Law & Liberty Blog

  

House Proposes Border Bill, But Is It Sensible?

*Thomas Warns

House Speaker John Boehner (R-OH).

House Speaker John Boehner (R-OH).

Yesterday, House Speaker John Boehner introduced a $659 million immigration bill in the House. The bill is an attempt to address the humanitarian and national security crisis occurring at the southern border, but so far it has been received with mixed press. Is it a reasonable bill?

Let’s start with the raw statistics. The bill would provide $405 million to the Border Patrol and Immigration and Customs Enforcement and another $197 million to the Department of Health and Human Services to care for children in U.S. custody, with the remaining amounts going towards hiring more judges for deportation hearings and transportation to reunite families in their home countries. It would also tweak a 2008 law, and allow unaccompanied minors from Central America to be deported more quickly.

One criticism that bill has received is that it is not even close to the amount that the President requested. President Obama initially requested $3.7 billion, while the Democratic Senate introduced a bill with $2.7 billion in funding. There is a reasonable explanation for this, however; the Republican bill only funds the border operations through the end of the fiscal year (which ends September 30th), while the President wanted funding for the next fifteen months.

The House’s funding amount is prudent, considering how fluid the circumstances are along the border. No one knows how long this crisis will last, or how serious it will become. In fifteen months, the flow of minors into this country might ebb to a trickle, or explode into a deluge; in short, no one knows. A lot of that will depend on whether or not President Obama attempts to use his executive powers; some have suggested that he plans to grant temporary work permits to illegal immigrants already in the country, which will undoubtedly cause more people to come to America. It should be noted, however, that the President himself has not tipped his hand about a potential executive order, and that many of the allegations that amnesty is coming soon have been advanced by Republicans looking to hurt the Democrats politically (this is in much the same vein as the fantasy that Republicans are trying to impeach President Obama, which has almost exclusively been advanced by Democrats in order to aid fundraising).

The House bill also deserves praise because it does not require new funding, but rather moves money primarily from FEMA in order to pay it. The Senate has responded by beefing up its own bill to $3.5 billion – it added funding for fighting wildfires in the west as well as money for Israel. While that cattle-trading is common place in Congress, it will not be enough to appease Senate Republicans, who also want to change the 2008 law which slows the deportation process down for illegal immigrants. President Obama has also asked for that change, and the Republican bill sensibly gives it to him, leaving only Senate Democrats in opposition. It seems that House Speaker Boehner is at least trying to find common ground on substantive problems, rather than trying to slide a greased-up pork-barrel bill through the Senate.

As conditions in shelters grow worse, children either need better care or to be sent home.

As conditions in shelters grow worse, children either need better care or to be sent home.

For practical reasons as well, the House bill is virtuous. Congress adjourns on Thursday for their August recess, making it imperative that some sort of resolution be reached before then. If nothing is done before the recess, it is likely that more children will suffer and the country will remain vulnerable to the small but significant minority of illegal immigrants who enter the country with serious illnesses or criminal records. A short term, low cost fix which grants the President more flexibility in deportations is more likely to pass through Congress and receive the President’s signature under a compressed time frame than a much larger, more contentious bill. Yet despite this, Senate Majority Leader Harry Reid is trying to jam immigration reform into the House bill, which would be difficult to pass at all and utterly impossible to pass in two days.

If Senate Democrats are truly interested in addressing the humanitarian crisis along the border, they will vote in favor of the stopgap House bill, and get back to work in September on a longer-term solution. But what if they refuse, because it might look bad in November? What does that say about their agenda?

* Thomas Warns is a J.D. Candidate in the Class of 2015 at New York University, and the Editor-in-Chief for the N.Y.U. Journal of Law & Liberty.

What If Democracy Is a Fraud?

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

What if you were allowed to vote only because it didn’t make a difference? What if no matter how you voted the elites always got their way? What if the concept of one person/one vote was just a fiction created by the government to induce your compliance?

What if democracy as it has come to exist in America today is dangerous to personal freedom? What if our so-called democracy erodes the people’s understanding of natural rights and the reasons for government and instead turns political campaigns into beauty contests? What if American democracy allows the government to do anything it wants, as long as more people bother to show up at the voting booth to support the government than show up to say no?

What if the purpose of contemporary democracy has been to convince people that they could prosper not through the voluntary creation of wealth but through theft from others? What if the only moral way to acquire wealth is through voluntary economic activity? What if the government persuaded the people that they could acquire wealth through political activity? What if economic activity includes all the productive and peaceful things we voluntarily do? What if political activity includes all the parasitical and destructive things the government does? What if the government has never created wealth? What if everything the government owns it has stolen?

What if governments were originally established to protect people’s freedoms but always turn into political and imperialist enterprises that seek to expand their power, increase their territory and heighten their control of the population? What if the idea that we need a government to take care of us is a fiction perpetrated to increase the size of government? What if our strength as individuals and durability as a culture are contingent not on the strength of the government but on the amount of freedom we have from the government?

What if the fatal cocktail of big government and democracy ultimately produces dependency? What if so-called democratic government, once it grows to a certain size, begins to soften and weaken the people? What if big government destroys people’s motivations and democracy convinces them that the only motivation they need is to vote and go along with the results?

What if Congress isn’t actually as democratic as it appears? What if congressional elections don’t square with congressional legislation because the polls aren’t what counts, but what counts are the secret meetings that come after the voting? What if the monster Joe Stalin was right when he said the most powerful person in the world is the guy who counts the votes? What if the vote counting that really counts takes place in secret? What if that’s how we lost our republic?

What if the problem with democracy is that the majority thinks it can right any wrong, write any law, tax any event, regulate any behavior and acquire any thing it wants? What if the greatest tyrant in history lives among us? What if that tyrant always gets its way, no matter what the laws are or what the Constitution says? What if that tyrant is the majority of voters? What if the majority in a democracy recognizes no limits on its power?

What if the government misinforms voters so they will justify anything the government wants to do? What if the government bribes people with the money it prints? What if it gives entitlements to the poor and tax breaks to the middle class and bailouts to the rich just to keep everyone dependent on it? What if a vibrant republic requires not just the democratic process of voting, but also informed and engaged voters who understand first principles of human existence, including the divine origin and inalienable individual possession of natural rights?

What if we could free ourselves from the yoke of big government through a return to first principles? What if the establishment doesn’t want this? What if the government remains the same no matter who wins elections? What if we have only one political party -- the Big Government Party -- and it has a Democratic wing and a Republican wing? What if both wings want war and taxes and welfare and perpetual government growth, but offer only slightly different menus on how to achieve them? What if the Big Government Party enacted laws to make it impossible for meaningful political competition to thrive?

What if the late progressive Edmund S. Morgan was right when he said that government depends on make believe? What if our ancestors made believe that the king was divine? What if they made believe that he could do no wrong? What if they made believe that the voice of the king was the voice of God?

What if the government believes in make believe? What if it made believe that the people have a voice? What if it made believe that the representatives of the people are the people? What if it made believe that the governors are the servants of the people? What if it made believe that all men are created equal, or that they are not?

What if the government made believe that it is always right? What if it made believe that the majority can do no wrong? What if the tyranny of the majority is as destructive to human freedom as the tyranny of a madman? What if the government knows this?

What do we do about it?

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel.

Obama's LGBT Blunder

Richard Epstein*

  RICHARD EPSTEIN

  RICHARD EPSTEIN

Earlier this week, President Barack Obama signed a much anticipated executive order that prohibits all government contractors from discriminating against their gay, lesbian, bisexual, or transgender employees. This anti-discrimination requirement will be set down in the contracts between the government and the contractors. After fierce lobbying from both sides, the President also decided that he would not exempt religious groups from this order. His order comes hard on the heels of the highly divisive Supreme Court’s decision in Burwell v. Hobby Lobby, where the Supreme Court, by a five-to-four vote, struck down the healthcare law’s contraceptive mandate under the Religious Freedom Restoration Act (RFRA).

The Government Goes Too Far

The President’s executive order creates a two-tier system whereby any firm that wants to do business with the United States government—and only those firms—must abide by the mandate; the Obama administration cannot impose the mandate by regulation on all businesses generally. But this raises a key normative question: should the government be able to impose by contract mandates on businesses that it could not impose on them by legislative action?

The popular acclaim that the President’s action has received from many gay rights activists should not be allowed to conceal the serious difficulties in this two-tier regime. No President should be allowed to do by executive order what he is unable to do by way of regulation, unless it can be shown to be essential for the operation of the government system, which is manifestly not the case here. Put otherwise, the prohibitions of RFRA should apply as much to executive orders as to regulations more generally, particularly on explosive subjects like religious freedom.

A great irony in this debate is how many people are defending the executive order: the president, they say, has greater degrees of freedom in imposing conditions by contract than he does in doing so by legislation. A common principle of contract law is that each party is the master of its own offer, and can therefore set the terms and conditions on which it is prepared to do business. The government in this sense is treated like just another person, entitled to impose whatever conditions it sees fit on its trading partners. The executive order that extends the reach of the anti-discrimination provision only extends the rule that is already in place for direct hiring by the United States. So why, the defenders ask, oppose the executive order?

This line of argument has serious intellectual difficulties. The United States government is not just another private party that should be allowed to do what it will with its resources. The United States raises revenues by taxation from all of its citizens, some of whom are passionately in favor of the executive order, and some of whom fiercely oppose it. It is not sufficient for the defenders of the new employment mandate to say that their tax dollars should not fund bigoted behaviors thinly veiled by dubious religious precedents. Nor, by the same token, is it sufficient for other taxpayers to insist that their tax dollars should not fund the activities of those whom they regard as activists bent on their destruction.  

It is therefore dangerous for the President to resolve this moral dispute in favor of the activists, just as it would be for a socially conservative president to come down the other way. In both cases the preferences of the dominant party become the norm, while those of its opponents are wholly disregarded. Funding now comes from all, but it is only spent on those groups in sync with the dominant political sentiment. All-or-nothing politics is a sure way to inflame political and social divisiveness. The President’s mandate is no more acceptable than one intended to implement the reverse goal of excluding gays and lesbians from firms that do business with the government. After all, if this is a raw political struggle, then why should one side, but not the other, be able to reap the harvests of war?

A Middle Way

 There is a better way, which reveals the proper place of the principle of neutrality in dealing with these explosive issues. The government should not take sides in these debates. Any individual, regardless of sexual preference or orientation should be eligible to apply for any government position, period. In dealing with public employees, members of rival political factions have to accept the foibles of their future coworkers, with whom they must work side by side. Neither side has the moral high ground from which it can exclude the other. Under this arrangement, the exact composition of the government workforce will then depend in the long run on the moral attitudes in society. As the case for non-discrimination based on sexual orientation gains traction, as it surely has, the mix of people in government employment should shift gradually in their direction—an approach that rightly puts both sides of the debate at risk of losing social support over time.

The same logic should apply to government contractors. All of these contracts should be opened up to all firms on equal terms. This position means that any firm that hires workers of all backgrounds is welcome to bid, and so to any group that has highly specialized employment requirements, including those firms that only hire gay, lesbian or transgendered workers, or those that hire co-religionists.

There are two advantages to this position. The first is that the government hiring decisions are now made exclusively on the basis of the quality and price of the goods and services supplied to the government. Every citizen, regardless of their religious or political views stands to gain from high-quality services supplied at the lowest possible cost. Any effort by government to exclude objectively qualified firms from bidding on government business imposes a financial cost borne by all in order to create gains reaped solely by the winning faction. The losers in this struggle lose both ways: they get a smaller share of a smaller pie.

The Racial Precedent

It is said in response that the issue of discrimination on the basis of sexual preference and sexual orientation is the same as discrimination on the basis of race, and that the President’s action here is little different from that which Lyndon Johnson took in 1965 under Executive Order 11246 whose key provision stated: "The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin.”

There are two general responses to this point. The first is that this executive order, at least in its original formulation, tracked the language of the Civil Rights Act of 1964. It did not seek to impose by contract that which could not be imposed by legislative regulation, as with the current executive order, whose legitimacy is therefore drawn into doubt. Second, in my minority view, Johnson’s executive order is fully appropriate even if Title VII of the 1964 Civil Rights Act were repealed today. The argument about freedom of contract articulated above has real traction for private firms working in competitive labor markets, whereas the target of Title VII of the 1964 Act were the trade unions that received monopoly power under the collective bargaining provisions of the National Labor Relations Act.

At this point, the most efficient solution does not impose any government mandates on private firms that hire in a competitive labor market. As I have long argued, anti-discrimination laws should be used in private markets only to counter monopoly positions in public utilities and transportation, or as a way to break down the intolerable abuses of a state-imposed segregation system. The more competitive the marketplace, the weaker the case for these laws.

The Dangers of Consensus

In response, some will argue that in dealing with the question of race, the overwhelming social consensus in favor of the law is the strongest reason for its continued adoption. But the point on consensus actually cuts in the opposite direction. If 90 percent of society thinks that certain forms of discrimination are out of bounds, they can operate just as they please even if the other 10 percent operates under different principles. Certainly, the extensive practice of affirmative action programs in labor markets (which are a sensible exception to any color-blind principle) can work well even if some fraction of firms sticks to the more traditional color-blind and sex-blind employment regimes. The outsiders in these labor cases do not engage in the threat or use of force that is capable of disrupting the lives of everyone else. Having a labor market where different firms cater to different subgroups avoids the sharp discontinuities that come with political action. It also opens up a greater array of opportunity for all persons in a world rid of the heavy compliance costs that always come with the enforcement of the next anti-discrimination rule.

The more modest view of government power also prevents dangerous extensions of executive orders and administrative regulations. Thus, should the President also issue an executive order that keeps out of national parks businesses that do not  hire gay and lesbian workers? Or an order that keeps these firms from participating in general job training programs? Just that position was suggested after the Boy Scouts’ victory in Boy Scouts of  America v. Dale when the Boy Scouts were allowed to exclude gay scouts from leadership positions. But all public facilities, from parks to roads, should be open to all groups whatever their private views may be. The great danger of the President’s position is that it represents a creeping expansion of power whose dangers are forgotten in the activists’ rush to judgment against those with whom they disagree. 

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Understanding the Obamacare Subsidy Rulings

*Richard Epstein

Richard Epstein

Richard Epstein

The battle lines over the Affordable Care Act were drawn sharply yesterday over an exotic question of statutory interpretation that has vast implications for the survival of the ACA as we know it. The two key decisions are Halbig v. Burwell, where Judge Thomas Griffith and Senior Judge Ray Randolph of the D.C. Circuit held that individuals who purchased their health insurance through the federal exchanges were not entitled to the subsidies for those who purchase their coverage through exchanges established by the states. Senior Judge Harry Edwards saw in this decision a “not-so-veiled attempt to gut” the ACA.

 In the parallel Fourth Circuit decision in King v. Burwell, a unanimous court thought that the case was indeed close, but then deferred to the decision of HHS on the scope of the provision, relying on the time-honored proposition of the Supreme Court in Chevron USA v. National Resources Defense Council (1984), which holds that, when a statutory text lacks a plain meaning, the courts should defer to the statutory administrator to resolve the ambiguity between the two rival interpretations.  

The issue has momentous significance because in some 36 states — through which over half the present enrollees have obtained their coverage — the exchanges are owned and operated by the federal government, not the states. Any judicial decision that knocks out these subsidies will lead to a two-tier system, which in turn will lead to a collapse of the overall program (not to mention a huge level of unpardonable dislocation to those individuals who thought they had coverage but now discover that after the fact they do not).  Today’s split decisions create an intolerable level of uncertainty that will only end when the United States Supreme Court decides the case, which it should do on an expedited basis.

These long and learned opinions should not obscure the fact that at the root of the case is a simple question: Do the words an “exchange established by a State” cover an exchange that is established by the federal government “on behalf of a state”? To the unpracticed eye, the two propositions are not synonyms, but opposites. When I do something on behalf of myself, it is quite a different thing from someone else doing it on my behalf. The first case involves self-control. The second involves a change of actors. It is not, moreover, that the federal government establishes the exchange on behalf of a state that has authorized the action, under which case normal principles of agency law would apply. Quite the opposite: the federal government decides to act because the state has refused to put the program into place. It is hard to see, as a textual matter, why the two situations should be regarded as identical when the political forces at work in them are so different. Under the so-called “plain meaning approach”, there is no need to look further. The text does not authorize the subsidies for these transactions, so it is up to Congress to fix the mess that it created in 2010.

The states in orange could lose federal subsidies.

The states in orange could lose federal subsidies.

Or so the argument of the majority in Halbig goes. Administrative law, however, is a strange subject in which deference is given to the administrator in the case of ambiguity, which can arise, it is commonly claimed, when the statutory language is placed into its larger context. In this case, that context includes a phrase that allows the federal government to set up “such exchange,” from which the inference might be drawn that any exchange that the federal government sets up should be treated for all purposes as if it were a state exchange—a proposition that leaves it unclear why the specific language that relates to the subsidies does not incorporate that understanding. One of the sad features of the original Chevron decision was that it imported ambiguity into a statute whose operative provision was clear by using precisely this tactic: find a different section that can be read in tension with the operative position and allow the administrator to pick between inconsistent readings.

The first criticism, therefore, of the government’s position is that it is too driven by the Chevron precedent. An issue of this magnitude should not be decided one way in a Democratic administration only for it to be fair game for reversal in a Republican administration. This is a question of law that should be decided by courts, which resolve the ambiguity the best that they can. The administrators are themselves inevitable partisans in these cases, so it makes no sense to defer on questions of legal interpretation where they do not have access to any materials that are not fully available to judges.

Yet the Chevron rule is so ingrained that no circuit court judge would be prepared to depart from that rule if it turns out that the statute does not have a plain meaning. Ultimately, the position of Griffiths is that the meaning was plain (enough) to carry the day. On balance, he was right — notwithstanding the strong counterassault, which comes in three parts.

The first argument is that the context and structure of the act suggests another meaning. This position is derived from Justice O’Connor’s excellent opinion in FDA v. Brown & Williamson, where the question was whether tobacco should be treated as a drug subject to FDA regulation under a statutory provision that stated any substance counted as a drug if was “intended to affect the structure or any function of the body.” That phrase is really broad; indeed, nonsensically so. Justice O’Connor reached the conclusion that was consistent with FDA precedents on the point that it is absurd to sweep into this literal definition any substance for which “there was no claim of therapeutic or medical benefit,” which no one made for cigarettes. Indeed, it would be absurd to think that the FDA should conduct clinical trials to see how tobacco cures cancer. 

Yet we are light years from that situation here because it is not incoherent to run a more limited program with the intent to drive states to form these exchanges. Indeed, that was just what was done with respect to the Medicaid mandate, where the effort was to cut out all benefits from pre-existing Medicaid programs if the states did not sign up for the new program—a position that was ultimately rejected by the Supreme Court in NFIB v. Sebelius (which also upheld the individual mandate — which now, of course, has been waived without clear executive authority). 

A second point of contention concerns the interaction of legislative history with text. On that subject, there was stunningly little material to go on: only a single statement by Max Baucus in the Senate hearing that the legislation “conditions” the willingness of the state to set up the exchange. What is striking about the defenders of the government is that they do not cite any language that cuts in the opposite direction, but only claim that there is nothing in the legislative history that demonstrates the point. In this connection, however, the single statement by Baucus looms large, both because of his central role in the design of the statute and because there is nothing written on the other side of the issue.

Next it is said by Judge Edwards that the ACA had as its central purpose the extension of coverage to virtually all Americans, which could not be done if the subsidies were denied to people who enrolled on the federal exchange. But the difficulty with that argument is that legislation has multiple purposes, and, although he derides, he does not refute the alternative view: the statutory design was intended to give the states a strong incentive to create their exchanges so that the federal government did not have to expend its resources to do so. There is, again, little in the debates to resolve this question, but, by the same token, there is no explanation as to why this provision was inserted if it was not intended to have that effect. It would have been simple enough to draft a provision saying that everyone gets the subsidy no matter whether they enroll on the state or federal exchanges. 

It is with decidedly mixed emotions that I conclude that the supposed ambiguity is not strong enough to displace the textual simplicity of the Griffith argument. It is really intolerable to first drive people out from private coverage and then pull out the rug from their federal coverage. What a miscarriage of justice. Sadly, however, those issues are not decisive on this question of statutory interpretation. On balance, I have to conclude that Judge Griffith’s opinion looks correct. The text seems to be clear and nothing else seems strong enough to displace it. It is an open question whether the Supreme Court will agree, as its precedents are sufficiently muddy that we live in a world of “anything goes.” My guess is that Griffith’s position will prevail 5-4 in the Supreme Court on a straight conservative-liberal split. This is, to be sure, an odd and unhappy way to make public policy.  

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Uber Caps Surge Pricing, and Consumers Suffer

*Thomas Warns

Last week, Uber announced that it was capping surge pricing during emergencies, following mounting public pressure. CNET reported the following related to the story:

In addition to riders complaining about running up bills totaling hundreds of dollars on New Year's Eve, people criticized Uber for initiating surge pricing during Hurricane Sandy.

Attorney General Eric T. Schneiderman said Uber will now limit surge pricing during incidents the government defines as "abnormal disruptions of the market." Typically, these are emergencies and natural disasters, according to a press release from Schneiderman's office. Uber is expected to extend this policy nationally, the office said.

"This policy intends to strike the careful balance between the goal of transportation availability with community expectations of affordability during disasters," Uber CEO Travis Kalanick said in the release.

Uber clarified that surge pricing will remain in effect for holidays and during rain storms, but that during widespread emergencies surge prices will be capped at 2.5 times the normal price (during emergencies, prices formerly went as high as 4.5 times the normal). The decision, however, is a mistake for both Uber drivers and customers.

It is obvious that the decision will hurt Uber drivers. During times when demand is high and supply is low, such as during an emergency like Hurricane Sandy, a free market will produce a price that is higher than the normal price, when demand is lower and supply is more plentiful. In other words, drivers would be able to earn more money by ferrying customers around following emergencies if surge pricing was not capped. By capping the multiplier at 2.5, the government has unethically forced a private company to redistribute the surplus of trade from the drivers to the complaining customers.

While Uber did voluntarily agree to cap “surge” pricing, it only did so only because the government threatened to regulate (i.e. meddle). Still, Uber may have made a shrewd business decision, even though they share in the revenue which Uber drivers rake in. Uber most likely hopes that by agreeing to cap surge pricing, they can avoid the grasping hands of regulators (for now) and the taxi cab lobby who want to destroy their competitive advantage under the guise of protecting the public from the non-existent threat their business poses. Unfortunately, drivers are undoubtedly getting the short end of the stick.

The less obvious fact is that customers are losing out too. The CNET article mentions consumer complaints over large bills during New Year’s Eve and following Hurricane Sandy; the comments are indicative of the primitive morality which instructs everyone that any price hike during a time of increased “need” is morally wrong. When trying to argue that surge pricing is actually better during times of high demand, the standard response from critics is that “only the rich will be able to get Ubers.” That of course is rubbish.

In a free market, resources should be allocated most efficiently by distributing them to the people who are willing to pay the most for them. If two people value the same car ride at $10 and $20, the person who is willing to pay $20 for the ride should receive the ride. The driver and customer both receive a greater benefit than if the $10 customer rode. By capping surge pricing, the efficiency of the market no longer operates after a certain point. If the same two customers both want that one cab during an emergency, there is in essence a lottery to determine who will actually be picked up, with just a 50% chance that the customer who values the ride most will be picked up.

When will free market ideas, the true protectors of consumers, have their day in the sun?

The free market however will best provide for the $10 customer as well. Most critics of surge pricing are incensed if only the $20 customer receives a ride – the rich, it seems, get their way, while the poor are left out to dry. But that is not so. If the emergency drives the Uber price multiplier high enough, more drivers will undertake the efforts needed to get back on the road and drive more people, as they are enticed by the profits available. As more drivers return to the roads, supply increases and drives prices down, until the $10 and $20 passenger can both be served. With surge pricing capped during emergencies, incentives are not properly aligned for as many drivers to get back on the road, and only the winner of the Uber lottery will get an affordable ride. Uber’s CEO said he wanted to balance driver availability with affordability, but he has failed on both fronts by caving into the Attorney General’s demands.

Thus, the threat of government intrusion forced Uber to adopt a change to its business model that hurts Uber, its drivers, and customers. When will free market ideas, the true protectors of consumers, have their day in the sun?

* Thomas Warns is a J.D. Candidate in the Class of 2015 at New York University, and the Editor-in-Chief for the N.Y.U. Journal of Law & Liberty.

Chilling

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

“Chilling” is the word lawyers use to describe governmental behavior that does not directly interfere with constitutionally protected freedoms, but rather tends to deter folks from exercising them. Classic examples of "chilling" occurred in the 1970s, when FBI agents and U.S. Army soldiers, in business suits with badges displayed or in full uniform, showed up at anti-war rallies and proceeded to photograph and tape record protesters. When an umbrella group of protesters sued the government, the Supreme Court dismissed the case, ruling that the protesters lacked standing -- meaning, because they could not show that they were actually harmed, they could not invoke the federal courts for redress.

 Yet, they were harmed, and the government knew it. Years after he died, longtime FBI boss J. Edgar Hoover was quoted boasting of the success of this program. The harm existed in the pause or second thoughts that protesters gave to their contemplated behavior because they knew the feds would be in their faces -- figuratively and literally. The government’s goal, and its limited success, was to deter dissent without actually interfering with it. Even the government recognized that physical interference with and legal prosecutions of pure speech are prohibited by the First Amendment. Eventually, when this was exposed as part of a huge government plot to stifle dissent, known as COINTELPRO, the government stopped doing it.

 Until now.

 Now, the government fears the verbal slings and arrows of dissenters, even as the means for promulgating one’s criticisms of the government in general and of President Obama in particular have been refined and enhanced far beyond those available to the critics of the government in the 1970s.

 So, what has the Obama administration done to stifle, or chill, the words of its detractors? For starters, it has subpoenaed the emails and home telephone records of journalists who have either challenged it or exposed its dark secrets. Among those journalists are James Risen of The New York Times and my colleague and friend James Rosen of Fox News. This is more personal than the NSA spying on everyone, because a subpoena is an announcement that a specific person’s words or effects have been targeted by the government, and that person continues to remain in the government’s crosshairs until it decides to let go.

This necessitates hiring legal counsel and paying legal fees. Yet, the targeting of Risen and Rosen was not because the feds alleged that they broke the law -- there were no such allegations. Rather, the feds wanted to see their sources and their means of acquiring information. What journalist could perform his work with the feds watching? The reason we have a First Amendment is to assure that no journalist would need to endure that.

 Two weeks ago, a notorious pot stirrer in Norfolk, Neb., built a mock outhouse, put it on a truck and drove the truck with permission in a local Fourth of July parade. In front of the outhouse, he placed a mannequin that he claimed looked like himself, and on the outhouse, he posted a sign that stated: “Obama Presidential Library.”

Some thought this was crude, and some thought it was funny; yet it is fully protected speech. It is protected because satire and opinion about public figures are absolutely protected, as well as is all criticism of the government. Yet, the Department of Justice has sent a team to investigate this event because a local official called it racist. Such an allegation by a public official and such a federal investigation are chilling. The reason we have a First Amendment is to ensure that the government stays out of investigating speech.

 And just last week, Attorney General Eric Holder, while in London, opined that much of the criticism of Obama is based on race -- meaning that if Obama were fully white, his critics would be silent. This is highly inflammatory, grossly misleading, patently without evidential support and, yet again, chilling. Tagging someone as a racist is the political equivalent of applying paint that won’t come off. Were the Democrats who criticized Attorney General Alberto Gonzales or Secretary of State Condoleezza Rice racists? Is it appropriate for government officials to frighten people into silence by giving them pause before they speak, during which they basically ask themselves whether the criticism they are about to hurl is worth the pain the government will soon inflict in retaliation?

The whole purpose of the First Amendment is to permit, encourage and even foment open, wide, robust debate about the policies and personnel of the government. That amendment presumes that individuals -- not the government -- will decide what language to read and hear. Because of that amendment, the marketplace of ideas -- not the government -- will determine which criticisms will sink in and sting and which will fall by the wayside and be forgotten.

 Surely, government officials can use words to defend themselves; in fact, one would hope they would. Yet, when the people fear exercising their expressive liberties because of how the governmental targets they criticize might use the power of the government to stifle them, we are no longer free.

Expressing ideas, no matter how bold or brazen, is the personal exercise of a natural right that the government in a free society is powerless to touch, directly or indirectly. Yet, when the government succeeds in diminishing public discourse so that it only contains words and ideas of which the government approves, it will have succeeded in establishing tyranny. This tyranny -- if it comes -- will not come about overnight. It will begin in baby steps and triumph before we know it.

Yet we do know that it already has begun.

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution. 

When Government Violates Contracts

Richard Epstein*

RICHARD EPSTEIN

RICHARD EPSTEIN

Last week, Harbinger Capital filed a major lawsuit against the United States government for breach of contract arising out of its March 26, 2010 acquisition of a valuable portion of the spectrum known as the L-Band. The deal originally represented a major breakthrough in telecommunications policy, but now it sadly represents how government misconduct leads to major losses for society.

The context of the case is as follows: Harbinger had entered into extensive negotiations with the Federal Communications Commission (FCC). At the core of the deal was an agreement that would allow Harbinger to gain access to a large band of spectrum by acquiring ownership of a company called LightSquared. In exchange, the FCC would issue a license that would allow LightSquared to construct and deploy a third of the nationwide broadband network by the end of 2015. On completion, this state-of-the-art communication system was set to reach some 260 million people throughout the United States, including many people living in rural and underserved areas. The network would be deployed in competition with AT&T and Verizon, to whom LightSquared could not sublicense spectrum without prior FCC approval.

 Armed with its FCC license, Harbinger then acquired LightSquared through extensive debt and equity financing. It entered into multiple contracts with major providers such as Sprint, Nokia, and Siemens, to bring its plan to fruition. It launched a $1 billion state-of-the art communications satellite, and lined up multiple sites for its terrestrial stations in order to honor its build-out commitments to the FCC. Consequently, its bills ran up to about $1.9 billion. As of September 2010, the estimated value of the LightSquared spectrum license was around $9 billion.

But, it was not to be. In February 2012, the FCC cancelled the LightSquared License at the behest of the global positioning (GPS) industry, whose three major firms are Deere & Company, Garmin International, Inc., and Trimble Navigation Limited. The GPS firms claimed that the proposed deployment of the LightSquared network would “interfere” with their ability to operate its extensive positioning systems used to guide everything from simple handheld navigation devices to airplanes and military weapons. All work on the LightSquared network ceased, as its trading partners terminated their deals. By May 2012, LightSquared was mired in bankruptcy disputes, its initial investment of $1.9 billion largely lost. In early 2013, I was retained as an outside consultant to Harbinger, and have been extensively involved in its multiple-front litigation that includes not only last week’s lawsuit, but a prior lawsuit, long stalled by the bankruptcy proceeding, that Harbinger brought against GPS in August 2013 for its role in a debacle that should have never happened.

The Breakdown in the FCC Policy

This basic narrative illustrates the serious mistakes in FCC spectrum policy. The story begins innocently over 100 years ago when Congress declared that the United States was owner of the spectrum, which it would then license to various parties for particular use. Those spectrum licenses only have value if signals from these bands do not interfere with each other. Accordingly, the FCC allows only one party to use any portion of the spectrum. Although absolute separation of frequencies is not possible, FCC rules prohibit excessive spillovers from one band into its neighbors.

In the run-up to the 2010 deal with the FCC, Harbinger conducted extensive negotiations with the GPS carriers over the interference issue that eventually brought down this venture. The GPS companies were worried that out-of-band-emissions (OOBE) from LightSquared’s network might gum GPS operations on its own spectrum band, located between the two LightSquared bands. On multiple occasions, Harbinger made technical fixes in its proposed plan to meet GPS concerns.

But as the OOBE problem was being solved, GPS never once raised the distinct question of out-of-band-reception (OOBR), which arose because GPS receivers “listened in”—that is gathered—sensitive signals over LightSquared’s band. When Harbinger entered into its March 2010 deal with the FCC, it had no knowledge that the basic business plan of GPS required listening over LightSquared’s spectrum. The gist of the complaint against GPS firms was that by virtue of their special knowledge, they had to disclose to Harbinger, with whom they had developed a close working relationship, the looming conflict. Those disclosures would have allowed Harbinger to steer clear of the deal if they could not cleanly resolve the OOBR with GPS. With stakes this high, GPS silence should not have been an option.

The problem of OOBR is, moreover, well known to the FCC, whose own rules allow anyone to listen in on the bands assigned to others, but only at their own risk. But that ability to listen over a spectrum assigned to another licensee never gives the interloper the right to block a licensee’s use of its own spectrum. Think of this land analogy. Anyone can look over my land until I build my house but they cannot stop the construction by claiming a legal entitlement to permanently enjoy that view. To do that, an onlooker has to purchase a covenant from the landowner that restricts construction, and for that right compensation has to be paid.

It is at this juncture that the differences between licenses and ownership start to matter. In 1959, Ronald Coase argued that the FCC should sell off the frequencies (subject to boundary conditions dealing with OOBE) to private parties in order to create strong property rights. If Congress had followed that suggestion, this lawsuit would have never have been needed. Harbinger and LightSquared would have a vested entitlement to build out their network, which the GPS firms could not block in court. At this point, they would have to persuade the government to condemn some interest from Light Squared to continue their spectrum use. The prospect of a substantial bill would have prodded Congress to demand that the GPS firms take every effort to reduce OOBR by redesigning their receivers to reduce any demands on LightSquared’s spectrum. In the end, the GPS firms would act to minimize the sum of two costs: their need to acquire limited use rights by contract over the LightSquared Spectrum, and the cost of receiver adaptation.

The interposition of FCC oversight changed these bargaining dynamics completely. Now GPS dealt with Harbinger and LightSquared from a position of strength, simply by holding firm and insisting that LightSquared intended to wreck its network. This upside-down “interference” claim was not lost on the technical people inside of the FCC. In 2011, one key official, Mindel De La Torre, protested that “the GPS community is yelling bloody murder” because they want “to drive their double-wide trailer” on LightSquared’s side of the road.

Indeed, initially the GPS strategy worked. Harbinger offered all sorts of concessions to keep LightSquared’s project afloat. For example, LightSquared would not use some portion of its spectrum near the GPS band; it would redesign its system; it would lower overall signal intensity. But the GPS community that had been so cooperative when it came to negotiating a reduction in LightSquared’s OOBE did not budge one inch in reducing its OOBR over LightSquared’s band. Because it thought it could use LightSquared’s spectrum free of charge, it treated every small technical issue as though it were a deal breaker.

Ultimately, the game worked—at least thus far. The FCC was not unaware that the Department of Defense, which is a major customer of GPS, has inordinate influence in Washington. Then FCC Chairman Julius Genachowski thus ratified the GPS’s upside down view of spectrum by concluding that “LightSquared will not be permitted to commence commercial operation in the L-Band if it would result in harmful interference to GPS systems such as those operated by our federal partners.” His fuzzy reference to “interference” never alluded to the critical distinction between OOBE and OOBR, between emitting and receiving, on which Harbinger had relied in concluding its March 2010 deal.

Not surprisingly, the FCC ducked by ordering extensive technical discussions to resolve the interference. Harbinger’s technical experts, a firm called JAVAD, concluded that these disputes could be resolved easily, at least “once you decide to solve it.” But its technical solutions were disregarded in favor of yet another round of tests, which Harbinger alleges were manipulated by the GPS firms to magnify the supposed incompatibilities between the two systems.

Back to the Rule of Law

The suit against the FCC is an effort to prevent these warped incentives from leading to the wholesale destruction of valuable property. The FCC had already limited itself by contract to a deal for developing LightSquared spectrum. If the FCC were a private licensor of, say, land, it could never revoke any license that it issued in exchange for a set of promises that its developer had carried out at great cost. It is therefore telling that the key precedent in this case, United States v. Winstar, provides, in no uncertain terms, that cases should be resolved “by applying ordinary principles of contract construction and breach that would be applicable to any contract action between private parties.”

That position should doom the government’s effort to escape liability for damages in this case. It should, if successful, also ensure that the United States remains a credible business partner in future negotiations. The perceived weaknesses of FCC licenses have given both the GPS and the FCC undue running opportunity for the political maneuvering that always leads to major social losses. The Harbinger lawsuits against the GPS and the FCC should send a clear message that these ploys will no longer be tolerated.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.  

Spying on Innocents

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

In what appears to be one of Edward Snowden’s final revelations, the former CIA and NSA agent has demonstrated conclusively that the National Security Agency has collected and analyzed the contents of emails, text messages, and mobile and landline telephone calls from nine Americans for every one foreign person it has targeted.

This puts the lie to the government’s claims that it has only collected metadata -- identifying markers such as phone numbers and email addresses -- and not content from unsuspecting and unsuspected Americans. It puts the lie to the government’s claims that it has studiously avoided prying into the private lives of Americans, in whom it has no intelligence-related or lawful interest. And this puts the lie to the government’s contentions and the opinions of judges of the secret Foreign Intelligence Surveillance Court that the NSA’s spying is somehow lawful, constitutional and helpful.

 We now know that the government has failed effectively to refute the Snowden claims that it has collected and maintained for future access massive amounts of personal materials about nearly all people in America since 2009. This includes the metadata and content of nearly every telephone call, email and text message made, sent or received in the U.S., as well as nearly every credit card bill, utility bill and monthly bank statement of nearly every person in the U.S.

This was accomplished through the issuance of general warrants by FISA court judges. General warrants do not particularly describe the place to be searched or the person or thing to be seized as the Constitution requires. General warrants authorize the bearer to use the power of government to search wherever he wishes. The use by British troops of general warrants was a principal motivation for the American Revolution, and the very purpose and literal wording of the Fourth Amendment was to outlaw and prohibit them.

 Nevertheless, in their lust to appear muscular in our constitutionally sad post-9/11 era, politicians from both major political parties have defied the plain meaning and universally accepted history of the right to privacy and reverted to these odious instruments so condemned by the nation’s founders and the Constitution’s framers.

 The recent Snowden revelations showed that about 900,000 innocent Americans -- including President Barack Obama himself -- were subjected to heavy NSA scrutiny. This was done by NSA agents who knew that the subjects of their scrutiny were not the targets of their investigation.

 How could that happen? It happened because the FISA court meets in secret, where the NSA has no opposition and the court has no transparency. This volatile mix has resulted in that court's granting well over 99 percent of NSA applications, including the “hop” rule implicated in the scrutiny of innocent Americans. In NSA-speak, a hop is a jump from one telephone conversation to another using a common phone.

 In the sterile, isolated and secret environment of the FISA court -- where even the judges cannot keep records of their own decisions -- NSA agents and lawyers have persuaded judges to permit spying on people who are six hops from a target. Thus, by way of illustration, if A is a target and speaks with B, the NSA can listen to all of B’s conversations, even those not with A. The leap from A to B is one hop, and the NSA gets six, so it can listen to any C who has spoken to B, any D who has spoken to any C, any E who has spoken to any D, any F who has spoken to any E and any G who has spoken to any F.

The 900,000 innocent Americans whose private and personal lives have been subjected to NSA scrutiny -- including the examination of their photographs, intimate personal behavior, medical and financial needs -- consist of those who are within six hops from a target; in the illustration above, that would be every B, C, D, E, F and G whom the NSA can find. According to Snowden, there is no effort made by the NSA to minimize the scrutiny of those who are in the B-G category -- even though the chances that any of them are in cahoots with A are extremely remote, particularly once the NSA gets beyond B.

But remoteness does not trouble the NSA, and neither does the Constitution. Remoteness is a serious constitutional and practical problem. It violates the rights of known innocents, as the NSA has no constitutional or lawful authority to spy on any non-targets and FISA court judges have no power to authorize that spying. It also consumes the time and resources of NSA agents, whose job it is to find terror plots.

 Is it any wonder that the Boston Marathon bombers discussed their plans with friends using their cellphones and the NSA missed it? Is it any wonder that when Gen. Keith Alexander, who ran the NSA for five years, was asked under oath how many plots his agents had uncovered with their spying on all Americans, he replied 57 and then the next day changed that reply to three and then was unable or unwilling to identify the supposed three? Is it any wonder that the two non-FISA court federal judges who scrutinized all this both found that it has uncovered no plots?

 When the government sees or hears all, it knows all. And when the people tolerate a government that knows all, they will be afraid to be themselves. And the joy of being and expressing oneself is the very reason we have a Constitution designed to restrain government.

James Madison warned that the loss of liberty rarely happens in one great event but rather happens gradually, over time, resulting from the actions of government officials who claim to be fortifying security. He practically predicted today’s events. The violations of our rights are obvious, undenied and undeniable. Yet what Madison probably feared most, he did not articulate: Once lost, liberty is lost forever.

 *Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution. The most recent is "Theodore and Woodrow: How Two American Presidents Destroyed Constitutional Freedom."

Al-Aulaqi v. Panetta and the Fourth Amendment: Wrongly Decided

*Randal John Meyer

Anwar al-Aulaqi, a U.S. citizen, was killed by a U.S. drone strike in 2011.

Anwar al-Aulaqi, a U.S. citizen, was killed by a U.S. drone strike in 2011.

“[T]here can be no question that apprehension by the use of deadly force is a seizure subject to the reasonableness requirement of the Fourth Amendment.”[1] In 1985, Justice White wrote those words to answer the question of whether the Fourth Amendment’s seizure language included the use of deadly force against a fleeing suspect in Tennessee v. Garner. More recently, the ACLU in al-Aulaqi v. Panetta argued that the federal government had infringed on Anwar al-Aulaqi’s right to be free from unreasonable seizure under the Fourth Amendment when they killed him with a drone strike. In that case, the district court found that the plaintiffs “ha[d] not stated a Fourth Amendment claim,”[2] and thus were not entitled to damages under Bivens v. Six Unknown Named Agents of the Federal Narcotics Bureau.

The district court’s decision rested primarily on Graham v. Connor, a Fourth Amendment excessive force case, and the classic Fourth Amendment case, Terry v. Ohio.[3] Relying on a footnote in Terry, the court reasoned that “seizure” under the Fourth Amendment a government official must “‘by means of physical force or show of authority . . . in some way restrained the liberty of a citizen.’”[4] Moreover, that “a “seizure” occurs when an officer brings a person “within the officer's control,” either by application of force, even if slight, or by the person's submission to a law enforcement officer's show of authority.”[5] This formulation of the rule interprets the “liberty” as if it were only the liberty of free movement, much narrower than the category of “seizures” which would qualify under the later Garner decision.

With this construction in mind, it is no wonder that when the court discussed Graham, it noted “the plaintiff in Graham claimed that an officer used excessive force during an investigatory stop,” or a restriction on his liberty of physical movement.[6] This stands in contrast to the case at bar, where the government used unmanned drones to make no attempt to restrict his liberty of movement or bring him under government control, but for the sole purpose of killing Anwar al-Aulaqi: “Plaintiffs further admit the inapplicability of Fourth Amendment principles by asserting that the United States killed the three men with missiles from unmanned drones. Unmanned drones are functionally incapable of ‘seizing’ a person; they are designed to kill, not capture. As the decedents were not ‘seized,’ Plaintiffs have not stated a Fourth Amendment claim.”[7] However, that is the functional equivalent of saying that a police officer who uses an unmanned drone to conduct his duties does not use seize a suspect using excessive force when his drone sneaks up on a suspect and he commands the drone to kill him without warning.

In finding that “in fact there was no “seizure” of Anwar Al–Aulaqi” and that the ACLU “[i]mpliedly concede this point when they complain that Defendants should have captured (i.e., seized) Anwar Al–Aulaqi instead of killing him,”[8] the court made clear reversible error: it didn't apply the right rule. The court here failed to recognize the touchstone of determining if a person was seized is whether a person was apprehended, not just whether the person was subjected to a restriction of movement pursuant to police power. The latter simply is a way in which the former can be accomplished, not the only way. As stated at the beginning of this piece, the rule in Fourth Amendment excessive force cases is that apprehension by the use of deadly force is a Fourth Amendment seizure. Otherwise, it would create a loophole to use excessive force with a rather macabre perverse incentive. A deadly shooting of a fleeing suspect does, in fact, apprehend the suspect and bring that suspect within police control—the force used that robbed the suspect of his ability to move and the resultant death certainly demonstrates law enforcement’s exertion of control over the suspect, no matter how brief. That same reasoning understandably extends to drone strikes, as it merely changes the enforcement tool from gun to missile. Anwar al-Aulaqi was apprehended and, in the estimation of his killers, brought to justice. A fleeing robber who is shot and killed exiting the scene of crime is no less seized, or brought within the reach of governmental power and punishment, than a robber doing the same and being halted for an investigatory Terry stop.

This conclusion logically follows from application of the proper case, Garner, and the facts of the Graham case. In Garner, the police responded to a burglary call and in the course of investigating, the burglar began to flee.[9] Knowing that the suspect was unarmed, the police yelled for him to halt, but decided to shoot him before he could finish scaling the fence.[10] The court held that the police did in fact seize the suspect.[11] Most important for these purposes, however, is that the police never applied any force to restrain his freedom of movement, except for the bullet that killed him. Thus, the application of the Graham case, where the suspect was subjected only to a particularly brutal and long investigatory stop, restraining solely his freedom of movement, is inapposite.[12] It bears little resemblance to the sort of force applied in the al-Aulaqi case, where the Garner case is much more comparable, albeit not perfectly analogous.

Thus, the issue with the Panetta decision is twofold. First, it both reads the Fourth Amendment Terry rule regarding seizures too narrowly so that apprehension by deadly force is not a seizure, contrary to later Supreme Court precedent. Second, the case relied on by the court to illustrate its improper distinction bears almost no resemblance to the facts of the case where more analogous and equally controlling precedents are available.

 

* Randal is a graduate of Brooklyn Law School and served as an Articles Editor on the Brooklyn Law Review.


[1] Tennessee v. Garner, 471 U.S. 1, 7 (1985).

[2] Al-Aulaqi v. Panetta, --- F. Supp. 2d ---, 2014 WL 1352452, at *11 (D.D.C. April 4, 2014).

[3] 490 U.S. 386 (1989); 392 U.S. 1 (1968).

[4] Panetta, 2014 WL 1352452, at *11 (quoting Terry, 392 U.S. 1, 19 n.16).

[5] Id. (quoting and citing California v. Hodari D., 499 U.S. 621, 624–626, (1991)).

[6] See id. (citing Graham v. Connor, 490 U.S. 386, 394 (1989)).

[7] Id.

[8] Id.

[9] Tennessee v. Garner, 471 U.S. 1, 3-4 (1985).

[10] Id.

[11] Id.

[12] See generally Graham v. Connor, 490 U.S. 386 (1989)

Hobby Lobby vs. the Contraceptive Mandate

*Richard Epstein

On June 30, a bitterly divided Supreme Court invoked the Religious Freedom Restoration Act (RFRA) to strike down the regulations of the Department of Health and Human Services (HHS) that imposed a contraceptive mandate on some employers covered by the Affordable Care Act. The ACA requires covered employers to supply “preventive care and screenings” to women “without any cost sharing requirements.” But it leaves its implementation to the HHS, which did not have to extend it to contraceptive devices or abortion procedures.

HHS took an aggressive stance about the scope of its powers. To be sure, under pressure, HHS exempted churches entirely from the mandate. For other religiously-oriented businesses and associations, including religious hospitals and universities, it only required that their healthcare insurer supply the needed coverage without charging back any of its costs to the protected institutions. But incorporated family-owned businesses like Hobby Lobby received no reprieve from the ACA to act in accordance with their Christian beliefs. In order to avoid paying, as it had always done, for four forms of contraception that could interfere with embryonic development after conception, Hobby Lobby faced this choice: either cancel all coverage or pay large fines.

Legal Challenges under the RFRA

The company’s legal challenge to the contraceptive mandate relied on these key provisions of Religious Freedom Restoration Act:

Section 2: Free exercise of religion protected.

(a) In general

Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.

(b) Exception

Government may substantially burden a person’s exercise of religion only if it demonstrates that application of the burden to the person—

(1) is in furtherance of a compelling governmental interest; and

(2) is the least restrictive means of furthering that compelling governmental interest.

This 1993 statutory provision did not arise out of whole cloth. Rather, as its statutory findings noted, it adopted to undo the effects of the 1990 Supreme Court decision in Employment Division v. Smith, where “the Supreme Court virtually eliminated the requirement that the government justify burdens on religious exercise imposed by laws neutral toward religion.” Under Smith, for example, the United States Army could compel all observant Jews and Muslims to eat pork every day of the week as part of a general military practice. RFRA recognized that Smith represented a startling and widely unpopular departure from previously accepted constitutional principles. Let’s address each of the three statutory issues in turn.

Substantially Burdening Any Person. This phrase raises two related issues. First, does a corporation count as a person for the purpose of this amendment? In some sense, the question is quite irrelevant. A corporation is an abstract entity that exists solely for the sake of legal purposes. However, its shareholders are anything but abstract entities. With public corporations, the diverse group of shareholders is likely to be indifferent to supplying contraceptive and abortion coverage, which is why Justice Alito’s opinion sensibly limited its scope to closed corporations whose shareholders had a uniform point of view. It would be nuts to tell a family partnership that it loses all constitutional protection by incorporating under state law. Indeed, even if the corporation were for some reason not protected, its shareholders surely are. It thus makes perfectly good sense to allow the single corporation to simplify litigation by suing on behalf of all of its shareholders.  

Nor should there be any doubt that ACA regulations “substantially burden” this free exercise right. Supreme Court cases have long recognized that individuals have both associational and individual First Amendment rights. Indeed, in a case handed down the same day as Hobby Lobby, the Supreme Court held in Harris v. Quinn that Illinois could not force home-care workers for disabled individuals (often family members) to join a union that bargained with the state on their behalf as supposed “joint employees” of the state.

For these purposes, however, the instructive opinion is Justice Elena Kagan’s dissent in Harris v. Quinn. She defended the 1977 synthesis of Abood v. Detroit Board of Education, which held that individuals did have a strong First Amendment claim not to make forced contributions to the political activities of the union, even if they could not refuse to support the union’s collective bargaining activities. The parallel to the free exercise clause is exact. There is no way that under the RFRA Hobby Lobby could opt out from the ACA altogether. But it can opt out from making contributions to causes that clash with its fundamental religious beliefs.

Compelling State Interest. The findings of the RFRA, moreover, make it clear that the government cannot show any compelling state interest to justify its restriction on Hobby Lobby’s religious liberties. Unfortunately, commentators like Ryan Grim on Huffington Post are silly enough to ask whether the Court would “make an exception to murder for the deeply religious?” It is always a compelling state interest to protect people against physical harm, including religious sacrifices. By the same token, the state can limit religious freedom to protect the public against foreign invasions, internal disruption, and natural disasters. But the standard to do so is high.

Hobby Lobby simply wanted to resist the imposition of state authority on its beliefs - a perfectly reasonable and Constitutional position, which the Supreme Court rightly upheld.
— Richard Epstein

Unfortunately, Justice Alito simply assumes that the state has a compelling state interest in women’s healthcare, and jumps right to the question of whether the ACA adopts the “least restrictive means” toward that end. In her dissent, Justice Ginsberg insists, without opposition, that women’s health is a compelling state interest. Her argument is, however, wrong at every level. RFRA’s legislative history makes reference to two early Supreme Court cases, Sherbert v. Verner (1963) and Wisconsin v. Yoder (1972), which set a high bar against any claim of a compelling state interest. For example, Sherbert makes explicit reference to NAACP v. Button (1963) in which Justice Brennan resorted to a tough compelling state interest test to protect the NAACP against Virginia’s race neutral anti-solicitation law. RFRA carries that tough standard over to cases of religious liberty.

A more detailed analysis of the history of health and safety regulations confirms this interpretation. Today, by common consent, constitutional law cannot be used to strike down the ACA’s massive interference with freedom of contract. Before the New Deal, however, the applicable standard provided that the constitutional protection of freedom of contract yielded to federal or state regulation that used reasonable means to advance the health and safety of employees under the government’s residual police power. But not one decision during that period ever concluded that the police power extended to protecting personal healthcare unrelated to the workplace activities. Thus, states could pass a worker’s compensation law to deal with job-related injuries, or impose restrictions on exposure levels dangerous to female reproduction. But they could not require any employer to supply its female (or male) employees with a full set of healthcare services unrelated to their job. Only the constitutional repudiation of the pre-New Deal cases on liberty of contract made the ACA possible, for its limitations on contractual freedom are tested under the toothless rational basis standard.

 Rational basis has no place under the RFRA, which requires the state to show that the supposed compelling interest in women’s healthcare justifies a statutory mandate that disrupts all preexisting practices whereby firms did not supply the mandated contraceptive services. But women’s healthcare is no more a compelling interest than men’s healthcare. The elaborate ACA legislative findings that uninsured women need healthcare fail miserably to explain the employer’s duty to subsidize anyone’s healthcare. Neither the ACA’s legislative history nor the Justice Ginsburg’s dissent identifies any systematic market disruption remotely comparable to natural disasters, domestic uprisings, and foreign invasions. The orderly private market for contraceptive services negates any government necessity to make employers pay for them. Nothing in the RFRA, of course, prevents the state from providing those benefits out of general revenues.

Least restrictive means. Once these first two issues are correctly resolved, there is no reason to ask whether one has chosen the least restrictive means to achieve something that falls far short of a compelling state interest. The case is decided at the second stage, so that it is unnecessary to ask whether the HHS’s gimmick of asking insurers to bear that obligation at no additional cost passes muster under the RFRA.

Justice Alito stated explicitly that supplying Hobby Lobby with the same option that is made available to specifically religious organizations was a less restrictive means to achieve the desired goal. But several days later, the six male justices imposed a temporary order on the federal government in Wheaton College v. Burwell that held open the possibility that Wheaton’s insurer could not be forced to pick up the slack. That decision opened the Court up to a blistering dissent from Justice Sotomayor, who asked why the Court backed away from an accommodation that it had endorsed just days before. The truth is that this issue would never have come up if Justice Alito had struck down the HHS regulations for want of a compelling state interest.

“The War Against Women”?

Unfortunately, many commentators have interpreted the court’s preservation of the status quo ante as the latest example of “the war against women.” Hillary Clinton claims that Hobby Lobby lets “the boss” impose its will on women.  Emily’s list says that we should “Stand with Hillary. . . if you agree that women should be able to make their own health decisions.”  Similarly, Senator Elizabeth Warren dismisses Hobby Lobby’s religious beliefs as some “vague moral objection.” A more accurate description is that Hobby Lobby resisted the state’s effort to “impose” its views of contraception on it. But in these objections, religious freedom never gets mentioned.

Alas, these women miss this point. Hobby Lobby is not seeking legislation to make healthcare decisions for its female employees or to ban their use of contraceptives. It only wishes not to be forced to pay for these services. If religious groups seek to impose their will on others by law, then they will not be protected by the RFRA. Rather their efforts would count as an unconstitutional effort to establish religion. But Hobby Lobby simply wanted to resist the imposition of state authority on its beliefs—a perfectly reasonable and Constitutional position, which the Supreme Court rightly upheld. 

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.