Monday, December 2, 2013
The Supreme Court today declined to review a Fourth Circuit ruling upholding the Affordable Care Act's employer mandate. Our post on the Fourth Circuit ruling is here.
The order rejecting cert. means that the Fourth Circuit ruling stays on the books and that the Supreme Court won't take on the employer mandate (now, and likely ever). The Obama administration delayed implementation of the mandate (sparking bills in Congress and lawsuits to override the delay); it's now scheduled to go into effect in 2015 (and not January 1, 2014, as the law seems to require).
Recall that the Fourth Circuit ruled in Liberty University v. Lew that Congress had authority under both the Commerce Clause and the Taxing Clause to impose a mandate on employers to provide health insurance to employees. The case was notable, because it held that Congress had authority under the Commerce Clause to impose the employer mandate, even though five justices on the Supreme Court ruled in NFIB v. Sebelius that Congress lacked authority under the Commerce Clause to impose the individual mandate. The Fourth Circuit said that in enacting the employer mandate Congress wasn't creating commerce to regulate it (as Chief Justice Roberts wrote in NFIB about the individual mandate). Instead, the Fourth Circuit said that the employer mandate was just another federal regulation on the terms and conditions of employment between an employee and an employer, who is already in interstate commerce.
Monday, November 11, 2013
The Veterans Day Off Bill, reintroduced by Congressperson Bruce Braley of Iowa this year would require employers with more than 50 employees to give any veteran Veterans Day off, with or without pay. The bill includes an exemption for cases in which the day off would negatively impact public health or safety, or cause significant economic or operational disruption.
First, there could be an equality challenge. Nonveterans could challenge the law as a denial of the equal protection component of the Fifth Amendment. Certainly the law would be making a classification between veterans and nonveterans. However, this classification receives receives the lowest level of scrutiny from the courts: the government would have the legitimate interest of "honoring veterans" and a single day off, that could be without pay, would most likely be reasonable. It would be similar to veterans preferences in government employment which have been held constitutional, even though they have a disparate negative impact on women, as in Personnel Administrator of Massachusetts v. Feeney, decided by the United States Supreme Court in 1979.
Second, there could be a challenge to Congressional power to require private employers to allow employees a day off. Requirements that private employers do not practice race or sex discrimination, or comply with wage and hour laws, or provide family medical leave, have all been held constitutional. This law would be similar to those laws, as well as the the federal law protecting employment for those serving in the military, the Uniformed Services Employment and Reemployment Rights Act (USERRA). The Bill does not apply to employees working for state governments where the Eleventh Amendment could serve as a potential bar to lawsuits seeking to vindicate rights.
Lastly, should the United States Supreme Court ever recognize that secular for-profit corporations have a free exercise of religion right under the First Amendment, the future could bring a challenge by the major shareholders of a corporation that sells sequins or makes kitchen cabinets or sells groceries on the basis that the shareholders are Quakers, for example, who have a sincere and deeply held pacifist religious belief that would be burdened by being mandated to support a day off for someone who had participated in the activities of war.
[image: The Afghanistan-Iraq War Memorial in Salem, Oregon, via]
Thursday, October 24, 2013
The Fourth Circuit ruled in Colon Health Centers of America v. Hazel that two out-of-state medical providers alleged a sufficient challenge to Virginia's "certificate of need" requirement to survive a motion to dismiss. The court remanded the case for fact-finding on the dormant Commerce Clause question.
The court suggested that the requirement wouldn't ultimately survive. The case, when it comes back to the Fourth Circuit after remand, may be significant, if, as the concurrence says, "in Virginia, and throughout much of the country, state certificate of need regimens continue to grow and now regulate an enormous segment of the national economy." Op. at 27-28.
Virginia's certificate-of-need program requires medical providers that seek to launch a medical enterprise in the state to show a public need for the service that it seeks to offer. (Judge Wilson puts a finer point on it in dissent: "Plaintiffs would like to render medical services in Virginia with equipment they cannot utilize without first proving to the Commonwealth that the competition they bring with them will not harm established local health care providers.") The plaintiffs, two corporations that provide colon screening and treatment, alleged that the program violates the dormant Commerce Clause (among other constitutional claims, rejected by both the district court and the Fourth Circuit).
The court ruled that the plaintiffs alleged sufficient facts to survive a motion to dismiss and to trigger discovery and fact-investigation by the trial court. The court gave unusually specific directions to the trial court to find facts on the program's discrimination against interstate commerce in purpose and effect, recognizing that this fact investigation would also spill over into the lower-level balancing test under the dormant Commerce Clause for state laws that create an undue burden on interstate commerce.
Friday, September 27, 2013
The Eighth Circuit this week in Southern Wine and Spirits of America, Inc. v. Division of Alcohol and Tobacco Control upheld Missouri's requirement that liquor wholesalers reside in Missouri against a dormant Commerce Clause challenge. The ruling means that Missouri's law stays on the books, at least for now.
The case pitted the equal treatment requirement of the dormant Commerce Clause against the state's authority to regulate alcohol under the Twenty-first Amendment. In the Supreme Court's last foray into that area, in Granholm v. Heald, the Court struck a state law allowing in-state wineries to ship their products directly to in-state consumers, but requiring out-of-state wineries to sell through wholesalers. The law meant that in-state wineries could sell their wine at lower costs. The Court said that "the Twenty-first Amendment does not supersede other provisions of the Constitution and, in particular, does not displace the [dormant Commerce Clause] rule that States may not give a discriminatory preference to their own producers."
But the Supreme Court also noted that its holding didn't call into question the constitutionality of the three-tier distribution system set by the state--producers, wholesalers, and retailers. In particular, it wrote (in dicta) that the three-tier distribution system is "unquestionably legitimate" and that the system includes the "licensed in-state wholesaler." It also wrote that state policies that define the structure of the liquor distribution system--and that give equal treatment to in-state and out-of-state liquor products and producers--are "protected under the Twenty-first Amendment."
Missouri's law requires wholesalers to be "resident corporation[s]." That means that the corporation has to be incorporated under Missouri law, all of its officers and directors must be residents of Missouri for at least three years, and resident stockholders must own at least 60 percent. The law has a grandfather clause, exempting licensed wholesalers as of January 1, 1947. (There is currently just one such wholesaler.)
The Eighth Circuit upheld the law against the dormant Commerce Clause challenge. In particular, the court held that there was no evidence of protectionist intent. And it said that under Granholm the law didn't discriminate against out-of-state products or producers, and that under Granholm states could require wholesalers to be "in-state."
The court held that Missouri's law easily passed the "deferential scrutiny" that Granholm says applies to state policies defining the distribution system. It said that the legislature could have believed that a wholesaler governed by Missouri residents might be more socially responsible and promote temperance, and that Missouri residents might be more likely to respond to concerns of the community. The court also said that the legislature could have concluded that in-state residency promotes law enforcement.
Thursday, September 19, 2013
The Third Circuit panel this week in NCAA v. Governor of New Jersey upheld the federal law prohibiting states from licensing sports gambling against a challenge that it exceeded congressional authority under the Commerce Clause, impermissibly commandeered the states, and violated the principle of equal sovereignty among the states.
The case was a significant test of congressional authority after NFIB v. Sebelius (upholding the ACA's individual mandate under congressional taxing authority, but ruling that it exceeded congressional Commerce Clause authority) and a significant test of the principle of equal sovereignty among the states after Shelby County v. Holder (ruling that the preclearance formula in the Voting Rights Act violated the principle of equal sovereignty among the states and exceeded congressional authority under the Fifteenth Amendment).
The Third Circuit panel rejected both arguments--and the commandeering argument, too--and upheld the federal prohibition. (The court also ruled that the plaintiffs, sports leagues, had standing to challenge the New Jersey law--in part because the law was directed at them (even if indirectly) and because they would have suffered a reputational injury by association with gambling.)
sponsor, operate, advertise, or promote . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.
Friday, July 12, 2013
A three-judge panel of the Fourth Circuit upheld the employer mandate in the Affordable Care Act. The ruling in Liberty University v. Lew deals a significant blow to challengers of the Act's requirement that large employers provide affordable health care coverage to full-time employees and dependents or pay a fine. Unless and until it's appealed to the full Fourth Circuit and the Supreme Court--and unless and until one or the other reverses--the ruling upholds the employer mandate.
The ruling is notable, because it says that Congress had authority under the Commerce Clause to enact the employer mandate. (Recall that five Justices on the Supreme Court said last summer in National Federation of Independent Business v. Sebelius that Congress exceeded its authority under the Commerce Clause to enact the individual mandate.) What's the difference? See below.
The case is a hold-over from the Supreme Court's ruling last summer in National Federation of Independent Business v. Sebelius. Recall that the Court in that case held that the Anti-Injunction Act did not bar a the suit challenging the individual mandate, and that the individual mandate was a valid exercise of Congress's taxing power. The Court also remanded Liberty University to the Fourth Circuit for a ruling consistent with NFIB. (The Fourth Circuit previously held that the Anti-Injunction Act deprived it of jurisdiction to rule on the merits and dismissed the case.)
The Fourth Circuit followed NFIB's lead and ruled that the employer mandate (like the individual mandate in NFIB) was not a "tax" for purposes of the Anti-Injunction Act. (The court also ruled that Liberty University had standing to lodge its pre-enforcement challenge of the employer mandate, and that the individual named plaintiffs had standing to challenge the individual mandate.)
On the merits, the court ruled that the employer mandate is a valid exercise of Congress's Commerce Clause authority. (Recall that five members of the Supreme Court in NFIB said that the individual mandate exceeded Congress's Commerce Clause authority, even if it fell within Congress's taxation power.) What's the difference between the employer mandate and the individual mandate? In short, unlike individuals who have not purchased health insurance, employers operate in interstate commerce, and health insurance is part of their employees' compensation package, which itself is regulable under the Commerce Clause. The Fourth Circuit explained:
To begin, we note that unlike the individual mandate . . . the employer mandate does not seek to create commerce in order to regulate it. In contrast to individuals, all employers are, by their very nature, engaged in economic activity. All employers are in the market for labor. And to the extent that the employer mandate compels employers in interstate commerce to do something, it does not compel them to "become active in commerce," [NFIB, emphasis in original]; it merely "regulate[s] existing commercial activity," id., i.e., the compensation of employees . . . .
Further, contrary to Liberty's assertion, the employer mandate does not require employers to "purchase an unwanted product." . . . Although some employers may have to increase employee compensation (by offering new or modified health insurance coverage), employers are free to self-insure, and many do.
(Interestingly, the court dropped a footnote, note 7, that says, "We express no opinion as to whether the limitation on the commerce power announced by five justices in NFIB constitutes a holding of the Court." We covered that topic here.)
Following NFIB, the court also upheld the individual mandate under Congress's taxing power, and applied that ruling to uphold the employer mandate under Congress's taxing power.
The court also rejected the plaintiffs' religion claims--based on the First and Fifth Amendments (equal protection) and the Religious Freedom Restoration Act.
July 12, 2013 in Cases and Case Materials, Commerce Clause, Congressional Authority, Establishment Clause, First Amendment, Jurisdiction of Federal Courts, News, Opinion Analysis, Religion, Taxing Clause | Permalink | Comments (0) | TrackBack (0)
Monday, April 15, 2013
The Roberts Court majority is avoiding taxes: not the income taxes revealed by the returns due today, April 15, but the constitutional scrutiny that taxes deserve.
Law Prof Linda Sugin (pictured left), in her article The Great and Mighty Tax Law: How the Roberts Court Has Reduced Constitutional Scrutiny of Taxes and Tax Expenditures, draft available on ssrn, analyzes two cases that are not typically paired.
First, she considers National Federation of Independent Business v. Sebelius, in which, as she describes it, Justice Roberts' "newly muscular tax law saved Obamacare from near death at the hands of the Commerce Clause."
Second, she examines Arizona Christian Schools v. Winn, in which, as dhe describes it, the majority "adopted a novel judicial approach to targeted tax benefits" and denied standing in an Establishment Clause challenge.
Sugin argues that these two cases, taken together, "challenge the revenue-raising role of the tax law, and give it tremendous potential to overcome constitutional obstacles that legislatures face," including state legislatures. She contends that the cases "introduce confusion into the law of taxation by incentivizing the adoption of more non-revenue policy in the tax law, and blurring the conceptual structure of taxation." She claims that "these decisions undermine the important work on tax reform and fiscal responsibility that other branches of government are doing." Ultimately, she argues that these decisions portend that "policies administered through the tax law" will be deemed constitutional "even where those same policies would be unconstitutional if administered as either direct regulation or appropriated spending."
Worth a read and not only on "tax day."
Thursday, March 28, 2013
The New York Court of Appeals today upheld a state statutory presumption that internet retailer "associates" operating within the state provide a sufficient nexus for the state to collect sales tax on the retailer's state sales. The ruling approves New York's end-run around the dormant Commerce Clause rule that a state can impose a sales tax on an out-of-state retailer only if the retailer has a physical presence--including economic activities by the retailer's employees, but not mere advertising.
With the rapid growth of internet sales across state lines, and with the last Supreme Court ruling on anything like this coming as far back as 1992 (on mail-order sales, of all things), this case may be a good candidate for high court review.
But on the other hand, the precise ruling in the case is rather limited. That's because the plaintiffs in the case pressed only their facial challenge at the Court of Appeals, not an as applied challenge. The problem here is that the statutory presumption can be rebutted, and an out-of-state retailer that can rebut it will also be exempt from it. This gives the presumption some wiggle room in certain cases and may be enough to protect out-of-state retailers against state sales taxes when they don't have sufficient business activity to constitute presence. The Court's ruling only says that the statutory presumption is not unconstitutional on its face. That's a far cry from saying that it's constitutional in every application.
The case, Overstock.com v. New York State Department of Taxation and Finance, tests New York's statutory presumption that an out-of-state internet retailer's in-state "associate" is soliciting business for the retailer:
a person making sales of tangible personal property or services taxable under this article ("seller") shall be presumed to be soliciting business through an independent contractor or other representative if the seller enters into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an internet website or otherwise, to the seller . . . .
New York Tax Law Sec. 1101(b)(8)(vi). The provision exactly describes Amazon's and Overstock.com's "associates"--local web-sites that include links to Amazon.com or Overstock.com and that receive a commission on each purchase through that link.
But neither Amazon nor Overstock.com has a physical presence in New York. And according to the Supreme Court in Quill Corp. v. North Dakota (1992), an out-of-state retailer like Amazon or Overstock.com has to have a physical presence in order for New York to impose a tax. (Quill Corp. involved an out-of-state mail order retailer. If you don't know what that is (!), click here.) Physical presence includes engaging in economic activities (like selling goods), but not advertising alone.
Enter the statutory presumption. The presumption says that Amazon's and Overstock.com's "associates"--those New York-based web-sites that contain a link to Amazon or Overstock.com, and receive a commission on each sale--establish a sufficient nexus between the out-of-state retailers and the state so that New York can impose its tax.
And the New York Court of Appeals OK'd it. The Court said that the retailers' associates were engaged in sufficient economic activity on behalf of the out-of-state retailers--business solicitation, and not mere advertising--to allow the state to tax.
Judge Smith dissented. He thought that the associates' links looked more like mere advertising, not business solicitation, and therefore weren't enough to establish a nexus between the retailers and the state.
The Court also rejected the retailers' due process claims, because the presumption is rational. The Court explained:
It is plainly rational to presume that, given the direct correlation between referrals and compensation, it is likely that residents will seek to increase their referrals by soliciting customers. More specifically, it is not unreasonable to presume that affiliated website owners residing in New York State will reach out to their New York friends, relatives, and other local individuals in order to accomplish this purpose.
Thursday, February 21, 2013
The Supreme court heard oral arguments yesterday in McBurney v. Young, a case testing whether a state's freedom of information law, or FOIA, can limit access to government information to its own citizens consistent with the Article IV Privileges and Immunities Clause and the Dormant Commerce Clause. (Together these provisions restrict states in discriminating against out-of-staters in the exercise of fundamental rights or important economic interests, or in interstate commerce.) The case was brought by two out-of-staters against Virginia after the state denied them access to records related to the state's enforcement of a child support order and state property records collected for clients as part of a business. Virginia is one of only three states that restricts its FOIA records to in-staters.
The case is tough, because it's not obvious that Virginia's restriction is a restriction on interstate commerce (in violation of the Dormant Commerce Clause), and it's not obvious that the access that the petitioners seek is the kind of right that they, as out-of-staters, should enjoy with respect to Virginia.
The questions from the bench went right to these points. The Court was concerned about whether Virginia's restriction was, in fact, a restriction on commerce, or whether it was merely a law, not a commercial regulation, that had at most an incidental effect on interstate commerce. (The Dormant Commerce Clause points go to the property-records seeker, not the child-support seeker.) In other words: does the Dormant Commerce Clause even apply, given that this may not be a regulation of commerce?
Justices were also concerned about the magnitude of the effect, on both sides. As to the petitioners, they wondered why the cost to the petitioner wasn't negligible. After all, any out-of-stater could simply hire an in-stater for a nominal fee to file their request and thus dodge the restriction. As to the state, they wondered why the cost to the state in providing equal access to its records was significant. The burden of addition requests from out-of-staters didn't seem to be much.
Finally the Justices wondered whether Virginia shouldn't be allowed to restrict access to its records, given that its law is designed to provide access to government information to ensure good government--a concern that applies uniquely to Virginians. On this point, several Justices compared the right to access to the right to vote, and noted that out-of-staters don't get it. In short: Shouldn't Virginia be able to keep its records to its own state citizens? The question goes at least in part to the purpose of Virginia's FOIA--to provide information on governance (as the state would have it), or to restrict information in restraint of free trade (as the petitioner argued).
The parties didn't provide terrific answers to any of these questions. But counsel for the petitioner did note that the challenge was as applied, not facial. This could allow the Court to rule narrowly in favor of this individual, without overturning the restriction as to anyone else. But even that result seems likely only if the Court can get over two threshold problems. First, the restriction is not a direct discriminatory regulation of interstate commerce (even if it may have an indirect effect on interstate commerce in this case). Next, Virginia is certainly able to restrict some of its state functions to its own citizens. The question for the Court: Is this one of them?
February 21, 2013 in Cases and Case Materials, Commerce Clause, Dormant Commerce Clause, Federalism, News, Privileges and Immunities, Privileges and Immunities: Article IV | Permalink | Comments (0) | TrackBack (0)
Monday, January 14, 2013
The Supreme Court on Friday agreed to hear a case asking whether Congress had authority to require a sex offender who already served out his sentence to later register when he moved within a single state. The case comes three years on the heels of United States v. Comstock, another case involving congressional authority over federal criminals after their sentences have run, and one suggesting expansive congressional authority. (Comstock held that Congress had authority under the Necessary and Proper Clause to designate federal prisoners as "sexually dangerous" and to detain them even beyond their original sentence.) It also comes just one year after the Court's sharply divided and controversial ruling in NFIB v. Sebelius, the ACA/Obamacare challenge defining a limit on congressional authority and holding that Congress lacked authority under the Commerce Clause to require individuals to purchase health insurance. (NFIB also held that Congress had authority under its taxing power to require individuals to purchase health insurance.) This case, United States v. Kebodeaux, thus gives the Roberts Court yet another important opportunity to define congressional authority and to read that authority as relatively broad (as in Comstock) or to find an important limit (as in NFIB--even if a different limit than the Court found in that case).
Kebodeaux involves a challenge to the federal Sex Offender Registration and Notification Act, or SORNA. SORNA, enacted in July 2006, requires sex offenders to register in the jurisdiction where they live. It requires states to adopt specified federal standards for registration as a condition of receipt of federal funds.
Kebodeaux, a convicted sex offender who served out his sentence and was released from prison "unconditionally" (the Fifth Circuit's word), was convicted of violating SORNA by failing to register when he moved from El Paso to San Antonio. Kebodeaux challenged his conviction on appeal, arguing that Congress lacked authority to penalize his failure to register in a purely intrastate move, because he had served his full sentence and was released by the time Congress enacted the registration requirement in SORNA.
The en banc Fifth Circuit agreed. It ruled that Congress had no authority over Kebodeaux when he made an intrastate move after he served out his full sentence. In short, the court said that the period of time between Kebodeaux's release and Congress's enactment of the registration requirement in SORNA broke the chain linking congressional authority and Kebodeaux, and Kebodeaux did not re-establish that chain (by way of the Commerce Clause) by crossing state lines. The court distinguished Comstock on exactly that basis: in Comstock, the federal government still had physical control over federal prisoners designated "sexually dangerous," even if they were literally on their way out of the federal prison, and thus had authority to regulate them by ordering their continued detention; here, in contrast, the federal government had no control over Kebodeaux.
Kebodeaux's facts go beyond those in Comstock, however, because this case is not merely about whether Congress can regulate the activity of someone still in federal custody past the expiry of his sentence. Importantly, it raises the further question whether Congress can regulate his activity solely because he was once convicted of a federal crime.
Op. at 6.
The court also worries that this authority would know no bounds and would intrude into areas of state regulation. And it worries that there is no authority, "from more than two hundred years of precedent, for the proposition that it can reassert jurisdiction over someone it had long ago unconditionally released from custody just because he once committed a federal crime." Op. at 9.
If these worries sound familiar, it's because similar worries drove the opponents of the ACA/Obamacare, and ultimately even the Court, in ruling that Congress exceeded its Commerce Clause authority in enacting the universal coverage provision, or the so-called individual mandate, in NFIB v. Sebelius. Many of us didn't see this coming in NFIB. A similar limit on congressional authority may be creeping up on us now.
On the other hand, the panel decision and sharp dissents in the Fifth Circuit en banc ruling argued that Comstock supported congressional authority to apply SORNA's registration requirements to Kebodeaux. This case could well follow Comstock and (again) highlight expansive congressional authority over those once in federal control.
Either way, Comstock, the sleeper of OT2009, will play a key role in the outcome. And the case will give us one more important datapoint to plot the trajectory of congressional authority under the Roberts Court.
Friday, November 30, 2012
The Sixth Circuit ruled in American Beverage Association v. Snyder that Michigan's requirement that returnable beverage containers bear a unique mark violated the Dormant Commerce Clause. The ruling strikes Michigan's requirement.
The ruling turns on the dormant Commerce Clause's "extraterritorial doctrine," which, according to one concurring judge on the panel, is "a relic of the old world with no useful role to play in the new[.]" If so, this case could offer the Supreme Court a good chance to clean up this corner of the dormant Commerce Clause.
The case involves Michigan's bottle-deposit law, which requires consumers to pay a ten-cent deposit on a beverage container (like a can or bottle). Containers sold in Michigan must bear a designation--"MI 10c"--in order to distinguish them from containers sold in other states. Consumers who return a container with the "MI 10c" designation get a ten-cent deposit back when they return the container. (Michigan is one of ten states with a bottle-deposit law.)
Some consumers discovered that they could return containers in Michigan that were purchased from states that have no deposit law (that is, non-"MI 10c" containers) and net ten cents on each return. This was especially easy with "reverse vending machines"--automated return machines that did not distinguish between Michigan containers and out-of-state containers.
The Michigan legislature responded by requiring beverage manufacturers to place a unique mark on Michigan returnable containers (in addition to the "MI 10c" mark) that would allow a reverse vending machine to determine whether the container was, in fact, a Michigan returnable container. Failure to comply could result in a penalty of up to six months' imprisonment or a $2,000 fine or both.
Manufacturers sued, arguing that the requirement amount to an unconstitutional restraint on interstate commerce in violation of the dormant Commerce Clause.
The Sixth Circuit agreed. It ruled that while the requirement did not discriminate against interstate commerce (on its face, in its purpose, or in its effect), it did "directly control commerce occurring wholly outside the boundaries of a State," and thus was extraterritorial under Healy v. Beer Inst. Inc. (1989). This doctrine renders extraterritorial regulation "virtually per se invalid under the dormant Commerce Clause." Op. at 13.
Judge Sutton concurred but wrote separately "to express skepticism about the extraterritoriality doctrine." Judge Sutton wrote that the doctrine may have outlived its usefulness.
Monday, November 26, 2012
The Supreme Court today reopened one of the cases challenging the federal Affordable Care Act and sent it back for further proceedings at the Fourth Circuit. The move means that the lower court, and possibly the Supreme Court, will have another crack at certain issues that the Supreme Court dodged this summer in its ruling in NFIB v. Sebelius.
Recall that the Fourth Circuit rejected a challenge to the ACA by several individuals and Liberty University in September 2011, holding that the Anti-Injunction Act barred the claim. The Supreme Court declined to review that case, Liberty University v. Geithner. But today the Court reopened the case, vacated the Fourth Circuit ruling, and sent the case back for further proceedings in light of the Court's ruling in NFIB.
The plaintiffs in the case originally challenged the universal coverage provision (the so-called "individual mandate," requiring individuals to acquire health insurance or to pay a tax penalty) and the employer mandate (requiring employers with more than 50 employees to provide health insurance coverage for their employees), arguing that they exceeded Congress's taxing and commerce powers and violated the Tenth Amendment, Article I, Section 9's prohibition against unapportioned capitation or direct taxes (the Direct Tax Clause), and the Religion Clauses and the Religious Freedom Restoration Act (among others). (As to the Religion Clauses, the plaintiffs argued that the requirements would cause them to support insurance companies that paid for abortions, a practice that they claimed ran against their religions.)
The district court ruled against the plaintiffs on all counts and dismissed the case. The Fourth Circuit dismissed the case under the AIA and didn't reach the merits.
The Supreme Court ruled in NFIB that the AIA did not bar the Court from ruling on the tax question, that Congress validly enacted the universal coverage provision under its Article I, Section 8 power "to lay and collect Taxes," and that it didn't violate the Direct Tax Clause. Thus after NFIB these issues appear to remain open on remand:
- Whether the mandates violate the Religion Clauses or the RFRA;
- Whether the employer mandate violates the taxing authority or the Direct Tax Clause;
- Whether the mandates violate equal protection;
- Whether the mandate violates free speech and associational rights.
As to the Religion Clauses, the district court ruled that the ACA's religious exemptions to universal coverage were permissible accommodations (and thus didn't violate the Establishment Clause) and that the ACA didn't require the plaintiffs to pay for abortions (and thus didn't violate the Free Exercise Clause or the RFRA).
As to the employer mandate: It's hard to see how the Supreme Court's tax analysis of the individual mandate in NFIB wouldn't apply with equal force to the employer mandate.
If the district court was right on the First Amendment and equal protection claims (as it seems), and if the Supreme Court's tax analysis applies with equal force to the employer mandate, this case doesn't seem to have much of a future.
But then again, that's what many of us said about NFIB.
November 26, 2012 in Abortion, Association, Cases and Case Materials, Commerce Clause, Congressional Authority, Equal Protection, Establishment Clause, First Amendment, Free Exercise Clause, Fundamental Rights, Jurisdiction of Federal Courts, News, Religion, Taxing Clause, Tenth Amendment | Permalink | Comments (0) | TrackBack (0)
Wednesday, November 7, 2012
With the election of Elizabeth Warren to the United States Senate, today might a good time to reread her article Unsafe at Any Rate, published in Democracy: A Journal of Ideas in 2007.
Warren was arguing for the creation of a new federal agency, the Financial Product Safety Commission. In doing so, she not only argued in favor of regulation (using an originalist argument among others), but also argued that federal regulation was appropriate:
The credit industry is not without regulation; credit transactions have been regulated by statute or common law since the founding of the Republic. Traditionally, states bore the primary responsibility for protecting their citizens from unscrupulous lenders, imposing usury caps and other credit regulations on all companies doing business locally. While states still play some role, particularly in the regulation of real-estate transactions, their primary tool–interest rate regulation–has been effectively destroyed by federal legislation. Today, any lender that gets a federal bank charter can locate its operations in a state with high usury rates (e.g., South Dakota or Delaware), then export that states’ interest rate caps (or no caps at all) to customers located all over the country. As a result, and with no public debate, interest rates have been effectively deregulated across the country, leaving the states powerless to act. In April of this year, the Supreme Court took another step in the same direction in Watters v. Wachovia, giving federal regulators the power to shut down state efforts to regulate mortgage lenders without providing effective federal regulation to replace it.
Recall that in Watters, the Court found no merit in the Supremacy Clause (preemption) and Tenth Amendment arguments.
Warren also argued that a federal agency could intervene more successfully than Congress because "the financial services industry is routinely one of the top three contributors to national political campaigns, giving $133 million over the past five years" and thus "the likelihood of quick action to respond to specific problems and to engage in meaningful oversight is vanishingly slim."
Although Congress eventually passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, with a FPSC agency, Elizabeth Warren was not named as its head given strong opposition to her by the Senate - the legislative body she will now be joining.
[image: Elizabeth Warren via]
Thursday, July 19, 2012
Professor Colin Starger has a terrific visual for teaching the commerce clause next semester:
Take a look at the entire "poster" available on ssrn here; the explanations are necessary and excellent.
Monday, July 2, 2012
What did Chief Justice Roberts do to the Necessary and Proper Clause in last week's ruling on the universal coverage provision of the Affordable Care Act?
Not much. Here's why.
Let's start with the opinion. Chief Justice Roberts wrote last week that universal coverage--the so-called individual mandate--exceeded Congress's authority under both the Commerce Clause and the Necessary and Proper Clause (although he wrote for a five-Justice majority that it fell within congressional taxing authority). (We wrote here about the Chief's opinion on the Commerce Clause.) In so writing, the Chief rejected the government's argument that because Congress had authority under the Commerce Clause to enact the guaranteed issue and community rating provisions, it also had authority under the Necessary and Proper Clause to enact universal coverage. After all, everybody agreed that guaranteed issue and community rating alone wouldn't work; they needed an individual mandate.
(Here's a primer. Guaranteed issue requires insurance companies to provide insurance to all comers. Community rating control premium rates within a particular community. Under these provisions, insurance companies will have to cover everyone (including those with high medical costs), within a range of premium rates. But when an insurance company covers everyone (including those with high medical costs), premiums go up. And when premiums go up, without an ability to discriminate, individuals are driven out of the market. Thus, guaranteed issue and community rating will drive up costs and drive down coverage. Unless, that is, individuals are required to buy insurance. If everybody has to buy insurance, the cost-distribution within the insurance pool will keep rates low (because the healthy, in effect, subsidize the unhealthy through the pool), and coverage (obviously) goes up.)
Chief Justice Roberts wrote that the Necessary and Proper Clause wasn't so malleable. He wrote that while universal coverage may be "necessary," it is not "proper," because universal coverage "draw[s] within its regulatory scope those who would otherwise be outside of it." Op. at 30. In other words, individuals are not the subject of the guaranteed issue and community rating regulations (insurance companies are); they are therefore not within the regulatory scope of valid congressional regulation under the Commerce Clause; and they are therefore outside of the scope of the Necessary and Proper Clause. Op. at 29-30. The Chief wrote that the Court's prior cases blessed congressional action under the Necessary and Proper Clause only when the subject of regulation under the Necessary and Proper Clause was already in the regulatory scope of congressional regulation under its principal Article I power. Here's how he described it:
The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power. This is in no way an authority that is "narrow in scope" . . . or "incidental" to the exercise of the commerce power. Rather, such a conception of the Necessary and Proper Clause would work a substantial expansion of federal authority. No longer would Congress be limited to regulating under the Commerce Clause those who by some preexisting activity bring themselves within the sphere of federal regulation. Instead, Congress could reach beyond the natural limit of its authority and draw within its regulatory scope those who otherwise would be outside of it. Even if the individual mandate is "necessary" to the Act's insurance reforms, such an expansion of federal power is not a "proper" means for making those reforms effective.
Op. at 29-30.
So, what's the effect of the Chief's opinion on the Necessary and Proper Clause? Very little.
There are two problems. The first one is exactly the same problem with the Chief's opinion on the Commerce Clause, only here it's even more pronounced. That is: the opinion may well be dicta, and, even if it's not, it doesn't have strong support as a guiding opinion under the Marks rule. Like Chief Justice Roberts's opinion on the Commerce Clause, his opinion on the Necessary and Proper Clause is not necessary to the Court's conclusion. Moreover, he's writing just for himself. The four "liberals" would have upheld universal coverage under the Necessary and Proper Clause. And the four other "conservatives" declined to join the Chief--and were in even sharper disagreement with him than they were on the Commerce Clause. (The four other conservatives would apparently read the Necessary and Proper Clause as allowing only regulation that is absolutely necessary to the named Article I powers--a reading that flies in the face of McCulloch v. Maryland and the Clause's entire history. Dissent, at 9-10.)
Moreover, the Chief's analysis is weak and apparently disavowed by all on the Court (though for different reasons), further alienating and weakening it. Chief Justice Roberts supports his new Necessary and Proper rule--that Congress can regulate only those things already within the regulatory scope--by describing the Court's prior Necessary and Proper cases. But while his description may be accurate on the facts, it is not supported by the language and analysis of those rulings. For example, the Court just two terms ago ruled in Comstock that the Necessary and Proper Clause allowed congress to authorize the detention of federal prisoners beyond their release date if they were deemed "sexually dangerous." Why? Because the Necessary and Proper Clause allows Congress to enact federal criminal law (in furtherance of its named Article I powers), and therefore to sentence offenders, and therefore to jail offenders, and therefore to keep dangerous offenders off the streets, even after their release dates--all in the name of the Necessary and Proper Clause.
Now it turns out that offenders were already within the regulatory scheme. But the Court's ruling did not turn on that, and, in fact, nowhere mentioned it. Instead, the Court said, quoting the usual language from McCulloch, that the Necessary and Proper Clause authorized Congress to take any action that was rationally related to its enumerated powers.
(The Court's opinion in Comstock was written by Justice Breyer. And Chief Justice Roberts joined it in full, even though he could have signed on with one of two more restrictive concurrences, written by Justice Kennedy and Justice Alito.)
In short, nothing in Comstock, or the Court's other Necessary and Proper decisions, sets out Chief Justice Roberts's new rule. It's just his gloss. And one, apparently, that nobody else on the Court subscribes to in his way and for his reasons.
But assuming that the courts treat the Chief's opinion as (at least) guiding, however--as they likely will--the second problem is that the Chief's opinion is quite narrow and thus only applicable to a small set of cases, if any. After all: How often does Congress seek to regulate something under the Necessary and Proper Clause that isn't within the regulatory scheme of its power-in-chief? By the Chief Justice's own reckoning: The Court has never seen this case.
And even if the Chief's opinion is guiding, courts must read it alongside Justice Breyer's majority opinion in Comstock--the Court's next-most recent foray into the Necessary and Proper Clause, and, again, an opinion that Chief Justice Roberts signed in full. Read alongside the expansive and capacious Necessary and Proper Clause described in Comstock, Chief Justice Roberts's new rule seems a narrow exception, indeed. Chief Justice Roberts did nothing last week to chip away at that expansive and capacious Clause; in fact, his opinion last week reaffirmed its long-standing principles (just as his opinion on the Commerce Clause reaffirmed the Court's broadest interpretations of that Clause).
In the end, the Chief's opinions on both the Commerce Clause and the Necessary and Proper Clause are almost certainly moot, anyway. The real story of the case is Chief Justice Roberts's majority opinion upholding universal coverage under the tax power. Any future Congress seeking to enact legislation that would push up against Chief Justice Roberts's new rules for the Commerce Clause and the Necessary and Proper Clause would do well to simply enact the policy as a tax penalty.
Friday, June 29, 2012
In a word: No. Or, even if yes, just by a hair--by adding just a footnote to the current doctrine. Here's why.
Let's start with some background on the health care case. While a five-Justice majority on the Supreme Court, led by Chief Justice Roberts, ruled yesterday that Congress could enact universal coverage in the Affordable Care Act under its taxing authority, a different five-Justice majority ruled that it couldn't enact it under the Commerce Clause. Chief Justice Roberts found himself--or, more precisely, placed himself--with each majority.
Chief Justice Roberts wrote the opinion of the Court on the taxing authority. His opinion on this point was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan.
He also wrote an opinion on the Commerce Clause. But he only wrote for himself. While Justices Scalia, Kennedy, Thomas, and Alito joined him in the result--that Congress exceeded its Commerce Clause authority in enacting universal coverage--those four wrote a decidedly distinct opinion, styled a dissent, and did not join Chief Justice Roberts's opinion on this issue. The Chief's opinion on the Commerce Clause is his own.
In sorting this out, as an initial matter, we need to know whether this single-Justice opinion, even if written by the Chief, is controlling. There are two issues.
First, the Marks rule. This rule, from Marks v. United States, says that when a majority on the Court agrees in a result, but cannot agree on a reason, the guiding opinion for future cases is the narrowest opinion on the winning side. In the language of Marks, "When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgment on the narrowest grounds."
Here, Chief Justice Roberts wrote a slightly narrower opinion on the Commerce Clause than the dissenters. But just barely. They all said that Congress lacks authority to regulate inactivity (more on this below), and that therefore Congress lacks authority to require individuals to purchase health insurance. This just-barely-narrower opinion, along with the Court's own characterization of Chief Justice Roberts's opinion as "an opinion" and the dissenters' opinion as "a dissenting opinion," Chief Justice Roberts's opinion, so far, is almost surely the guiding opinion under the Marks rule.
But there's another issue. It's not clear that Chief Justice Roberts's opinion on the Commerce Clause is anything more than dicta. In other words, Chief Justice Roberts's ruling on the Commerce Clause isn't necessary to the Court's ruling upholding universal coverage under the taxing authority. Chief Justice Roberts argued in Section IIID of his opinion--again, writing just for himself here--that his analysis of the Commerce Clause was necessary, because "the statute reads more naturally as a command to buy insurance than as a tax," and "[i]t is only because the Commerce Clause does not authorize such a command that it is necessary to reach the taxing power question." But this is an exceedingly weak justification. There's nothing that says that an argument presented alternatively must be addressed in the order presented. (Here, the government argued first that the Commerce Clause supported universal coverage and second that the taxing authority did.) Indeed, the better course--the judicial minimalist course--would be not to address it.
More importantly, Chief Justice Roberts's explanation gets only one vote. Moreover, it's not necessary to any other Justice's analysis--even the dissenters. (Why? Because the dissenters object to everything. They don't need to explain why they address the Commerce Clause--they have to address it as an alternative argument, because they also rule universal coverage unconstitutional under the taxing authority.) Thus, it is not the holding of the Court on its own (because it gets only one vote) and it is not the guiding holding of the case under Marks (because it reflects the ruling of no other Justice). If Chief Justice Roberts's weak explanation isn't the law, it seems, his analysis based upon that justification is also highly suspect.
If all this is right, then we have a highly fractured Court with no controlling opinion on the Commerce Clause. If that's right, then the Commerce Clause hasn't changed.
But let's assume that's not right--because, in fact, courts will probably treat Chief Justice Roberts's opinion on the Commerce Clause as guiding. Does the substance of his opinion limit the Commerce Clause?
The answer: Yes, but just by a hair. Chief Justice Roberts wrote that the Commerce Clause doesn't allow Congress to require activity where there is no existing market. In other words, Congress can't compel individuals to act without a background interstate market.
But Chief Justice Roberts was also very careful to write that Congress has never done this before. (Indeed, that's his stated reason to "pause to consider the implications of the Government's arguments." Op. at 18.) Agree or disagree with that conclusion, by its own terms it means that this is an exceptional, outside case. That's the same thing that the government has said all along, although in different terms: the health-care market is different.
If everybody agrees that this is an exceptional case, Chief Justice Roberts's restriction on the Commerce Clause--that Congress can't regulate inactivity without a background interstate market--applies only in the rarest of circumstances. Other than the very unusual hypos the Court tested at oral argument--a market for burial services (justifying a requirement to buy burial insurance), a market for emergency services (justifying a requirement to buy a cell phone to dial 911), and, of course, a market for food (justifying a requirement to buy broccoli)--this restriction will have no effect on congressional authority.
Indeed, even Chief Justice Roberts wrote--citing and reaffirming even those cases that reflect the broadest Commerce Clause power we've seen--that it never has had an effect on congressional authority.
The only workable rule in the opinion is that Congress can't regulate inactivity when there's no background interstate market. But by the Chief's own reckoning, this will only apply in the rarest of cases.
In other words: Chief Justice Roberts may have restricted the Commerce Clause, but just by a hair. The restriction will be a mere footnote when we teach the modern doctrine.
But some have argued that the spirit of the opinion (if not the law of the opinion) reflects a restricted authority. The bottom-line holding belies this: Congress has authority to enact universal coverage. The aggregate weight of congressional authority hasn't much changed, even if it shifted a little from commerce to taxation.
In the end, Chief Justice Roberts's opinion on the Commerce Clause will make little difference. There's a remote chance that it won't emerge as the controlling or guiding opinion; but even if it does (as seems highly likely), it just doesn't change the doctrine or the spirit all that much.
Thursday, June 28, 2012
A sharply divided Supreme Court today upheld key provisions in the Affordable Care Act (the "ACA," or Obamacare). The upshot is that five Justices (Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan) held that universal coverage (or the individual mandate) is upheld, and that a three-Justice plurality (Chief Justice Roberts and Justices Breyer and Kagan) held Medicaid expansion is upheld in a somewhat weaker form. A different five Justices (Chief Justice Roberts and Justices Scalia, Kennedy, Thomas, and Alito) held that the commerce clause did not support universal coverage (but for different reasons).
The ruling means that universal coverage stands, and Medicaid expansion stands, although in a somewhat weaker form.
Chief Justice Roberts wrote for the majority; by issue:
Taxing Clause. A five-Justice majority held that Congress could enact the universal coverage provision (also called the individual mandate) under the taxing authority. Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, wrote that the tax penalty for failing to purchase health insurance was a valid tax.
First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the "prohibitory" financial punishment in Drexel Furniture. Second, the individual mandate contains no scienter requirement. Third, the payment is collected solely by the IRS through the normal means of taxation--except that the Service is not allowed to use those means most suggestive of a punitive sanction, such as criminal prosecution.
Op. at 35-36. The majority was untroubled that the tax penalty could be a "tax" for taxing authority purposes, but a non-"tax" for Anti-Injunction Act purposes: Chief Justice Roberts wrote that Congress itself enacted the AIA and could therefore itself draft around it (which it did here); but Congress's taxing authority may support congressional action whether or not Congress calls its action a "tax."
Justices Scalia, Kennedy, Thomas, and Alito dissented, arguing that universal coverage exceeded the taxing power.
Commerce Clause. A five-Justice majority concluded that the Commerce Clause did not support congressional authority to enact universal coverage, but for two different reasons. Chief Justice Roberts, writing for himself alone, wrote that universal coverage amounted to regulating before entrance into the market for health services--i.e., regulating someone who's "inactive." (And Chief Justice Roberts didn't buy the government's claim that the maarket for health insurance was integrally connected to the market for health care.) Chief Justice Roberts wrote that universal coverage was unprecedented and unsupported by the Court's cases. (Chief Justice Roberts justified reaching the issue--even though the case could be (and was) decided on the taxing power alone--because, he said, the government designed universal coverage first as a regulation and only secondly (or alternatively) as a tax.)
Justices Scalia, Kennedy, Thomas, and Alito took a harder line, arguing that Congress here went too far, because it first sought to create commerce, and then to regulate it.
Medicaid Expansion. Chief Justice Roberts wrote for himself and Justices Breyer and Kagan that Medicaid expansion as-is under the ACA--in which a state declining to participate in Medicaid expansion would stand to lose its entire pot of federal Medicaid money--was unduly coercive. But the same plurality held that Medicaid expansion could be saved by simply reading the statute to mean that a declining state could lose only the additional federal money that would have come with the expansion.
Justices Ginsburg and Sotomayor wrote separately to argue that Medicaid expansion as-is under the ACA did not violate the Constitution.
Justices Scalia, Kennedy, Thomas, and Alito dissented, writing that Medicaid expansion was flatly unconstitutional.
June 28, 2012 in Cases and Case Materials, Commerce Clause, Congressional Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Recent Cases, Separation of Powers, Spending Clause, Taxing Clause | Permalink | Comments (3) | TrackBack (0)
Tuesday, May 29, 2012
Washington Superior Court Judge Sharon S. Armstrong denied the plaintiffs' motion for a preliminary injunction, or in the alternative for a permanent injunction and mandamus, in Mackey v. McKenna, the state court suit by a group of Washington women against the state attorney general challenging the state AG's role in the Affordable Care Act litigation now at the Supreme Court.
As we posted, a group of Washington women sued state AG Rob McKenna seeking a state court order requiring McKenna to file corrective pleadings asking the Supreme Court to uphold the ACA provisions that protect women's health care, even if it strikes down the so-called individual mandate. The plaintiffs claimed that McKenna himself said that it was in the best interest of Washingtonians to invalidate only the individual mandate, and to leave certain other provisions of the Act in place--in other words, to sever the mandate. Yet he joined the state in the multi-state suit challenging the entire ACA, and the plaintiffs' position in that case that the mandate was not severable. The plaintiffs said that this violated his professional duties to Washingtonians.
Judge Armstrong rejected the argument. She wrote:
Had Attorney General McKenna taken the formal legal position that only severability could protect the interests of the State of Washington and its citizens, and then filed contrary briefing in the federal courts, he would have violated his ethical duty to faithfully represent the interests of the State of Washington and its residents, would have improperly relinquished control over his role in the litigation to other attorneys general, and filed an erroneous brief to the U.S. Supreme Court.
But here the court found that statements by McKenna contrary to his litigation position were merely "political statements by an elected official," and were thus "issues to be addressed in the political realm." In the end, Judge Armstrong wrote that the court "lacked authority to second-guess the attorney general's legal strategy in the health care reform litigation, whatever the wisdom of his legal strategy."
The ruling is hardly a surprise. The case was a stretch to begin with, and even the plaintiffs' requested relief wouldn't have changed the picture at the Supreme Court. It was really about holding AG McKenna accountable for his statements, and his actions. Judge Armstrong was clear: Any holding-to-account should go through the ordinary political process, not the courts.
Thursday, May 10, 2012
Law students know him as the "Katzenbach" of Katzenbach v. McClung, 379 U.S. 29 (1964), the "Ollies BBQ case" upholding Congressional power under the Commerce Clause for the accomodations portions of the 1964 Civil Rights Act, and of Katzenbach v. Morgan, 384 U.S. 641 (1966), the "Puerto Rican voting case" upholding Congressional power under §5 of the Fourteenth Amendment for the Voting Rights Act of 1965.
The NYT obituary highlights Katzenbach's actions during the civil rights era: "Perhaps his tensest moment came on June 11, 1963, when he confronted George C. Wallace in stifling heat on the steps of the University of Alabama in Tuscaloosa."
The WaPo obituary places him at the center of government during a turbulent era: "Katzenbach’s time in government was like a history of government in the 1960s: The Bay of Pigs. The Cuban Missile Crisis. Integration of schools. The Warren Report. The Civil Rights Act. Vietnam." It also links him as a source for Robert Caro's biography of LBJ.
The ACS Blog has a moving personal remembrance by Estelle Rogers.
[image: Katzenbach, 1968, via]
Friday, April 20, 2012
The animal fighting statute provides "it shall be unlawful for any person to knowingly sponsor or exhibit an animal in an animal fighting venture" and defines an "animal fighting venture" as
any event, in or affecting interstate or foreign commerce, that involves a fight conducted or to be conducted between at least 2 animals for purposes of sport, wagering, or entertainment . . . .
The Fourth Circuit opinion in Gilbert, however, had "no difficulty concluding that Congress acted within the limitations established by the Commerce Clause in enacting the animal fighting statute." Writing for a unanimous panel, Judge Barbara Milano Keenan stated that there was "a substantial relation to interstate commerce," unlike the statutes invalidated in United States v. Lopez (1995) and United States v. Morrison (2000). Extensively discussing Congressional findings and legislative history, she concluded that "the link between animal fighting ventures and its effect on interstate commerce is not attenuated."
Rather, the link is direct, because animal fighting ventures are inherently commercial enterprises that often involve substantial interstate activity. Thus, in contrast to the statute at issue in Lopez, there is no need to "pile inference upon inference" in order to establish the link between animal fighting and interstate commerce.
In sum, our task is simply to determine, with a presumption of constitutionality in mind, whether there is a rational basis for concluding that the practice of animal fighting, when conducted for "purposes of sport, wagering or entertainment," substantially affects interstate commerce.
The opinion rejected the argument that a defendant required scienter regarding the affect on interstate commerce, an argument that was expanded in the companion case of Lawson.
In Lawson, the defendants/appellants added to the Commerce Clause argument an argument pursuant to the Fifth Amendment's equal protection component. The focus was on the varying scienter requirements depending upon state law. Under the animal fighting statute, if a defendant lives in a jurisdiction where gamefowl fighting is legal under the laws of that jurisdiction, the government must prove as an additional element of the offense that the defendant knew that at least one bird in the fighting venture traveled in interstate or foreign commerce. In contrast, if a defendant lives in a jurisdiction that prohibits gamefowl fighting, the government need only prove that the defendant sponsored or exhibited an animal in an animal fighting venture, irrespective whether the bird traveled in interstate or foreign commerce.
In an opinion again authored by Judge Keenan, the panel applied rational basis scrutiny and found that the classification amongst residents of various states was rationally related to a legitimate purpose. Although, as Judge Keenan noted, "cockfighting is illegal in all 50 States and the District of Columbia," it is legal in several United States territories such as Guam and Puerto Rico. The increased statutory burden for prosecutions in "states" (including territories) merely reflects "the decision of Congress to accommodate principles of federalism, a concern that unquestionably is a legitimate governmental interest."
Although not successful on the facial constitutional attack to the statute, the court did rule in Lawson that there were reversible errors in the trial. The panel concluded that the government has failed to demonstrate that a juror’s misconduct did not affect the verdict with respect to the violations of the animal fighting statute and vacated the defendants’ convictions for violating the animal fighting statute, while upholding other convictions.
These companion cases are carefully reasoned and nicely structured, with solid yet relatively concise analysis. They take the Commerce Clause and equal protection arguments seriously, even if they are ultimately rejected.
[image: "Cock-fighting Match" by John Kay, circa 1826, via]