Short Circuit: A roundup of recent federal court decisions

Dangerous tennis shoes, a magnificent distillery, and bad advice from the IRS.

Please enjoy the latest edition of Short Circuit, a weekly feature from the Institute for Justice.

Praised by James Madison as a "bulwark in favor of personal security and private rights," the Contract Clause has long since fallen into obscurity and disuse, giving legislators relatively free rein to retroactively rewrite contracts. This week, the Supreme Court declined to reverse course, voting 8–1 to uphold a Minnesota law that automatically terminates life insurance designations upon divorce. Only Justice Gorsuch dissented. Nick Sibilla has the story.

New on the podcast: Special guest Clark Neily, vice president for criminal justice at the Cato Institute, talks qualified immunity, the FTC's cybersecurity crackdowns, and a virulently racist lawyer. Click here for iTunes.

• EPA: If a federal circuit court rules against us in a Clean Air Act permitting fight, we don't need to follow the ruling in other circuits. Industry groups: The EPA needs to follow the ruling in the other circuits. D.C. Circuit: No, the EPA's position is reasonable.
• The Dep't of Homeland Security permits foreigners admitted on student visas to stay and work in STEM fields for up to three years after graduation; their employers must attest they aren't replacing a native worker, nor being paid less than one. Plaintiffs: Congress never authorized this; it lowers wages for U.S. workers. D.C. Circuit: Plaintiffs have standing to sue. (The lawsuit is now in its 10th year.)
• Boston College student crossing crowded dance floor is accused of putting his fingers far up another student's dress. A school disciplinary board suspends him a month later—before forensic and video evidence (that he says will exonerate him) become available. First Circuit: Which isn't a breach of contract; nor is there evidence of pervasive anti-male bias in the school's sex assault adjudications. Some claims should go forward, though. Among them: that school officials gave special treatment to a third student (to put him at ease during the hearing) who the accused says is the likely culprit.
• Some eight hours after robbery of San Lorenzo, P.R. bank, the authorities locate suspect at rural house. They coax him out, arrest him, and then search the house. Inside: lots of cash from the bank. First Circuit: Needed a warrant for the search. Suppress the evidence.
• Allegation: Without warning, NYPD fires "sound gun," a siren that causes hearing damage, to clear nonviolent protesters (protesting no indictment for officer who put a man in a fatal chokehold) from street onto sidewalk. Second Circuit: Hearing damage is a severe consequence for blocking the road. No qualified immunity. (Click here for some longform journalism on sound guns. Tell 'em Chief Judge Katzmann sent you.)
• Taxpayer files appeal of adverse tax decision a week late. Allegation: Because IRS staffers, whose job is to help people navigate the appeals process, gave her false information. Fourth Circuit: Doesn't matter. Case dismissed. (The appeal was argued by a Harvard Law School student, Allison Bray.)
• Houston physician learns his accountant embezzled $11 mil that was meant for the IRS. The accountant goes to jail. The physician shuts down his practice, turns over its assets to the IRS, and loans $100k to the practice to pay his employees one last time. IRS: That $100k should have gone to us. The physician (now deceased) must pay a $4.3 mil penalty. He's a victim, but he was also grossly negligent for trusting the accountant. Fifth Circuit: Maybe not; remanded for a trial. Judge Jones, concurring: The IRS was "irresponsible at best" in the way it litigated this case. "Is it too much to assume the tax collectors can read bank and financial records adeptly, and that ethically, they wouldn't make claims without factual foundations"?
• Employees at Houston dental office note that doctor's office in same building serves huge numbers of out-of-state patients, many of them unkempt, who loiter, bathe in bathroom sinks, and seem impaired. The dental employees snoop through the doctor's trash and, finding suspicious notes about painkiller prescriptions, alert the authorities. Fifth Circuit: There is sufficient evidence he was running a pill mill, so we won't disturb the jury's verdict.
• A trademark dispute gives Judge Sutton of the Sixth Circuit occasion to hold forth on bourbon, busy bodies, and Kentucky's eastern hollows—as well as to relate the story of a historic, long-disused Woodford County distillery that is being restored to former glory.
• Prosecutors: Two defendants faced threat of harm from Mexican cartel, were in no position to profit from their role in drug-smuggling operation. Because of their cooperation and remorse, we recommend below-guidelines sentences of three years. District court: They each get 10 years. Sixth Circuit: Vacated. Remanded to different judge.
• Immigrant serves five-year sentence after 1992 drug conviction but isn't deported because Iraq isn't issuing travel papers. He's rearrested in 2017 after Iraq begins issuing such papers. Immigrant: I'm a Chaldean Christian; it's not safe for me there. Board of Immigration Appeals: You didn't provide sufficient evidence that you'll be tortured by the Iraqi gov't or with its acquiescence. Sixth Circuit: We don't have jurisdiction to review the BIA's factual determinations.
• No need to overturn a $28.1 mil award to six exonerees (about $365,000 per person for each year in prison) exonerated of 1985 murder of elderly Beatrice, Neb. woman, says the Eighth Circuit. (Click here for some longform journalism on the case.)
• In Missouri, individuals wishing to receive or spend money to advocate for or against a ballot measure must register as a "campaign committee" at least 30 days prior to the vote. Eighth Circuit: The 30-day blackout period violates the First Amendment. (True story: A learned scholar once conducted an experiment where 255 participants, mostly grad students, filled out the appropriate paperwork to comply with Missouri and two other states' rules for campaign committees. Not a single one did it right. All could have faced legal liability had it been a real-world exercise.)
• High, mentally ill man shouts at Newport Beach, Calif. police from within a convenience store, pantomimes having a gun, tells police to shoot him. Police take position outside, behind car doors. He runs toward them brandishing what turns out to be a metal display hook. They shoot, kill him. Excessive force? Quite possibly, says a Ninth Circuit panel. But that wasn't clearly established, so the man's parents can't sue under the Fourth Amendment. Their state-law claims should not have been dismissed, however.
• Man wearing tennis shoes kicks, stomps on victim, causing brain damage. Ninth Circuit: And properly got a sentencing enhancement for using a dangerous weapon, the tennis shoes.
• Allegation: Though state standards prohibit male officers from guarding female inmates, Ottawa County, Okla. sheriff hires only male officers. Moreover, he's aware there are blind spots in the jail's video surveillance. A guard rapes an inmate. Can she sue the sheriff? District court: Yes. Tenth Circuit: No.
• Health insurer: Under ObamaCare, we entered risky health insurance markets because we were promised we would receive billions of dollars to alleviate the risk. But the federal government isn't sending us the money! ($12 bil or more is on the line). Trump Administration: The Obama Administration may have been willing to make payments even though Congress never appropriated the money, but we won't. Federal Circuit: No money for you, insurers. By not appropriating the money for the "risk corridor" payments, Congress made a decision to suspend the government's obligation to pay.
• After five drone strikes narrowly miss him over a three-month span, American journalist reporting in Syria comes to believe that he is on a secret "kill list" compiled by U.S. intelligence services. Feds: But the court can't hear this claim for a variety of reasons, e.g. whom the gov't targets in wartime is a political question the courts shouldn't interfere with. District court: The lawsuit may proceed. Plaintiff has a "birthright" as a U.S. citizen to make his case for why he shouldn't be "targeted for legal action." Indeed, his interest in not getting killed is "uniquely compelling." (H/t: Owen Barcala.)

Colorado outsources the enforcement of its campaign finance laws to the public at large, permitting anyone to sue over alleged violations. Unsurprisingly, political insiders frequently use the law to silence opponents and critics. For instance: IJ client Tammy Holland. Holland placed an ad in the local paper urging readers to familiarize themselves with school board candidates—hardly an attack ad. Nevertheless, school officials sued her. And though the suit was meritless (since the law does not apply to ads that do not expressly advocate for or against candidates), Holland incurred thousands in legal expenses. This week, however, a federal judge ruled that such suits violate the First Amendment and voiced concern that Colorado's system of private enforcement had become "a feeding ground for political warfare and what could be described as extortion." Click here to read more.