Why Did the White House Pass Over McConnell?:
Over at Balkinization, Marty Lederman has a very interesting post on a passage in Jan Crawford Greenberg's excellent book on why the White House passed over Judge Michael McConnell for a seat on the Supreme Court. The passage states:
With some, it took one bad opinion to knock them out. [F]ederal appeals court judge Michael McConnell was a favorite of some conservatives, but he'd written a decision earlier in the spring that would have subjected police officers to sweeping liability for actions while on the job. That was enough for [Deupty White House Counsel William] Kelley.
  The decision in question is Lawrence v. Reed, a case that involved a Wyoming Sherriff's decision to order the removal of about 70 unsightly derelict vehicles from a woman's property pursuant to a local ordinance. Under the local ordinance, the police could notify the owner of the vehicle of the city's plan to remove derelict vehicles, and then, after waiting a period, it could remove them. A city fair was coming, and the town council wanted these particular vehicles removed. The Sherriff met with the city attorney and the city manager to discuss how to enforce the ordinance, and they agreed on an arrangement. The Sheriff ended up taking away the 70 vehicles and bringing them to the dump. The owner of the vehciles then sued the government and the sherriff for an unlawful taking of her vehicles without a hearing required by the Due Process clause.

  In the Lawrence case, the Sheriff conceded that he had violated the owner's constitutional rights. With the benefit of hindsight, the ordinance was clearly unconstitional, as it allowed the Sheriff to take private property without a hearing required by the Due Process clause. The question in the case was whether the Sheriff was entitled to qualified immunity, on the theory that he reasonably could have believed that his conduct was constitutional. Judge McConnell concluded that the answer was "no," as a reasonable official should have realized that the ordinance was unconstitutional and that he could not take the vehicle without a hearing. He wrote:
What [the Sherriff] really wants us to conclude is that it is generally reasonable to rely on the city attorney’s advice—that it is the attorney’s job, not the police officer’s, to point out when a statutorily authorized course of conduct violates the Constitution. But this is an argument that officers should not be held responsible for knowing the law in the first place, not that consultation with the city attorney somehow interfered with that knowledge. Given [the Sheriff's] concession that his conduct violated Mrs. Lawrence’s clearly established rights, and given the Supreme Court’s admonishment that "a reasonably competent public official should know the law governing his conduct," Harlow, 457 U.S. at 819, Mr. Reed must point to something in his consultation with the city attorney that prevented him from knowing the law. This he has not done.
  Judge Hartz dissented, arguing that a reasonable officer would think his actions were legal:
In the present case [the Sheriff] fully informed the City Attorney of the relevant surrounding circumstances and how he intended to proceed. The City Attorney gave his imprimatur. It would be contrary to [existing law] to tell officials like the sheriff that they cannot rely on their chief nonsubordinate government attorneys but must postpone action (to conduct their own research or call a professor at the nearest law school?) or risk being sued.
  Marty Lederman asks why the White House ruled out McConnell based on this opinion:
[T]he court's actual holding in Lawrence is exceedingly narrow and fairly uncontroversial, and has almost no precedential effect.

So the mystery, then, is why this decision might have been so troubling to the White House that it served to disqualify Judge McConnell from consideration. Here's one possibility, the only one I can think of that makes any sense at all (unless Greenberg's sources are simply wrong):

. . . [If] Lawrence is properly understood as a case not about the arcane question of when the law is "clearly established" for purposes of qualified immunity, but instead as a decision rejecting the idea that reliance on government counsel is necessarily a "reasonable" ground for engaging in conduct that would otherwise be understood as unlawful, the White House's unease with Judge McConnell becomes much more explicable. This is, after all, an Administration in which officials of the CIA, NSA and Defense Department often balked when requested to engage in conduct of dubious legality ("enhanced" interrogation techniques; warrantless electronic surveillance), only to be assured that they could reasonably rely upon very unorthodox legal advice from the Department of Justice — including, in the case of the August 2002 OLC torture opinion, advice about the Commander-in-Chief Clause that "never once discussed" much of the "applicable constitutional law" (such as the Steel Seizure decision and Little v. Barreme).

. . . [O]ne can easily imagine why Deputy Counsel Kelley might have been concerned by Judge McConnell's reasoning in Lawrence. If one or more Administration officers or employees later found themselves facing possible criminal sanction, and they were to invoke a reliance-on-OLC defense, it would be a bit disconcerting, to say the least, to be confronted with a recent decision of a Justice McConnell stressing that "reasonably competent public officials" should "know the law governing [their] conduct," and that discussion with counsel changes the equation only if the defendants can "point to something in his consultation with the [counsel] that prevented him from knowing the law."
  That's a possibility, but I don't think we know enough to tell. (And reasonably enough; it's hard to guess why someone you have never met did something he allegedly did.) Reading over the Lawrence opinion for the first time, though, I'm not sure which side is right. My instincts have me leaning towards Judge Hartz's dissent, but I'm not familiar enough with the cases -- especially the 10th Circuit precedents -- to read any sort of conclusion. However, Judge Hartz's dissent uses pretty strong language, and it could be that Kelley misread the (in)significance of the decision in light of the dissent. And of course this assumes that Greenberg's sources have it right; it's quite possible that they presented a misleading picture of why McConnell was ruled out.