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Monday, September 9, 2024

Democrats Implicitly Admit Corporations Are People

In 2010, the Supreme Court issued its decision in Citizens United v. Federal Election Commission. In it, the Supreme Court ruled that corporations (and unions) had free speech rights as did other non- and for-profit organizations. On August 11, 2011, Mitt Romney, in a response to a demand to raise taxes on corporations, argued that "Corporations are people."

Both events left enormous impacts on the body politic. This was used as a political bludgeon by the Obama campaign. Also, "At the DNC, [Elizabeth] Warren offered a...stinging rejoinder to Romney & co." It continued to be used against him even beyond the 2012 election.

Citizens United has been used as a Democratic bogeyman even longer. Biden in 2020; "Vice President Harris has been a vocal opponent of the disastrous Citizens United decision" and introduced a constitutional amendment to overturn it. The Wikipedia page has a list of additional opposition.1

For those with a deep memory, a consistent policy platform, and an eye for hypocrisy, it wouldn't have escaped their notice that the left's stance on NetChoice is entirely at odds with their stance on Citizens United. There are two NetChoice cases where Florida and Texas have passed laws restricting social media platforms' ability to moderate their users.

The reactionary left, automatically sides with NetChoice. They're just trying to censor racists and false information, and they're going up against elected Republicans from red states.

Some may realize, though most do not, that the NetChoice Argument is the Citizens United Argument. Corporations have free speech rights. In the latter, that allowed them to create political messaging, and in the former, it allows them to moderate their users and censor posts.2

Corporations are indeed people.

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Monday, March 20, 2023

Why Challenging Student Loan Forgiveness is Challenging

Background

President Biden's Student Loan Forgiveness Case (Department of Education v. Brown) serves as a wonderful illustration of the myriad issues swirling around in a Supreme Court case. The media tend to simplify these cases to the point that the real questions are distorted, so it's beneficial to go over them from time to time.

With any Supreme Court case, there are several questions that can be answered:

• Is the policy in question a good one, one which the government should enforce?
• Is the policy in question legal? Is the President doing something that Congress did not empower him to do? Did Congress pass a law that the Constitution forbids?

Typically, most media outlets will focus on the first question, because it's the simpler to understand and fight over (and also is more likely to implicate the outcome the media prefers). However, the first question is never the question that the Supreme Court should be deciding, and at least officially, it never does. Instead, it is meant to consider the second question.

The cynical would argue that the Supreme Court is really just deciding based on how they feel about the first question. To the extent that's true, it's very difficult to prove, but what is unquestionably true is that even if that's the case, they try to couch their decisions in terms of whether Congress or the President has the ability to do something, not whether they should or not.1

In the context of the student loan forgiveness case, the questions become "Is it good policy to forgive student loans?" and "Does President Biden have the authority to forgive student loans?"

On the first question, there are many dimensions that come into play: how much should be forgiven, who should be forgiven, is it unfair for the people who paid off their debts or worked to avoid debt. These are all questions for legislators to hash out in determining a policy that satisfies many competing interests. These are not questions that the should enter the minds of the Justices.

Their only consideration should be the legality. Did Congress or the President have the authority to act in the way that they acted? In this case, few people would argue that Congress could not legislate some kind of loan forgiveness, and no one here is arguing that Congress did not have authority because the loan forgiveness was initiated by the Biden administration. The case, therefore, is about whether Biden (and his Department of Education) were empowered to enact such a sweeping forgiveness program.

On that point, there is widespread skepticism of Biden's move including from Nancy Pelosi and the Washington Post editorial board. I will leave the debate on the merits and the legality to others.

Standing

There is, however, a third question that arises in Supreme Court cases, and that is standing. Simply put, to be able to challenge an act of Congress or the President (or anyone) in court, you have to have been harmed by the act. In most cases, this is not a large hurdle to overcome. Go through the worst cases, and most of them have an obviously harmed party--The EPA's regulation would have cost power plants money, Korematsu was a Japanese citizen forced to relocate to an internment camp, Hobby Lobby was being forced to pay for reproductive services for its employees.

In Dept of Ed v Brown, it's not as clear if anyone is harmed because the effect of the act is to reduce debt, so no one is supposed to be made worse off, only better off. In fact, the Biden administration modified its plan after its original trial-ballooning to narrow its scope in order to exclude parties that could claim some harm and be able to challenge it.

The issue of standing has been more significant than most people realize because most coverage of court issues defaults to the goodness or badness of the policy in question, and reporters either don't understand the legal arguments or they think their audiences don't want to read them. For example, a substantial number of the lawsuits brought by the Trump campaign in the aftermath of the 2020 election were dismissed due to lack of standing.

In 2021, before the Dobbs decision overturned Roe v. Wade and states wanting to outlaw abortions had to figure out ways to get around the Court-granted right, Texas devised a sue-your-neighbor-for-abortion policy specifically to avoid challenges. Since any clinics that might be sued were not being harmed by the state, no government officials or representatives could be sued. By designing it this way, Texas relied on standing to prevent any lawsuits, at least in the short-term, and the Supreme Court agreed.

Standing is a major issue with the Student Loan Forgiveness case. Because Biden designed (and modified it) so that it would not bring harm to anyone. The recipients of the forgiveness are obviously better off because the debt they are obliged to repay has been reduced or eliminated. Presumably, the lender would be the losing party as they lose out on the interest that students would pay while servicing their loan. However, only 7% of student loan debt is held by private lenders, who would have standing. The other 93% is held by the federal government (who does have standing but since they're the ones pursuing this, they won't sue themselves!).

Further, the forgiveness does not apply to the 7% of loans that are held by private institutions, so they are unharmed and cannot challenge.

In one interesting challenge, an individual who was eligible for the loan forgiveness claimed that he would be harmed because the state he lived in would consider the debt cancellation as income and would tax it. In addition, he receives no offsetting benefit for the forgiveness, which would negate his claim since he would receive more than he would need to pay, because he was participating in the federal Public Service Loan Forgiveness program already. That program would already forgive his loan without subjecting him to additional state taxation.

While this challenge would provide standing to the challenger under the policy as announced on the Department of Education's website, which claimed that the debt cancellation would be automatic, if the plaintiff was allowed to opt-out of the policy, then any harm that the policy caused would be self-inflicted because he would have to actively pursue it himself. The administration realized this between the time the case was filed and before the policy was formalized, and changed its website's description of the forgiveness and replaced the mention of automatic relief with the opt-out "clarification." The litigation is still active, and it's unclear whether he has standing.

More info here

The MOHELA Case

Even the case that was argued at the Supreme Court features insightful complications. MOHELA, the Missouri Higher Education Loan Authority, is a government-created and run servicer of loans in Missouri. Because MOHELA receives revenues from servicing the loans in question, they would be financially harmed if the loans were forgiven. To my knowledge, no one questions whether MOHELA itself has standing, but MOHELA itself (and its administrators) chose not to sue the Department of Education. The state of Missouri, then, sued on its behalf, so the debate over standing has become a debate over whether MOHELA is independent of the state, and to what degree, if the state of Missouri can sue on their behalf.

Wherefore Not Taxpayers

You may ask yourself, all of these debates over standing seem to be debates over the interest, the incidental taxes, or other indirect components of the debt, but if debt is being cancelled, surely someone is paying for that. If a bank cancels your debt, then the bank has taken a loss on the principal and the interest. In this case, who is paying for the principal and why can they not sue. The answer to that, dear taxpayer, is you. As the holder of debt, the U.S. government is owed vast sums of money. If the government erases it, future revenues that would pay for myriad government programs will not be available and those programs will need to be funded through taxes and debt (ultimately paid for through taxes).

If taxpayers are on the hook, why can't they sue. In another of the enormously significant Supreme Court Cases, Massachusetts v. Mellon determined that taxpayers do not have standing to challenge based on the notion that they would pay for any programs. This created a substantial blind spot in our legal system where Congress or the President can act unilaterally as long as their actions exclusively benefit people and harm no one. They are free, then, expend any amount of money for any cause, at taxpayer expense, and whether or not they have the authority to do so, there are extremely limited paths to rein them in.

Footnotes

1Of course, this isn't always the case. Sotomayor brought up the effects on students who are the beneficiaries of this program which has nothing to do with its legality.

Tuesday, February 14, 2023

Supremely Bad Decisions

Recently "Poli-Sci Twitter" ran a poll on the worst Supreme Court decisions of all time. The results are simultaneously illuminating and alarming. There's an obvious recency bias and left-leaning political bias in the results.

1. Citizens United v. FEC
2. Korematsu v. United States
3. Shelby County v. Holder
4. Marbury v. Madison
5. Buck v. Bell
6. Dred Scott v. Sandford
7. Bush v. Gore
8. West Virginia v. EPA
9. Burwell v. Hobby Lobby
10. Plessy v. Ferguson
11. Williams v. Mississippi
12. Chae Chan Ping v. United States
13. Dobbs v. Jackson Women's Health
14. San Antonio v. Rodriguez

Luke Thompson on Twitter briefly (over-)summarized the cases, but a clearer, objective summary would be very beneficial.

The 14 case list contains 6 decisions from the 2000s, 3 from the 1900s, and 5 from the 1800s While the list spans cases back to 1803, the recency bias is evident. Two of the worse cases of all time happened to come down last year, and the worst case, worse even than the cases that stripped African-Americans of all of their rights, relegated Japanese Americans to internment camps, and allowed for apartheid in the South, was a case that allowed corporations to support political candidates.

The Democratic-tilt is also obvious in this list. Half of the cases (Citizens United, Shelby County v. Holder, Bush v. Gore, West Virginia v. EPA, Burwell, Dobbs, and San Antonio Schools) are cases that curtailed the Democratic-exclusive agenda.

This list was probably produced in response to an analogous list produced by the conservative Law & Liberty organization on the 50th anniversary of Roe v. Wade.

Of the 20 cases named here, 3 occurred in the 1800s, 14 in the 1900s (7 after 1950, 7 before), and 3 in the 2000s. Like the previous list, there's clearly some Republican-bias with these. Roe v. Wade, Oborgefell, Planned Parenthood, Lawrence v. Texas, Griswold, and several cases dealing with religion and school.

Other Thoughts

A decision's quality can be judged either by the strength of the legal arguments or the effects it wreaks in society. Dred Scott was disastrous by both standards. Obviously people will disagree over the results of Roe v. Wade (and Griswold), for that matter, but it should not be debated that both were extremely thinly supported decisions on a constitutional basis. In fact, there is widespread agreement across the political spectrum that this was a poorly-reasoned decision.

For many of the conservative cases, I wonder how many are abhorred because of their impact on society or because of their legal reasoning. The U. California v. Bakke case (affirmative action), had a debatable effect on society. I'm not convinced affirmative action really helped African Americans much, but I do believe that that was the intention, which counts for something.

Legally, though, it seems a terrible decision. It is based on a "compelling interest", which seems to just be "anything goes as long as you want something good." There were times that society considered segregation a "compelling interest." It's sloppy reasoning to rely on something so easily applied.

I'm surprised Lochner is on the conservatives' list since it restricted state governments from regulating labor. According to the write-up, the reason is that it created a "right to contract" that didn't exist, not unlike Roe v. Wade created a right to privacy.

In the spirit of Luke Thompson's original tweet, here's a Worst Cases of the Supreme Court Cheat Sheet. (In alphabetical order)