Balkinization  

Saturday, October 31, 2015

What it means to be business-friendly

Andrew Koppelman



It is now well established that the Roberts Court is extremely business-friendly, but this way of putting it masks the fact that there are different ways of being business-friendly.  Some of these subvert what is valuable and honorable about business. 



Today’s New York Times reports the increasingly widespread use of arbitration clauses in consumer contracts, with the Supreme Court’s encouragement, to insulate businesses from class action suits.  The consequence is that the misbehavior that such suits target – small thefts and abuses that affect large numbers of consumers, producing millions of dollars in illicit profits – is insulated from any legal remedy.



Among the lawyers who devised this clever trick was one John G. Roberts.  He later provided the crucial vote to interpret the Federal Arbitration Act to shut down consumer and employment discrimination suits, in defiance of the intentions of the act’s authors. 



Doubtless class action suits can be a nuisance for businesses, and sometimes they’re not meritorious.  But when they are entirely blocked, really nasty business practices can be conducted with impunity.  The Times describes one case in which Sprint allegedly imposed roaming charges for customers’ cellphone calls from their homes.  If this was true, each individual suffered a roughly $20 loss, far too little to be worth suing for on an individual basis, even though it was worth quite a bit to Sprint.  (Sprint’s successful legal argument was that it did not matter if it was true.)



In the world that the Court’s arbitration jurisprudence has brought about, businesses that do not swindle their customers for small sums are foolishly leaving money on the table.



Business is a good and honorable pursuit because, in a free market, you can feel confident that your good or service is making your customers better off.  If you weren’t somehow improving the world, you wouldn’t be making any money.  But the Court doesn’t care if you’re honest.  If you’re in business, the Court is on your side.



There has been a notorious tendency, in some police departments, for officers to refuse to inform on corrupt or brutal cops.  I suppose you could say that this is “police-officer-friendly.”  A similar guild mentality led many leaders of the Catholic Church for years to cover up priests' sexual abuse of minors.  One might perhaps call that “priest-friendly.”  But isn’t that a silly way to talk?   The best people in both professions understood that this willful concealment spread the disgrace from these few malefactors to the entire profession.  You don’t protect a corrupt cop just because he’s a cop.  You don’t protect a predatory priest just because he’s a priest. 



For the same reason, you don’t protect a cheating businessman just because he’s a businessman.  Honest people in that profession should repel the Court’s embrace with disgust.


Tuesday, October 27, 2015

Constitutionality of Congressional Restrictions on Guantanamo Prisoner Transfers

Deborah Pearlstein

Cross-posted at Opinio Juris

Harold Koh has an interesting post over at Just Security thinking through what options would remain available to President Obama to close Guantanamo if Congress once again imposes restrictions on the transfer of prisoners off the base.  Congress has imposed a range of such restrictions in annual legislation since 2009, invariably prohibiting the transfer of prisoners to the United States.  As Koh notes, Congress has accomplished this on each occasion not by imposing an outright ban, but through its capacious Spending Clause power under Article I of the Constitution.  Congress famously holds the purse strings for all U.S. government spending, and it has prohibited the expenditure of any funds for the purpose of such transfers.  Are these restrictions an unconstitutional infringement by Congress on the President’s own powers under Article II (as Commander in Chief, etc.)? Koh stops short of answering directly, but he does say this (quoting President Obama’s recent veto statement and past signing statement):
“[M]ost likely, the President’s action would stand even if challenged, as Prosecutor-in-Chief to ‘determine when and where to prosecute them, based on the facts and circumstances of each case and our national security interests,’ and as Diplomat-in-Chief and Commander-in-Chief to decide and arrange through negotiations ‘when and where to transfer them consistent with our national security and our humane treatment policy.’”

Koh is surely right there must be some limits to Congress’ power to act through spending restrictions, as with all constitutional power; legislation will be held unconstitutional if it violates Bill of Rights prohibitions, for example.  Particularly to the extent the legislative restrictions impinge on the President’s prosecutorial powers (although only to that extent - it seems clear the administration still contemplates criminally prosecuting only a fraction of the remaining detainees), the President has a constitutional case to make that the Constitution gives him, and only him, not only the power but the duty to execute the laws that are established.  Koh might also have added that the weight of history, such as it is, is on the President’s side. As I’ve written in detail elsewhere, in all of the major wars of the 20th and 21st centuries in which U.S. detention operations are now concluded – World Wars I and II, Korea and Vietnam, the 1991 and 2003 Iraq Wars – conflicts during which the United States held hundreds of thousands of prisoners in total, the imprisonment of enemies held pursuant to wartime authorities has always come to an end, and the resolution of these detentions has always been handled by the executive branch.  Indeed, Congress has not imposed anything like the current restrictions on the exchange, transfer or release of prisoners, during or after the period of armed conflict in any of the previous conflicts over the past century.  

Nonetheless, I remain deeply skeptical of the strength of the constitutional argument that the President has sufficient Article II power to succeed in demonstrating that the spending restrictions are an unconstitutional infringement on presidential power.  Here’s one reason: the months-old Supreme Court decision Koh interestingly doesn’t cite, Zivotofskyv. Kerryin which the Court for the first time in its history actually recognizes a presidential power that is preclusive of congressional efforts to regulate it. (It is of course one constitutional thing to say the President has an Article II power, it is quite another to say he holds the power exclusively, even if Congress legislates to the contrary – what Justice Jackson’s famous Youngstown Sheet & Tube opinion called the President’s power at its “lowest ebb.”)

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Sunday, October 25, 2015

Bootleggers and Baptists in the Student Loan Debate

Frank Pasquale

The New York Times editorial board has intervened in the student loan debate, focusing on law schools. There are many problems with the piece, but three are fundamental. First, it inexplicably focuses on limiting federal loans to law schools, when the private loans likely to replace them feature harsher terms. Second, it conflates for-profit and non-profit law schools, saying the latter "increasingly" act like the former, while ignoring clear differences in governance and mission. Third, it provides surprisingly little data to back up its assumptions about defaults--assumptions that one of the Times's own contributors questioned last month. 

1) From Federal to Private Lending: Out of the Frying Pan, Into the Fire

Private lenders are sure to be pleased by the editorial.  Law school loans are lucrative for them because of "extremely low student loan default rates for law school borrowers." They and their foundation allies have been lobbying for years to bring us closer to the Bush era of privatized loan profits. The stage is now set for a bootlegger/baptist coalition: as prohibitionists cut off the flow of federal loans, private lenders line up to take their place. 
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Thursday, October 22, 2015

Why Raul Labrador Is Right to Oppose Paul Ryan's Wish for Dictatorial Powers

Sandy Levinson



Paul Ryan is apparently demanding that the House change its rule, dating back to Thomas Jefferson’s initial drafting of the rules for the House, that allows any member of the House to move at any time that the Speakership be “vacated.”  It was, apparently, the threat of such a motion by members of the Freedom Caucus that led Speaker John Boehner to quit.  Idaho Representative Raul Labrador has suggested that what was good enough for Thomas Jefferson should continue to be good enough for the House today.  He is correct.

One might envision the House as a mini-parliamentary system composed of a number of factions within the larger two-party system.  Just as in any parliament, the majority coalition of individual factions elects a leader (the Speaker of the House) who has gained (and can keep) the confidence of a majority of its membership.  So the Speaker is like the Prime Minister.  In parliamentary systems, prime ministers serve at the pleasure of the parliament.  A vote of no-confidence can be called at any time.  In some systems, a vote of no-confidence causes the government to fall and new elections to be held (or, at the very least, it will generate a process of negotiation among the various coalitions within the parliament over organizing a new government).  In Israel and Germany, those who wish to displace a sitting Chancellor must indicate in the vote whom they want as a replacement.  (This is a so-called “constructive vote” of no-confidence, designed to prevent the unseemly lack of a functioning government during a process of negotiations among coalition partners.)  

What Ryan wants is presumably what all prime ministers would love to have, tenure in office.  But this House does not, and should not, work that way.  I am no great fan of fixed terms for Presidents, which, alas, is written into the Constitution.  Perhaps there is a good reason, in the 21st century, for fixed term presidencies, though I remain to be convinced that we would not be better off with a no-confidence mechanism that would allow us to remove presidents in whom, say, 2/3 of the voting members of Congress had truly lost confidence.  But there is, I think, no good reason for fixed-term Speakers, assuming, of course, that Speakers exercise genuine power with regard, say, to bringing bills to the floor for a vote.  Paul Ryan wishes in effect to be able to dictate to the House the terms under which it will operate at least until January, 2017.  He ought not be granted his wish.  The fact that Labrador is an oft-quoted member of the Tea Party—and Gail Collins loves to have fun with his name—does not mean that those of us who do not share his general political orientation should fail to recognize that he is absolutely correct in trying to fend off this power play by Rep. Ryan.  I am no originalist, and I do not believe, therefore, that we should mindlessly follow the guidance of Thomas Jefferson or any other founder, unless we believe, on independent groups, that they in fact got it right in the first place.  Jefferson did get it right in the first place, and it is right for us today.  

UPDATE:  One of the comments notes that Ryan, should he become Speaker, will now be second in line for presidential succession behind Biden and suggested that the Succession Act could, in the future, promote a certain kind of strategic game playing if, for example, there were no VP.  That's an interesting point.  I agree with Akhil and Vik Amar that the Presidential Succession Act of 1947 is not only extremely unwise but quite likely unconstitutional (though, as a practical matter, there is no way of adjudicating the point).  One of the reasons for the unwisdom is that the skill set required of an effective Speaker is almost certainly different from the skill set one looks for in a president, especially in traumatic times likely to exist in case of succession. Perhaps the House should ask who among its members is best equipped to take the reins of the Oval Office when selecting a Speaker.  No thoughtful person would have thought that John Boehner was the asnwer; undoubtedly, some Republicans think very differently about Paul Ryan.  But I think that no sane person could believe that Daniel Webster, who I believe is still running, would make an acceptable president.
And, of course, there is the independent problem that the Speaker, as in this case, is of a very different political party from the president to whose office he would be succeeding.  That is a possibility that deserves full airing at the constitutional convention I still strongly support.  Is it a feature or a bug that Nancy Pelosi could have succeeded George Bush or Dick Cheney or that John Boehner or Paul Ryan could take over from Barack Obama or Joe Biden?



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