Fox Makes Law

Yesterday, the Supreme Court decided FCC v. Fox Television Stations. The case made big news because of its titillating facts: the FCC determined that Fox violated the statutory prohibition against broadcasting "any . . . indecent . . . language," 18 U.S.C. § 1464, by broadcasting the 2002 and 2003 Billboard Music Awards, during each of which celebrities (Cher and Nicole Richie) used expletives that made it onto the air unbleeped. The Commission rejected its prior view that the "fleeting," nonliteral use of individual expletives is not actionable and determined that the broadcasts, taken in full context, violated the indecency prohibition.

The context ensures that the case captures public attention, but for us administrative law professors the interesting thing is that the case is just bristling with ad law principles. The Court declined to consider any First Amendment issues in the case (those remain open for further consideration), but ad law issues were definitely on the menu. The case positively chock full of them.

Here's a quick rundown of ad law points that the Court decided:

* The Court reminded us that the Administrative Procedure Act "sets forth the full extent of judicial authority to review executive agency action for procedural correctness." Courts always have a tendency to make up procedural rules and impose them on agencies, so the Court's reminder that courts can only enforce the APA is important.

* The Court also reminded us that the standard of review under the APA "arbitrary" or "capricious" test is "narrow."

* Probably most important, the Court decided that judicial review is not heightened or more searching when an agency changes its past practice. The Court agreed that the agency must provide an explanation that shows that it is aware that it is changing its practice (the agency cannot simpy ignore what it has done in the past), but it has no duty to prove to a court's satisfaction that its new policy is better than the old.

This is a useful clarification. I had always understood this to be the rule -- the principle that an agency must explain its changes of course traces back to a D.C. Circuit opinion in which Judge Leventhal wrote that "an agency changing its course must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored." That seems pretty clearly to say what the Supreme Court said yesterday, but somehow, it gradually got transmuted, in the minds of some courts, into the principle that an agency is subject to some kind of heightened or more stringent review when it changes its mind. As far as I can see, Judge Leventhal never meant anything more than that agencies should not change course out of ignorance. They must say "we know what we used to do, but we don't like it anymore." But so long as the new policy would have been permissible as an original matter, the agency should remain free to switch to it.

In part, this reflects the fact that some agency policies can and should be expected to flip with changes in political control of the executive branch. If Democrats like some policies and Republicans prefer others, and either policy would be permissible for an agency to adopt under its organic statute (i.e., the statute vests the agency with discretion to make the choice), neither party should be able to entrench its view past its time in office. When an election changes the President and, therefore, the agency heads, the agency should be free to take that into account. If party control shifts from Democratic to Republican and back again, we obviously can't require the agency to show that each new policy is better than old -- A can't be greater than B and B greater than A.

* The Supreme Court held that arbitrary and capricious review is no more stringent than usual when constitutional liberties are involved. The "avoidance" canon, which counsels courts to interpret statutes so as to avoid constitutional difficulties, is a principle of statutory construction, not a principle of arbitrary and capricious review.

* The Court held that, although agencies are required to provide factual support for their decisions, this requirement does not mean that they always have to gather empirical evidence. In the Fox case, the Court determined that an agency would have no practical way to gather empirical evidence to prove that broadcast profanity could harm children. Therefore, the Court held, the agency was free to act on the plausible intuitions that children mimic the behavior they observe, and that a per se exemption for fleeting expletives would lead to increased use of such expletives on television.

* The Court held that judicial review of "independent" regulatory agencies (those where the agency heads do not serve at the pleasure of the President but have some tenure protection) is no different than review of agencies fully controllable by the President.

Whew! It's not often that a single case makes so many administrative law points, one after another. Look out for this case in a casebook near you soon.

More on that Repeal

Update: I sent Professor Randy Barnett yesterday's post, and what do you know, he agreed! By e-mail, he informed me that he's modified his proposal so that it doesn't just repeal the 16th Amendment, but specify clearly that Congress cannot impose an income tax. Of course, we still disagree on the policy of it.

And here's one more thought: why would you need to pass a constitutional amendment to repeal the income tax? Congress can repeal the income tax any time. Remember that a constitutional amendment requires an extraordinary supermajority of Americans to sign on: either two-thirds of each house of Congress needs to propose an amendment, or legislatures of two-thirds of the states need to call a ratifying convention (that's Professor Barnett's ambitious plan, even though it's never happened), and then three-quarters of the states need to ratify any proposed amendment. My goodness, if there were sufficient opposition to the income tax to get a constitutional amendment forbidding it through that procedure, why wouldn't Congress just repeal the income tax?

Income tax is not imposed on us by aliens from Mars; it comes from politicians who are responsive to public opinion. There are a lot of impediments to getting anything through Congress, but I find it hard to believe that there could be sufficient public support for a constitutional amendment taking away Congress's power to impose the income tax but not enough support to get a repeal of the income tax through Congress itself.

"Federalism Amendment"

Professor Randy Barnett of Georgetown University writes in the Wall Street Journal to propose a "federalism amendment" to the U.S. Constitution that would limit the powers of Congress, allegedly to what was originally intended. Part of his proposed amendment would repeal the 16th Amendment, which, Barnett says, "authorized a federal income tax." Repealing the amendment would, according to Barnett, "eliminate[] the federal income tax," and Congress would then have to impose something else, such as a national sales tax.

Professor Barnett's proposal is a bad idea on policy grounds, because the income tax is one of the few progressive taxes we have (i.e., richer people pay a higher percentage of their income than poorer people), and even it doesn't do the greatest job on this score, as Warren Buffett has pointed out (because dividends and capital gains receive preferential treatment, he pays a lower tax rate than his secretary). But a sales tax is regressive, so Barnett's proposal amounts to saying that the less wealthy should bear a higher proportion of the national tax burden relative to their incomes.

But putting policy issues aside, the even bigger problem with Barnett's proposal is that it would be ineffective. It wouldn't "eliminate[] the federal income tax," because Barnett is wrong when he claims that the 16th Amendment "authorized a federal income tax." As every tax protestor knows, the 16th Amendment in fact "conferred no new power of taxation."

The power to impose an income tax was granted by Article I, section 8 of the Constitution, which gives Congress the power to "lay and collect Taxes, Duties, Imposts and Excises." As is explained in detail here, the Supreme Court approved an income tax as early as 1880, prior to adoption of the 16th Amendment.

It's true that the 16th Amendment became necessary because the Supreme Court ruled that certain aspects of income tax were unconstitutional because they were "direct taxes" that, in accordance with the Constitution, had to be apportioned among the states according to the census. In a case called Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, on reh'g, 158 U.S. 601 (1895), the Supreme Court, roughly speaking, disapproved an income tax on income from property (e.g., rents). That's the problem the 16th Amendment fixed.

So if the 16th Amendment were repealed, it might make income taxes on some income (income from property) unconstitutional, but it wouldn't eliminate taxes on wage and salary income. That would probably be OK with Professor Barnett, because if you like the idea of replacing a progressive income tax with a regressive sales tax, you probably like the idea of limiting income tax to wages and salary too, because it has the same effect of shifting the tax burden from the wealthy to the less wealthy. But apart from being a bad idea, it would not "eliminate the federal income tax."

It's also possible that the Supreme Court would conclude that Pollock was wrongly decided and that the constitutional prohibition on unapportioned "direct" taxes shouldn't apply to taxes on income from property, but only to taxes on the value of the property itself -- wealth taxes. In that case, repealing the 16th Amendment would have almost no effect on income taxes at all.

So if we're going to amend our precious Constitution based on bad policy ideas, we should at least do so effectively. Declaring that "the 16th article of amendment to the Constitution of the United States is hereby repealed," as Barnett proposes, would not eliminate the income tax. You'd need to say something more like, "Congress shall not impose a tax on incomes." If that's what you want, it's not so hard to state.

Fortune, No Fortune

Some of my Faithful Readers have been complaining that Law Prof on the Loose (a Law Professor Looks at the News, the World, and Life) has been spending too much time looking at the News and not enough looking at the World and Life. Ah, it's so difficult meeting the needs of one's rich and varied readership. But there has, perhaps, been a little overweighting of legal topics lately. So let me get right to a really important topic: fortune cookies.

Have you noticed that fortune cookies don't contain fortunes anymore? It used to be that fortune cookies would say things like, "You will encounter an old friend," or "A job offer is coming your way" or something like that. These days, more often than not, fortune cookies don't contain fortunes at all. I had Chinese food last night, and my "fortune" was "It's not what you know, but how you use what you know that counts."

What kind of a fortune is that? That's not a fortune, it's just an observation. When I open a fortune cookie, I want a fortune! It not a fortune unless it predicts something about the future. Commentaries on the present don't count.

What's become of the fortune cookie industry? I presume they do market research like anyone else. They must have concluded that their customers prefer sayings to fortunes. Who are you people out there who prefer sayings? When you open a fortune cookie, don't you want a fortune?

Ouch

The new U.S. News grad school rankings are out, and it's official, GW fell from 20th to 28th. That's a considerable drop.

Some of the drop results from a change in the rankings methodology -- U.S. news finally decided to count part-time students in a school's stats. That affects schools that have a large part-time program, such as GW. The other big factor appears to be a drop in our "students employed 9 months after graduation" stat, from 97.1% to 92.8%. That doesn't sound like that big a deal, but with most schools tightly bunched on that statistic, a small change can cause a big drop.

Some professors put on a show of not caring about rankings, but in fact people care a lot, and it's especially important for schools that were hanging on to the edge of the top 20 -- i.e., us. There's going to have to be a lot of soul-searching and some tough decisions around here as we figure out how to regain our traditional ranking.

Supreme Court Succumbs to Logic!

Interesting decision today in Arizona v. Gant. The defendant, who was suspected of having something to do with sales of illegal drugs, was arrested for driving with a suspended license. He was handcuffed and locked in the back of a police car. Then the police searched the defendant's car and found cocaine in the pocket of a jacket.

Was the search lawful? Among the many, Byzantinely complicated rules of search and seziure law is that the police may conduct a search that is "incident" to a lawful arrest. This rule grew out of cases in which the Supreme Court expressed the concern that, at the moment of arrest, the arrestee might destroy evidence or produce a weapon and use it injure police. Therefore, the Court held, the police have the right to search the area within the arrestee's immediate control -- sometimes colloquially referred to by courts as his "wingspan" -- for evidence or weapons. Whatever they find is admissible. This rule, the Court held in 1981, applies to the passenger compartment of a car in which a suspect is arrested.

That's the theory, but the practice has been somewhat different. In cases too numerous to cite, the courts have held that the police's ability to search is wholly decoupled from the concerns that gave rise to it. So even if the defendant is handcuffed and in the back of a police car -- indeed, even if the defendant has left the scene -- courts have permitted the police to search the defendant's car.

Logically, this never made any sense. If the suspect is handcuffed and locked in the back of a police car, the suspect is not about to reach into his own car and pull out a weapon or destroy evidence. But the interests of law enforcement get a lot of weight in judicial decisions. So courts looked the other way as police conducted searches that had nothing to do with the rationale for them.

Today, the Supreme Court succumbed to logic. Recognizing that these decisions make no sense, and finally overwhelmed by the good old maxim cessante ratione legis, cessat et ipsa lex ("where the reason for a rule ceases, the rule ceases"), the Court limited the car search rule to the circumstances that justify it. If the suspect is restrained so that he can't get in the car, a search is not automatically allowed. Oh, there are still plenty of circumstances in which the search will end up being lawful -- in today's decision, the Court said searches would be permitted if when the police have reasonable grounds to believe they might find evidence relating to the offense for which they arrest the suspect -- but it's no longer automatic.

Prescription Strength Case

The Supreme Court hears arguments today in a case about a strip-search of a 13-year-old schoolgirl who was suspected, apparently incorrectly, of being in possession of prescription-strength ibuprofen pills. Students are subject to more intrusions on their liberties than adults, but this case will test whether the search was unreasonably intrusive.

I have just one question: what is the point of "prescription-strength" ibuprofen? Apparently, each prescription-strength pill contains 400 mg of active ingredient, as opposed to your standard ibuprofen pill, which contains 200 mg.

Are people stupid? Or do the regulators just think people are stupid? I can understand the importance of regulating prescription drugs that you can't get over the counter. But does anyone imagine that someone who can't get at those tantalizing 400 mg ibuprofen pills, because they're available only by prescription, won't think of taking two 200 mg ibuprofen pills that you can buy anytime, anywhere?

Civi Weirdness

Lots of heavy legal analysis this week, so we can take a moment out to ask what the heck is up with this weird Honda Civic ad? OK, it's cool that you tuned rumble strips to particular notes, so that the car plays a melody as it goes over them. But this has exactly what to do with the virtues of the car? Wouldn't any car make about the same notes? Am I supposed to like the car because you drove over a bunch of tuned rumble strips with it? I don't think that's going to happen.

And by the way, it doesn't sound anything like the William Tell Overture.

More Chevron Portents

One of the interesting things about the Entergy decision that I blogged the other day is that it just straightforwardly expressed the rule of Chevron deference: where a statute is entrusted to an administrative agency like EPA for enforcement, it's up to the agency to resolve ambiguities in the statute. The agency doesn't has to come up with what a court thinks is the best interpretation of its governing statute; only a reasonable interpretation. If ther interpretation is reasonable, a court must uphold it, even if the court thinks a different interpretation is better.

Chevron is just about the most important case in administrative law -- it effected a big transfer of power to the Executive branch at the expense of Congress and the courts. Basically, under Chevron, whenever agency statutes are ambiguous, which happens all the time, the agency gets to decide what they mean.

Chevron's been around since the 1980s, but recently there's been increasing doubt about when the rule applies. It used to apply routinely in administrative cases, but lately the Court keeps creating exceptions to the Chevron rule. In fact, the Court's been chipping away at it in case after case to the point where some serious thought is needed in each case to decide whether Chevron applies. So it was interesting to see the rule just stated without equivocation in Entergy.

Working back to a case from last month, it is equally interesting to see a concurring opinion by Justice Stevens arguing for a pretty major limitation on Chevron deference. He thinks that courts should resolve statutory ambiguities when they involve "pure questions of statutory interpretation" and agencies should get deference only when the matter involves "policymaking" or "interstitial questions." And the funny thing is, Justice Stevens wrote Chevron!

It's curious that the Court can't tell us the rule about when the most important administrative law rule applies.

The Taxman Cometh

Lots of important news (including Al Franken's courtroom victory), but here at Law Prof on the Loose we have to take today to think about taxes and, of course, tax protestors.

A wave of protestors are planning "tea bag" parties for today, mailing tea bags to government officials, that sort of thing. Having some small personal experience (working on Capitol Hill) with the way our government makes spending decisions, I have to agree that there's a lot of waste in the system. Unfortunately, our legislative system is well set up to take care of special interests and it can be difficult to make the system serve the general public. It would be great to cut out wasteful spending and reduce taxes as a result.

But at the same time, let's not get too carried away. Taxes may be too high, but as Oliver Wendell Holmes said, with them we buy civilization. If the choice is between a good governmental system that has some waste as an inevitable side effect and a bad governmental system, I think the choice is clear.

Meanwhile, for those keeping score, here are a few tax protestor updates:

* Peter Hendrickson, author of "Cracking the Code" (which I believe promotes the idea that you can get out of paying taxes by "correcting" your W-2 to show that you earned zero wages) lost his own civil case and was permanently enjoined from falsely reporting zero income. He has filed a cert petition in the Supreme Court, which will be denied. He's also under criminal indictment. Not a promising record for someone who claims to have figured out the truth about income tax.

* Ed and Elaine Brown, arrested and jailed after a months-long standoff while they were holed up in their New Hampshire home (following their conviction on tax charges), are now under indcitment for crimes stemming from the standoff. They may never leave prison.

* Tommy Cryer, who was, remarkably, acquitted on criminal tax charges, is battling the IRS in a civil case. The IRS claims he owes over $1 million in taxes and penalties. A useful reminder that acquittal in a criminal tax case does not get you out of owing the money.

In short, tax protestors seem to be batting at about their usual average -- zero on civil cases, almost zero on criminal cases. Wake up protestors! You don't have to like the income tax, but it does exist.

Entergy

I'm a little slow getting to it, but I just read the Supreme Court's very interesting opinion in Entergy Corp. v. Riverkeeper, Inc. The case concerned the requirements imposed by EPA regarding power plants that have water intake systems. These systems, which may use millions of gallons of water per day for cooling purposes, have adverse environmental impact on fish and other acquatic life that get crushed up against intake screens or sucked into the intake system. The EPA's regulations require measures to mitigate this adverse impact.

And here's the key: by statute, the regulations must require power plants to use "the best available technology for minimizing adverse environmental impact." Now, what does that mean? Does it mean that the EPA must require plants to use the available technology that most reduces adverse environmental impact -- regardless of how much it costs? Does the EPA have discretion not to require the use of technology that would bankrupt the power industry? Does the EPA have even more discretion to balance costs against benefits generally and make what it regards as a reasonable decision?

The Court held that Congress's use of the term "best" is ambiguous, and so, under the principle of Chevron deference, it's up to the agency to resolve the ambiguity in any reasonable way.

I guess this is a possible reading of the term "best." I'm inclined to think the term is more naturally read to mean the technology that best serves the purpose in question, without regard to cost. Still, when a magazine recommends the "best" stereo for you to buy, it could mean the very best stereo on the market, without regard to cost, but it might also mean the best one for actual people to buy, which would include some consideration of cost.

The interesting thing is that I had always understood the cases to suggest that cost is a virtually ubiquitous consideration in administrative decisionmaking and that, unless it's pretty clearly forbidden, agencies are permitted to consider it, even when it's not expressly mentioned in a statute. Then in 2001 the Supreme Court, in an opinion by Justice Scalia, said that where Congress requires the EPA to set a certain pollution limit at the level that is "requisite to protect the public health," that language clearly forbids any consideration of cost (Whitman v. American Trucking). Now, the Court, in another opinion by Justice Scalia, has said that the language "best available technology for minimizing adverse environmental impact" permits consideration of cost. I guess I'm missing the subtle distinction in the language involved.

Big Change

Vermont just legalized same-sex marriage. Although Vermont now becomes the fourth state in which same-sex marriage is legal (joining Massachusetts, Connecticut, and Iowa), Vermont is really first in any extremely significant way: Vermont becomes the first state to legalize same-sex marriage through a democratic vote of the state's elected representatives. The legislature even had enough votes to override a gubenatorial veto.

Previously, conservatives have been able to argue that the public doesn't want same-sex marriage and that unelected judges are forcing it upon them through constitutional rulings. Now, one of the states of the union has voted to adopt same-sex marraige by ordinary democratic processes. This is a very significant step.

Interpretive Puzzle

Interesting decision from the Supreme Court today in Corley v. United States. Corley was arrested for allegedly robbing a bank and held in custody for over nine hours following which he confessed. The question was the admissibility of his confession.

Under the "McNabb-Mallory doctrine," which has been around for over 60 years, confessions to federal police are inadmissible if made after the unreasonable failure of the police to present an arrested suspect to a magistrate promptly. But in 1968, Congress enacted a statute that said that "a confession made . . . by . . . a defendant therein, while such person was under arrest . . . , shall not be inadmissible solely because of delay in bringing such person before amagistrate judge . . . if such confession is found by thetrial judge to have been made voluntarily . . . and if suchconfession was made . . . within six hours [of arrest]."

No problem, you would think; Corely was held for more than nine hours before confessing, so the statute doesn't apply and the McNabb-Mallory doctrine does. But there's a complication. The same statute also said that "a confession . . . shall be admissible in evidence if it is voluntarily given."

Now what? The five-Justice Court majority says that the general rule of admissibility doesn't apply to confessions made more than six hours after arrest. The four-Justice minority says that it does.

The Court majority has the better of this one. The general rule of admissibility of voluntary confessions seems very broad, but if it really is so broad, what is the 6-hour window provision doing there? It's totally redundant to say that voluntary confessions made within six hours of arrest are admissible if all voluntary confessions are admissible.

As the Court held, a better understanding is that the general provision was designed to overturn the Miranda decision (a design that the Court thwarted, incidentally), and the other provision is specifically directed at limiting the McNabb-Mallory doctrine. Therefore, the provision specifically directed at the situation of unnnecessarily elongated questioning applies, and it limits, but does not eliminate, the McNabb-Mallory doctrine.

Sign of The Times

It's been a while since I actually looked at the print edition of the New York Times (I read it online), so I don't know how long this has been going on, but today's print edition contains a huge, banner ad right across the bottom of the front page. My, how the mighty are brought low. It's been a couple of years since the Times got physically smaller, and now they're taking up some of the reduced space on the front page with a big ad.

I can't say that I really blame them. They have to survive, and they've been hit with the double whammy of the economic crisis coming on top of the crash in newspaper revenues. But what can anyone do? The fundamental problem is that people won't pay for what they can get free online. Even I, who love newspapers generally and the NY Times particularly, don't subscribe to the print edition.

Maybe it's time for them to reorganize as a nonprofit and ask for donations. I wouldn't pay to subscribe to the Times, but if the paper made a public radio-like appeal and said, "Send us $100 donation or we'll go under!" I might respond to that.