Wednesday, December 4, 2013
The Ninth Circuit earlier this week upheld a congressional ban on paid advertisements for for-profits, issues of public importance or interest, and political candidates. The 9-2 (or 8-1-1) ruling in Minority Television Project, Inc. v. FEC said that the ban, at 47 U.S.C. Sec. 399b, did not violate the First Amendment.
The ruling is most notable for Chief Judge Kozinski's call for the Supreme Court to reconsider its approach to the First Amendment for broadcast media. If Chief Judge Kozinski is reading the tea leaves right, this case may just be the vehicle for the Court to change course on its traditional lower-level review (and therefore greater tolerance) for speech restrictions on broadcast media.
The majority applied the traditional intermediate scrutiny test set out in League of Women Voters and ruled that 399b comfortably satisfied it:
We conclude that substantial evidence before Congress supported the conclusion that the advertising prohibited by Section 399b posed a threat to the noncommercial, educational nature of NCE programming and that the additional evidence bears out Congress's predictive judgment in enacting Section 399b.
Op. at 16. As to fitness:
In contrast [to the statute overturned in League of Women Voters], Section 399b's restrictions are narrowly tailored to the harms Congress sought to prevent. Having documented the link between advertising and programming, Congress reaffirmed the long-standing ban on advertising on NCE stations, but in a more targeted manner. In place of the prior absolute ban on promotional content, which swept within its reach a wide range of speech that did not pose a significant risk to public programming, Congress enacted targeted restrictions that leave untouched speech that does not undermine the goals of the statute. The restrictions leave broadcasters free to air enhanced underwriting, which both the FCC and Congress determined did not pose the same risk to programming as advertisements. Broadcasters may air any promotional content for which consideration was not receieved. Finally, the statute permits non-profit advertisements. As to this latter category, the government offered evidence that non-profit advertisements, which are few in number and perceived by the public as consistent with the mission of public broadcasting, do not pose the same threat as other forms of advertising.
Op. at 26-27.
The court declined the plaintiff-petitioner's invitation to apply strict scrutiny under Citizens United. The court said that "Citizens United was not about broadcast regulation; it was about the validity of a statute banning political speech by corporations." Citizens United did not "overrule decades of precedent sub silentio--especially given that the Court there expressly overruled two other cases with no mention of League of Women Voters or an intent to change the level of scrutiny for broadcasting." Op. at 13.
Judge Callahan concurred as to the prohibition against paid advertisements by for-profits, but dissented (for the same reasons as Chief Judge Kozinski) as to the prohibition on ads on issues of public importance and for political candidates.
Chief Judge Kozinski dissented (joined by Judge Noonan) with a full frontal assault on the intermediate scrutiny standard for speech restrictions in broadcast media. He wrote that the rationale for that standard "no longer carries any force." He said that intermediate scrutiny was too squishy and was undermined for broadcast media by "intervening developments" in the media. He pointed to an earlier Ninth Circuit ruling in which the court defied Supreme Court precedent based on changed circumstances, but was nevertheless affirmed by the Supreme Court. "So I guess the lesson is, we must not get ahead of the Supreme Court--unless we're right."
He obviously thinks he's right in predicting the downfall of intermediate scrutiny here.
Gerard Magliocca (Indiana) appeared recently on Your Weekly Constitutional, a pod-cast and radio show affiliated with James Madison's Montpelier, to discuss his new book American Founding Son: John Bingham and the Invention of the Fourteenth Amendment. Magliocca talks about John Bingham and the creation of the Fourteenth Amendment in this terrific hour-long segment with YWC host Stewart Harris.
Tuesday, December 3, 2013
Opponents of the Affordable Care Act, or Obamacare, have set off a new wave of challenges to the Act, according to today's NYT. Among these: the religious challenges to the contraception mandate; cases challenging President Obama's extension of the employer mandate deadline; and challenges to the IRS rule providing a subsidy to purchasers of health insurance on the federal exchange.
As to that last one: plaintiffs in a spate of cases argue that Section 1401(a) of the ACA provides that purchasers of health insurance on a state exchange, but not the federal exchange, get a federal subsidy; yet the IRS issued a rule that extends the federal subsidy (in the form of a tax credit) to purchasers on the federal exchange. This, they say, violates the Administrative Procedures Act and the Tenth Amendment.
Why the Tenth Amendment? Opponents say that under the ACA an employer who declines to extend coverage has to pay a penalty if and when the federal government gives the employer's employees a subsidy for purchasing health insurance on a state exchange. Opponents say that the IRS rule extends this federal subsidy, and also the employer penalty, when the employer's employees purchase health insurance on the federal exchange. According to opponents, that undermines the state's policy decision not to open a state exchange in the first place. Or, as Indiana put it in paragraph 10 of its complaint in State of Indiana v. IRS:
[The IRS rule] contravenes the text of the ACA, thwarts Indiana's ability to execute State policy sparing employers from Employer Mandate penalties, induces Plaintiffs to reduce the hours of certain employees, including part-time and intermittent employees, to avoid having to provide all such employees with minimum essential coverage, and requires Plaintiffs to file onerous reports with the IRS detailing insurance coverage decisions. It thereby violates both the Administrative Procedure Act and the Tenth Amendment, and the Court should permanently enjoin Defendants from putting it into effect.
Later, in paragraph 17, it says:
In light of the IRS Rule, the State will be forced to reduce the hours of several part-time or intermittent employees in order to avoid the "assessable payment" or employer penalty of the ACA.
According to the Notice of Final Rulemaking, the IRS considered and rejected claims that the ACA itself limits subsidies to purchasers on state exchanges when it took comments on the proposed rule. The IRS said:
The statutory language of section 36B and other provisions of the Affordable Care Act support the interpretation that credits are available to taxpayers who obtain coverage through a State Exchange, regional Exchange, subsidiary Exchange, and the Federally-facilitated Exchange. Moreover, the relevant legislative history does not demonstrate that Congress intended to limit the premium tax credit to State Exchanges.
The Supreme Court heard arguments today in Northwest, Inc. v. Ginsberg, the case testing whether the Airline Deregulation Act preempts a state-law claim for breach of implied covenant of good faith and fair dealing arising out of an airline's termination of a customer's membership in its frequent flyer program. Our argument preview is here.
Given that the Court has ruled in Wolens that the ADA does not preempt an ordinary breach-of-contract claim, arguments today turned on whether the claim for breach of implied covenant of good faith and fair dealing is simply an incorporated contract requirement or a rule of contract interpretation (so that it's actually part of the contract, and thus not preempted), or whether it's an additional state-imposed obligation on top of the plain terms of the contract (and thus preempted). This question is informed by the deregulatory purpose of the ADA. Justice Breyer framed the issue this way:
I absolutely agree wtih you that--that a free market in price is at the heart of the Deregulation Act. Given.
I also think frequent flyer programs are simply price discounts. Given.
I also think that if you don't have contracts, you can't have free markets. Given.
But I also think the State cannot, under the guise of contract law, regulate the prices of airlines. If you allow that, you're going to have worse than we ever had. It'll be 50 different systems, all right?
Justice Kagan framed it this way, suggesting a solution that would preserve the implied covenant claim:
I guess what I'm suggesting is that the implied covenant here, it's just an interpretive tool. It says that there are certain kinds of provisions that are written very broadly or very vaguely, and an implied covenant comes in to help us interpret those kinds of provisions. And viewed in that way, it's just a contractual device that in light of Wolens ought to be permitted.
Justice Sotomayor said it this way, and proposed a standard for distinguishing between ordinary breach-of-contract claims and implied covenant claims:
My simpler standard comes from quoting Hennepin: "Does the implied covenant claim extend to actions beyond the scope of the underlying contract, or can it override the express terms of the agreement? If the answer is no, it's not preempted."
The question is complicated by the fact that the frequent flyer program in this case gave Northwest the "sole discretion" to terminate. So: Is an implied covenant part of that contract, or is it an additional state-law requirement? And what's the standard for sorting that out?
As an initial matter, any standard may not answer the preemption question categorically. That's because different states interpret their implied covenant laws differently. This gave the Court another problem: Does it have to sort out the particular state law on implied covenants in order to determine whether a claim in a particular state is preempted? And might the answer change depending on the state, leading to inconsistent results and undermining the deregulatory purpose of the ADA? Justice Scalia put this point on it:
Wow, somebody's really been given a raw deal. You know, that's still going to be possible even if we rule for [Ginsberg] here. It depends on what State he's from, right?
Complicating things yet more, the answer may turn on the implied covenant's waivability. Justice Kagan made this point:
But if it can't be waived, it sure seems as though it is operating independently of the parties' reasonable expectations.
It may also turn on the fact that frequent flyer programs work for airline miles, but also for other goods and services--and thus state regulation of them may not amount to a regulation of airline price, in violation of the ADA. Justice Alito put it this way:
I don't want to take up your rebuttal time, but if the facts were that under a particular program 90 percent of the miles were earned by purchasing things other than flying and 90 percent of the miles were spent on things other than flying, wouldn't that be very different?
This could give the Court a way out of the problem, by ruling that state implied-covenant claims based on frequent flyer programs aren't preempted because they don't regulate the price of airline tickets. This seems unlikely, though: even if frequent flyer programs work for other goods and services, they still also work for airline tickets.
Finally, there's the presumption against preemption--and whether it has any bearing on this case. Chief Justice Roberts seemed to think so:
I do agree, it seems pretty inconsistent with the normal presumption against preemption that we apply out of respect for the State legal regimes to say we're going to adopt a broad prophylactic rule.
But Justice Scalia thought not:
But the whole purpose of the ADA was to preempt State laws. I mean, I can understand applying that presumption to other statutes which say nothing about preemption. The whole purpose of the ADA was to deregulate airlines, was to say there was going to be no Federal regulation. Let the free market handle it and there will be no State regulation.
On the one hand, a narrow ruling in this case--one that address Ginsberg's particular claim, under Minnesota law, recognizing that this particular program gave the airline "sole discretion" to terminate--seems both likely and appropriate, especially given the particularities of this case. But on the other hand, as at least some on the Court suggested, an overly narrow ruling, without a broader standard, leaves open the possibility (or even probability) that this very same issue, or one like it, could give the lower courts a headache in the 49 other states (where implied covenant claims might work differently).
If Ginsberg loses, and his claim is preempted, the U.S. Department of Transportation can still investigate Northwest's frequent flyer program. But that remedy doesn't do anything for Ginsberg.
Ever since the Supreme Court upheld the Affordable Care Act's individual mandate in NFIB, we've been treated to a new and surprising argument by constitutional conservatives. That argument is in favor of judicial activism. Yes, that's right: after years of railing against activist judges, conservatives now claim that the federal courts aren't activist enough, in particular, in checking out-of-control exercises of legislative power.
In a series of new books this fall, and reviews in the WSJ here and here (h/t Jon Gutek), constitutional conservatives argue that government regulation has gone wild, and that the courts have not properly checked this growth. Exhibit A: the Supreme Court's ruling upholding the individual mandate in NFIB.
For example, Randy Barnett, reviewing Clark M. Neily III's Terms of Engagement, argues that Chief Justice Roberts rewrote the individual mandate as a tax, using a "saving construction" as an exercise in judicial restraint in order to uphold a law validly enacted by the legislature. George Melloan, reviewing Josh Blackman's Unprecedented and Ken Cuccinelli's The Last Line of Defense, similarly argued that Chief Justice Roberts saved the mandate by "call[ing] the act's penalty for noncompliance . . . a 'tax' and waved the ACA through."
But this turns history on its head. The government always defended the individual mandate under both its Commerce Clause authority and its taxing power. It argued the tax point explicitly to the Supreme Court, starting at page 52 of its brief. It's hardly novel, then, let alone a rewrite of the Act, that the Court upheld the individual mandate under the taxing power. Indeed, it's exactly what the government argued. This may not be how constitutional conservatives read the Act's mandate, but it's how all three branches of government did. The Court's ruling on the taxing power wasn't a reach to defer to the legislature. Indeed, it wasn't a reach at all.
Barnett's argument that the courts aren't activist enough also ignores the startling activism of the Roberts Court. Remember, the Court rejected the individual mandate under the Commerce Clause, even as it upheld it under the taxing power. The Court also limited the Medicaid expansion component of the ACA. We could go on and on with examples of how this Court overturned state and federal legislative acts, but this one is undoubtedly the biggest: the Court last summer rejected the coverage formula for preclearance under the Voting Rights Act--a provision enacted by a breathtaking bipartisan majority in Congress and signed by a Republican president (no big government types, these). Given the history, it's hard to argue that this wasn't a supremely activist ruling. This Court has demonstrated its appetite for activism. But it's apparently not activist enough.
Barnett goes on to argue that judicial activism in the name of legislative restraint is necessary because voters don't know enough to hold their elected representatives accountable:
In practice, the claim that laws and administrative regulations reflect the will of the public is often a fiction. In the economic sphere, regulations are more commonly the product of pressure from politically connected and well-established companies at the expense of upstart entrepreneurs. Because voters know little about these laws and their impact, they can't hold their representatives accountable for enacting them, and the few affected individuals can hardly influence a general election.
This seems a remarkable claim, given the political backlash to the ACA, or Obamacare, and, as Melloan notes, the political blows that Obamacare supporters suffered in the 2008 mid-terms and beyond. Voters apparently knew how to hold Obamacare supporters accountable. But the claim is also ironic: the very problem that Barnett describes only gets worse with more money in politics--a result that the activist Supreme Court ensured when it overturned congressional regulation of corporate campaign expenditures in Citizens United.
These constitutional conservative talking points fall apart on their own terms. And that's not even getting to the merits.
The Supreme Court hears oral arguments today in Northwest, Inc. v. Ginsberg, the case testing wether the federal Airline Deregulation Act preempts a state-law claim for breach of implied covenant of good faith and fair dealing arising out of an airline's termination of a customer's membership in its frequent flyer program. Here's my preview of the oral argument from the ABA Preview of United States Supreme Court cases, with permission:
S. Binyomin Ginsberg was an active member of WorldPerks, the Northwest Airline’s frequent flyer program, since 1999. Ginsberg, an expert in education and administration, travelled frequently on Northwest to give lectures, conduct seminars and workshops, and advise other educators and administrators. In 2005, Ginsberg earned Platinum Elite Status in the WorkPerks program, the highest level of benefits available.
But in June 2008, Northwest revoked Ginsberg’s WorldPerks membership. A Northwest representative explained by phone that Northwest was revoking his membership because he had abused the program by complaining too many times and strategically booking himself on full flights in order to get bumped. A Northwest Customer Care Coordinator later sent Ginsberg an e-mail citing Paragraph 7 of the WorldPerks General Terms and Conditions and saying that “[a]buse of the WorldPerks program . . . may result in cancellation of the member’s account and future disqualification from program participation, forfeiture of all mileage accrued and cancellation of previously issued but unused awards.” The e-mail also said that Northwest may determine “in its sole judgment” whether a passenger has abused the program. The e-mail did not give any specific information about how Ginsberg had abused the program.
Ginsberg filed suit on January 8, 2009, asserting four causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) negligent misrepresentation; and (4) intentional misrepresentation. The district court dismissed the case, ruling that Ginsberg failed to show sufficient facts to support his breach-of-contract claim, and that the federal Airline Deregulation Act preempted Ginsberg’s other three claims.
Ginsberg appealed, but only as to his claim for breach of the implied covenant of good faith and fair dealing. The United States Court of Appeals for the Ninth Circuit reversed, and this appeal followed.
Congress enacted the Airline Deregulation Act (ADA) in 1978, concluding that “maximum reliance on competitive market forces” would best further “efficiency, innovation, and low prices” as well as “variety [and] quality . . . of air transportation services.” As part of the Act, and in order to ensure that states would not frustrate deregulation by enacting their own regulations, Congress included a preemption provision barring any state from “enact[ing] or enforce[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.” At the same time, Congress retained the Act’s already-existing “savings clause,” which preserved common law and statutory remedies.
The Supreme Court addressed the ADA’s preemption clause in two important cases. In the first case, Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992), the Court ruled that the ADA preempted state regulation of airlines’ fare advertisements. The Court held that the preemption clause’s phrase “related to” was quite broad, and that the ADA sought to preempt any state enforcement actions “having a connection with or reference to airline ‘rates, routes, or services’ . . . .” The Court had little trouble concluding that state regulation of airlines’ fare advertisements fell comfortably within that definition.
In the second case, American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995), a case very similar to Ginsberg’s, the Court ruled that the ADA preempted state enforcement suits against an airline arising under state-imposed obligations (as in a state law regulating an airline), but not under an airline’s breach of its own, self-imposed obligations (as in the airline’s own contract with its customers). According to the Court, “[a] remedy confined to a contract’s terms simply holds parties to their agreement,” and does not impose additional obligations related to a price, route, or service. Wolens sued American Airlines for making retroactive changes to the terms and conditions of its frequent flyer program. The Court held that the ADA preempted Wolens’s claim under the state Consumer Fraud Act, but that it did not preempt Wolens’s claim for routine breach of contract.
Considering the broad reading of the preemption clause in Morales, the parties here argue whether Ginsberg’s claim for breach of the implied covenant of good faith and fair dealing looks like more a state-imposed obligation or whether it looks more like an airline-imposed obligation under Wolens.
Northwest argues first that the plain language of the ADA preempts Ginsberg’s claim. It says that Ginsberg’s suit, which seeks reinstatement of program membership and renewed access to the reduced prices and enhanced services that come with it, is plainly “related to” Northwest’s prices, routes, and services, especially given the Court’s broad approach to the ADA’s preemption provision. Moreover, Northwest contends that Ginsberg’s claim seeks to enlarge the program’s General Terms and Conditions, a voluntary agreement between the parties, by invoking state law that is external to the agreement. In other words, Northwest says that Ginsberg’s implied covenant of good faith and fair dealing claim is no ordinary breach-of-contract claim, designed simply to enforce the terms of the agreement between the parties. Instead, it says that Ginsberg’s claim goes above-and-beyond simple enforcement of the agreement and, if allowed, would enforce state policies outside the four corners of the agreement, external to the contract. Northwest argues that this violates the Court’s rule in Wolens.
Next, Northwest argues that preemption of Ginsberg’s claim is consistent with the policies underlying the ADA. Northwest contends that Ginsberg’s implied covenant claim is amorphous and subject to different interpretations, and, if enforced here and elsewhere, would lead to a patchwork of state regulations over agreements like this. (In contrast, Northwest says that simple breach-of-contract claims are uniform enough across jurisdictions to avoid a patchwork result.) Moreover, Northwest argues that Ginsberg’s claim, if recognized, would create a risk of state interference with competition and commercial activity in the airline industry by substituting state law for market forces. Northwest claims that the patchwork result and state interference are both inconsistent with the goals of the ADA, to further “efficiency, innovation, and low prices” in the airline industry through “maximum reliance on competitive market forces.” (Northwest also notes that the U.S. Department of Transportation (DOT) has authority to investigate unfair practices in frequent flyer programs, so that Ginsberg and others like him may seek federal administrative relief.)
The federal government weighed in to support Northwest. Like Northwest, the government argues that the ADA preempts Ginsberg’s claim, because Ginsberg’s claim is external to his contract with Northwest. The government contends that because the district court rejected Ginsberg’s breach-of-written-contract claim on the basis that it gave Northwest complete discretion to determine Ginsberg’s status in the program, and because Ginsberg did not appeal that portion of the ruling, Ginsberg’s implied-covenant claim necessarily seeks to impose an additional, non-contractual obligation on Northwest. The government says that under Wolens this claim is preempted. But unlike Northwest the government does not argue for a categorical rule that all implied-covenant claims are preempted by the ADA, because, it says, some implied-covenant claims may require only adjudication of routine breach-of-contract claims, consistent with Wolens. The government says that only those implied-covenant claims that seek to enforce policies outside the contract, like Ginsberg’s, are preempted.
Ginsberg argues first that his implied covenant of good faith claim is not preempted under Wolens. Ginsberg says that his claim does not look outside the contract; instead, it stays within the contract. According to Ginsberg, that’s because a contract includes both express and implied terms, and his claim simply seeks to put an implied-obligation-of-good-faith gloss on the contract language that gives Northwest “sole judgment” to determine whether he abused the program. Ginsberg claims that this gloss is no extra-contractual obligation; rather, it is part-and-parcel of the contract itself. He says that courts read in an implied covenant of good faith to a contract in order to protect the contract’s express terms, and not to add an additional or external obligation or policy. Moreover, Ginsburg contends that his decision not to appeal the dismissal of his claim for a breach of the written contract does not transform his implied covenant of good faith claim into one based on extra-contractual policies, as argued by the federal government. Again, he says that the contract includes both express and implied terms, and his implied claim simply seeks to enforce the contract itself. Ginsberg says that holding Northwest to implied terms furthers the aims of the ADA, because enforcement in good faith increases the stability of contracts and reduces the costs of entering into them. Ginsberg claims that DOT enforcement does not replace the role of the courts in resolving contract disputes, whether they involve express or implied terms of a contract.
Ginsberg argues next that his claim is not preempted because it does not seek to “enact or enforce a law, regulation, or other provision.” Ginsberg says that the Court unanimously held that a statutory provision in the Federal Boat Safety Act that preempts enforcement of “a law or regulation” does not preempt common-law claims. For the same reasons that that provision did not preempt, Ginsberg contends that the ADA should not preempt. He also says that the word “provision” does not extend to common-law duties. As a result, Ginsberg contends that the ADA’s preemption clause does not apply, even aside from his Wolens argument.
Finally, Ginsberg argues that his claim is not preempted because it does not relate to airline prices, routes, or services. He says that his claim, unlike the claim in Wolens, does not challenge access to flights and upgrades or the number of miles needed to obtain a ticket. Instead, Ginsberg argues that his claim goes only to the termination of his WorldPerks membership. He says that this claim does not reference, does not seek to regulate, and will not affect the price, route, or service of air transportation. (Ginsberg argues that the WorldPerks program is not a “service” within the meaning of the ADA.) Ginsberg underscores this point by noting that frequent flyer miles can be earned and spent on many things other than air transportation, and that consumers can participate in a frequent flyer program without buying a single airline ticket. Finally, Ginsberg says that the DOT advises consumers to “consider legal action through the appropriate civil court” if they are unhappy with the way a frequent flyer program is administered. He says that is exactly what he did here.
On one level, this case simply addresses a claim that falls between the cracks of the sharp distinction between contract-based claims and extra-contractual claims that the Court drew in Wolens. By this reckoning, the case is only another opportunity for the Court to round out its analysis of ADA preemption and to give guidance to lower courts and litigants for the next round of claims against the airlines. The case is significant, but only insofar as it deals with ADA preemption of a particular kind of claim. The parties do not argue that the Court should overturn Wolens, and they do not argue that the ADA does not preempt an ordinary breach-of-contract claim. Thus, whatever the Court likely rules in this case, Ginsberg and plaintiffs like him will continue to be able to assert an ordinary breach-of-contract claim against an airline, even if they cannot assert more. (The fact that Ginsberg appealed his implied covenant claim, but not his breach-of-contract claim, says that the implied covenant claim sweeps more broadly, and could be easier to prove, than the breach-of-contract claim. If so, a ruling favoring preemption could mean that plaintiffs would lose a broader class of claims (implied covenant claims), even if they would retain a basic breach-of-contract claim.)
On another level, the case, like many preemption cases, pits significant considerations of federal-state relations against an individual plaintiff’s ability to seek redress for injuries under state law against a corporation. In this way, the case is significant for how it balances federalism against state law remedies against corporations. To put a finer point on it, this case, like some other recent federalism cases, is likely to be seen in pro-corporation or pro-plaintiff terms, depending on the outcome.
These cases involving federalism and individual state-law remedies sometimes come down with surprising alliances among the justices. In Wolens, for example, Justice Ginsberg wrote the Court’s opinion; it was joined by Chief Justice Rehnquist and Justices Kennedy, Souter, and Breyer. But the composition of the Court has changed in critical ways since Wolens, making predictions here even more difficult than usual. Look to Chief Justice Roberts and Justice Kennedy as the likely pivotal votes.
Monday, December 2, 2013
The Supreme Court today heard oral arguments in Michigan v. Bay Mills Indian Community, the case asking whether a Native American Indian tribe enjoys tribal sovereign immunity against a state's suit against it for operating an illegal casino outside of Indian lands.
One thing seemed clear: the Court is prepared to reconsider the scope of tribal sovereign immunity.
One problem is the odd result under the Tribe's position that a state could sue a tribe for operating a casino on its lands, but not off its lands. The Tribe's position is that the state has a number of other ways to regulate a casino outside Indian lands, short of a suit against the Tribe, which would require relinquishing tribal sovereign immunity. For example, the state could deal with the problem under the required compact between the state and the Tribe; it could sue Tribal officials for injunctive relief under an Ex Parte Young theory; the state could prosecute individuals who work at or frequent the casino; or it could get the federal government to enforce federal law against an illegal, off-Indian land casino. But it's not clear that any of these alternatives would be effective--and the Court seemed skeptical of each of them. In other words, practically speaking, relinquishing tribal sovereign immunity may be the only way that the state could regulate an off-Indian land casino. (The Tribe and federal government both noted that the casino isn't currently operating--that it's waiting for a defiinitive answer to the question whether it can operate legally.)
At the end of the day, this problem may come down to the state's ability to collect money damages--something it can't do if the Tribe enjoys tribal sovereign immunity. Justice Kagan proposed this modification to tribal sovereign immunity to the Tribe's attorney, Neal Katyal:
JUSTICE KAGAN: Mr. Katyal, what is the difference--the State can really--it can shut down these gambling operations easily if it's off Indian lands. What the State can't do is get any kind of damages or money remedies; is't that really the difference?
MR. KATYAL: I do think so. I think that's--I think that that's underlying some of this, absolutely.
JUSTICE KAGAN: Maybe that's an important difference. I mean, maybe we should give the State the ability to collect damages.
Justice Kennedy came at it from a different angle, the problem with the definition of the land where the casino is located:
But if the tribe takes such an obscure position, such a changing position, as to whether or not we are dealing with . . . Indian land, maybe that's a reason why we should confine and limit [tribal immunity as defined in] Kiowa so that it doesn't apply to Indian gaming and we won't have this problem.
Another problem is the odd result that under the Tribe's theory a Native American Indian tribe would enjoy wider sovereign immunity than other states and foreign sovereigns. Chief Justice Roberts put this fine point on the problem:
[Native American Indian tribes are] [d]ependent sovereigns, which is surprising that the scope of their immunity exceeds that of States or foreign sovereigns.
Combining the two problems, Justice Ginsburg proposed this to the Deputy Solicitor General:
Mr. Kneedler, you went through the development of foreign sovereign immunity, and whether the courts were influenced by the government, it was the courts that recognized this distinction between commercial activity and governmental activity.
Why couldn't the court extend that same distinction to Indian tribes and say it makes sense in the foreign country context, it also makes sense in the context of the tribes, to distinguish commercial from governmental?
Finally, there's the problem of who decides on tribal sovereign immunity. Both the Tribe and the federal government argues that Congress should decide. But that didn't sit well with the Court. Justice Ginsburg said this on the question:
Mr. Katyal, isn't it odd to say that when this is the Court--the doctrine of tribal immunity is something that was announced by this Court. Congress never passed a law that said the tribes have immunity. It's all this Court. And then you say what this Court made only Congress can unmake. That seems strange to me.
In all, it seems likely that the Court will redefine the scope of tribal sovereign immunity. It's less clear exactly how: whether the Court will carve out a limited exception to tribal sovereign immunity for off-Indian land commercial activity, or whether it will more substantially restrict tribal sovereign immunity.
The Supreme Court today declined to review a Fourth Circuit ruling upholding the Affordable Care Act's employer mandate. Our post on the Fourth Circuit ruling is here.
The order rejecting cert. means that the Fourth Circuit ruling stays on the books and that the Supreme Court won't take on the employer mandate (now, and likely ever). The Obama administration delayed implementation of the mandate (sparking bills in Congress and lawsuits to override the delay); it's now scheduled to go into effect in 2015 (and not January 1, 2014, as the law seems to require).
Recall that the Fourth Circuit ruled in Liberty University v. Lew that Congress had authority under both the Commerce Clause and the Taxing Clause to impose a mandate on employers to provide health insurance to employees. The case was notable, because it held that Congress had authority under the Commerce Clause to impose the employer mandate, even though five justices on the Supreme Court ruled in NFIB v. Sebelius that Congress lacked authority under the Commerce Clause to impose the individual mandate. The Fourth Circuit said that in enacting the employer mandate Congress wasn't creating commerce to regulate it (as Chief Justice Roberts wrote in NFIB about the individual mandate). Instead, the Fourth Circuit said that the employer mandate was just another federal regulation on the terms and conditions of employment between an employee and an employer, who is already in interstate commerce.
That's the question before the Supreme Court today in Michigan v. Bay Mills Indian Community. More particularly, the case asks whether the federal courts have jurisdiction to hear a state's claim that a Native American tribe's off-reservation casino violates the Indian Gaming Regulatory Act, and whether the tribe enjoys immunity from such a suit.
With the rapid proliferation of tribal gaming, including off-reservation gaming, the case could make an important statement about the regulatory authority of the tribe, the state, and the federal government over off-reservation gaming. It could also make an important statement about federal court jurisdiction over a state's claim that a tribe's off-reservation gaming violates federal law, and about tribal immunity for such gaming.
Here's my oral argument preview of the case, republished, with permission, from the ABA Preview of U.S. Supreme Court Cases:
Congress enacted the Indian Gaming Regulatory Act of 1988 (IGRA) in order to regulate gaming activities on “Indian lands.” The IGRA divides gaming into three separate classes and specifies how each class is regulated. Class I gaming includes social games and traditional tribal games; it is under the exclusive jurisdiction of the tribe. Class II gaming includes bingo and certain card games like poker; it is primarily within the jurisdiction of the tribe but subject to federal oversight.
Class III gaming, the class at issue here, includes everything else, such as slot machines and casino-style games. Class III gaming is not regulated by a uniform structure. Instead, an Indian tribe wishing to conduct Class III gaming has to adopt a gaming ordinance that is approved by the National Indian Gaming Commission (NIGC), a federal agency. The tribe also has to negotiate with the state where it is located and enter into a compact that will govern the gambling.
The Bay Mills Indian Community, a federally-recognized Indian tribe with a reservation in Michigan’s northern peninsula, entered into a compact with Michigan in 1993. Soon after the compact was finalized, the NIGC approved Bay Mills’s gaming ordinance. Bay Mills then proceeded to establish its own Gaming Commission. Bay Mills has continuously operated one or more gaming facilities on its reservation ever since.
In 1997, Congress passed the Michigan Indian Land Claims Settlement Act. The Act appropriated funds to Bay Mills and other Michigan Indian tribes to satisfy judgments that the Indian Claims Commission had entered in favor of the tribes. The Settlement Act directed that 20 percent of the funds awarded to Bay Mills be deposited in a “Land Trust” and required that earnings from the Trust “be used exclusively for improvements on tribal land or the consolidation and enhancement of tribal landholdings through purchase and exchange.” It also said that “[a]ny land acquired with funds from the Land Trust shall be held as Indian lands are held.”
In August 2010, Bay Mills used the funds from the Settlement Act land trust to purchase approximately 40 acres of land in Vanderbilt, Michigan, about 100 miles from the Tribe’s reservation. Bay Mills constructed a small casino on the property (initially with 38 electronic gaming machines, but later expanded to 84 machines) and began operating it on November 3, 2010. The U.S. Department of the Interior and the NIGC later issued letters concluding that the Vanderbilt casino was not located on “Indian lands” as defined by the IGRA, that it was therefore not eligible for gaming under the IGRA, and that the NIGC had no jurisdiction over it.
The state filed suit against Bay Mills in federal court. The state’s counts I and II alleged that the Vanderbilt land did not constitute “Indian lands” under the IGRA, and that Bay Mills therefore violated the compact. The state’s count III alleged that Bay Mills violated the IGRA by conducting gaming outside of Indian lands and that even if the Vanderbilt land constituted “Indian lands,” Bay Mills violated 25 U.S.C. § 2719 (and therefore the compact’s requirement that gaming comply with federal law) by operating a gaming facility on land acquired after October 17, 1988, that does not satisfy any statutory exception. The Little Traverse Bay Bands of Odawa Indians, which operated a competing casino about 40 miles away, filed a separate suit with similar claims the next day.
The district court consolidated the cases and entered a preliminary injunction halting the Bay Mills casino. Bay Mills appealed and moved for a stay of the injunction; the district court and the United States Court of Appeals for the Sixth Circuit both denied a stay.
While Bay Mills’s appeal was pending, the state amended its complaint to add three additional claims. Count IV alleged that Bay Mills violated federal common law by operating a casino that exceeds the scope of its authority. Count V alleged that Bay Mills failed to obtain a state license for a gaming facility in violation of Michigan law. Count VI alleged that the casino was a public nuisance under state law. The state also added several defendants—the Bay Mills Tribal Gaming Commission, the Commission’s members in their official capacities, and the members of the Bay Mills Executive Council in their official capacities.
On appeal, the Sixth Circuit reversed and vacated the preliminary injunction. The court held that the district court lacked jurisdiction as to counts I, II, and III. The court held that the district court had jurisdiction as to counts IV, V, and VI against Bay Mills, but that those counts were barred by tribal sovereign immunity. The court remanded the case to the district court to address the state’s counts IV-VI against the additional individual defendants.
The state brought this appeal. Little Traverse is not a party to it; neither are the individuals named in the state’s amended complaint.
Federal courts are courts of limited jurisdiction. This means that their jurisdiction must be defined by statute. One common source of federal jurisdiction is found in 28 U.S.C. § 1331, which creates the so-called “federal question” jurisdiction. Under § 1331, federal district courts have original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.”
Another source of federal jurisdiction—one that goes particularly to gaming on Indian lands—is found in 25 U.S.C. § 2710(d)(7)(A)(ii), part of the NIGC. That provision says that federal district courts have jurisdiction over “any cause of action initiated by a State or Indian tribe to enjoin a class III gaming activity located on Indian lands and conducted in violation of any Tribal-State compact . . . .”
The parties here dispute whether the federal courts have jurisdiction over the state’s claims. In particular, they dispute whether the state’s claims arising out of the Bay Mills’s alleged violation of the compact fall under § 1331 (because these claims might amount to a violation of the IGRA, a federal statute), and whether the Vanderbilt casino is “a class III gaming activity located on Indian lands” under § 2710.
But even if a federal court has jurisdiction (under §§ 1331, 2710, or some other federal statute), certain parties, like Indian tribes, enjoy immunity from suit. The Supreme Court has recognized tribal sovereign immunity, and both parties agree that “the doctrine is now part of this Court’s settled precedent . . . .” But they disagree sharply over the extent of that immunity.
The state argues first that the district court has jurisdiction over its suit pursuant to § 2710. The state says that the Vanderbilt casino is “a class III gaming activity located on Indian lands,” because Bay Mills authorized, licensed, and operated the casino from its reservation. More particularly, it contends that § 2710 extends federal court jurisdiction to the gaming itself, but also to the gaming activity, which, the state argues, includes authorizing, licensing, and operating the casino. The state claims that its interpretation of the text is consistent with the congressional intent.
The state argues next that the district court has jurisdiction over its federal claims pursuant to § 1331. The state says that it alleged a violation of the IGRA, a federal statute, when it claimed that Bay Mills violated the compact (in counts I, II, and III). It also says that nothing in the IGRA limits the federal courts’ federal question jurisdiction under § 1331.
The state argues that tribal sovereign immunity does not bar its suit for two independent reasons. First, the state contends that the IGRA abrogated tribal sovereign immunity. The state says that the Court uses a “more holistic approach” in determining whether a federal statute abrogates tribal sovereign immunity, and that the IGRA viewed as a whole (and not just § 2710) makes clear that Congress intended that a state could enforce its gaming laws in federal court against an Indian tribe engaged in off-reservation gaming. The state claims that the opposite rule would lead to an absurd result—that the state could obtain a federal court injunction to stop illegal gaming on Indian lands, but not on its own sovereign state lands. The state says that Congress could not have intended this result.
Second, the state argues that even if the IGRA does not abrogate tribal sovereign immunity, the Court should decline to extend immunity here. The state says that the Court has never expressly extended tribal immunity to a tribe’s off-reservation commercial activities, and, especially given tribal immunity’s “dubious foundation,” the Court should decline to extend it to those activities in this case.
In response, Bay Mills first argues that the state cannot claim that the Vanderbilt casino is “on Indian lands,” as it does in its first point. Bay Mills says that that argument falls outside the questions presented, which speak solely to gaming activities “outside of Indian lands.” But even if this argument were properly before the Court, Bay Mills contends that the state is wrong: the IGRA itself says that a tribe’s decision to open a gaming facility is not a “class III gaming activity.”
Next, Bay Mills argues that it is immune from Michigan’s suit under § 1710. Bay Mills claims that § 1710 only abrogates tribal sovereign immunity “on Indian lands,” and that the whole premise of the state’s claim is that the Vanderbilt casino is off Indian lands. Bay Mills says that under the plain language of § 1710, “Michigan has simply pled itself out of court.”
To the extent that Michigan and its amici argue for a Court-created exception to tribal sovereign immunity, Bay Mills argues that the Court has already rejected the proposed exceptions. Bay Mills also says that the Court has rejected pleas to overrule its tribal sovereignty immunity precedents. Bay Mills contends that it is Congress’s prerogative, not the Court’s, to alter the scope of tribal sovereign immunity, and that Congress has only reaffirmed it. Bay Mills claims that tribal sovereign immunity “has deep roots in this country’s jurisprudence,” and that there is no reason for the Court to abrogate it now.
Finally, Bay Mills argues that the Ninth Circuit decision will not leave the state without a remedy, as the state argues. Bay Mills says that Michigan most obviously can invoke the dispute resolution procedure in the compact. Bay Mills claims that Michigan could also sue tribal officials for injunctive relief. Additionally, Bay Mills argues that the state could negotiate a waiver of sovereign immunity in the next round of compact negotiations, seek federal intervention in the dispute, or even outlaw gaming throughout the state.
The federal government, as amicus in support of Bay Mills, also argues that the federal courts lack jurisdiction over Michigan’s claims. The federal government says that § 2710 does not extend jurisdiction of the state’s claims to the district court. Contrary to the state’s argument, the federal government says that numerous provisions in the IGRA demonstrate that the phrase “class III gaming activities” refers to the games themselves, and not to authorizing, licensing, and operating games. And because the games themselves are not located on Indian lands, § 2710 is not a basis for jurisdiction. Moreover, the federal government says that § 1331 does not extend jurisdiction, because the state’s federal claims (counts I, II, and III) do not fall within § 2710, and because the compact does not contain a provision agreeing to federal court review of the state’s other claims.
Next, the federal government argues that Bay Mills enjoys tribal sovereign immunity. The federal government says that § 2710 did not abrogate sovereign immunity, because the state alleged that the Vanderbilt casino is not on Indian lands. The federal government contends that 18 U.S.C. § 1166 also does not abrogate sovereign immunity, because that statute gives the federal government (not the states) enforcement authority in Indian lands for violations of assimilated state gambling laws. The federal government says that § 1166 does not give states authority to enforce state gambling laws outside Indian lands, and even less to sue the tribe itself. The government contends that tribal sovereign immunity already extends to a tribe’s commercial activities wherever they take place, and that the Court should leave it to Congress to balance the interests of the tribes and the states and to determine the scope of immunity.
Finally, the federal government argues that Michigan has other remedies. Like Bay Mills, the federal government says that the state could seek injunctive relief against an individual tribal official. The federal government claims that the state could also negotiate a waiver of sovereign immunity in the compact. Moreover, the federal government contends that the state could request approval from the NIGC of a site-specific gaming ordinance for the Vanderbilt casino, forcing the NIGC to determine whether the site is eligible for gaming, and appeal the decision in court. Finally, the federal government notes that the state can enforce its own gaming laws against individuals involved in gaming at the Vanderbilt casino. With all these options, the federal government argues that there is no need to diminish tribal sovereign immunity to create a remedy that would resolve this dispute.
At its core, this case is about the allocation of power between states and Indian tribes over the operation of an activity, tribal-sponsored gambling, that has seen astonishing growth in recent decades and today is worth tens of billions of dollars nationwide. (The NIGC tracks this growth in Gaming Revenue Reports, available at http://www.nigc.gov/Gaming_Revenue_Reports.aspx.) Both Indian tribes and states use legalized gaming more and more for revenue, economic development, and economic activity and opportunity. Within this broader context, the regulation of tribal gaming, even at the margins, is itself a high-stakes game.
To be sure, this case deals with only a small part of this larger question, that is: off-reservation gambling. And it involves only special federal jurisdictional and immunity questions that come up in the particular case when an Indian tribe purchases land to build an off-reservation casino.
Still, in the rapidly growing sector of Indian gaming, the case already matters. As Michigan indicates, it “is already aware of at least three additional lawsuits where parties have cited the Sixth Circuit’s decision here in support of a tribe’s operation (or planned operation) of a casino in violation of IGRA or tribal-state gaming compacts.” The state notes that “[a]s tribes continue to look for better casino locations . . . or new ways to profit from the explosion of casino gaming, the friction between state authority and tribal immunity will inevitably increase.” That’s not to say that Michigan’s positions in the case are (necessarily) right, but only that the issues are already significant, and only likely to grow in importance.
Moreover, the issues are highly controversial. On the one hand, many favor expanding off-reservation gaming opportunities, because Indian tribes and states can use off-reservation gaming to generate more revenue and economic development in more attractive locations off the reservations (like closer to urban centers). On the other hand, many oppose off-reservation gaming, because it encroaches on local communities. The debate is playing out in communities across the country where Indian tribes are seeking permission to conduct off-reservation gaming. The debate is also playing out in Washington, where the Obama administration moved in 2011 to loosen requirements for some off-reservation gaming, and where some in Congress have introduced legislation to tighten them. Again, this case sits right at the center of these debates.
Whatever happens in this case, though, it cannot change the basic statutory framework under the IGRA: Indian tribes will still have to adopt a gaming ordinance and negotiate a compact with the state. The compact requirement ensures that both states and Indian tribes will have a significant hand in regulating casino-like tribal gaming. But the outcome of the case may affect how Indian tribes and states negotiate their compacts and the terms they include in them.
It is important to remember that the Department of the Interior and the NIGC issued opinions that the Vanderbilt casino was not on “Indian lands” and was therefore not eligible for gaming under the NGRA. The federal government does not disavow these opinions. Indeed, the federal government sets out an array of options for Michigan to regulate the Vanderbilt casino (and other future casinos), notwithstanding (as the federal government argues) the federal courts’ lack jurisdiction over the state’s claims and Bay Mills’s immunity from suit. In other words, the Sixth Circuit ruling does not mean that Bay Mills can operate its casino, or that other tribes could operate like casinos off reservation, without at least some state and federal oversight and permission.
Finally, the case is significant because it will resolve splits in the circuits. There is disagreement among the circuits on both questions presented—the scope of federal jurisdiction, and the scope of tribal sovereign immunity.
Wednesday, November 27, 2013
The Treasury Department yesterday announced that it will propose new guidance for social welfare organizations that will better define the requirements for tax-exempt status for those organizations engaged in candidate-related political activities.
The new proposed guidance is aimed at 501(c)(4) organizations, which are organized under the IRC for social welfare purposes, but nevertheless engage in significant political activities. The 501(c)(4) form allows these organizations to fly under the radar while still engaging in politics. For example, 501(c)(4) organizations need not disclose their donors to the FEC, and they need not disclose all of their political activities to the IRS. (The Center for Responsive Politics notes that "Americans for Tax Reform, for instance, told the FEC it spent $15.8 million on independent expenditures in 2012, while it told the IRS it spent just $9.8 million.) An organization can retain its 501(c)(4) status so long as less than half (up to 49%) of its activity is political.
These "dark money" organizations have exerted dramatically increased influence in elections: "While nonprofit organizations spent just $5.2 million on federal elections in 2006, that number rocketed to more than $300 million by 2012," according to The Daily Beast. These organizations include tea party groups and others that the IRS targeted, leading to an IG report earlier this year, which led to the proposed rules.
The proposed guidance is designed to make it easier for the IRS to determine whether a social welfare organization exceeds the threshold for candidate-related political activities by better defining those activities. "These proposed rules reduce the need to conduct fact-intensive inquiries, including inquiries into whether activities or communications are neutral and unbiased." The likely net result is that some or many of these organizations will find that their activities now increase the percentage of "candidate-related political activity" in which they're involved, forcing them either to reduce their political activities or to lose their non-profit status.
The proposed guidance "defines the term 'candidate-related political activity,' and would amend current regulations by indicating that the promotion of social welfare does not include this kind of activity." In particular, the guidance defines certain communications, grants and contributions, and activities closely related to elections or to candidates as "candidate-related political activity."
Citizens for Responsibility and Ethics in Washington has a statement here and a resource page here. The Center for Responsive Politics has a statement here and a resource page, with a nice graphic, here.
Friday, November 22, 2013
The Federal Election Commission split 2-2 and thus denied a request from the Tea Party Leadership Fund for an exemption from FEC disclosure requirements of names of individual contributors who contributed more than $200 to the group. The non-action means that the Tea Party Leadership Fund will have to disclose contributors like everybody else subject to the FEC's disclosure requirement. NPR reports here.
The Tea Party argued that its donors are subject to harassment and hostility from government officials and private actors--with over 1,400 pages of evidence. Two Commissioners reportedly agreed, and two disagreed. The two competing draft FEC opinions are here. The Commission, splitting 2-2, didn't accept either. That meant that the Tea Party's request was denied.
The Court upheld disclosure requirements against a facial challenge in Buckley v. Valeo. But it also said that the disclosure requirements might be unconstitutional as against a minor party that could show a "reasonable probability" that its contributors would be subjected to threats, harassment, and reprisals if their contributions were disclosed. Buckley at 69-74 (discussing NAACP v. Alabama).
Courts and the FEC have awarded an exemption under this standard only in very narrow cases, to the Communist Party and the Socialist Workers Party, minor parties that "rarely have firm financial foundation." On the other hand, a court in 2011 denied an exemption to ProtectMarriage.com, a group that raised $30 million and supported California's Prop 8 (banning same-sex marriage in the state). (Doe v. Reed, the Court's 2010 case, involved disclosure, but by way of a state's Public Records Act, not the FEC regs.)
Thursday, November 21, 2013
Senate Majority Leader Harry Reid announced today that he's proposing changes to the Senate rules that would abolish the filibuster for most judicial and executive branch nominees. Reid's proposal would reportedly retain the filibuster for Supreme Court nominees.
Reid is reportedly prepared to go nuclear--that is, to change the rules by a simple majority vote.
Reid's proposal comes on the heels of three successful filibusters in as many weeks by Senate Republicans of President Obama's picks for the D.C. Circuit.
Tuesday, November 19, 2013
Among the materials released today as we discussed earlier, is the 87 page opinion by the Presiding Judge of the Foreign Intelligence Surveillance Court, again difficult to name or cite given that the usual caption material is redacted:
But the opinion's footnote 27 with the portions redacted - - - and not redacted - - - does deserve special notice:
"For ease of reference, the term XXXXXXXXXXXXX is used to mean XXXXXXXXXXXXXX."
The Obama administration late Monday released a trove of documents related to NSA surveillance, including key FISA court rulings and other materials going back to the Bush administration. The NYT reports here. Lawfare is covering the release and analyzing particular documents here.
The materials include documents on government e-mail and domestic phone surveillance, including the Bush administration's 2006 application for initial approval by the FISA court to collect bulk logs of domestic phone calls and a FISA court ruling approving a program to track e-mails during the Bush administration.
Monday, November 18, 2013
The National Constitution Center and the Constitutional Accountability Center will co-host a Town Hall discussion tomorrow, Tuesday, November 19, 2013, at noon Eastern at the National Constitution Center and simultaneously web-cast here.
On the 150th anniversary of the Gettysburg Address, join constitutional scholars and Yale Law professor Akhil Amar, historian and Princeton University professor Sean Wilentz and Jeffrey Rosen of the National Constitution Center for a wide-ranging conversation about the constitutional legacy of Lincoln and the address itself.
Also check out David Gans's (CAC) excellent post over at the Text & History Blog at the CAC, The Gettysburg Address at 150: How Lincoln's Immortal Words Helped Transform the Constitution.
Senate Republicans once again successfully blocked a nominee for the D.C. Circuit. Today's vote, 38 to 53, fell seven short of the 60 needed to overcome the Republican filibuster of Robert Wilkins's nomination to the court. Politico reports here.
Some Senate Democrats are making more noise about using the nuclear option, that is, getting rid of the filibuster (the cloture rule) for judicial nominees. Republicans (still) say that the court isn't busy enough to fill the three vacancies, and that they're just doing the same thing that Democrats did when they blocked President Bush's nominee to the court, Peter Keisler.
Active judges on the court are evenly divided between those appointed by Democrats and those appointed by Republicans. But five of the court's six senior judges--who still sit and decide cases--are appointed by conservatives. Indeed, 15 of the last 19 appointments to the court were by Republican presidents.
Sunday, November 17, 2013
Neil H. Buchanan (GW) argues at the Jurist.org that the President should just pay the nation's bills if Congress fails to increase the debt ceiling.
Buchanan summarizes an argument that he and Michael Dorf made over three articles last year in the Columbia Law Review--one, two, and three--that the President should do the least constitutional damage if ever faced with a trilemma involving taxing, spending, and a debt ceiling that don't add up.
Buchanan and Dorf argue that Congress would create this trilemma if it failed to increase the debt limit: Congress would have authorized a particular level of taxation; Congress would have authorized a higher level of spending; and Congress would have capped the debt limit at a level lower than authorized spending. All three are congressional acts that the President must enforce, but if the President enforces any two, he necessarily violates the third.
So: what to do?
Buchanan and Dorf argue that the constitution requires the President to take the action (1) that exercises as little legislative power as possible and (2) in a way that allows Congress to later enact legislation that can undo his actions, if it so desires.
Those two criteria mean that the President should, even must, violate the debt limit. That's because violating the debt limit (but complying with the taxing and spending measures passed by Congress) is the choice that's least legislative in nature, and the one that Congress can later undo (by enacting taxing and spending measures that add up).
Buchanan explains why this solution is novel--but also why it's right:
Bizarrely, the shared assumption among Republicans and Democrats alike has been that the president must simply default on the government's spending obligations, if he is ever faced with a trilemma. . . .
The reason that is so bizarre is that it simply presumes that duly-enacted spending laws can be ignored by the president. They cannot. We are not taking about choosing to increase or decrease future levels of spending, after all. We are, instead, contemplating having the president refuse to honor legal claims for payment from the federal government, choosing not to pay the government's legal obligations, in full, on the date that they are due.
Wednesday, November 13, 2013
In a 15 page opinion (with extensive appendices) issue late Wednesday, In re Reassignment of Cases: Ligon; Floyd et al. v. City of New York, et al., the Second Circuit clarified its removal of Judge Shira Scheindlin, which we discussed here. Calling her a "long serving and distinguished jurist of the United States District Court for the Southern District of New York," the Second Circuit panel nevertheless again concluded that "reassignment is advisable to preserve the appearance of justice."
Recall that the underlying controversy involves Judge Shira Scheindlin's orders in Floyd v. City of New York and in Ligon v. City of New York regarding the NYPD's implementation of stop and frisk as violative of equal protection.
In today's opinion, the panel
"explains the basis for our order of October 31, 2013, directing the reassignment of these cases to a randomly selected district judge and supersedes that order. To reiterate, we have made no findings that Judge Scheindlin has engaged in judicial misconduct. We conclude only that, based on her conduct at the December 21, 2007 hearing and in giving the interviews to the news media in May 2013, Judge Scheindlin’s appearance of impartiality may reasonably be questioned within the meaning of 28 U.S.C. § 455 and that “reassignment is advisable to preserve the appearance of justice.”
The explanation stresses that the opinion is based on the appearance of partiality rather than any "findings of misconduct, actual bias, or actual partiality on the part of Judge Scheindlin." Again, this appearance of partiality is twofold. First, there are the judge's statements on the record in a related case. After quoting some of the statements, the panel concluded:
We believe that a reasonable observer viewing this colloquy would conclude that the appearance of impartiality had been compromised. We do not mean to suggest that a district judge can never engage in a colloquy with a party during which the judge advises the party of its legal or procedural options. However, we think, particularly in combination with the public statements described below, that a reasonable observer could question the impartiality of the judge where the judge described a certain claim that differed from the one at issue in the case before her, urged a party to file a new lawsuit to assert the claim, suggested that such a claim could be viable and would likely entitle the plaintiffs to documents they sought, and advised the party to designate it as a related case so that the case would be assigned to her.
Second, the panel considered - - - as the "statements described below" - - - the judge's statements to the press. While the panel noted the judge "did not specifically mention the Floyd or Ligon cases in her media interviews," nevertheless, the context was critical. And while "nothing prohibits a judge from giving an interview to the media,"
judges who affiliate themselves with news stories by participating in interviews run the risk that the resulting stories may contribute to the appearance of partiality. It is perhaps illustrative of how such situations can get out of the control of the judge that, later in The New Yorker piece, the article quotes a former law clerk of Judge Scheindlin: “As one of her former law clerks put it, ‘What you have to remember about the judge is that she thinks cops lie.’”
The panel opinion does not reference the First Amendment. The panel did, however, reference the Code of Conduct for United States Judges, but only to disavow its mention in the earlier order. Here, the Second Circuit panel of judges wrote,
We now clarify that we did not intend to imply in our previous order that Judge Scheindlin engaged in misconduct cognizable either under the Code of Conduct or under the Judicial Conduct and Disability Act. . . .
But as to the removal - - - or reassignment - - - the panel again found this to be the proper remedy. Reassignment, the panel wrote, "while not an everyday occurrence, is not unusual in this Circuit." In support of this, the panel cited nine cases from 1999 - 2011. The panel also noted it occurs in other circuits. [UPDATE: For scholarship on this topic, see here].
Thus, the opinion softens some of the original language, expanding on the relatively brief previous order, but does not waver from the conclusion or remedy. If the original order was a "slap" as some people characterized it, this replacement is more of a stern lecture rendered in patronizing and disappointed tones.
Intelligence Squared will host a live, on-line debate tomorrow, Thursday, November 14, at 6:45 p.m. EST, titled Has the Second Amendment Outlived its Usefulness? The debate will feature Alan Dershowitz and Sandy Levinson (arguing yes) and David Kopel and Eugene Volokh (arguing no).
The stream will be interactive with a Twitter feed, so viewers can join the discussion. It'll also be available to watch on demand shortly after the event.
Tuesday, November 12, 2013
The Senate failed to break a Republican-led filibuster today on President Obama's nomination of Nina Pillard to the D.C. Circuit. The vote on the cloture motion was 56-41, but 60 votes are needed to close debate.
The move marks the second time in two weeks that Republicans have successfully filibustered President Obama's nominees to the D.C. Circuit. The last failed cloture vote came on October 31, on Patricia Millett's nomination.
Republicans complain that the President is trying to "stack" this court, often called the second most important court in the country. But that's not exactly right: Democratic Presidents still have a ways to make up with their nominees on the court, as we explained here. The American Constitution Society's JudicialNominations.org has more information about judicial vacancies, including the D.C. Circuit, here.
No word whether the Democrats will use the nuclear option (and eliminate the filibuster for judicial nominations), but TPM Livewire reports that Senate Grassley "dared Democrats to 'go ahead,'" warning that such a move would make it easier for future Republicans "to appoint judges like Antonin Scalia."