Speaking of Quotes from the Early 1800s …

Let me offer two more (besides the one about Queen Caroline), which came to mind when contemplating the most recent talk of impeachment. First, credited to Napoleon:

When the enemy is making a false movement we must take good care not to interrupt him.

Second, credited to a French official of the era (though apparently not Talleyrand):

It is worse than a crime, it is a mistake.

Just some multipurpose lines that I’ve long liked, offered for whatever meaning you might find in them. (As with all such lines, analogies to a current situation are never perfect, and many distinctions can always be drawn; the question is whether there is still enough of a connection to inspire some insight.)

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The Death Throes of the Republican Party

One can never really predict the future, but yesterday sure felt like one of those turning-point days in American history, one in which a switch is thrown and we all move onto a very different track than the one we had been traveling on.

Over the past month, I had puzzled over the President’s motives in deciding to continue—and to intensify—his attacks on the legitimacy of Biden’s victory.  Was he actually hoping that he’d get a January 6 Miracle?  That Mike Pence would say “I will not count the certified electoral count from Arizona [and Georgia, and Pennsylvania]” and throw the election into the House? Could be. Or perhaps he was merely positioning himself for a post-presidency role as movement leader, Republican kingpin, or television star? Or perhaps it was just the simple inability of a very, very insecure man to accept the public humiliation of an electoral defeat, with no greater strategic goal in mind?

But whatever his motives were (or are), it seemed pretty clear that one virtually certain outcome of his provocations would be that the Republican Party would be rent in two. Thanks to his pressing the issue, Congressional Republicans would have no place to hide. He would force a totally unnecessary and entirely futile “are-you-with-me-or-are-you-against-me moment” on every one of them. And he would be taking names.

And so it happened—in a manner almost unimaginable a few days ago*—and the Republican Party has indeed been rent in two.  It looks to me, though, like the President may have miscalculated a bit, and that, here again, he has come up short, and is left holding the smaller of the two portions.

* If you imagined that the President of the United States would send a message saying “We love you, you’re very special” to armed rioters who had forcibly occupied the US Capitol, your powers of imagination are superior to mine.

I watched most of the Senate debate yesterday and last night, and the sight of the Republican Senators, one after another—McConnell, Toomey, Lee, Loeffler, Daines, Romney, Paul, Portman, Sasse, Graham, …—publicly repudiating the President, refusing to do the one thing everyone knew he wanted them to do, was absolutely breath-taking. It was as though they had all, suddenly, awoken from a bad dream, after four years in which they had collectively cowered in the corner, afraid to say a single word that might draw the ire of the Capo, lest he direct his terrible fury at them.

How many of them would have done so had not a majority of their colleagues also done so is an interesting question we’ll never be able to answer. But the fact is that the majority of their Republican colleagues, for once, did not cave in, and one can’t help but think that the collective nature of the response help strengthen some of the backbones involved.

It was the answer to the question that many of us had been asking for years:  When, if ever, would they push back?  What, if anything, is over the line?  Is there anything—short of shooting someone on Fifth Avenue—that would make them say “Enough is enough”?

The President, intentionally or not, finally found the line—with two weeks to go in his presidency—that only the True Believers would cross.

He may declare war on the Infidels who refused to join him in the coming months and years, or others may do so on his behalf.  We shall see. But he would be doing so from a much, much weaker position than he was in just a few days ago, because his “base,” all of a sudden, is a lot smaller than it was before. The Party turned its back on him; only seven of 52 Republican Senators, once the line was drawn, crossed it at his behest. Fifteen percent—of Republicans. And I’m pretty confident that no more than the same small fraction of the Republican electorate—more than, say, that 15%—will stand behind a president (let alone an ex-president) who sent his love and good wishes to armed rioters** who had forcibly occupied the US Capitol.

**Although many commentators are using the term “insurrection” to describe yesterday’s events, I prefer calling it a “mob riot.”  To my ears, “insurrection” connotes that someone has a plan. It may not be shared by others, and it might not even make a lot of sense; but once the gates are stormed, someone has a step 2: Take over the TV station, or run the new flag up the flagpole, or take opponents into custody (or shoot them on sight), or issue a declaration, … Something.  From what I could see, it didn’t look like anyone (let alone the collective) had a plan yesterday for their assault on the Capitol other than generally whooping it up and getting their picture taken sitting in Nancy Pelosi’s office. This event looked quite a bit like the takeover of the University Administration Building at Columbia in 1968; it was much more serious than that, of course, because it was directed at the US Capitol, and because many of the rioters were, apparently, armed, but the perpetrators seemed to possess the same general cluelessness of what the point of the exercise was.

Donald Trump cannot control the Republican Party from that 15% perch. Two days ago the Republican Party was securely within his grip.  Today, it is not.

As it turns out, the forces he unleashed gave him no place to hide.

What the Republican Party will look like in the aftermath of this debacle is anybody’s guess. But I do think the rioters may actually have—inadvertently, to be sure—performed a great service for the country. I am among those who believe that the country needs something it has not had for some time: A functioning, principled, conservative Republican Party. The events of January 6 have exposed for all to see the anti-democratic and dictatorial heart of Trumpism, and helped to push push it off to the fringe of the political landscape where it belongs. For that, we should all be grateful.

 

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Speaking of Quotes from the Early 1800s …

Let me offer two more (besides the one about Queen Caroline), which came to mind when contemplating the most recent talk of impeachment. First, credited to Napoleon:

When the enemy is making a false movement we must take good care not to interrupt him.

Second, credited to a French official of the era (though apparently not Talleyrand):

It is worse than a crime, it is a mistake.

Just some multipurpose lines that I’ve long liked, offered for whatever meaning you might find in them. (As with all such lines, analogies to a current situation are never perfect, and many distinctions can always be drawn; the question is whether there is still enough of a connection to inspire some insight.)

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Queen Caroline

Queen Caroline, the wife of King George IV, was put on trial (in effect) before Parliament in 1820, on charges of adultery. One of her lawyers cited the Bible passage that ends with Jesus saying, “Neither do I condemn thee: go, and sin no more.” This may have been inapt, since the defense was arguing that Caroline was factually innocent, whereas Jesus’s was that we should forgive even the guilty (since none of us is without sin). But in any event, this led an unknown wag to write,

Most Gracious Queen, we thee implore
To go away and sin no more
Or if that effort be too great
To go away at any rate.

For some reason this passage has been going through my mind.

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Queen Caroline

Queen Caroline, the wife of King George IV, was put on trial (in effect) before Parliament in 1820, on charges of adultery. One of her lawyers cited the Bible passage that ends with Jesus saying, “Neither do I condemn thee: go, and sin no more.” This may have been inapt, since the defense was arguing that Caroline was factually innocent, whereas Jesus’s was that we should forgive even the guilty (since none of us is without sin). But in any event, this led an unknown wag to write,

Most Gracious Queen, we thee implore
To go away and sin no more
Or if that effort be too great
To go away at any rate.

For some reason this passage has been going through my mind.

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Incitement and Ordinary Speakers; Duty and Political Leaders

A friend asked me whether Trump’s speech yesterday could be punished as criminal incitement of the appalling Capitol riot.

I doubt it, at least as I read what Trump was saying. Under Brandenburg v. Ohio, even “advocacy of the use of force or of law violation” can’t be punished unless it “is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.” Saying things that foreseeably move some audience members to act illegally isn’t enough. Speaking recklessly isn’t enough. The Court was well aware that speech supporting many movements—left, right, or otherwise—that merely moves the majority to political action may also lead a minority of the movement to rioting or worse. It deliberately created a speech-protective test that was very hard to satisfy.

And that test of course applies equally to all speakers, politicians or otherwise. If an ordinary citizen said what Trump had said, it seems to me very hard to see how prosecutors can show beyond a reasonable doubt that he was intentionally promoting a riot (see, e.g., Hess v. Indiana), or even intentionally promoting trespassing. (Intentionally promoting trespassing might or might not lead to civil negligence liability for foreseeable injuries as a result of the trespassing, which is the issue in the Mckesson v. Doe litigation that the Court sent back to the Fifth Circuit recently. But again I doubt this can be found here.) I might be mistaken here, but that’s my sense based on what I’ve seen.

In theory, statements that don’t facially call for illegal conduct could be found to implicitly advocate it, and to be implicitly intended to be understood as calls for illegal conduct. One hears academics and even occasionally judges, for instance, point to Marc Antony’s funeral speech for Caesar (“Brutus is an honourable man”) in discussing such a posibility, but in practice this is very unlikely under modern incitement law. And such a specific intent to incite illegal conduct is especially hard to find where the speaker actually had a good deal to lose politically from his supporters’ violence. (Members of Congress might be swayed by a fear of losing elections, but, for all their faults, I think they’re quite unlikely to be swayed by rioters at the Capitol, and are indeed likely to be swayed against their positions.)

Nor should we want ordinary citizens to be criminally punished for such speech. Again, a great deal of fiery rhetoric aimed at promoting peaceful political pressure—whether related to racial equality, abortion, police brutality, gun rights, environmentalism, animal rights, labor, or a vast range of other topics—can lead some people to act violently. Yet Brandenburg was quite right, I think, that such rhetoric needs to be protected, despite the violent action by some listeners that it might foreseeably cause. We certainly shouldn’t let outrage against Trump allow the distortion of a constitutional rule that protects speakers generally.

The problem here is that it’s Trump’s job to prevent and stop rioting, especially rioting against federal institutions. He’s supposed to prevent and stop such behavior even when it’s promoted by total strangers to him. He has a special responsibility to prevent and stop such behavior by people who are on his side, since those are the ones whom he can most effectively try to calm even when they’re already in a rioting mood.

He most certainly isn’t supposed to say things—even constitutionally protected things—that are pretty likely to cause harms of the sort that we hired him to stop. The incitement test, which applies equally to all speakers, doesn’t capture this factor, nor should it. This factor is all about the special responsibilities of government officials (Presidents, governors, mayors, police chiefs, legislators, and the like). Such officials are supposed to be politically savvy enough to know what’s likely to produce (even contrary to their intentions) criminal conduct, and are supposed to organize their speech and action in a way that minimizes this, rather than making it especially likely.

Trump’s failure was a failure not as a speaker, of the sort that strips speakers of First Amendment protection. It was a failure, a massive and unjustifiable failure, as a public servant.

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When Are We Going to Admit that Trump is Unfit to be President?

I posted this at Instapundit, where the readership, and some of the bloggers, have been unvaryingly pro-Trump:

I know this isn’t going to win me any popularity contests with most Instapundit readers, but I’m here to express my opinion, not to reflect readers’, so here goes.

There is no evidence of widespread fraud that could plausibly be said to have cost Trump the election, nor even a single state. It’s true the media and big tech was overtly pro-Biden, and while that’s not good for democracy it’s also not illegal or fraudulent, and thus has no bearing on whether Biden won the election or not. And all that is why Trump’s lawyers lost every single case they brought before judges of all parties and ideologies, including a dozen or so rulings by Trump-appointed federal judges who would undoubtedly have preferred that he won.

But it’s more serious than that. Even if you accept any of the not-completely-crazy theories I’ve seen of how the election was “stolen,” at best that gets Trump to a narrow victory in the Electoral College. Yet the president continues to insist not just that he won, not just that the election was stolen, but that he won in a “landslide.”

There is no excuse for political violence, and Trump, admittedly, did not ask anyone to engage in violence. However, if you tell people that their votes didn’t count, that the election was a sham, that the election you lost wasn’t even close but in fact a landslide in your favor, it’s only natural to expect that some people will be inclined to resort to violence, because the whole point of elections is to settle political matters without violence. If the election process is a total fraud, then violence is to be expected.

Even in the face of the violence yesterday, Trump, while telling the rioters to go home, also continued to insist that he really won in a landslide, thus continuing to foment violence. He is unfit to be president. And no, that doesn’t excuse all the examples of bad behavior on the left over the past 4 years, and that bad behavior undoubtedly created an atmosphere in which violence becomes more acceptable (not least by the tacit and sometimes explicit acceptance of the mass violence last Summer). But the basic moral principle of “two wrongs don’t make a right” still applies. Sometimes f you fight fire with fire, you burn down your house.

 

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Incitement and Ordinary Speakers; Duty and Political Leaders

A friend asked me whether Trump’s speech yesterday could be punished as criminal incitement of the appalling Capitol riot.

I doubt it, at least as I read what Trump was saying. Under Brandenburg v. Ohio, even “advocacy of the use of force or of law violation” can’t be punished unless it “is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.” Saying things that foreseeably move some audience members to act illegally isn’t enough. Speaking recklessly isn’t enough. The Court was well aware that speech supporting many movements—left, right, or otherwise—that merely moves the majority to political action may also lead a minority of the movement to rioting or worse. It deliberately created a speech-protective test that was very hard to satisfy.

And that test of course applies equally to all speakers, politicians or otherwise. If an ordinary citizen said what Trump had said, it seems to me very hard to see how prosecutors can show beyond a reasonable doubt that he was intentionally promoting a riot (see, e.g., Hess v. Indiana), or even intentionally promoting trespassing. (Intentionally promoting trespassing might or might not lead to civil negligence liability for foreseeable injuries as a result of the trespassing, which is the issue in the Mckesson v. Doe litigation that the Court sent back to the Fifth Circuit recently. But again I doubt this can be found here.) I might be mistaken here, but that’s my sense based on what I’ve seen.

In theory, statements that don’t facially call for illegal conduct could be found to implicitly advocate it, and to be implicitly intended to be understood as calls for illegal conduct. One hears academics and even occasionally judges, for instance, point to Marc Antony’s funeral speech for Caesar (“Brutus is an honourable man”) in discussing such a posibility, but in practice this is very unlikely under modern incitement law. And such a specific intent to incite illegal conduct is especially hard to find where the speaker actually had a good deal to lose politically from his supporters’ violence. (Members of Congress might be swayed by a fear of losing elections, but, for all their faults, I think they’re quite unlikely to be swayed by rioters at the Capitol, and are indeed likely to be swayed against their positions.)

Nor should we want ordinary citizens to be criminally punished for such speech. Again, a great deal of fiery rhetoric aimed at promoting peaceful political pressure—whether related to racial equality, abortion, police brutality, gun rights, environmentalism, animal rights, labor, or a vast range of other topics—can lead some people to act violently. Yet Brandenburg was quite right, I think, that such rhetoric needs to be protected, despite the violent action by some listeners that it might foreseeably cause. We certainly shouldn’t let outrage against Trump allow the distortion of a constitutional rule that protects speakers generally.

The problem here is that it’s Trump’s job to prevent and stop rioting, especially rioting against federal institutions. He’s supposed to prevent and stop such behavior even when it’s promoted by total strangers to him. He has a special responsibility to prevent and stop such behavior by people who are on his side, since those are the ones whom he can most effectively try to calm even when they’re already in a rioting mood.

He most certainly isn’t supposed to say things—even constitutionally protected things—that are pretty likely to cause harms of the sort that we hired him to stop. The incitement test, which applies equally to all speakers, doesn’t capture this factor, nor should it. This factor is all about the special responsibilities of government officials (Presidents, governors, mayors, police chiefs, legislators, and the like). Such officials are supposed to be politically savvy enough to know what’s likely to produce (even contrary to their intentions) criminal conduct, and are supposed to organize their speech and action in a way that minimizes this, rather than making it especially likely.

Trump’s failure was a failure not as a speaker, of the sort that strips speakers of First Amendment protection. It was a failure, a massive and unjustifiable failure, as a public servant.

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When Are We Going to Admit that Trump is Unfit to be President?

I posted this at Instapundit, where the readership, and some of the bloggers, have been unvaryingly pro-Trump:

I know this isn’t going to win me any popularity contests with most Instapundit readers, but I’m here to express my opinion, not to reflect readers’, so here goes.

There is no evidence of widespread fraud that could plausibly be said to have cost Trump the election, nor even a single state. It’s true the media and big tech was overtly pro-Biden, and while that’s not good for democracy it’s also not illegal or fraudulent, and thus has no bearing on whether Biden won the election or not. And all that is why Trump’s lawyers lost every single case they brought before judges of all parties and ideologies, including a dozen or so rulings by Trump-appointed federal judges who would undoubtedly have preferred that he won.

But it’s more serious than that. Even if you accept any of the not-completely-crazy theories I’ve seen of how the election was “stolen,” at best that gets Trump to a narrow victory in the Electoral College. Yet the president continues to insist not just that he won, not just that the election was stolen, but that he won in a “landslide.”

There is no excuse for political violence, and Trump, admittedly, did not ask anyone to engage in violence. However, if you tell people that their votes didn’t count, that the election was a sham, that the election you lost wasn’t even close but in fact a landslide in your favor, it’s only natural to expect that some people will be inclined to resort to violence, because the whole point of elections is to settle political matters without violence. If the election process is a total fraud, then violence is to be expected.

Even in the face of the violence yesterday, Trump, while telling the rioters to go home, also continued to insist that he really won in a landslide, thus continuing to foment violence. He is unfit to be president. And no, that doesn’t excuse all the examples of bad behavior on the left over the past 4 years, and that bad behavior undoubtedly created an atmosphere in which violence becomes more acceptable (not least by the tacit and sometimes explicit acceptance of the mass violence last Summer). But the basic moral principle of “two wrongs don’t make a right” still applies. Sometimes f you fight fire with fire, you burn down your house.

 

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The Changing Face of the SEC Restitution Remedy

In Liu v. SEC, the Court trimmed the sails of the SEC’s ability to get equitable restitution under the name “disgorgement.” Justice Thomas’s dissent correctly said there was no traditional equitable remedy of disgorgement. The majority correctly said that although the name “disgorgment” may have been new, there was a longstanding practice of equitable restitution, under names like “accounting for profits.” And the majority reined in the SEC practice, requiring it to conform more closely to traditional equitable requirements (including the principle that there are no penalties in equity, a principle best explained in the Heydon opinion in the Australian case of Harris v. Digital Pulse).

But what tied together the majority and dissent was that the SEC suits for restitution, if they were to be allowed, had to be justified by recourse to the history of equity. The reason for this focus on equitable restitution was plain enough, because the statutory basis for relief was an authorization of “equitable relief.”

Now restitution comes in two flavors: legal and equitable. Legal restitution comes from the old common counts, Moses v. Macferlan, etc., and for a while the term in vogue for this category was “quasi-contract.” Other terms are “restitution via money judgment” or simply “legal restitution.” Equitable restitution is organized according to a set of distinctive remedies–accounting for profits and then various proprietary remedies (constructive trust, equitable lien, subrogation).

Although the SEC has typically sought equitable restitution (understandably, given the statutory authorization), one could imagine the SEC being authorized to sue for legal restitution, which would be subject to different powers and limits.

An aside: note that the word disgorgement doesn’t tell us anything about whether the remedy sought is legal or equitable. The word is a late twentieth-century coinage (as Justice Thomas correctly notes). It’s used sometimes as a term for non-proprietary equitable restitution (i.e., accounting for profits), sometimes as a term for any gain-based equitable remedy (covering both accounting for profits and constructive trust, e.g.), and sometimes as a term for any gain-based remedy whether legal or equitable (covering accounting for profits, constructive trust, quasi-contract).

So where does this leave us? Well, the SEC has been seeking a remedy it calls “disgorgement,” and that remedy is characterized as equitable because the statute authorizes equitable relief, and the Supreme Court has recently upheld the SEC’s ability to obtain that equitable relief while also reasserting some of the traditional limitations on equitable restitution.

But the statute just changed. Section 6501 of the Defense Authorization Act, enacted a few days ago over the veto of President Trump, changes the statutory authorization for remedies available to the SEC. (You can find the law here, but it’s massive: search for “disgorgement.” I’m grateful to my colleague Patty O’Hara for bringing it to my attention.)

In part the changes to the statute shore up the SEC’s authority. Now the SEC is specifically authorized to seek and obtain “disgorgement.” The statutory amendment also seems to support Liu v. SEC‘s criticism of joint-and-several liability, criticism which the Court based on traditional equitable practice. (Critique of joint-and-several liability was a point developed in the restitution scholars’ brief in Liu.)

Now this is where things get interesting. The statutory revision classifies the remedy of “disgorgement” as not being an equitable remedy. It sets up two statute of limitations periods. One is for “disgorgement” (with qualifications, five years) and the other is for “any equitable remedy, including for an injunction or for a bar, suspension, or cease and desist order” (with qualifications, ten years). The structure of the statute is very clear. Subsection (a)(8) is called “Limitations Periods”; and under that heading subsection (A) is titled “Disgorgement” and subsection (B) is titled “Equitable Remedies.” It is inescapable from the text and headings that the authorized remedy of “disgorgement” is not being classified as an equitable remedy.

The conclusion that follows is that the remedy Congress has authorized the SEC to seek is a legal restitutionary remedy. Because this remedy, which it still calls “disgorgement,” is not equitable, it is not subject to the traditional requirements of equitable restitution (including the avoidance of penalties). So the limits of Liu v. SEC do not apply (though they would apply to other agencies with statutes similar to the prior statute for the SEC).

But the SEC restitutionary remedy is subject to other rules and principles. And, because the SEC remedy is now one for legal restitution, the defendants have a right to a jury trial under the Seventh Amendment and the remedy cannot be enforced with contempt. A current overview of the distinction between legal and equitable restitution can be found in the “Remedies” chapter in the Oxford Handbook of the New Private Law. And here’s a paragraph from p. 326 of Ames, Chafee, and Re on Remedies (edited by Emily Sherwin and me):

To be a successful litigator, the essential thing is for you to recognize the range of terminology and learn the usage in your own jurisdiction. Whatever label is used, when a plaintiff prevails on a legal restitutionary claim, the court will award a judgment for a certain amount of money. That judgment resembles an award of damages (except, of course, that it is measured by the defendant’s gain and not by the plaintiff’s loss). That the restitutionary claim is legal, as opposed to equitable, has several important consequences. These include the possibility of a jury, the lack of various equitable defenses, the lack of equitable enforcement powers such as contempt, and the lack of preferential treatment in bankruptcy. The opposite is true for a claim for one of the equitable restitutionary remedies, such as accounting for profits, constructive trust, and equitable lien.

It is clear that this statutory revision is a response to Liu v. SEC. But it is not a straightforward repudiation of that case. The focus on the statute of limitations might derive from the predecessor case, Kokesh v. SEC (a point for which I’m indebted to Caprice Roberts). But whatever the reason for Congress’s choice, its decision to reclassify the SEC’s restitutionary remedy as legal winds up meaning that it is outside of Liu v. SEC entirely—outside of its approval, and outside of its limitation. It’s a new world ahead, and I suspect securities lawyers, inside and outside the government, are going to start reading up on legal restitution.

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