Vague Laws Defy the Rule of Law

Following Enron’s downfall, the federal government charged company CEO Jeffrey Skilling with “honest services fraud” connected to the alleged manipulation of Enron’s market value (and other securities irregularities). This charge — also at issue in two other cases before the Court this term — is based on a statute which says, in its entirety: “For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”

Skilling was convicted, and his conviction was upheld by the Fifth Circuit. The Supreme Court agreed to review the application of the “honest services fraud” statute to Skilling (as well as the issue of potential jury bias stemming from pretrial publicity in Houston). Cato, joined by the Pacific Legal Foundation, filed an amicus brief supporting neither party, arguing simply that vague statutes such as the one at issue here offend due process.

We take no position on whether Skilling committed a crime, or even the crime at issue here (whatever that may be). Instead, we argue that the Court should clarify that the constitutional prohibition on vague laws protects sophisticated and unsophisticated defendants alike in the realm of economic regulation, as well as in criminal law. The due process requirements of fair warning and definiteness apply equally in the contexts of white collar business crimes, business torts, and civil regulations.

Vague laws involve three basic dangers: First, they may harm the innocent by failing to warn of the offense. Second, they encourage arbitrary and discriminatory enforcement because vague laws delegate enforcement and statutory interpretation to individual government officials. Third, because citizens will take extra precautions to avoid violating the law, vague laws inhibit our individual freedom.

For more on this issue, see Tim Lynch’s posts here and here, Gene Healy’s op-ed, or the related policy forum and podcast.

CP: Cato's blog

Health Care Mandate Is Unconstitutional — and Don’t Leave Home Without the Cato Constitution

Yesterday the Heritage Foundation released a new paper on the unconstitutionality of the proposed health care mandate. Think tanks aren’t normally in the habit of promoting their peer institutions’ work, but this paper is incredibly timely and its lead author is Cato senior fellow Randy Barnett. You really should go read it.

Interestingly, at the event unveiling the paper, Eugene Volokh (of UCLA Law School and the Volokh Conspiracy blog) at one point wanted to quote the Constitution and realized he wasn’t carrying one! Eugene asked if anyone had a Heritage Constitution. Former Attorney General Ed Meese, now chairman of Heritage’s Center for Legal and Judicial Studies, saved the day by passing Eugene his… handy, dandy, Washington Post-bestselling Cato Constitution. It seems that General Meese likes our version because it’s smaller and so fits easier into your pocket. (I would add that it also features the Declaration of Independence — as does Heritage’s — as well as a preface by my boss, Roger Pilon.)

You can watch the entire health care event, which features Senator Orrin Hatch along with Randy and Eugene, here (the Constitution bit starts at about 40:15; I ask a question at 1:04:46). The bottom line — beyond the health care abomination — is that you should always carry your Cato pocket Constitution wherever you go. Like Josh Blackman, I keep one in every suit jacket (as well as backpacks, totebags, briefcases, and roll-aboards). You never know when you — or someone else — may need it.

They also make great stocking stuffers and gifts for any night of Hanukkah (as does the latest Cato Supreme Court Review, though you may need a slightly larger stocking).

CP: Cato's blog

Cato Files Brief to Extend Second Amendment Rights, Provide Protections for Privileges or Immunities

Last year, in District of Columbia v. Heller, the Supreme Court confirmed what most scholars and a substantial majority of Americans long believed: that the Second Amendment protects an individual right to keep and bear arms. Heller led to the current challenge to Chicago’s handgun ban, which raises the question of whether the Fourteenth Amendment protects that right against infringement by state and local governments. The Seventh Circuit answered the question in the negative, finding itself foreclosed by 19th-century Supreme Court decisions. The Supreme Court agreed to review the case — after Cato filed an amicus brief supporting the cert petition — and specifically consider whether the Fourteenth Amendment’s Due Process Clause or its Privileges or Immunities Clause is the proper provision for incorporating the Second Amendment right to keep and bear arms as against the states.

Now Cato, joined by the Pacific Legal Foundation, has filed a brief supporting those challenging the handgun ban — who are represented by Alan Gura, the lawyer who successfully argued Heller — and calling for an overruling of the Slaughter-House Cases, which eviscerated the Privileges or Immunities Clause in 1873. Slaughter-House narrowly circumscribed the rights protected by the Privileges or Immunities Clause, contrary to the intentions of the Amendment’s framers and in direct contradiction to the developments in legal theory that underlay its adoption.

We also argue that in addition to ignoring the history surrounding the Fourteenth Amendment, the Slaughter-House majority violated basic rules of constitutional interpretation. Finally, restoring the Privileges or Immunities Clause would not result in the demise of substantive due process because the idea at the core of that doctrine — that the Due Process Clause imposes something more than mere procedural limits on government power — was widely accepted when the Fourteenth Amendment was enacted and its authors rightly believed that the Due Process and the Privileges or Immunities Clauses would provide separate but overlapping protections for individual rights.

Again, go here to read Cato’s brief in McDonald v. City of Chicago. Related, Josh Blackman and I have put up on SSRN our article, “Opening Pandora’s Box? Privileges or Immunities, The Constitution in 2020, and Properly Incorporating the Second Amendment,” which comes out in January in the Georgetown Journal of Law & Public Policy. I will be blogging more about “Pandora” — and, of course, the McDonald case — in future.

CP: 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.

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.]

Our Latest Salvo in the Battle Over Campaign Finance Reform

Yesterday I filed an amicus brief on Cato's behalf in Citizens United v. Federal Election Commission, an election regulation/campaign finance case that will be argued before the Supreme Court in March or April. Testing the bounds of the Court’s landmark decision in Wisconsin Right to Life II (WRTL II), the Federal Election Commission recently sought to apply certain prohibitions and disclosure requirements of the Bipartisan Campaign Reform Act of 2002 to advocacy group Citizens United’s political documentary, Hillary: The Movie, and to the group’s broadcast advertisements for the film. Though the FEC conceded that the ads, at least, are not the functional equivalent of express campaign advocacy, as defined in WRTL II, it nevertheless determined that Citizens United must disclose the identities of its contributors.

Cato’s brief argues that BCRA violates the First Amendment freedom of association belonging to those contributors, which freedom includes the right to associate anonymously and to control the group’s character and message free from government intervention. For groups engaging in political speech, compelled disclosure of contributors’ identities infringes their freedom of private expressive association, a burden often no less severe than direct restraint of the group’s speech. This type of government action must be subject to strict constitutional scrutiny—a level of scrutiny that in practice is almost always fatal. The district court failed to afford sufficient value to associational rights and so failed to scrutinize appropriately BCRA’s unjustified infringement on those rights.

Supreme Court Crack-Up (and Down with Punitive Damages)

Certain commentators are noting the relative dearth of 5-4 decisions this term after a full third of last year’s cases were decided by that narrowest of margins (with Justice Kennedy in the majority in all of them). That’s a bit premature, however, as already the last ten days have produced more 5-4 cases than the term leading up to them. Tomorrow — with the contentious issues of energy deregulation, campaign finance, and, of course, the D.C. gun ban — will no doubt have even more. They always leave the close cases for the end, folks, and none of today’s four cases were anywhere near unanimous. The two decisions that got all the attention, of course, were Kennedy v. Louisiana (capital child rape) and Exxon v. Baker (punitive damages from the Valdez spill).

I won’t say much about Kennedy, other than that, as he has so, so many times in the past, Justice Kennedy again shamelessly substituted his own policy preferences for the will of the people. Regardless of one’s views on whether certain types of crimes short of murder (aggravated rape, child rape, treason, etc., etc.) warrant the death penalty, this is an issue properly left to the people and their elected representatives in state legislatures. We do not pick nine (left alone five) black-robed lawyers to be our moral arbiters, philosopher-kings, or bureaucrats-in chief. Kennedy versus Louisiana indeed!

As for Exxon, here we have the curious situation on the Court splitting 4-4 (Justice Alito having recused himself for owning Exxon stock) on the question of whether maritime law — the Court was only reviewing issues of federal maritime not constitutional law — permits punitive damages for the acts of agents. This means that, on that issue, the Ninth Circuit’s opinion is summarily affirmed (without setting Supreme Court precedent), a terrible result because the Courts of Appeal are themselves split. The Court went on, nevertheless and I think properly, by a 5-3 vote to vacate the $2.5 billion punitive damages award because, under maritime common law, punitives should be limited to the amount of compensatory damages (here $507.5 million). The trial lawyers are, of course, upset (at losing 80% of their contingency fee). For further comment both on the issue of deadlock-producing recusals and punitive damages, I’ll save pixels here and refer you to my podcast.

And again, stay tuned tomorrow for D.C. v. Heller (guns, for which my colleague Bob Levy is co-counsel and in which Cato filed an amicus brief), Davis v. FEC (campaign finance, in which we also have a brief), and Morgan Stanley v. Public Utility No.1 (electricity contracts). The way the opinions have come down, smart money is on Scalia writing Heller (majority or plurarity) and Alito writing Davis. Note that all three cases were long ago selected for inclusion in this year’s Cato Supreme Court Review.

[Cross-posted on Cato's blog.]

Supreme Court Stands Up for Free Speech in California

Today, by a vote of 7-2, the Supreme Court overturned a California statute that prohibited employers from speaking out on issues relating to unions and labor policy. The restriction even applied to the payment of salaries, speaking about unions to employees working on state contracts, and meeting with employees on state property to discuss union-related issues. The statute, passed after intense lobbying by the AFL-CIO, applied to any employers who received over $10,000 in state program funds – including everything from MediCal reimbursements to payments for building roads and schools. The only significant exceptions all relate to employer speech favoring union activity.

Cato filed a brief supporting the petitioners in this case — the Chamber of Commerce and a group of small business owners — to argue that 1) the case should be decided on labor law grounds because the National Labor Relations Act (NLRA) clearly prohibits state regulations of this kind; but 2) if the Supreme Court reached the First Amendment issue that the Ninth Circuit took it upon itself to decide (and decide erroneously), the statute should be struck down because it imposes an unconstitutional condition on the receipt of state funds and burdens private speech in an area unrelated to the programs for which the funds are given. In the end, the Supreme Court correctly decided the case on NLRA preemption grounds — that California intruded on an area that is properly left to Congress’s authority – noting its own 1976 determination that Congress had left unionization activities to be “controlled by the free play of market forces.” As Justice Stevens aptly stated, California’s statute acted to regulate within “a zone protected and reserved for market freedom” and thus had to be struck down.

[Cross-posted at Cato's blog.]

Even Argentina's Good Policies Undermine Its Rule of Law

Much as I hate to rain on my Cato colleague Juan Carlos Hidalgo’s understandable happiness at Argentina's decriminalization of personal consumption/possession of small amounts of drugs, this doesn’t exactly represent a ray of hope in the country's otherwise gloomy policy mix. Not because I believe in the War on Drugs – I can’t imagine anybody at Cato does – but because it was a court that reached this decision instead of a policymaking body.

Imagine the outcry if the U.S. Supreme Court simply decreed a policy it didn’t like to be unconstitutional – I know, with Justices Stevens and Kennedy at the apogee of their powers, it’s not a far stretch. Better yet, recall the poison the Court injected into our legal and political systems when it short-circuited the political process by inventing a right to abortion in Roe v. Wade (again, I’m not saying anything about the underlying policy arguments).

So it is here: Instead of having the Argentine Congress change the law, the nation’s Supreme Court (by a vote of 4-3) simply decreed that criminalizing drug use is unconstitutional. Reports are still sketchy, but this sounds like precisely the kind of judicial fiat developing (or any) countries need to avoid if they want to strengthen the rule of law.

[Cross-posted at Cato's blog.]

This Week at the Supreme Court

Notwithstanding last week’s agreement to hear the D.C. guns case — the announcement of which managed to be both later than originally expected and earlier than expected after the decision’s postponement – the Court has gone back to putting itself out of business by reducing its workload to nothingness. (How’s that for judicial restraint?)

The Court has granted review to 51 cases this term, putting it about at the same pace as last year, when only 68 cases were decided after argument. This is down from the 70-low-80s of the previous 15 years (except 92 in 1997-98), which itself is down from the 100-110 pace before that (and, for example, 129 in 1973).

But forgetting the numbers game, this week the Court is hearing four arguments, in cases involving: 1) private causes of action under ERISA (Larue v. DeWolff); 2) the deductibility of financial advisers’ fees from trust/estate taxes (Knight v. Commissioner of Internal Revenue); 3) whether New Jersey may construct a natural gas facility on the Delaware River over Delaware’s objection (New Jersey v. Delaware); and 4) the federal preemption of a (Maine) state law that blocks the delivery of Internet-bought tobacco to teenagers (Rowe v. New Hampshire Motor Transport Assn.). Not too exciting, other than that case 3 comes in under the Court’s rare original jurisdiction (meaning no state or lower federal court first ruled on the matter).

On Friday, the justices are scheduled to hold a private conference to discuss more pending cert petitions, with orders on those expected next Monday. The safe bet is that they’ll deny them all — though there is one interesting case (McDermott v. Boehner) where one sitting congressman is suing another over the latter’s disclosure to reporters of an illegally taped (and embarrassing) phone conversation. Stay tuned.

[NB: I recently started contributing to Cato's blog, so this is cross-posted here.]

Beer and Pizza

About half and hour ago I got back from Cato's weekly Friday happy hour. The media people run it and, apparently, there's always a theme. Tonight's theme was "back to school."

That is, back to college. So there was beer and pizza and wings. And wine for some reason (did girls drink that in college?). Unfortunately, I arrived 10 whole minutes after the thing started -- had been reading the recently released transcript of the Khalid Sheikh Mohammed testimony -- so there were but a few slices left, and almost nothing that wasn't vegetarian. (Why do people always order too much vegetarian? Why is it always us carnivores who are left with nothing appetizing to eat? But I digress...)

A few Coronas and some scintillating conversations in various languages later, I returned to my office to provide you, dear reader, with this (and the previous) blogpost.