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  • Anti-Business Myths Pervade Reporting on Religious Freedom Legislation

    April 1, 2015 3:36 PM

    Sometimes, the media propagates anti-business myths, in the course of reporting on legislation that has little impact on business. So it is with its recent reporting on the Religious Freedom Restoration Act legislation enacted in Indiana, and passed by Arkansas legislators. (CEI takes no position on such legislation, which we previously discussed at length at this link.)

    As The Washington Examiner notes, “The federal version of Indiana's bill, which was signed into law in 1993 by Democratic President Bill Clinton, prohibits the federal government from substantially burdening a person's free exercise of their religion — except in instances where the government can prove it has a ‘compelling interest’ and can impose the burden in the least-restrictive way possible.”

    In reporting on the Indiana legislation, many media sources have erroneously suggested that it is somehow radical to give rights to businesses or corporations (as opposed to individuals) and that such legislation would be unprecedented in allowing religious freedom to be asserted as a defense to a lawsuit by a private person.

    Press coverage has also often falsely implied that religious-freedom legislation gives religious businesses a broad right to discriminate against gays and lesbians, when in fact no such right has ever been recognized under the similar legislation that already exists at the federal level and in many states. As The Washington Examiner points out, “The words ‘gay,’ ‘lesbian’ and ‘sexual orientation’ are nowhere to be found in” its “language,” and “no religious freedom bill has been used successfully to defend discrimination against members of the LGBT community in the 22 years since Congress and states began adopting such laws.”

    This is not because of the novelty or rarity of such laws: as The Washington Post’s Hunter Schwarz notes, many states have their own Religious Freedom Restoration Act, and “Indiana is actually . . . one of 20 states with a version of the Religious Freedom Restoration Act.” Instead, religious defenses to gay-rights claims tend to fail because the court finds a “compelling interest” justifying regulation, or finds no “substantial burden” on the business owner, which illustrates the limited reach of these religious freedom statutes as applied to discrimination claims.

    But, in fact, there is already a Religious Freedom Restoration Act at the federal level, and as Washington Post fact-checker Glenn Kessler has observed, it has already been interpreted to apply as a defense in lawsuits brought by private persons, by most (but not all) of the federal appeals courts that have considered the question, including “The U.S. Courts of Appeals for the 2nd, 8th, 9th and D.C. Circuits.”

    I have previously explained why businesses should be able to assert constitutional rights and other civil liberties as a defense to lawsuits by private people at this link. Thus, Kessler’s colleague Sandhya Somashekar was mistaken to write earlier that Indiana’s law is “fundamentally different” from the “federal” RFRA, which “protects only individuals seeking relief from government intrusions on their religious beliefs, while “[t]he Indiana law and others like it also apply to disputes between private parties.” In reality, Indiana’s law merely makes explicit what was already implicit in the federal law, as commentators like Reason’s Jacob Sullum and law professor Josh Blackman have observed.

    The media have also suggested it is somehow radical to give rights to businesses (as opposed to individuals). But it makes little sense to deny rights to an association of persons, such as a corporation, since that would allow the government to effectively use the corporate form to take away the rights of real people. The Supreme Court’s Hobby Lobby and Gonzales decisions, like the great majority of prior court rulings, allowed corporations to rely on the federal Religious Freedom Restoration Act. I have previously explained why corporations logically have rights at this link, noting that corporations also have rights under international human-rights accords, such as the European Convention on Human Rights. (See also this Detroit News op-ed by CEI’s Ryan Young and me at this link, and my commentary, “Amendments try to take away the rights of corporations and gay people.”)

    There is nothing novel about a corporation having constitutional or other rights: The Supreme Court first recognized such rights in ruling in favor of Dartmouth College, an incorporated entity, in its decision two centuries ago interpreting the Constitution’s Contracts Clause, in Dartmouth College v. Woodward (1819).

  • Is Ferguson "the Norm"? In Some Ways, Yes

    March 20, 2015 7:30 AM

    Recently, the Justice Department issued a report that was very critical of the Ferguson police department and courts. In response, President Obama stated that “he doesn't believe Ferguson is typical of most police departments,” and that the city’s practices were “not the norm.”

    But in reality, the practices described in the report are commonplace outside of Ferguson, including both those that the Justice Department rightly condemned for violating Fourth Amendment rights, and those that may have had a more innocent explanation given the Justice Department’s very poor use of statistics.

    The report leaves the indelible impression that Ferguson’s municipal government was extortionate towards many of its citizens, and took great liberties with the Fourth Amendment. Unfortunately, these practices are not in any way unique to the Saint Louis region, but rather are typical in some neighboring municipalities. In The Washington Post, Radley Balko wrote about how many municipalities in Saint Louis County gouge motorists and others to raise revenue. They also are very harsh and hostile to small businesses in their code enforcement and permitting requirements, an abuse they share with other economically-depressed cities like Detroit.

    In the St. Louis area, there are innumerable tiny municipalities. Just driving to work can take you through a dozen. The tax base can’t possibly support that many little governments, so they engage in predatory practices. One possible solution would be to merge a lot of these small municipalities but, of course, no one wants to vote themselves out of power.

  • When Regulations Undermine Justice and Due Process

    March 19, 2015 4:10 PM

    Recently, I participated in a March 13 panel discussion at the National Press Club titled “Bringing an End to Second-Class Justice,” discussing how federal micromanagement of college discipline by the Education Department ignores federal court rulings, increases college costs, and stacks the deck against some accused students. Here is the text of my remarks at the event, which was put together by the group Stop Abusive and Violent Environments:

    A Stacked Deck: OCR and Sexual Harassment Liability

    In the attached handouts, I have explained how the Office for Civil Rights, where I used to work, has made punishment of innocent students more likely, and in some cases, inevitable, through its rules on how colleges must handle sexual harassment allegations, which apply both to verbal harassment and sexual assault. 

    For example, in recent investigations, OCR has required that colleges impose “interim measures” against accused students before they ever receive a hearing on the charge against them, measures that can include expulsion from a dorm and classes shared with the accuser. In its April 2011 Dear Colleague letter to the nation’s colleges, OCR instructed to colleges to restrict cross-examination, even though the Supreme Court has declared that cross-examination is the “greatest legal engine ever invented for the discovery of truth.” It also ordered colleges to abolish the clear-and-convincing standard of evidence that was once the norm in college discipline.

    OCR also has recently required some investigated colleges (such as Harvard and SUNY) to conduct “individual complaint reviews” for all allegations in past academic years to see if the college “took steps” against harassment in each case. That creates the risk of students being investigated all over again for an offense the college previously found them not guilty of, much like double jeopardy.

    But a bigger threat to innocent students is the massive financial risk colleges face if they do not swiftly expel accused students. Thanks partly to OCR stacking the deck, it can be much cheaper for a college to expel a possibly innocent student than to find him not guilty. Even before OCR’s recent rules changes, colleges had massive incentives to suspend or expel students who might be guilty of sexual assault or harassment.

  • Least Transparent Administration Closes Records on Fannie and Freddie

    March 19, 2015 10:30 AM

    This Sunshine Week, the administration that swept into office promising to be the “most transparent” in history was just judged by a major news service as least transparent of modern presidencies.

    An analysis by the Associated Pres found that “the Obama administration set a record again for censoring government files or outright denying access to them last year under the U.S. Freedom of Information Act.” The AP adds that the administration “also acknowledged in nearly 1 in 3 cases that its initial decisions to withhold or censor records were improper under the law - but only when it was challenged.”

    But FOIA requests are just the tip of the iceberg for this administration’s secrecy, much of which has nothing to do with the legitimate exception of national security. In Dodd-Frank, the administration set up the Consumer Financial Protection Bureau and the Financial Stability Oversight Council—the constitutionality of both of which are now subject to a lawsuit from the Competitive Enterprise Institute and other parties—to be exempt from many open meetings and (especially with FSOC) open records requests.

    But probably the most egregious example of this administration’s practicing of secrecy concerns its management of the government-sponsored housing enterprises (GSEs) Fannie Mae and Freddie Mac. In August 2012, then–Treasury Secretary Tim Geithner issued the “Third Amendment” to the GSE conservatorship. The Third Amendment would require all of the GSEs’ profits to be siphoned off to the U.S. Treasury Department in perpetuity—even after the GSEs paid back what they owed to taxpayers.

    This arbitrary action has spawned more than 20 lawsuits from Fannie and Freddie’s private shareholders. The suits charge the administration with everything from violating the Administrative Procedure Act to unconstitutionally taking property without just compensation.

    The Third Amendment has also raised concerns that the profit sweep is leaving Fannie and Freddie with very little capital reserves, furthering the chance for more taxpayer bailouts should something go awry with the housing market again. See this excellent paper by Cato Institute Director of Financial Regulation Studies Mark Calabria and former FDIC General Counsel Michael Krimminger on this point.

  • Civil Rights Commissioners Oppose Budget Increase for Education Department’s Office for Civil Rights

    March 12, 2015 2:36 PM

    On February 26, two members of the U.S. Commission on Civil Rights, Gail Heriot and Peter Kirsanow, wrote to the chairmen of the congressional appropriations committees, to warn “against” a “provision of the proposed Obama budget that would increase funding for the Department of Education’s Office for Civil Rights (‘OCR’) by 31%.”  

    As the Commissioners observed in their letter, there has been “a disturbing pattern of disregard for the rule of law at OCR. That office has all-too-often been willing to define perfectly legal conduct as unlawful. Though OCR may claim to be under-funded, its resources are stretched thin largely because it has so often chosen to address violations it has made up out of thin air. Increasing OCR’s budget would in effect reward the agency for frequently over-stepping the law. It also would provide OCR with additional resources to undertake more ill-considered initiatives for which it lacks authority. We strongly encourage Congress to take into account this troubling pattern of overreach in deciding whether to support the President’s proposed increases to OCR’s budget.”

    The Commissioners’ letter focuses on OCR’s attacks on free speech. For example, it discusses OCR’s 2013 attempt to redefine constitutionally protected speech about sexual issues in college classrooms as sexual harassment in a case involving the University of Montana, an act of overreaching criticized not just by free-speech groups like the Foundation for Individual Rights in Education, but also by law professors like Eugene Volokh and even by liberal commentators in the Washington Post and Chronicle of Higher Education, as well as by moderate Republican Senator John McCain. As the Washington Times and The College Fix note, it also criticized OCR’s 2011 attempt to federalize school bullying, and its related guidance redefining some speech protected by the First Amendment among K-12 students as illegal racial or sexual harassment. (See my discussion of that guidance here and here.)

  • University of California Dean: Academic Freedom Makes Students "Feel Unsafe"

    March 6, 2015 12:39 PM

    Recently, the dean of the School of Social Welfare at the University of California at Berkeley condemned a professor’s constitutionally protected remarks, including but not limited to his mention of black-on-black crime at a Black Lives Matter event. A complaint has also apparently been filed against the professor with the Office for the Prevention of Harassment and Discrimination.  

    Rather than defending academic freedom, Dean Jeffrey Edelson said “we deeply regret the reported incident” involving Steven Segal, a tenured professor, who has taught at Berkeley for more than 40 years and is world-renowned for his research on mental illness. Worse, the dean said that his remarks “made the classroom environment feel unsafe” for the complaining students. The dean reportedly set up a “shadow class” for students offended by the professor’s remarks: “Students in Segal’s class were offered an alternate section” with “a different professor.” 

    The University’s overreaction to Professor Segal’s speech was so absurd that a former head of the Education Department’s Office for Civil Rights told me that what occurred at the University of California “could just as easily be a Saturday Night Live skit.” 

    But it also sets a very bad precedent for academic freedom. Why are taxpayers paying to subsidize a school of social work whose officials exhibit so little common sense—and so much disdain for constitutional free speech guarantees?

    The federal appeals court with jurisdiction over the University of California has made clear that speech like Professor Segal’s cannot be banned even by labeling it as a threat to people on campus or the classroom environment. In Bauer v. Sampson, it held that a college professor's caricatures of a college president and satirical yearning for his death were protected by the First Amendment, even though the college declared it a violation of its policy against “workplace violence.” Similarly, the Ninth Circuit held that the First Amendment protected a professor’s racially charged emails about immigration, which offended Hispanic faculty, in Rodriguez v. Maricopa Community College District (2010), holding that such speech was protected by the First Amendment against a racial harassment lawsuit, even if the complainants perceived it as discriminatory or creating a racially “hostile environment.” 

  • Another Illegal Rule from the Education Department

    March 2, 2015 8:19 AM

    Recently, I wrote about a report to the Senate by a task force of college presidents, on how the Education Department is illegally dumping an avalanche of new rules and regulations on America’s schools, without even complying with the Administrative Procedure Act’s notice-and-comment requirements.

    Yet another example of such mischief is the 2014 sexual harassment guidance issued by the Education Department’s Office for Civil Rights. That guidance radically expanded liability for harassment under Title IX from OCR’s past 1997 and 2001 harassment guidance, and deviated sharply from principles of harassment liability developed by the courts. And it imposed new obligations on colleges without any notice or opportunity to comment.

    (The Administrative Procedure Act requires notice and comment before an agency imposes new obligations on regulated entities. In addition, the D.C. Circuit Court of Appeals’ Paralyzed Veterans decision also requires notice and comment for changes to many interpretive rules. The Education Department ignores these requirements.)

    OCR’s 2014 harassment guidance generally imposes liability on institutions even if they correctly discipline those who engage in sexual harassment or sexual assault, if they do not also “prevent its recurrence” and “remedy its effects,” and it warns that even punishing the harasser “likely will not be sufficient” to comply with Title IX. See Office for Civil Rights, “Questions and Answers on Title IX and Sexual Violence“ (April 29, 2014), at pg. 25 (“imposing sanctions against the perpetrator, without additional remedies, likely will not be sufficient to eliminate the hostile environment and prevent recurrence as required by Title IX,” since the school must not just “end the sexual violence,” but also “eliminate the hostile environment, and prevent its recurrence”), and at pg. 1, Question A-2 (institution must “eliminate the hostile environment, prevent its recurrence, and, as appropriate, remedy its effects”).

  • Education Department Floods Schools with New Uncodified Bureaucratic Mandates

    February 25, 2015 3:17 PM

    Recently, a task force of college presidents chronicled massive regulatory overreaching by the U.S. Department of Education, which, on a daily basis, floods the nation’s schools with new, uncodified agency requirements that have never even been vetted through the formal rulemaking process. “The Report of the Task Force on Federal Regulation of Higher Education: Recalibrating Regulation of Colleges and Universities,” correctly notes that:

    “According to the basic tenets of administrative law, Congress passes laws, and it is up to the agencies to implement them. However, in recent years, the Department has increasingly used the regulatory process not in response to any specific legislative change enacted by Congress, but rather as a means to achieve its own policy objectives.” (Pg. 35)

    “The compliance problem is exacerbated by the sheer volume of mandates—approximately 2,000 pages of text—and the reality that the Department of Education issues official guidance to amend or clarify its rules at a rate of more than one document per work day. As a result, colleges and universities find themselves enmeshed in a jungle of red tape, facing rules that are often confusing and difficult to comply with.”

    (Executive Summary, pg. 2).

    The report, issued by a task force set up by a bipartisan group of U.S. Senators, cites examples such as a needlessly expensive distance-education regulation imposed on colleges without the notice and comment required by the Administrative Procedure Act. It carries an enormous price tag for schools that provide online learning, discouraging cheap and innovative forms of learning: 

    “A public institution with a well-established online program estimated the costs at nearly $800,000. One private institution has estimated that it will cost $290,000 and take up to 2,000 hours annually to deal with the changes. . . . In 2012, a federal appellate court upheld the original decision to vacate the regulation due to the Department’s failure to properly give notice of this issue in its pending notice of proposed rulemaking and provide stakeholders with a meaningful opportunity to comment on the policy. Despite the court’s ruling, the Department continues to pursue this policy.” (Pg. 24)

  • Victory for "Caveman" Blogger and Free Speech in North Carolina

    February 19, 2015 6:54 AM

    Many people associate professional licensing with consumer safety. For example, we wouldn’t want any schlub doing surgery. But where occupational licensing laws may have started out with the goal of protecting consumers, they have now become a means by which certain professionals restrict competition. States require licenses for hundreds of occupations including perilous professions like florist, funeral director, hair braider, and fortune teller.

    The case of the “Caveman” blogger who was bullied by the North Carolina Board of Dietetics/Nutrition for providing nutritional advice without a license illustrates how licensing threatens not just our economic freedom, but our other basic freedoms. Luckily for blogger Steve Cooksey, his right to express his opinion and give advice to fellow dieters won out over the need to protect licensed dieticians from competition.

    As the Institute for Justice, which has been fighting on Cooksey behalf, wrote yesterday:

    In December 2011, Steve Cooksey started an advice column on his blog to answer reader questions about his struggle with Type II diabetes. Cooksey had lost 78 pounds, freed himself of drugs and doctors, and normalized his blood sugar after adopting a low-carb “Paleo” diet, modeled on the diet of our Stone Age ancestors. He wanted to use his blog to share his experience with others.

    However, in January 2012, the North Carolina Board of Dietetics/Nutrition informed Cooksey that he could not give readers personalized advice on diet, whether for free or for compensation, because doing so constituted the unlicensed practice of dietetics. The board deemed Cooksey’s advice the unlicensed practice of nutritional counseling, sent him a 19-page print-up of his website indicating in red pen what he was and was not allowed to say, and threatened him with legal action if he did not comply.

  • Coming Up: King Plaintiffs’ Day in Court

    February 13, 2015 5:20 PM

    Oral arguments before the U.S. Supreme Court in King v. Burwell will be held on March 4, 2015. The Competitive Enterprise Institute is coordinating this case, which challenges an IRS regulation that illegally distributes subsidies in states that refused to establish state-based health insurance exchanges. The IRS regulation is illegal because it is contrary to the plain language of the law passed by Congress.

    The four plaintiffs involved are individuals who are harmed by this regulation because it makes them subject to Obamacare’s individual mandate, which requires people to enroll in comprehensive healthcare coverage or pay a tax penalty. Both lower courts unanimously agreed that the individual plaintiffs have standing and the Justice Department expressly abandoned any challenge to their standing before the Supreme Court.  

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