Monday, June 29, 2020

Court Strikes CFPB Director's Independence

The Supreme Court today struck the statutory independence of the Director of the Consumer Financial Protection Bureau, even as it declined to rule the entire CFPB unconstitutional. This means that the CFPB stays in place, Director and all, but that the President can terminate the Director at will. (As to the particular case before the Court, which challenged a CFPB enforcement demand, the ruling invalidates the demand. But the CFPB could reissue it and re-commence enforcement, but without protections for the Director.)

More broadly, the ruling in Seila Law v. CFPB says that Congress lacks authority to create an Executive Branch "independent" principal office, unless that office is part of a larger board or commission, and probably without significant executive power.

The ruling is a victory for the Trump Administration, which opposed independence for the CFPB Director. But at the same time, it sharply restricts Congress's power to create an independent principal office within the Executive Branch.

Under the Dodd-Frank Act, the CFPB has authority to implement and enforce a variety of consumer financial protection laws to "ensur[e] that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive."

The Director is nominated by the President and confirmed by the Senate. In creating an independent Director, Congress legislated that the Director would be appointed for five years and can be removed only for "inefficiency, neglect of duty, or malfeasance in office." It's that "independence" that was at stake in the case.

The Court ruled that this independence violated the separation of powers. Pointing to the Article II Vesting Clause, the Court wrote that "[t]he entire 'executive Power' belongs to the President alone." It held that statutory independence for a principal executive officer who is not a part of a board of commission impermissibly restricts the President's executive power.

The Court distinguished Humphrey's Executor, holding that Humphrey's upheld the independence of a multi-member board, the FTC, whereas the CFPB has a single head. According to the Court, unlike the FTC (at the time), the CFPB's single Director is not a "body of experts," is not "non-partisan," and does not have staggered terms that "prevent[] complete turnover in leadership." Moreover, the CFPB Director has greater responsibilities than the old FTC did, including the "quintessentially executive power" to seek monetary penalties in federal court.

The Court distinguished Morrison v. Olson, holding that Congress may create an independent inferior officer. The Court said that the CFPB Director was a principal office, and had more wide-ranging authority than the independent counsel in Morrison, and that the independent counsel's prosecutorial authority looked inward, to Executive Branch officials on specified matters, whereas the CFPB Director has authority over "millions of private citizens and businesses, imposing even billion-dollar penalties through administrative adjudications and civil actions."

The Court declined to "extend" those cases to cover the "new situation" of the CFPB Director's independence. The Court said that there was no precedent for this kind of office, and that it "is incompatible with our constitutional structure." "The . . . constitutional strategy is straightforward: divide power everywhere except for the Presidency, and render the President directly accountable to the people through regular elections. In that scheme, individual executive officials will still wield significant authority, but that authority remains subject to the ongoing supervision and control of the elected President."

But even as the Court struck statutory independence for the Director, it declined to take down the entire CFPB. The Court ruled that the independence provision was severable from the rest of the Act, and therefore that the CFPB could remain, Director and all, but without the independence protection.

Justice Kagan, dissenting on independence but concurred on severability, and joined by Justices Ginsburg, Breyer, and Sotomayor, wrote:

If a removal provision violates the separation of powers, it is because the measure so deprives the President of control over an official as to impede his own constitutional functions. But with or without a for-cause removal provision, the President has at least as much control over an individual as over a commission--and possibly more. That means the constitutional concern is, if anything, ameliorated when the agency has a single head. . . .

In second-guessing the political branches, the majority second-guesses as well the wisdom of the Framers and the judgment of history. It writes in rules to the Constitution that the drafters knew well enough not to put there. It repudiates the lessons of American experience, from the 18th century to the present day. And it commits the Nation to a new static version of governance, incapable of responding to new conditions and challenges.

June 29, 2020 in Appointment and Removal Powers, Cases and Case Materials, Congressional Authority, Executive Authority, News, Opinion Analysis, Separation of Powers | Permalink | Comments (0)

Friday, June 26, 2020

Ninth Circuit Says President Can't Reprogram Funds for Border Wall

In a pair of rulings today, here and here, the Ninth Circuit held that President Trump exceeded his authority under federal law and violated the Appropriations Clause in reprogramming funds to build portions of a border wall between the U.S. and Mexico.

The rulings are a sharp set-back to President Trump's efforts to make good on his promise to build the wall.

Today's rulings come after the case has already been to the Supreme Court. Recall that the Court earlier granted the Administration's motion for a stay of the district court's earlier injunction, affirmed by the Ninth Circuit. The Court's stay meant that the injunction would not remain in place as the case moved forward on the merits. So the case moved forward on the merits, sans injunction. But then the district court ruled in favor of the plaintiffs and granted a new injunction. That's why we got today's rulings.

(There's some weirdness here. The Supreme Court granted the stay, stating, "Among the reasons is that the Government has made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting Secretary's compliance with Section 8005." Despite this language, the court today ruled that the plaintiffs in both cases did have causes of action.)

The rulings say that President Trump exceeded his authority under the 2019 Defense Department Appropriations Act and violated the Appropriations Clause, and affirmed a permanent injunction.

The court held that in order to reprogram under Sections 8005 and 9002 of the 2019 Defense Department Appropriations Act, (1) there must be for an unforeseen military requirement and (2) Congress must not have previously denied funding. The court said that President Trump's reprogramming violated both requirements.

As to the first, the court said that the border wall was no "unforeseen military requirement." Among other things, the court noted that President Trump had long advocated for the wall, suggesting that it couldn't have been "unforeseen."

As to the second, the court noted that Congress had previously denied the Administration's request for full funding.

Judge Collins dissented in both cases. Judge Collins argued that the plaintiffs didn't have a cause of action (see the weirdness parenthetical, above), and that even if they did they'd lose on the merits.

June 26, 2020 in Cases and Case Materials, Congressional Authority, Executive Authority, News, Opinion Analysis, Separation of Powers | Permalink | Comments (0)

Wednesday, June 24, 2020

D.C. Circuit Orders District Judge to Dismiss Flynn Prosecution

A sharply divided three-judge panel of the D.C. Circuit today ordered Judge Emmet Sullivan to dismiss the criminal case against Michael Flynn for lying to the FBI. This is hardly the final word, though: the extraordinary ruling is sure to go to the full circuit, and perhaps even the Supreme Court.

Flynn was charged with lying to the FBI as part of the FBI's investigation into connections between the Trump campaign and Russia in the 2016 election. He pleaded guilty--twice, before two different federal judges--and agreed to cooperate with the government in its ongoing investigation. The court deferred sentencing to allow Flynn to continue to cooperate.

Flynn then moved to withdraw his plea, arguing that the government failed to produce exculpatory evidence. Most recently, DOJ came across material that, according to the government, means that the prosecution can no longer prove the charge. So the government moved to dismiss the case.

Judge Sullivan appointed an amicus to represent the no-dismissal side, invited other amici to weigh in, and set a hearing date on the motions--all to determine whether he should grant "leave of court" to dismiss. (That's the standard under a Rule 48(a) motion to dismiss a criminal charge.) (Judge Sullivan had serious concerns about the government's motion, given the many, many irregularities in the case.)

Then Flynn filed a writ of mandamus in the D.C. Circuit, and the government weighed in to support it. Note that Judge Sullivan had not yet even held the hearing on the motion to dismiss, much less denied it.

(Just gotta say it: Wow. Not your usual federal prosecution.)

Today the D.C. Circuit ruled for Flynn and ordered the prosecution dismissed. Judge Rao wrote the majority opinion, which concluded that Judge Sullivan committed clear legal error. Moreover, by ordering dismissal without a hearing or further consideration by the lower court, the court said that the district court had no role under the Rule 48(a) "with-leave-of-court" standard.

Judge Rao started by noting that a prosecution's motion to dismiss is entitled to a presumption of regularity. But the court wrote that Judge Sullivan raised nothing to challenge this presumption, or to show that this was the kind of case that warranted a hearing or further judicial inquiry into the motion. As such, the court concluded that Judge Sullivan went beyond his authority in appointing an amicus and scheduling a hearing. Again: All this before Judge Sullivan even held the hearing, much less ruled against dismissal.

Judge Rao explained in separation-of-powers terms:

In this case, the district court's actions will result in specific harms to the exercise of the Executive Branch's exclusive prosecutorial power. The contemplated proceedings would likely require the Executive to reveal the internal deliberative process behind its exercise of prosecutorial discretion, interfering with the Article II charging authority. Thus, the district court's appointment of the amicus and demonstrated intent to scrutinize the reasoning and motives of the Department of Justice constitute irreparable harms that cannot be remedied on appeal.

Judge Rao seemed to try to leave open some room for a district court to determine whether to grant "leave of court" on a Rule 48(a) motion to dismiss. But if this case doesn't fit the bill (again, with all its irregularities), it's not clear what would.

Judge Wilkins dissented. In short:

This appears to be the first time that we have issued a writ of mandamus to compel a district court to rule in a particular manner on a motion without first giving the lower court a reasonable opportunity to issue its own ruling; the first time any court has held that a district court must grant "leave of court" pursuant to Federal Rule of Criminal Procedure 48(a) without even holding a hearing on the merits of the motion; and the first time we have issued the writ even though the petitioner has an adequate alternative remedy [that is, appeal after a denial of the motion to dismiss], on the theory that another party [the government] would not have had an adequate alternative remedy if it had filed a petition as well. Any one of these is sufficient reason to exercise our discretion to deny the petition; together they compel its rejection.

 

June 24, 2020 in Cases and Case Materials, Courts and Judging, Executive Authority, News, Opinion Analysis, Separation of Powers | Permalink | Comments (2)

Tuesday, June 2, 2020

SCOTUS Upholds Appointments to Puerto Rico's Financial Oversight Board

A unanimous Supreme Court yesterday ruled in Financial Oversight and Management Board for Puerto Rico v. Auerelius Investment, LLC, that the President's appointment of members to the Financial Oversight Board, without Senate advice and consent, didn't violate (or even implicate) the Appointments Clause.

The ruling is a win for the Board and its authority to carry Puerto Rico through bankruptcy.

The Court said first that the Appointments Clause applies to all officers of the United States, including officers who operate within territories. But it went on to say that Board members in this case aren't officers of the United States, and the Appointments Clause therefore doesn't restrict their appointment.

The Court looked functionally to the Board's powers and duties and concluded that they're local, not national. The Court said that Board members therefore aren't officers of the United States covered by the Appointments Clause.

Justice Thomas concurred. He argued that the Court should have looked to the original public meaning of the Appointments Clause, not the "ill-defined path" that it took, and come out with the same result.

Justice Sotomayor concurred, too. She argued that given Puerto Rico's history--and, in particular, the compact between Puerto Rico and the federal government that established home rule for the island--it wasn't clear that Congress could create the Board at all. But nevertheless concurred, because the parties hadn't raised that issue:

These cases raise serious questions about when, if ever, the Federal Government may constitutionally exercise authority to establish territorial officers in a Territory like Puerto Rico, where Congress seemingly ceded that authority long ago to Puerto Rico itself. . . .

The Board members, tasked with determining the financial fate of a self-governing Territory, exist in a twilight zone of accountability, neither selected by Puerto Rico itself nor subject to the strictures of the Appointments Clause. I am skeptical that the Constitution countenances this freewheeling exercise of control over a population that the Federal Government has explicitly agreed to recognize as operating under a government of their own choosing, pursuant to a constitution of their own choosing. . . . Nevertheless, because these issues are not properly presented in these cases, I reluctantly concur in the judgment.

 

June 2, 2020 in Appointment and Removal Powers, Cases and Case Materials, Executive Authority, Federalism, News, Opinion Analysis | Permalink | Comments (0)

Monday, June 1, 2020

SCOTUS Says no Standing for Retirement-Plan Participants to Sue for Mismanagement

A sharply divided Supreme Court ruled today in Thole v. U.S. Bank that retirement-plan participants can't sue their former employer for mismanagement of the plan, because they hadn't demonstrated sufficient direct and concrete harm.

The ruling deals a sharp blow to defined-benefit plan participants who seek to sue for plan mismanagement. Under the ruling, those participants have to wait until their actual benefits drop, or close to it. And even so, the Court's ruling may give employers an out. At the same time, the ruling shields employers from liability unless and until their mismanagement is so bad that it actually or imminently results in lowered benefits.

While the plaintiffs sued under the individual cause of action in ERISA, the Court's ruling is based on Article III standing. This means that Congress can't change the law to create more permissive standing.

The case arose when two retirees of U.S. Bank sued that Bank and others for mismanaging their retirement-plan assets. The plaintiffs sued under ERISA's individual cause of action.

The Court ruled that the plaintiffs lacked Article III standing because, in short, they didn't suffer a harm. Justice Kavanaugh wrote for the five conservatives that the plaintiffs' monthly defined benefits didn't drop, or wouldn't imminently drop, based on the mismanagement, and any court ruling wouldn't affect their monthly benefits under the plan.

The Court also noted that the plaintiffs' benefits wouldn't drop even if the retirement plan failed, because the Pension Benefit Guarantee Corporation backstops failed retirement plans. This raises the question whether the plaintiffs would have standing even if the plan's failing led to a reduction in the benefits that the plan pays out (because the plaintiffs, after all, would theoretically continue to receive the full measure of their defined-benefit plan, even if from the PBGC, and not the plan).

The ruling means that the plaintiffs have to wait to sue until the plan's failure actually or imminently results in a reduction in their own benefits. And even then, the Court might've written in an out for the employer by noting that the PBGC backstops failing plans.

Justice Sotomayor, joined by the three other progressives, dissented. She argued that the plaintiffs have an interest in their plan's integrity, just as private trust beneficiaries have an interest in protecting their trust; that breach of a fiduciary duty is a cognizable injury, even if it doesn't result in financial harm or increased risk of nonpayment; and that the plaintiffs have associational standing to sue on behalf of the plan.

She concluded:

It is hard to overstate the harmful consequences of the Court's conclusion. . . . After today's decision, about 35 million people with defined-benefits plans will be vulnerable to fiduciary misconduct. The Court's reasoning allows fiduciaries to misuse pension funds so long as the employer has a strong enough balance sheet during (or, as alleged here, because of) the misbehavior. Indeed, the Court holds that the Constitution forbids retirees to remedy or prevent fiduciary breaches in federal court until their retirement plan or employer is on the brink of financial ruin. This is a remarkable result, and not only because this case is bookended by two financial crises.

June 1, 2020 in Cases and Case Materials, Courts and Judging, Jurisdiction of Federal Courts, News, Opinion Analysis, Standing | Permalink | Comments (0)

Saturday, May 30, 2020

SCOTUS Denies Emergency Injunction by Church Challenging California COVID-19 Order

A closely divided Court in South Bay United Pentacostal Church v. Newsom denied the application for emergency injunction relief sought by the church from California Governor Newsom's Executive Order placing numerical restrictions on all gatherings to combat the spread of the highly infectious corona virus causing COVID-19. The Ninth Circuit panel and the district judge had similarly denied the church's motion for a preliminary injunction.

There is no opinion from the Court. Chief Justice Roberts, who joined the majority in rejecting the emergency application, filed a brief concurring opinion.  On the merits, Chief Justice Roberts wrote:

Although California’s guidelines place restrictions on places of worship, those restrictions appear consistent with the Free Exercise Clause of the First Amendment. Similar or more severe restrictions apply to comparable secular gatherings, including lectures, concerts, movie showings, spectator sports, and theatrical performances, where large groups of people gather in close proximity for extended periods of time. And the Order exempts or treats more leniently only dissimilar activities, such as operating grocery stores, banks, and laundromats, in which people neither congregate in large groups nor remain in close proximity for extended periods.

The precise question of when restrictions on particular social activities should be lifted during the pandemic is a dynamic and fact-intensive matter subject to reasonable disagreement. Our Constitution principally entrusts “[t]he safety and the health of the people” to the politically accountable officials of the States “to guard and protect.” Jacobson v. Massachusetts, 197 U. S. 11, 38 (1905). When those officials “undertake[ ] to act in areas fraught with medical and scientific uncertainties,” their latitude “must be especially broad.” Marshall v. United States, 414 U. S. 417, 427 (1974). Where those broad limits are not exceeded, they should not be subject to second-guessing by an “unelected federal judiciary,” which lacks the background, competence, and expertise to assess public health and is not accountable to the people. See Garcia v. San Antonio Metropolitan Transit Authority, 469 U. S. 528, 545 (1985).

That is especially true where, as here, a party seeks emergency relief in an interlocutory posture, while local officials are actively shaping their response to changing facts on the ground. The notion that it is “indisputably clear” that the Government’s limitations are unconstitutional seems quite improbable.

In short, religious gatherings were not being treated any differently under the California Order and the judiciary should defer to the politically accountable entities in health situations, especially when these are uncertain and changing.

Justice Bret Kavanaugh wrote a dissenting opinion, joined by Justices Thomas and Gorsuch — but interestingly not Justice Alito — concluding that the California Order did not treat the religious institutions the same as "comparable secular businesses" such as grocery stores. Kavanaugh argues that given this differential treatment, struct scrutiny should apply, and California has not advanced a sufficiently compelling reason to treat religious gatherings differently.

As the pandemic continues, there is certainly sure to be more litigation, but for a majority of the Court, gatherings including those that are religious can be limited in service to public health.

May 30, 2020 in Cases and Case Materials, Courts and Judging, First Amendment, Free Exercise Clause, Medical Decisions, Opinion Analysis, Religion, Science, Supreme Court (US) | Permalink | Comments (0)

Friday, May 15, 2020

Sixth Circuit Says Governor's Shut-Down Order Likely Violates Free Exercise

The Sixth Circuit ruled earlier this week that Kentucky Governor Beshear's business shut-down order likely violates the Free Exercise Clause as applied to religious services. The ruling prevents the government from enforcing the shut-down order against religious services while the case moves forward. At the same time, however, the ruling tells the Governor how to regulate religious services consistent with free exercise (simply impose social distancing requirements, e.g.).

The court recognized that religiously-neutral, generally-applicable laws are usually upheld (under rational basis review). But it said that the shut-down order wasn't generally applicable, as demonstrated by the many "life-sustaining" "exceptions" to shut-down:

Do the four pages of exceptions in the orders, and the kinds of group activities allowed, remove them from the safe harbor for generally applicable laws? We think so. As a rule of thumb, the more exceptions to a prohibition, the less likely it will count as a generally applicable, non-discriminatory law. "At some point, an exception-ridden policy takes on the appearance and reality of a system of individualized exemptions, the antithesis of a neutral and generally applicable policy and just the kind of state action that must run the gauntlet of strict scrutiny. . . .

The exception for "life-sustaining" businesses allows law firms, laundromats, liquor stores, gun shops, airlines, mining operations, funeral homes, and landscaping businesses to continue to operate so long as they follow social-distancing and other health-related precautions. But the orders do not permit soul-sustaining group services of faith organizations, even if the groups adhere to all the public health guidelines required of the other services.

The court went on to say that the Governor's order would likely fail strict scrutiny, because it wasn't narrowly tailored. "There are plenty of less restrictive ways to address these public-health issues," for example, "insist[ing] that the congregants adhere to social-distancing and other health requirements and leave it at that--just as the Governor has done for comparable secular activities[.]"

May 15, 2020 in Cases and Case Materials, Free Exercise Clause, News, Opinion Analysis | Permalink | Comments (1)

Thursday, May 14, 2020

Wisconsin High Court Strikes Isolation Order, Justices Debate Separation of Powers

A sharply divided Wisconsin Supreme Court struck the isolation order issued by the state Department of Health Services Secretary-Designee, effective immediately. The 4-3 ruling said that the order didn't go through administrative rule-making process and exceeded DHS's statutory authority.

The ruling says nothing about Governor Evers's emergency order. And nothing in the ruling restricts the state DHS from going back to the drawing board to tailor an administrative rule or order to the court's ruling.

The majority opinion focuses almost exclusively on administrative law and statutory authority.

But don't stop there: the lengthy concurring and dissenting opinions, and their back-and-forth on the separation of powers, are well worth a look--if only for the dramatically different ways that the Justices apply these principles.

May 14, 2020 in Cases and Case Materials, Comparative Constitutionalism, News, Opinion Analysis, Separation of Powers | Permalink | Comments (0)

Fourth Circuit Denies Trump's Appeal in Emoluments Case

The Fourth Circuit, sitting en banc, denied President Trump's interlocutory appeal of the district court's failure to rule on his motion to dismiss in the Emoluments Clause case brought by Maryland and D.C.

The ruling is a victory for Maryland and D.C., in that it keeps the case going. But it says nothing on the merits, or on the several other barriers that the plaintiffs may face in bringing this suit. It merely sends the case back to the district court for a ruling on President Trump's motion and other proceedings.

After Maryland and D.C. sued President Trump for Emoluments Clause violations, the President moved to dismiss, arguing that he enjoyed absolute immunity. The district court didn't rule on the motion for seven months, so President Trump filed an interlocutory appeal with the Fourth Circuit, arguing that the district court effectively denied his motion.

A three-judge panel agreed and held that Maryland and D.C. lacked standing. (We posted on the Fourth Circuit's standing ruling here.) The court vacated that ruling and granted en banc review.

Today's ruling says that the Fourth Circuit didn't have jurisdiction to hear the case.

The court said that

the district court neither expressly nor implicitly refused to rule on immunity. It did not make any rulings with respect to the President in his individual capacity. To the contrary, the district court stated in writing that it intended to rule on the President's individual capacity motion. Despite the President's suggestion, the district court's deferral did not result in a delay 'beyond all reasonable limits.'

The dissent disagreed, and wrote that "[t]he district court's treatment of the President's invocation of absolute immunity is best characterized as deliberately dilatory and, more probably, manipulative."

May 14, 2020 in Cases and Case Materials, Courts and Judging, Executive Authority, Executive Privilege, News, Opinion Analysis, Standing | Permalink | Comments (0)

Wednesday, May 13, 2020

Court Hears Cases Testing States' Control Over Presidential Electors

The Supreme Court heard oral arguments today in Chiafalo v. Washington and Colorado v. Baca, both testing whether and how states can control the votes of their presidential electors. Both cases involved "faithless electors"--electors who, in violation of state law, voted for individuals in the 2016 election who did not win the state's popular vote.

Maybe the only thing that was clear from the arguments today is that . . . nothing is clear. Text doesn't answer the question. Original understanding is equivocal. Past practice can be manipulated by both sides. Even the practical effect of a ruling either way is uncertain, or at least reasonably disputed. The Court searched for a limiting principle from both sides, in both cases, but came up blank.

All this indeterminacy only served to illustrate how screwed up our system of electing a president really is. As the arguments revealed, that system, the Electoral College, appears to have no firm or settled basis in any variety of democratic theory, or any theory of federalism. If it did, we'd at least have some guidance on the question.

Given the indeterminacy, we might expect the Court to punt on cases like these under the political question doctrine. Indeed, the issue bears a remarkable resemblance to partisan gerrymandering--no settled constitutional test, could benefit or harm either major party--on which the Court declined to rule most recently in Rucho v. Common Cause. If anything, the text, history, and precedent are even less determinate here than in partisan gerrymandering cases.

So: Look for the Court to leave things as they are--to allow the states to control their electors, or allow the states to set them free, as the states wish. As Justice Kagan asked, "What would you say if I said that if I think that there's silence, the best thing to do is leave it to the states and not impose any constitutional requirement on them?"

May 13, 2020 in Cases and Case Materials, Federalism, News, Oral Argument Analysis | Permalink | Comments (0)

Check it Out: Cato on Qualified Immunity

Check out Cato's Daily Podcast on the question Is the Supreme Court Ready to End Qualified Immunity? It comes on the heels of a Reuters investigation showing how the doctrine shuts down constitutional claims. It also comes when the Court'll consider whether to take up the issue.

May 13, 2020 in Cases and Case Materials, News | Permalink | Comments (0)

Fifth Circuit Upholds Title IX's State Sovereign Immunity Waiver Condition

The Fifth Circuit yesterday upheld the state sovereign immunity waiver for state recipients of Title IX funding. The ruling means that state recipients of Title IX can be sued for monetary damages in federal court for violations of Title IX.

That's the same result that's long been on the books in the Fifth Circuit and all others to have considered the question.

But this case is notable because it rejects a novel claim by Louisiana (LSU was the defendant) that the Supreme Court's Medicaid ruling in NFIB v. Sebelius changed the landscape as to Title IX waiver. In particular, the state claimed that under NFIB the Title IX waiver was unduly coercive.

Not so, said the court. The court said that NFIB "does not unequivocally alter Dole's conditional-spending analysis," under which the Court previously upheld the Title IX waiver. Moreover, "[t]he threat of LSU losing what amounts to just under 10% of its funding is more like the 'relatively mild encouragement' of a state losing 5% of its highway funding . . . than the 'gun to the head' of a state losing all of its Medicaid funding [in NFIB]."

May 13, 2020 in Cases and Case Materials, Congressional Authority, Eleventh Amendment, Federalism, News, Opinion Analysis | Permalink | Comments (0)

Tuesday, May 12, 2020

High Court Hears Arguments in Trump Tax Cases

The Supreme Court heard oral arguments today in Trump v. Mazars and Trump v. Vance, the cases testing congressional authority and a local D.A.'s authority, respectively, to subpoena President Trump's financial records from his accounting firm and bank.

We previewed Mazars here; we previewed Vance here.

As usual, it's hard to say where the Court is going to land based on oral arguments. (It might be even harder than usual, given the teleconference format.) But based on questioning, it seems likely that the Court in Mazars could issue a split decision, upholding one or two subpoenas while overturning the other(s). In both cases, the Court'll seriously balance the interference (or not) of the subpoenas with the President's ability to do the job. Look for that balance to split along conventional ideological lines, with Chief Justice Roberts right in the center.

Another possibility: the Court could set a new standard for these subpoenas and remand for reconsideration.

Whatever the Court does, two things seem very likely. First, the rulings will have a dramatic effect on the separation of powers and checks and balances, likely shifting power and immunities (to some degree, more or less) to the President. Second, likely the only way we see President Trump's financial records and taxes before the 2020 election is if the Court outright upholds one of the House Committee's subpoenas. (Even if the Court rules against the President in Vance, grand jury secrecy rules mean that we probably may not see those records until after the election.)

The two cases raise very different questions. Mazars is all about the separation of powers--congressional authority to issue subpoenas to third parties for the President's personal information--while Vance is about federalism and presidential immunities--a local prosecutor's authority, through a grand jury, to subpoena that same material, and the President's claim of absolute immunity from any criminal process.

Despite the differences, though, much of the arguments in both cases focused on how the subpoenas, wherever they came from, would, or would not, "interfere" with the President's execution of the Article II powers. The President's attorneys argued repeatedly that allowing subpoenas in this case could open the door to free-flowing subpoenas from every congressional committee and every local prosecutor, and would thus impede the President's ability to do the job. On the other hand, attorneys for the Committees and the D.A. noted that these particular subpoenas are directed at a third party and don't require the President to do anything.

Look for the Court to incorporate this into its reasoning--the extent to which the subpoenas interfere with the President's job, either in fact (where there's no real evidence that President Trump has actually been distracted by these subpoenas) or in theory (where we can imagine that a future President might be distracted by a flurry of future subpoenas).

Questions in Mazars also focused on the three committees' precise authorities and reasons for their subpoenas. Did they have authority under the House's standing rules? Did the House's subsequent "ratification" of them suffice to demonstrate that the whole House supported them? Were the reasons within a "legitimate legislative purpose"?

These questions suggest that the Court may examine each subpoena separately, and could well uphold one or two, while overturning the other(s).

We also heard some pretty breathtaking claims by the President's attorneys about the scope of presidential powers and immunities. In Mazars we heard that Congress can't regulate the President at all (even if it can regulate other offices in the Executive Branch), and therefore can't investigate (and subpoena) material to help enact law that would regulate the President. In Vance, we heard that the President is absolutely immune from all criminal processes.

The government, weighing in as amicus in both cases in support of the President, dialed back the President's most extreme and categorical positions, and argued instead for a more stringent test for subpoenas directed at the President's personal information. This could give the Court an attractive "middle" position. (This isn't really a middle position. But the President's extreme claims make the government's position look like a middle position.)

On the other side, Congress's attorney in Mazars struggled to identify a limit to Congress's power to subpoena--an issue that several Justices thumped on. The lack of a limiting principle could come back to bite the House Committees, even if these particular subpoenas might've come well within a reasonable limiting principle. That's because if the Court rules for the Committees, it'll have to say why--knowing that the reason will apply to all future congressional subpoenas. If the Committees can't give the Court a limiting principle, the Court could conclude that they see no limit on their authority. And that may be reason enough for at least some of the Justices to rule against them.

May 12, 2020 in Cases and Case Materials, Congressional Authority, Executive Authority, Executive Privilege, Federalism, News, Oral Argument Analysis, Separation of Powers | Permalink | Comments (0)

Monday, May 11, 2020

SCOTUS Hears Oral Arguments in Ministerial Exemption Cases

The United States Supreme Court heard oral arguments (telephonically) in the consolidated cases of Our Lady of Guadalupe School v. Morrisey-Berru and St. James School v. Biel

Recall that these cases involve an application of the First Amendment's "ministerial exception" first accepted by the Court in 2012 in Hosana-Tabor Evangelical Lutheran Church and School v. EEOC.  In the unanimous decision in Hosanna-Tabor, the Court found that the school teacher Cheryl Perich was tantamount to a minister. Thus, under both Religion Clauses of the First Amendment, as a "minister" her employment relations with her church school employer were eligible for a "ministerial exception" to the otherwise applicable employment laws, in that case the Americans with Disabilities Act. 

But how far such this extend and who should qualify as a "ministerial" employee subject to the exemption from employment laws?  The factors that courts have derived from Hosana-Tabor include:

  • (1) whether the employer held the employee out as a minister by bestowing a formal religious title;
  • (2) whether the employee’s title reflected ministerial substance and training;
  • (3) whether the employee held herself out as a minister; and
  • (4) whether the employee’s job duties included “important religious functions.”

Throughout the oral argument, the question was which of these factors should be the test.  Morgan Ratner, on behalf of the United States as amicus curiae argued that the sole factor of  the employee performing an "important religious function" should be the test.  And yet, the very determination of whether an employee was performing "important religious functions" implicates an Establishment Clause issue should the court make such determinations. Indeed, Justice Gorsuch pressed on whether the court should simply accept the religious organization's statement that it had a sincere religious belief.

Nevertheless, the United States argued that this "important religious functions" factor should govern,  even if the employee was not terminated for a religious reason, but — as is the allegation in these cases — for a health issue or for age discrimination. Both Justices Ginsburg and Sotomayor repeated the broadness of the exemption sought. And further, the fact that the teacher need not share religious identity with the organization should not be relevant to a determination of "important religious functions":

KAGAN: [A]nd if a position can be filled by any old person, not by a member of a faith, isn't that a pretty good sign that the employee doesn't have that special role within the religious community?
MS. RATNER: No, Justice Kagan, I don't think so. And -- and there are really several reasons. The -- the most important one is that's essentially a religious judgment about who is qualified to perform certain important religious functions and how much of the creed of that religion you need to share to perform that function.

Arguing for the teachers who had been terminated, Jeffrey Fisher pointed out the number of teachers employed in religious schools, and the number of other employees in religious hospitals. Fisher argued the expansiveness of the religious organization's argument:

So it really is a sea change – even as to teachers, leaving everything else aside, it is truly a sea change that is being requested by the other side here today in terms of how teachers and schools are classified and whether they have any employment rights at all or -- or, in fact, whether at least if you follow the way the lower courts have -- have implemented the ministerial exception, you basically have employment law-free zones in all religious schools.

Fisher also contended that many other laws were at stake, not only discrimination laws, but wage and hour and equal pay acts, as well as teacher credentialing laws including specific provisions such as criminal background checks.

Thus, while the ministerial exemption as rooted in the free exercise and establishment clauses of the First Amendment originally excepted only "ministers," there is a chance that it will be broadened to include all - - - or almost all - - - employees at religious organizations.

 

May 11, 2020 in Cases and Case Materials, Courts and Judging, Disability, Establishment Clause, First Amendment, Free Exercise Clause, Oral Argument Analysis | Permalink | Comments (0)

Court to Test President's Immunity from Grand Jury Subpoena for Financial Records

The Supreme Court will hear oral argument tomorrow in Trump v. Vance, the case testing whether the President is immune from a state grand jury subpoena for his records that have nothing to do with his official duties. Here's my Preview, from the ABA Preview of United States Supreme Court Cases, with permission:

FACTS

In the summer of 2018, the New York County District Attorney’s Office (the Office) opened an investigation into possible criminal misconduct in activities connected to the Trump Organization. The Office obtained information about transactions and tax strategies by individuals and organizations that raised the prospect that a continuing pattern of criminal activity might have occurred within the Office’s jurisdiction and within the statute of limitations. Importantly, the Office has not eliminated President Trump himself as a potential target.

These transactions include the now-familiar “hush money” payments during the 2016 presidential campaign that President Trump’s attorney, Michael Cohen, paid to two women with whom President Trump had extra-marital affairs. Cohen admitted that he violated campaign finance laws in coordination with, and at the direction of, a person later identified as President Trump. Cohen pleaded guilty to the charges and is now serving a prison sentence.

Around the time of Cohen’s guilty plea, at the request of federal prosecutors and in order to avoid disruption of the ongoing federal investigation, the Office deferred its own investigation. After the Office learned in July 2019 that the federal investigation had concluded without any further charges, the Office then resumed its investigation.

On August 1, 2019, the Office served the Trump Organization with a grand jury subpoena for records and communications concerning certain financial transactions. The Office later informed the Trump Organization’s attorney that the subpoena also required production of certain tax returns. Over the next several months, the Trump Organization produced responsive documents, but not the tax returns.

On August 29, 2019, the Office served a grand jury subpoena on Mazars USA, LLP, President Trump’s accounting firm, for financial and tax records from January 1, 2011, to the date of the subpoena, including records for President Trump himself and entities he owned before becoming President. The Office largely patterned the Mazars subpoena on a similar subpoena to Mazars issued by the House Committee on Oversight and Reform. The Office’s Mazars subpoena does not seek any official government communications or involve any official presidential conduct.

Soon after the Office issued the Mazars subpoena, the Trump Organization informed the Office that they believed that the request for tax records implicated constitutional considerations. The Office agreed to temporarily suspend the tax portion of the subpoena to allow the Trump Organziation to challenge it.

President Trump then sued the Office and Mazars, seeking preliminary injunctive relief to stop Mazars from complying with the subpoena. (The “Vance” in the case name refers to Cyrus R. Vance, Jr., District Attorney of the County of New York.) President Trump argued that as sitting President he enjoyed absolute immunity from any form of “criminal process” or “investigation,” including a subpoena issued to a third party like Mazars.

The district court dismissed the case, ruling that it belonged in state court, not federal court. Alternatively, the district court denied injunctive relief, holding that the President’s claim of absolute immunity from criminal process “finds no support in the Constitution’s text or history” or in the Court’s precedents. The Second Circuit vacated the district court’s ruling that the case belonged in state court, but affirmed its alternative ruling on the merits. This appeal followed.

CASE ANALYSIS

The Supreme Court has ruled in a series of cases that the President enjoys certain privileges and immunities from various judicial processes. For example, the Court held in United States v. Nixon, 418 U.S. 683 (1974), that the President had an “executive privilege” against disclosure of confidential presidential communications. At the same time, however, the Court ruled that a sufficiently important countervailing need for the information (like a federal court’s need for evidence in a criminal trial, as in that case) could outweigh the President’s interest in confidential communications.

As to immunities, the Court held in Nixon v. Fitzgerald, 457 U.S. 731 (1982), that the President is absolutely immune from civil liability for official acts taken while in office. But the Court held in Clinton v. Jones, 520 U.S. 681 (1997), that the President is not immune from civil suits for unofficial actions taken before he came to office.

The Department of Justice has long held the position that the President is immune from criminal prosecution while in office. But the Supreme Court has never addressed that question, or the related question whether the President is immune from any criminal process that might lead up to a prosecution. That last question is what this case is all about.

President Trump argues that as sitting President he is absolutely immune from any criminal process that targets him, including the Office’s subpoena to a third party like Mazars. President Trump claims that subjecting him to any criminal process at all would interfere with the President’s “unparalleled responsibilities to defend the nation, manage foreign and domestic affairs, and execute federal law.” Moreover, he contends that subjecting the President to any criminal process would “stigmatize the President in ways that will frustrate his ability to effectively represent the United States in both domestic and foreign affairs.” President Trump says that Congress can hold the President to account through impeachment, and that state and federal prosecutors can hold the President to account through criminal processes after he leaves office, but that the President is absolutely immune from criminal process while in office. President Trump asserts that this is consistent with the text, structure, and history of the Constitution and with the longstanding position of the Justice Department.

President Trump argues that the need for absolute immunity from criminal processes is particularly acute when it comes to state and local prosecutors. He says that these processes (unlike federal criminal processes, from which the President also claims absolute immunity) threaten federal supremacy under the Constitution’s Supremacy Clause. In particular, President Trump contends that without absolute immunity, state and local prosecutors, motivated only by their own parochial and political interests, could impede the work of the President and the President’s duties to the entire, undivided nation.

President Trump argues that the Mazars subpoena violates all of these principles. He says that there is “no dispute” that the Mazars subpoena targets him, given that it specifically seeks his records. And he says that it doesn’t matter that his compliance with this subpoena would not burden his official duties (because it is directed as Mazars, not him); instead, he claims that the President’s absolute immunity is based on the mere threat of a like subpoena (or other criminal process) by every state and local prosecutor.

President Trump argues that the Court’s precedents support his position. He points to Nixon v. Fitzgerald, where the Court held that a former President was immune from a suit for civil damages based on the President’s official acts. He says that subjecting the President to criminal processes would be even more burdensome. President Trump distinguishes Clinton and United States v. Nixon, arguing that both cases arose from federal, not state, proceedings, and that they involved different kinds of behavior or processes. Finally, President Trump argues that at the very least United States v. Nixon requires that a prosecutor show a “demonstrated, specific need” for material sought in a subpoena directed at the President, and that the Office failed to show this.

The government weighs in to support President Trump and echoes many of these themes. The government, however, stops short of arguing for absolute immunity from all criminal processes and instead argues only that President Trump is immune from “any process that would risk impairing the independence of his office or interfering with the performance of its functions.” In evaluating any particular process, the government contends that the Court should apply, at a minimum, the “heightened standard of need” in United States v. Nixon. It says that the Mazars subpoena does not meet this standard.

The Office argues in response that the President has no absolute immunity from a state grand jury subpoena for documents unrelated to the President’s official duties. The Office claims that the Court’s precedents extend immunity only to official acts (not private acts), and that the “mere risk of interference” with the President’s official functions cannot support immunity from this kind of subpoena. The Office contends that the Mazars subpoena only seeks information related to President Trump’s private acts, and only raises, at most, a “risk of interference” with the President’s official functions (because it’s directed at Mazars, not President Trump), and so the President is not immune from it.

The Office argues that this result is not altered by the President’s arguments in support of absolute immunity from all criminal processes. It says that responding to a subpoena is far less burdensome than facing indictment or prosecution, and does not stigmatize the President the way an official accusation of wrongdoing might. By way of comparison, it claims that the burdens on the President in United States v. Nixon were far greater, yet the Court still ruled against the President’s claim of privilege.

As to President Trump’s federalism claims, the Office argues that these lack merit. It says that state and local prosecutors are on the front lines of criminal law enforcement in the country, and that they are “cloaked with a presumption of regularity that makes federal interference particularly inappropriate.” Moreover, it asserts that there are other procedural safeguards—including a prohibition on state investigation of official presidential conduct—that protect the President from abusive state and local criminal processes. In any event, the Office contends that the Court already considered and dismissed President Trump’s worry that state and local prosecutors could hassle the President for political reasons when it rejected a similar argument for immunity from a private civil suit against the President in Clinton.

The Office argues further that there are good policy reasons not to provide absolute immunity to the President. For one, such immunity could effectively immunize the President from any post-office indictment and prosecution, because evidence may go stale and statutes of limitations may run. For another, immunity may impede other, related criminal investigations and prosecutions.

In short, the Office argues that there is no basis for absolute presidential immunity from all criminal processes, that there are good reasons not to provide such sweeping immunity, and that in any event the President has plenty of opportunities to claim immunities on a case-specific (and not absolute, categorical) basis.

The Office argues that the alternative test for immunity, the government’s “heightened standard of need,” derives from the Court’s test in evaluating claims of executive privilege, and has no application here. According to the Office, that’s because the subpoena here does not seek privileged material or material related to official conduct. Moreover, it says that the mere risk of the subpoena’s burden on the President is insufficient to justify a heightened standard. And it claims that such a standard would impede state and local law enforcement.

Finally, the Office argues that President Trump has failed to demonstrate that the Mazars subpoena suffers from any of the problems that may immunize the President from it. In particular, the Office says that President Trump has failed to show that it was issued in bad faith, or that it would be overly burdensome. (The Office notes that the district court already ruled on this last point, and that President Trump hasn’t produced any new evidence.)

SIGNIFICANCE

This case has obvious and much-rehearsed (maybe too much rehearsed) political significance. In short, President Trump’s refusal to release his tax returns has been a central issue of political debate since at least the 2016 primaries. A ruling for President Trump would close this particular channel that could eventually lead to public release. A ruling against him, on the other hand, would require Mazars to turn over President Trump’s taxes to the Office, and thus leave open this channel which could lead to public release. It’s not entirely clear how much this matters, however, given that so many voters are stuck in their support of or opposition to President Trump, whatever his taxes might reveal. In any event, the ruling (which will likely come down this summer) will fast become political fodder for both sides and will certainly play some role in the presidential election.

The case and its companions, Trump v. Mazars USA, LLP, and Trump v. Deutsche Bank AG, raise the specter of a secondary political effect, which is likely far more significant. That is: these cases, as much as any other this Term (given the high-profile role that President Trump’s taxes and finances continue to play in our politics), will put the Court front and center in the ongoing political debates and the 2020 presidential election. Whatever the Court says, polls on one side or the other will claim that our Supreme Court justices are really only politicians masquerading in robes. That inevitable claim could have extra resonance here, in this explosive political environment and on this uniquely red-hot political issue, and could do serious and lasting damage to our collective faith in the judiciary and to the separation of powers.

And speaking of the separation of powers, this case could fundamentally reshape our structural constitution. The Court has never come close to endorsing the President’s claimed sweeping and absolute privilege against all criminal processes. If it creates such a privilege here, the ruling will mark a dramatic shift of power away from Congress, the judiciary, and even the states—and to the Executive Branch. This is big enough that we’ll almost feel the shift in our constitutional tectonic plates.

One final point. This case, of course, is linked with Trump v. Mazars and Trump v. Deutsche Bank AG, the two cases testing congressional authority to get President Trump’s taxes. While those cases raise the same practical bottom-line question—Can anybody get at President Trump’s taxes and financial records?—they involve very different constitutional issues, and therefore have their own (also quite weighty) constitutional significance.

May 11, 2020 in Cases and Case Materials, Congressional Authority, Executive Authority, Executive Privilege, Federalism, News, Separation of Powers | Permalink | Comments (0)

Court to Test Congressional Authority to Subpoena President's Financial Records

The Supreme Court will hear oral arguments tomorrow in Trump v. Mazars and Trump v. Deutsche Bank, testing whether Congress has authority to subpoena the President's financial records from third-party custodians of those records. Here's my Preview, from the ABA Preview of United States Supreme Court Cases, with permission. (This doesn't address the political question issue, which the Court asked the parties to brief after this came out).

FACTS

These cases test the authority of three different Committees of the U.S. House of Representatives to issue third-party subpoenas in support of their oversight and investigations into different aspects of President Trump’s private financial dealings. Let’s look at the Committees’ investigations one at a time.

The Oversight Committee Investigation

The House Committee on Oversight and Reform is engaged in an ongoing investigation into Executive Branch ethics and conflicts of interest, presidential financial disclosures, federal lease management, and possible violations of the Constitution’s Emoluments Clauses. As relevant here, the Committee is examining President Trump’s personal business interests and his decision to maintain ties to these interests (and not fully divest from them, consistent with prior presidential practice). In particular, the Committee has identified concerns with the Government Services Administration’s (GSA) ongoing management of the lease of the federal Old Post Office Building for the Trump International Hotel in Washington, D.C.; the adequacy and accuracy of President Trump’s financial disclosures and the adequacy of federal ethics laws; and allegations by Michael Cohen that President Trump falsely reported his assets. According to the Committee, the investigation is designed “to determine the adequacy of existing laws and perform related agency oversight.”

After the Committee heard testimony from Cohen that included allegations that President Trump falsely reported his assets, the chair wrote to Mazars and requested accounting documents related to President Trump and certain of his businesses from January 1, 2009, to the present. Mazars declined to produce this material.

On April 12, 2019, the chair then sent a memorandum to Committee members explaining the need for a subpoena to Mazars. The memo identified four subjects that the Committee had “full authority to investigate”: (1) “whether the President may have engaged in illegal conduct before and during his tenure in office,” (2) “whether [the President] has undisclosed conflicts of interest that may impair his ability to make impartial policy decisions,” (3) “whether [the President] is complying with the Emoluments Clauses of the Constitution,” and (4) “whether [the President] has accurately reported his finances to the Office of Government Ethics and other federal entities.” The chair also wrote that the Committee’s “interest in these matters informs its review of multiple laws and legislative proposals under our jurisdiction.”

The Committee then issued a subpoena to Mazars seeking documents related to financial statements, engagement letters, supporting documents, and related communications for President Trump and certain of his businesses, from 2011 through 2018.

The Financial Services Committee Investigation

The Financial Services Committee is engaged in an ongoing, broad investigation into financial institutions’ compliance with banking laws and whether those laws adequately protect against foreign money laundering, other financial crimes, and high-risk loans. As part of this investigation, the Committee is looking into practices at Deutsche Bank and Capital One.

These banks “have long provided business and personal banking services” to President Trump and his family. According to a series of media reports over the last few years, these banks made questionable loans to President Trump. Most recently, a New York Times Magazine article reported that Deutsche Bank had concerns that President Trump’s “real estate projects were laundromats for illicit funds from countries like Russia, where oligarchs were trying to get money out of the country.”

In order to further its investigation, the Committee issued two subpoenas. The first was directed at Deutsche Bank; it sought documents and records that included detailed financial information “belonging to, or likely to reveal information, concerning” President Trump and his family. The Deutsche Bank subpoena covered material from January 1, 2010, to the present (with no closing date). The second subpoena was directed at Capital One; it sought information about various Trump businesses and their principals and “other representatives,” including businesses affiliated with the Trump International Hotel in Washington, D.C. The Capital One subpoena covered material from July 19, 2016, to the present (again with no closing date). Deutsche Bank and Capital One declined to comply.

The Intelligence Committee Investigation

The House Intelligence Committee is engaged in an ongoing investigation into “efforts by Russia and other foreign actors to influence our political process before, during, and since the 2016 election.” The investigation includes assessing “whether foreign actors have financial leverage over President Trump, whether legislative reforms are necessary to address these risks, and whether our Nation’s intelligence agencies have the resources and authorities needed to combat these threats.”

In order to further its investigation, the Committee issued a subpoena to Deutsche Bank, covering the exact same material and time frames as the Financial Services Committee’s subpoena. Deutsche Bank declined to comply.

In all, the three House committees issue four third-party subpoenas for financial information about President Trump.

Before the response date for any of the subpoenas, President Trump brought two separate lawsuits—one in Washington, D.C., and the other in New York City—to stop Mazars and the banks from complying. President Trump sued “solely in his capacity as a private citizen.” Mazars and the banks took no position on the underlying issue—the Committees’ authority to issue the subpoenas—and so the Committees intervened as defendants.

After the President filed suit, the House passed Resolution 507, purporting to ratify the Committees’ subpoenas. The Resolution stated that the House “ratifies and affirms all current and future investigations” and “subpoenas previously issued or to be issued in the future, by any standing or permanent select committee of the House,” related to the President, his immediate family, his businesses and organizations, and others with ties to the President, including any “current or former” government employees.

Both district courts ruled against President Trump, and the D.C. and Second Circuits affirmed. This appeal followed.

CASE ANALYSIS

Congress has implied authority under the Constitution to engage in investigations and oversight of issues and areas that fall within its legitimate lawmaking power. As part of this implied authority, Congress can issue subpoenas to collect information to advance its investigations and oversight. Either house of Congress can delegate these authorities to its committees.

But a committee’s investigative and oversight authorities are not unbounded. Congressional investigations or oversight must serve a “legitimate legislative purpose,” they must be authorized by their full house, and they may not impermissibly encroach on another branch’s authority.

The parties frame their arguments around these baseline principles.

President Trump argues first that the committees did not have a legitimate legislative purpose in issuing the subpoenas. For one, he says that the subpoenas at best seek information that might lead to legislation. But he claims that this is not enough to bring the subpoenas within Congress’s legitimate lawmaking authority. For another, he asserts that the subpoenas probe into areas where Congress simply cannot legislate, for example, extending conflict-of-interest restrictions to, and imposing disclosure requirements upon, the President, and that they therefore lack a legitimate legislative purpose. For a third, he contends that the bank subpoenas impermissibly seek his personal financial information only as a “case study” for financial sector reform, and that simply does not fit within Congress’s legitimate lawmaking power. For a fourth, he contends that the subpoenas are part of the Committees’ exercise of law enforcement power, not law-making power, and that they impermissibly encroach on executive authority in violation of the separation of powers. And for a fifth, he asserts that the subpoenas are based on the Committees’ pure political interests, not legitimate lawmaking interests.

President Trump argues that for all these reasons even an ordinary congressional subpoena would fail. But he claims that the “unprecedented” congressional subpoenas seeking private information of the President should be subject to an even higher standard, and that under a higher standard these subpoenas would fail all the more.

President Trump argues next that the Committees lack express authority under House rules to issue the subpoenas. He claims that express delegation to the Committees to issue subpoenas is necessary in investigations, like these, that raise serious separation-of-powers issues, because “Congress seeks to encumber the President” and because the Committees are pushing the outer boundaries of congressional authority. Moreover, he says that requiring an express delegation, and ruling against the Committees because they lacked it, would allow the Court to avoid ruling on the underlying constitutional issues. President Trump contends that Resolution 507 did not provide express delegation, because it did not purport to amend House rules, did not expand the Committees’ authority, and acted retroactively “in violation of controlling precedent.” Finally, President Trump argues that interpreting Resolution 507 to expressly delegate power to the Committee to issue these subpoenas would only clear the way for every House Committee to issue its own subpoenas. According to the President, this, in turn, would “keep[] the President from fulfilling the obligations of his office.”

The government weighs in as amicus to support President Trump. The government lodges arguments similar to President Trump’s, but puts a finer point on the “heightened requirements” that it says Congress must meet in order to subpoena the President’s records. In particular, the government proposes this:

At the threshold, the full [House] chamber should unequivocally authorize a subpoena against the President. Moreover, the legislative purpose should be set forth with specificity. Courts should not presume that the purpose is legitimate, but instead should scrutinize it with care. And as with information protected by executive privilege, information sought from the President should be demonstrably critical to the legitimate legislative purpose. A congressional committee cannot evade those heightened requirements merely by directing the subpoenas to third-party custodians, for such agents generally assume the rights and privileges of their principal . . . .

For many of the same reasons raised by President Trump, the government says that the Committees’ subpoenas do not meet this heightened test.

The Committees counter that legislative subpoena power is an essential and time-tested part of congressional authority. (They rehearse in their merits brief the many similar congressional investigations that illustrate why their own investigations are hardly “unprecedented,” as the President contends.) They say that congressional authority’s “historical pedigree is too strong for it to be narrowed by the arguments” of the President and the government. They contend that instead of applying “heightened requirements” for these subpoenas (as the President and the government argue), the Court should defer to the Committees, so long as the subpoenas are related to a valid legislative purpose—one that “will inform Congress on a subject on which legislation could be had.”

The Committees argue next that they had “multiple legislative purposes” in issuing the subpoenas, as the courts below found. To illustrate this, they point to several pending bills, which are constitutionally permissible, that will be informed by these investigations. Moreover, the Committees contend that it doesn’t matter that they are investigating wrongdoing, so long as the investigations are related to a legitimate legislative purpose (which they are). And they say, contrary to the President and the government, these subpoenas (directed, as they are, to third parties) do not impair the President’s ability to perform his constitutional duties.

The Committees argue that the government’s “heightened standard” for subpoenas for material related to the President’s purely personal behavior conflicts with the Constitution. They say that the government’s proposed requirement that the full House authorize subpoenas concerning the President disregards the House’s constitutional power to determine its own rules. They contend that the proposed requirement that courts more closely scrutinize Congress’s stated purposes “invites inappropriate judicial micromanagement of Congressional oversight.” And they assert that the proposed requirement that a subpoena is “demonstrably critical” to congressional purposes “brazenly stacks the deck in favor of one Branch over another.” But the Committees contend that even if the Court applied the government’s test, their subpoenas would satisfy it.

Finally, the Committees argue that the House properly authorized them to conduct their investigations and issue their subpoenas. They contend that they have explicit authority to issue any subpoenas that they “consider[] necessary” to carry out “any of [their] functions and duties” under House Rule XI.2(m)(1). And they say that House Resolution 507 ratified and affirmed the specific subpoenas here.

SIGNIFICANCE

This case, just like the companion case Trump v. Vance, testing whether President Trump has to comply with a state grand jury subpoena for his tax records, has obvious and much-discussed political significance. But the subpoenas in this case sweep more broadly than the subpoena in Vance: these subpoenas seek a variety of material related to President Trump and his business organizations, while the subpoena in Vance now only seeks his tax records. As a result, this case has potentially higher stakes. In particular, a ruling against President Trump could allow the Committees to obtain a trove of material relating to President Trump’s financial dealings and their bearing, if any, on his public duties. On the other hand, a ruling for President Trump could hamstring the Committees’ investigations, or even halt them altogether, and close off this avenue to public disclosure of this material. While President Trump’s taxes may get more play in our popular political debates, his broader financial dealings are likely far more significant.

As with Vance, however, it’s not clear how much any of this will matter. Given President Trump’s remarkably stable and durable base, and given his similarly remarkably stable and durable opposition, the Court’s ruling, whatever it is, will likely be interpreted by the general public in pure political terms (pro-Trump, or anti-Trump). That’s especially true coming on the heels of the impeachment proceedings, when relations between President Trump and House Democrats are already at a new low. In this highly strained political environment, it’s easy to see how partisans will put a political cast on these rulings, and on the justices behind them. It’s equally easy to see how the inevitable reactions to these cases, therefore, threaten to do lasting harm to our collective faith in a politically independent judiciary.

This case also threatens to do lasting harm to Congress. If adopted by the Court, President Trump’s arguments, echoed by the government, could substantially rein in Congress’s investigation and oversight authorities. In particular, if the Court were to adopt the argument that Congress lacked a legitimate legislative purpose—an argument that this administration has pressed hard in other congressional investigations not directly involving the President—this could seriously constrain Congress’s power to check the Executive Branch. In its strongest form, sometimes adopted by this administration, this argument could allow the Executive Branch to wholly ignore congressional oversight and investigations, leaving Congress little practical authority to coax the administration to cooperate. But even at the very least, this argument, if adopted by the Court, could open the door to active judicial intervention in congressional oversight and investigations. In short, this argument, if adopted by the Court, would shift power away from Congress to the Executive Branch and the courts, and thus significantly alter our current separation of powers.

 

May 11, 2020 in Cases and Case Materials, Congressional Authority, Courts and Judging, Executive Authority, News, Separation of Powers | Permalink | Comments (0)

Saturday, May 9, 2020

Check it Out: Finkelstein and Painter on Presidential Immunity in Trump v. Vance

Check out Claire Finkelstein and Richard Painter's piece in the NYT, Trump's Bid to Stand Above the Law--a primer on the oral arguments next week in Trump v. Vance (testing the Manhattan D.A.'s subpoena to President Trump's accountants for his financial records), including President Trump's claim of absolute executive privilege in that case.

May 9, 2020 in Cases and Case Materials, Executive Authority, Federalism, News | Permalink | Comments (0)

Thursday, May 7, 2020

High Court Says Ninth Circuit Impermissibly Ruled Beyond Issues in Case

The Supreme Court ruled today in United States v. Sineneng-Smith that the Ninth Circuit overstepped when it invited amici to brief, and then ultimately ruled upon, an issue not raised by the parties. Justice Ginsburg concluded for a unanimous court, "[A] court is not hidebound by the precise arguments of counsel, but the Ninth Circuit's radical transformation of this case goes well beyond the pale."

The case arose when Evenlyn Sineneng-Smith, an immigration consultant, charged multiple clients over $6,000 each for filing applications for a labor certification program. The problem: the applications missed the deadline, and Sineneng-Smith knew it.

She was indicted for violations of 8 U.S.C. Sec. 1324, which makes it a felony to "encourag[e] or induc[e] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law."

Sineneng-Smith argued that the provisions didn't cover her conduct and, if they did, that they violated the Petition and Free Speech Clauses of the First Amendment. The district court rejected those arguments and convicted her.

Sineneng-Smith appealed, raising the same claims. But the Ninth Circuit invited amici to brief and argue that Section 1324 was impermissibly overbroad (among other things), a claim that Sineneng-Smith hadn't yet raised. The Ninth Circuit ultimately ruled that Section 1324 was overbroad in violation of the First Amendment.

The Supreme Court reversed. The Court ruled that the Ninth Circuit reached out for this issue, in violation of the principle that courts rely on the parties to frame the issues. The Court vacated the judgment and remanded "for reconsideration shorn of the overbreadth inquiry interjected by the appellate panel and bearing a fair resemblance to the case shaped by the parties."

Justice Thomas concurred, but wrote that he would consider revisiting the overbreadth doctrine in an appropriate case.

May 7, 2020 in Cases and Case Materials, Courts and Judging, Jurisdiction of Federal Courts, News, Opinion Analysis | Permalink | Comments (0)

Tuesday, May 5, 2020

Argument Preview: Little Sisters v. Pennsylvania, Trump v. Pennsylvania

The Supreme Court will hear oral arguments in these consolidated cases tomorrow, testing whether the Trump Administration had authority to grant a categorical exemption from the ACA's contraception guarantee for organizations with a religious or moral objection to contraception. Here's my Preivew, from the ABA Preview of United States Supreme Court Cases, with permission:

FACTS

In 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA) in order “to increase the number of Americans covered by health insurance and decrease the cost of health care.” To those ends, the ACA requires employers, with some exceptions (those with 50 or fewer employees, and those with grandfathered insurance plans), to offer their employees health insurance with certain “minimal essential coverage.” As relevant here, the ACA requires employers to offer insurance to female employees that includes “preventive care and screenings” without cost to the employees. The ACA delegates authority to determine the particular “preventive care and screenings” to the Health Resources and Services Administration (HRSA), an office within the Department of Health and Human Services (HHS).

Pursuant to this authority, the HRSA and other implementing agencies (the Department of Labor and the Department of the Treasury) issued Interim Final Rules (IFRs) that required employers to provide insurance coverage for items in HRSA’s preventive-care guidelines. Those guidelines included all female contraceptives approved by the Food and Drug Administration (FDA). The HRSA and other implementing agencies exempted certain religious employers (like churches), however, out of recognition that some individuals and organizations have faith-based objections to providing coverage for contraception.

The agencies then issued their final rule. The final rule maintained the exemption for certain religious employers (again, like churches), and added an accommodation for certain other religious non-profit employers that objected to the contraceptive guarantee. Under the accommodation, an employer would communicate its objection to its insurer or the third-party administrator (TPA) of its health plan. At that point, the federal government required or encouraged the insurer or TPA to provide contraceptive coverage directly to the employee, separate from the employer’s health-insurance plan, thus bypassing the objecting employer.

Numerous non-profit and for-profit religious organizations (including the Little Sisters) sued to halt the accommodation provision under the Religious Freedom Restoration Act (RFRA). They argued that the provision didn’t really accommodate their faith-based objections to providing contraceptive coverage to employees. Instead, they claimed that the requirement that they communicate their objections to their insurer or TPA triggered their insurer or TPA to provide contraceptive coverage. By this reckoning, the accommodation actually made them complicit in providing contraception to their employees.

Eight of nine circuit courts ruled against the plaintiffs in these cases. The Court stepped in to grant emergency relief in two of them, one brought by the Little Sisters, the other brought by Wheaton College, but the Court did not address the merits. Around the same time, in June 2014, in Burwell v. Hobby Lobby, 573 U.S. 682 (2014), the Court ruled that the contraceptive guarantee violated the RFRA as to closely-held for-profit businesses. (The final rule did not include an accommodation for for-profits.) The Court held that the guarantee substantially burdened those businesses’ exercise of religion, and that there were other ways that the government could  provide contraceptive coverage to female employees. As an example, the Court pointed to the accommodation for religious non-profits in the final rule; but it also specifically declined to say whether the accommodation itself violated the RFRA.

In response to the Court’s emergency relief in the non-profit cases and its ruling in Hobby Lobby, the implementing agencies modified the accommodation in two ways. First, they allowed objecting non-profits to notify HHS of their objections, instead of their insurers or TPAs. Next, they extended the accommodation to closely-held for-profits.

In 2016, in Zubick v. Burwell, 136 S. Ct. 1557, the Court finally took up the cases brought by religious non-profits. But rather than ruling on the merits, the Court vacated the lower courts’ rulings and ordered the parties to work out a solution. (The Court only had eight justices at the time. Justice Antonin Scalia had deceased, and the Senate refused to consider President Barak Obama’s nominee to replace him. As a result, the Court was probably evenly divided on the merits, and this solution allowed the Court avoid a four-four ruling on this important question.)

The parties could not work out a solution by the end of the Obama Administration. As a result, the implementing agencies retained the existing accommodation.

Then, in October 2017, the agencies issued IFRs that expanded the exemption for religious organizations. In particular, the IFRs categorically exempted for-profits and non-profits with a religious or moral objection from the contraceptive guarantee. (The agencies added organizations with a “moral” objection.) The agencies acknowledged that the rules would leave between 31,700 and 120,000 women without contraceptive coverage in one year.

Pennsylvania sued to halt these latest IFRs, arguing that the agencies violated the APA. The district court granted a nationwide preliminary injunction barring implementation of the IFRs. (Several other similar cases were also pending at the time, and at least one other court issued an injunction. California v. HHS, 281 F. Supp. 3d (N.D. Cal. 2017).) The court also declined to allow the Little Sisters to intervene in the case, although the Third Circuit later permitted the organization to defend “the portions of the [2017 religious rule] that applied to religious nonprofit entities.”

As the case was pending, the agencies adopted final rules nearly identical to the latest IFRs. In particular, the Final Rules exempted all private entities, including publicly-traded corporations, from the contraceptive guarantee (or allowed them to self-exempt) based on religious objections; exempted all but publicly-traded corporations based on moral objections; and made the accommodation option. The agencies acknowledged that the Final Rules would mean that between 70,500 and 126,400 women would lose access to contraception in one year.

Pennsylvania, now joined by New Jersey, filed an amended complaint. The district court granted another nationwide preliminary injunction. The Third Circuit affirmed, and this appeal followed.

CASE ANALYSIS

The parties raise four different issues. Let’s take a look, one at a time.

Standing

The Little Sisters argue that they have appellate standing, because they have a direct stake in the outcome of this case. They claim that the Third Circuit was wrong when it held that they lacked standing based on the theory that a Colorado injunction in a similar case, also involving the Little Sisters, mooted the Little Sisters’ interests in this case. The organization says that the Colorado injunction is more limited than what the Little Sisters seek in this case, and so they continue to have an independent interest in this case. The Little Sisters contend that their standing is even stronger now that the case is at the Court. After all, they assert, the Court’s ruling will affect all similar cases.

Pennsylvania counters that the Little Sisters lack appellate standing. The state says that the agencies are now enjoined from enforcing the contraceptive guarantee against the organization, and that the district court expressly excluded the organization from the injunction now on appeal. Because the Little Sisters lack a direct stake in this injunction, Pennsylvania claims that the organization lacks appellate standing in this case.

Substantive Statutory Authority

The respondents argue that the agencies had statutory authority to issue the final rules. They claim that the plain text of the ACA delegates sufficiently broad authority to the HRSA to grant categorical exemptions from the preventive-services guarantee, and that the agencies, in issuing the final rules, merely drew on that broad authority. They point out that the agencies provided for a categorical exemption from the beginning (for religious organizations like churches), and claim that this only underscores their position that the ACA delegates authority to grant this categorical exemption.

The respondents argue next that the RFRA requires, or at least permits, the broader exemptions in the final rules. They point to the Court’s ruling in Hobby Lobby that the contraceptive guarantee, without an accommodation, violates the RFRA. And they contend that the accommodation doesn’t really change that calculus. That’s because at least some religious non-profits see the accommodation itself as triggering the contraceptive guarantee, in violation of their religious beliefs. In other words, for some, the accommodation itself violates the RFRA. As a result, the respondents contend that the RFRA required the agencies to adopt the categorical exemptions in the final rules. (The respondents say that even if the RFRA did not require the agencies to adopt the final rules, it at least permitted the agencies to adopt them. They contend that an agency can be more protective of religious rights than the RFRA requires, if it so chooses.)

On the other side, Pennsylvania argues that the ACA does not authorize the agencies to adopt the final rules. The state says that the ACA only delegates authority “to identify which preventive services for women must be covered,” and not to “grant non-health related exemptions to a sub-agency with narrow expertise in health care.” Pennsylvania contends that the original exemption for religious organizations is different, because it was “independently authorized by the well-established church autonomy doctrine,” and not the ACA itself.

Pennsylvania argues next that the RFRA does not authorize the final rules. The state says that the accommodation is consistent with the RFRA, because it does not substantially burden religious exercise. (The state claims that the accommodation simply requires a religious non-profit to report its objection. At that point, federal law, not the religious non-profit, is responsible for guaranteeing contraceptive coverage.) Because the accommodation doesn’t violate the RFRA, the state contends that the RFRA provides no basis for issuing a broader, categorical exemption. Moreover, Pennsylvania asserts that the RFRA doesn’t affirmatively grant federal agencies any rulemaking power, except to the extent that an agency regulates to resolve a RFRA violation in a program the agency administers. But the state says that this is not the case here.

Procedural Compliance with the APA

The respondents argue that the final rules comport with APA requirements. They contend that the final rules—the only rules at issue here—complied with APA notice-and-comment requirements. And they say that the earlier IFRs complied with the APA requirements for interim final rules. They point out that all of the agencies’ rules on the contraceptive guarantee started as interim final rules, and that the latest IFRs are no different.

Pennsylvania replies that the final rules violate the APA. The state contends that the 2017 IFRs violated the APA, because they failed to meet the APA standard for interim final rules, in particular, that they were not so urgent as to allow the agencies to bypass normal notice-and-comment procedures. The state contends that the 2018 final rules violate the APA, too, because the agencies did not allow for pre-publication notice and comment. (Instead, the agencies took comments on the 2017 IFRs, not the proposed 2018 final rules.) Pennsylvania argues that the APA does not permit the agencies to sidestep notice-and-comment requirements this way.

Nationwide Injunction

Finally, the respondents argue that the Court should reverse the district court’s nationwide injunction. They claim that the nationwide injunction grants relief far beyond the interests of the states, and thus exceeds the power of the district court. They claim that a nationwide injunction in this case is particularly inappropriate, because it could conflict with rulings in the many other similar cases pending around the country.

Pennsylvania argues in response that the nationwide injunction is consistent with the APA, which requires courts to set aside unlawful rules without limitation and grants courts authority to enter preliminary orders “to postpone the effective date of an agency action or to preserve status or rights.” The state also says that a nationwide injunction fully redresses its injuries, because the final rules would exempt out-of-state entities whose employees, students, or children might come to Pennsylvania and burden the state with the cost of their contraceptive coverage.

SIGNIFICANCE

This case is the latest chapter, and probably the last one, in the long-running saga over the contraceptive guarantee. This regulatory provision has been under sustained attack from the beginning. While opponents of guaranteed contraception have lost overwhelmingly in the circuit courts, the Supreme Court has been a much friendlier venue. As mentioned above, the Court ruled in Hobby Lobby that the guarantee (without an accommodation) violated the RFRA as to closely-held corporations. Moreover, it granted interim relief in a pair of cases challenging the accommodation for religious non-profits. And while it dodged the underlying issue in Zubick, there’s reason to think that it ruled this way to avoid a four-four split on the eight-justice Court—in other words, that four of the eight justices would have struck the accommodation.

If that’s right, then we might expect that there are now five justices that would rule that the accommodation violates the RFRA. (Since Zubick, Justice Neil Gorsuch replaced Justice Scalia, and Justice Brett Kavanaugh replaced Justice Anthony Kennedy. If the Court would have split four-four on the merits in Zubick, Justice Gorsuch’s addition probably means that there are now five votes for striking the accommodation.)

But that doesn’t necessarily answer the questions in this case. In particular, even if the accommodation violates the RFRA, that alone doesn’t mean that the agencies had authority to issue the Final Rules, or that they issued them consistently with the APA. Remember that the Final Rules categorically exempt a much broader set of organizations than were covered by the accommodation. (Keep an eye on the categorical exemption for organizations with a moral objection to contraception. This opens a potentially gaping hole in the contraceptive guarantee.) Moreover, the government itself estimates that the Final Rules will result in lost contraceptive coverage for tens of thousands of women in one year—seemingly undermining the very purpose of the ACA to provide “minimal essential coverage.” The broad sweep of the Final Rules, and their procedural irregularities, could mean that the agencies lacked authority to adopt them, even if a majority on the Court might agree that the accommodation violated the RFRA.

On a different note entirely: This case raises a critically important question about the authority of district courts to issue nationwide injunctions. This practice is increasingly common, and increasingly controversial, as plaintiffs have sought more and more to halt administration policies across the board. The government invites the Court to address this issue, even if it doesn’t rule in favor of the government on the merits.

This question may seem like it has partisan overtones. But it doesn’t. If the Court rules that district courts lack authority to issue nationwide injunctions, that will take away a key tool that advocates can use—and have used—to challenge government policies in any administration.

May 5, 2020 in Cases and Case Materials, Congressional Authority, Executive Authority, News, Separation of Powers | Permalink | Comments (0)

Argument Preview: Barr v. American Association of Political Consultants

The Supreme Court will hear oral arguments on Wednesday in Barr v. American Association of Political Consultants, Inc., the case testing whether the general ban on automated calls to cell phones in the Telephone Consumer Protection Act is an impermissible content-based restriction on speech because the Act exempts calls to collect government owned debt. Here's my Preview, from the ABA Preview of United States Supreme Court Cases, with permission:

FACTS

Congress enacted the Telephone Consumer Protection Act of 1991 (TCPA) in order to protect individuals from the “nuisance” and “invasion of privacy” wrought by automated calls. Among other things, the TCPA prohibits any automated call to any cell phone number, except calls made for an emergency purpose or with the express consent of the called party. 47 U.S.C. § 227(b)(1)(A)(iii). While Congress was particularly concerned about automated telemarketing calls, the automated-call restriction is not limited to calls made to sell goods or services. Congress delegated authority to enforce the TCPA to the Federal Communications Commission (FCC).

In 2015, Congress added an exception to the automated-call restriction for calls “made solely to collect a debt owed to or guaranteed by the United States.” 47 U.S.C. § 227(b)(1)(A)(iii). The provision, called the “government-debt exception,” was designed to help the United States collect on debts “as quickly and efficiently as possible.” As part of the provision, Congress authorized the FCC to issue regulations “restrict[ing] or limit[ing] the number and duration of” these calls, so that the FCC could “protect consumers from being harassed and contacted unreasonably.” FCC regulations limit the government-debt exception to only those calls involving delinquent debt that the United States owns or guarantees, and where a caller has authority to accept payment and the recipient has a responsibility to pay.

In 2016, a group of political organizations and an association of political consultants, fundraisers, and pollsters sued the Attorney General and the FCC, arguing that the automated-call restriction, as amended by the government-debt exception, was a content-based restriction on speech in violation of the First Amendment. The plaintiffs sought a declaratory judgment that the automated-call restriction was unconstitutional on its face.

The district court ruled in favor of the government. The Fourth Circuit vacated the judgment and remanded for further proceedings. (The Fourth Circuit ruled that the government-debt exception was an impermissible content-based regulation on speech. But it then severed that exception from the broader automated-call restriction, and sent the case back to the district court to determine whether the automated-call restriction, now without the government-debt exception, violated free speech.) This appeal followed.

CASE ANALYSIS

As a general matter, a content-based restriction on speech must be narrowly tailored, or necessary, to serve a compelling government interest. This test, called “strict scrutiny,” is the most demanding test known to constitutional law. It usually means that a content-based restriction on speech violates the First Amendment.

This case has a twist, though. The content-based portion of the automated-call restriction is in the government-debt exception (assuming, that is, that the government-debt exception is content-based—the first point of contention between the parties). The plaintiffs don’t challenge the government-debt exception alone (and that makes sense, because, after all, the exception allows speech); instead, they challenge the overall automated-call restriction based on the alleged impermissibly content-based government-debt exception.

And that leads to severability—the second point of contention between the parties. If the government-debt exception is a content-based regulation on speech, and if it therefore renders the entire automated-call restriction a content-based regulation on speech, then the Court may be able to save the automated-call restriction by simply extracting, or severing, the government-debt restriction—that is, by simply removing the offending portion.

The government argues that the government-debt exception is not a content-based restriction on speech. The government claims that the exception does not regulate speech based on its content, but rather based on “a certain kind of economic activity (the collection of government-backed debts).” To illustrate this point, the government says that the exception doesn’t apply unless the government owns or guarantees the debt, the caller has authority to collect the debt, and the debt is not delinquent—all requirements that do not relate to the content or message of the call. And to the extent that these requirements may touch on the content of the call, the government contends that these are not the kinds of things that typically trigger strict scrutiny.

Because the government-debt exception is not a content-based regulation of speech, the government argues that it is subject to a lower level of scrutiny, intermediate scrutiny, and that it passes. The government claims that the exception serves the “significant public and governmental interest in protecting the federal fisc,” and that the exception “directly advances” that interest by allowing automated calls to more efficiently collect on government debt. It says that the exception allows only a narrow range of calls for a limited purpose, and therefore sufficiently protects the privacy interests of those who are called.

Finally, the government argues that even if the government-debt exception is a content-based regulation of speech, the Court should sever it from the rest of the TCPA and leave the automated-call restriction intact. The government claims that the Act itself contains a severability provision that unambiguously requires severability, and that the history and purposes of the TCPA confirm “that Congress would have wanted the automated-call restriction to remain in effect independently of the government-debt exception.” (The government points to the fact that the automated-call restriction was on the books for 24 years before Congress added the government-debt exception.) The government contends that when the Court severs the government-debt exception, it removes the content-based regulation on speech (again, only assuming that the government-debt exception is a content-based regulation on speech) so that it can’t infect the rest of the Act—and so that the automated-call restriction can continue to stand.

The plaintiffs counter that the automated-call restriction is an impermissible content-based restriction on speech. The plaintiffs point to the government-debt exception to illustrate this. In short, they say that the automated-call restriction, including its government-debt exception, allows speech that “discusses only the collection of government-backed debt” but disallows speech on any other topic. The plaintiffs contend that fails strict scrutiny, because the government doesn’t have a compelling interest in protecting the public from unwanted communication, and, in any event, the “sweeping prohibitions” under the automated-call restriction “are far from the least restrictive means of furthering that interest.” (Indeed, they argue that “the statute is so hopelessly ill-tailored to the Government’s asserted privacy interest that [the automated-call restriction] fails any level of scrutiny.”)

The plaintiffs argue that the only appropriate remedy is to strike the automated-call restriction. They claim that Court precedent supports the idea that when a statute restricts speech based on content with exceptions that allow speech, the Court strikes the restriction, not the exceptions. Moreover, they claim that it’s the automated-call restriction, and not the government-debt exception, that harms them. The plaintiffs contend that the content-based discrimination reflected in the government-debt exception shows that the overall automated-call restriction is also content-based, and therefore unconstitutional. They assert that severing the government-debt exception (the provision that allows more speech) only to uphold the automated-call restriction (the provision that allows less speech) makes no sense when the First Amendment protects free (or more) speech.

Finally, the plaintiffs argue that the automated-call restriction violates free speech even if the Court severs the government-debt exception. They claim that the automated-call restriction is itself a content-based restriction on speech (even without considering the government-debt exception), and that it is “far broader than necessary to advance the narrow privacy interests the Government asserts.”

SIGNIFICANCE

This ruling could have immediate and all-too-palpable significance for the estimated 96 percent of people in the United States who have a cell phone. Perhaps to state the obvious: a ruling for the plaintiffs could allow automated political calls to cell phones, right as the 2020 election goes into full swing. This could be a huge boon to those who seek to use automated-calling technology for political purposes (like the plaintiffs in this very case), but it could also be a huge drag to cell phone users who wish to avoid an onslaught of political calls on a device that was previously protected from them.

A ruling for the plaintiffs would effectively open up calls for other purposes, too, including commercial solicitations, advertisements, surveys, and the like.

But this is only if the Court rules (1) that the government-debt exception is a content-based restriction on speech, (2) that the government cannot justify the exception under strict scrutiny, and (3) that the government-debt exception therefore renders the entire automated-call restriction irremediably unconstitutional (because the government-debt exception cannot be severed). This is a tall order, even for a Court that has in recent years demonstrated an extreme preference for a free and open “marketplace of ideas”—and an equally extreme distaste for all manner of content-based regulations on speech.

Taking a step back from the particulars of First Amendment doctrine, here’s another way to think about this case: as a balance between, on the one hand, a free and open marketplace of ideas, involving our most highly valued speech (political speech), and, on the other, our need for and expectation of privacy from automated calls on our cell phones. At what point does the marketplace of ideas run into our expectation of privacy, on this especially private device?

May 5, 2020 in Cases and Case Materials, First Amendment, News, Speech | Permalink | Comments (0)