We Need a National Debate on a Federal Tax on Wealth

This article was originally published in April 2017.

America’s increasing economic inequality threatens our liberal democracy. Economic inequality translates into political inequality and corrodes our democratic institutions and the viability of our Constitution. Ganesh Sitaraman describes these threats in his excellent new book, The Crisis of the Middle Class Constitution: Why Economic Inequality Threatens Our Republic. We need urgently to find innovative tools to counter the erosion of our foundational, shared belief in opportunity and fairness, the American Dream.

It is time to begin a serious national debate about the wisdom and constitutionality of a federal tax on wealth – an annual tax of a small percentage of an individual taxpayer’s net worth in excess of some large minimum. Just for example:  a 1 percent annual tax on wealth in excess of 10 million dollars, which would affect less than 1 percent of Americans. We leave the details to those skilled in economic and tax policy. Nor do we have in mind the short-term political viability of such a tax in the current Congress – though we will note that in 1999 Donald Trump suggested a one-time 14.25 percent tax on net worth in excess of 10 million dollars.

What we wish to do now is to spark the debate by arguing against the common (and in our view, unwarranted) assumption that a U.S. tax on wealth would be unconstitutional.

The Constitution grants Congress broad power to “lay and collect Taxes,” which clearly includes the authority to tax wealth. No problem there. A serious question is raised by a second requirement for how certain taxes must be apportioned: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.”

Translating 18th century language, this means Congress must apportion any capitation (per person, without regard to income or wealth) or other direct tax among the states relative to their population. This makes sense for a per capita “head” or “poll” tax, but it clearly would be unworkable, indeed nonsensical, for a tax on wealth. Some states have far more wealthy individuals and wealth per capita than others. Compare Connecticut and Mississippi, or California and Montana.

The requirement that "direct" taxes be apportioned was an expedient to foster compromise between northern and southern states at the constitutional convention, rather than any thoughtful or principled decision to limit the federal government’s authority to tax wealth. James Madison recounted in his notes of the debate of Aug. 20, 1787: "Mr [Rufus] King asked what was the precise meaning of direct taxation? No one answd." The Constitution’s other reference to direct taxes occurs in the infamous “Three-Fifths” compromise clause, which (prior to its abrogation by the Fourteenth Amendment) directed how persons who were enslaved were to be counted for purposes of calculating “Representatives and direct Taxes.”

Constitutional text of course may not be ignored simply because it was based on compromise rather than thoughtful policy, even compromise deeply infected by the evils of slavery. So what, if anything, beyond a per capita “head” tax is a “direct” tax?

The Supreme Court addressed this question early, in a 1796 decision upholding an unapportioned federal tax on carriages. The unanimous Court in Hylton v. United States agreed on the principle that “direct” should be narrowly and sensibly construed to apply only where apportionment would work in practice for that type of tax. The Court identified two categories of “direct” taxes: “capitation” taxes (those imposed equally on every individual, at a uniform, fixed rate without regard to circumstance) and taxes on land.

Writing individually, as was customary at the time, Justice Chase emphasized that because “[t[he great object of the Constitution was, to give Congress a power to lay taxes, adequate to the exigencies of government,” this limitation on that power “is only to be adopted in such cases where it can reasonably apply.” Justice Paterson explained that the apportionment limit on a per acre land tax was intended to help the Southern states, which “had extensive tracts of territory, thinly settled, and not very productive.” He observed that the apportionment requirement itself “was the work of compromise” and “cannot be supported by any solid reasoning” and “therefore, ought not to be extended by construction.” These Justices’ contemporaneous understanding was consistently applied for more than a century, most notably in 1881 in Springer v. United States to uphold a tax on income, where the Court wrote “direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate.”

In 1895 the Court took a wrong turn in its deeply flawed decision in Pollock v. Farmers’ Loan & Trust Company striking down a federal income tax as an unapportioned “direct” tax. Decided at the dawn of the now-discredited era of extreme activism that struck down minimum wage, maximum hour and child labor laws, Pollock expanded the definition of “direct” taxes beyond capitation and land taxes to encompass taxes on real and personal property and even income from real or personal property. Four Justices, including John Marshall Harlan, vigorously dissented.

Pollock was and is widely recognized as wrongly decided. The ratification in 1913 of the Sixteenth Amendment abrogated Pollock’s holding that a tax on income derived from real or personal property was a "direct" tax and explicitly granted Congress the power to tax income without apportionment – which Congress did, as we are reminded every April 15. But the Amendment did not expressly reject Pollock’s rationale under which a wealth tax almost certainly would be considered a “direct” tax that the apportionment requirement would effectively preclude. That the Sixteenth Amendment did not expressly address this rationale one way or the other is not surprising, given the nature of constitutional text.

The Court has not reexamined Pollock’s reasoning and departure from Hylton and its progeny in a way that squarely addresses a wealth tax. Instead, the Court generally has distinguished Pollock and upheld many federal taxes without addressing the issues that a wealth tax squarely would present. One important exception is Eisner v. Macomber, which struck down a tax on stock dividends, also decided in the “Lochner Court” era when an inappropriately activist Court struck down a range of progressive state and federal social and economic legislation. Four Justices, including Holmes and Brandeis, strongly dissented.

Once we set aside the errors that Pollock set in motion, a wealth tax does not seem to us to be a “direct” tax, either as a functional or a categorical matter, the two criteria the Court set forth in Hylton. Under Hylton’s functional principle (which we think reflects the correct understanding of “direct” tax), because “the rule of apportionment” cannot “reasonably apply” to a wealth tax, it would not be a “direct” tax. Apportionment of a tax on net worth among the states according to population, like the Court said of an apportionment of a tax on carriages, “would evidently create great inequality and injustice.”

On its face, Hylton’s recognition of land taxes as “direct” taxes that must be apportioned might seem a difficulty, given that a general wealth tax must include real property as an element in the calculation of net worth. But we think that a tax on wealth would be a categorically different because it would not be based on the value of real property viewed in the abstract. This is illustrated by the many Americans with almost all of their savings in heavily mortgaged homes on which they pay real estate taxes – some even with negative net worth thanks to “under water” mortgages that exceed the home’s value.

Ultimately, we see no sound constitutional justification for interpreting “Capitation, or other direct, Tax” to deny the federal government the authority to tax wealth. Hylton was correct in its central premise: the apportionment requirement was intended by the Founders, and is properly read now, to limit only narrowly the broad taxing power that actually was a principal motivation for adopting the Constitution to replace the Articles of Confederation. Pollock was rooted in discredited Lochner-era restrictions on the government’s power to affect private property interests. The remnants of Pollock that may have survived the Sixteenth Amendment and that the Court has not yet formally rejected should not stand in the way of the federal government’s ability to address the pressing national problem of economic inequality.

Just as the New Deal Court rejected the Lochner-era freedom of contract and Commerce Clause decisions – just as the Darby Court in 1941 repudiated Hammer’s invalidation of federal protections against child labor – so should our generation restore the original and nineteenth century view of “direct” tax and reject misguided limitations on congressional power. We welcome the constitutional debate that the proposal would engender, just as FDR welcomed and ultimately prevailed in the constitutional debate over the New Deal.

A Lesson in Failure: OIRA, Neomi Rao, and Deregulation at Any Cost

The most significant function of the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) is reviewing agency rulemakings, including weighing a proposed rule’s economic costs to industry against its public benefits.[1]  This is no minor responsibility.  As the Government Accountability Office (GAO) has found, OIRA review “can have a significant—if not determinative—effect on a broad array of federal regulations.”  Indeed, OIRA reviews often result in changes, reconsideration, or full withdrawal of agency actions.

While the value and appropriate scope of OIRA review has been the subject of intense debate, the value of such review (regardless of scope) necessarily relates directly to the quality, thoroughness, and integrity of its analysis.  Without a commitment to sound, robust, and fact-driven examination, OIRA review can offer nothing of genuine worth.  As a result, when OIRA shirks its public responsibility to engage in thorough and reasoned decision-making, its function in government becomes at best pointless bureaucracy, and at worst flagrant political tampering.

Under President Trump, and with Neomi Rao at the helm, OIRA has embraced politicized regulatory obstruction as its raison dêtre.  It has seemingly abandoned any commitment to professionalism and objectivity – turning its back on the core value of “neutral competence”[2] – and has rubber stamped politically driven agency actions divorced from methodological integrity or thorough technical analysis. The office, in effect, has abdicated its responsibility to the body politic and to the American people, in service of a corporate-driven deregulatory ideology.  A practice that Rao brags about, perhaps unsurprisingly in light of her ideological zeal and the radical nature of her past writings.

OIRA’s shameful treatment of recent EPA rules illustrates the perfidy of its current leadership.  In the instance of EPA’s proposed gutting of the Mercury Air Toxics Standards (or MATS) – rules that save as many as 11,000 lives every year across America, and prevent hundreds of thousands of hospitalizations, asthma attacks, and missed school and work days – OIRA greenlighted EPA’s plan to issue a backhanded repeal of the regulations.  In doing so, OIRA turned a blind eye to the fact that EPA had conducted no analysis whatsoever of the lost public health benefits of this rule for the American public.  OIRA instead went along with EPA’s transparent subterfuge, relying on a legal technicality to claim that EPA was not repealing the rule at all.  Not only did OIRA entirely ignore the actual consequences of the agency’s action, it went even further by tacitly adopting a new way of performing cost-benefit analysis that allows OIRA to pretend that the real world benefits of certain rules (including but not limited to the MATS rule) simply do not exist.  This unprecedented and frankly outrageous approach to cost-benefit analysis is a one-way ratchet designed to disadvantage rulemakings that save lives and protect the public – a point with which even hawkish Cass Sunstein agrees.  Similarly, OIRA allowed actions attempting to delay EPA standards addressing accidental chemical releases and rules limiting emissions of methane – each of which failed to include any meaningful analysis of costs or benefits.  These examples (and many others) reflect OIRA’s decision to sacrifice public health and wellbeing in the interest of inflating corporate profits – without any serious demand for the kind of scrutiny that OIRA is meant to ensure.

In the end, there are two ways to view OIRA’s failures:  either it reflects a lack of skill or understanding on the part of the organization’s leadership, or it demonstrates the leadership’s willful and knowing subversion of the institutional mission of OMB.  Certainly, the fact that courts have struck down the vast majority of challenged OIRA-approved rules (including environmental rules) suggests a degree of incompetence.  Either way, OIRA’s conduct amounts to a betrayal of the public trust.

Moreover, OIRA’s malfeasance raises serious concerns for the integrity of the U.S. Court of Appeals for the District of Columbia Circuit – a court to which Trump has nominated Neomi Rao (the figure at the center of OIRA’s credibility gap).  The DC Circuit plays a special role in the federal judiciary, both as the court most vital to defining the scope of federal agency authority and legality of their actions, and as a court regularly called upon to render decisions that are fundamentally grounded in the science, data, and technical analysis of expert agencies.  OIRA’s willingness under Rao’s leadership to overlook glaring shortcomings in agencies’ consideration of public benefits, costs, impacts and tradeoffs, in the interest of ideologically driven political outcomes bodes poorly for the influence that Rao might have on the integrity of DC Circuit jurisprudence.

Given the national significance of the DC Circuit’s rulings, this ought to trouble not just lawmakers in Washington, but everyone who wants their government to be accountable to the people, not just to the powerful corporate lobby.

[1] See Curtis W. Copland, The Role of the Office of Information and Regulatory Affairs in Federal Rulemaking, 33 Fordham Urban Law Journal, 101 (2011).

[2] See Is this Any Way to Run a Democratic Government, Stephen J. Wayne ed., at p. 137 (2004).

‘Judicial Hellholes’: The Best Legal Joke of 2018

This blog originally appeared in Public Justice.

Here’s a good riddle: What do you call a court system that holds a drug manufacturer accountable for causing brain damage to children by failing to warn of its drug’s dangers? There are lots of good answers: Fair. Just. True to America’s principles.

But none of those are funny.

The American Tort Reform Foundation’s answer, however, is hilarious: “Judicial Hellhole #1.”

It’s the best legal joke of the year!

ATRF is devoted to changing the law so corporate wrongdoers can get away with almost anything. The December edition of its annual attack on courts making corporations compensate their victims — Judicial Hellholes 2018-2019 — calls California “Judicial Hellhole #1” because the Supreme Court of California ruled unanimously in T.H. v. Novartis that a brand-name drug manufacturer can be sued when the generic version of its inadequately-labeled drug causes brain damage to children.

That fact alone shows that ATRF’s “Judicial Hellholes” propaganda campaign is laughable. It also confirms that, for corporations valuing profits over people’s lives, accountability is “hell.”

Let’s be clear. The whole idea of courts being called “judicial hellholes” by ATRF is ridiculous. According to the latest publicly-available information, ATRF is funded by pharmaceutical giants, tobacco companies, oil companies, insurance companies, auto manufacturers, and others — the very companies it attacks courts for holding responsible. The entire exercise is absurd. It’s like Al Capone calling J. Edgar Hoover “Public Enemy #1,” the Mafia calling America’s safest neighborhoods “Law Enforcement Hellholes,” or the Joker calling Batman “Arch-Criminal #1.”

ATRF’s attack piece should be published on Opposite Day. It should be covered by the press, if at all, as a farce.

T.H. v. Novartis

What happened in T.H. v. Novartis exposes the absurdity of the “Judicial Hellhole” campaign.  Public Justice was co-counsel for the plaintiffs. (Leslie shared the argument with Ben Siminou.) California’s high court ruled that, because brand-name drug companies write the labels for all versions of their drugs, people injured by mislabeled generic versions of their drugs can sue them. (The generic drug manufacturers are immune under federal law because the brand-name manufacturers control the labels’ wording.) The decision opens the courthouse doors to millions of victims of inadequately-labeled drugs — who would otherwise have no remedy at all.

The lawsuit was filed on behalf of twins injured in utero by a generic version of a brand-name drug called “Brethine,” which their mother took to control preterm labor. Novartis is the brand-name drug company that wrote the label for Brethine. It knew that Brethine (and its generic equivalents) could cause fetal brain damage, but didn’t want to say so on the drug’s label because it was making too much money selling Brethine to pregnant women.

So Novartis didn’t change the label; instead, it sold the rights to the drug to another company for a big profit and walked away. A few years later, the twins’ mother was prescribed Brethine to control her preterm labor. Her prescription was filled with a generic version of the drug, and her children were born with brain damage.

The twins couldn’t sue the generic drug maker because generic drug manufacturers are required, by federal law, to use the label written by the brand-name manufacturer.

Instead, they sued Novartis. They argued that the brand-name company could be held liable because Novartis (a) wrote the label for the drug; (b) knew that manufacturers of generic Brethine were required by law to use Novartis’s label; (c) knew its label was inadequate and failed to warn of its drug’s dangers; and yet (d) chose to prioritize profits over safety by declining to update the label to protect the drug’s market value as a therapy for preterm labor.

The California Supreme Court agreed. It held that brand-name manufacturers have a duty to consumers of generic versions of their drugs — and that Novartis’s sale of its drug to another company didn’t let Novartis off the hook for its failure to update the label when it manufactured the drug.

The decision will make California — and America — safer. The risk of liability creates an incentive for drug companies to change their labels when new risks emerge. But, if drug companies can’t be sued for hiding their drugs’ dangers, all bets are off.

The Big Picture

ATRF knows that, but it’s dedicated to corporate profits, not public safety. It called California “Judicial Hellhole #1” for our case, but its reasons for smearing other places are equally ludicrous. The rest of ATRA’s top five are:

  • Florida, because, most significant, its Supreme Court upheld an $8 million verdict for an asbestos victim with mesothelioma and refused to change state law so judges could bar expert scientific testimony more easily;
  • New York City, primarily because so many consumer class actions are filed there;
  • St. Louis, especially because so many personal injury cases are filed there and a jury found Johnson & Johnson’s talcum powder caused ovarian cancer in 22 women and issued a large verdict; and
  • Louisiana, particularly for hiring contingency-fee lawyers to sue the oil and gas companies for destroying its coastline.

These are places where corporations are being — and can be — held accountable. Instead of insulting them and seeking immunity for its corporate backers, ATRF should be pushing its funders to stop hurting people and violating the law.

The brain-injured children seeking justice in T.H. v. Novartis are already in hell.

They deserve a court system that hears and resolves their claims fairly.

That’s what the Supreme Court of California gave them.

And that’s no joke.

Trump’s Travel Ban Two Years Later

January 27, 2019 marked the two-year anniversary of the “Muslim” or “Travel Ban.” Today, this version remains in full effect because of a Supreme Court decision issued last June and an earlier decision by the Court. This post explains the current application of Travel Ban 3.0.

On January 19, 2018, the Supreme Court agreed to hear arguments on the legality of Travel Ban 3.0. In the lower courts, the legal challenges to Travel Ban 3.0 were wide ranging. The challenges were constitutional and statutory. Whereas the Hawaii court focused on the statutory arguments to conclude that Travel Ban 3.0 violates the immigration statute by denying immigrant visas based on nationality, the Maryland court focused on the likelihood that Travel Ban 3.0 violates the Establishment Clause of the First Amendment to the U.S. Constitution.

On December 4, 2017 the Supreme Court issued orders staying the injunctions placed on certain aspects of Travel Ban 3.0 by federal district courts in Hawaii and Maryland pending a decision by the appellate courts and the Supreme Court. On this date, the Court did not make a decision on the legality of the ban. What this means is that Travel Ban 3.0 took full effect on December 4, 2017.

The Government appealed the Maryland and Hawaii decisions. On December 22, 2017, the Ninth Circuit Court of Appeals ruled that the plaintiffs are likely to succeed on the claim that the Proclamation violates the Immigration and Nationality Act. On February 15, 2018, the Fourth Circuit Court of Appeals ruled that the plaintiffs are likely to succeed on the claim that the ban violates the First Amendment of the U.S. Constitution and found that the Proclamation is “unconstitutionally tainted with animus toward Islam.” Both appellate courts limited the injunction to those with bona fide relationships and stayed their decisions pending a decision by the Supreme Court. On April 10, 2018, the White House announced that Chad would be removed from the travel ban after finding that the country met “baseline” security standards.

On June 26, 2018, the Supreme Court of the United States issued an opinion in the case of Trump v. Hawaii. (Travel Ban 3.0). Writing for the five-justice majority, Chief Justice Roberts held [that President Trump’s travel ban does not violate the constitution or the Immigration and Nationality Act (INA)]. The Proclamation remains in full force indefinitely.

The following nationals are covered by Travel Ban 3.0:

  • Libya and Yemen: All immigrants and those entering as tourists or business travelers
  • Iran: All immigrants and nonimmigrants, EXCEPT F, J and M visa holders (extra scrutiny)
  • North Korea and Syria: All immigrants and nonimmigrants
  • Somalia: Immigrants (and nonimmigrants subject to extra scrutiny)
  • Venezuela: Certain nonimmigrants government officials and their family members

The following categories are exempt from Travel Ban 3.0:

  • Lawful permanent residents (green card holders)
  • Foreign nationals admitted or paroled to the United States on or after the effective date
  • Foreign nationals with travel documents that are not visas that are valid before or issued after the effective date
  • Dual nationals traveling on a passport that is not one of the affected countries
  • Those traveling on a diplomatic or related visa
  • Foreign nationals who have already been granted asylum, refugees who have already been granted admittance, and those who have been granted withholding of removal, advanced parole, or protections under the Convention Against Torture

If a person is covered by the ban and does not qualify for an exemption, a consular officer may, on a case-by-case basis and within their discretion, grant a waiver to affected immigrants for certain reasons. The person seeking entry must prove that: 1) denying entry would cause the foreign national undue hardship; 2) entry would not pose a threat to the national security or public safety of the United States; and 3) entry would be in the national interest. According to the Department of State, “As of January 15, 2019, 2,584 applicants were cleared for waivers after a consular officer determined the applicants satisfied all criteria and completed all required processing.  Many of those applicants already have received their visas.” By contrast, critics have challenged the waiver scheme both in the courts of law and in the court of public opinion.

For detailed instructions on how to prepare a waiver request packet, or for assistance, impacted individuals should consult with an immigration attorney. The Middle East Interest Group of the American Immigration Lawyers Association (AILA) has developed a practice pointer for seeking a waiver.

Where can I find more resources?

[1] *Adapted from a Medium Post, By: Shoba Sivaprasad Wadhia, Sirine Shebaya and Abed Ayoub and a Fact Sheet from Penn State Law Center for Immigrants’ Rights Clinic. This document does not constitute legal advice. It was updated at 8:30pm on 1/28/2019.

Protecting Natural Resources Through State Law: Two Examples from California

With intransigence at the federal level on environmental issues, there is a unique opportunity for those seeking to improve the protection of natural resources to focus on state law and state agencies. This blog describes how, in California, two laws that present opportunities to protect natural resources are the Reclamation Act and the Coastal Zone Management Act. 

With the results of the November 2018 midterm elections, and control of the House of Representatives returned to the Democrats, natural resources law is now at a pivotal point.

On the one hand, with Democratic control of the House of Representatives, it is now unlikely that legislative efforts to federally pre-empt state law natural resource protections will succeed. For instance, H.R. 23, which had passed the House of Representatives and was awaiting a vote by the Senate, provided for broad federal pre-emption of California state law that protects fisheries, water quality and instream flows in rivers. Federal pre-emption along the lines proposed in H.R. 23 no longer appears a likely political threat for the next two years.

On the other hand, with Republican control of the Senate and White House still in place, it is also unlikely that legislative efforts to strengthen federal laws protecting natural resources (such as fisheries and water) will succeed prior to the November 2020 elections.

This scenario, where it is unlikely that there will be federal pre-emption of state laws to protect natural resources but also unlikely that federal laws to protect natural resource law will be strengthened, creates a unique opportunity for those seeking to improve protection of natural resources to focus on state law and state agencies. A particular opportunity presents itself under the federal Reclamation Act and the federal Coastal Zone Management Act (CZMA). Two examples from California highlight the potential for more effective deployment of state law and state authority pursuant to the Reclamation Act and CZMA to protect natural resources.

As a first example, the Reclamation Act governs federal water projects constructed and operated by the Bureau of Reclamation, such as the Central Valley Project (CVP) in California. Section 8 of the Reclamation Act requires that the Bureau of Reclamation operate the CVP and other federal water projects in conformity with state water law. As Justice William Rehnquist wrote for a unanimous United States Supreme Court in its 1978 decision in United States v. California, “The history of the relationship between the Federal government and the States in the reclamation of the arid lands of the Western States is both long and involved, but through it runs the consistent thread of a purposeful and continued deference to state water law by Congress.”

California has numerous sources of state water law and state fisheries law that protect water quality and fisheries, including California’s Porter-Cologne Act, public trust law as set forth by the California Supreme Court in National Audubon v. Alpine County Superior, the reasonable use provisions of the California Constitution and California Water Code, and Section 5937 of the California Fish and Game Code which require releases of water to maintain fisheries below Bureau of Reclamation dams in good condition. Under these sources of state law, the California State Water Resources Control Board and the California Department of Fish and Wildlife have current authority under the Reclamation Act to require the Bureau of Reclamation to operate the CVP in a manner more protective of water quality and fisheries. It is just a question of California putting its reserved state authority to full use.

As a second example, the federal CZMA provides federal agencies with authority to approve and undertake many projects and policies within the 200-miles exclusive economic zone (EEZ) in the oceans off of coastal states. However, the CZMA also provides, that before approving and undertaking such offshore activities federal agencies must first request a “consistency determination” from the state coastal agencies designated pursuant to the CZMA, to confirm that the proposed federal action is consistent with state coastal policies. In the case of California, these provisions of the CZMA provide the California Coastal Commission with an opportunity to object to and prohibit proposed federal actions related to such activities as off-shore oil drilling, exploration and fracking.

The key to exercising such authority under the CZMA is the adoption of clear and strong state coastal policies related to the offshore activities in question, and the political will to legally challenge the federal government if such “consistency determinations” by coastal states are either bypassed altogether or disregarded. In California, in connection with the federal government’s recent approval of off-shore fracking in the EEZ adjacent to the California coast, the failure to request and obtain a CZMA consistency determination was the subject of the Environmental Defense Fund v. United States Bureau of Ocean Management lawsuit filed in the United States District Court for the Central District of California. In a November 9, 2018 ruling in this case, the federal district court judge granted summary  judgment against the federal government and issued an preliminary injunction holding: “the public interest would not be disserved by issuing an injunction because any interest in proceeding forward with [offshore fracking activity] is outweighed by the interest of the people of the state of California in ensuring that their representatives are afforded their statutory right to review the proposed action for consistency with California’s coastal management plan.”

The experience with the Reclamation Act and CZMA in California evidence that, under existing federal natural resources laws, there are ample opportunities to rely upon sources of state law to improve protection of natural resources such as water, fisheries and off-shore coastal oceans. With legislative federal pre-emption of such state laws no longer a threat as a result of the November 2018 election results, now is the time for states committed to robust natural resource protection to more fully flex their legal muscle.

 

* Professor of Water Law, Golden Gate University School of Law, and natural resources counsel to the Water and Power Law Group. Professor Kibel is the author of the forthcoming book What Remains of the River: Water Rights Reconciled to Instream Flow.

For an expanded analysis of the ways that state water law can serve as the legal basis for keeping water instream, see Paul Stanton Kibel, California Rushes In: Keeping Water Instream for Fisheries Without Federal Law, 42 William and Mary Environmental Law & Policy Review 477 (2018).

The Federal Government Shutdown is a Thirteenth Amendment Problem

Update 1/25: President Trump announced a temporary end to the shutdown.

Today, the shutdown of the federal government is in its 33rd day. The claims of federal workers deemed “essential” and forced to work without pay have been brought under the expected statute for unpaid wages— the Fair Labor Standards Act of 1938.   On January 14, a federal judge refused to require the government to pay the workers, saying that the decisions of the court will not “be leverage in the internal struggle between the branches.”  Besides a host of reasons why federal courts are loathe to be involved in interbranch disputes, the courts are hesitant to enjoin bad actors if the damages can later be repaired through back pay and penalties at a later date.

But another claim brought by some of the plaintiff federal workers merits greater attention as a way to stop an ongoing constitutional violation — the Thirteenth Amendment to the United States Constitution.  And that provision seems to provide a strong case for the intervention of the federal courts now.

Section One of the Amendment provides that “[n]either slavery nor involuntary servitude .  . . shall exist in the United States or any place subject to their jurisdiction.” An exception, not applicable here, allows forced labor “as a punishment for a crime whereof the party has been duly convicted . . . .”

Most people know that the Thirteenth Amendment in 1865 ended the system of racial slavery that precipitated the Civil War.  What is less known are the ways that the Amendment has been and can be used to invalidate oppressive economic arrangements even when they are entered into voluntarily.

Economic systems like sharecropping and debt bondage that existed before the Civil War and after emancipation which replicated slavery were held unconstitutional under the Thirteenth Amendment regardless of whether they were imposed voluntarily or involuntarily.  Thus, the “voluntary” nature of the work does not end the discussion about whether the work violates the Amendment.

Under federal labor law, private sector workers have the right to strike, but federal workers are legally prevented from doing so. The unsuccessful strike of the Professional Air Traffic Controllers Organization (PATCO) in 1981 reminds workers of the employment consequences of such an action, even though the leverage a strike provides would effectively hasten the end of the shutdown.  That is exactly the kind of unequal floor for free labor that the Thirteenth Amendment was intended to abolish. As Professor James Pope has written, the Amendment set a floor for free labor which is ineffective without the right to strike.  As I argue in a new article, the Thirteenth Amendment and its context provides the legal and historical infrastructure for our modern minimum wage laws.

Courts have been able to avoid interpreting the Thirteenth Amendment because of 20th Century statutes that prohibited race discrimination and unpaid work. Because Congress grounded the power to regulate the economy in the authority to regulate commerce, the Supreme Court has not had to address the scope of Congress’s authority under the Thirteenth Amendment.  Even so, Congress has shown renewed interest in the Amendment by basing legislation prohibiting human trafficking and hate crimes under its power under Section Two to enforce the Thirteenth Amendment “by appropriate legislation.”

The federal workers’ FLSA claims are likely to prevail, as similar litigation during the 2013 government shutdown resulted in legal victories for the workers. Now, six years later, they have yet to recover all of the compensation owed to them.

The current impact on the shut-out workers has been immediate and severe, and cannot be fully remedied with back wages and interest received years from now.  The ongoing constitutional violation can be stated plainly.  While the federal workers are “voluntarily” working, the coercive nature of working without pay and being prevented from going on strike cannot be understated.  While it is true that some workers are so essential that they may be required to work, the definition of what is essential is highly political and should be applied sparingly.  Look no further than the Internal Revenue Service workers forced to process refunds so the political impact on the Trump Administration will be lessened.  At a minimum, a judge should scrutinize closely the Administration’s claims that such workers are essential to “protecting life and property.”

The jurisprudential future of the Thirteenth Amendment is not yet written.  I am working with scholars including Lea VanderVelde and Rebecca Zietlow on a project to bring to bear the Thirteenth Amendment into discussions of contemporary economic problems like this one.  Historians will continue to debate the full impact of the Amendment on economic subordination.

Current debates about prison labor explore the contemporary meanings of the Thirteenth Amendment’s clause quoted above excepting servitude “as a punishment for crime.”  Litigators continue to assert these claims in courts.  Irrespective of the outcomes of these legal and historical debates, most Americans find something morally wrong about forcing people to work without pay.  Under this popular interpretation of “involuntary servitude,” then, the workers should have already won their case.  It remains to be seen whether courts will ultimately be responsive to the Thirteenth Amendment’s potential to prevent ongoing oppressive labor conditions.