Aftermath of AMG v. FTC

On April 22nd, the United States Supreme Court handed down a unanimous decision in AMG Capital Management, LLC, et al. v. Federal Trade Commission. The Court declared that section 13(b) of the Federal Trade Commission Act does not authorize the Federal Trade Commission (FTC) “to seek…equitable monetary relief such as restitution or disgorgement.” 

In response to this decision Acting Chairwoman Rebecca Kelly Slaughter said, “In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior.”

In this episode, Vec responds to the FTC’s reaction to their loss in AMG v. FTC.

 

Congress Seizes State Taxing Authority

Later in the episode, Mark discusses a group of 13 states including Florida, West Virginia and Alaska that have sued the U.S. Treasury Department over a provision in the American Rescue Plan Act of 2021 that prohibits states from using federal funds for state tax cuts.

West Virginia et al. v. U.S. Department of the Treasury et al. addresses the federal provision that prohibits states from using the recent $350 billion cash infusion to states and localities if they "directly or indirectly offset … [states'] net tax revenue" via state laws, regulations or through rate cuts, rebates, deductions, credits "or otherwise." States that don't comply with the provisions would be required to repay funds equal to the amount of tax cuts they gave. 

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Executive fiat has become the lawmaking method of choice in Biden's first 100 days. In this episode, Mark and Vec discuss Biden's first 100 days and the executive orders he’s signed.

As of April 29, Biden had issued 41 executive orders, more than twice the number issued by either Obama (19) or Bush (11), and two-thirds more than Trump (25). Counting other unilateral executive actions, but excluding mostly symbolic actions like declaring a National Agriculture Day, Biden issued 64 compared to 54, 41, and 20 for Trump, Obama, and Bush, respectively.

NCLA has launched a database in response to the unprecedented amount of unlawful administrative power that the White House is generating. Check out our new webpage, “Dazed and Abused: Biden’s 100-day Avalanche of Administrative Abuses.”

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New CFPB Rule Strengthens Unlawful Eviction Moratorium 

In this episode, Vec criticizes the new Consumer Financial Protection Bureau (CFPB) eviction rules for landlords. On April 19th, CFPB issued an interim final rule strengthening tenant protections under the Fair Debt Collection Practices Act (“FDCPA”), in support of the Centers for Disease Control and Prevention’s (CDC) COVID-19-related eviction moratorium.

The rule requires debt collectors to provide to tenants who may have rights under the eviction moratorium a written notice of those rights concurrent with an eviction notice or on the date that an eviction action is filed, and clarifies that notice given over the phone or by electronic means such as text or email is insufficient.

NCLA filed several lawsuits across the country challenging CDC’s unlawful eviction moratorium and similar government edicts. NCLA filed a class-action lawsuit, Mossman v. CDC, in the U.S. District Court for the Northern District of Iowa. The case Brown v. CDC is on appeal in the U.S. of Appeals for the Eleventh Circuit. The cases Johnson v. Murphy and Kravitz v. Murphy challenge New Jersey Governor Murphy’s abuse of power in issuing Executive Order No. 128, which unilaterally forces residential housing providers to use their tenants’ security deposits towards rent payments and criminalizes adherence to existing contracts.

 

Arizona DCS Ruins Man’s Reputation Before Due Process 

Later in the episode, Mark discusses NCLA’s Arizona Court of Appeals case in Phillip B. v. Faust. NCLA filed a reply brief this week in the Arizona Court of Appeals which challenges the Maricopa County Superior Court’s decision allowing the Arizona Department of Child Safety (DCS) to overrule factual findings and credibility determinations made by an independent administrative law judge (ALJ). DCS’s unjust decision placed NCLA client Phillip B. (whose name has been redacted to preserve his anonymity under court rules) on the DCS Central Registry of child abusers for 25 years, destroying his reputation and career.

After taking live testimony, the ALJ did not find probable cause to support the accusations of alleged child abuse against Mr. B. But state law allowed DCS to appeal the ALJ’s decision to its own Director, who in July 2019, disregarded due process and rejected the findings of the ALJ, adopting his own agency’s unsupported and unproven version of events. Acting as prosecutor, judge, and jury, then-director of DCS, Greg McKay, decided unilaterally that the charges against Mr. B. were ‘substantiated.’

For 27 years, Phillip B. has been a coach, school teacher, and group-home caregiver for troubled teens. In 2018, Mr. B. was falsely accused of child abuse by one of the teens in a group home. After a two-day trial, the ALJ found that Mr. B. committed no abuse when he placed his hand on the upset teenager’s shoulder to calm him down.

Director McKay rewrote the ALJ’s facts and applied an unconstitutional standard of proof that deviated from DCS’s own regulations. Additionally, Director McKay carried out his own decision without waiting for the court process to commence, much less conclude.

The Court should reverse and vacate the DCS Director’s and the Superior Court’s decisions, and follow the initial conclusion of the neutral ALJ, who deemed the allegations against Mr. B. baseless. In addition, the Court of Appeals should require DCS to accord due process before placing anyone’s name in the Central Registry in the future.

Read more about the case here: https://nclalegal.org/2021/04/ncla-asks-az-court-of-appeals-to-require-due-process-before-dcs-adds-names-to-central-registry/

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Carr v. Saul

In this episode, Mark discusses NCLA’s amicus win at SCOTUS in Carr v. Saul. The U.S. Supreme Court unanimously held that the lower courts erred in imposing an issue-exhaustion requirement on Social Security disability claimants. In Carr v. Saul, claimants challenged a judge-made version of the administrative exhaustion rule, a requirement that litigants at an administrative hearing must raise any legal arguments in support of their claim at each step of the administrative process or forfeit those arguments on appeal. NCLA and the Cato Institute filed a joint amicus brief arguing that imposing issue exhaustion requirements is inappropriate when the issue does not depend on an agency’s discretion, expertise, or fact-finding.

In Justice Sotomayor’s opinion for the Court, the judgments of the Eighth and Tenth Circuit Courts of Appeal were reversed under the reasoning that petitioners could not have developed their Appointments Clause challenges in the Social Security Administration (SSA) administrative law judge (ALJ) proceedings given that: (1) the proceedings were non-adversarial; and (2)(a) the structural constitutional claims at issue were ill suited for agency adjudication because they fell outside the agency’s expertise; and (b) raising them would have been futile since the SSA ALJ could not have granted the claimants their requested relief.

NCLA’s amicus briefs in Lucia v. SEC and now Carr aim to ensure that agency adjudicators must afford people their constitutionally guaranteed rights. The Court’s decision in Carr makes certain that Article III courts will serve as a constitutional backstop and step in to enforce the Constitution when agencies can’t or won’t.

Read more about the decision here: https://nclalegal.org/2021/04/in-victory-for-ncla-supreme-court-unanimously-rejects-issue-exhaustion-requirement-before-alj/

 

AMG v. FTC

Later in the episode, Vec talks about NCLA’s second SCOTUS victory of the week in AMG Capital Management, LLC, et al. v. Federal Trade Commission. Justice Stephen Breyer handed down a unanimous decision declaring that section 13(b) of the Federal Trade Commission Act does not authorize the Federal Trade Commission (FTC) “to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.”

Section 13(b) of the Federal Trade Commission Act strictly authorizes the Commission to obtain, “in proper cases,” a “permanent injunction” in federal court against “any person, partnership, or corporation” that it believes “is violating, or is about to violate, any provision of law” that the Commission enforces. But the FTC had transformed its limited statutory right to enjoin present or future unlawful conduct into a near-absolute right to secure any “equitable remedy” for past damages under Section 13(b). NCLA’s successful amicus brief admonished FTC for its unlawful practice of applying the agency’s statutory provisions in an unauthorized way to avoid the due process protections for monetary remedies Congress provided in the FTC Act.

NCLA commends the Court for rejecting the FTC’s arguments and for restoring the limits Congress imposed on the agency.

Read more about the decision here: https://nclalegal.org/2021/04/ncla-celebrates-scotus-win-rejecting-ftc-power-grab-and-restoring-limits-on-rogue-agency/

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Biden’s Pistol Brace EO

In this episode, Vec discusses Biden’s new executive actions on firearms that target ghost guns, red flag laws, and pistol-stabilizing braces. Biden has called on the Department of Justice to issue proposed rules to stop the proliferation of so-called “ghost guns” within 30 days. In addition, within 60 days, DOJ will issue a proposed rule that will require firearms equipped with “pistol stabilizing braces” to be registered as Short-Barreled Rifles (SBRs) subject to the requirements of the National Firearms Act.

President Biden has said the brace makes the pistol more lethal and “a hell of a lot more accurate.”

In the cases Aposhian v. Wilkinson, et al. and Michael Cargill v. Garland, et al., NCLA represents gun owners who filed lawsuits against the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), seeking to overturn the federal ban on bump stocks and to halt its enforcement. NCLA argues that the ATF rule banning bump stocks exceeds the agency’s legal authority. Pistol stabilizing braces and bump stock devices are both aftermarket gun accessories.

Read more about the cases here: https://nclalegal.org/aposhian-v-wilkinson/; https://nclalegal.org/cargill-v-garland/

Commercial Speech and Credit Card Surcharges

Later in the episode, Mark reviews a recent commercial speech decision out of the U.S. District Court, District of Kansas, on credit card surcharges. Since 2013, U.S. merchants have been allowed to impose a surcharge on consumers who pay for goods or services with a credit card. Some states, like Kansas, have enacted statutes prohibiting or restricting merchants from surcharging customers who elect to pay via credit card. The U.S. District Court, District of Kansas, ruled in CardX, LLC v. Schmidt that the Kansas statute which prohibits the credit card surcharge violated the First Amendment rights of a payment processing technology company but limited the scope of its ruling to the plaintiff technology company.

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The Court-Packing Blitz

In this episode, Vec reacts to recent news that Democrat lawmakers are preparing to unveil legislation that would add four seats to the U.S. Supreme Court, a move that could harm the rule of law in the U.S. This comes on the heels of an executive order, signed by President Biden last week, that establishes a 36-member commission to report back within six months on possible changes to the Supreme Court’s membership, jurisdiction, and lifetime terms.

The legislation will have slim hopes of passage, with Republicans united in opposition to any effort that would upset the balance of the court, and even many Democrats reluctant to prejudge the issue while President Biden’s commission is at work.

The work of the commission and the pressure campaign from judicial activists could, however, be intended as a shot across the bow to influence the deliberations of the Supreme Court. The proposals to apply term limits or adding justices to the Supreme Court would require a constitutional amendment. The judiciary should remain independent.

Supreme Court justices are appointed by the president rather than elected by the people, and once confirmed by the Senate, they owe no allegiance to any person or party. Their only allegiance is to the Constitution. The president can’t replace them at will like a political appointee; justices can only be replaced when they retire, die, or are impeached and removed from office for cause.

Justice Thomas on Big Tech and the First Amendment

Later in the episode, Mark dissects Justice Thomas’s latest concurring opinion in Biden v. Knight First Amendment Institute at Columbia University, a lawsuit in which a lawyer alleged President Trump violated the Constitution in blocking this individual from @realdonaldjtrump on Twitter. The case was dismissed as moot by the U.S. Supreme Court on April 5th.

Justice Thomas points out that “public forum” law does not fit well with online platforms. He then outlines two other doctrines that have a long legal history of application to private businesses: “common-carrier law” and “public accommodation law.”

Justice Thomas, concurring: “The Second Circuit feared that then-President Trump cut off speech by using the features that Twitter made available to him. But if the aim is to ensure that speech is not smothered, then the more glaring concern must perforce be the dominant digital platforms themselves. As Twitter made clear, the right to cut off speech lies most powerfully in the hands of private digital platforms. The extent to which that power matters for purposes of the First Amendment and the extent to which that power could lawfully be modified raise interesting and important questions. This petition, unfortunately, affords us no opportunity to confront them.”

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Beckett Win and Gov. Murphy's EO 128

Vec and Mark discuss the recent win for Beckett and religious liberty in Archbishop of Washington v. Bowser.

On December 16, 2020, Mayor Bowser signed an updated order that raised the cap to 250 persons so that the Archdiocese’s churches could open their doors to many more parishioners on Christmas Day. On March 25, 2021, a federal judge ruled against D.C.’s arbitrary caps, allowing the Basilica and other Catholic churches in the Archdiocese to welcome as many of their parishioners as could safely attend Easter services.

The two also discuss NCLA's recent legal action in Kravitz v. Murphy.

The lawsuit challenges Governor Murphy’s Executive Order No. 128 (EO 128), an unconstitutional mandate that unilaterally forces residential housing providers to use their tenants’ security deposits toward rent payments and criminalizes adherence to existing contracts. The order undermines property rights by suspending existing laws governing residential leasehold contracts and depriving property owners of security against property damage caused by tenants.

NCLA represents small property owners who have fallen victim to Governor Murphy’s unlawful order. The appellants in this case are ordinary people who are also struggling financially as a result of the pandemic. Without the contractually required security deposits, these housing providers are now forced to cover the costs of any tenant-caused property damage out of their own pockets rather than using the restitution guaranteed in the contracts they signed. In one instance, a landlord has been unable to track down former tenants who caused over $1,800 worth of damage to his rental property.

Read more about the case here: https://nclalegal.org/2021/04/eo-128-ncla-asks-nj-appellate-court-to-halt-governors-unlawful-interference-with-rental-contracts/

 

Show me the Money! NCAA v. Alston

Later in the episode, Vec and Mark review the oral argument made before the Supreme Court in NCAA v. Alston on whether college athletes can be paid.

The case before the court was filed as a class action against the NCAA and the major athletic conferences in 2014, arguing that the NCAA’s restrictions on eligibility and compensation violate federal antitrust laws by barring the athletes from receiving fair-market compensation for their labor. A federal district court in California ruled that the NCAA could restrict benefits that are unrelated to education (such as cash salaries), but it prohibited the NCAA from limiting education-related benefits (such as free laptops or paid post-graduate internships). The U.S. Court of Appeals for the 9th Circuit upheld that decision, setting the stage for the Supreme Court’s review in NCAA v. Alston.

Justice Samuel Alito suggested that the circumstances of major-college athletics “paint a pretty stark picture” in which powerhouse programs bring in billions of dollars and pay enormous salaries to coaches, but the athletes themselves put in long hours of training, at significant cost to their studies, resulting in “shockingly low” graduation rates. The athletes, Alito concluded, are “recruited, they’re used up, and then they’re cast aside.”

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The Peril of Politics in Court

In this episode, Vec discusses Supreme Court Justice Stephen G. Breyer's speech at Harvard Law School's annual Scalia Lecture held April 7th, where he discussed the complexities at the intersection of the “authority of the court” and the “peril of politics”. In his speech, Breyer warned against court-packing and said that the court’s authority depends on “a trust that the court is guided by legal principle, not politics.”

“What I’m trying to do is to make those whose initial instincts may favor important structural change or other similar institutional changes — such as forms of court-packing — think long and hard before they embody those changes in law,” he said.

 

FinCEN's Proposed Rule

Later in the episode, Mark explains NCLA’s objection to a proposed rule by the Financial Crimes Enforcement Network (FinCEN) within the U.S. Department of Treasury.  The "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets" presents USTD's planned “crackdown” on cryptocurrency holders’ private wallets. NCLA considers this an unconstitutional power grab that would lead to a massive collection of people’s personal information. The unlawful requirements laid out by FinCEN, would likely force privacy-sensitive digital assets out of the U.S. banking system. The proposed rule represents a radical—and unlawful—extension of FinCEN’s financial surveillance.

If FinCEN moves forward with its proposal in its current form, digital assets would fall into the “monetary instruments” category of regulated currencies. That designation would mean a vast expansion of the Bank Secrecy Act’s (BSA) record-keeping and currency transaction reporting requirements—to collect private data of Bitcoin’s and Ethereum’s users, among others. Besides transaction reports, the proposed rule sets in motion a chain reaction of personal information mandatory disclosure. Whenever a financial institution makes a transaction involving digital assets worth more than $3,000 with a person—even an individual holding them in an “unhosted” wallet—it must keep detailed records concerning both the customer and the counterparty. Even existing BSA requirements for traditional banks do not require this level of disclosure about counterparties.

NCLA argues that the proposed rule exceeds appropriate constitutional limits by empowering FinCEN to exercise Congress’ exclusive legislative power. First, in reclassifying digital assets, FinCEN is not filling in details in existing law, but rather is writing new rules, on new subjects, with criminal consequences. Second, the proposed rule is not within the Executive Branch’s inherent powers, for it creates whole new types of criminal liability—a uniquely legislative prerogative.

Furthermore, the proposed rule violates the Fourth Amendment by extending the BSA’s reach to require production of sensitive financial information from those who have never voluntarily disclosed it to a financial institution, and who, like cryptocurrency owners, have been excluded from the BSA’s reach. It would unconstitutionally require disclosure of private information to law enforcement without any suspicion of wrongdoing.

Read more about our objection to the proposed rule here: https://nclalegal.org/2021/03/ncla-comments-warn-against-treasurys-proposed-crypto-surveillance-rule-as-unconstitutional/

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Sixth Circuit Strikes Down Bump Stock Ban

Mark explains the Sixth Circuit’s strike down of the bump stock ban and its refusal to defer to ATF’s legal interpretation.

A federal appeals court Thursday (March 25) ruled that a federal regulation barring bump stocks is likely illegal and was incorrect in claiming that the devices make a weapon a machine gun.

The 6th U.S. Circuit Court of Appeals ruled that the accessories are not subject to a 2018 ban imposed by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) at the order of then-President Donald Trump.

 

Amicus Briefs Filed In NCLA’s Case Against NLRB

Vec details amicus briefs filed in NCLA’s Third Circuit FDRLST case, including one signed by PJ O’Rourke and Penn & Teller. 

Liberty-minded organizations, distinguished civil liberties activists, including former ACLU president Nadine Strossen, and prominent entertainers, Penn and Teller, are among the amici curiae who have filed briefs in support of the arguments presented by NCLA in the satirical tweet case, FDRLST Media v. NLRB.

NCLA’s appellate brief asks the U.S. Court of Appeals for the Third Circuit to reverse the flawed ruling of the National Labor Relations Board (NLRB) from last November, which concluded that Mr. Domenech’s satirical tweet from his personal account constituted an unfair labor practice by his employer. FDRLST Media, publisher of the online magazine The Federalist, is fighting back because NLRB has neither subject-matter jurisdiction over this case nor personal jurisdiction over the company.

Bridging the political divide, the amici curiae briefs contend that individuals have the right to speak freely and satirically to express their personal views under the First Amendment of the U.S. Constitution.

Read more about the case here: https://nclalegal.org/joel-f-v-fdrlst-media-llc/

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NCLA Amicus Victory

In an NCLA amicus victory, Mark discusses a Second Circuit en banc Fair Housing Act case that refused to create landlord liability for tenant-on-tenant discrimination.

On March 25, a 7-5 en banc ruling in the U.S. Court of Appeals for the Second Circuit vacated a flawed panel decision and dismissed the complaint in the case Donahue Francis v. Kings Park Manor, Inc., et al. The court’s decision on narrow grounds correctly interpreted the scope of the statutes, held the plaintiff to appropriate pleading requirements, and thus affirmed the district court’s dismissal of a claim that sought to hold a landlord liable for tenant-on-tenant racial harassment.

Read more about the case here: https://nclalegal.org/2021/03/victory-second-circuit-refuses-to-make-landlords-liable-for-tenant-on-tenant-racial-harassment/

 

WI Sup. Ct. Shuts Down Gov.'s State of Emergency

Vec praises a Wisconsin Supreme Court ruling shutting down the governor’s efforts to perpetuate a state of emergency.

The court ruled 4-3 that Governor Tony Evers violated state law by unilaterally issuing multiple emergency orders to extend the mandate for months. It found that Gov. Evers needed legislative approval to issue more orders after the expiration of the initial 60-day mandate he issued in August. 

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