The Wise Crowds Say Individual Mandate Is Unconstitutional
FantasySCOTUS.net, a project of the Constitution-educating Harlan Institute (on whose non-profit board I sit), has been tracking its 12,000+ members’ predictions in the Obamacare case before the Supreme Court. You can read more in-depth about the current state of the prediction market — with fancy graphs! – but here’s a summary:
- 90.6% predict that the lawsuit can proceed, overcoming the Anti-Injunction Act;
- 51.7% predict that the Court will strike down the individual mandate;
- 73.5% predict that the Court will then sever the mandate from the rest of the legislation (though this response isn’t very meaningful becuase the severability issue, unlike the others, isn’t a binary up-down choice for the justices);
- 77.2% predict that the Court will uphold the constitutionality of the Medicaid expansion.
The FantasySCOTUS managers caution that these predictions are still preliminary, particularly because most members don’t offer predictions until after oral arguments. To learn more about FantasySCOTUS and its crowdsourcing techniques (“wisdom of the crowds”), see this recent article from the Northwestern Journal of Technology and Intellectual Property.
And if you want to get in on the predicting, you can sign up here.
Our Constitution Is Out of Step with the Rest of the World
Is the Constitution out of date? That’s the impression that comes across from an article in yesterday’s New York Times, written by the paper’s crack Supreme Court reporter, Adam Liptak. It comes in turn from an article he points to by two law professors, David S. Law at Washington University in St. Louis and Mila Versteeg at the University of Virginia, scheduled for the June New York University Law Review. In it the authors conclude that the Constitution appears to be losing its appeal as a model for constitution drafters in other countries, despite its having served that role up until as recently as 1987, the year of its bicentennial. So what’s changed over the past quarter century?
Unfortunately, from the Times article we don’t get a clear picture of just how it is that the constitutions other countries have drafted in recent years differ from our own, except for the emphasis throughout the piece on rights. Yet right there is a clue about what’s going on. On that score, in fact, Liptak cites striking comments Justice Ruth Bader Ginsburg made in a television interview during a visit to Egypt last week:
“I would not look to the United States Constitution if I were drafting a constitution in the year 2012,” she said. She recommended, instead, the South African Constitution, the Canadian Charter of Rights and Freedoms or the European Convention on Human Rights.
Liptak then notes, not entirely accurately, that “the rights guaranteed by the American Constitution are parsimonious by international standards, and they are frozen in amber.”
To be sure, the rights enumerated in our Constitution and in the amendments that were added later, including in the Bill of Rights, are few in number. But numbers alone, like rights alone, tell only part of our constitutional story. To tell the story more fully and accurately, we have to step back a bit.
It’s true that our Framers, unlike many others, especially more recently, did not focus their attention on rights. Instead, they focused on powers— and for good reason. Because we have an infinite number of rights, depending on how they’re defined, the Framers knew that they couldn’t possibly enumerate all of them. But they could enumerate the government’s powers, which they did. Thus, given that they wanted to create a limited government, leaving most of life to be lived freely in the private sector rather than through public programs of the kind we have today, the theory of the Constitution was simple and straightforward: where there is no power there is a right, belonging either to the states or to the people. The Tenth Amendment makes that crystal clear. Rights were thus implicit in the very idea of a government of limited powers. That’s the idea that’s altogether absent from the modern approach to constitutionalism—with its push for far reaching “active” government—about which more in a moment.
The ‘Law of Nations’ Is What It Was in 1789
One of our oldest laws, the Alien Tort Statute (1789), grants federal courts jurisdiction over lawsuits brought by aliens for actions “in violation of the law of nations.” Courts have differed in their method of interpreting this “law of nations” — an old way of saying “international law” – and thus in their decisions on what behavior violates it and the types of defendants who may be liable. Recent ATS litigation has thus ignited a debate over the role of judges in applying international law.
Kiobel v. Royal Dutch Petroleum presents the question of whether, under the ATS, the law of nations can be applied against an entity that is not a natural person: a corporation. In this case, 12 Nigerians sued Royal Dutch and its Shell subsidiaries, alleging that Nigerian soldiers committed human rights abuses on the companies’ behalf between 1992 and 1995, purportedly in response to demonstrations against oil exploration.
The district court dismissed most of the claims but let certain others proceed. The Second Circuit dismissed the case entirely, holding that the ATS’s jurisdictional grant does not extend to cases against corporations, which are not liable for crimes under the law of nations. The Supreme Court agreed to review the case.
Cato has now filed a brief arguing that the ATS must be interpreted in a manner consistent with Congress’s original jurisdictional grant. This interpretation, supporting the Second Circuit’s ruling, maintains the Constitution’s separation of powers — which gives Congress the power to determine the scope of federal courts’ jurisdiction. Allowing courts to expand their jurisdiction without Congress’s consent would create a “democracy gap” that would be particularly serious here, where the case involves issues of foreign affairs that are appropriately the province of the political branches.
The Supreme Court made clear in Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. (1999) that evolving methods of interpreting international law do not inform the ATS’s jurisdictional reach, which has not changed since 1789. Nonetheless, lower courts are split on whether corporations may be liable for the sorts of violations at issue here, largely due to their varied interpretive methods.
In our brief, we urge the Court to clarify the proper method of interpreting the law of nations under the ATS. We argue that Judge José Cabranes, a leading international law jurist (and Justice Sonia Sotomayor’s mentor) who authored the Second Circuit’s Kiobel decision, set out the correct interpretive method in an earlier case, Flores v. Southern Peru Copper Corp. (2003). Judge Cabranes’s reasoning in Flores embodied both the guidance that the Supreme Court would give in Sosa v. Alvarez-Machain (2004) and the teachings of classical theorists like Grotius, by defining customary international law as “composed only of those rules that States [countries] universally abide by, or accede to, out of a sense of legal obligation and mutual concern.”
Judge Cabranes used as relevant evidence the States’ formal lawmaking actions, such as international conventions that “establish[] rules expressly recognized by the contesting states” and international custom where the States adhere “out of a sense of legal obligation.” He further acknowledged that the method used in 1789 to interpret what comprised the law of nations defined both the claims and the parties cognizable under international law. By looking to the proper sources, Judge Cabranes correctly concluded that corporations cannot be held liable for violations of international law for ATS purposes, and in so doing recognized the constitutional checks that prevent courts from expanding their own jurisdiction.
The Supreme Court will hear oral argument in Kiobel v. Royal Dutch Petroleum on February 28.
Thanks to legal associate Anastasia Killian for her help with this blogpost.
The First Amendment Protects Students’ Rights to Speak on Religious Subjects
If the First Amendment means anything, then school officials cannot prohibit students from handing out gifts with Christmas messages due to the religious content of those messages. Nonetheless, the Fifth Circuit held en banc that student speech rights are not “clearly established,” and that, therefore, two Plano, Texas officials could invoke qualified immunity to shield themselves from liability for doing so.
Yesterday Cato filed an amicus brief supporting the students’ request that the Supreme Court hear their case—our third brief in this long-running saga. We argue that educators have fair warning that viewpoint-based discrimination against student speech violates the First Amendment and thus may not invoke qualified immunity.
While the Fifth Circuit held that a constitutional right must have previously been defined with a “high degree of particularity” in a case that is “specific[ally] and factually analogous” to be clearly established, the Supreme Court has repeatedly said that neither “fundamentally similar” nor “materially similar” cases are required and that general statements of law can give fair warning. Indeed, if the Fifth Circuit’s qualified-immunity standard is upheld, it will be so difficult to establish fair warning for unconstitutional actions that qualified immunity will cease to be “qualified.”
Student speech rights were clearly established by the foundational student-rights case of Tinker v. Des Moines School District (1969), wherein the Court held that student speech cannot be suppressed unless the speech will “materially and substantially disrupt the work and discipline of the school,” subject to limited exceptions. Such exceptions include lewd or vulgar speech, or speech that may reasonably be viewed as advocating unlawful drug use. Certainly the student speech at issue here, which included Christmas greetings written on candy canes, and pencils and other small gifts with messages like “Jesus loves me, this I know, for the Bible tells me so,” does not fall under those exceptions.
We further argue that the same standard for determining whether a law is clearly established should determine whether a court can look to nonbinding precedent; if Supreme Court and relevant-circuit precedent is on point, courts should not look to authority from other jurisdictions. These standards maintain the proper balance between providing officials with fair notice of behavior that could result in civil liability and ensuring that individuals have legal recourse when their rights are violated.
The Supreme Court will decide later this winter whether to take the case, Morgan v. Swanson, and hear argument in the fall.
Thanks to Cato legal associate Anastasia Killian for her help with this post, and with our brief.
Supreme Court Rejects Texas Redistricting Maps, Showing That Modern Voting Rights Act Is Outmoded and Unworkable
Two weeks ago I wrote about the emergency appeal of Texas’s new redistricting maps that reached the Supreme Court last month and was argued early last week. The state argued that the interim maps a three-judge district court in San Antonio drew didn’t defer sufficiently to the maps passed by the Texas legislature (which could not go into direct effect because they hadn’t been approved by either the Justice Department or a three-judge D.C. district court, per the requirements of Section 5 of the Voting Rights Act). A group of challengers, meanwhile, claimed that Texas’s maps discriminated against and diluted the voting strength of minorities in violation of the VRA’s Section 2. Cato’s brief supported neither side but urged the Court to reconsider the constitutionality of the modern VRA altogether, not least because Sections 2 and 5 conflict with each other and with the Constitution.
Today, the Supreme Court unanimously overturned the San Antonio court’s maps because that court may not have used the “appropriate standards” in drawing its interim maps. In a tight 11-page opinion, the Court made clear that, regardless of the legal ambiguities and other challenges the lower court faced, it still had to use the Texas legislature’s maps as a starting point and only deviate from them on districts where the Section 2 plaintiffs had a “likelihood of success on the merits” of their claims or where there was a “reasonable probability” of failing to get Section 5 approval. Here’s the nut of the Court’s decision:
To the extent the District Court exceeded its mission to draw interim maps that do not violate the Constitution or the Voting Rights Act, and substituted its own concept of “the collective public good” for the Texas Legislature’s determination of which policies serve “the interests of the citizens of Texas,” the court erred.
That legal ruling is almost certainly correct — and in any event provides much-needed guidance for future such difficult situations — but may not change the ultimate result all that much because the district court most erred in explaining how it did it what it did rather than in doing it. It even deferred significantly to the Texas maps after saying that it owed them no deference!
Unfortunately, the perfect storm that landed this case in the Supreme Court’s lap — no Section 5 “preclearance,” potentially viable Section 2 challenges, the need to have maps finalized quickly for the timely administration of primaries, the undesirability of having courts draw maps and the lack of clear rules of doing so — is not unique. Justice Thomas is thus onto something when he reiterated today, in his separate concurrence, his long-held position that Section 5 is unconstitutional.
But the problem is bigger than that: the Voting Rights Act as a whole has served its purpose but is now outmoded and unworkable — and consequently unconstitutional. Section 2 requires race-based districting, even as Section 5, along with the Fourteenth and Fifteenth Amendments, seem to prohibit it. For its part, Section 5 arbitrarily prevents common national redistricting standards. These tensions cannot but produce chaotic proceedings like those here, which are replicated every redistricting cycle. This state of affairs only serves to frustrate state legislatures, the judicial branch, and the voting public.
Put simply, the VRA’s success has undermined its continuing viability; courts and legislatures struggle mightily and often fruitlessly to satisfy both the VRA’s race-based mandate and the Fifteenth Amendment’s equal treatment guarantee. Section 5′s selective applicability precludes the establishment of nationwide districting standards, confounding lower courts and producing different, often contradictory, treatment of voting rights in different states – in large part because Sections 2 and 5 themselves conflict with each other.
These difficulties – constitutional, statutory, and practical — disadvantage candidates, voters, legislatures, and courts, and undermine the VRA’s great legacy of vindicating the voting rights of all citizens. While Perry v Perez may not have been the right vehicle for doing so because of exigencies involved in election administration, the Court should reconsider the constitutionality of the Voting Rights Act as presently conceived at the next available opportunity.
Obamacare’s Medicaid Expansion Violates Federalism
Today Cato filed its second Supreme Court amicus brief in the Obamacare litigation, on the issue of whether the health care law’s Medicaid expansion is a proper exercise of the Constitution’s Spending Clause.
That is, states must now accept a comprehensive reorganization of Medicaid or forfeit all federal Medicaid funding—even though the spending power is circumscribed to preserve a distinction between what is local and what is national. If Congress is allowed to attach conditions to spending that the states cannot refuse in order to achieve an objective it could not outright mandate, the local/national distinction that is so central to federalism will be erased.
Joining the Center for Constitutional Jurisprudence, Pacific Legal Foundation, Rep. Denny Rehberg (chairman of the House Appropriations Subcommittee on Labor, Health & Human Services, Education, and Related Agencies), and Kansas Lt. Gov. Jeffrey Colyer (also a practicing physician) we argue that, in requiring states to accept onerous conditions on federal funds that it could not impose directly, the government has exceeded its enumerated powers and violated basic principles of federalism.
California is at risk of losing $25.6 billion in annual federal funding, for example, and together the states stand to lose more than a quarter trillion dollars annually. On average, states would have to increase their general revenue budgets by almost 40% in order to maintain their current level of Medicaid funding.
The 1987 case of South Dakota v. Dole, however, prohibits such a coercive use of the spending power and recognizes that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” Indeed, the states’ obligations, should they “choose” to accept federal funding and thus commit themselves to doing the government’s bidding, are far more substantial than those the Supreme Court invalidated in New York v. United States and Printz v. United States (which prohibit federal “commandeering” of state officials).
Moreover, the Congress that enacted the original Social Security Act, to which Medicare and Medicaid were added in the 1960s, recognized that social safety has always been the prerogative of the states and should continue to be done under state discretion. Medicaid itself was narrowly tailored to serve particularly needy groups.
In short, if Obamacare does not cross the line from valid “inducement” to unconstitutional “coercion,” nothing ever will. Just as the Commerce Clause is not an open-ended grant of power, the Spending Clause too has limits that must be enforced.
EPA Actions Should Be Subject to Judicial Review
Michael and Chantelle Sackett bought some Idaho land and began placing gravel fill on the site to prepare for laying a foundation for their dream home. Then they got something from the EPA: a “Compliance Order,” declaring that they were in violation of the Clean Water Act, because their land had been deemed a “wetland” subject to federal jurisdiction.
By beginning construction without a federal permit, the Sacketts were breaking the law and exposing themselves to civil and possibly criminal penalties, according to the Order. The Order instructed them to stop their construction and restore the property to its “original state” — it even told them what type of shrubbery to plant on the site, and exactly where to plant it. If they failed to comply with the order, they were subject to $37,500 fines per day.
The Sacketts were, understandably, shocked: they had no reason to think their property was a wetland; their neighbors had been allowed to build homes, and there was no indication in their title documents that the land was subject to federal control. So they asked for a hearing — and that was when they learned that the Compliance Order process does not entitle them to a hearing. They must either comply with the Order immediately to avoid the fines, or play chicken with the EPA — waiting until the EPA decides to file an “enforcement action.” At that time, they would be allowed to present their arguments that the land is not actually a “wetland.” But of course, by that time, the fines would have accumulated to hundreds of thousands or millions of dollars.
Worse, these Compliance Orders are issued by a single EPA bureaucrat, on the basis of “any evidence.” That’s the language of the statute itself — and federal courts have interpreted “any evidence” to mean even an anonymous phone call or a newspaper story.
And a Compliance Order doesn’t just demand that you obey EPA’s orders or face fines — ignoring a Compliance Order is a separately punishable offense against federal law, aside from the liability for any environmental damage. In other words, you can face penalties for violating the Clean Water Act and also for ignoring a Compliance Order. Worse still, ignoring a Compliance Order can serve as the basis of a finding of “wilfulness,” and thus the basis of criminal charges.
Pacific Legal Foundation represents the Sacketts and argues that they should have their day in court — either under federal statutes like the Administrative Procedure Act or under the Due Process Clause — without having to face the possibility of devastating penalties. PLF lawyer Damien Schiff argued the case today before the Supreme Court; while the justices were active in probing the weaknesses of both sides, the government’s lawyer didn’t do the EPA any favors. So today may have ended being a very good day for the Sacketts, even if the New York Times editorial page took the alarmist stance that allowing them to seek pre-enforcement judicial review would be a ”big victory to corporations and developers who want to evade the requirements of the Clean Water Act.”
The case is Sackett v. EPA; read the argument transcript here and the briefs here.
This blogpost was coauthored by adjunct scholar Timothy Sandefur, who is a principal attorney at PLF and wrote about the case in Regulation magazine.
Obamacare at the Supreme Court: Can the Individual Mandate Be Severed?
The Obamacare litigation has arrived on the big stage: the Supreme Court. The first opportunity for those opposing the legislation to weigh in comes on the issue that will be the last one the Court considers, “severability.” That is, if the individual mandate is struck down as unconstitutional, what (if any) of the rest of the law must fall with it?
On one hand, even in the absence of a severability clause, the Court should avoid striking down an entire law when only one small part is declared unconstitutional, particularly if the remainder of the law is unrelated to the defective bit (imagine an omnibus spending bill). On the other, the Court cannot go provision-by-provision and execute some sort of judicial line-item veto (creating a new law completely unrecognizable from what Congress enacted).
Many think that the rules in this area are unclear, but the analysis boils down to two questions:
- Can the remainder “fully operate as law”?
- Would Congress have passed the remainder?
In our brief, joined by the Texas Public Policy Foundation and co-authored by Prof. Richard Epstein, we examine these questions with a focus on Titles I and II of the law, which contain all the key provisions relating to Obamacare’s fundamental transformation of the national health care system: the requirement that insurers cover people with preexisting conditions (“guaranteed issue”), the requirement that premiums be assessed by a “community rating” formula, the creation of state insurance exchanges, Medicaid expansion, premium supports, etc.
Against Forced Unionization of Independent Workers
Over the past decade, more than a dozen states have forced independent contractors who are paid through Medicaid to join public-sector unions.In 2003, Illinois unionized home healthcare workers and imbued the Service Employees International Union with the right to collect compulsory fees from the workers’ paychecks. Democracy is thus being turned on its head: the elected representatives for the people of Illinois have chosen a sub-representative for some of the people and given that sub-representative a taxing power.
In so doing, they have severely impaired home healthcare workers’ First Amendment right of association and the right to petition the government for a redress of grievances. Without limits on government’s ability to forcibly unionize people who indirectly receive government-funded compensation (an increasingly large group), more and more citizens will have to interact with their representatives through a government-designated intermediary (a union); our democracy will become even more dominated by special interests than it is now.
Cato, joined by the National Federation of Independent Business and the Mackinac Center, filed a brief urging the Supreme Court to address this issue and vindicate the First Amendment freedoms upon which a thriving democracy depends. We argue that the forcible unionization of home healthcare workers serves none of the compelling purposes for public-sector unionization that have been articulated by the Supreme Court.
Because the Court has long recognized that unionization impinges certain constitutional rights, it has limited public-sector collective bargaining to those situations which advance the aims of promoting “labor peace” and eliminating “free riders.” Labor peace is promoted by limiting competing workplace interests from bargaining over the conditions of employment — for example, two unions at the same workplace representing different colleagues. Free riders are non-union employees who enjoy the benefits of union-achieved gains without paying into the union’s war chest. But neither aim is promoted by a system, such as Illinois’s, in which employees work in different locations and in which the customer — the disabled person paying the homecare worker through a Medicaid disbursal—still controls every crucial aspect of the employment relationship, including hiring and firing.
This last fact is most telling: the Illinois law only allows collective bargaining for higher wages and more generous benefits. That is, the law is only about speech — petitioning the government for higher wages and benefits — and does not address workplace conditions at all.
As more and more states push to unionize more workers who indirectly receive government money — campaigns that, in face o dwindling private-sector union membership, have been called “labor’s biggest victory in over sixty years” — it is vital that the Supreme Court articulate a limiting principle on this practice. Otherwise, more and more of us will be forced to interact with our representatives only through government-appointed bodies.
Enforcing Housing Codes Is Not Racist
The federal Fair Housing Act makes it unlawful “[t]o refuse to sell or rent after the making of a bona fide offer . . . or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” Magner v. Gallagher addresses the question of whether the FHA’s ban on racial discrimination can be violated by someone who does not actually engage in racial discrimination: Owners of rental properties in St. Paul, Minnesota brought this suit claiming that the city’s enforcement of its housing code — ensuring that rental units were safe and otherwise habitable — violated the FHA because the repairs and maintenance necessary to comply with the code would increase rents and price out many of their African-American tenants.
Unable to show that the housing code intentionally discriminated based on race, however, the owners argued — and the Eighth Circuit Court of Appeals accepted — a “disparate impact” theory under which a plaintiff need only show that an otherwise neutral practice has a disproportionate effect on some racial group. Cato has now joined the Pacific Legal Foundation, the Center for Equal Opportunity, and the Competitive Enterprise Institute on an amicus brief supporting the city’s request for Supreme Court review and arguing that the statutory language and congressional intent of the FHA preclude disparate impact claims.
We argue that extending such claims to the FHA “would deeply intrude on the authority of state and local governments, and render much of their housing policies illegal,” and “would inappropriately alter the federal-state balance in far-reaching ways.” Indeed, disparate impact claims would preclude all institutions subject to the FHA — public and private — from implementing many practical policies. For example, “because [the FHA] applies to financial institutions, banks and mortgage companies would be pressured to provide loans to unqualified applicants in order to avoid disparate impact liability. Similar actions played a key role in triggering the mortgage crisis of 2007-2008.”
Moreover, the disparate impact doctrine directly conflicts with the Fourteenth Amendment’s equal protection guarantees by forcing government agencies “to engage in unconstitutional race-conscious decision making” in order to avoid liability under the Act. In short, allowing disparate impact claims under the FHA would both lead to adverse economic consequences and create new constitutional tensions.
The Supreme Court will hear Magner v. Gallagher on Feb. 29.
Supreme Court Should Use Texas Redistricting Case to Reconsider Voting Rights Act
The decennial redrawing of electoral districts consistently produces extensive litigation. The most notable cases this cycle come, as they often have, from Texas.
A number of activist groups challenged the Texas legislature’s maps for state house, state senate, and congressional districts, alleging racial discrimination under Section 2 of the Voting Rights Act in a special three-judge federal district court in San Antonio. At the same time, Texas is seeking in another three-judge district court in D.C. the “preclearance” of its maps that it needs to implement them under the VRA’s Section 5.
Enacted in 1965 to combat pervasive discrimination against black voters in the South, the VRA has exceeded expectations in excising that shameful phenomenon. Its application now, however, stymies the orderly implementation of free and fair elections, particularly in jurisdictions subject not only to the general prohibition on race-based voter discrimination, but also the Section 5 preclearance requirement.
Originally conceived as a check on states where discrimination was prevalent in the 1960s, preclearance requires certain jurisdictions to obtain federal approval before changing any election laws. (The Section 5 list is bizarre: six of the eleven states of the Old Confederacy — and certain counties in three others — plus Alaska, Arizona, and some counties or townships in five other states as diverse as New Hampshire and South Dakota. Curiously, (only) three New York counties are covered, all boroughs in New York City. What is going on in the Bronx, Brooklyn, and Manhattan that is not in Queens or Staten Island?) To obtain preclearance, proposed changes may not result in “retrogression,” a reduction in minority voters’ ability to elect their “preferred” candidates.
Section 5 was originally a valuable tool in the fight against systemic disenfranchisement, but now facilitates the very discrimination it was designed to prevent. Indeed, the prohibition on retrogression effectively requires districting that assures that minority voters are the majority in a set number of districts — an inherently race-conscious mandate. The law, most recently renewed in 2006 for another 25 years, is based on deeply flawed assumptions and outdated statistical triggers, and flies in the face of the Fifteenth Amendment’s requirement that all voters be treated equally.
In any event, because the D.C. court here had not yet ruled on preclearance, the San Antonio court felt obligated to draw “interim” maps for use pending final adjudication of both the Section 2 and 5 cases. Texas filed an emergency appeal with the Supreme Court, arguing that the lower court insufficiently deferred to the Texas legislature’s maps. Now on an expedited briefing and argument schedule, Cato filed an amicus brief supporting neither side and arguing that this case demonstrates all that is wrong with the VRA as it currently exists — highlighting the tension between the VRA and the Constitution and the practical difficulties that conflict engenders for election administration.
Put simply, the VRA’s success has undermined its continuing viability; courts and legislatures struggle mightily and often fruitlessly to satisfy both the VRA’s race-based mandate and the Fifteenth Amendment’s equal treatment guarantee. We also point out that Section 5′s selective applicability precludes the establishment of nationwide districting standards, confounding lower courts and producing different, often contradictory, treatment of voting rights in different states — in large part because Sections 2 and 5 themselves conflict with each other. We note that regardless of the outcome of this litigation, it is unlikely that Texas will have fully legal electoral maps in time to administer the 2012 elections in a fair and efficient manner.
These difficulties — constitutional, statutory, and practical — disadvantage candidates, voters, legislatures, and courts, and undermine the VRA’s great legacy of vindicating the voting rights of all citizens. The Court should thus schedule this case for broader reargument on the constitutionality of the Voting Rights Act as presently conceived.
The Court will hear argument in Perry v. Perez on January 9. See SCOTUSblog’s coverage for more on the case.
The IRS Can’t Overrule the Supreme Court
Since the foundational administrative law case of Chevron v. Natural Resources Defense Council (1984), courts have given significant deference to executive agency interpretations of federal law. United States v. Home Concrete & Supply tests whether there are any meaningful limits on such deference.
The case involves a group of taxpayers who initiated a number of transactions designed to reduce their tax liability by allowing a financial entity they created, Home Concrete, to increase its tax basis and reduce its taxable gain from the sale of certain assets. In June 2003, the IRS ruled that the taxpayers’ use of Home Concrete in this way was improper and issued an adjustment to their tax return (requiring payment of back-taxes). Having missed the standard three-year limit for such actions, however, the IRS argued that the adjustment was timely under a tax-code provision that extends the statute of limitations to six years if the taxpayer “omits from gross income an amount properly includible therein which is in excess of 25 percent of the amount of gross income stated in the return.”
Despite the Supreme Court’s having long ago held otherwise, Colony v. Commissioner of Internal Revenue (1956), the IRS argues that an overstatement of basis qualifies as an omission under that tax provision. Further, during the course of this litigation, the Treasury Department issued a new regulation “clarifying” the provision in a way that supports the IRS’s argument. The IRS now argues that this new regulation is controlling and should be retroactively applied to Home Concrete’s 1999 returns.
After (mostly) winning at the district court, the IRS lost before the Fourth Circuit and asked the Supreme Court to review the case—which involves one of many similar applications of the relevant tax provisions. The Court took the case and now Cato has joined the National Federation of Independent Business on an amicus brief supporting the taxpayers, arguing that sanctioning this sort of ad hoc rule-making would undermine the rule of law and the separation of powers.
We note that “[t]he government’s position is that this regulation is due judicial deference” but the Supreme Court has “consistently held that where a statute has an unambiguous meaning, an agency’s contrary interpretation is not entitled to deference.” As Judge J. Harvie Wilkinson noted in his Fourth Circuit concurrence, “agencies are not a law unto themselves” and the government’s position in this case “seems to [be] something of an inversion of the universe and to pass the point where the beneficial application of agency expertise gives way to a lack of accountability and a risk of arbitrariness.”
In deciding Chevron, the Supreme Court surely never intended to undermine the very structure of the Republic and unleash an administrative state wholly a law unto itself.
The Supreme Court will hear United States v. Home Cincrete & Supply on January 17.
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