FedSoc Blog

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On June 27, 2011, the Supreme Court announced its decision in Arizona Free Enterprise Club's Freedom Club PAC v. Bennett. The question in this case was whether Arizona's matching funds system for publicly funded candidates for state office violated the First Amendment.

In an opinion delivered by Chief Justice Roberts, the Court held by a vote of 5 to 4 that "Arizona's matching funds scheme substantially burdens protected political speech without serving a compelling state interest and therefore violates the First Amendment." Justices Scalia, Kennedy, Thomas, and Alito joined the opinion of Chief Justice Roberts. Justice Kagan filed a dissenting opinion, which was joined by Justices Ginsburg, Breyer, and Sotomayor.

To discuss the case, we have Bradley A. Smith, who is the Josiah H. Blackmore II/Shirley M. Nault Designated Professor of Law at Capital University Law School.

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A Wall Street Journal editorial today discusses the attempt of Congress and the President to provide an answer to the Supreme Court's ruling last Term in Skilling v. United States that the Department of Justice could only use the federal "honest services" statute to prosecute people for bribery and kickbacks. Outside of these clear cases, the law was unconstitutionally vague and thus could not be used as the basis of criminal liability, held the Court.

According to the editorial, members of Congress are now attempting to respond to the Supreme Court's ruling by passing a Senate billl "transforming many state or local ethics violations into federal felonies any time there is an allegation of undisclosed 'self-dealing'" and a House bill broadening mail- and wire-fraud statutes and setting a lower standard for proving bribery of federal officials.

These proposals, says the Journal, contain some of the same vagueness problems as the statute from the Skilling case, and some provisions could allow prosecution for conduct currently thought to be legal. The editorial states:

The biggest objection to such laws is their injustice, but they also harm the economy by introducing legal uncertainty that deters or delays business investment. A Congress that claims to care about job creation would drop these attempts to undermine a wise and unanimous Supreme Court decision.

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A panel of the U.S. Court of Appeals for the 11th Circuit has ruled that the individual mandate in the health care law is unconstitutional because it exceeds Congress's authority to enact legislation under the U.S. Constitution's Commerce Clause.

Click here for a pdf of the ruling. Click here for the Wall Street Journal article on the ruling.

Stay tuned for updates.

According to a Washington Post article today, a decision in July by a panel of the D.C. Circuit Court of Appeals striking down a regulation issued by the Securities and Exchange Commission could have far-reaching effects in the regulation of Wall Street, and even beyond into the area of environmental regulation when weighing economic concerns is involved.

The D.C. Circuit panel decision declared invalid an SEC rule making it easier for shareholders to get rid of directors on corporate boards. The panel decided that, in issuing the rule, the SEC acted "arbitrarily and capriciously" by not sufficiently analyzing how it might affect the economy, thus violating a federal statute.

Click here to read the original FedSoc Blog post on the decision. Click here to read the decision (pdf).

The article in The Washington Post says that the ruling's standard may be impossible to meet in some areas of regulation. As J. Robert Brown Jr., a professor at the University of Denver's Sturm College of Law, puts it: "What the court is doing is second-guessing economic analysis that can always be second-guessed."

The panel decision said that the SEC failed to respond to economic concerns raised in the comments submitted by businesses in the rule-making process. According to Eugene Scalia, a lawyer for business groups in the case, sometimes the SEC must act without complete data, but "(i)f it just doesn't know that what it's doing is positive, it shouldn't do it."

On August 29, the Federalist Society is hosting a Teleforum on the issues surrounding this case and proxy access in general. Mark the call on your calendar, and stay tuned for further details!

The WSJ Law Blog today describes a new legal fight over the Ten Commandments at a courthouse in Dixie County, Florida. The subject of the current litigation is a display with the Ten Commandments and the message "Love God and Keep His Commandments."

While Judge Maurice Paul of the federal court for the Northern District of Florida has sided with the American Civil Liberties Union in ordering the monument removed because it results in the inappropriate government promotion of a religious message, many citizens of Dixie County are planning to make things difficult for those in charge of the removal.

Donald Eady, a mechanic in the area, said, "There will be people standing around it to protect it when they come to remove it."

Click here for the district court ruling in the case. It is now on appeal in the 11th Circuit, where Dixie County argues that the display is owned by a private citizen and thus comprises a private display of law and history.

The 11th Circuit Court of Appeals will have to deal with what the Law Blog calls "squishy" precedent from the Supreme Court on the issue. In 2005, the Court ruled in companion cases from Texas and Kentucky that displaying the commandment on public grounds is not by itself unconstitutional, but that it may be unconstitutional if the display can be seen as endorsing religion.

The Blog of Legal Times reports that attorneys for Exxon Mobil Corp. have filed a petition with the U.S. Court of Appeals for the D.C. Circuit requesting that the court review a panel decision exposing Exxon to liability under the Alien Tort Statute (ATS) for the alleged torture of civilians in Indonesia.

Click here for the petition. Click here for the 2-1 panel decision. Judge Judith Rogers wrote the majority opinion.

The appellate case grew out of two lawsuits from civilians who claim they were tortured by the Indonesian military over a number of years while it was guarding Exxon facilities. In her opinion, Judge Rogers found:

The law of the United States has been uniform since its founding that corporations can be held liable for the torts committed by their agents. This is confirmed in international practice, both in treaties and in legal systems throughout the world.

Exxon argued that it was not subject to suit under the ATS both because under customary international law only individuals, rather than corporations, can face liability for human rights violations and because the statute, passed in 1789 to give district courts jurisdiction to hear tort suits from aliens for "violation(s) of the law of nations or a treaty of the United States," was not meant to apply to actions taken outside the country. In the petition, lawyers for Exxon write:

There is a strong presumption in American law that statutes do not apply extraterritorially, even where an express cause of action exists. There is nothing in the text or statutory history of the ATS sufficient to trump this strong presumption.

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The Federalist Society has published a new article by Kenneth L. Marcus on the Obama Administration's campaign against bullying in the public schools. The article examines the controversy surrounding the "administrative core of the campaign," a new bullying policy announced in a "Dear Colleague" guidance letter from the U.S. Department of Education's Office for Civil Rights (OCR) on Oct. 26, 2010.

According to Marcus:

As a substantive matter, two things must be said about OCR's new bullying policy. First, it is neither new nor a bullying policy. Rather, it is a repackaging of longstanding OCR interpretations of harassment law ... Second, it is neither a straightforward application of federal anti-discrimination statutes, nor a faithful application of judicial case law. Instead, it provides OCR's distinctive and controversial interpretation of its civil rights statutes, deviating in significiant ways from the courts' precedents.

Click here for the pdf of the article, "Bullying as a Civil Rights Violation: The U.S. Department of Education's Approach to Harassment," forthcoming in the August 2011 issue of Engage: The Journal of the Federalist Society Practice Groups.

Matthew Furman has written a new paper for the Federalist Society's New Federal Initiatives Project (NFIP) that explores a new rule proposed by federal agencies, including the SEC and FDIC, seeking to prevent compensation schemes at "covered" financial institutions that are excessive or could incentivize employees at these institutions to allow financial losses.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 required these agencies to propose regulations dealing with these perceived incentive problems. According to the paper, the rule takes the view that:

supervision and regulation of incentive compensation, as with other aspects of financial oversight, can play an important role in helping ensure that incentive compensation practices at covered financial institutions do not threaten their safety and soundness.

Critics of the proposed rule have argued, among other things, that it is vague, contains little guidance, and may reduce the ability of the covered institutions to compete.

Click here for more NFIP papers.

Eugene Scalia of Gibson Dunn & Crutcher has an op-ed in today's Wall Street Journal discussing the Obama Administration's new rules changing organizing elections for unions. Scalia writes:

Government encroachments typically come as a wolf in sheep's clothing, Justice Antonin Scalia once observed, but occasionally they are brazen - then, the "wolf comes as a wolf." The Obama administration recently proposed a pair of rules to help unions win workplace elections. One rule is obviously a wolf. The other is a pretty creepy looking sheep.

Under the first rule, the National Labor Relations Board (NLRB) is now allowing unions to give companies only ten days' notice before they hold organizing elections. A union could hold a hearing determining important issues related to such an election, such as who can vote, a week after it petitions for the election.

Click here for a NLRB fact sheet on the new election rules.

The second rule (the "creepy looking sheep," as Scalia puts it), proposed by the Department of Labor, requires increased disclosure of details of the relationship between the company and outside parties hired to consult on union issues. This rule limits the current exception allowing companies not to disclose details about their relationships with firms that merely "advise" the company rather than directly persuading the employees.

Click here for the Department of Labor's announcement of the proposed disclosure rule.

The election rule, Scalia writes, is intended to increase union power over what employees hear and decide as the company scrambles to catch up with a union that has been planning to launch its election announcement for months. The disclosure rule, he argues, seeks to hamper the efforts of companies to inform their workers about the consequences of their votes on union matters because these companies do not wish to report sensitive, strategic activities in government filings. Both, Scalia says, are a gift from the Obama Administration to unions.

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Eugene Volokh has a post today on Volokh Conspiracy about the constitutionality of the new U.S. Joint Select Committee on Deficit Reduction created by the legislation raising the U.S. debt ceiling signed into law last week.

The Joint Committee will be comprised of 12 members of Congress and is charged with recommending deficit reductions for the next ten-year period. The committee's recommendations will then be put to an up-or-down vote in each chamber of Congress, with no amendments or filibusters allowed. 

According to some (including recently-removed language in a Wikipedia entry on "Super-Congress," which is available here), the Committee is unconstitutional because it consolidates legislative power that can only be exercised by Congress according to the methods prescribed in the Constitution.

However, Prof. Volokh argues that the Committee is simply a manifestation of each congressional chamber's power to "determine the Rules of its proceedings" under Article I, Sec. 5 of the Constitution. While the Constitution doesn't authorize any other body to exercise the legislative power, even if that power is delegated to the body by Congress, Volokh says that Congress may do so as long as the body is merely making proposals that Congress afterward approves as law.

And, in this case, Congress is approving the legislation before it becomes law, writes Volokh, although he acknowledges that the legislation's "fast-track mechanism, with the restrictions on amendments and on the time available for debate, is unusual, and is intended to make the Committee's work product especially influential."

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On June 16, 2011, the Supreme Court announced its decision in J.D.B. v. North Carolina. This case concerns a thirteen-year-old, J.D.B., who was questioned by a uniformed police officer and school administrators in a closed-door conference room at J.D.B.'s school. Before the questioning began, the police officer did not Mirandize J.D.B., give him the opportunity to call his legal guardian, or tell him that he was free to leave the room. The question in this case is "whether the age of a child subjected to police questioning is relevant to the custody analysis of Miranda v. Arizona."

In an opinion delivered by Justice Sotomayor, the Court held by a vote of 5-4 that "a child's age properly informs the Miranda custody analysis." Justices Kennedy, Ginsburg, Breyer, and Kagan joined Justice Sotomayor’s opinion. Justice Alito filed a dissenting opinion, which was joined by Chief Justice Roberts and Justices Scalia and Thomas.

To discuss the case, we have Carissa Byrne Hessick, who is a professor at the Sandra Day O'Connor College of Law at Arizona State University.

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The New York Times has an article today about how some Republicans in Congress, following the conflict with congressional Democrats and the President over raising the debt ceiling, are now pushing hard for a Balanced Budget Amendment to the U.S. Constitution.

Such an amendment would, at its most basic level, state that the federal government cannot spend more than the amount it takes in. The amendment would require approval from two-thirds of each congressional chamber and three-fourths of the state legislatures to become part of the Constitution.

In the alternative, two-thirds of the states could call for a convention for proposing amendments, and three-fourths of the states could ratify any amendments issuing from that convention. This method of proposing amendments would have the ultimate effect of bypassing Congress, but it has never been used since the ratification of the Constitution.

A balanced budget amendment passed the House of Representatives in 1995, but it failed in the Senate by one vote.

Two versions of the balanced budget amendment have gained some traction in Congress: one mandating that outlays not exceed total receipts for each fiscal year, except interest payments, unless Congress allows this by a three-fifths vote in each chamber; and the other requiring a two-thirds majority in each chamber to raise taxes and to raise spending above 18% of the country's gross domestic product.

Rep. Eric Cantor of Virginia wrote in an op-ed, "House and Senate passage of the balanced budget amendment will make reckless borrowing a thing of the past and will ensure that our childrene enjoy futures full of opportunity." Opponents, however, state that requiring a balanced budget may weaken the government's power in times of crisis and that now, just after U.S. default was narrowly averted, is not good timing for consideration of such a measure.

The Wall Street Journal has an editorial today noting that former President Bill Clinton has compared new voter ID laws in states across the country to attempts by Southern states in the Jim Crow era to discourage African-Americans from voting. In remarks to a student group last month, Clinton said:

There has never been in my lifetime, since we got rid of the poll tax and all the other Jim Crow burdens on voting, the determined effort to limit the franchise that we see today.

Former President Clinton was referring to legislation passed in states such as Alabama, Kansas, Rhode Island, South Carolina, Tennessee, Texas, and Wisconsin that require identification at the polls with the stated goal of keeping voters from impersonating others, making it more difficult to vote at more than one polling station, and stopping illegal immigrants from voting.

According to the editorial, voters have consistently supported reforms to require identification to vote, and federal courts, including the U.S. Supreme Court, have upheld these laws in multiple cases. Rep. Jon Brien of the Rhode Island House of Representatives stated, "I think that party leaders have tried to make this a Republican versus Democrat issue. It's not. It's simply a good government issue."

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The Federalist Society has released its latest issue of ABA Watch. This issue offers a preview of the ABA's annual meeting in Toronto beginning tomorrow, August 4, including discussing proposals regarding judicial disqualification and profiles of those lawyers being honored by the Association. It also talks about recent scrutiny of the ABA law school accreditation process, and it digests and summarizes actions before the House of Delegates.

Click here for a pdf of the latest issue. Click here to see a list of past issues of ABA Watch.