Aug 27, 2015

Law School Diversity “Shell Game” and Compelling Interests

Jay Sterling Silver (St. Thomas) has a disquieting Op-Ed in the National Law Journal, titled “Law Schools’ Shell Game of Minority Enrollment.” (Via TaxProf). Silver writes that law schools are taking example of a reporting “loophole” to increase diversity numbers without hurting their LSAT numbers and rankings. What’s the loophole? First, schools report the median LSAT of the incoming 1L class, not 2L transfers. Schools have every incentive to get this number as high as possible, in order to improve the all-important U.S. News & World Rankings. As a result, fewer minority applicants are admitted as 1Ls. Second, schools report the diversity numbers for the entire student body, not just the incoming 1Ls. As a result, schools then admit minority students as 2L transfers. Silver writes:

As one law school administrator explains: It is not a terribly well-kept secret that many upper-tier schools or aspiring upper-tier schools will take no chances at all on their entering classes and then will raid places like here for students of color who have done well and give them lots of money and take them in. Then they can report that their overall student population has diversity even though their first-year class looks very white.

But why? It’s simple. As a group, the LSAT scores of minority students are lower than nonminority students. In a gaping and opportunistic loophole, the ABA requires law schools to report the racial makeup of the student body as a whole, but only the LSAT scores of first-year students. Neither the race nor the LSATs of transfer students must be disclosed. Admitting more minority students after the first year thus kills two birds with one stone: It inflates the number of minorities enrolled at the school while, at the same time, preserving the school’s all-important, LSAT-related ranking in U.S. News.

This “shell game,” Silver writes, creates the “illusion of minority access.”

The cost of the practice, of course, is that these schools have produced nothing more than the illusion of expanded minority access to the profession, often provide these students with smaller scholarships, and, in the process, have successfully gamed the rankings by averting the inclusion of lower LSAT scores into the LSAT profile they must disclose.

Silver offers this anecdote, though he doesn’t name names:

Elite schools — two of which ushered in transfers last year roughly equal in number to one-fifth of their first-year class — are hardly exempt from the temptation.

Many schools, not content to wait for transfer applications to show up in the mail, aggressively recruit transfers. And often it’s not pretty. At some schools, administrators write and phone students on the dean’s list at neighboring law schools, sometimes disparaging the students’ current school. But perhaps the seamiest ploy of all was a recent dinner party thrown by a law dean who implored his guests, almost all of whom were minority students who’d done well at another school, to transfer and to convince their classmates to do so as well.

This behavior is shameful, not just from a policy perspective, but from a constitutional perspective. In his dissent in Grutter v. Bollinger, Justice Thomas contends that if schools really want to increase diversity–and this is indeed a “compelling” interest that satisfies strict scrutiny under the Equal Protection Clause–then there is a much easier way of accomplishing this goal. Instead of using using race-based preferences, schools should drop the discriminatory admission criteria (LSAT). Thomas cites the success of historical black colleges that do no have stringent admission criteria. But of course, Thomas writes, “elite” schools will not do this as it will impact their academic selectivity.” Priorities: academic standing comes before diversity. Instead, schools turn to affirmative action as a way to keep their elite rankings, and admit more minority students, without harming their overall academic standing.

Read Justice Thomas’s analysis.

One must also consider the Law School’s refusal to entertain changes to its current admissions system that might produce the same educational benefits. The Law School adamantly disclaims any race-neutral alternative that would reduce “academic selectivity,” which would in turn “require the Law School to become a very different institution, and to sacrifice a core part of its educational mission.” Brief for Respondents Bollinger et al. 33—36. In other words, the Law School seeks to improve marginally the education it offers without sacrificing too much of its exclusivity and elite status.4

4.  The Law School believes both that the educational benefits of a racially engineered student body are large and that adjusting its overall admissions standards to achieve the same racial mix would require it to sacrifice its elite status. If the Law School is correct that the educational benefits of “diversity” are so great, then achieving them by altering admissions standards should not compromise its elite status. The Law School’s reluctance to do this suggests that the educational benefits it alleges are not significant or do not exist at all.

Apparently, even with affirmative action policies in place, schools refuse to admit the minority candidates as 1Ls, and let them in as 2Ls, to keep their rankings high. The critical benefits from diversity, it seems, are only needed for the 2nd and 3rd years of law school.

If diversity were such a compelling interest, that it can overcome equal protection strict scrutiny–a distinction only achieved previously in Korematsu–it would be unthinkable for law school deans to sacrifice minority admission in the 1L class, and amplify them for the 2L class, so rankings would not take a hit. If diversity is important for a 2L class, why should it be any less important for the 1L class. If anything, new wide-eyed law students would stand to benefit most from a broad-range of perspectives, far more than the jaded 2Ls, no? This does not suggest that the commitment to diversity is consistent, let alone compelling. Justice Thomas, at least in this part of his Grutter dissent, is exactly right. Indeed, the decision of George Washington University to drop the SAT requirement, in the hopes of attracting more minority students, is an example of putting their money where their mouth is. (Although, it may be the case that eliminating the SAT requirement means there are fewer bad scores to report, and thus rankings are higher).

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Aug 27, 2015

Katrina, Commandeering, and Posse Comitatus

Former FEMA Director Michael Brown (of “Brownie” fame) writes in Politico that he isn’t to blame for many of the failures in New Orleans after Hurricane Katrina. His explanation why he didn’t force the city to evacuate–involving federalism and the posse comitatus act–is fascinating.

I’m often asked, as the person who was running FEMA when Hurricane Katrina hit, why I didn’t evacuate New Orleans. My response is simple—FEMA had no authority to do that under the Constitution, which clearly establishes a system of federalism in which state and local governments are autonomous governmental entities. We call first responders “first” for a reason. When you dial 9-1-1 your call isn’t answered by an operator at 500 C Street SW, Washington, D.C., 20472. Your call is answered by a local government entity that has first and primary responsibility for a disaster.

Could FEMA have ordered the evacuation of New Orleans? Yes, had it waived posse comitatus and invoked the Insurrection Act, which Congress ultimately amended in 2006 to permit deployment of troops in response to natural disasters. That unprecedented action was actually contemplated days after landfall aboard Air Force One—and I advocated for it. After I advised the president to federalize the response, he sat with Louisiana Governor Kathleen Blanco and New Orleans Mayor Ray Nagin on Air Force One and outlined his plan. We immediately started drafting the federalization documents for the president’s signature, but Governor Blanco requested time to think it over and the president acquiesced. While the governor considered her options, the city became more and more dysfunctional. Blanco ultimately rejected the president’s plan, and political considerations eventually pushed the idea aside.

Go figure. The Bush Administration considered invoking the Insurrection Act to evacuate New Orleans after Katrina.

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Aug 26, 2015

Surge Pricing for In-Flight Wi-Fi

Air travel has been revolutionized over the last two years–for me at least. First, the FAA eliminated the idiotic rule that prevented me from using my phone during takeoff and landing. That would eliminate roughly 30 minutes of productivity from every flight. Second, United (my airline of choice in the hub of Houston) has expanded Wi-Fi coverage to almost its entire fleet. This has increased my productivity in ways I can’t even describe, especially on flights during the day that are more than 2 hours long. On flights where the middle seat has been empty, I’ve even been able to set up my second monitor. With Wi-Fi, I can do everything I could do on the ground, in the air. I’ve even purchased the WiFi over my phone, and tethered over bluetooth to my laptop, so I can stay online without paying again when the laptop ban goes into effect during takeoff and landing. It has been a game-changer.

United, unlike American and Delta, does not rely on Gogo. Rather, it uses its own proprietary service, United WiFi. Unfortunately, United does not allow for a monthly subscription, but the FAQ says “we may offer these options in the future.” As a result, I pay the full price every time I fly. I’ve noticed that the rate bounces around, almost randomly. Here is a sampling:

  • IAH – EWR, 3 hours cost $11.97 (Friday)
  • IAH – MIA, 2 hours cost $7.98 (this was a mistake, as there was no coverage over the Gulf of Mexico)
  • IAH – DCA,  unlimited for $6.99 (Sunday)
  • IAH – DCA, unlimited for $4.99 (Friday)
  • IAH – EWR, unlimited for $3.99 (Thursday)
  • IAH – EWR, unlimited for $8.99 (Wednesday)

In other words, the prices for the same destinations are all over the place, even on the same trip. I suspected some sort of surge pricing was in effect. The New York Times confirms this may be the case, at least with respect to GoGo.

Consider the following increases: Wi-Fi service on transcontinental flights — such as from San Francisco to New York, from Boston to Seattle or from Los Angeles to New York — now cost $28 to $40, up from roughly $18 in 2012, according to Gogo.

Yet those numbers rarely show up in the average price quote for an in-flight Gogo Wi-Fi session, which now amounts to about $12, up just slightly from $10 in 2012. That’s partly because on flights where fewer people are likely to use Wi-Fi, pricing has remained unchanged, which brings down the average cost per session. For example, Gogo’s Wi-Fi service on flights between New York and Fort Lauderdale, Fla., has cost $10 since 2012. In addition, passengers can choose to pay smaller amounts to use Wi-Fi for a portion of a flight instead of the entire trip.

Gogo’s prices are not just higher now; they are also more unpredictable. The company uses a method called dynamic pricing, in which it tries to forecast the demand for Wi-Fi on each flight and scale pricing accordingly. So the prices for the full durations of transcontinental flights also change each day: Gogo charges the most, $40, on Mondays and Thursdays; Tuesdays, Wednesdays, Fridays and Sundays cost $34; and Saturdays are the cheapest, at $28.

At first travelers may balk at the high prices, but there is a good reason for it–congestion and limited capacity. Wi-Fi in the air is a classic example of scarce resources.

Michael Small, the chief executive of Gogo, said in an interview that the company had raised prices because demand for Internet service in the sky had exceeded capacity.

“We’re starting to have millions of users, so it’s getting more and more congested, and we have raised prices, which you typically do when you have more demand than you have supply,” he said. “There’s nothing to apologize for. We have trouble finding a business in America that does anything differently.”

Part of the reason Gogo’s costs can be so high is that the prevailing technology it uses has hit some limits. Its in-flight Wi-Fi works like the cellular network that provides service for cellphones, in which antennas are used to transmit signals to and from towers on the ground. Adding capacity is difficult because there is a limited amount of radio spectrum available for the towers.

To improve the situation, Gogo uses satellite technology for over-water flights, and the company is upgrading to a faster satellite technology called2Ku. The new satellite technology, which received regulatory approval on Monday and will be widely released next year, should add capacity and eventually let the company lower prices, Mr. Small said.

“When we start rolling out the satellite technology and bring out more capacity, we’ll be back in the business of trying to bring on new customers and grow the business and introduce exciting new price plans,” Mr. Small said.

Consider Southwest, which does not have variable pricing.

Southwest has about 550 aircraft equipped with Global Eagle Entertainment’s Wi-Fi services, said Kevin Kleist, Southwest’s manager of Wi-Fi and in-flight entertainment. He said the company had experimented with different prices before concluding that $8 was the sweet spot.

“You don’t want to overprice and not get enough customers. And you don’t want to underprice it and get too many and too much congestion,” Mr. Kleist said.

With respect to Southwest, I recently took a flight and paid $8 for Wi-Fi. I noticed that many people on the sold-out flight were signed onto their phones. It was so slow, it became unusable.  It was a waste of money. The Wi-Fi on United is really fast. I can even search WestLaw and other cumbersome databases with ease. On Southwest, the same search was so slow it became a waste of time to even try.

I wish United offered an unlimited monthly package, which GoGO does. I would buy it in a heartbeat. Or at a minimum, give customers with status, or who are in Business Class a steep discount.

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Aug 26, 2015

Cato Daily Podcast: Little Sisters of the Poor Amicus Brief

I am on today’s Cato Daily Podcast with Caleb Brown discussing the brief I authored with Ilya Shapiro on behalf of the Little Sisters of the Poor’s cert petition. You can listen here or download the file here. Also, I was recently selected as a Cato Adjunct Scholar, and now have a snazzy people page.

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Aug 26, 2015

Jeb Bush on #SCOTUS Nominees: “Fight Like Hell” for Candidates “With Proven Record” of “Judicial Restraint”

The Bush legacy on Supreme Court nominees is mixed. President George H.W. Bush, seeking to avoid a bruising confirmation battle, appointed the “stealth” David Souter, who turned out to be a consistent vote with the liberal bloc. But, he also appointed Clarence Thomas, who by several measures is the most conservative Justices in decades. President George W. Bush, presented with the opportunity to fill the Chief Justice position, chose John Roberts. Roberts, a long-time attorney in Republican administration, and the premier Supreme Court advocate of his day, had fastidiously avoided expressing his own views on the law–other than a brief stint on the D.C. Circuit. Bush’s second nomination, Harriet Miers (thankfully) went up in flames. The backup pick, Samuel Alito, was a safe, and reliable appointment, in light of Alito’s two-decades service on the Third Circuit.

So what lessons has presidential candidate Jeb Bush learned from the last-four Republican nominations to the Supreme Court, at the hands of his brother and father? They’re mixed. On the one hand, Bush seemingly learned the lesson of the Souter nomination–a lifetime Supreme Court appointment is so important, that a bruising political fight is well worth the cost. On the other hand, he didn’t learn the lesson of what it means to appoint a candidate with a record of “judicial restraint.”

In remarks in New Hampshire, Bush explained:

He said past presidents — whom he didn’t name, but the past two Republicans in the White House were his father and his brother — have picked people “that don’t have a proven record” because they’ve been too worried about facing an increasingly bloody Senate confirmation process.

“They wander, and you go, ‘How could that be?'” Mr. Bush said at a town hall meeting this month in Keene, New Hampshire.

“Because we’re in this partisan environment now where every one of these appointees, it’ll be a big huge fight, and so, I believe we need to have people of experience, of a proven record, a consistent judicial philosophy that you know because they’ve done it over and over and over again, and then you got to fight like hell to make sure they get passed, and that’s my pledge,” the former governor said.

He added during an interview with radio host and ConLaw prof Hugh Hewitt:

“And so I think you have to be all in to fight for people that have a record, because today in America, the minute you have a record, you’re subject to attack. But that’s the best way to prove that someone has a consistency in their view of, in terms of judicial philosophy.”

Yes, appointing candidates with records is essential. No more stealth candidates, hoping they can breeze through the hearing. Let’s focus on judges with paper trails, so we know how they approach the law. (See my writings here and here). The “nuclear option” left the fillibuster on the table for Supreme Court nominations, but we should not kid ourselves to think that is set in stone. Whichever party is in power next will strongly consider, and perhaps eliminate it, especially if it involves a replacement for Justice Kennedy.

But where Bush has not learned his lesson, is what kind of “proven record” he is looking for. Hewitt asked Bush about his criteria for a Justice:

“I think the way you do it is that you focus on people that are qualified to be Supreme Court justices that have a proven record of judicial restraint,”

He added that he wants:

people who have a “proven record of not legislating from the bench.”

His spokesperson made the point even more clearly:

“As evidenced by his record in Florida, Governor Bush would nominate and fight to confirm individuals with a clear, proven record grounded in strictly interpreting the law, not legislating from the bench, and adherence to the Constitution’s limits on government’s authority,” she said.

These are talking points that didn’t work 20 years ago, and they mean even less today than they did before. While Bush has learned his lesson from the Souter nomination, he has not gleaned any insights from the Roberts nomination. Roberts’s judicial restraint has led to his decisions in NFIB and King v. Burwell. In the former, he found that the individual mandate exceeded Congress’s powers under the commerce clause, but through the saving construction, he saved the law. In the latter, he found that the plain-meaning of the statute was “strong,” but that couldn’t have possibly been what Congress meant, so he saved the law. If it wasn’t entirely clear how he approaches the issue, the last paragraph of his King opinion made painfully clear that he would defer to Congress, and only the democratic process could do anything about it. Restrained, no? (My working theory on Roberts–who has venerated the Court for so long–is that his fidelity to the Supreme Court as an institution trumps his fidelity to the Constitution itself. He will only exercise the judicial role when he thinks the Court can weather the storm. His judgment has proved myopic–liberals are still outraged at Citizens United and Shelby County, and conservatives are still outraged at NFIB and King v. Burwell. I will develop this in more detail elsewhere).

Yet what does Bush say about Roberts, in light of his decisions in King v. Burwell and Obergefell.

“Well, I liked one of his rulings, and I didn’t like the other, but he is a person of unimpeachable integrity and great intelligence, and I’ve met him a few times. And he’s an impressive guy for sure.”

This is not reassuring for 2016. It isn’t clear Bush has considered the implications of how Roberts’ judicial restraint saved Obamacare not once, but twice. He should look closer to the other two Bush nominees–Thomas and Alito. Both ruled against Obamacare twice, and both followed their understanding of the Constitution and the statute. Would Bush call them activist judges that legislate from the bench?

The debate about “judicial restraint” and “engagement” never seems to end (and I’m sure this post will unleash a torrent of replies), but at a minimum, a Presidential candidate should actually understand what the phrase “judicial restraint” means, and how the Chief Justice’s minimalism has affected his votes. This is too important to screw up again.

(For purposes of full disclosure, I have been advising the Rand Paul campaign on various legal issues.)

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Aug 26, 2015

William Rehnquist’s High School Yearbook

I now have a copy of William Rehnquist’s 1942 High School Yearbook, The Copperdome, form Shorewood High School in Shorewood, Wisconsin. Though Rehnquist is most remembered as an Arizonan, he was born in Milwaukee. I also have a copy of Justice Scalia’s HS Yearbook and Justice Ginsburg’s College Yearbook.

It’s crazy to think he graduated barely 6 months after Pearl Harbor.

20150825_190716

Rehnquist’s caption reads:

The favorite pastime of Bill, in and out of school, is cartooning. Lost to art however, he did become co-feature editor of the Ripples and was awarded the Quill and Scroll for his work there. A member of Student council, Hall monitors, and Hi-Y, Bill completed his list of extra curriculars.

20150825_185544

Rehnquist was a lifelong Doodler, as revealed in his papers housed at Stanford:

The Rehnquist files do offer a few glimpses into the justice’s lighter side.

He had a habit of doodling faces in the margins of his law school notebooks, and a journal from 1948—the year he earned both his bachelor’s and master’s degrees—kept records of his poker winnings and expenditures.

Kyle Graham added:

(2) It also appears that Rehnquist liked to doodle, and in particular, that he enjoyed drawing portraits of now-obscure individuals in the margins of his notebooks. So, here’s a word of advice to you kids out there: Don’t pay attention in class, and you eventually will become Chief Justice of the United States Supreme Court.

 

Here is his photograph from Hi-Y (second row, first from the left):

20150825_185514

Here is his photograph as a Hall Monitor (top row, third from the left).

20150825_185448

Rehnquist also wrote a signature to Dorothy, whose yearbook I now have. It reads:

Dorothy we’ve been through 2 years of [something] writing and four of home-room together – and it’s been fun. B. Rehnqusit.

20150825_185254

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Aug 26, 2015

Prop2 Class 4 – Marketable Title

Today we will continue our discussion of the contract of sales with a focus on duty to disclose defects and the merger doctrine. The lecture notes are here.

Here is the Texas form listing all the required disclosures.

The New York Times and Atlas Obscura have good articles about the Haunted House.

The Ghost of Nyack | Atlas Obscura

The Times writes:

The phones have been ringing at real-estate offices in Rockland County. A patient in a psychiatric hospital called. So did a para-psychologist from Florida. And so did the Amazing Kreskin, all the way from his hotel room in Atlantic City.

That turreted turn-of-the-century Victorian house in Nyack is back on the market – the one that the owner says has not one, not two, but three ghosts. The one that was the subject of a court ruling last week.

There was nothing creepy about Justice Edward H. Lehner’s decision in State Supreme Court in Manhattan. He found that a would-be buyer, Jeffrey M. Stambovsky, could not back out of a $650,000 contract on the three-story clapboard house without losing his $32,500 down payment on it.

Mr. Stambovsky, who acknowledges that the contract expired after he skipped a scheduled closing last fall, had argued that no one warned him about any preternatural residents who, presumably, would not comply with ordinary eviction orders.

As for whether he will see the ghosts in Nyack – in 22 years, the owner, Helen V. Ackley, has seen only one.

”He was sitting in midair, watching me paint the ceiling in the living room, rocking and back forth,” she said. ”I was on an 8-foot stepladder. I asked if he approved of what we were doing to the house, if the colors were to his liking. He smiled and he nodded his head.”

Mrs. Ackley said one of the other ghosts would waltz into her daughter’s bedroom. ”We don’t know whether or not she was the one who woke the children up by shaking the bed,” she said.

Ghost No. 3 was a Navy lieutenant during the American Revolution. ”My son saw him eyeball to eyeball outside the basement door,” Mrs. Ackley said.

Atlas Obscura writes:

During the 1960s, the 7,000 residents of the tiny village knew that the 5,000 square foot house was haunted, but nobody bothered to tell the Ackley couple before they decided to move in.

Helen and George Ackley, who lived in the home for more than 20 years, reported that they had seen a ghost in the house on at least one occasion and that they would be awoken every morning by a shaking bed, but otherwise lived in peace with whatever spirits resided in their home. When they decided to move and sold the house in 1990, they didn’t bother to tell the new buyers about the ghost problem.

With $32,500 in escrow, Jeffrey and Patrice Stambovsky backed out of the contract when they learned that the house was haunted. When the Ackleys refused to refund the deposit, the Stambovskys sued, leading to what would come to be known as the “Ghostbusters” ruling. The New York Appellate court ruled that, because a routine home inspection would never uncover it, sellers must disclose that a house is haunted to potential buyers.

Here is a Google Map of the haunted house:


View Larger Map

There was at least one Texan who wanted a lease voided because the house was haunted. In some cases, a haunted house may actually increase the property value. Recently the Pennslyvania Supreme Court found that there was no duty for sellers to disclose there was a murder-suicide in the house. Also, the ABA Journal asks if spirits, slayings are “material defects.”

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Aug 26, 2015

ConLaw Class 4 – The Legislative Powers

The lecture notes are here.

The Legislative Powers

  • Bicameralism & Presentment (260-261).
  • INS v. Chadha (261-272).
  • Clinton v. City of New York (272-281).
  • Read Article I, Section 8 of the Constitution (3-4).
  • Enumerated Powers in Article I, Section 8 (281-283).
  • Bills of Attainder (283-284).
  • Note 5 – Nixon v. GSA (293-294).
  • Ex Post Facto Clause (294-295).
  • Contracts Clause (295).

This is Chief Justice Warren E. Burger, who wrote the majority opinion in INS v. Chadha.

burger

This is Jagdish Chadha.

Jagdish Rai Chadha

chadha-book

Justice Louis Powell authored a concurring opinion.

powell

Justice White dissented.

white

The City of New York was led, at the time by Mayor Rudy Giuliani, who opposed President Clinton’s usage of the “Line Item Veto.”

rudy

The majority opinion was authored by Justice John Paul Stevens.

stevens

Justice Anthony Michael Kennedy concurred.

kennedy-pic

Justice Stephen G. Breyer dissented, in part.

breyer

Justice Antonin Scalia dissented, in other parts.

scalia-pic

Nixon v. GSA concerned President Nixon’s attempts to keep secret tapes he recorded privately in the White House.

nixon3nixon2nixon1

 

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Aug 25, 2015

Betting on #SCOTUS

My Lex Predict colleagues Daniel Katz and Mike Bommarito, along with Tyler Soellinger and James Chen, have published a fascinating study of how securities markets react to the Supreme Court. The authors find:

Across all cases decided by the Supreme Court of the United States between the 1999-2013 terms, we identify 79 cases where the share price of one or more publicly traded company moved in direct response to a Supreme Court decision. In the aggregate, over fifteen years, Supreme Court decisions were responsible for more than 140 billion dollars in absolute changes in wealth.

For example, here is the graph showing the abnormal returns in the stock for Myriad Genetics, before and after the Supreme Court’s complicated decision at 10:00.

myriad

You can see the spike right after 10:00 when the decision was released.The authors explain:

As displayed in Figure 1, the Court’s compromise decision initially confused the equity market. Fueled in part by media reports, would-be arbitrageurs interpreted the Court’s decision as positive to Myriad in the initial hours of trading. However, this view was ultimately displaced as more careful reading and subsequent understanding revealed that the decision was highly unfavorable to Myriad’s business interests. As a result, the stock began to trade down in the second half of the session. Media coverage following the initial trading day called it a “wild ride” and a “market whipsaw.”

As the dust settled, the Court’s decision was indeed detrimental to Myriad’s long-term financial value. Even after controlling for overall market trends, Myriad’s stock lost in excess of 20% of value over the two-day trading window. Attendant to this change in price, there was also a significant increase in volume as traders sought to shift their positions in light the Court’s decision. Specifically, on the date of decision, there was roughly a thirteen-fold increase in trading volume of the stock. The day thereafter witnessed an eighteen-fold increase in trading volume.

The article also highlights a number of SCOTUS decisions that yielded statistically significant movements on the market. For examples, these graphs illustrate what happened after 10:00 in four cases:

  • Limelight Networks v. Akamai (2014): The Court held the answer was no and that decision was highly beneficial to Limelight Networks (LLNW). As displayed in Figure 5, the stock experienced an almost immediate gain of 5%, finishing the day up nearly 15%. The second day of trading saw LLNW continue to steadily rise into the afternoon of the session.
  • Coeur Alaska v. SE Alaska Conservation Council (2009): “As displayed in Figure 5, within hours, the Coeur stock (CDE) traded up 10% and finished the day by posting S&P adjusted cumu- lative abnormal returns around 15%. The following day saw some small additional gains, but most of the returns had been established in the first trading day. “
  • Altria Group v. Good (2008): “As displayed in Figure 5, following this Court announcement, Altria’s (MO) stock immediately trended down, followed by lateral trading for much of the balance of the date of decision. In the following day, Altria’s continued to decline relative to the S&P as the financial implications of the Court’s decision began to become more widely understood. Ultimately, at the close of the two-day window, the stock had experienced a negative cumulative abnormal return of nearly 9%. “
  • Whitman v. American Trucking (2001):  “While the Court’s decision was somewhat mixed, Figure 5 reveals what appears to be a clear negative market reaction to the Court’s decision. The then largest automaker General Motors (GM) traded down over the next two sessions.13 ”
    four-cases

The portion of the paper that hits closest to home studies the impact of NFIB v. Sebelius on the leading healthcare companies:

nfib

Fascinatingly, the insurance companies surged during the initial reporting that the Court invalidated the mandate. (This counters the conventional wisdom that the insurance companies are happy with Obamacare…). But when everything settled, and everyone realized what happened, the insurance stocks tumbled. The only stocks that continued to grow was Hospital Corporation of America and Magellan Health Services. Aetna, Cigna, Humana, and Anthem all fell.

In Figure 6, we plot cumulative abnormal returns for a significant number of healthcare related stocks including Aetna (AET), Cigna (CI), Hospital Corporation of America (HCA), Health Net (HNT), Humana (HUM), Magellan Health (MGLN) and Anthem / Well Point (WLP). Over the two-day trading window, the Court’s decision drove down the price of a variety of health insurance companies while simultaneously increasing the value of one large hospital conglomerate (HCA) and a healthcare management business (MGLN). Interestingly, each of the stocks of the health insurance companies that ultimately trended downward experienced a significant short term uptick in the immediately aftermath of the Court’s decision. This is likely due to the widespread initial misreporting of the Court’s decision, which appeared to engender market confusion in the immediate aftermath of the Court’s ruling.14 However, unlike the Myriad case discussed earlier, the market quickly corrected itself in response to the subsequent accurate reporting of the Court’s decision. Collectively, among the stocks we evaluated in this study, the Obamacare decision was responsible for absolute changes in shareholder wealth in excess of 6.3 billion dollars.

Very cool.

In 2011, I noted that Ted Franks (who is now my attorney) made an investment decision based on his predicted outcome in Wal-Mart v. Dukes. He was so confident that the Supreme Court would reverse the 9th Circuit that he made a leveraged bet–of 10% of his net assets–that WMT (Wal-Mart’s symbol) will bounce. At the time, 76% of FantasySCOTUS members predicted a reversal. The great, and late Larry Ribstein suggested markets need greater sources of information to make these sorts of investments.

Unfortunately, Ted’s bet didn’t pan out. WSJ Law Blog reported:

No, unfortunately for the lawyer he was in court all morning, challenging the $3.4 billion settlement reached in 2009 in the high-profile Indian trust litigation, which claims the federal government mismanaged the revenue in American Indian trust funds. (Here’s an LB post on the settlement in that case.)

Frank told the Law Blog that by the time he got out of the Cobell settlement hearing, for a noon lunch break, he had missed the bump from the Dukes ruling.

“There were 90 people in the courtroom,” he said. “I couldn’t say, ‘can we stop the proceedings, because I need to engage in a stock sale.’”

Now, it seems Ted is not alone. Others are taking advantage of their SCOTUS predicting prowess.

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Aug 25, 2015

New Amicus: How Regulatory Incompetence and King v. Burwell Could Save the Little Sisters of the Poor

Obamacare imposes a requirement that employers provide insurance that covers “preventive care” for women, but does not specify what that entails. The Department of Health & Human Services (HHS) determined that “preventive care” includes all FDA-approved contraceptives, from condoms to the morning-after pill.

While houses of worship were exempted outright from the mandate, other religious orders were not. (And, as we know from the Hobby Lobby case, for-profit employers who object to certain forms of contraceptive don’t have to pay to cover them.) Instead, under an “accommodation” created by HHS and the Departments of Labor and Treasury, an objecting religious organization isn’t required to pay for the offending contraceptives, but they do have to notify HHS, which then modifies their insurance contracts so their insurers cover the objected-to items.

Even though the religious organizations are not paying for the contraceptives, groups like the Little Sisters of the Poor—an order of nuns who provide various kinds of social services—still feel complicit in sin and claim that their free exercise of religion has been burdened.

Cato and I have filed an amicus brief supporting the Little Sisters’ request that the Supreme Court hear their case. The Little Sisters raise claims under the First Amendment and the Religious Freedom Restoration Act. Our brief asks the Court to consider a supplemental question: Whether the Departments have the interpretive authority and “expertise” to resolve this “major question” of profound social, “economic and political significance”—to quote Chief Justice Roberts’s majority opinion in King v. Burwell (where he said that courts couldn’t simply defer to the IRS on the important question presented there).

Congress gave absolutely no indication that it delegated to federal agencies the authority to decide which religious groups would be exempted and which could have their religious liberty burdened under an accommodation, or for that matter, how agencies were to design any accommodations. To quote another recent case where the Court refused to defer to an administrative agency, UARG v. EPA (2014), here the agencies are “laying claim to an extravagant statutory power” affecting fundamental religious liberty interests—a power that the ACA “is not designed to grant.”

Here is the summary of the argument:

This case can be resolved without further engaging in the delicate analysis required by the Religious Freedom Restoration Act. In Burwell v. Hobby Lobby Stores, the Court held that regulations implementing the Affordable Care Act’s “preventive care” mandate violated RFRA for certain closely held corporations. 134 S.Ct. at 2785. The petition here focuses on the legality of a religious “accommodation” to the same “preventive care” mandate for certain religious non-profits. It was promulgated by the Departments of Health and Human Services (“HHS”), Labor, and Treasury (“Departments”). Before addressing RFRA, however, the threshold question is whether the Departments had the requisite interpretive authority and “expertise” to resolve this “major question” of profound social, “economic and political significance.” King v. Burwell, 135 S.Ct. 2480, 2489 (2015) (citing Utility Air Regulatory Group v. EPA, 134 S.Ct. 2427 (2014) (“UARG”) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000))). If they do not, Hobby Lobby provides the rule of decision and petitioners must be exempted from the mandate. The Court should supplement the questions presented by the petitioners to resolve this foundational issue.

If the Departments lack the interpretive authority to craft accommodations, then Hobby Lobby provides the rule of decision and the Little Sisters must be exempted from the mandate. Accordingly, the Supreme Court should consider this additional question and conclude that the Departments’ regulatory incompetence prevents them from forcing the Little Sisters to be complicit in what they view as sin.

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Aug 24, 2015

Prop2 Class 3: Introduction to the Sales Contract

Today we will provide an introduction to buying and selling homes, and go over the contract of sale.

All of Texas’s standardized sales contract forms are available here. You may wish to take a look at the Texas Real Estate Commission Residential Sales Contract, which we will go over in class.

The lecture note are here.

The site of the first case, Licari v. Blackwelder, is in Westport, CT.

The Texas Statute of Frauds provides:

Sec. 26.01.  PROMISE OR AGREEMENT MUST BE IN WRITING. (a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is

(1)  in writing; and

(2)  signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.

(b)  Subsection (a) of this section applies to:

(1)  a promise by an executor or administrator to answer out of his own estate for any debt or damage due from his testator or intestate;

(2)  a promise by one person to answer for the debt, default, or miscarriage of another person;

(3)  an agreement made on consideration of marriage or on consideration of nonmarital conjugal cohabitation;

(4)  a contract for the sale of real estate;

(5)  a lease of real estate for a term longer than one year;

(6)  an agreement which is not to be performed within one year from the date of making the agreement;

(7)  a promise or agreement to pay a commission for the sale or purchase of:

(A)  an oil or gas mining lease;

(B)  an oil or gas royalty;

(C)  minerals;  or

(D)  a mineral interest;  and

(8)  an agreement, promise, contract, or warranty of cure relating to medical care or results thereof made by a physician or health care provider as defined in Section 74.001, Civil Practice and Remedies Code.  This section shall not apply to pharmacists.

The Texas Enacted Uniform Electronic Transactions Act provides:

322.002-
(8)  “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

322.005-
(b)  This chapter applies only to transactions between parties each of which has agreed to conduct transactions by electronic means.  Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.

 

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Aug 24, 2015

ConLaw Class 3 – The Separation of Powers

The lecture notes are here.

The Separation of Powers

  • Separation of Powers (173-175).
  • Youngstown Sheet & Tube (175-190).
  • The Powers of Congress – Article I (190-192).
  • Enumerated Powers (192-193).
  • M’Culloch v. Maryland (193-209)

This is a postcard of the Youngstown Sheet and Tube Mill.

youngstown-postcard

Here are photographs of the actual steel mill at issue in Youngstown, Ohio.

youngstown1

youngstown2

youngstown3

This is Secretary of Commerce Charles Sawyer, whom Truman ordered to seize the steel mill.

CharlesSawyer

 The lead opinion in Youngstown was authored by Justice Hugo Black.

Hugo_Black

There were also concurring opinions written by five Justices. This is Justice Felix Frankfurter.

frankfurter

This is Justice William O. Douglas.

douglas

This is Justice Robert H. Jackson. Justice Jackson, who would serve as the lead prosecutor at Nuremberg, authored what has been seen as the definitive opinion in Youngstown.

robert-jackson

This is Justice Tom C. Clark (a graduate of University of Texas at Austin).

Tom_Clark_portrait

Chief Justice Vinson dissented, joined by Justices Reed and Minton.

FredVinson

You can read Executive Order 10340, Executive Order 10340 – Directing the Secretary of Commerce to Take Possession of and Operate the Plants and Facilities of Certain Steel Companiesm, here:

NOW, THEREFORE, by virtue of the authority vested in me by the Constitution and laws of the United States, and as President of the United States and Commander in Chief of the armed forces of the United States, it is hereby ordered as follows:

1. The Secretary of Commerce is hereby authorized and directed to take possession of all or such of the plants, facilities, and other property of the companies named in the list attached hereto, or any part thereof, as he may deem necessary in the interests of national defense; and to operate or to arrange for the operation thereof and to do all things necessary for, or incidental to, such operation.

2. In carrying out this order the Secretary of Commerce may act through or with the aid of such public or private instrumentalities or persons as he may designate; and all Federal agencies shall cooperate with the Secretary of Commerce to the fullest extent possible in carrying out the purposes of this order.

3. The Secretary of Commerce shall determine and prescribe terms and conditions of employment under which the plants, facilities, and other properties possession of which is taken pursuant to this order shall be operated. The Secretary of Commerce shall recognize the rights of workers to bargain collectively through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining, adjustment of grievances, or other mutual aid or protection, provided that such activities do not interfere with the operation of such plants, facilities, and other properties.

4. Except so far as the Secretary of Commerce shall otherwise provide from time to time, the managements of the plants, facilities, and other properties possession of which is taken pursuant to this order shall continue their functions, including the collection and disbursement of funds in the usual and ordinary course of business in the names of their respective companies and by means of any instrumentalities used by such companies.

5. Except so far as the Secretary of Commerce may otherwise direct, existing rights and obligations of such companies shall remain in full force and effect, and there may be made, in due course, payments of dividends on stock, and of principal, interest, sinking funds, and all other distributions upon bonds, debentures, and other obligations, and expenditures may be made for other ordinary corporate or business purposes.

6. Whenever in the judgment of the Secretary of Commerce further possession and operation by him of any plant, facility, or other property is no longer necessary or expedient in the interest of national defense, and the Secretary has reason to believe that effective future operation is assured, he shall return the possession and operation of such plant, facility or other property to the company in possession and control thereof at the time possession was taken under this order.

7. The Secretary of Commerce is authorized to prescribe and issue such regulations and orders not inconsistent herewith as he may deem necessary or desirable for carrying out the purposes of this order; and he may delegate and authorize subdelegation of such of his functions under this order as he may deem desirable.

This was Marshall’s original draft opinion in M’Cullough v. Maryland.

Mccullochvmaryland

This excellent video from the HBO John Adams Miniseries about the central banks is very well done.

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Aug 22, 2015

Congress Is Not Required To “Declare War”

In The Atlantic, Garrett Epps writes a strong piece explaining that Congress has fallen on its duty for refusing to vote on the President’s use of military action against ISIS. I agree wholeheartedly that to avoid the political blowback, Congress has ceded its power over the use of force. But I take one, small exception with Garrett’s article. He writes:

There is a way that the government could explain itself; indeed, the government is required to do that by Article I of the Constitution, which assigns to Congress the power to “declare war.”

Garrett emphasized “required” in the original. That is not correct. Congress isn’t required to do (nearly) anything.

Article I, Section 8 provides that “The Congress shall have power . . . to declare war.” Congress has the power, but they need not use it. It is discretionary. If Congress doesn’t declare war, that means the President must stop engaging in war. (We can discuss elsewhere whether POTUS already has the authority under the 2001 or 2002 AUMFs).

I discuss the fact that Congress really doesn’t have any affirmative obligations in this article:

Our Constitution strikes a stark asymmetry with respect to the duties and obligations of Congress and the President. In Article I, Congress bears no affirmative duties.21 “Congress shall have Power” to make a number of laws,22 but need not do so. The only duties Congress owes to the other branches concern compensation for the President and federal judges—these commands appear in Article II23 and Article III,24 not in Article I.25 This structure reflects the framers’ design that the Congress need not, and indeed cannot, act unless majorities of the House and Senate agree.

Article II operates in a diametrically opposite manner on the unitary executive. While congressional power is bound in discretion and agreement, the Executive power bears heavy responsibilities. This philosophy is embodied in the constitutional duty to “take Care that the Laws be faithfully executed.”26 Section I vests the office of the Presidency and determines how he is elected.27 Section II grants the President a number of authorities.28 Virtually all of these duties are prefaced by shall: “shall be Commander-in-Chief” and “shall have Power to grant Reprieves and Pardons.”29 Several of the key “shall” duties may only be exercised “by and with the Advice and Consent of the Senate,” such as the power to “make Treaties,” and “nominate” ambassadors, ministers, judges, and officers of the United States.30

The Constitution does not simply vest the President with powers concerning his own office, but imposes a duty on the President to execute the laws of Congress with Specifically, Article II, Section III defines the scope of the President’s affirmative obligations toward Congress. First, the President “shall from time to time give to the Congress Information of the State of the Union.”32 This is a duty the President cannot shirk; Congress must be apprised of the state of the nation to inform its governance.33 Second, the President “shall receive Ambassadors and other public Ministers.”34 He must engage with this aspect of foreign diplomacy, which limits what is sometimes viewed as an unfettered power over foreign affairs. Third, the President “shall Commission all the Officers of the United States.”35 The President has an obligation to commission officers for whatever positions Congress creates. Fourth, “on extraordinary Occasions,” the President “may”—not must—“adjourn” or “convene” Congress.36 Indeed, so as not to unduly infringe on the separation of powers, the Framers limited that responsibility to circumstances where the President “shall think [it] proper,” rather than at his whim.37

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Aug 22, 2015

BREAKING: #SCOTUS Grants Stay in Mellouli v. Lynch

Last term, the Supreme Court decided the case of Mellouli v. Lynch, and reversed the 8th Circuit’s decision affirming the petitioner’s removal. However, as I discussed with Kimberly Robinson of Bloomberg, the Court only reversed the case, and did not remand it. The 8th Circuit remanded the case to the Board of Immigration Appeals. The court noted, that SCOTUS “did not explicitly remand for further proceedings to this court or to the BIA.”

Melloui then filed an emergency stay with the Supreme Court.

Yesterday, Circuit Justice Alito referred the petition to the entire Court, and granted a stay pending “the timely filing of a petition for a writ of certiorari, or of a petition for writ of mandamus and prohibition, and further order of this Court.”

I think this may be an illustration of what Richard Re calls a “SCOTUS Repeater.” Once the Court has taken an interest in a case once, it is more likely to take an interest in it again. This isn’t a cert grant, but at a minimum, the Justices were aware of the facts, and quickly jumped in to stop the remand.

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Aug 21, 2015

Podcast: Steve Vladeck and I Talk About Second Amendments Rights for Non-Citizens

You can hear my buddy Steve Vladeck and I on Bloomberg Law to discuss the 7th Circuit’s recent decision finding the Second Amendment applies to non-citizens.

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Aug 21, 2015

I am on Bloomberg Law Radio Talking about 2nd Amendment Rights for Non-Citizens

You can listen here now.

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Aug 21, 2015

WSJ Law Blog on Topless Times Square Panhandlers

The WSJ Law Blog Reports on Mayor de Blasio’s suggestion that the Times Square Plaza should be dug up to eliminate the topless panhandlers. I offer some quotes, and the Mayor’s spox replies:

The city would have to meet the strictest of First Amendment standards, South Texas College law professor Josh Blackman predicts. Such scrutiny would require the city to show that its crackdown is both narrowly tailored and advances a compelling government interest.

“Such a decision….would be subject to strict scrutiny, and would be invalidated,” Mr. Blackman writes.

Nothing prevents the city from ticketing beggars who are engaging in actual harassment. But the professor says sweeping actions like reopening the whole plaza to vehicle traffic would be vulnerable to court challenges.

Mr. de Blasio, as WSJ reported, said re-engineering the plaza could reduce the congregation of the square’s high-profile panhandlers, including women who go topless and others who are costumed as children’s characters.

“It’s quite evident this is turning into a business,” he said of the panhandling. “We’ve certainly heard enough reports of how aggressively this business is being pursued. Clearly, a lot of people are very uncomfortable with it, I understand why, and I agree. On a common sense level, this is not appropriate in the middle of a public square.”

The mayor’s comments came as he formed a city task force to look at other ideas to clean up Times Square.

A spokeswoman for the mayor, Karen Hinton, told Law Blog by email that Mr. Blackman is “jumping to the wrong conclusions.” Said Ms. Hinton:

No decision about any of the options has been made. Bringing together the city’s experts on constitutional law, planning, transportation, and law enforcement, the task force will make its recommendations by October 1st.

The mayor has strongly expressed his concern about the constitutional issues and has said there’s no reason to take actions that would only land the city in court over First Amendment rights.

The power of the city to impose restrictions that target toplessness is less clear.

In 1992, the state’s highest court ruled in favor of women who were arrested for going topless in a Rochester public park, saying that restricting women — but not men — from baring their chests discriminates on the basis of sex. But the court said its ruling applied only to women who aren’t engaging in commercial activity.

“[It isn’t clear if topless women asking for money would be commercial,” Mr. Blackman tells Law Blog.

“It sounds like it is commercial,” First Amendment expert and legal blogger Eugene Volokhtold the New York Times. “The city could say if you are naked in a public place for a commercial purpose, we are going to apply the law to you.”

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Aug 20, 2015

Horne v. USDA, Canadian Style: Quebec Maple Syrup Cartels Seizes Black Market Maple Syrup

In Horne v. USDA, the Supreme Court found that a New Deal-era program, where the federal government seizes excess raisins to stabilize market prices, constituted a taking. It seems Quebec  has a similar program in effect for maple syrup. The Federation of Quebec Maple Syrup Producers was authorized by the courts to seize any black-market maple syrup that was not sold at the correct price.

It is effectively a cartel, approved by the provincial government and backed by the law. In 1990, the federation became the only wholesale seller of the province’s production, and in 2004, it gained the power to decide who gets to make maple syrup and how much.

 

And what happens if a producer doesn’t comply? The cartel will send guards to take it.

For weeks, security guards, hired by the Federation of Quebec Maple Syrup Producers, kept watch over Mr. Hodge’s farm. Then one day, the federation seized 20,400 pounds of maple syrup, his entire annual production, worth about 60,000 Canadian dollars, or nearly $46,000.

The incident was part of the escalating battle with farmers like Mr. Hodge who break the law by not participating in the federation’s tightly controlled production and sales system.

Talk about a sticky situation! Without their syrup, the black-market producers are tapped out, and stripped of their source of income. We’re not talking about a drop in the bucket here. This cartel has really tightened the spigot. Are my puns too sappy? (I’ll be here all night).

Unsurprisingly, most members of the cartel are happy with the arrangement, as it has jacked up the price of their product:

“Three-quarters of our members are happy or very happy with what we are doing,” said Simon Trépanier, the federation’s executive director. “Those producers are living through the maple syrup production. It’s their main income because we present them with a stable income.” …

In 2003, a majority of federation members voted to make production quotas mandatory, meaning farmers could sell only a certain amount each year. Farmers are required to sell all of their syrup through the federation or its designated agents.

Under the system, prices have risen to 2.92 Canadian dollars a pound for the highest grades of syrup, from 2.14 Canadian dollars in 2004. In American stores, a pint goes for about $10. The shift has helped turn an annual ritual into a full-time occupation for many Quebec farmers.

 

 

And yes, there is a maple syrup strategic reserve.

Then in 2012, $18 million of maple syrup was stolen from the global strategic reserve, a warehouse where the federation stockpiles the sweetener. Police arrested more than two dozen people in the heist, the first of whom is expected to go on trial in November. … Most of the world’s syrup passes through the new and more secure global strategic reserve in Laurierville, Quebec, which opened after the heist. …

To keep prices high, the federation enforces strict quotas for the province’s 7,400 producers. Instead of flooding the market during years with bumper crops, all syrup produced beyond that amount is stored in the federation’s warehouse, which helps prop up prices by limiting supply. When seasons are lean, it releases the syrup, to maintain stable supply and pricing. (Sales of small containers to consumers at farms are exempt from the system.

But not Mr. Hodge, who, like the Hornes, doesn’t want anyone tell him what he can sell and where.

Mr. Hodge is similarly intransigent. At this point in the season, Mr. Hodge would normally have sold his syrup, turning his attention to his cattle and other crops. But this year he had nothing to sell. He believes that farmers should be allowed to set their own level of production and sell directly to large buyers, regardless of what the law says.

“They call us rebels, say we’re in a sugar war or something. I’ve heard rumors of that,” said Mr. Hodge, at his farm in Bury, Quebec.

“Yeah, I guess you could call it that.”

“Well, I don’t accept the system because I don’t believe in not being able to sell our product,” he said. “We just think that that product is ours. We bought the land. We’ve done all the work. Why should we not be able to sell our product the way we want as long as we legitimately put it on our income tax?”

And where does the unhappy owner want to go? To where the 5th Amendment applies!

“It’s a good thing that I’m not 35, 40 years old because I’d pack up all my sugar equipment that’s movable, and I’d go to the United States — oh yes, in a minute, in a minute,” said Mr. Hodge, 68.

It’s like OPEC for maple syrup.

 

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Aug 20, 2015

7th Circuit Creates Circuit Split: Non-Citizens are “The People” Under the Second Amendment

Writing for the 7th Circuit, Judge Wood parted company with the 4th, 5th, 8th, and 10th Circuits, and found that the Second Amendment protects non-citizens, as they are part of “the people.”

We first tackle the question whether the Second Amendment protects unauthorized non-U.S. citizens within our borders. The Amendment provides that “the right of the people to keep and bear Arms, shall not be infringed.” U.S. CONST. amend. II. The Supreme Court has confirmed that this language confers an “individual right to possess and carry weapons.” District of Columbia v. Heller, 554 U.S. 570, 592 (2008). But neither Heller nor any other Supreme Court decision has addressed the issue whether unauthorized noncitizens (or noncitizens at all) are among “the people” on whom the Amendment bestows this individual right.

Wood contends that the Framers consciously chose the phrase “people” over “citizen.”

Other language in Heller supports the opposite result: that all people, including non-U.S. citizens, whether or not they are authorized to be in the country, enjoy at least some rights under the Second Amendment. (Although it is hard to find good data about the percentage of noncitizens in the United States before 1820, see BUREAU OF THE CENSUS, U.S. DEP’T OF COMMERCE, HISTORICAL STATISTICS OF THE UNITED STATES 1789-1945: A SUPPLEMENT TO THE STATISTICAL ABSTRACT OF THE UNITED STATES (1949), available at http://www2.census.gov/prod2/statcomp/documents/ HistoricalStatisticsoftheUnitedStates1789-1945.pdf, immigra- tion in the late 18th century was a common phenomenon. And such provisions as Article I, section 2, paragraph 2, which limits membership in the House of Representatives to persons who have been “seven Years a Citizen,” and Article II, section 1, paragraph 4, which requires the President to be “a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution,” show that the drafters of the Constitution used the word “citizen” when they wanted to do so.)

Though, who was a citizen of the United States in 1787? See my article, Original Citizenship. (I promise, it has NOTHING to do with birthright citizenship).

Further, the 2nd Amendment should be read similarly to the 4th Amendment, where “the people” also refers to non-citizens.

Heller noted the similarities between the Second Amendment and the First and Fourth Amendments, imply- ing that the phrase “the people” (which occurs in all three) has the same meaning in all three provisions. See Heller, 554 U.S. at 592 (“[I]t has always been widely understood that the Second Amendment, like the First and Fourth Amendments, codified a pre-existing right.”); id. at 580 (noting that “the people” is “a term of art employed in select parts of the Con- stitution,” including the First, Second, Fourth, Ninth, and Tenth Amendments) (quoting United States v. Verdugo- Urquidez, 494 U.S. 259, 265 (1990)). An interpretation of the Second Amendment as consistent with the other amend- ments passed as part of the Bill of Rights has the advantage of treating identical phrasing in the same way and respect- ing the fact that the first ten amendments were adopted as a package.

The government contends that the noncitizen cannot be part of “the people” because he hasn’t accepted the basic obligation of U.S. society:

First, it contends that unauthorized noncitizens categorically have not accepted the basic obligations of membership in U.S. so- ciety and thus cannot be considered as part of “the people.”

The court rejected this reasoning, explaining that the Second Amendment is not a second-class right, and noncitizens can have this attachment:

In the post-Heller world, where it is now clear that the Second Amendment right to bear arms is no second-class entitlement, we see no principled way to carve out the Second Amendment and say that the unauthorized (or maybe all noncitizens) are excluded. No language in the Amendment supports such a conclusion, nor, as we have said, does a broader consideration of the Bill of Rights.

Judge Flaum concurred, and would not have reached this issue. This opinion does create a circuit split, and under circuit rules, no judge voted for en banc.

Because this holding creates a split between our circuit and the Fourth, Fifth, and Eighth Circuits, ante at 7, this opinion has been circu- lated to all active judges pursuant to Circuit Rule 40(e). No judge voted to hear the case en banc.

However, the court found the conviction under 18 U.S.C. 922(g)(5) to be permissible under Skoien intermediate scrutiny. And because Congress has an interest in keeping hands out of non-citizens, the conviction was upheld.

Congress’s objective in passing § 922(g) was “to keep guns out of the hands of presumptively risky people” and to “suppress[] armed violence.” Yancey, 621 F.3d at 683–84 (cit- ing S. REP. NO. 90-1501, at 22 (1968)); see also Huitron-Guizar, 678 F.3d at 1169–70 (§ 922(g)’s purposes are to assist law en- forcement in combating crime and to keep weapons away from those deemed dangerous or irresponsible). One such group includes aliens “who … [are] illegally or unlawfully in the United States.” 18 U.S.C. § 922(g)(5)(A). The government argues that the ban on the possession of firearms by this group of people is substantially related to the statute’s gen- eral objectives because such persons are able purposefully to evade detection by law enforcement. We agree with this po- sition: unauthorized noncitizens often live “largely outside the formal system of registration, employment, and identifi- cation, [and] are harder to trace and more likely to assume a false identity.” Huitron-Guizar, 678 F.3d at 1170. Persons with a strong incentive to use false identification papers will be more difficult to keep tabs on than the general population. (Section 922(g)(5)(B)’s prohibition on firearms possession by most aliens who are lawfully present but who hold only nonimmigrant visas reflects a similar concern. Holders of nonimmigrant visas sometimes have no address associated with them, making them equally difficult to track.)

Although showing some teeth for scrutiny, the court rejects the government’s positions that non-citizens are more likely to commit gun-related crimes.

The government also argues that § 922(g)(5) reflects the likelihood that unauthorized immigrants are more likely to commit future gun-related crimes than persons in the gen- eral population. It offers no data to support that assertion, however, and we have our doubts about its accuracy. The government extrapolates from the fact that persons who are here illegally have “show[n] a willingness to defy our law” to the conclusion that they are likely to abuse guns. This may go too far: the link to firearms is unclear, and unlawful pres- ence in the country is not, without more, a crime. See Arizona v. United States, 132 S. Ct. 2492, 2505 (2012) (“As a general rule, it is not a crime for a removable alien to remain present in the United States.”). While it is a misdemeanor to enter the country improperly, see 8 U.S.C. § 1325(a), many unau- thorized immigrants—such as Meza-Rodriguez himself— were too young to form the requisite intent to violate this statute when they were originally brought to the United States. Even if this future-oriented rationale lacks support, however, the government has an strong interest in prevent- ing people who already have disrespected the law (includ- ing, in addition to aliens unlawfully in the country, felons, §922(g)(1), fugitives, §922(g)(2), and those convicted of misdemeanor crimes of domestic violence, § 922(g)(9)) from possessing guns.

Will the government seek certiorari here? It’s a close call. They won on the underlying issue, but lost on the question of the applicability of the 2nd Amendment. Such a ruling opens up other possible 2nd Amendment challenges by resident aliens who cannot bear arms. This could be the first time the federal government has petitioned for cert on a 2nd Amendment case since Heller itself!

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Aug 20, 2015

De Blasio: To Eliminate Speech in Times Square Plaza, Eliminate the Plaza

I previously noted that New York City will run into some difficulties as it attempts to regulate costumed panhandlers in the Times Square Plaza. In light of Reed v. Gilbert, such a regulation would almost certainly be treated as content based, and subject to strict scrutiny.  Now the city is considering a plan B. Years ago, Mayor Bloomberg blocked off portions of Broadway and Seventh Avenue from vehicular traffic, creating plazas that people can walk around–and get hustled for tips by Mickey Mouse and Elmo. To get rid of the panhandlers, de Blasio is considering eliminating the plazas altogether.

Mr. de Blasio has been keen to demonstrate that he is addressing the concerns, and on Thursday he announced a task force to consider ideas on how to better prevent activities that the city deems illegal or harmful to the area’s quality of life.

But the mayor, at a news conference in Queens, surprised many urban planners when he said he would give “a fresh look” to whether the pedestrian plazas should remain.

“That’s a very big endeavor, and like every other option comes with pros and cons,” Mr. de Blasio said of removing the plazas. “So we’re going to look at what those pros and cons would be. You could argue that those plazas have had some very positive impacts. You could also argue they come with a lot of problems.”

Police Commissioner William J. Bratton had stronger, more critical words about the plazas in a separate interview on Thursday.

“I’d prefer to just dig the whole damn thing up and put it back the way it was,” Mr. Bratton said in an interview with the radio station 1010 WINS.

Yep. The City will simply eliminate the sidewalk–a traditional public forum–because the government doesn’t like the speakers who use the forum. Instead of creating a time/place/manner regulation, the city will just eliminate the forum altogether! Such a decision–and the fact that public officials said the decision was motivated by a desire to eliminate speech–would be subject to strict scrutiny, and would be invalidated.

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