A news release from the Competitive Enterprise Institute notes that the attorneys general of Michigan, Oklahoma, and South Carolina have joined their lawsuit challenging the constitutionality of portions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The original suit challenged several Dodd-Frank provisions, including creation of the Consumer Financial Protection Board. The states’ challenge focuses on Title II’s “orderly liquidation authority,” which allows the federal government to seize allegedly troubled financial institutions with minimal notice or recourse. According to the states, these provisions lack adequate due process and could threaten state pension funds. Here’s the amended complaint. [...]
This morning, in Intercollegiate Broadcast System v. Copyright Royalty Board, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit consisting of Judges Garland, Griffith, and Senior Judge Williams declared the Copyright Royalty Board to be unconstitutional under the Appointments Clause, and adopts a narrow fix. This was not a surprising development, as this issue has been brewing for some time (as I noted in these posts). Senior Judge Williams’ opinion for the court in begins:
Intercollegiate Broadcasting, Inc. appeals a final determination of the Copyright Royalty Judges (“CRJs” or “Judges”) setting the default royalty rates and terms applicable to internet-based “webcasting” of digitally recorded music. We find we need not address Intercollegiate’s argument that Congress’s grant of power to the CRJs is void because the provision for judicial review gives us legislative or administrative powers that may not be vested in an Article III court. But we agree with Intercollegiate that the position of the CRJs, as currently constituted, violates the Appointments Clause, U.S. Const., art. II, § 2, cl. 2. To remedy the violation, we follow the Supreme Court’s approach in Free Enterprise Fund v. Public Company Accounting Oversight Bd., 130 S. Ct. 3138 (2010), by invalidating and severing the restrictions on the Librarian of Congress’s ability to remove the CRJs. With such removal power in the Librarian’s hands, we are confident that the Judges are “inferior” rather than “principal” officers, and that no constitutional problem remains. Because of the Appointments Clause violation at the time of decision, we vacate and remand the determination challenged here; accordingly we need not reach Intercollegiate’s arguments regarding the merits of the rates and terms set in that determination.
McCulloch v. Maryland had a very good day at the Supreme Court yesterday, with NFIB relying on and applying McCulloch‘s rules for when an enactment violates the Necessary and Proper Clause. What happened after the McCulloch decision also shows the next steps in battle over the individual mandate, as I suggest in an essay this morning for National Review Online.
In refusing to hold the Second Bank of the United States unconstitutional, the McCulloch Court gave Congress broad latitude in Congress’s own evaluation of whether the Bank was “necessary” in a constitutional sense. Relying on and quoting McCulloch, President Andrew Jackson made his own judgment of constitutional necessity when he vetoed the recharter of the Bank in 1832. After a titanic political struggle, the Bank was gone, and a new term created by Jackson, “equal protection,” had become part of what the American People were coming to believe the Constitution was supposed to mean.
President Jackson dealt the Bank a fatal blow by withdrawing federal deposits from the Bank, and moving them to state banks. President Romney can follow Jackson’s lead on his first day in office, instructing the Acting Secretary of Health and Human Services to use the waiver powers in the ACA statute to issue waivers to everyone for the individual mandate. Because the individual mandate is (supposedly) a tax, it can then be repealed through the budget reconciliation process, which cannot be filibustered.
I predict that the individual mandate will never mandate anyone. Yet the mandate will be long remembered as one of the most consequential laws enacted by a Congress. The result of the “bank battle” was that even though a central bank was judicially permissible, central banking was politically toxic for the rest of the century. The “mandate battle” may have the same [...]
The State National Bank of Big Spring, Texas, the 60-Plus Association, and the Competitive Enterprise Institute filed suit against the Consumer Financial Protection Board alleging that the CFPB, as currently structured, is unconstitutional. Specifically the suit alleges that the CFPB lacks political accountability because, among other things, the President cannot remove the Bureau’s director save for cause and Congress cannot exercise control over the Bureau’s budget. Further, the suit notes, the Dodd-Frank statute limits judicial review of CFPB actions. “As a whole, Dodd-Frank aggregates the power of all three branches of government in one unelected, unsupervised and unaccountable bureaucrat,” commented former White House counsel C. Boyden Gray, who is representing the plaintiffs. Of note, CEI served as plaintiffs co-counsel in Free Enterprise Fund v. Public Company Accounting Oversight Board, which invalidated limitations on the removal of PCAOB members. CEI has more info on the suit here.
UPDATE: Boyden Gray and State National Bank of Big Spring CEO Jim Purcell have an op-ed in Friday’s WSJ on the unconstitutional aspects of the CFPB and the Financial Stability Oversight Council. Here’s an excerpt:
Dodd-Frank created both the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, giving each agency effectively unlimited power. The FSOC can declare a financial firm “systemically important”—that is, too big to fail—based on “any” “risk-related factors” that it “deems appropriate.” And the CFPB can punish even responsible lenders who in good faith offer loans that the bureau later deems to be “unfair,” “deceptive” or “abusive.” . . .
Ordinarily, when regulators wield broad power, their discretion is still limited by checks and balances. The Constitution empowers the president and Congress, as well as our courts, to prevent regulators from running amok with excessive, arbitrary or even partisan regulations.
But Dodd-Frank does not honor
From Charlie Savage’s NYT report on President Obama’s assertion of Executive Privilege as the basis for the Justice Department’s refusal to turn over internal agency documents concerning the “Fast and Furious” scandal to a house oversight committee:
The invocation of executive privilege by Mr. Obama added a new element to the drama. While there is little dispute that the privilege covers communications made directly to the president and among his White House advisers, it is far less clear that the privilege trumps Congress’s right to subpoena internal communications within an agency. . .
A White House spokesman cited several examples of Republican presidents asserting executive privilege to withhold agency documents not involving presidential communications.
Still, Mr. Obama appeared to adopt a narrower view of executive privilege during the 2008 campaign. Then a senator, Mr. Obama was asked by The Boston Globe whether he believed that executive privilege covered documents about decision-making within the executive branch not involving confidential advice communicated to the president.
He replied: “With respect to the ‘core’ of executive privilege, the Supreme Court has not resolved this question, and reasonable people have debated it. My view is that executive privilege generally depends on the involvement of the president and the White House.”
House Republicans adopted a more limited view of executive privilege as requiring White House involvement, suggesting it was a victory for their side either way.
For more background on recent assertions of Executive Privilege and those few cases in which courts have wrestled with the doctrine, some may be interested in this this CRS report from 2008.
UPDATE: At Monkey Cage, Andrew Rudalevige summarizes the development and use of Executive Privilege in recent administrations.
I have not been following the “Fast and Furious” scandal all that closely (or even much at all), but this seems like an interesting development for those who are interested in separation of powers questions.
President Obama asserted executive privilege over documents related to the “Fast and Furious” operation Wednesday as a House panel moved to hold Attorney General Eric H. Holder Jr. in contempt for failing to cooperate with a related congressional inquiry. . . .
Sharing the “Fast and Furious” documents “would raise substantial separation of powers concerns and potentially create an imbalance in the relationship” between Congress and the White House, Holder wrote in a letter to Obama delivered late Tuesday.
Releasing the documents “would inhibit candor of such Executive Branch deliberations in the future and significantly impair the Executive Branch’s ability to respond independently and effectively to congressional oversight,” Holder added.
The decision is Obama’s first use of executive privilege, which has been invoked throughout U.S. history by presidential administrations to preserve the confidentiality of information in the face of legislative inquiries. . . .
In response, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), who led Wednesday’s hearing to review the contempt charges, said he learned of Obama’s decision early Wednesday and believes the move “falls short of any reason to delay today’s proceedings.”
As some may recall, in 2008 the U.S. House of Representatives voted to hold former White House counsel Harriett Miers and White House Chief of Staff Joshua Bolten in contempt of Congress for failing to answer questions about the mass firing of U.S. attorneys by the Bush Administration. The vote was 223 to 32 because most of the House Republicans left the chamber for the vote.
In non-mandate news, the Supreme Court issued two merits opinions today, including Zivotofsky v. Clinton, a challenge to the State Department’s refusal to follow a federal statute directing the federal government to recognize Jerusalem as a part of Israel specifically by allowing American citizens born in Jerusalem to have “Israel” listed as their birthplace. The U.S. Court of Appeals for the D.C. Circuit had held that Zivotofsky’s claim presented a non-justiciable political question as it involved a foreign policy question implicating separation of powers questions best resolved by the political branches. in Zivotofsky, the Supreme Court disagreed. Chief Justice Roberts wrote the opinion for the Court, joined by Justices Scalia, Kennedy, Thomas, Ginsburg, and Kagan. Justices Alito and Sotomayor wrote opinions concurring in the judgment and Justice Breyer dissented. [...]
The AP is reporting that President Obama will give former Ohio Treasurer Richard Cordray a recess appointment today to head the new Consumer Financial Protection Board. Cordray was nominated to the post some months ago but Senate Republicans have blocked his confirmation due to their opposition to the CFPB’s structure, in particular the lack of meaningful legislative or executive oversight.
If the AP’s report is correct, President Obama’s decision is particularly interesting because the Senate has not officially recessed, at least not according to Senate traditions. As the AP story notes, the Senate has been having pro forma sessions every three days for the express purpose of preventing there from being a recess during which recess appointments could be made. Though done at Republican insistence now, the practice of adjourning without recessing began in 2007 when Senate Democrats sought to prevent President Bush from making recess appointments. According to The Hill, an Obama Administration Justice Department official previously said a recess must be at least three days and a CRS report reported that in the past thirty years no recess appointment has been made during a recess of fewer than ten days. As the CRS report also notes, thus far President Obama has made recess appointments at a significantly slower rate than either of his two immediate predecessors.
UPDATE: From the LA Times:
While the Constitution gives the president the authority to fill executive branch vacancies when the Senate is in recess, a Justice Department opinion in 1993 implied that a recess of more than three days was needed before the president could exercise the power, according to the nonpartisan Congressional Research Service. No such appointments have been made during recesses of fewer than 10 days over the last 20 years, the service said in a December report.
On Thursday, U.S. District Court Judge Reggie Walton dismissed Kucinich v. Obama, a suit filed by ten members of Congress alleging that President Obama’s use of military force in Libya was unlawful as it violated the War Powers Act and lacked Congressional authorization. Judge Walton held the members of Congress lacked standing to bring the challenge, as they had ample legislative means at their disposal to oppose the President’s use of military force. Judge Walton noted a “long line of cases” that “all but foreclosed the idea that a member of Congress can assert legislative standing to maintain a suit against a member of the Executive Branch,” including a relative recent case involving a suit by Rep. Kucinich against then-President Bush. Judge Walton added in a footnote:
Interestingly, Representative Kucinich, the lead plaintiff in Kucinich v. Bush, the case in which these words were written, is the lead plaintiff in this case in which members of Congress are again attempting to bring an action against Executive Branch officials. Indeed, the plaintiffs “acknowledge the contrary result” reached by the District of Columbia Circuit in a case also involving alleged presidential violations of the War Powers Clause and the War Powers Resolution. See Pls.’ Opp’n at 17. While there may conceivably be some political benefit in suing the President and the Secretary of Defense, in light of shrinking judicial budgets, scarce judicial resources, and a heavy caseload, the Court finds it frustrating to expend time and effort adjudicating the relitigation of settled questions of law. The Court does not mean to imply that the judiciary should be anything but open and accommodating to all members of society, but is simply expressing its dismay that the plaintiffs are seemingly using the limited resources of this Court to achieve what appear
This Wednesday at 12:15 PM, I will be debating the legality of the Libya intervention at the University of Akron Law School with Akron law professor Wilson Huhn.
is an illegal, unconstitutional joint select committee, created by the Budget Control Act of 2011, enacted on August 2, 2011. The Act was intended to consolidate dictatorial power and prevent the rapid process of sovereign default that would have resulted from the 2011 U.S. Debt Ceiling Crisis and forced the U.S. government to be more accountable for their actions.
I expect that the rhetoric will be removed in the Wikipedia entry in due course, but I’ve heard others likewise argue that the committee is somehow an unconstitutional “Super Congress” to which congressional power has been improperly delegated.
I don’t think this is right; Amanda Rice (Just Enrichment) has a good analysis of why the plan for the Committee (see Title IV of the Budget Control Act) is indeed constitutional, and commenter Brian Bishop adds more on the nondelegation point. Here’s my quick analysis:
1. Article I, § 5 of the Constitution provides that “Each House may determine the Rules of its proceedings.” This is the basis for how a wide variety of Congressional decisions are delegated in the first instance to committees, and how some matters are delegated to joint committees. And the Act makes clear that, “The provisions of this title are enacted by Congress … as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively, and as such they shall be considered as part of the rules of each House, respectively, or of that House to which they specifically apply.”
2. This power doesn’t extend to actually allowing some other body, whether a Committee or not, to do things that [...]
GWU law professor Jonathan Turley has filed suit against the Obama Administration on behalf of several members of Congress, including Reps. Dennis Kucinich (D-OH) and Walter Jones (R-NC). The complaint alleges that President Obama acted unlawfully by going to war in Libya without Congressional authorization and seeks, among other things, an order that the military action in Libya constitutes a war that was undertaken without Congressional authorization, as required by the Constitution, and an injunction ”to end the violations alleged above, including but not limited to an order to suspend military operations in Libya absent a declaration of war from Congress.”
It is extremely unlikely this lawsuit will go anywhere. I would be very surprised were it not dismissed on political questions grounds, and simply flabbergasted were a court to actually order that the U.S. military suspend operations in Libya (or anywhere else, for that matter). If Congress feels that the President has overstepped his authority, then Congress has to act directly, conducting oversight and (if necessary) cutting off funds for operations it seeks to stop.
I doubt Congress will use the power of the purse, but a milder confrontation over the war power is possible. Speaker of the House John Boehner recently called upon the Adminsitration to seek Congressional approval of the Libya operations or explain why the War Powers Act is inapplicable. As Charlie Savage reports in the NYT, the Obama Administration has taken the latter course, telling Congress that this is not the sort of operation covered by the Act.
“We are acting lawfully,” said Harold Koh, the State Department legal adviser, who expanded on the administration’s reasoning in a joint interview with White House Counsel Robert Bauer.
The two senior administration lawyers contended that American forces have not been in “hostilities” at least since April 7, when NATO took over
A federal statute enacted in 1976 — Pub. L. 94-503, quoted in the notes follow 28 U.S.C.A. § 532 — says that the Director of the FBI shall be appointed by the President, with the advice and consent of the Senate, for 10 years, and “A Director may not serve more than one ten-year term.” (That was apparently a reaction to the power accumulated by J. Edgar Hoover during his many years in office.) Now “The Obama administration is asking Congress to extend by two years the term of FBI Director Robert Mueller, who transformed the bureau to fight terrorism.” (See this Bloomberg story.)
I don’t have much to say about the question whether Mueller should serve an extra two years; but I do think that statutes such as this create an interesting constitutional situation. The Constitution’s Appointments Clause provides:
[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.
This allows the President to appoint certain officers, if the Senate agrees, but it leaves no role for the House, or for previous sessions of the Senate. Congressional statutes therefore may not limit the President’s power under the Appointments Clause to appoint whomever he chooses.
But at the same time the Senate is entitled to block the President’s nomination, for whatever reason strikes the Senators as suitable, including that the Senators believe the appointee had already [...]
One rider [to the bill] – Section 2262 — de-funds certain White House adviser positions – or “czars.” The president in his signing statement declares that he will not abide by it.
“The President has well-established authority to supervise and oversee the executive branch, and to obtain advice in furtherance of this supervisory authority,” he wrote. “The President also has the prerogative to obtain advice that will assist him in carrying out his constitutional responsibilities, and do so not only from executive branch officials and employees outside the White House, but also from advisers within it. Legislative efforts that significantly impede the President’s ability to exercise his supervisory and coordinating authorities or to obtain the views of the appropriate senior advisers violate the separation of powers by undermining the President’s ability to exercise his constitutional responsibilities and take care that the laws be faithfully executed.”
Therefore, the president wrote, “the executive branch will construe section 2262 not to abrogate these Presidential prerogatives.”
This raises an extremely serious constitutional question: if Congress has refused to fund the “czars,” where exactly does President Obama get the authority and funding to pay them?
Remember Iran-Contra? The problem for the Reagan Administration there was that Congress banned the president from allocating money to the Contras. The Administration, quite illegally in my view, tried to get around that ban by using funds from arm sales to Iran to subvert the Congressional ban.
At least the Reagan Administration had the decency to do this secretly, knowing that it was acting unconstitutionally. Moreover, the Reagan folks at least were able to claim that they technically weren’t violating the Congressional ban, because they weren’t using Congressionally allocated funds, but the proceeds from arms sales.
The Obama Administration, [...]
This Thursday, I will be taking part in a panel on the legal issues raised by US intervention in the Libya, sponsored by the George Mason University International Law Society. The panel is entitled “Is There Any Law to Hold Us in Libya?” and will be held at George Mason University School of Law at noon. The address is 3301 Fairfax Drive in Arlington, Room 121.
The other panelists will be my law school colleague Jeremy Rabkin, Professor Jeremy Mayer of the GMU School of Public Policy, and Professor Agnieszka Paczynska of the Institute for Conflict Analysis and Resolution.
Perhaps best of all, there will be free food, including pizza.