Saturday, July 7, 2012

Missouri Supreme Court Upholds Ballot Initiative Repealing Local Earnings Tax

A unanimous Supreme Court of Missouri last week ruled in Dujakovich v. Carnahan that a ballot proposition designed to repeal state law authorizing Kansas City to levy an earnings tax did not violate the state constitution.  

The ruling means that the repeal stays on the books, thus making it more difficult and costly--though not impossible--for cities to continue to levy an earnings tax.  Under the repeal, any city that enacted an earnings tax (under its previous statutory authority) could continue to levy the tax, but they'd have to put it to the city voters every five years.  (Any city that did not levy an earnings tax is now entirely prohibited from doing so.)  The practical effect may be to eliminate certain city earnings taxes.

The case started way back in 1963, when the Missouri General Assembly enacted enabling legislation that authorized Kansas City to levy an earnings tax for general revenue purposes.  More recently, in 2009, Secretary of State Carnahan certified a voter ballot initiative to repeal that authority, but to allow cities that levied earnings taxes under it to continue to do so, so long as city voters approved the levy by ballot every five years.  Here's the text of the initiative:

Shall Missouri law be amended to:

  • repeal the authority of certain cities to use earnings taxes to fund their budgets;
  • require voters in cities that currently have an earnings tax to approve continuation of such tax at the next general municipal election and at an election held every 5 years thereafter;
  • require any current earnings tax that is not approved by the voters to be phased out over a period of 10 years; and
  • prohibit any city from adding a new earnings tax to fund their budget?

After Missouri voters approved the question, appellants sued, arguing that it violated three provisions of the Missouri constitution.  First, they argued that the initiative was a de facto appropriation in violation of Article III, Section 51, because it required cities to run an election to continue an earnings tax without providing a new source of revenue for the cost of those elections.  (Section 51 says that an "initiative shall not be used for the appropriation of money other than of new revenues created and provided for thereby.")  The court rejected this claim, stating that nothing in the initiative required cities to run an election: cities could simply decline to put the earnings tax to their voters (and thus necessarily forego the tax).

Next, appellants claimed that the initiative violated the Hancock Amendment to the Missouri constitution.  That Amendment prohibits the state from imposing any new activity or service on any political subdivision of the state, or from reducing the state financed proportion of the costs of any existing activity.  The court ruled that nothing in the Hancock Amendment restricts the power of the people to govern themselves by intiative--itself a state constitutional right under Article III, Section 49.

Finally, appellants argued that the initiative impermissibly amended the city's charter in violation of Article VI, Section 20.  But the court said that any conflict between a city charter--authorized by the general assembly, after all--and state law must be resolved in favor of the state law.

Next step for the appellants: Get the cities to put the earnings tax to city voters, and get out the vote.


July 7, 2012 in Cases and Case Materials, Comparative Constitutionalism, News, Opinion Analysis, State Constitutional Law | Permalink | Comments (0) | TrackBack (0)

Friday, July 6, 2012

D.C. Circuit Strikes Copyright Judges' Removal Protection

A three-judge panel of the D.C. Circuit ruled today in Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board that the appointment of Copyright Royalty Judges, or CRJs, violated the Appointments Clause.  The court remedied the violation by reading out of the CRJ statute the CRJs' for-cause removal provision and permitting the Librarian of Congress to remove CRJs at will.  The court said that this alone changed CRJs from "Officers" to "inferior Officers" under the Appointments Clause and allowed them to be appointed by the Librarian of Congress (as provided by statute), and without Presidential nomination and advice and consent of the Senate.

The ruling simply modifies a characteristic of the CRJs' job to put them in line with the Appointments Clause (by making them inferior officers) and sends the case back to the lower court for consideration of the merits.  It probably doesn't break any significant new ground under the Appointments Clause or separation of powers (even if this kind of ruling is relatively rare).  The court looks to both the power of the position and to its removability to determine whether it's an "Office" or "inferior Office," but the court turns it from an "Office" into an "inferior Office" by focusing only on removability.  The court's remedy--reading out of the CRJ statute the for-cause removal and leaving CRJs with only at-will removal--takes a page from the Supreme Court's playbook in Free Enterprise Fund v. PCAOB.

The case arose out of a challenge to a CRJ decision on licensing terms between an association of noncommercial webcasters who transmit digital music over the internet in high schools and colleges and owners of the songs' copyrights.  CRJs have statutory authority to set these terms, subject to review, discussed below, when the parties can't come to an agreement.  The association, Intercollegiate, didn't like the terms set by the CRJ and brought this case arguing that the CRJ is unconstitutional under the Appointments Clause.

That Clause, Article II, Section 2, Clause 2, says that the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . Officers of the United States," but that "Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments."  Intercollegiate lodged a two-prong attack: First, it argued that CRJs were "Officers" and thus required Presidential nomination and Senate advice and consent (and that their appointment by the Librarian of Congress therefore violated the Appointments Clause); and second, it argued that the Library of Congress wasn't a "Department" (and that therefore Congress couldn't vest CRJs' appointment in its head, the Librarian of Congress, and their appointment was therefore unconstitutional).

The court agreed on the first argument, but disagreed on the second.  The court, principally applying Edmond v. United States, ruled that the CRJs were "Officers," not "inferior Officers" the the purpose of the Appointments Clause.  It wrote that the CRJs were supervised by the Librarian of Congress and the Registrar, but only as to pure issues of law, leaving the CRJs with vast discretion and authority to set rates on their own.  It said that CRJs could only be removed by the Librarian of Congress for misconduct or neglect of duty.  And it wrote that the CRJs' rate determinations were not reviewable or correctable by any other officer or entity within the executive branch (although they are reviewable by the D.C. Circuit).  Thus it ruled that the three Edmond factors lined up in favor of "Officer," not "inferior Officer."

But the court didn't stop there.  Following the Supreme Court's approach in Free Enterprise Fund, the court severed the removability provision for CRJs--the one that allows the Librarian of Congress to fire them only for misconduct or neglect of duty--and read out the "misconduct or neglect of duty" part.  The effect was to leave CRJs with no protection against termination--and to allow the Librarian of Congress to remove them at will.  This alone, the court ruled, turned the otherwise "Officers" into "inferior Officers."  And this allowed Congress to vest their appointment in the Librarian of Congress--exactly what Congress did--and saved them.  And: "We further conclude that free removability constrains their power enough to outweigh the extent to which the scope of their duties exceeds that of the special counsel in [Morrison v. Olson]."

As to Intercollegiate's second argument, the court ruled that the Library of Congress is a "Department" under the Appointments Clause.  It ruled that the Library's power "to promulgate copyright regulations, to apply the statute to affected parties, and to set rates and terms case by case" are associated with executive authority, even if there are some aspects of the Library (like the Congressional Research Service) that make it look like a legislative agency.  The Librarian of Congress is the Library's "head," and so the appointment of the now-inferior-officers is valid.


July 6, 2012 in Appointment and Removal Powers, Cases and Case Materials, Congressional Authority, Executive Authority, News, Opinion Analysis, Separation of Powers | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 4, 2012

Florida Judge Overturns "Medical Privacy Concerning Firearms" Act

Judge Marcia Cook (S.D. Fl.) last week ruled in Wollschlaeger v. Farmer that the Florida's law restricting health care providers from asking whether a patient owns a firearm violates free speech.  The ruling permanently enjoins the state from enforcing four provisions of the act and from disciplining health care providers who violate them.  We posted on the case previously--when Judge Cook granted a preliminary injunction--here.

The ruling is a blow to state efforts to restrict health care providers from talking and asking patients about gun ownership.  But the ruling makes clear that any worries about discrimination against gun owners was based on only the thinnest actual evidence.  (In other words, the law protected against something that didn't exist--at least in any widespread, systematic way.)  Thus, this case isn't a ruling on a clash between First and Second Amendment rights--because the state failed to show that there was any real interference with Second Amendment rights driving the law.  This is a pure free speech case, and the state's stated interests just don't hold up.

A group of doctors and health care providers brought the case challenging Florida's ban--which prohibits doctors and health care providers from talking or asking patients about firearms ownership.  The plaintiffs claimed that the law chilled their speech about preventive health issues.  Judge Cook agreed.  The state's biggest problem, according to Judge Cook, was that it didn't show that the law was tailored to meet any particular problem--that the state failed to show that there was any widespread infringement on the right to bear arms or any widespread discrimination against gun owners by health care providers.

Florida Statutes 790.338 provides:

(1) A health care practitioner . . . or a health care facility . . . may not intentionally enter any disclosed information concerning firearm ownership into the patient's medical record if the practitioner knows that such information is not relevant to the patient's medical care or safety, or to the safety of others.

(2) A health care practitioner . . . or a health care facility . . . shall respect a patient's right to privacy and should refrain from making a written inquiry or asking questions concerning the ownership of a firearm or ammunition by the patient or by a family member of the patient, or the presence of a firearm in a private home or other domicile of the patient or a family member of the patient.  Notwithstanding this provision, a health care practitioner or health care facility that in good faith believes that this information is relevant to the patient's medical care or safety, or the safety of others, may make such a verbal or written inquiry.

. . .

(5) A health care practitioner . . . or a health care facility . . . may not discriminate against a patient based solely upon the patient's exercise of the constitutional right to own and possess firearms or ammunition.

(6) A health care practitioner . . . or a health care facility . . . may not discriminate against a patient based solely upon the patient's exercise of the constitutional right to own and possess firearms or ammunition.

After ruling that the plaintiffs had standing to challenge these four provisions of the law, and that the challenge was ripe, Judge Cook ruled that these provisions violated the First Amendment.  She wrote that the provisions were content-based restrictions on speech, subject to strict scrutiny; that they were a ban on (especially protected) truthful, non-misleading speech; and that the state's interests didn't stand up.

The state said that it had interests in protecting patients' Second Amendment rights, protecting patients' access to health care in the face of discrimination (against those who own firearms), protecting patients' privacy rights, and regulating professionals.  

But Judge Cook ruled that the state couldn't show any widespread infringement on patients' Second Amendment rights, access, or equal treatment.  The law was based entirely on a handful of anecdotes.  Moreover, the law itself contains protections for patients--for example, allowing them not to answer questions about firearms ownership.  The state's interests, Judge Cook ruled, were therefore insufficient to withstand strict scrutiny analysis.

They were also insufficient to withstand a less rigorous balancing under Gentile v. State Bar of Nevada, a case setting the free speech bar lower when a state seeks to regulate a lawyer's speech.

Judge Cook also ruled that two clauses were unconstitutionally vague: "relevant to the patient's medical care or safety, or the safety of others"; and "unnecessarily harassing."  Those phrases, she said, do not give sufficient guidance to health care providers as to what speech is covered and what speech is not.


July 4, 2012 in Cases and Case Materials, Courts and Judging, First Amendment, Jurisdiction of Federal Courts, News, Opinion Analysis, Ripeness, Second Amendment, Speech, Standing | Permalink | Comments (1) | TrackBack (0)

July 4: Declaration of Independence

Declaration_of_independenceThe Declaration of Independence, signed on July 4, 1776, is the textual basis for the "Fourth of July" or "Independence Day" holiday. 

Drafted by Thomas Jefferson, the document itself (or what we have come to consider the document but is actually a 1823 transcription) is on view at The National Archives.

The text is also available on the National Archives website.

The status of the Declaration of Independence as a foundational document is undisputed.  However, its status as quasi-constitutional is subject to debate.

Unlike in the 2010-2011 Term, however, the United States Supreme Court did not seem to cite the Declaration of Independence even once in this past Term's opinions.


July 4, 2012 in History, Supreme Court (US) | Permalink | Comments (0) | TrackBack (0)

Monday, July 2, 2012

Chief Justice Roberts's Necessary and Proper Clause

What did Chief Justice Roberts do to the Necessary and Proper Clause in last week's ruling on the universal coverage provision of the Affordable Care Act?

Not much.  Here's why.

Let's start with the opinion.  Chief Justice Roberts wrote last week that universal coverage--the so-called individual mandate--exceeded Congress's authority under both the Commerce Clause and the Necessary and Proper Clause (although he wrote for a five-Justice majority that it fell within congressional taxing authority).  (We wrote here about the Chief's opinion on the Commerce Clause.)  In so writing, the Chief rejected the government's argument that because Congress had authority under the Commerce Clause to enact the guaranteed issue and community rating provisions, it also had authority under the Necessary and Proper Clause to enact universal coverage.  After all, everybody agreed that guaranteed issue and community rating alone wouldn't work; they needed an individual mandate. 

(Here's a primer.  Guaranteed issue requires insurance companies to provide insurance to all comers.  Community rating control premium rates within a particular community.  Under these provisions, insurance companies will have to cover everyone (including those with high medical costs), within a range of premium rates.  But when an insurance company covers everyone (including those with high medical costs), premiums go up.  And when premiums go up, without an ability to discriminate, individuals are driven out of the market.  Thus, guaranteed issue and community rating will drive up costs and drive down coverage.  Unless, that is, individuals are required to buy insurance.  If everybody has to buy insurance, the cost-distribution within the insurance pool will keep rates low (because the healthy, in effect, subsidize the unhealthy through the pool), and coverage (obviously) goes up.)

Chief Justice Roberts wrote that the Necessary and Proper Clause wasn't so malleable.  He wrote that while universal coverage may be "necessary," it is not "proper," because universal coverage "draw[s] within its regulatory scope those who would otherwise be outside of it."  Op. at 30.  In other words, individuals are not the subject of the guaranteed issue and community rating regulations (insurance companies are); they are therefore not within the regulatory scope of valid congressional regulation under the Commerce Clause; and they are therefore outside of the scope of the Necessary and Proper Clause.  Op. at 29-30.  The Chief wrote that the Court's prior cases blessed congressional action under the Necessary and Proper Clause only when the subject of regulation under the Necessary and Proper Clause was already in the regulatory scope of congressional regulation under its principal Article I power.  Here's how he described it:

The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power.  This is in no way an authority that is "narrow in scope" . . . or "incidental" to the exercise of the commerce power.  Rather, such a conception of the Necessary and Proper Clause would work a substantial expansion of federal authority.  No longer would Congress be limited to regulating under the Commerce Clause those who by some preexisting activity bring themselves within the sphere of federal regulation.  Instead, Congress could reach beyond the natural limit of its authority and draw within its regulatory scope those who otherwise would be outside of it.  Even if the individual mandate is "necessary" to the Act's insurance reforms, such an expansion of federal power is not a "proper" means for making those reforms effective.

Op. at 29-30.

So, what's the effect of the Chief's opinion on the Necessary and Proper Clause?  Very little.

There are two problems.  The first one is exactly the same problem with the Chief's opinion on the Commerce Clause, only here it's even more pronounced.  That is: the opinion may well be dicta, and, even if it's not, it doesn't have strong support as a guiding opinion under the Marks rule.  Like Chief Justice Roberts's opinion on the Commerce Clause, his opinion on the Necessary and Proper Clause is not necessary to the Court's conclusion.  Moreover, he's writing just for himself.  The four "liberals" would have upheld universal coverage under the Necessary and Proper Clause.  And the four other "conservatives" declined to join the Chief--and were in even sharper disagreement with him than they were on the Commerce Clause.  (The four other conservatives would apparently read the Necessary and Proper Clause as allowing only regulation that is absolutely necessary to the named Article I powers--a reading that flies in the face of McCulloch v. Maryland and the Clause's entire history.  Dissent, at 9-10.)

Moreover, the Chief's analysis is weak and apparently disavowed by all on the Court (though for different reasons), further alienating and weakening it.  Chief Justice Roberts supports his new Necessary and Proper rule--that Congress can regulate only those things already within the regulatory scope--by describing the Court's prior Necessary and Proper cases.  But while his description may be accurate on the facts, it is not supported by the language and analysis of those rulings.  For example, the Court just two terms ago ruled in Comstock that the Necessary and Proper Clause allowed congress to authorize the detention of federal prisoners beyond their release date if they were deemed "sexually dangerous."  Why?  Because the Necessary and Proper Clause allows Congress to enact federal criminal law (in furtherance of its named Article I powers), and therefore to sentence offenders, and therefore to jail offenders, and therefore to keep dangerous offenders off the streets, even after their release dates--all in the name of the Necessary and Proper Clause.

Now it turns out that offenders were already within the regulatory scheme.  But the Court's ruling did not turn on that, and, in fact, nowhere mentioned it.  Instead, the Court said, quoting the usual language from McCulloch, that the Necessary and Proper Clause authorized Congress to take any action that was rationally related to its enumerated powers.

(The Court's opinion in Comstock was written by Justice Breyer.  And Chief Justice Roberts joined it in full, even though he could have signed on with one of two more restrictive concurrences, written by Justice Kennedy and Justice Alito.)

In short, nothing in Comstock, or the Court's other Necessary and Proper decisions, sets out Chief Justice Roberts's new rule.  It's just his gloss.  And one, apparently, that nobody else on the Court subscribes to in his way and for his reasons. 

But assuming that the courts treat the Chief's opinion as (at least) guiding, however--as they likely will--the second problem is that the Chief's opinion is quite narrow and thus only applicable to a small set of cases, if any.  After all: How often does Congress seek to regulate something under the Necessary and Proper Clause that isn't within the regulatory scheme of its power-in-chief?  By the Chief Justice's own reckoning: The Court has never seen this case.

And even if the Chief's opinion is guiding, courts must read it alongside Justice Breyer's majority opinion in Comstock--the Court's next-most recent foray into the Necessary and Proper Clause, and, again, an opinion that Chief Justice Roberts signed in full.  Read alongside the expansive and capacious Necessary and Proper Clause described in Comstock, Chief Justice Roberts's new rule seems a narrow exception, indeed.  Chief Justice Roberts did nothing last week to chip away at that expansive and capacious Clause; in fact, his opinion last week reaffirmed its long-standing principles (just as his opinion on the Commerce Clause reaffirmed the Court's broadest interpretations of that Clause).

In the end, the Chief's opinions on both the Commerce Clause and the Necessary and Proper Clause are almost certainly moot, anyway.  The real story of the case is Chief Justice Roberts's majority opinion upholding universal coverage under the tax power.  Any future Congress seeking to enact legislation that would push up against Chief Justice Roberts's new rules for the Commerce Clause and the Necessary and Proper Clause would do well to simply enact the policy as a tax penalty.


July 2, 2012 in Cases and Case Materials, Commerce Clause, Congressional Authority, Courts and Judging, News, Opinion Analysis, Recent Cases, Taxing Clause | Permalink | Comments (0) | TrackBack (0)