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.”
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.
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.
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.
June 17, 2015 11:05 AM
Under the Obama administration, the Education Department has pressured schools and colleges to restrict speech, including off campus speech, even when it is protected by the First Amendment, and is not severe and pervasive. It claims this is required by federal anti-discrimination laws such as Title IX and Title VI. It also expects colleges to investigate off-campus sexual misconduct by students, even though most federal appellate court rulings say schools have no such duty under Title IX.
As I recently noted in The Wall Street Journal, “the Education Department, where I used to work,” is
pressuring colleges to adopt unconstitutional speech codes in the name of fighting sexual harassment. It has disregarded many court rulings in doing so.
For example, the Education Department has wrongly ordered schools to regulate off-campus speech and conduct. That contributed to the harassment charges against Prof. Laura Kipnis, who was accused over a politically incorrect essay she wrote in the Chronicle of Higher Education and statements she made on Twitter. Court rulings like Roe v. Saint Louis University (2014) reject Title IX claims over off-campus conduct, but the Education Department ignores them. It also ignores court rulings like Klein v. Smith (1986) emphasizing that the First Amendment usually bars public schools from restricting off-campus speech. For example, the Education Department told schools to regulate comments “on the Internet” in an October 2010 letter. In 2014, it demanded that Harvard regulate off-campus conduct more.
At Northwestern University, Professor Laura Kipnis was subjected to a bizarre Title IX investigation over an essay in the Chronicle titled “Sexual Paranoia Strikes Academe” (which hypersensitive students claimed offended them and constituted sexual harassment) and her subsequent statements defending herself on Twitter (which the students claimed constituted “retaliation” in violation of Title IX, even though she did not identify them by name). Kipnis was ultimately found not guilty.
Although it eventually became clear that nothing Kipnis did violated Title IX, Northwestern probably felt obligated to subject Kipnis to that chilling, lengthy, and extensive investigation due to improper mandates issued by the Education Department’s Office for Civil Rights (OCR), which make it hard to summarily dismiss weak or baseless Title IX complaints.
June 9, 2015 8:42 PM
Our friends over at the Reason Foundation, a venerable libertarian think tank and publisher of Reason magazine, recently received a grand jury subpoena from a federal prosecutor in New York, reports Ken White at Popehat. The subpoena demands that Reason disclose “all identifying information” it has regarding six pseudonymous users who posted comments about the death and afterlife of a federal judge on Reason’s Hit & Run blog.
These comments came in response to a May 31 Reason post by Nick Gillespie about the trial and sentencing of Ross Ulbricht, who was convicted in February of running an Internet-based narcotics and money laundering platform known as Silk Road. In late May, Judge Katherine Forrest, who sits on the U.S. District Court for the Southern District of New York, sentenced Ulbricht to life in prison. This sentence was met with mixed reactions, with many commentators criticizing Judge Forrest for handing down what they perceived as an exceedingly harsh sentence.
A few Reason users, some of whom may have followed Reason’s extensive coverage of the fascinating trial, apparently found Ulbricht’s sentence especially infuriating. One commenter argued that “judges like these … should be taken out back and shot.” Another user, purporting to correct the preceding comment, wrote that “[i]t’s judges like these that will be taken out back and shot.” A follow-up comment suggested the use of a “wood chipper,” so as not to “waste ammunition.” And a user expressed hope that “there is a special place in hell reserved for that horrible woman.”
Within hours, the office of Preet Bharara, the U.S. Attorney for the Southern District of New York, sent Reason a subpoena for the commenters’ identifying information “in connection with an official criminal investigation of a suspected felony being conducted by a federal grand jury.” This doesn’t mean a grand jury actually asked about the commenters; instead, in federal criminal investigations, it’s typically up to the U.S. Attorney to decide when to issue a subpoena “on behalf” of a grand jury. See, e.g., United States v. Kleen Laundry & Cleaners, Inc., 381 F. Supp. 519, 521 (E.D.N.Y. 1974). The subpoena demands from Reason information about the six users, including their email and Internet Protocol (IP) addresses—which, if disclosed, could enable the government to uncover the true identities of the commenters, perhaps after another round of subpoenas are sent to the users’ respective Internet Service Providers.
Popehat’s Ken White is quite troubled by the government’s decision to issue this subpoena. Ilya Somin, writing at The Volokh Conspiracy, also objects to the subpoena. So do the Cato Institute’s Tim Lynch and Techdirt’s Mike Masnick, among many others.
I too find it quite concerning. Even if this subpoena is valid under current law—more on that angle in a bit—the government made a serious mistake in seeking to force Reason to hand over information that could uncover the six commenters’ identities. Unless the Department of Justice is investigating a credible threat to Judge Forrest with some plausible connection to the Reason comments at issue, this subpoena will serve only to chill hyperbolic—but nonetheless protected—political speech by anonymous Internet commenters. And if Reason decides to stand up for its users’ rights, the resulting court battle will amount to a waste of federal law enforcement resources that could instead help bring actual criminals to justice, as Tim Lynch reminds us.
To be sure, I have no problem with the feds seeking to locate and prosecute people who actually threaten to commit murder—which, if transmitted in interstate commerce, is a federal crime under 18 U.S.C. § 875. Threatening to kill a federal judge is especially problematic; assassinations of federal judges do happen from time to time. As such, it’s only natural that law enforcement takes such threats seriously.
Yet, while the comments identified in the subpoena are undeniably vile, they’re also protected by the First Amendment, and rightly so. Hyperbolic political statements have a long history in the United States; for instance, Ken Shultz notes that Martin Luther King, Jr., once said that “[t]he hottest place in Hell is reserved for those who remain neutral in times of great moral conflict.” Sound familiar?
June 9, 2015 3:20 PM
The Supreme Court has said that true threats can be banned without violating the First Amendment, but that doesn’t mean that hyperbolic rants are unprotected just because they express a yearning for someone’s demise. That doesn’t make them a true threat. For example, the Supreme Court ruled on the issue in Watts v. United States (1969). Robert Watts, a young black man, stated during a protest in Washington, D.C.:
I have already received my draft classification as 1-A and I have got to report for my physical this Monday morning. I am not going. If they ever make me carry a rifle the first man I want to get in my sights is L.B.J. They are not going to make me kill my black brothers.
The Supreme Court reversed his conviction for making threats, ruling that Watts’ statement was political hyperbole rather than a true threat. “We agree with [Watts] that his only offense here was ‘a kind of very crude offensive method of stating a political opposition to the President.’”
But prosecutors sometimes confuse hyperbolic dissent with true threats. School officials are even worse. They equate even mild academic references to violent protests in the distant past with unprotected threats.
For example, Oakton Community College (OCC) concluded that a one-sentence “May Day” email referencing the Haymarket Riot sent by a faculty member to several colleagues constituted a “true threat” to the college president. On May 1, Chester Kulis sent an email to OCC colleagues that read, “Have a happy MAY DAY when workers across the world celebrate their struggle for union rights and remember the Haymarket riot in Chicago.” Lawyers for the Chicago-area college argue that the email, which commemorated the riot, thus threatened violence.
The United States Department of Justice is using federal grand jury subpoenas to identify anonymous commenters engaged in typical internet bluster and hyperbole in connection with the Silk Road prosecution. . . .Why is the government using its vast power to identify these obnoxious asshats, and not the other tens of thousands who plague the internet? Because these twerps mouthed off about a judge. . .. The subpoena commands Reason to provide the grand jury "any and all identifying information" Reason has about participants in what the subpoena calls a "chat."
The "chat" in question is a comment thread on Nick Gillespie's May 31, 2015 article about Ross "Dread Pirate Roberts" Ulbricht's plea for leniency to the judge who would sentence him in the Silk Road prosecution. That plea, we know now, failed, as Ulbricht received a life sentence, with no possibility of parole.
Several commenters on the post found the sentence unjust, and vented their feelings in a rough manner. The grand jury subpoena specifies their comments and demands that Reason.com produce any identifying information on them.
May 26, 2015 8:56 AM
In the past, businesses have been happy to put new factories in states like South Carolina and Virginia, due to their right-to-work laws and relatively reasonable employment laws. But they should think twice about doing so in the future, thanks to some recent, very unreasonable court rulings against employers in those states by the U.S. Fourth Circuit Court of Appeals. Those decisions illustrate a contempt for binding Supreme Court precedent, and basic rules of logic, evidence, civil procedure, and appellate procedure
A classic example is the Fourth Circuit’s 2-to-1 decision on May 11 in Brown v. Nucor Corp., which violated fundamental rules of appellate review and class-action procedure. Essentially, the court allowed a class action lawsuit alleging racial discrimination in promotions to be brought based on statistics that other courts (like the Eighth Circuit) have correctly rejected as unreliable junk science, in rejecting class actions lawsuits against the very same company. Compare Bennett v. Nucor Corp., 656 F.3d 802 (8th Cir. 2011).
It also permitted the plaintiff to make internally contradictory arguments to get that junk science into evidence, improperly put the burden of proof on defendant to disprove the admissibility of evidence, and allowed the plaintiff to make arguments it had waived by not including them in its opening brief, but rather putting them into its reply, where the company never even had a chance to rebut them.
The decision also flouted the Supreme Court’s 2011 decision in Wal-Mart v. Dukes. That Supreme Court decision overturned a finding of “commonality” among Wal-Mart’s female employees in a class action lawsuit alleging discriminatory promotions, saying they didn’t have enough in common to sue together in a class action. That principle applies to the lawsuit against Nucor with added force, since it was brought under Rule 23(b)(3), the rule under which class actions for damages are brought. This rule requires not just commonality but also an additional, heightened showing of predominance of such common issues: “a Rule 23(b)(3) certification . . requires proof that common issues not only exist but also predominate over individual issues and that class treatment is superior to handling the absent class members’ claims individually.”
But the Fourth Circuit effectively held that rather than following the Supreme Court’s decision in Wal-Mart, the trial court should have followed an earlier prior Fourth Circuit decision involving Nucor that was abrogated by the Supreme Court’s Wal-Mart decision, Brown v. Nucor Corp., 576 F.3d 149 (4th Cir.2009) (“ Brown I ”). Or rather, it held that the trial court should have certified a class action based on invisible ink in that decision, namely a non-existent finding in it that common issues predominated over individual issues. Even if it had made such a finding, it would be abrogated by Wal-Mart, since if commonality is absent, predominance will even more clearly be absent in almost all cases. (As the Fourth Circuit observed, the Wal-Mart decision “provided a sufficiently significant change in the governing legal standard to permit a limited reexamination of whether the class satisfied the commonality requirement of Rule 23(a)(2)”).
May 11, 2015 11:16 AM
On April 15, President Obama once again made false claims about what the Supreme Court did in its decision in Ledbetter v. Goodyear Tire & Rubber Co. (2007), insinuating that the Court set a deadline for suing over pay discrimination that expires before many employees could possibly discover the discrimination.
He falsely claimed that the Supreme Court said it didn’t “matter” when Lilly Ledbetter learned of the pay disparity she unsuccessfully sued over, and that it ruled against her even though she explained that “I just found out” about the discrimination right before suing.
In reality, Ledbetter admitted in her deposition that she knew of the pay disparity years earlier. Yet she waited until long after the deadline to sue. The Supreme Court specifically said in footnote 10 of its decision that it had “no occasion” to consider whether Ledbetter could have sued had she only just found about the discrimination shortly before suing, since Ledbetter never argued to the courts that she had just discovered the discrimination. If she had just found about the discrimination, her lawyers would have argued that the “discovery rule” applied to restart the deadline for suing, making her lawsuit timely, but they never did so.
The "Draw Muhammad" Contest and the Futility of Trying to Correct Journalistic Mistakes about the LawMay 6, 2015 2:03 PM
Journalists often not only get the law wrong, but then have the audacity to smugly talk down to people who attempt to correct them (usually in a way that manifests a pro-regulatory slant). A classic example was CNN anchor Chris Cuomo’s statement, in the context of a “Draw Muhammad” contest in Garland, Texas, that “hate speech is excluded from protection. dont just say you love the constitution...read it.”
Cuomo has seemingly never read the Constitution himself, despite having once attended law school. The Constitution doesn’t even contain the word “hate,” much less mention “hate speech” in the First Amendment. The Supreme Court has made clear over and over again that hate speech in public settings is protected by the First Amendment. As Twitchy observed, “in 2011, the Supreme Court ruled 8-1 in Snyder v. Phelps stating the always awful Westboro Baptist Church” – which vociferously hates gay people – “had the right to protest at the funerals of slain military members. In other words, hate speech is protected speech.” This is not a new legal principle. The Supreme Court invalidated a hate-speech ordinance in R.A.V. v. St. Paul (1992). Moreover, it has also ruled that a racist group couldn’t be charged more fees based on its racist message (Forsyth County v. Nationalist Movement), and that a racist Klan speech was protected speech (Brandenburg v. Ohio (1969).
When this was pointed out to Cuomo, he justified his erroneous statement by citing the legally irrelevant “Chaplinsky case,” a case that said nothing about hate speech, but rather involved the judicially created “fighting words” exception to the Constitution. The “fighting words” exception seldom applies to hate speech, and requires face-to-face insults, not depictions of the prophet Mohammed, however inflammatory such depictions might be. As the Supreme Court explained in its Texas v. Johnson decision, which struck down attempts to ban flag burning, the fighting words exception doesn’t reach apply to even extremely inflammatory speech unless it involves a “direct personal insult or an invitation to exchange fisticuffs.” In response to a Jewish reader who attempted to correct his error, he argued that it wouldn’t cover speech in which someone would “call you something ugly for being Jewish.” But calling somebody something ugly, even in-person, is typically protected speech under the Supreme Court’s decisions in Gooding v. Wilson and Lewis v. City of New Orleans, which limited the reach of the fighting words doctrine to cover almost no speech.
Running out of patience with Cuomo, the First Amendment and criminal-defense lawyer Ken White, also known as Popehat, called Cuomo “a disgrace to Fordham Law School, which only admitted you because of your famous father.” Popehat’s acerbic remark may reflect his frustration over widespread media myths about the scope of the First Amendment, such as a recent McClatchy news story that quoted a political science professor erroneously suggesting that the Mohammed cartoons in Texas might have be unprotected incitement of violence. In reality, the Supreme Court’s ruling in Hess v. Indiana made clear that such speech cannot be banned as “incitement,” since even inciteful speech retains its protection under the First Amendment unless it is intended to incite imminent lawless action.