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  • CEI Issues Report on the Nation’s Six Worst State Attorneys General

    August 27, 2015 8:08 AM

    Today, CEI issued another of its periodic “worst state attorney general” lists, in a lengthy report explaining why those attorneys general received that dubious distinction. (Previous versions were issued in 2007 and 2010.) The Nation’s Worst State Attorneys General 2015 is now available.

    Pennsylvania’s recently indicted Kathleen Kane was rated the worst state attorney general. As the Huffington Post notes, “Almost half of Pennsylvania voters want Kathleen Kane, the state's embattled Democratic attorney general, to step down, according to a Quinnipiac University poll released Tuesday. Forty-nine percent said Kane, who is facing criminal charges relating to allegations she leaked information about a rival, should resign. Twenty-seven percent said she should remain in her position.” Fifty-four percent of Pennsylvania voters disapproved of her job performance, while 20 percent approve. Kane was indicted on August 6 for illegally leaking grand jury material and a subsequent cover-up. Kane is charged with perjury, official oppression, obstruction of justice, and contempt of court.

    State attorneys general are supposed to represent the interests of their clients, not their own. For attorneys general, that includes representing state agencies that are sued, defending state laws, and giving unbiased legal advice to state officials. But AGs are often self-seeking politicians who chafe at having to perform these duties rather than aggrandizing their own power. For many, it is tempting to use their office to enrich themselves or their trial lawyer friends, or to file lawsuits attacking political opponents or out-of-state businesses that have done nothing illegal, but have no redress at the polls.

    Past examples include former Texas attorney general Dan Morales, who was jailed for mail fraud and tax evasion related to Texas’s 1998 tobacco settlement; Alabama’s Richmond Flowers, who was sentenced to eight years in prison for conspiring to extort payments from companies; and Missouri’s William Webster, who was sentenced to two years in prison for rewarding lawyers who donated to his campaign with bigger settlements.

  • Tell Us How You Really Feel about Federalism

    August 6, 2015 3:13 PM

    In the nation’s capital, many of us are eagerly awaiting tonight’s Republican presidential debate. There’s no question that it will be entertaining, but will we learn where the candidates really stand on anything? Will we get real answers about the principles they truly hold dear and the ones that are just political talking points?

    Personally, I’m hoping that one of the three moderators (Bret Baier, Chris Wallace, and Megyn Kelly) will ask the potential commanders-in-chief how committed they really are to the principles ingrained in the Constitution. It’s particularly important that the candidates clarify their position on the Tenth Amendment. Traditionally, Republicans have been the party that upholds—at least in their rhetoric—the principle that powers not enumerated to the federal government belong to the states and individuals. But in practice, most of the candidates seem to have an ambivalent relationship with this part of the Constitution and often only appeal to the Tenth Amendment as a justification for their position on certain issues. 

  • HUD's "Affirmatively Furthering Fair Housing" Rule Is about Social Engineering, Not Desegregation

    July 20, 2015 9:41 AM

    Failure to meet a racial quota is not the same thing as segregation. That basic fact has eluded the federal Department of Housing and Urban Development, which recently adopted a rule called “Affirmatively Furthering Fair Housing” that seeks to alter the racial makeup of America’s cities and towns even when there is no justifiable reason to do so.

    This recently issued Fair Housing Act rule wrongly defines “segregation” as a “high concentration of persons of a particular race” or “religion.” (See 78 Fed. Reg. 43709, 43730.)

    But mere “concentration” is not segregation. For example, Orthodox Jews are concentrated in certain neighborhoods because they have to walk to synagogue, not because of segregation.

    The rule wrongly treats communities as segregated if they lack racially “balanced living patterns.” That ignores the 1964 Civil Rights Act, which states that school “‘desegregation” does not require institutions “to overcome racial imbalance,” and the Supreme Court, which stated in Fisher v. University of Texas (2013) that “racial balancing” is “patently unconstitutional.”

    The federal government should focus on breaking down arbitrary regulatory barriers to cheap housing—such as onerous zoning regulations—that disproportionately harm minorities (since the Fair Housing Act has now been interpreted, rightly or wrongly, to cover “disparate impact”). But it should not expect communities to meet arbitrary notions of racial “balance,” or spend taxpayer money to do so.

  • EEOC Legislates New Federal Ban on Discrimination Based on Sexual Orientation

    July 17, 2015 4:00 PM

    When Congress declines to pass a law that would expand an agency’s powers, the agency will sometimes respond by making up the law on its own. The Equal Employment Opportunity Commission recently did this, by adding a new protected class to federal employment laws, at the expense of America’s employers.

    Congress has never enacted a ban on private-sector sexual orientation discrimination, so the subject is governed largely by state or local law (most, but far from all, of America’s workplaces are covered by a state law or municipal ordinance banning sexual orientation discrimination).

    To the EEOC’s displeasure, a bill to prohibit sexual orientation discrimination at the federal level, the Employment Non-Discrimination Act, has repeatedly failed to pass Congress, in the face of questions about whether it is really needed (virtually all Fortune 500 companies have banned sexual orientation discrimination for years) or whether banning private-sector sexual orientation discrimination would cause problems for certain businesses (such as potentially triggering “hostile work environment” lawsuits against religious broadcasters, publications, or bookstores over workplace expression).

    So, the EEOC has decided to legislate a ban on sexual orientation discrimination on its own, declaring that all sexual orientation discrimination is a form of sex discrimination. “Allegations of discrimination on the basis of sexual orientation necessarily state a claim of discrimination on the basis of sex,” the commission concluded in a decision dated July 15.

    Discrimination on the basis of sex is already banned by a 1964 law—Title VII of the Civil Rights Act—but while that law lists several types of discrimination that are forbidden—race, religion, sex, and national origin—it does not list sexual orientation. The EEOC concedes as much when it admitted that sexual orientation “is not” “explicitly listed in Title VII as a prohibited basis for employment actions.” Yet, in spite of this, the EEOC declares in its ruling that Title VII forbids sexual orientation discrimination, and that “allegations of discrimination on the basis of sexual orientation state a claim of discrimination on the basis of sex.”

  • CEI Sues TSA for Violating Federal Law and Court Order on Body Scanners

    July 16, 2015 1:15 PM

    Yesterday, July 15, 2015, CEI filed a petition for writ of mandamus with the D.C. Circuit Court of Appeals. Our suit requests the court enforce its July 15, 2011, decision that found the TSA’s deployment of body scanners in violation of the Administrative Procedure Act. The 2011 court ordered the TSA to “promptly” open a rulemaking proceeding and produce a final rule. Yesterday was the four-year anniversary of the court order and we still do not have a final rule to evaluate and potentially challenge. In fact, given that TSA has been rolling out body scanners since 2007, they have been violating the APA for eight years.

    Other than CEI, petitioners are the National Center for Transgender Equality, The Rutherford Institute, CEI President Lawson Bader, and yours truly, in our capacity as private individuals. CEI’s attorneys are representing the petitioners.

    Our primary interest in this case is ensuring the TSA is forced to follow the law. However, results of a classified Department of Homeland Security Inspector General audit were leaked to and publicized by ABC News on June 1. The failure rate was an astounding 96 percent. So, not only is the TSA violating the law by deploying these machines, the machines likely don’t even work as advertised, as we and others have alleged in the past.

    So far, USA TodayThe Washington ExaminerReason magazine have covered the lawsuit, with a small blurb in The New York Times.

    The summary of our argument can be found here. The full complaint is here. For more from CEI on TSA’s illegal body scanner policy, see our 2013 comments to the agency and a 2012 op-ed by former American Airlines CEO Robert L. Crandall and myself summarizing our amicus brief in EPIC v. DHS.

  • Supreme Court Expands Power of Trial Lawyers Over Elections in Arizona Ruling

    July 7, 2015 4:15 PM

    The Supreme Court’s recent healthcare decision in King v. Burwell wasn’t the only case in which it twisted clear statutory or constitutional language in order to protect the progressive political agenda. The King decision perversely claimed that the words “‘Exchange established by the State’” “means ‘Exchange established by the State or the Federal Government,’” even though “the Act defines ‘State’ to mean ‘each of the 50 States and the District of Columbia.’”

    Similarly, in another recent case, the Supreme Court perversely redefined the word “legislature” to include unaccountable, undemocratic bodies influenced by special interest groups. That disturbing ruling will increase the power of left-wing trial lawyers over America’s Congressional elections, by expanding the influence of trial-lawyer-influenced judicial nominating commissions over congressional redistricting.

    If you are going to have gerrymandering of congressional districts, it might as well be done by a state legislature, which is accountable to the people, rather than an “independent” commission, which is not. Moreover, regardless of who would do a better job, the Constitution explicitly states that it’s the legislature’s job: the Constitution’s elections clause states that the “Times, Places, and Manner of holding Elections for Senators and Representatives shall be prescribed in each State by the Legislature thereof.”

    But on June 29, the Supreme Court ignored the language of the Constitution in its ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission. In a five-to-four decision, the Court “upheld a plan Arizona voters approved in 2000 that set up an independent commission to draw the boundaries.” Although voters may have been fooled by the “independent” label applied to this commission, it has proven to be not truly independent, but rather a reliable ally of state Democrats, who comprise a minority of Arizona voters.

  • Supreme Court Ruling that Fair Housing Act Bans Disparate Impact Creates Confusion and Uncertainty

    July 1, 2015 3:50 PM

    The Supreme Court’s June 25 decision in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc. creates confusion and uncertainty in multiple respects. In a 5-to-4 decision, the Court ruled that the Fair Housing Act bans certain landlord rental practices and local housing regulations that are racially neutral and nondiscriminatory on their face, if they have a “disparate impact” on a minority group, by excluding minorities at a higher rate than whites, and thus causing a racial imbalance deemed statistically significant.

    In creating such a “disparate impact” prohibition, it failed to follow longstanding principles of statutory construction. And it also failed to provide meaningful guidance about what rises to the level of illegal “disparate impact.” This deeply myopic ruling will have many perverse consequences, as lawyer Paul Mirengoff explains in the article, “In housing case, Justice Kennedy’s eyes are wide shut.”

    As the Court admitted, the Fair Housing Act does not explicitly mention “disparate impact” claims in its ban on discrimination “because of race, color, religion, sex, familial status, or national origin.” But the court read such a prohibition on “disparate impact” into the law, finding that they could be read into the words “otherwise make unavailable” (the law prohibits acts that “otherwise make unavailable ... a dwelling to any person because of race, color, religion, sex, familial status, or national origin.”).

    In lacking any reference to “disparate impact,” the Fair Housing Act is quite unlike the workplace race and sex discrimination law, Title VII, which was expressly amended in 1991 by Congress to include “disparate impact” claims. But the Court read a ban on disparate impact into it anyway.

    In so doing, it violated the basic principle of statutory construction that says that statutes, where possible, should be interpreted to avoid raising even potential constitutional problems. (This overly expansive interpretation of the Fair Housing Act also violates several other principles of statutory construction, which we discussed at this link). The Court itself admitted that “disparate impact” liability, through its focus on racial balance, can sometimes lead to quotas or other unconstitutional uses of race. And in past decisions, it had stated that “racial balancing” is “patently unconstitutional.” See Fisher v. University of Tex. at Austin (2013).

    As the dissent observed, “The Court acknowledges the risk that disparate impact may be used to ‘perpetuate race-based considerations rather than move beyond them.’ ... And it agrees that ‘racial quotas ... rais[e] serious constitutional concerns.’ Yet it still reads the FHA to authorize disparate-impact claims. We should avoid, rather than invite, such ‘difficult constitutional questions.’ ... By any measure, the Court today makes a serious mistake.”

  • Supreme Court Rewrites Obamacare, Again

    June 25, 2015 2:40 PM

    This morning, the U.S. Supreme Court ruled for the Obama administration in King v. Burwell, upholding the legality of health insurance tax credits for people in the 36 states that haven’t set up insurance exchanges under Obamacare. Chief Justice John Roberts wrote for the Court, while Justice Antonin Scalia dissented, joined by Justices Alito and Thomas.

    Unlike the major Obamacare case decided by the Supreme Court in 2012, NFIB v. Sebelius, today’s decision in King doesn’t concern the law’s constitutionality. Instead, the case challenged an IRS regulation interpreting the meaning of the Affordable Care Act (ACA)—better known as Obamacare. The law says that many low- and middle-income Americans can get “premium assistance” to help them pay for health insurance. This assistance comes in the form of income tax credits, hence the IRS’s involvement.

    But according to the ACA provision that explains how the IRS calculates which taxpayers are eligible for tax credits, a person cannot get a tax credit unless she’s enrolled in a health care plan offered by “an Exchange established by the State.” This may sound like a technicality, but it’s actually a very big deal, because Obamacare lets each state (and the District of Columbia) decide whether to set up a health insurance exchange. Only 14 states and D.C. have established their own exchange; in the remaining 36 states, individual health insurance is available through Healthcare.gov, an exchange run by the federal government.

    Despite the plain language of the law, the Court decided that an “Exchange established by the State” actually means “Exchange established by the State or the Federal Government.” The majority reasoned that Congress couldn’t possibly have intended to deny health insurance subsidies—or the individual coverage mandate—in states that opted not to set up their own exchanges. Otherwise, the Court feared that in the 36 states where the federal government runs the exchange, the absence of subsidies would lead to a “death spiral.” Healthy people would forego costlier health insurance, while sicker and older people would keep paying, sending prices higher and higher.

    If a state were worried about such a death spiral, however, all it would need to do is establish its own exchange—for which the subsidies would offer an incentive. But the Court rejected the notion that Congress might have actually designed Obamacare to work this way, siding instead with the administration’s position that lawmakers never intended to encourage states to set up their own exchanges by linking them with valuable health insurance subsidies. So the Court rewrote the law, much as it did in NFIB v. Sebelius, which held that the “penalty” Obamacare imposes on people who fail to buy health insurance is actually a “tax.” (Never mind that a bill with the word “tax” in it may not have passed Congress.)

    The Court’s explanation for why Congress didn’t really mean what it wrote regarding who can get tax credits is unpersuasive. The majority points to several parts of the Act that would supposedly make no sense if subsidies were available only in states that established their own exchange. But the majority’s version of the law creates irregularities of its own. The dissent identifies several obligations imposed on “an Exchange established by the State” that cannot logically apply to states where the federal government operates the exchange. Instead of reading the law to mean what it says, the Court rewrote the Act’s plain language to avoid some minor oddities.

    Moreover, the subsidy provision doesn’t seem to be an accident. As the dissent notes, the very phrase the Court rewrote—“an Exchange established by the State under section 1311”—appears in the Affordable Care Act not once, but seven times. In other parts of the Act, only the word “Exchange” is used. The Court dismissed this aspect of the law as the byproduct of “inartful drafting,” and thus replaces the text Congress actually wrote with words that make more sense to the six Justices in the majority.

  • Ten Years After Kelo v. New London

    June 23, 2015 10:43 AM

    Ten years ago today, the U.S. Supreme Court issued a 5-4 decision upholding the City of New London, Connecticut’s “right” to condemn Connecticut homeowners’ properties, transfer them to a state-created entity called the New London Development Corporation, which would then transfer those properties to a private developer of a planned mixed-use redevelopment project aimed at supporting an adjacent Pfizer research facility. (Land of the free, right?) At issue was the interpretation of the Fifth Amendment’s Takings Clause “public use” standard.

    The Court relied primarily on three previous cases involving the “public use” standard:

    Berman v. Parker (1954)—This case upheld the right of municipalities to declare entire areas blighted, even if the parcel in question isn’t blighted. It also accepted Washington, D.C.’s argument that the area condemnation was necessary to prevent future blight. An all-around terrible decision.

    Hawaii Housing Authority v. Midkiff (1984)—This case involved the redistribution of land titles in Hawaii. When the state moved to seize the properties, 49 percent of land in Hawaii was controlled by government and 47 percent was controlled by 72 private owners. The Court failed to recognize the central problem with land distribution in Hawaii at the time: almost half of the property was controlled by government, which created massive real estate market distortions—in addition to Hawaii’s odd economic history. While Justice Sandra Day O'Connor wrote the majority opinion in Midkiff, she also wrote a scathing dissent in Kelo, where she regretted her broad language in the Midkiff ruling that opened the door for a terrible opinion like Kelo.

    Ruckelshaus v. Monsanto Co. (1984)—This case involved chemical industry trade secrets. While it was solely about intellectual property, the Court argued that this case was relevant because it dealt with public use in a purely economic context. The enormous distinctions between intellectual property and real property were lost on the majority in Kelo.

    The result was the majority definitively watering down “public use” to a weak “public purpose” standard, leaving us with a “public purpose” standard that can be satisfied in the following situation: the government condemns your house in order to transfer it to a private developer, which the government expects the property will be put to higher use under the planned redevelopment and thus will increase its tax base. Think that couldn’t happen in the U.S.? Well, it did and was supported by the majority of the Supreme Court in Kelo.

  • The IRS, Obamacare, and the English Language

    June 17, 2015 11:06 AM

    In the days just before the March 4 Supreme Court hearing in King v. Burwell, I got a number of calls from total strangers who had read about the case and who wanted to be plaintiffs in it. I explained to them that it was too late to join the case then, but listened to their stories of cancelled insurance policies and jobs jeopardized by Obamacare. One call stood out in particular. It was from a woman in California who had moved to the U.S. years ago from the Ukrainian city of Donetsk. After explaining her health care predicament, she asked me: Do you understand how crazy this is? I left a totally dysfunctional country to come here, and now I find myself trapped in this insanity!

    That’s an interesting contrast to the disaster stories that we’ve been hearing for months, about what will happen if the Supreme Court rules in our favor in King. At issue in the case is an IRS rule that provides nationwide health insurance subsidies. The question for the Court is whether that rule is legal, since the underlying statute authorizes subsidies only in those states that set up their own health insurance exchanges—something only 14 states have done. We argue that the IRS rule is contrary to the clear language of the law Congress enacted. The government argues that invalidating the rule will frustrate Congress’s alleged purpose of making health care available to everyone. 

    This is where the disaster stories come in—about how, without nationwide subsidies, millions of people will be left uninsured and without medical treatment. But the Obamacare insurance subsidies aren’t some long-established fixture of medical care; they only took effect in 2014. And for several years before then Obamacare was delayed by purely political decisions made by the White House. Where were the cries of disaster back then? There weren’t any, in large part because we had a sizable array of medical entitlements aimed at preventing such disasters. We still have them. To the extent that state or federal fixes are necessary to ease transition problems that might be caused by a court ruling, nothing would stand in their way. States that chose not to set up exchanges could, for example, change their mind.

    One thing the disaster stories leave out is the fact that, for millions of Americans, Obamacare itself has been a disaster. These victims of Obamacare—yes, victims—include people who, like the woman from Donetsk, can no longer buy low-priced catastrophic insurance, or who find that the cost of their current policies have increased steeply, or who can’t keep their doctors. They include workers pushed into part-time status by companies trying to avoid Obamacare’s dictates, and companies that shelve their expansion plans due to its regulatory burdens. They include the taxpayers who foot the bill.

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