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Does the U.S. Constitution protect economic liberty, such as the right to work in an occupation of one’s choosing free from unreasonable government regulation? Pennsylvania Supreme Court Justice David Wecht thinks not. Writing in dissent last week in Ladd v. Real Estate Commission of the Commonwealth of Pennsylvania, Wecht faulted his colleagues in the majority for their “judicial intrusion into the realm of legislative value judgments” after that court allowed a legal challenge to proceed against a state occupational licensing scheme. “I cannot endorse a constitutional standard that encourages courts,” he declared, “to second-guess the wisdom, need, or appropriateness” of duly enacted economic regulations.

In Wecht’s telling, the Pennsylvania Supreme Court is now living in its “own Lochner era,” a reference to the U.S. Supreme Court’s decision in Lochner v. New York (1905), which struck down a maximum working hours law on the grounds that it served no valid health or safety purpose and violated the right to liberty of contract protected by the 14th Amendment. “For many years, and under the pretext of protecting ‘economic liberty’ and ‘freedom of contract,’ the Supreme Court routinely struck down laws that a majority of the Court deemed unwise or improvident,” Wecht wrote of Lochner and several related cases. “Most now recognize that those decisions had nothing to do with the text or history of the Constitution; they were based upon nothing more than the policy preferences of the justices who signed on to them.”

Respectfully, I would encourage Justice Wecht to read some more legal history. He might start with the speeches of Rep. John Bingham (R–Ohio). In 1866 Bingham served as the principal author of Section One of the 14th Amendment, which, among other things, forbids the states from passing or enforcing laws which violate the privileges or immunities of citizens. As Bingham told the House of Representatives, “the provisions of the Constitution guaranteeing rights, privileges, and immunities” includes “the constitutional liberty…to work in an honest calling and contribute by your toil in some sort to the support of yourself, to the support of your fellow men, and to be secure in the enjoyment of the fruits of your toil.”

That view was widely shared at the time by those who framed and ratified the amendment. What is more, even those who opposed the passage of the 14th Amendment agreed that it was designed to protect economic liberty from overreaching state regulation—indeed, that was a big reason why they opposed the amendment in the first place. Rep. Andrew Jackson Rogers (D–N.J.), for example, complained to the House that “all the rights we have under the laws of the country are embraced under the definition of privileges and immunities….The right to contract is a privilege….I hold if that ever becomes a part of the fundamental law of the land it will prevent any State from refusing to allow anything to anybody embraced under this term of privileges and immunities.” The “right to contract” was of course later secured by the Supreme Court in Lochner.

Contrary to Justice Wecht’s flawed assertion, economic liberty most certainly does have something to do with the text and history of the Constitution.

Related: “Lochner Isn’t a Dirty Word.”

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From today’s opinion by Judge Brian McDonald:

On April 15, 2020, WASHLITE filed a first amended complaint alleging that Fox violated the Consumer Protection Act …. The complaint alleges that in February and March 2020, hosts and guests on Fox’s programs falsely described the coronavirus as a “hoax” and falsely minimized the threat of the coronavirus and COVID-19. According to WASHLITE, “[t]hese representations were deceptive because they caused consumers to fail to take appropriate action to protect themselves and others from the disease, mitigate its spread, and contributed to a public health crisis and a subsequent state wide shut down causing damage to businesses and the loss of employment by persons located in Washington State.”

By way of relief, WASHLITE seek an order enjoining Fox from televising any misinformation regarding COVID-19, an order directing Fox to issue specific retractions of every false and/or misleading statement, and treble damages.

WASHLITE does not dispute that the speech at issue in this case involves a matter of great public importance. Instead, it argues that Fox, as a cable programmer, does not have the same First Amendment rights accorded to newspapers and broadcast television stations. According to WASHLITE, “cable programmers do not have First Amendment rights on the cable medium” and, therefore, Fox “does not have First Amendment protections on the cable medium.”

These assertions do not hold up to scrutiny. Over 25 years ago, the United States Supreme Court held, “There can be no disagreement on an initial premise: Cable programmers and cable operators engage in and transmit speech, and they are entitled to the protection of the speech and press provisions of the First Amendment.” Turner Broad. Sys., Inc. v. F.C.C. (1994). The Court observed that, “[t]hrough ‘original programming or by exercising editorial discretion over which stations or programs to include in its repertoire,’ cable programmers and operators ‘see[k] to communicate messages on a wide variety of topics and in a wide variety of formats.'”

The case primarily relied upon by WASHLITE, Denver Area Educ. Telcoms. Consortium v. FCC (1996), does not stand for the notion that providers of cable news programs lack First Amendment rights. The Denver decision held that a statute authorizing cable operators to refuse to carry indecent programming on leased access channels did not violate the First Amendment. In the opinion, the Court continued to acknowledge the existence of “the First Amendment interests of cable operators and other programmers.” WASHLITE’s attempt to distinguish cable programmers from other media providers is not supported by the relevant caselaw.

In its briefing, WASHLITE also argues the First Amendment does not apply because “there is no First Amendment right to lie.” The law on this issue is more nuanced than suggested by WASHLITE.

In United States v. Alvarez (2012), the United States Supreme Court held that the Stolen Valor Act, which made it a crime to falsely claim to be a Congressional Medal of Honor recipient, was unconstitutional under the First Amendment. In his plurality opinion, Justice Kennedy explained, “Absent from those few categories where the law allows content-based regulation of speech is any general exception to the First Amendment for false statements. This comports with the common understanding that some false statements are inevitable if there is to be an open and vigorous expression of views in public and private conversation, expression the First Amendment seeks to guarantee.”

In Alvarez, Justice Kennedy in his plurality opinion and Justice Breyer in his concurrence set forth examples of where narrowly tailored statutes properly allowed for civil claims or criminal prosecution based upon falsehoods. For example, Justice Kennedy noted that “[e]ven when considering some instances of defamation and fraud, moreover, the Court has been careful to instruct that falsity alone may not suffice to bring the speech outside the First Amendment. The statement must be a knowing or reckless falsehood.”

The speech in this case involves matters of public concern that is at the heart of the First Amendment’s protection, and WASHLITE does not explain how its CPA claim in this case might fall under the few categories identified in Alvarez.

Washington courts have previously rejected attempts to use the CPA to punish speech made by the media. In Fid. Mort. Corp. v. Seattle Times Co. (Wash. Ct. App. 2005), the Court of Appeals upheld the trial court’s dismissal of a CPA claim against the Seattle Times based upon an allegedly false and deceptive mortgage rate chart published in the newspaper. In doing so, the court held “the quarterly rate chart is not paid advertising. It is a news article, and as such it is not published ‘in the conduct of any trade or commerce.’ It does not fall within those activities governed by [the CPA].”

In many of the United States Supreme Court’s seminal First Amendment decisions, the motives for seeking to curtail or prohibit speech were understandable and could be considered righteous. Yet, as the Supreme Court recognized, “If there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.” Texas v. Johnson (1989). WASHLITE’s professed goal in this lawsuit—to ensure that the public receives accurate information about the coronavirus and COVID-19—is laudable. However, the means employed here, a CPA claim against a cable news channel, runs afoul of the protections of the First Amendment….

I think this is generally quite right, certainly as to the “cable television is unprotected” argument (see this post) and likely also as to the “false statements about epidemics are unprotected” argument (see this post). I also think the alleged misinformation on Fox’s part consisted of expressions of opinion, not false statements of fact (see this post), but the judge’s reasoning here made it unnecessary for him to decide that.

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If there is one thing the coronavirus pandemic has shown, it’s that regulation gets in the way. 

Americans for Tax Reform, a conservative non-profit that advocates for lower taxes, has compiled a running—and growing—list of federal and state rules and regulations relaxed or suspended during the crisis. As of this writing, the list is up to 561 regulations. Unsurprisingly, many of the rollbacks are specifically related to the provision of health care services, one of the most heavily regulated sectors of the economy. But the regulatory rollbacks span the gamut, from legalizing cocktails to-go and relaxing rules governing distillery production of hand sanitizer to small business lending reforms to allowing “remote marriage” in a number of states. 

Each of these rules formerly made it more difficult to conduct one’s business or personal affairs, and each made it more difficult to respond, or merely live, in a pandemic. It’s both sad and telling that it took a unique global health crisis for policymakers to decide that they were not worth the costs they imposed.  

One reason why is that the costs of regulation are not always obvious. The nature of rulemaking is to impose hidden costs, especially when, at the federal level, the writing of regulations is largely delegated to executive branch agencies not subject to the same budgetary processes and pressures that govern Congress. 

Instead, to calculate the cost of these sorts of rules, we must turn to independent estimates like The Ten Thousand Commandments, an annual survey of the cost of the federal regulatory state produced by Clyde Wayne Crews, the vice president for policy at the Competitive Enterprise Institute, a libertarian think tank. 

The latest edition of the report, out today, tabulates the total yearly cost of federal regulation at $1.9 trillion. That’s equal to about 9 percent of the total national economy. In addition, the federal government spent about $72 billion to administrate these rules, according to an estimate by The Weidenbaum Center at Washington University in St. Louis and the George Washington University Regulatory Studies Center in Washington, D.C. That breaks down to an average of about $14,000 per household annually. If it were a tax, the total burden would be larger than all corporate and personal income taxes combined. 

The majority of these rules come from just a handful of federal agencies, according to the report: The Departments of Commerce, Defense, Health and Human Services, the Interior, Transportation, the Treasury, and the Environmental Protection Agency, which together account for a little more than half of all conventional federal regulations. It is not too hard to see the impact these agencies have on nearly every aspect of life: Although unelected, they have become de facto lawmaking entities, setting legally enforceable rules whose costs Congress never explicitly considered. On average, in 2019, each federal law resulted in 28 new rules—up from 11 per law in 2018. 

Courts, meanwhile, have adopted a doctrine that amounts to presumptive deference to agency interpretations of rules under which any “rational basis” will do. Federal agencies not only get to make rules that act as laws, they are granted considerable leeway to decide what those rules mean. 

CEI has been tabulating these costs since 1993; since then, federal agencies have issued more than 107,000 rules. President Trump has, to his credit, taken steps to reduce the flow of federal regulation, implementing a two-in, one-out rule. But even that effort is slowing, with the Trump administration claiming only 1.7 rules “out” for every one rule “in” in 2019. 

And Trump’s own impulses threaten his successes: As Crews writes, the president “has pruned rules and costs and held down regulatory output with more enthusiasm than other presidents,” but his administration has also pushed forward with new rules concerning antitrust, hospital pricing, social media regulations, trade restrictions, vaping, farming and agriculture, the telecom industry, immigration, and more. “When all is said and done,” the report concludes, “the administrative state cannot be said to have fundamentally changed under Trump.”

The same can be said about the regulatory rollbacks spurred by the coronavirus. Although some rule changes are likely to be made permanent, the various governmental pipelines that produce them are likely to remain in place, and, in some cases, empowered. Still, the hundreds of rollbacks are a reminder of the myriad regulations that rule and restrict our lives every day—how onerous they are, how unnecessary, and how easy it is to live without them. 

Disclosure: I worked at the Competitive Enterprise Institute from 2005 through 2007. 

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It’s been almost seven years to the day since the state of Indiana seized resident Tyson Timbs’ Land Rover for a drug crime, launching a legal odyssey that would take Timbs all the way to the Supreme Court and lead to a landmark ruling on civil asset forfeiture.

On Tuesday, Timbs arrived home to find that same Land Rover back in his driveway.

Although the Indiana Attorney General is still appealing Timbs’ case at the Indiana Supreme Court—the third time the court has been asked to consider the tangled case of Timbs’ SUV—his car has been returned for the moment, according to the Institute for Justice, a libertarian-leaning public interest law firm that represents Timbs and has challenged forfeiture laws in several states. 

“For years, this case has been important not just for me, but for thousands of people who are caught up in forfeiture lawsuits,” Tyson said in a press release. “To me, the State’s refusal to give back my car has never made sense; if they’re trying to rehabilitate me and help me help myself, why do you want to make things harder by taking away the vehicle I need to meet with my parole officer or go to a drug recovery program or go to work? Forfeiture only makes it more challenging for people in my position to clean up and be contributing members of society.”

Timbs pleaded guilty in 2015 to selling heroin to undercover police officers and was sentenced to one year of house arrest and five years of probation. But Indiana also used a practice known as civil asset forfeiture to seize his $42,000 Land Rover, which Timbs purchased with money from his late father’s life insurance payout, not the proceeds of drug sales.

Under civil asset forfeiture laws, police can seize property—cash, cars, and even houses—suspected of being connected to criminal activity. Law enforcement groups say civil asset forfeiture is a critical tool for disrupting drug trafficking and other organized crime. 

However, civil liberties groups say the practice creates perverse profit incentives for police and is disproportionately used against low-level offenders like Timbs, and in many cases against people who aren’t even charged with a crime. More than half of U.S. states have passed some form of asset forfeiture reforms in response to these concerns.

Timbs challenged the seizure, arguing that taking his vehicle, which was worth four times the maximum fine for the crime he committed, amounted to an unconstitutionally excessive fine under the Eighth Amendment. The Indiana Supreme Court rejected that argument on the grounds that the U.S. Supreme Court had never explicitly ruled that the Eighth Amendment applies to the states—a doctrine known as “incorporation.”

Last February, the Supreme Court unanimously ruled that the Eighth Amendment and its protections against excessive fines and fees applied to states. “For good reason, the protection against excessive fines has been a constant shield throughout Anglo-American history,” Justice Ruth Bader Ginsburg wrote in the Court’s opinion. The ruling opened up a new avenue for plaintiffs like Timbs trying to challenge asset forfeiture in court.

The Supreme Court, however, did not rule on what constituted an “excessive” fine. It kicked that question back to the Indiana Supreme Court, which created a three-prong test last October to determine when a government fine or seizure is disproportionate to the alleged offense. The Indiana Supreme Court in turn sent Timbs’ case back to a state trial court to be reconsidered.

In April, an Indiana judge ruled that, under the new test, the seizure of Timbs’ Land Rover—”a tool essential to maintaining employment, obtaining treatment, and reducing the likelihood that he would ever again commit another criminal offense”—was unconstitutionally excessive and ordered the vehicle returned.

The Indiana Attorney General is now appealing that decision to the state supreme court, again.

“Tyson’s case has gone through every level of the American judicial system—in some instances, twice,” Institute for Justice senior attorney Wesley Hottot said in a statement. “The state’s relentless use of its forfeiture machine is—and continues to be—a profoundly unjust exercise of power, and it underscores that civil forfeiture is one of the greatest threats to property rights in the nation today.”

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Almost exactly three months ago, the first major outbreak of COVID-19 within the United States occurred at a nursing home in Washington state.

Now, after more than 100,000 Americans have died from the disease that has swept across the country and wrecked wide swaths of the economy, it appears that nursing homes are still the most vulnerable places—by a wide margin.

In at least 22 states, more than half the reported COVID-19 fatalities have occurred in nursing homes and other long-term care facilities, according to state-reported data aggregated by researchers at the Foundation for Research on Equal Opportunity (FREOPP), a free market think tank focused on low-income Americans. Across the 39 states that report the location of COVID-19 deaths, 42 percent have occurred in nursing and residential care facilities, a tally that includes facilities for the care of people with disabilities as well as hospice programs.

For comparison, the Centers for Disease Control and Prevention (CDC) estimates that 2.1 million Americans live in nursing homes or long-term care facilities. That’s 0.6 percent of the total population.

And the 42 percent figure may even be undercounting nursing home deaths. As Avik Roy, president of FREOPP, explained in an article for Forbes, some states (including New York, which has experienced a large COVID-19 outbreak) “exclude from their nursing home death tallies those who die in a hospital, even if they were originally infected in an assisted living facility.”

That’s probably why New York’s official nursing home death rate is only 13.8 percent, the lowest count of any state that reports the location of infections and deaths. But outside of New York, more than half of all COVID-19 fatalities nationally were residents of nursing homes and other long-term care facilities.

These residents have been most vulnerable to COVID-19 in other countries, too. Researchers at the International Long Term Care Policy Network, a global organization that shares research and best practices, found that 40.8 percent of reported COVID-19 fatalities across 18 countries took place in nursing homes.

There are probably several reasons why nursing homes have been particularly hard hit by the pandemic. Most residents of nursing homes are elderly or infirm, with many people suffering from long-term ailments or particularly vulnerable due to weakened immune systems. People live close together, sharing living quarters and common spaces like cafeterias. And there is good evidence that the coronavirus spreads more efficiently indoors.

But some states made policy choices in the early days of the COVID-19 pandemic that may have made nursing homes even more vulnerable to the disease. Governors in some states—including Michigan, New York, and Pennsylvania—prevented nursing homes from turning away patients with active COVID-19 infections. Those policies likely helped spread the disease to some of the most vulnerable populations.

Other states, like Florida, have locked down nursing homes and prioritized shipments of personal protective equipment (PPE) to those facilities, putting them on the same level as hospitals. That may help explain why Florida has had fewer overall deaths than other large states—despite 40 percent of those deaths occurring in nursing homes—and it’s something other states should copy.

As states emerge from total lockdowns and begin to restart their economies, policies must adapt to reflect the growing body of evidence about COVID-19 vulnerabilities. We now have a better idea about the overall fatality rate of the disease—about 0.3 percent, lower than was feared at earlier stages in the crisis. We also know more about how the disease spreads and which populations need the most protection.

That doesn’t, of course, mean that anyone not living in a nursing home is safe from the virus, it does not soften the blow of the deaths that have already occurred, nor will it make deaths of friends and loved ones any easier. But the concentration of deaths in nursing homes should give younger, healthier Americans more confidence about returning to some semblance of normal life and should inform public policy decisions about how to slow the disease’s spread.

“The fact that nearly half of all COVID-19 deaths have occurred in long-term care facilities means that the 99.4 percent of the country that doesn’t live in those places is roughly half as likely to die of the disease,” writes Roy. That means schools and many businesses can be reopened without the risk of huge spikes in hospitalizations or deaths, according to him, and that states must learn from their earlier missteps in handling nursing home outbreaks. These data have implications for policy making as states look to safely reopen their economies.

The coronavirus is going to be a long-term problem, but the next step in fighting it is for governments to lift economically ruinous lockdowns when possible and focus on saving the lives most at risk.

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Yesterday I highlighted former judge Michael Luttig’s critique of Judge Emmet Sullivan’s handling of the Department of Justice’s motion to dismiss the charges against former National Security Advisor Michael Flynn.

Stuart Gerson, who served as Assistant Attorney General in the George H.W. Bush Administration and briefly as Acting Attorney General, has a response to Luttig’s op-ed in today’s Washington Post. Here’s a taste:

Luttig argues in his op-ed that the appeals court should step in to replace the advisory counsel that Sullivan selected to argue against the motion to dismiss, block the receipt of briefs from friends of the court (including one in which I participated), and name a new trial court judge to oversee the case. With due respect, he is wrong on all counts. . . .

This would be unwarranted, unfair and an inefficient use of judicial resources. Sullivan has overseen the Flynn case, has accepted his guilty plea and is well-versed in the facts. He has done nothing improper in dealing with the extraordinary move by the government, at the 11th hour, to abandon its own case. He is an independent thinker who has stood up to the Justice Department before, most notably in using an outside counsel to uncover the tarnished prosecution of the late Sen. Ted Stevens (R-Alaska.) In this situation, that is an asset, not a demerit.

Sullivan’s concern about the gravity and complexity of the issue before him is understandable, as is his effort to establish mechanisms to help ensure that he has the benefit of a competing view now that the government has aligned itself with the defense’s effort to end the case. The D.C. Circuit should let him proceed.

 

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