Author Archive
A Lesson for Young Journalists, Courtesy of Justice Kennedy
A high school newspaper in Manhattan recently added a new and prestigious editor to its staff: Supreme Court Justice Anthony Kennedy. Adam Liptak of the New York Times reports:
It turns out that Justice Anthony M. Kennedy, widely regarded as one of the court’s most vigilant defenders of First Amendment values, had provided the newspaper, The Daltonian, with a lesson about journalistic independence. Justice Kennedy’s office had insisted on approving any article about a talk he gave to an assembly of Dalton high school students on Oct. 28.
Kathleen Arberg, the court’s public information officer, said Justice Kennedy’s office had made the request to make sure the quotations attributed to him were accurate.
The justice’s office received a draft of the proposed article on Monday and returned it to the newspaper the same day with “a couple of minor tweaks,” Ms. Arberg said. Quotations were “tidied up” to better reflect the meaning the justice had intended to convey, she said.
I’m all for being tidy — and, for all his faults, Kennedy has indeed been friendly to the First Amendment (if not to student speech rights in the “Bong Hits for Jesus” case, Morse v. Frederick) – but public figures don’t usually get to change a story to “better reflect” the intent of their words.
…Frank D. LoMonte, the executive director of the Student Press Law Center, questioned the school’s approach. “Obviously, in the professional world, it would be a nonstarter if a source demanded prior approval of coverage of a speech,” he said. Even at a high school publication, Mr. LoMonte said, the request for prepublication review sent the wrong message and failed to appreciate the sophistication of high school seniors.
While this is hardly a major scandal — and it’s not unusual for justices to exclude the press entirely from public appearances — Kennedy’s use of a judicial editor’s pen does support the general feeling that students don’t always get a fair shake when it comes to their constitutional rights. As I said about an unrelated case in which Cato filed a brief last week (quoting the landmark Tinker case), students shouldn’t have to “shed their constitutional rights to freedom of speech… at the schoolhouse gate” — especially when a man charged with protecting those rights comes to talk to them about the importance of law and liberty.
H/T: Jonathan Blanks
Filed under: Government and Politics; Law and Civil Liberties
Taking Land for Public Uselessness
Over at the Washington Examiner, Tim Carney reports that Pfizer is abandoning its New London offices and deciding what to do with the property it gained in the infamous Kelo v. New London land-grab:
The private homes that New London, Conn., took away from Suzette Kelo and her neighbors have been torn down. Their former site is a wasteland of fields of weeds, a monument to the power of eminent domain.
But now Pfizer, the drug company whose neighboring research facility had been the original cause of the homes’ seizure, has just announced that it is closing up shop in New London.
To lure those jobs to New London a decade ago, the local government promised to demolish the older residential neighborhood adjacent to the land Pfizer was buying for next-to-nothing. Suzette Kelo fought the taking to the Supreme Court, and lost. Five justices found this redevelopment met the constitutional hurdle of “public use.”
That this purported “public use” is now exposed as the façade for corporate welfare that it always was is, of course, little comfort to Suzette Kelo and the other homeowners whose land was seized. But hopefully this will be an object lesson for other companies considering eminent domain abuse as a route to acquire land on the cheap — and especially for state and local officials who acquiesce in this type of behavior.
You can read Cato’s amicus brief for the ill-fated case here. Cato also hosted a book forum for the story of Suzette’s struggle, Little Pink House, featuring the author, Jeff Benedict, the attorney who argued the case, the Institute for Justice’s Scott Bullock, and Ms. Kelo herself, here.
HT: Jonathan Blanks
Filed under: Government and Politics; Law and Civil Liberties
The Right to Speak in Non-Government-Approved Ways
School officials denied student Pete Palmer the right to wear a shirt supporting John Edwards’s presidential campaign at his Dallas-area high school. They cited the district’s dress code, which prohibited messages on student clothing except for those that supported school activities or district-approved organizations, clubs or teams.
The U.S. Court of Appeals for the Fifth Circuit agreed with the school district that this was a reasonable “time, place and manner” speech restriction. Applying the test from United States v. O’Brien, the court found that the dress code was content- and viewpoint-neutral, and served an important governmental purpose. Palmer now seeks Supreme Court review, citing seemingly contradictory precedents from the Second and Third Circuits and arguing that the regulation here flies in the face of the protection afforded to student speech by the famous case of Tinker v. Des Moines Independent Community School District.
Cato, joined by the Institute for Justice, the Becket Fund for Religious Liberty, the Christian Legal Society, and the National Association of Evangelicals, filed an amicus brief supporting Palmer’s petition and urging the continued use of Tinker. We argue that the Court should clarify its jurisprudence in this area to stop schools from applying broad restrictions in an attempt to avoid controversy and debate—and thereby threaten the very political and religious speech at the First Amendment’s core.
To prevent the chilling of student speech, the Court should solidify Tinker’s central tenet, reaffirming that so long as speech doesn’t “materially and substantially disrupt” the educational process, students do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.”
The case is Palmer v. Waxahachie Independent School District. The Court will be deciding early in 2010 whether to hear it.
Liberty Most Deer
As a footnote to Chris Moody’s post about Monday’s 20-year anniversary of the fall of the Berlin Wall, I just came across this article about red deer refusing to cross from Germany into the Czech Republic. This, of course, is a border that was the once heavily fortified dividing line between free West Germany and captive Czechoslovakia.
Even deer who weren’t born when barbed wire, watchtowers, and armed guards prevented the natural extension of their happy grazing grounds act as if the Cold War never ended — apparently because they learned their habits from their parents, who learned them from their parents.
Still, as with the new generation of Eastern Europeans who have no memory of Communism, some young deer are starting to break the mold, taking advantage of — and even taking for granted — their newfound freedom. I wonder if the grass (and ferns, and whatever else deer eat) is any greener on the other side of the former Iron Curtain.
Give Us Your Tired, Your Energetic, Your Poor, Your Rich — Pretty Much Anyone Who’s Not a Criminal or Terrorist
On Wednesday I blogged about how, for the first time in many years — since the last recession — H-1B skilled worker visas remain available despite the hard cap on their number. In other words, even foreigners respond to market incentives: when there are no jobs, there are fewer immigrants.
I’ve gotten some interesting email in response to that little notice, one of which I post below, along with my paragraph-by-paragraph responses.
Just read your blog entry on the H-1b visa. The problem is that this visa has been misused by sponsoring companies, suffering from high rates of fraud. I find it strange that Cato supports (or appears to support) a labor tool that is anything but free market. The H-1b visa is more of an indentured servant visa program than anything else – where employees must be sponsored by an employer. Since employees aren’t free to find new jobs or start their own business, it results in a captive workforce who will do whatever the employee asks, even beyond reason. They won’t bargain for higher wages, quit if mistreated, join unions, or do anything that might result in their immigration status being jeopardized.
Having myself been on H-1Bs with several employers, including Cato, I agree that the program is seriously flawed, in the ways this correpondent describes and in others. Ideally, people would be able to apply for a work permit — their application gaining more “points,” say, for language, youth, skills, the needs of the economy, or whatever other criteria the political process determines are important — and then not be tied to an employer and have an opportunity to receive permanent residence and eventual naturalization if they pay their taxes, stay out of jail, etc. Or, indeed, we could admit all people who want to come here (after screening for security, criminal, and health concerns), and give them the same opportunity. But until we get to that more perfect world, I see no conflict in advocating for a repeal of the H-1B cap or pointing out how this recession shows that immigrants come for jobs, not to leech off our welfare state (if that’s the concern, then wall off the welfare state, not the country) or commit crimes.
One thing not correct in your blog is that H-1b visa holders cannot get a green-card. They can, unfortunately most of the workers are from India so it is difficult for those workers to get the green-card because of how, numerically, green-cards are issued. The H-1b visa is a “dual intent” visa meaning there is a path to permanent residence and after 6 years on the visa holders can extend 1 year until their green-card is processed. Indian workers call it the “green carrot” and relate it to the picture of where the mule driver holds a carrot on a stick in front of the mule to keep him moving. No matter how hard the mule tries, the carrot gets no closer.
The H-1B’s “dual intent” provision is categorically not a path to a green card. All it does is, as the correspondent points out, allow the worker to stay in the country during the green card application process. That process, however, and the substantive requirements for obtaining a green card, is no different for H-1B holders than it is for anyone else. Indeed, spending five or six years on an H-1B with one employer can be a detriment, inasmuch as that employer’s sponsorship application cannot take into account the skills gained during that time of employment. And yes, the nationality-based restrictions are also obnoxious.
Filed under: Government and Politics; Law and Civil Liberties; Trade and Immigration
As it Turns Out, There Are Limits on Congress’s Power
In 2006, Congress passed the Adam Walsh Child Protection and Safety Act. One provision of the law authorizes the federal government to civilly commit anyone in the custody of the Bureau of Prisons whom the attorney general certifies to be “sexually dangerous.” The effect of such an action is to continue the certified person’s confinement after the expiration of his prison term, without proof of a new criminal violation.
Six days before the scheduled release of Graydon Comstock — who had been sentenced to 37 months in jail for receiving child pornography — the attorney general certified Comstock as sexually dangerous. Three years later, Comstock thus remains confined in a medium security prison, as do more than 60 other similarly situated men in the Eastern District of North Carolina alone.
Comstock and several others challenged their confinements as going beyond Congress’s constitutional authority and won in both the district and appellate courts. The United States successfully petitioned the Supreme Court to review the case.
Cato, joined by Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a brief opposing the government. We argue that the use of federal power here is unconstitutional because it is not tied to any of Congress’s limited and enumerated powers. The government’s reliance on the Necessary and Proper Clause of Article I, Section 8, is misplaced because that clause grants no independent power but merely “carries into execution” the powers enumerated elsewhere in that section. The commitment of prisoners after their terms simply is not one of the enumerated powers.
While the government justifies its actions by invoking its implied power “to establish a federal penal system” — itself a necessary and proper auxiliary to certain enumerated powers — civil commitment is unrelated to creating or maintaining a penal system (let alone any enumerated power). Nor can the law at issue fall under the Commerce Clause, because civil commitment involves non-economic intrastate activity.
As the Supreme Court recognized almost 150 years ago in Ex Parte Milligan, “[n]o graver question was ever considered by this court, nor one which more nearly concerns the rights of the whole,” than the government’s unconstitutional assertion of power against its own citizens. In this spirit, the Court should affirm the Fourth Circuit’s rejection of this blatant government overreach.
United States v. Comstock will be argued on January 12. You can read Cato’s brief here.
Filed under: Government and Politics; Law and Civil Liberties
Immigrants Respond to Economic Incentives
As I blogged here, I got my green card in April — and am now counting down the days till I can naturalize (five years from the green card, though you can apply three months before that and processing takes a year or so). Because of my various travails over the years that led to that fortunate day this spring, I’ve learned quite a bit about immigration, both as a matter of policy and as a matter of law. Indeed, both before joining Cato and ever since, it’s been an area in which I’ve been writing and speaking — and I appreciate very much the synergy this work has had with my colleagues in the trade and immigration shop.
One oped I had in National Review Online dealt with H-1Bs, the temporary visas for highly skilled workers to work in the United States. One of the problems with H-1Bs is that they provide no path to a green card (meaning permanent residence) or citizenship — so just as hard-working, tax-paying professionals gain expertise in a particular American company or industry, just as they grow roots in an American community, they have to leave. Nevertheless, there have long been more H-1B applicants than available visas. The last few years, the annual 65,000 quota has been oversubscribed on the very first day of eligibility for each fiscal year!
Well, not any more. As this recent article points out, the recession has impacted our immigration system as well: “A coveted visa program that feeds skilled workers to top-tier U.S. technology companies and universities [the H-1B program] is on track to leave thousands of spots unfilled for the first time since 2003, a sign of how the weak economy has eroded employment even among highly trained professionals.”
This is just another indication that the free movement of goods, money, and people, will regulate even such perceived social ills as “foreigners taking American jobs.” There’s simply no need for “U.S. citizen only” provisions in (so-called) stimulus bills, or (further) immigration restrictions during bad economic times.
In other words, even foreigners respond to market incentives.
For more on Cato’s work on immigration policy, go here.
Filed under: Law and Civil Liberties; Trade and Immigration
The Constitutional Right to Save Lives
Our friends at IJ have filed an exciting new lawsuit, one that, if successful, could save the lives of more than 1,000 people a year: people who die needlessly of assorted blood diseases (including leukemia) because the federal government criminalizes the offering of even modest compensation for bone marrow donation.
That is, the National Organ Transplant Act — which outlawed the sale of kidneys and other organs — for some reason included bone marrow.
NOTA’s criminal ban is unconstitutional because it arbitrarily treats bone marrow like nonrenewable solid organs instead of like other renewable or inexhaustible cells – such as blood or sperm — for which compensated donation is legal. (That makes no sense because bone marrow, unlike kidneys, replenishes itself in just a few weeks, leaving the donor whole. )
The ban also fails constitutional muster because it irrationally interferes with the right to participate in safe, accepted, lifesaving, and otherwise legal medical treatment.
As Chip Mellor, president and general counsel of the Institute for Justice, said in a press release announcing the case: “Bad things happen when the federal government exceeds its constitutional authority. In this case, people actually die. The Institute for Justice intends to stop that and to restore constitutional constraints that prohibit arbitrary limits on individual liberty.”
IJ brought this suit on behalf of adults with deadly blood diseases, the parents of sick children, a California nonprofit, and a world-renowned medical doctor who specializes in bone marrow research. You can find more information here. Perhaps more interestingly, IJ senior attorney Jeff Rowes is guest-blogging about the case all week at the Volokh Conspiracy. Here’s his first post.
Filed under: Health, Welfare & Entitlements; Law and Civil Liberties
Health Care Bill Improves Lawyers’ Financial Health
The great thing for legislators about a nearly 2000 page bill — such as, oh, the House’s latest health care salvo — is that very few people bother to read the whole thing. So it’s easy to bury little gifts to favored supporters. Or big ones.
For example, check out section 2531 — that’s pages 1431-33 for those following along at home — which has gone largely unnoticed in the major news cycle. These three pages of the bill reward states that refrain from setting (or repeal) any caps on medical malpractice rewards — and the accompanying lawyers’ fees! – by requiring the Secretary of Health and Human Services to provide them a bribe an “incentive payment.”
As Hans von Spakovsky notes at NRO’s Corner, this “alternative medical liability law” aims to eviscerate cost-saving measures that protect doctors from frivolous lawsuits that increase the cost of health care to the consumer. So this has nothing to do with providing better or cheaper care, covering the uninsured, or even eliminating waste and fraud. Instead, it’s a pure sop to one of the Congressional Democrats’ key constituencies: trial lawyers.
For more information on free market health care reform alternatives, please visit Cato’s Health Care website here.
Filed under: Government and Politics; Health, Welfare & Entitlements; Law and Civil Liberties
Defending Civil Rights and Suing Rogue Prosecutors Is Left-Wing Lawyering?
The National Law Journal and the Wall Street Journal Law Blog note an apparent legal curiosity: Paul Clement, superstar head of King & Spaulding’s appellate group and Bush-administration solicitor general, now “flirts with liberalism” and has “embrace[d] left-leaning causes” to grow his practice. Is this another case of a conservative lawyer “growing” in office or “drifting” to the left, seduced by the cocktail parties and press attention of the Washington elite?
Hardly. The two cases that prompted this gnashing of teeth (or cautious optimism, depending on where the commentator resides on the political spectrum) are Perdue v. Kenny A. and Pottowattamie County v. McGhee. In Kenny A., Clement represented a group of public interest attorneys who won a big case on behalf of mistreated foster children and argued that they should be entitled to the enhanced fees the trial court awarded them for exceptional performance. In McGhee, Clement’s clients are two men who were framed by overzealous prosecutors and served 25 years in prison for crimes they didn’t commit — the convictions for which were based on the prosecutors’ fabricated evidence.
To say that these are left-wing positions is to consider the Left to be the only possible champion of justice and constitutional rights, and to paint the non-Left as standing for limitless, unaccountable governmental power. Neither of these positions is accurate, to say the least. If anything, Clement’s positions are solidly libertarian.
Indeed, Cato filed briefs in both cases, and I signed both of them. You can read our brief in Kenny A. here and in McGhee here – Clement actually called me to make sure Cato got involved in this one – and you can read my blog posts about the cases here and here, respectively.
In short, if Paul Clement has gone red, well then so have I — and trust me, there won’t be any kumbaya confabs at my place any time soon. My car’s new vanity plate does say FED 51, however — short for Federalist 51 — so feel free to call me out for flirtations with Madisonian political theory.
H/T: Manny Klausner
More Supreme Court Review on the Road
As an update to an earlier post about my speaking schedule this fall, here are my remaining public events through Thanksgiving. All these events, other than the one on Nov. 3, are sponsored by the Federalist Society (and in some cases co-sponsored by other organizations) and all are open to the public. As always, if you decide to attend one of the presentations after learning of it from this blog post, please feel free to drop me a line beforehand, and do introduce yourself after the event.
Event info after the jump.
Next Move: Suing the Sun for Unseasonably Cool Weather
The New Orleans-based Fifth Circuit, the federal court of appeals where I once clerked, has allowed a class action lawsuit by Hurricane Katrina victims to proceed against a motley crew of energy, oil, and chemical companies. Their claim: that the defendants’ greenhouse gas emissions raised air and water temperatures on the Gulf Coast, contributing to Katrina’s strength and causing property damage. Mass tort litigation specialist Russell Jackson calls the plaintiffs’ claims “the litigator’s equivalent to the game ‘Six Degrees of Kevin Bacon.’”
In Comer v. Murphy Oil USA, the plaintiffs assert a variety of theories under Mississippi common law, but the main issue at this stage was whether the plaintiffs had standing, or whether they could demonstrate that their injuries were “fairly traceable” to the defendant’s actions. The court dismissed several claims but held that plaintiffs indeed could allege public and private nuisance, trespass and negligence. The court also held that these latter claims do not present a so-called “political question” that the court doesn’t have the authority to resolve. You can read about the Court’s ruling in more detail at the WSJ Law Blog and Jackson’s Consumer Class Actions and Mass Torts Blog.
This is actually the second federal appeals court to rule this way; last month, the Second Circuit (based in New York) held that states, municipalities and certain private organizations had standing to bring federal common law nuisance claims to impose caps on certain companies’ greenhouse gas emissions. Here’s the opinion in that case, Connecticut v. American Electric Power Company, and you can read a pretty good summary and analysis here.
Both of these cases, which herald a flood of global warming-related litigation, so to speak, owe their continuing vitality to the Supreme Court’s misbegotten 2007 decision in Massachusetts v. EPA. The 2006-2007 Cato Supreme Court Review covered that case in an insightful article by Andrew Morriss of the University of Illinois. (To get your copy of the latest (2008-2009) Review, go here.)
I should note from my own experience at the Fifth Circuit that the panel here consisted of the two worst judges on the court — Clinton appointees Carl Stewart and James Dennis — and one of Reagan’s weakest federal appellate appointments, Eugene Davis. Even Davis, however, wrote separately to note that while he agreed on the standing issue, he would have affirmed the district court’s dismissal of the suit on a different ground (that pesky proximate cause issue).
I predict that the full (16-judge) Fifth Circuit will review this case en banc –and if not that the Supreme Court will eventually take it up (if the district court on remand doesn’t again dispose of the case on causation grounds).
Filed under: Government and Politics; Law and Civil Liberties
Who Is John Gupta?
Apparently Ayn Rand’s popularity is growing on the subcontinent. For more on Rand’s resurgence, attend or watch online this Cato event next week.
(H/T: Josh Blackman.)
Filed under: International Economics and Development; Political Philosophy
Even Lawyers Should Be Paid More for Good Performance
Another oral argument I attended this week was in the case of Perdue v. Kenny A., in which Cato filed a brief at the end of August. The issue is whether a court can ever increase the statutorily set fees attorneys receive from the government when they successfully bring civil rights challenges to state action.
In order to enforce civil rights guarantees, Congress had two choices: either expand the Department of Justice to cover all civil rights cases, or privatize the system and allow free market principles to encourage private attorneys to prosecute violations. Congress chose the latter, creating a system of market incentives to encourage private attorneys to enforce civil rights and hold elected representatives responsible for the waste of taxpayer dollars lost in the defense of legitimate civil rights violations and repayment of “reasonable” attorney fees.
Here a group of attorneys won an important case for foster children in Georgia, and the court awarded them $6 million in fees based on prevailing hourly rates — the “lodestar” method — and an additional $4.5 million enhancement for the exceptional quality of work and results achieved. At Georgia’s request, the U.S. Supreme Court decided to review the case and determine whether quality of work and results are appropriately considered components of a reasonable fee.
Cato, joining six other public interest legal organizations, filed an amicus brief supporting the attorneys. We argue that the enhancement in this case is necessary to preserve incentives in the privatized market. Not only does it encourage attorneys to pursue civil rights abuses, but it provides a powerful disincentive for governments to draw out litigation in the hope that attorneys will no longer be able to afford pursue it. In addition, quality of performance and attained results are rightly considered as part of the attorney fee calculus. The enhancement here helps to promote the free market of privatized civil rights prosecutions and encourages governments to resolve civil rights cases quickly.
Unfortunately, the Court didn’t seem to be convinced at oral argument that there was a problem with the way civil rights attorneys are compensated under the lodestar method. Chief Justice Roberts and Justice Scalia, in particular, were aggressive in questioning a very well prepared Paul Clement (the former solicitor general, with whom I had the privilege to work on a different case that will be argued next month). They expressed concern about how to evaluate the “exceptional results” needed to justify a fee enhancement. Clement said that the Court could leave this to the trial judges’ discretion,to which Justice Scalia replied: “You say discretion. I say randomness.”
Only Justice Sotomayor, who was again an active questioner, suggested a standard to guide judges, citing such factors as a discrepancy between the market in which the attorney practices and the market on which fees are based, as well as the attoney’s experience (for example, the justices frequently referred to a “brilliant” second-year associate who might be paid at a partner rate). But several justices, at least, would never agree to such a standard. Even Justice Breyer, typically friendly to civil rights claims, expressed skepticism over whether millions of taxpayer dollars should be paid to already well-compensated lawyers.
Still, while it would be strange for district judges to have the ability to reduce fee awards for various reasons (such as inferior performance, even if technically victorious) while not being able to increase them, that’s the result we’ll have if the Court rules as all indications now suggest.
Due Process Case to be Decided on Procedural Grounds
Yesterday I went to the Supreme Court to watch the argument in Alvarez v. Smith, a case about civil forfeiture in which Cato filed an amicus brief.
Civil forfeiture, the practice in which the police seize cars, money and other kinds of property that they say has some connection to crime, can raise various of legal and policy issues — from property rights to due process. The question in Alvarez is the basic one of whether people seeking to get their property back are entitled to a prompt hearing before a judge.
Illinois’ forfeiture law allows the State to wait as long as six months before having to prove the legitimacy of the seizure, which proceeding may then be delayed indefinitely for “good cause.” The six plaintiffs in Alvarez — three of whom were never charged with a crime — had their cars or money seized without a warrant for months or years without any judicial hearing, and sued the state and city authorities for violating their rights to due process. The Seventh Circuit found the Illinois law to be unconstitutional because of the delay between the seizure and the forfeiture proceeding and ruled that the plaintiffs must be afforded an informal hearing to determine whether there is probable cause to detain the property. The Supreme Court agreed to review the case at the request of the Cook County State Attorney.
Cato’s brief, joined by the Goldwater Institute and Reason Foundation, supports the individuals whose property was seized. Written by David B. Smith, who previously supervised all forfeiture litigation for the Department of Justice and is now the nation’s leading authority on civil and criminal forfeiture, the brief makes three arguments: 1) Because the Illinois law, unlike the federal Civil Asset Forfeiture Reform Act of 2000, is stacked in favor of law enforcement agencies and lacks protections for innocent property owners, the Court should apply the due process analysis from Mathews v. Eldridge, rather than the more lenient test the State proposes; 2) What has become known as a Krimstock hearing has proven to be an effective and not overly burdensome means of preventing government delay and a meaningful opportunity to contest seizure; and 3) the State’s comparison of the time limits in CAFRA with those in its own law is misleading.
Unfortunately, though some justices appeared at argument inclined to rule that at least some prompt process was due — many other states require that the police quickly come before a judge to make a showing equivalent to the one necessary to get a search warrant — several seemed to want to avoid the due process question for another day because Alvarez was procedurally flawed, so to speak. That is, Justice Scalia pointed that none of the six plaintiffs have a live claim any more – three have had their cars returned, two defaulted on their claims, and the State reached agreement with one – so the case was “moot.” And Justice Stevens noted that the appellate court left it to the trial court to determine the details of the hearing to which the plaintiffs were entitled. (Of course, if the latter “problem” ends up being the key to the case, the Court will simply dismiss the appeal and let the Seventh Circuit’s ruling stand, which is good news — but only for people in Illinois, Indiana, and Wisconsin.)
For more on the case, see George Mason law professor and Cato adjunct scholar Ilya Somin’s oped, and his related blog post at the Volokh Conspiracy.
The Government Robbed Chrysler Creditors
In January 2009, Chrysler stood on the brink of insolvency. Purporting to act under the Emergency Economic Stabilization Act, the Treasury extended Chrysler a $4 billion loan using funds from the Troubled Asset Relief Program (TARP). Still in a bad financial situation, Chrysler initially proposed an out-of-court reorganization plan that would fully repay all of Chrysler’s secured debt. The Treasury rejected this proposal and instead insisted on a plan that would completely eradicate Chrysler’s secured debt, hinging billions of dollars in additional TARP funding on Chrysler’s acquiescence.
When Chrysler’s first lien lenders refused to waive their secured rights without full payment, the Treasury devised a scheme by which Chrysler, instead of reorganizing under a chapter 11 plan, would sell its assets free of all secured interests to a shell company, the New Chrysler. Chrysler was thus able to avoid the “absolute priority rule,” which provides that a court should not approve a bankruptcy plan unless it is “fair and equitable” to all classes of creditors.
Cato joined the Washington Legal Foundation, Allied Educational Foundation, and George Mason law professor Todd Zywicki on a brief supporting the creditors’ petition asking the Supreme Court to review the transaction’s validity. We argue that the forced reorganization amounted to the Treasury redistributing value from senior, secured creditors to debtors and junior, unsecured creditors.
The government should not be allowed, through its own self-dealing, to hand-pick certain creditors for favorable treatment at the expense of others who would otherwise enjoy first lien priority. Further, a lack of predictability and consistency with regard to creditors’ expectations in bankruptcy will result in a destabilization of existing and future credit markets.
The Court will be deciding whether to hear the case later this fall. Thanks very much to Cato legal associate Travis Cushman for his help with the brief.
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Law and Civil Liberties
Supreme Court Mulls Gladiators and the “Human Sacrifice Channel”
Following up on David’s post about the Stevens “depictions of animal cruelty” case, my takeaway from this morning’s argument is that there’s not a single vote to uphold the law. The closest the government came to sympathy for its position came when Chief Justice Roberts wondered whether, if a narrower statute proscribing the “crush videos” that were the ostensible target of this legislation, the Court might uphold this broad statute on its face but also welcome many as-applied challenges in instances of prosecutorial overreach. (For a pithy discussion of facial versus as-applied challenges, noting that the Court generally favors facial attacks in First Amendment cases, see Roger Pilon’s foreword to this year’s Cato Supreme Court Review.)
A less technical line of questioning involved the constitutionality of a statute banning a hypothetical “human sacrifice channel” or the broadcast of fight-to-the-death gladiatorial battles — from a foreign country where that sort of thing is legal. (Justice Scalia quipped that the rule cannot be that you satisfy the broad legislation’s “historical value” exception if you dress up as an ancient Roman.)
Much of the analysis about these types of extreme scenarios turns on whether the broadcast/depiction creates a market for such activities — which is the rationale for banning child pornography (i.e., fewer children are subject to sexual abuse if there is not a legal market for pictures and videos of children being sexually abused). Thus, a narrow statute banning the aforementioned crush videos would be kosher, as it were, but not the broad legislation at issue — which could potentially sweep in, to take one example, promotional videos put out by the Spanish board of tourism that include bullfighting clips.
For a more detailed report, see Lyle Denniston on SCOTUSblog (whom you can also see all week on C-SPAN’s excellent Supreme Court documentary mini-series). And again, to read Cato’s view, see our amicus curiae brief.
Think Tanks Should Be Able to Opine on Public Policy Without Running Afoul of Campaign Finance Regulations
In 2005, political opponents filed a complaint against the Independence Institute for not complying with the Colorado constitution and other campaign finance regulations when it spoke against a state ballot initiative. These regulations require, among other things, disclosure of the identity of anyone who has donated more than $20 to a cause and imposes registration and contribution limits on groups who have major interests in ballot issues.
The Independence Institute challenged the constitutionality of Colorado’s state ballot issue requirements and the issue is petitioning the Supreme Court for certiorari in Independence Institute v. Buescher. Cato has filed an amicus brief, in cooperation with Wyoming Liberty Group, the Center for Competitive Politics, the Sam Adams Alliance, the Montana Policy Institute, and the Goldwater Institute in support of the Independence Institute. We argue that Colorado’s ballot campaign regulations run roughshod over constitutional protections for political speech and association, which lie at the very heart of the First Amendment—particularly for think tanks and other organizations that regularly comment on public policy matters. Loss of these First Amendment protections will chill think tanks’ future attempts to educate the public about issues that are the subject of ballot campaigns. The Court should thus review this case and ensure that citizens maintain their associational rights—including the right to remain anonymous when donating to non-profits—and associations their freedom of expression.
You can download the entire brief here. A special thanks to Cato Legal Associate Travis Cushman for his assistance on this brief.
A New Court Term: Big Cases, Questions About the New Justice
Today is the first Monday in October, and so is First Monday, the traditional start of the Supreme Court term. The Court already heard one argument – in the Citizens United campaign finance case — but it had been carried over from last year, so it doesn’t really count.
In any event, continuing its trend from last term, the Court has further front-loaded its caseload — with nearly 60 arguments on its docket already. Fortunately, unlike last year, we’ll see many blockbuster cases, including:
- the application of the Second Amendment to state gun regulations;
- First Amendment challenges to national park monuments and a statute criminalizing the depiction of animal cruelty;
- an Eighth Amendment challenge to life sentences for juveniles; a potential revisiting of Miranda rights;
- federalism concerns over legislation regarding the civil commitment of “sexually dangerous” persons;
- a separation-of-powers dispute concerning the agency enforcing Sarbanes-Oxley;
- judicial takings of beachfront property; and
- notably in these times of increasing government control over the economy, the “reasonableness” of mutual fund managers’ compensation.
Cato has filed amicus briefs in many of these cases, so I will be paying extra-close attention.
Perhaps more importantly, we also have a new justice — and, as Justice White often said, a new justice makes a new Court. While Sonia Sotomayor’s confirmation was never in any serious doubt, she faced strong criticism on issues ranging from property rights and the use of foreign law in constitutional interpretation to the Ricci firefighters case and the “wise Latina” speeches that led people to question her commitment to judicial objectivity. Only time will tell what kind of justice Sotomayor will be now that she is unfettered from higher court precedent — and the first term is not necessarily indicative.
Key questions for the new Court’s dynamics are whether Sotomayor will challenge Justice Scalia intellectually and whether she will antagonize Justice Kennedy and thus push him to the right. We’ve already seen her make waves at the Citizens United reargument — questioning the scope of corporations’ constitutional rights — so it could be that she will decline to follow Justice Alito’s example and jump right into the Court’s rhetorical battles.
In short, it’s the first day of school and I’m excited.
Filed under: Government and Politics; Law and Civil Liberties
Cato Supreme Court Review on the Road
With last week’s Constitution Day conference behind us (watch it here) — and the release of the 2008-2009 Cato Supreme Court Review — I can finally escape the office where I’ve been holed up all summer. Yes, it’s time to go on the road and talk about all these wonderful legal issues we’ve learned about over the past year, as well as previewing the new Supreme Court term.
To that end, below the jump is my fall speaking schedule so far. All these events are sponsored by the Federalist Society (and in some cases co-sponsored by other organizations) and all are open to the public.
If you decide to attend one of the presentations after learning of it from this blog post, please feel free to drop me a line beforehand, and do introduce yourself after the event.
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