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In November, Judge Posner issued a decision involving Northwestern University against the Chabad Lubavitch (a Jewish outreach organization) and Rabbi Dov Klein. The opinion, as par for the course with Posner, was littered with facts gleaned from YouTube and “other online material about him [that] can be obtained by Googling his name.” In an odd concurring opinion, Judge Bauer faults Posner for looking outside the record.

Now, Chabad and Rabbi Klein have filed a petition for rehearing en banc, with Nathan and Alyza Lewin as counsel. This was the father-daughter team that has litigated the Zivotofsky case. Nathan stepped aside to allow Alyza the chance to argue the second go-round.

The petition faults Posner for looking outside the record, but more strikingly asks him to be disqualified. Here is an overview of the argument:

(1) The panel decision invokes and relies on evidence “not taken from the record of the case” (as the concurring Judge acknowledges) and therefore conflicts with the established rule under which “federal appellate courts will not consider . . . evidence . . . not part of the trial record.” IBM Corp. v. Edelstein, 526 F.2d 37, 45 (2d Cir. 1975). …

(3) Judge Posner should have recused himself under 28 U.S.C. § 455(a) because his “impartiality might reasonably be questioned” as a result of his having received an honorary degree from Northwestern University, the principal defendant in this case.

(4) The “tone of derision that pervades” Judge Posner’s opinion and the unilateral reliance on material that “was not part of the record” demonstrates that this appeal should have been heard by “a different . . . judge” than Circuit Judge Posner under the standard subsequently announced by Judge Posner in Stuart v. Local 727, Int’l Bhd. Of Teamsters, 2014 WL 5906562 (7th Cir. Nov. 14, 2014).

The brief focuses on 10 misstatements of fact:

1. The panel opinion misstates facts at least ten times. The opinion erroneously states:

(i) that Rabbi Klein “made no effort to limit consumption of alcohol,” (ii) “that [Rabbi Klein] . . . was himself intoxicated,” (iii) that Rabbi Klein was “plying minors with hard liquor,” (iv) that there was “underage and excessive drinking by the kids who frequent the Chabad house,” (v) that Rabbi Klein’s claim is “that the university should have told him to exercise closer supervision over alcohol consumption at the house,” (vi) that Rabbi Klein “wants a second chance,” (vii) that Rabbi Klein “had gotten away for more than a quarter of a century with an irresponsible attitude toward excessive underage drinking that went on under his nose in the Chabad house,” (viii) that Rabbi Klein “thought that he could continue to do so, with impunity, indefinitely,” (ix) that Rabbi Klein “was given multiple chances,” (x) that Rabbi Klein was “warned repeatedly, but did not react.”

None of these were in the record:

None of these factual assertions in the panel opinion was found by the District Court, none is based on evidence in the record, all are categorically false, and all would have been denied by Rabbi Klein had he been confronted with them. The “findings” stated in the panel’s opinion were baseless assertions by the author of the panel opinion and appear to reflect his preconceived opinion of Chabad- Lubavitch and Rabbi Klein – derived entirely from the author’s own improper extra-record research. …

In his concurrence Judge Bauer noted what is obvious from even a superficial reading of the panel opinion: The decision is not based on the appellate record but on Judge Posner’s personal excursion into “youtube” and other websites. The facts recited in the panel opinion – disparaging to Rabbi Klein personally and to Lubavitch-Chabad generally – are, as Judge Bauer observed, “not taken from the record of the case.”

Posner even merges different plaintiffs, and describes Rabbi Klein in a way to show bias:

2. The panel opinion ignores and eradicates the separate legal interests of the organizational plaintiffs by declaring that “for simplicity we’ll pretend that Rabbi Klein is the only plaintiff.” …

Moreover, Judge Posner’s own investigation of Rabbi Klein’s appearances on “youtube” and his individual appraisal of Rabbi Klein from the “youtube” films as a “colorful figure” who is “lively, engaging, eminently approachable, enthusiastic, and one might even say charismatic” exceeds the permissible bounds of judicial authority assigned to a federal appellate judge. This evaluation of Rabbi Klein appears to have influenced Judge Posner in crafting an opinion that included a wealth of wholly erroneous factual assertions. See pp. 12-13, infra. Indeed, the independent investigation made unilaterally by the judge would warrant disqualifying him from rendering any judgment regarding Rabbi Klein. See Costello v. Flatman, LLC, 558 Fed. Appx. 59 (2d Cir. 2014).

And this reliance on facts is reversible error:

The panel opinion fails to begin with the usual recitation when this Court reviews summary judgments – i.e., that the appellate court (like the trial court) must view all facts “in a light most favorable to the non-moving party” (Burnell v. Gates Rubber Co., 647 F.3d 704, 707-708 (7th Cir. 2011)) and that any doubt regarding a material fact must be resolved in favor of the non-moving party (Doe v. R.R. Donnelley & Sons Co., 42 F.3d 439, 443 (7th Cir. 1994)). The reason for this omission is obvious. The opinion contains an abundance of factual assertions that are wholly unsupported by any evidence whatever, and many are false. None of them was found by the District Court when it purported to follow the appropriate summary-judgment standards.

We have enumerated at pages 3-4, supra, ten (10) such factual assertions that Rabbi Klein and the other appellants deny. None of these assertions has any probative evidentiary support in the record, and none was relied on by the District Court. All are stated in the panel opinion as established facts.

This Court should, in the interest of fairness and consistent application of its standards of review of summary judgments, vacate the panel opinion that violates these standards and rehear the case on its proper appellate record.

In addition to challenging Judge Posner’s fact-finding, the petition also raises several grounds for which Judge Posner should have disqualified himself.

First, the brief cites the fact that Posner received a degree from Northwestern.

An extrajudicial “factor” that also requires recusal of Judge Posner from this appeal is his receipt of an honorary degree of Doctor of Laws from Northwestern University in 2001. Because this Court’s standard practice is not to disclose the names of the judges who would be hearing this appeal until the morning of the oral argument, counsel for the appellant did not know before the morning of the oral argument that Judge Posner was on the panel that would be hearing the appeal. Nor did counsel learn, until after the decision was rendered (just 10 calendar days after the oral argument), that Northwestern University – the principal appellee in this case whose counsel presented oral argument – had conferred an honorary degree on Judge Posner. … Conferral of an honorary degree is a favor that naturally inclines the recipient to prefer the institution that gives him or her that honor

Specifically:

Under the briefing schedule set by the Clerk of the Court in this case the appellant’s Reply Brief was due to be filed on October 8, 2014. While appellant’s counsel was busy drafting the Reply Brief, he was notified on October 2, 2014, that oral argument would be held on October 28, 2014.

There was, to be sure, no urgency to this appeal. It was an appeal from dismissal of a complaint in a civil case. Appellant’s counsel expected that, pursuant to Circuit Rule 34 and this Court’s standard procedures, a panel would be randomly selected by the Clerk after the Reply Brief was filed. Indeed, appellant’s counsel had not been asked to submit any written indication of dates when he would be unavailable. (In fact, appellant’s counsel returned from overseas travel on the evening of October 27 and, if he had been given an opportunity, would have requested that oral argument not be held, for this reason, on October 28, 2014.)

Appellant’s counsel has appeared and argued orally in every Circuit of the United States Court of Appeals. Ordinarily, in counsel’s experience, oral argument is held not less than one month after the Appellant’s Reply Brief is filed. In this case, it was held 20 days after the filing of Appellant’s Reply Brief. This extraordinary scheduling gives rise to reasonable doubt regarding the process by which a panel was to be randomly selected.

Any 7th Circuit litigators wish to opine? Judge Easterbrook has weighed in on this topic before.

 

On Sunday, I will be giving three talks during #AALS2015. First, I will be giving a brief presentation at the Property Law Breakfast (7:00 a.m. – 8:30 a.m. in McKinley Room). I will be discussing my work on backdoor zoning, with a focus on Houston’s Ashby High Rise.

Second, I am speaking on the AALS Hot Topic/Bridge Program – Public Use Since Kelo (2:00 p.m. – 3:45 p.m. in Wilson A). Many thanks to my friend Ilya Somin for organizing this panel. I will be discussing eminent domain and popular constitutionalism post-Kelo.

2:00 pm – 3:45 pm

AALS HOT TOPIC/BRIDGE PROGRAM

Wilson A, Mezzanine Level, Washington Marriott Wardman Park Hotel

Public Use since Kelo

Moderator and Speaker:

Ilya Somin, George Mason University School of Law

Speakers:

Josh Blackman, South Texas College of Law
Carol N. Brown, The University of Richmond School of Law
David A. Dana, Northwestern University School of Law
Alexandra B. Klass, University of Minnesota Law School
Julia D. Mahoney, University of Virginia School of Law

Kelo v. City of New London (2005) was one of the most controversial rulings in the modern history of the Supreme Court. This panel addresses the decision’s legal and political impact over the last decade. Among the topics covered will be the massive political reaction generated by Kelo, which led to the enactment of eminent domain reform laws in 45 states (more legislation than has ever been generated by any other Supreme Court decision). There is much disagreement about the desirability of these reforms and their likely effects. In addition to its political and legislative impact, Kelo has had a substantial influence on property rights jurisprudence in state and lower federal courts. We will also consider the ongoing controversy over the costs and benefits of the use of eminent domain in the years since Kelo. The debate ranges over such seemingly disparate issues as “blight” condemnations and the use of eminent domain for pipelines and public utilities. Finally, some of the panelists will focus on the ongoing debate over the meaning of the Public Use Clause of the Fifth Amendment, which many believed to be effectively over until it was rekindled by Kelo.

Download at Google Play or Apple App Store. See everyone in D.C.

Here is an overview of the articles, essays, Op-Eds, I wrote in 2014, as well as various talks and media hits I gave. You can find all of my accomplishments on my C.V.

Published Articles

Visit my SSRN page to view all of my works.

One of the hallmarks of Obamacare has been the sudden, ad hoc modifications of the law, outside the notice and comment process, through a series of executive memorandum, blog posts, and even oh-so-helpful FAQs. I’ve dubbed this administrative law workaround “regulation by blog post.”

And now, it seems, this process has caught up with the administration. D.D.C. has actually enjoined HHS from implementing on its website an FAQ that misstates the law, and results in Hospitals receiving inadequate Medicaid reimbursements!

This is an actual order from a federal court.

On page 18 of the 46 page memorandum, the district court explains why this regulation by blog post failed the APA’s notice-and-comment procedures. In short, the government could not identify the statutory or regulatory authority for FAQ #33, so the government claims the FAQ is the source of authority for the FAQ. Or something like that.

Plaintiffs argue that FAQ 33 was promulgated in violation of the Administrative Procedure Act and that it is contrary to the Medicaid Act. The defendants dispute this and also assert that plaintiffs are unlikely to succeed on the merits because they lack standing. Underlying these arguments is a more fundamental disagreement about the nature of this case: The parties agree that the defendants have a policy of requiring the inclusion of private-insurance payments for Medicaid services in the calculation of a hospital-specific limit, but they disagree on the legal basis for that policy. Plaintiffs assert that neither the Medicaid Act nor the 2008 Rule provides a basis for the policy, so FAQ 33 must be its source. The defendants maintain that FAQ 33 is not the source of the policy, but it took some time for them to identify what is the source. During the December 8, 2014 status hearing, the government could not do so.2 The government now contends that the 2008 Rule provides a legal basis for its policy.

2 See Transcript of Dec. 8, 2014 Hearing, ECF No. 13 at 20:2– 21:12. Defendants agreed that “[t]he agency’s position is essentially that which is in FAQ 33.” Id. at 20:16–17. They could not identify why, however, stating “[i]t may be that there are other documents that state that . . . principle which we believe to be longstanding.” Id. at 20:23–25. When asked by the Court “[w]ell, what is the final agency action?” the government had no answer. See id. at 21:10–12.

In the end, the court finds that the FAQ is the source for the FAQ and policy, and that it is likely “plainly erroneous.”

Accordingly, plaintiffs are likely to succeed in arguing that the Rule cannot support defendants’ policy and that FAQ 33 is the sole authority for it.

To be sure, the Court must “give substantial deference to an agency’s interpretation of its own regulations.” Thomas Jefferson Univ. v. Shalala, 512 U.S 504, 512 (1994). The government, however, has offered a “plainly erroneous interpretation,” id., which ignores a specific definition.

And finally, FAQ 33 is likely a final agency action, so it would be subject to the notice-and-comment provisions of the APA.

Because FAQ 33 makes a substantive change to the formula for calculating a hospital’s DSH limit, binds state Medicaid agencies, and effectively amends the 2008 Rule, it likely constitutes a final agency action that may be challenged pursuant to 5 U.S.C. § 704, and may only be promulgated in accordance with the notice-and-comment provisions of 5 U.S.C. § 553. There is no dispute that FAQ 33 was not subject to notice-and-comment procedures, so plaintiffs are likely to succeed in arguing that FAQ 33 must be set aside as unlawful.

As I followed the implementation of the ACA, I was stunned at how glibly law and policy was changed by updating an FAQ or posting a letter. For reasons I argued in King v. Burwell, such ad-hoc lawmaking that affects millions of people and billions of dollars is really, really troubling. This case made its way to court, as hospitals were receiving inadequate payments. But, for the most part, the government has been spending too much money, bestowing unappropriated benefits, and waiving mandates, in the absence of any statutory authority, standing was lacking.

H/T Andrew Grossman