Friday, December 18, 2015
Judge Royce Lamberth (D.D.C.) ruled yesterday that the district court lacked jurisdiction over a Guantanamo detainee's habeas claim seeking his periodic review, as ordered by President Obama.
The ruling in Salahi v. Obama leaves Guantanamo detainees without a way to enforce the Periodic Review Board process set by executive order by President Obama.
Recall that President created an interagency process in 2011 to periodically review whether continued detention of certain Guantanamo detainees was "necessary to protect against significant threat to the security of the United States." Under EO 13567, every detainee was to get a full hearing every three years from a PRB, plus interim review under certain circumstances.
Salahi has been detained at Guantanamo since 2002, without charges, and has yet to have a PRB hearing (or even have one scheduled). He filed a habeas claim in the D.C. District seeking, among other things, a scheduled PRB hearing.
The court rejected his claim. The court said that "probabilistic" claims--that is, claims that only might lead to release--don't fall within habeas, and that in any event the EO didn't create any substantive rights that a Guantanamo detainee might actually enforce in court.
The upshot is that while the President may order periodic review, that doesn't mean that detainees can actually get it.
Wednesday, December 16, 2015
The full Second Circuit last week denied en banc review of its June ruling in Turkmen v. Ashcroft. That ruling allowed a civil rights case against former AG Ashcroft and former FBI Director Mueller, among others, by alien detainees held at the Metropolitan Detention Center in New York to go forward. (The June ruling was not a ruling on the merits, however.) The full Second Circuit denied review by a 6-6 vote. (H/t: Joe Dicola.)
The June ruling and the full court's denial of review are victories for the plaintiffs and, more generally, for access to justice. They deal a major blow to the government in defending detainee-abuse suits that arise in domestic, non-military detention facilities. But while the rulings are significant (to say the least), they may be short-lived. That's because the government is sure to appeal to the Supreme Court, and because the Court will almost surely take it.
Wednesday, November 18, 2015
The Seventh Circuit ruled today that students who authorized the corporations who run the SAT and ACT standardized tests to provide their personal information to educational organizations lacked standing to challenge the corporations' sale of that information. The ruling means that the putative class action against the SAT and ACT is dismissed.
Along the way, the court also ruled that the Iqbal/Twombly heightened pleading standard ("plausibility") applies to facial challenges to standing under Rule 12(b)(6). This may raise the bar for plaintiffs in pleading and arguing standing. This portion of the ruling aligns with the approach in several other circuits; but it's in tension with the Ninth Circuit, which says that "Twombly and Iqbal are ill-suited to application in the constitutional standing context."
The case arose when ACT, Inc., and The College Board (which administers the SAT) sold personal information of students who signed up to take the tests. The students agreed that the corporations could share their personal information with educational groups (schools, scholarship funds, and the like), but they didn't know that the corporations were going to sell their personal information. (The price was small--$.33 per student per educational group--but would add up quickly for the defendants.) The plaintiffs argued that they were harmed by the sale because (1) they should have received some of the proceeds, (2) the sale diminished the value of their personal information, and (3) they paid a fee to take the ACT or SAT, which presumably would have been lower if they had not consented to the sale.
The Seventh Circuit flatly rejected these claims. The court ruled that under the Iqbal/Twombly standard, the plaintiffs' allegations didn't plausibly suggest that they'd been harmed. The court said that just because the defendants benefited doesn't mean that the plaintiffs were harmed for standing purposes: "Plaintiffs have claimed injury based solely on a gain to Defendants and without alleging a loss to themselves." (Although the court applied the Iqbal/Twombly standard, it looks like the plaintiffs would have failed even without it.)
The court rejected the plaintiffs' claim that their complaint gave rise to a reasonable inference that if they knew of the sale they would have conditioned their permission on receipt of a portion of the proceeds. The court said that the plaintiffs didn't provide factual support for the inference, so it didn't even need to get to whether the claim gives rise to a plausible claim of subject matter jurisdiction under Iqbal and Twombly.
In other words, it's not clear that the heightened Iqbal/Twombly standard mattered to the outcome at all. Still, the case says that the standard now applies to standing in the Seventh Circuit.
Monday, November 9, 2015
A sharply divided panel of the Fifth Circuit ruled today that states had a substantial likelihood of success on the merits in their case against the President's deferred action program for parents of Americans and lawful permanent residents, or DAPA. The ruling affirms a nationwide injunction issued by the lower court and means that the government is barred from enforcing DAPA across the country--unless and until the government files for and wins a stay and appeals.
The ruling is a win for plaintiff-states that don't like DAPA and a loss, though perhaps not unexpected (at the conservative Fifth Circuit), for the government.
The dispute between the majority and the dissent on the merits comes down to whether DAPA is really an exercise of discretionary non-enforcement (majority says no; dissent says yes) and whether DAPA violates federal law (majority says yes; dissent says no). The majority and dissent also dispute the states' ability to bring the suit in the first place, or their standing.
This ruling is surely not the last say on the question; this case is undoubtedly going to the Supreme Court.
The court issued four key holdings. First, the court said that the states had standing, and that the case is justiciable. Next, the court said that DAPA likely violated notice-and-comment rules of the APA. Third, the court said that DAPA likely violated federal law (the Immigration and Naturalization Act) and therefore violated substantive APA requirements. Finally, the court said that the district court was within its discretion to issue a nationwide injunction.
The court did not address the plaintiffs' Take Care Clause challenge.
As to standing, the court said as an initial matter that the states were due "special solicitude" for standing under Massachusetts v. EPA. The court went on to say that the states had standing because DAPA would require them to issue drivers licenses to DAPA beneficiaries, because DAPA would "impos[e] substantial pressure on them to change their laws" for drivers licenses, and because the states "now rely on the federal government to protect their interests" in immigration matters.
On the procedural APA claim, the court ruled that the states "established a substantial likelihood that DAPA would not genuinely leave the agency and its employees free to exercise discretion," despite conflicting evidence on the point, apparently ignored by the lower court. The court also ruled that DAPA is a substantive rule (and not procedural), because "receipt of DAPA benefits implies a 'stamp of approval' from the government and 'encodes a substantive value judgment,' such that the program cannot be considered procedural." As a result, according to the court, DAPA was subject to APA notice-and-comment rulemaking, and, because the government didn't use notice and comment, the states had a substantial likelihood of success on their procedural APA claim.
On the substantive APA claim, the court said that DAPA is "manifestly contrary to the [Immigration and Naturalization Act]," in particular, the INA's "specific and intricate provisions" that "directly addressed the precise question at issue." The court rejected the government's claim that DAPA is consistent with historical practice.
Importantly, the court did not "address whether single, ad hoc grants of deferred action made on a genuinely case-by-case basis are consistent with the INA . . . ." It only concluded "that the INA does not grant the Secretary discretion to grant deferred action and lawful presence on a class-wide basis to 4.3 million otherwise removable aliens."
Finally, the court said that the district court could issue a nationwide injunction, because, in short, immigration is a nationwide issue that calls for uniform regulation.
Judge King wrote a lengthy and sharp dissent, challenging the majority at each turn.
Monday, November 2, 2015
The Supreme Court heard oral arguments today in Spokeo v. Robins, the case testing whether Congress can confer standing on a plaintiff by statute, even when the plaintiff lacks a sufficient and independent harm for Article III standing purposes.
The case is important for what it will say about access to the courts, and, in particular, class actions. The justices at oral arguments seemed sharply divided along conventional ideological lines, with progressives favoring access and conservatives, including Justice Kennedy, going the other way. If so, the case will take its place among the line of cases coming out of the Roberts Court that limit access to the judiciary and favor (corporate and government) defendants.
(Check out the outstanding Vanderbilt roundtable on the case, with six different takes, available here.)
The case arose when Spokeo, the owner of a web-site that provides searchable reports containing personal information about individuals, reported false information about Thomas Robins. For example, Spokeo reported that Robins had a graduate degree (he doesn't), that he was employed in a professional or technical field, with "very strong" "economic health" and wealth in the "Top 10% (he's unemployed), and that he's in his 50s, married, with children (he's not in his 50s, not married, and no children).
Robins filed suit, claiming that Spokeo's representations violated the federal Fair Credit Reporting Act. He sought damages under the Act for a willful violation. Robins claimed that Spokeo's false report made it harder for him to find a job.
Justices Kagan and Scalia marked out the competing positions early in Spokeo's argument, and at times bypassed Spokeo's attorney (Andrew Pincus) entirely and simply argued with each other. At one point, Justice Scalia even intervened to answer a question for Pincus, and then told Pincus that it was the right answer. In short, Justice Kagan argued that Congress identified a concrete harm in the Act and provided a remedy for it; Justice Scalia argued that any harm was merely "procedural," because any harm was only Spokeo's violation of the Act's procedures (with no additional concrete harm). Here's a little of the exchange:
Justice Kagan: But did that procedural requirement--this is--this is exactly what Lujan says, "It's a procedural requirement the disregard of which could impair a concrete interest of the plaintiff."
And we distinguished that from procedural requirements in vacuo.
. . .
Justice Scalia: Excuse me. That--that would lead to the conclusion that anybody can sue . . . not just somebody who--whose information was wrong.
Pincus seemed to make an important concession in response to a question by Justice Kennedy, whether "Congress could have drafted a statute that would allow [Robins] to bring suit?" Pincus said yes, and proceeded to describe it--basically a statute that required a plaintiff to show a concrete harm that would be sufficient for Article III. If Justice Kennedy is in play, Pincus's softer position may assuage any concerns over an extreme position that Congress can never confer standing. The softer position also saves other statutes that have similar Congress-confered-standing provisions. (Justice Kennedy picked up this theme with Robins's attorney (William Consovoy) and noted that Consovoy's position of a Congress-created-harm (alone) seemed circular--but Consovoy didn't seem to give a satisfying answer.) At one point Pincus made another important concession: some plaintiffs might have standing under the FCRA, so long as they show an independent and sufficient harm.
On the other side, Chief Justice Roberts pressed Consovoy early on the limits of his argument--a point we're likely to see in the opinion:
Chief Justice Roberts: What about a law that says you get a--a--$10,000 statutory damages if a company publishes inaccurate information about you? . . . The company publishes your phone number, but it's wrong. That is inaccurate information about you, but you have no injury whatever. Can that person bring an action for that statutory damage?
Consovoy didn't have a response, or, rather, his response only opened new cans of worms. (Justice Breyer intervened and offered an interpretation of the statutory language that gives a cause of action to "any consumer who has obtained--who suffers from false information.") Chief Justice Roberts and Consovoy had a similar exchange later in the argument, too. Consovoy maintained that the FCRA was different than the Chief's hypotheticals, because the FCRA authorizes damages only for someone who was injured. He didn't seem to persuade the Chief on this point, though, despite Justice Breyer's help.
Justice Alito pointed to the record and argued that it didn't support a concrete harm. Indeed, he pointed out that nobody in the record (other than Robins himself) searched for him on Spokeo--a "quintessential speculative harm"--probably another point we'll see in the final opinion.
Chief Justice Roberts asked a different question--and a far more loaded one (politically, and constitutionally)--to the government, amicus for Robins:
Chief Justice Roberts: [L]et's kind of say your--your--Congress thinks that the president is not doing enough to stop illegal immigration, so it passes a law that says, anyone in a border State--so it's particularized--who is unemployed may bring an action against an illegal immigrant who has a job. And they get damages, maybe they get an injunction.
. . .
And I would have thought that the--the president would be concerned about Congress being able to create its own enforcement mechanism. I thought that you would be concerned that that would interfere with the executive prerogative.
The government tried to distinguish the hypo, but, again, counsel probably didn't persuade the conservatives.
November 2, 2015 in Cases and Case Materials, Congressional Authority, Courts and Judging, Executive Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, Standing | Permalink | Comments (0)
Monday, October 26, 2015
The D.C. Circuit on Friday ruled in a fractured opinion that a U.S. citizen secretly detained, transferred involuntarily between countries, and threatened with torture by FBI agents did not have a claim for violation of the Fourth Amendment in federal courts. That's because "special factors" counseled against such a remedy under Bivens v. Six Unknown Agents.
The ruling means that Plaintiff Meshal's case is dismissed, and leaves him without a remedy. It also makes it yet even more difficult for plaintiffs like Meshal to get their cases heard in federal court.
The FBI originally detained and held Meshal because of his alleged connections to al Qaeda; it later released him without charges.
The court wrote that Meshal's claim involved a "new context" for Bivens--a strike against him right out of the gate:
Not only does Meshal's claim involve new circumstances--a criminal terrorism investigation conducted abroad--it also involves different legal components--the extraterritorial application of constitutional protections. Such a different context requires us to think anew. To our knowledge, no court has previously extended Bivens to cases involving either the extraterritorial application of constitutional protections or in the national security domain, let alone a case implicating both--another signal that this context is a novel one.
Because the case arose in a "new context," the court looked to special factors counseling against a Bivens remedy. And it found two, which, taken together, left Meshal without a Bivens cause of action: (1) the case involves "the military, national security, or intelligence," and (2) the conduct occurred outside the borders of the United States. The court also said that a host of "practical factors" counseled against a Bivens remedy, including requiring the court to second guest executive officials operating in foreign justice systems, unknown diplomatic consequences of the suit, and forcing the courts to answer hard questions about the extraterritorial application of the Constitution outside of peacetime.
Judge Kavanaugh wrote separately to especially emphasize the military, counter-terrorism, and foreign context of the suit--the "new context" that triggered the special factors analysis and weighted so heavily against a Bivens claim.
Judge Pillard wrote a lengthy and scathing dissent, dissecting the court's analysis point-by-point. Judge Pillard was particularly concerned about the blind judicial deference to the government's mere invocation, without reasonable explanation, of foreign policy and national security as special factors counseling against a Bivens remedy. She summed up the strange and deeply disturbing result:
Had Meshal suffered these injuries in the United States, there is no dispute that he could have sought redress under Bivens. If Meshal's tormentors had been foreign officials, he could have sought a remedy under the Torture Victim Protection Act. Yet the majority holds that because of unspecified national security and foreign policy concerns, a United States citizen who was arbitrarily detained, tortured, and threatened with disappearance by United States law enforcement agents in Africa must be denied any remedy whatsoever.
Friday, October 23, 2015
President Obama this week vetoed H.R. 1735, the National Defense Authorization Act for Fiscal Year 2016, citing a variety of objections, including the NDAA's restriction on the use of funds to close Guantanamo Bay, to transfer detainees out of Guantanamo Bay, and to house them here in the United States.
In prior years, President Obama signed the NDAA, but issued a signing statement saying that the Guantanamo-closure provisions were unconstitutional.
But this year, he used those provisions--Sections 1031 through 1041 in the bill--along with other objectionable features of the bill, as a reason to veto. Here's what he said about restrictions on closing Guantanamo:
I have repeatedly called upon the Congress to work with my Administration to close the detention facility at Guantanamo Bay, Cuba, and explained why it is imperative that we do so. As I have noted, the continued operation of this facility weakens our national security by draining resources, damaging our relations with key allies and partners, and emboldening violent extremists. Yet in addition to failing to remove unwarranted restrictions on the transfer of detainees, this bill seeks to impose more onerous ones. The executive branch must have the flexibility, with regard to those detainees who remain at Guantanamo, to determine when and where to prosecute them, based on the facts and circumstances of each case and our national security interests, and when and where to transfer them consistent with our national security and our humane treatment policy. Rather than taking steps to bring this chapter of our history to a close, as I have repeatedly called upon the Congress to do, this bill aims to extend it.
At the same time, he said that he supported a provision imposing statutory restrictions on interrogation techniques and limiting techniques to those in the Army Field Manual.
Monday, September 28, 2015
The D.C. Circuit announced that it would rehear en banc a panel's earlier judgment vacating the military commission conviction of Ali Hamza Ahmad Suliman al Bahlul, an alien enemy combatant who one time bragged about his role in the 9/11 attacked.
A panel this past June vacated al Bahlul's conviction for inchoate conspiracy. The panel said that the conviction violated Article III because it was based on "the purely domestic crime" of inchoate conspiracy, which is not an offense under the international law of war.
The panel's summer ruling was a victory for al Bahlul and a blow to the government in conducting military commission trials. But the court's latest ruling gives it a second bite at this apple. The ruling vacates the panel's summer judgment and sets oral argument before the entire court for December 1, 2015.
Friday, September 11, 2015
The Connecticut Supreme Court ruled that state regulation of attorneys who offer certain debt-relief services to clients violates state constitutional separation of powers principles. The ruling is quite limited, however, and does not extend to attorneys who set up a sham shop as a cover for a distinct debt-relief operation. (The ruling keeps the regulatory scheme on the books; it simply says that it can't apply to certain actual attorneys doing actual legal work.)
The ruling means that Connecticut attorneys who are really practicing law (but also providing debt-relief services) cannot be regulated outside the judiciary, but attorneys who are simply providing cover for debt-relief operations (without really practicing law) can be.
The case tested a Connecticut law that authorizes the state Banking Commissioner to license and regulate persons engaged in the debt negotiation business. Attorneys in this line of work are not exempt, except those who are "admitted to the practice of law in [Connecticut] who [engage] or [offer] to engage in debt negotiation as an ancillary matter to such [attorneys'] representation of a client . . . ."
A Connecticut law firm that enters into retainer agreements for legal services and an attorney-client relationship with clients, but also provides debt-relief counseling, challenged the licensing and regulation scheme on the ground that it's the courts, not the legislature, that regulate an attorney's law practice in Connecticut. The firm claimed that the Commissioner's attempts to regulate it intruded into the role of the judiciary and thus violated state constitutional separation of powers.
The court agreed. (Like many states, Connecticut has an explicit clause on separation of powers. Connecticut's says, "The powers of government shall be divided into three distinct departments, and each of them confided to a separate magistracy, to wit, those which are legislative, to one; those which are executive, to another; and those which are judicial, to another. . . .")
The court also emphasized, however, that a presumption that an attorney is practicing law (and not subject to Commissioner regulation) can be overcome where "the Connecticut attorney has failed to (1) exercise meaningful oversight over debt negotiation staff, (2) provide any genuine legal advice or other legal services, and/or (3) maintain a bona fide attorney-client relationship with the client." The court also reminded the Office of Chief Disciplinary Counsel of its "duty to regulate lawyers when they are acting as debt negotiators," and urged it "to monitor vigilantly their activities and fees in this area of practice."
Wednesday, September 9, 2015
Judge Rosemary Collyer (D.D.C.) ruled today that the U.S. House of Representatives has standing to pursue its claim that the administration spent money on a portion of the Affordable Care Act without a valid congressional appropriation. But at the same time, Judge Collyer ruled that the House lacked standing to sue for an administration decision to delay the time when employers have to provide minimum health insurance to their employees.
The split ruling means that the House's case against the administration for spending unappropriated funds can go forward, while the case for extending the time for the employer mandate cannot.
But Judge Collyer's ruling is certainly not the last word on this case. The government will undoubtedly appeal.
And just to be clear: this is not a ruling on the merits. It only says that a part of the case can go forward.
The case arose when the House authorized the Speaker to file suit in federal court against HHS Secretary Burwell and Treasury Secretary Lew for spending money on an ACA program without an appropriation and for unilaterally extending the statutory time for employers to comply with the employer mandate.
As to the spending claim, the House said that a provision of the ACA, Section 1402, which authorizes federal reimbursements to insurance companies for reducing the cost of insurance to certain eligible beneficiaries (as required by the ACA), never received a valid appropriation. That is, Congress never funded the provision. That's a problem, the House said, because Article I, Section 9, Clause 7 of the Constitution says that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law . . . ." In short, the administration's funding of Section 1402 violated the Constitution.
As to the employer mandate claim, the House said that the administration pushed back the employer mandate beyond December 31, 2013, the date set in the ACA, without congressional authorization. (The House couched this in constitutional terms, but, as Judge Collyer wrote, it's really essentially a statutory claim.)
The Secretaries filed a motion to dismiss for lack of standing.
Judge Collyer denied the motion as to the appropriations theory, but granted it as to the employer mandate claim. According to Judge Collyer, the House could show an institutional harm from the administration's use of non-appropriated funds (because the Constitution itself specifies a role in appropriations for the Congress, which the House said that the administration ignored here, and because the claim isn't about the administration's execution of law). But at the same time she wrote that the House couldn't show a particular institutional harm for the administration's push-back for the employer mandate (because this claim was all about the administration's execution of the law--a role reserved under the Constitution to the executive). She explained:
Distilled to their essences, the Non-Appropriation Theory alleges that the Executive was unfaithful to the Constitution, while the Employer-Mandate Theory alleges that the Executive was unfaithful to a statute, the ACA. That is a critical distinction, inasmuch as the Court finds that the House has standing to assert the first but not the second.
As to the employer mandate claim, she said,
The [House's] argument proves too much. If it were accepted, every instance of an extra-statutory action by an Executive officer might constitute a cognizable constitutional violation, redressable by Congress through a lawsuit. Such a conclusion would contradict decades of administrative law and precedent, in which courts have guarded against "the specter of 'general legislative standing' based upon claims that the Executive Branch is misinterpreting a statute or the Constitution."
We'll watch this case on appeal.
September 9, 2015 in Cases and Case Materials, Congressional Authority, Courts and Judging, Executive Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, Standing | Permalink | Comments (0)
Tuesday, August 11, 2015
The D.C. Circuit ruled that the new Copyright Royalty Board, reconstituted after the court previously held that the old Board violated the Appointments Clause, did not itself violate the Appointments Clause after it came to the same decision as the old Board using the same record. The ruling upholds the new Board's decision to impose a $500 per station or per channel annual minimum fee for collegiate Internet radio stations.
The Copyright Royalty Board was originally composed of three Copyright Royalty Judges who were appointed by the Librarian of Congress and could only be removed for cause. The Board imposed the $500 fee on webcasters in 2011. Intercollegiate Broadcasting System, a nonprofit that represents college and high school radio stations, challenged the fee, arguing that the Board violated the Appointments Clause. The D.C. Circuit agreed, ruling that the judges had sufficient authority and independence to qualify as principal officers, thus requiring Presidential appointment and Senate confirmation. The court cured the defect by severing the statutory provision that barred the Librarian of Congress from removing the judges without cause.
The Librarian then replaced the Board with new members. The new Board decided to re-determine the copyright terms based on the existing record (the one that the parties established with the original Board) and to review the record de novo. The new Board issued the same $500 fee, and Intercollegiate again appealed.
This time Intercollegiate argued that the new Board was tainted by the old Board's decision, and thus the new Board also violated the Appointments Clause. The court flatly rejected this argument. Among other things, the court noted that the parties themselves set the record with the old Board, and the new Board re-decided the case on its own terms, without taint from the original Board.
The ruling is consistent with circuit law that a body reconstituted to comply with the Appointments Clause does violate the Appointments Clause simply because the original body did.
Wednesday, August 5, 2015
The D.C. Circuit ruled in Dodge of Naperville v. NLRB that the NLRB's finding of an unfair labor practice against the petitioner was valid, and that the Board didn't lack quorum to act in the waning days of Member Craig Becker's recess appointment.
The ruling means that the NLRB's finding stands.
The petitioners challenged the NLRB finding on the merits and based on the NLRB's lack of quorum at the time it issued its finding. As to the latter, the petitioners argued that the NLRB had only two members (one shy of quorum) when it issued its opinion on January 3, 2012, because the appointment of Member Becker (who was recess appointed in the second session of the 111th Congress) expired on December 17, 2011. That's the date when the Senate agree to adjourn and convene for pro forma sessions only every Tuesday and Friday until January 23, 2012.
But the court flatly rejected this argument. The court said that Member Becker's appoint was valid until "the end of their next session"--that is, until noon on January 2, 2012. The court, citing Noel Canning, said that "the end of an annual session is triggered by a recess only if the Senate adjourns sine die--that is, without specifying a date to return." But under the Senate's adjournment plan, the body convened every few days after December 17, making the short breaks between meetings intra-session recesses--and not end-points for the prior session.
The court rejected the petitioners' argument that maybe the Board's opinion issued after noon on January 3, because the petitioner only raised this point for the first time on reply.
Friday, July 24, 2015
The D.C. Circuit on Friday ruled that a case challenging the constitutionality of the Consumer Financial Protection Bureau can move forward. At the same time, the court dismissed claims against Dodd-Frank's Financial Stability Oversight Council and the government's orderly liquidation authority.
The mixed ruling sends the plaintiffs' case against the CFPB and the recess appointment of Director Richard Cordray back to the district court for a ruling on the merits. We'll undoubtedly see this case back at the D.C. Circuit.
We last posted on a challenge to the CFPB here. (The D.C. Circuit dismissed that case for lack of standing.)
The State National Bank of Big Spring and a number of states brought the case, arguing four points. First, the Bank argued that the CFPB is unconstitutional, because, as an independent agency, it has to be headed by multiple members, not a single director (as it is). Moreover, the bank says that Congress's delegation to the CFPB violates the non-delegation doctrine.
Second, the Bank argues that President Obama appointed Director Cordray as a recess appointment during a three-day intra-session Senate recess, in violation of Noel Canning. (Cordray was subsequently confirmed by the Senate, but the Bank says his actions in the meantime are invalid.)
Third, the Bank claims that the Financial Stability Oversight Council, which monitors the stability of the U.S. financial system and responds to emerging threats and has statutory authority to designate certain "too big to fail" financial companies for additional regulation, violates the non-delegation doctrine and related separation-of-powers principles.
Finally, the states claim that Dodd-Frank's liquidation authority, which permits the government to liquidate failing financial companies that pose a risk to financial stability, violates the non-delegation doctrine and the Bankruptcy Clause's guarantee of uniform bankruptcy laws.
The court held that the bank, as an entity actually regulated by the CFPB, had standing. The court also said that the bank's claims were ripe, under Abbott Labs and Free Enterprise Fund (the PCAOB case).
But the court ruled that the Bank lacked standing to challenge the Council. In particular, it rejected the Bank's novel claim that the Bank was harmed because the Council designated one of the Bank's competitors as "too big to fail," thus giving the competitor a "reputational subsidy."
The court also held that the states lacked standing to challenge the government's liquidation authority. The states said that they invested pension funds in financial companies, that states are therefore creditors in possible future liquidations, that such liquidations could deprive the states of uniform treatment, and that as a result the states' current investments are worth less. The court said this was too speculative.
July 24, 2015 in Cases and Case Materials, Congressional Authority, Courts and Judging, Jurisdiction of Federal Courts, News, Nondelegation Doctrine, Ripeness, Separation of Powers, Standing | Permalink | Comments (0)
Thursday, June 25, 2015
The Supreme Court ruled today that the Affordable Care Act means exactly what Congress thought it meant in the first place: everybody should get--and be able to get--health insurance.
The Court ruled in King v. Burwell that the ACA authorizes federal tax subsidies for qualified purchasers of health insurance on federally-subsidized exchanges. The ruling means that qualified purchasers will continue to receive federal tax subsidies for their health insurance, that they won't go without insurance (at least not for a lack of subsidies), and that Obamacare remains intact.
Opponents attacked the subsidies, arguing that the ACA authorized subsidies only for purchasers on state exchanges, not federally-facilitated exchanges, and that the IRS had to stop extending subsidies to purchasers on federally-facilitated exchanges. Their argument turned on a single phrase in the Act, that subsidies extend to "an Exchange established by the State," despite the overwhelming evidence that the Act, as a whole, was designed to provide universal coverage. Our oral argument preview is here.
The Court today rejected the opponents' arguments. Chief Justice Roberts wrote the majority opinion, joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan. He wrote that the phrase "an Exchange established by the State" was ambiguous, given the way the rest of the Act hung together, and that the Court therefore should give the phrase a reading that harmonizes with the rest of the Act, including the Act's clear purpose to provide universal coverage. That reading, he wrote, meant that tax subsidies extend to purchasers on both state-created and federally-facilitated exchanges.
Chief Justice Roberts's opinion is notable for its recognition of the several key components of Obamacare (guaranteed issue, community rating, individual mandate, and tax subsidies) and how they are designed to operate together to ensure universal (or close to universal) coverage. The majority opinion also discussed in some detail how these components evolved and ended up in the ACA and the health-care and health-insurance problems they were designed to solve (including the death spiral).
But Chief Justice Roberts also took the opportunity make a dig on process--how the legislative road to the ACA was hurried and lacked transparency.
Justice Scalia wrote the dissent, joined by Justices Thomas and Alito. The dissent was predictably colorful, but comes down to this:
The Court holds that when the Patient Protection and Affordable Care Act says "Exchange established by the State" it means "Exchange established by the State or the Federal Government." This is of course quite absurd, and the Court's 21 pages of explanation make it no less so.
Friday, June 12, 2015
The D.C. Circuit today vacated the conspiracy conviction by military commission of Ali Hamza Ahmad Suliman al Bahlul, an alien enemy combatant who one time bragged about his role in the 9/11 attacks. The court said that the conviction for inchoate conspiracy--a charge that's not an offense under the international law of war--violated the Article III power of the judiciary "by authorizing Executive Branch tribunals to try the purely domestic crime . . . ."
The ruling is a victory of Bahlul and a blow to the government in conducting military commissions. In short, the case says that the government's charge in a military commission must be recognized as violation of the international law of war, and that Congress lacks authority to define an otherwise domestic crime as an international law of war in order to vest a military commission with authority to convict for its violation.
But while the ruling is significant, it's almost certainly not the last word on this case that's already gone up and down the judicial hierarchy. In particular: It's gone en banc at the D.C. Circuit before, and seems likely to go en banc again, if not farther, to the Supreme Court.
The court ruled first that Bahlul's structural challenge (that his conviction violated Article III) was not waivable, and that the court could therefore hear it--and to hear it de novo--even though he didn't raise it below.
The court went on to say that while the government could conduct law-of-war military commissions under Ex Parte Quirin, Quirin and its progeny limit the charges to "offenses against the law of war." But the court held that inchoate conspiracy isn't one of those offenses, that even the government agreed that it isn't, and that Congress didn't have power to define it as such: "Congress cannot, pursuant to the Define and Punish Clause, declare an offense to be an international war crime when the international law of war concededly does not." The court held that because conspiracy is only a domestic offense, and not an international law offense, the Bahlul's conviction by military commission (an Article I tribunal, not an Article III court) impermissibly intruded into the Article III role of the courts.
The court rejected the government's arguments that historical practice and the Necessary and Proper Clause (augmenting the Define and Punish Clause) did the trick.
Judge Tatel, concurring, explained why he joined the en banc court when it previously said that the Ex Post Facto Clause did not prevent Congress from granting military commissions jurisdiction over conspiracy, but now joined Judge Rogers in saying that separation-of-powers did:
The answer is the standard of review. The en banc Court came down the way it did, and I voted the way I did, because al Bahlul had forfeited his [previous] ex post facto challenge by failing to raise it before the Commission, so our review was for plain error. Applying that highly deferential standard, the Court concluded that it was "not 'obvious that conspiracy was "not . . . triable by law-of-war commissions" at the time al Bahlul committed his crimes.
But the court reviewed Bahlul's structural challenge de novo. And "[i]n my view, whether Article III prohibits military commissions from trying conspiracy turns on what Ex Parte Quirin says and what Hamdan does not"--that "the law-of-war exception is exclusively international," and does not include domestic crimes.
Judge Henderson wrote a lengthy dissent, arguing that the majority's approach to Congress's power to define the international law of war would restrict Congress to only what the international community has said, and, worse, by the judiciary's reckoning:
My colleagues contend--as a matter of constitutional law, not simply comity--that the Congress cannot authorize military-commission trials unless the international community agrees, jot and tittle, that the offense in question violates the law of war. And the contend of international law is to be determine by--who else?--the Judiciary, with little or no deference to the political branches.
June 12, 2015 in Cases and Case Materials, Congressional Authority, Courts and Judging, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, War Powers | Permalink | Comments (0)
Monday, June 8, 2015
The Supreme Court ruled today in Zivotofsky v. Kerry that the President has exclusive power of recognition of foreign sovereigns, and that a congressional attempt to force the President to recognize sovereignty over Jerusalem (by Israel) impermissibly intrudes on the President's power.
The ruling is a decisive win for the presidency over Congress in the area of recognition of foreign sovereignty. It also puts an end to this highly politicized case involving U.S. recognition of sovereignty over Jerusalem.
Recall that Congress enacted legislation requiring the State Department to put "Israel" as the country-of-birth on a passport of any U.S. citizen born in Jerusalem, upon the request of the passport applicant. President George W. Bush signed the legislation, but with a signing statement saying that this was unconstitutional. The State Department has long had regs that say that only "Jerusalem" (and not "Israel") go on the passport of a U.S. citizen born in Jerusalem, so as not to tilt the balance toward one side on the sensitive question of who has sovereignty over Jerusalem.
Justice Kennedy wrote the Court's opinion, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. Justice Kennedy said that the text and history of the Reception Clause (giving the President power to "receive Ambassadors and other public Ministers") gives the President alone authority to recognize foreign sovereigns. He wrote that the text and purpose of Section 214(d) of the Foreign Relations Authorization Act--which required the State Department to list "Israel" as the country-of-birth for a U.S. citizen born in Jerusalem, upon the passport applicant's request--intruded on that authority.
Justice Breyer filed a concurring opinion; Justice filed an opinion concurring in part and dissenting in part; Chief Justice Roberts filed a dissent (joined by Justice Alito); and Justice Scalia wrote a dissent (joined by Chief Justice Roberts and Justice Alito).
We'll have more analysis and review later.
Friday, May 29, 2015
The Fifth Circuit this week denied the government's motion for a stay of Judge Hanen's nationwide injunction against the government's deferred action program for parents of Americans and lawful permanent residents, or DAPA. The denial is not a final ruling on the merits (the court wrote that "we do not decide whether the Secretary has the authority to implement DAPA" at this "early stage of the case"); it says only that Texas's challenge to the program is sufficiently likely to succeed to withstand the government's motion for a stay. Still, the ruling presages the likely result on the merits and makes the case look even more likely to end up at the Supreme Court.
The court addressed two issues: Texas's standing to challenge DAPA, and the state's claim that DHS violated the Administrative Procedures Act in failing to use notice-and-comment rulemaking before implementing DAPA.
The court held that Texas had standing, because it'll cost the state some $130 under state law to subsidize each driver license for each DAPA beneficiary. The government argued that Texas could avoid the economic injury by changing its license-fee structure, and that in any event the many economic benefits of the DAPA program would offset the costs for the state.
The court rejected the former argument, saying that the "forced choice" itself is an injury:
The flaw in the government's reasoning is that Texas's forced choice between incurring costs and changing its fee structure is itself an injury: A plaintiff suffers an injury even if it can avoid that injury by incurring other costs. And being pressured to change state law constitutes an injury.
The court rejected the latter argument, saying that the economic offsets are of a different type--and that the injury therefore still stands, notwithstanding any economic benefits that the program may bring to the state.
Because the court said that Texas had standing based on its economic harm, it did not rule on Texas's claim that it had standing based on the district court's "abdication theory" (that Texas had standing because the federal government "abdicated" its "responsibility" to enforce the law in an area where it has exclusive authority).
The court said that Texas easily falls within the zone of interests of the INA, because "Congress permits states to deny many benefits to illegal aliens," and "the states seek only to be heard in the formulation of immigration policy before [the government] imposes substantial costs on them." The court also said that the INA doesn't bar judicial review.
The court held that DAPA amounts to "nonenforcement" of the INA, because it is the "affirmative act of conferring 'lawful presence' [quoting Johnson's memo] on a class of unlawfully present aliens." "[T]hat new designation triggers eligibility for federal and state benefits that would not otherwise be available."
On the merits, the court held that DAPA is not a mere policy statement (as the government argued), but rather is a "substantive" rule that requires notice and comment under the APA. According to the court, that's because DAPA doesn't really offer enforcement discretion, and it's more than internal procedural guidance (it's substantive, according to the court).
As to the nationwide injunction, the court only said that anything short of a nationwide ban would result in a "patchwork system" that would detract from the uniformity that Congress sought in the INA.
Judge Higginson dissented. He argued that "Supreme Court and Fifth Circuit caselaw forecloses plaintiffs' arguments challenging in court this internal executive enforcement guideline," and that "DHS is adhering to the law, not derogating from it." He argued that DAPA amounts to discretionary enforcement guidelines that aren't subject to notice-and-comment rulemaking under the APA.
Sunday, May 17, 2015
Judge Reggie B. Walton (D.D.C.) ruled in American Freedom Law Center v. Obama that the plaintiffs lacked standing to challenge the federal government's "transitional policy" and "hardship exemption," which permit individuals temporarily to maintain health insurance coverage through plans that are not compliant with the general requirements of the Affordable Care Act.
The ruling deals a blow to opponents of the government's exemption--but a fully predictable one.
The plaintiffs' theory of standing turned on market forces driving up an AFLC staff member's premiums. It goes like this: When the federal government temporarily exempted certain individuals from enrolling in non-compliant plans (in reaction to the political blow-back after many folks received notices that their insurance would be cancelled and changed to comply with the ACA), this depleted the pool of individuals enrolling in ACA-compliant plans; and that drove up the costs of those plans. Plaintiff Muise was enrolled in such a plan, and, indeed, saw his premiums rise.
In short, Muise argued that his premiums rose in his compliant plan because the government's exemption meant that fewer people enrolled in compliant plans.
Judge Walton disagreed. He noted that insurance premiums can fluctuate for any number of reasons, not just the government's exemption, and that the plaintiff's theory suffered from other defects in the causal chain. Quoting from the government's motion to dismiss:
[the] [p]laintiffs have not established any of the links in the causal chain . . . that would be necessary to their apparent theory of standing to challenge this particular exemption. [The] [p]laintiffs have not alleged, for example, that there are individuals in Michigan with cancelled policies; that any such individuals consider the other policies available to them to be unaffordable; that any such individuals have availed themselves of [the defendants'] "hardship" exemption for consumers with cancelled policies; that, but for this exemption, any such individual would have purchased "minimum essential coverage" . . .; that in purchasing such coverage, that individual would have entered the same risk pool as these [p]laintiffs; and that such individual's addition to the risk pool would have lowered [the] [p]laintiffs' premiums.
The ruling is consistent with similar rulings in other district courts.
May 17, 2015 in Cases and Case Materials, Courts and Judging, Executive Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, Standing | Permalink | Comments (0) | TrackBack (0)
Wednesday, May 6, 2015
The D.C. Circuit last week dismissed a case challenging the Consumer Financial Protection Bureau under separation of powers. The ruling in Morgan Drexen, Inc. v. CFPB held that the plaintiffs lacked standing and should pursue their constitutional claims against the CFPB in a CFPB enforcement action pending in another federal district court.
The ruling ends this particular challenge to the CFPB (for now), but allows the plaintiff to pursue its challenge in the enforcement action.
Morgan Drexen filed the claim after the CFPB threatened enforcement action against the firm for violations of the Consumer Financial Protection Act and the Telemarketing Sales Rule in its bankruptcy and debt-relief services. Kimberly Pisinski, an attorney who contracts with Morgan Drexen for paralegal services, joined the suit on the theory that the CFPB's enforcement action against Morgan Drexen would affect her own law practice.
Morgan Drexen and Pisinski sought declaratory and injunctive relief, arguing that the CFPB is unconstitutional because its powers are overbroad, it's headed by a single director who is removable only for cause, it is funded outside the ordinary appropriations process, and judicial review of its actions is limited.
But soon after Morgan Drexen and Pisinski sued in the D.C. District, the CFPB filed an enforcement action against Morgan Drexen in the Central District of California. Pisinski, who apparently really, really wanted to be a part of the action, moved to intervene in that suit, too. (The court denied her motion. The court also recently granted the CFPB's motion for sanction and default judgment against Morgan Drexen, finding that "[d]efendants willfully and in bad faith engaged in a coordinated and extensive effort to deceive the Court and opposing counsel" and having "blatantly falsified evidence . . . concealing this fact from the Court, opposing counsel, and even their own counsel at every turn.")
The D.C. Circuit ruled that Morgan Drexen could lodge its constitutional claims against the CFPB in the enforcement case in the Central District of California instead of in its case in the D.C. District. The court said that Morgan Drexen wouldn't suffer any harm in harm in doing so, and that it'd support judicial economy.
The court also ruled that Pisinski lacked standing. That's because she didn't allege a CFPB enforcement action would harm her practice, or that she engaged in any illegal conduct as a Morgan Drexen contractor:
In sum, Pisinski has failed to proffer evidence in support of any of her theories of standing: that she was responsible for Morgan Drexen's allegedly illegal conduct, that her practice is or will be economically harmed by the Bureau's enforcement action against Morgan Drexen, or that implicit accusations by the Bureau that she exercised too little control over Morgan Drexen or engaged in illegal conduct herself could damage her professional standing. The record evidence does not show that she used Morgan Drexen's allegedly illegal services or that there is a substantial risk that the Bureau's enforcement action will cause harms to her practice or professional reputation that she has asserted.
Judge Kavanaugh dissented, arguing that Pisinsky had standing, and that the majority's approach is "more complicated than it needs to be."
Tuesday, April 7, 2015
The Fifth Circuit today affirmed the dismissal of a challenge to the Deferred Action for Childhood Arrivals, or "DACA," program by a group of ICE agents and deportation officers and the State of Mississippi. We previously posted on the suit here.
The plaintiffs lodged several claims against the DACA program, including a separation-of-powers and a violation of the Take Care Clause. They claimed that they had standing because Mississippi incurred expenses for state benefits for "illegal aliens" and because DACA forced the officers to violate the law, change the way they enforced the law, and face job sanctions for not deferring.
The court today rejected these standing claims and affirmed the dismissal of case. As to Mississippi, the court said that any injury was "purely speculative because there was no concrete evidence that Mississippi's costs had increased or will increase as a result of DACA." As to the officers, the court said that a violation of their oath to uphold the laws was not a sufficient injury for standing purposes; that their burden to comply with DACA also wasn't a sufficient injury and that in any event they failed to allege specific facts to support it; and that any threat of employment sanctions for not enforcing DACA was too speculative.
As to this last point, the court emphasized that DACA requires individual officers to "exercise their discretion in deciding to grant deferred action, and this judgment should be exercised on a case-by-case basis." This feature of DACA, of course, also goes to the merits by hard-wiring DACA with prosecutorial discretion and putting the program squarely within executive discretionary authority. As to standing, the court said that this feature makes it unlikely that an officer would be sanctioned for exercising discretion to deport.
Today's ruling says nothing about the merits of DACA. But it does illustrate why it's so hard to bring a challenge to DACA in court.