Friday, January 31, 2014

The Debt Ceiling Abroad

-- Posted by Neil H. Buchanan

I am in the airport in Tokyo right now, returning home after two-plus weeks abroad.  Last night, I gave a talk to the Japan Tax Association, explaining the debt ceiling situation and the various arguments that Professor Dorf and I have offered in our writings.  (There was an interpreter, who would translate after every sentence or two.  The stop-and-go nature of that format was an interesting experience, to say the least.)  The Q&A there, like the Q&A after I delivered a similar lecture last week at the Australasian Tax Teachers' Association in Brisbane (Australia), alternated between polite versions of "What the hell is going on over there?!" and "Why can't the courts solve it?"  None of my answers satisfied anyone -- certainly not me.

In a conversation before my lecture, I did learn that Japan's government, although structured as a parliamentary system, nevertheless nearly had a debt ceiling-like crisis very recently.  Apparently, they do not have a debt ceiling, but they are required to have a law that authorizes borrowing.  Or, more accurately, they have a law that requires the government to authorize borrowing to finance a deficit on the government's "operating budget."  What is an operating budget, you ask?  This is an issue about which I have written in my pre-debt ceiling scholarship (see especially, my Good Deficits article), and I have commented on it regularly here on Dorf on Law (e.g., here).

An operating budget is the counterpart to a "capital budget."  Almost all entities of any size separate their accounts into spending on items for immediate use/consumption, and spending on items for investment that will allow the entity to grow over time (and, in the case of for-profit enterprises, to increase profits over time).  The basic idea is that it is OK to borrow the money necessary to buy capital/investment items, because they pay for themselves over time -- "you have to spend money to make money."  Current operating expenditures, on the other hand, need to be paid from current revenues.  This is the "golden rule" of budgeting.

As I noted above, almost all entities of any size use capital budgeting.  The U.S. federal government does not.  Japan's does, and they thus are able to protect investment spending from any shenanigans regarding authorizing borrowing on an ongoing basis.  They do, however, have a legal structure that allows politicians to create something like a trilemma.  If the operating budget is out of balance, but the Diet (legislature) does not vote to authorize the concomitant borrowing, there is the same arithmetic impossibility for default that the Tea Partiers have been trying to create in the U.S.

Apparently, the minority party in one house of the Diet held up the borrowing authorization long enough to necessitate emergency actions, which sounded awfully similar to our "extraordinary measures" here.  In conversation with my Japanese hosts, I was not able to determine whether the canceled/delayed spending would constitute outright default, had it continued for more than a few days, but at the very least, there was some amount of nail biting (and short term financial pain, for various federal budgets and recipients) regarding the outcome of that manufactured crisis.  After an initial bit of bluster and posturing, the opposition party simply came to its senses, as opposition parties in the U.S. used to do.

As Professor Dorf and I note in our new paper, Australia (to our surprise) until recently had a debt ceiling law of some sort.  Recently, however, quite consciously in response to the U.S. debt ceiling madness, the Aussies repealed their debt ceiling.  Interestingly, in the same bill, they apparently strengthened the capital budgeting system that was already in use by their Treasury.  So, they managed to get it doubly right: no to the inherently dangerous debt ceiling, yes to a fundamentally sound capital budgeting system.  Good on ya, mates!  Wish we could learn from your example.

Back in the U.S., we will soon see where things go after the debt ceiling is reinstated next Friday.  Recent reports indicate that the Republicans are not going to fight too hard against a clean increase in the debt ceiling next month.  As I pointed out to my listeners last night, however, there were similarly soothing reports this past August and September, suggesting that the Republicans would never shut down the government and mess with the debt ceiling again.  Past performance is no guarantee of future returns, but we can at least take current assurances with a truckload of salt.

Even if we see relatively little drama this time, however, even the don't-worry-be-happy reports suggest that the Republicans plan to extend the ceiling only through January 2015.  At that point, fresh off of what they hope will be big wins in the mid-term elections (although it matters not at all for these purposes), they will make their fateful stand on the debt ceiling.

Meanwhile, if the Republicans do pull their punches this time, the Obama people will surely claim that their stare-down strategy has been validated.  Until the next time.

Thursday, January 30, 2014

What's a Technicality in the Death Penalty Context?

by Mike Dorf

My latest Verdict column uses the occasion of two recent executions gone awry to call for the Supreme Court to overrule Baze v. Rees (which upheld lethal injection) and one or both of the two decisions that enable states to execute people who, according to the International Court of Justice, had their rights violated under the Vienna Convention on Consular Relations.

I won't recap the argument here but I end the column by speculating that even though the SCOTUS continues to regulate the death penalty pursuant to the Eighth Amendment, it appears to be skeptical of what it may consider "opportunistic" challenges to the death penalty--i.e., challenges to a particular method of execution by lawyers who believe that all methods are unconstitutional or challenges to the violation of Vienna Convention rights by countries that don't care to assert their Vienna Convention claims in non-capital cases.  I make clear at the end of the column that while this kind of thinking may explain why the Court ruled as it did in Baze and the Vienna Convention cases (Sanchez-Llamas v. Oregon and Medellin v. Texas), it hardly justifies those rulings.

In this post I want to explore what might be meant by a "technicality" in the context of the death penalty.

We are all familiar with the notion of a defendant "getting off on a technicality" with respect to the guilt phase of a criminal proceeding.  When someone makes that complaint, what he means is that the defendant in fact committed the crime but that some procedural rule that does not correlate with the merits resulted in the exclusion of evidence.  For example, the police searched the defendant's home without a warrant when they needed one, so although they discovered incontrovertible proof of the defendant's guilt, the prosecutor is unable to enter it at trial.  This sort of thing happens less frequently than one might guess from watching police dramas on tv and in the movies, partly because the constitutional rules have so many exceptions, but it does happen from time to time.

"Technicality" certainly has a normative dimension.  For example, people who believe strongly in Fifth Amendment rights are unlikely to regard the failure of the police to Mirandize a suspect in custody before interrogating him as a mere "technical" violation of rights.  Still, one does not need to share in the normative view of the critics to understand the distinction they are (implicitly) drawing between grounds for acquittal or dismissal that are merits-based (even if the defendant is guilty) and those that flow from violations of procedural norms that do not closely correlate with guilt or innocence.

Thus, even someone who takes a dim view of defendants' rights would not ordinarily say that a defendant "got off on a technicality" in many circumstances in which a guilty defendant is acquitted. For example, if the defendant is a persuasive liar, or if the defendant's boyfriend fabricates a persuasive-sounding alibi, or even if the prosecutor simply does a bad job of assembling his case, a guilty person may go free, and we would thus say that an injustice has occurred, but we would not typically classify that injustice as the product of a "technicality."

Accordingly, we appear to have a reasonably stable, reasonably determinate, conception of "technicality" with respect to guilt and innocence.  Now let's turn to capital cases.

Above and in the column, I said that conservative Justices may regard method-of-execution claims and Vienna Convention claims as technicalities.  The point is clear enough with respect to the Vienna Convention, where claims closely parallel Miranda claims under the Fifth Amendment.  But upon closer examination, it's not entirely clear what it means to say that someone evaded the death penalty on the basis of a technicality.  The reason is that we don't have the same sort of pre-legal understanding of who should get the death penalty that we do with respect to the categories of guilt and innocence.  Put differently, to say that someone avoided the death penalty on a technicality implies that there are people who simply deserve the death penalty as a factual matter in the same way that someone is guilty of a crime as a factual matter.

Certainly the converse can be true in a certain sense.  Someone who is intellectually disabled or a minor or committed a non-homicide offense is entitled to avoid the death penalty on substantive constitutional grounds, and so we wouldn't ordinarily characterize a successful Atkins,  Roper, or Coker claim as one that utilizes a technicality.  Likewise, someone who is not "death-eligible" because the state failed to prove the requisite aggravating factor(s) under state law would have avoided the death penalty on the merits.

But, because the Constitution forbids a mandatory death penalty, no one can ever be said to deserve the penalty of death in quite the same way that someone is guilty of a crime.  Accordingly, while we can distinguish technical from non-technical grounds for avoiding the death penalty, to the extent that the whole idea of "getting off on a technicality" rests on a picture of a counterfactual world in which the defendant gets his just desserts, the notion of a technicality has less bite in the capital sentencing context than in the guilt/innocence context.

Wednesday, January 29, 2014

New Debt Ceiling Article by Professors Buchanan and Dorf

-- Posted by Neil H. Buchanan

Professor Dorf and I are happy to announce that we have drafted a new article (our fourth) analyzing the debt ceiling, just in time for the February 7 reinstatement of that ill-considered law.  Readers who wish to read our draft on SSRN can find it here.  See also my new post immediately below, in which I summarize the new article and add some further musings.

The Debt Ceiling Does Not Put a Ceiling on Debt (Nor Should It)

-- Posted by Neil H. Buchanan

As I noted in my Dorf on Law post this past Friday, Professor Dorf and I have very recently completed drafting a new law review article, again offering a constitutional analysis of the federal debt ceiling.  The article, Borrowing By Any Other Name: Why Presidential "Spending Cuts" Would Still Exceed The Debt Ceiling, is now up on SSRN (here).  We are very happy that it will soon be published in the online Sidebar version of Columbia Law Review, which also published our other three debt ceiling-related articles (here, here, and here).

In this post, I will summarize the main points of the new article,  Then, I will offer two additional observations related to the arguments that we make there.  I suspect that Professor Dorf will weigh in as well with further thoughts, perhaps as early as tomorrow (although we have not conferred about that).

In last Friday's post, I noted that the new article is "non-'trilemma'-related."  Even occasional readers of Dorf on Law, or of our columns on Verdict (see especially our joint column from last January, here) might reasonably feel bombarded by our favorite way of framing the impossible problem that would face a President, if Congress were to refuse to increase the debt ceiling as needed to accommodate the arithmetic difference between Congress's spending and taxing laws.  Because any decision that the President made under such circumstances would usurp a power of Congress (borrowing, spending, or taxing), he would violate the Constitution no matter what he chose to do.

Our central argument has been that the least-bad choice would be to engage in unconstitutional borrowing, rather than unconstitutional taxing or an unconstitutional refusal to pay in full for Congress's spending decisions (that is, to default on the government's obligations).  But in our new article, we consider the possibility (so far, an entirely hypothetical one) that someone could articulate different criteria, or weigh our criteria differently, such that they could reasonably disagree with us and say that the President must (as Obama and his advisors resolutely insist) default on the nation's bills.  Alternatively, what if someone could simply convince us that defaulting was not a violation of the spending power at all?  Would either of those possibilities mean that there was no constitutional violation?

In a word, no.  We begin by developing a point that I sketched out in a Dorf on Law post this past October: "It's Two ... Two ... Two Constitutional Violations in One!"  It turns out that our stipulation that defaulting would at least avoid usurping Congress's borrowing power (even while usurping the spending power) was simply wrong.  If the President were to decide to leave any obligations unpaid (either by "prioritizing" various obligations, or simply allowing default to befall obligees in the order in which their payments from the government came due), he would still be borrowing, because he would surely be saying "not yet" when he regretfully announced the defaults.  Whether or not the President promised also to pay interest would be irrelevant, because he would be turning an obligation to make payments that had come due (and thus had not yet ripened into debts before their due date) into a "forced loan" from the unlucky obligees.

In my earlier post, I had framed this purely as a statutory matter, pointing out that the language of the debt ceiling law clearly covered "obligations" that went beyond the traditional Treasury securities that are the normal method by which the federal government borrows money from (willing) lenders.  In our new article, however, we point out that the constitutional language is even more damning for the White House's claim that it must default.  Only Congress has the constitutional authority "to borrow Money on the credit of the United States."  That the borrowing in this case would take the form, "Oh, sorry, we're out of cash for now, so we'll pay you when we can," is morally worse than voluntary borrowing, and just as unconstitutional.

But what if the President explicitly repudiated the new debt?  He would have to first default, and then acknowledge that the new debt must be repudiated, but we do not quibble about the nano-seconds between creating the new debt and then extinguishing it.  We agree that this would save the President from committing an unconstitutional usurpation of Congress's borrowing power.  The problem is that this would violate -- Are you ready? -- Section 4 of the Fourteenth Amendment.  Some readers might recall that we (and a few others) have, independently from our trilemma argument, concluded that the "public debt clause" in Section 4 prevents the President from obeying the debt ceiling, because it would cause people to "question" the "validity" of the public debt.   One response to that argument has been that only an outright repudiation rises to the level of a constitutional violation, because that is what it supposedly means to question the debt's validity.

Even by that most cramped reading of the relevant language, however, the President avoids violating Article I, Section 8, only by violating Amendment XIV, Section 4.  We also note that, if the President defaults but claims that there is nothing to repudiate, then he would simply have engaged in an unconstitutional "taking" without just compensation -- because the only just compensation for the unpaid bills would be the amount of the obligation that had not been paid in the first place.

There is more in the article, of course, but this is the gist of it: If the President refuses to float new bonds to cover the shortfall between Congress's spending and taxing laws, then he either violates the Constitution by borrowing on the credit of the United States, or he violates the Constitution in some other way -- and, by the way, puts himself in even hotter political waters.  (Would you like to be the one who explains why obligees will never be paid?)

We, of course, continue to believe that our original analysis is correct.  If we are right, then defaulting amounts to the "two constitutional violations in one," about which I wrote in October 2013.  If we are wrong, however, then the President would still violate the Constitution -- and he would do so by borrowing more money, which is exactly what he insists he cannot do.

Two additional thoughts are worth mentioning here, I think.  First, back when I presented a draft of our first article to the Tax Policy Colloquium at Duke Law School, I argued pretty unambiguously that the debt ceiling law serves no purpose at all, because debt is the consequence of Congress's taxing and spending decisions.  Both of the colloquium's professors (Rich Schmalbeck and Larry Zelenak) posed variations on the following question: Isn't it possible that the debt ceiling is a kind of fail-safe, given that it is not possible to know, ex ante, exactly how much money will ultimately be borrowed under any given set of spending and taxing laws?  Given the existence of commitments tied to contingent events, for example, Congress's spending laws could end up obligating the country to pay much more than Congress would have wanted.

In essence, this argument turns the debt ceiling law into what might playfully be called the "alternative maximum borrowing" (AMB) law, a law that undoes what Congress has otherwise purported to do, if circumstances become unexpectedly extreme.  (Readers who are not tax geeks might not recognize the punny reference to the Alternative Minimum Tax, but believe me, it's hilarious.)

My response at the time to the Schmalbeck-Zelenak query, which I still think is correct, was that Congress has the responsibility to write its laws in a way that covers such contingencies.  In our third article, in fact, Professor Dorf and I discussed what amounted to the same argument, showing that the debt ceiling law would, if read as a fail-safe law, be an unconstitutionally unguided delegation of authority to the President.

In light of our new article, I think the answer to the AMB argument is even clearer.  If Congress thinks that passing a debt ceiling law will actually limit debt, then it is sadly mistaken.  If it truly wants to install pressure-release valves into its laws, then it retains the power to do so explicitly.  But obligating the government to pay certain bills, and then expecting the President not to pay some of those bills if Congress has not paid enough attention to contingencies, is not a way to avoid having the President borrow more money than the debt ceiling allows.

My second thought about our new article is that the framing of our argument might plausibly reinforce the damaging idea that debt is always bad.  One easy (and accurate) way to summarize our argument, after all, is something like this: "The President cannot avoid violating the debt ceiling by defaulting, because Congress's decisions already required that the spending be paid for.  Only Congress can prevent the need for more borrowing."

Although nothing in that summary carries a necessary condemnation of federal borrowing, I fear that it plays into the idea that "Congress is just a bunch of spendthrifts, who cannot stop themselves from putting us all in hock."  Indeed, Tea Party extremist Rep. Raul Labrador of Idaho actually got this much right a few days ago, when he reportedly said: "The time to fight for spending cuts is when you’re talking about spending, not at debt ceiling time. So when people caved on the budget and caved on the [Ryan-Murray] agreement, it’s really hard for them to come back and say, ‘We don’t want to increase the debt ceiling’ when they’ve already voted for something that increases the debt.”

This is why I added the parenthetical comment to the title of this blog post.  When Professor Dorf and I emphasize the nonpartisan nature of our arguments, we frequently note that those who wish to limit the debt have a perfectly straightforward and constitutional method of doing so: cutting spending and/or increasing taxes.  As I have argued repeatedly, however (for example, here on Dorf on Law), "arguendo reasoning" -- assuming that one's opponent's starting point is correct, in order to show that his argument fails even on its own terms -- often ends up reinforcing one's opponent's assumptions.

Here, by noting that the increase in borrowing above the debt ceiling is set in stone by Congress's actions, we do not have to be read as saying that Congress made a mistake in requiring the debt to rise.  Indeed, we both believe that Congress should increase some spending and decrease some taxes, in order to stimulate the economy now, and to invest in the economy's future growth.  When we take pains to say, in essence, "But you need not agree with us about Keynesian economics to agree with us about the unconstitutionality of the debt ceiling," we are doing what scholars do.

That, however, often translates poorly into political discussion.  Therefore, this is my meager effort to say that our constitutional argument is truly, truly agnostic about the wisdom (or lack thereof) of fiscal austerity.  It should not be read as an argument that the larger goal of the debt ceiling fanatics is somehow wise, if only it were pursued through sane (and constitutional) means.

Tuesday, January 28, 2014

What Interest Does a State Have in Limiting How Much Its Subdivisions May Tax?

By Mike Dorf

An interesting intra-Democratic disagreement is currently playing out between New York City Democratic Mayor Bill de Blasio and New York State Democratic Governor Andrew Cuomo.  Among de Blasio's more popular campaign promises was the proposed establishment of universal pre-K in NYC, to be funded by a dedicated fund from taxes on the wealthiest city residents.  But recently, Governor Cuomo announced that he wants to create a state program of universal pre-K that would render the de Blasio plan unnecessary.  Rather than treat Cuomo's announcement as the highest form of flattery, de Blasio is (for now) pushing ahead with his plans.

In a nutshell, de Blasio argues that his approach is still needed even if the state funds pre-K for (at least) the following reasons.  First, the city program would be up and running this year, whereas Cuomo plans to take five years to phase in the state program.  Second, de Blasio envisions a higher quality, and thus costlier, program, for which the city's pro rata share of the state funds would be inadequate.  Indeed, Cuomo proposes spending less money statewide ($2.2 billion) than de Blasio proposes to spend just in NYC ($2.5 billion).  Third,  even apart from total cost, de Blasio worries that state funding from general revenues would make the state program vulnerable to cuts or cancellation in Albany's political process, whereas a city program with a dedicated revenue source would be less vulnerable.  (This argument is undercut by de Blasio's proposal to have the new tax expire after five years.)

I don't have a view on the relative merits of the proposals (or of universal pre-K more generally), but I do want to use this dispute to raise a question about the relation between political units and their sub-units with respect to taxation.  Under New York law, the city cannot impose the proposed tax without permission from the state, which is why de Blasio was in Albany yesterday pleading his case to the legislature.

The question I want to raise here is this: What sorts of grounds would justify a state in denying to a subdivision the power to raise taxes?  I raise the question because, prima facie, one might think that it's better to let the smaller geographic units make these decisions for themselves.  de Blasio made just this point in talking about his proposal as an exercise in "self determination."  And there's certainly something to that.  The people within the geographic sub-unit already have an incentive to resist taxes they regard as too high, and so decision making at the level closer to the people has the advantage, other things being equal, of being more democratic.  Below I'll discuss three ways in which other things might not be equal.

(1) Tax Base.  State officials sometimes complain that federal taxes effectively crowd out state taxes.  In principle, states can set their tax rates at whatever they want, but as a practical matter, people in each state will think about total taxes when deciding how they feel about state taxes.  Thus, the lower the federal tax rate, the more room the state has to impose its taxes.  In general, the same phenomenon occurs from states to local governments--with state tax rates operating as a kind of baseline and local taxes acting on top of that.  With most local governments, the relevant kind of tax is on real estate but in NYC and some other local governments, there is also a separate income tax.  Now the key point is that if a local government is big enough--as NYC is relative to NYS--then state taxes not only constrain how much revenue the local government can raise; the local taxes can constrain the state as well.

(2) Distribution.  Closely connected are questions of distribution.  Again, assuming as a practical matter that voters care about their total rate of taxation, raising local taxes for local purposes constrains how much money can be raised statewide for statewide purposes.  So, if a particular locality is rich relative to the rest of the state, the state may not want the locality to use its wealth only for local purposes.  This dynamic is clearly in play in the de Blasio/Cuomo disagreement.  NYC is home to the wealthiest residents of the state as well as some of the poorest.  The question here is whether the money that can be extracted from those wealthy city residents should be used to benefit schoolchildren statewide or just within NYC.  There's no clearly "right" answer to that question, but it's hardly surprising that each jurisdiction would want the resource spent within its jurisdiction.

(3) Policy.  We can imagine circumstances in which a locality seeks authority to impose a new tax that, as a practical matter, wouldn't seriously constrain the ability of the state to impose other taxes. Nonetheless, the state might object on policy grounds.  Suppose that a municipality wants to implement a tax on large sugary drinks.  (Just saying.)  For reasons of principle (libertarianism, here) or politics (the power of "Big Sugar" in the state capital), the state might refuse permission (assuming this were the sort of tax that required state approval).  Or state legislators might take a different view of the likely impact of a tax.  de Blasio might think that upper east side investment bankers will grumble into their brandy snifters while pining for the good old days when a billionaire ran the city but that they will ultimately just fall into line and pay his new tax.  Meanwhile, a state legislator might disagree, thinking that de Blasio's pre-K tax will be the straw that breaks the banker's back, leading him to pack his bags for Jersey City or Greenwich.  (There was a suggestion along these lines yesterday.)  Even though the state legislators are not necessarily better positioned than the local officials are to calibrate the tax to raise revenue without inducing flight, such flight, if it occurred, would have an impact on the state too, and so state legislators will indeed vote on such matters.

Note that the considerations I've discussed are all connected to what we might think of as ideology, but they're not simply about the role of government.  Nonetheless, we can expect that much of the news coverage--and some of the actual grounds for disagreement--will focus on the supposed battle for control of the Democratic Party, pitting de Blasio the progressive against Cuomo the Clintonian pragmatist.

Monday, January 27, 2014

RFRA v. Bureaucracy: The SCOTUS Order in Little Sisters

By Mike Dorf

On Friday, the SCOTUS issued an order in The Little Sisters case.  The order reads, in full, as follows:
The application for an injunction having been submitted to  Justice Sotomayor and by her referred to the Court, the Court orders: If the employer applicants inform the Secretary of Health and Human Services in writing that they are non-profit organizations that hold themselves out as religious and have religious objections to providing coverage for contraceptive services, the respondents are enjoined from enforcing against the applicants the challenged provisions of the Patient Protection and Affordable Care Act and related regulations pending final disposition of the appeal by the United States Court of Appeals for the Tenth Circuit. To meet the condition for injunction pending appeal, applicants need not use the form prescribed by the Government and need not send copies to third-party administrators. The Court issues this order based on all of the circumstances of the case, and this order should not be construed as an expression of the Court’s views on the merits.
Notwithstanding the disclaimer at the end, it is hard not to read the order as reflecting at least some view on the merits.  After all, if the Court had accepted the government's representation that, because the Little Sisters use a "church plan," their employees would not receive contraceptive insurance in any event, it is hard to see how the equities could have warranted a stay.  Accordingly, the Court's order suggests that, at least at this stage of the litigation, the plaintiffs have made out a colorable claim that they are being required to do something--fill out a form that plays some causal role in other people receiving contraception--that conflicts with their religious beliefs.

In my prior blog posts (here and here) as well as a Verdict column, I expressed skepticism about the Little Sisters claims for a number of reasons, including the point that in order to succeed on a RFRA claim, it is not sufficient for a claimant to say that the government is requiring her to participate in an activity she regards as wrong (because the government does that sort of thing to everyone in various ways); the level of participation must, from the claimant's perspective, rise to a violation of some religious obligation.

Accordingly, it is not clear to me that the temporary relief that the Little Sisters won should satisfy them.  They objected to filling out the government's Form 700 because of the consequences of that form.  But if the government is able to accomplish whatever it needed to accomplish without the form, then the Little Sisters may regard even the level of participation contemplated by the Court's order as violating their religious obligations.  I don't think that they will take that view, but it's possible.

In any event, Friday's Supreme Court order reminded me a bit of a (quite possibly apocryphal) story I once heard about an order issued by a federal district judge.  According to the story, a pro se plaintiff sued the FBI, alleging that the government had been using sophisticated electronic means to control his thoughts.  The government denied the allegations and the judge scheduled a hearing.  At the hearing, the plaintiff described his subjective experience, whereupon the government attorney again denied that the government had been controlling his thoughts.  The judge then asked the plaintiff if he would be satisfied by an order to the government permanently enjoining it from directing his thoughts. "Yes, your honor," he reportedly answered.  The judge then turned to the government attorney and asked if she would commit the government to abide by such an order going forward, so long as it said bothing about liability for any past practices.  The government lawyer wisely said that she would.  Thereupon, the judge entered a consent decree to that effect and everyone went away happy.

Did the judge in this tale really have the legal authority to issue the consent decree?  Maybe not, but so what?  This was a creative solution.  Likewise, with the Little Sisters case, if the plaintiffs are satisfied with giving the government the same operative information that comes with Form 700 but not on Form 700, then it seems like we should all go home and call it a day.

Sure, it seems strange that anyone would have a religious objection to a particular government form but not to providing the same information with a different piece of paper, but maybe not so terribly strange. Suppose that Form 700 contained a watermark stating "by using this form, the applicant acknowledges the sovereignty of Satan."  Surely then it would be understandable for religious objectors to invoke RFRA (although the watermark would surely violate the Establishment Clause as well).  And certainly protected religious beliefs--obligating believers to use one but not another kind of mind-altering substance, or making it permissible to consume the flesh of animals raised and slaughtered in one inhumane way rather than in another inhumane way, or designating one day rather than another as the sabbath--are, from the perspective of non-believers, arbitrary.

So, if the interim order is acceptable to all sides, then kudos to whoever on the Court came up with it.

Friday, January 24, 2014

Immeasurably Extraordinary Foolishness

-- Posted by Neil H. Buchanan

[My apologies to Dorf on Law's readers for missing my scheduled Thursday, January 23 post.  It turns out that internet access abroad, even in advanced countries, is not entirely reliable.]

Well, the debt ceiling will be back soon. I don't like it any better than you do, but the whole mess is set to start up again in two weeks. The latest news is that the grace period created by the Treasury's use of "extraordinary measures" is likely to be very short this time around. According to a news article on Wednesday of this week, Secretary of the Treasury Jacob Lew has sent a letter to Congress explaining that the debt ceiling's "drop-dead date" is likely to come very soon -- certainly well before the mid-May date that Senate Majority Leader Harry Reid had been expecting.

Here, I will briefly explain the background on all of this. Then, I will try to explain exactly what the extraordinary measures are that the Treasury uses when it needs to "juggle the books" to prevent default, after the debt ceiling is formally reached. It turns out to be a surprising story, and it exposes even more clearly just how crazy the whole notion of the debt ceiling truly is.

There have been two brief time periods during which the debt ceiling law has been suspended. The first ran from last February 4 through May 19, and the second began on October 17 (with the end of the government shutdown -- a legally unrelated, but politically contemporaneous story) and runs through February 7, 2014. The laws that created each of those suspensions dictated that the debt ceiling would be reset at whatever level the debt had reached during its hibernation.

I have described elsewhere the silly political posturing involved in all this, and I have emphasized the notable lesson that living without a debt ceiling does not result in a limitless increase in debt.  This is, of course, because changes in the total amount of debt result from the differences in annual spending and taxing, not because of the arbitrary dollar amount of the statutory debt ceiling at any given moment.

The most immediate reason that Secretary Lew's letter is important is that it lets everyone know that politicians will not have as much time to play around this time as they did a year ago.  Back then, the lag between the awakening of the debt ceiling and the ultimate drop-dead date was almost exactly five months (May 19 through October 17), mostly because a strengthening economy increased revenues and decreased spending, compared to expectations.  As Lew explains, however, reawakening the debt ceiling at the beginning of February -- with no distance at all between current debt and the debt ceiling -- is a particularly bad bit of timing.  Because February sees a big outflow of tax refunds every year, and because that outflow this year is going to be increased by the shutdown-related narrowing of tax filing season, it is a very real possibility that the Treasury will exhaust its extraordinary measures in a matter of a few short weeks.

That is all very worrisome, because there has been no indication from Republicans that they are rethinking their determination to use the next debt ceiling renewal as a means to get all of the things they failed to get from the shutdown.  If anything, the ultra-right's fury over the supposedly centrist compromise represented by the latest austerity budget will cause them to press even harder on the debt ceiling.  Republican pseudo-wonk Paul Ryan is already on record as trying to recover credibility with the Tea Party by promising to play hardball on the debt ceiling.

Moreover, when Minority Leader Mitch McConnell announced that he would also refuse to increase the debt ceiling without Democratic giveaways, he did so apparently in response to a well-funded Tea Party primary challenge for his Senate seat.  Had the extraordinary measures bought enough time to allow McConnell to win (or lose, for that matter) his primary, then he would have been able to return to his wheeler-dealer roots and make something happen on the debt ceiling.  If this all comes to a head in February, on the other hand, his political stakes will be much higher -- so high as potentially to make the difference between a near-miss and an out-and-out economic disaster.

All of this means that things will heat up very soon, and that the margin for error will be smaller than ever.  As it happens, Professor Dorf and I have drafted another article for publication in law reviews, making a new (non-"trilemma"-related, if you can believe it!) argument about the unconstitutionality of the debt ceiling.  We will post that article on SSRN soon, and we will surely summarize our argument here on Dorf on Law.  Not that we think the White House will listen to us this time around, either, but we are still the only game in town, when it comes to legal scholars who are actually engaging with the issues.

Notwithstanding all of that, an interesting background question has to do with those extraordinary measures that everyone (including me) keeps mentioning, but not explaining.  How is it possible that the debt ceiling is not really a limit, such that we can reach the debt ceiling on one date, but have weeks or months during which we spend more than we collect in revenues, without exceeding the debt ceiling?

Most news reports that I have read describe a laundry list of measures, such as selling government assets, moving the payment dates back for certain obligations (where the law allows such delays), and other vague and unspecified tactics.  The news article to which I linked above was even less specific, saying merely that "the Treasury shuffle[s] government accounts to meet its obligations."  When I have tried to describe extraordinary measures in my public appearances, I have struggled to capture what is really going on.  In a talk in Australia earlier this week, for example, I analogized Treasury's moves to "prosecutorial discretion."  That was a good hand-waving move, I suppose, but it did not communicate anything meaningful.

In my defense, it has never been necessary to describe those extraordinary measures, in order to write about the subjects that I have discussed throughout this debate.  It really does not matter what the extraordinary measures are, because what I care about is the possibility of default, pure and simple.  If some bookkeeping maneuvers allow us to change the date of our collective economic execution, so be it.  The politicians will wait until the last minute, whenever that is.

Even so, it might be interesting finally to lay out exactly what those extraordinary measures include.  It turns out that Treasury does "juggle the books," but not in the way that most people understand that idea.  A recent report from a major bank (which might be a proprietary report, so I am not citing it or linking to it) identifies five places to which Treasury turns when it needs to make funds come into existence, currently totaling about $265 billion.  Other than "cash on hand," these sources carry curious names like "Civil Service Retirement and Disability Fund," "Federal Financing Bank," and similarly obscure government accounts.

Why do these particular sources offer respite from the debt ceiling?  The simplest explanation is that Treasury can use them to exploit the nonsensical definition of debt that is covered by the debt ceiling statute.  As I have noted many times, the debt ceiling limits the gross debt of the federal government, which is defined to include the Treasury securities that are held in internal government accounts, such that one federal agency agrees to pay another federal agency money in the future, should that become necessary.  Currently, out of slightly less than $17.3 trillion in gross federal debt, almost exactly $5 trillion is actually intra-governmental debt, leaving net "debt held by the public" at about $12.3 trillion.

So, because Congress has decided to include non-debt in the determination of the total amount of debt that is subject to the ceiling, it has always been possible for Congress to redefine debt in a way that would end this silliness.  Of course, they could then go back and mess things up again by lowering the ceiling on net debt, or by waiting until net debt rises to the existing limit, and then have another standoff.  (The latter process might take a decade, on the current path of debt, but it is possible.)  That is why the debt ceiling needs to be repealed or declared unconstitutional.

What does all of this have to do with extraordinary measures?  It turns out that Congress has, in fact, explicitly allowed Treasury to temporarily reclassify "debt" under those various funds as non-debt.  Even more amazingly, Treasury originally did this during Ronald Reagan's presidency, without prior Congressional authorization, and Congress blessed it after the fact.

As a 2013 report from the Congressional Research Service described it, in 1985 Treasury delayed issuing Treasury securities to various government investment accounts.  Why?  Because issuing those securities would have counted against the debt ceiling. To create room under the ceiling, "Treasury took the additional step of 'disinvesting' the Civil Service Retirement and Disability Trust Fund, the Social Security Trust Funds, and several smaller trust funds by redeeming some trust fund securities earlier than usual."  In short, Treasury temporarily treated non-debt as the non-debt that it is, and it later went back to treating non-debt as debt, as Congress generally requires.  And, as noted above, "Congress subsequently authorized Treasury to alter its normal investment and redemption procedures for certain trust funds during a debt limit crisis."

Now, therefore, Treasury is allowed by Congress to "prematurely redeem" securities in various trust funds, thus reducing the debt subject to the ceiling. Even better, "[b]ecause these funds are required by law to be made whole once the debt limit is increased, these specific actions did not affect federal retirees or employees once the debt limit was increased."

Notably, Congress's post-1985 blessing did not cover the Social Security Trust Funds, which are by far the biggest part of the non-debt that is covered by the debt ceiling law.  Even so, Congress has created the space to extend the debt ceiling for a limited time by expressly allowing Treasury to play games with bookkeeping using other accounts.

Of course, if the public in general knew of this, they might think that this is all funky for exactly the wrong reason.  We would surely hear George W. Bush-like cries that "the trust funds aren't REAL," as an excuse not to honor the long-term commitments that those trust funds actually do represent.  The fact is, however, that the extraordinary measures created by Congress allow Treasury to flip back and forth between the legal baseline (including non-debt in the total amount of federal debt) and the sensible alternative (excluding non-debt from the debt subject to the ceiling).

No matter one's point of view on the path of debt overall, or even on the politics of the debt ceiling, this background story should be disturbing.

Wednesday, January 22, 2014

The Rights of the Dead

by Sherry F. Colb

In my Verdict column this week, I discuss the case of Marlise Munoz, a young woman who is pregnant and who, tragically, collapsed almost two months ago and is currently being sustained on life support in a Texas hospital.  Munoz's family has asked the hospital to remove her from life support, in deference to what they understand to have been her wishes.  The hospital, however, has refused to withdraw life support, citing a Texas law that prohibits the withdrawal or withholding of life support from a pregnant patient.  In my column, I analyze some ways in which the dilemma posed by Munoz's situation differs, both legally and morally, from the dilemma posed by the termination of an unwanted pregnancy in ordinary circumstances, and I draw some conclusions about the implications of those differences for Munoz's case.

Because -- by some reports -- Marlise Munoz has already been declared brain dead, I turn my attention in the post to the more general issue of rights to bodily integrity on the part of the dead.  Under existing law, if a person prefers not to donate any organs or tissue after she dies may be buried or cremated or otherwise laid to rest with her organs intact.  This means, among other things, that even when there is an organ shortage and people who might otherwise have lived will die without a transplant from a suitable donor, the government lacks the power to take organs from a potential donor who, prior to her death, did not consent to donation. In fact, as I have discussed elsewhere, the legal presumption, in the absence of evidence one way or the other, is that people have refused to donate their organs post-mortem.

One way of thinking about this approach is to say that our bodies belong to us, both in life and in death, and we have the right not to share them with anyone else, no matter how helpful such sharing would be or how necessary to save lives.  By respecting people's right to refuse to donate organs upon death, then, we are showing respect for each individual's dignity rather than viewing people instrumentally, whether alive or dead, as organ donors.

One difficulty with this view is that dead people are quite different from living people, and we do appear to make a variety of demands of the dead in the interests of the rest of the population, demands that we seemingly would not make of the living.  One example is that we require people to dispose of their dead in particular ways regarded as consistent with the public health.  This means that even if John Doe makes known while alive that he would like his remains to be kept in the trunk of his car in his garage for eternity, his dead body will nonetheless be removed from that trunk and either buried in a cemetery, cremated, or otherwise handled in accordance with the law, notwithstanding his contrary wishes.

One response to this reality, though, is to suggest that failing to bury or cremate or otherwise "process" the dead poses a threat to other people's health and wellbeing; at the very least, it creates a nuisance.  While an individual has the right to maintain his or her bodily integrity, then, even after death, he or she does not have the right to create hazards for others, including the sorts of infections that could spread as a result of leaving a rotting corpse in a garage.  And this is not just true of the dead.

A living person too must observe limits on his or her behavior when those limits guard the public health or safety.  This is why people with a virulent infection could potentially be lawfully quarantined to prevent a contagion.  Donating organs, by contrast, is a very different matter, one might argue, because being buried or cremated intact does not pose a "threat" to others who need an organ any more than living a long life (and not donating organs) poses such a threat.  Using or wasting something that belongs to us does not generally constitute a threat to others.  The difference between burial and organ donation, then, is the distinction between a prohibition against harming others and a right not to aid others, a distinction that applies to the living and to the dead.

Perhaps a better analogy, we might say, is to autopsies.  If police suspect that a dead person may have been the victim of a crime (and in various other circumstances), then the medical examiner may perform an autopsy, even over the objections of the decedent's family members (or the expressed intention of the deceased).  In this case, burying or cremating the body of the deceased without an autopsy does not pose a threat to anyone, much as bury or cremating a body without donating its organs does not pose a threat.  The autopsy is instead a governmental use of the decedent's body to help solve the crime and thereby exact retribution on behalf of the state or perhaps prevent the perpetrator from committing similar crimes against others.  An autopsy, in other words, represents a way in which the decedent affirmatively aids others -- both the government and potential victims, and not a manner in which the decedent is stopped from harming others.  Does the autopsy requirement not prove that dead people, unlike the living, lack the right to refrain from helping others avoid harm?

The answer is maybe not.  When it comes to the court system, the distinction between aid and non-harm becomes blurry, even for the living.  If you witness a crime or a civil wrong, a party to a lawsuit or a criminal prosecution can subpoena you as a witness, and you must testify if you have personal knowledge bearing on the case.  There is a Fifth Amendment exception to this principle for people whose responses to questions are self-incriminating, but otherwise, none of us actually has the right to remain silent, and if our testimony is relevant and we are called as witnesses, we may be legally forced to testify with the threat of being fined or jailed for contempt.  We may also be forced to appear for jury duty against our will, another affirmative obligation imposed on the living.

What are we to take from this?  It does seem that our system currently and consistently respects the bodily integrity rights of the dead to a degree that is substantially similar to the ways in which our system respects the bodily integrity rights of the living, and that includes placing limits on those rights when the court system (including police investigation) is in play.  One reason for respecting the rights of the dead may be religious -- many people believe that there is a life of sorts that follows death, and we therefore extend to people the right to control the disposal of their remains as though their bodies continued to belong to someone animate even after death.

Another reason for respecting the rights of the dead may be the worry that if we demand organ or tissue donations, there could be a perverse incentive on the part of treating physicians to err on the side of declaring a person whose organs are needed to be dead.  Many of us have heard horror stories about people who were supposedly dead and ready to be taken off life support and then, seemingly miraculously, woke up.  We would not want to bring about more of those situations.

Ultimately, however, I remain concerned about the autonomy we give ourselves over our dead bodies, even in the face of the compelling interest in organ transplants.  Even as people have the right to insist on having their usable organs decompose in the ground, moreover, we utilize the organs of sentient nonhuman animals for transplant -- including pigs and cows -- for transplantation, as though they are mere commodities to be used to satisfy our needs.  Of course, killing an animal for an organ transplant that would save a human life is far more understandable than killing an animal to consume his or her flesh or secretions (which not certainly not life-saving for the human).  Yet if we treated humans' dead bodies instrumentally, in this one limited way, we would be showing greater respect for the lives of the humans who need organs as well as showing regard for the animals whose organs ought to belong to them,, not to us.

Tuesday, January 21, 2014

Did Personal Jurisdiction Just Get Personal?

By Mike Dorf

Last week, in Daimler AG v. Bauman, the Supreme Court unanimously reversed a 9th Circuit ruling that had permitted a victim of the Argentine dirty war to sue Daimler AG in federal district court in California on the ground that Mercedes Benz (the predecessor corporation to the parent company of a subsidiary doing business in California) cooperated with human rights abuses by the Argentine junta.  The 9th Circuit had ruled that Daimler AG was an agent of the parent company, and thus its continuous and systematic contacts with California should be attributed to the parent; those continuous and systematic contacts were enough, the 9th Circuit said, to support "general jurisdiction", i.e., to permit lawsuits against the corporate defendant even when the alleged grounds for liability have no connection to the corporation's business in the forum state. The Supreme Court said that even attributing the sub's contacts to the parent company, that's not enough to sustain general (or "all-purpose") jurisdiction.  The Court said that a company is only subject to general jurisdiction in a forum in which it is "at home", and since Daimler AG is not incorporated in California nor does it have its principal place of business there, it is not any more "at home" in California than in any other state where it does a large volume of business.

Justice Ginsburg wrote for herself and seven other Justices.  The Court was unanimous in its bottom line but Justice Sotomayor concurred only in the judgment. She thought that the Court should have held that personal jurisdiction over the defendant was unreasonable (and thus impermissible), given the nature of the case and the parties.  Because reasonableness is a separate prong of the personal jurisdiction inquiry, Justice Sotomayor would not have reached the issue that her colleagues resolved but she made clear that if she were to reach it, she would disagree with the majority.  In her view, the prior cases are best read to establish that a corporation can be subject to general jurisdiction in multiple fora, so long as it has systematic and continuous contacts with each forum.

Think of the dispute between Justice Sotomayor and her colleagues as turning on whether a corporation can have more than two homes (for personal jurisdiction purposes).  Justice Sotomayor says yes; the rest of the Court very strongly implies no.  (For the majority, it appears that a corporation is only at home in its state of incorporation and the place where it has its principal place of business, but the majority doesn't strictly rule out the possibility of another "home").

Are you bored yet?  I certainly am.  But wait.  This could get juicy.  The ruling produced a rather testy exchange between, on the one hand, Justice Sotomayor and, on the other hand, Justice Ginsburg and the rest of the Court.  Given that the two of them typically agree in ideologically charged cases, and that they in fact agreed on the outcome of this case, one might wonder whether the testiness of the exchange suggests some personal animosity between Justice Sotomayor and at least Justice Ginsburg but possibly other Justices.  For example, Josh Blackman nicely captures the substance and tone of the exchange--including dueling accusations that the other side is dishonestly reading either prior cases or the record--and also notes a prior occasion when other Justices have made similar accusations against Justice Sotomayor.

Moreover, the testiness is most testy over how to read the somewhat cryptic 1952 case of Perkins v. Benguet.  It's hard to see why anyone would get especially exercised about such an arcane question, unless there was some pre-existing animosity.

So, what's the deal?  Are eight Justices ganging up on Justice Sotomayor because of her tendency at oral argument to interrupt lawyers before they are finished answering questions posed by her colleagues?  Did Justice Sotomayor take more than her fair share of nuts from the communal candy dish at the Court's holiday party?

Before everyone gets too excited, let me suggest a more banal explanation. The most pointed digs in the respective opinions appear in footnotes.  The footnotes in the Ginsburg majority opinion that respond to the Sotomayor opinion would have likely been added after the other Justices had joined in Ginsburg's opinion. And although the Ginsbug footnotes are hard-hitting, they don't exactly come right out and say "Justice Sotomayor is a liar", so it's not surprising that the seven Justices who joined Ginsburg's opinion did not thereafter beseech her to remove the tough footnotes.

Put differently, Justice Sotomayor probably "started it", and did so entirely on the merits:  she was worried that the majority opinion was constraining plaintiffs' rights to sue.  Meanwhile, Justice Ginsburg may well have taken some offense at the accusation, both as a civil procedure expert and as someone who sees herself as sympathetic to plaintiffs.  From there, things could have easily escalated as each of the Justices' respective law clerks looked for any ammunition they could find.  Of course, each Justice bears responsibility for accepting what her respective law clerks may have proposed adding to the footnotes, but it is easy to imagine that no one was paying all that much attention to the tone of the footnotes.

So yes, it's possible that some of the snark reflects underlying personal tensions, but the case is no smoking gun.

Monday, January 20, 2014

Academic Enabling of Inequality Denialism

-- Posted by Neil H. Buchanan

My Verdict column last Thursday addressed the renewed focus on inequality among mainstream politicians and pundits in the U.S.  In my short Dorf on Law post on Friday, I noted that that column had immediately elicited an especially funny example of the red-baiting that has become par for the course from right-wingers in this debate.

In today's post, I will make two broad points.  I will discuss another aspect of the big takeaway from my Verdict column, which is that academics (especially economists and economist wannabes) have enabled politicians and pundits to ignore (at best) inequality.  Before getting to that discussion, however, I will take a few swipes at New York Times columnist Bill Keller's recent Clintonian rejection of calls for redistribution.

Keller, of course, is one of the best current examples of the kind of pundit who pretends to care about inequality, but who always somehow finds a reason to reject doing much about it.  To some extent, of course, picking on Keller is far too easy.  He is lazy and self-satisfied, and he obviously does not care that his columns would not earn a generous B- in a college composition course.  On the other hand, he has a huge audience.  It is arguably worth the effort to do what one can to expose his sloppiness (and worse).

The column in question is, by now, almost a month old.  In a Dorf on Law post that was published the day before Christmas, I commented on some especially inane comments about taxes that Keller offered in the column.  The problems with the column, however, go far beyond muddled thinking about tax policy.

Hiding behind the cutesy title, "Inequality for Dummies," Keller offers a primer on how to slime progressives while pretending to referee the debate between liberals and "third way" Clinton alums.  Calling out Keller's rhetorical moves alone could consume several blog posts, but here I will focus instead on his identification of three key differences between "center-left" and "left-left" politicians.

First, he says that they disagree on "how to restart the engine of growth," with the "divide [being] over policies that might unleash the energy of the private sector."  Admitting that Keynesian policies are "vindicated by history," he nonetheless says that the center-left has a point that domestic consumption is already 70% of GDP.  Apparently, he thinks this is a high number, but he never explains why.  Nor does he acknowledge that fighting lingering stagnation with Keynesian spending programs would "unleash the energy of the private sector" not only by allowing the private sector to sell more goods to domestic consumers, but by encouraging it to invest more (to keep up with rising demand).  The ensuing investment would reduce consumption as a percentage of GDP.

No, he simply points out that Obama (of whom Keller strongly approves, precisely because Obama is manifestly NOT a redistributionist) wants to cut corporate tax rates, "do trade deals," cut deficits, and streamline regulations.  In other words, the big fight over how to restart growth is between those who would actually restart growth and those who would simply double down on the Republican agenda that has been driving policy for the entire period during which inequality became such a huge problem.  Inequality for dummies, indeed.

"The second argument is over entitlements."  At this point, the argument is pointless, because Keller has already revealed that he is incapable of acknowledging the difference among the three big spending programs: Social Security, Medicare, and Medicaid.  They are very different programs, and random statistics about aging tell us nothing about their long-term prospects.  No, he sees it all as being about "the stampede of baby boomers into Social Security and Medicare [that] will crowd out everything else."  This is nonsense.  He then endorses the argument that there should be "some restraint on entitlements."  Bold.  (Earlier in the column, he happily quotes a Third Way op-ed that accused populists of indulging a "you can have it all fantasy.")

"And a third difference between the near left and the far left is the question of making government more efficient."  (See what I mean about the rhetoric?  From "progressives" to "left left" to "far left.")  When Keller immediately admits that he is describing "not so much a policy dispute as a mind-set," he again tips his hand.  He assures us that "[t]he left responds to rising costs with rising subsidies; the center looks for ways to change incentives."  Right.  At all of my meetings with card-carrying left-leftists, we start by promising that we will never look for ways to change incentives.

So, Clintonian triangulators are right because they: (1) cling to failed supply-side bromides, (2) try to take away benefits from "entitled" elders, and (3) believe that only centrists care about incentives.  This is embarrassing stuff.  Sadly, it is also what counts as high-end analysis in political circles.

Where does all of this nonsense come from?  As I noted in my Verdict column, buffoons like Keller do not come up with this silliness out of thin air.  They draw their material third- or fourth-hand from economists and policy scholars, whose work is mediated through the think tanks in DC and New York.  I argued that even non-conservative economists ended up inadvertently contributing to the atmosphere that shouted down discussions of inequality.  I also noted that the growth-versus-equality divide was not a crazy analytical move in the 1960's and 1970's, when growth really did seem to help everyone.  What began as an agreement to treat inequality as a separate issue, however, ended up becoming an atmosphere in which people who tried to talk about inequality were told that they were irrelevant (or worse).  I cannot count how many times I heard someone in a seminar room say (to me or others), "Sure, but that's merely a distributional question."

This mutation of the academic debate over income inequality has an interesting analogy in another area of economic analysis.  The famous "Coase Theorem" supposedly says that distribution does not matter, so long as property rights are assigned to maximize efficiency.  At least, that is how even non-ideologues often summarize the theorem.  The standard hypothetical example is that it does not matter whether a polluter owns the right to dump sludge in a stream, or a property owner owns the right to prevent sludge from being dumped in a stream, because the two parties will in any case negotiate a price to optimize the amount of pollution.  The only thing that could prevent an efficient outcome is "transactions costs," which we agree to assume away.  The bottom line: distribution is not interesting or important.  Efficiency is everything.

The problem is, as the Canadian economist Dan Usher wrote in the late 1990's, that "The Coase theorem is tautological, incoherent or wrong."  Usher pointed out that the modern understanding of the theorem reversed the logic.  Ronald Coase never said, "After we assume away transactions costs, we can conclude that it doesn't matter who holds a property right."  He said, "Because we should not assume away transactions costs, we must be aware that it very much matters who holds a property right."

Moreover, Coase lived long enough to say -- repeatedly -- that people had gotten his theorem all wrong.  (See, e.g., here.)  Even so, it is easy to find people who will say that Coase proved that you can assume away transactions costs, and that distribution therefore does not matter.  In this case, of course, "distribution" is not about overall economic distribution between income classes.  Even so, the analogy is clear.  The "distribution doesn't matter" argument resulted from a group distortion of a perfectly respectable (and context-specific) argument.

But it is exactly that kind of ridiculously incorrect argument that ends up filtering into the op-eds in the New York Times and elsewhere.  Someone tells someone else that he read somewhere that economics is all about efficiency and never about distribution, and the people who want to sound smart echo that sentiment.  We see the sorry results, not only on the op-ed pages but in the policies of the people whom those self-congratulatory "centrists" support.

Friday, January 17, 2014

Is My Face Red?

-- Posted by Neil H. Buchanan

My new Verdict column was published yesterday: "The Great Inequality Debate, and the Reemergence of Distribution as a Respectable Subject of Discussion."  In the column, I argue (surprise!) that the renewed concern with inequality among Democratic politicians is a very good thing.  I also discuss how academic economists (and economistic policy analysts) played an essential role in dismissing the subject of inequality from polite discussion for the past generation.

I will offer some more thoughts along those lines in a Dorf on Law post this coming Monday.  However, I just arrived in Australia after a 36-hour travel marathon, and I need to sleep.  Even so, I cannot resist sharing part of a piece of hate mail that I received from a reader after my Verdict column was published.  It is just too fascinatingly bizarre not to share.

As I note in passing in my column, one of the increasingly common moves on the right in the U.S. is to red-bait anyone who argues in favor of income redistribution.  At this point, simply being in favor of a progressive tax system makes one a card-carrying member of the Communist party, it seems.  Not everyone on the right does this, of course, but it is depressingly common.

I have certainly been red-baited before, and when that happens, I take it as a sign of the critic's desperation.  The email in question, however, sets a new standard, going far beyond merely suggesting that I am a secret collectivist.  I will spare my readers the bizarre lead-in, because it is simply incoherent.  But the writer's punch line is that "history has amply demonstrated" that arguments like mine have been
... the foundation of atrocities from slavery to the Killing Fields to the Inquisition to the Holocaust.  And your notion of distributed justice rests on nothing different or better than the notions productive of those injustices. Your only retort can be, “perhaps – but my intentions are better”. That may be, but your intentions are no guarantee of less atrocious outcome."
I love this job.

Thursday, January 16, 2014

Why Are Sidewalks A Public Forum For Speech?

By Mike Dorf

Yesterday the Supreme Court heard oral argument in McCullen v. Coakley, which presents the question of whether the Massachusetts law requiring a 35-foot buffer zone around the entrance to reproductive health services providers violates the First Amendment rights of anti-abortion activists who seek to approach women seeking abortions to attempt to dissuade them from carrying out their plans.

As one might expect, the Court is ideologically divided roughly along the lines that divide the Court on abortion.  Justice Kennedy, who is the swing vote on abortion but the closest Justice on this Court to a free speech absolutist, pretty clearly is going to join Justices Scalia and Thomas to strike down the law.  That's hardly news.  All three of them dissented in Hill v. Colorado, which sustained "floating" buffer zones.  And all three (essentially) dissented in Madsen v. Women's Health Center, which sustained a 36-foot buffer zone as part of an injunction.

Meanwhile, Justice Kagan may vote to invalidate this particular law as establishing too large a buffer zone but it's pretty clear that the liberals will by and large vote to sustain at least some buffer zones.  The Justice whose views seem most susceptible to criticism as result-oriented here is Justice Alito--the lone dissenter in Snyder v. Phelps.  There, Justice Alito thought that the interest of funeral-goers in avoiding unwanted speech sufficed to limit speech in a public forum but here, judging by the oral argument, Justice Alito is likely to swing to protect anti-abortion protesters.  Lyle Denniston, writing on SCOTUSblog, thinks that CJ Roberts is the likely swing vote on the sutainability of any buffer zones around abortion providers, but it's hard to know what he thinks, as he didn't ask any questions.  If I were betting, I'd bet that the Court rules against Massachusetts.  As for the broader question, I think buffer zones won't survive for much longer.  That is, even if the Court officially distinguishes Hill rather than overrules it, the writing will be on the . . . sidewalk.

And that brings me to my chosen topic for today.  A crucial element of the challengers' case here is the fact that the Massachusetts law restricts speech on public sidewalks, because public sidewalks are, in the Court's doctrine, a traditional "public forum" for speech, in which the government may only enact narrowly-tailored, content-neutral time, place and manner regulations that leave open ample means of alternative communication.  That all sounds fine, until one thinks about how weakly the competing interests (speech on the one hand; security on the other) are linked to the exact character of the physical space.

To enter Planned Parenthood's Greater Boston Health Center, patients must first walk along the public sidewalk--and that fact appears to be crucial to the plaintiffs' case.  As the lawyer for the government argued, in Worcester and Springfield, where most patients arrive by car, there is a small area of public sidewalk connecting the parking lot to the building, and the buffer zone operates there.  But suppose instead that patrons entered the health center along a privately owned sidewalk that connected to the center's parking lot.  Then, following the holding of United States v. Kokinda, the private sidewalk would not be a public forum, and so the plaintiffs would have a substantially weaker case.  Indeed, in Kokinda, the relevant patch of sidewalk was owned by the government (the Post Office to be precise) but was not deemed a traditional sidewalk, so for that reason it wasn't a public forum. Likewise, the plaintiffs would have a substantially weaker case if the health center were located in a privately owned shopping mall or in a tower office building--for then too the area immediately outside of the health center would not be a public forum.

Clear thinking about a case like McCullen and about public forum doctrine more generally requires that we ask why it is that sidewalks are considered traditional public fora.  The Court's cases do not exactly say, lumping them in with streets and parks, but to my mind, streets and parks are different: Those are public fora because they provide the sort of space needed as a staging ground for large demonstrations and protests.  But the speech interest in sidewalks is different.  You can't really have a parade or a march on a sidewalk.  What you get on a sidewalk--as the Court recognized in Hill--is the right to approach people, including people who presumably disagree with you, in order to try to persuade them to your viewpoint (absent a sufficiently strong state interest in overriding that right).

To what extent should the right to approach people on sidewalks encompass a right to take advantage of where those people happen to be?  A person campaigning for a boycott of products from Norway and Japan on the ground that those countries support whaling will meet with more success if she targets people leaving a showing of the movie Blackfish than if she is relegated to approaching random passersby on a random patch of sidewalk.  So the anti-whaling activist effectively has a First Amendment right to approach a likely sympathetic audience in front of an urban movie theater but not at a suburban multiplex, where the cinema empties into the private mall or the private parking lot.

I want to be clear that I'm not (now) taking a position on which way the tension should be resolved.  Perhaps the protections that people enjoy--including the ability to take advantage of who tends to visit what sort of establishment--ought to be extended to apply to places that are not currently considered public fora.  But to make the right turn on whether the particular space abuts a public sidewalk or a private parking lot does seem quite arbitrary.

Finally, I'll add a small dose of realism. In Doe v. Bolton, the companion case to Roe v. Wade, the Supreme Court invalidated a state law requirement that abortions be performed in hospitals.  The result saved money for abortion providers but it also meant that freestanding abortion clinics became better targets for anti-abortion protesters.  If you're trying to dissuade women from having abortions, you'll reach more women seeking abortions if you stand outside a Planned Parenthood clinic than if you stand outside a hospital (although even in front of the Planned Parenthood clinic you'll reach a lot of women who are going in for non-abortion-related medical services).  Even if Doe was responsible for the initial turn to freestanding abortion clinics, their persistence--and their combination with ideologically sympathetic providers like Planned Parenthood--is now more like a necessity.  You don't see many abortion clinics in shopping malls because the mall owners don't want the headache of dealing with protests.  So it seems a bit like double-counting for the very anti-abortion protesters whose tactics play a role in effectively requiring Planned Parenthood to rent space that simply fronts on a public sidewalk, to then invoke that fact as a basis for a right to protest (or leaflet or engage in "sidewalk counseling") right in front of that space.

Wednesday, January 15, 2014

Should Mental Illness Count As Religion?

By Mike Dorf

My latest Verdict column uses the Little Sisters case as a jumping-off point to discuss religious exemptions. I argue that religious objections to "participating" in other people's activities are, other things being equal, more difficult to accommodate than objections to actions (or omissions) that one must take (or refrain from taking) oneself.  Spoiler Alert: Near the end of the column, I make the provocative comparison of the Little Sisters plaintiffs' view of participation to objections to living in a society that tolerates blasphemous cartoons. Now, just in case any readers aren't already offended, I want to compare religion to mental illness--albeit in a limited sense.

The column grapples with the following question: Is there anything special about religion that warrants giving people exemptions from general laws when they have religiously-based objections but not when they have non-religiously-based objections?  Let me begin by bracketing one reason that is sometimes offered in the relevant literature: that religion is especially valuable because it teaches morality, it creates social bonds, etc. Whether or not this is empirically true (a question about which I express no view), this rationale seems to me at war with itself, because religious freedom in a liberal society includes the freedom to practice no religion.

In the column, I offer (but don't endorse) a more-commonly expressed ground for treating religious obligations as special: A legally mandated violation of a religious commandment is, to a person of faith, a more serious burden on liberty than is violation of a mere obligation of non-religious conscience to a non-religious person (or to a person who is religious but whose particular view on some matter is rooted in her conscience rather than her religion).  Someone who thinks that God has commanded her not to X may experience being forced by the state to X as condemning her to eternal damnation, whereas someone who has a non-religious objection will be unhappy about mandatory X'ing but will feel less tormented.

I think that there is something to this point, at least in some contexts, but that it is both under-inclusive and over-inclusive as a ground for privileging religious grounds for exemptions.  It is under-inclusive because we protect religious practices even when their practitioners do not think that violation of religious obligations results in damnation. Some religions have no concept of Hell.  In others, salvation does not depend on acts.  Meanwhile, if the belief that X'ing will bring enormous suffering (as experienced in Hell) is what creates an entitlement to an exemption, then certain forms of mental illness also ought to qualify one for exemptions.

Suppose that Tom has a delusional belief that he must attend each of the home games of the Green Bay Packers or else he will experience hellfire here on Earth.  Tom does not hold this belief for any religious reason.  It's the product of a refractory mental illness. Now Tom's government employer tells him he has to work on Sundays, meaning he can't attend Packers' home games.  Under RFRA, if Tom had to be at church, he would be entitled to an exemption (unless the government could satisfy the compelling interest test), but there is no MIFA (Mental Illness Freedom Act), and so Tom has no claim--even though his beliefs mean that he will suffer a much greater burden than is suffered by a religious person who needs to go to church but whose theology does not condemn him to Hell if he fails to do so.

Accordingly, I don't think that the seriousness of the consequences to religious believers is a sufficient justification for treating religious grounds for exemptions as stronger than other grounds.  Instead, it strikes me that--at least for purposes of Free Exercise and RFRA, though not for Establishment Clause purposes--people with non-religious claims of conscience ought to be entitled to exemptions to the same degree as people with religious claims of conscience.  (This view can be found in the academic literature, too.)

Interestingly, that result would have been easier to achieve under the pre-Employment Div v. Smith Free Exercise Clause than it is under RFRA.  For while the First Amendment singles out religion for free exercise protection, a general right of conscience is sufficiently closely related that it could be extrapolated as an unenumerated right as a matter of substantive due process or the Ninth Amendment.  But there is no SDP or Ninth Amendment for RFRA.  To find that RFRA protects non-religious rights of conscience, one would need to construe "exercise of religion" to mean exercise of conscience.  That's more or less what the Court did with respect to conscientious objection to military service (as I explain in the column), and so I'm okay with going there, but it's a tougher linguistic move than the parallel move under the pre-Smith Free Exercise Clause.

Tuesday, January 14, 2014

Polygamy, Substantive Due Process and Free Exercise

by Mike Dorf

A story in last Thursday's NY Times discussed the federal district court ruling that invalidated the "cohabitation" provision of the Utah bigamy law in the "Sister Wives" case (Brown v. Buhman).  That ruling lit up the blawgosphere when it was handed down last month, and as I'm late to the party, I don't want to now repeat points that others have made.  Instead, I want to take this opportunity to distinguish the case from the contemporaneous litigation over Utah's same-sex marriage prohibition. Given the rough simultaneity of the two cases, the fact that both involve Utah, and, most importantly, the fact that opponents of same-sex marriage often invoke polygamy as a kind of reductio ad absurdum of permitting SSM, it is understandable that the cases would be linked in the public imagination.  But in fact the Brown district court ruling is based on a quite different set of considerations.

(1) Although the Brown plaintiffs sought both legal recognition for their polygamous marriage and invalidation of the ban on cohabitation, the district court only ruled in their favor with respect to cohabitation. To be sure, the plaintiffs are appealing the ruling with respect to recognition, but to my mind there are (at least) two factors that a court could invoke to find a right to legal recognition of SSM while rejecting a right to legal recognition of polygamous marriages. First, polygamous marriages create administrative complexities (about state benefits, etc.) that two-person same-sex marriages do not.  Second, and more fundamentally, laws denying a right to same-sex marriage reflect animus towards gay people, treating them as second-class citizens.  Although particular anti-polygamy laws may be rooted in prejudice (more about that below), they are not inherently discriminatory against a class of persons in quite the same way.  Sometimes people invoke a third distinction--that polygamous marriages are more likely to be coercive than other marriages--but I don't know that this factor should be given much weight in a case in which the marriage is not coercive. I have similar misgivings about distinguishing polygamy as necessarily sexist, because the distinction relies on a claim about false consciousness with which I'm not entirely comfortable.

(2) The Times story reports that the district court relied on Lawrence v. Texas, and quotes GW Law Professor Jonathan Turley saying "This is essentially the Lawrence v. Texas for plural marriages." Without more context, that's a little misleading. In Brown, the district court said that it was bound by 10th Circuit precedent holding that Lawrence did not establish a fundamental right to sexual intimacy, but nonetheless found that the cohabitation prohibition failed the Lawrence-inflected rational basis test that applies to intimate conduct.  So yes, there's a connection between the Brown ruling and one of the leading gay rights precedents, but it's a bit of a fuzzy one.

(3) That connection is rendered fuzzier by the fact that the district court relied, as an independent ground for invalidating the law, on the First Amendment's Free Exercise Clause. After an interesting discussion critiquing the "Orientalism" (citing Edward Said) in the 19th Century case of Reynolds v. U.S. (which upheld a polygamy prohibition notwithstanding the clear anti-Mormon bias that infected it), the district court in Brown went on to say that although the Utah cohabitation law is neutral on its face, in operation it is used to target religiously motivated polygamists.  Thus, the court concluded that it discriminates against religion in violation of Church of Lukumi v. Hialeah.

(4) As yet another basis for the holding, the district court relied on a caveat in the Supreme Court's opinion in Employment Division v. Smith: Although laws of general applicability that incidentally infringe religion do not trigger heightened scrutiny for that reason alone, "hybrid" rights that combine religions exercise with some other right do.  (For what it's worth, I've never found this "hybrid" rights category to make much sense; I thought Justice Scalia invented it in Smith so he could distinguish rather than overrule cases that went against him; but the lower courts, understandably, regard themselves as bound to apply the hybrid rights rule).  Here, the Brown opinion says that freedom of association, equal protection and a list of other rights combine with free exercise to trigger heightened scrutiny--which the cohabitation prohibition fails.

Whether the district court is affirmed or reversed on any or all of these grounds, it should be clear that the legal fate of same-sex marriage in Utah (and elsewhere) is not closely linked to the fate of polygmay.

Monday, January 13, 2014

Is Chris Christie's Political Career Over? Should We Really Want It to Be?

-- Posted by Neil H. Buchanan

The George Washington Bridge-related scandal (I refuse to call it "Bridgegate") that has engulfed the administration of New Jersey Governor Chris Christie reached a crescendo last week, and the path forward most likely involves ongoing investigations, along with occasional dribs and drabs of information that will be damaging but not lethal to Christie's governorship.  Unless something big happens that leads to outright impeachment or resignation (not at all a remote possibility), he will continue to serve as governor of the Garden State.  The question going forward will be the one that I (along with plenty of other commentators) addressed last week: How will this affect Republican presidential politics leading up to 2016?

Normally, I would be among those people who think that it is ridiculous to talk about the next election now, given that we are only one year into President Obama's second term.  John Oliver, during his time filling in for Jon Stewart on The Daily Show last summer, repeatedly pleaded for a respite from the Permanent Presidential Campaign.  In general, that desire is completely reasonable.

The Christie scandal, however, is both highly unusual and potentially transformative regarding the dynamics of the fight for the Republican nomination.  Some news stories end up being fleeting.  Even big events, like the poorly managed roll-out of healthcare.gov, will -- despite Republican attempts to keep it alive -- almost surely fade quickly from people's minds and end up having little or no effect on outcomes in the 2014 midterm elections, much less the next general election.  Christie's bridge scandal, on the other hand, could permanently alter the landscape.

On Friday, therefore, I indulged myself by offering a few thoughts on where this all might lead.  Now that I have digested some very good comments from our readers, and after an off-list discussion with Professor Dorf, my thinking has developed further.  I still believe that Christie is a dead man walking (at least as a presidential contender, and maybe as a public figure), but that is by no means certain.  And if the governor is done, that might not even be a good thing for liberals like me.  We might want Christie to be resurrected (pun intended).  I am not saying that we definitely should cheer on his return, but it is at least a possibility that the world will end up worse off because of Christie's demise.

The threshold issue remains whether the events that climaxed last week have permanently ended Christie's presidential possibilities.  In my post on Friday, I suggested that they have.  In particular, I noted that Christie's opponents will have no problem using the scandal against him.  Not that any of his likely opponents have any shame, but none of them would even need to be hypocritical to attack Christie on this issue.  He is guilty either of planning to use governmental power to harm people, or of presiding over a group of aides who used governmental power to harm people.  This is truly bipartisan in its awfulness.  Conservatives hate government all the time, and liberals hate when politicians make government look bad.

Even so, as one commenter noted, it is not hard to imagine Christie emerging from this with a new credibility among his party's base.  What has been holding Christie back among the ultra-conservative faithful is that he has actually tried to make government work.  Embracing President Obama after Hurricane Sandy was a huge deal (especially because it happened only weeks before the 2012 election), and Christie's "brand" to this point has been that he can be sold as an electable moderate-conservative.  He is not really moderate, unless one views being to the left of Rand Paul as moderation, but that is not the point.  Christie was viewed with suspicion by the Tea Partiers.

As our commenter noted, however, the very nastiness of the bridge scandal could breathe credibility into Christie's attempts to appeal to that base.  Remember, after all, that these are the people who shouted "Let 'em die!" when a candidate was asked what should happen to uninsured people who show up at a hospital with a life-threatening illness.  (Yes, the 2012 Republican primaries were an entertaining horror show.)  Harming weak people -- being a bully -- is not only OK with this group, but it is what they admire most.  The question is whether these non-Northeastern voters would excuse Christie for harming regular people, because the people who were harmed are likely not to be Tea Partiers.  "Sure, I'd be pissed if he messed up my commute, but who cares about a buncha Blue State voters!"

Even if Christie could parlay the scandal into a plus with the people who admire autocrats, however, he might have already ruined himself in their eyes by apologizing (and apologizing and apologizing) in last week's operatic press conference.  He would, therefore, have to be able to convince the pro-bully base not only that they can trust him only to harm the kind of weak people that they would like to harm, but also that he was merely being opportunistic in apologizing for doing so.  That, again, is difficult, but hardly impossible.

Moreover, the evidence continues to accumulate that the Republicans' primary voters are truly a nasty lot.  The ongoing efforts by House Republicans to cut food stamps, to end unemployment benefits, and so on, have opened a lot of people's eyes regarding the party's priorities.  Depending on how one measures it, the "takers" so reviled on the right might literally add up to "the 99%."  Certainly, it is at least 47%.

There are, moreover, two recent examples of Republican presidential aspirants who seemed dead in the water, only to find new life.  In 2008, John McCain was polling in the low single digits, only months after having been the presumptive nominee.  He then recovered, winning the nomination rather easily.  In 2012, Newt Gingrich died two political deaths, when the first one should have been more than enough to finish him off.

The Gingrich comparison is an interesting one.  During his few days as the front-runner in late 2011, I asked here on Dorf on Law: "Will Americans Voters Elect an Unbearably Pompous President?"  Although I believe that the comparison between Christie and Rudolf Giuliani (which I discussed in last Friday's post) is most apt, the Christie-Gingrich similarities are hard to ignore.  Gingrich has an undeserved reputation for having "ideas," which is not Christie's supposed strength, but both of them are condescending, nasty, and dismissive of their detractors (and even of people who simply ask them to explain themselves).  If anything, Christie has perfected Gingrich's snarling pose.

Of course, Gingrich's comeback in 2012 was not at all a matter of having found a way to be more appealing to voters.  He simply found a billionaire to back him, and he managed to hang on in the primaries a few weeks longer than otherwise would have been possible.  And even then, he lost badly.  Could Christie find a billionaire of his own?  Maybe.

I do not have anything to say about the McCain comeback in 2008, except that it proves how quickly the unthinkable becomes the obvious in politics.  For that reason, I can certainly imagine Christie's public image morphing multiple times over the next two years, ending in a place where he is once again a plausible candidate for President.  Based on everything that I have written above, I do not view such an outcome as at all likely.  I do, however, readily admit that it is not impossible.

From the standpoint of liberals and Democrats, is Christie's near-certain political demise good news or bad news?  Before the scandal broke, absurdly-early polling had shown Christie to be in a dead heat with Hillary Clinton.  Christie's image as the moderate, electable candidate was, in fact, what drove his aides to push so hard on New Jersey Democrats to endorse him.  He's bipartisan!

The large segment of the punditocracy that believes in "centrism" abhors a vacuum.  If there is no actual moderate out there, they will invent one.  Christie himself is the result of that very dynamic.  If Christie goes, to whom would the faux-centrists turn?  Professor Dorf reminded me that Paul Ryan -- PAUL freakin' RYAN!! -- could use last month's budget deal as a way to convince the Bill Kellers and Thomas Friedmans of the world that he is their guy.  That is to say, to convince them that he is the one about whom they can sagely say: "We disagree with him about everything, but you have to admit that he's reasonable.  And liberals have to accept reality and try to work with this pragmatic compromiser."  That Ryan is already wrongly viewed as a serious wonk would only enhance his appeal to be the guy who replaces Christie as the false moderate.

We thus could find a Republican field in which every candidate is as conservative as the next, but Ryan could be the designated "reasonable conservative."  Weird, but not unprecedented.  Would it, therefore, actually be better to have Christie still in there, given that he has actually shown that he is not a complete right-wing ideologue?  Unlike Mitt Romney, who sold out whatever moderate views he had in pursuit of the presidency, Christie is stubborn enough that he probably would not cave to the will of the craziest people in his party.

Ryan and the other potential false moderates (Bobby Jindal comes to mind) really are pretty much the same as the other extremists in their party.  They might differ on odd things like enthusiasm for the gold standard, but otherwise they are all in line with the hard-core conservative agenda.  (As others have noted, this is not the "Tea Party agenda," but truly the Republican agenda.  The intramural differences really are about tactics, not goals.)

It is probably true that a Democrat would have an easier time against a non-Christie candidate, because it would be easy in principle to demonstrate the falseness of the moderation of such a non-Christie Republican.  That, however, merely raises the age-old question about such choices.  Is the non-zero probability of a crazy extremist winning so scary that it would be better to root for a very conservative, more electable "pragmatist"?

The people who cheered on Ronald Reagan in the 1980 primaries against George H.W. Bush thought that Reagan could not possibly win, and that his nomination guaranteed Jimmy Carter's reelection.  At this point, it seems fair to imagine that any of the potential Republican candidates could actually win.  I am not prepared to say that we should hope for Christie to make a comeback.  I am, however, unwilling to say with any certainty that the net result of his disappearance would be good for the world.