D.C. Circuit’s “COOL” Decision Eases Government’s Burden in Justifying Compelled Speech

DC CircuitIf government wants to force you to say something you would not otherwise express, it must have a very good reason for doing so. This bedrock First Amendment principle applies to individuals and business enterprises alike.

In July, the U.S. Court of Appeals for the D.C. Circuit—arguably the nation’s second most important federal court—carved away at this principle and the constitutional protection it provides. Below, we discuss how that court allowed a federal agency to repeatedly change its declared reason for compelling speech and in an en banc panel opinion improperly eased government’s burden to prove a substantial governmental interest.

District Court Challenge. The compelled speech at issue in American Meat Institute (AMI) v. USDA is a country of origin label (“COOL”) recording the place of birth, residence, and slaughter of the animal from which each cut of meat taken. In the proposed rule’s Statement of Benefits and Costs, USDA asserted the mandate was justified because “certain U.S. consumers valued the designation.” AMI argued in its public comments that this interest was neither governmental nor substantial. USDA responded in the final rule with a stunning tautology: our interest is substantial and governmental because Congress empowered us to impose the COOL mandate.

When AMI sued to enjoin COOL on July 25, 2013, the agency again shifted focus, advancing a new justification that never appeared in the administrative record: “correct misleading speech and prevent consumer deception.” The federal district court bought USDA’s made-for-litigation governmental interest while denying AMI’s motion. In permitting this new justification, Judge Jackson ignored a 1947 Supreme Court precedent, SEC v. Chenery Corp. That decision holds that when judging the propriety of agency action, courts are limited to what is in the administrative record. Continue reading

Supreme Court’s “Executive Benefits” Bankruptcy Ruling Provides a Practical Solution to a “Stern” Problem

supreme courtGuest Commentary

by Dee Wallander, a 2014 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech University School of Law.

In an overlooked but practically significant decision from its October 2013 term, Executive Benefits Insurance Agency v. Arkison, the U.S. Supreme Court clarified the procedural impact of its 2011 bankruptcy decision, Stern v. Marshall. In Stern (a case that received more fanfare for its underlying facts—which featured the late model Anna Nicole Smith—than for its legal issues), the Court narrowly held that a bankruptcy court can preside over actions arising from bankruptcy, but cannot hear state-law claims independent of the bankruptcy action. More specifically, Stern held that Article III of the U.S. Constitution bars bankruptcy courts from adjudicating counterclaims to proofs of claims, even though such actions are permissible under 28 U.S.C. § 157 as “core” traditional bankruptcy claims. Despite the Court’s attempt to rule narrowly in Stern, lower courts’ varying interpretations of the decision have created confusion in the bankruptcy system.

Justice Thomas, who wrote the unanimous Executive Benefits opinion, carefully avoided a detailed analysis of Stern by discussing only the narrow statutory question of how federal district and bankruptcy courts should procedurally handle so-called Stern claims. Continue reading

Federal Jurists ♥ Utilitarian Philosopher Jeremy Bentham

BenthamThe U.S. Court of Appeals for the D.C. Circuit, sitting as an en banc panel of 11 judges, sent shock waves through the world of First Amendment enthusiasts on July 29 with its opinion in American Meat Institute v. U.S. Dept. of Agriculture. We’re still digesting this compelled speech ruling, and will be producing a number commentaries over the next several weeks with our thoughts and insights from other experts.

But in the meantime, we couldn’t resist highlighting a wonderful quip in Judge Janice Rogers Brown’s dissent and how it relates to a dissent by Justice Antonin Scalia in a 2013 opinion (which borrowed a concept from 18th Century philosopher, jurist, and utilitarianism proponent Jeremy Bentham).

Upon reading American Meat Institute, an attorney who’s written publications for WLF on commercial speech called to our attention Judge Brown’s creative phrasing, which he thought rivals a quip he recalled Justice Scalia making last year in Maryland v. King.

At the outset of her American Meat Institute dissent, Judge Brown stated, “If, as Jeremy Bentham once quipped, a fanciful argument may be dismissed as ‘nonsense upon stilts,’ the court’s analysis in this case can best be described as delirium on a pogo stick.” Such an intelligently cutting statement is not at all unusual for Judge Brown, whose well-written and cogently reasoned opinions are often peppered with witty historical references. An NPR report about Judge Brown’s U.S. Senate confirmation hearings noted that her opinion writing “reminds [one] very much of Justice Scalia’s writing style.” Continue reading

The Supreme Court’s NOT Top 10: October 2013 Term Cases the Justices Wrongly Passed Over

supreme courtThe Supreme Court press and other court observers have spilled a lot of ink this past month discussing the cases the Supreme Court took and decided during October Term 2013. Relatively little was said about the cases the court chose not to decide—and it passed over some doozies. But as Rush drummer and lyricist Neil Peart put it so eloquently, “If you choose not to decide, you still have made a choice.”

Pro-Business? Journalists like to portray the Roberts Court as particularly business friendly (see, e.g., here , here, and here; but see here), but businesses asked the Court to take plenty of cases this past term that it instead declined. When the Court denies cert in cases of such importance to business at the same time that it has a historically light docket, it can hardly be said to be pro-business. Companies crave legal certainty, so even if the Court took these cases and decided them against business interests, many times simply settling contested questions would be better than leaving them up in the air.

Wanted: More Business Cases. The Court needs to hear more business cases than it currently is, for at least two reasons. First, the unprecedented proliferation of new regulations by this administration has given rise to many more conflicts of the kind that produce Supreme Court cases. Second, to the extent the Clinton-and-Obama-appointee-dominated lower courts are predisposed against business litigants (or, more charitably, deciding close questions consistently against them), businesses will appeal more cases to the Supreme Court when they believe a lower court has denied them justice. Of course the Supreme Court justices take neither of these criteria into consideration when assessing individual cases, but surely these factors matter when assessing whether the Court leans in favor of business in forming its docket. Continue reading

Noel Canning: A Triumph of Judicial Restraint Over Originalism

noelIn its late June decision in NLRB v. Noel Canning, the U.S. Supreme Court unanimously invalidated President Obama’s efforts to make three recess appointments to the National Labor Relations Board.  The Court was sharply divided, however, on the rationale for its decision.  Five justices joined Justice Breyer’s majority opinion, which rejected the most sweeping challenges to the recess appointments and ruled against the Administration on the much narrower ground that the Senate was not, in fact, in recess at the time that the appointments were made.  As a long-time advocate of judicial restraint, I applaud the narrow approach adopted by Justice Breyer.  Justice Scalia’s opinion concurring only in the judgment would have had the effect of preventing future Presidents from making recess appointments except in the rarest of circumstances.  To me, it illustrates the shortcomings of originalism as a means of ensuring judicial restraint.

Article II of the Constitution mandates that the President ordinarily must obtain “the Advice and Consent of the Senate” before appointing an officer of the United States.  The Recess Appointments Clause creates a limited exception to that requirement by authorizing the President, on a temporary basis, “to fill up all Vacancies that may happen during the Recess of the Senate.”  Noel Canning forced the Court to construe the meaning of two phrases contained in the clause.

First, what is meant by “the Recess of the Senate?”  Those challenging the NLRB appointments claimed that the phrase refers only to an inter-session recess, i.e., a break between formal sessions of Congress.  On the other hand, President Obama asserted (as have all recent Presidents) that the phrase also encompasses an intra-session recess, such as a summer recess in the midst of a session.  The NLRB appointments would have been improper under the challengers’ interpretation because the Senate indisputably was not on an inter-session recess at the time of the appointments.

Second, what is the scope of the phrase “Vacancies that may happen?”  The challengers asserted that the phrase refers only to vacancies that first come into existence during a recess.  President Obama (and his predecessors dating back for at least a century) urged a broader reading that would also encompass vacancies that arise prior to a recess but continue to exist during that recess.  The NLRB appointments would have been improper under the challengers’ interpretation because they were made to fill offices that first became vacant before the start of the recess in question.

Continue reading

Supreme Court Observations: Don’t Buy the Spin, EPA Lost the Utility Air Regulatory Group v. EPA Case

peterglaserGuest Commentary

by Peter S. Glaser, Troutman Sanders LLP

*Editor’s note: On June 23, the U.S. Supreme Court issued its opinion in Utility Air Regulatory Group v. Environmental Protection Agency. The author of this commentary represented Washington Legal Foundation pro bono in the case for our amicus briefs at both the petition for certiorari and merits stages.

EPA lost; it didn’t win 

Although you wouldn’t know it from the way EPA and environmental NGOs are portraying the decision.  Industry opposed EPA’s Tailoring Rule with essentially two alternative arguments.  Industry’s maximum position was that EPA could not regulate greenhouse gasses ( GHGs) at all under the Prevention of Significant Deterioration (PSD) or Title V permit programs.  Industry’s alternative position was essentially that if a source is subject to PSD because of its non-GHG emissions (with some caveats), it could be required to do best available control technology (BACT) for both its non-GHG and its GHG emissions.  The Court adopted a variant of industry’s alternative argument.  During briefing, EPA resisted both of industry’s positions.  So it’s a little much for EPA to be claiming victory.

We don’t need to relitigate whether industry should have presented alternative positions or whether industry should have presented the Court with an all-or-nothing position:  either uphold the Tailoring Rule, which we know you don’t want to do, or rule that GHGs cannot be regulated under PSD or Title V at all.  Certainly, a maximum victory would have been preferable to the victory we got, where large facilities triggering PSD for their non-GHG emissions must undertake GHG BACT—a result that is not too far off from at least steps one and two of the Tailoring Rule.  In the end, only two justices (Alito and Thomas) expressed a preference for industry’s maximum position even when presented with the alternative argument.  Whether the other three justices in the majority would have endorsed industry’s maximum position if there had been no alternative position—or whether not presenting an alternative would have resulted in losing the case—is something we will never know. Continue reading

Supreme Court Observations: Alice Corp. v. CLS Bank

LangdonSmith,DanielF-48047-87-bwrGuest Commentary

by Evan H. Langdon and Daniel F. Smith, Adduci, Mastriani & Schaumberg, LLP*

The Supreme Court’s ruling in Alice Corp. v. CLS Bank is notable for what it does not say. Though the Court struck down a software invention directed to mitigating settlement risk through a computer intermediary as patent ineligible, the Court did not rule that software patents or patents that implement software on a computer are per se ineligible. The Court was careful to leave open the door for patent protection of software inventions. In a 9-0 ruling, the Supreme Court affirmed the en banc U.S. Court of Appeals for the Federal Circuit ruling that Alice Corp.’s patent was invalid as directed to ineligible subject matter under 35 U.S.C. § 101. In so doing, the Court reiterated its ruling in Bilski v. Kappos that it is the invention itself that must be patent eligible and whether a claim is directed to software or is tied to a computer does not alter the analysis.

CLS Bank initiated the case by filing for declaratory judgment that the asserted patent was invalid, unenforceable, and not infringed; Alice Corp. counterclaimed for infringement. The parties cross-moved for summary judgment on whether the asserted claims are eligible for patent protection. After the Supreme Court issued Bilski, the District Court granted CLS Bank’s motion finding the claims ineligible for patent protection because they were directed to an abstract idea. On appeal, the Federal Circuit panel reversed the District Court, finding it was not “manifestly evident” that the claims were directed to an abstract idea. A divided en banc Federal Circuit upheld the District Court’s conclusion with a five judge plurality concluding that the claims draw on an abstract idea and the use of a computer added nothing of substance to that idea.

Reliance on Mayo and Gottschalk

In analyzing the claims at issue, the Court relied heavily on its established precedent under 35 U.S.C. § 101 and concluded that Alice Corp.’s claims did not cover patentable subject matter. The Court emphasized the long-standing principle that laws of nature, natural phenomena, and abstract ideas are not patentable because upholding such a patent would effectively grant a monopoly and pre-empt the claimed approach in all fields. Continue reading