SB 213 passed all the necessary hurdles and is now awaiting the governor’s signature. Our Health Care Policy blogger Brian Schwartz reminds us with this Health Policy Solutions op-ed why this bill is important in the fight for controlling health care costs borne by both the recipients of health care services and we taxpayers. What SB 213 does is “increase CHP+ enrollment fees for the wealthiest of eligible households.” CHP+ is the state run, taxpayer funded child health insurance pool. As Brian mentioned, and I reiterated in Don’t Buy That Cake, increasing enrollment fees for CHP+ for families who make between 205 and 250% of the federal poverty level is not asking much. They already spend a large portion of their income on alcohol, tobacco, sweets and entertainment. So essentially, we’re asking that they cut out a few smokes and instead put that money towards their kid’s health insurance. That small sacrifice would alleviate some stress from Colorado taxpayers. We believe it’s an easy tradeoff any responsible parent would make. As Brian puts it in the closing of his op-ed,

Why does CHP+ allow eligible parents to value entertainment and satisfying bodily appetites more than securing their own children’s health? … if the state must compel taxpayers to fund CHP+, Senate Bill 213 would increase enrollment fees so eligible parents can more sensibly weigh the costs of their kids’ health care against the costs of booze, tobacco, sweets and movies.

Probably no part of the Constitution has been so misunderstood as the Necessary and Proper Clause, which is located at Article I, Section 8, Clause 18. The Necessary and Proper Clause has been called both an “elastic clause” and a “sweeping clause,” and many have claimed it grants vast power to Congress. For example, a recent Supreme Court case, United States v. Comstock, stated that the “Necessary and Proper Clause grants Congress broad authority to enact federal legislation.”

In fact, most federal regulations today are justified by the Necessary and Proper Clause. They are said to be within Congress’s Interstate Commerce Power— but within not the core Commerce Clause (“The Congress shall have Power . . . To regulate Commerce . . . among the several States”). Rather, they are said to be supported by the accompanying authority to “make all Laws which shall be necessary and proper for carrying into Execution” the power to regulate commerce.

Now, here’s the irony of the situation: Far from granting “broad authority” to Congress, the truth is that Necessary and Proper Clause grants no power at all. It is placed at the end of Article I, Section 8 as an explanation—that is, a “recital.” A recital is a passage in a legal document that has no substantive legal effect, but serves to inform the reader of assumptions or facts behind the document. Another example of a recital in the Constitution is the Preamble.

In recent years, several constitutional scholars have investigated the true meaning of the Clause, and have worked to correct the record. The process began with an article written by Professor Gary L. Lawson and Patricia B. Granger: The Proper Scope of Federal Power: A Jurisdictional Interpretation of the Sweeping Clause, 43 Duke L. J. 267 (1994). It focused on the meaning of “proper.” A decade later, I delved into the historical record. I found that wording of this kind was extremely common in eighteenth-century documents granting power from one person to another. I also found the courts had issued cases interpreting this language, and that the Founders had adopted the courts’ interpretation. See articles here and here.

Finally, Professors Lawson and I teamed up with two other noted scholars, Geoff Miller, and Guy Seidman, and wrote a book on the subject. (We all have differing political views, by the way.) The book is called The Origins of the Necessary and Proper Clause, and it was published last year by Cambridge University Press.

Here’s what we found:

* The Clause is a mere recital. It informs the reader how to interpret congressional authority. It does not grant any power.

* The term “necessary” tells the reader that congressional authority is interpreted according to the intent behind the document, rather than very strictly (as the Articles of Confederation required).

* The Clause does this by telling the reader that the legal “doctrine of incidental powers” applies to the Constitution. This means that Congress can regulate certain activities outside the strict reading of its powers, but ONLY IF this ancillary regulation is (1) subordinate to an express power, and (2) a customary or necessary way of carrying out the express power. For example, in regulating commerce, Congress can require accurate labels on goods to be shipped in interstate commerce. But Congress cannot regulate the entire manufacturing process.

* The word “proper” means that a law must comply with Congress’s fiduciary (public trust) responsibilities. A law is not “proper”—and is therefore unconstitutional— if it invidiously discriminates among people, violates individual rights, is utterly irrational, or exceeds congressional authority.

* Contrary to prevailing legal mythology, Chief Justice Marshall’s famous case of McCulloch v. Maryland (1819) did not stretch the Clause, but applied it properly and with due regard for its limitations.

Recently, Dave Kopel, the Independence Institute Research Director, filed an amicus curiae brief in the most important anti-Obamacare lawsuit. He did so on behalf of Professors Lawson, Seidman, and me. The goal? To correct the record and inform the courts what the Necessary and Proper Clause REALLY means.

City of New York v. Mickalis Pawn Shop was recently decided by a unanimous 3-judge panel of 2d Circuit Judges Sack and Wesley, plus Judge Eaton (Court of International Trade) sitting by designation. The case began several years ago when New York City Michael Bloomberg brought a public nuisance lawsuit against several firearms stores located in the southeastern United States. Bloomberg alleged that the stores had violated federal gun laws by selling firearms to straw purchasers (lawful buyers who are acting as a front for a person who is prohibited from possessing firearms), and that as a result, some of the defendants’ guns had been used in crimes in New York City. The defendants argued that  Judge Weinstein, of the federal Eastern District of New York, had no jurisdiction. At various stages of the litigation, defendants dropped out, and a default judgment was entered against them. They appealed to the Second Circuit. The key issues decided by the panel were as follows:

1. The federal Protection of Lawful Commerce in Arms Act (PLCAA) prohibits most civil lawsuits against firearms stores. The 2d Circuit ruled that the PLCAA is not jurisdictional, because courts should not construe a statute as depriving a court of jurisdiction unless the legislature has expressed a clear intent to do so. According to the 2d Circuit, the PLCAA might well bar a plaintiff’s cause of action, but that is not the same as prohibiting subject-matter jurisdiction itself.

2. The next question was whether entry of a default judgment (Fed. Rules Civ. Pro. 55(a))  is proper against defendants who have participated in some stages of the litigation, but then withdrawn. There is a circuit split on this, and the  Second Circuit candidly acknowledged that the leading treatises (Moore; Wright/Miller/Kane) oppose a default judgment in circumstances such as Mickalis, and that some 2d Circuit dicta seems to agree. However, the Mickalis panel held that 2d Circuit precedent supported a default judgment.

3. By defaulting, the defendants forfeited their claim that the PLCAA bars the Bloomberg lawsuits.

4. Defendants likewise forfeited their claim that Judge Weinstein lacked personal jurisdiction over them.

5. Default does not deprive the Second Circuit of the ability to review whether the District Court’s injunction complied with FRCP 65(d)(1): “Every order granting an injunction . . . must: (A) state the reasons why it issued; (B) state its terms specifically; and (C) describe in reasonable detail — and not by referring to the complaint or other document — the act or acts restrained or required.”

6. The Weinstein injunction violated Rule 65 in four ways:

“First, the injunctions impose on defendants an obligation to act ‘in full conformity with applicable laws pertaining to firearms,’ and to ‘adopt[] appropriate prophylactic measures to prevent violation’ of those laws, without specifying which laws are ‘applicable’ or identifying the ways in which the defendants must alter their behavior to comply with those laws.... A directive to undertake ‘appropriate’ measures does not ‘describe in reasonable detail . . . the act or acts restrained or required,’ Fed. R. Civ. P. 65(d)(1), nor does it provide ‘explicit notice of precisely what conduct is outlawed,’ Schmidt, 414 U.S. at 476.” So “an injunction must be more specific than a simple command that the defendant obey the law..”

Second, the injunction applies to much more than straw purchases, which were “the sole kind of illegal practice identified in the City’s amended complaint...An injunction is overbroad when it seeks to restrain the  defendants from engaging in legal conduct, or from engaging in illegal conduct that was not fairly the subject of litigation.”

Third, the injunctions put the stores under the essentially limitless supervision of a Special Master, and any violation of the Special Master’s directives would itself be considered a violation of the injunction. Thus, the terms of the injunction were not clear from the injunction itself, but would be based on what amounted to a nearly unchecked grant of discretion to the Special Master. “Serious constitutional questions arise when a master is delegated broad power to determine the content of an injunction as well as effectively wield the court’s powers of contempt.”

Finally, part of the injunction “prohibits certain conduct by reference to the amended complaint. This drafting technique, however efficient, is expressly prohibited by Rule 65(d).”

Thus, the injunction was voided, and the case remanded to District Judge Weinstein to enter a new injunction.

Judge Wesley joined the opinion in full, but also wrote a concurring opinion. He agreed that the defendants had forfeited their argument about personal jurisdiction. However, he wrote separately in order to point out that  “the district court’s jurisdictional analysis has no basis in New York law.” According to Judge Wesley, the district court had flagrantly ignored the well-established standards of New York State’s long-arm statute, and had contradicted his own prior decisions by inventing “out of whole cloth” a 7-factor test to be applied against gun stores. [The test is quoted on page 10, note 6, of the concurring opinion.] The assertion of personal jurisdiction over the defendant stores does not “‘comport[] with the requirements of due process.’” The defendants had never done business in New York. A “‘defendant’s awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.’ Asahi Metal Indus. v. California, 480 U.S. 102, 112 (1987).” There was no precedent for Judge Weinstein’s assertion that a different rule should apply for what he termed “inherently dangerous products.”

Judge Weinstein’s theory that “cumulative parallel conduct” of several defendants could create personal jurisdiction over them, even though there might not be jurisdiction over an individual defendant considered on its own, was an indisputable violation of New York Court of Appeals precedent. [When federal courts hear claims based on state law issues, their jurisdiction over defendants generally cannot extend further than what would be allowed in the state courts of the relevant state.]

“In sum, the district court’s analysis with respect to defendants’ affirmative defense based on lack of personal jurisdiction was a substantial and unjustified deviation from well-known and easily understood principles of New York law. The jurisdictional analysis performed by the court below appears to be based on one federal judge’s view of how the law of New York ought to be constructed, rather than on how it is clearly delineated by statute and in the decisions of the state and federal courts.”

Denver, Colorado — Onlookers stood in amazement as the first pieces of swag were unveiled in front of the west steps of the Colorado state capitol building. The historic items? Two pens and one tote bag. Normally a couple of pens and a bag originating from the Colorado General Assembly don’t make news, but these were different. These items were the first to display the brand new logo of the Colorado General Assembly. Lawmakers proudly exchanged nods of encouragement to each other as they tried on the tote bag for size for the cameras. Senator McBride from Stapleton remarked, “Feels good doesn’t it? That old logo just didn’t represent us anymore.”

The old logo the Senator was referring to was the Colorado state seal – a logo that stood for nearly 150 years. For the past several weeks however, lawmakers reflected on their votes this 2011 legislative session and came to a nearly unanimous conclusion – it’s time for a new logo. “The old logo represents the seal of the people. As we’ve demonstrated this legislative session, we don’t necessarily represent the people,” commented Representative Myer of Glenwood Springs.

A source close to the decision process explained that lawmakers were tired of pretending they “listened to their constituents on matters of energy-pricing and the environment.” They needed a brand new image, something that “reflected the times.” Therefore, lawmakers met in a joint conference committee meeting last week to agree on a brand new logo for the General Assembly. They agreed it had to include the words, “Xcel’s bitch.” What was a point of contention however, was the size of the font and whether they should include an image of an energy rate-payer bending over. In the end, they tabled the picture idea and went with “Xcel’s Bitch” in a font size that looked good on official stationary, envelopes, pens, coffee cups, tote bags, and the occasional mint tin.

An official statement from the General Assembly was given to reporters. “It’s a great day for the Colorado General Assembly. We proudly lead the nation in energy policy and now our state symbol reflects that.  We can’t thank our friends at Xcel enough for their ongoing support and guidance through all of our tough decisions we made this session regarding energy policy in Colorado. We are thrilled to pass every bill you ask us to and kill those you dislike, because Xcel is Colorado.”

Xcel could not be reached for comment.

Bills like HB 1072 and SCR-001 have reminded us that the assaults on our initiative and referendum rights are not going anywhere. This coming Thursday, May 26th, we’ll be addressing these assaults on our rights as Colorado citizens to petition our government. We are holding a panel event at the University Club that will feature keynote speaker John Fund of the Wall Street Journal. Panelists include yours truly, Paul Jacob of the Citizens in Charge Foundation, Elena Nunez of Colorado Common Cause, M. Dane Waters of The Humane Society of the United States, and Thad Tecza of the University of Colorado. The event is FREE so please join us! You can RSVP online here.

Remember, one of the great checks against government’s power is for the people to petition their representatives. Join us as we explore how we can preserve this vital check.

Finally some good news came out of the general assembly yesterday, the final day of this year’s legislative session. By the skin of our teeth, we Coloradans dodged the “Son of Ref O,” also known as SCR-001. As you might remember, this Senate resolution was aimed at limiting our right to petition our government, which stands as the people’s safety valve against an out of control legislature. Among other traps against our petition process, SCR-001 would have required a super-majority of 60% to pass an amendment on the ballot. A super-majority requirement in the past would have prevented great things like TABOR and term limits from passing. But more importantly, requiring a super-majority for constitutional amendments does nothing to change the simple majority that exists to chip away at things like our taxpayer bill of rights. Catch my drift? 60% to pass, but 50% + 1 to undue constraints on government.

Notice in the Durango Herald article this quote,

Supporters might try to put it on the ballot through a citizens’ campaign, said Sen. Ellen Roberts, R-Durango, a co-sponsor of the measure.

Oh really? Because the resolution died this legislative session, you’d like to put in on this November’s ballot where it could pass with just a simple 50% + 1 majority? Back in my English literature class, we learned that’s called irony.

This week’s Devil’s Advocate is the regular half-hour of public affairs television excellence, but in two segments. First, I am joined by Jenny Flanagan from Colorado Common Cause and Ari Armstong from FreeColorado.com to talk about whether Colorado’s numerous campaign laws are actually a form of censorship. Then Susan Greene from the Huffington Post and Denver Post reporter Jeremy Meyer join me for a look at the Denver mayoral race. That’s Friday, May 13 at 8:30 PM on Colorado Public Television 12. Re-broadcast the following Monday at 1:30 PM.

The Colorado legislature this year took a modest, but welcome step towards restraining its own penchant for overcriminalizing the economic and personal lives of Coloradans. Let’s hope it makes us all a little bit freer from an often overweening state.

House Bill 11-1239 came out of recommendations by the Commission on Criminal and Juvenile Justice (CCJJ), passed 64-1 in the Colorado House of Representatives and unanimously in the Colorado Senate, and has been signed into law by Governor Hickenlooper.

A meatier bill might require that every time a legislator seeks to create or expand a punishable offense, they would have to recommend an existing law to pare back or repeal, but it is hard to imagine that actually passing. As it is, HB 1239 requires that the fiscal note for any piece of legislation that creates a new crime, or makes changes to the punishment or elements of an existing offense, must include additional information, including:

a) A description of the elements of the proposed new crime, or a description of the new, amended, or additional elements of an existing crime;

(b) an analysis of whether the new crime, or changes to an existing crime, may be charged under current Colorado law;

(c) a comparison of the proposed crime classification to similar types of offenses; and

(d) an analysis of the current and anticipated future prevalence of the behavior that the proposed new crime, or changes to an existing crime, intends to address.

In this podcast interview, Colorado State Public Defender and CCJJ voting member Doug Wilson notes that in Colorado there are numerous “boutique” crimes (where legislators passed criminal offenses already covered by other criminal offenses) that “really complicated the criminal code.” Wilson continues that the idea behind HB 1239 is that when a legislator introduces a bill, there will be information provided that shows whether that bill is necessary, what it would cost to enact the new crime, and if not necessary, what other criminal offenses already cover that conduct.

Such “boutique” crimes complicating the criminal code is an excellent example of overcriminalization.

According to the Heritage Foundation’s Overcriminalized.com website:

“Overcriminalization” describes the trend in America — and particularly in Congress — to use the criminal law to “solve” every problem, punish every mistake (instead of making proper use of civil penalties), and coerce Americans into conforming their behavior to satisfy social engineering objectives.

Overcriminalization is also a trend at the state level. As I wrote in a 2005 Independence Institute issue paper on overcriminalization in Colorado:

Colorado currently has some 30,000 laws filling more than 50 volumes of the Colorado Revised Statutes, both criminal and regulatory. Every session, the Colorado General
Assembly passes hundreds of new laws for government to enforce and citizens to both understand and obey. Aside from the sheer number of laws, the definition of what constitutes a criminal act has changed; often the legislature actually creates new crimes, and thus, new criminals, where no inherent criminality exists. Overcriminalization detracts from the seriousness of the law. This in turn breeds a lack of respect for the law.

Overcriminalization is also a step backwards from the concept of clear and simple rules — essential for dynamic and vibrant economic activity — so that both individuals and businesses can be reasonably sure as to the legality of activity in which they are engaging.

To be sure, the legislature is still free to pass redundant, convoluted and even unnecessary laws that we are all obligated to both understand and follow, but hopefully HB 1239 will provide the information needed to at least slow the growth of overcriminalization in Colorado.

(Originally published in the Huffpost Denver)

Despite the changing defense of Obamacare, one of the most relied upon arguments in defense of the individual mandate to purchase health insurance is to invoke the Necessary and Proper Clause of our Constitution. But what the enablers of Obamacare did not expect was to have ace legal mind and Independence Institute Research Director Dave Kopel on their case. You may recall that Dave submitted an amicus brief in both the monumental DC v. Heller and McDonald v. Chicago Second Amendment Supreme Court cases. In fact, Dave’s brief was either directly cited or relied upon by Supreme Court Justices Scalia, Alito, Breyer, and Stevens opinions in those cases. Now put yourself in the position of an Obamacare supporter when you find out that Dave Kopel is filing an amicus brief that argues that the Necessary and Proper Clause is not a justification for Obamacare and its individual mandate.

Scary huh?

Well, you should be scared. Dave decided to assemble a legal team for his amicus that would make any pro-health control apologist shake in their penny loafers. He called upon the authors of the book The Origins of the Necessary and Proper Clause – Gary Lawson, Guy Seidman, and our Senior Fellow in Constitutional Studies Rob Natelson. It’s like the modern day version of Captain Planet, except in this case they combine their powers for good rather than a bunch of feel good green mumbo jumbo.(But Dave does have a pair of those tight red skivvies).

If you want to read the amicus, you can download the PDF here. Or for a brief overview of the arguments, you can check out the press release we sent out earlier today. Dave gives a great summary of the arguments found inside the brief:

A just-filed amicus curiae brief from the Independence Institute undercuts one of the key legal defenses of the Patient Protection and Affordable Care Act. The brief shows that the “Necessary and Proper” Clause of the Constitution does not grant Congress additional power to impose an individual mandate to make people purchase health insurance from corporations favored by Congress.

The amicus brief was filed in the case of Florida v. Department of Health and Human Services, a 26-state suit against Obamacare. The State of Colorado, represented by Attorney General John Suthers, is one of the plaintiffs in the case. The 11th Circuit Court of Appeals will hear oral argument on June 8. The federal government is appealing
from a district court decision that the individual mandate is unconstitutional, and that the entire PPACA is therefore void.

The Obama administration argues that the constitutional power of Congress “To regulate Commerce…among the several States” means that Congress can force people to engage in commerce by buying a particular type of health insurance they do not want. As the district court observed, never in the history of the United States has the power to “regulate” commerce been interpreted to include a power to compel commerce.

So as a fallback position, the Obama administration argues that the individual mandate is authorized by the constitutional power “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing powers….”

The Independence Institute brief explains why the administration’s argument about the Necessary and Proper Clause is wrong:

The word “necessary” was simply an affirmance of the well-known legal principle that the express grant of a particular power also included lesser, unstated, incidental powers. For example, the Constitution’s enumerated power to establish post offices also includes the lesser power to punish crimes committed against postal employees.

The individual mandate does not meet the legal test for “necessary.” The power to compel the purchase of a product is as great or greater than the power to regulate voluntary commerce. Thus, the mandate is not a lesser, incidental power.

Secondly, the individual mandate is not “proper.” The intended, widely-understood meaning of “proper” was to reiterate the requirement that federal laws be impartial. For example, during the debates over ratification of the Constitution, participants recognized that a law chartering a commercial monopoly would be “improper.” A law to create a monopoly would favor the monopolist at the expense of consumers. The individual mandate is even more improper: With a monopoly, citizens can still choose not to purchase the monopolist’s product, but the individual mandate compels citizens to purchase products from an insurance oligopoly.

The Independence Institute brief was written by Independence Institute Senior Fellow Robert G. Natelson, Research Director David B. Kopel, and Boston University Law Professor Gary Lawson. Natelson and Lawson are co-authors of the 2010 book The Origins of the Necessary and Proper Clause, the most in-depth historical examination of the clause.

That’s the argument of an Independence Institute amicus brief submitted to the 11th Circuit in Florida v. Department of Health and Human Services. Here’s the summary of argument:

The Necessary and Proper Clause was one of a large family of similar clauses commonly appearing in eighteenth-century legal instruments delegating authority from one party to another. Those clauses followed several possible formulae. The Necessary and Proper Clause is a specimen of the most restrictive of those formulae: It does not actually grant additional authority beyond that conveyed by other enumerated powers. Rather, it is a recital, designed to inform the reader of two legal default rules: 

First, that express grants of enumerated powers, stated elsewhere, carry with them subsidiary incidental powers (“necessary”). 

Second, that congressional enactments must comply with standards of fiduciary obligation and administrative reasonableness (“proper”).

This understanding of the Clause appears in the legal practices and leading cases at the time the Constitution was adopted, and also in the history of the Clause itself—the records of its drafting, in the ratification debates, in the Supreme Court’s great case on the subject, M’Culloch v. Maryland, 17 U.S. 316 (1819), and in Chief Justice John Marshall’s public explanations of M’Culloch.

Once the meaning of the Clause is understood, the implications for the individual mandate are clear:

The mandate is not “necessary” because power to impose it is not a subsidiary “incident” to Congress’s Commerce Power. The power to compel the purchase of a product is as great or greater than the power to regulate voluntary commerce; therefore the mandate cannot be an incidental power regardless of how helpful it might be. For Congress to possess authority of that kind, it would have to be separately enumerated in the Constitution.

The mandate is not “proper” because it violates the fiduciary obligations of impartiality embedded in the word “proper.” During the debates over ratification, participants recognized that a law chartering a commercial monopoly would be “improper.” A fortiori, compelled purchase from favored oligopolists is improper.

Thus, to the extent that the constitutionality of the individual mandate depends upon the Necessary and Proper Clause, the mandate is unconstitutional.

Besides the Independence Institute, the amici on the brief are Prof. Gary Lawson (BU), Prof. Robert G. Natelson (retired from U. Montana Law; currently a Senior Fellow at the Independence Institute); and Prof. Guy I. Seidman (Interdisciplinary Center Herzliya, Israel). The three professors are among the co-authors of The Origins of the Necessary and Proper Clause (Cambridge, 2010).