Wall Street Fat Cats to Challenge Bank Tax As Unconstitutional Bill of Attainder

January 18th, 2010

From the New York Times (yes, it is still free, for now) (H/T How Appealing):

Wall Street’s main lobbying arm has hired a top Supreme Courtlitigator to study a possible legal battle against a bank tax proposed by the Obama administration, on the theory that it would be unconstitutional, according to three industry officials briefed on the matter.

In an e-mail message sent last week to the heads of Wall Street legal departments, executives of the lobbying group, the Securities Industry and Financial Markets Association, wrote that a bank tax might be unconstitutional because it would unfairly single out and penalize big banks, said these officials, who did not want to be identified to preserve relationships with the group’s members.

The Times doesn’t use the constitutional words, but they are clearly considering a challenge under the Bill of Attainder clause (Article 1, Section 9):

No bill of attainder or ex post facto Law shall be passed.

You may recall last year during the AIG fiasco, the President wanted to place a special tax on the bonuses given to AIG executives.

BHO brought in Larry Tribe as a hired gun:

Outside legal scholars agree. “It seems to me that it is not even a close question,” saidLaurence H. Tribe, a constitutional law professor at Harvard who was a legal adviser to the Obama campaign. Mr. Tribe contends that imposing a fee or requirement to return a sum of money cannot be construed as a punishment. Even more important, the administration’s proposal lays out a clear set of criteria, not a list of individual culprits, Mr. Tribe said.

For some additional analysis, see this Volokh thread.

I love constitutional challenges. Especially when it invokes a seldom-used clause, like of bill of attainders.