Richard Epstein talks with EconTalk host Russ Roberts on the differences between libertarianism and classical liberalism, the Constitution, and Lochner.
Law & Liberty Blog
James Maxwell Koffler*
When I first read that Williamstown, Kentucky [a state], was going to be the bond issuer in a multi-million dollar bond offering to finance the building of a replica of Noah’s Ark, I thought that it was a hoax. Unfortunately, it is true. This convergence of forces is sure to have Jefferson and Madison rolling over in their graves as two of the things that they distrusted most were “stock-jobbing” and the commingling of religious and state funds.
Apparently the founder of the Creation Museum, Ken Ham, is in the market to expand his land of make-believe, to include a theme park built around the “Ark Encounter.” The Executive Summary for the Ark Encounter (available on this linked page) states that the project hopes to “rebuild” the Ark as well as, eventually, the world before the flood as told in Genesis. The first attraction will be a model Noah’s Ark containing live animals. If that creation is successful then they might build the Tower of Babel, and a frightening Children’s Area where youth can “play in and learn about God’s creation.”
While I am all for this being created, so long a s the animal’s are treated well, the government should not be helping to fund this. To recapitulate, a governmental entity subject to the restraints of the Establishment Clause under the theory of incorporation is sponsoring municipal bonds to fund a project so that visitors to the Ark “will have a saving encounter with the Lord Jesus Christ[.]” I do not think that any religious individual should be thrilled to have a municipality helping to fund the first step towards building a theme park for “the greatest story ever [s]old.” Having the government actively involved in tipping the scales towards a particular religious belief in the marketplace sets an extraordinarily bad precedent.
On the other hand, here is hoping that Stamford, Connecticut chooses to help me fund my “Trek to Tartarus” where kids can learn how Hades ran the Underworld.
*James Maxwell Koffler is a L.L.M. candidate at New York University School of Law, class of 2014, and a staff editor on the Journal of Law & Liberty.
Judge Andrew P. Napolitano*
What happens when the United States government participates meaningfully in toppling foreign governments in the name of spreading democracy? That behavior usually results in unintended consequences and often produces disasters.
When the United States invaded Iraq in 2003, initially to search for weapons of mass destruction that we now know the Bush administration knew did not exist there, and eventually for regime change, the U.S. succeeded in changing profoundly the Iraqi government. But in the process, we lost 4,500 American troops, suffered 45,000 substantial injuries, borrowed and spent and have not paid back more than $2 trillion, caused the deaths of 650,000 Iraqis, displaced 2.5 million Iraqis, and unleashed into Iraq our public enemy, al-Qaida. Al-Qaida was not in Iraq before we invaded. Today, it controls one-third of that now unstable country.
In 2010, President Obama decided he no longer liked America’s favorite Middle Eastern dictator, President Hosni Mubarak of Egypt, even though he and his four immediate predecessors gave the Mubarak government about $4 billion annually. So our agents fomented revolution in the streets while Obama suggested openly that it was time for Mubarak to leave office. Then the hoped-for and promised free elections took place, and avowed enemy of the West and Islamic fanatic Mohammed Morsi became the first popularly elected president in Egyptian history. Then the U.S. decided it did not want him in power no matter the lawfulness and moral legitimacy of his election, and so the Obama administration encouraged a military coup.
Morsi was arrested by his own military commanders and is currently on trial for permitting his soldiers under those same commanders to kill nine people who were resisting the coup, even though the American-backed military plotters -- who now rule Egypt and are prosecuting Morsi -- have killed thousands of Egyptian civilians who attempted to resist the removal of Morsi from office. The result is a military dictatorship and murderous resistance far more odious than in the Mubarak years.
And in Ukraine in 2004, the Bush administration fomented the so-called Orange Revolution. This, too, was done by our diplomats and intelligence community, whose agents agitated demonstrators in the streets and liberally distributed American dollars to them. This resulted in a free election, which resulted in subsequent free elections, until the most recent of those produced a president who -- as an ex-communist -- was more drawn to Russia than to the U.S. or Europe.
When the Ukraine government needed cash and Russia offered it a better deal than the European Union, our imperial diplomats and lawless intelligence gurus were embarrassed. So, the U.S. fomented another revolution in the streets of Kiev. One of our diplomats, Victoria Nuland, acknowledged as much in a tapped and taped (complete with expletives) and eventually viral cellphone conversation. Then, Viktor Yanukovich, the popularly and lawfully elected Ukraine president, was toppled and fled to Moscow. The new unelected Ukraine president has received American recognition and help. Earlier this week, the U.S. offered him $1 billion in immediate cash.
Enter Vladimir Putin. He is the popularly elected president of Russia who has designs on reconstituting the old Soviet Union. Putin is also an ex-KGB agent; he is a torturer, a murderer, a tyrant and a monster. He often has lamented the demise of the former Soviet Union. Ukraine was a part of that union until the evil empire dissolved in 1991. It was the most economically productive part of that union. Today it enjoys a mostly free market and is highly entrepreneurial, though partly a welfare state. Roughly two-thirds of Ukraine identifies with Europe and one-third with Russia.
After Yanukovich showed up at Putin’s doorstep in Moscow, Putin flexed his muscles by sending 16,000 Russian troops, in uniforms without insignias and wearing black masks (you cannot make this up), over the border to occupy Crimea, a province of Ukraine, which had been part of Russia and the Soviet Union until 1954.
Putin’s invasion is profoundly unlawful, as it constitutes the introduction of military troops into a sovereign territory without governmental invitation or consent, and the absence of identifying insignia puts this invasion outside the protections of the Geneva Conventions and the rules of war. Hence the Russian troops are legally fair game for Ukrainian troops and civilian militias. But don’t expect that to happen. Russia has two times the number of tanks as Ukraine, 10 times the troops and 12 times the air power.
As well, don’t expect the Russians to leave. Most residents of Crimea are Russian speaking and actually welcome their invaders (again, you cannot make this up). And Putin’s track record in foreign incursions shows a pattern of retaining conquered territories. When he invaded Georgia in 2008, he kept two provinces, which are still occupied with more than 40,000 idle and costly Russian troops.
The U.S. and Europe are in no position to resist the Russian invasion, nor should they. Europe receives roughly 30 percent of its oil, natural gas and coal from Russia. If the U.S. tightens the economic screws on Russia, American banks will suffer, and the Russian oligarchs and Russian people will suffer, but no group will suffer as much as Europeans who have grown dependent on Russian fuel. And Putin is unmoved by personal embarrassment or human suffering.
The stated purpose of the Russian invasion is to protect predominantly ethnic Russians in Crimea from the mob-induced fate of Yanukovich. At first blush, this seems nonsense. But consider the view from Moscow of the American-induced expulsion of the popularly elected and Russian-oriented Ukraine president. And then consider this: What would the U.S. do if the Chinese had fomented a revolution in Mexico and installed a Chinese-friendly government there that solicited Chinese loans and invited the Chinese to help govern? Would the U.S. protect English-speaking American-friendly folks along the Texas-Mexico border?
And how is anyone in the U.S. harmed by Putin’s lawlessness? Should the United Sates government roam the world seeking monsters to slay, or should it learn from its recent grave mistakes? Nearly two centuries ago, President John Quincy Adams warned his successors against the foreign policies that would be manifest in the Bush/Obama years. “Americans should not go abroad to slay dragons that they do not understand in the name of spreading democracy.”
But the government is an old dog that cannot learn new tricks.
*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.”
What follows is a short account of the central argument of a long book, of some 700 pages, that seeks to cover the basic outlines of constitutional law in three major areas: interpretation, structure, and individual rights. The theme that unifies these three separate topics is how they all relate to the quest for limited government. That task requires an interpretive method and an institutional design that is strong enough to allow for government rule, but not so powerful that it suffocates the very individuals whose liberty and security it is intended to protect.
Conservative, Progressive, and Classical Liberal
In dealing with this central theme, my most distressing observation is that the two modern schools of constitutional interpretation do not address the essential challenge of political theory in this fashion. I therefore spend much of the initial section of the book dissecting the two theories of constitutional interpretation—conservative and progressive—that dominate modern discourse of constitutional law, which in oversimplified fashion are these.
First, the conservative view of judicial restraint stresses unduly the need for the judges to take a back seat on major questions of domestic policy and foreign affairs, leaving it to the Congress and the President to divide the key powers of government between them. As a matter of political outlook, most of the conservatives tend to favor, for example, a broad role for private markets and to acknowledge the desirable features of separation of powers on the one hand and of federalism on the other. But by the same token, they do not think that it is the province of the justices to make the central institutional calls on these vital matters, which they think are properly left to the political branches of the government. In so doing, they make the familiar modern mistake of accepting popular democracy as the ideal of government, rejecting implicitly the more structured form of classical republicanism whose complex checks and balances were introduced to counteract the evils of popular democracy that operated by majority will.
That same logic of judicial restraint leads conservative justices to tolerate in large measure extensive forms of regulation of property and contract at both the state and national level, yielding vast scope to the government in the overall control of the economy, even with respect to policies that these justices either reject or doubt on substantive grounds. Again the principle of judicial restraint shapes their institutional role.
To the progressive or liberal justices, the basic challenge takes somewhat different form. By and large they think that separation of powers is a recipe for paralysis in a complex economy that cries out for an activist state. They also believe that the traditional common law rules that governed the law of property, contract and tort have played themselves out in modern times. In their place, they follow the early progressive vision calling for a strong central government to face the challenges of modern times. That program in turn has two separate parts. The first relies on extensive public participation in the deliberative process to set the broad national course on general economic and social affairs. The second looks to group of neutral and learned experts to translate this political consensus into a set of workable rules that can be systematically applied by modern administrative agencies that often operate with substantial independence from judicial, and often, political oversight.
On many particular areas, conservative and progressive thinkers disagree with each other. But the central truth of the modern political economy is that both for different reasons think that the economic and social choices in the United States should be left to democratic and administrative processes. The classical liberal position thus takes issue with both of these points of view, and insists that the great genius of the American Constitution lies in its appeal to a very different political tradition, that counts Locke, Montesquieu, Hume, and Madison as the serious intellectual forbearers of the Constitution.
The Originalist Enterprise—Reconceived
On this general view, the central challenge is to forge sensible institutions that divide and fragment power so that it cannot become the source of political domination or oppression. In dealing with this issue, the entire interpretative structure of the Constitution is critical because if the Framers could not provide clear directives as to the structure of government and the protection of individual rights, the great constitutional crusade for limited government will be stopped in its tracks. To the linguistic skeptic, the endless confusion implicit in key constitutional commands leads to judicial deference to the political branches that then engage in nonstop political horse-swapping devoid of constitutional principle and judicial oversight.
The best elements of constitutional originalism are keenly aware of the dangers associated with the view that any word can have whatever meaning that the justices, the legislators or the president decide to give it. They know that without some check on this exercise, the effort to find a principled basis for limited government will necessarily fail. There is much to be said in favor of this view, so that it become in my view utterly untenable to claim, for example, that the term “commerce” is broad enough to encompass agriculture, mining and manufacture, when in ordinary English the term is used in opposition to these three kinds of activities that our Constitution designedly left to the control of the States. In similar fashion, it is not possible to read the term “private property” as though it encompasses only the right or exclusive possession to land, animals or chattels, when the term has always been used in both common and Roman law —the Framers were far from ignorant to the classical tradition—to cover the rights of use, within the boundaries of nuisance law, and the right of disposition whether by sale, lease, mortgage or gift.
The constant effort to expand the meaning of commerce and restrict the meaning of private property are key components of the Progressive agenda, by combining an expansion of federal power with a contraction of the domain of protected private rights in the second. A faithful originalism is on solid ground when it resists the constant effort to redesign terms so as to turn a classical liberal constitution into a modern progressive one, without going through the process of formal amendment. More generally, there is no necessary connection between the conservative insistence on judicial restraint and classical liberal theory. A Constitution drafted by defenders of limited government should not by interpretation be converted into an open-ended charter of government power.
If the originalists are on sound ground on this issue, they are on far weaker ground if they think that the close examination of the written text, standing alone, is sufficient to unlock the meaning of general constitutional provisions. It is at this point, that the defenders of judicial restraint show insufficient respect to the well-developed interpretive tradition that treats any constitutional text as creating the initial presumption whose gaps are filled in by a conceptual analysis that links the basic textual provisions to the larger constitutional purposes of limited government. These ends are, of course, the control of force and fraud, the common defense, and the provision of public goods, such as roads and other infrastructure, whose creation was contemplated under the Constitution.
It is therefore necessary to recognize that virtually every constitutional text leaves unstated three critical questions for its implementation; anticircumvention rules, justifications, and remedial choices..
First, constitutional limitations are intended to prevent abuse by the political bodies. It is therefore necessary to read the text broadly enough to prevent government from enacting artful measures to circumvent the constitutional limitations on its powers. If the states cannot impose taxes on imports, they cannot be allowed to impose special taxes on importers that could achieve the same end. If the government is not allowed to regulate speech, it cannot be allowed to subject it to heavy taxation. If the government cannot take property, it cannot burn it to the ground, and leave the rubble in the possession of its former owners.
By the same token, it is critical to recognize that in the constitution (as in the ordinary law of contract and tort) the basic rules take the form of presumptions not absolute, allowing the government to justify its actions in particular cases. People should prima facie keep their promises, but not when induced by force or fraud. Individuals should not use force against others, except in cases of self-defense. One of the great vices of modern constitutional law is that the justices and the commentators often see constitutional law as a self-contained body of rules and principles divorced from the rules of private law that explain how ordinary people interact with one another.
This explicit linkage between public and private law brings two critical propositions into view. The first is that the same principles of interpretation have to be brought to bear on the great constitutional guarantees, which now become presumptions not absolutes. Historically, this was done by the articulation of systematic rules that governed the police power, which becomes the main axis along which constitutional doctrine develops on all matters of structural constraint and individual rights, even though those two words are not found anywhere in the Constitution.
The second point is that it should be possible to give principled content to the scope and function of the police power. The standard classical liberal formulation of this doctrine spoke of the need to protect the “safety, health, morals, and general welfare” of the population. Broad as these terms were meant to be, they never gave the state the general power to pass “labor laws,” which were rejected for their excessive paternalism or for their eagerness to treat competitive harm as though it were the type of wrong that the government was in a position to prevent.
The question here is how to choose and defend one consistent interpretation. All too often, the recognition that the constitutional text has some play in the joints is often taken as creating “a living constitution”, which lets the Supreme Court fashion exceptions to the original constitutional norms in ways that reflect our modern sensibilities, so that comprehensive regulation of the economy or the use of real property may properly protect against competitive harms on the one hand, or the loss of views on the other.
Unfortunately, the living constitution approach misunderstands how constitutional justifications should be fashioned. The standard exceptions in the private law are in essential outline the same today as they were in ancient Rome and the early common law. Such notions of assumption of risk and self–which lie at the root of the police power are not new conceptions introduced on an ad hoc basis. What could turn out to be novel, of course, are the types of actions that constitute the threat or use of force.
Yet matters belong in context. The ability of the government to control cyberfraud and cybertrespass should be unquestioned. In contrast, the ability of government to suppress truthful speech or to license forced entry onto the land of others (which is allowed to labor organizations under modern law) cannot be read into any principled reading of the police power. Similarly the constant effort to tell people whom they must deal with under either the National Labor Relations Act or the Civil Rights Law represent a major expansion from the earlier police power jurisprudence, which concentrated in licensing and preventing actions, like the use of fireworks that could cause public nuisances.
Third, there is nothing in the Constitution that states the remedies that should be applied in the event of a constitutional violation by the government. It is therefore necessary to decide whether specific performance should be required, whether the state should be enjoined from certain activity, or whether some measure of damages or compensation should be paid. There are no distinctive constitutional principles that govern these questions. So that the implementation of a coherent remedial structure depends on carrying over to the public context the rules that are used to organize remedies in private disputes. Once again the great difficulty of constitutional interpretation is that the text necessarily poses many critical questions to which it does not necessarily supply explicit answers.
It should not be supposed that a Constitution that hews to these principles is unable to respond to serious modern challenges. The classical liberal judges of the “old court” that operated roughly speaking between the end of the Civil War and the great constitutional transformation of 1936-1937 was able to deal with the major issues that a narrow libertarian theory cannot. The imposition of taxes, the provision of public infrastructure, the use of the condemnation power, and the regulation of monopoly are all standard exercises of government power that are inconsistent with strong libertarian theory, but which are explicitly incorporated into the Constitution—which is why this book is called “The Classical Liberal Constitution” and not The Libertarian Constitution.
What is characteristic of most of the judicial decisions of this period was their willingness to face up to the greatest challenge of their time. The general issue of rate regulation preoccupied the Supreme Court during this period, and the justices (often unanimously) worked long and hard to prevent the accumulation of monopoly power on the one hand, without committing the equally great sin of confiscating private wealth under the guise of regulation. It was the New Deal Court, with its great attachment to state-sponsored monopolies that abandoned the old system so that regulation now became the device to prop up monopoly and not to limit it. Similarly in the area of antitrust, the classical liberal judges were relentless in their pursuit of cartel and other monopoly arrangements, but were careful not to convert the antitrust laws into tools for creating and protecting monopoly power, a task that the progressive justices all too eagerly embraced. Similarly, the classical liberal justices understood the need for taxation, but were equally aware that it was essential to put limits on the structure and objects of taxation lest it become a device whereby governments could create huge transfer programs among states and among individuals that has unleashed a veritable deluge of special interest legislation today. And it was the classical liberal justices who sought for the most part to curb the use of state regulatory power as it applied to economic and land use regulation.
In making this defense of the classical liberal constitution, it is important to recognize the imperfections of a doctrine that tolerated slavery at the outset of the nation and fostered various forms of institutionalized segregation after the Civil War. Needless to say these political compromises are totally at war with classical liberal theory. Similarly, many justices before modern times used the “morals: head of the police power to expand government control over personal conduct, particularly on matters of marriage and sex of which the most egregious example is not the contemporary opposition to gay marriage, but instead remains the systematic suppression of polygamy in the territories, which led to the forfeiture of extensive Mormon holdings to the state.
It is critical, moreover, to note that the basic principles of limited government apply not only to issues of separation of powers, and federalism, but also to such matters as religious freedom and charitable associations that do not have narrow economic ends as their sole objective. Finally, it is critical to note too that there are many areas today where both conservative and progressive justices exhibit a high degree of agreement in ways that fully respect classical liberal principles.
On the structural side, the aggressive use of the “dormant commerce” clause has served to protect national markets against state balkanization even without explicit textual warrant. In my view these deviations from original intention should be respected insofar as they satisfy two conditions. First, they are by long usage embedded into the national culture, and second, they are consistent with classical liberal principles. It is this dual interplay that makes so much of constitutional interpretation difficult.
Similarly on the individual liberty side, the great success of the First Amendment is that in most ways (except for the Progressive dalliance with campaign finance regulation), the text is interpreted just as the classical liberal would have it. Speech is read broadly to avoid the risk of government circumvention. The police power justifications deal with the control of force (threats of assault or violence), fraud and defamation, and the application of the antitrust laws to prevent illegal combinations in restraint of trade. But simple public dislike of an offensive position is never justification for state power. Finally, the use of remedies is carefully guarded to avoid, for example, injunctive relief in most defamation and invasion of privacy cases, but not for the protection of business trade secrets from public disclosures.
Yet by the same token, the great failures of modern time cannot be avoided. The willingness of the Court to let ObamaCare pass constitutional muster represents a three-fold failure. There is no willingness to attack the statute for its massive interference with freedom of contract, for its massive overreaching under the commerce power, and for its disregard of the essential limits on the federal power of taxation. That statute is emblematic of all that is wrong with both the conservative and progressive traditions of constitutional law. Only an explicit embrace adoption of the Classical Liberal Constitution at all levels of government can stop the slide of the United States into long-term stagnation and political discord.
It is a common insight that no system of civil procedure can be perfect. Make the requirements to maintain a lawsuit too lax and you'll invite too many speculative or abusive law suits. Make the pleading rules too tight and many meritorious claims will find themselves kept out of the courts. In all cases, getting the right balance is equal parts art and science. In dealing with well-established legal practices, the proper approach is generally to enact legal change only incrementally unless there is strong proof of some wholesale breakdown of the system.
The Senate is currently considering a bill (the Transparency in Assertion of Patents Act) that violates that maxim in patent cases. Ostensibly designed to the curb the influence of "patent trolls" — those companies that, according to the bill's sponsor, Senator Claire McCaskill, "buy patents, but then fail to actually produce goods or services, opting instead to intimidate or sue other small businesses" — this piece of legislation defines its ambitious goal as: “To curb unfair and deceptive practices during assertion of patents, and for other purposes.” This is not a novel goal. But the means offered to achieve those end are nothing short of revolutionary—and unwise. In the effort to control those unidentified trolls, her legislations threatens to wreck the current procedural system.
The proposed legislation makes grievous errors in two critical areas. The first is its wholesale alteration of the pleading rules under the Federal Rules of Civil Procedure. The second is the massive overkill that it embraces with respect to public enforcement of the new rules by a combination of actions through the Federal Trade Commission and the Attorney Generals in all 50 states. It is worth explicating both points.
To orient the discussion of civil procedure, it is best to harken back for a moment to the adoption of the Federal Rules of Civil Procedure (FRCP), adopted after much reflection in 1938. The basic assumption of the FRCP was that pleadings were supposed to serve a “notice” function; namely, they were supposed to give the other side some awareness of the nature and source of the claim against them.
Most of the factual disputes were to be resolved through the process of discovery, which followed the pleading. Under the FRCP, there is much opportunity for abuse in the discovery process, but most of that can be handled in ways that reform the discovery rules without undercutting the sensible role of the notice pleading. Thus it is possible to require that parties get leave of the court to pursue discovery, or to limit the amount of material that can be requested at any time, or to require the moving party to pay for the costs of the production of documents when requests become too onerous. Applying these reforms across the board would improve the civil procedure system without singling out patent infringement claims for special treatment.
Unfortunately, the proposed Senate bill takes none of these steps applicable to all civil litigation. Instead, it presumptively introduces a set of detailed pleading requirements for all patent claims that would embarrass the most ardent special pleaders from the era before the FRCP. These rules are not set out in the statute, but are to be formulated by the Federal Trade Commission, which now displaces the various federal rulemaking bodies that normally cover this territory.
To make matters worse, the statute allows the FTC to fashion some exemptions to this rule, allowing them to exclude, for instance, disclosures of "written communications between parties regarding existing licensing agreements." That phrasing carries with it the negative pregnant that all future written licensing arrangements may well be caught by the act. It also allows the FTC to exempt written communications "not necessary for the protection of consumers or within the scope of the purposes of this Act." Which communications meet that standard, however, are not defined in the statute. The details are to be filled in by FTC rule making that grants the agency enormous amounts of discretion, largely insulated from judicial review.
The wooliness of this general grant is matched by the incredible reach of the substantive provisions that fall within the jurisdiction of the FTC. The problem starts with a demand that the parties list, in detail, all patents for which they claim infringement, and all claims of these patents. It then doubles down on this approach by requiring an equally exact description of all the ways in which the defendant’s invention may infringe the patent in question, along with information about manufacturers whom an aggrieved party might sue for indemnity.
The confusion is then compounded by a requirement that the plaintiffs list all of the potential interested parties in the patented technology, whether as “owner, coowner, assignee, exclusive licensee, and entity with the authority to enforce the patent, and the ultimate parent entity of each owner, coowner, assignee, exclusive licensee and entity with the authority to enforce the patent.” That list could involve hundreds of parties. In most cases, this information may well prove irrelevant; in some cases it could require the disclosure of trade secrets; and in cases of multiple patents, it could overwhelm the system with endless amounts of trivia.
The cascade of demands then includes a requirement that the plaintiff make disclosures of its FRAND obligations — that is, those obligations to license the patented technology on reasonable and non-discriminatory terms. It requires a proposal on how to deal with the measure of damages without having knowledge of the extent or scope of the potential violations. And it caps off the list of requirements by forcing the plaintiffs to disclose whether the patent in question is in reexamination before the Patent and Trade Office.
I list all of these onerous demands to show just how far off the rails this Senate bill has gone. To be sure, these requirements many make sense in some simple cases (of which there are precious few in patent law). But they border on the oppressive in cases that involve the application of patent portfolios with multiple overlapping and complementary patents.
In many cases there may appear to be some evidence that some of these patents have been infringed, but it is almost impossible to determine whether that is the case without taking some discovery in the first place. Yet there is no explanation as to why the correct approach is not to allow the trial judge discretion to require a more definite statement of those issues that the defendant thinks relevant to the successful defense of the case. The net effect of these provisions is to overwhelm the entire system. Yet there is no protection for honest and good faith errors, only a provision that prohibits “an assertion that lacks a reasonable basis in fact or law” without excluding the possibility of imposing a system of strict liability.
To round out the discussion of this bill, it is necessary to discuss its multiple systems of enforcement. The one glimmer of sanity in this statute is that it does not appear to authorize private rights of action by individuals who are subject to lawsuits that do not meet these requirements. But that limitation offers scant consolation, because the proposed law offers both the FTC and the state Attorney Generals the option to commence suit. At the federal level, the FTC can unleash the full set of actions for damages, injunctions, and civil penalties. For their part, the state AGs are specifically authorized to sue for damages and restitution, and for statutory fines up to $16,000 for each “separate violation,” — a term that receives no statutory definition. In a sense, this arrangement is worse than ordinary private litigation, because it allows defendants to use state resources to defend themselves in at least some cases, unfortunately, it is all too easy to believe that, at the first sign of trouble, they will call their state AG, who is allowed to intervene in individual cases or initiate enforcement actions.
To be sure, the proposed statute contains one constructive limitation that blocks the state Attorneys General from initiating their proceedings if the FTC has started its own enforcement proceedings. But it does not appear that the law prohibits any concurrent FTC action if the state AGs sue first. Nor does it appear the state AGs must stay their actions when the federal proceedings are going on. There are lots of opportunities for cooperative game-playing between like-minded FTC officials and state AGs. The cumulative enforcement of this law could amount to a barrage of major lawsuits, most of which involve ordinary licensing activity for which there has been no evidence of abuse at all. Bringing out the heavy artillery might be relevant for massive abuse and overreaching. But in these cases, the response is wholly disproportionate to mistakes in pleading under exacting rules that should not be adopted in the first place.
There are, moreover, serious constitutional issues lurking in the wings. The situation massively chills the right to bring any lawsuit, and may well constitute a violation of the due process norm that allows all individuals to have access to courts to protect their own property.
There is also a real possibility, given the aggregate burdens that the law imposes, that it creates First Amendment issues under the complex Noerr-Pennington doctrine that allows parties to petition the government for redress of grievances, which has been read by the Supreme Court to protect the initiation of lawsuits, including patent lawsuits, that are brought in good faith.
This is not the place to examine the immense difficulties that this proposed legislation could raise. My hope is that the Senate regains its senses and decides to start over with a more modest and more sensible piece of legislation that does not revolutionize the entire law of civil procedure in patent cases for the worse in order to address a troll that is of far more modest proportions than its supposed statutory solution.
The Two Sides of Internet Neutrality
In January, net neutrality was dealt a painful blow by the FCC’s defeat in the D.C. Circuit case Verizon v. FCC. At issue was the FCC’s 2010 Open Internet Order, which sought to enforce the principles of net neutrality on broadband internet providers. Supporters of net neutrality bemoan this decision as a huge loss, and fear that companies like Verizon will quickly take advantage of it; after all, why would Verizon oppose the Open Internet Order if it didn’t have something different in mind than the FCC regulations allow? Fortunately, many signs indicate that this setback is likely temporary.
Let’s start with the basics. Net neutrality is the idea that broadband providers should not be able to block or discriminate against any companies (“edge providers”) who wish to transmit information to end users; essentially all data must be treated equally. The FCC labels this the “Open Internet” principle. Net neutrality supporters fear that without a level playing field, broadband providers could throttle connection speeds to certain websites in order to extract payments in exchange for faster service. They could also wish to block competitor applications; for example, Verizon could hypothetically attempt to block Skype in order to provide more business for a rival web-calling program of its own creation. More nefariously, some fear broadband providers could try to violate free speech principles by blocking access to news websites they don’t agree with, like MSNBC or Fox News.
Supporters of net neutrality point out that the Internet’s greatest strength is the interconnectedness of the global network as a whole: users can connect to virtually anything, anywhere, and anytime. The low barrier to entry means that innovative start-ups can get off the ground and eventually become the successful companies we enjoy today like Google or Facebook. If broadband providers could discriminate, it would essentially entrench today’s successful companies; the next Google or Facebook would never get off the ground because it couldn’t pay to play in the big leagues with those two giants. An open internet by comparison would keep the internet alive as an equal opportunity pipeline for services, education, communication, and everything else we have come to rely on it for.
Critics of net neutrality counter that the internet has remained largely unregulated in the last decade, and so far no attempts at odious price discrimination have come to fruition (though there have been minor dustups). They argue that any attempts at price discrimination would drive outraged consumers into the arms of a rival. Indeed, the disastrous 2012 SOPA bill, which would have granted the government the heavy-handed power to shut down websites suspected of copyright violations, was absolutely eviscerated by a spontaneous uprising of millions of angry internet users who besieged Congress. This seems to lend credence to the idea that discerning internet users would use their diffuse market power to defeat price discrimination. A recent survey indicates that 71% of internet users would switch to a net neutral company if their internet service provider started discriminating, and 10% of users would “quit” the internet altogether if net neutrality was eliminated (if you can believe that second figure).
The ugly truth however is that most end users don’t have a lot of choice regarding their broadband provider – a majority of Americans only have one or two options to choose from. When such monopoly problems exist, the advantages of competition aren’t present. Since laying the infrastructure to reach the end users is very costly, it is almost impossible for more competitors to break into the market. Getting permission from the local governments across the entire nation to lay more cables into people’s homes is next to impossible, meaning most people can only choose between their telephone company and cable company for internet. If both companies enact discriminatory regimes without colluding in the matter, internet users would be left with no alternatives. Indeed, cable and phone companies already “bundle” internet service in a cheaper package with their phone or cable service, so that if you opted out in order to seek out a third party internet provider, the costs of service you are already buying from them would go up and erase any potential gains from using the third party.
The Zombie Lives – Internet Neutrality Will Come Back From the Grave
This brings us back to the D.C. Circuit case. It is important to note that for jurisdictional reasons, the D.C. Circuit ruled that the FCC did not have the authority to promulgate the Open Internet Order because it lacked the authority to do so under the 1996 Telecommunications Act. The FCC had designated the broadband providers as an information service, and not a common carrier; if broadband providers are designated instead as common carriers, the court would almost certainly grant them the authority to ensure net neutrality. The court expressly avoided any ruling on the merits of net neutrality as a concept, and would likely grant deference to the FCC under the Chevron doctrine if it reclassified broadband providers as common carriers. Internet neutrality is not dead.
Given the FCC’s and the public’s desires to maintain internet neutrality, the Verizon v. FCC case will likely represent only a roadblock towards the goal of open internet. Despite public suspicions, the broadband companies have not yet moved to exploit the case by enacting discriminatory pricing regimes. Recently, Comcast and Netflix reached an agreement on cost sharing for the video-streaming company on Comcast’s network. This was not the first sign of the death of internet neutrality however; this was a different beast. “Backbone networks” are long haul networks that transport data from companies providing web content to the broadband providers who actually deliver it to the customers. There are portals at the gateway between the backbone networks and the broadband providers; normally if traffic is very heavy in one direction, one of the parties will open up additional portals to accommodate it (these are commonly called peering agreements). The parties essentially self-policed each other, and worked on the mutual premise that either party would open up more portals to accommodate traffic in one direction or another.
Netflix’s interests do not fit this paradigm of self-policing. Netflix requires massive data transfers downstream to the user, but almost goes back upstream. Thus, Comcast had to keep opening up portals, while the backbone providers never had to reciprocate. Comcast eventually got tired of essentially propping up Netflix’s business model, and decided to allow traffic to back up at the portals until Netflix agreed to pay extra to establish a direct connection with Comcast. The custom that had built up around the portals broke down because Netflix was not at all like previous websites. Thus, the agreement did not kill net neutrality, but rather answered the question of whether Netflix’s customers or Comcast’s customers will pay for the voracious appetite for movies and shows that Netflix customers have displayed; the rational decision prevailed, and these two private actors agreed that it should largely be Netflix’s customers. This was not discriminating data based on its content, but rather based on its volume.
Agreements of this nature would not impact start-ups, because they would not impose massive one-sided costs on broadband providers until their businesses were sufficiently built up that they could pay the broadband providers on whom they impose substantial costs. Simply put, this sort of deal does not signal the end of net neutrality. In fact, some people think it might be a good thing, as the extra payments from Netflix and other companies would encourage broadband providers to invest in improved infrastructure to increase internet speeds, which would essentially serve as a rising tide that would lift all boats.
Potential for Compromise
It is hard to trust broadband providers when they have a near monopoly on internet access for most Americans, but critics of net neutrality do have one strong argument against the FCC’s plan: the damage that a heavy-handed regulatory regime could do. To a certain extent, the supporters and critics of net neutrality fall on either side of the line depending on who they fear less: a handful of corporations, or the federal bureaucracy of the United States government. The correct balance should rely exclusively on neither.
If the FCC were to heavily regulate internet traffic with pricing schemes and burdensome paperwork requirements, they could potentially do far more harm than good. Perhaps the best solution would be to reclassify the broadband networks as common carriers and create principles for open internet that would utilize the FCC as a backstop only when necessary. It doesn’t make sense for the FCC to go poking around at Verizon and Comcast when so far neither has moved to significantly jeopardize net neutrality. If either did, it would likely be apparent when edge providers and users began complaining about it and filed complaints with the FCC. In the absence of any allegations of wrongdoing however, the FCC should keep their hands off. For almost all of its existence, the internet has been both unregulated and open; we should only change the former if there is a change in the latter.
*Thomas Warns is a J.D. Candidate, class of 2015, at NYU School of law, Staff Editor on the NYU Journal of Law & Liberty , and author of the weekly column "Consider This a Warning."
Thomas Warns, NYU Law Class of 2015 and JLL's incoming Editor-in-Chief for the 2014 - 2015 academic year, will be appearing on BronxNet TV this evening to discuss net neutrality.
Tom will be discussing the recent legal developments surrounding net neutrality on a program entitled "Today's Verdict" with host David Lesch. The program airs tonight at 6:30 and can be viewed via live stream here, Cablevision Channel 67, or Verizon Fios Channel 33.
President Obama plans to execute via a drone strike another US citizen, but this time under his revised signature killing procedures. These procedures evidently are more stringent than the original targeted killing procedures. This has angered some Republicans, who argue greater procedures will slow down the killing of alleged enemies. While this is a complicated topic, I think the Obama Administration is correct in increasing the required procedures prior to killing US citizens. In fact, the Obama Administration probably did not go far enough.
Generally, under the 5th Amendment the executive cannot execute persons (let alone citizens) absent the due process of law. Therefore, it would seem obvious that the president cannot write and execute a kill list. Yet one obvious exception to the 5th Amendment is Jus in Bello – the law of war. During war, it would be impossible for the president to provide due process in any meaningful way to enemy soldiers. This exception must be narrowly construed and diligently enforced, less the exception swallows up the general rule.
The global war on terror is a grey place where the rule and exception come very close to meeting. Once again, no one would deny that the US President could during war order an attack that kills enemy combatants. Moreover, if that attack killed US citizens who defected to the enemy, I do not think there would be 5th Amendment arguments that would prohibit the attack. The difficulty in the war on terror is that it is very unclear whether someone has actually defected to the enemy. It isn’t always clear who the enemy is. Moreover, the war has neither defined borders nor a start/end date. It is very much not a war in the traditional sense. This should make everyone weary of giving any executive substantial latitude – the power will exist for a long time.
As such, it makes the targeted killing question very difficult to answer: does it fall under the war exception or the general 5th Amendment rule? Attorney Holder seemingly offered an in-between. He argued that a non-judicial process that was vetted by the executive was sufficient. This strikes me as the fox guarding the hen house. Yet recent alternatives do not seem particularly appealing. The FISA court was either a rubber stamp or was simply lied to by the NSA. Congress often delegates on matters of national security. How do you solve this issue?
Perhaps an improved FISA court? One of the large problems with the FISA court was its ex parte nature. Ideally, we could construct a targeted killing court where standing rules could be relaxed permitting non-governmental organizations, such as the ACLU, to argue cases on behalf of the alleged enemy. This court could not be an Article III Court. The second problem with the FISA court was the secrecy behind the court. Because its opinions weren’t made public, the legal conclusions were not scrutinized. Now, given the nature of targeted killings there would need to be some secrecy. But there could be a standard that all opinions must be published within 9 months. This would open the killings court to criticism, which could help avert some of the problems that plagued the FISA court and would make clear whether the court is functioning properly.
In the end, Obama was right to want more procedure. However, he probably needs to include more non-executive procedure and non-government stakeholders in the process.
*Isaiah Hunter is a J.D. Candidate at New York University School of Law, class of 2014, and is Senior Articles Editor of the Journal of Law & Liberty.
Judge Andrew P. Napolitano*
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA’s most troublesome behavior has not been a part of the public debate. This behavior constitutes the government’s assaults on the American legal system. Those assaults have been conducted thus far on two fronts, one of which is aimed at lawyers who represent foreign entities here in America, and the other is aimed at lawyers who represent criminal defendants against whom evidence has been obtained unlawfully and presented in court untruthfully.
Investigative reporters at The New York Times recently discovered that the NSA has been listening to the telephone conversations between lawyers at a highly regarded Chicago law firm and their clients in Indonesia. The firm, Mayer Brown, has remained publicly silent about the revelations, as has its client, the government of Indonesia. But it is well known that Mayer Brown represents the government of Indonesia concerning trade regulations that govern exports of cigarettes and shrimp to the U.S. The lawyers on the other side of the bargaining table from Mayer Brown work for the federal government, which also employs, of course, the NSA.
Can the NSA lawfully tell lawyers for the government who are negotiating with Mayer Brown lawyers what it overheard between the Mayer Brown lawyers and their client? The answer, incredibly, is: Yes. Federal rules prohibit the NSA from sharing knowledge with lawyers for the federal government only about persons who have been indicted. In this case, Mayer Brown is attempting to negotiate favorable trade relations between Indonesia and the U.S., and the lawyers for the U.S. have the unfair advantage of knowing in advance the needs, negotiating positions and strategy of their adversaries. In the Obama years, this is how the feds work: secretly, unfairly and in utter derogation of the attorney-client privilege.
For 100 years, that privilege -- the right of lawyers and their clients to speak freely and without the knowledge of the government or their adversaries -- has been respected in the U.S., until now. Now, we have a lawyer who, as president, uses the NSA to give him advance warning of what his office visitors are about to ask him. And now we have lawyers for the federal government who work for the president and can know of their adversaries’ most intimate client communications.
This is profoundly unfair, as it gives one side a microscope on the plans of the other. It is unwise, too, as clients will be reluctant to open up to counsel when they know that the NSA could spill the beans to the other side. In the adversarial context, for the system to work fairly and effectively, it is vital that clients be free to speak with their lawyers without the slightest fear of government intrusion, particularly when the government is on the other side of the deal or the case.
If you have spoken to a lawyer recently and if that lawyer is dealing with the federal government on your behalf, you can thank the constitutional scholar in the Oval Office for destroying the formerly privileged nature of your conversations.
But that is not the only legal protection that President Obama has destroyed. In 2012, the U.S. Supreme Court heard oral argument in a case in which journalists in the pre-Snowden era challenged the government’s spying on them. The government won the case largely because it persuaded the court that the journalists did not have standing to bring the lawsuit because, the court ruled, their fears of being spied upon were only hypothetical: They suspected that their communications with their sources were being monitored, but they couldn’t prove it. In this post-Snowden era, we now know that the journalists in that case were being spied upon.
Nevertheless, during the oral argument in that case, government lawyers told the high court that should government prosecutors acquire from the NSA evidence of criminal behavior against anyone whom they eventually would prosecute and should they wish to use that evidence in the prosecution, the Justice Department would inform defense counsel of the true source of the evidence so that the defendant would have the ability to challenge the evidence.
Yet, last week, in a case in federal court in Oregon, the same Justice Department that told the highest court in the land last year that it would dutifully and truthfully reveal its sources of evidence -- as case law requires and even when the source is an NSA wiretap -- told a federal district court judge that it had no need or intention of doing so. If this practice of using NSA wiretaps as the original source of evidence in criminal cases and keeping that information from the defendants against whom it is used is permitted, we will have yet another loss of liberty.
Federal law requires that criminal prosecutions be commenced after articulable suspicion about the crime and the defendant. Prosecutions cannot be commenced by roving through intelligence data obtained through extra-constitutional means. That is the moral equivalent of throwing a dart at a dart board that contains the names of potential defendants and prosecuting the person whose name the dart hits.
For the past 75 years, federal prosecutors have not been permitted to use unlawfully obtained evidence in criminal cases, and they have been required to state truthfully the sources of their evidence so that its lawfulness can be tested. This rule generally has served to keep law enforcement from breaking the laws it has sworn to uphold by denying to its agents the fruits of their own unlawful activity.
Liberty is rarely lost overnight. It is lost slowly and in the name of safety. In the name of keeping us safe, the feds have spied on the lawyers who negotiate with them, lied to the lawyers whose clients they are prosecuting and misrepresented their behavior to the Supreme Court. As far as the public record reveals, they have not corrected that misrepresentation. They have done all of this in utter defiance of well-settled law and procedures and constitutional safeguards.
What will they do next?
*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.”
As our four-part series for the month of February about wasteful government spending comes to a close, one more bittersweet government program must be confronted: the USDA’s loans to sugar manufacturers.
The program’s roots can be traced to the Agriculture and Food Act of 1981. The program uses several mechanisms to try to increase the price of sugar in America, which will help the sugar producers and processors (the companies which turn raw beet and cane into sugar) stay profitable. The most controversial (and wasteful) part of the program is the loans to sugar processors.
The loans prop up the sugar industry. When sugar prices are high, the companies usually pay off the loans; when sugar prices are low, the sugar companies often default on the loans and instead exercise the option to pay the loans with sugar they have put down as collateral. The USDA adds few restrictions to loan eligibility, so companies are eligible for loans almost immediately after defaulting on previous ones. Adding insult to injury, the government will then leave money on the table by selling the sugar to ethanol producers at a discount of ten cents a pound (about 50% off based on current sugar prices) in order to make more of that wasteful fuel – it essentially bundles two wasteful subsidies together.
The sugar industry claims that the practices sustain an industry that employs 142,000 people. But what about the American taxpayers and consumers – how much are they paying for this sticky mess? The sugar processors defaulted on $171 million of loans in 2013, despite the fact that the USDA also purchased $106 million worth of sugar in order to help drive up sugar prices (removing supply tends to increase price – how come the USDA only seems to understand the basics of supply and demand curves in limited contexts?). The USDA will give away some sugar to prisons and nursing homes, and will try to sell the rest to ethanol producers, but because of the ten cent per pound price cut, they will still lose $80 million from the $171 million worth of loans that defaulted.
There is no way to sugarcoat these facts – the program is a total policy failure. What is even more disturbing is the fact that economic and political reasons seem to be aligning so that this will continue indefinitely. Sugar prices will remain low while countries such as Mexico continue to experience a boom in sugar production and send more exports to the U.S. – extra supply usually means lower prices. Domestic production is likely to only increase as well, since the loans basically insulate sugar processors and farmers from any of the repercussions of overproduction of sugar. Politically, attempts to change virtually anything in the Farm Bill are met with opposition. The last attempt at reform was defeated, and Congress simply extended the existing Farm Bill another year.
By now, the solution should be painfully obvious – the government needs to stop meddling in the free market. The government may feel it is noble to dole out these subsidies to big sugar companies because the jobs of 142,000 workers may hang in the balance, but they’re only wasting money and driving up costs for consumers and taxpayers. If the U.S. government stopped giving out loans to sugar processors and stopped buying excess sugar in order to support higher sugar prices, sugar companies would be forced to adjust their production to appropriate levels. Instead, they are incentivized to keep producing more and more sugar, because they are essentially insulated from any negative results – if sugar prices are too low, the government will essentially bail them out. Congressional inactivity will likely allow the size of the subsidies to increase each year, and even a heaping spoonful of sugar won’t help Americans feel any better about the bitter medicine being shoved down their throats.
*Thomas Warns is a J.D. Candidate, class of 2015, at NYU School of law, Staff Editor on the NYU Journal of Law & Liberty , and author of the weekly column "Consider This a Warning."