Defending Civil Rights and Suing Rogue Prosecutors Is Left-Wing Lawyering?

The National Law Journal and the Wall Street Journal Law Blog note an apparent legal curiosity: Paul Clement, superstar head of King & Spaulding’s appellate group and Bush-administration solicitor general, now “flirts with liberalism” and has “embrace[d] left-leaning causes” to grow his practice. Is this another case of a conservative lawyer “growing” in office or “drifting” to the left, seduced by the cocktail parties and press attention of the Washington elite?

Hardly. The two cases that prompted this gnashing of teeth (or cautious optimism, depending on where the commentator resides on the political spectrum) are Perdue v. Kenny A. and Pottowattamie County v. McGhee. In Kenny A., Clement represented a group of public interest attorneys who won a big case on behalf of mistreated foster children and argued that they should be entitled to the enhanced fees the trial court awarded them for exceptional performance. In McGhee, Clement’s clients are two men who were framed by overzealous prosecutors and served 25 years in prison for crimes they didn’t commit — the convictions for which were based on the prosecutors’ fabricated evidence.

To say that these are left-wing positions is to consider the Left to be the only possible champion of justice and constitutional rights, and to paint the non-Left as standing for limitless, unaccountable governmental power. Neither of these positions is accurate, to say the least. If anything, Clement’s positions are solidly libertarian.

Indeed, Cato filed briefs in both cases, and I signed both of them. You can read our brief in Kenny A. here and in McGhee here – Clement actually called me to make sure Cato got involved in this one – and you can read my blog posts about the cases here and here, respectively.

In short, if Paul Clement has gone red, well then so have I — and trust me, there won’t be any kumbaya confabs at my place any time soon. My car’s new vanity plate does say FED 51, however — short for Federalist 51 — so feel free to call me out for flirtations with Madisonian political theory.

H/T: Manny Klausner

CP: Cato's blog

More Supreme Court Review on the Road

As an update to an earlier post about my speaking schedule this fall, here are my remaining public events through Thanksgiving. All these events, other than the one on Nov. 3, are sponsored by the Federalist Society (and in some cases co-sponsored by other organizations) and all are open to the public. As always, if you decide to attend one of the presentations after learning of it from this blog post, please feel free to drop me a line beforehand, and do introduce yourself after the event.

Event info after the jump.

Oct. 26 at 12:00pm - Florida International University Law School (Miami) – Use of Foreign Law in Constitutional Interpretation

Oct. 27 at 12:30pm – University of Miami Law School – Use of Foreign Law in Constitutional Intepretation

Oct. 28 at 12:30pm – University of Dayton Law School – Hillary Clinton and the Emoluments Clause

Oct. 29 at 12:00pm – Northern Kentucky University Chase College of Law – October Term 2009 Overview

Nov. 3 at 12:00pm – Environmental Law Institute (Washington) – Panel on Stop the Beach Renourishment and Judicial Takings

Nov. 4 at 3:00pm – Seton Hall University Law School – Debate on the The Chrysler Bankruptcy

Nov. 5 at 12:00pm – Yeshiva University Cardozo Law School (NYC) – Immigration and the Constitution

Nov. 16 at 12:00pm – St. Louis University Law School – Use of Foreign Law in Constitutional Interpretation

Nov. 17 at 12: 00pm – Washington University (St. Louis) Law School – The Looming Danger of Transnational Progressivism

Next Move: Suing the Sun for Unseasonably Cool Weather

The New Orleans-based Fifth Circuit, the federal court of appeals where I once clerked, has allowed a class action lawsuit by Hurricane Katrina victims to proceed against a motley crew of energy, oil, and chemical companies. Their claim: that the defendants’ greenhouse gas emissions raised air and water temperatures on the Gulf Coast, contributing to Katrina’s strength and causing property damage. Mass tort litigation specialist Russell Jackson calls the plaintiffs’ claims “the litigator’s equivalent to the game ‘Six Degrees of Kevin Bacon.’”

In Comer v. Murphy Oil USA, the plaintiffs assert a variety of theories under Mississippi common law, but the main issue at this stage was whether the plaintiffs had standing, or whether they could demonstrate that their injuries were “fairly traceable” to the defendant’s actions. The court dismissed several claims but held that plaintiffs indeed could allege public and private nuisance, trespass and negligence. The court also held that these latter claims do not present a so-called “political question” that the court doesn’t have the authority to resolve. You can read about the Court’s ruling in more detail at the WSJ Law Blog and Jackson’s Consumer Class Actions and Mass Torts Blog.

This is actually the second federal appeals court to rule this way; last month, the Second Circuit (based in New York) held that states, municipalities and certain private organizations had standing to bring federal common law nuisance claims to impose caps on certain companies’ greenhouse gas emissions. Here’s the opinion in that case, Connecticut v. American Electric Power Company, and you can read a pretty good summary and analysis here.

Both of these cases, which herald a flood of global warming-related litigation, so to speak, owe their continuing vitality to the Supreme Court’s misbegotten 2007 decision in Massachusetts v. EPA. The 2006-2007 Cato Supreme Court Review covered that case in an insightful article by Andrew Morriss of the University of Illinois. (To get your copy of the latest (2008-2009) Review, go here.)

I should note from my own experience at the Fifth Circuit that the panel here consisted of the two worst judges on the court — Clinton appointees Carl Stewart and James Dennis — and one of Reagan’s weakest federal appellate appointments, Eugene Davis. Even Davis, however, wrote separately to note that while he agreed on the standing issue, he would have affirmed the district court’s dismissal of the suit on a different ground (that pesky proximate cause issue).

I predict that the full (16-judge) Fifth Circuit will review this case en banc –and if not that the Supreme Court will eventually take it up (if the district court on remand doesn’t again dispose of the case on causation grounds).

C: Cato's blog.

Who Is John Gupta?

Apparently Ayn Rand’s popularity is growing on the subcontinent. For more on Rand’s resurgence, attend or watch online this Cato event next week.

H/T: Josh Blackman. CP: Cato's blog.

Even Lawyers Should Be Paid More for Good Performance

Another oral argument I attended this week was in the case of Perdue v. Kenny A., in which Cato filed a brief at the end of August. The issue is whether a court can ever increase the statutorily set fees attorneys receive from the government when they successfully bring civil rights challenges to state action.

In order to enforce civil rights guarantees, Congress had two choices: either expand the Department of Justice to cover all civil rights cases, or privatize the system and allow free market principles to encourage private attorneys to prosecute violations. Congress chose the latter, creating a system of market incentives to encourage private attorneys to enforce civil rights and hold elected representatives responsible for the waste of taxpayer dollars lost in the defense of legitimate civil rights violations and repayment of “reasonable” attorney fees.

Here a group of attorneys won an important case for foster children in Georgia, and the court awarded them $6 million in fees based on prevailing hourly rates — the “lodestar” method — and an additional $4.5 million enhancement for the exceptional quality of work and results achieved. At Georgia’s request, the U.S. Supreme Court decided to review the case and determine whether quality of work and results are appropriately considered components of a reasonable fee.

Cato, joining six other public interest legal organizations, filed an amicus brief supporting the attorneys. We argue that the enhancement in this case is necessary to preserve incentives in the privatized market. Not only does it encourage attorneys to pursue civil rights abuses, but it provides a powerful disincentive for governments to draw out litigation in the hope that attorneys will no longer be able to afford pursue it. In addition, quality of performance and attained results are rightly considered as part of the attorney fee calculus. The enhancement here helps to promote the free market of privatized civil rights prosecutions and encourages governments to resolve civil rights cases quickly.

Unfortunately, the Court didn’t seem to be convinced at oral argument that there was a problem with the way civil rights attorneys are compensated under the lodestar method. Chief Justice Roberts and Justice Scalia, in particular, were aggressive in questioning a very well prepared Paul Clement (the former solicitor general, with whom I had the privilege to work on a different case that will be argued next month). They expressed concern about how to evaluate the “exceptional results” needed to justify a fee enhancement. Clement said that the Court could leave this to the trial judges’ discretion,to which Justice Scalia replied: “You say discretion. I say randomness.”

Only Justice Sotomayor, who was again an active questioner, suggested a standard to guide judges, citing such factors as a discrepancy between the market in which the attorney practices and the market on which fees are based, as well as the attoney’s experience (for example, the justices frequently referred to a “brilliant” second-year associate who might be paid at a partner rate). But several justices, at least, would never agree to such a standard. Even Justice Breyer, typically friendly to civil rights claims, expressed skepticism over whether millions of taxpayer dollars should be paid to already well-compensated lawyers.

Still, while it would be strange for district judges to have the ability to reduce fee awards for various reasons (such as inferior performance, even if technically victorious) while not being able to increase them, that’s the result we’ll have if the Court rules as all indications now suggest.

Cross-posted at Cato's blog.

Due Process Case to Be Decided on Procedural Grounds

Yesterday I went to the Supreme Court to watch the argument in Alvarez v. Smith, a case about civil forfeiture in which Cato filed an amicus brief.

Civil forfeiture, the practice in which the police seize cars, money and other kinds of property that they say has some connection to crime, can raise various of legal and policy issues — from property rights to due process. The question in Alvarez is the basic one of whether people seeking to get their property back are entitled to a prompt hearing before a judge.

Illinois’ forfeiture law allows the State to wait as long as six months before having to prove the legitimacy of the seizure, which proceeding may then be delayed indefinitely for “good cause.” The six plaintiffs in Alvarez — three of whom were never charged with a crime — had their cars or money seized without a warrant for months or years without any judicial hearing, and sued the state and city authorities for violating their rights to due process. The Seventh Circuit found the Illinois law to be unconstitutional because of the delay between the seizure and the forfeiture proceeding and ruled that the plaintiffs must be afforded an informal hearing to determine whether there is probable cause to detain the property. The Supreme Court agreed to review the case at the request of the Cook County State Attorney.

Cato’s brief, joined by the Goldwater Institute and Reason Foundation, supports the individuals whose property was seized. Written by David B. Smith, who previously supervised all forfeiture litigation for the Department of Justice and is now the nation’s leading authority on civil and criminal forfeiture, the brief makes three arguments: 1) Because the Illinois law, unlike the federal Civil Asset Forfeiture Reform Act of 2000, is stacked in favor of law enforcement agencies and lacks protections for innocent property owners, the Court should apply the due process analysis from Mathews v. Eldridge, rather than the more lenient test the State proposes; 2) What has become known as a Krimstock hearing has proven to be an effective and not overly burdensome means of preventing government delay and a meaningful opportunity to contest seizure; and 3) the State’s comparison of the time limits in CAFRA with those in its own law is misleading.

Unfortunately, though some justices appeared at argument inclined to rule that at least some prompt process was due — many other states require that the police quickly come before a judge to make a showing equivalent to the one necessary to get a search warrant — several seemed to want to avoid the due process question for another day because Alvarez was procedurally flawed, so to speak. That is, Justice Scalia pointed that none of the six plaintiffs have a live claim any more – three have had their cars returned, two defaulted on their claims, and the State reached agreement with one – so the case was “moot.” And Justice Stevens noted that the appellate court left it to the trial court to determine the details of the hearing to which the plaintiffs were entitled. (Of course, if the latter “problem” ends up being the key to the case, the Court will simply dismiss the appeal and let the Seventh Circuit’s ruling stand, which is good news — but only for people in Illinois, Indiana, and Wisconsin.)

For more on the case, see George Mason law professor and Cato adjunct scholar Ilya Somin’s oped, and his related blog post at the Volokh Conspiracy.

Cross-posted at Cato's blog.

The Government Robbed Chrysler Creditors

In January 2009, Chrysler stood on the brink of insolvency. Purporting to act under the Emergency Economic Stabilization Act, the Treasury extended Chrysler a $4 billion loan using funds from the Troubled Asset Relief Program (TARP). Still in a bad financial situation, Chrysler initially proposed an out-of-court reorganization plan that would fully repay all of Chrysler’s secured debt. The Treasury rejected this proposal and instead insisted on a plan that would completely eradicate Chrysler’s secured debt, hinging billions of dollars in additional TARP funding on Chrysler’s acquiescence.

When Chrysler’s first lien lenders refused to waive their secured rights without full payment, the Treasury devised a scheme by which Chrysler, instead of reorganizing under a chapter 11 plan, would sell its assets free of all secured interests to a shell company, the New Chrysler. Chrysler was thus able to avoid the “absolute priority rule,” which provides that a court should not approve a bankruptcy plan unless it is “fair and equitable” to all classes of creditors.

Cato joined the Washington Legal Foundation, Allied Educational Foundation, and George Mason law professor Todd Zywicki on a brief supporting the creditors’ petition asking the Supreme Court to review the transaction’s validity. We argue that the forced reorganization amounted to the Treasury redistributing value from senior, secured creditors to debtors and junior, unsecured creditors.

The government should not be allowed, through its own self-dealing, to hand-pick certain creditors for favorable treatment at the expense of others who would otherwise enjoy first lien priority. Further, a lack of predictability and consistency with regard to creditors’ expectations in bankruptcy will result in a destabilization of existing and future credit markets.

The Court will be deciding whether to hear the case later this fall. Thanks very much to Cato legal associate Travis Cushman for his help with the brief.

Cross-posted at Cato's blog.

Supreme Court Mulls Gladiators and the “Human Sacrifice Channel”

Following up on my colleague David Boaz’s post about the U.S. v. Stevens “depictions of animal cruelty” case, my takeaway from this morning’s argument is that there’s not a single vote to uphold the law. The closest the government came to sympathy for its position came when Chief Justice Roberts wondered whether, if a narrower statute proscribing the “crush videos” that were the ostensible target of this legislation, the Court might uphold this broad statute on its face but also welcome many as-applied challenges in instances of prosecutorial overreach. (For a pithy discussion of facial versus as-applied challenges, noting that the Court generally favors facial attacks in First Amendment cases, see Roger Pilon’s foreword to this year’s Cato Supreme Court Review.)

A less technical line of questioning involved the constitutionality of a statute banning a hypothetical “human sacrifice channel” or the broadcast of fight-to-the-death gladiatorial battles — from a foreign country where that sort of thing is legal. (Justice Scalia quipped that the rule cannot be that you satisfy the broad legislation’s “historical value” exception if you dress up as an ancient Roman.)

Much of the analysis about these types of extreme scenarios turns on whether the broadcast/depiction creates a market for such activities — which is the rationale for banning child pornography (i.e., fewer children are subject to sexual abuse if there is not a legal market for pictures and videos of children being sexually abused). Thus, a narrow statute banning the aforementioned crush videos would be kosher, as it were, but not the broad legislation at issue — which could potentially sweep in, to take one example, promotional videos put out by the Spanish board of tourism that include bullfighting clips.

For a more detailed report, see Lyle Denniston on SCOTUSblog (whom you can also see all week on C-SPAN’s excellent Supreme Court documentary mini-series). And again, to read Cato’s view, see our amicus curiae brief.

Cross-posted at Cato's blog.

Think Tanks Should Be Able to Opine on Public Policy Without Running Afoul of Campaign Finance Regulations

In 2005, political opponents filed a complaint against the Independence Institute for not complying with the Colorado constitution and other campaign finance regulations when it spoke against a state ballot initiative. These regulations require, among other things, disclosure of the identity of anyone who has donated more than $20 to a cause and imposes registration and contribution limits on groups who have major interests in ballot issues.

The Independence Institute challenged the constitutionality of Colorado’s state ballot issue requirements and the issue is petitioning the Supreme Court for certiorari in Independence Institute v. Buescher. Cato has filed an amicus brief, in cooperation with Wyoming Liberty Group, the Center for Competitive Politics, the Sam Adams Alliance, the Montana Policy Institute, and the Goldwater Institute in support of the Independence Institute. We argue that Colorado’s ballot campaign regulations run roughshod over constitutional protections for political speech and association, which lie at the very heart of the First Amendment—particularly for think tanks and other organizations that regularly comment on public policy matters. Loss of these First Amendment protections will chill think tanks’ future attempts to educate the public about issues that are the subject of ballot campaigns. The Court should thus review this case and ensure that citizens maintain their associational rights—including the right to remain anonymous when donating to non-profits—and associations their freedom of expression.

You can download the entire brief here. A special thanks to Cato Legal Associate Travis Cushman for his assistance on this brief.

Cross-posted at Cato's blog.

A New Court Term: Big Cases, a New Justice

Today is the first Monday in October, and so is First Monday, the traditional start of the Supreme Court term. The Court already heard one argument – in the Citizens United campaign finance case — but it had been carried over from last year, so it doesn’t really count.

In any event, continuing its trend from last term, the Court has further front-loaded its caseload — with nearly 60 arguments on its docket already. Fortunately, unlike last year, we’ll see many blockbuster cases, including:

• the application of the Second Amendment to state gun regulations;
  
• First Amendment challenges to national park monuments and a statute criminalizing the depiction of animal cruelty;
  
• an Eighth Amendment challenge to life sentences for juveniles; a potential revisiting of Miranda rights;
  
• federalism concerns over legislation regarding the civil commitment of “sexually dangerous” persons;
  
• a separation-of-powers dispute concerning the agency enforcing Sarbanes-Oxley;
  judicial takings of beachfront property; and
  
• notably in these times of increasing government control over the economy, the “reasonableness” of mutual fund managers’ compensation.

Cato has filed amicus briefs in many of these cases, so I will be paying extra-close attention.
Perhaps more importantly, we also have a new justice — and, as Justice White often said, a new justice makes a new Court. While Sonia Sotomayor’s confirmation was never in any serious doubt, she faced strong criticism on issues ranging from property rights and the use of foreign law in constitutional interpretation to the Ricci firefighters case and the “wise Latina” speeches that led people to question her commitment to judicial objectivity. Only time will tell what kind of justice Sotomayor will be now that she is unfettered from higher court precedent — and the first term is not necessarily indicative.

Key questions for the new Court’s dynamics are whether Sotomayor will challenge Justice Scalia intellectually and whether she will antagonize Justice Kennedy and thus push him to the right. We’ve already seen her make waves at the Citizens United reargument — questioning the scope of corporations’ constitutional rights — so it could be that she will decline to follow Justice Alito’s example and jump right into the Court’s rhetorical battles.

In short, it’s the first day of school and I’m excited.

Cross-posted on Cato's blog.

Cato Supreme Court Review on the Road

With last week’s Constitution Day conference behind us (watch it here) — and the release of the 2008-2009 Cato Supreme Court Review — I can finally escape the office where I’ve been holed up all summer. Yes, it’s time to go on the road and talk about all these wonderful legal issues we’ve learned about over the past year, as well as previewing the new Supreme Court term.

To that end, below is my fall speaking schedule so far. All these events are sponsored by the Federalist Society (and in some cases co-sponsored by other organizations) and all are open to the public.

If you decide to attend one of the presentations after learning of it from this blog post, please feel free to drop me a line beforehand, and do introduce yourself after the event.

Sept. 24 at 11:50am – DePaul Law School, Chicago – Debate on the Second Amendment post-Heller

Sept. 24 at 4:30pm – Chicago-Kent School of Law – Panel on Rule of Law in Iraq

Sept. 29 at 5:00pm – University of Cincinnati Law School - Rule of Law and Economic Development

Sept. 30 at 12:00pm – Capital University Law School (Columbus, OH) – Review of October Term 2008/Preview of October Term 2009

Sept. 30 at 3:30pm – Ohio Northern School of Law (Ada, OH) – Debate on Ricci and Affirmative Action in Employment

Oct. 1 at 12:00pm – University of Toledo Law School – Debate on Ricci and Affrimative Action in Employment

Oct. 1 at 5:00pm – Thomas M. Cooley Law School (Auburn Hills, MI) – Immigration and the Constitution

Oct. 5 at 12:00pm – University of Pennsylvania Law School – Debate on the Use of Foreign Law in Constitutional Interpretation

Oct.6 at 5:30pm – Blank Rome LLP in Philadelphia (Federalist Society Lawyers Chapter; small admission fee) – Panel on Rule of Law in Iraq

Oct. 8 at 1:00pm – Penn State-Dickinson Law School (University Park) – October Term 2009 Preview

Oct. 13 at 5:15pm – George Mason University Law School (Arlington, VA) – October Term 2009 Preview

Oct. 26 at 12:00pm – Florida International University Law School (Miami) – Topic TBA

Oct. 27 at 12:30pm – University of Miami Law School – Topic TBA

[Cross-posted at Cato's blog.]

Use Only U.S. Law to Interpret the U.S. Constitution

This fall, the Supreme Court will hear two cases involving Eighth Amendment challenges to the sentencing of juveniles to life without parole (”LWOP”) – Graham v. Florida and Sullivan v. Florida — claims that these types of sentences are “cruel and unusual.” Cato takes no position on the wisdom of these types of sentences, but when evaluating their constitutionality the Court should only consider American law.

That is, regardless of the criminological or moral merits of juvenile LWOP sentences, the Supreme Court ought not consider non-binding provisions of international human rights treaties and customary international law in its analysis (as it has in cases like Roper v. Simmons and Atkins v. Virginia). To that end, Cato joined the Solidarity Center for Law and Justice, the Sovereignty Network, and 10 other groups in a brief urging the Court to limit its constitutional analysis to domestic law and the decisions of U.S. courts.

Our brief argues that the Court should leave to the political branches the decision of whether to transform international norms into domestic law and only allow duly ratified international agreements to override domestic law — in the way the Court has set out in cases such as Medellin v. Texas. It further contends that if the Court believes this is one of the rare cases where international norms are relevant, it should follow the test it laid out in Sosa v. Alvarez Machain, which addressed the (unrelated) Alien Tort Statute: The relevant norm must be widely accepted by the civilized world and as clearly defined as the historic “law of nations” norms regarding safe conduct permits, ambassadorial rights, and piracy on the high seas.

The brief also cautions that reliance on non-binding and indefinite international norms will undermine the democratic process and rule of law, casting considerable uncertainty over many U.S. laws.

More generally, while looking to foreign and international example is prudent when designing constitutions and drafting legislation — or even adjudicating complex international legal disputes — it is simply not relevant to interpreting the nation’s founding document.

[Cross-posted at Cato's blog.]

Prosecutors Should Not Be Allowed to Fabricate Evidence

In 1977, county attorney David Richter and assistant county attorney Joseph Hrvol worked side by side with police to investigate and “solve” the notorious murder of a former police officer in Pottawattamie County, Iowa. The prosecutors fabricated evidence and used it to charge and convict Curtis McGhee and Terry Harrington, sending them to prison for 25 years.

After the convictions were overturned for prosecutorial misconduct, McGhee and Harrington sued the county and prosecutors. The defendants in that civil suit invoked the absolute immunity generally afforded prosecutors to try to escape liability. After the Eighth Circuit ruled against them, the Supreme Court agreed to review the case.

On Friday, Cato joined the National Association of Criminal Defense Lawyers and the ACLU on a brief supporting the men unjustly imprisoned. We argue that prosecutors should be responsible for their role in manufacturing a false “case,” just as police officers would be under the same circumstances. As the Court has held, prosecutors enjoy absolute immunity only during the prosecutorial phase of a case, not its investigatory phase. Were prosecutors to receive absolute immunity here, citizens would have no protection from or recourse against prosecutors who frame the innocent by fabricating evidence and then using that evidence to convict them.

To read Cato’s brief in the case of Pottawattamie County v. McGhee, see here.

[Cross-posted at Cato's blog.]

"We Don’t Put Our First Amendment Rights In the Hands of FEC Bureaucrats"

I (and several colleagues) have blogged before about Citizens United v. Federal Election Commission, the latest campaign finance case, which was argued this morning at the Supreme Court. The case is about much more than whether a corporation can release a movie about a political candidate during an election campaign. Indeed, it goes to the very heart of the First Amendment, which was specifically created to protect political speech—the kind most in danger of being censored by politicians looking to limit the appeal of threatening candidates and ideas.

After all, hard-hitting political speech is something the First Amendment’s authors experienced firsthand. They knew very well what they were doing in choosing free and vigorous debate over government-filtered pablum. Moreover, persons of modest means often pool their resources to speak through ideological associations like Citizens United. That speech too should not be silenced because of nebulous concerns about “level playing fields” and speculation over the “appearance of corruption.” The First Amendment simply does not permit the government to handicap speakers based on their wealth, or ration speech in a quixotic attempt to equalize public debate: Thankfully, we do not live in the world of Kurt Vonnegut’s Harrison Bergeron!

A few surprises came out of today’s hearing, but not regarding the ultimate outcome of this case. It is now starkly clear that the Court will rule 5-4 to strike down the FEC’s attempt to regulate the Hillary Clinton movie (and advertisements for it). Indeed, Solicitor General Elena Kagan — in her inaugural argument in any court — all but conceded that independent movies are not electioneering communications subject to campaign finance laws. And she reversed the government’s earlier position that even books could be banned if they expressly supported or opposed a candidate! (She went on to also reverse the government’s position on two other key points: whether nonprofit corporations (and perhaps small enterprises) could be treated differently than large for-profit business, and what the government’s compelling interest was in prohibiting corporations from using general treasury funds on independent political speech.)

Ted Olson, arguing for Citizens United, quickly recognized that he had his five votes, and so pushed for a broader opinion. That is, the larger — and more interesting — question is whether the Court will throw out altogether its 16-year-old proscription on corporations and unions spending their general treasury funds on political speech. Given the vehement opposition to campaign finance laws often expressed by Justices Scalia, Kennedy, and Thomas, all eyes were on Chief Justice Roberts and Justice Alito, in whose jurisprudence some have seen signs of judicial “minimalism.” The Chief Justice’s hostility to the government’s argument — “we don’t put our First Amendment rights in the hands of FEC bureaucrats” — and Justice Alito’s skepticism about the weight of the two precedents at issue leads me to believe that there’s a strong likelihood we’ll have a decision that sweeps aside yet another cornerstone of the speech-restricting campaign finance regime.

One other thing to note: Justice Sotomayor, participating in her first argument since joining the Court, indicated three things: 1) she has doubts that corporations have the same First Amendment rights as individuals; 2) she believes strongly in stare decisis, even when a constitutional decision might be wrong; and 3) she cares a lot about deferring to the “democratic process.” While it is still much too early to be making generalizations about how she’ll behave now that she doesn’t answer to a higher Court, these three points suggest that she won’t be a big friend of liberty in the face of government “reform.”

Another (less serious) thing to note: My seat — in the last row of the Supreme Court bar members area — was almost directly in front of Senators John McCain and Russ Feingold (who were seated in the first row of the public gallery). I didn’t notice this until everyone rose to leave, or I would’ve tried to gauge their reaction to certain parts of the argument.

Finally, you can find the briefs Cato has filed in the case here and here.

[Cross-posted at Cato's blog.]

What Is "Unreasonable" Compensation? And Who Gets to Decide?

As could be expected, the effects of the financial crisis — and people’s reaction thereto — are starting to make their way to the least political branch of government, the judiciary. The Supreme Court this term will be hearing several cases that could have serious repercussions on our economic recovery, one of which led us to file an amicus brief. Here’s the situation:

The Investment Company Act of 1940 places on investment advisers a fiduciary duty with respect to the compensation they receive for the services they provide their clients. In the case of Jones v. Harris Associates, shareholders in various mutual funds contend that their adviser fees were excessive and violated the ICA. The Seventh Circuit, the federal appellate court based in Chicago, affirmed the judgment of the district court that the fees were not excessive but also expressly disapproved of the methodology for evaluating such claims used by the Second Circuit (based in New York). Judge Frank Easterbrook’s opinion explains that the ICA creates a fiduciary duty but does not act as a rate regulator, and that judicial price-setting does not accompany fiduciary duties. Judge Richard Posner, writing for five judges, dissented from the denial of an en banc rehearing. The Supreme Court agreed to review the case to settle the circuit split.

Our brief supports the investment adviser and makes three arguments:

1. All persons have a fundamental human right to whatever compensation their contracting partners freely and honestly choose to pay them.
   
2. Courts have no power to second-guess the reasonableness of any salary or compensation agreement honestly and freely signed by both contracting parties.
   
3. The ICA’s fiduciary duty requires only fair dealing, not any particular outcome.

Thanks to Cato adjunct scholar Tim Sandefur for spearheading this effort, and to Cato intern Matthew Aichele for helping with much of the attendant busywork.

[Cross-posted at Cato's blog.]

Beach v. Florida

Cato Adjunct Scholar and Pacific Legal Foundation Senior Staff Attorney Tim Sandefur published an excellent op-ed in the National Law Journal this week on the upcoming Supreme Court case Stop the Beach Renourishment v. Florida Department of Environmental Protection:

The case involves a Florida statute determining the boundaries of
oceanfront property. Under a 1961 law, the state drew a brand-new line
separating public and private land on certain beaches, meaning that some land
that would have been privately owned would belong instead to the state. A group
of property owners filed suit, arguing that the law deprived them of property
without just compensation, violating the state and federal
constitutions.

Last December, Florida’s highest court rejected their arguments. It held
that, while the new boundary gave the state ownership of the beach land, the
former owners actually had no such right to begin with. Despite more than a
century of Florida law to the contrary, the court announced that the owners
actually only had a right to “access” the ocean, and because the state promised
to allow them to keep crossing the land to reach the water, it actually hadn’t
taken anything away when it seized the land itself.

Thus, by simply reinterpreting state property law, the court allowed the
state to take property without compensation with a mere stroke of a pen. Yet the
U.S. Constitution forbids states from confiscating property – even through legal
legerdemain – without payment.

[...]

[T]he U.S. Constitution also guarantees every American’s right to due
process of law and to protection of private property. If state judges can
arbitrarily rewrite a state’s property laws, those guarantees would be
meaningless. More than four decades ago, Justice Potter Stewart warned that,
without a constitutional limit on the states’ power to determine the nature of
property, states could “defeat the constitutional prohibition against taking
property without due process of law by the simple device of asserting
retroactively that the property it has taken never existed at all.”

It is well-worth a full read here.

Despite the dreadful decision in the Kelo case several years ago, the fight to maintain the fundamental right to private property continues in our courts and legislatures. Tim and PLF have been doing yeoman’s work in the fight for property rights, and I am proud to team Cato up with them and the NFIB Legal Center in filing an amicus brief on behalf of the rightful property owners in this case. You can download the PDF of the brief here.

[Cross-posted from Cato's blog.]

Sotomayor Confirmed, Constitutional Debate Continues

All Americans should take pride in seeing our first Hispanic Supreme Court justice (not counting Benjamin Cardozo). While this moment should have belonged to Miguel Estrada—who was denied even a vote by an unprecedented Democratic filibuster—we should nevertheless celebrate Sonia Sotomayor’s rise from very humble beginnings to reach the highest court in the land. Although her selection represents the very worst of racial politics—she is not a leading light of the judiciary and would not have been considered had she not been a Hispanic woman—her career achievements show that the American Dream endures.

What makes the American Dream possible, however, is the rule of law, which in this country is ultimately guaranteed by the Constitution. The Constitution provides for a very specific government structure, with checks on each branch’s powers designed to maximize liberty and eliminate arbitrary and capricious rule. To that end, officers of the judicial branch—judges—are to make their decisions irrespective of the race, religion, or riches of those who come before them. And judges are to interpret the Constitution as written text. If they set aside the text and rule based on their own notions of fairness, then they act as unelected legislators or, worse, extra-constitutional amenders of our founding document.

Nominee Sotomayor knew all this, which is why the testimony she gave at her confirmation hearings disclaimed many of her previous speeches and writings, even going so far as to reject President Obama’s “empathy” standard—the idea that a judge applies the law differently when a litigant is sympathetic in some politically correct way. While she was evasive most of the time—reason enough to vote against her—when she did say something about judicial philosophy, it was often indistinguishable from the words of John Roberts or Samuel Alito (as evidenced by the frustration of left-wing commentators). And for good reason: in poll after poll, the American people overwhelmingly support a vision of the judicial role as one of enforcing the law as written, not of imposing their own policy preferences or vision of justice.

Kudos from this exercise go to those Republicans whose hard questions and thoughtful statements elevated the discussion of the Constitution beyond mere abstractions, so Americans could better understand the significance of ideological differences over the judicial role, or the use of foreign law in interpreting the Constitution, or property rights, or employment discrimination.

In walking away from so many controversial positions, Sonia Sotomayor established a new standard to which all future nominees will at least have to pay lip service. While confirmation was almost a foregone conclusion from the start because of the Democrats’ strong Senate majority, the Republicans played well the cards they had been dealt by engaging in a serious discussion about constitutional interpretation and jurisprudential philosophy.

Cross-posted at Cato's blog.

Sarbanes-Oxley’s Harms Are Magnified by the PCAOB’s Unconstitutional Structure

Passed with scant deliberation amid a stock market panic, the Sarbanes-Oxley Act of 2002 vastly expanded the federal government’s role in regulating corporate governance and the accounting industry. As part of that effort, Congress created a new agency to “audit the auditors.” Known as the Public Company Accounting Oversight Board, the agency has broad rulemaking and enforcement powers to set accounting standards, investigate accounting firms, punish criminal violations, and make whatever rules “may be necessary or appropriate in the public interest or for the protection of investors.”

Remarkably, the PCAOB (pronounced “peek-a-boo”) also has the power to fund its own budget by levying taxes on publicly traded companies. Despite giving the PCAOB all this power, however, Congress insulated it entirely from presidential oversight. Unlike with an ordinary “independent agency,” the president has no power whatsoever to appoint or remove PCAOB officials. Those officials may be removed only “for cause” by the SEC, not the president; and SEC officials may themselves be removed only for cause.

The Free Enterprise Fund challenged the constitutionality of the PCAOB and appealed to the Supreme Court. Cato’s supporting brief focuses on the PCAOB’s practical policy consequences, illustrating how the PCAOB’s unconstitutional structure has created incentives for out-of-control spending, agency aggrandizement, and lack of coordination between regulators. Our brief also highlights the PCAOB’s efforts to impose American accounting standards abroad, which has caused confusion and invited retaliation from foreign regulators.

I previously blogged about this case here and here.

Cross-posted at Cato's blog.

A Chance to Rethink How We Regulate Political Speech

At the March 24 argument in Citizens United v. Federal Election Commission, the U.S. government argued that Section 203 of the Bipartisan Campaign Reform Act of 2002 (otherwise known as McCain-Feingold) permits the FEC to ban corporations, including ideological nonprofits like Citizens United, from making independent expenditures on films, books, or even “a sign held up in Lafayette Park.” The jurisprudential justification for this extraordinary and shockingly expansive view of the government’s power to suppress political speech traces to the Supreme Court’s 1990 decision in Austin v. Michigan Chamber of Commerce. In Austin, the Court held that Michigan had a compelling state interest in banning political speech funded with wealth accumulated using the corporate form. Though the Court contended that such speech, because it bears little correlation to public support for the political ideas expressed, constituted a “different type of corruption,” in reality it upheld Michigan’s statute as a “counterbalance” to the “distorting” and “unfair” influence corporate funds could have on the outcome of elections.

This relative-equality rationale—suppressing disfavored speakers to enhance the voice of other government-favored speakers—is antithetical to core First Amendment protections and elsewhere has been expressly rejected by the Court (in Buckley v. Valeo and, more recently, in Davis v. FEC). Accordingly, to decide Citizens United’s appeal, the Court ordered rebriefing and reargument on Austin’s continuing validity.

On Friday, Cato filed its brief, the second we’ve filed in the case. We argue that Austin, and the part of McConnell v. FEC that upheld Section 203’s facial validity, are not entitled to stare decisis deference and should thus be overturned. These relatively recent decisions are poorly reasoned, have engendered no reliance interests (no one relies on less freedom of speech), and have spawned an unworkable and irrational campaign finance system in which the government rations different levels of permissible political speech to otherwise equally situated speakers.

The case will be reargued September 9, in a special session about a month before the official start of the Court’s new term.

Cross-posted at Cato's blog.

Senate Panel Endorses Sotomayor

The judiciary committee’s vote to endorse Sonia Sotomayor is not surprising. None of the Democrats are from red states and so have little to fear from voters, while the quixotic Lindsey Graham—in what can only be described as a triumph of hope over experience—was the only Republican to have set aside legitimate qualms and voted for the “wise Latina.” But voting on a Supreme Court nomination is more than a matter of deciding whether a nominee is “qualified”—even if Sonia Sotomayor had been a leading light of the judiciary rather than just the best available Hispanic woman—or deferring to the president. Instead, Senator Dick Durbin had it right when he said during John Roberts’s confirmation hearings that “no one has a right to sit on the Supreme Court” and that the “burden of proof for a Supreme Court justice is on the nominee.”

Given Sotomayor’s repeated rejection of the idea that law is or should be objective or discernible from written text, her inability in oral and written testimony to even state a position on important cases and legal doctrine beyond an acceptance of precedent—by which she would no longer be bound in her new role—leaves me with an abiding concern about the damage she could do to the rule of law in this country. I am similarly hard-pressed to accept hearing-seat conversions that contradict over 15 years of speeches and articles: most notably on the idea that judges’ ethnic backgrounds—and even “physiological differences”—should affect their rulings and on using foreign law to inform constitutional interpretation. Because of her evasion, obfuscation, and doubletalk, I like Sotomayor less now than when she was first nominated.

And so, in following the “burden of proof” paradigm and also respecting the logic of Senator Arlen Specter, who curiously evoked Scottish law at President Clinton’s impeachment trial, I would vote that the case for confirming Sonia Sotomayor to the Supreme Court is “not proven”—under American law.

[Cross-posted at Cato's blog.]