It is almost never “rational, never mind ‘appropriate’” to ignore regulatory costs

Today’s Supreme Court decision in Michigan, et al. v. EPA (consolidated with Utility Air Regulatory Group v. EPA and National Mining Assoc. v. EPA) invalidated EPA’s regulation on electric power plant hazardous air pollutants for not taking its enormous costs into account.

It affirms a common-sense principle that EPA too often ignores: regulatory agencies must consider both the benefits and costs of their regulations and only issue those in which the benefits outweigh the various costs they impose, including the cost of compliance. Any other practice is economically and environmentally unsustainable, and it almost always violates federal law. Writing for the Court, Justice Scalia stressed that regulatory agencies must engage in “reasoned” decisionmaking, regardless of the underlying statute, and that EPA’s actions in ignoring massive costs under the particular provision fell far short of that mark. Continue reading

Supreme Court agrees to review Univ of Texas racial preferences – again

It has been a long road for Abigail Fisher, but she will have her day once again in the Supreme Court of the United States.  Two years ago the Court rightly ruled that tax-supported universities don’t deserve the benefit of the doubt from courts when they engage in race-based preferences and discrimination.  The issue stemming from Fisher’s lawsuit against the University of Texas at Austin, was whether the University’s practice of color-coding admissions applicants, and giving preferences based on race was necessary to achieve a racially diverse student body.

The Court held in 2013 that the Fifth Circuit used an improper standard and sent the case back for a more demanding review.  But last year the court of appeals again approved the University’s discriminatory policy.  The Court announced today that it would review that decision.  The precise issue is whether the University’s racial discrimination was justified because it used the least discriminatory means of achieving the educational benefits that flow from a diverse student body.  The case is Fisher v. University of Texas at Austin.

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President’s weekly report — June 26, 2015

The physical invasion of the raisin snatchers a property rights victory at the Supreme Court 

In a week marked by several major Supreme Court decisions that were quite disappointing to advocates of limited government and the rule of law, there was one very bright spot: this decision in Horne v. United States Department of Agriculture. That’s the case where the feds demanded that a raisin grower and handler literally turn over a large percentage of raisin crop to the feds, for which he might, or might not, get paid.  He was fined over $680,000 for not giving away his raisins.  The Court surmised because Horne’s raising were physically taken, he suffered a physical invasion style takings.  Justice Sotomayor constituted the sole dissent, strangely suggesting that there was no physical taking because Horne might be paid, in a good year, something for some of the raisins.  For more on the case, see our blog post here and our amicus brief here.

Coastal Commission gets acquisitive

In Kretowicz v. California Coastal Commission a couple is seeking a permit to build a pool and do some improvements on their home.  But the Commission is demanding the owner first give up an easement across their property down to the shoreline.  Now there is no way the Commission could justify that under cases like Nollan and Dolan.  But the Commission says, no matter, we had already imposed that condition on a prior owner thirty-five years ago — years before Nollan put a stop to the practice of extorting easements for permits.  However, the easement was never recorded and there is no practical way the Kretowiczs could have known about the easement unless they scoured the records at the Commission’s headquarters.  We filed this amicus brief pointing out that under California law, when an easement is not properly recorded, it isn’t enforceable.  Otherwise, homeowners would forever be subject to “gotcha” surprises left behind in the chain of title.

Rats and slumlords rejoice — Fair Housing Act supports disparate impact claims Continue reading

Can the Coastal Commission attach a dormant easement as a condition to a permit?

Today, PLF filed an amicus brief in the California Court of Appeal defending the property rights of La Jolla coastal landowners Ure and Dianne Kretowicz. The Kretowiczs purchased their blufftop home from a bank after a foreclosure in 1994, unaware of any restrictions on the title. But when they tried to get a permit to build a swimming pool and make some minor improvements to their house, they unwittingly provoked a long battle with the California Coastal Commission. The Commission said that a public easement across the property had been dedicated across the property back in 1979. So, if the Kretowiczs wanted their permit, they would have to acknowledge the easement and allow the public to cross their property.

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Victory for economic liberty in Texas! (or, Yay! Facts matter!)

The Texas Supreme Court today issued its ruling in a case called Patel, which is about what you have to prove when you challenge a restriction on your economic liberty as unconstitutionally excessive. Under federal law, an entrepreneur who is deprived of the right to earn a living by a government regulation—a licensing requirement, for example—must prove that the law is absolutely irrational, a very demanding test, and one that is excessively deferential to the government. But what about Texas state law? Texas’s Constitution forbids the government from taking away people’s freedom without “due course of law.” Does that protect people more than the very lenient, pro-government federal precedent does?

In our amicus brief, we said yes: the Texas Constitution’s Due Course of Law Clause should be interpreted to protect the rights of Texans more than the lenient federal Due Process of Law Clause does. We pointed out that especially in a state like Texas, with a strong tradition of independent entrepreneurship and protections from government interference, it makes sense to read the state Constitution as a stronger protection for economic freedom. And the majority opinion today agrees. Instead of the extremely pro-government federal standard, which says that an entrepreneur seeking to defend his rights must “negative every conceivable basis” for a challenged law, the Texas Court says that under state law, a court considering the constitutionality of a restriction on economic freedom must decide

whether the statute’s effect as a whole is so unreasonably burdensome that it becomes oppressive in relation to the underlying governmental interest…. [S]tatutes are presumed to be constitutional. To overcome that presumption, [the plaintiff] must demonstrate that either (1) the statute’s purpose could not arguably be rationally related to a legitimate governmental interest; or (2) when considered as a whole, the statute’s actual, real-world effect as applied to the challenging party could not arguably be rationally related to, or is so burdensome as to be oppressive in light of, the governmental interest…. Although whether a law is unconstitutional is a question of law, the determination will in most instances require the reviewing court to consider the entire record, including evidence offered by the parties.

That last bit is particularly nice, because some federal courts have gone to the extreme of arguing that when it comes to restrictions on your economic freedom, evidence does not matter at all, and you should not be allowed to even try to argue that the law is unconstitutional (which is wrong even if you buy the whole “rational basis” thing). Today’s decision is a far cry from the “anything goes” test that federal courts and many state courts apply when upholding the constitutionality of arbitrary and unjust restrictions on the right to earn a living.

By the way, don’t miss Justice Willett’s particularly keen concurring opinion, in which he explains how licensing laws have routinely been used to prevent economic competition for the benefit of existing businesses, and at the expense of entrepreneurs and consumers. “[T]he unalienable right to pursue happiness is not merely the right to possess things or to participate in activities we enjoy,” he writes, “it necessarily includes the right to improve our lot in life through industry and ingenuity.”

Congrats to our IJ friends for this fine win.

The lingering constitutional problem with disparate impact

Today the Court held that disparate impact claims are cognizable under the Fair Housing Act (our earlier blog post on the case is here). The Court came to this conclusion as a matter of statutory interpretation, but didn’t say much about the constitutional problems that might arise in a disparate impact lawsuit. Like the antagonist in the early part of a horror movie, those problems continue to lurk in the background.

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L.A. Daily Journal runs PLF Op-Ed on the Horne Decision

Today, the L.A. Daily Journal ran an op-ed written by PLF attorneys Brian T. Hodges and Christopher Kieser on the Supreme Court’s takings decision in the raisin case, Horne v. Department of Agriculture. [update: the link to the article has been disabled; the article is only available to subscribers]

Supreme Court holds Fair Housing Act prohibits disparate impact discrimination

In a disappointing 5-4 decision written by Justice Kennedy, the Supreme Court held today that the Federal Fair Housing Act, Title VIII of the Civil Rights Act of 1968, encompasses claims for disparate impact.  The majority insists that disparate-impact claims are consistent with the FHA’s central purpose to eradicate discriminatory practices within a sector of our Nation’s economy.  The case is Texas Department of Housing and Community Affairs v. Inclusive Communities Project.

Attorneys for PLF filed a brief in that case, with Center for Equal Opportunity, Competitive Enterprise Institute, Cato Institute, Individual Rights Foundation, Reason Foundation, and Project 21.  PLF’s brief demonstrated how the text and legislative history of the original Act are not consistent with a theory of discrimination that imposes liability on defendants who act without any discriminatory motive or intent.

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