Latest Scholarship

December 19, 2014

Faculty Scholarship: Legal Studies Research Paper Series, Vol. 16, No. 6

Faculty members at UC Davis School of Law publish truly unique scholarship that advances the legal profession. You can view their scholarly works via the Social Science Research Network (SSRN) Legal Scholarship Network. An archive can be found on this web page.

What follows here is the most recent collection of papers:

"Corporate Social Responsibility in India" 
The Conference Board Director Notes No. DN-V6N14 (August 2014)
UC Davis Legal Studies Research Paper No. 399

AFRA AFSHARIPOUR, University of California, Davis - School of Law
Email: aafsharipour@ucdavis.edu
SHRUTI RANA, University of Maryland
Email: shrutirana@yahoo.com

In an era of financial crises, widening income disparities, and environmental and other calamities linked to some corporations, calls around the world for greater corporate social responsibility (CSR) are increasing rapidly. Unlike the United States and other major players in the global arena, which have largely emphasized voluntary approaches to the adoption and spread of CSR, India has chosen to pursue a mandatory CSR approach. This report discusses India's emerging CSR regime and its potential strengths and weaknesses.

"The Advent of the LLP in India" 
Research Handbook on Partnerships, LLCs and Alternative Forms of Business Organizations (Robert W. Hillman and Mark J. Loewenstein eds.) (Edward Elgar Publishing, 2015, Forthcoming)
UC Davis Legal Studies Research Paper No. 408

AFRA AFSHARIPOUR, University of California, Davis - School of Law
Email: aafsharipour@ucdavis.edu

In 2008, India passed a ground-breaking law to introduce the Limited Liability Partnership form into Indian business law. The Indian LLP Act was the first major introduction of a new business form in India in over 50 years. While the partnership and corporate forms (i.e. companies under the Indian Companies Act) have long flourished in India, both forms have presented challenges for certain Indian businesses. The Indian government's impetus for the LLP Act was to develop a business association form that could better meet the needs of entrepreneurs and professionals with respect to liability exposure, regulatory compliance costs and growth. This chapter begins with a broad overview of the political and legislative process which led to the adoption of the LLP Act. It then addresses the critical aspects of the Indian LLP Act, and analyzes some of the challenges and uncertainties that may derail the success of the LLP form.

"Reed v. Town of Gilbert: Signs of (Dis)Content?" 
NYU Journal of Law & Liberty, Forthcoming
UC Davis Legal Studies Research Paper No. 403

ASHUTOSH AVINASH BHAGWAT, University of California, Davis - School of Law
Email: aabhagwat@ucdavis.edu

This essay provides a preview of the Reed v. Town of Gilbert, Arizona, a case currently (OT 2014) pending in the Supreme Court. The case concerns the regulation of signs by a town government, and requires the Supreme Court to resolve a three-way circuit split on the question of how to determine whether a law is content-based or content-neutral for First Amendment purposes. The basic question raised is whether courts should focus on the face of a statute, or on the legislative motivation behind a statute, in making that determination. I demonstrate that under extant Supreme Court doctrine, the focus should clearly be on the face of the statute, and that under this approach the Town of Gilbert's sign regulation is (contrary to the Ninth Circuit) clearly content-based.

That the Ninth Circuit erred here is, however, not the end of the matter. More interesting is why it erred. I argue that the Ninth Circuit's resistance to finding Gilbert's ordinance content-based was based on subterranean discontent with the most basic principle of modern free speech doctrine - that all content-based regulations are almost always invalid. At heart, what the Gilbert ordinance does is favor signs with political or ideological messages over other signs. Current doctrine says that this is problematic. I question whether that makes any sense. Given the broad consensus that the primary purpose of the First Amendment is to advance democratic self-government, why shouldn't legislators, and courts, favor speech that directly advances those purposes over other speech, especially when allocating a scarce resource such as a public right of way? Given the brevity of this essay, I only raise but do not seek to answer this question, but argue that it is worthy of further attention by the Court (and of course by scholars).

"Brand New World: Distinguishing Oneself in the Global Flow" 
UC Davis Law Review, Vol. 27, No. 2, December 2013
UC Davis Legal Studies Research Paper No. 410

MARIO BIAGIOLI, University of California, Davis - School of Law
Email: mbiagioli@ucdavis.edu
ANUPAM CHANDER, University of California, Davis - School of Law
Email: achander@ucdavis.edu
MADHAVI SUNDER, University of California, Davis - School of Law
Email: msunder@ucdavis.edu

Ancient physicians engaged in property disputes over the seals they impressed on the containers of their medications, making brand marks the oldest branch of intellectual property. The antiquity of brand marks, however, has not helped their proper understanding by the law. While the conceptual and historical foundations of copyrights and patents continue to be part and parcel of contemporary legal debates, the full history and theorizing on business marks is largely external to trademark doctrine. Furthermore, with only a few and by now outdated exceptions, whatever scholarship exists on these topics has been performed mostly not by legal scholars but by archaeologists, art historians, anthropologists, sociologists, and historians of material culture. Such a striking imbalance suggests that the law is more eager to assume and state what trademarks should be rather than understand how they actually work today. Nor does the law often acknowledge the many different ways in which marks have always been deployed to distinguish both goods and their makers. This is not just a scholarly problem: given the extraordinary importance of brands in the global economy, the growing disjuncture between the way brands function in different contexts and cultures and trademark law's simplified conceptualization of that function has become a problem with increasingly substantial policy implications.

"Justifying a Revised Voting Rights Act: The Guarantee Clause and the Problem of Minority Rule" 
Boston University Law Review, Vol. 94, No. 5, 2014
UC Davis Legal Studies Research Paper No. 411

GABRIEL J. CHIN, University of California, Davis - School of Law
Email: gjackchin@gmail.com

In Shelby County v. Holder, the Supreme Court invalidated Section 4 of the Voting Rights Act of 1965, which required certain jurisdictions with histories of discrimination to "preclear" changes to their voting practices under Section 5 before those changes could become effective. This Article proposes that Congress ground its responsive voting rights legislation in the Constitution's Guarantee Clause, in addition to the Fourteenth and Fifteenth Amendments. The Court has made clear that the Guarantee Clause is a power granted exclusively to Congress and that questions of its exercise are nonjusticiable. It is also clear from the Federalist Papers and from scholarly writing - as well as from what little the Court has said - that the purpose of the Guarantee Clause is to protect majority rule. That is precisely what was at issue after the Civil War when Congress first used the Guarantee Clause to protect African American votes. As an absolute majority in three states and over forty percent of the population in four others, African Americans possessed political control when allowed to vote; when disenfranchised, they were subjected to minority rule. African Americans are no longer the majority in any state. But in a closely divided political environment, whether African Americans and other minorities can vote freely may be decisive in many elections. For this reason, Congress could legitimately ground a revised Voting Rights Act in the Guarantee Clause, and the Court should treat its validity as a nonjusticiable political question committed by the Constitution to Congress.

"Wills Law on the Ground" 
UCLA Law Review, Vol. 62, 2015 Forthcoming
UC Davis Legal Studies Research Paper No. 404

DAVID HORTON, University of California, Davis - School of Law
Email: dohorton@ucdavis.edu

Traditional wills doctrine was notorious for its formalism. Courts insisted that testators strictly comply with the Wills Act and refused to consider extrinsic evidence to construe instruments. However, the 1990 Uniform Probate Code revisions and the Restatement (Third) of Property: Wills and Donative Transfers replaced these venerable bright-line rules with fact-sensitive standards in an effort to foster individualized justice. Although some judges, scholars, and lawmakers welcomed this seismic shift, others objected that inflexible principles provide clarity and deter litigation. But with little hard evidence about the operation of probate court, the frequency of disputes, and decedents' preferences, these factions have battled to a stalemate. This Article casts fresh light on this debate by reporting the results of a study of every probate matter stemming from deaths during the course of a year in a major California county. This original dataset of 571 estates reveals how wills law plays out on the ground. The Article uses these insights to analyze the issues that divide the formalists and the functionalists, such as the requirement that wills be witnessed, holographic wills, the harmless error rule, ademption by extinction, and anti-lapse.

"Can Human Embryonic Stem Cell Research Escape its Troubled History?" 
44 Hastings Center Report 7 (Nov.-Dec. 2014)
UC Davis Legal Studies Research Paper No. 409

LISA CHIYEMI IKEMOTO, University of California, Davis - School of Law
Email: lcikemoto@law.ucdavis.edu

In 2013 and 2014, three U.S.-based research teams each reported success at creating cell lines after somatic cell nuclear transfer with human eggs. This essay assesses the disclosures about how oocytes were obtained from women for each of the three projects. The three reports described the methods used to obtain eggs with varying degrees of specificity. One description, in particular, provided too little information to assess whether or not the research complied with law or other ethical norms. This essay then considers methodological transparency as an ethical principle. Situating the research within the ethical and moral controversies that surround it and the high-profile fraudulent claims that preceded it, the essay concludes that transparency about methodology, including the means of obtaining human cells and tissues, should be understood as an ethical minimum.

"Evidence of a Third Party's Guilt of the Crime that the Accused is Charged with: The Constitutionalization of the SODDI (Some Other Dude Did It) Defense 2.0" 
UC Davis Legal Studies Research Paper No. 401

EDWARD J. IMWINKELRIED, University of California, Davis - School of Law
Email: EJIMWINKELRIED@ucdavis.edu

Defense counsel have employed a version of the SODDI defense for decades. The late Johnny Cochran successfully employed the defense in the O.J. Simpson prosecution, and the legendary fictional defense attorney Perry Mason used the defense in all his cases.

However, in most jurisdictions there are significant limitations on the availability of the defense. In an 1891 decision, the United States Supreme Court announced that evidence of a third party's misconduct is admissible only if it has a "legitimate tendency" to establish the accused's innocence. Today most jurisdictions follow a version of the "direct link" test. Under this test, standing alone evidence of a third party's motive or opportunity to commit the charged offense is inadmissible unless it is accompanied by substantial evidence tying the third party to the commission of the charged crime. Moreover, the evidence that the accused proffers to support the defense must satisfy both the hearsay and character evidence rules. If the defense offers out-of-court statements describing the third party's conduct, the statements must fall within an exemption from or exception to the hearsay rule. If the defense attempts to introduce evidence of the third party's perpetration of offenses similar to the charged crime, the defense must demonstrate that the evidence is admissible on a noncharacter theory under Federal Rule of Evidence 404(b)(2).

However, a new version of the SODDI defense has emerged - SODDI 2.0. When the defense relies on this theory, the accused makes a more limited contention. The defense does not contend that reasonable doubt exists because there is admissible evidence of the third party's guilt. Rather, the defense argues that there is reasonable doubt because the police neglected to investigate the potential guilt of a third party who was a plausible person of interest in the case. Two 2014 decisions, one from the Court of Appeals for the Second Circuit and another from an intermediate Utah court, approved this version of the defense. Even more importantly, both courts ruled that the trial judge violated the accused's constitutional right to present a defense by curtailing the accused's efforts to develop the defense at trial.

The advent of this new version of the defense is both significant and controversial. The development is significant because the defense can often invoke this version of the defense when the restrictions on the traditional SODDI defense preclude the accused from relying on the traditional defense. As the two 2014 decisions point out, when the defense invokes the 2.0 version of the defense, the hearsay rule does not bar testimony about reports to the police about the third party's misconduct. Under the 2.0 version of the defense, those reports are admissible as nonhearsay to show the reports' effect on the state of mind of the police officers: putting them on notice of facts that should have motivated them to investigate the third party. Similarly, when the defense relies on the 2.0 version of the defense, the prosecution cannot invoke the character evidence prohibition to bar testimony that the third party has committed offenses similar to the charged crime. The prohibition applies only when the ultimate inference of the proponent's chain of reasoning is that the person engaged in conduct consistent with his or her character trait. In this setting, the prohibition is inapplicable because the ultimate inference is the state of mind of the investigating officers.

Since the restrictions on the new version of the SODDI defense are much laxer than those on the traditional defense, the advent of this defense is also controversial. Are the inferences from the 2.0 version of the defense so speculative that as a matter of law, the defense is incapable of generating reasonable doubt? Moreover, is it wrong-minded to recognize a version of the defense with such minimal requirements when the prevailing view is that traditional version is subject to much more rigorous requirements?

This article addresses those questions and concludes that it is legitimate to recognize the SODDI defense 2.0. In the past few decades, there has been a growing realization of the incidence of wrongful convictions. In the late Johnny Cochran's words, some of those convictions were a product of a "rush to judgment" by the police. The recognition of the SODDI defense 2.0 will provide a significant disincentive to such premature judgments by police investigators.

"Should Arrestee DNA Databases Extend to Misdemeanors?" 
Recent Advances in DNA & Gene Sequences, 2015, Forthcoming
UC Davis Legal Studies Research Paper No. 406

ELIZABETH E. JOH, U.C. Davis School of Law
Email: eejoh@ucdavis.edu

The collection of DNA samples from felony arrestees will likely be adopted by many more states after the Supreme Court's 2013 decision in Maryland v. King. At the time of the decision, 28 states and the federal government already had arrestee DNA collection statutes in places. Nevada became the 29th state to collect DNA from arrestees in May 2013, and several others have bills under consideration. The federal government also encourages those states without arrestee DNA collection laws to enact them with the aid of federal grants. Should states collect DNA from misdemeanor arrestees as well? This article considers the as yet largely unrealized but nevertheless important potential expansion of arrestee DNA databases.

"Racial Profiling in the 'War on Drugs' Meets the Immigration Removal Process: The Case of Moncrieffe v. Holder" 
University of Michigan Journal of Law Reform, Forthcoming
UC Davis Legal Studies Research Paper No. 402

KEVIN R. JOHNSON, University of California, Davis - School of Law
Email: krjohnson@ucdavis.edu

This paper is an invited contribution to an immigration symposium in the Michigan Journal of Law Reform.

In 2013, the Supreme Court in Moncrieffe v. Holder rejected a Board of Immigration Appeals order of removal from the United States of a long-term lawful permanent resident based on a single criminal conviction involving possession of a small amount of marijuana. In so doing, the Court answered a rather technical question concerning the definition of an "aggravated felony" under the U.S. immigration laws.

Because the arrest and drug conviction were not challenged in the federal removal proceedings, the Court in Moncrieffe v. Holder did not have before it the full set of facts surrounding the state criminal prosecution of Adrian Moncrieffe. However, examination of the facts surrounding the criminal case offers important lessons about how the criminal justice system works in combination with the modern immigration removal machinery to disparately impact communities of color. By all appearances, the traffic stop that led to Moncrieffe's arrest is a textbook example of racial profiling.

This Article considers the implications of the facts and circumstances surrounding the stop, arrest, and drug crimination of Adrian Moncrieffe for the racially disparate enforcement of the modern U.S. immigration laws. As we shall see, Latina/os, as well as other racial minorities, find themselves in the crosshairs of both the modern criminal justice and immigration removal systems.

Part II of the Article provides details from the police report of the stop and arrest that led to Adrian Moncrieffe's criminal conviction. The initial stop for a minor traffic infraction is highly suggestive of a pretextual traffic stop of two Black men on account of their race. Wholly ignoring the racial tinges to the criminal conviction, the U.S. Supreme Court only considered the conviction's immigration removal consequences - and specifically the Board of Immigration Appeals' interpretation of the federal immigration statute, not the lawfulness of the original traffic stop and subsequent search.

The police report describes what appears to be a routine traffic stop by a police officer who, while apparently trolling the interstate for drug arrests in the guise of "monitoring traffic." The officer stopped a vehicle with two Black men - "two B/M's," as the officer wrote - based on the tinting of the automobile windows. Even if the stop and subsequent search did not run afoul of the Fourth Amendment, Moncrieffe appears to have been the victim of racial profiling. A police officer, aided by a drug sniffing dog, in drug interdiction efforts relied on a minor vehicle infraction as the pretext to stop two Black men traveling on the interstate in a sports utility vehicle with tinted windows.

The Moncrieffe case exemplifies how a racially disparate criminal justice system exacerbates racially disparate removals in a time of record-setting deportations of noncitizens. Although he was fortunate enough to stave off deportation and separation from an entire life built in the United States, many lawful permanent residents are not nearly so lucky.

"Social Innovation" 
Washington University Law Review, Vol. 92, No. 1, 2014
UC Davis Legal Studies Research Paper No. 407

PETER LEE, University of California, Davis - School of Law
Email: ptrlee@ucdavis.edu

This Article provides the first legal examination of the immensely valuable but underappreciated phenomenon of social innovation. Innovations such as cognitive behavioral therapy, microfinance, and strategies to reduce hospital-based infections greatly enhance social welfare yet operate completely outside of the patent system, the primary legal mechanism for promoting innovation. This Article draws on empirical studies to elucidate this significant kind of innovation and explore its divergence from the classic model of technological innovation championed by the patent system. In so doing, it illustrates how patent law exhibits a rather crabbed, particularistic conception of innovation. Among other characteristics, innovation in the patent context is individualistic, arises from a discrete origin and history, and prioritizes novelty. Much social innovation, however, arises from communities rather than individual inventors, evolves from multiple histories, and entails expanding that which already exists from one context to another. These attributes, moreover, apply in large part to technological innovation as well, thus revealing how patent law relies upon and reinforces a rather distorted view of the innovative processes it seeks to promote. Moving from the descriptive to the prescriptive, this Article cautions against extending exclusive rights to social innovations and suggests several nonpatent mechanisms for accelerating this valuable activity. Finally, it examines the theoretical implications of social innovation for patent law, thus helping to contribute to a more holistic framework for innovation law and policy.

"Brief of Interested Law Professors as Amici Curiae Supporting Respondent in Direct Marketing Association v. Brohl" 
Stanford Public Law Working Paper No. 2516159
San Diego Legal Studies Paper No. 14-71
UC Davis Legal Studies Research Paper No. 400
UC Berkeley Public Law Research Paper No. 2516159
UCLA School of Law Research Paper No. 14-19

DARIEN SHANSKE, University of California, Davis - School of Law
Email: dshanske@ucdavis.edu
ALAN B. MORRISON, George Washington University - Law School
Email: abmorrison@law.gwu.edu
JOSEPH BANKMAN, Stanford Law School
Email: JBANKMAN@LELAND.STANFORD.EDU
JORDAN M. BARRY, University of San Diego School of Law
Email: jbarry@sandiego.edu
BARBARA H. FRIED, Stanford Law School
Email: bfried@stanford.edu
DAVID GAMAGE, University of California, Berkeley - Boalt Hall School of Law
Email: david.gamage@gmail.com
ANDREW J. HAILE, Elon University School of Law
Email: ahaile@brookspierce.com
KIRK J. STARK, University of California, Los Angeles (UCLA) - School of Law
Email: STARK@LAW.UCLA.EDU
JOHN A. SWAIN, University of Arizona - James E. Rogers College of Law
Email: john.swain@law.arizona.edu
DENNIS J. VENTRY, University of California, Davis - School of Law
Email: djventry@ucdavis.edu

The petitioner in this case has framed the question presented as follows: "Whether the Tax Injunction Act bars federal court jurisdiction over a suit brought by non-taxpayers to enjoin the informational notice and reporting requirements of a state law that neither imposes a tax, nor requires the collection of a tax, but serves only as a secondary aspect of state tax administration."

Amici agree with the respondent, the State of Colorado, that the Tax Injunction Act bars federal courts from enjoining the operation of the Colorado Statute at issue in this case because this lawsuit is intended to create the very kind of premature federal court interference with the operation of the Colorado use tax collection system that the TIA was designed to prevent. To assist the Court in understanding the application of the TIA to this case, amici (i) place the reporting requirements mandated by the Colorado Statute in the broader context of tax administration and (ii) explain the potential interaction between a decision on the TIA issue in this case and the underlying dispute concerning the dormant Commerce Clause.

Third-party reporting of tax information is a ubiquitous and longstanding feature of modern tax systems. When tax authorities rely on taxpayers to self-report their taxable activities, compliance rates for the collection of any tax is low. Like all states with a sales tax, Colorado faced - and faces - a voluntary compliance problem with the collection of its use tax. The use tax is a complement to the sales tax; in-state vendors collect and remit the sales tax, while in-state consumers are responsible for remitting the use tax on purchases made from out-of-state vendors that do not collect the sales tax. To this compliance challenge, Colorado turned to a third-party reporting solution. In broad strokes, the Colorado Statute imposes a modest requirement on one party to a taxable transaction - specifically on relatively large retailers who do not collect the use tax - to report information on their Colorado sales both to the consumer/taxpayer and to the taxing authorities.

Amici law professors contend that the centrality of third-party reporting to tax administration in general, and its aptness for this problem in particular, indicate that enjoining the operation of the Colorado Statute constitutes "restrain[ing] the assessment, levy or collection" of Colorado's use tax.

Amici also observe, however, that even a narrow ruling on the scope of the TIA in the Supreme Court could have an unexpected - and we would argue undesirable - impact on the federalism concerns that we think should decide this case. This is because any interpretation of the Colorado Statute for purposes of the TIA made by the Court might be erroneously construed as carrying over to interpreting the Statute for purposes of the dormant Commerce Clause.

We think it likely and reasonable for the courts below to look to the Supreme Court's decision on the TIA for guidance as to what test to apply under the dormant Commerce Clause. However, amici fear that a decision that held that Colorado's reporting requirement is integral to Colorado's "tax collection" for purposes of the TIA will exert a gravitational pull on the lower courts, encouraging them to apply the physical presence test from Quill Corp. v. North Dakota, 504 U.S. 298 (1992) to the Colorado Statute. The Quill test is an especially strict test under the dormant Commerce Clause, and one arguably meant only for "taxes." Thus, a victory for sensible state tax administration and federalism in this Court could be transmuted into a defeat for those principles below. Amici believe that NFIB v. Sebelius, 132 S. Ct. 2566 (2012), teaches that an answer on the TIA does not compel an answer concerning the dormant Commerce Clause. We call this issue to the Court's attention so that the Court is aware of how a decision on the TIA issue might be used - or misused - when the case reaches the merits, either in the state or federal court system.

"Non-Citizen Nationals: Neither Aliens Nor Citizens" 
UC Davis Legal Studies Research Paper No. 405

ROSE CUISON VILLAZOR, University of California, Davis
Email: rcvillazor@ucdavis.edu

The modern conception of the law of birthright citizenship operates along the citizen/noncitizen binary. Those born in the United States generally acquire automatic U.S. citizenship at birth. Those who do not are regarded as non-citizens. Unbeknownst to many, there is another form of birthright membership category: the non-citizen national. Judicially constructed in the 1900s and codified by Congress in 1940, non-citizen national was the status given to people who were born in U.S. territories acquired at the end of the Spanish-American War in 1898. Today, it is the status of people who are born in American Samoa, a current U.S. territory.

This Article explores the legal construction of non-citizen national status and its implications for our understanding of citizenship. On a narrow level, the Article recovers a forgotten part of U.S. racial history, revealing an interstitial form of birthright citizenship that emerged out of imperialism and racial restrictions to citizenship. On a broader scale, this Article calls into question the plenary authority of Congress over the territories and power to determine their people's membership status. Specifically, this Article contends that such plenary power over the citizenship status of those born in a U.S. possession conflicts with the common law principle of jus soli and the Fourteenth Amendment's Citizenship Clause. Accordingly, this Article offers a limiting principle to congressional power over birthright citizenship.

December 19, 2014

The Year in Constitutional Review: Our Top 5 Constitutional Developments of 2014 (And None of Them Is a Supreme Court Decision!)

Co-authored with Professor Alan Brownstein. Cross-posted from Justia's Verdict.

As 2014 draws to a close, we thought it appropriate to reflect on some of the most significant constitutional developments of the past year. Recognizing that any short-list requires difficult choices, we present our catalog of five noteworthy constitutional events or trends (in no specific order) below. Most interestingly, none of the five involves a particular 2014 ruling from the Supreme Court; instead, the list shows that other institutional actors (sometimes feeding off what the Court has done in the past and often acting completely independently from the Court) are crucial in giving meaning to the Constitution.

#1. President Obama's Announcement of Immigration Enforcement (or non-Enforcement) Priorities

One of the biggest constitutional changes over the last century has surely been the rise in power and prominence of the presidency. The President and his executive branch have grown in influence and stature for a number of reasons. One is the modern need (in a world of increasing economic complexity and international linkages) for the federal government to make decisions quickly, decisively, and based on specialized expertise (as in the Great Depression) and sometimes making use of information that cannot be made fully public (as in the War on Terror). Another is the fact that, although the electoral college is still part of our constitutional fabric, we have moved in the direction of popular election of the President, such that he garners far more votes nationwide than does any other elected official, and thus has a special claim to national electoral legitimacy-unlike that of even the Speaker of the House and the Senate Majority leader, the two elected leaders of Congress.

Many people embrace broadened Presidential authority, and many lament it. Some folks seem to have evolved in this regard. An example of such evolution might be Chief Justice John Roberts, who seemed to advocate for broad executive powers as a young government lawyer but who has recently bemoaned the fact that "the Framers could hardly have envisioned today's vast and varied federal bureaucracy and the authority administrative agencies now hold over our economic, social and political activities." But love it or hate it, broad executive discretion about whether and how to enforce laws is part of the federal constitutional landscape. And President Obama's recent announcement removing the threat of deportation for four million or so persons who entered or stayed in the United States in violation of immigration laws is a good example. Drawing on his key role in foreign affairs and law enforcement, and reminding the American people that he was reelected in part to manage the immigration problem (thus playing on both the reasons for presidential ascension mentioned above), Mr. Obama laid out his plans for how best to implement immigration laws in the near term. His announcement was a reminder of how, in the normal run of things, the President makes a lot of important decisions over which the Supreme Court may never have a say. (There have been lawsuits filed that test the President's actions here, and lower court judges are likely to express a range of opinions on the matter, but it remains unclear how the lower federal courts will ultimately adjudicate this issue and whether the Supreme Court will wade into this thicket.)

#2. The Events in Ferguson and NYC Regarding Police Actions Toward African American Men

A second set of events, involving local government rather than the federal government, raises important normative questions about race relations in the United States and public policy questions about the best way both to avoid these tragedies and to deal with them when they occur. We speak here, of course, of recent events in Ferguson, Missouri, and in New York City involving the killing of unarmed African Americans by police officers and the failure of grand juries to indict the officers involved. These police actions and grand jury decisions, like President Obama's immigration announcement, remind us of how powerful a device executive discretion is within our constitutional system.

But these episodes also remind us of another important constitutional theme. The 14th Amendment proclaims that "No State shall . . . deny to any person the equal protection of the laws." Surely, this provision requires the equal treatment of black and white Americans in the criminal justice system. If the equal protection of the laws means anything, it must mean that the use of force by police officers against persons alleged to violate the law cannot vary depending on the race of the perpetrator. Similarly, equal protection must require that prosecutors and grand juries ignore the race of both the police officer and the victim of the officer's conduct in determining whether the officer's use of force has violated the law.

Yet the Ferguson and New York City events reveal how little bite this constitutional guarantee has when the law gives government actors substantial, unguided discretion in performing their duties. Police officers have considerable discretion in determining whether and how much force should be used in the performance of their duties. Prosecutors have enormous discretion in deciding whether or not to bring charges to a grand jury and in determining how they will conduct the grand jury proceeding. Grand juries also have tremendous discretion. They can decide to indict a "ham sandwich," as the saying goes, or they can decide not to indict a police officer who has choked someone to death.

Because, in circumstances involving official discretion, it is often very difficult to determine the extent to which race influenced state action, the constitutional guarantee of equal protection has little ability to control such decision making. Perhaps the Constitution's primary and most effective role in these events is protecting the rights of individuals and groups to protest what they see as unsanctioned violations of the equal protection of the laws.

#3. Same-Sex Marriage in the Lower Courts

Equality was a theme not just in the Ferguson and New York controversies, but also in the treatment of same-sex marriage by the lower courts this year. Last year, in United States v. Windsor, the Supreme Court teed up but did not resolve the question of whether states were prohibited by the Fourteenth Amendment from treating same-sex marriages differently from opposite-sex marriages. And the lower federal courts have taken up that question in earnest ever since. Until the Sixth Circuit's decision to uphold same-sex marriage bans in four states this fall broke the momentum, same-sex marriage advocates had achieved an overwhelming number of lower court victories; four U.S. Courts of Appeals and over twenty federal district courts had struck down state laws discriminating against same-sex marriage. Indeed, until the Sixth Circuit's ruling by a divided three-judge panel in November, many commentators had concluded that the Supreme Court would not even take a marriage equality case anytime soon because the issue had essentially been resolved by the lower courts. Many of the lower court rulings took their cue from Windsor, of course, and now that the Sixth Circuit has created a split the Supreme Court will likely weigh in relatively soon-so no one is arguing the Supreme Court is irrelevant in this debate-but lower courts have definitely framed the issue and developed competing arguments in a way that makes it much harder for the Supreme Court to reject the right of same-sex couples to marry. For the marital equality movement, 2014 was the year of the lower courts.

# 4. Abortion Rights

The past year saw states continuing the recent trend of adopting and defending significant regulations of abortion services and access. The regulations vary in their content. Several states have enacted statutes (some of which are subject to lower court injunctions) that ban an abortion 20 weeks after fertilization occurs or at an even earlier time during the gestation period. Other regulations restrict the provision of medication used to induce an abortion. Other laws, responding to the new health care framework created by the Affordable Care Act, prohibit insurance offered through the Act's exchanges from covering abortions. Yet other laws regulate clinics that provide abortion services by requiring them to comply with the building, equipment, and staffing standards applicable to an ambulatory surgical center or a hospital. They also require physicians performing abortions to have admitting privileges at a local hospital. The lower courts are continually reviewing the constitutionality of many of these regulations, but it is (aggressive) state legislatures that are driving this issue right now.

Certainly, the need for greater clarity in this area of the law is obvious. Under the doctrine initially evolving from Roe v. Wade, the Court applied strict scrutiny review to pre-viability abortion regulations that ostensibly furthered some important state interest, such as promoting the health of the mother, but also increased the cost of abortions or otherwise limited access to providers. Under this rigorous standard of review, a state had to demonstrate that its regulations furthered a compelling state interest and that the state adopted the least restrictive means to further its objectives. This two- pronged approach required courts to balance the effectiveness of a state's regulations against the burden the law imposed on the right to have an abortion.

In Planned Parenthood v. Casey, however, the Court collapsed the two-pronged approach used in prior cases and adopted a unitary standard. All pre-viability abortion regulations are now constitutionally permissible as long as they do not have "the purpose or effect of imposing an undue burden on women seeking abortion." This standard focuses on the magnitude of the burden, the percentage of women seeking abortions who will experience that burden, and whether the regulation serves some purpose other than the goal of inhibiting access to abortion services. The Court's application of this standard to various regulations in the Casey case itself has mystified both constitutional law scholars and lower courts. The number and highly restrictive nature of new abortion regulations may require Supreme Court intervention and clarification of this standard in the near future.

#5. The 2014 Congressional Election

Although we have highlighted the way institutions other than the Supreme Court (e.g., the President, local governments, lower courts, state legislatures) have helped shape the meaning of the Constitution in 2014, we would never deny the centrality of the Court itself in constitutional interpretation. And yet we must remember that the Court is not a static institution, but rather one whose membership and decisions change over time. So our final candidate for important constitutional developments of the year is the congressional election in November that saw the Republicans gain solid control of the U.S. Senate. Because replacing departing Justices with new members is the single most important way the Constitution has been kept responsive to the values of the people, decisions by the American electorate about who shall be the President (and nominate new members to the Court) and who shall control the Senate (and decide whether to confirm presidential nominations) are quintessentially important constitutional events. Regardless of whether a Democrat or Republican wins the White House in 2016, Republican control of the Senate for the foreseeable future is likely to influence the kind of persons appointed to the (closely divided) Court in the coming years, which in turn is likely to affect how the Court rules in many controversial constitutional areas. It is fitting, even as it is sometimes overlooked, that We the People remain the most important institutional actors in giving content to our basic government charter.

December 10, 2014

Argument preview: When does a difference in tax treatment amount to a proscribed discrimination?

By Professor Darien Shanske, UC Davis School of Law. Cross-posted from SCOTUSblog.

On Alabama Department of Revenue v. CSX Transportation, Inc. 

This case is about Section 11501(b)(4) of the Railroad Revitalization and Regulatory Reform Act of 1976 (the "4-R Act"), which prohibits a state from "impos[ing] another tax that discriminates against a rail carrier." Wait, where are you going? This case, which has already been before the Supreme Court once, not only involves interesting questions of statutory interpretation, but also implicates fundamental questions about the meaning of "discrimination" in the tax context (and beyond). Indeed, the resolution of the case may require the Court to appeal to deep structural principles beyond tax. Both sides have reasonable arguments based on the text of the statute, legislative history, and policy. Thus the resolution of the case may turn on whether or not federalism concerns indicate that there should be a thumb on the scale in favor of a narrower construction of a statute that preempts state authority.

Put roughly, here are the facts. Alabama charges sales tax on the fuel purchases of railroads; it does not charge the sales tax on the fuel purchases of motor carriers - such as trucks. Because a federal statute bars discrimination against railroads, the railroad CSX Transportation, the respondent in this case, argues that the Alabama sales tax violates the 4-R Act. Not so fast, says Alabama, the petitioner in this case: Motor carriers pay a separate excise tax on their purchases of fuel, a tax that rail carriers do not pay. Surely, counters Alabama, when Congress prohibited "discrimination" it expected courts to be able to look at more than one section of a state tax code.

The provision in the 4-R Act at issue in this case is short and broad, barring "another tax that discriminates." CSX argues that this breadth is what Congress intended, while Alabama argues that Congress intended that the provision's meaning be filled out - and limited - by reference to earlier provisions of the Act and more general state and local tax jurisprudence.

The two questions before the Court are as follows:

1) When the statute forbids "discrimination," to which comparison class should the lower courts look? Should the Court read in a comparison class from the immediately preceding subsections of the 4-R Act, or did Congress specifically not wish to include that limitation?

2) If a court finds facial discrimination, can a state defend it by pointing to the operation of its larger tax system? The statute does not specify that such a justification could be availing. On the other hand, it would seem like there could not be a discrimination if the difference in treatment were justified.

Let's return to the facts. Alabama imposes a general sales and use tax which is based on the value of the item purchased. When railroads purchase diesel fuel, they must pay the tax. However, two competing businesses are exempt from paying the same sales tax on their purchase of diesel fuel: - motor carriers and interstate water carriers (that is, ships). The motor carriers pay a different tax, a per-gallon excise tax on their purchase of diesel fuels. The water carriers do not pay the excise tax; they have been exempt from the sales tax since 1959 because the state believed that the dormant Commerce Clause prevented it from imposing the tax.

The procedural history of this case indicates its difficulty. During its first trip up to the Supreme Court, the district court dismissed CSX's complaint; the Eleventh Circuit affirmed on the ground that subsection 11501(b)(4) of the Act cannot be used to challenge a sales tax "exemption" (as compared with a property tax exemption, which the Court had already held cannot be challenged under the Act).

The Supreme Court rejected that argument, held that a sales tax exemption could result in a prohibited discrimination, and remanded the case to the lower courts. Justices Clarence Thomas and Ruth Bader Ginsburg dissented from that disposition, on the ground that Alabama's scheme clearly did not violate the Act. These two Justices argued that there must be a comparison class implicit to subsection 11501(b)(4). They found that the relevant class was the comparison class established for property tax discrimination purposes in the immediately preceding subsections of the Act - namely, "commercial and industrial taxpayers."

On remand, CSX lost before the district court and won before a divided panel of the Eleventh Circuit.  Both the district court and the Eleventh Circuit found that the appropriate class to which to compare CSX was other competitors, rather than the broader class of commercial and business entities. That competitors constitute the appropriate comparison class is the position currently advanced by CSX before the Court. The district court, however, went on to find that the Alabama sales tax exemption for motor fuel did not amount to discrimination because of the complementary fuel excise tax. It found that, in fact, the charge paid by motor carriers was generally higher than that faced by railroads. As for water carriers, the district court found no discrimination because, among other reasons, the railroads had not shown that the water carriers were truly competitors.

The Eleventh Circuit reversed. Specifically, it held that Alabama could not justify its facial discrimination through the sales tax by appealing to the motor fuel excise tax. The court of appeals held that the statute does not indicate that courts should assess the treatment of railroads by looking at the tax system as a whole, and with good reason, because such an inquiry would amount to a "Sisyphean burden." The dissent countered that the there is no giant rock for courts to deal with, as a court need only compare the tax treatment of one industry to that of its competitors as to one tax.

Before the Court in this case, CSX and its amici defend and elaborate upon the opinion of the Eleventh Circuit.   Congress could have defined discrimination in subsection (b)(4) as relative to a specific class, as it did in the earlier provisions of the same statute, but it did not. Therefore, this kind of discrimination vis-à-vis competitors should be held to violate the statute. Furthermore, because one of the rationales of the 4-R Act was to protect the fiscal integrity of railroads, interpreting this provision in a way that protects the railroads from a tax provision that benefits their primary competition is consistent with the purpose of the Act.

The state counters that the correct comparison class is to commercial and industrial entities, as Justice Thomas had argued. This interpretation is also consonant with the purpose of the statute, as it protects railroads, as interstate entities, from being treated less well than the average in-state business entity. (Note that if a majority of the Court agrees with Alabama (and Justices Thomas and Ginsburg) on this question of comparison class, then the Court need not reach the second question as to the scope of the discrimination analysis.)

As to the scope of the discrimination analysis, Alabama argues that it does not make sense for courts to find a tax discriminatory without looking at the broader tax system - if there is an offsetting charge, then where is the discrimination? Furthermore, in the context of the dormant Commerce Clause, the Court has long accepted the possibility that the existence of a complementary tax could justify a seeming instance of discrimination. Not only does the complementary tax doctrine demonstrate the correct analysis of the concept of discrimination, but this doctrine was well established when the 4-R Act was passed and therefore Congress should be presumed to have assumed it would be applied.

CSX and its amici - including Walter Hellerstein, the leading state and local tax scholar, who is counsel of record for the Tax Foundation - strongly object to the importation of the complementary tax doctrine into the 4-R Act. First, the Act does not provide an opportunity for a state to justify its discrimination. Second, the Eleventh Circuit was correct that evaluating such a justification would be Sisyphean. In this case, for instance, because the two taxes are levied on different tax bases - the volume of fuel versus the price of fuel - the analysis would need to be updated regularly. Worse, other states have different sets of taxes and exemptions. Furthermore, if there is to be a more holistic analysis, why limit the analysis to a comparison of the sales and excise taxes? Railroads also pay more in property taxes and maintain their own rights of way, while motor carriers enjoy rights of way paid for by their motor fuel excise taxes as well as other taxes. Indeed, if the goal is to treat tax systems realistically, should courts not also consider which entity bears the true economic burden of a tax - that is, its incidence?  Yet tax incidence analysis is a shifting and tentative endeavor, even for trained economists.

Interestingly, the United States, in an amicus brief filed in support of neither party, proposes a Solomonic quasi-resolution of this case. The United States agrees with CSX that the proper comparison class is other competitors. However, the United States agrees with Alabama that the broader tax system should be taken into account, at least to the extent of considering whether the excise tax justifies the discriminatory application of the sales tax. Because the Eleventh Circuit eschewed this task as Sisyphean, the United States argues that the Court should remand the case to the Eleventh Circuit to give the task a try.

It would seem likely that the Court, as in the first go-round for this case, will try to resolve the questions here narrowly, grounding its answer in the text of the statute, such as it is. Nevertheless, given the import of the notion of "tax discrimination" to other federal statutes and to the dormant Commerce Clause in general, even a narrow answer could well have broader implications.

December 9, 2014

How Federalism Cuts Against the Challengers in King v. Burwell: Part Two in a Two-Part Series

Cross-posted from Justia.

In Part One of this two-part series, I contended that the reading of the Obamacare statute offered by the plaintiffs in the important King v. Burwell case pending in front of the Supreme Court was problematic for reasons grounded in federalism. In particular, I argued that even if the plantiffs' reading-that Congress, by using the phrase "established by the State" in certain places in the Act, intended that citizens of states that did not set up exchanges would not be eligible for federal tax credit health insurance subsidies-reflected the best overall interpretation of the statute, such a reading could not be accepted because it fails the requirement that Congress speak in a "clear voice" if it wants to condition the receipt of federal moneys on things that participating states must do. In the space below, I discuss possible counterarguments to my thesis, and also explain why I believe the federalism perspective I discuss adds an important element to the federal government's position in the King case.

Should the Clear-Voice Requirement Apply When There Is Only One Condition?

Perhaps the most forceful counterargument to my thesis is that the "clear voice" requirement on which I rely should not apply when the alleged congressional spending condition in question is the only condition in the picture, as distinguished from the more common instances in which everyone agrees that Congress imposed some conditions on states for the receipt of federal funds, but the question is whether one or more additional conditions were stated clearly enough by Congress. Why should this difference arguably matter? Because when everyone agrees Congress has clearly imposed some conditions, and participating states have already satisfied those conditions, participating states can be said to have already done something for the federal government. If those states are then confronted with additional, arguably unclear requirements they must also satisfy, the terms of the bargain seem to be changed. Since the Supreme Court has observed, first in the seminal case of Pennhurst State School & Hospital v. Halderman, that "[l]egislation enacted pursuant to the spending power is much in the nature of a contract," when states take actions to satisfy some federal conditions, they could be said to have transferred "consideration" to the federal government (in the form of helping the federal government accomplish whatever policies are furthered by the conditions the states have met.) By contrast, if there is one and only one condition (and its clarity is in doubt), no states can be said to have given any consideration to the federal government in any respect.

But if the presence of consideration were necessary, a state faced with a statute that created a clear condition on federal funding alongside an arguable and in any event unclear condition would be unable, prior to the state's having done anything to satisfy the clear condition, to obtain a judicial declaration that the unclear condition is not valid on account of its lack of clarity. At most, a state could get a court to declare whether the unclear condition was in fact an actual condition. Yet I believe that a court in this situation would apply the "plain voice" requirement to free the state from having to satisfy any unclear conditions.

And remember too that the Court has said that conditional spending is "much in the nature" of a contract, not that it is a contract itself. And there is another doctrine, known as "promissory estoppel," that is "much in the nature" of a contract but that does not require consideration, and instead focuses on the reliance placed on a promise. Consider the following hypothetical. Congress promises a state $X of funding to be used for highway construction for each of the next three years. In Year Two, Congress's budget has provided for the expenditure, but now someone urges that there is the non-obvious requirement in the original statute that states that receive the funding raise their legal drinking age to 25. Could a state be allowed to object to this unforeseeable condition even though the state (up to this point) has not given the federal government anything beyond spending the federally disbursed money as directed? I think the answer is yes, because a state could have relied on the federal promise of funding in deciding how to budget its own state funds for roadwork. Or in deciding what roadway safety laws to enact or reject. And if this is true for road funding, the same would have to be true for money earmarked for healthcare. So if Congress promised three years' worth of federal funding to states for Medicaid (without requiring states to spend any matching funds during this period), and passed laws authorizing the federal expenditures, no one could try in Year Two to assert an unclear condition and apply it to the states, even if it were the only condition anyone had ever suggested was in the statute.

Now it is true, of course, that the states that accepted these (highway or healthcare) funds might not have actually relied on the federal promises when they built their own budgets or policies, and that these states would in fact be no worse off if an unclear condition were to be imposed after the statute was adopted than they would have been if the condition had been clearly expressed by Congress at the outset. But the same is true for the conditional spending mechanism struck down by the Court in the 2012 Obamacare case, National Federation of Independent Business v. Sebelius, which I discussed extensively in Part One. When the Court there invalidated the Medicaid expansion provisions of Obamacare and said that states were not clearly on notice of the possibility of the conditions involved in the expansion when Congress first offered the states Medicaid money decades ago, the Court did not say, or even suggest, that had states actually been told way back when of a possible subsequent expansion that any states would have been likely to turn down the funding at the outset (even before the expansion condition was imposed). And, in fact, no one could suggest that states would have been likely to do that.

This tells us a couple of related things. First, the "clear voice" requirement is not about actual reliance, but rather even the mere hypothetical possibility of reliance on federal assertions. The "clear voice" requirement is a kind of a prophylaxis designed to avoid detrimental reliance before it occurs. And, like all prophylactic devices, it applies even to situations in which the evil to be avoided would not come to pass in any event. Second, and related, the "clear voice" requirement seems largely about showing respect for states by giving them all the information clearly up front to facilitate informed decision making, even if in the real world the decisions by states in such high stakes take-it-or-leave-it settings would not be likely to be affected much by additional clarity. In fact, this is precisely how the Court explained the "clear voice" requirement in Pennhurst, where the majority explicitly observed that "the crucial inquiry is not whether a state would knowingly [have acted differently if the condition had been clearly stated] but whether Congress spoke so clearly that we can fairly say that the State could make an informed choice." In the context of Obamacare, if the setting up of a state exchange was in fact a condition for a state to receive federal tax credit subsidies, respect for states required Congress to say this "clearly [enough] that we can fairly say that the State could make an informed choice" about whether to set up an exchange or not.

Does It Matter Whether Federal Money Ever Enters State Coffers?

But what about the fact that the federal subsidies under Obamacare are going not necessarily into state coffers, but rather directly to the healthcare consumers? Does this feature automatically remove the case from the conditional spending doctrinal category? At least in the context of the King plaintiffs' reading of Obamacare, I think not. The key facts are that, under their reading, tax subsidies are available to individuals as citizens of a particular state qua citizens of that particular state, and subsidy eligibility turns on the actions of that person's particular state government to set up an exchange or not. To see the point, imagine that Medicaid moneys were given not to state governments (conditioned upon the states expending matching funds and doing other things), but instead were given to the individual citizen beneficiaries, but only in those states that had expended matching funds and satisfied other conditions. I think the "clear voice" requirement should still apply. It is true that an individual's eligibility for federal tax benefits can sometimes depend on the particularities of state law in the place of one's residence, and that perhaps not all such interrelatedness between federal and state law triggers the a "clear voice" requirement. But when Congress intends (as the King plaintiffs assert Congress did in Obamacare) to give a state the direct choice of doing something the federal government wants it to do, in return for which the federal government will provide billions of dollars' worth of federal subsidies targeted towards the eligible persons in that state, the state must be able to see that choice easily.

Nor is the situation altered by the fact that the federal subsidies may take the form of tax credits rather than moneys actually disbursed. In fact, the federal government may advance money to Obamacare subsidy beneficiaries (in the form of payments to health care insurers) prior to an individual filing her federal tax return, but even if that were not the case, there should be no difference between a credit and a dollar disbursement; both kinds of programs are enacted pursuant to Congress's power to "tax" and to "spend" for the "general welfare," and are thus laws "enacted pursuant to the spending power," to use the Court's phrase. Indeed, go back to Medicaid. If, instead of affirmatively doling out money to states conditioned upon their doing certain things, Congress credited states (that satisfied certain conditions) with respect to fees or payments those states otherwise owed the federal government, the "clear voice" requirement would surely apply as to the conditions that would generate the credits. (It is true that the Court under the Establishment Clause of the First Amendment has distinguished tax credits from expenditures, but its reasoning there was limited to certain peculiarities of Establishment Clause jurisprudence.)

Does The Federalism Argument Add Much to Other Arguments Already in the Case?

Finally, I think it important to reflect on why this federalism "clear voice" requirement could prove especially important in the King case. For starters, this is an argument that was not really addressed by the two judges of the D.C. Circuit who (last summer) ruled in favor of the reading of Obamacare advanced by the King plaintiffs, so we don't know whether judges who are otherwise inclined to agree with the King plaintiffs would be unpersuaded by the "clear voice" line of argument. Indeed, even the Fourth Circuit that rejected the King plaintiffs' reading did not rule on this argument (though a form of this argument was made in the State of Virginia's amicus brief), so if observers believe (as many do) the Supreme Court's grant of review in King means that there are at least four Justices who were unpersuaded by the Fourth Circuit ruling, having an argument that was not addressed in the Fourth Circuit opinion is a good thing for the federal government.

The Fourth Circuit did rely on a related, but importantly different, kind of requirement of statutory unambiguity-the so-called Chevron doctrine (named after the 1984 Chevron, USA, Inc. v. Natural Resources Defense Council case)-under which federal courts defer to an administrative agency's interpretation of an ambiguous statutory term, so long as the administrative interpretation is reasonable. But there are many reasons why one could reject Chevron deference in King and yet apply the "clear voice" requirement of Pennhurst. First, and most technically, Chevron deference applies only if Congress can be said to have delegated to the agency in question (here, the IRS) the authority to interpret the relevant provisions in the statute. Different Justices seem to require different levels of clarity in that initial delegation, and the 2013 Arlington v. FCC case (about which I wrote a Justia column) exposed unlikely rifts between ordinarily like-minded Justices on just how far Chevron should be extended. In particular, Chief Justice Roberts, joined by Justices Kennedy and Alito, declined to read Chevron broadly, largely because of fears that the federal executive had become too powerful and that giving federal agencies broad interpretive authority is particularly dangerous. In the context of Obamacare, there may be disputes about whether the Chevron framework should be applicable.

Second, even if the Chevron doctrine governs, under it federal courts must give effect to the "unambiguously expressed intent of Congress"; deference to the agency comes into play only after it is determined that Congress has not expressed such an unambiguous intent. Now it may seem that "unambiguous intent," and "clear voice" capture the same idea, but I don't think that the two concepts in these two settings are identical. In other words, it is possible to say that Congress's intent was expressed unambiguously such that Chevron deference doesn't apply, and yet still say that Congress hasn't spoken in a sufficiently clear voice to satisfy the Pennhurst standard. In particular, many courts (including the Supreme Court) have used legislative history behind a statute, and also the way a statutory term may have been used in earlier statutes, to determine whether Congress's intent with respect a particular statute was expressed unambiguously for Chevron purposes. But I can't see how those extra-statutory sources could be used to decide whether Congress has spoken in a "clear voice" to put states on adequate notice in the conditional spending realm. On top of that, a provision whose meaning takes too much work for states to discern, even within the four corners of a single convoluted statute, might not be expressed by Congress in a "clear voice," even if in the end Congress's will is discernable to a high degree of confidence.

Relatedly, and more generally, Chevron is about separation of powers-the relationship between Congress, the federal judiciary and the federal executive. That is why the initial inquiry under Chevron is how much Congress delegated to the federal agency and how certain we can be about "the intent of Congress." By contrast, the "clear voice" rule is about federalism-the relationship between the federal government and state governments. That is why, in conditional spending cases, the Court says that "[w]e must view [a federal statute] from the perspective of a state official who is engaged in the process of deciding whether the State should accept [federal] funds. . . . " In conditional spending settings, we care less about how firm we are in our conviction of what Congress wanted, and more about what states would have necessarily understood.

Federalism and separation of powers push different buttons for folks. On and off the Court, many observers today seem to be (legitimately or not) concerned about broad assertions of federal executive authority. Recall that Chief Justice Roberts and Justices Kennedy and Alito have recently (in the Arlington case) expressed qualms about the breadth of Chevron precisely because they fear federal executive power. Chief Justice Roberts wrote that administrative agencies today "as a practical matter . . . exercise legislative power, . . . executive power . . . and judicial power. . ." and that the "accumulation of these powers in the same hands is not an occasional or isolated exception to the constitutional plan [, but rather] a central feature of modern American government." These Justices (and it's hard to imagine the federal government prevailing in King without winning over at least one of them) may be more receptive (as all three were in the Medicaid expansion setting in 2012) to arguments that are grounded in the distinctive respect owed states, and the Simon-says-like rules we should employ to make sure states aren't duped or misled into making decisions without being able to be aware of the consequences.

December 5, 2014

Why the Federalism Teachings from the 2012 Obamacare Case Weaken the Challengers’ Case in King v. Burwell

Cross-posted from Justia.

In an essay for Justia a few weeks ago, my fellow columnist and friend Mike Dorf wrote about how the Obamacare statute (Act) might be in danger in the King v. Burwell case pending at the Supreme Court today because of things various Justices felt and said in the 2012 Obamacare case, National Federation of Independent Business v. Sebelius (National Federation). Mike focused particularly on the views expressed by four dissenting Justices in 2012 that the so-called individual mandate exceeded Congress's powers and that the whole Obamacare statute was constitutionally invalid. I agree with Mike that the National Federation case is very relevant to the current dispute, but I see important ways in which Obamacare is less vulnerable, rather than more vulnerable, to the statutory challenge brought today because of what was said and done at the Court two years ago.

Background on the King v. Burwell and National Federation Cases

As Mike ably explained, the King v. Burwell lawsuit currently in front of the Justices asks whether a provision in the Obamacare law that permits federal tax credits to be given to qualified persons who purchase health insurance on an exchange "established by the State" also permits tax credits for individuals who purchase insurance on the so-called federal exchange that was set up (pursuant to the Act's provisions) by the federal government in those states that chose not to set up exchanges themselves. According to the plaintiffs in King, federal tax credits are not available under the Act to citizens of states that did not set up Obamacare exchanges, because Congress wanted tax-credit eligibility to operate as an incentive for states to set up exchanges so that the federal government wouldn't have to undertake the work.

Although the question is one of statutory construction, rather than constitutional authority, it has momentous implications; if federal tax credit subsidies are not available on the federal exchange, then a great many uninsured folks will remain uncovered, and a great many healthy individuals will be left out of the insurance market pools that experts say must be large and robust for Obamacare to work.

The question in King primarily comes down to the statutory meaning of the term "established by the State," in the context of a large and complicated statute that uses this and similar terms in many different places, and that also directs the federal government, in those states that decline to erect exchanges, to set up "such" exchanges itself. I agree with Mike that the best reading of the complicated, interlocking statute-as a whole and in light of sensible canons of statutory construction-indicates that subsidies are available on federal exchanges, and that at the very least the Obama Administration is reasonable in embracing and acting on such an interpretation.

As Mike points out, however, Obamacare has many detractors, both on and off the courts, and some Justices may be looking for ways to avoid giving workable effect to the ambitious statute. Specifically, Mike analyzes the possibility that the four Justices who dissented in the 2012 National Federation case (Justices Scalia, Kennedy, Thomas, and Alito) might, notwithstanding the principle of stare decisis, stick to their 2012 stance-that the individual mandate runs afoul of the Tenth Amendment and the whole statute must be jettisoned-and continue to reject any application of Obamacare.

The scenario Mike posits is certainly plausible; stare decisis principles are pretty malleable and seem to be frequently ignored by many if not all of the Justices (albeit in different cases) in disputes involving the Tenth Amendment and other constitutional questions. Nonetheless, I am more sanguine than Mike about whether the four 2012 dissenters will brush aside stare decisis cautions and use their 2012 views to block Obamacare today, for two reasons.

First, a crucial bloc of the Supreme Court (with Justice Kennedy being a key member) in the famous 1992 Planned Parenthood v. Casey case involving the continuing vitality of Roe v. Wade, observed that when the Court, in the absence of "the most compelling reason," overrules a "watershed" decision "under [political] fire," it runs the risk of "subvert[ing] the Court's own legitimacy beyond any serious question." The National Federation ruling was a "watershed" moment for the Court, Obamacare remains "under [heavy] fire," and a Supreme Court U-turn on Congress's power to enact the law could be understood by many as a concession to the political pressure. Indeed, any 5-4 ruling next summer gutting Obamacare would no doubt be viewed by a wide swath of Americans first and foremost as a Republican-appointed Supreme Court doing the bidding for Republicans who don't have the votes in Congress to repeal the divisive law.

Interestingly, this "don't overrule under fire because to do so will damage institutional legitimacy" argument has more force here than it did even in Casey, because Roe itself was a decision that many analysts believed had the effect of undermining the Court's legitimacy-insofar as Justice Blackmun's majority opinion in Roe wasn't tightly grounded in distinctively constitutional arguments-so that leaving Roe intact was not without legitimacy costs. Whatever one thinks of the National Federation ruling upholding Congress's power to enact Obamacare, that ruling-because it deferred to rather than overrode the elected branches-has not opened the Court to the same kind of charge of sitting as an "unelected super-legislature" that Roe has.

My second reason for thinking the National Federation dissenters may have a somewhat tough time relying on their 2012 stance has to do with technical differences in stare decisis between constitutional interpretation cases and statutory construction decisions. Stare decisis is a rather flexible constraint in constitutional matters, whereas the Court has made clear that the bar for overruling a past decision that was construing a federal statute is particularly high (presumably because Congress can fix erroneous judicial constructions of statutes more easily than it can correct wrong-headed readings of the Constitution). As Mike pointed out, in the National Federation case, the dissenters thought that the mandate was unconstitutional, and "also thought that the entire law had to fall with the mandate." That latter question-known in the business as "severability"-turned on how interlinked all the parts of the Act were, and whether any of the law could stand if the "pillar" (as the dissenters called it) of the mandate were invalidated.

The question of interrelationship between the various parts of Obamacare is ultimately a question of how best to read the statute and Congress's intent. Five Justices in 2012 rejected the dissenters' "pillar" reading, and although these five didn't speak explicitly to the relationship between individual mandate in particular and the rest of the law, the majority certainly read the interrelatedness of the overall statute and Congress's intent differently from how the joint dissenters did. So even if the four 2012 dissenters felt unbound by the National Federation Court's ruling on whether the mandate exceeds federal authority, they would also (in order to block Obamacare because of the mandate today) have to explain why they should not obey the 2012 majority's statutory interpretation on the question of severability. It would not be impossible for the 2012 dissenters to make some arguments here, but such arguments might look result-oriented when they minimize the effect of statutory stare decisis, ordinarily an uncontroversial topic.

How the National Federation Case Bolsters Obamacare Against the Current Challengers

There is another aspect of the National Federation case, an aspect on which seven Justices (including the joint dissenters) agreed, that bolsters rather than weakens Obamacare against its current challengers. I refer here to the Medicaid expansion part of the 2012 decision, in particular the Court's holding that Congress could not "surprise[e]" states by enforcing terms of a Medicaid bargain that were not "unambiguously" declared when the Medicaid deal was offered to states decades ago. Because the statutory provision entitling Congress to make alterations or amendments to Medicaid could "reasonably" be "assume[d]" by states to mean that Congress can make "adjustments" but not "transform[ations], states were protected against substantial retroactive conditions Congress sought to attach.

National Federation is just the latest in a line of case in which the Court has noted that "legislation enacted pursuant to the spending power [when the federal government is offering money to states to promote the general welfare] is much in the nature of a contract," and that the legitimacy of deals offered to states:

rests on whether the State voluntarily and knowingly accepts the terms of the "contract." There can, of course, be no knowing acceptance if a State is unaware of the conditions or is unable to ascertain what is expected of it. Accordingly, if Congress intends to impose a condition on the grant of federal moneys, it must do so unambiguously. By insisting that Congress speak with a clear voice, we enable the States to exercise their choice knowingly. . .

The theory behind this requirement that Congress speak "unambiguously" and with a "clear voice" seems pretty straightforward (even though the Court has not spent a lot of ink elaborating it): Because states are worthy of special respect as important partners in our federal system, we want to minimize the risk that states accept or forgo federal moneys without an accurate sense of the consequences of their actions.

How does this play out in King? Well, even if the challengers are correct that the best reading of the phrase "established by the State," in the context of a complicated 900-page statute, means that Congress did not intend for citizens of states that did not set up exchanges to be able to obtain the tax credits, it's hard to believe that the statute puts states on clear notice of that consequence. The statute never explicitly says (in so many words) that a state that does not set up an exchange gives up tax credits for its residents. And this Congressional message-if it be a message-seems not to have been effectively communicated. After all, various judges in the D.C. and Fourth Circuits don't read the statute the way the King challengers do. The I.R.S. hasn't read the statute the way the challengers do. One of the architects of the challenge (who was presumably familiar with the big aspects of the law shortly after its enactment) is reported to have said he was "surprised" when he discovered the reading that he now embraces. Key members of Congress did not publicly communicate the reading of the statute the challengers assert at the time of enactment. I am aware of no journalist who offered that interpretation of the statute at the time it was passed and presented to the states.

And, most importantly, states do not seem to have said or done things that suggest they actually understood the statute the way the challengers do, at the time decisions were made about whether to set up an exchange in each state. (If there are states that took actions indicating they understood "the deal," such actions should be highlighted.) The absence of state conduct suggesting awareness is particularly powerful, because as to the Medicaid expansion provisions that were litigated in National Federation, governors in states that declined the expansion did feel obligated to defend to their voters the decision to turn down federal money. No such explanations seem to have been offered by governors or legislators in states that decided not to set up exchanges about why turning down federal money was the right thing to do notwithstanding the cost. And one would certainly expect a lot of explanation if states understood they were giving up tax credits for their citizens.

Even the joint dissenters in National Federation, in describing the way exchanges would work, seemed not to see the deal the King plaintiffs say Congress offered. The dissenters observed that, in order to accomplish its statutory goal of near-universal coverage, "Congress provided a backup scheme" for those states that did not set up exchanges: "If a State declines to participate in the operation of an exchange, the Federal Government will step in and operate an exchange in that State." The implication in this passage is that the Federal Government's exchange would operate, as regards the goal of making insurance coverage more available, just as a state-established exchange would.

It is of course possible that the statute is "unambiguous" and "clear" in offering the deal the challengers assert, and that most everyone simply missed that clarity for months leading up to and following from the law's enactment. That judges and Justices, and journalists, and law professors, and members of Congress, and governors and state legislators all failed to see this plain aspect of the statute does not mean that it is not there. To the extent that the Court's doctrine does not require actual, subjective knowledge by states (a true meeting of the minds) as to what is expected of them, but rather only an easy ability to ascertain what the expectations are (a question Supreme Court cases don't fully answer, as far as I am aware), then the fact that many reasonable people didn't notice something doesn't mean there wasn't notice.

But even if the test focuses only on objective clarity -a plain statement of the contract terms so that states can know what they are getting into or turning down-it's hard to see how the challengers' reading of Obamacare can prevail. Can anyone really credibly argue that states were put on more clear notice of the loss of tax-credits by the use of the term "established by the State" alongside the federal power to create "such" exchanges in the context of an interlocking and convoluted statute than they were that Congress might make major changes to future Medicaid eligibility when Congress explicitly reserved for itself the power to "alter, amend or repeal any provision" of the Medicaid program (the term at issue in National Federation)? The challengers' reading of the statute (even assuming it is the best overall reading) is clearly visible only in the way Waldo's whereabouts are plain and clear after your child circles him with a highlighter on the page for you. If the deal Congress offered to states (according to the Obamacare challengers) was clearly presented in the statute, then we will have effectively overruled the "clear voice" requirement altogether, which is something a Court that is supposed to care about federalism should be loath to do.

In Part Two of this series, to be posted next, I take up counterarguments and additional questions raised by this federalism defense of federal exchange tax credits, including: (1) Why this federalism argument might be particularly important; (2) Why this federalism argument doesn't involve the same inquiry as so-called Chevron deference to administrative agency interpretation; and (3) Why federal tax credits to individual state citizens should be treated the same, for these purposes, as federal moneys given over to state coffers.

November 25, 2014

Immigration in the News

Cross-posted from the Dean's Blog.

President Obama's recent announcement that he would take executive action on immigration reform set off a frenzy of media coverage of immigration issues, and I'm proud to say that many reporters turned to King Hall faculty for information and commentary. 


Faculty and students gathered at King Hall to watch the President's televised address.

In the past few days, I've spoken on immigration issues with KXTV, the Sacramento Bee, Impacto Latin News, National Public Radio, PolitiFact.com, KCRA-3, and Capital Public Radio, and also published an op-ed in "Room for Debate" on  the New York Times website. Professor Jack Chin has also been very active, commenting for KCRA-3 and Yahoo! News, and it was especially nice to see Jack and Professor Leticia Saucedo on another KCRA-3 report that included live shots of the emotional reaction from UC Davis students to President Obama's actions.

Meanwhile, University of California President Janet Napolitano announced on November 21 that UC Davis School of Law will host an exciting new pilot program that will expand legal services available to undocumented students at UC campuses without law schools: UC Merced, UC San Francisco, UC Santa Cruz, UC Santa Barbara, UC San Diego and UC Riverside. The program, one of the first of its kind in the country, will operate out of the UC Davis School of Law Immigration Law Clinic, offering our students the opportunity to represent clients in immigration court and before immigration agencies under the direction of staff attorneys.

Our faculty has a long tradition of active engagement in the most pressing legal issues of our time.  It's great to see that continuing with regard to immigration reform.

November 13, 2014

Class Crits VII at UC Davis School of Law

The School of Law is pleased to host this year's Class Crits conference on November 14 and 15.

This year marks the 50th anniversary of the enactment of the Civil Rights Act of 1964, President Johnson's declaration of a "War on Poverty," and the establishment of the first Neighborhood Legal Services Program pilot in Washington, D.C. Each of these initiatives attempted to address problems of structural economic inequality-problems that remain with us nationally and internationally. The seventh meeting of ClassCrits will focus on work, poverty, and resistance in an age of increasing economic insecurity.

In law, it is generally easier to discuss "poverty" than to look deeply into its causes and incidents-including income and wealth inequality, the close interaction of class and race in America, and the connections between gender and economic hardship. It is also easier to discuss "poverty" than what some scholars call "precarity"-the increasing vulnerability of workers, even those above the official poverty line, to disaster. Precarity has both economic and political roots. Its economic sources include the casualization of labor, low wages, persistently high unemployment rates, inadequate social safety nets, and constant vulnerability to personal financial catastrophes. Its political sources include the success of neoliberal ideology, upward redistribution of wealth, increasing polarization and dysfunction in Congress, and the dependence of both political parties on a steady stream of big money. Precarity is also not limited to the United States, but is reshaping space around the globe. While the aftermath of the housing bubble and subsequent foreclosures drain home values across America and strip equity disproportionately from minority neighborhoods, in developing-country "megacities," millions of slum-dwellers are displaced to make way for high-end residential and commercial real estate developments.

Finally, this conference focuses on challenging structural forms of inequality from a place of compassion and creating possibilities for resilience. In the words of Martin Luther King, Jr., "True compassion is more than flinging a coin to a beggar. It comes to see that an edifice that produces beggars needs restructuring." In this spirit, ClassCrits VII will explore the risks, uncertainty, and structural challenges of this period and discuss possibilities for shared goals and new forms of resistance.

Speakers from the School of Law include Dean Kevin R. Johnson and Professors Angela Harris, Lisa Ikemoto, Lisa Pruitt, Darien Shanske, Leticia Saucedo, and Brian Soucek.

For more information, visit law.ucdavis.edu/class-crits.

October 24, 2014

Whether and Why Delegations of Government Power to Private Actors Are Problematic

Cross-posted from Justia's Verdict.

Among the interesting U.S. Supreme Court cases this fall is U.S. Department of Transportation v. Association of American Railroads, to be argued in about a month, involving the so-called "nondelegation" doctrine - the idea that Congress cannot lawfully delegate or cede legislative powers to other institutions or actors. If the Court ends up relying on some form of a nondelegation principle in striking down the federal statute at issue, the case would break important new ground.

Background on the Nondelegation Concept

The nondelegation idea gets fought over most often in the context of statutes that confers very broad-arguably overly broad-power to the executive branch. As I and other scholars have written, under the Necessary and Proper Clause of the Constitution, each constitutionally granted congressional power "implies a power to create authority under it sufficient to effect its purposes." But for over 150 years, the Court's decisions have been sprinkled with categorical statements that Congress may not relinquish any of its powers to enact legislation through grants to federal administrators. The first Justice Harlan's statement of this nondelegation doctrine in Field v. Clark is typical: "That Congress cannot delegate legislative power to the President is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution."

The Supreme Court has twice struck down federal legislation as having improperly delegated legislative power to the President, but both of these cases are more than 70 years old, and came from a Court that was known for its systematically ungenerous attitude towards congressional legislation. Since 1935, the Court has not invalidated a single congressional delegation of legislative authority to an administrative agency or the President, even though many grants of authority that have been upheld are arguably broader than those struck down in 1935. In 1974, when Justice William Douglas's majority opinion in one case construed the fee-setting authority of a federal agency narrowly so as to avoid nondelegation problems, Justice Thurgood Marshall wrote:

The notion that the Constitution confines the power of Congress to delegate authority to administrative agencies, which was briefly in vogue in the 1930's, has been virtually abandoned by the Court for all practical purposes . . . The doctrine is surely as moribund as the substantive due process approach of the same era-for which the Court is fond of writing an obituary - if not more so.

The explanation for this judicial hesitance to intervene is easy to see: almost all laws create some significant enforcement discretion in the executive branch, and drawing a principled line between allowable standard-guided authorizations of executive power, on the one hand, and impermissible standardless delegations to the executive branch, on the other, is well-nigh impossible for courts to do. As a result, the Court simply said that Congress must lay down some "intelligible principle" by which the executive branch can determine how to enforce a law, and it has found every law that has come before it to have at least one such "intelligible principle."

The Railroad Case Currently Before the Court

The case pending before the Justices involves a related, but arguably distinct, kind of nondelegation problem: delegation of lawmaking power by Congress to a private actor. Although the facts of the case are complex, in basic terms the statute under challenge works as follows: The Federal Railroad Administration (FRA), a federal agency that regulates railroads, is directed to work with Amtrak-a complicated hybrid entity that partakes of some private characteristics and some public features-to come up with some performance standards for Amtrak. If Amtrak falls too far short of meeting these standards, another federal agency is directed to investigate whether other railroads-whose rail lines are used by Amtrak-are not giving Amtrak sufficient access to the railways to permit Amtrak to perform better. So far, so good. The potential problem? If the FRA and Amtrak can't agree on performance standards to be adopted, the FRA doesn't have the power to override Amtrak's resistance. Amtrak, in effect, has at least a temporary veto over the FRA's proposals. In cases of such impasse, the FRA is limited to submitting the matter to an arbitrator, who then gets to decide which standards to adopt. And the statute by its terms doesn't make clear whether the arbitrator must be a public official or institution, as opposed to a private actor.

Based on this statutory scheme, non-Amtrak railroads brought a challenge alleging that the statute gives private-sector entities (Amtrak and the arbitrator) a right to veto and determine the content of regulation of the railroad industry, including regulation of Amtrak's competitors. Conferral of this power, the challengers argued, constitutes an impermissible delegation of federal lawmaking powers to private parties. The U.S. Court of Appeals for the D.C. Circuit agreed, calling the statute "legislative delegation in it most obnoxious form," and observing that delegations to private actors create difficulties that "are even more prevalent" than those raised by delegations to the executive branch. Indeed, the D.C. Circuit observed that "even an intelligible principle cannot rescue a statute empowering private parties to wield regulatory authority."

Resolving the Case Without Breaking New Nondelegation Ground

The Court may (indeed should) be able to dispose of this case without engaging a fundamental inquiry into the nondelegation doctrine as it applies to private actors. The Court could easily find Amtrak to be a public entity, in which case, at worst, the statute confers power in multiple federal executive agencies rather than to private entities, and (under the intelligible principle idea) the government would win.

The Court could also reasonably hold that the performance standards at issue here do not constitute lawmaking or regulation in any meaningful sense, since they are used-at most-to initiate investigations into whether non-Amtrak railroads have been violating federal law; the performance standards do not themselves apply to any other railroads. And quite often federal investigation of wrongdoing is triggered by private actors, so Amtrak's role in devising standards that are used to help decide whether investigation of potential illegality is warranted should be unproblematic.

Or the Court might hold the outside arbitrator who resolves disputes between Amtrak and the FRA must be another federal governmental entity, such that private actors (even if Amtrak is deemed a private entity) do not in fact control or have a veto over the formulation of the standards. And many earlier cases make clear that mere involvement or input by private parties in the regulatory process does not, absent a private-party veto over proposed regulation, create delegation problems. Indeed, if the Court thinks a nondelegation problem were otherwise created by Amtrak's role in the standard-setting process, and that the inclusion of a government arbitrator as a tiebreaker between Amtrak and the FRA would solve the problem, the Court would almost have to read the (ambiguous) statutory references to the arbitrator to mean government arbitrator, because the Court is ordinarily supposed to read ambiguous statutes so as to avoid, rather than create, constitutional questions.

But should the Court, for one reason or another, reach the core of the nondelegation claim, it will have to decide whether the D.C. Circuit is correct that alleged delegations to private parties cannot be cured by intelligible principles, and that such delegations constitute the most serious offense to the nondelegation norm. On these big questions, I am not at all sure the D.C. Circuit got it completely right. To see why, we must first look at where the nondelegation doctrine comes from. (Interested readers can consult earlier and more elaborate work I've published in the Vanderbilt Law Review, on which some of the ideas explained below are built.)

Background on the Nondelegation Idea Itself

The nondelegation doctrine is said to have both textual and theoretical underpinnings. Textually, Article I, Section 1 of the Constitution provides that "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives" (emphasis added). The theoretical justifications of the nondelegation doctrine stem from, as Professor Laurence Tribe has observed, "implicit constitutional requirements of consensual government under law." As Tribe has explained, American political theory finds legitimacy of government in the "supposed consent of the governed." This notion of consent presupposes the possibility of tracing governmental exercise of power to a choice made by a "representative" branch that is "politically and legally responsible" to the People. Thus, the valid exercise of a congressionally created power depends upon the prior "adoption of a declared policy by Congress and its definition of the circumstances in which its command is to be effective . . . ."

Both the textual and theoretical justifications for a nondelegation principle are open to question. First, it is not clear why the term "vested" in Article I means nondelegable. After all, Article II provides that "[t]he executive Power shall be vested in a President of the United States of America," yet no one doubts that the President may transfer executive authority to his underlings in the Executive Branch. Moving from text to theory, why does the "traceability" requirement foreclose delegation? Why can't we "trace" congressional delegations to the President back to Congress and hold it accountable accordingly? After all, as I just observed, the President delegates executive authority to unelected underlings, and yet we seem to believe that his accountability suffices under American democratic theory. Nor did "accountability" prohibit the People of the United States from delegating some of their sovereign power of self-determination to the federal government by ratifying the Constitution. The fact that the People have given temporary authority to federal institutions to govern on their behalf does not, under American democratic theory, mean that sovereignty has been "divested" from the People and permissibly delegated to the government.

Some might respond to my analogies by pointing out that the People are free to reclaim the power they have given to federal institutions through constitutional amendment, and that the President is free to reclaim authority he has given to his underlings at will. This is all true enough, but it suggests that delegations of power are not problematic per se, but that what might be driving at least part of the nondelegation concern is the ability (or inability) to reclaim power once delegated. This possibility is supported by seminal work done at the beginning of last century by Professors Patrick W. Duff and Horace E. Whiteside. These scholars attempted to uncover the origins of the Latin nondelegation maxim, "delegata potestas non potest delegari," which most people understand to mean "delegated power may not be redelegated." Their groundbreaking historical research established that the earliest forms of the common law agency nondelegation maxim-thought by many to explain much of the American constitutional nondelegation concern-were phrased somewhat differently: Delegated authority cannot "be so delegated, that the primary (or regulating) power does not remain with the King himself" (emphasis added). As Professors Duff and Whiteside conclude, the concern is that the "King's power not be diminished by its delegation to others." This reformulation focuses attention on one key aspect of the delegation problem: that delegation is more problematic when it is harder to reclaim.

This perspective would suggest that delegations to private actors are in some ways less problematic than delegations to the President. When Congress tries to reclaim delegations to the President, the President (who might be enjoying the delegation) can attempt to veto the proposed repeal law, requiring a supermajority of both houses to overcome. By contrast, if Congress doesn't like the way Amtrak (if Amtrak be a private entity) is obstructing federal regulation, it can amend the statute to dilute or eliminate Amtrak's involvement. And unlike the executive branch headed by the President, Amtrak (notwithstanding its political clout) cannot formally veto a subsequent reclamation attempt by Congress.

There are, of course, some ways in which delegations to private actors raise distinct constitutional problems that must be taken into account. Private actors (unlike the executive branch) have virtually no public accountability, and Congress may be too busy to address their misdeeds by repealing legislation. Moreover, and related, regulation in the hands of private actors often raises profound conflict-of-interest and anti-competition problems, with some market participants improperly empowered to make rules governing competitors. But these problems can be addressed without resort to the nondelegation problem; if private actors are wielding government power in ways that are unfair to other private actors, the Due Process and Equal Protection Clauses of the Constitution are the appropriate vehicles. Why might, say, due process be better than the nondelegation doctrine for these purposes?

One reason is that states have nondelegation doctrines that often mirror the federal approach. Indeed, state constitutions usually have the same kind of text (e.g., all legislative power is vested in a legislature and all executive power is vested in a governor) and theory as the federal Constitution, giving rise to doctrine substantially similar to federal law. When we think about application of nondelegation ideas at the state level, we see that due process review, which invokes an explicit balancing of interests, is the right kind of contextual approach to discern problematic delegations (such as giving General Motors a right to regulate car safety standards for its competitors, to use one of the D.C. Circuit's examples) from unproblematic delegations (such as a minister being empowered to facilitate a civil marriage). (Indeed, even if the Amtrak case really does involve delegation to a private party, it is not clear to me that such a delegation raises major conflict-of-interest or anti-competition concerns - those questions would have to be looked at more carefully.) If we use an uncompromising nondelegation doctrine instead of due process, the system would lack the flexibility to distinguish true problems-where delegation creates harm to the interests of third-parties-from formalistic ones-where regulatory or implementation power may technically be performed by private actors, but in settings where such privatization does no real harm.

So I hope that, whatever the Court does in the Amtrak case, the Justices do not embrace an overly broad rejection of all delegations to private actors. And if the Court has problems with the empowerment of Amtrak, I hope the Justices explain how Amtrak's involvement is unfair to other participants, and that they limit their holding to those kinds of situations.

 

October 10, 2014

The Supreme Court to Consider When Threats Can Be Punished Consistent with the First Amendment

Co-authored by Professors Vikram Amar and Alan Brownstein. Cross-posted from Justia's Verdict.

'Tis the season to begin looking carefully at the Supreme Court's 2014-2015 docket, now that the Justices have returned from their summer recess and are hearing cases again. One interesting case to be argued in a couple of months, Elonis v. United States, raises questions about how courts should define so-called "true threats" that fall outside First Amendment protection and thus are subject to punishment. Anthony Elonis was convicted of violating federal criminal statutes that prohibit the interstate transmission of communications containing threats to injure other persons, and his convictions were upheld by the U.S. Court of Appeals for the Third Circuit.

Background Facts of the Dispute

Mr. Elonis allegedly posted threats on Facebook directed at, among others, his ex-wife, federal law enforcement officials, and school children. For example, in referring to FBI officials (who had visited his home to interview him about his activities), Elonis wrote (seemingly in rap-style cadence):

[T]he next time you know, you best be serving a warrant
And bring yo' SWAT an explosives expert while you're at it
Cause little did y'all know, I was strapped wit' a bomb . . .
I was jus' waitin' for y'all to handcuff me and pat me down.
Touch the detonator in my pocket and we're all goin' BOOM!

In another posting, Elonis wrote:

That's it. I've had about enough.
I'm checking out and making a name for myself.
Enough elementary schools in a ten mile radius to initiate the most heinous shooting ever imagined. . .
The only question is. . . which one?"

In posts about his wife, Elonis wrote: "There's one way to love you but a thousand ways to kill you. I'm not going to rest until your body is a mess, soaked in blood and dying from all the little cuts. Hurry up and die, bitch . . . "

Throughout his prosecution, Elonis has challenged the definition of a threat to be used by the jury, namely, that "[a] statement is a true threat [subject to prosecution] when a defendant intentionally makes a statement in a context or under such circumstances wherein a reasonable person would foresee that the statement would be interpreted by those to whom the maker communicates the statement as a serious expression of an intention to inflict bodily injury or take the life of an individual." Elonis argues under the First Amendment (and also under the federal criminal statute he is charged with violating) that, before a person can be punished for expressing a threat, the government must allege and prove that the defendant subjectively intended to threaten his victim. Elonis does not (and could not) argue that the government must prove a defendant intended to carry out the threat, but he does assert that the government must prove that he intended to place the victim in fear of bodily harm or death.

The Third Circuit (along with a large number of other circuits) rejected this kind of subjective intent requirement. Instead, it held that statements that are reasonably construed as threats by the listener can be punished under the First Amendment. Conversely, the Ninth Circuit (and a number of state high courts) has required the subjective intent to threaten as a predicate to a prosecution for threatening speech. The courts that do require subjective intent often rely on the Supreme Court's 2003 ruling in Virginia v. Black, where the Court upheld the major portions of a Virginia statute making intimidating cross burning illegal. While the Court upheld the ban on threats expressed through cross burning, however, it also struck down a part of the Virginia law that made burning a cross itself prima facie proof of intimidation and relieved the state of having to offer any other evidence as to the meaning of the accused's symbolic expression. In reaching its decision, the Court observed that "'true threats' encompass those statements where the speaker means to communicate a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals . . . [whether or not] the speaker . . . actually intended to carry out the threat." The Court noted that prohibitions on threats protect individuals from the fear of violence and the disruption that fear creates, and not just from the likelihood of actual violence. The Court also observed that "intimidation in the constitutionally proscribable sense of the word is a type of true threat, where a speaker directs a threat to a person . . . with the intent of placing the victim in fear. . . ." Many of the arguments in Elonis focus on what this language from Black means.

The Issues Elonis Presents

Initially, we offer some relatively modest observations about First Amendment doctrine and Supreme Court practice illustrated by Elonis. First, this is a less-than-ideal vehicle to decide whether intent to threaten is statutorily or constitutionally required, since a reasonable jury might easily conclude that the evidence against Elonis establishes such intent in this case in any event. In other words, if Mr. Elonis wins at the Supreme Court, and the case is sent back for a new trial, a new instruction would be given to the jury but a conviction seems likely in any case. Certainly, the Court can (and will likely) reach the merits in Elonis if it wants to, but this is arguably not the best case for resolving the constitutional issue in dispute.

Second, the Court might avoid the constitutional question by reading a subjective intent requirement into the federal statute. If it does so, then it would still need to rule in a later case on whether the First Amendment requires subjective intent (in the context of a federal or state statute that clearly does not require it.)

Third, notice that much of the debate in this case revolves not around core First Amendment principles, but rather what the Court meant in Virginia v. Black. The Third Circuit's reading of the words in Black certainly seems plausible; the Court's description of "intimidation" as including the intent to instill fear could, as the Third Circuit held, refer to a subset of true threats, rather than a definition of the entire category of true threats. And we think the Ninth Circuit misreads Black to the extent that the Ninth Circuit believes that the Court's result in Black necessarily implies the existence of a subjective intent requirement. Whether or not there is a subjective intent requirement, the Virginia statute that made cross burning prima facie evidence of a threat would be constitutionally problematic because it would relieve the government of having to show, in a case where the defendant exercised his right not to present a defense, that a particular cross burning was, in context, something a reasonable person would perceive as threatening (which is certainly true of many but not all cross burnings).

But more generally, we are not sure the Court in Black was offering a general answer to the question of whether subjective intent in a necessary element the government must prove to convict someone for expressing a true threat. Indeed, we think that assigning so much weight to the precise words Justice O'Connor used in her Black opinion misses the forest for the trees. Determining whether subjective intent is a constitutional prerequisite to punishing a speaker for expressing a true threat is an issue the Court needs to discuss and evaluate on its own terms, not as a derivative discussion of the meaning of ambiguous language in a case where the question was never explicitly raised and thus may not have been on the minds of the Justices whose language is being parsed.

Comparing Threats to Other Types of (Potentially) Harmful Speech

Our fourth, larger point goes to the heart of the matter. If subjective intent is required to hold a person liable under a threat statute when a reasonable person would understand the accused's expression to constitute a serious threat, the speaker who places a victim in fear of bodily harm or death will escape sanction when the government cannot prove beyond a reasonable doubt that the speaker intended to instill fear. But the First Amendment does not give speakers a right to cause, whether intentionally or not, this kind of fear and apprehension. The key free speech issue raised by this case is: When does the First Amendment prevent government from protecting people from speech that undeniably causes real harm because government action jeopardizes other important free speech interests?

We think the best way to analyze this question is to compare the treatment of threats with the treatment of other kinds of potentially harmful speech, such as incitement, defamation, and offensive speech. Threats are proscribed not just because they might lead to action, but because they inflict injury in themselves. Unlike, say, incitement, where the evil to be regulated is the possibility that a listener may be influenced to act on the speaker's words, threats wound by their very utterance. In this respect, laws banning threats are more akin to laws sanctioning defamatory speech. In providing civil sanctions for defamation, at least as to private figure victims, no subjective intent is required before government can regulate such expression, whereas in the former setting (of incitement), the First Amendment does seem to require intent to incite before punishment can be imposed. What accounts for this difference in treatment? The answer cannot be that society thinks incitement is necessarily less dangerous than defamation; the costs of incitement have always been recognized as significant.

One explanation for this difference in treatment is that the government's interest in punishing speech because such speech may influence the thoughts and actions of the audience goes to the very core of why we have a First Amendment. The foundation of free speech doctrine is the right to use speech to persuade others of the merits of our ideas. Thus, when speech is dangerous because it might be acted upon, we are more reluctant to regulate it, and we add the extra layer of a subjective intent requirement as protection against government overreaching. Where speech is dangerous because it causes harm directly, however, (as it does in defamation cases) the government's interests do not conflict directly with foundational free speech principles. Accordingly, we allow the civil sanctioning of defamatory speech without the extra buffer requirement of subjective intent.

Using this comparative analysis, we would ask whether speech that causes a reasonable person to fear that he or she is threatened with bodily harm or death is of sufficient constitutional value to justify courts adding the additional buffer of protection provided by a subjective intent requirement. We are not at all convinced that the value of such speech can justify allowing the harm it causes to go unsanctioned.

Another comparison-this one between threats, incitement and so-called offensive speech (use of vulgar and insensitive words, etc.)-may also be instructive. In the incitement realm we require government to prove intent and immediacy notwithstanding the harm that incendiary speech may cause not only because of our commitment to shielding persuasive speech from government prohibitions. We also recognize that there is a slippery slope with regard to punishing incitement. Every idea expressed with passion risks inciting its audience. And, accordingly, every idea that is critical of the government and its policies risks inciting anti-government behavior and violations of law. If we provide inadequate protection to incitement, all speech critical of government could be subject to sanction.

A similar analysis applies to the full protection we provide to offensive speech. Here too we recognize that offensive speech may cause its victims real harm and anguish. No one doubts that the grieving mourners at a soldier's funeral who were subjected to the disparaging speech of Westboro Baptist Church protestors suffered psychological torment. Yet in Snyder v. Phelps, the Court protected the protestors' right to express their hateful and hurtful message free from civil sanction. But here again we also recognize that tolerance of offensive speech is essential to the maintenance of a free speech regime. Every challenge to orthodoxy may offend some people who are comfortable with the status quo. We must vigorously guard against allowing speech to be punished simply on the ground that it offends people because restricting speech to serve this interest risks swallowing up a substantial part of the First Amendment.

Threats are arguably quite different. Unlike state interests justifying restrictions on incitement or offensive speech, the state's interest in protecting people from threats of physical violence that would instill fear in reasonable people seems more cabined and focused. We do not worry that core free speech principles would be undermined if speech that places reasonable people in fear of serious bodily harm or death is prohibited, whether or not the speaker intends his message to have such a frightening effect.

How Will the High Court Rule?

Some analysts predict the Court will reverse the Third Circuit and add a subjective intent requirement to the test for constitutionally proscribable threats. They say this because the current Court has been extremely protective of expression (even odious expression) in a variety of settings, and because so much speech today (especially in rap music and other popular forms of entertainment) is coarse and uses provocative and sometimes violent language. The notion would be that true threats should not be defined so broadly as to sweep too much of what people actually say in the real world within a category of unprotected speech. (Indeed, Mr. Elonis argues that the rap style of his Facebook postings makes his speech less threatening.)

We understand this argument, but aren't persuaded by it. The prevalence of violent imagery in music and other cultural venues in today's society should already be taken into account by the requirement (on which everyone agrees) that a listener's fear must be reasonable in context, and not based simply on some hypersensitivity to ugly, disturbing language. Unless there is a reason to fear that juries won't already factor changes in speech patterns into the definition of what reasonable people would experience as a threat, it is not clear, at least to us, that an extra element of subjective intent is needed here.

Before we conclude, we do note (circling back to our comparative analysis) that in the defamation setting, constitutional doctrine does require subjective intent (in the form of knowledge or recklessness as to falsity) when the victim is a public official. The case law is more protective of speech critical of our government officials than it is with respect to negative speech concerning private individuals. Perhaps the same should be true for threats; because we want citizens to be free to vent anger against their representatives, maybe we should allow them to engage in threatening speech except when they mean to instill fear. On the other hand, the requirement that a victim/listener feel reasonably threatened might itself be sufficiently flexible to protect vociferous ranting against officials, in that officials are less likely to be reasonable in feeling fear than are ordinary folks because officials should know that citizens may exaggerate their anger and rhetoric when it comes to government. In this regard, we emphasize that a reasonable-victim standard does not give juries carte blanche to punish speech whenever they desire; judges are perfectly capable of ruling that, as a matter of law, certain provocative words cannot, in modern and specific context, be understood by listeners as actual threats that put the listeners in reasonable fear of harm.

October 2, 2014

Major Conference Highlights Impact of Place on Poverty

The UC Davis Center for Poverty Research will host a major conference on the impact place has on poverty and effective interventions on November 13-14. Our own Professor Lisa Pruitt is the conference's organizer.

The conference "Poverty and Place" will host leading scholars in sociology, economics, law, education, social work, geography and planning. They will present new research on how place can aggravate poverty, addressing different aspects of urban, suburban and rural challenges and solutions.

"Concentrated poverty-whether in rural, urban, or suburban places-greatly aggravates the challenges facing those living in poverty, and place-specific or spatial barriers can undermine the efficacy of safety-net programs," said Professor Pruitt. "This conference takes up these and a broad array of other issues related to the geography of poverty."

The conference will coincide with another conference, titled "Poverty, Precarity and Work: Struggle and Solidarity in an Era of Permanent(?) Crisis," held at UC Davis School of Law. This second conference will take place November 14-15. Visit law.ucdavis.edu/class-crits for more information.