The EPA and Regulatory Costs: Letting the Market In

Alec Webley*

On Wednesday the Supreme Court heard Michigan v. EPA, a case that considered the legality of an Environmental Protection Agency (EPA) rule restricting the mercury emissions from coal-fired power plants. Setting aside some of the statutory niceties, the case seems to pose a compellingly simple question: must the EPA consider costs when it decides to regulate certain kinds of power plants?

To petitioners, including a bevy of states and electricity industry lobby groups, the answer is simple: yes, the EPA should always consider costs, and often this will tip the scales against regulation. The EPA’s answer is also pretty simple: no, because Congress didn’t require it to under the relevant bit of the Clean Air Act. And, the EPA and its supporters go on to say, if the EPA was required to consider costs, its regulation would still be justified.

So goes another round of the interminable debate between industry and regulators. But what if they are focusing on the wrong part of the question? What if the question is not whether costs should be considered when regulating power plants, but whether the EPA should consider them?

This was one of the themes raised in the Institute for Policy Integrity at NYU Law’s amicus brief on the case. When asking who considers costs rather than whether they’re considered at all, this case becomes a lot more interesting, because it helps show how the EPA could regulate air pollution in more sophisticated ways than current ‘command and control’ rules allow.

The question should be who sets the standards.

The question should be who sets the standards.

The heart of this approach lies in section 112(d) of the Clean Air Act. This statute says that when the EPA has decided to regulate a plant or factory emitting hazardous air particles (a list of which Congress included elsewhere), it has a choice, more or less, between two options.

The first, called 112(d)(2), leaves the cost calculation to the EPA itself. While the agency has to balance compliance costs against the benefits to public health and the environment, it decides how to strike that balance, and what mechanisms industry may use to comply with what they decide (subject to judicial review if the EPA is ‘arbitrary and capricious’ in its determinations).

The second choice is more subtle. Congress was worried that the EPA would be too timid in its regulations; in the 1980s, the old Clean Air Act set such a high standard for public health that the EPA seemingly chose not to regulate pollutant-emitters at all for fear of shutting down huge swathes of the U.S. economy that relied on them (like, say, those who rely on coal-generated electricity). Congress didn’t want to leave EPA that choice again, so in 1990 they enacted section 112(d)(3). Congress said that when the EPA identifies an emitter of hazardous pollutants, it can choose to impose a standard set by the market itself – the “maximum achievable control technology,” or MACT, that the best performing, cleanest sources in the category have already implemented.

MACT, under section 112(d)(3), is a “race to the top” rule. If the best-performing plants (those with the lowest emissions) use a certain technology, then their peers have to catch up. If no plants currently use a technology – possibly because it’s too expensive – then no one is compelled to adopt it.  The great thing about MACT is that, within the emissions limits the EPA and other set, the industry decides which technology is feasible and which isn’t; the EPA only has to look at choices made in existing markets, and then tell the emitters bringing up the rear to catch up to their faster peers.

Of course, those best performers often only install technology because some other regulator has told them to clean up their act, but in many cases those regulators aren’t the EPA– they’re states and local governments responding to pressure from citizens seeking cleaner air. And even when the regulator is the EPA, best performers are often responding to market-style incentives, such as from the Title IV acid rain program, under which plants can gain valuable emission “credits” to trade by upgrading their technology.

In other words, when the EPA is forced to look to MACT rather than its own cost-benefit analysis, it empowers those outside the environmental bureaucracy in Washington, D.C. There are tremendous benefits to this approach. As the Solicitor General argued on Wednesday, and as Justice Breyer has argued in concurrences elsewhere, often the cost to industry of these best practice standards is much lower than advertised – and much lower than the cost drawn up by administrators.

Critics of the EPA should cautiously welcome the adoption of MACT standards precisely because they allow real market conditions, and not EPA staffers, to set the relevant technological standards. Indeed, if industry wins Wednesday’s case it may well be a pyrrhic victory. First, if industry wins the Supreme Court will strike down the EPA’s rule as written. But after that happens the EPA will simply come back with pretty much the same rule with a new cost calculation stuck on the front.

Herein lies the rub: the more industry asks the Court to demand that the EPA account for costs, the less the EPA can, or will, take into account the outside actors and the limited market forces that make MACT a step in the right direction. A wise, and libertarian, policy on the part of industry should build on MACT, not undermine it by requiring the EPA to do its own math up front.

Fans of market mechanisms for environmental regulation (such as this author) should cheer any use of market-based measures, even when they merely help set the terms of a direct regulation. In environmental law, we might say that the arc of regulatory history is long, but it bends towards markets. Industry petitioners in this case should be wary of victory; they may unintentionally make that arc bend more slowly.

Alec Webley is a J.D. Candidate in the New York University School of Law Class of 2016, a member of the Regulatory Policy Clinic, and a researcher at the Institute for Policy Integrity at NYU School of Law. The views expressed are his and not the Center’s.

Amendment by Consent

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

Here is a short pop quiz.

When Israeli Prime Minister Benjamin Netanyahu addressed Congress earlier this month about the parameters of the secret negotiations between the United States and Iran over nuclear weapons and economic sanctions, how did he know what the negotiators were considering? Israel is not a party to those negotiations, yet the prime minister presented them in detail.

When Hillary Clinton learned that a committee of the U.S. House of Representatives had subpoenaed her emails as secretary of state and she promptly destroyed half of them -- about 33,000 -- how did she know she could get away with it? Destruction of evidence, particularly government records, constitutes the crime of obstruction of justice.

When Gen. Michael Hayden, the director of both the CIA and the NSA in the George W. Bush administration and the architect of the government’s massive suspicionless spying program, was recently publicly challenged to deny that the feds have the ability to turn on your computer, cellphone or mobile device in your home and elsewhere, and use your own devices to spy on you, why did he remain silent? The audience at the venue where he was challenged rationally concluded that his silence was his consent.

And when two judges were recently confronted with transcripts of conversations between known drug dealers -- transcripts obtained without search warrants -- and they asked the police who obtained them to explain their sources, how is it that the cops could refuse to answer? The government has the same obligation to tell the truth in a courtroom as any litigant, and in a criminal case, the government must establish that its acquisition of all of its evidence was lawful.

The common themes here are government spying and lawlessness. We now know that the Israelis spied on Secretary of State John Kerry, and so Netanyahu knew of what he spoke. We know that the Clintons believe there is a set of laws for them and another for the rest of us, and so Mrs. Clinton could credibly believe that her deception and destruction would go unpunished.

We know that the NSA can listen to all we say if we are near enough to a device it can turn on. (Quick: How close are you as you read this to an electronic device that the NSA can access and use as a listening device?) And we also know that the feds gave secret roadside listening devices to about 50 local police departments, which acquired them generally without the public consent of elected officials in return for oaths not to reveal the source of the hardware. It came from the secret budget of the CIA, which is prohibited by law from spying in the U.S.

What’s going on here?

What’s going on here is government’s fixation on spying and lying. Think about it: The Israeli Mossad was spying on Kerry while the CIA was spying on the Mossad. Hillary Clinton thought she could destroy her emails just because she is Hillary Clinton, yet she forgot that the administration of which she was an integral part dispatched the NSA to spy on everyone, including her. And though it might not voluntarily release the emails she thought she destroyed, the NSA surely has them. The police have no hesitation about engaging in the same warrantless surveillance as the feds. And when Hayden revealed a cat-like smile on his face when challenged about the feds in our bedrooms, and the 10,000 folks in the audience did not reveal outrage, you know that government spying is so endemic today that it is almost the new normal.

Yet, government spying is not normal to the Constitution. Its essence -- government fishing nets, the indiscriminate deployment of government resources to see what they can bring in, government interference with personal privacy without suspicion or probable cause -- was rejected by the Framers and remains expressly rejected by the Fourth Amendment today.

For our liberty to survive in this fearful post-9/11 world, the government’s lawless behavior must be rejected not just by the words of dead people, but by the deeds of we the living. When the president violates the Constitution and the Congress and courts do nothing to stop him, we have effectively amended the Constitution with a wink and a nod -- by consent, if you will. Its guarantees of liberty are only guarantees if the people in whose hands we repose it for safekeeping honor them as guarantees and believe and behave as such because the Constitution means what it says.

Where is the outrage? If you knew the feds were virtually present in your bedroom or your automobile, and your representatives in Congress did nothing about it, would you buy the nonsense that you should have nothing to hide? Would you send those weaklings back to Congress? Or would you say to a lawless government, as the Founders did to the British, "Thou shalt not enter here"? Does the Constitution mean what it says in bad times as well as in good times?

These are not academic questions. They address the most important issue of our day. For nothing will destroy our personal liberties more effectively than the government refusing to honor them and Americans sheepishly accepting that. And without freedom, what are we?

*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 Israeli Prime Minister Benjamin Netanyahu addressed Congress earlier this month about the parameters of the secret negotiations between the United States and Iran over nuclear weapons and economic sanctions, how did he know what the negotiators were considering? Israel is not a party to those negotiations, yet the prime minister presented them in detail.

When Hillary Clinton learned that a committee of the U.S. House of Representatives had subpoenaed her emails as secretary of state and she promptly destroyed half of them -- about 33,000 -- how did she know she could get away with it? Destruction of evidence, particularly government records, constitutes the crime of obstruction of justice.

When Gen. Michael Hayden, the director of both the CIA and the NSA in the George W. Bush administration and the architect of the government’s massive suspicionless spying program, was recently publicly challenged to deny that the feds have the ability to turn on your computer, cellphone or mobile device in your home and elsewhere, and use your own devices to spy on you, why did he remain silent? The audience at the venue where he was challenged rationally concluded that his silence was his consent.

And when two judges were recently confronted with transcripts of conversations between known drug dealers -- transcripts obtained without search warrants -- and they asked the police who obtained them to explain their sources, how is it that the cops could refuse to answer? The government has the same obligation to tell the truth in a courtroom as any litigant, and in a criminal case, the government must establish that its acquisition of all of its evidence was lawful.

The common themes here are government spying and lawlessness. We now know that the Israelis spied on Secretary of State John Kerry, and so Netanyahu knew of what he spoke. We know that the Clintons believe there is a set of laws for them and another for the rest of us, and so Mrs. Clinton could credibly believe that her deception and destruction would go unpunished.

We know that the NSA can listen to all we say if we are near enough to a device it can turn on. (Quick: How close are you as you read this to an electronic device that the NSA can access and use as a listening device?) And we also know that the feds gave secret roadside listening devices to about 50 local police departments, which acquired them generally without the public consent of elected officials in return for oaths not to reveal the source of the hardware. It came from the secret budget of the CIA, which is prohibited by law from spying in the U.S.

What’s going on here?

What’s going on here is government’s fixation on spying and lying. Think about it: The Israeli Mossad was spying on Kerry while the CIA was spying on the Mossad. Hillary Clinton thought she could destroy her emails just because she is Hillary Clinton, yet she forgot that the administration of which she was an integral part dispatched the NSA to spy on everyone, including her. And though it might not voluntarily release the emails she thought she destroyed, the NSA surely has them. The police have no hesitation about engaging in the same warrantless surveillance as the feds. And when Hayden revealed a cat-like smile on his face when challenged about the feds in our bedrooms, and the 10,000 folks in the audience did not reveal outrage, you know that government spying is so endemic today that it is almost the new normal.

Yet, government spying is not normal to the Constitution. Its essence -- government fishing nets, the indiscriminate deployment of government resources to see what they can bring in, government interference with personal privacy without suspicion or probable cause -- was rejected by the Framers and remains expressly rejected by the Fourth Amendment today.

For our liberty to survive in this fearful post-9/11 world, the government’s lawless behavior must be rejected not just by the words of dead people, but by the deeds of we the living. When the president violates the Constitution and the Congress and courts do nothing to stop him, we have effectively amended the Constitution with a wink and a nod -- by consent, if you will. Its guarantees of liberty are only guarantees if the people in whose hands we repose it for safekeeping honor them as guarantees and believe and behave as such because the Constitution means what it says.

Where is the outrage? If you knew the feds were virtually present in your bedroom or your automobile, and your representatives in Congress did nothing about it, would you buy the nonsense that you should have nothing to hide? Would you send those weaklings back to Congress? Or would you say to a lawless government, as the Founders did to the British, "Thou shalt not enter here"? Does the Constitution mean what it says in bad times as well as in good times?

These are not academic questions. They address the most important issue of our day. For nothing will destroy our personal liberties more effectively than the government refusing to honor them and Americans sheepishly accepting that. And without freedom, what are we?

*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.

Barack vs. Bibi

Richard Epstein*

The past month has witnessed some tumultuous events that have further frayed the notoriously uneasy relationship between the United States and Israel. Israeli Prime Minister Benjamin Netanyahu’s Likud party pulled off a come-from-behind victory in the Israeli elections on March 17, 2015. Two weeks earlier, Netanyahu delivered a speech before Congress—at which some 58 members of Congress were missing—attacking both President Obama’s effort to break the impasse between Israelis and Palestinians on a two-state solution, and his response to the Iranian development of nuclear fuels and nuclear weapons. These intensely political negotiations are tough and they are made even more difficult because of a set of structural difficulties that are then magnified by the personal characteristics of the key negotiators.

Let’s backtrack a bit by starting with some basic bargaining theory. Political negotiations are the antithesis of those that take place in competitive markets, which are characterized by huge numbers of transactions, but relatively few prolonged negotiations. Merchants know that their customers can go elsewhere, and so they price their goods and services at attractive levels, almost always as “take-it-or-leave-it” offers. That ultimatum strategy reduces the transaction costs of doing business for both sides. Their key terms are not just pulled out of a hat, but are carefully choreographed options to win customers. Just imagine what would happen if every customer on every check-out line could haggle about the price of each item. Other customers would bolt for the door.

Bargaining is far more complicated with bilateral monopolies, where each side can turn to only one party to make a deal. Take as an instructive example the protracted negotiations between management and labor under the National Labor Relations Act. Unlike competitive markets, the NLRA requires that every employer must bargain “in good faith” with a union elected by a majority of employees in an appropriately defined bargaining unit. And unlike in competitive markets, the NLRA requires an employer to disclose information about its costs, so as to enable the union to calibrate its bargaining demands against the employer.

The NLRA thus dangerously confers on unions a monopoly position that all too often makes labor negotiations protracted ordeals, in which bargaining impasses can trigger either union strikes or employer lockouts. One notable effort to short-circuit this situation was the strategy adopted by General Electric in the late 1950s through its then Vice President for Labor Relations, Lemuel Boulware. In the aftermath of some ruinous GE strikes in the 1940s, Boulware tried to impose a take-it-or-leave-it approach to labor relations at GE. Boulware’s approach, which has been roundly criticized, was to make a single “truthful” offer to its union members based on its own comprehensive examination of the overall situation. It then ferociously defended its position to the workers and the public, not coincidentally in part through its then spokesman Ronald Reagan. In 1969, the Court of Appeals for the Second Circuit by a divided vote condemned GE’s “unbending firmness” in its union negotiations as an unfair labor practice.

Legally, the Second Circuit’s view runs headlong into Section 8(d) of the NLRA that states that the statutory obligation to bargain in good faith "does not compel either party to agree to a proposal or require the making of a concession." Without that provision, each side could demand fatal concessions from its opponents. Nonetheless, it is foolish to make employers go through a bargaining ritual by first making an unacceptable strategic offer in order to allow them to make pre-planned concessions at the eleventh hour. It is equally unwise for the Courts to require that employers give detailed information about their costs so as to let unions extract high monopoly rents from their protected bargaining positions. It is easy to see why the crazy-quilt set of NLRA bargaining rules should be scrapped in their entirety. A return to competitive markets reduces bargaining costs, counteracts uncertainty, and expands the labor market.

As things stand, however, no parallel approach will let anyone to cut through the Gordian knots in the Palestinian and Iranian negotiations. All international disputes between sovereign nations and political groups involve irreducible levels of strategic bargaining that no law can remove. The brute truth is that the contending forces have no choice but to negotiate with each other, giving everyone strong incentives to hold out for the best possible deal, even when impasse could easily lead to armed conflict or nuclear destruction.

Unfortunately, the uneasy accommodation between good faith bargaining and concession-free bargaining never goes away no matter how high the stakes. Yet nothing about basic bargaining theory indicates who should make the first concession, or, after these are made, whether some other party should increase its demands or make reciprocal concessions of its own.

This framework helps in evaluating the recent political moves of Netanyahu. Let us assume that Netanyahu made two serious blunders during the past month, first in warning Israeli Jews that Israeli Arabs were being bussed en masse to the polls, and second by repudiating the possibility of any two-state solution, only to reverse himself, credibility tarnished, afterwards. The first of these statements may have contributed to his surprise victory over a now dispirited liberal wing in Israeli politics. Defeated Zionist Union candidates Isaac Herzog and Tzipi Livni blamed their loss on Netanyahu’s racist statements.

Surely those forces did rear their ugly heads in the past election, but in the long run they are sideshows in the existential battle of how the Israelis should negotiate their way through the two conflicts. Netanyahu’s later strategic announcements that the times and conditions were not propitious for a two-state solution contains more force than either a deeply offended President Obama or Israel’s own liberal critics acknowledge. Boulwarism is alive and well in the mid-east after the 1993 agreements broke down in frustration in 2000 when Ehud Barak (who was strongly committed to making a deal) and Yasser Arafat failed to reach an agreement, leading to a second intifada shortly thereafter.

In essence, Netanyahu has taken, for the moment at least, the no-concessions view of ongoing negotiations. These negotiations of course cannot end, because they necessarily take place both before and after the parties sit down at some bargaining table. In the current situation, Netanyahu is right to note that the conditions for peaceful negotiations are far more difficult now than in 1993, and for two reasons. First, Israel’s complete and unilateral withdrawal from Gaza in 2005 has brought forth an unrepentant and vicious Hamas government, and has since led to three major wars in 2008-2009, 2012, and 2014. The Israelis should regard Gaza as the canary in the mine. A unilateral withdrawal from the West Bank could lead to a Hamas government, increased attacks against Israeli territories and citizens, and a concentration of foreign troops on Israel’s borders, which cannot be credibly sealed, unlike Gaza, where the aggressive cooperation of Egyptian President Abdel Fattah Sisi has made a huge difference on the ground. What is needed now is an explicit Palestinian offer on how best to go forward, which is just not forthcoming. A Palestinian hard-line option is of course their prerogative, but so too is an Israeli response that bars further concessions until the Palestinians move first.

The second source of difficulty in getting negotiations started again is paradoxically President Obama. There is no way, period, that any lasting settlement between the Israelis and the Palestinians—including one that requires the painful removal of a substantial number of Israeli settlements from the West Bank—will be credible without third-party backing. The United Nations is useless for this purpose, so the only creditable guarantee is an alliance of Western nations led by the United States. Here, the death of Pax Americana is taking its toll. The Israelis and the rest of the world know that the United States will not be a credible guarantor of any peace so long as President Obama remains in office. Such is the legacy of American foreign policy in Syria, Iraq, Iran, Russia, and the Ukraine.

At this point, therefore, an Israeli no-concession policy should dominate. Indeed if the Herzog/Livni ticket had won, Israel’s Palestinian negotiation strategy would have been much the same, even if the political atmospherics might have differed. Remember Livni was Netanyahu’s lead negotiator when the 2014 negotiations brokered by Secretary of State John Kerry failed, on her account after the Palestinian Authority made a short-term alliance with Hamas, and decided unilaterally to join some 15 International Conventions.

This same United States weakness has led to widespread Israeli frustrations with respect to Iran’s nuclear program. Here too the negotiations show the dangers of concession bargaining. The Iranians have hung tough throughout, and President Obama, as leader of the western coalition, continues to make concessions to them in hopes of concluding a deal by the end of March. In order to do this, he has sought to push Congress off to one side, by dubiously insisting that any such agreement does not count as a “treaty” under the U.S. Constitution, which says that the President “shall have Power, by and with the Advice and Consent of the Senate to make Treaties, provided two thirds of the Senators present concur.” His strong position in turn has provoked a letter to Iran from 47 Republican Senators, incensed that they had been passed by, in which they noted that any executive compact reached may not outlast the Obama Administration.

Let us postulate that sending the letter was an unwise political maneuver, even if it is far from a constitutional violation under the overbroad 1799 Logan Act that forbids any communications, direct or indirect, by citizens with foreign governments. The same criticism could not have been lodged if the Senators had sent a public letter directly to President Obama, with the same message. Yet it is important to understand that any mistake by the Senators does not excuse the weak negotiation posture of the President, nor will it do anything to quell the rising bipartisan disaffection inside the Senate over the President’s willingness to make too many concessions. There is of course an alternative, which is to reimpose the sanctions that have been softened in the interim. Once again, the United States is under no duty to make further concessions in its Iranian negotiations.

In the end, it is critical to understand that the current weaknesses in American foreign policy stem from the President’s adamant reluctance to commit to the use of American force in international relations, whether with Israel, Iran or with ISIS. Starting from that position, the President has to make huge unilateral concessions, and force his allies to do the same thing. Right now his only expertise is leading from behind.  The President has to learn to be tough in negotiations with his enemies. Right now, sadly, he has demonstrated that toughness only in his relationships with America’s friends and allies.

*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.

What If Hillary Doesn't Care?

Judge Andrew P. Napolitano*

Judge Napolitano 02.jpg

What if Hillary Clinton’s emails were hacked by foreign agents when she was the secretary of state? What if persons claiming to have done so are boasting about their alleged feats on Internet websites and in chat rooms traditionally associated with illegal or undercover activities? What if this is the sore underbelly of an arrogant and lawless secretary of state who used her power to exempt herself from laws that govern executive branch employees and didn’t care about national security?

What if the law required Clinton to swear under oath on her first day as secretary of state that she would comply with all laws governing the use of federal records? What if the principal governing law -- the Federal Records Act of 1950 -- makes it clear that when you work for the feds all the records you receive and generate belong to the government and you cannot lawfully conceal them from the government?

What if she refused to sign such a promise because she knew she’d be violating that law?

What if the State Department has an inspector general whose job it is to assure the public and the attorney general that the secretary of state is complying with federal law? What if agents of the inspector general signed documents swearing that Clinton told them she agreed to abide by the law, and so they permitted her to have access to federal records? What if they did this because Clinton refused to sign an oath herself since she had no intention of complying with it, and because she ordered them to sign in her place?

What if the law required Clinton to swear an oath at the time she left office that she had no federal records in her possession or control? What if she signed that oath knowing that nearly all of her records were in her possession and not the government’s? What if she refused to sign that oath because she knew she possessed federal records contrary to law? What if she blamed her failure to sign that oath on her own inspector general? What if the law requires the inspector general to report her refusal to sign this oath to the attorney general? What if that report was made and the attorney general looked the other way?

What if the president has known since 2009 that Clinton has concealed government records from the government? What if his assertion that “Hillary has given her emails back” to the State Department is a trick based on the slippery use of words? What if the emails of the secretary of state do not and never did belong to her, but rather to the federal government? What if her diversion of government records away from the government and onto her husband’s computer server is a criminal act? What if Clinton is a lawyer who knows the law and knows when she is breaking it?

What if the whole premise of the law governing the records of federal employees is that the government owns and possesses all emails and documents used by the employee, and if the employee, upon leaving the government, wants any of her records, she must ask for them, and the government then reviews her records and decides which are personal?

What if Clinton turned that law on its head by keeping all of the government’s records and having her own representatives review them? What if after that review she decided which records to return to the government and which ones to DESTROY? What if this amounted to the destruction of government property? What if we are not talking about destroying meaningless scraps of paper, but rather 33,000 emails over the course of four years in office?

What if Clinton seriously exposed classified secrets that could affect national security by discussing them on an email system owned by her husband and not secured by a mature Internet service provider or by the government? What if she did this because she didn’t want anyone in the government or the public to see her records? What if the real reason for her theft of records was not personal convenience, as she has claimed, but fear of exposure of her true thoughts and unguarded behavior? What if she feared she could not publicly account for her concealed behavior, and so she kept it from the government?

What if when she claimed her husband’s email server had never been hacked she didn’t know what she was talking about? What if victims can’t always tell when they’ve been hacked? What if the persons with whom she has been emailing have been hacked? What if one of her former aides -- with the lurid nickname of the "prince of darkness" (real name: Sid Blumenthal) -- was hacked? What if among the hacked emails of the Prince of Darkness were some to and from Clinton strategizing about the way to portray her role at the time of the assassination in Benghazi of the American ambassador to Libya?

What if all this lawlessness and secrecy was orchestrated by Clinton herself -- a person devoid of a moral compass and disdainful of compliance with law and a habitual stranger to the truth? What if she is presently the leading candidate for the Democratic nomination for president? What if the Democrats don’t care?

*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.


Race Baiting and Ferguson

Richard Epstein*

RICHARD EPSTEIN

RICHARD EPSTEIN

The most recent news from Ferguson concerns what Eric Holder has rightly called the “ambush shooting” of two police officers outside the city’s police department. This incident occurred in the wake of two detailed reports released by the Department of Justice. The first report deals in depth with the shooting of Michael Brown by Ferguson police officer Darren Wilson. The report recommended that the case against him be closed. The second DOJ report contained a scathing indictment of the sad state of affairs within the entire criminal justice system of Ferguson. The combined effect of these two reports is likely to make matters worse in Ferguson by combining the back-handed exoneration of Darren Wilson with the unstinting condemnation of the City of Ferguson.

Let’s start with the DOJ report that exonerated Wilson. The federal prosecutors ran an exhaustive review of all the physical, forensic, and testimonial evidence in the case. It is necessary to state its final conclusion in full: “Darren Wilson’s actions do not constitute prosecutable violations under the applicable federal criminal civil rights statute, 18 U.S.C. § 242, which prohibits uses of deadly force that are ‘objectively unreasonable,’ as defined by the United States Supreme Court. The evidence, when viewed as a whole, does not support the conclusion that Wilson’s uses of deadly force were “objectively unreasonable” under the Supreme Court’s definition. Accordingly, under the governing federal law and relevant standards set forth in the USAM [United States Attorneys’ Manual], it is not appropriate to present this matter to a federal grand jury for indictment, and it should therefore be closed without prosecution.”

The legal conclusion is surely correct, but the tone of the report’s findings are slanted against Wilson. It is not just the case that there is insufficient evidence to support a criminal prosecution. It is that, beyond a reasonable doubt, the evidence supports that Wilson’s conduct was fully justified. During the initial encounter, Brown had tried to wrest Wilson’s gun from him by reaching into Wilson’s Chevy Tahoe SUV. Wilson’s story was corroborated, to quote the report, “by bruising on Wilson’s jaw and scratches on his neck, the presence of Brown’s DNA on Wilson’s collar, shirt, and pants, and Wilson’s DNA on Brown’s palm.” Later on, the evidence also showed that Brown was running toward Wilson at the time Wilson fired the fatal shots, not knowing whether Brown was armed or not. The incident was far clearer than the oft-ticklish situations in which the courts have to decide whether a police officer used excessive force against a person who was resisting arrest, as with the controversial grand jury decision not to indict any police officer for the killing of Eric Garner.

What the DOJ now has to do is to acknowledge that the killing of Michael Brown was a justifiable homicide. It must abandon its contrived legalisms and defend Wilson, by condemning unequivocally the entire misguided campaign against him, which resulted in threats against his life and forced his resignation from the police force. Eric Holder owes Wilson an apology for the unnecessary anguish that Wilson has suffered. As the Attorney General for all Americans, he must tell the protestors once and for all that their campaign has been thoroughly misguided from start to finish, and that their continued protests should stop in the interests of civic peace and racial harmony. In light of the past vilification of Wilson, it is not enough for the DOJ to publish the report, and not trumpet its conclusions. It is necessary to put that report front and center in the public debate so that everyone now understands that Wilson behaved properly throughout the entire incident.

The situation is made worse with the publication of the second DOJ report which offers a top-to-bottom condemnation of Ferguson’s criminal justice system. This report was clearly prompted by the belief that Wilson’s killing of Michael Brown was the result of structural problems in Ferguson. But why pick on Ferguson after Wilson was exonerated? It would be one thing to argue that the illegal killing of Michael Brown stemmed from a corrupt and racist culture inside that department. But once it is established that Wilson was fully justified in acting as he did, it is impossible to explain how the culture and norms of the police could have contributed to any illegal act. Indeed, the only plausible inference cuts the opposite way. The ability of Wilson to handle himself well under extreme pressure reflects approvingly on his conduct and on the ethos of the Ferguson Police Department.

In this case, however, the DOJ was determined to make a big deal out of the various misdeeds of the Department. In so doing, it set back race relations in the United States by sending out the unmistakable message that while the DOJ could not get Wilson, it could surely get the city for which he had worked. The Ferguson report gets off on the wrong foot by leading with the claim that “Ferguson’s law enforcement practices are shaped by the City’s focus on revenue rather than by public safety needs.” That basic orientation, the report continues, leads the police to concentrate on collecting revenue from traffic offenses in order to fill any hole in the Ferguson budget left by a shortfall in sales tax collection. It then further chides the city for sending out arrest warrants for individual ticket holders to meet court dates and to pay for their offenses.

Protests and riots have rocked many communities, especially Ferguson, since August.

Protests and riots have rocked many communities, especially Ferguson, since August.

At this point, the key question is whether Ferguson is alone in its practices, or if there are other cities that do the same thing. Given the financial pressures on all cities, Ferguson does not stand alone. If it acts in violation of the public trust, then so do all other cities. Why then pick out Ferguson for special condemnation? It is well known that various form of asset forfeiture are common across the United States. The practices are condemned on all sides of the political spectrum. The liberal American Civil Liberties, for example, begins its Blog of Rights on the subject of Asset Forfeiture Abuse, by noting: “Across the country, law enforcement agents stop motorists—predominantly people of color—and seize the money in their possession simply by asserting that they believe the money is connected to some illegal activity, even without ever pursuing criminal charges. Under federal law and the laws of most states, they are entitled to keep the money they seize, which goes to fill police department coffers, pay salaries, buy new equipment, and fund other perks for the officers.”

The libertarian Institute for Justice harps on the same message in its report “Policing for Profit: The Abuse of Civil Asset Forfeiture.” And most ironically, it was only this January that Holder himself “barred local and state police from using federal law to seize cash, cars and other property without evidence that a crime occurred.” Any balanced report on the situation in Ferguson should ask whether the city is worse off than other state and local governments. Yet nothing suggests that it is, let alone that some culture of revenue collection leads to the improper use of deadly force.

The DOJ report is even odder for its suggestion that it is improper for Ferguson, or any other city, to issue arrest warrants for those who do not pay their fines. Clearly, the entire system will fall apart if parties who receive tickets for traffic violations ignore them with impunity. Some of these tickets at least are given for offenses that do have an adverse impact on public safety, so it seems absurd to think that it is improper to demand their collection. No other state or local government should yield to that practice, so why should Ferguson?

The evidence is no better when the DOJ resorts to statistical evidence to show that the police force has behaved in an improper way because “African Americans experience disparate impact in nearly every aspect of Ferguson’s law enforcement system. Despite making up 67% of the population, African Americans accounted for 85% of FPD’s traffic stops, 90% of FPD’s citations, and 93% of FPD’s arrests from 2012 to 2014.”

The point here represents a gross abuse of statistical evidence for two reasons. First, the disparity in arrests for various offenses ignores one question that matters: did African Americans commit these various offenses at a higher rate than the rest of the population? If they did, then the evidence is perfectly consistent with even-handed enforcement. Second, the report gives no information about the arrest rates in other communities. As John Lott has noted, “The Bureau of Justice Statistics’ 2011 Police-Public Contact Survey indicates that, nationwide, blacks were 31 percent more likely than whites to be pulled over for a traffic stop.” If so, then the Ferguson numbers are consistent with national norms, and thus do not show any distinctive form of racial bias.

Finally, the DOJ report points to the presence of some emails from police officials that “stereotype” African Americans. But here, again, it is important to note that isolated emails from various officials, however reprehensible in and of themselves, do not indicate any pervasive forms of misbehavior that suffices to indict an entire police force. Nor is there any evidence that these offensive emails sent between 2008 and 2011 indicate present abuse that could have contributed to poor police practices.

The two DOJ reports do not cohere. The first shows that Wilson’s use of force against Michael Brown was fully justified. The second uses that incident to launch a scathing attack against Ferguson, leading to the resignation of its key officials for conduct that looks on balance to be no better or worse than that in other cities around the country. The serious consequence of the second high-profile report is to keep alive the image that racial injustice is alive and well in the United States. What the report fails to understand is that it is as dangerous to exaggerate the risk of racial injustice as it is to ignore it. In a sad sense, the overheated DOJ report contributes to the inflamed atmosphere that led to the most recent shootings in Ferguson. 

*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.

Obama and the Clinton Emails

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

Hillary Rodham Clinton, the former first lady, U.S. senator from New York and secretary of state, used a private email server for all of her emails when she was President Obama’s secretary of state from 2009 to 2013.

During that time, she enjoyed a security clearance identical to that of the president, the secretary of defense, the director of the CIA and others -- it is the highest level of clearance the government makes available.

She had that classified clearance so that she could do her job, which involved knowing and working with military, diplomatic and sensitive national security secrets. The government guards those secrets by requiring high-ranking government officials to keep the documents and emails that reflect them in a secure government-approved venue and to return any retained records when leaving office.

I have not seen Clinton’s signature on any documents, but standard government procedure is for her to have signed an agreement under oath when she began her work at the State Department requiring her to safeguard classified records, and another agreement under oath when she ended her work that she had returned all records to the government.

She violated both agreements, and she violated numerous federal laws.

By using her personal email address -- @clintonemail.com -- she kept her work documents from the government. Concealing government documents from the government when you work for it is a felony, punishable by up to three years in prison and permanent disqualification from holding public office.

Failing to secure classified secrets in a government-approved facility or moving them to a non-secure facility outside the government’s control is a misdemeanor, punishable by a hefty fine and a year in jail. Using a false email address that gives the clear impression that the user is not using a government server when she is, or one that creates the false impression that the emailer is using a government server when she is not, is also a felony.

The legal issues in Clinton’s case are all the more curious when one hears Obama’s tepid reaction to this latest scandal. Asked by Bill Plante of CBS News last weekend when he first learned of Clinton’s use of a personal email server instead of the government’s, the president told Plante he learned of it from the media, last week, when the rest of us did. He later had his press secretary state that he did recognize her use of a non-governmental email address, but did not know it was unlawful or unsecured until last week.

Does the White House not know where the president’s emails are coming from and where they are going?

I wish Plante had followed up with that question and more. Mr. President, are you not troubled that your secretary of state had a non-secure email account and used it for all of her work? Are you not troubled that she might have kept classified secrets on a server in her barn on her estate in Chappaqua, N.Y. that the Secret Service might or might not have known about, or at a computer company in Texas that the Secret Service was unable to protect?

Does it not trouble you, Mr. President, that foreign intelligence services likely would have had a far easier time hacking into the emails of your secretary of state because of all this? Mr. President, will your Department of Justice prosecute Clinton for retaining 48 months of classified records on her personal server after she left office, as it did Gen. David Petraeus, who kept 15 months of classified records in a desk drawer in his home after he left office?

Mr. President, the premise of the law regulating government records is that the government owns them all, and when a high-ranking government official leaves office, the ex-official may ask the government for copies of her personal emails, and the government decides which ones it will give her. Mr. President, don’t you realize that Clinton turned the law on its head by keeping all of her emails from the government?

Thus, rather than the government deciding which emails were personal, Clinton decided which emails were governmental, and she turned those over to the government. How does the government know what is contained in the emails she kept? Mr. President, this is a privilege that even you don’t have, and it is the very behavior that the laws you have sworn to uphold were written to prevent.

Mr. President, did you cut a deal with Clinton’s husband that permits her to get away with this type of behavior? Mr. President, is it true that there are standards of behavior for Bill and Hillary Clinton and their friends and other standards for the rest of us?

Mr. President, do you remember that crackpot Sandy Berger, who was Bill Clinton’s national security adviser from 1997 to 2001 and Mrs. Clinton’s foreign policy adviser when she ran against you in 2008, and who stole documents from the National Archives in 2003 by hiding them under an on-site construction trailer? Do you know that Bill got Sandy a no-jail-time deal including the return of his security clearance, and he got Sandy’s prosecutor a federal judgeship?

Mr. President, when you ran against Hillary Clinton, you promised the most transparent government in history. Do you honestly think you have given us that?

*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.

Obamacare's Tangled Web

Richard Epstein*

RICHARD EPSTEIN

RICHARD EPSTEIN

One of the most anticipated cases of the Supreme Court’s 2014-2015 term is King v. Burwell. In it, the Supreme Court is confronted with what should be a straightforward question of statutory interpretation about the scope of subsidies available under the Affordable Care Act (ACA). Section 1311 of the ACA states that “each state shall, not later than January 1, 2014, establish an American Health Benefit Exchange.” Another part of the law, section 1321, then qualifies that apparently absolute duty by providing that if the state does not “elect” to establish that exchange by January 1, 2014, or if it otherwise fails to meet the federal requirements for an exchange, “the Secretary [of HHS] shall . . . establish and operate such exchange within the state.”

The question of whether a state establishes this exchange determines far more than where individuals can buy their health care coverage. It also determines whether any purchaser of health insurance is entitled to a tax credit against his or her cost of coverage, as that subsidy is limited to taxpayers who are enrolled in a qualifying plan “through an Exchange established by the state” under Section 1311. Internal Revenue Service regulations interpreted the ACA requirement so that its tax subsidies were available to all individuals whether they enrolled in an exchange established by the state or by HHS when the state elected or failed to do so. The plaintiffs’ challenge to the regulation was in essence that the plain language of the ACA precluded the IRS from expanding the scope of the subsidy by this sleight of hand. King would have been an open-and-shut victory for the plaintiffs if the disputed interpretation had been some run-of-the-mill tax provision. But 36 states did not establish these exchanges even though they knew that their citizens could not obtain any federal tax subsidies. They made a business judgment that the hassles of compliance were not worth the benefits.

Unfortunately, high stakes litigation invites fevered argument, which was on ample display in the Supreme Court on Wednesday, March 4, 2015. Matters got off on the wrong foot when Justice Ruth Bader Ginsburg challenged the four petitioners’ standing to bring the suit at all. Technicalities aside, it would be a real travesty of justice if the Court postponed its decision until some other party with a sufficient financial stake knocked on its door. Millions of individuals, and thousands of public officials, need to know their duties sooner rather than later. Indeed, one real tragedy of this entire episode is that our twisted law of standing has allowed no one to challenge the IRS regulation the day it was promulgated. The long delay in litigation added no useful information about how to read the various provisions of the ACA, but it did force everyone to make a major business decision when major legal issues were left unresolved.

Once this initial diversion was pushed to one side, the battle switched to three distinct clusters of issues. The first of these addresses the proper reading of sections 1311 and 1321. The second asks whether the ACA should be found constitutional if it were read to allow subsidies only on state exchanges. The third asks about the social consequences of the IRS regulation being struck down.

            To put the textual question in perspective, we should ask what would happen if the IRS regulations would limit the said subsidies only to policies purchased through state exchanges. Without question, a regulation that tracks the statute is consistent with it, even if it adds the gloss that the “state” is not the federal government. How then is it possible to turn the provisions upside down so that federal exchanges are treated as state exchanges?

In an effort to avoid that conclusion, Justices Breyer, Kagan, and Sotomayor stressed the use of the word “such” in section 1321, which they claimed meant that when the state chose or failed to create the exchange, the federally created exchange was the state exchange. But that weird interpretation makes hash out of the rest of the statute, where the natural meaning of “such” is that the federal government will establish its own exchange that is the functional equivalent to the state exchange, except for the key fact that it will not be eligible for the subsidy on the state exchange. Elsewhere, the ACA provides that territorial exchanges “shall be treated as a state.” Those words don’t appear in the provision governing the creation of the federal exchanges.

Equally implausible is the argument of Justice Elena Kagan that it would be odd to put such a critical provision in the taxation section of the ACA when it should have been featured more prominently elsewhere. But there is no canon of statutory construction that says the meaning of a general provision is determined by its location in the statute, especially when it makes perfectly good sense to put provisions on tax benefits in a section that is devoted to, well, tax credits. Indeed, King is an easy case of statutory construction because from these two short sentences, the ACA contains no other moving parts that have to be integrated with this coverage provision.

In contrast, other statutes have broad definitional provisions that do need adjustment. To this effect, Solicitor General Donald Verrilli compared King with the case FDA v Brown & Williamson, which was about whether tobacco products count as “drugs” that can be regulated by the federal government. But the two cases are at opposite poles. The Food, Drug and Cosmetic Act defines the term drug to include "articles (other than food) intended to affect the structure or any function of the body." By this definition, taken literally, it is hard to think of any product that is ingested that is not a drug, including not only tobacco, but also mouthwash. But that broad reading is at war with the ordinary meaning of the term drug, and it doesn’t make sense in the context of the rest of the statute, unless one thinks that it is imperative to conduct clinical trials to see which diseases tobacco is intended to cure.

Long before the tobacco case arose, this definitional section had always been read to apply only to those products for which its manufacturer claimed that it had therapeutic effects. When in the 1950s tobacco companies did make such claims, they were rightly slapped down by the FDA. But the definition of drug to cover tobacco when no such claims are made represents an inexcusable deviation from settled understandings.

There is no similar difficulty with the ACA. The government may protest that its subsidies are only available through the state exchanges, but the result is not unintelligible. Indeed the provision makes perfectly good sense if the plan, as often stated by MIT economist Jonathan Gruber, was intended to give states a strong incentive to sign up with the program, even if only 14 states rose to take the bait.

The inescapable truth is that the word “state” is defined in opposition to federal, and no amount of linguistic high-stepping can change its meaning. The four liberal judges were determined to inject ambiguity into this provision in order to take advantage of the so-called Chevron doctrine, dating from 1984, which holds that in those cases where the text is not clear, the courts must give deference to the agency’s interpretation of the statute. In oral argument, Justice Scalia, who is one of Chevron’s champions, held that it did not apply because the statute was clear on its face no matter how much the government regretted the outcome. But unfortunately, the question of what counts as a clear statute is itself subject to serious ambiguities, which the liberal justices hoped to exploit in this case.

The strongest answer to that approach is to protest against the application of the Chevron doctrine altogether. The obvious technical difficulty with the doctrine is that its author, Justice John Paul Stevens, never bothered to cite Section 706 of the 1946 Administrative Procedure Act that treats all questions of statutory interpretation as questions of law to be decided by the courts. That result is surely desirable on matters of this importance. During oral argument, Chief Justice Roberts asked whether a different administration could switch interpretations on the statute to meet its own view. Solicitor General Verrilli answered, incorrectly, that such a switch is possible only if the new government could make out “a very strong case” in view of the “disruptive consequences” that such a shift would have. But in fact, Chevron itself involved just that kind of switch between the Carter and Reagan administrations, and no one required the substantial showing of cause that Verrilli mentioned.

Unfortunately, such disruptive flip-flops are all too possible under Chevron. That is the strongest reason why the question should be treated as a question of law, which makes it impossible for one administration to reverse the decision of its predecessor. In any event, it is hard to think that an agency interpretation that returns to the plain meaning of the statute could ever be attacked because of its inconsistency with the strained reading that the Obama Administration has put on the clause. Verrilli’s response to the Chief Justice is a nonstarter.

In one sense the most novel argument of the day was an ill-thought-out suggestion by Justice Anthony Kennedy that the ACA might be unconstitutional if it were read to deny subsidies to health care policies purchased on the federal exchanges. Justice Kennedy never bothered to state whether his suggestion would require invalidation of the entire statute, or the creation of a massive subsidy that Congress itself had never authorized. There is, fortunately, no need to choose between these two unappetizing alternatives. Kennedy tossed off an argument that no one ever raised throughout the litigation: the denial of the federal subsidies would coerce individual states to set up exchanges in order to benefit their citizens.

The supposed precedent for this argument was the earlier decision in NFIB v. Sebelius that struck down part of Title II of the ACA that required states to forfeit all their current Medicaid benefits if they failed to sign up for the expanded set of Medicaid benefits under the ACA. Chief Justice Roberts held that this provision was coercive. No state could possibly withstand that financial hit. But in this instance, many states refused to establish the exchanges precisely because they were not threatened with the loss of any collateral benefits.

Shortly after the oral argument, Oklahoma Attorney General Scott Pruitt protested Justice Kennedy’s argument, noting that Oklahoma knew what the law required and was prepared to live with its consequences, given the heavy costs that it would have to incur to establish a state exchange. Indeed, the Kennedy provision leads to the bizarre conclusion that the statute would be unconstitutional if it omitted the possibility of purchasing any coverage under the federal exchanges, and his argument would invalidate dozens of statutes under which states are entitled to get benefits if they first undertake some particular action. The section is constitutional as written.

The hard question about King is not found in these far-fetched efforts to defeat its plain meaning. It rests instead on the massive disruption that this interpretation could impose on those individuals who, in good faith, purchased insurance on the federal exchange confident that they could gain the subsidy. The government’s defenders stress this point constantly even though they said little about the massive disruptions when millions of people lost their coverages in the original ACA rollout in the fall of 2013. The sad point here is that this latest transitional fiasco was largely avoidable. The Internal Revenue Service knew full well of the risk that it took and yet decided to plunge forward in its willful course of action. It would be distressing if the government’s conscious administrative overreach were rewarded, and it would be equally distressing if millions of innocent people were left in the lurch.

The hard question is whether it is the job of a court to ratify the sins of a government agency, given the dreadful precedent it would create for all future cases. The better choice, on balance, seems for the Court to strike down the IRS regulation and for Congress to work out some fix. That fix should not include expanding the coverage to federal exchanges, which would allow the Obama administration to work an illicit extension of the initial program. A far better suggestion is to make block grants to the states, which could fund subsidies to pick up the slack when the IRS regulation is struck down. The Republicans might well pass such legislation quickly and dare President Obama to veto it—which he might do to legitimate his own misconceived legislation.

*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.

A Lone Wolf President

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

Can the president rewrite federal laws? Can he alter their meaning? Can he change their effect? These are legitimate questions in an era in which we have an unpopular progressive Democratic president who has boasted that he can govern without Congress by using his phone and his pen, and a mostly newly elected largely conservative Republican Congress with its own ideas about big government.

These are not hypothetical questions. In 2012, President Obama signed executive orders that essentially said to about 1.7 million unlawfully present immigrants who arrived in the U.S. before their 16th birthdays and who are not yet 31 years of age that if they complied with certain conditions that he made up out of thin air they will not be deported.

In 2014, the president signed additional executive orders that essentially made the same offer to about 4.7 million unlawfully present immigrants, without the age limits that he had made up out of thin air. A federal court enjoined enforcement of the 2014 orders last month.

Last week, the Federal Communications Commission -- the bureaucrats appointed by the president who regulate broadcast radio and television -- decreed that it has the authority to regulate the Internet, even though federal courts have twice ruled that it does not.

Also last week, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, whose director is appointed by the president, proposed regulations that would outlaw the only mass-produced bullets that can be fired from an AR-15 rifle. This rifle has been the target of the left for many years because it looks like a military weapon; yet it is a lawful and safe civilian rifle commonly owned by many Americans.

This week, the president’s press secretary told reporters that the president is seriously thinking of signing executive orders intended to raise taxes on corporations by directing the IRS to redefine tax terminology so as to increase corporate tax burdens. He must have forgotten that those additional taxes would be paid by either the shareholders or the customers of those corporations, and those shareholders and customers elected a Congress they had every right to expect would be writing the tax laws. He has eviscerated that right.

What’s going on here?

What’s going on is the exercise of authoritarian impulses by a desperate president terrified of powerlessness and irrelevance, the Constitution be damned. I say “damned” because when the president writes laws, whether under the guise of administrative regulations or executive orders, he is effectively damning the Constitution by usurping the powers of Congress.

The Constitution could not be clearer. Article I, section 1 begins, “All legislative Powers herein granted shall be vested in a Congress of the United States.” Obama actually asked Congress to write the laws he is now purporting to write, and Congress declined, and so he does so at his peril.

In 1952, President Truman seized America’s closed steel mills because steel workers went on strike and the military needed hardware to fight the Korean War. He initially asked Congress for authorization to do this, and Congress declined to give it to him; so he seized the mills anyway. His seizure was challenged by Youngstown Sheet & Tube Co., then a huge operator of steel mills. In a famous Supreme Court decision, the court enjoined the president from operating the mills.

Youngstown is not a novel or arcane case. The concurring opinion by Justice Robert Jackson articulating the truism that when the president acts in defiance of Congress he operates at his lowest ebb of constitutional power and can be enjoined by the courts unless he is in an area uniquely immune from congressional authority is among the most highly regarded and frequently cited concurring opinions in modern court history. It reminds the president and the lawyers who advise him that the Constitution imposes limits on executive power.

The president’s oath of office underscores those limits. It requires that he enforce the laws faithfully. The reason James Madison insisted on using the word “faithfully” in the presidential oath and putting the oath itself into the Constitution was to instill in presidents the realization that they may need to enforce laws with which they disagree -- even laws they hate.

But Obama rejects the Youngstown decision and the Madisonian logic. Here is a president who claims he can kill Americans without due process, spy on Americans without individualized probable cause, start wars on his own, borrow money on his own, regulate the Internet, ban lawful guns, tell illegal immigrants how to avoid the consequences of federal law, and now raise taxes on his own.

One of the safeguards built into the Constitution is the separation of powers: Congress writes the laws, the president enforces the laws, and the courts interpret them. The purpose of this separation is to prevent the accumulation of too much power in the hands of too few -- a valid fear when the Constitution was written and a valid fear today.

When the president effectively writes the laws, Congress is effectively neutered. Yet, the reason we have the separation of powers is not to protect Congress, but to protect all individuals from the loss of personal liberty. Under Obama, that loss has been vast. Will Congress and the courts do anything about it?

*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.

Abercrombie’s Hijab Problem

Richard Epstein*

RICHARD EPSTEIN

RICHARD EPSTEIN

This past week, the United States Supreme Court heard oral arguments on a contentious employment discrimination case, Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores. The conflict arose when Samantha Elauf, a Muslim teenager, applied for a position as a sales-floor employee for Abercrombie & Fitch. Abercrombie has always referred to its sales-floor employees as “Models.” Ms. Elauf claimed that during the interview she wore a headscarf, or hijab, as required by her religious beliefs. Ms. Elauf’s religious commitment collided with Abercrombie’s long-standing “Look Policy,” which bans models from wearing any black clothing or “cap” on the sales floor.

Abercrombie’s dress code was not adopted casually. It was done pursuant to its view that its stores all had to project a uniform brand image that in its words “exemplifies a classic East Coast collegiate style of clothing.” The company’s “Look Policy” treated its models as a seamless extension of the basic brand, which turned them into walking advertisements of Abercrombie’s clothes. Violation of that policy could lead to serious discipline, including dismissal.

No one in this case doubted Abercrombie’s critical interest in strong brand promotion. No one thought that its policy was crafted to covertly discriminate against Muslims or members of any other religion. The matter of trade dress assumes especial importance for a clothing chain that has to project an appropriate and consistent image through multiple outlets to give consumers the confidence that they can get the same services and goods wherever they shop. It is indeed just this concern that led McDonald’s to standardize for its franchises all aspects of its business (including trade dress). That business practice has now entered center stage in its conflict with the National Labor Relations Board over the Board’s claim that its brand control somehow makes McDonald’s a joint employer with the individual franchisee.

In this case the conflict between brand and employment practices does not arise in the union arena, but under the employment discrimination laws, which state that, “It shall be an unlawful employment practice for an employer - (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”

Title VII offers a clear mandate only in those cases where a firm hangs up a sign that says something like, “No Muslims need apply.” The most sensible reading of Title VII knocks out Ms. Elauf’s case at the opening gate. She was refused employment “because of” Abercrombie’s policy that was made prior to and independent of Ms. Elauf’s case. But unfortunately, the current expansionist view of Title VII rejects that sensible interpretation whenever the particulars of the plaintiff’s status are known to the employer. To see just how restrictive Title VII is, just ask what would happen if, as I have long urged, Title VII were repealed tomorrow.

Here is how it would go. Ms. Elauf would apply for a job. Without Title VII’s external constraints on hiring, the company would ask whether she was prepared to take off her hijab on the floor. At that point, she would have to make a decision. Decide no, and she would be told that no offer could be extended. It would be totally irrelevant whether she insisted on wearing the hijab because of religious, cultural, or personal beliefs. But if she were prepared to do without the headscarf, then she would go through Abercrombie’s normal hiring process, until a final decision were made.

At that point, any contract depends only on the joint consent of the two parties. The deal once struck would thereafter be enforced in accordance with its terms. But if Ms. Elauf refused to follow the rule, she would have to look elsewhere for a job. Abercrombie has no monopoly position in labor markets, or even in clothing stores. Other stores that wish to project different images may well be quite pleased to hire her with or without her headscarf.

One of the great advantages of unregulated labor markets is that they lead to better fits between workers and their positions. Forced associations may externally require accommodations that often prove unstable in the long run. Allowing the voluntary market will reduce the overall cost of hiring and firing and will therefore systematically increase job opportunities across the board. Title VII provides no exception to the general rule that regulated labor markets underperform competitive ones.

This point is brought home with exceptional clarity by looking at the tortured record in Ms. Elauf’s case. First, did Ms. Elauf have a religious belief that prevented her from taking the job on the terms customarily offered? In this case, the parties sparred over whether Ms. Elauf wore the hijab because of religious beliefs or to affirm her cultural and social ties. The issue was complicated by evidence in the record that her friend, Farisa Sepahvand, who had worked at Abercrombie, had mentioned the dress code to Ms. Elauf and stated that the code should not raise any conflict if she wore a white headscarf.

Perhaps for that reason, Ms. Elauf wore her headscarf during her initial job interview, but at no point announced that she wore it to comply with her religious beliefs. Yet when the matter went to an Abercrombie supervisor, he lowered her application score on the critical question of appearance, which made it crystal clear why she did not get an offer. Once it was decided that Ms. Elauf wore the scarf for religious reasons, the outcome in the case turned solely on whether Abercrombie went through all the EEOC’s elaborate hoops governing the hiring process.

For starters, the EEOC has stated that “an applicant’s religious affiliation or beliefs . . . are generally viewed as non job-related and problematic under federal law,” and should therefore not be raised in an interview. But that rule does not mesh well with this basic EEOC guideline: “Unless it would be an undue hardship on the employer's operation of its business, an employer must reasonably accommodate an employee's religious beliefs or practices.” It takes no eagle eye to realize that both undue hardship and reasonable accommodation raise delicate questions of degree that can be resolved only after some detailed factual investigation of each case.

The EEOC guidelines then observe: “When an employee or applicant needs a dress or grooming accommodation for religious reasons, he should notify the employer that he needs such an accommodation for religious reasons.” The exhaustive opinion of the Tenth Circuit majority held that this was a categorical requirement. Ms. Elauf therefore lost at the starting gate by not raising the issue during her interview. The anguished response of the EEOC was that since Ms. Elauf was wearing the headscarf, the interviewer was put on notice to ask about her religious requirement, even though Ms. Elauf did not verbally call the point to the interviewer’s attention. The Supreme Court was asked whether Title VII was triggered “only if the employer has actual knowledge that a religious accommodation was required” by explicit employee notice.

Last week’s oral argument before the Supreme Court was trapped by a lengthy digression as to how certain Abercrombie’s knowledge was that Ms. Elauf needed an accommodation. The transcript reads like an episode straight out the theater of the absurd, with the justices asking tough questions on such delicate niceties matters as whether it must be “that the employer know, rather than just correctly understand, the need for an accommodation.” After that simple remark, the argument veered from bad to worse as the justices struggled to determine whether it mattered that the employer had formed accurate odds about the need for a religious accommodation. Thereafter, the justices speculated whether the employer should take the initiative, or whether that issue should be left to the employee. Chief Justice John Roberts thought that it might be unwise to require the employer to begin the dialogue on the ground that this very question might well “promote the stereotypes” that Title VII is meant to avoid—although why an honest inquiry should have that effect was left unexplained.

It is instructive to note the peculiar way that Supreme Court argument distracts from the central problems of the employment relationship. Looking only at the narrowest issue, it makes no sense for the Supreme Court justices to spend their valuable time speculating about the appropriate rules for conducting job interviews for large and heterogeneous classes of employers and employees. It makes equally little sense for the EEOC to pretend that it has any expertise in dealing with these sensitive human resource issues either. At this point, the EEOC should try to give some general guidance that avoids case-by-case determinations.

A more sensible approach is for the EEOC to create a safe harbor for any employer that posts on its website the simple announcement that any applicant who wants a religious accommodation should just ask for it. It can then supplement that rule by asking employers to pose the question routinely in all interviews. Unless the answer is in the affirmative, the claim is waived. The point here is to forestall repetitions of Abercrombie, not to relive them.

The notice point, however, leaves untouched the larger question of what should be done when the issue is now on the table. Under current EEOC doctrine, the undue hardship constraint is construed so narrowly that Abercrombie will lose if it asks Ms. Elauf to compromise her religious beliefs. The firm can therefore insist on the white hijab, but not on none at all. But that relatively clear outcome ducks the larger question. Why use this, or indeed any other public balancing test, at all? Sadly, any effort to second guess these accommodations reduces the flexibility that every responsible firm needs to run its own business. Abercrombie thinks any relaxation of its Look Policy will generate systematic losses that extend beyond the individual case. It is just absurd for the EEOC to ask lifetime professionals to run expensive independent empirical studies to show that it knows how to run its own business: the firm’s local knowledge is likely to be far more reliable.

Indeed, there is no telling what will happen now that Abercrombie will surely face new pressures to relax that policy in other cases. Yet those system-wide losses never make it onto the EEOC’s radar, which is why Title VII is such a crude and unwelcome system of social control. My own sense is that times are changing, and that in time Abercrombie may change its policy in response to pressure from its own customer base. But that is just the point. I have no idea how Abercrombie should run its business. Sadly, neither does the EEOC. 

*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.

What if the Government Fears Freedom?

Judge Andrew P. Napolitano*

JUDGE NAPOLITANO

JUDGE NAPOLITANO

What if the current massive spying on Americans began with an innocent secret executive order signed by President Reagan in 1986? What if Reagan contemplated that he was only authorizing American spies to spy on foreign spies unlawfully present in the U.S.?

What if Reagan knew and respected the history of the Fourth Amendment? What if the essence of that history is the colonial revulsion at the British use of general warrants? What if general warrants were issued by a secret court in London and authorized British agents in America to search wherever they wished and to seize whatever they found? What if the revulsion at this British government practice was so overwhelming that it led to the Revolutionary War against the king?

What if the whole purpose of the Fourth Amendment was to outlaw general warrants? What if the Fourth Amendment specifically guarantees the right to privacy to all in America in their persons, houses, papers and effects?

What if, in order to emphasize its condemnation of general warrants, the Fourth Amendment requires the government to obtain a warrant from a judge before invading the persons, houses, papers or effects of anyone and lays down the preconditions for the issuance of such warrants? What if those preconditions are individualized suspicion and articulated evidence of crime -- called probable cause -- about the specific person whose privacy the government seeks to invade?

What if these principles of constitutional fidelity, privacy and probable cause and the unlawfulness of general warrants have been regarded universally and publicly as quintessentially American values, values that set this nation apart from all others?

What if the administration of President George W. Bush was so embarrassed that 9/11 happened on its watch that it fought a useless public war in Iraq -- which had nothing to do with 9/11 -- and a pernicious private war against American values by unleashing American spies on innocent Americans as to whom there was no individualized probable cause so that it could create the impression it was doing something to keep America safe from another 9/11-like attack?

What if the Bush folks took Reagan’s idea of spying on foreign spies and twisted it so that they could spy on not just foreign spies, but also on foreign persons? What if they took that and leapt to spying on Americans who communicated with foreign persons?

What if they then concluded that it was easier to spy on all Americans rather than just those who communicated with foreign persons? What if they claimed in secret that all this was authorized by Reagan’s executive order and two federal statutes, their unique interpretations of which they refused to discuss in public? What if the Reagan order and the statutes authorized no such thing?

What if The New York Times caught the Bush administration in its massive violation of the Fourth Amendment, whereby it was spying on all Americans all the time without any warrants? What if the Times sat on that knowledge during, throughout and beyond the presidential election campaign of 2004? What if, when the Times revealed all this, the Bush administration agreed to stop spying? What if it didn’t stop?

What if President Obama came up with a scheme to make the spying appear legal? What if that scheme involved using secret judges in secret courts to issue general warrants? What if the Obama administration swore those judges to secrecy? What if it swore to secrecy all in the government who are involved in undermining basic American values? What if it forgot that everyone in government also swears an oath to uphold the Constitution? What if Edward Snowden violated his oath to secrecy in order to uphold his oath to the Constitution, which includes the Fourth Amendment, and spilled the beans on the government?

What if all this spying by the feds has spawned spying by the locals? What if more than 50 local police departments now have received false cell towers from the FBI, but have sworn not to tell anyone about them? What if these towers trick cellphone signals into exposing the content of cellphone conversations to the police? What if the police have done this without the knowledge of the elected representatives who are their bosses? What if they do this without any warrants? What if the Supreme Court last year outlawed police invading cellphones without warrants?

What if both Bush and Obama have argued that their first job is to keep America safe, and they will twist, torture the plain meaning of and even break laws in order to accomplish that job? What if the presidential oath is to enforce all laws faithfully, including ones the president may hate?

What if Bush and Obama have been wrong about the priority of their constitutional duties as president? What if the president’s first job is to preserve the Constitution? What if that includes the Fourth Amendment? What if the president keeps us safe but unfree?

What if invading our freedoms keeps us less safe? What if the president has failed to keep our freedoms safe? What if the government doesn’t like freedoms? What if the government is afraid we will exercise them?

*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.