- Get the truckers what they need: reversing itself, Pennsylania agrees to reopen all 17 closed turnpike service plazas, heavily relied on by truck workforce [Ashley, CDL Life]
- No, Senator, Medicare for All would not have kept us safe: “An Epidemic Big Enough to Accommodate Everyone’s Wish List” [Jacob Sullum] Has spending on the federal Centers for Disease Control and National Institutes of Health been squeezed, gutted, etc.? My colleague Chris Edwards checks the numbers;
- This is not the first time epidemics have interrupted the Supreme Court in its work [ABA Journal]
- Medical supplier, speaking anonymously “for fear of FDA retaliation,” says it has large quantities of protective masks ready that cannot be used or even unpacked until FDA gets around to inspection [Tom Rogan, Washington Examiner] As part of liability protection, new bill will allow masks manufactured for industrial uses to be put into health care service [Jeanne Whalen, Washington Post; earlier here and here]
- Good luck and renewed health to David Lat, founder of Above the Law and longtime friend of this site, who’s on ventilation in a New York hospital with a COVID-19 diagnosis [New York Law Journal, his Twitter and Facebook posts]
- Emergency measures have a way of bleeding into later policy: “Politicians Declare Eviction Moratoriums To Combat Coronavirus. Will They Give Up That Power After the Virus Fades?” [Christian Britschgi]
I’m in today’s Wall Street Journal [paywalled for some readers] with a piece on last week’s vote by the San Francisco Board of Supervisors to brand the National Rifle Association a “domestic terrorist organization.” The resolution repeatedly takes the view that “advocacy,” “propaganda” and “promotion” of certain political viewpoints, or of gun ownership, constitutes terrorism or, as the case may be, “material support” for it.
First Amendment aside, there’s more than just symbolism in the board’s divisive attempt to change the meaning of words by main force. The resolution also declares a crackdown on city contractors who do business with the gun-advocacy group, and under current law that is very likely to be struck down in itself as inconsistent with the First Amendment under a 1996 Supreme Court precedent.
Some related links: the resolution; the 1996 Board of County Commissioners v. Umbehr case, in which the Supreme Court ruled 7-2 that the First Amendment restrains localities’ discretion to shun contractors because of their politics; Jonathan Adler in 2015 on the Chick-Fil-A controversies; and reporting on the San Francisco supervisors’ resolution to use nicer, not-so-dehumanizing terminology about criminals (Jim Geraghty at National Review noticed this before me).
Earlier this month a federal jury found two Boston city hall officials guilty of conspiracy to commit extortion after prosecutors proved that they told a concert promoter that unless it hired members of a union that had supported Mayor Marty Walsh, it wouldn’t get a permit for its event. [Jerome Campbell, WBUR, AP/CBS Boston, earlier here, here, here]
So far, so Boston. Even more characteristic of the city’s political culture: ten Boston city councilors put out a statement decrying the verdict. The really perfect touch? “Some 70 nonprofit organizations, representing environmental, LGBTQ, housing, senior, education, and civil rights advocates,” have also denounced the verdict, claiming that it interferes with “democracy.”
Veteran Boston Globe columnist Joan Vennochi calls it “bizarre” for these groups to “condon[e] threats from city officials as an acceptable standard for doing business in Boston”:
Supporters of Brissette and Sullivan argue that the case criminalizes advocacy. Suggesting that concert organizers hire union help might qualify as simple advocacy. But organizers of the Boston Calling concert were basically told there would be no permit unless they hired union labor. That’s wrong, and Brissette and Sullivan knew it. Joe Rull, the city’s former chief of operations, who testified under a grant of immunity, told the court that when Brissette wanted to employ that hardball tactic during a previous disagreement concerning the use of nonunion production workers he told him, “You can’t do that, it’s not legal.”
More from Josh McCabe:
In case you were wondering, here's the full list of organizations that took it upon themselves to defend extortion and corruption by taking out a full page ad in the Boston Globe. pic.twitter.com/fL4Q4CDSJF
— Josh McCabe (@JoshuaTMcCabe) August 26, 2019
A federal judge has ruled the National Rifle Association can proceed with its First Amendment suit against New York Gov. Andrew Cuomo over his pressure on regulated banks, insurers to cut ties with gun rights advocacy groups like the NRA. “U.S. District Judge Thomas McAvoy questioned Cuomo’s claim that his messages about the wisdom and propriety of providing financial services to the NRA amount to nothing but legitimate regulatory oversight and protected government speech.” [Jacob Sullum and background, Eugene Volokh] “It is well-established under binding federal appeals court decisions that government officials like Cuomo are not allowed to pressure organizations or businesses to cut off services to someone because of their political stances or expression — even when the government official uses informal pressure as opposed to explicit threats. (See, e.g., Rattner v. Netburn, 930 F.2d 204 (2d Cir. 1991)).” [Hans Bader] Earlier here, here and here (ACLU files amicus brief defending NRA’s rights), etc.
- “California’s Unconstitutional Gender Quotas for Corporate Boards” [Ilya Somin, Stephen Bainbridge, Jerome Woehrle, Ann Althouse]
- Useful tool, or abuse of power? “Leveraging allows regulators to use their gatekeeping authority to secure concessions that they might not be able to achieve otherwise—and to do so quickly and cheaply.” [William Kovacic and David Hyman, Cato Regulation magazine]
- The conflict minerals law fiasco: “between 2010 and 2012, the monthly incidence of battles, looting and violence against civilians strongly increased in the mining areas targeted by Dodd-Frank” [Nik Stoop, Marijke Verpoorten and Peter van der Windt, Washington Post “Monkey Cage”, Dominic Parker, PERC (summarizing two recent studies), my earlier]
- “Return of Bill Lerach: Disbarred attorney consults on case alleging hedge funds mismanaged Kentucky pensions” [ABA Journal]
- “The Politics of Pay: The Unintended Consequences of Regulating Executive Compensation” [Kevin J. Murphy and Michael C. Jensen, Cato Institute Research Briefs in Economic Policy series]
- “Increasingly, our [financial] regulatory structure has been adopting processes that are inconsistent with adherence to the rule of law.” What to do? [Charles Calomiris, Cato Journal]
“It was quite something to hear Republicans sounding like Elizabeth Warren on a trust-busting bender, but it is difficult to take seriously the proposition that what’s at work here is concern about monopoly power, Supreme Court precedents, or anything of the sort: This is about friends and enemies, and Republicans have decided that Silicon Valley is the enemy.” [Kevin Williamson, National Review] “Trump allies propose nationalizing Facebook, Google data” [Jason Tashea, ABA Journal] And see John Hinderaker, PowerLine, on a tape showing Google employees disappointed by the results of the last election (“Break them up under the Sherman Act? Turn them into regulated public utilities, with public employee-level salaries and no stock options? Those are all possibilities.”) Related: Thomas Hazlett, “Making the Fairness Doctrine Great Again,” Reason, March.
Last month we noted that the ACLU had filed a brief on the side of the NRA in its regulatory-retaliation First Amendment suit against New York Gov. Andrew Cuomo. The brief “strikes me as quite sound legally,” writes Eugene Volokh, who quotes and annotates its text. But the action has roused passionate opposition within the organization itself, reports Mark Joseph Stern at Slate. For example, the ACLU’s New York affiliate declined to join the brief and its officials issued a public statement critical of it. Among their arguments: the NRA “has enormous resources and is fully able to present its First Amendment claim.” Others argue that the dispute is at least in part fact-intensive and does not rest entirely on First Amendment issues, since Cuomo had denounced a particular insurance product marketed by the NRA as unlawful — although the governor’s own statements make clear that his call for regulators to squeeze the group’s finances went beyond that, and indeed included a call for them to put the squeeze on groups with advocacy missions similar to the NRA’s. Yet other factions within the ACLU charge that for it to side with the NRA is to advance “white supremacy.” More: Scott Greenfield.
The legal role the ACLU is playing here, it should be noted, is amicus, as distinct from pro bono defense. As Howard Wasserman, writing at PrawfsBlawg, notes:
The resources argument (putting aside whether it has any merit) strikes me as inapposite in this case. The ACLU is not representing the NRA in this case, so any expenditure of ACLU resources does not relieve the NRA of the burden to spend money on its own lawyers to make its own arguments. The benefit of the ACLU’s brief, on which it did expend some of its limited resources, is to the NRA’s legal position, not to its wallet. An argument that the ACLU not only should not represent well-resourced parties* but should not provide amicus support for well-resourced parties seems over-inclusive, tying the merits of a party’s constitutional position to the money in its bank account.
I’ve been critical of the ACLU lately but its amicus-brief defense of the NRA’s First Amendment rights against New York Gov. Andrew Cuomo’s strong-arm use of insurance and bank regulation is vital, timely, and right:
Public officials are, of course, free to criticize groups with which they disagree. But they cannot use their regulatory authority to penalize advocacy groups by threatening companies that do business with those groups. And here the state has admitted, in its own words, that it focused on the NRA and other groups not because of any illegal conduct, but because they engage in “gun promotion” — in other words, because they advocate a lawful activity.
Substitute Planned Parenthood or the Communist Party for the NRA, and the point is clear. If Cuomo can do this to the NRA, then conservative governors could have their financial regulators threaten banks and financial institutions that do business with any other group whose political views the governor opposes. The First Amendment bars state officials from using their regulatory power to penalize groups merely because they promote disapproved ideas.
As we mentioned in a brief earlier item, New York Gov. Andrew Cuomo has “directed the Department of Financial Services to urge insurance companies, New York State-chartered banks, and other financial services companies licensed in New York to review any relationships they may have with the National Rifle Association and other similar organizations. Upon this review, the companies are encouraged to consider whether such ties harm their corporate reputations and jeopardize public safety.” [Cuomo press release] Maria T. Vullo, Superintendent of Financial Services for the state of New York, issued a guidance memorandum. In language not altogether typical of safety-and-soundness financial regulation, Vullo wrote:
While the social backlash against the National Rifle Association (the “NRA”) and similar organizations that promote guns that lead to senseless violence has in the past been strong, the nature and the intensity of the voices now speaking out, including the voices of the passionate, courageous, and articulate young people who have experienced this recent horror first hand, is a strong reminder that such voices can no longer be ignored and that society, as a whole, has a responsibility to act and is no longer willing to stand by and wait and witness more tragedies caused by gun violence, but instead is demanding change now.
Brian Knight writes at FinRegRag:
This request could easily be construed is a thinly veiled threat. While the NYDFS statement does not explicitly say that NY FIs (financial institutions) that may face regulatory sanction for failing to cut ties with the NRA, it doesn’t rule out the possibility either. If the NYDFS had no intention of threatening regulatory sanctions, they could clearly have added language taking the threat of enforcement off of the table. They didn’t, which indicates they want NY FIs to think there is a potential the government will come after them if they don’t end their relationships with groups like the NRA.
These instructions to NY FIs could also be seen as an attempt to suppress political speech that some New York policy makers disagree with. Whatever one thinks of the NRA, it is an organization engaged in legal political speech and advocacy. Cutting off the NRA’s access to financial services could change the political debate by reducing opposition to political efforts to tighten gun laws. The NYDFS release says, “This is not just a matter of reputation, it is a matter of public safety, and working together, we can put an end to gun violence in New York once and for all.” Given that the NRA does not make a product that could pose a direct risk to public safety, this release is clearly referencing the NRA’s political advocacy.
Knight compares the initiative to the Operation Choke Point episode, in which federal regulators steered banks away from dealing with various controversial but lawful lines of business, including some that were politically fraught. But in that episode, at least, the target enterprises were primarily engaged in the sale of goods and services and thus might in principle have faced financial risks related by fraud or unfulfillable obligations to customers.
The NYDFS order appears to be inherently about political speech. After all, there is no allegation that the NRA is committing fraud against its members. Rather, the argument is that the NRA’s positions are so dangerous that they are harmful to the community and pose a risk to the reputation of any FI that works with them. This could fairly be seen as an attempt to restrict the NRA’s ability to operate in the political arena and marketplace of ideals.
The guidance memorandum might thus accomplish by indirection what it would be plainly improper for the state to attempt directly:
There is no law that says a FI (financial institution) cannot do business with a gun rights group and such a law would almost assuredly be unconstitutional. However if the regulator declares that such an affiliation poses a reputational risk to the FI (that the regulator, not the market, determined existed), it has leverage to force the FI to comply.
The NRA has filed a suit against the governor and New York officials saying the program amounts to “coercion” aimed at depriving the association and its constituents of First Amendment rights. More: Scott Greenfield.
Meanwhile, in other news of regulatory retaliation — see also our tag on that — U.S. President Donald Trump reportedly urged the U.S. Postal Service to double its rates for handling packages shipped by Amazon.com, linked in his mind through founder Jeff Bezos with his journalistic nemesis the Washington Post. Postmaster General Megan Brennan is said to have “resisted Trump’s suggestion in private conversations in 2017 and 2018, telling him that package delivery rates are set by contract and reviewed by an independent commission” and that the Postal Service does not get a bad deal from its arrangements with Amazon and other e-commerce firms. [Reuters]
- Using regulation to stomp political adversaries endangers rule of law: Gov. Cuomo directs New York financial regulators to pressure banks, insurers to break ties with National Rifle Association (NRA) [J.D. Tuccille, Reason]
- My opinion piece on New Jersey governor’s scheme for a state bank has now escaped its WSJ paywall; WSJ readers respond [letters] And Sen. Kirsten Gillibrand [D-N.Y.] has now introduced a plan to get the federal government into retail banking via the post office [Daniel Marans, Huffington Post, quoting Gillibrand’s interesting claim that “Literally the only person who is going to be against this is somebody who wants to protect payday lender profits.”] More: Nick Zaiac on postal banking;
- “From Kelo to Starr: Not Merely an Unlawful Taking but an Illegal Exaction” [Philip Hamburger on federal government’s acquisition of a dominant equity stake in AIG]
- Court’s opinion on consumer debt contract formed in New York specifying Delaware law undermines “valid-when-made” doctrine that promotes liquidity of secondary debt market [Diego Zuluaga, Cato]
- “Some blockchains, as currently designed, are incompatible with” the European Union’s General Data Protection Regulation [Olga Kharif, Bloomberg via Tyler Cowen]
- And if you’re interested in the legal constraints holding back the extension of banking services to the cannabis industry, tune in to a Cato conference on that subject May 10.