The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.
Friends, the feds are proposing a new, clear-as-mud rule requiring new corporate entities to identify all owners who exercise "substantial influence over important decisions." It is believed that this will help the gov't catch out drug dealers and money launderers using shell companies to hide their misdeeds, but—we promise you—the bad guys will just shift their tactics. The actual effect of the rule will be to require law-abiding small business owners to file millions of unnecessary reports, creating a honeypot of sensitive information that hackers can exploit. IJ Senior Attorney Robert Everett Johnson has more at USA Today.
- Environmental groups sue the EPA in 2014 for failing to consider whether a pesticide it approved complies with the Endangered Species Act. The EPA concedes it did not do so. D.C. Circuit: (2017): You guys had better get on that. EPA: Yeah, we'll get around to it. D.C. Circuit: 2022: MANDAMUSED! Finish it by next September and give us updates on your progress every 60 days.
- In October 2018 and again in March 2019, two Boeing 737 MAX 8 aircraft crashed, killing all aboard and revealing fatal defects that lead to the planes being grounded worldwide. A class of plaintiffs sue. Oh, not about those crashes—they sue about having flown on Boeing 737 MAX 8 aircraft that brought them safely to their destinations. But if they had known about the planes' alleged deficiencies, they definitely would not have paid so much for their tickets. Fifth Circuit: Airlines don't offer customers discounts for flying on riskier aircraft; if the defects had been public knowledge, the airlines would have operated no flights on the 737 MAX 8, reducing the number of available seats and increasing ticket prices. No economic injury, no case.
- What do you do if you want to regulate, but you don't want to actually … regulate? Maybe you give a group of private people the power to regulate their peers. That's the approach Congress took in a 2020 law that gave a private association power to regulate the horseracing industry, including the power to promulgate rules, investigate violations, and impose penalties. Fifth Circuit: And that violated the cardinal rule that private parties cannot wield gov't power.
- Man caught entering U.S. from Mexico convicted of unlawful reentry (having been deported twice before). District court: Though its predecessor, the Undesirable Aliens Act of 1929, violated equal protection, Congress's deliberation and enactment of more recent versions of the statute cured the prior discriminatory taint. You're sentenced to 30 months in prison and three years of supervised release, the latter of which allows you time to appeal the conviction. Fifth Circuit: Can't base the term of supervised release on the timing for an appeal.
- To mitigate the economic effects of COVID-19, Congress throws a boatload of cash at the states but says they can't use the money to "directly or indirectly offset a reduction" in taxes. Ohio (in one lawsuit) and Kentucky and Tennessee (in another) claim the "offset" is unconstitutional. In response, Treasury says most tax cuts are OK as long as the total amount of spending doesn't decrease. Sixth Circuit: And because of this "credible" clarification, Ohio's suit is moot. Sixth Circuit: And so (over a dissent) is Kentucky's. But Tennessee's isn't because it will have more paperwork. And that means we can say Congress was unconstitutionally vague. (The Sixth thus splits with the Eighth Circuit, which found that Missouri lacked standing.)
- Allegation: Weeks after Columbus, Ohio officers say man fled from traffic stop, he's arrested at his home (on Thanksgiving) and jailed for five days. Yikes! The man's roommate, who doesn't look anything like him, had borrowed his car on the night in question. The officers just looked up the car owner's photo and put his description in their report. Sixth Circuit (unpublished): "Officers lying about the basis for probable cause is the kind of 'obvious' rights violation that does not demand a catalog of factually similar cases." Moreover, "[a]n officer does not need to be on notice of a specific kind of lie he is prohibited from telling." That said, there is a case on point. No qualified immunity.
- Plaintiffs: These Michigan counties illegally retain the surplus value of homes sold to enforce tax liens, so we sue them! Insurance company (for one of the counties): Our policy doesn't require us to cover these claims, so we sue you right back! Sixth Circuit: You can't sue somebody who hasn't asked you to do anything just because you want a declaration that you won't have to pay for a judgment they might someday perhaps obtain against a third party.
- Illinois subscriber to Good Housekeeping finds her personal information has been sold to data miners without her permission. She sues Hearst Communications for violating the Illinois Right of Publicity Act. Seventh Circuit: The Act doesn't ban selling the personal information ("Here's everything we know about Elizabeth"), it bans using the personal information to sell things ("Elizabeth from Illinois thinks our subscriber data is the best!"). No claim.
- Younger-abstention aficionados will know that the federal courts' overreliance on the so-called "Middlesex factors" has aged like fine milk in the decade since the Supreme Court's decision in Sprint Communications, Inc. v. Jacobs. Eighth Circuit: So why are the parties' briefs in this Younger-abstention appeal "focused almost entirely on the Middlesex factors"? Pish posh. No Younger abstention. The case—a challenge to Stone County, Mo.'s vacation rental rules—may proceed.
- Citizen of El Salvador illegally came to the U.S. when a minor and over the next few years "accumulated a fairly lengthy criminal record." After an arrest in 2018, he's placed in removal proceedings. He asks to be let out on bond; is denied. Fourteen months later, and still in removal proceedings, he asks for another bond hearing. Does he have a due process right to the second hearing because his proceedings have been "prolonged"? Ninth Circuit: Not under the standard balancing test. Concurrence: This guy might have won if James Madison's views of immigrants had prevailed. Too bad John Marshall's did instead. Dissent: The test says yes.
- Plaintiffs who allege they are the heirs to owners of beachfront Cuban properties that were nationalized after the 1959 revolution sue … U.S. travel websites? Indeed! The sites allow one to secure lodging at resorts the Cuban gov't built on the stolen land, and in 1996 Congress created a private cause of action allowing suits against folks who knowingly traffic in expropriated property. (The cause of action had been suspended by successive presidential decrees until 2019.) Eleventh Circuit: The district court has jurisdiction over the defendants and the plaintiffs have standing. Case undismissed.
- And yet, says the Eleventh Circuit, a man suing cruise lines that use commercial waterfront property in Cuba that was confiscated from plaintiff's cousin's brother in 1960 cannot recover because he inherited his interest in the property in 2000, which is after 1996. Concurrence: Which is indeed the outcome the statute requires, but it sure looks like a case of sloppy drafting.
- And in en banc news, the Ninth Circuit will not reconsider its decision upholding the Mandatory Repatriation Tax of the Tax Cuts and Jobs Act of 2017, which requires investors in foreign companies to pay taxes on unrealized investment gains. Four judges dissent, arguing that the tax is an unapportioned direct tax that exceeds Congress' power under the 16th Amendment, which applies only to realized income.
- And in amicus brief news, IJ is asking the Second Circuit to rule that an officer pointing a gun at someone who is compliant and nonthreatening is by itself a clearly established Fourth Amendment violation. Earlier this year, a federal district court granted qualified immunity to an NYPD officer who pointed his gun at a school teacher (at a traffic stop) because the officer did not also make verbal threats or physical contact.
- And in more amicus brief news, IJ is asking an Indiana state trial court put a stop to a troubling new trend: the state—acting through a private prosecutor—conducting civil forfeitures in virtual secrecy by redacting basic information (including the names of the defendants, descriptions of the property being forfeited, and nearly all of the probable-cause affidavit required by state law) on court documents. That violates Indiana Supreme Court rules requiring openness in judicial proceedings and also the state's civil forfeiture statute, which requires prosecutors to publicly report the very data that's being withheld.
Judges can authorize a search of your home. But they aren't supposed to personally supervise the search themselves. Indeed, that's what a federal district court ruled recently, denying absolute judicial immunity to a Raleigh County, WV family court judge who forced her way into IJ client Matthew Gibson's home under threat of arrest so that his ex-wife could remove some disputed property, including DVDs and an umbrella stand. (The judge forbade Matthew from filming the search, which she conducted barefoot.) Now, IJ is asking the Fourth Circuit to uphold the district court's ruling. Click here to learn more. Or click here for a lovingly crafted podcast episode on the history of judicial immunity.