Privacy v. Free Speech in Florida

With a majority of the U.S. Supreme Court in recent years supporting a robust understanding of the First Amendment’s protection of the freedom of expression, it’s interesting to see that some state legislatures remain unbowed. In the term just ended, for example, the Court struck down state regulations limiting the sale of violent video games to children, as well efforts to publicly fund election campaigns and to prevent data mining of physician prescription records.

And now comes Florida and its new law aimed at protecting the privacy of firearm owners. Signed into law last month by Governor Rick Scott, the law prohibits physicians from inquiring of their patients about such matters as “the ownership of a firearm or ammunition by the patient or by a family member of the patient,” or “the presence of a firearm in a private home or other domicile of the patient or a family member of the patient.” (An exception may be made if the doctor “in good faith believes the information is relevant to a patient’s medical care or safety, or the safety of others.”)

In addition, the law prohibits doctors from entering into a patient’s medical records information about the subject of gun ownership, if that information “is not relevant to the patient’s medical care or safety, or the safety of others,” and it prohibits doctors from “unnecessarily harassing” patients in the subject of “firearm ownership.” Violations of these provisions may expose a physician potentially to revocation of the license to practice, administrative fines in the thousands of dollars, and letters of reprimand.

Unsurprisingly, this law is vulnerable to a First Amendment challenge—and it has already been challenged by several physicians and medical organizations. The prohibition is an express, content-based restriction on the speech of qualified medical professionals seeking to make determinations within their realm of expertise about how best to care for their patients. The critical question will be whether the state can assert an interest sufficiently compelling to justify the speech prohibition.

The U.S. Supreme Court’s decision last month in a case called Sorrell v. IMS Health may be particularly instructive on this question. Sorrell concerned a Vermont law enacted to restrict the sale, disclosure, and use of pharmacy records that revealed the prescription practices of individual doctors. The Court concluded that, because the state allowed such records to be made available for other reasons, the law discriminated against certain speakers—namely, the data miners who sought the prescription record information for commercial purposes. Among the interests the state asserted as justifying the law was the privacy of the doctor-patient relationship, but the Court was unconvinced that the restriction sufficiently promoted this interest.

In light of Sorrell, it’s not clear that protecting the privacy of firearm owners would be deemed so important as to convince a court to uphold the Florida law. The expression the Sorrell Court deemed protected was commercial speech, traditionally subject to broader regulation than other forms of expression. If privacy was not a sufficient justification for restricting commercial speech, it is probably not a sufficient justification for restricting speech, like a doctor’s legitimate medical inquiries, that traditionally has received more protection under the First Amendment.

This is not to say that privacy is not an important value. But many cases involving constitutionally protected individual rights present a choice between competing and important interests, and it falls to the courts to determine which interest should prevail in a given instance. As recent cases have demonstrated, the Roberts Court almost always values free speech over other interests. Whether the Court will someday encounter an obstacle on its free speech campaign remains to be seen, but it is not likely to be the Florida law protecting the privacy of firearms owners.

Lawrence Friedman

Libya and the War Powers Act

In a recent post, my colleague George Dargo suggested that the Obama administration has no reason not to comply with the terms of the War Powers Act regarding our support of NATO forced in Libya. One of the members of the Obama administration who has argued that the War Powers Act does not apply is Harold Koh, the Legal Advisor to the State Department. He recently addressed an audience of international law and law of war experts at the annual International Law Conference, hosted by the U.S. Naval War College.

Mr. Koh sought to highlight ways in which the Obama administration’s approach to many of these issues fundamentally differed from his predecessor. Among the topics discussed was congressional authorization for U.S. military involvement and support for rebels in Libya who are seeking to topple the Gaddafi regime. The War Powers Act requires the President to seek congressional authorization for U.S. forces engaged in hostilities for more than 60 days. The Obama administration has been under pressure from some members of Congress to seek this authorization for continued military action. The administration’s position is that the War Powers Act does not apply because the nature of our military involvement does not rise to the level of “hostilities” as defined by the War Powers Act.

Mr. Koh repeated that assertion in his address. In addition, he made the following points:

- The military involvement in Libya is not the kind of military action that Congress contemplated when it passed the War Powers Act.
- If Congress wants to prevent the President from supporting the rebel forces in Libya, then Congress must take some affirmative action.
- If Congress decides to withdraw U.S. military support for the rebels, then it should do so with the understanding that it is giving Colonel Gaddafi the green light to resume the slaughter of his own citizens.

The War Powers Act is certainly fraught with problems, not the least of which it that it requires the President to remove U.S. forces from hostilities unless Congress takes some affirmative action authorizing their continued participation. Mr. Koh, however, repeated several times that the Obama administration was not challenging the constitutionality of the War Powers Act; it was simply arguing, primarily for policy reasons, that the Act does not apply to the situation in Libya.

Mr. Koh might have been seeking to convince the audience that, because the administration was not attacking the constitutionality of the War Powers Act, its view of presidential power is more limited than Mr. Obama’s predecessor. I am not sure that is the case.

First, claiming that the President does not have to seek Congressional authorization and that, if Congress wants to prevent the President from committing military support to NATO’s effort in Libya, then Congress must take some affirmative step turns the law on its head. One of the primary purposes of the War Powers Act was to prevent the President from committing military forces and then escalating that commitment over time without congressional approval. Recognizing that the President should have some leeway, Congress gave the President a 60 day window to commit forces into hostilities, and then make the case to Congress at the end of the 60 days why those forces should remain engaged in hostilities. Mr. Koh ignores this very fundamental purpose of the War Powers Act when he claims that the situation is Libya is not the kind of military engagement contemplated by the War Powers Act. The President’s actions seem to be exactly what Congress was concerned about when it passed the Act.

Even more interesting and, perhaps, more troubling is Mr. Koh’s policy assertion that if U.S. forces were to disengage from Libya, then Colonel Gaddafi would be able to resume killing his own citizens. This may well be true, but it is hardly a reason why the President can ignore the legal requirement to seek congressional authorization. In essence, Mr. Koh claims that the President can ignore the requirements of the statute if the President believes that compliance would frustrate important policy objectives. This view of presidential power is not so different than the arguments made by the Bush administration lawyers that the President did not have to comply with the requirements of the Foreign Intelligence Surveillance Act (FISA) because FISA interfered with his Article II powers as commander-in-chief.

While Mr. Koh’s argument may be subtler, it may also be more disingenuous. At least the Bush administration lawyers openly asserted that, in certain matters of national security, the President had the authority to ignore laws passed by Congress. The Obama administration seems to me making that same argument under the guise of statutory interpretation.

Victor Hansen

Turner v. Rogers: A Basis for Cautious Optimism Despite the Opinion’s Flaws

From an Access to Justice and Civil Right to Counsel perspective, the Supreme Court’s decision in Turner v. Rogers provides a basis for cautious optimism despite the opinion’s flaws. It is unsurprising that the Court would decline to find a categorical right to counsel in a fact pattern it viewed as an extension of settled law. Yet, the Court’s actual holding found that Mr. Turner’s due process rights were violated because he “received neither counsel nor the benefit of alternative procedures like those we have described.” Any notion of a civil right to counsel invariably will require some difficult line-drawing. No proponent of such a right claims that all indigent litigants in all civil proceedings are entitled to counsel at the state’s expense.

Many of us recognize that the right to counsel should be viewed as a component of an overarching access to justice strategy. I find it helpful to think of a three-pronged strategy. Prong 1 requires the courts to re-envision their procedures, and the roles of the judges, court-connected mediators to maximize the provision of meaningful access to justice. Prong 2 urges the support of a variety of forms of assistance short of full representation by counsel, paired with careful evaluation of case outcomes to help determine which forms of assistance are sufficient to provide the help needed, and which are not. Prong 3 supports the expansion of a civil right to counsel, where basic human needs are at stake and nothing short of full representation with provide the needed assistance.

Viewed this way, the right to counsel is inevitably tied not only to the rights at issue, but the procedures in place. The more the courts provide meaningful access, and assistance programs are proven to be effective, the smaller the pool of cases in need of counsel may be. The more that procedures deprive litigants of meaningful access and steamroll their claims, the more that appointment of counsel may be required. The Court’s approach is not inconsistent with the idea that the procedures matter in assessing the need for counsel.

So too does the complexity of the case. The Court found the child support cases here to be “sufficiently straightforward,” suggesting a different result as the claims get more complex. The Court adds to the calculus that the opposing party here was unrepresented by counsel. It is not necessarily antithetical to the call for an expanded civil right to counsel to consider the capabilities and circumstances of both parties, suggesting a different result in some settings where the opposing party is a well-funded represented party as opposed to an indigent, unrepresented one. The greater the imbalance of power between the parties, the greater the need for counsel will be.

None of this is to ignore the Court’s pronouncements that might instead set the march toward increased Access to Justice and an expanded Civil Right to Counsel backward. It is disappointing that the Court would characterize (in dicta) its jurisprudence as holding that the right to counsel under federal law exists “’only’ in cases involving incarceration.” Lassiter itself contemplated the possibility of counsel being constitutionally required in cases concerning the termination of parental rights.

The Court disappoints further by relying so heavily on the distinction between criminal and civil and its perceived role of the state. If our courts are to respond to the needs of the public who must turn to the courts – or are forced by others to appear in court – where basic human needs are at stake, we cannot continue to rely on mechanical distinctions that fail to comport with our values and our sense of fairness. If incarceration resulting from civil contempt might lead to a longer imprisonment than incarceration resulting from criminal contempt, it is small solace to those in peril of losing their liberty that their right to counsel turns entirely on the civil/criminal distinction. Moreover, most parents would prefer to serve thirty days in jail than lose custody of their children in a private custody dispute or have their families rendered homeless through eviction, yet the mechanical application of the criminal/civil distinction prioritizes the lesser harm for access to counsel.

Nor should we be comforted by the Court’s reliance on the distinction between cases brought by the State and those brought by private parties. The Court saves for another day the question of contempt proceedings for child support payments owed to the state, but the deprivation of liberty applies equally to defendants owing money to the state or someone else. Homeless families will find little solace in the realization that they were rendered homeless in proceedings in which the government was the landlord, as opposed to a private landlord, including one that might receive government subsidies. In the area of child custody, in the words of one state supreme court justice, a parent is deprived of the care, custody, companionship, and control of the children whether the State takes custody through termination or dependency proceedings or her former husband does through private litigation. The State plays too large a role in regulating the legal relationships and establishing the processes for enforcing our basic rights to hide behind such a distinction.

In the long run, the impact of the Turner decision will be less about its language and more about its application at the state and local level. If the disappointing portions of Turner lead states to roll back their existing provisions for counsel by declaring their procedures sufficient under Turner, or if what is meant by adequate procedures is little more than a rubber stamp, the decision will prove to be a devastating one indeed. If, instead, the decision prompts state courts, legislatures, access to justice commissions and bar associations to engage in a careful examination of the procedures where basic human needs are at stake, and provide counsel where the procedures are lacking, the law is complex or the litigants are on the wrong side of a power imbalance, the decision might prove to be the touchstone for reforms that further access to justice and lead to an expansion of a civil right to counsel.

Russell Engler

The War Powers Debate: Is the U.S. Engaged in “Hostilities” in Libya?

How many angels can dance on the head of a pin? When does the use of the armed forces of the United States trigger the War Powers Resolution of 1973? Why have we not intervened in "hostilities" within the meaning of that resolution with our military operations in Libya?

Learned counsel for the State Department and the White House appear to know the answers to such questions with reasons that would make medieval scholastics blush with embarrassment.

There are no caveats in the War Powers Resolution. The words are perfectly clear -- certainly clear enough for a former lecturer in constitutional law -- or even for a former dean of the Yale Law School -- to be able to comprehend and apply in the manner that Congress intended.

George Dargo

Should We Abolish the Estate Tax?

Here’s a simple yes or no question: Do you personally favor or oppose completely eliminating the estate tax—that is the tax on property left by people who die?

After you have answered that question consider this. Suppose you receive an unexpected call from a lawyer who tells you that she represents the estate of your great Aunt Leona, who recently died. She goes on to tell you that, in her will, Aunt Leona left you a bequest of $100,000 in cash. Do you think you would you be required to pay federal income taxes on that amount?

When I ask my new tax students this question most assume that federal income taxes would be owed. But most students' assumptions are wrong, because under federal income tax law property received by bequest or inheritance (and even that received by gift) is excluded from the definition of income. So you would get the whole $100,000, free and clear of federal income taxes.

What about federal “death” taxes? Federal law does include what is known as an “estate tax,” which is a tax on the aggregate value of everything a person owned at death. Would that tax reduce the amount you received from Aunt Leona’s estate? No, because that tax is paid by the decedent’s estate after her death. You would receive your bequest in full after the payment of any federal estate tax that was due. But chances are overwhelmingly good that Aunt Leona’s estate would owe no federal estate tax anyway. The tax has for many years applied to only a very small fraction of estates. And that fraction keeps getting smaller.

In keeping with this trend, late last year, Congress passed, and the President signed, a law under which no federal estate tax is owed unless the estate exceeds $5 million in total value, less any substantial gifts made during lifetime. Decedents can also leave an unlimited amount to their surviving spouses without any estate tax becoming due. Those spouses can then generally leave up to $10 million in assets to the next generation without their estates being liable for any federal estate tax.

To put this in perspective, in 2007 there were probably no more than 600,000 total households in the U.S. with a net worth in excess of $10 million. Based on today’s total U.S. population of about 308 million people, this means that far less than 1% of the U.S. population will be exposed to this tax. Although the 2010 law is more generous than most prior laws in exempting wealth from the estate tax, the federal estate tax has for many years affected only 2% or less of estates.

Consider again the question posed at the beginning of this post—do you favor or oppose the complete elimination of the estate tax? In annual polls commissioned by the Tax Foundation and conducted by Harris Interactive in 2006-2007, 66%-68% of people favored completely eliminating the estate tax altogether when that question was posed exactly as stated in the first sentence of this post. Note how this poll question, given by an organization that describes itself as “a nonpartisan tax research group,” was phrased as all-or-nothing: the “complete elimination” of the estate tax.

Consider some more data. In 2010, Michael Norton of Duke University and Dan Ariely of Harvard Business School devised a survey wherein they asked a “nationally representative online panel to estimate the current distribution of wealth in the United States and to ‘build a better America’ by constructing distributions with their ideal level of inequality.” The results: most of those surveyed vastly underestimated the actual percentage of wealth owned by the top 20% of Americans—those surveyed guessed it was 60% when in reality it’s 85%. The survey takers estimated that the poorest 40% of the population owned about 10% of the country’s total wealth. The real number is three-tenths of 1%. Perhaps even more striking, over 90% of those surveyed (including Republicans) preferred wealth distribution like that of Sweden (35% of wealth owned by the top 20%) over the U.S. when asked which type of wealth distribution they would deem most just.

A common argument in favor of estate tax elimination is that it amounts to a “double-tax.” In other words, income is taxed to the recipient, and then when the recipient dies that income, now in the form of wealth, is taxed again by the estate tax. But there are at least three counterarguments here.

First, the person who “earned” the property (and presumably paid tax on it) is now dead, and the heir (the new owner) paid no tax. The money you received from Aunt Leona’s estate is no longer Aunt Leona’s, it’s now yours, and this is why so many people automatically assume that it is subject to the income tax. In fact, under the tax law’s general definition of income as all “accessions to wealth” it would be taxed if it were not for a specific exclusion written into the Internal Revenue Code for gifts and bequests.

Second, studies have shown that some 56% of estates of over $10 million consist of unrealized capital gains. This means that even the dead person paid no income tax ever on over one-half of what he is passing on. To give this some context let’s assume, for example, that Aunt Leona had left you a painting she bought for $100 that was now worth $100,000. She may have paid tax on the $100 she earned to buy the painting but would never have paid tax on the $99,900 in appreciation.

Finally, other income tax rules provide that the recipient can sell almost any property inherited at the value it was when inherited and pay no tax on the proceeds. In other words, when you sell Aunt Leona’s painting for $100,000, you can pocket the sales price free of tax.

So rules governing taxation at death are complex, but generally pretty favorable to the taxpayer. This brings us back to the question that we started with. Do you favor the complete elimination of the estate tax? Or does the question need context and the answer call for nuance?

Kent Schenkel

iProfile

In April, researchers discovered that the latest generation of iPhones had the capability to keep a minute-by-minute log of everywhere you go. iPhone users were understandably outraged. In a column about the issue, New York Times technology writer David Pogue suggested this was much ado about nothing. Though Apple has since provided a fix for those who prefer their phones not keep track of them in this way, and there appears to have been no nefarious intent behind this aspect of Apple’s technology, there may have been more here to concern individuals than Pogue allows.

Pogue writes: “Now, I’ve been in this job long enough to know that there’s a privacy-paranoia gene. Some people have it, some don’t.” And he does not, because, he says, he has “nothing to hide.”

But that is not really the point, is it?

Pogue maintains that, if he were to review all of our personal information, Big Brother would be “bored to tears.” But this view trivializes the potential negative effects of information about you being stored in various information silos maintained by credit-card companies, banks, phone companies, cable companies, and Facebook.

Pogue is right about one thing: these private entities are not Big Brother. They collect user and customer information for purely economic purposes, to know more about the people who buy their products and services and to sell more of those products and services.

The Big Brother of George Orwell’s novel, 1984, was the government. And, under current Fourth Amendment precedent, the government today has relatively easy access to much of the information that these private entities have stored, and from that information could assemble an interesting picture of you—a picture that might accurately represent where you live and work, where you go, and who you spend time with.

Which is not to say that any agents of the federal government are, at this moment, busy compiling dossiers on each of us. It is to say, though, that the government could do that without much trouble. And when that information about you is viewed out of context, it may be that Big Brother would find it all very interesting, regardless whether you believe you have something to hide.

Lawrence Friedman

Postmortem Publicity Rights: Coming Soon to a Court Near You?

Most of us are aware that famous persons can control and profit from the use of their identities during their lifetimes. Indeed, many celebrities are said to make much more from the selling of their endorsements and likenesses than from the activities that made them famous in the first place. Essential to securing this type of revenue stream is legal recognition of one’s “identity” as a property right. Granting individual identity the status of property means that the non-owner must have permission to use it. This permits individuals such as Michael Jordan, Oprah Winfrey and Madonna to package and sell publicity rights while imposing any restrictions on the use of their names, likenesses or images they choose.

But what happens when the celebrity dies? Do the heirs and beneficiaries of dead celebrities succeed to their publicity rights, allowing them to market and profit from them? That turns out to be a complicated question. And it’s a question that has heated up considerably in recent years.

Some states, such as California, recognize postmortem publicity rights, and some, such as New York, do not. One issue that presents considerable difficulty is which state’s law controls. Descendible publicity rights also raise sticky federal estate tax issues. Valuation is sure to be complicated and contested (a “herculean task” according to some experts), and discharging the tax obligation virtually requires that the property rights be exploited.

Perhaps most interesting are the policy questions. In a recent op-ed piece in the New York Times, Boston College law professor Ray Madoff argues that postmortem rights of publicity are “getting out of control.” She points out that the identities of important historical figures, such as Rosa Parks and Albert Einstein, are now being used to sell products, and raises concerns about whether literary endeavors involving these figures will infringe on property rights held by their heirs and the companies to whom those rights were sold.

Madoff also contends that while the preservation of proprietary rights in the identities of the dead makes money for heirs and companies, it is unlikely that a famous person would be able to take action during life to prevent a postmortem sale of those rights. She cites a longstanding principle of wills law that a person cannot effectively decree that their property be destroyed at their death. Further, those rights may have to be sold to raise money to pay the bloated estate tax bill accruing as a result of this property interest. Professor Madoff concludes that Congress should enact a preemptive federal statute that provides for a property right that is limited in time and that allows an individual to prevent the endurance of publicity rights after death.

Although Madoff’s proposed solution has precedent in federal trademark and copyright law, don’t look for federal legislation in this area anytime soon. In the meantime, with so much money to be made off of the famous dead, and with the laws in this area being so unsettled, litigation is sure to proliferate.

Kent Schenkel

Budget Cutbacks Undermine Massachusetts Constitution

Recently, the Boston Bar Association issued a report on the proposed Massachusetts budget for 2012. The report is titled “Justice on the Road to Ruin,” and makes clear that the Massachusetts court system has been making do with too little for too long. Within the past three years, the total funding for the court system has been reduced by more than 14 percent. Positions are going unfilled, dockets are becoming clogged, and the court system is trying not to do more with less, but merely to stay afloat.

One of the early casualties of the budget process was trial court law clerks. These recently graduated law students assisted the judges in the various trial departments – the Superior Court, the Land Court, the Family & Probate Court, and the Juvenile Court – with research and writing opinions and decisions.

The loss of these positions may strike some critics as inconsequential. Why, they might ask, can’t the judges do their own research and writing?

Many judges would probably like to do more research and writing, but the fact is, they are busy judging. They are hearing cases, meeting with attorneys, and attending to the many administrative matters that keep the Massachusetts court system running. They do not have much time left for the kind of in-depth research that, say, a complicated motion for summary judgment requires.

What this means is that trial court litigants may not fully appreciate why they lost their motion or case, and it could mean they are unsure of the grounds on which they might appeal. Further, as one appellate judge told me, in the long term, fewer narrative decisions and opinions mean more work for the appellate courts in reconstructing the basis for the trial court’s determination.

A tangential result of the increased time that state appellate courts must devote simply to understanding the lower court’s ruling is less time, in constitutional cases, to devote to the hard work of interpreting the state constitution. Massachusetts state constitutional claims arise in many criminal and individual rights cases, and the Commonwealth’s appellate courts have a long and storied history of taking seriously the task of figuring out just what it is that the state constitution means in a particular instance, often concluding that it provides more protection than its federal counterpart.

Budget cutbacks necessarily undermine serious efforts at state constitutional interpretation. As I explain in an article forthcoming in the Penn State University Law Review, a lack of time and law clerk resources inhibit the ability of state courts to fully develop their own constitutional law, which results in recourse by these courts to the principles announced by the U.S. Supreme Court, interpreting the federal constitution.

Now, there may be reasons why similarly-worded constitutional state and federal protections should be interpreted in similar ways. But it does not bode well for the future of Massachusetts state constitutional interpretation if the meaning of the federal constitution becomes by default the meaning of the Massachusetts Constitution, simply because the Commonwealth’s appellate courts are unable to do more. That is a loss not just for litigants pressing novel state constitutional arguments in our courts; it is a loss for any citizen who might claim the protection of the Massachusetts Constitution in the future – which is to say, a loss for all of us.

Lawrence Friedman

Is There a Policy Behind the Grantor Trust?

We were all taught in school that statutory laws start with intentional legislative action. This means that federal laws favoring a particular economic faction, for example, were enacted by Congress with the intent to assist that group. We can determine Congressional policy then, by looking at the effect of laws enacted by Congress. The law reflects the intent of Congressional action. Likewise, administrative regulations reflect intent on the part of the responsible agency.
But in their 2010 book Winner-Take-All Politics, the political scientists Jacob Hacker and Paul Pierson ask us to focus, in part, on another aspect of governmental legal activity. Just as important as governmental action is government’s failure to act. Hacker and Pierson identify a form of inaction they call “drift.” Drift results from “systematic, prolonged failures of government to respond to the shifting realities of a dynamic economy.” They give the example of federal minimum wage laws. As inflation reduces the purchasing power of the dollar, minimum wage laws, if they are to keep pace, must be adjusted upward. Failure to make this adjustment in the face of continuing inflation will eventually drain these laws of all of their original effect. This is drift, and the Congressional policy reflected by this drift is that wage floors should not be set by the government.
In a paper prepared for the 2010 meeting of the American Political Science Association, Hacker and Pierson point out that drift often benefits legislators by allowing them to effect (for the benefit of a particular group) what might be broadly unpopular policy without bearing responsibility for that policy. And this form of legislative inaction, just like legislative action, is often mediated by powerful political groups.
Which leads me to the real topic of this post. University of Texas law professor Mark Ascher has written an important paper that shows how Congress, by failing to act, is furthering policies favoring only the high-end estate planning industry and those it serves. Ascher, who is the author of a well-known and regarded treatise on the income taxation of trusts, concerns himself in this article with a device known as the “grantor trust.” A grantor trust is a trust all of the income of which is taxed to the creator and funder of the trust, also known as the “grantor,” or “settlor” of the trust. This is a different taxation regime than exists for those trusts that are not grantor trusts. As a general rule, the typical “non-grantor” trust is liable for tax on income retained by the trust. This means that the trustee must pay the federal income tax out of the trust assets. In contrast, the grantor trust is not seen as separate from the trust’s settlor. All trust income and corresponding deductions are reported on the settlor’s tax return and the settlor is liable for the tax.
The grantor trust rules arose to prevent high-bracket taxpayers from shifting income from themselves to low-bracket trusts, while retaining the benefit of that income. At first, those rules covered only those situations where a settlor retained the right to revoke a trust or retained beneficial enjoyment of the trust’s income. But in a notable Supreme Court case from 1940 called Helvering v. Clifford, the taxpayer created a trust for his wife that was to terminate after five years. He retained the power to determine the amount of any income distributions to his wife. Presumably, the settlor’s goal was to have his wife taxed on income distributed to her from the trust and to have the trust taxed on any income retained by the trust. In this way, he could take advantage of the lower marginal rates to which his wife and the trust was subject.
The Supreme Court held that the settlor was liable for tax on all the trust’s income, which left the law regarding grantor trusts in a state of confusion. A few years later, the Treasury promulgated comprehensive regulations setting out the circumstances under which a trust would be treated as a grantor trust. So these regulations, like the extant grantor trust rules dealing with revocable trusts and trusts that make distributions benefitting the settlor, were enacted to prevent abuses of the income rules by shifting income to trusts. The regulations were later statutorily codified by Congress into the current grantor trust rules.
Between the date of enactment of the grantor trust rules and today, however, Congress also enacted a number of other laws whose combined effect was to virtually eliminate the advantages of using trusts for income-shifting:
• It allowed married to taxpayers to file a joint tax return, essentially treating their combined income as though one-half was earned by each.
• It enacted the “kiddie tax” which generally taxes a child’s unearned income at the parents’ rate.
• It reduced the highest individual tax rate (to which trusts are also potentially subject) from a high of 91% to its current 35% rate.
• It reduced the rate on dividends and capital gains to a maximum of 15%.
• It compressed the trust tax brackets so that trusts are now subject to a tax at the highest marginal rate on all income in excess of $11,350.
• It mandated the treatment of multiple trusts with substantially the same settlors and beneficiaries as one trust.
As a result, Ascher convincingly argues that taxpayers now have little or no incentive to create trusts for the purposes of income-shifting. Congress could therefore repeal the grantor trust rules. Yet it has not done so. As a result, rules enacted to prevent abuse of the income tax rules are now being employed in a number of strategies to avoid transfer (estate and gift) taxes.
Here’s a simplified overview of one of the simplest these strategies. Suppose that TP is a taxpayer whose estate is potentially subject to the federal estate tax. This means that TP’s total wealth exceeds that of well over 99% of all Americans. In order to reduce estate taxes, TP creates a trust for the benefit of his offspring and transfers some of his appreciating assets to the trust. Normally, this trust would be liable for income tax on all income generated by trust investments that is not distributed to trust beneficiaries. But TP makes the trust a grantor trust by inserting a provision in the trust instrument that provides that TP can, if he wants to, replace the trust property by substituting other property of equivalent value. (There is no need to ever actually replace the trust property, this is just language inserted in the trust instrument that allows TP to do this.) The result is that all trust income is now taxable to TP and not to the trust.
Why is this advantageous? The advantage comes when one considers that by paying the tax on trust income from his own assets, TP is essentially making an additional gift to the trust beneficiaries. Moreover, this transfer is not a gift subject to the gift tax because TP is legally liable for the payment of the tax—the tax payment is not a voluntary transfer. The effect, however, is the same as a gift.
Ascher goes into some detail describing a number of other strategies involving grantor trusts being employed by estate planners for the benefit of their wealthy clients. He concludes that these strategies pervert the original purpose of the grantor trust rules and that almost all of those rules should therefore now be repealed. He would preserve the rule that makes a revocable trust a grantor trust.
Ascher’s article is important because it sheds light on policies furthered by Congressional inaction. The integrity of our system of taxation depends on a fair and equitable application of laws. And as Ascher states, ploys like those available to the few under the grantor trust rules exacerbate “the already widely held impression that the [Internal Revenue Code] is a venal collection of provisions designed to allow those whose advisors are ‘in the know’ immense latitude in minimizing their tax liabilities.” Any Congress that fails to reform or repeal the grantor trust rules is by its inaction implementing policies that help bring reality in line with this impression.
Kent Schenkel

This Just In: President’s Use of Military Force in Libya Does Not Require Prior Congressional Approval!

The Office of Legal Counsel (OLC) recently issued an opinion on the President’s decision to direct the use of force in Libya in support of United Nation Security Council (UNSC) Resolution 1973. The OLC concluded, unsurprisingly, that the President had the constitutional authority to direct the use of force without prior congressional approval. The OLC opinion is the latest in a series of opinions which reached the same conclusions in a long and growing list of Presidential authorizations for the use force in Panama, Somalia, Haiti (twice), Bosnia, and Yugoslavia. According to the OLC opinion, in contrast to the long history of the President’s unilateral authorization to use force, Congress’s power to declare war is not well defined, even though it is expressly provided for in Article I of the Constitution.

The OLC’s opinion reasons that both the Constitution and past history show that not every use of force must have congressional authorization. According to the OLC opinion, the President can unilaterally authorize the use of force when important national interests are at stake and the use of force does not rise to the level of a “war” in the constitutional sense. In the case of Libya, according to the memo, the President articulated two national security interests. First, the United States has a longstanding national security and foreign policy interest in the stability of the Middle East, a stability threatened by Qadhafi’s actions. Second, the United States has longstanding commitments to maintaining the credibility of the United Nations Security Council. If the United States were unwilling to support UNSC 1973, the authority and credibility of the Council would be undermined.

Finally, the opinion concluded that the force the President authorized was limited and did not rise to the level of a “war” in the constitutional sense, and therefore there was no need for congressional authorization. The OLC reached this conclusion for three reasons. First, the President did not authorize the use of ground forces. Second, the operations were limited to a “well-defined mission” to protect civilians and prevent a humanitarian disaster. Finally, the bombing missions were not preparatory to a ground invasion.

Now that we are a month into this limited “well –defined mission,” it is useful to see just how closely the OLC’s opinion squares with the facts on the ground. It is interesting to note that Secretary of Defense Robert Gates may not have been fully on board with the OLC’s rationale when he testified before Congress, in advance of Security Counsel Resolution 1973, that establishing a no-fly zone over Libya was tantamount to an act of war. From the very first days of the military mission, there has also been a great deal of confusion as to exactly what the supposed “well-defined mission” is. Is it to remove Qadhafi from power? Is it to prevent a humanitarian disaster? Is it to support the loosely aligned band of rebels in their efforts to gain territory and eventually move into Tripoli? Is it to maintain the status quo? If the recent squabbling among the NATO allies over the mission is any indication, no one really seems to know the answer to these most basic questions.

In spite of this confusion over what the mission really is, we should not be surprised by OLC’s conclusions. It would really have been news if the OLC concluded that the President needed congressional authorization to use force. Nonetheless, in spite of the long history of Presidents claiming that they have the constitutional authority to authorize the use of force without any input from Congress, Congress can do more than sit passively on the sidelines watching as events unfold. It is noteworthy for example, that Speaker Boehner recently sent a letter to the President asking him to clarify specifically what the mission in Libya is and how long the military action is likely to last. A letter may be nothing more than a political gesture, but it may also provide the spark for Congress to engage in more focused and robust involvement. If Congress really hopes to be an equal partner in such important national security decisions like committing our forces to military action, it cannot simply take the legal opinions from the OLC as the final word on this issue. Time will tell if Congress is up to the task.

Congress, Commerce and the Health Care Law

Writing in Slate in early February, Dahlia Lithwick opined:

If the odds of success for the health care law [in the U.S. Supreme Court] have tilted in recent months, it’s not because the suits [challenging the law] have somehow gained more merit. It’s because the public mood and the tone of political discourse have shifted dramatically—emboldening some federal judges willing to support constitutional idea whose time, in their view, has finally come.

That constitutional idea is that there are judicially-enforceable limits on Congress’s power under the Commerce Clause. Until the Supreme Court’s 1995 decision in United States v. Lopez, the federal courts had regarded the exercise of the commerce power deferentially—legislation would be upheld so long as Congress had a rational basis for concluding that intrastate activity would have a substantial effect on interstate commerce.

In Lopez, the Supreme Court signaled that the commerce power had at least one judicially-enforceable limit: to be subject to regulation, intrastate activity must be inherently economic. Mere possession of a gun, the Court concluded in that case, is not inherently economic.

A decade later, however, in Gonzales v. Raich, the Court confirmed that Congress could regulate even non-economic intrastate activity, if that regulation was a part of a larger, comprehensive scheme to manage a national market—in Gonzales, the market in controlled substances. Gonzales suggested cases like Lopez might remain outliers.

Now, as Lithwick observes, popular criticism of the new health care law has found its champions. In two recent cases, United States District Courts in Virginia and Florida have declared the law unconstitutional because, they reason, it does not regulate economic activity, but rather inactivity—namely, an individual’s decision not to obtain health insurance.

These courts have thus erected a new barrier to Congressional regulation under the Commerce Clause: the distinction between activity and inactivity. Setting aside the lack of precedent supporting the existence of such a distinction, it is enough to say that this new rule does not exactly lend itself to consistent application over time. Is a decision not to purchase health insurance really inactivity, when the economic consequences of that decision are measurable and, in the aggregate, have a significant effect on interstate commerce?

The effort to make and justify such a distinction is a fool’s errand. It is not the responsibility of the federal courts to protect a political majority from itself. As Chief Justice John Marshall reasoned in Gibbons v. Ogden, the first great Commerce Clause case, Congressional discretion ultimately will be controlled by the people. And, as the great Chief Justice might have predicted, the most recent national elections and even more recent polls indicate that the forces opposed to the health care law appear to need no help from the judiciary.

It remains to be seen whether the U.S. Supreme Court will agree with Marshall’s view that, where commerce is concerned, deference to our elected officials is warranted. Many commentators are, as Lithwick notes, predicting a close decision. As in so many close cases, the meaning of our constitution likely will come down to the vote of Justice Anthony Kennedy. At some point, the American people may seriously begin to wonder how it is that we arrived at this place, where one justice’s vote may deny the people’s representatives both the ability to make policy for the nation and the opportunity to change it in response to their constituents’ wishes.

Lawrence Friedman

The End of Marriage?

In “The Judicial Imposition of Same-Sex Marriage: The Boundaries of Judicial Legitimacy and Legitimate Redefinition of Marriage,” recently published in the Washburn Law Journal, Professor Lynn Wardle argues that judicial decisions invalidating same-sex marriage prohibitions by the United States District Court in Perry v. Schwarzenegger, the Iowa Supreme Court in Varnum v. Brien, and the Connecticut Supreme Court in Kerrigan v. Commissioner of Public Health

raises serious questions about the nature and scope of legitimate judicial authority to alter the state (and social) institution of marriage, about the nature of marriage itself, and about the legitimacy of same-sex marriage created by or as a result of an illegitimate judicial decree.

He condemns these decisions and expresses deep concern about whether we as a nation will survive this onslaught of what he considers unmitigated judicial activism.

Chances are, we will.

As was true of the civil rights movement in the 1950s and 1960s, when it comes to the issue of same-sex marriage, judges are not acting alone. Brown v. Board of Education may have lit the way, but it took Congressional action to effectuate the principle of equality the Supreme Court articulated in that case. Today there are more American jurisdictions that recognize same-sex marriage than Professor Wardle might have imagined ten years ago, not all of them as a result of a judicial decree.

Though, as the courts in California, Iowa and Connecticut have held, equal protection does not permit the perpetuation of discrimination for arbitrary reasons, the real shift in thinking about marriage will not be accomplished through judicial decisions. Wardle is right when he contends that the issue of same-sex marriage ultimately will be decided by the American people.

What will they decide? It may not be what the opponents of marriage equality think. Consider the announcement this week that Barbara Bush, daughter of President George W. Bush, has endorsed legalization of same-sex marriage. She is just the latest child of a prominent Republican to do so.

This is further evidence of a wider generational split: surveys show that young people are not nearly as anxious about same-sex marriage as their parents and grandparents. They are growing up in a world in which it is unremarkable to have openly gay friends, relatives, neighbors, and colleagues. These young people will one day be a political majority. And when they are, courts will have moved on to adjudicating new civil rights issues.

Lawrence Friedman

Free Speech and Inflammatory Rhetoric

None of the outrageous comments coming out of the mouth of Sarah Palin has been more disturbing than her use of the term "blood libel" to describe media criticisms of her in relation to the tragedy in Tucson.

I doubt that Palin has any understanding of the significance of the phrase, what it refers to, or why it is laden with emotional content, especially for Jews. Undoubtedly, it is the product of the frenzied imagination of someone on her staff.

Nevertheless, it represents a new low in American political rhetoric. It has subliminal power which Palin is now mobilizing to counter the well-founded, nearly universal media critique of how she has conducted herself, particularly in the run-up to the recent election and her very deliberate targeting of Congressional districts like that of Gabrielle Giffords, who just happens to be Jewish.

There is absolutely no justification for this. The press and the media should be uncompromising in condeming this for what it is—in the name of free speech and free expression, nothing less than a blatant attempt to stir up a witches’ brew of hate, bigotry, and mindless passion at a time when there is a need for balance, reason, and self-reflection.

George Dargo

An abbreviated version of this essay was published in the New York Times on Jan. 13, 2011.

The Judges Among Us

Amid the many tragic stories that came out of the horrific shooting in Tucson this past weekend, I was particularly saddened by the death of John Roll, the Chief Judge of the U.S. District Court for the District of Arizona. Surely the untimely loss of a respected jurist is reason enough for mourning, but I could not exactly pinpoint why his death struck me so hard. I did not know Judge Roll personally, and my professional interactions with him had been minimal -- limited to one case (and never a face-to-face appearance) before him in 2006, and one request for research assistance from his district in 2007. But it has still felt like a very personal loss. Why?

After two days of reflection, I think the answer lies in the level of neighborly familiarity we have with federal judges (and state judges, for that matter). Unlike the President and Congress, who achieve a sort of celebrity status by virtue of election campaigns, and who reside in Washington for all or part of the year, most judges maintain a low profile and live full-time in the communities they serve. When they remove their robes, they are part of that community in exactly the same way we are; through the years, I have run into judges at the supermarket, houses of worship, restaurants and ball games. According to news accounts, Judge Roll went to the Giffords event last Saturday simply to thank her for her support of a measure that would allow his court to better manage its docket. He was a good man, caught in the wrong place at the wrong time. For all the death threats that he had received in 2009 based on an unpopular immigration ruling, he was untimely taken from us because of an innocent and rather impromptu decision to extend a personal thank you. It's a decision that any of us could have made; the ordinariness of the action is why it hit so hard for me.

My deepest sympathies to the families of all the victims of this monstrous act. May the wounded be speedily restored to health, and may those who were lost always remain with their loved ones as a blessing.

"Zombie" Constitutionalism

Talk about bad and shopworn ideas ("zombies" to use Paul Krugman's nice formulation): the proposed amendment that would enable states to repeal any federal statute if approved by two-thirds of the state legislatures is a notion that came and went, in various forms, in the 18th and 19th centuries. First it was called Nullification, and then it morphed into the Secessionist craze whose 150th anniversary we are about to commemorate. The Civil War was supposed to have relegated those ideas to the proverbial dustbin of history.

This nutty notion -- if adopted -- would transform the entire structure and character of our constitutional system. The difference between the Constitution (which supporters of this amendment say they revere) and its predecessor -- the Articles of Confederation -- is that the federal government under the Constitution framed at Philadelphia in 1787 is an independent entity whose laws act directly upon the people and is not dependent upon the approval or disapproval of the states. To provide states with a mechanism for disapproving of federal laws would not only undermine the institution of Judicial Review, but it would fundamentally alter the architecture of American government as we have come to know it in the past two hundred years.

This is a very bad idea whose time came and went centuries ago. It should be so regarded.

George Dargo

Targeted Killings and Judicial Review, continued

My colleagues Victor Hansen and George Dargo last week debated the dismissal of a federal lawsuit brought by Nasser Al-Aulaqi in respect to the targeting of his son—an American citizen—by the President of the United States for supporting Al Qaeda in the Arabian Peninsula. Hansen and Dargo debated the merits of a secret court to review targeting determinations. Professor Hansen argued that the law of armed conflict and self-defense place limits on the President’s discretion to target individuals for assassination, while Professor Dargo maintained that, absent Congressional authorization, the President lacks the authority under Article II of the Constitution to target American citizens.

This is an important issue and an important debate; the weight of the United States government behind targeted assassination is not a policy to be taken lightly.

Traditionally, the President has been regarded as having the discretion to make strategic and tactical battlefield determinations, a consequence of his commander-in-chief power under Article II—a discretionary power triggered by a Congressional authorization to use force, or an exigent circumstance that warrants military action, such as an attack on the United States. Congress authorizes the conflict, but the President controls the military; accordingly, Congress could not direct the President to, for example, position troops in a particular location, or deploy forces in a particular way in the midst of an authorized armed conflict.

Closer to home, Congress does not need to declare a war on crime to authorize state or federal agents to take down a gunman who has opened fire in a crowded public square—those state and federal agents have the authority to respond to the exigency posed by that gunman. This is not to say, of course, that state and federal agents legally could plan to assassinate that gunman in advance, or that Congress could authorize them to do so, for it is far from clear that a “war on crime” is an armed conflict in the same way that the war against terror is an armed conflict.

Further, there is some question here whether Al-Aulaqi poses the same kind of threat as our hypothetical gunman. But, as Professor Hansen has argued, the judiciary does not have the competence to second-guess that targeting decision—that is, to make the determination, based upon an evaluation of confidential intelligence information, that Al-Aulaqi is doing more than simply inciting opposition to the United States.

At the end of the day, the most important question raised by the Al-Aulaqi case is whether targeted assassination, as a state policy, is morally justifiable. But I am not sure that is a question that can be answered by a court interpreting the due process clause. At the same time, we should all hope it is a question to which the President and his advisors devote no small amount of consideration.

Lawrence Friedman

Targeted Killings and Judicial Review

President Obama’s program of using drone attacks, often referred to as targeted killings or targeted assassinations, was recently challenged in federal court by the father of one of the alleged targets. Nasser Al-Aulaqi brought the suit on behalf of his son, Anwar Al-Aulaqi. Anwar Al-Aulaqi is a dual citizen of the United States and Yemen and he is believed to be an active member of Al Qaeda in the Arabian Peninsula. The lawsuit claims that the President’s unilateral decision to target Al-Aulaqi without some form of judicial process is a violation of his 4th and 5th Amendment rights and is a violation of the Alien Tort Claims Act. Last week a federal court dismissed the suit based upon lack of standing and the political question doctrine.

In its decision, the court did note that the case raised challenging questions, including whether the “Executive can order the assassination of a U.S. citizen without first affording him any form of judicial process whatsoever, based on the mere assertion that he is a dangerous member of a terrorist organization.” A New York Times Op-Ed following the dismissal of the case called for the creation of a secret court similar to the FISA court now used to authorize wiretaps of foreign agents within the United States, to conduct a judicial review of the terrorist suspect targets chosen by the President before any targeting could take place. In the paragraphs below Professors Dargo and Hansen debate the creation of such a secret court.

Professor Hansen: I agree that some scrutiny is in order, but I disagree that the scrutiny should come from the courts. Such a review is outside of a court's competence and federal judges, even holding hearings in secret, are not competent to make -- or review -- targeting determinations. In dismissing the Al-Aulaqi case the court correctly noted, “To be sure, this Court recognizes the somewhat unsettling nature of its conclusion -- that there are circumstances in which the Executive's unilateral decision to kill a U.S. citizen overseas is ‘constitutionally committed to the political branches’ and judicially unreviewable. But this case squarely presents such a circumstance.” Even having some kind of secret process reviewed by a FISA type court would not address very real concerns that the Executive may need to act quickly because of the nature of the threat. It would be unprecedented and unwise for courts to get involved in this level of targeting decisions. Should courts review all battle plans before execution to make sure that they are in compliance with the laws of war?

The primary limits on the President's authority in this context come first from the inherent right of self defense and from the laws of armed conflict. Certainly there is an open question as to the contexts in which the law of armed conflict should apply. For example, should its limits be tied to the territory where most of the actual fighting is taking place? Or should the law of armed conflict and the right to target an individual like Al-Aulaqi follow the individual terrorist and allow him to be targeted wherever he or goes? While there are no clear answers to these questions, the fact that these questions are being asked suggests that the law of armed conflict and the inherent right to self defense constrain the President's authority.

Congress and not the courts should be checking Presidential authority in this instance. Congress has the constitutional authority, the competence, and the power to place limits on such a program if Congress believes that the President is exceeding his authority.

Professor Dargo: I do agree that Congress should attempt to regulate this in some way. But your major approach -- to look at it through the prism of "the laws of war and armed conflict" -- I think is mistaken. As I see it, it should be viewed from the context of basic constitutional principles which govern the government and protect individual American citizens. Ours is a government of limited and specified powers, and even though those of the President are not as enumerated as those in Article I, this does not mean that the President's powers are unlimited. The basic principle is that the federal government -- any of its branches -- can only act upon authority which has been granted to it and not by some unlimited and vague assertion of necessity. Under Article I, Section 8 (necessary and proper clause), the Congress can give powers to the Executive in order to enable it to carry out its implied powers -- for example, to protect the country. That would at least give it some color of respectability under such landmark cases as Youngstown Sheet and Tube (Justice Jackson's concurring opinion). Then, of course, there is the rights aspect -- rights which are enumerated as a further check on the exercise of unlimited power. And the right in question, which is also part of the equation, of course would be Due Process. As the Times editorial notes, and the judge seems to say or imply, it makes no sense to require process to authorize electronic surveillance, but not to take away life. I just find that your approach -- viewing this through the lens of the laws of war -- does not adequately address the full dimensions of this issue.

Professor Hansen: No question that there are many dimensions to this issue. So let’s look at this issue in a more traditional battlefield context. Assume that during World War II, a U.S. solider decided to abandon his unit and join the German Army. Certainly, under the law of armed conflict and the inherent right to self defense, that solider could now be targeted and killed by U.S. forces without any resort to judicial review. If the law of armed conflict and the inherent right to self defense similarly applies in the Al-Aulaqi context, then the outcome should be the same. If, on the other hand the law of armed conflict and the inherent right to self defense do not apply (and that is an issue for debate), then the President has exceeded his authority. The point here is that the Executive’s authority is not unbounded. The check comes by way of the law of armed conflict and the inherent right to self defense. Congress, as the other political branch with the constitutional authority to oversee the Executive’s actions, not the courts, should act if it believes that the President has exceeded his authority.

Professor Dargo: We seem to be in agreement that Congress should establish some sort of mechanism for the purpose of authorizing executive action in this circumstance. The AUMF (Authorization for the Use of Military Force) adopted soon after the September 11th attacks are not sufficient for this purpose. To hold that the AUMF is sufficient would be to give a "blank check" to the President to conduct the so-called War on Terror against any persons, anywhere, anytime for any purposes he deems a threat to the security of the United States. I believe that Congress had no such intention back in 2001. Accordingly, in the absence of any other relevant authorizing power, then the President's action in ordering targeted assassination would be acting on the basis of his own Article II powers which, under Justice Jackson's formulation, would be a very weak reed indeed. For these reasons, I believe that targeted assassinations of American citizens in places like Yemen are beyond the powers of the President.

Professor Hansen: While I agree that the AUMF is not a “blank check” it is certainly not a “bounced check” either. If we say that in passing the AUMF Congress did not anticipate that the President would use the authorization to capture and kill those who pose a threat to the United States, I’m left to wonder what the AUMF authorized.

Is the Health Care Law Beyond the Commerce Power?

In his decision this week in Virginia v. Sebelius finding the Patient Protection and Affordable Care Act unconstitutional, United States District Judge Henry E. Hudson explains that Congress cannot, under Article I’s Commerce Clause, compel individuals to purchase health care insurance by assessing them a penalty if they choose not to do so. He distinguishes this case from Wickard v. Filburn. In that case, the Supreme Court concluded that Congress can regulate the activity of the individual wheat farmer, because such activity in the aggregate has a substantial effect on interstate commerce even if the wheat transactions of each individual farmer do not.

But wouldn’t there be a significant effect on interstate commerce—as Congress believes—if individuals declined to purchase health care insurance (assuming they are not otherwise covered)? Indeed, isn’t that the whole point of the new health care law—to avoid that effect by creating incentives, through the assessment of a tax penalty, for individuals to purchase coverage?

The answer to the second question is yes—but the answer to the first, according to Judge Hudson, depends on the activity in question. In his view, Congress’s commerce power only reaches activity in a market, not the decision not to participate in a market. Yet in Wickard, the Court allowed Congress to reach wheat farmers who chose not to sell the wheat they produced—just as in this case, where Congress is trying to reach individuals who have chosen not to purchase their own health insurance.

Not so fast, Judge Hudson tells us. In Wickard, the individual farmers could have avoided regulation entirely by choosing not to engage in the production of wheat, while in this case, he argues, individuals cannot avoid the regulation: they must either purchase coverage or pay the penalty.

This reasoning has a superficial appeal, but it ignores the fact that, unlike the farmer who chooses not to grow wheat, no individual living in the United States can help being a part of the health care market. If you choose (for whatever reason) not to have health insurance coverage, that does not mean that you are not participating in the health care market—and it does not mean the health care services you will inevitably receive at some point in your life have no economic value. Rather, you have simply chosen a different way to structure your particular health care transaction—namely, by relying upon the rest of us to pay for the consequences of your decision not to have coverage.

In the end, you may have chosen not to pay for health insurance coverage, but you have not chosen to avoid an economic transaction. Surely Congress has the authority under the Commerce Clause to regulate the aggregate effect on interstate commerce of all those individuals who have chosen to engage in that particular economic transaction.

Lawrence Friedman

More ruminations on judicial elections

Last week's general election proved to be a tough day for state courts and state court judges. Despite support from the state legislature and national luminaries such as Sandra Day O'Connor, Nevada voters rejected a ballot initiative to move away from contested judicial elections and toward a merit selection system. (I previously blogged about the dangers of judicial elections and the benefits of the Nevada initiative here.) The proposed merit system would have instituted careful screening of judicial applicants and evaluation of existing judges, both of which were in the public interest. Sadly, the public itself was not interested.

Other states saw issue politics directly impact judicial retention elections. In Iowa, as my colleague Lawrence Friedman noted last week, three supreme court justices failed in their retention bids after voters made the election a referendum on that court's ruling on same-sex marriage. Opponents of the three justices spent approximately $800,000 to secure their removal, nearly all of it coming from sources outside the state. In Florida, two supreme court justices were targeted by tea party groups after they ruled that a proposed initiative exempting Florida from the new national health care legislation did not meet state ballot requirements. While these justices were retained, they received lower retention rates than their counterparts who were not directly targeted.

Not all news was bad, however. In Colorado and Kansas, voters looked past similar issue-oriented campaigns designed to oust members of their respective highest courts, and chose to retain a host of thoughtful and experienced jurists. And in many other states, retention elections proceeded without much commotion.

What to make of these results? We should be cautious about drawing too many comparisons between states, since the dynamics of each state's electorate can be very different. But it is hard not to notice that states with strong, public judicial performance evaluation (JPE) programs tend to be more immune from politicized retention elections than states without such programs. JPE offers voters comprehensive, neutral evaluations about each judge's performance with respect to the process of judging. In other words, JPE encourages voters to retain (or not retain) a judge based on the judge's demonstrated ability to communicate clearly, treat parties fairly, manage his or her docket, and behave appropriately in the courtroom. The substance of individual decisions never comes into play during the evaluations. JPE therefore asks voters to consider the entire context of the judge's role, not just a particular substantive decision.

In Kansas, comprehensive JPE may have blunted the campaign to remove Justice Carol Beier on grounds related to abortion, and in Colorado the same type of extensive JPE program may have caused voters to disregard the "activist judge" rhetoric of that state's unsuccessful "Clear the Bench" campaign. By contrast, the three Iowa justices had no formal, process-based evaluation to help contextualize their overall work on the bench. They now join a growing club of former state supreme court justices who have lost retention elections over the past 25 years -- Rose Bird, Cruz Reynoso and Joseph Grodin in California, Penny White in Tennessee, and David Lanphier in Nebraska -- none of whom had JPE available to them at the time of their failed retention bids.

JPE is not a cure-all. To work, the evaluations must be fair, thoughtful and accessible, and voters must actually read them and incorporate them into their decision-making. But the potential upside of JPE warrants at least a closer look in other states. Perhaps in the next election cycle, we can celebrate informed voting rather than bemoaning the impact of special interest campaigns.

Judging Judges in Iowa

On election day 2010, Iowa voters removed three state supreme court judges from the bench because those judges had joined in the court’s unanimous opinion in Varnum v. Brien, the 2009 decision holding unconstitutional, under the state constitution, the state’s prohibition against same-sex marriage. As the New York Times reported, “[a]fter years of grumbling about ‘robed masters,’ conservatives demonstrated their ability to target and remove judges who issue opinions they disagree with.” The Times also reported that similar ouster campaigns had begun on a variety of issues, including a woman’s right to choose, taxes, tort reform, and health care.

When the United States Supreme Court rules in favor of upholding an individual right and against the legislature that enacted the law undermining that right, there is usually some cry of outrage at the temerity of “activist” judges “legislating from the bench.” Given the cases in which the cry of activism is made—Roe v. Wade, of course, but also Bush v. Gore and District of Columbia v. Heller—it seems fair to describe an activist decision as one whose result you just don’t like.

The difference between the U.S. Supreme Court and the Iowa Supreme Court—indeed, most state supreme courts—is that we cannot remove the judges who sit on the former court quite so easily. To remove a federal judge from the bench, the House of Representatives must issue articles of impeachment and the Senate must convict. This has happened only rarely, and Congress has never been able to muster majorities in favor of ousting a federal judge because of disagreement with the substance of a particular decision.

But in Iowa, the situation is different. There, judges must face retention elections, and this year well-funded groups—primarily from outside the state—that disagreed with the result in Varnum urged citizens to express their outrage at the polls. They did so, in the words of one person who organized opposition to retaining these judges, to send a message to the court’s other and future members: be careful about how you decide certain cases if you would like to keep your job.

The framers of the U.S. Constitution likely would have looked askance at the suggestion that the enjoyment of individual rights like due process and equal protection of the law should essentially be subject to a majoritarian veto. A primary reason for a separate and independent judiciary is the protection of individual rights from the whims of the majority. Surely those groups opposed to same-sex marriage would not want their right to marry, or to protest marriage, put to a vote. They might not like the outcome. The time has come, in Iowa and elsewhere, to reconsider the wisdom of any method of selecting judges that undermines their ability to enforce basic constitutional values.

Lawrence Friedman