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Constitutional Law
Toyota Stumbles Into a Dark Legal Alley…
…and the U.S. Department of Justice emerges whistling with $1.2 billion. I explain how it happened in a Wall Street Journal opinion piece today (more: Overlawyered). Toyota’s cars are very safe indeed, and “sudden acceleration” was a concoction of media-fueled panic, as the government’s own safety engineers have confirmed. But now the company is being punished not just for alleged data-reporting and compliance infractions unlikely to have caused any genuine material risk to the public, but also for defending itself and its products at Congressional hearings and in the arena of public opinion. DoJ’s demagogic press release cites, among the instances of supposed fraud for which Toyota is now being punished by the gigantic forfeiture, such standard exercises in bland crisis communication as, “The safety of our owners and the public is our utmost concern and Toyota has and will continue to thoroughly investigate and take appropriate measures to address any defect trends that are identified.”
A couple of other points I didn’t have room for in the WSJ piece: Toyota is settling the government’s trumped-up single charge of mail fraud by way of a so-called Deferred Prosecution Agreement, or DPA, and its terms really must be seen to be believed. “Toyota understands and agrees that the exercise of the Office’s discretion under this Agreement is unreviewable by any court,” appears on clause 14 on page 6, with “Office” referring to the office of the U.S. Attorney for the Southern District of New York, currently Preet Bharara. And if you are expecting even the tiniest squeak from anyone at Toyota in contradiction to the government line, even around the coffee machine at the local dealership, consider clause 13, which states: that Toyota “agrees that it shall not, through its attorneys, agents, or employees, make any statement, in litigation or otherwise, contradicting the Statement of Facts or its representations in this Agreement.” If DoJ catches wind of any such statement it can revoke the agreement not to prosecute, without of course having to give back the billion dollars. “The decision as to whether any such contradictory statement shall be imputed to Toyota for the purpose of determining whether Toyota has violated this agreement shall be within the sole discretion of the Office.”
When people talk about federal prosecutors having become a law unto themselves, this is the sort of thing they mean.
Litt on Warrants for Searching American Communications: Either Misleading or Terrifying
At a hearing Wednesday, members of the Privacy & Civil Liberties Oversight Board asked intelligence official Robert Litt a crucial question: If the sweeping general warrants authorized by the FISA Amendments Act are only supposed to be used for “targeting” foreigners for surveillance, shouldn’t a judicial warrant be necessary before NSA can intentionally dig through its massive database of intercepts for Americans’ communications? Otherwise, after all, such “backdoor searches”—currently allowed under NSA guidelines—seem a dangerous loophole that enables an end-run around the rules that would require court approval to directly target an American’s communications for interception.
Litt’s answer was either extremely misleading or extremely disturbing. He told the oversight board that the number of annual queries to the intercept database was “considerably larger” than the few hundred analysts currently run against NSA’s vast archive of telephony metadata records. That would make the “operational burden” of a warrant requirement utterly impractical, Litt asserted, and that the Foreign Intelligence Surveillance Court “would be extremely unhappy if they were required to approve every such query.”
Now, it’s possible that Litt was talking about the total number of queries analysts run against the database of intercepted communications as they sift through it for nuggets of foreign intelligence. No doubt that number is very large indeed. But it’s also utterly irrelevant to the question PCLOB was asking. Nobody, after all, is suggesting that a warrant be required for every query of NSA’s databases—including queries for topical keywords or “selectors” associated with known foreign intelligence targets. The question, rather, was whether a warrant should be required for the subset of those queries involving the name or e‑mail address of a particular U.S. person—the very query terms that the government would be forbidden from using as selectors to task interception without first obtaining a particularized, probable cause warrant. If Litt was answering that question by alluding to the total number of queries, then his answer had little bearing on what the PCLOB was trying to discover, and would vastly overstate the practical burden of such a requirement—seriously misleading overseers about the feasibility of a proposed civil liberties safeguard. Litt ought to correct the record if that is what he meant.
What would be hugely more disturbing, however, is if Litt really was giving an answer pertinent to the question he was asked. In that case, he would be representing that NSA runs “considerably more” than a few hundred annual queries for the names and e‑mail addresses of specific U.S. persons, against a database of private communications gathered via general warrants—an authority justified on the premise that it is “targeted” exclusively at non-Americans located outside the United States. That would suggest that the blanket surveillance authority created by §702 of the FISA Amendments Act is precisely what civil libertarians feared: A Trojan Horse mechanism for spying on Americans using the pretext of “foreign targeting.”
In short, either added safeguards on NSA’s use of the §702 database are far more feasible than Litt led the PCLOB to believe, or the authority is being used in a way that circumvents constitutional and statutory protections for Americans’ communications on a chilling scale. Litt should clarify which it is—and then Congress should hasten to reform §702 accordingly.
While You Fill Out Your Bracket, Chris Christie Busts the NCAA’s Racket
After considerable debate, the Founding Fathers elected to give the new federal government the power of regulating commerce among the several states. We’ve all seen what’s become of that power, but in the beginning, giving the federal government the ability to regulate—literally, to “make regular”—interstate commerce made good sense as a way to avoid the otherwise inevitable collective-action problems, like trade wars and anti-competitive jockeying for monopolies. The goal was to ensure that federal law would not permit or bestow any unfair competitive advantage to any one state or group of states over the others.
Throughout much of our nation’s history, the federal government has, for the most part, succeeded at this particular goal. Thanks to the Professional and Amateur Sports Protection Act of 1992 (PASPA), however, Congress’s power to keep states from obtaining unfair advantages is being used to grant some states (most notably Nevada, but also Oregon, Montana, and Delaware) an unfair advantage: a special right to license gambling, which PASPA prohibits to other states.
In 2012, New Jersey Governor Chris Christie signed a sports-gambling bill into law, and as a result was sued by the NCAA, NFL, MLB, NHL, and NBA, who believed that additional sports betting would result in corruption and game-fixing. Christie defended his actions by arguing that PASPA violates the 10th Amendment by restricting New Jersey’s right to govern itself, and also that it violates the equal-sovereignty doctrine by giving an unfair advantage on certain states.
The federal district court and the U.S. Court of Appeals for the Third Circuit failed to recognize these constitutional flaws, so New Jersey has now asked the Supreme Court to hear its case. Cato has joined the Pacific Legal Foundation on a brief supporting New Jersey’s petition.
We explain that the principle of equal sovereignty was central to the creation of Congress’s power to regulate interstate commerce, and that conferring state-specific advantages is precisely opposite to the federal power that the Framers created. We think it important that the Supreme Court hear this case because it offers an excellent opportunity to explain the equal-sovereignty doctrine and how it furthers federalism, and to provide guidance as to the scenarios in which the doctrine applies. Congress shouldn’t be able to pick winners and losers among the states.
The Supreme Court will likely decide whether to take the case of Christie v. NCAA before recessing for the summer at the end of June.
This blogpost was co-authored by Cato legal associate Julio Colomba.
SCOTUS Deferred to Executive Agencies. What Happened Next Will Infuriate You!
In the 1996 case Auer v. Robbins, the Supreme Court ruled that where there is any ambiguity or disagreement over what a federal regulation means, courts should defer to the interpretation favored by the agency that issued the regulation. The practical consequence of this decision has been that government agencies have had the power not just to create and enforce their own rules but also to definitively interpret them. Given the mind-boggling number of federal regulations that exist—and the exceptional breadth of behavior that they govern—the importance of this “Auer deference” can’t be overstated.
While handing the powers of all three branches of government to the bureaucracy is problematic in and of itself, a recent decision by the U.S. Court of Appeals for the Ninth Circuit further extended the deference courts show to agency rulemakers by declaring that an agency’s interpretation of its own rule is authoritative even if the agency has altered its interpretation dramatically since the regulation came into effect. Under that logic, an agency could spend decades saying that its regulation governing footwear only applied to shoes—and then, without warning or consultation, unilaterally decide to extend the rule to sandals and slippers (despite explicitly saying for years that they were not covered by the regulation).
Such a power to rewrite regulations through after-the-fact “reinterpretation” is incredibly tempting, freeing agencies to change the rules of the game without further legislation or congressional oversight, or even the formalized rulemaking process required by the Administrative Procedure Act.
Peri & Sons, a family-run farm in Nevada (one of America’s largest onion producers), is caught in just such an Kafkaesque morass. In its case, the Ninth Circuit ruled that even though the Department of Labor for over five years interpreted regulations issued under the Fair Labor Standards Act to mean that employers aren’t required to pay employees for the costs of moving for a job (including passport and visa applications), DOL is free to change its interpretation to now require employers to cover those costs.
Cato, along with the Center for Constitutional Jurisprudence and the National Federation of Independent Business, filed a brief urging the Supreme Court to hear this case. We argue not just against the Ninth Circuit’s extension of Auer to cases where the agency has reversed its position, but also that Auer itself was incorrectly decided. Granting agencies post-hoc control over their regulations’ textual meaning is an abdication by the courts of their constitutional duty to zealously guard against executive encroachment on the judiciary’s role as interpreters of the law. And we’re not alone in questioning the wisdom of Auer; as recently as 2011, Justice Scalia criticized the ruling as being “contrary to [the] fundamental principles of separation of powers.”
The Supreme Court will be deciding this spring whether to hear Peri & Sons Farms v. Rivera.We urge the Court to take the case and restore a modicum of the Constitution’s separation and balance of powers.
Progress in De-Escalating the War on Drugs
Earlier today, Attorney General Eric Holder asked the U.S. Sentencing Commission to reduce sentences for a broad range of federal drug crimes. This is a long way from legalization, but it goes in the right direction. More broadly, Holder’s action signals that drug crime will continue to fade as an enforcement priority for the federal government. This makes it easier for state and city governments to scale back enforcement as well.
As long as drug prohibition is on the books, it has potential for great harm. In particular, a new administration can easily reverse the Obama administration’s enforcement priorities.
But the harm from prohibition increases with the level of enforcement, so any de-escalation is welcome. And perhaps political realities dicate that gradualism is the way to eventually eliminate prohibition entirely.
On Corrupting the Constitutional Order
Michael Gerson, former speechwriter to Bush the Younger and perennial libertarian antagonist, has denounced Rand Paul’s foreign policy views. That should surprise no one, but the manner in which he did so bears discussing.
Gerson’s bill of particulars is as follows:
The younger Paul has proposed defense cuts, criticized foreign aid, led opposition to U.S. involvement in Syria, raised the possibility of accepting and containing a nuclear Iran and railed against “possible targeted drone strikes against Americans on American soil.”
Each of these is its own argument, but what’s more interesting is how Gerson broadens the discussion in an attempt to paint the younger Paul in a conspiratorial light:
His libertarian foreign policy holds that America is less secure because it has been “too belligerent” and that decades of international engagement have both corrupted our constitutional order and corrupted other nations with our largess or militarism.
Reasonable people can disagree about the extent to which U.S. foreign policy has gone off the deep end in recent decades. Also, with due acknowledgment of the victims of U.S. “engagement” in places from Laos to Iraq, people could also disagree about the extent to which our militarism has “corrupted other nations.” But nobody with a lofty perch like Gerson’s should dispute the idea that international engagement has corrupted our constitutional order.
You could fill a library with the volumes that demonstrate how war and preparation for war—which is what Gerson means by “engagement”—have contributed to the growth of the state and the evolution of American political, economic and legal institutions. As that last link shows, influential American legal scholars are hailing Nazi jurist Carl Schmitt as “our hero” in providing the legal case for an unchecked presidency, with James Madison playing the republican bad guy.
And it is the height of irony that Gerson holds up for ridicule the idea that our foreign policy has corrupted our constitutional order the very same week that a U.S. Senator—who is a strong partisan of the CIA—gave a 40 minute speech lambasting the Agency for spying on the legislature in the context of the latter’s investigation of the CIA’s use of torture, or if you prefer, “enhanced interrogation techniques.”
Warrantless NSA spying on Americans, senior Executive Branch officials baldly lying to Congress about it with no consequences, the tortured legal reasoning that led to Guantanamo Bay, the American president claiming the power to assassinate a US citizen with no meaningful legal or legislative oversight on the grounds that he’s talked it over with his legal team, the internment of more than a hundred thousand American citizens for the crime of having had the wrong ancestors… One could go on.
The people who framed our constitution were the sort of people who opposed forming a standing army at a time when European empires were mucking around in the Western hemisphere. So whatever his disagreements with Rand Paul on foreign policy, Gerson could stand to consider—or better yet, do some reading—about how war and militarization have “corrupted our constitutional order.” It’s a bit of an open-and-shut case.