Stupid Federal Shipping Regulations Will Prevent Alaskans From Buying Alaskan Natural Gas

A newly announced plan to tap into natural gas reserves in northern Alaska promises to produce 4 million tons of liquid natural gas (LNG) annually over the next 20 years. Yet not a single drop of that will go to Americans, thanks to a nonsensical federal shipping regulation.

ExxonMobile and Qilak LNG, an Alaska-based subsidiary of a Dubai-based energy firm, announced plans last month to extract natural gas from the state’s far northern reaches, along the coast of the Arctic Ocean. Because there are no pipelines serving that remote region, the two companies say they will export the gas via icebreaking ships equipped to carry LNG. Shipping LNG from northern Alaska across the Bering Strait to markets in Asia will be 40 percent less expensive than building a pipeline across the state.

But thanks to the Jones Act, a 1920s federal law regulating American shipping, Alaskans (and Americans in general) won’t get to use a single drop of the 80 million tons of LNG expected to be extracted. No icebreaking LNG-carrying vessels currently meet the Jones Act’s stringent requirements to serve American ports.

Under the terms of the law, ships carrying goods from one American port to another must be American-built and American-flagged, and must have a crew that’s at least 75 percent American. It will be perfectly legal for non-American vessels to pick-up LNG from the new production facilities in northern Alaska, but not if they stop at any other American ports to offload even a portion of their cargo.

There’s nothing wrong with exporting that energy, of course, but it seems ridiculous to cut off Alaskans from the benefits of resources found in their own backyards. That’s doubly true considering that Alaskans pay higher than average energy prices—a fact that itself is partly attributable to the Jones Act.

It’s not just Alaska. All remote parts of the United States that do not have access to natural gas pipelines suffer because of the Jones Act. Puerto Rico imports natural gas from Russia because it is illegal to ship natural gas from Texas or Louisiana to the island in a non-Jones-Act-compliant vessel. The same thing happened recently in New England, when Russian natural gas had to be imported by ship when pipeline capacity was insufficient to meet demand.

The Jones Act “evidently creates large cost inefficiencies by protecting the shipbuilding industry—a tiny economic sector in the U.S.—at the expense of other U.S. industries with enormous economic potential,” researchers for the Organization for Economic Cooperation and Development concluded in a report released earlier this year. Abolishing the Jones Act would lower the cost of shipping between U.S. ports by as much as 50 percent, the report concluded. That would boost the American economy by $135 billion, three times the size of the U.S. shipbuilding industry.

In the meantime, the artificially higher shipping costs created by the Jones Act have direct consequences for the people who live in places like Puerto Rico or Alaska. The median income in Puerto Rico is less than half of what it is in the poorest U.S. state, but the cost of living there is higher than the U.S. average. The numbers for Alaska are less dramatic, but similar.

For all those costs, the Jones Act doesn’t seem to deliver much in the way of benefits.

The number of ships that meet the Jones Act’s requirements for operating between American ports has shrunk from 193 in 2000 to just 99 in 2018. It costs more than three times as much to build a cargo ship in America as it does in some other countries, according to a 2017 report from the Cato Institute, and American shipping companies respond to that incentive by buying foreign-built ships. That means there are fewer ships capable of serving American ports. Fewer ships mean higher prices.

Indeed, the large shipyard in Philadelphia—which has twice been bailed out by taxpayers—currently has no orders for new ships. The most recent vessel built there, a $209 million cargo ship that will shuttle goods between the West Coast and Hawaii, is six times smaller and yet $50 million more expensive than the world’s largest cargo ship.

“Denied the benefits of foreign competition, this sector has failed to innovate and reduce costs, in turn depressing demand for its offerings,” wrote Cato Institute trade scholars Colin Grabow and Inu Manak earlier this year.

No wonder there aren’t any LNG carriers that meet the Jones Act’s requirements. If you create legal barriers that artificially raise the cost of doing business in one place, investments and jobs are naturally going to flow somewhere else.

Sen. Mike Lee (R–Utah) has introduced a bill to repeal the Jones Act, and President Donald Trump once even offered tepid support for the idea—but that was before lawmakers from shipbuilding states convinced him it was a bad idea.

The end result of this ludicrous pile of protectionism is that Alaskan natural gas will be sent to Asia while Alaskans pay to import their fuel from Russia and elsewhere. Global trade is a wonderful thing, but prohibiting Americans from buying American-produced natural gas just because it wasn’t delivered in an American-built ship makes little sense.

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Stupid Federal Shipping Regulations Will Prevent Alaskans From Buying Alaskan Natural Gas

A newly announced plan to tap into natural gas reserves in northern Alaska promises to produce 4 million tons of liquid natural gas (LNG) annually over the next 20 years. Yet not a single drop of that will go to Americans, thanks to a nonsensical federal shipping regulation.

ExxonMobile and Qilak LNG, an Alaska-based subsidiary of a Dubai-based energy firm, announced plans last month to extract natural gas from the state’s far northern reaches, along the coast of the Arctic Ocean. Because there are no pipelines serving that remote region, the two companies say they will export the gas via icebreaking ships equipped to carry LNG. Shipping LNG from northern Alaska across the Bering Strait to markets in Asia will be 40 percent less expensive than building a pipeline across the state.

But thanks to the Jones Act, a 1920s federal law regulating American shipping, Alaskans (and Americans in general) won’t get to use a single drop of the 80 million tons of LNG expected to be extracted. No icebreaking LNG-carrying vessels currently meet the Jones Act’s stringent requirements to serve American ports.

Under the terms of the law, ships carrying goods from one American port to another must be American-built and American-flagged, and must have a crew that’s at least 75 percent American. It will be perfectly legal for non-American vessels to pick-up LNG from the new production facilities in northern Alaska, but not if they stop at any other American ports to offload even a portion of their cargo.

There’s nothing wrong with exporting that energy, of course, but it seems ridiculous to cut off Alaskans from the benefits of resources found in their own backyards. That’s doubly true considering that Alaskans pay higher than average energy prices—a fact that itself is partly attributable to the Jones Act.

It’s not just Alaska. All remote parts of the United States that do not have access to natural gas pipelines suffer because of the Jones Act. Puerto Rico imports natural gas from Russia because it is illegal to ship natural gas from Texas or Louisiana to the island in a non-Jones-Act-compliant vessel. The same thing happened recently in New England, when Russian natural gas had to be imported by ship when pipeline capacity was insufficient to meet demand.

The Jones Act “evidently creates large cost inefficiencies by protecting the shipbuilding industry—a tiny economic sector in the U.S.—at the expense of other U.S. industries with enormous economic potential,” researchers for the Organization for Economic Cooperation and Development concluded in a report released earlier this year. Abolishing the Jones Act would lower the cost of shipping between U.S. ports by as much as 50 percent, the report concluded. That would boost the American economy by $135 billion, three times the size of the U.S. shipbuilding industry.

In the meantime, the artificially higher shipping costs created by the Jones Act have direct consequences for the people who live in places like Puerto Rico or Alaska. The median income in Puerto Rico is less than half of what it is in the poorest U.S. state, but the cost of living there is higher than the U.S. average. The numbers for Alaska are less dramatic, but similar.

For all those costs, the Jones Act doesn’t seem to deliver much in the way of benefits.

The number of ships that meet the Jones Act’s requirements for operating between American ports has shrunk from 193 in 2000 to just 99 in 2018. It costs more than three times as much to build a cargo ship in America as it does in some other countries, according to a 2017 report from the Cato Institute, and American shipping companies respond to that incentive by buying foreign-built ships. That means there are fewer ships capable of serving American ports. Fewer ships mean higher prices.

Indeed, the large shipyard in Philadelphia—which has twice been bailed out by taxpayers—currently has no orders for new ships. The most recent vessel built there, a $209 million cargo ship that will shuttle goods between the West Coast and Hawaii, is six times smaller and yet $50 million more expensive than the world’s largest cargo ship.

“Denied the benefits of foreign competition, this sector has failed to innovate and reduce costs, in turn depressing demand for its offerings,” wrote Cato Institute trade scholars Colin Grabow and Inu Manak earlier this year.

No wonder there aren’t any LNG carriers that meet the Jones Act’s requirements. If you create legal barriers that artificially raise the cost of doing business in one place, investments and jobs are naturally going to flow somewhere else.

Sen. Mike Lee (R–Utah) has introduced a bill to repeal the Jones Act, and President Donald Trump once even offered tepid support for the idea—but that was before lawmakers from shipbuilding states convinced him it was a bad idea.

The end result of this ludicrous pile of protectionism is that Alaskan natural gas will be sent to Asia while Alaskans pay to import their fuel from Russia and elsewhere. Global trade is a wonderful thing, but prohibiting Americans from buying American-produced natural gas just because it wasn’t delivered in an American-built ship makes little sense.

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Are Iranian-Americans Presumptively “Socially Disadvantaged”?

The Small Business Administration has programs that favor “socially disadvantaged” business owners. Under the relevant law, African Americans, Hispanics, Asians (but not Asians from east of India), and members of federally-recognized tribes are presumptively socially disadvantaged. The SBA has the authority to recognize additional groups. In the late 1980s, an Iranian-American group petitioned for the SBA to be recognize Iranian-Americans as presumptively socially disadvantaged, based on the hostility they face due to their skin color and hostility to Iran. The petition was denied. The SBA found that any hostility to Iranian-Americans was primarily political, and such hostility does not constitute social disadvantage within the meaning of the law:

The Small Business Act and the conference report to the 8(a) authorizing legislation, Public Law 95–507, define social disadvantage in terms of racial or ethnic prejudice or cultural bias. No mention is made of politically motivated bias being a cause for 8(a) group eligibility. See H.R.Rep. No. 1714, 95th Cong., 2d Sess. 20–23, reprinted in 1978 U.S.CODE CONG. & ADMIN.NEWS 3879, 3881–3884. Animosity toward a group of persons based on political events cannot constitute “ethnic or racial prejudice or cultural bias” within the meaning of the law. Such a posture seems reasonable when the consequences of admitting a group based on political affiliation or bias because of that affiliation are considered. If such were the case, then any group that espoused an unpopular political belief could successfully petition the SBA for minority group status. That is clearly not the intent of Public Law 95–507.

The distinction between “ethnic” and “cultural” bias and the bias faced by Iranian-Americans eludes me, and of course any “political bias” faced by Iranians is not because they espouse unpopular beliefs, but because of ethnic stereotypes of what Iranians are thought to believe. Nevertheless, the law of ethnic preferences is filled with arbitrary classifications, and this is just one of them.

One recurring issue is whether being of Spanish descent, by itself, is sufficient to qualify one as socially disadvantaged. Some administrative law judges have denied “Hispanic” status based on “Northern European” appearance, birth certificates designating the applicant as white, lack of fluency in Spanish, and lack of ties to the Hispanic community. Other ALJs have ruled that none of those factors may even be considered once the applicant has established that he is of Spanish descent and is therefore of “Hispanic origin” within the literal meaning of the statute.

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Mark Janus doesn’t get his money back

Last year, Eugene and I wrote an article about compelled subsidies and the Supreme Court’s decision in Janus v. AFSCME, where (among other things) we talked about the possibility that those who were charged fees held unconstitutional by Janus might be able to bring claims against the unions who collected the money. Fred Smith and Aaron Tang, as well as Erwin Chemerinsky and Catherine Fisk, wrote skeptical responses.

On Tuesday, the Seventh Circuit decided the first court of appeals opinion about these post-Janus suits—in Mark Janus’s very case, as well as a related case—and it ruled in favor of the unions. In an opinion by Chief Judge Wood, the court concluded that these suits are effectively suits for damages, and that they are subject to a “good faith” defense.

Here is the heart of its reasoning:

A. Existence of Good-faith defense

We now turn to the ultimate question in this case: to what remedy or remedies is Mr. Janus entitled? As the Supreme Court wrote in Davis v. United States, 564 U.S. 229 (2011), retroactivity and remedy are distinct questions. “Retroactive application does not … determine what ‘appropriate remedy’ (if any) the defendant should obtain.” Id. at 243; see also American Trucking Ass’ns, Inc. v. Smith, 496 U.S. 167, 189 (1990) (plurality opinion) (“[T]he Court has never equated its retroactivity principles with remedial principles….”). It thus does not necessarily follow from retroactive application of a new rule that the defendant will gain the precise type of relief she seeks. See Powell v. Nevada, 511 U.S. 79, 84 (1994). To the contrary, the Supreme Court has acknowledged that the retroactive application of a new rule of law does not “deprive[ ] respondents of their opportunity to raise … reliance interests entitled to consideration in determining the nature of the remedy that must be provided.” James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 544 (1991).

Sometimes the law recognizes a defense to certain types of relief. An example that comes readily to mind is the qualified immunity doctrine, which is available for a public employee if the asserted constitutional right that she violated was not clearly established. See, e.g., Ashcroft v. al-Kidd, 563 U.S. 731 (2011). We must decide whether a union may raise any such defense against its liability for the fair-share fees it collected before Janus II.

This is a matter of first impression in our circuit. But, as the district court noted, every federal appellate court to have decided the question has held that, while a private party acting under color of state law does not enjoy qualified immunity from suit, it is entitled to raise a good-faith defense to liability under section 1983. See Clement v. City of Glendale, 518 F.3d 1090, 1096–97 (9th Cir. 2008); Pinsky v. Duncan, 79 F.3d 306, 311–12 (2d Cir. 1996); Vector Research, Inc. v. Howard & Howard Attorneys P.C., 76 F.3d 692, 698–99 (6th Cir. 1996); Jordan v. Fox, Rothschild, O’Brien & Frankel, 20 F.3d 1250, 1275–78 (3d Cir. 1994); Wyatt v. Cole, 994 F.2d 1113, 1118–21 (5th Cir. 1993) (“Wyatt II”).

Mr. Janus takes issue with this consensus position. He points to the text of section 1983, which we grant says nothing about immunities or defenses. That, he contends, is the end of the matter. “Shall be liable to the party injured” is mandatory language that, in his view, allows for no exceptions. The problem with such an absolutist position, however, is that the Supreme Court abandoned it long ago, when it recognized that liability under section 1983 is subject to common-law immunities that apply to all manner of defendants.

The Court discussed that history in Wyatt I, where it noted that despite the bare-bones text of section 1983, it had “accorded certain government officials either absolute or qualified immunity from suit if the tradition of immunity was so firmly rooted in the common law and was supported by such strong policy reasons that Congress would have specifically so provided had it wished to abolish the doctrine.” 504 U.S. at 163–64 (quoting Owen v. City of Independence, 445 U.S. 622, 637 (1980)) (internal quotation marks omitted). In Wyatt I, the Court had to decide how far its immunity jurisprudence reached, and specifically, whether private parties acting under color of state law would have been able, at the time section 1983 was enacted (in 1871), to invoke the same immunities that public officials had. (That is more than a bit counterfactual, as the Court did not recognize this type of private liability until 1982, but we put that to one side.) Surveying its immunity jurisprudence, including Mitchell v. Forsyth, 472 U.S. 511, (1985), Harlow v. Fitzgerald, 457 U.S. 800 (1982), Wood v. Strickland, 420 U.S. 308 (1975), and Pierson v. Ray, 386 U.S. 547 (1967), the Court “conclud[ed] that the rationales mandating qualified immunity for public officials are not applicable to private parties.” 504 U.S. at 167, 112 S.Ct. 1827.

The Court recognized that this outcome risked leaving private defendants in the unenviable position of being just as vulnerable to suit as public officials, per Lugar, but not protected by the same immunity. Id. at 168. But, critically for AFSCME, the Court pointed toward the solution to that problem. It distinguished between defenses to suit and immunity from suit, the latter of which is more robust, in that it bars recovery regardless of the merits. Id. at 166. It then confirmed that its ruling rejecting qualified immunity did “not foreclose the possibility that private defendants faced with § 1983 liability under [Lugar] could be entitled to an affirmative defense based on good faith and/or probable cause or that § 1983 suits against private, rather than governmental, parties could require plaintiffs to carry additional burdens.” Wyatt I, 504 U.S. at 169.

Mr. Janus rejects the line that the Court drew between qualified immunity and a defense to liability; he sees it as nothing but a labeling game. But Wyatt I directly refutes this criticism. Adding to the language above from the majority, Justice Kennedy, in concurrence, explained why a defense on the merits might be available for private parties even if immunity is not. “By casting the rule as an immunity, we imply the underlying conduct was unlawful, a most debatable proposition in a case where a private citizen may have acted in good-faith reliance upon a statute.” 504 U.S. at 173 (Kennedy, J., concurring). The distinction between an immunity and a defense is one of substance, not just nomenclature, and “is important because there is support in the common law for the proposition that a private individual’s reliance on a statute, prior to a judicial determination of unconstitutionality, is considered reasonable as a matter of law.” Id. at 174; see also Lugar, 457 U.S. at 942 n.23 (“Justice Powell is concerned that private individuals who innocently make use of seemingly valid state laws would be responsible, if the law is subsequently held to be unconstitutional, for the consequences of their actions. In our view, however, this problem should be dealt with not by changing the character of the cause of action but by establishing an affirmative defense.”).

The Wyatt I Court remanded the case to the Fifth Circuit, which decided that the “question left open by the majority”—whether a good-faith defense is available in section 1983 actions—”was largely answered” in the affirmative by the five concurring and dissenting justices. Wyatt II, 994 F.2d at 1118. The court accordingly held “that private defendants sued on the basis of Lugar may be held liable for damages under § 1983 only if they failed to act in good faith in invoking the unconstitutional state procedures, that is, if they either knew or should have known that the statute upon which they relied was unconstitutional.” Id.
Other circuits followed suit. In Jordan, the Third Circuit noted “the [Supreme Court’s] statement [in Wyatt I] that persons asserting section 1983 claims against private parties could be required to carry additional burdens, and the statements in Lugar which warn us [that] a too facile extension of section 1983 to private parties could obliterate the Fourteenth Amendment’s limitation to state actions that deprive a person of constitutional rights and the statutory limitation of section 1983 actions to claims against persons acting under color of law.” 20 F.3d at 1277 (cleaned up). Those considerations, the court said, lead to the conclusion that ” ‘good faith’ gives state actors a defense that depends on their subjective state of mind, rather than the more demanding objective standard of reasonable belief that governs qualified immunity.” Id. The Sixth Circuit concurred in Vector Research, 76 F.3d at 699, as did the Ninth Circuit in Clement, 518 F.3d at 1096–97. Most recently, in a case decided after Harris v. Quinn, the Second Circuit allowed a good-faith defense to a section 1983 claim for reimbursement of agency fees paid prior to decision. Jarvis v. Cuomo, 660 F. App’x 72, 75–76 (2d Cir. 2016).
Mr. Janus pushes back against these decisions with the argument that there is no common-law history before 1871 of private parties enjoying a good-faith defense to constitutional claims. As we hinted earlier, however, the reason is simple: the liability of private parties under section 1983 was not clearly established until, at the earliest, the Court’s decision in United States v. Price, 383 U.S. 787 (1966). For nearly 100 years, nothing would have prompted the question.

We now join our sister circuits in recognizing that, under appropriate circumstances, a private party that acts under color of law for purposes of section 1983 may defend on the ground that it proceeded in good faith. The final question is whether that defense is available to AFSCME.

B. Good-faith Defense for AFSCME

Although this is a new question for us, we note that every district court that has considered the precise question before us—whether there is a good-faith defense to liability for payments collected before Janus II—has answered it in the affirmative. While those views are not binding on us, the unanimity of opinion is worth noting.

The first task we have under Wyatt I is to identify the “most closely analogous tort” to which we should turn for guidance. 504 U.S. at 164 (citations and internal quotation marks omitted). Arguing in some tension with his statute-of-limitations position, Mr. Janus says that his claim lacks any common law analogue. His back-up position is that good faith is pertinent only if the underlying offense has a state-of-mind element, and he asserts that the most analogous tort in his case lacks such an element.

Mr. Janus compares the First Amendment violation in his case to conversion. But that analogy does not work, at least with regard to the state’s deduction of fair-share fees and its transfer of those fees to the union. Conversion requires an intentional and serious interference with “the right of another to control” a chattel. Restatement (Second) of Torts § 222A (1965). At the time AFSCME received Mr. Janus’s fair-share fees, he had no “right to control” that money. Instead, under Illinois law and Abood, the union had a right to the fees under the collective bargaining agreement with CMS. This rules out conversion. As the Supreme Court said in Chicot Cnty. Drainage Dist. v. Baxter State Bank, 308 U.S. 371 (1940), “the actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored.” Id. at 374.

There are also at least two privileges that may be relevant to a conversion-style claim: authority based upon public interest, Restatement (Second) of Torts § 265 (1965), and privilege to act pursuant to court order, Restatement (Second) of Torts § 266 (1965). Section 265 provides that “one is privileged to commit an act which would otherwise be a trespass to a chattel or a conversion if he is acting in discharge of a duty or authority created by law to preserve the public safety, health, peace, or other public interest, and his act is reasonably necessary to the performance of his duty or the exercise of his authority.” While the usual context for the assertion of this privilege is law enforcement, it is not too much of a stretch to apply it to the union’s conduct here. CMS and AFSCME acted pursuant to state law. That sounds like action in discharge of a duty imposed by law. Section 266, which provides a privilege when one acts pursuant to a court order, is not directly applicable because there was no court order directing AFSCME to receive fair-share fees—Abood was permissive, not mandatory. Nevertheless, CMS and AFSCME did rely on the Supreme Court’s opinion upholding the legality of exactly this process.

AFSCME contends that the better analogy is to the tort of abuse of process. Abuse of process occurs where a party “uses a legal process, whether criminal or civil, against another primarily to accomplish a purpose for which it is not designed.” Restatement (Second) of Torts § 682 (1977). Alternatively, the most analogous tort might be interference with contract. See Restatement (Second) of Torts § 766A (1979). Under the agency-fee arrangement, a certain portion of the salary CMS contracted to pay employees went instead to the union. This arguably made the contract less lucrative for objecting employees and violated their First Amendment rights.

None of these torts is a perfect fit, but they need not be. We are directed to find the most analogous tort, not the exact-match tort. This is inherently inexact. Although there are reasonable arguments for several different torts, we are inclined to agree with AFSCME that abuse of process comes closest. But perhaps the search for the best analogy is a fool’s errand. As several district courts have commented, the Supreme Court in Wyatt I embarked on the search for the most analogous tort only for immunity purposes—the Court never said that the same methodology should be used for the good-faith defense. See, e.g., Carey, 364 F. Supp. 3d at 1229–30; Babb, 378 F. Supp. 3d at 872–73; Diamond, ––– F.Supp.3d –––– at –––– – ––––, 2019 WL 2929875 at *25–26. In the alternative, therefore, we leave common-law analogies behind and consider the appropriateness of allowing a good-faith defense on its own terms.

C. Good-faith Defense under Wyatt I

Like our sister circuits, we read the Court’s language in Wyatt I and Lugar, supplemented by Justice Kennedy’s opinion concurring in Wyatt I, as a strong signal that the Court intended (when the time was right) to recognize a good-faith defense in section 1983 actions when the defendant reasonably relies on established law. This is not, we stress, a simple “mistake of law” defense. Neither CMS nor AFSCME made any mistake about the state of the law during the years between 1982 and June 27, 2018, when Janus II was handed down. Abood was the operative decision from the Supreme Court from 1977 onward, until the Court exercised its exclusive prerogative to overrule that case. Like its counterparts around the country, the State of Illinois relied on Abood when it adopted a labor relations scheme providing for exclusive representation of public-sector workers and the remit of fair-share fees to the recognized union. The union then relied on that state law in its interactions with other actors.

We realize that there were signals from some Justices during the years leading up to Janus II that indicated they were willing to reconsider Abood, but that is hardly unique to this area. Sometimes such reconsideration happens, and sometimes, despite the most confident predictions, it does not. See, e.g., Dickerson v. United States, 530 U.S. 428 (2000) (reaffirming the Miranda rule); see also Agostini, 521 U.S. at 237 (“We do not acknowledge, and we do not hold, that other courts should conclude our more recent cases have, by implication, overruled an earlier precedent.” (cleaned up)). The Rule of Law requires that parties abide by, and be able to rely on, what the law is, rather than what the readers of tea-leaves predict that it might be in the future.

Notably, Mr. Janus does not allege that CMS and AFSCME, acting pursuant to state law, failed to comply with Abood. Mr. Janus says only that AFSCME did not act in good faith because it “spurned efforts to have agency fees placed in escrow while their constitutionality was determined.” But AFSCME was under no legal obligation to escrow the fair-share fees for an indefinite period while the case was being litigated. Such an action, as AFSCME says, would (in the absence of a court order requiring security of some kind) “have been hard to square with the fiduciary duty the Union owes to its own members,” as the unit’s exclusive representative.

Until Janus II said otherwise, AFSCME had a legal right to receive and spend fair-share fees collected from nonmembers as long as it complied with state law and the Abood line of cases. It did not demonstrate bad faith when it followed these rules.

There is something quite intuitive about this result. As we noted in the piece, to hold unions liable for doing what the Supreme Court said they could do up to 2018 recalls the “Otter Principle” from the great authority, Animal House: “You fucked up! You trusted us!”

But I will repeat here what Eugene and I wrote last year, which I still think is correct. This outcome may not be legally correct, and may not survive Supreme Court review:

Post-Janus suits against unions could also provide the setting for an “affirmative defense based on good faith and/or probable cause,” or a new remedial twist to the Court’s civil retroactivity doctrine. Indeed, some lower courts have given private parties a good faith defense to suits under § 1983, to eliminate the apparent unfairness created by the combination of Wyatt and Lugar. A few lawsuits brought against unions under Harris v. Quinn (a precursor to Janus) were dismissed by the lower courts on such grounds. But unions still should not be too confident that they will have such a defense against Janus suits. First, this good faith defense has never been endorsed by the Supreme Court, and there is little clear authority for it. If one of the cases makes it to the Court, there is no guarantee that the Justices will recognize the defense. And if the Court turns to private law analogues for such a defense, it might find that restitution and unjust enrichment provide the better analogue. Second, these particular suits may present a particularly unsympathetic vehicle to the Court. In a discussion of union reliance on Abood, the Court’s opinion in Janus specifically noted that “public-sector unions have been on notice for years regarding this Court’s misgivings about Abood” and opined that, since 2012, “any public-sector union seeking an agency-fee provision in a collective-bargaining agreement must have understood that the constitutionality of such a provision was uncertain.” So even if such a good faith defense were recognized, the courts may well conclude that unions were knowingly gambling on the continued validity of Abood, and therefore cannot complain about their losses.

The Seventh Circuit’s rejection of the analogy to “conversion,” for instance, rests on a view that Abood was “the law” and that nonmembers had no “right to control” their money until the Supreme Court said so. But the conclusion of Janus was that the Constitution provided such a right, and that Abood had been a misinterpretation of the law in failing to recognize that right. And in an earlier part of the Seventh Circuit opinion it claimed to “to assume for the sake of argument that the right recognized in Janus II should indeed be applied … Mr. Janus himself and all others whose cases were in the pipeline at the time of the Court’s decision.” Some of the court’s subsequent analysis seems to be at odds with this assumption.

To be sure, I think it is quite plausible that lower courts will unanimously reject the plaintiffs claims, following the logic of yesterday’s Seventh Circuit decision. And if they do, the Supreme Court will probably not review the cases. But if a split emerges, Supreme Court review seems likely. And if the Supreme Court does review the issue, it is really not clear whether it will find a good faith defense in these circumstances.

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Are Iranian-Americans Presumptively “Socially Disadvantaged”?

The Small Business Administration has programs that favor “socially disadvantaged” business owners. Under the relevant law, African Americans, Hispanics, Asians (but not Asians from east of India), and members of federally-recognized tribes are presumptively socially disadvantaged. The SBA has the authority to recognize additional groups. In the late 1980s, an Iranian-American group petitioned for the SBA to recognize Iranian-Americans as presumptively socially disadvantaged, based on the hostility they face due to their skin color and hostility to Iran. The petition was denied. The SBA found that any hostility to Iranian-Americans was primarily political, and such hostility does not constitute social disadvantage within the meaning of the law:

The Small Business Act and the conference report to the 8(a) authorizing legislation, Public Law 95–507, define social disadvantage in terms of racial or ethnic prejudice or cultural bias. No mention is made of politically motivated bias being a cause for 8(a) group eligibility. See H.R.Rep. No. 1714, 95th Cong., 2d Sess. 20–23, reprinted in 1978 U.S.CODE CONG. & ADMIN.NEWS 3879, 3881–3884. Animosity toward a group of persons based on political events cannot constitute “ethnic or racial prejudice or cultural bias” within the meaning of the law. Such a posture seems reasonable when the consequences of admitting a group based on political affiliation or bias because of that affiliation are considered. If such were the case, then any group that espoused an unpopular political belief could successfully petition the SBA for minority group status. That is clearly not the intent of Public Law 95–507.

The distinction between “ethnic” and “cultural” bias and the bias faced by Iranian-Americans eludes me, and of course any “political bias” faced by Iranians is not because any particular Iranian-Americans espouses unpopular beliefs, but because of ethnic stereotypes of what Iranians are thought to believe. Nevertheless, the law of ethnic preferences is filled with arbitrary classifications, and this is just one of them.

One recurring issue is whether being of Spanish descent, by itself, is sufficient to qualify one as socially disadvantaged. Some administrative law judges have denied “Hispanic” status based on “Northern European” appearance, birth certificates designating the applicant as white, lack of fluency in Spanish, and lack of ties to the Hispanic community. Other ALJs have ruled that none of those factors may even be considered once the applicant has established that he is of Spanish descent and is therefore of “Hispanic origin” within the literal meaning of the statute.

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Mark Janus doesn’t get his money back

Last year, Eugene and I wrote an article about compelled subsidies and the Supreme Court’s decision in Janus v. AFSCME, where (among other things) we talked about the possibility that those who were charged fees held unconstitutional by Janus might be able to bring claims against the unions who collected the money. Fred Smith and Aaron Tang, as well as Erwin Chemerinsky and Catherine Fisk, wrote skeptical responses.

On Tuesday, the Seventh Circuit decided the first court of appeals opinion about these post-Janus suits—in Mark Janus’s very case, as well as a related case—and it ruled in favor of the unions. In an opinion by Chief Judge Wood, the court concluded that these suits are effectively suits for damages, and that they are subject to a “good faith” defense.

Here is the heart of its reasoning:

A. Existence of Good-faith defense

We now turn to the ultimate question in this case: to what remedy or remedies is Mr. Janus entitled? As the Supreme Court wrote in Davis v. United States, 564 U.S. 229 (2011), retroactivity and remedy are distinct questions. “Retroactive application does not … determine what ‘appropriate remedy’ (if any) the defendant should obtain.” Id. at 243; see also American Trucking Ass’ns, Inc. v. Smith, 496 U.S. 167, 189 (1990) (plurality opinion) (“[T]he Court has never equated its retroactivity principles with remedial principles….”). It thus does not necessarily follow from retroactive application of a new rule that the defendant will gain the precise type of relief she seeks. See Powell v. Nevada, 511 U.S. 79, 84 (1994). To the contrary, the Supreme Court has acknowledged that the retroactive application of a new rule of law does not “deprive[ ] respondents of their opportunity to raise … reliance interests entitled to consideration in determining the nature of the remedy that must be provided.” James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 544 (1991).

Sometimes the law recognizes a defense to certain types of relief. An example that comes readily to mind is the qualified immunity doctrine, which is available for a public employee if the asserted constitutional right that she violated was not clearly established. See, e.g., Ashcroft v. al-Kidd, 563 U.S. 731 (2011). We must decide whether a union may raise any such defense against its liability for the fair-share fees it collected before Janus II.

This is a matter of first impression in our circuit. But, as the district court noted, every federal appellate court to have decided the question has held that, while a private party acting under color of state law does not enjoy qualified immunity from suit, it is entitled to raise a good-faith defense to liability under section 1983. See Clement v. City of Glendale, 518 F.3d 1090, 1096–97 (9th Cir. 2008); Pinsky v. Duncan, 79 F.3d 306, 311–12 (2d Cir. 1996); Vector Research, Inc. v. Howard & Howard Attorneys P.C., 76 F.3d 692, 698–99 (6th Cir. 1996); Jordan v. Fox, Rothschild, O’Brien & Frankel, 20 F.3d 1250, 1275–78 (3d Cir. 1994); Wyatt v. Cole, 994 F.2d 1113, 1118–21 (5th Cir. 1993) (“Wyatt II”).

Mr. Janus takes issue with this consensus position. He points to the text of section 1983, which we grant says nothing about immunities or defenses. That, he contends, is the end of the matter. “Shall be liable to the party injured” is mandatory language that, in his view, allows for no exceptions. The problem with such an absolutist position, however, is that the Supreme Court abandoned it long ago, when it recognized that liability under section 1983 is subject to common-law immunities that apply to all manner of defendants.

The Court discussed that history in Wyatt I, where it noted that despite the bare-bones text of section 1983, it had “accorded certain government officials either absolute or qualified immunity from suit if the tradition of immunity was so firmly rooted in the common law and was supported by such strong policy reasons that Congress would have specifically so provided had it wished to abolish the doctrine.” 504 U.S. at 163–64 (quoting Owen v. City of Independence, 445 U.S. 622, 637 (1980)) (internal quotation marks omitted). In Wyatt I, the Court had to decide how far its immunity jurisprudence reached, and specifically, whether private parties acting under color of state law would have been able, at the time section 1983 was enacted (in 1871), to invoke the same immunities that public officials had. (That is more than a bit counterfactual, as the Court did not recognize this type of private liability until 1982, but we put that to one side.) Surveying its immunity jurisprudence, including Mitchell v. Forsyth, 472 U.S. 511, (1985), Harlow v. Fitzgerald, 457 U.S. 800 (1982), Wood v. Strickland, 420 U.S. 308 (1975), and Pierson v. Ray, 386 U.S. 547 (1967), the Court “conclud[ed] that the rationales mandating qualified immunity for public officials are not applicable to private parties.” 504 U.S. at 167, 112 S.Ct. 1827.

The Court recognized that this outcome risked leaving private defendants in the unenviable position of being just as vulnerable to suit as public officials, per Lugar, but not protected by the same immunity. Id. at 168. But, critically for AFSCME, the Court pointed toward the solution to that problem. It distinguished between defenses to suit and immunity from suit, the latter of which is more robust, in that it bars recovery regardless of the merits. Id. at 166. It then confirmed that its ruling rejecting qualified immunity did “not foreclose the possibility that private defendants faced with § 1983 liability under [Lugar] could be entitled to an affirmative defense based on good faith and/or probable cause or that § 1983 suits against private, rather than governmental, parties could require plaintiffs to carry additional burdens.” Wyatt I, 504 U.S. at 169.

Mr. Janus rejects the line that the Court drew between qualified immunity and a defense to liability; he sees it as nothing but a labeling game. But Wyatt I directly refutes this criticism. Adding to the language above from the majority, Justice Kennedy, in concurrence, explained why a defense on the merits might be available for private parties even if immunity is not. “By casting the rule as an immunity, we imply the underlying conduct was unlawful, a most debatable proposition in a case where a private citizen may have acted in good-faith reliance upon a statute.” 504 U.S. at 173 (Kennedy, J., concurring). The distinction between an immunity and a defense is one of substance, not just nomenclature, and “is important because there is support in the common law for the proposition that a private individual’s reliance on a statute, prior to a judicial determination of unconstitutionality, is considered reasonable as a matter of law.” Id. at 174; see also Lugar, 457 U.S. at 942 n.23 (“Justice Powell is concerned that private individuals who innocently make use of seemingly valid state laws would be responsible, if the law is subsequently held to be unconstitutional, for the consequences of their actions. In our view, however, this problem should be dealt with not by changing the character of the cause of action but by establishing an affirmative defense.”).

The Wyatt I Court remanded the case to the Fifth Circuit, which decided that the “question left open by the majority”—whether a good-faith defense is available in section 1983 actions—”was largely answered” in the affirmative by the five concurring and dissenting justices. Wyatt II, 994 F.2d at 1118. The court accordingly held “that private defendants sued on the basis of Lugar may be held liable for damages under § 1983 only if they failed to act in good faith in invoking the unconstitutional state procedures, that is, if they either knew or should have known that the statute upon which they relied was unconstitutional.” Id.
Other circuits followed suit. In Jordan, the Third Circuit noted “the [Supreme Court’s] statement [in Wyatt I] that persons asserting section 1983 claims against private parties could be required to carry additional burdens, and the statements in Lugar which warn us [that] a too facile extension of section 1983 to private parties could obliterate the Fourteenth Amendment’s limitation to state actions that deprive a person of constitutional rights and the statutory limitation of section 1983 actions to claims against persons acting under color of law.” 20 F.3d at 1277 (cleaned up). Those considerations, the court said, lead to the conclusion that ” ‘good faith’ gives state actors a defense that depends on their subjective state of mind, rather than the more demanding objective standard of reasonable belief that governs qualified immunity.” Id. The Sixth Circuit concurred in Vector Research, 76 F.3d at 699, as did the Ninth Circuit in Clement, 518 F.3d at 1096–97. Most recently, in a case decided after Harris v. Quinn, the Second Circuit allowed a good-faith defense to a section 1983 claim for reimbursement of agency fees paid prior to decision. Jarvis v. Cuomo, 660 F. App’x 72, 75–76 (2d Cir. 2016).
Mr. Janus pushes back against these decisions with the argument that there is no common-law history before 1871 of private parties enjoying a good-faith defense to constitutional claims. As we hinted earlier, however, the reason is simple: the liability of private parties under section 1983 was not clearly established until, at the earliest, the Court’s decision in United States v. Price, 383 U.S. 787 (1966). For nearly 100 years, nothing would have prompted the question.

We now join our sister circuits in recognizing that, under appropriate circumstances, a private party that acts under color of law for purposes of section 1983 may defend on the ground that it proceeded in good faith. The final question is whether that defense is available to AFSCME.

B. Good-faith Defense for AFSCME

Although this is a new question for us, we note that every district court that has considered the precise question before us—whether there is a good-faith defense to liability for payments collected before Janus II—has answered it in the affirmative. While those views are not binding on us, the unanimity of opinion is worth noting.

The first task we have under Wyatt I is to identify the “most closely analogous tort” to which we should turn for guidance. 504 U.S. at 164 (citations and internal quotation marks omitted). Arguing in some tension with his statute-of-limitations position, Mr. Janus says that his claim lacks any common law analogue. His back-up position is that good faith is pertinent only if the underlying offense has a state-of-mind element, and he asserts that the most analogous tort in his case lacks such an element.

Mr. Janus compares the First Amendment violation in his case to conversion. But that analogy does not work, at least with regard to the state’s deduction of fair-share fees and its transfer of those fees to the union. Conversion requires an intentional and serious interference with “the right of another to control” a chattel. Restatement (Second) of Torts § 222A (1965). At the time AFSCME received Mr. Janus’s fair-share fees, he had no “right to control” that money. Instead, under Illinois law and Abood, the union had a right to the fees under the collective bargaining agreement with CMS. This rules out conversion. As the Supreme Court said in Chicot Cnty. Drainage Dist. v. Baxter State Bank, 308 U.S. 371 (1940), “the actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored.” Id. at 374.

There are also at least two privileges that may be relevant to a conversion-style claim: authority based upon public interest, Restatement (Second) of Torts § 265 (1965), and privilege to act pursuant to court order, Restatement (Second) of Torts § 266 (1965). Section 265 provides that “one is privileged to commit an act which would otherwise be a trespass to a chattel or a conversion if he is acting in discharge of a duty or authority created by law to preserve the public safety, health, peace, or other public interest, and his act is reasonably necessary to the performance of his duty or the exercise of his authority.” While the usual context for the assertion of this privilege is law enforcement, it is not too much of a stretch to apply it to the union’s conduct here. CMS and AFSCME acted pursuant to state law. That sounds like action in discharge of a duty imposed by law. Section 266, which provides a privilege when one acts pursuant to a court order, is not directly applicable because there was no court order directing AFSCME to receive fair-share fees—Abood was permissive, not mandatory. Nevertheless, CMS and AFSCME did rely on the Supreme Court’s opinion upholding the legality of exactly this process.

AFSCME contends that the better analogy is to the tort of abuse of process. Abuse of process occurs where a party “uses a legal process, whether criminal or civil, against another primarily to accomplish a purpose for which it is not designed.” Restatement (Second) of Torts § 682 (1977). Alternatively, the most analogous tort might be interference with contract. See Restatement (Second) of Torts § 766A (1979). Under the agency-fee arrangement, a certain portion of the salary CMS contracted to pay employees went instead to the union. This arguably made the contract less lucrative for objecting employees and violated their First Amendment rights.

None of these torts is a perfect fit, but they need not be. We are directed to find the most analogous tort, not the exact-match tort. This is inherently inexact. Although there are reasonable arguments for several different torts, we are inclined to agree with AFSCME that abuse of process comes closest. But perhaps the search for the best analogy is a fool’s errand. As several district courts have commented, the Supreme Court in Wyatt I embarked on the search for the most analogous tort only for immunity purposes—the Court never said that the same methodology should be used for the good-faith defense. See, e.g., Carey, 364 F. Supp. 3d at 1229–30; Babb, 378 F. Supp. 3d at 872–73; Diamond, ––– F.Supp.3d –––– at –––– – ––––, 2019 WL 2929875 at *25–26. In the alternative, therefore, we leave common-law analogies behind and consider the appropriateness of allowing a good-faith defense on its own terms.

C. Good-faith Defense under Wyatt I

Like our sister circuits, we read the Court’s language in Wyatt I and Lugar, supplemented by Justice Kennedy’s opinion concurring in Wyatt I, as a strong signal that the Court intended (when the time was right) to recognize a good-faith defense in section 1983 actions when the defendant reasonably relies on established law. This is not, we stress, a simple “mistake of law” defense. Neither CMS nor AFSCME made any mistake about the state of the law during the years between 1982 and June 27, 2018, when Janus II was handed down. Abood was the operative decision from the Supreme Court from 1977 onward, until the Court exercised its exclusive prerogative to overrule that case. Like its counterparts around the country, the State of Illinois relied on Abood when it adopted a labor relations scheme providing for exclusive representation of public-sector workers and the remit of fair-share fees to the recognized union. The union then relied on that state law in its interactions with other actors.

We realize that there were signals from some Justices during the years leading up to Janus II that indicated they were willing to reconsider Abood, but that is hardly unique to this area. Sometimes such reconsideration happens, and sometimes, despite the most confident predictions, it does not. See, e.g., Dickerson v. United States, 530 U.S. 428 (2000) (reaffirming the Miranda rule); see also Agostini, 521 U.S. at 237 (“We do not acknowledge, and we do not hold, that other courts should conclude our more recent cases have, by implication, overruled an earlier precedent.” (cleaned up)). The Rule of Law requires that parties abide by, and be able to rely on, what the law is, rather than what the readers of tea-leaves predict that it might be in the future.

Notably, Mr. Janus does not allege that CMS and AFSCME, acting pursuant to state law, failed to comply with Abood. Mr. Janus says only that AFSCME did not act in good faith because it “spurned efforts to have agency fees placed in escrow while their constitutionality was determined.” But AFSCME was under no legal obligation to escrow the fair-share fees for an indefinite period while the case was being litigated. Such an action, as AFSCME says, would (in the absence of a court order requiring security of some kind) “have been hard to square with the fiduciary duty the Union owes to its own members,” as the unit’s exclusive representative.

Until Janus II said otherwise, AFSCME had a legal right to receive and spend fair-share fees collected from nonmembers as long as it complied with state law and the Abood line of cases. It did not demonstrate bad faith when it followed these rules.

There is something quite intuitive about this result. As we noted in the piece, to hold unions liable for doing what the Supreme Court said they could do up to 2018 recalls the “Otter Principle” from the great authority, Animal House: “You fucked up! You trusted us!”

But I will repeat here what Eugene and I wrote last year, which I still think is correct. This outcome may not be legally correct, and may not survive Supreme Court review:

Post-Janus suits against unions could also provide the setting for an “affirmative defense based on good faith and/or probable cause,” or a new remedial twist to the Court’s civil retroactivity doctrine. Indeed, some lower courts have given private parties a good faith defense to suits under § 1983, to eliminate the apparent unfairness created by the combination of Wyatt and Lugar. A few lawsuits brought against unions under Harris v. Quinn (a precursor to Janus) were dismissed by the lower courts on such grounds. But unions still should not be too confident that they will have such a defense against Janus suits. First, this good faith defense has never been endorsed by the Supreme Court, and there is little clear authority for it. If one of the cases makes it to the Court, there is no guarantee that the Justices will recognize the defense. And if the Court turns to private law analogues for such a defense, it might find that restitution and unjust enrichment provide the better analogue. Second, these particular suits may present a particularly unsympathetic vehicle to the Court. In a discussion of union reliance on Abood, the Court’s opinion in Janus specifically noted that “public-sector unions have been on notice for years regarding this Court’s misgivings about Abood” and opined that, since 2012, “any public-sector union seeking an agency-fee provision in a collective-bargaining agreement must have understood that the constitutionality of such a provision was uncertain.” So even if such a good faith defense were recognized, the courts may well conclude that unions were knowingly gambling on the continued validity of Abood, and therefore cannot complain about their losses.

The Seventh Circuit’s rejection of the analogy to “conversion,” for instance, rests on a view that Abood was “the law” and that nonmembers had no “right to control” their money until the Supreme Court said so. But the conclusion of Janus was that the Constitution provided such a right, and that Abood had been a misinterpretation of the law in failing to recognize that right. And in an earlier part of the Seventh Circuit opinion it claimed to “to assume for the sake of argument that the right recognized in Janus II should indeed be applied … Mr. Janus himself and all others whose cases were in the pipeline at the time of the Court’s decision.” Some of the court’s subsequent analysis seems to be at odds with this assumption.

To be sure, I think it is quite plausible that lower courts will unanimously reject the plaintiffs claims, following the logic of yesterday’s Seventh Circuit decision. And if they do, the Supreme Court will probably not review the cases. But if a split emerges, Supreme Court review seems likely. And if the Supreme Court does review the issue, it is really not clear whether it will find a good faith defense in these circumstances.

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November 7 as Victims of Communism Day

Bones of tortured prisoners. Kolyma Gulag, USSR (Nikolai Nikitin, Tass).

Since 2007, I have advocated designating May 1 as an international Victims of Communism Day. The May 1 date was not my original idea, but I have probably devoted more time and effort to it than any other commentator. In my view, May 1 is the best possible date for this purpose because it is the day that communists themselves used to celebrate their ideology, and because it is associated with communism as a global phenomenon, not with any particular communist regime, such as that of the USSR or China. However, I have also long recognized that it might make sense to adapt another date for Victims of Communism Day, if it turns out that some other date can attract a broader consensus behind it. The best should not be the enemy of the good.

As detailed in my May 1 post this year, November 7 is probably the best such alternative, and in recent years it has begun to attract considerable support. Unlike May 1, this choice is unlikely to be contested by trade unionists and other devotees of the pre-communist May 1 holiday. While I remain unpersuaded by their objections on substantive grounds, pragmatic considerations suggest that an alternative date is worth considering, if it can sidestep this debate, and thereby attract broader support.

For that reason, I am doing a Victims of Communism Day post today, in addition to the one I did on May 1. If November 7 continues to attract more support, I may eventually switch to that date exclusively. But I reserve the options of returning to an exclusive focus on May 1, doing annual posts on both days, or switching to some third possibility should there be an other date that attracts a broader consensus than either May 1 or November 7.

In addition to its growing popularity, November 7 is a worthy alternative because it is the anniversary of the day that the very first communist regime was established in Russia. All subsequent communist regimes were at least in large part inspired by it, and modeled many of their institutions and policies on the Soviet precedent.

The Soviet Union did not have the highest death toll of any communist regime. That dubious distinction belongs to the People’s Republic of China. North Korea probably surpassed the USSR in the sheer extent of totalitarian control over everyday life. Pol Pot’s Cambodia may have surpassed it in terms of the degree of sadistic cruelty and torture practiced by the regime, though this is admittedly a very difficult thing to measure. But all of these tyrannies—and more –  were at least in part variations on the Soviet original.

Having explained why November 7 is worthy of consideration as an alternative date, it only remains to remind readers of the more general case for having a Victims of Communism Day. The following is adopted from this year’s May 1 Victims of Communism Day post, and some of its predecessors:

The Black Book of Communism estimates the total number of victims of communist regimes at 80 to 100 million dead, greater than that caused by all other twentieth century tyrannies combined. We appropriately have a Holocaust Memorial Day. It is equally appropriate to commemorate the victims of the twentieth century’s other great totalitarian tyranny.

Our comparative neglect of communist crimes has serious costs. Victims of Communism Day can serve the dual purpose of appropriately commemorating the millions of victims, and diminishing the likelihood that such atrocities will recur. Just as Holocaust Memorial Day and other similar events promote awareness of the dangers of racism, anti-Semitism, and radical nationalism, so Victims of Communism Day can increase awareness of the dangers of left-wing forms of totalitarianism, and government domination of the economy and civil society.

While communism is most closely associated with Russia, where the first communist regime was established, it had equally horrendous effects in other nations around the world. The highest death toll for a communist regime was not in Russia, but in China. Mao Zedong’s Great Leap Forward was likely the biggest episode of mass murder in the entire history of the world.

November 7, 2017 was the 100th anniversary of the Bolshevik seizure of power in Russia, which led to the establishment of the first-ever communist regime. On that day, I put up a post outlining some of the lessons to be learned from a century of experience with communism.  The post explains why most of the horrors perpetrated by communist regimes were intrinsic elements of the system. For the most part, they cannot be ascribed to circumstantial factors, such as flawed individual leaders, peculiarities of Russian and Chinese culture, or the absence of democracy. The latter probably did make the situation worse than it might have been otherwise. But, for reasons I explained in the same post, some form of dictatorship or oligarchy is probably inevitable in a socialist economic system in which the government controls all or nearly all of the economy.

While the influence of communist ideology has declined since its mid-twentieth century peak, it is far from dead. Largely unreformed communist regimes remain in power in Cuba and North Korea. In Venezuela, the Marxist government’s socialist policies have resulted in political repression, the starvation of children, and a massive refugee crisis—the biggest in the history of the Western hemisphere. The regime continues to hold on to power by means of repression, despite growing international and domestic opposition.

In Russia, the authoritarian regime of former KGB Colonel Vladimir Putin has embarked on a wholesale whitewashing of communism’s historical record. In China, the Communist Party remains in power (albeit after having abandoned many of its previous socialist economic policies), and has recently become less tolerant of criticism of the mass murders of the Mao era (part of a more general turn towards greater repression).

In sum, we need Victims of Communism Day because we have never given sufficient recognition to the victims of the modern world’s most murderous ideology or come close to fully appreciating the lessons of this awful era in world history. In addition, that ideology, and variants thereof, still have  a substantial number of adherents in many parts of the world, and still retains considerable intellectual respectability even among many who do not actually endorse it. Just as Holocaust Memorial Day serves as a bulwark against the reemergence of fascism, so this day of observance can help guard against the return to favor of the only ideology with an even greater number of victims.

 

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November 7 as Victims of Communism Day

Bones of tortured prisoners. Kolyma Gulag, USSR (Nikolai Nikitin, Tass).

Since 2007, I have advocated designating May 1 as an international Victims of Communism Day. The May 1 date was not my original idea, but I have probably devoted more time and effort to it than any other commentator. In my view, May 1 is the best possible date for this purpose because it is the day that communists themselves used to celebrate their ideology, and because it is associated with communism as a global phenomenon, not with any particular communist regime, such as that of the USSR or China. However, I have also long recognized that it might make sense to adapt another date for Victims of Communism Day, if it turns out that some other date can attract a broader consensus behind it. The best should not be the enemy of the good.

As detailed in my May 1 post this year, November 7 is probably the best such alternative, and in recent years it has begun to attract considerable support. Unlike May 1, this choice is unlikely to be contested by trade unionists and other devotees of the pre-communist May 1 holiday. While I remain unpersuaded by their objections on substantive grounds, pragmatic considerations suggest that an alternative date is worth considering, if it can sidestep this debate, and thereby attract broader support.

For that reason, I am doing a Victims of Communism Day post today, in addition to the one I did on May 1. If November 7 continues to attract more support, I may eventually switch to that date exclusively. But I reserve the options of returning to an exclusive focus on May 1, doing annual posts on both days, or switching to some third possibility should there be an other date that attracts a broader consensus than either May 1 or November 7.

In addition to its growing popularity, November 7 is a worthy alternative because it is the anniversary of the day that the very first communist regime was established in Russia. All subsequent communist regimes were at least in large part inspired by it, and modeled many of their institutions and policies on the Soviet precedent.

The Soviet Union did not have the highest death toll of any communist regime. That dubious distinction belongs to the People’s Republic of China. North Korea probably surpassed the USSR in the sheer extent of totalitarian control over everyday life. Pol Pot’s Cambodia may have surpassed it in terms of the degree of sadistic cruelty and torture practiced by the regime, though this is admittedly a very difficult thing to measure. But all of these tyrannies—and more –  were at least in part variations on the Soviet original.

Having explained why November 7 is worthy of consideration as an alternative date, it only remains to remind readers of the more general case for having a Victims of Communism Day. The following is adopted from this year’s May 1 Victims of Communism Day post, and some of its predecessors:

The Black Book of Communism estimates the total number of victims of communist regimes at 80 to 100 million dead, greater than that caused by all other twentieth century tyrannies combined. We appropriately have a Holocaust Memorial Day. It is equally appropriate to commemorate the victims of the twentieth century’s other great totalitarian tyranny.

Our comparative neglect of communist crimes has serious costs. Victims of Communism Day can serve the dual purpose of appropriately commemorating the millions of victims, and diminishing the likelihood that such atrocities will recur. Just as Holocaust Memorial Day and other similar events promote awareness of the dangers of racism, anti-Semitism, and radical nationalism, so Victims of Communism Day can increase awareness of the dangers of left-wing forms of totalitarianism, and government domination of the economy and civil society.

While communism is most closely associated with Russia, where the first communist regime was established, it had equally horrendous effects in other nations around the world. The highest death toll for a communist regime was not in Russia, but in China. Mao Zedong’s Great Leap Forward was likely the biggest episode of mass murder in the entire history of the world.

November 7, 2017 was the 100th anniversary of the Bolshevik seizure of power in Russia, which led to the establishment of the first-ever communist regime. On that day, I put up a post outlining some of the lessons to be learned from a century of experience with communism.  The post explains why most of the horrors perpetrated by communist regimes were intrinsic elements of the system. For the most part, they cannot be ascribed to circumstantial factors, such as flawed individual leaders, peculiarities of Russian and Chinese culture, or the absence of democracy. The latter probably did make the situation worse than it might have been otherwise. But, for reasons I explained in the same post, some form of dictatorship or oligarchy is probably inevitable in a socialist economic system in which the government controls all or nearly all of the economy.

While the influence of communist ideology has declined since its mid-twentieth century peak, it is far from dead. Largely unreformed communist regimes remain in power in Cuba and North Korea. In Venezuela, the Marxist government’s socialist policies have resulted in political repression, the starvation of children, and a massive refugee crisis—the biggest in the history of the Western hemisphere. The regime continues to hold on to power by means of repression, despite growing international and domestic opposition.

In Russia, the authoritarian regime of former KGB Colonel Vladimir Putin has embarked on a wholesale whitewashing of communism’s historical record. In China, the Communist Party remains in power (albeit after having abandoned many of its previous socialist economic policies), and has recently become less tolerant of criticism of the mass murders of the Mao era (part of a more general turn towards greater repression).

In sum, we need Victims of Communism Day because we have never given sufficient recognition to the victims of the modern world’s most murderous ideology or come close to fully appreciating the lessons of this awful era in world history. In addition, that ideology, and variants thereof, still have  a substantial number of adherents in many parts of the world, and still retains considerable intellectual respectability even among many who do not actually endorse it. Just as Holocaust Memorial Day serves as a bulwark against the reemergence of fascism, so this day of observance can help guard against the return to favor of the only ideology with an even greater number of victims.

 

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The NYPD Bragged About a Big Pot Bust. Turns Out It Seized 106 Pounds of Legal Hemp.

After six years in the natural medicine business, Green Angel CBD owner John Dee has faced an obstacle so large that he could be forced to close his doors: the New York Police Department’s 75th Precinct.

Over the weekend, Dee sent a 106-pound shipment of hemp flower from a Vermont farm via FedEx Freight. FedEx thought the $30,000 shipment might be pot, so it informed the Williston Police Department in Vermont. After investigating, the cops produced a police report showing that the company was a licensed hemp grower and that the hemp’s THC content was 0.06 percent, well within the legal limit.

The Williston police advised FedEx that it would not seize the shipment, and the hemp made its way to New York. There, a FedEx driver brought in the NYPD. As the Williston police noted, the shipment was clearly marked with the proper documentation. But the New York cops officers ignored the documentation, seized the shipment, and staged the seizure as a drug bust on social media.

Great job by Day Tour Sector E yesterday. Working with FedEx and other local law enforcement, they were able to confiscate 106 Lbs. of marijuana, and arrest the individual associated with the intended delivery.

Posted by NYPD 75th Precinct on Sunday, November 3, 2019

The NYPD then contacted Dee, asking him to go to the station to pick up the shipment. Dee was recovering from a medical procedure, so he sent his brother, Ronan Levy, in his place. The request appeared to be a trap. After Levy walked into the station, the officers arrested him, charged him with six counts of possession, and jailed him. He has since been released without bail.

At a press conference on Wednesday, officials said the shipment was tested as marijuana and denied that Levy had a proper bill of landing stating that shipment was hemp.

Dee believes the officer ignored the paperwork in hopes that he had a major drug bust on his hands.

Dee also says the NYPD relied on an outdated field test from the 1960s. The test cannot differentiate between levels of THC, a key to absolving the company and Levy of any suspected crime.

Records show that Rodney Greenidge, the arresting officer, reached his initial conclusion because the hemp “possesses the same physical characteristics” as pot. Hemp’s similarity to marijuana has led to all sorts of confusion in American law enforcement.

Because the department is holding on to his shipment, Dee stands to lose a lot of money—and perhaps even his business. “This was our shipment,” he wrote on Instagram. “My brother was falsely arrested. Those bags were all hemp. All documents were in each box. The farm also called them to give them all there paperwork proving it’s all hemp! Please spread the word! We need to let people know we are not criminals.”

Dee and Levy are also considering legal action against FedEx and the NYPD.

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The NYPD Bragged About a Big Pot Bust. Turns Out It Seized 106 Pounds of Legal Hemp.

After six years in the natural medicine business, Green Angel CBD owner John Dee has faced an obstacle so large that he could be forced to close his doors: the New York Police Department’s 75th Precinct.

Over the weekend, Dee sent a 106-pound shipment of hemp flower from a Vermont farm via FedEx Freight. FedEx thought the $30,000 shipment might be pot, so it informed the Williston Police Department in Vermont. After investigating, the cops produced a police report showing that the company was a licensed hemp grower and that the hemp’s THC content was 0.06 percent, well within the legal limit.

The Williston police advised FedEx that it would not seize the shipment, and the hemp made its way to New York. There, a FedEx driver brought in the NYPD. As the Williston police noted, the shipment was clearly marked with the proper documentation. But the New York cops officers ignored the documentation, seized the shipment, and staged the seizure as a drug bust on social media.

Great job by Day Tour Sector E yesterday. Working with FedEx and other local law enforcement, they were able to confiscate 106 Lbs. of marijuana, and arrest the individual associated with the intended delivery.

Posted by NYPD 75th Precinct on Sunday, November 3, 2019

The NYPD then contacted Dee, asking him to go to the station to pick up the shipment. Dee was recovering from a medical procedure, so he sent his brother, Ronan Levy, in his place. The request appeared to be a trap. After Levy walked into the station, the officers arrested him, charged him with six counts of possession, and jailed him. He has since been released without bail.

At a press conference on Wednesday, officials said the shipment was tested as marijuana and denied that Levy had a proper bill of landing stating that shipment was hemp.

Dee believes the officer ignored the paperwork in hopes that he had a major drug bust on his hands.

Dee also says the NYPD relied on an outdated field test from the 1960s. The test cannot differentiate between levels of THC, a key to absolving the company and Levy of any suspected crime.

Records show that Rodney Greenidge, the arresting officer, reached his initial conclusion because the hemp “possesses the same physical characteristics” as pot. Hemp’s similarity to marijuana has led to all sorts of confusion in American law enforcement.

Because the department is holding on to his shipment, Dee stands to lose a lot of money—and perhaps even his business. “This was our shipment,” he wrote on Instagram. “My brother was falsely arrested. Those bags were all hemp. All documents were in each box. The farm also called them to give them all there paperwork proving it’s all hemp! Please spread the word! We need to let people know we are not criminals.”

Dee and Levy are also considering legal action against FedEx and the NYPD.

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