawberries and The Clash Helped Save Separation of Powers

Yesterday the Supreme Court ruled in the case of National Labor Relations Board v. SW General that an “acting” officer cannot simultaneously stand as a nominee to hold that office permanently, regardless of how the acting officer was appointed. The ruling is a double victory, both for the separation of powers between the president and Senate and for textualism.

Though technical, the statutory interpretation issue in this case was not overly complicated. The Federal Vacancies Reform Act (FVRA) lays out three methods by which someone can become an acting officer in three separate clauses, subsections (a)(1), (a)(2), and (a)(3). It also has a “disqualifying clause,” declaring that (with some exceptions not relevant here) “a person may not serve as an acting officer” if he has also been nominated for a permanent position as that same officer.

There would be no dispute that the disqualifying clause applies to all acting officers, except for one wrinkle: the disqualifying clause begins with the preamble “Notwithstanding subsection (a)(1).” Based only on this preamble, the government argued that the disqualifying clause applies only to those who became acting officers under subsection (a)(1). This would mean that anyone who became an acting officer under subsections (a)(2) or (a)(3) (including the man at the center of this case, former NLRB acting general counsel Lafe Solomon) could never be disqualified by the clause.

Read more at https://www.cato.org/blog/how-strawberries-clash-helped-save-separation-powers

Cato: Government Can’t Ban Businesses from Telling their Customers the Truth

In a unanimous decision yesterday, the U.S. Court of Appeals for the Eleventh Circuit vindicated Ocheesee Creamery’s free speech rights when it reversed a district court’s decision that prevented the creamery from telling its customers the truth about the products it sells.

Ocheesee Creamery is a small, all-natural dairy farm located in rural Florida that prides itself on selling organic products to its customers. This mission requires that they not add ingredients to the food they sell. One such product the creamery offered was “skim milk”—which is simply milk that has had the cream removed. For a number of years, Ocheesee sold its milk and accurately labeled it as pure pasteurized skim milk—nothing more, nothing less.

In 2012, however, the Florida Department of Agriculture and Consumer Services (FDACS) told the small business that it had to inject its all-natural milk with artificial vitamins or quit telling its customers that what they were offering was skim milk, and instead call it “imitation milk product.” FDACS regulations define skim milk as milk that is not just milk, but as milk injected with vitamins A and D. Now, you might ask yourself how injecting artificial ingredients into all-natural product transforms it into something that is considered “imitation”. Yet that’s precisely what the FDACS requires under its regulations.

Read more at https://www.cato.org/blog/government-cant-ban-businesses-telling-their-customers-truth

Cato: SNAP: $15 Billion on Junk Food

The Supplemental Nutrition Assistance Program (SNAP) aims for recipients to “make healthy food choices within a limited budget.” SNAP is supposed to “permit low-income households to obtain a more nutritious diet.”

However, the lofty goals of federal programs often differ from the actual results. It turns out that about $15 billion of SNAP benefits are for junk food. Apparently, recipients are not making the nutritious and healthy choices that the government promised.

SNAP, or food stamp, benefits totaled $67 billion in 2016. Food stamps can be used to buy just about any edible item in grocery stores other than alcohol, vitamins, and hot food. But exactly what is being purchased by the program’s 44 million recipients has been mainly shrouded in secrecy—until now.

A November study by the U.S. Department of Agriculture finally shed light on food stamp purchases. The study examined detailed data for SNAP and non-SNAP shoppers for one large food retailer over a one-year period.

The study found that SNAP shoppers bought slightly more junk food than non-SNAP shoppers. For example, 9.25 percent of total purchases by SNAP shoppers were for “sweetened beverages” such as cola, which compared to 7.1 percent for non-SNAP shoppers. At the same time, SNAP shoppers spent relatively less on nutritious foods such as fruits and vegetables.

Read more at https://www.cato.org/blog/snap-15-billion-junk-food

Cato: The Filibuster: A Primer

Most legal scholars agree that Supreme Court nominee Neil Gorsuch has the necessary experience, expertise, and temperament to be confirmed as Justice Scalia’s replacement.  But suppose the Democrats decide to filibuster the nomination and Republicans can’t get the 60 votes needed to break the filibuster?  If that happens, you can expect the Republicans to “go nuclear” and change the filibuster rules so that only 51 votes are required to shut off debate.  To understand what that means, here’s a short backgrounder on the filibuster:

Senate filibusters have been around since 1837.  Beginning in 1917, a cloture vote to shut off debate required a 2/3 supermajority; that was changed to 60 votes in 1975.  Sen. Strom Thurmond (D-SC) set the record with a 1957 talk-a-thon against civil rights legislation: 24 hours, 18 minutes.  Nowadays, senators need not actually speak.  They merely announce their intent to prolong debate and that triggers the 60-vote cloture rule.

Suppose senators want to revise the 60-vote rule.  Rules can be revised by majority vote.  But suppose further that the vote on revising the 60-vote rule is itself filibustered.  According to Senate rules, if a vote to change the 60-vote rule is filibustered, it takes two-thirds of the senators to break the filibuster.  The so-called nuclear option would override that rule.

There are two versions of the nuclear option – one simple and one complicated.  First, the simple version:  On the first day of a new Congress, Senate rules don’t yet apply.  Therefore, new rules can be adopted – and debate can be halted – by the default procedure, which is majority vote.  After the first day, however, that option isn’t available.

The second version is more complicated; but it can be used at any time.  One party, let’s say the Republicans, moves to change the 60-vote cloture rule to 51 votes.  The Democrats filibuster the rule-change – which means it would take 67 votes to close debate.  Republicans then go for the nuclear option – which is a point-of-order, upheld by the presiding officer, declaring that the 67-vote requirement is unconstitutional.

Read more at https://www.cato.org/blog/filibuster-primer

Cato: The Road to Cordray’s Removal Just Got Longer

The plot thickens in the ongoing battle for the Consumer Financial Protection Bureau, the controversial agency created in the wake of the 2008 financial crisis.  Yesterday, a federal appeals court decided it would grant rehearing of last year’s case, PHH v. CFPB, which held the agency’s structure to be unconstitutional.  The decision issued last year not only ruled the agency’s structure to be unconstitutional, but also placed the director under the president’s authority, giving the president the power to fire the director at will.  Now that the court will rehear the case, its earlier decision is no longer binding, meaning the president can no longer rely on it if he wishes fire Director Richard Cordray.

The bureau is the brain-child of Massachusetts Senator Elizabeth Warren, but even the progressive firebrand did not dream up an agency as powerful as the one that congress ultimately created.  Senator Warren, then a private citizen, initially proposed a commission structure.  While independent commissions, such as the Securities and Exchange Commission (SEC), are constitutionally questionable (they are not directly accountable to the President or Congress, and are therefore outside the three branches of government established by the Constitution), they have the benefit of both precedent and a measure of checks and balances.  As Judge Kavanaugh noted in the initial PHH v. CFPB decision, a structure like the SEC’s allows the commissioners to serve as checks on each other.  The SEC is by law bi-partisan, with no more than three of the five seats filled by members of the same party, and there is pressure for the chair to get consensus from all five commissioners or risk a reputation for divisiveness and partisanship.  Other regulators, like the Commodity Futures Trading Commission and the Federal Trade Commission, have similar structures.

Read more at https://www.cato.org/blog/road-cordrays-removal-just-got-longer

Cato: House Moves Forward On Tort Reform — And With A Nod To Federalism

As I note in a post at Overlawyered, the House of Representatives has been moving quickly on litigation reform, both on perennial measures long stymied by Democratic opposition and on others of newer vintage (more). Of particular interest, two measures track recommendations Cato scholars have been making for years, while a third has been scaled back in a way that at least nods to concerns Cato scholars have expressed.

The new 8th edition Cato Handbook for Policymakers contains a chapter on tort and class action law prepared by Robert Levy, Mark Moller, and me. Its first federal-level recommendation is that “Congress should restore meaningful sanctions for meritless litigation in federal court.” On March 10, by a largely party-line vote of 230-188, the House passed the Lawsuit Abuse Reduction Act (LARA), H.R. 720, which would restore the regime of strong Rule 11 sanctions in federal litigation that were gutted in 1993 (committee report here). LARA has been proposed in one form or another for many Congresses and has passed the House more than once before stalling in the Senate; more on it here.

Our handbook chapter also recommends that Congress “implement further reforms for class actions that cross state lines,” a type of suit that often enables state courts to assert their power over transactions and parties in other states. While our recommendations are multi-faceted, many of them overlap with provisions in the pending H.R. 985, the Fairness in Class Action Litigation Act (committee report; passed the House March 9, 220-201). FICALA in turn adds other provisions of its own; attorney Andrew Trask, author of multiple essays on class action law for the Cato Supreme Court Review, takes a relatively favorable view of its overall impact.

Read more at https://www.cato.org/blog/house-moves-forward-lawsuit-reform-nod-federalism

Cato: Why Judicial Independence Matters

Late yesterday The Hill posted a short op-ed I wrote on President Trump’s nomination of Judge Neil Gorsuch to fill the seat of the late Justice Antonin Scalia. As often happens, a couple of editorial changes, especially in the title, muted somewhat the central point of the piece. But even were that not so, that point is worth further attention.

It concerns judicial independence. As I wrote, facing a nominee with impeccable qualifications, Democrats are now crafting an indirect assault against Judge Gorsuch. Thus, they’re pointing to the president’s outrageous attacks on the judiciary, among other things he’s said, and contending that he’s imposed a “litmus test” on the nominee. So they’re demanding that Judge Gorsuch “very explicitly and directly” disavow the president’s remarks, which he has already done respectfully, but in addition that he “very specifically” make his own policy views known in the upcoming confirmation hearings (which we’ve just learned will begin on March 20).

Read more at https://www.cato.org/blog/why-judicial-independence-matters