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Salty about the SALT Deduction Cap, Blue States File Suit in New York v. Mnuchin

U.S. Secretary of the Treasury Steven Mnuchin takes a question during a press briefing at the White House in Washington, U.S., April 24, 2017.

Alak Mehta, CLS ’21

Does The Tax Cuts and Jobs Act of 2017’s cap on state and local tax (SALT) deductions exceed the scope of Congress’ taxing power under the Constitution?[1] Secondly, does this provision unconstitutionally coerce states into changing their tax policies, in violation of the principles of federalism embodied in the Tenth Amendment?[2] No and no, according to U.S. District Court Judge J. Paul Oetken, in a September 30, 2019 opinion dismissing a constitutional challenge levied by four blue states – New York, Connecticut, Maryland, and New Jersey – against the U.S. Treasury Department.[3]

The Tax Cuts and Jobs Act of 2017, signed into law by President Trump, implemented a cap of $10,000 on the amount a taxpayer may deduct from her federal taxable income to account for state and local tax payments.[4] Historically, taxpayers have been able to deduct the full amount of SALT payments on their federal tax returns (with some exceptions).[5] The plaintiff states, whose state and local taxes tend to be substantially higher than the national average, challenged this amendment due to the adverse impact it is likely to have on the states themselves and their taxpayers.[6]

Before delving into the merits of the challenge, Oetken disposed of three challenges by the United States to the court’s subject matter jurisdiction.[7] First, Oetken found that the states have standing to challenge the provision, conferred by the loss of tax revenue the states allege will result from the SALT deduction cap.[8] More specifically, the states contend that this tax revenue decrease will arise from declines in home values[9] and household spending.[10] Second, Oetken held that the Anti-Injunction Act, which bars state and federal courts from hearing suits seeking injunctions prohibiting the collection of federal taxes, does not cover this lawsuit because the states assert a violation of their own rights, not the rights of their taxpayers (which would likely be covered by the Anti-Injunction Act.)[11] Third, Oetken held that the political question doctrine does not bar the court from resolving this dispute, as assessing the constitutionality of a statute “is what courts do.”[12]

Moving on to the merits of the case, Oetken first held that there is no implicit constitutional limitation on the federal taxing power preventing Congress from setting a SALT deduction cap.[13] Put differently, Congress holds plenary power under the Constitution to tax income, meaning that deductions granted are purely a matter of legislative grace.[14] In his analysis, Oetken acknowledged that this cap on SALT deductions is “in some ways unprecedented,” but he failed to find any structural limitation in the Constitution barring such a cap.[15]

After confirming that SALT deduction caps are not unconstitutional per se, Oetken then found that the specific SALT deduction cap in the Tax Cuts and Jobs Act of 2017 does not unconstitutionally coerce states to decrease their tax burdens.[16] Drawing from the Supreme Court’s anti-commandeering and Spending Power jurisprudence, the plaintiff states argued that the SALT deduction cap represents an intentional effort by Congress to compel high-tax states to lower their tax rates.[17] In response, Oetken first noted that legislative intent is not relevant to the coercion inquiry: “An otherwise valid federal law does not offend the Constitution simply because it seeks to affect state policies.”[18] Rather, the coercion inquiry must be based on the statute’s effects.[19] Following this principle, Oetken next held that the States had not plausibly suggested that the SALT deduction cap would have the effect of “burden[ing] their taxpayers so heavily” that the States will be forced to choose between lowering tax rates and facing budgetary catastrophe.[20] In other words, the SALT deduction cap is not unconstitutionally coercive.

Oetken’s opinion is unsurprising, given federal courts’ reluctance to find even the imposition of conditions on states’ receipt of federal grants unconstitutionally coercive.[21] However, it is notable in its acceptance of the application of the coercion inquiry to a new domain: federal tax legislation. Given the plaintiff states’ loss in this case, it appears that their best hope of reinstating a complete SALT tax deduction is through Congress, rather than the courts.

 

 

[1] Tax Cuts and Jobs Act, Pub. L. No. 115-97, 131 Stat. 2054 (2017); U.S. Const. art. 1, §8, cl. 1.

[2] U.S. Const. amend. X; see South Dakota v. Dole, 483 U.S. 203 (1987).

[3] New York v. Mnuchin, 2019 WL 4805709 (S.D.N.Y. Sep. 30, 2019).

[4] New York v. Mnuchin, 2019 WL 4805709 (S.D.N.Y. Sep. 30, 2019), at *3.

[5] Id. at *12.

[6] Id. at *1.

[7] Id. at *5-11.

[8] Id. at *8.

[9] The SALT deduction cap has, in fact, led to a decline in home values in several counties in the plaintiff states, according to a recent Moody’s study. See Jonathan D. Salant & Samantha Marcus, Your N.J. Home is Worth Less Than It Should Be, Thanks to the Trump Tax Law, NJ.com (Oct. 12, 2019), https://www.nj.com/politics/2019/10/your-nj-home-is-worth-less-than-it-should-be-thanks-to-the-trump-tax-law.html; Moody’s Analytics, Home Price Impact of Tax Cuts and Jobs Act of 2017, ProPublica (Oct. 2019), https://www.propublica.org/datastore/dataset/home-price-impact-of-tax-cuts-and-jobs-act-of-2017.

[10] New York v. Mnuchin, 2019 WL 4805709, at *6-7 (S.D.N.Y. Sep. 30, 2019)

[11] Id. at *10.

[12] Id. at *11, (quoting Zivotofsky v. Clinton, 566 U.S. 189, 195 (2012)).

[13] Id. at *12-14.

[14] Id. at *12-14.

[15] Id. at *12.

[16] Id. at *14-17.

[17] Id. at *14; see South Dakota v. Dole, 483 U.S. 203 (1987).

[18] Id. at *14.

[19] Id. at *16.

[20] Id. at *16.

[21] But see Nat’l Fed. of Indep. Business v. Sebelius (NFIB), 567 U.S. 519 (2012) (opinion of Roberts, C.J.). In that case, for the first time ever, a majority of the Supreme Court found an exercise of Congress’ spending power unconstitutionally coercive. To see how Judge Oetken distinguishes NFIB, see New York v. Mnuchin, 2019 WL 4805709, at *17 (S.D.N.Y. Sep. 30, 2019).

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Tempering Great Expectations After Mobley v. State

Image of the Georgia Supreme Court

Sherwin Nam, CLS ’21

On October 21, 2019, the Supreme Court of Georgia issued its opinion in Mobley v. State, extending Fourth Amendment protection to warrantless retrievals of electronic data from cars.

Victor Mobley was involved in a car collision that killed both occupants of the other car. Mobley’s 2014 Dodge Charger had a built-in airbag control module (ACM).  ACMs automatically record the speed of the vehicle, the status of the brakes, and various other electronic data.  At the scene of the accident, investigators retrieved the data from the ACM of Mobley’s car and discovered that Mobley was speeding at nearly 100 miles per hour in the moments leading up to the collision.  Law enforcement soon after launched a criminal investigation into Mobley.  A grand jury later indicted Mobley, charging him with two counts of first-degree vehicular homicide.  Mobley moved to suppress the ACM data, but the trial court denied the motion.  Mobley was subsequently tried and convicted.  The Georgia Court of Appeals affirmed.

At issue before the Georgia Supreme Court was (1) whether investigators searched Mobley’s vehicle when they collected the ACM data; (2) if so, whether that search was reasonable; and (3) if the search was unreasonable, whether the procedural protections of Georgia Code § 17-5-30[1] barred any exception to the exclusionary rule.[2]

The Court found that investigators did conduct a search and that that search was unreasonable.  The traditional Fourth Amendment test for determining a search or seizure is grounded in trespass.  In other words, if law enforcement physically intrudes on a constitutionally protected area,[3] then it has conducted a search.[4]  To obtain the ACM data here, law enforcement physically intruded on Mobley’s car, which is “plainly among the ‘effects’ with which the Fourth Amendment[] . . . is concerned[.]”[5]  Thus, the Court found that the government had conducted a search.  This search was unreasonable because the government failed to rebut the presumption that warrantless searches are per se unreasonable.  That is, the government did not identify any applicable exception to the warrant requirement.

In finding that the government’s search was unreasonable, the Court partially overruled its prior decision in Gary v. State.  In Gary, the Court held that Georgia Code § 17-5-30 statutorily barred all exceptions to the exclusionary rule.[6]  Gary provided incredible protection to Georgia defendants because all evidence obtained without the proper constitutional process would be excluded from the record.  This was significant because other jurisdictions might make available, for example, an inevitable discovery exception to admit otherwise unlawfully obtained evidence if it “inevitably would have been discovered by lawful means[.]”[7]  In partially overruling Gary, the Court made available, moving forward, exceptions to the warrant requirement and strongly limited Fourth Amendment protections.  It did, however, explicitly leave open the question whether the Leon exception[8] would remain barred under Gary.

While Mobley is a step in the right direction—and commentators have already recognized the importance of this decision for privacy rights[9]—we should temper expectations of significantly greater Fourth Amendment protections for electronic data, even those obtained from ACMs, for three reasons.

First, the Court treaded lightly in reaching its decision.  It noted in its analysis on the reasonableness of the search, albeit relegated to a footnote, that its decision was “based on the record before [it].”[10]  The Court’s careful words sound in Carpenter v. United States,[11] where Chief Justice Roberts cautioned, “Our decision today is a narrow one.  We do not express a view on matters not before us[.]”[12]  Many lower courts in the wake of Carpenter have clung to those words as a failsafe when declining to extend Fourth Amendment protection to historical cell-site location data and other surveillance and tracking technologies.[13]  Lower courts in Georgia may follow suit and deny Mobley protection to ACM data and other forms of electronic data-recording devices.

Second, the Court left open the question whether the Leon exception might still apply where law enforcement agents obtain evidence relying in good faith on the validity of a search or seizure.  The Court welcomed, moving forward, government challenges to motions to suppress based on the good-faith exception.  This could arm lower courts with further legal backing to restrict Fourth Amendment protections, at least in cases where searches occurred prior to Mobley.  Indeed, after Carpenter, many lower courts relied on Leon to bar Fourth Amendment protection.[14]  Until the Georgia Supreme Court decides on the issue, we can expect Leon challenges to proliferate, potentially admitting evidence when lower courts would not have admitted it pre-Mobley.

Lastly, and perhaps most importantly, the Court explicitly uprooted Gary, which once provided vast evidentiary protection to defendants.  While the Leon exception may or may not remain barred, courts now have free range over the buffet of options including the automobile exception,[15] the exigent circumstances exception,[16] and the inevitable discovery exception,[17] among others.  Thus, Georgia law enforcement gained significant procedural backstops to admitting evidence, even if the evidence was collected using otherwise constitutionally dubious methods.

Undoubtedly, Mobley will eventually provide great Fourth Amendment protection to defendants navigating the criminal justice system in Georgia.  In current and future criminal investigations, law enforcement will be bound by Mobley when attempting to collect ACM data.   But unfortunately, it may take years before Georgia courts apply this protection uniformly and realize the true potential of Mobley.

[1] Georgia Code § 17-5-30 is a rule of criminal procedure that governs motions to suppress evidence.  Prior to this case, Georgia courts held that the rule bars all exceptions to the exclusionary rule.

[2] The Court also considered whether the inevitable discovery doctrine applied to this case, but that issue goes beyond the scope of this blog post.

[3] The Fourth Amendment provides that “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated[.]”  U.S. Const. amend. IV.

[4] See United States v. Jones, 565 U.S. 400, 406 n.3 (2012).

[5] Mobley v. State, No. S18G1546, 2019 WL 5301819, at *5 (Ga. 2019) (citation omitted).

[6] 262 Ga. 573 (1992).

[7] Mobley, 2019 WL 5301819, at *12.

[8] In United States v. Leon, 468 U.S. 897 (1984), the Supreme Court held that evidence obtained from law enforcement agents who rely in good faith on the constitutionality of a search or seizure is an exception to the exclusionary rule.

[9] See Karl Bode, Cops Need a Warrant to Access Your Car’s Data, Court Rules, Vice: Motherboard (Oct. 22, 2019 8:00 AM), https://www.vice.com/en_us/article/ne8kxk/cops-need-a-warrant-to-access-your-cars-data-court-rules (quoting Nathan Wessler, ACLU Staff Attorney, and Guarav Laroia, Senior Policy Counsel at Free Press); Jeffrey Neuburger, Warrantless Retrieval of Electronic Automobile Data Held to Be Unreasonable Search – Ruling Points to Private Nature of Digital Data in Today’s World, Proskauer Rose LLP: New Media and Technology Law Blog (Oct. 21, 2019), https://newmedialaw.proskauer.com/2019/10/21/warrantless-retrieval-of-electronic-automobile-data-held-to-be-unreasonable-search-ruling-points-to-private-nature-of-digital-data-collected-in-todays-world/ (calling [Mobley] an “important follow-up to . . . Riley [v. California] and Carpenter”).

[10] Mobley, 2019 WL 5301819, at *6 n.10 (finding that the government had not shown the applicability of the automobile exception and the exigent circumstances exception).

[11] For a digest of Carpenter and its place in Fourth Amendment jurisprudence, see Sean Lerner, Fourth Amendment Law and Third-Party Doctrine After Carpenter v. US, Columbia University School of Law Journal of Law & Social Problems: The Common Law (Nov. 16, 2018), http://jlsp.law.columbia.edu/2018/11/16/fourth-amendment-law-and-third-party-doctrine-after-carpenter-v-us/.

[12] 138 S. Ct. 2206, 2220 (2018).

[13] See, e.g., United States v. Kelly, 385 F. Supp. 3d 721, 726 (E.D. Wis. 2019) (highlighting the narrow holding of Carpenter); United States v. Felton, 367 F. Supp. 3d 569, 575 (W.D. La. 2019) (holding that the narrow ruling of Carpenter does not apply to the instant case); Hicks v. State, No. 129654C, 2019 WL 4233844, at *13 (Md. Ct. Spec. App. Sep. 6, 2019) (declining to extend Carpenter’s “narrow” holding to the instant case).

[14] See, e.g., United States v. Korte, 918 F.3d 750, 759 (9th Cir. 2019) (affirming the district court’s application of the good-faith exception); United States v. Ackies, 918 F.3d 190, 196 (1st Cir. 2019) (finding that even if the government did not prove probable cause for the warrants, the good-faith exception would apply); United States v. Streett, 363 F. Supp. 3d 1212, 1328 (D.N.M. 2018) (finding that the good-faith exception applies to the instant case).

[15] The automobile exception to the warrant requirement allows admission of evidence only when the vehicle in question is “readily mobile.”  United States v. Delva, 922 F.3d 1228, 1243 (11th Cir. 2019).  It does not apply where the suspect did not have access to the vehicle due to the officers impounding the vehicle.  See State v. LeJeune, 276 Ga. 179, 182 (2003).

[16] “The exigent circumstances exception to the warrant requirement applies when the exigencies of the situation make the needs of law enforcement so compelling that a warrantless search is objectively reasonable under the Fourth Amendment.”  8A Barbara J. Van Arsdale et al., Federal Procedure, Lawyer’s Edition § 22:229 (2019) (citation omitted).  Examples of exigent situations include danger of damage and possible loss or destruction of evidence, risk of physical harm to officers or others, when officers are in hot pursuit of a fleeing suspect.  See id.

[17] The inevitable discovery applies only when “a reasonable probability that the evidence in question would have been discovered by lawful means[.]”  Mobley, 2019 WL 5301819, at *12.

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Court Ruling: Cracking down on the Unauthorized Administration of Psychotropic Medication to Migrant Children

Ilana Gomez, CLS ’21

The legacy of the 1985 class-action lawsuit, Flores v. Reno, promulgated the Flores Settlement Agreement (“Flores Settlement”) and began a nationwide conversation on the ethical standards of processing undocumented minors separated from their parents and families. The agreement, which has proved a contentious crux for Trump’s zero-tolerance policy, essentially ordered the government to detain children in the “least restrictive” settings, create and implement appropriate standards of care of detained children, and release children “without unnecessary delay” to specific individuals listed in the agreement.

Many U.S. detention centers have failed to meet the Flores standards, and some have allegedly provided psychotropic medication without appropriate authorization.[1] In 2018, the Center of Human Rights and Constitutional Law (CHRCL) filed a class action lawsuit, Flores v. Sessions, against a Texas facility in Manvel, Texas, alleging that the Department of Health and Human Services’ Office of Refugee Resettlement (ORR) unlawfully administered  psychotropic drugs to detained children without appropriate consent.[2] On one occasion, ORR staff threw a child to the ground and forcibly opened his mouth, while another complaint detailed coercive practices where children were threatened to take medication.[3] Such threats included telling the children that the only way they could leave the center was if they took the medication.[4] This treatment violates the Flores Settlement’s requirement where ORR facilities must “comply with all applicable state child welfare laws and regulations,” and only provide children with “appropriate mental health interventions when necessary.”[5]

In July 2018, U.S. District Judge Dolly Gee ordered in Flores v. Sessions, that Texas state child welfare laws and regulations govern the administration of any psychotropic medication to children at the Texas detention center in question.[6] Therefore, legally authorized persons defined in the Texas Administrative Code, Texas Family Code, or a court, must disclose any administration of psychotropic medication to detained children. In an emergency situation, however, the detention center could administer medication if it is immediately necessary to provide medical care in order to prevent the imminent probability of death or substantial bodily harm to the child or others.[7]

This recent decision, while a step in the right direction, might be insufficient for the protection of detained children’s consent rights considering the varying state child welfare laws and regulations defining informed consent. In Arizona, for example, an ORR Director or a licensed physician can medically authorize psychotropic medication to detained children.[8] The ORR also has a policy that if a state law requires informed consent from a parent – and it is not possible or timely to retrieve it due to the inability to locate the parent – then the ORR may direct a facility to seek a court order authorizing the medication.[9] It is clear that child welfare laws were drafted without undocumented and parentless children in mind, and therefore appropriate policy specific to the needs of migrant families separated at the border is both necessary and urgent.

 

[1] Scott J. Schweikart, April 2018 Flores Settlement Suit Challenges Unlawful Administration of Psychotropic Medication to Immigrant Children, 21 AMA Journal of Ethics 67, 67-68 (2018).

[2] Flores v Sessions, No. CV 85-4544 DMG (AGRx), 20-21 (C.D. Cal. Nov. 5, 2018).

[3] Samantha Schmidt, S. Trump Administration Must Stop Giving Psychotropic Drugs to Migrant Children Without Consent, Judge Rules, Washington Post (July 31, 2018) https://www.washingtonpost.com/news/morning-mix/wp/2018/07/31/trump-administration-must-seek-consent-before-giving-drugs-to-migrant-children-judge-rules/

[4] Id.

[5] U.S. Department of Health & Human Services, Office of Refugee Resettlement, Children Entering the United States Unaccompanied: Section 3. (2015)

[6] Flores v Sessions, No. CV 85-4544 DMG (AGRx), 23-24 (C.D. Cal. Nov. 5, 2018).

[7] Id. at 23.

[8] U.S. Department of Health and Human Services, Office of Inspector General,

Care Provider Facilities Described Challenges Addressing Mental Health Needs of Children in HHS Custody (2019).

[9] Id.

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Mandating a Seat at the Table

Valerie Achille, CLS ’21

On September 30, 2018, then-Governor of California Jerry Brown signed into law SB 826,  making California the first state to mandate the inclusion of female directors on corporate boards.[1] By the end of 2019, all publicly traded companies must have a minimum of one female director on their board.[2] By 2021, boards with five directors must have at least two female directors and boards with six directors must have at least three female directors.[3] Corporations that fail to comply with the new requirements can be fined $100,000 for a first-time violation and then $300,000 for subsequent violations.[4]

The purpose of SB 826 is to increase the number of female directors in order to produce equitable gender representation in corporate boards. At the time the bill was introduced, women held only fifteen percent of board seats.[5] Moreover, a quarter of California’s publicly traded companies did not have any women at all on their boards.[6]

There have been concerns about the constitutionality of SB 826. On August 6, 2019, Judicial Watch, a conservative activist group, filed a lawsuit in Los Angeles County Superior Court challenging the new law.[7] In its complaint, Judicial Watch argues that SB 826  is unconstitutional under the California Constitution because it creates a quota system.[8] Since there is a specific number of women that must be on the board, the plaintiffs argue that the law effectively makes boards discriminate against qualified male candidates. For example, if two qualified candidates (one male and one female) apply and the board has not met its requirement for female directors, the board would be required to choose the female candidate solely based on her gender.[9]

With this constitutional challenge on the horizon, proponents of SB 826 must overcome an additional obstacle. The California Assembly Committee on Judiciary determined that in order to defend the constitutionality of this bill, the defenders of the bill would need to show specific evidence of discriminatory behavior; citing statistics that women are grossly underrepresented on corporate boards alone would not be sufficient.[10]

The short-term effects of SB 826 demonstrate that the law merits preservation. The new law has led to real change in the demographics of company boards. As of July 2019, all S&P 500 companies have at least one female director on their board of directors.[11] The number of Russell 3000 companies with all-male boards has decreased from 500 to 376 companies.[12]

Despite its good intentions and good results, SB 826 may not be able to withstand these constitutional challenges. The new law reveals the difficulty for states to make significant impact in gender representation while remaining within the parameters of the Constitution.

[1] Patrick McGreevy. Gov. Jerry Brown Signs Bill Requiring California Corporate Boards to Include Women. Los Angeles Times, (Sept. 30, 2018) www.latimes.com/politics/la-pol-ca-governor-women-corporate-boards-20180930-story.html.

[2] Associated Press. Lawsuit Challenges California Law Requiring Women on Boards A Conservative Activist Group Is Challenging California’s First-in-the-Nation Law Requiring Publicly Held Companies to Put Women on Their Boards of Directors. US NEWS, (Aug. 9, 2019) www.usnews.com/news/best-states/california/articles/2019-08-09/lawsuit-challenges-california-law-requiring-women-on-boards.

[3] Id.

[4] Patrick McGreevy. Gov. Jerry Brown Signs Bill Requiring California Corporate Boards to Include Women. Los Angeles Times, (Sept. 30, 2018) www.latimes.com/politics/la-pol-ca-governor-women-corporate-boards-20180930-story.html.

[5] Governor Signs Jackson Bill to Make California the First State to Require Women on Corporate Boards. Senator Hannah-Beth Jackson- Representing Senate District 19, (Oct. 2, 2018) sd19.senate.ca.gov/news/2018-10-01-governor-signs-jackson-bill-make-california-first state-require-women-corporate.

[6] Ibid.

 [7] Judicial Watch. Judicial Watch Sues California Over Gender Quota Mandate for Corporate Boards. Los Judicial Watch. (Aug. 9, 2019) www.judicialwatch.org/press-releases/judicial-watch-sues-california-over-gender-quota-mandate-for-corporate-boards/.

[8] Ibid.

[9] Maj Veseghi & Sarah Ray, Bill to Impose Gender Quotas in Boardrooms Reflects Larger Trend, Daily Journal (Sep. 11, 2018) https://www.lw.com/thoughtLeadership/bill-to-impose-gender-quotas-in-boardrooms-reflects-larger-trend-daily-journal

[10] Assembly Judiciary Committee Staff Report, at 6.

[11] Lawsuit Challenges Constitutionality of California Law Mandating Women on Public Company Boards. O’Melveny, (Aug. 14, 2019) www.omm.com/resources/alerts-and-publications/alerts/lawsuit-challenges-constitutionality-of-california-law-mandating-women-on-public-company-boards/.

[12] Id.

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What Now? The Aftermath of Common Cause v. Lewis

Andrew Sun, CLS ’21

            After gerrymandering reform efforts met disappointment at the Supreme Court in Rucho v. Common Cause, which held that federal courts did not have enough guidance by the federal Constitution to handle gerrymandering challenges, a glimmer of hope came from a North Carolina state court.[1] A three-judge panel sitting in Wake County, North Carolina ruled unanimously in Common Cause v. Lewis that North Carolina’s Constitution provided sufficient guidance in a gerrymandering challenge and held that state legislative maps were unlawful as against the North Carolina Constitution’s free election, equal protection, freedom of speech, and freedom of assembly clauses.[2] This decision has the potential to serve as a guide for litigants and judges in other states to formulate the legal arguments against gerrymandered state legislative maps, especially in a time when federal courts have shuttered their doors to these challenges.[3]

The specific remedies that the court ordered and the lessons of the decision’s aftermath may also prove to be particularly instructive to litigants and courts in other states seeking to remedy gerrymandered maps.  Below are the remedies discussed in the remainder of the article, although additional remedies were included in the decision.[4]

  • Timeline: The court required the legislature to create new maps within two weeks of the decision and also retained the authority to change scheduled election dates if doing so should become necessary to provide proper relief.[5] The new maps must then be approved by a court appointed expert referee from Stanford University.[6]
  • Election data: Partisan considerations, elections results, and other election data cannot be used in the drawing of the new districts, and intentional attempts to favor voters or candidates of one political party is prohibited.[7]
  • Maps used as starting points: The maps invalidated in the case may not be used as a starting point for the new maps.[8]
  • Incumbency protection: Drafters of the remedial maps are allowed to take steps such that incumbents are not pitted against each other in the same district.[9]
  • Public process: The remedial process must be conducted “in full public view,” which, at a minimum, requires all map drawings to occur at public hearings.[10]

At the time of the writing of this article, the court is reviewing remedial maps passed by both chambers of the North Carolina legislature.[11] Mitch Kokai, senior political analyst at the John Locke Foundation, says that the maps are likely to be approved by both the expert and the court because of strong bipartisan support.[12] PlanScore, a nonpartisan group that analyzes maps nationwide, suggested that the new maps are an improvement over their predecessors.[13]

Yet the redistricting process has not been without controversy. Although the process has taken place with an unprecedented degree of transparency, the method by which the baseline map was chosen and developed upon raised suspicion.[14] The starting map that the legislature worked from was taken from a set of 1,000 maps simulated by Jowei Chen, a political scientist who served as an expert for the plaintiffs challenging the gerrymandered maps.[15] These maps were not drawn in public view, as they were created before the trial as trial evidence.[16] Additionally, during the mapmaking process a private legal team for the GOP shared a link with members of the House of Representatives containing political data for each of Chen’s maps, describing which would be more or less advantageous for GOP candidates.[17] Although the link was quickly shut down, this email still caused a delay in the mapmaking process due to the uncertainty of whether the process was prejudiced as a result of any lawmaker being exposed to the contents of the link.[18]

Some have also raised more general arguments against the court’s remedy. One economist has posited that barring the legislature from using partisan considerations and encouraging them to follow county lines is mathematically likely to produce more skewed districts, against the goal of the court.[19] Others, like Charlotte Senator Jeff Jackson and J. Michael Bitzer, scholar of North Carolina politics at Catawba College, challenge that legislators should not be involved at all in the redrawing process, as they are motivated by their own political interests.[20] A specific concern is that although partisan considerations are not allowed in the mapmaking process, Republicans can still serve their own political interests through the court’s allowance of incumbency protection, since currently most incumbents are Republican.[21]

So far, it seems that the court has successfully compelled the legislature to change their maps, but only time will tell as to whether the decision will improve the rights of voters in North Carolina. Either way, those seeking to challenge gerrymandering in other states ought to keep a close watch on how the aftermath of Lewis unfolds.

[1] 139 S. Ct. 2484, 2507 (2019).

[2] No. 18 CVS 014001, 2019 N.C. Super. LEXIS 56 (N.C. Super. Ct., Wake County Sept. 3, 2019).

[3] See Amber Phillips, Why Democrats’ Big Gerrymandering Win in North Carolina Matters, Washington Post (Sept. 4, 2019), https://www.washingtonpost.com/politics/2019/09/04/how-democrats-win-north-carolinas-redistricting-battle-could-reverberate/; see also Ella Nilsen & Tara Golshan, A North Carolina Court Just Threw Out Republicans’ Gerrymandered State Legislature Map, Vox (Sept. 3, 2019), https://www.vox.com/policy-and-politics/2019/9/3/20848087/north-carolina-court-republican-gerrymander-state-legislature-map.

[4] For a complete description of the court’s remedies, see Lewis, 2019 N.C. Super. LEXIS 56 at *404-420. Other court orders such as compliance with the Voting Rights Act and country grouping requirements have not generated much controversy thus far. As a result, these remedies have been omitted.

[5] Id. at *413.

[6] Michael Wines, In North Carolina, New Political Maps Don’t End Old Disputes, N.Y. Times (Sept. 17, 2019), https://www.nytimes.com/2019/09/17/us/north-carolina-gerrymandering.html.

[7] Lewis, 2019 N.C. Super. LEXIS 56, at *416-17.

[8] Id. at *417.

[9] Id. at *416.

[10] Id. at *418-19.

[11] Brent Van Vliet, New State Legislative Maps Head to N.C. Superior Court for Approval, Daily Tar Heel (Sept. 23, 2019), https://www.dailytarheel.com/article/2019/09/new-ncga-maps-0923.

[12] Id.

[13] Wines, supra note 6.

[14] Will Doran, Did NC Lawmakers Look at Data Banned by Gerrymandering Ruling on Day 1 of Redraw?, Raleigh News & Observer (Sept. 10, 2019), https://www.newsobserver.com/news/politics-government/article234925852.html.

[15] Mark Joseph Stern, Instead of Fixing Their Gerrymander, North Carolina Republicans Are Trolling the Court, Slate (Sept. 10, 2019), https://slate.com/news-and-politics/2019/09/north-carolina-republicans-gerrymander-trolling-court.html.

[16] Id.

[17] Doran, supra note 14.

[18] Id.

[19] See Charles Blahous, Don’t Expect a Revolution from NC Gerrymandering Ruling, E21 (Sept. 13, 2019), https://economics21.org/north-carolina-gerrymandering-ruling-district-maps.

[20] Will Doran, New Political Maps Pass NC Legislature, Will Be Reviewed by Judges Who Ordered Redraw, Raleigh News & Observer (Sept. 17, 2019), https://www.newsobserver.com/news/politics-government/article235159817.html; Wines, supra note 6.

[21] Van Vliet, supra note 11; see also Stern, supra note 15.

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News Digest on the E-Cigarette Industry

Niusha Tavassoli, CLS ’21

In the past several weeks, there have been many headlines about vaping-induced hospitalizations. When looking at who to blame for this pandemic, there has been a lot of finger pointing from state and federal government officials. Earlier this week, Acting Chief of the FDA, Ned Sharpless, expressed that he felt the FDA should have acted sooner and is now playing a game of catch up to regulate the vaping industry.[1] At the center of this controversy is Juul Labs, a Silicon Valley based e-cigarette start-up that has been valued at $35 billion.[2]

In the past two years, there has been an uptick in vaping and e-cigarette usage. This uptick is especially startling when looking at teen e-cigarette usage. According to a statistic provided by the FDA, from 2017 to 2018, the number of high school students who reported current e-cigarette use within the last 30 days increased 78% to include a total of approximately 3.05 million American high school students.[3]

E-cigarette companies, and predominantly Juul Labs, have been criticized by government officials for targeting their products to the younger populations due to the style of their advertising and the use of flavored products. Public health officials have stated that studies show that e-cigarette flavors encourage youth use of e-cigarettes and can in turn lead youth to become tobacco users.[4] Additionally, the fact that the Juul vaporizer does not resemble traditional e-cigarettes is another factor that is attributed to its success amongst youth. However, Juul spokespersons stand by their products being an alternative for those trying to quit smoking.

“In 2016, FDA finalized a rule extending CTP’s regulatory authority to cover all tobacco products, including electronic nicotine delivery systems (ENDS) that meet the definition of a tobacco product. FDA regulates the manufacture, import, packaging, labeling, advertising, promotion, sale, and distribution of ENDS, including components and parts of ENDS but excluding accessories.”[5] However, this rule has clearly not been utilized to control the current epidemic.

The Trump Administration has recently announced that there will be a forthcoming ban on all fruit-flavored e-cigarette products, unless approved by the FDA.[6][7] Amidst the controversy, the CEO of Juul Labs, Kevin Burns, has resigned and the company has agreed to halt lobbying efforts against the ban.[8]

However, as the Federal government has been slow to act, local governments have taken matters into their own hands. Out of frustration, many cities, including San Francisco where Juul is headquartered, have extended their own local bans on flavored tobacco products to temporarily ban the sale of e-cigarettes entirely beginning in 2020.[9] Many other cities and states, such as Michigan, are following San Francisco’s suit.[10] In fact, Massachusetts has taken the strongest stance against vaping, becoming the first state to place a temporary 4-month ban on e-cigarettes after the vaping-induced deaths of 9 individuals.[11]

The regulations being implemented now are an attempt to clean up the mess that has been created by the lack of regulatory oversight. However, this raises the question of whether these regulations will now do more harm than good. While states are proposing banning e-cigarettes, they are still selling cigarettes and other tobacco products. It is important to consider whether these regulations will encourage the adults using e-cigarettes as a smoking aid and the youth who are now addicted, to turn to other tobacco products with known and serious harms. These realizations are crucial, especially in light of the fact that there is no specific vape product that has been linked to the vaping-induced hospitalizations.[12] Furthermore, many states have regulations banning tobacco sales to individuals under the age of 21.[13] Effective enforcement of the regulations already in place could counteract the allure of the flavored pods. All in all, the implications of regulating the industry are important considerations and will have lasting consequences.

 

[1]Thomas M. Burton, FDA’s Acting Chief Says Agency Acted Too Slowly to Avoid Vaping Crisis, Wall St. J. (Sept. 25, 2019), https://www.wsj.com/articles/fdas-acting-chief-says-agency-acted-too-slowly-to-avoid-vaping-crisis-11569433928?mod=searchresults&page=1&pos=7.

[2]Angelica LaVito, Tobacco giant Altria takes 35% stake in Juul, valuing e-cigarette company at $38 billion, CNBC (Dec. 20, 2018), https://www.cnbc.com/2018/12/20/altria-takes-stake-in-juul-a-pivotal-moment-for-the-e-cigarette-maker.html.

[3]2018 NYTS Data: A Startling Rise in Youth E-cigarette Use, FDA (Feb. 06, 2019), https://www.fda.gov/tobacco-products/youth-and-tobacco/2018-nyts-data-startling-rise-youth-e-cigarette-use.

[4]2018 NYTS Data: A Startling Rise in Youth E-cigarette Use, FDA (Feb. 06, 2019), https://www.fda.gov/tobacco-products/youth-and-tobacco/2018-nyts-data-startling-rise-youth-e-cigarette-use.

[5]Vaporizers, E-Cigarettes, and other Electronic Nicotine Delivery Systems (ENDS), FDA (Sept. 12, 2019), https://www.fda.gov/tobacco-products/products-ingredients-components/vaporizers-e-cigarettes-and-other-electronic-nicotine-delivery-systems-ends.

[6] Sheila Kaplan, Trump Administration Plans to Ban Falvored E-Cigarettes, N. Y. TIMES (Sept. 11, 2019), https://www.nytimes.com/2019/09/11/health/trump-vaping.html.

[7]Richard Harris and Carmel Wroth, FDA To Banish Flavored E-Cigarettes To Combat Youth Vaping, NPR (Sept. 11, 2019), https://www.npr.org/sections/health-shots/2019/09/11/759851853/fda-to-banish-flavored-e-cigarettes-to-combat-youth-vaping.

[8]Bobby Allyn, Juul Accepts Proposed Ban On Flavored Vaping Products As CEO Steps Down, NPR (Sept. 25, 2019), https://www.npr.org/2019/09/25/764201798/juul-will-agree-to-ban-on-flavored-vaping-products-says-its-ceo-is-stepping-down.

[9]Laura Klivans, San Francisco Bans Sale of E-Cigarettes, NPR (Jun. 25, 2019), https://www.npr.org/sections/health-shots/2019/06/25/735714009/san-francisco-poised-to-ban-sales-of-e-cigarettes.

[10]Hannah Knowles, Massachusetts to ban sale of all vaping products for 4 months in toughest state crackdown, Wash. Post (Sept. 24, 2019), https://www.washingtonpost.com/health/2019/09/24/massachusetts-ban-all-vaping-product-sales-months-toughest-state-crackdown/.

[11]Laurie McGinley, Michigan becomes first state to ban flavored e-cigarettes, Wash. Post (Sept. 04, 2019), https://www.washingtonpost.com/health/michigan-becomes-first-state-to-ban-flavored-e-cigarettes/2019/09/03/34f234c6-ce4c-11e9-8c1c-7c8ee785b855_story.html.

[12]Hannah Knowles and Lena H. Sun, What we know about the mysterious vaping-linked illness and deaths, Wash. Post (Sept. 27, 2019), https://www.washingtonpost.com/health/2019/09/07/what-we-know-about-mysterious-vaping-linked-illnesses-deaths/.

[13]Michael Greenwood, Banning tobacco sales to people under age 21 reduces smoking, Yale News (Jul. 26, 2019), https://news.yale.edu/2019/07/26/banning-tobacco-sales-people-under-age-21-reduces-smoking.

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Carlson, Postage Stamps, and Hints at the Future of Administrative Law

Samuel E. Weitzman, CLS ’21

In Carlson v. Postal Regulatory Comm’n, recently appointed D.C. Circuit Judge Neomi Rao delivered her first opinion pertaining to administrative law.[1] Judge Rao worked extensively on administrative law issues before ascending the federal bench, both in academia and as the administrator of the Office of Information and Regulatory Affairs.[2] As such, she already has expressed her views on various topics in public. Like Justice Thomas (for whom she clerked)[3] and Justice Scalia (whom she described as a “remarkable man” with whom she agreed “about many matters of legal interpretation”),[4] she is highly critical of congressional delegation to administrative agencies,[5] favors an expansive view of the President’s “sphere of action,”[6] and generally supports deregulation.[7] For the first time, however, legal observers have some sense of how she will rule.

Carlson’s facts were more whimsical than remarkable. The pro se petitioner was Douglas F. Carlson, “a postal customer and watchdog.”[8] Carlson challenged the Postal Regulatory Commission’s (PRC) five-cent increase in the price of “Forever Stamps” (from 50 cents to 55 cents) as arbitrary and capricious under the Administrative Procedure Act.[9] Specifically, Carlson argued that – in promulgating Order 4875 – the PRC failed to (a) consider all of the relevant statutory factors and objectives specified in the Postal Accountability and Enhancement Act (PAEA); (b) explain its justification for the price hike consistent with the requirement of “reasoned decisionmaking”; or (c) respond adequately to public comments, including Carlson’s.[10] The unanimous three-judge panel agreed, opting to vacate the new rates for first-class postage while leaving the rest of Order 4875 in place.[11]

Whether or not the D.C. Circuit was right in its determination is immaterial for present purposes: this blog is about law, not philately. Of greater interest is how Judge Rao reached her conclusion – and what it portends for her jurisprudence. Notably, in distinguishing between rulemaking and adjudication, Judge Rao quoted twice from Justice Scalia’s solo concurrence in Bowen v. Georgetown Univ. Hosp.[12] On the second occasion, she neglected to signal that her citation came from a single jurist rather than a majority of the Supreme Court – perhaps a mere Bluebooking error, but telling nonetheless.[13] The difference between the majority and concurrence’s views in Bowen was subtle yet significant. Speaking through Justice Kennedy, eight members of the Court held that agencies cannot promulgate legislative rules with retroactive effect unless Congress provides for that power using “express terms.”[14] Justice Scalia, meanwhile, maintained that administrative rules could never apply retroactively: for him, rules were exclusively prospective, while adjudications were wholly retroactive.[15] Bowen remains good law, and Justice Scalia’s concurring opinion has received its share of scholarly criticism.[16]

Judge Rao’s suggestion that, instead, Justice Scalia’s interpretation is the law of the land provides two insights into her approach. First, in adhering to Justice Scalia’s rigid delineations of APA categories, Judge Rao exhibited her formalist predilections. This demonstration was no revelation, following as she does in the footsteps of Justices Scalia and Thomas. Her formalism manifested itself elsewhere in the opinion, too, including through her textualist mode of rejecting the PRC’s interpretation of the PAEA.[17] Second, Judge Rao evinced a willingness to disregard precedent in favor of adopting a position hewing closer to her ideological preferences. She is hardly alone in doing so; jurists often borrow from non-controlling opinions to bolster their rhetoric. And sometimes, the concurrence or dissent really does become the doctrinal standard.[18] Perhaps Judge Rao is just ahead of the curve on rejecting Bowen presumption in favor of a categorical approach. If not, however, she risks wandering into areas unblessed – or even precluded – by prevailing doctrine.

How one feels about these tendencies may depend on how one conceives of the law, and thus one may either welcome or worry about these facets of Judge Rao’s jurisprudence. One thing is certain, however: her implicit rejection of Bowen will be just the first of many contributions Judge Rao makes to administrative law from her new seat on the federal bench.

[1] Carlson v. Postal Regulatory Comm’n, No. 18-1328, 2019 WL 4383260 (D.C. Cir. Sept. 13, 2019). Carlson was Judge Rao’s second opinion authored for the D.C. Circuit. Her first opinion did not involve any issues of administrative law. See Dist. No. 1, Pac. Coast Dist., Marine Eng’rs Beneficial Ass’n, AFL-CIO v. Liberty Mar. Corp., 933 F.3d 751 (D.C. Cir. 2019).

[2] Karen Zraick, Neomi Rao Will Replace Brett Kavanaugh on Key Appeals Court, N.Y. Times (Mar. 13, 2019), https://www.nytimes.com/2019/03/13/us/politics/neomi-rao-confirmed.html.

[3] Id.

[4] Remembering Justice Antonin Scalia, Antonin Scalia L. Sch. (last visited Sept. 25, 2019), https://www.law.gmu.edu/news/2016/scalia_tribute.

[5] See Neomi Rao, Administrative Collusion: How Delegation Diminishes the Collective Congress, 90 N.Y.U. L. Rev. 1463 (2015).

[6] See Neomi Rao, The President’s Sphere of Action, 45 Willamette L. Rev. 527 (2009). See also Neomi Rao, Removal: Necessary and Sufficient for Presidential Control, 65 Ala. L. Rev. 1205 (2014).

[7] See Neomi Rao, The Trump Administration’s Deregulation Efforts are Saving Billions of Dollars, Wash. Post. (Oct. 17, 2018), https://www.washingtonpost.com/opinions/the-trump-administration-is-deregulating-at-breakneck-speed/2018/10/17/09bd0b4c-d194-11e8-83d6-291fcead2ab1_story.html.

[8] Carlson, 2019 WL 4383260, at *3. Carlson has also been described as “sort of a Ralph Nader of the mail.” See Carl Nolte, Stamping Out Mail Problems: Civilian Advocate Addresses Service at the U.S. Postal Service, S.F. Chron. (Sept. 4, 2001), https://www.sfchronicle.com/bayarea/article/PROFILE-Doug-Carlson-Stamping-out-mail-2882873.php.

[9] Carlson, 2019 WL 4383260, at *4.

[10] Id. at *4.

[11] Id.

[12] Id. at *1–2 (quoting Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 219 (1988) (Scalia, J., concurring)).

[13] Id. at *2 (quoting Bowen, 488 U.S. at 218 (Scalia, J., concurring)).

[14] Bowen, 488 U.S. at 208.

[15] Id. at 216–25 (Scalia, J., concurring).

[16] See, e.g., Ronald M. Levin, The Case for (Finally) Fixing the APA’s Definition of “Rule,” 56 Admin L. Rev. 1077, 1085–88 (2004); William F. Luneberg, Retroactivity and Administrative Rulemaking, 1991 Duke. L.J. 106, 143–47 (1991); Frederick Schauer, A Brief Note on the Logic of Rules, with Special Reference to Bowen v. Georgetown University Hospital, 42 Admin L. Rev. 447, 449–55 (1990). One author recently claimed that “Justice Scalia’s concurrence is frequently referred to as an explanation of the law.” However, the author provided no evidence for this bare assertion. See William C. Neer, Discerning the Retroactive Policymaking Powers of the United States Patent and Trademark Office, 71 Admin. L. Rev. 413, 426 (2019).

[17] Carlson, 2019 WL 4383260, at *8–10.

[18] See, e.g., Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 634–55 (1952) (Jackson, J., concurring).