Who is able to complete this discussion?

Chapter 1 & 3

Cited Source:

Langvardt, A. W., Barnes, A. J., Prenkert, J. D., McCrory, M. A., & Perry, J. E. (2019).  Business law: The ethical, global, and e-commerce environment (17th ed.). Retrieved from https://www.vitalsource.com 

Chapter 1

Types and Classifications of Law

The Types of Law

Identify the respective makers of the different types of law (constitutions, statutes, common law, and administrative regulations and decisions).

Constitutions Constitutions, which exist at the state and federal levels, have two general functions. 1  First, they set up the structure of government for the political unit they control (a state or the federal government). This involves creating the branches and subdivisions of the government and stating the powers given and denied to each. Through its  separation of powers , the U.S. Constitution establishes the Congress and gives it power to make law in certain areas, provides for a chief executive (the president) whose function is to execute or enforce the laws, and helps create a federal judiciary to interpret the laws. The U.S. Constitution also structures the relationship between the federal government and the states. In the process, it respects the principle of  federalism  by recognizing the states’ power to make law in certain areas.

The second function of constitutions is to prevent the government from taking certain actions or passing certain laws, sometimes even if those actions or laws would otherwise appear to fall within the authority granted to the government under the first function. Constitutions do so mainly by prohibiting government action that restricts certain individual rights. The Bill of Rights to the U.S. Constitution is an example. You could see the interaction of those two functions, for instance, where Congress is empowered to regulate interstate commerce but cannot do so in a way that would abridge the First Amendment’s free speech guarantee.

Statutes Statutes are laws created by elected representatives in Congress or a state legislature. They are stated in an authoritative form in statute books or codes. As you will see, however, their interpretation and application are often difficult.

Throughout this text, you will encounter state statutes that were originally drafted as  uniform acts . Uniform acts are model statutes drafted by private bodies of lawyers and scholars. They do not become law until a legislature enacts them. Their aim is to produce state-by-state uniformity on the subjects they address. Examples include the Uniform Commercial Code (which deals with a wide range of commercial law subjects), the Revised Uniform Partnership Act, and the Revised Model Business Corporation Act.

Common Law The  common law  (also called judge-made law or case law) is law made and applied by judges as they decide cases not governed by statutes or other types of law. Although, as a general matter, common law exists only at the state level, both state courts and federal courts become involved in applying it. The common law originated in medieval England and developed from the decisions of judges in settling disputes. Over time, judges began to follow the decisions of other judges in similar cases, called  precedents . This practice became formalized in the doctrine of stare decisis (let the decision stand). As you will see later in the chapter, stare decisis is not completely rigid in its requirement of adherence to precedent. It is flexible enough to allow the common law to evolve to meet changing social conditions. The common law rules in force today, therefore, often differ considerably from the common law rules of earlier times.

The common law came to America with the first English settlers, was applied by courts during the colonial period, and continued to be applied after the Revolution and the adoption of the Constitution. It still governs many cases today. For example, the rules of tort, contract, and agency discussed in this text are mainly common law rules. In some instances, states have codified (enacted into statute) some parts of the common law. States and the federal government have also passed statutes superseding the common law in certain situations. As discussed in  Chapter 9 , for example, the states have established special rules for contract cases involving the sale of goods by enacting Article 2 of the Uniform Commercial Code.

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This text’s torts, contracts, and agency chapters often refer to the Restatement—or Restatement (Second) or (Third)—rule on a particular subject. The Restatements are collections of common law (and occasionally statutory) rules covering various areas of the law. Because they are promulgated by the American Law Institute rather than by courts, the Restatements are not law and do not bind courts. However, state courts often find Restatement rules persuasive and adopt them as common law rules within their states. The Restatement rules usually are the rules followed by a majority of the states. Occasionally, however, the Restatements stimulate changes in the common law by suggesting new rules that the courts later decide to follow.

Because the judge-made rules of common law apply only when there is no applicable statute or other type of law, common law fills in gaps left by other legal rules if sound social and public policy reasons call for those gaps to be filled. Judges thus serve as policy makers in formulating the content of the common law. In Price v. High Pointe Oil Company, Inc., which follows shortly, the Court surveys the relevant legal landscape and concludes that a longstanding common law rule should remain in effect. A later section in the chapter will focus on the process of case law reasoning, in which courts engage when they make and apply common law rules. That process is exemplified by the first half of the Price opinion.

Price v. High Pointe Oil Company, Inc. 828 N.W.2d 660 (Mich. 2013)

In 2006, Beckie Price replaced the oil furnace in her house with a propane furnace. The oil furnace was removed, but the pipe that had been used to fill the furnace with oil remained in place.

At the time the furnace was replaced, Price canceled her contract for oil refills with the predecessor of High Pointe Oil Company, the defendant. Somehow, though, in November 2007, High Pointe mistakenly placed Price’s address back on its “keep full list.” Subsequently, a High Pointe truck driver pumped around 400 gallons of fuel oil into Price’s basement through the oil-fill pipe before realizing the mistake. Price’s house and her belongings were destroyed. The house was eventually torn down, the site was remediated, and a new house was built on a different part of Price’s property. Price’s personal property was all cleaned or replaced. All of her costs related to her temporary homelessness were reimbursed to her, as well. Thus, she was fully compensated for all of her economic losses resulting from High Pointe’s error.

Nevertheless, Price sued High Pointe alleging a number of claims. The only of her claims to survive to trial was one focused on her noneconomic losses—for example, pain and suffering, humiliation, embarrassment, and emotional distress. A jury found in Price’s favor and awarded her $100,000 in damages.

High Pointe filed an appeal to the intermediate appellate court, to no avail. High Pointe then appealed to the Michigan Supreme Court, excerpts of whose opinion is below.

Markman, J.

III. Analysis

The question in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. Absent any relevant statute, the answer to that question is a matter of common law.

A. Common Law

As this Court explained in [a prior case], the common law “is but the accumulated expressions of the various judicial tribunals in their efforts to ascertain what is right and just between individuals in respect to private disputes[.]” The common law, however, is not static. By its nature, it adapts to changing circumstances…. The common law is always a work in progress and typically develops incrementally, i.e., gradually evolving as individual disputes are decided and existing common-law rules are considered and sometimes adapted to current needs in light of changing times and circumstances.

The common-law rule with respect to the damages recoverable in an action alleging the negligent destruction of property was set forth in [a 1933 case]:

If injury to property caused by negligence is permanent or irreparable, the measure of damages is the difference in its market value before and after said injury, but if the injury is reparable, and the expense of making repairs is less than the value of the property, the measure of damages is the cost of making repairs.

Michigan common law has continually followed [that] rule…. Accordingly, the long-held common-law rule in Michigan is that the measure of damages for the negligent destruction of property is the cost of replacement or repair. Because replacement and repair costs reflect economic damages, the logical implication of this rule is that the measure of damages excludes noneconomicdamages.

Lending additional support to this conclusion is the simple fact that, before the Court of Appeals’ opinion below, no case ever in the history of the Michigan common law has approvingly discussed the recovery of noneconomic damages for the

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negligent destruction of property. Indeed, no case has even broached this issue except through the negative implication arising from limiting damages for the negligent destruction or damage of property to replacement and repair costs….

Moreover, the Court of Appeals has decided two relatively recent cases concerning injury to personal property in which noneconomic damages were disallowed. In Koester v. VCA Animal Hospital, the plaintiff dog owner sought noneconomic damages in a tort action against his veterinarian following the death of his dog resulting from the veterinarian’s negligence. The trial court granted the defendant’s motion for summary disposition, holding that “emotional damages for the loss of a dog do not exist.” On appeal, the Court of Appeals affirmed, noting that pets are personal property under Michigan law and explaining that there “is no Michigan precedent that permits the recovery of damages for emotional injuries allegedly suffered as a consequence of property damage.”

Later, in Bernhardt v. Ingham Regional Medical Center, the plaintiff [accidentally left] her grandmother’s 1897 wedding ring (which was also her wedding ring) and a watch purchased in 1980 around the time of her brother’s murder … in the [hospital’s] washbasin and left the hospital. Upon realizing her mistake, the plaintiff contacted the defendant and was advised that she could retrieve the jewelry from hospital security. However, when she tried to retrieve the jewelry, it could not be located. The plaintiff sued, and the defendant moved for summary disposition, arguing that the plaintiff’s damages did not exceed the $25,000 jurisdictional limit of the trial court. The plaintiff countered that her damages exceeded that limit because the jewelry possessed great sentimental value. The trial court granted the defendant’s motion. On appeal, the Court of Appeals affirmed, citing Koester for the proposition that there “is no Michigan precedent that permits the recovery of damages for emotional injuries allegedly suffered as a consequence of property damage”…. In support of its conclusion, Bernhardt quoted the following language from the Restatement Second of Torts:

If the subject matter cannot be replaced, however, as in the case of a destroyed or lost family portrait, the owner will be compensated for its special value to him, as evidenced by the original cost, and the quality and condition at the time of the loss…. In these cases, however, damages cannot be based on sentimental value. Compensatory damages are not given for emotional distress caused merely by the loss of the things, except that in unusual circumstances damages may be awarded for humiliation caused by deprivation, as when one is deprived of essential elements of clothing.

While Koester and Bernhardt both involved negligent injury to personal property, they speak of property generally. Although the Court of Appeals in the instant case seeks to draw distinctions between personal and real property, neither that Court nor plaintiff has explained how any of those distinctions, even if they had some pertinent foundation in the law, are relevant with regard to the propriety of awarding noneconomic damages. In short, while it is doubtlessly true that many people are highly emotionally attached to their houses, many people are also highly emotionally attached to their pets, their heirlooms, their collections, and any number of other things. But there is no legally relevant basis that would logically justify prohibiting the recovery of noneconomic damages for the negligent killing of a pet or the negligent loss of a family heirloom but allow such a recovery for the negligent destruction of a house. Accordingly, Koester and Bernhardt underscore [the long-standing] exclusion of noneconomic damages for negligent injury to real and personal property.

Finally, we would be remiss if we did not address Sutter v. Biggs, which the Court of Appeals cited as providing the “general rule” for the recovery of damages in tort actions. Sutter stated:

The general rule, expressed in terms of damages, and long followed in this State, is that in a tort action, the [party that committed the tort] is liable for all injuries resulting directly from his wrongful act, whether foreseeable or not, provided the damages are the legal and natural consequences of the wrongful act, and are such as, according to common experience and the usual course of events, might reasonably have been anticipated. Remote contingent, or speculative damages are not considered in conformity to the general rule.

Although Sutter articulates a “general rule,” it is a “general rule” that has never been applied to allow the recovery of noneconomic damages in a case involving only property damage, and it is a “general rule” that must be read in light of the more narrow and specific “general rule” [that Michigan has always followed with regard to the noneconomic damages exclusion in cases involving property damage].

The development of the common law frequently yields “general rules” from which branch more specific “general rules” that apply in limited circumstances. Where tension exists between those rules, the more specific rule controls…. With respect to this case, although Sutter articulated a general rule, [the rule excluding noneconomic damages for property damages is] a more specific “general rule”…. Accordingly, because this case involves only property damage, the [latter] rule … controls.

B. Altering the Common Law

Because the Court of Appeals determined that the “general rule” is that “in a tort action, the [party who committed the tort] is liable for all injuries,” the Court of Appeals contended that it was not altering the common law but, rather, “declin[ing] to extend” to real property the personal property “exception” set forth in Koester and Bernhardt. However, as previously mentioned, the Court of Appeals’ opinion constitutes the first and only Michigan case to support the recovery of noneconomic damages for the negligent destruction of property. Accordingly, contrary to the Court of Appeals’ own characterization and for the reasons discussed [above], the Court of Appeals’ holding represents an alteration of the common law. With that understanding, we address whether the common law should be altered.

“This Court is the principal steward of Michigan’s common law,” … and it is “axiomatic that our courts have the constitutional authority to change the common law in the proper case….” However, this Court has also explained that alteration of the common law should be approached cautiously with the fullest consideration of public policy and should not occur through sudden departure from longstanding legal rules…. Among them has been our attempt to “avoid capricious departures from bedrock legal rules as such tectonic shifts might produce unforeseen and undesirable consequences.” … As this emphasis on incrementalism suggests, when it comes to alteration of the common law, the traditional rule must prevail absent compelling reasons for change. This approach ensures continuity and stability in the law.

With the foregoing principles in mind, we respectfully decline to alter the common-law rule that the appropriate measure of damages for negligently damaged property is the cost of replacement or repair. We are not oblivious to the reality that destruction of property or property damage will often engender considerable mental distress, and we are quite prepared to believe that the particular circumstances of the instant case were sufficient to have caused exactly such distress. However, we are persuaded that the present rule is a rational one and justifiable as a matter of reasonable public policy. We recognize that might also be true of alternative rules that could be constructed by this Court. In the final analysis, however, the venerability of the present rule and the lack of any compelling argument that would suggest its objectionableness in light of changing social and economic circumstances weigh, in our judgment, in favor of its retention. Because we believe the rule to be sound, if change is going to come, it must come by legislative alteration. A number of factors persuade us that the longstanding character of the present rule is not simply a function of serendipity or of judicial inertia, but is reflective of the fact that the rule serves legitimate purposes and values within our legal system.

First, one of the most fundamental principles of our economic system is that the market sets the price of property. This is so even though every individual values property differently as a function of his or her own particular preferences…. Second, economic damages, unlike noneconomic damages, are easily verifiable, quantifiable, and measurable. Thus, when measured only in terms of economic damages, the value of property is easily ascertainable…. Third, limiting damages to the economic value of the damaged or destroyed property limits disparities in damage awards from case to case. Disparities in recovery are inherent in legal matters in which the value of what is in dispute is neither tangible nor objectively determined, but rather intangible and subjectively determined…. Fourth, the present rule affords some reasonable level of certainty to businesses regarding the potential scope of their liability for accidents caused to property resulting from their negligent conduct. [U]nder the Court of Appeals’ rule, those businesses that come into regular contact with real property—contractors, repairmen, and fuel suppliers, for example—would be exposed to the uncertainty of not knowing whether their exposure to tort liability will be defined by a plaintiff who has an unusual emotional attachment to the property or by a jury that has an unusually sympathetic opinion toward those emotional attachments.

Once again, it is not our view that the common-law rule in Michigan cannot be improved, or that it represents the best of all possible rules, only that the rule is a reasonable one and has survived for as long as it has because there is some reasonable basis for the rule and that no compelling reasons for replacing it have been set forth by either the Court of Appeals or plaintiff. We therefore leave it to the Legislature, if it chooses to do so at some future time, to more carefully balance the benefits of the current rule with what that body might come to view as its shortcomings.

IV. Conclusion

The issue in this case is whether noneconomic damages are recoverable for the negligent destruction of real property. No Michigan case has ever allowed a plaintiff to recover noneconomic damages resulting solely from the negligent destruction of property, either real or personal. Rather, the common law of this state has long provided that the appropriate measure of damages in cases involving the negligent destruction of property is simply the cost of replacement or repair of the negligently destroyed property. We continue today to adhere to this rule and decline to alter it. Accordingly, we reverse the judgment of the Court of Appeals and remand this case to the trial court for entry of summary disposition in defendant’s favor.

Equity The body of law called  equity  historically concerned itself with accomplishing “rough justice” when common law rules would produce unfair results. In medieval England, common law rules were technical and rigid and the remedies available in common law courts were too few. This meant that some deserving parties could not obtain adequate relief. As a result, separate equity courts began hearing cases that the common law courts could not resolve fairly. In these equity courts, procedures were flexible, and rigid rules of law were deemphasized in favor of general moral maxims.

Equity courts also provided several remedies not available in the common law courts (which generally awarded

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only money damages or the recovery of property). The most important of these equitable remedies was—and continues to be—the  injunction , a court order forbidding a party to do some act or commanding him to perform some act. Others include the contract remedies of  specific performance  (whereby a party is ordered to perform according to the terms of her contract),  reformation  (in which the court rewrites the contract’s terms to reflect the parties’ real intentions), and  rescission  (a cancellation of a contract and a return of the parties to their precontractual position).

As was the common law, equity principles were brought to the American colonies and continued to be used after the Revolution and the adoption of the Constitution. Over time, however, the once-sharp line between law and equity has become blurred. Nearly all states have abolished separate equity courts and have enabled courts to grant whatever relief is appropriate, whether it be the legal remedy of money damages or one of the equitable remedies discussed earlier. Equitable principles have been blended together with common law rules, and some traditional equity doctrines have been restated as common law or statutory rules. An example is the doctrine of unconscionability discussed in Chapter 15.

Administrative Regulations and Decisions As Chapter 47 reveals, the administrative agencies established by Congress and the state legislatures have acquired considerable power, importance, and influence over business. A major reason for the rise of administrative agencies was the collection of social and economic problems created by the industrialization of the United States that began late in the 19th century. Because legislatures generally lacked the time and expertise to deal with these problems on a continuing basis, the creation of specialized, expert agencies was almost inevitable.

Administrative agencies obtain the ability to make law through a delegation (or grant) of power from the legislature. Agencies normally are created by a statute that specifies the areas in which the agency can make law and the scope of its power in each area. Often, these statutory delegations are worded so broadly that the legislature has, in effect, merely pointed to a problem and given the agency wide-ranging powers to deal with it.

The two types of law made by administrative agencies are administrative regulations and agency decisions. As do statutes, administrative regulations appear in a precise form in one authoritative source. They differ from statutes, however, because the body enacting regulations is not an elected body. Many agencies have an internal courtlike structure that enables them to hear cases arising under the statutes and regulations they enforce. The resulting agency decisions are legally binding, though appeals to the judicial system are sometimes allowed.

Treaties According to the U.S. Constitution,  treaties  made by the president with foreign governments and approved by two-thirds of the U.S. Senate become “the supreme Law of the Land.” As will be seen, treaties invalidate inconsistent state (and sometimes federal) laws.

Ordinances State governments have subordinate units that exercise certain functions. Some of these units, such as school districts, have limited powers. Others, such as counties, municipalities, and townships, exercise various governmental functions. The enactments of counties and municipalities are called  ordinances ; zoning ordinances are an example. Ordinances resemble statutes, and the techniques of statutory interpretation described later in this chapter typically are used to interpret ambiguous language in ordinances.

Executive Orders In theory, the president or a state’s governor is a chief executive who enforces the laws but has no law-making powers. However, these officials sometimes have limited power to issue laws called  executive orders . This power normally results from a legislative delegation.

Priority Rules

Identify the type of law that takes precedence when two types of law conflict.

Because the different types of law may, from time to time, conflict, rules for determining which type takes priority are necessary. Here, we briefly describe the most important such rules.

1. According to the principle of  federal supremacy , the U.S. Constitution, federal laws enacted pursuant to it, and treaties are the supreme law of the land. This means that federal law defeats conflicting state law.

2. Constitutions defeat other types of law within their domain. Thus, a state constitution defeats all other state laws inconsistent with it. The U.S. Constitution, however, defeats inconsistent laws of whatever type.

3. When a treaty conflicts with a federal statute over a purely domestic matter, the measure that is later in time usually prevails.

4. Within either the state or the federal domain, statutes defeat conflicting laws that depend on a legislative delegation for their validity. For example, a state statute defeats an inconsistent state administrative regulation.

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5. Statutes and any laws derived from them by delegation defeat inconsistent common law rules. Accordingly, either a statute or an administrative regulation defeats a conflicting common law rule.

Courts are careful to avoid finding a conflict between the different types of law unless the conflict is clear. In fact, one maxim of statutory interpretation (described later in this chapter) instructs courts to choose an interpretation that avoids unnecessary conflicts with other types of law, particularly constitutions that would preempt the statute. Statutes will sometimes explicitly state the enacting legislature’s intent to displace a common law rule. In the absence of that, though, courts will look for significant overlap and inconsistency between a statute and a common law rule to determine that there is a conflict for which the statute must take priority. The following Advance Dental Care, Inc. v. SunTrust Bank case illustrates this. Notice how the court first looks to the statutory language for explicit instruction regarding displacement of the common law rule. Then it considers whether the statute and common law rule overlap, particularly whether the statute offers a sufficient remedy to replace the common law rule. Finally, the court notes an important inconsistency between the statute and the common law rule.

Advance Dental Care, Inc. v. SunTrust Bank 816 F. Supp. 2d 268 (D. Md. 2011)

Michelle Rampersad was an employee of Advance Dental at its dental office in Prince George’s County, Maryland. During a period of more than three years ending in fall 2007, Rampersad took approximately 185 insurance reimbursement checks that were written to Advance Dental and endorsed them to herself. She then took the checks to SunTrust Bank and deposited them into her personal accounts. The checks totaled $400,954.04.

Advance Dental filed a lawsuit against SunTrust after it discovered Rampersad’s unauthorized endorsement and deposit of the checks. The lawsuit claimed SunTrust violated two provisions of the Maryland version of the Uniform Commercial Code (UCC) dealing with negligence and conversion. It also stated a claim of negligence pursuant to the common law of Maryland. The court had previously dismissed the UCC negligence claim for reasons not relevant here. In the opinion that follows, the court considers whether Advance Dental’s common-law negligence claim has been displaced by the statutory UCC conversion claim.

Alexander Williams, Jr., U.S. District Court Judge

In this case of first impression, the Court must determine whether section 3-420 of the Maryland U.C.C. [(the U.C.C. conversion provision)] displaces common-law negligence when a payee seeks to recover from a depositary bank that accepted unauthorized and fraudulently endorsed checks.

A. Availability of an Adequate U.C.C. Remedy

Maryland case law concerning a drawer’s claims against a depositary bank [is] instructive…. Although [prior courts] allowed a common-law action to proceed, the drawer’s lack of adequate remedy under the U.C.C. was fundamental to each ruling…. Additionally, other courts have held that common-law negligence claims can proceed only in the absence of an adequate U.C.C. remedy.

In the present case, it is indisputable that Advance Dental has an adequate U.C.C. remedy—conversion—for which Advance Dental has already filed a claim. Therefore, in light of the overwhelming case law, … [the U.C.C. conversion provision] displaces common-law negligence because Advance Dental has an adequate U.C.C. remedy.

B. Indistinct Causes of Action with Conflicting Defenses

Statutory authority also emphasizes the necessity of displacing common-law negligence in this case. Section 1-103(b) of the Maryland U.C.C. establishes the U.C.C.’s position regarding the survival of common-law actions alongside the U.C.C.: “[u]nless displaced by the particular provisions of Titles 1-10 of this article, the principles of law and equity … shall supplement its provisions….” Since the U.C.C. has no express “displacement” provision, the Court must determine whether [the U.C.C. conversion provision] is a “particular provision” that displaces the common law.

The Court finds significant overlap between [the U.C.C. conversion provision] and common-law negligence. [The U.C.C. conversion provision] defines conversion as “payment with respect to [an] instrument for a person not entitled to enforce the instrument or receive payment.” Here, Advance Dental alleges that SunTrust is liable in negligence for allowing Rampersad to fraudulently endorse and deposit checks made payable to Advance Dental into her personal account. Therefore, … both negligence and conversion require a consideration of whether there was payment over a wrongful endorsement.

The duplicative nature of these two theories suggests the U.C.C.’s intention to create a comprehensive regulation of payment over unauthorized or fraudulent endorsements…. In the presence of such intent, courts have preempted common-law claims. To do otherwise would destroy the U.C.C.’s attempt to establish reliability, uniformity, and certainty in commercial transactions.

Here, Advance Dental’s common-law negligence action has no independent significance apart from [the U.C.C. conversion provision]. In fact, when discussing common-law negligence, Advance Dental simply refers to the same conduct alleged in Count I (conversion) to argue that SunTrust has breached its duty of reasonable and ordinary care…. In other words, [the U.C.C. conversion provision] has effectively subsumed common-law negligence claims.

Not only is common-law negligence insufficiently distinct from [the U.C.C. conversion provision], but the conflicting defenses available for each cause of action are also problematic. The U.C.C. is based on the principle of comparative negligence. In contrast, contributory negligence remains a defense for common-law negligence.2 Displacement is thus required since Maryland courts “hesitate to adopt or perpetuate a common law rule that would be plainly inconsistent with the legislature’s intent….”

IV. Conclusion

For the foregoing reasons [and reasons not included in this edited version of the opinion], the Court GRANTS Defendant’s Renewed Motion to Dismiss Count III of Plaintiff’s Complaint.

Classifications of Law Three common classifications of law cut across the different types of law. These classifications involve distinctions between (1) criminal law and civil law; (2) substantive law and procedural law; and (3) public law and private law. One type of law might be classified in each of these ways. For example, a burglary statute would be criminal, substantive, and public; a rule of contract law would be civil, substantive, and private.

Explain the basic differences between the criminal law and civil law classifications.

Criminal and Civil Law  Criminal law  is the law under which the government prosecutes someone for committing a crime. It creates duties that are owed to the public as a whole.  Civil law  mainly concerns obligations that private parties owe to each other. It is the law applied when one private party sues another. The government, however, may also be a party to a civil case. For example, a city may sue, or be sued by, a construction contractor. Criminal penalties (e.g., imprisonment or fines) differ from civil remedies (e.g., money damages or equitable relief). Although most of the legal rules in this text are civil law rules, Chapter 5 deals specifically with the criminal law.

Even though the civil law and the criminal law are distinct bodies of law, the same behavior will sometimes violate both. For instance, if A commits an intentional act of physical violence on B, A may face both a criminal prosecution by the state and B’s civil suit for damages.

Substantive Law and Procedural Law  Substantive law  sets the rights and duties of people as they act in society.  Procedural law  controls the behavior of government bodies (mainly courts) as they establish and enforce rules of substantive law. A statute making murder a crime, for example, is a rule of substantive law. The rules describing the proper conduct of a trial, however, are procedural. This text focuses on substantive law, although Chapters 2 and 5, examine some of the procedural rules governing civil and criminal cases.

Public and Private Law Public law concerns the powers of government and the relations between government and private parties. Examples include constitutional law, administrative law, and criminal law. Private law establishes a framework of legal rules that enables parties to set the rights and duties they owe each other. Examples include the rules of contract, property, and agency.

Jurisprudence

Describe key ways in which the major schools of jurisprudence differ from each other.

The various types of law sometimes are called positive law. Positive law comprises the rules that have been laid down by a recognized political authority. Knowing the types of positive law is essential to an understanding of the American legal system and the topics discussed in this text.

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Yet defining law by listing these different kinds of positive law is no more complete or accurate than defining “automobile” by describing all the vehicles going by that name. To define law properly, some say, we need a general description that captures its essence.

The field known as  jurisprudence  seeks to provide such a description. Over time, different schools of jurisprudence have emerged, each with its own distinctive view of law.

Legal Positivism One feature common to all types of law is their enactment by a governmental authority such as a legislature or an administrative agency. This feature underlies the definition of law that characterizes the school of jurisprudence known as  legal positivism . Legal positivists define law as the command of a recognized political authority. As the British political philosopher Thomas Hobbes observed, “Law properly, is the word of him, that by right hath command over others.”

The commands of recognized political authorities may be good, bad, or indifferent in moral terms. To legal positivists, such commands are valid law regardless of their “good” or “bad” content. In other words, positivists see legal validity and moral validity as entirely separate questions. Some (but not all) positivists say that every properly enacted positive law should be enforced and obeyed, whether just or unjust. Similarly, a judge who views the law through a positivist lens would typically try to enforce the law as written, excluding her own moral views from the process. Note, however, that this does not mean that a positivist is bound to accept the law as static or unchangeable. Rather, a positivist who was unhappy with the law as written would point to established political processes as the appropriate mechanism for the law to evolve (e.g., by lobbying a legislature to amend or repeal a statute).

Natural Law At first glance, legal positivism’s “law is law, just or not” approach may seem to be perfect common sense. It presents a problem, however, for it could mean that any positive law—no matter how unjust—is valid law and should be enforced and obeyed so long as some recognized political authority enacted it. The school of jurisprudence known as  natural law  rejects the positivist separation of law and morality.

Natural law adherents usually contend that some higher law or set of universal moral rules binds all human beings in all times and places. The Roman statesman Marcus Cicero described natural law as “the highest reason, implanted in nature, which commands what ought to be done and forbids the opposite.” Because this higher law determines what is ultimately good and ultimately bad, it serves as a criterion for evaluating positive law. To Saint Thomas Aquinas, for example, “every human law has just so much of the nature of law, as it is derived from the law of nature.” To be genuine law, in other words, positive law must resemble the law of nature by being “good”—or at least by not being “bad.”

Unjust positive laws, then, are not valid law under the natural law view. As Cicero put it: “What of the many deadly, the many pestilential statutes which are imposed on peoples? These no more deserve to be called laws than the rules a band of robbers might pass in their assembly.”

An “unjust” law’s supposed invalidity does not translate into a natural law defense that is recognized in court, however. Nonetheless, judges may sometimes take natural law–oriented views into account when interpreting the law. As compared with positivist judges, judges influenced by natural law ideas may be more likely to read constitutional provisions broadly in order to strike down positive laws they regard as unjust. They also may be more likely to let morality influence their interpretation of the law. Of course, neither judges nor natural law thinkers always agree about what is moral and immoral—a major difficulty for the natural law position. This difficulty allows legal positivists to claim that only by keeping legal and moral questions separate can we obtain stability and predictability in the law.

American Legal Realism To some, the debate between natural law and legal positivism may seem disconnected from reality. Not only is natural law unworkable, such people might say, but sometimes positive law does not mean much either. For example, juries sometimes pay little attention to the legal rules that are supposed to guide their decisions, and prosecutors have discretion concerning whether to enforce criminal statutes. In some legal proceedings, moreover, the background, biases, and values of the judge—and not the positive law—drive the result. An old joke reminds us that justice sometimes is what the judge ate for breakfast.

Remarks such as these typify the school of jurisprudence known as  American legal realism . Legal realists regard the law in the books as less important than the law in action—the conduct of those who enforce and interpret the positive law. American legal realism defines law as the behavior of public officials (mainly judges) as they deal with matters before the legal system. Because the actions of such decision makers—and not the rules in the books—really affect people’s lives, the realists say, this behavior is what deserves to be called law.

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It is doubtful whether the legal realists have ever developed a common position on the relation between law and morality or on the duty to obey positive law. They have been quick, however, to tell judges how to behave. Many realists feel that the modern judge should be a social engineer who weighs all relevant values and considers social science findings when deciding a case. Such a judge would make the positive law only one factor in her decision. Because judges inevitably base their decisions on personal considerations, the realists assert, they should at least do this honestly and intelligently. To promote this kind of decision making, the realists have sometimes favored fuzzy, discretionary standards that allow judges to decide each case according to its unique facts.

Sociological Jurisprudence  Sociological jurisprudence  is a general label uniting several different approaches that examine law within its social context. The following quotation from Justice Oliver Wendell Holmes is consistent with such approaches:

The life of the law has not been logic: it has been experience. The felt necessities of the time, the prevalent moral and political theories, intuitions of public policy, avowed or unconscious, even the prejudices which judges share with their fellow-men, have had a good deal more to do than the syllogism in determining the rules by which men should be governed. The law embodies the story of a nation’s development through many centuries, and it cannot be dealt with as if it contained only the axioms and corollaries of a book of mathematics.3

Despite these approaches’ common outlook, there is no distinctive sociological definition of law. If one were attempted, it might go as follows: Law is a process of social ordering reflecting society’s dominant interests and values.

Different Sociological Approaches By examining examples of sociological legal thinking, we can add substance to the definition just offered. The “dominant interests” portion of the definition is exemplified by the writings of Roscoe Pound, an influential 20th-century American legal philosopher. Pound developed a detailed and changing catalog of the social interests that press on government and the legal system and thus shape positive law. An example of the definition’s “dominant values” component is the historical school of jurisprudence identified with the 19th-century German legal philosopher Friedrich Karl von Savigny. Savigny saw law as an unplanned, almost unconscious, reflection of the collective spirit of a particular society. In his view, legal change could only be explained historically, as a slow response to social change.

By emphasizing the influence of dominant social interests and values, Pound and Savigny undermine the legal positivist view that law is nothing more than the command of some political authority. The early 20th-century Austrian legal philosopher Eugen Ehrlich went even further in rejecting positivism. He did so by identifying two different “processes of social ordering” contained within our definition of sociological jurisprudence. The first of these is positive law. The second is the “living law,” informal social controls such as customs, family ties, and business practices. By regarding both as law, Ehrlich sought to demonstrate that positive law is only one element within a spectrum of social controls.

The Implications of Sociological Jurisprudence Because its definition of law includes social values, sociological jurisprudence seems to resemble natural law. Most sociological thinkers, however, are concerned only with the fact that moral values influence the law, and not with the goodness or badness of those values. Thus, it might seem that sociological jurisprudence gives no practical advice to those who must enforce and obey positive law.

Sociological jurisprudence has at least one practical implication, however: a tendency to urge that the law must change to meet changing social conditions and values. In other words, the law should keep up with the times. Some might stick to this view even when society’s values are changing for the worse. To Holmes, for example, “[t]he first requirement of a sound body of law is, that it should correspond with the actual feelings and demands of the community, whether right or wrong.”

Other Schools of Jurisprudence During the past half century, legal scholars have fashioned additional ways of viewing law, explaining why legal rules are as they are and exploring supposed needs for changes in legal doctrines. For example, the law and economics movement examines legal rules through the lens provided by economic theory and analysis. This movement’s influence has extended beyond academic literature, with law and economics-oriented considerations, factors, and tests sometimes appearing in judicial opinions dealing with such matters as contract, tort, or antitrust law.

The critical legal studies (CLS) movement regards law as inevitably the product of political calculation (mostly of the right-wing variety) and longstanding class biases on the part of lawmakers, including judges. Articles published by CLS adherents provide controversial assessments and critiques of legal rules. Given the thrust of CLS and the view it takes of lawmakers, however, one would be hard-pressed to find CLS adherents in the legislature or the judiciary.

Other schools of jurisprudence that have acquired notoriety in recent years examine law and the legal system from the vantage points of particular groups of persons or sets of ideas. Examples include feminist and queer legal theory and critical disability theory.

As you read the excerpts of judicial opinions throughout this text, consider whether one or more of these jurisprudential approaches appears to have influenced the judges’ thinking when interpreting or applying the law. Certainly judges seldom, if ever, explicitly reference those influences, but you may find them lurking significantly between the lines of some of the opinions.

The Functions of Law

In societies of the past, people often viewed law as unchanging rules that deserved obedience because they were part of the natural order of things. Most lawmakers today, however, treat law as a flexible tool or instrument for the accomplishment of chosen purposes. For example, the law of negotiable instruments discussed later in this text is designed to stimulate commercial activity by promoting the free movement of money substitutes such as promissory notes, checks, and drafts. Throughout the text, moreover, you see courts manipulating existing legal rules to achieve desired results. One strength of this instrumentalist attitude is its willingness to adapt the law to further the social good. A weakness, however, is the legal instability and uncertainty those adaptations often produce.

Just as individual legal rules advance specific purposes, law as a whole serves many general social functions. Among the most important of those functions are:

1. Peacekeeping. The criminal law rules discussed in Chapter 5 further this basic function of any legal system. Also, as Chapter 2 suggests, the resolution of private disputes serves as a major function of the civil law.

2. Checking government power and promoting personal freedom. Obvious examples are the constitutional restrictions examined in Chapter 3.

3. Facilitating planning and the realization of reasonable expectations. The rules of contract law discussed in Chapters 9, 10, 11, 12, 13, 14, 15, 16, 17, and 18 help fulfill this function of law.

4. Promoting economic growth through free competition. The antitrust laws discussed in Chapters 48, 49, and 50 are among the many legal rules that help perform this function.

5. Promoting social justice. Throughout this century, government has intervened in private social and economic affairs to correct perceived injustices and give all citizens equal access to life’s basic goods. Examples include some of the employment laws addressed in Chapter 51.

6. Protecting the environment. The most important federal environmental statutes are discussed in Chapter 52.

Obviously, the law’s various functions can conflict. The familiar clash between economic growth and environmental protection is an example. Chapter 5’s cases dealing with the constitutional aspects of criminal cases illustrate the equally familiar conflict between effective law enforcement and the preservation of personal rights. Only rarely does the law achieve one end without sacrificing others. In law, as in life, there generally is no such thing as a free lunch. Where the law’s objectives conflict, lawmakers may try to strike the best possible balance among those goals. This suggests limits on the law’s usefulness as a device for promoting particular social goals.

Legal Reasoning

This text seeks to describe important legal rules affecting business. As texts generally do, it states those rules in what lawyers call “black letter” form, using sentences saying that certain legal consequences will occur if certain events happen. Although it provides a clear statement of the law’s commands, this black letter approach can be misleading. It suggests definiteness, certainty, permanence, and predictability—attributes the law frequently lacks. To illustrate, and to give you some idea how lawyers and judges think, we now discuss the two most important kinds of legal reasoning: case law reasoningand statutory interpretation.4 However, we first must examine legal reasoning in general.

Legal reasoning is basically deductive, or syllogistic. The legal rule is the major premise, the facts are the minor premise, and the result is the product of combining the two. Suppose a state statute says that a driver operating an automobile between 55 and 70 miles per hour must pay a $50 fine (the rule or major premise) and that Jim Smith drives his car at 65 miles per hour (the facts or minor premise). If Jim is arrested, and if the necessary facts can be proved, he will be required to pay the $50 fine. As you will now see, however, legal reasoning often is more difficult than this example would suggest.

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Ethics in Action

Some schools of jurisprudence discussed in this chapter—most notably natural law and the various approaches lumped under the sociological jurisprudence heading—concern themselves with the relationship between law and notions of morality. These schools of jurisprudence involve considerations related to key aspects of ethical theories that will be explored in Chapter 4, which addresses ethical issues arising in business contexts.

Natural law’s focus on rights thought to be independent of positive law has parallels in ethical theories that are classified under the rights theory heading. In its concern over unjust laws, natural law finds common ground with the ethical theory known as justice theory. When subscribers to sociological jurisprudence focus on the many influences that shape law and the trade-offs involved in a dynamic legal system, they may explore considerations that relate not only to rights theory or justice theory but also to the theory of utilitarianism and considerations central to shareholder theory. As you study Chapter 4 and later chapters, keep the schools of jurisprudence in mind. Think of them as you consider the extent to which a behavior’s probable legal treatment and the possible ethical assessments of it may correspond or, instead, diverge.

Case Law Reasoning

Describe the respective roles of adhering to precedent (stare decisis) and distinguishing precedent in case law reasoning.

In cases governed by the common law, courts find the appropriate legal rules in prior cases called precedents. The standard for choosing and applying prior cases to decide present cases is the doctrine of stare decisis, which states that like cases should be decided alike. That is, the present case should be decided in the same way as past cases presenting the same facts and the same legal issues. If no applicable precedent exists, the court is free to develop a new common law rule to govern the case, assuming the court believes that sound public policy reasons call for the development of a new rule. When an earlier case may seem similar enough to the present case to constitute a precedent but the court deciding the present case nevertheless identifies a meaningful difference between the cases, the court distinguishes the earlier decision.

Because every present case differs from the precedents in some respect, it is always possible to spot a factual distinction. For example, one could attempt to distinguish a prior case dealing with a defense to a claim of breach of contract because both parties in that case had black hair, whereas one party in the present case dealing with that same defense has brown hair. Of course, such a distinction would be ridiculous because the difference it identifies is insignificant in moral, social policy, or legal terms. A valid distinction involves a widely accepted ethical or policy reason for treating the present case differently from its predecessor. Because people disagree about moral ideas, public policies, and the degree to which they are accepted, and because all these factors change over time, judges may differ on the wisdom of distinguishing a prior case. This is a source of uncertainty in the common law, but it gives the common law the flexibility to adapt to changing social conditions.5

When a precedent has been properly distinguished, the common law rule it stated does not control the present case. The court deciding the present case may then fashion a new common law rule to govern the case. Consider, for instance, an example involving the employment-at-will rule, the prevailing common law rule regarding employees in the United States. Under this rule, an employee may be fired at any time—and without any reason, let alone a good one—unless a contract between the employer and the employee guaranteed a certain duration of employment or established that the employee could be fired only for certain recognized legal causes. Most employees are not parties to a contract containing such provisions. Therefore, they are employees-at-will. Assume that in a precedent case, an employee who had been doing good work challenged his firing and that the court hearing the case ruled against him on the basis of the employment-at-will rule. Also assume that in a later case, a fired employee has challenged her dismissal. Although the fired employee would appear to be subject to the employment-at-will rule applied in the seemingly similar precedent case, the court deciding the later case nevertheless identifies an important difference: that in the later case, the employee was fired in retaliation for having reported to law enforcement authorities that her employer was engaging in seriously unlawful business-related conduct. A firing under such circumstances appears to offend public policy,

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notwithstanding the general acceptance of the employment-at-will rule. Having properly distinguished the precedent, the court deciding the later case would not be bound by the employment-at-will rule set forth in the precedent and would be free to develop a public policy–based exception under which the retaliatory firing would be deemed wrongful. (Chapter 51 will reveal that courts in a number of states have adopted such an exception to the employment-at-will rule.)

The Coomer case, which follows, provides a further illustration of the process of case law reasoning. In Coomer, the Missouri Supreme Court scrutinizes various precedents as it attempts to determine whether Missouri’s courts should extend the so-called baseball rule, under which injuries suffered as a result of certain risks that are inherent to an activity—like being struck by a foul ball at a baseball game. (Negligence law, upon which Coomer’s claim is based, is discussed in depth in Chapter 7.) Ultimately, the court decides not to expand the baseball rule to the facts of Coomer’s case, finding his injury did not result from a risk inherent to attending the baseball game.6

Coomer v. Kansas City Royals Baseball Corp. 437 S.W.3d 184 (Mo. 2014)

On September 8, 2009, John Coomer and his father attended a Major League Baseball game between the Kansas City Royals the Detroit Tigers. The game, which took place in Kansas City at Kauffman Stadium, was less well attended than normal, because it rained most of the day leading up to the first pitch. Early in the game, Coomer and his father moved from their assigned seats to better, empty seats six rows behind the visitor’s dugout.

Shortly after Coomer moved to the better seats, Sluggerrr, the mascot for the Royals, mounted the dugout to begin the “Hotdog Launch,” which had been a feature of every Royals home game since 2000. The Launch happened between innings, when Sluggerrr used an air gun to shoot hotdogs from the roof of the visitor’s dugout to fans seated beyond hand-tossing range. When his assistants were reloading the air gun, Sluggerrr tossed hotdogs by hand to the fans seated nearby. Sluggerrr usually tossed the hotdogs underhand while facing the fans, but sometimes he threw them overhand, behind his back, or side-armed.

At the game in question, Sluggerrr began to toss hotdogs by hand to fans seated near Coomer, while Sluggerrr’s assistants were reloading the hotdog-shaped air gun. Coomer testified that he saw Sluggerrr turn away from the crowd as if to prepare for a behind-the-back throw, but because Coomer chose that moment to turn and look at the scoreboard, he admits he never saw Sluggerrr throw the hotdog that he claims injured him. Coomer testified only that a “split second later … something hit me in the face,” and he described the blow as “pretty forceful.”

A couple of days later, Coomer reported that he was “seeing differently” and something “wasn’t right” with his left eye. The problem progressed until, approximately eight days after the incident. Coomer saw a doctor and was diagnosed with a detached retina. Coomer underwent surgeries to repair the retina and to remove a “traumatic cataract” in the same eye.

Coomer sued the Kansas City Royals Corp. for, among other things, negligence (i.e., that Sluggerrr’s careless acts, which were the responsibility of the Royals to oversee an control, caused his injury). The Royals did not deny responsibility for Sluggerrr’s acts but instead argued that Sluggerrr did not act negligently and, in any event, that Coomer had accepted the risk posed by Sluggerrr’s hotdog toss by buying a ticket and attending the game. The latter is a theory known as implied primary assumption of risk. 7

Among the instructions the trial judge gave to the jury was one asking the jury to decide whether the risk of being injured by Sluggerrr’s hotdog toss is one of the inherent risks of watching a Royals home game, which Coomer assumed merely by attending the game.

The jury found in favor of the Royals, and Coomer appealed.

Paul C. Wilson, Judge

In the past, this Court has held that spectators cannot sue a baseball team for injuries caused when a ball or bat enters the stands. Such risks are an unavoidable—even desirable—part of the joy that comes with being close enough to the Great American Pastime to smell the new-mown grass, to hear the crack of 42 inches of solid ash meeting a 95–mph fastball, or to watch a diving third baseman turn a heart-rending triple into a soul-soaring double-play. The risk of being injured by Sluggerrr’s hotdog toss, on the other hand, is not an unavoidable part of watching the Royals play baseball. That risk is no more inherent in watching a game of baseball than it is inherent in watching a rock concert, a monster truck rally, or any other assemblage where free food or T-shirts are tossed into the crowd to increase excitement and boost attendance.

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II. Implied Primary Assumption of the Risk and the “Baseball Rule”

One of the most interesting—and certainly the most relevant—applications of implied primary assumption of the risk involves certain risks assumed by spectators at sporting events. Long before the Kansas City Athletics moved to Oakland and the fledging Royals joined the Junior Circuit, an overwhelming majority of courts recognized that spectators at sporting events are exposed to certain risks that are inherent merely in watching the contest. Accordingly, under [the] implied primary assumption of the risk, these courts held that the home team was not liable to a spectator injured as a result of such risks.

The archetypal example of this application of implied primary assumption of the risk is when a baseball park owner fails to protect each and every spectator from the risk of being injured by a ball or bat flying into the stands. Just as Missouri teams have led (and continue to lead) professional baseball on the field, Missouri courts helped lead the nation in defining this area of the law off the field. More than 50 years ago, this Court was one of the first to articulate the so-called “Baseball Rule”:

[W]here a baseball game is being conducted under the customary and usual conditions prevailing in baseball parks,  it is not negligence to fail to protect all seats in the park by wire netting, and that the special circumstances and specific negligence pleaded did not aid plaintiff or impose upon the defendant a duty to warn him against hazards which are necessarily incident to baseball and are perfectly obvious to a person in possession of his faculties.

Anderson v. Kansas City Baseball Club, 231 S.W.2d 170, 172 (Mo. 1950) (emphasis added).

Anderson was based on this Court’s earlier decision in Hudson v. Kansas City Baseball Club, 164 S.W.2d 318, 320 (Mo. 1942), which used the “no duty” language of implied primary assumption of the risk to explain its holding:

The basis of the proprietor’s liability is his superior knowledge and if his invitee knows of the condition or hazard  there is no duty  on the part of the proprietor to warn him and there is no liability for resulting injury because the invitee has as much knowledge as the proprietor does and then by voluntarily acting, in view of his knowledge, assumes the risks and dangers incident to the known condition.

Hudson, 164 S.W.2d at 323 (emphasis added) (applying Restatement (Second) of Torts, § 343). Hudson involved a spectator with personal knowledge of the inherent risk of being injured by a foul ball while watching a baseball game. But, when the Court returned to this same issue eight years later in Anderson, it continued to rely on section 343 of the Restatement (Second) of Torts (i.e., the “open and obvious dangers” doctrine under the rules of premises liability) to extend Missouri’s no-duty rule to cases involving baseball spectators with no prior knowledge of baseball or the risks inherent in watching it.

All of the cases cited here and many others which are cited in Hudson v. Kansas City Baseball Club … emphasize that when due care has been exercised to provide a reasonable number of screened seats, there remains a hazard that spectators in unscreened seats may be struck and injured by balls which are fouled or otherwise driven into the stands.  This risk is a necessary and inherent part of the game  and remains after ordinary care has been exercised to provide the spectators with seats which are reasonably safe. It is a risk which is assumed by the spectators because it remains after due care has been exercised and is not the result of negligence on the part of the baseball club. It is clearly  not an unreasonable risk to spectators which imposes a duty  to warn [or protect].

Anderson, 231 S.W.2d at 173 (emphasis added).

Anderson and Hudson are just two of the many dozens of cases around the country holding that, as long as some seats directly behind home plate are protected, the team owes “no duty” to spectators outside that area who are injured by a ball or bat while watching a baseball game. Despite being decided by such different courts across so many decades, all of these cases reflect certain shared principles. First, it is not possible for baseball players to play the game without occasionally sending balls or bats (or parts of bats) into the stands, sometimes at unsafe speeds. Second, it is not possible for the home team to protect each and every spectator from such risks without fundamentally altering the game or the spectators’ experience of watching it through such means as: (a) substituting foam rubber balls and bats that will not injure anyone (or be very fun to watch); (b) erecting a screen or other barrier around the entire field protecting all spectators while obstructing their view and making them feel more removed from the action; or (c) moving all spectators at least 600 feet away from home plate in all directions. Third, ordinary negligence principles do not produce reliably acceptable results in these circumstances because the risk of injury (and the extent of the harm) to spectators is substantial, yet the justification for not protecting spectators from that risk can be expressed only in terms of the amusement or entertainment value of watching the sport that brought the spectators to the stadium in the first place.

Against this background, Anderson and Hudson (and dozens of Baseball Rule cases around the country) represent a conscious decision to favor the collective interests of all spectators by rejecting as a matter of law the individual claims of injured

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spectators. [T]he rationale [is] now identified as implied primary assumption of the risk, [and] these decisions protect the home team from liability for risks that are inherent in watching a baseball game based on the team’s failure to take steps that could defeat the reason spectators are there at all, i.e., to get as close as they can to the action without interfering with the game they came to watch.

But the rationale for this rule—and, therefore, the rule itself—extends only to those risks that the home team is powerless to alleviate without fundamentally altering the game or spectator’s enjoyment of it. As a result, the solid wall of authority in support of the Baseball Rule is badly cracked in cases where a spectator is injured by a ball  when  the game is not underway or  where fans ordinarily do expect to have to keep a careful lookout for balls or bats leaving the field. This Court has not had to address such a question and does not do so now.

Moreover, even though the “no duty” rationale of the Baseball Rule applies to risks inherent in watching a baseball game, the home team still owes a duty of reasonable care not to  alter or increase  such inherent risks. One example, useful both for its facts and its analysis, is Lowe v. California League of Prof. Baseball, 56 Cal.App.4th 112 (1997). There, the court began by explaining this “no duty” rationale:

In the first instance, foul balls hit into the spectators’ area clearly create a risk of injury. If such foul balls were to be eliminated, it would be impossible to play the game. Thus, foul balls represent an inherent risk to spectators attending baseball games. Under [the rule announced in a prior case], such risk is assumed.

In Lowe, however, even though the plaintiff was struck by a foul ball, he claimed that his injuries were not caused by that inherent risk. Instead, the plaintiff claimed he was prevented from watching for foul balls because he was repeatedly jostled and distracted by the team’s dinosaur mascot. The court agreed that the Baseball Rule did not bar such a claim:

[T]he key inquiry here is whether the risk which led to plaintiff’s injury involved some feature or aspect of the game which is inevitable or unavoidable in the actual playing of the game …. Can [this] be said about the antics of the mascot?  We think not.  Actually, the … person who dressed up as Tremor, recounted that there were occasional games played when he was not there. In view of this testimony, as a matter of law, we hold that the antics of the mascot are not an essential or integral part of the playing of a baseball game. In short, the game can be played in the absence of such antics.

Id. (emphasis added).

Accordingly, even though implied primary assumption of the risk precludes recovery for injuries caused by the inherent risk of being hit by a foul ball while watching a baseball game, Loweholds that the jury can hold the team liable for such injuries if the negligence of its mascot altered or increased that otherwise inherent risk and this negligence causes the plaintiff’s injuries.

Accordingly, the proper application of implied primary assumption of the risk in this case … is this: if Coomer was injured by a risk that is an inherent part of watching the Royals play baseball, the team had no duty to protect him and cannot be liable for his injuries. But, if Coomer’s injury resulted from a risk that is not an inherent part of watching baseball in person—or if the negligence of the Royals altered or increased one of these inherent risks and caused Coomer’s injury—the jury is entitled to hold the Royals liable for such negligence….

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IV. Being Injured by Sluggerrr’s Hotdog Toss Is Not a Risk Inherent in Watching Royals Baseball

The Royals admit that, “[s]trictly speaking, this is not a baseball rule case” because Coomer does not claim he was injured by a foul ball or loose bat. But, because it claims the Hotdog Launch is a “common sense” activity, the Royals contend that the same implied primary assumption of the risk rationale should apply and bar all recovery by Coomer. According to the Royals, the risk to a spectator of being injured by Sluggerrr’s hotdog toss shares the same essential characteristics as the other risks that this Court (and many others) determined long ago were inherent in watching a baseball game in person, i.e., risks that a spectator will be injured by a flying ball or bat. The Court disagrees.

The rationale for barring recovery for injuries from risks that are inherent in watching a particular sport under implied primary assumption of the risk is that the defendant team owner cannot remove such risks without materially altering either the sport that the spectators come to see or the spectator’s enjoyment of it. No such argument applies to Sluggerrr’s hotdog toss. Millions of fans have watched the Royals (and its forebears in professional baseball) play the National Pastime for the better part of a century before Sluggerrr began tossing hotdogs, and millions more people watch professional baseball every year in stadiums all across this country without the benefit of such antics.

Some fans may find Sluggerrr’s hotdog toss fun to watch between innings, and some fans may even have come to expect it, but this does not make the risk of injury from Sluggerrr’s hotdog toss an “inherent risk” of watching a Royals game. “[I]nherent” means “ structural  or involved in the  constitution or essential character of  something: belonging  by nature or settled habit ,” Webster’s Third New International Dictionary (1966), at 1163 (emphasis added). There is nothing about the risk of injury from Sluggerrr’s hotdog toss that is “structural” or involves the “constitution or essential character” of watching a Royals game at Kauffman Stadium.

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The Royals concede that Sluggerrr’s hotdog toss has nothing to do with watching the game of baseball but contend that the Hotdog Launch is a well-established (even customary) part of the overall stadium “experience.” In support, the Royals cite cases that have applied the Baseball Rule to risks that were not created directly from the game. These cases do not support the Royals’ argument.

In Loughran v. The Phillies, 888 A.2d 872, 876–77 (Pa.Super. 2005), because a plaintiff was injured when a fielder tossed the ball into the stands after catching the last out of the inning, the court held that implied primary assumption of the risk barred the plaintiff’s claims. In rejecting the plaintiff’s claim that the Baseball Rule should not apply because the throw was not part of the game itself, Loughran holds that—even though the “’no duty’ rule applies only to ’common, expected, and frequent’ risks of the game”—the link between the game and the risk of being hit with a ball tossed into the stands by a player is undeniable. Id. at 876. Baseball is the reason centerfielder Marlon Byrd was there, just as it was the reason the fans were in the stands (including the many who were yelling for Byrd to toss the ball to them). Here, on the other hand, there is no link between the game and the risk of being hit by Sluggerrr’s hotdog toss. The Hotdog Launch is not an inherent part of the game; it is what the Royals do to entertain baseball fans when there is no game for them to watch. Sluggerrr may make breaks in the game more fun, but Coomer and his 12,000 rain-soaked fellow spectators were not there to watch Sluggerrr toss hotdogs; they were there to watch the Royals play baseball.

Somewhat closer to the mark—but still inapposite—is the Royals’ reliance on Cohen v. Sterling Mets, L.P., 840 N.Y.S.2d 527 (N.Y.Sup.Ct.2007), aff’d 58 A.D.3d (N.Y.App.Div.2009). A vendor sued the team for injuries caused by a fan who hit the vendor while diving for a souvenir T-shirt that had been tossed into the crowd. The court dismissed these claims, stating: “When a ball is tossed into the stands by a player many spectators rush toward the ball in hopes of getting a souvenir, just as what allegedly occurred here during the t-shirt launch.” Id.

The Royals’ reliance on Cohen highlights one of the basic flaws in its effort to use implied primary assumption to bar Coomer’s claims, and it shows the importance of correctly identifying the risks and activity in each case. [W]hat makes a risk “inherent” for purposes of this doctrine … is that the risks are so intertwined (i.e., so “structural” or involved in the “constitution or essential character”) with the underlying activity that the team cannot control or limit the risk without abandoning the activity. In Cohen, because the Mets could not control how fans reacted to the T-shirt launch, that reaction was an inherent risk—not of watching a baseball game but—of taking part in the T-shirt launch (which the plaintiff’s work required him to do). Here, on the other hand, not only is being injured by Sluggerrr’s hotdog toss not an inherent risk of watching a Royals game, it is not an inherent risk of the Hotdog Launch….

Accordingly, the Court holds as a matter of law that the risk of injury from Sluggerrr’s hotdog toss is not one of the risks inherent in watching the Royals play baseball that Coomer assumed merely by attending a game at Kauffman Stadium. This risk can be increased, decreased or eliminated altogether with no impact on the game or the spectators’ enjoyment of it. As a result, Sluggerrr (and, therefore, the Royals) owe the fans a duty to use reasonable care in conducting the Hotdog Launch and can be held liable for damages caused by a breach of that duty.

Conclusion

For the reasons set forth above, this Court vacates the judgment and remands the case.

Statutory Interpretation Because statutes are written in one authoritative form, their interpretation might seem easier than case law reasoning. However, this is not so. The natural ambiguity of language serves as one reason courts face difficulties when interpreting statutes. The problems become especially difficult when statutory words are applied to situations the legislature did not foresee. In some instances, legislators may deliberately use ambiguous language when they are unwilling or unable to deal specifically with each situation the statute was enacted to regulate. When this happens, the legislature expects courts and/or administrative agencies to fill in the details on a case-by-case basis. Other reasons for deliberate ambiguity include the need for legislative compromise and legislators’ desire to avoid taking controversial positions.

Ambiguity in statutory language can also arise from the vagaries of grammar, either as a result of sloppiness or because rules of grammar are contested. The following O’Connor case, for instance, illustrates just how much can ride on a “missing” comma, namely millions of dollars in unpaid overtime wages. As you read the case, consider what strategies the judges use to resolve the ambiguity. Those strategies correspond to the techniques of statutory interpretation that are described in the text following the case.

O’Connor v. Oakhurst Dairy 851 F. 3d 69 (1st Cir. 2017)

A group of delivery drivers for Oakhurst Dairy sued the dairy and its parent company for unpaid overtime wages. Oakhurst Dairy processes, bottles, stores, markets, and distributes milk and other dairy products from facilities in Portland, Waterville, Bangor, and Presque Isle, Maine.

Oakhurst designated the plaintiff drivers “route salesmen” on their official job descriptions. The drivers, however, claimed they solely engaged in deliveries of Oakhurst’s products.

State and federal wage and hour laws generally require employers to pay their employees a premium wage for any hours the employees work in excess of 40 hours in a given week, unless the employees are exempted from overtime rules by the relevant statutory language.

The drivers argued that they were not exempted from the overtime wage requirement in the Maine wage and hour statute, while Oakhurst argued that they were exempt under a provision focused on workers who deal with perishable food products.

The district court considered the question and agreed with Oakhurst, granting partial summary judgment to the defendants and otherwise dismissing various of the plaintiffs’ claims.

The drivers appealed.

BARRON, Circuit Judge

For want of a comma, we have this case. It arises from a dispute between a Maine dairy company and its delivery drivers, and it concerns the scope of an exemption from Maine’s overtime law. Specifically, if that exemption used a serial comma to mark off the last of the activities that it lists, then the exemption would clearly encompass an activity that the drivers perform. And, in that event, the drivers would plainly fall within the exemption and thus outside the overtime law’s protection. But, as it happens, there is no serial comma to be found in the exemption’s list of activities, thus leading to this dispute over whether the drivers fall within the exemption from the overtime law or not.

The District Court concluded that, despite the absent comma, the Maine legislature unambiguously intended for the last term in the exemption’s list of activities to identify an exempt activity in its own right. The District Court thus granted summary judgment to the dairy company, as there is no dispute that the drivers do perform that activity. But, we conclude that the exemption’s scope is actually not so clear in this regard. And because, under Maine law, ambiguities in the state’s wage and hour laws must be construed liberally in order to accomplish their remedial purpose, we adopt the drivers’ narrower reading of the exemption. We therefore reverse the grant of summary judgment and remand for further proceedings.

I.

The Maine overtime law is part of the state’s wage and hour law.

The overtime law provides that “[a]n employer may not require an employee to work more than 40 hours in any one week unless 1 1/2 times the regular hourly rate is paid for all hours actually worked in excess of 40 hours in that week.”

[S]ome workers who fall within the statutory definition of “employee” nonetheless fall outside the protection of the overtime law due to a series of express exemptions from that law. The exemption to the overtime law that is in dispute here is Exemption F.

Exemption F covers employees whose work involves the handling—in one way or another—of certain, expressly enumerated food products. Specifically, Exemption F states that the protection of the overtime law does not apply to: “The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of: (1) Agricultural produce; (2) Meat and fish products; and (3) Perishable foods.” The parties’ dispute concerns the meaning of the words “packing for shipment or distribution.”

The delivery drivers contend that, in combination, these words refer to the single activity of “packing,” whether the “packing” is for “shipment” or for “distribution.” The drivers further contend that, although they do handle perishable foods, they do not engage in “packing” them. As a result, the drivers argue that, as employees who fall outside Exemption F, the Maine overtime law protects them.

Oakhurst responds that the disputed words actually refer to two distinct exempt activities, with the first being “packing for shipment” and the second being “distribution.” And because the delivery drivers do—quite obviously—engage in the “distribution” of dairy products, which are “perishable foods,” Oakhurst contends that the drivers fall within Exemption F and thus outside the overtime law’s protection.

* * *

III.

Each party recognizes that, by its bare terms, Exemption F raises questions as to its scope, largely due to the fact that no comma precedes the words “or distribution.” But each side also contends

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that the exemption’s text has a latent clarity, at least after one applies various interpretive aids. Each side then goes on to argue that the overtime law’s evident purpose and legislative history confirms its preferred reading.

We conclude, however, that Exemption F is ambiguous, even after we take account of the relevant interpretive aids and the law’s purpose and legislative history. For that reason, we conclude that, under Maine law, we must construe the exemption in the narrow manner that the drivers favor, as doing so furthers the overtime law’s remedial purposes. See Dir. of Bureau of Labor Standards v. Cormier, 527 A.2d 1297 (Me. 1987). Before explaining our reasons for reaching this conclusion, though, we first need to work our way through the parties’ arguments as to why, despite the absent comma, Exemption F is clearer than it looks.

A.

First, the text. In considering it, we do not simply look at the particular word “distribution” in isolation from the exemption as a whole. We instead must take account of certain linguistic conventions—canons, as they are often called—that can help us make sense of a word in the context in which it appears. Oakhurst argues that, when we account for these canons here, it is clear that the exemption identifies “distribution” as a stand-alone, exempt activity rather than as an activity that merely modifies the stand-alone, exempt activity of “packing.”

Oakhurst relies for its reading in significant part on the rule against surplusage, which instructs that we must give independent meaning to each word in a statute and treat none as unnecessary. To make this case, Oakhurst explains that “shipment” and “distribution” are synonyms. For that reason, Oakhurst contends, “distribution” cannot describe a type of “packing,” as the word “distribution” would then redundantly perform the role that “shipment”—as its synonym—already performs, which is to describe the type of “packing” that is exempt. By contrast, Oakhurst explains, under its reading, the words “shipment” and “distribution” are not redundant. The first word, “shipment,” describes the exempt activity of “packing,” while the second, “distribution,” describes an exempt activity in its own right.

Oakhurst also relies on another established linguistic convention in pressing its case—the convention of using a conjunction to mark off the last item on a list. Oakhurst notes, rightly, that there is no conjunction before “packing,” but that there is one after “shipment” and thus before “distribution.” Oakhurst also observes that Maine overtime law contains two other lists in addition to the one at issue here and that each places a conjunction before the last item.

Oakhurst acknowledges that its reading would be beyond dispute if a comma preceded the word “distribution” and that no comma is there. But, Oakhurst contends, that comma is missing for good reason. Oakhurst points out that the Maine Legislative Drafting Manual expressly instructs that: “when drafting Maine law or rules, don’t use a comma between the penultimate and the last item of a series.” In fact, Oakhurst notes, Maine statutes invariably omit the serial comma from lists. And this practice reflects a drafting convention that is at least as old as the Maine wage and hour law, even if the drafting manual itself is of more recent vintage.

B.

If no more could be gleaned from the text, we might be inclined to read Exemption F as Oakhurst does. But, the delivery drivers point out, there is more to consider. And while these other features of the text do not compel the drivers’ reading, they do make the exemption’s scope unclear, at least as a matter of text alone.

The drivers contend, first, that the inclusion of both “shipment” and “distribution” to describe “packing” results in no redundancy. Those activities, the drivers argue, are each distinct. They contend that “shipment” refers to the outsourcing of the delivery of goods to a third-party carrier for transportation, while “distribution” refers to a seller’s in-house transportation of products directly to recipients. And the drivers note that this distinction is, in one form or another, adhered to in [the New Oxford English American Dictionary and Webster’s Third New International Dictionary] definitions.

Consistent with the drivers’ contention, Exemption F does use two different words (“shipment” and “distribution”) when it is hard to see why, on Oakhurst’s reading, the legislature did not simply use just one of them twice. After all, if “distribution” and “shipment” really do mean the same thing, as Oakhurst contends, then it is odd that the legislature chose to use one of them (“shipment”) to describe the activity for which “packing” is done but the other (“distribution”) to describe the activity itself.

The drivers’ argument that the legislature did not view the words to be interchangeable draws additional support from another Maine statute. That statute clearly lists both “distribution” and “shipment” as if each represents a separate activity in its own right. And because Maine law elsewhere treats “shipment” and “distribution” as if they are separate activities in a list, we do not see why we must assume that the Maine legislature did not treat them that way here as well. After all, the use of these two words to describe “packing” need not be understood to be wasteful. Such usage could simply reflect the legislature’s intention to make clear that “packing” is exempt whether done for “shipment” or for “distribution” and not simply when done for just one of those activities. [1]

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Next, the drivers point to the exemption’s grammar. The drivers note that each of the terms in Exemption F that indisputably names an exempt activity—“canning, processing, preserving,” and so forth on through “packing”—is a gerund. By, contrast, “distribution” is not. And neither is “shipment.” In fact, those are the only non-gerund nouns in the exemption, other than the ones that name various foods.

Thus, the drivers argue, in accord with what is known as the parallel usage convention, that “distribution” and “shipment” must be playing the same grammatical role—and one distinct from the role that the gerunds play. In accord with that convention, the drivers read “shipment” and “distribution” each to be objects of the preposition “for” that describes the exempt activity of “packing.” And the drivers read the gerunds each to be referring to stand-alone, exempt activities—“canning, preserving….”

By contrast, in violation of the convention, Oakhurst’s reading treats one of the two non-gerunds (“distribution”) as if it is performing a distinct grammatical function from the other (“shipment”), as the latter functions as an object of a preposition while the former does not. And Oakhurst’s reading also contravenes the parallel usage convention in another way: it treats a non-gerund (again, “distribution”) as if it is performing a role in the list—naming an exempt activity in its own right—that gerunds otherwise exclusively perform.

Finally, the delivery drivers circle back to that missing comma. They acknowledge that the drafting manual advises drafters not to use serial commas to set off the final item in a list—despite the clarity that the inclusion of serial commas would often seem to bring. But the drivers point out that the drafting manual is not dogmatic on that point. The manual also contains a proviso—“Be careful if an item in the series is modified”—and then sets out several examples of how lists with modified or otherwise complex terms should be written to avoid the ambiguity that a missing serial comma would otherwise create.

Thus, the drafting manual’s seeming—and, from a judge’s point of view, entirely welcome—distaste for ambiguous lists does suggest a reason to doubt Oakhurst’s insistence that the missing comma casts no doubt on its preferred reading. For, as the drivers explain, the drafting manual cannot be read to instruct that the comma should have been omitted here if “distribution” was intended to be the last item in the list. In that event, the serial comma’s omission would give rise to just the sort of ambiguity that the manual warns drafters not to create.

Still, the drivers’ textual points do not account for what seems to us to be Oakhurst’s strongest textual rejoinder: no conjunction precedes “packing.” Rather, the only conjunction in the exemption—“or”—appears before “distribution.” And so, on the drivers’ reading, the list is strangely stingy when it comes to conjunctions, as it fails to use one to mark off the last listed activity.

To address this anomaly, the drivers cite to Antonin Scalia & Bryan Garner, Reading Law: The Interpretation of Legal Texts (2012), in which the authors observe that “[s]ometimes drafters will omit conjunctions altogether between the enumerated items [in a list],” in a technique called “asyndeton,” id. at 119. But those same authors point out that most legislative drafters avoid asyndeton. And, the delivery drivers do not provide any examples of Maine statutes that use this unusual grammatical device. Thus, the drivers’ reading of the text is hardly fully satisfying. [2]

IV.

The text has, to be candid, not gotten us very far. We are reluctant to conclude from the text alone that the legislature clearly chose to deploy the nonstandard grammatical device of asyndeton. But we are also reluctant to overlook the seemingly anomalous violation of the parallel usage canon that Oakhurst’s reading of the text produces. And so—there being no comma in place to break the tie—the text turns out to be no clearer on close inspection than it first appeared. As a result, we turn to the parties’ arguments about the exemption’s purpose and the legislative history.

A.

Oakhurst contends that the evident purpose of the exemption strongly favors its reading. The whole point of the exemption, Oakhurst asserts (albeit without reference to any directly supportive text or legislative history), is to protect against the distorting effects that the overtime law otherwise might have on employer decisions about how best to ensure perishable foods will not spoil. And, Oakhurst argues, the risk of spoilage posed by the distribution of perishable food is no less serious than is the risk of spoilage posed by the other activities regarding the handling of such foods to which the exemption clearly does apply.

B.

We are not so sure. Any analysis of Exemption F that depends upon an assertion about its clear purpose is necessarily somewhat speculative. Nothing in the overtime law’s text or legislative history purports to define a clear purpose for the exemption.

Moreover, even if we were to share in Oakhurst’s speculation that the legislature included the exemption solely to protect against the possible spoilage of perishable foods rather than for some distinct reason related, perhaps, to the particular dynamics of certain labor markets, we still could not say that it would be arbitrary for the legislature to exempt “packing” but not “distributing” perishable goods. The reason to include “packing” in the exemption is easy enough to conjure. If perishable goods are not packed in a timely fashion, it stands to reason that they may well spoil. Thus, one can imagine the reason to ensure that the overtime law creates no incentives for employers to delay the packing of such goods. The same logic, however, does not so easily apply to explain the need to exempt the activity of distributing those same goods. Drivers delivering perishable food must often inevitably spend long periods of time on the road to get the goods to their destination. It is thus not at all clear that a legal requirement for employers to pay overtime would affect whether drivers would get the goods to their destination before they spoiled. No matter what delivery drivers are paid for the journey, the trip cannot be made to be shorter than it is.

Of course, this speculation about the effect that a legal requirement to pay overtime may or may not have on increasing the risk of food spoilage is just that. But such speculation does make us cautious about relying on what is only a presumed legislative purpose to generate a firm conclusion about what the legislature must have intended in drafting the exemption.

* * *

C.

To be clear, none of this evidence is decisive either way. It does highlight, however, the hazards of simply assuming—on the basis of no more than supposition about what would make sense—that the legislature could not have intended to craft Exemption F as the drivers contend that the legislature crafted it. Thus, we do not find either the purpose or the legislative history fully clarifying. And so we are back to where we began.

V.

We are not, however, without a means of moving forward. The default rule of construction under Maine law for ambiguous provisions in the state’s wage and hour laws is that they “should be liberally construed to further the beneficent purposes for which they are enacted.” Dir. of Bureau of Labor Standards v. Cormier, 527 A.2d 1297, 1300 (Me. 1987). The opening of the subchapter of Maine law containing the overtime statute and exemption at issue here declares a clear legislative purpose: “It is the declared public policy of the State of Maine that workers employed in any occupation should receive wages sufficient to provide adequate maintenance and to protect their health, and to be fairly commensurate with the value of the services rendered.” Thus, in accord with Cormier, we must interpret the ambiguity in Exemption F in light of the remedial purpose of Maine’s overtime statute. And, when we do, the ambiguity clearly favors the drivers’ narrower reading of the exemption.

* * *

VI.

Accordingly, the District Court’s grant of partial summary judgment to Oakhurst is reversed.

 

[1] We also note that there is some reason to think that the distinction between “shipment” and “distribution” is not merely one that only a lawyer could love. Oakhurst’s own internal organization chart seems to treat the two as if they are separate activities.

[2] The drivers do also contend that their reading draws support from the noscitur a sociis canon, which “dictates that words grouped in a list should be given related meaning.” Dole v. United Steelworkers of Am., 494 U.S. 26, 36 (1990) (citation omitted). In particular, the drivers contend that distribution is a different sort of activity than the others, nearly all of which entail transforming perishable products to less perishable forms—“canning,” “processing,” “preserving,” “freezing,” “drying,” and “storing.” However, the list of activities also includes “marketing,” which Oakhurst argues undercuts the drivers’ noscitur a sociis argument. And even if “marketing” does not mean promoting goods or services, as in the case of advertising, and means only “to deal in a market,” … it is a word that would have at least some potential commonalities with the disputed word, “distribution.” For that reason, this canon adds little insight beyond that offered by the parallel usage convention.

CYBERLAW IN ACTION

Section 230 of the Communications Decency Act (CDA), a federal statute, provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Although § 230 appears in a statute otherwise designed to protect minors against online exposure to indecent material, the broad language of § 230 has caused courts to apply it in contexts having nothing to do with indecent expression.

For instance, various courts have held that § 230 protects providers of an interactive computer service (ICS) against liability for defamation when a user of the service creates and posts false, reputation-harming statements about someone else. (ICS is defined in the statute as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server.”) With courts so holding, § 230 has the effect of superseding a common law rule of defamation that anyone treated as a publisher or speaker of defamatory material is liable to the same extent as the original speaker or writer of that material. Absent § 230, ICS providers could sometimes face defamation liability under the theory that they are publishers of statements made by someone else. (You will learn more about defamation in  Chapter 6 .) This application of § 230 illustrates two concepts noted earlier in the chapter: first, that federal law overrides state law when the two conflict, and second, that an applicable statute supersedes a common law rule.

Cases in other contexts have required courts to utilize statutory interpretation techniques discussed in this chapter as they determine whether § 230’s shield against liability applies. For example, two cases presented the question whether § 230 protects website operators against liability for alleged Fair Housing Act (FHA) violations based on

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material that appears on their sites. The FHA states that it is unlawful to “make, print or publish” or to “cause” the making, printing, or publishing of, notices, statements, or advertisements that “with respect to the sale or rental of a dwelling[,] … indicate[s] any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.” A civil rights organization sued Craigslist Inc., which operates a well-known electronic forum for those who wish to buy, sell, or rent housing and miscellaneous goods and services. The plaintiff alleged that Craigslist users posted housing-related statements such as “No minorities” and “No children” and that those statements constituted FHA violations on the part of Craigslist.

In Chicago Lawyers Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F.3d 666 (7th Cir. 2008), the U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s dismissal of the plaintiff’s complaint. The Seventh Circuit held that a “natural reading” of § 230 of the CDA protected Craigslist against liability. The statements that allegedly violated the FHA were those of users of the electronic forum—meaning that Craigslist would be liable only if it were treated as a publisher or speaker of the users’ statements. The plain language of § 230, however, prohibited classifying Craigslist as a publisher or speaker of the content posted by the users. Neither did Craigslist “cause” users to make statements of the sort prohibited by the FHA. Using a commonsense interpretation of the word “cause,” the court concluded that merely furnishing the electronic forum was not enough to implicate Craigslist in having “cause[d]” the users’ statements. There were no facts indicating that Craigslist suggested or encouraged statements potentially running afoul of the FHA.

Very shortly after the Craigslist decision, a different federal court of appeals decided Fair Housing Council v. Roommates.com, LLC. That case presented the question whether § 230 of the CDA protected Roommates.com against FHA liability for allegedly discriminatory housing-related statements posted by users of Roommates.com’s electronic forum. The case’s basic facts appear in problem case 10 at the end of this chapter. Review those facts and compare them to the facts of the Craigslist case. Then determine whether § 230 protected Roommates.com against liability (as it protected Craigslist) or whether the facts of the Roommates.com case warranted a different outcome.

Identify what courts focus on when applying the major statutory interpretation techniques (plain meaning, legislative purpose, legislative history, and general public purpose).

To deal with the problems of ambiguity that arise from drafting errors, unclear language, or the application of clear language to unanticipated circumstances, courts use various techniques of statutory interpretation. As you saw in the O’Connor case, different techniques may dictate different results in a particular case. Sometimes judges employ the techniques in an instrumentalist or result-oriented fashion, emphasizing the technique that will produce the result they want and downplaying the others. It is, therefore, unclear which technique should control when different techniques yield different results. Judges have considerable latitude in this regard.

A conceptually helpful metaphor here might be to think of a judge approaching a question of statutory interpretation as a repairperson. The various techniques of statutory interpretation described here are the tools he or she might use for a repair job. Sometimes a particular tool is more suited to a particular job, but a repairperson uses his or her judgment in determining which tools to use to accomplish the goal of making the repair. Likewise, a judge retains the freedom to reach in the “statutory interpretation toolbox” for any of the tools described here, but professional norms and experience often guide a judge’s choice, just as it would a repairperson’s.

Plain Meaning Courts routinely begin their interpretation of a statute with its actual language. If the statute’s words have a clear, common, accepted meaning, courts often employ the plain meaning rule. This approach calls for the court to apply the statute according to the usual meaning of its words, without concerning itself with anything else. At times, this approach is clear and settles the matter. Often, though, judges find the application of plain meaning unhelpful. It may lead to absurd or patently unjust results, or it might simply fail to resolve the ambiguity at issue. In James v. City of Costa Mesa, which follows the description of these statutory interpretation techniques, both the majority and the dissenting judges agree that the plain meaning of the statutory text at issue is ambiguous, even as they disagree as to what that meaning is.

Legislative History and Legislative Purpose Courts sometimes refuse to follow a statute’s plain meaning when its legislative history suggests a different result. Almost all courts resort to legislative history when the statute’s language is ambiguous. A statute’s legislative history includes the following sources: reports of investigative committees or law revision commissions that led to the legislation, transcripts or summaries of hearings of legislative committees that originally considered the legislation, reports issued by such committees, records of legislative debates, reports of conference committees reconciling the chambers’ conflicting versions of the law in a  bicameral legislature , amendments or defeated amendments to the legislation, other bills not passed by the legislature but proposing similar legislation, and discrepancies between a bill passed by one chamber of a bicameral legislature and the final version of the statute.

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Sometimes a statute’s legislative history provides no information or conflicting information about its meaning, scope, or purposes. Some sources prove to be more authoritative than others. The worth of debates, for instance, may depend on which legislator (e.g., the sponsor of the bill or an uninformed blowhard) is quoted. Some sources are useful only in particular situations; prior unpassed bills and amendments or defeated amendments are examples. Consider, for instance, whether mopeds are covered by an air pollution statute applying to “automobiles, trucks, buses, and other motorized passenger or cargo vehicles.” If the statute’s original version included mopeds but this reference was removed by amendment, it is unlikely that the legislature wanted mopeds to be covered. The same might be true if six similar unpassed bills had included mopeds but the bill that was eventually passed did not, or if one house had passed a bill including mopeds but mopeds did not appear in the final version of the legislation.

Courts use legislative history in two overlapping but distinguishable ways. They may use it to determine what the legislature thought about the specific meaning of statutory language. They may also use it to determine the overall aim, end, or goal of the legislation. In this second case, they then ask whether a particular interpretation of the statute is consistent with this legislative purpose. To illustrate the difference between these two uses of legislative history, suppose that a court is considering whether our pollution statute’s “other motorized passenger or cargo vehicles” language includes battery-powered vehicles. The court might scan the legislative history for specific references to battery-powered vehicles or other indications of what the legislature thought about their inclusion. The court might also use the same history to determine the overall aims of the statute and then ask whether including battery-powered vehicles is consistent with those aims. Because the history probably would reveal that the statute’s purpose was to reduce air pollution from internal combustion engines, the court might well conclude that covering battery-powered vehicles would be inconsistent with the legislative purpose and, therefore, decline to include them within the coverage of the statute.

General Public Purpose Occasionally, courts construe statutory language in the light of various general public purposes. These purposes are not the purposes underlying the statute in question; rather, they are widely accepted general notions of public policy. For example, the Supreme Court once used the general public policy against racial discrimination in education as an argument for denying tax-exempt status to a private university that discriminated on the basis of race.

Prior Interpretations Courts sometimes follow prior cases and administrative decisions interpreting a statute, regardless of the statute’s plain meaning or legislative history. The main argument for following these prior interpretations is to promote stability and certainty by preventing each successive court that considers a statute from adopting its own interpretation. The courts’ willingness to follow a prior interpretation depends on such factors as the number of past courts adopting the interpretation, the authoritativeness of those courts, and the number of years that the interpretation has been followed. 8

Maxims Maxims are general rules of thumb employed in statutory interpretation. There are many maxims, which courts tend to use or ignore at their discretion. The O’Connor court used several maxims to interpret the Maine overtime law exemption in the case at the beginning of this section. The court there referred to the maxims as “canons” of statutory interpretation. For our purposes, maxim and canon are synonyms. The judge in O’Connor explained the maxim of noscitur a sociis in the second footnote of the opinion. Another example of a maxim is the ejusdem generis rule, which says that when general words follow words of a specific, limited meaning, the general language should be limited to things of the same class as those specifically stated. Suppose that the pollution statute quoted earlier listed 12 types of gas-powered vehicles and ended with the words “and other motorized passenger or cargo vehicles.” In that instance, ejusdem generis probably would dictate that battery-powered vehicles not be included.

The following James v. City of Costa Mesa case reports the decision of a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit. Two of the three judges agreed with one interpretation of the statutory language at issue; the third disagreed with that interpretation. The decision of the two judges who agreed is presented as the majority opinion of the court, while the disagreeing judge’s argument is in the dissenting opinion. Notice how each opinion uses plain meaning and legislative history and purpose (with a maxim or two peppered in for good measure) to interpret the language to different conclusions. This illustrates how, regardless of these consistent techniques described here, there is still substantial room for contested judgment in statutory interpretation. Likewise, you should compare and contrast the James court’s application of those techniques with the earlier O’Connor opinion.

James v. City of Costa Mesa 700 F.3d 394 (9th Cir. 2012)

Marla James, Wayne Washington, James Armantrout, and Charles Daniel Dejong (collectively referred to here either as “the plaintiffs” or “James,” the name of the lead plaintiff) suffer from serious medical conditions. To alleviate pain associated with their impairments, they each use marijuana, as recommended and monitored by their medical doctors. In California, where the plaintiffs live, the medical use of marijuana is permissible according to state law. Marijuana, however, remains a controlled substance under the federal Controlled Substances Act (CSA). As a result, it is generally a federal crime to possess and distribute marijuana, even for medical purposes.

The plaintiffs filed a lawsuit against the cities of Costa Mesa and Lake Forest, California, for taking steps to close down or otherwise prohibit the operation of marijuana-dispensing facilities within their boundaries. The plaintiffs claimed that the cities’ actions violated Title II of the Americans with Disabilities Act (ADA), which prohibits discrimination on the basis of disability in the provision of public services. The lawsuit asked the court to enjoin the cities’ actions (i.e., issue a decision ordering the cities to stop their efforts to close the marijuana-dispensing facilities).

A judge in the United States District Court for the Central District of California declined to issue an injunction on the ground that the ADA does not protect against discrimination on the basis of plaintiffs’ marijuana use, even medical marijuana use supervised by a doctor in accordance with state law. The judge based his decision on a determination that the plaintiffs are not entitled to the protection of the ADA in this instance because only a “qualified individual with a disability” is protected from being denied the benefit of public services. The ADA states that “the term ’individual with a disability’ does not include an individual who is currently engaging in the illegal use of drugs, when the covered entity acts on the basis of such use.”

The plaintiffs appealed the District Court’s ruling to the U.S. Court of Appeals for the Ninth Circuit.

Raymond C. Fisher, Circuit Judge

This case turns on whether the plaintiffs’ medical marijuana use constitutes “illegal use of drugs[.]”

[The ADA] defines “illegal use of drugs” as

the use of drugs, the possession or distribution of which is unlawful under the Controlled Substances Act. Such term does not include the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law.

The parties agree that the possession and distribution of marijuana, even for medical purposes, is generally unlawful under the CSA, and thus that medical marijuana use falls within the exclusion set forth in [the above definition’s] first sentence. They dispute, however, whether medical marijuana use is covered by one of the exceptions in the second sentence. The plaintiffs contend their medical marijuana use falls within the exception for drug use supervised by a licensed health care professional.

There are two reasonable interpretations of the [ADA]’s language excepting from the illegal drug exclusion “use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law.” The first interpretation—urged by the plaintiffs—is that this language creates two exceptions to the illegal drug exclusion: (1) an exception for professionally supervised drug use carried out under any legal authority, and (2) an independent exception for drug use authorized by the CSA or other provisions of federal law. The second interpretation—offered by the cities and adopted by the district court—is that the provision contains a single exception covering all uses authorized by the CSA or other provisions of federal law, including both CSA-authorized uses that involve professional supervision (such as use of controlled substances by prescription … and uses of controlled substances in connection with research and experimentation), and other CSA-authorized uses. Under the plaintiffs’ interpretation, their state-sanctioned, doctor-recommended marijuana use is covered under the supervised use exception. Under the cities’ interpretation, the plaintiffs’ state-authorized medical marijuana use is not covered by any exception because it is not authorized by the CSA or another provision of federal law. Although [the definition of “illegal use of drugs”] lacks a plain meaning and its legislative history is not conclusive, we hold, in light of the text and legislative history of the ADA, as well as the relationship between the ADA and the CSA, that the cities’ interpretation is correct.

The meaning of [the definition of “illegal use of drugs”] cannot be discerned from the text alone. Both interpretations of the provision are somewhat problematic. The cities’ reading of the statute renders the first clause in [the definition]’s second sentence superfluous; if Congress had intended that the exception cover only uses authorized by the CSA and other provisions of federal law, it could have omitted the “taken under supervision” language altogether. But the plaintiffs’ interpretation also fails to give effect to each word of [the statute] … , for if Congress had really intended that the language excepting “other uses authorized by the Controlled Substances Act or other provisions of Federal law” be entirely independent of the preceding supervised use language, it could have omitted

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the word “other,” thus excepting “use of a drug taken under supervision by a licensed health care professional, or uses authorized by the Controlled Substances Act.” Moreover, unless the word “other” is omitted, the plaintiffs’ interpretation renders the statutory language outright awkward. One would not naturally describe “the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law” unless the supervised uses were a subset of the uses authorized by the CSA and other provisions of federal law. The plaintiffs’ reading thus results not only in surplusage, but also in semantic dissonance.

The cities’ interpretation also makes the most sense of the contested language when it is viewed in context…. Here, the context reveals Congress’ intent to define “illegal use of drugs” by reference to federal, rather than state, law. [The definition] mentions the CSA by name twice, and [a subsequent provision of the ADA] provides that “[t]he term ’drug’ means a controlled substance, as defined in … the Controlled Substances Act.”

We therefore conclude that the cities’ interpretation of the statutory text is the more persuasive, though we agree with the dissent that the text is ultimately inconclusive. We therefore look to legislative history, including related congressional activity.

The legislative history of this provision, like its text, is indeterminate. It is true, as the plaintiffs point out, that Congress rejected an early draft of the “taken under supervision” exception in favor of a broader version. [The early version excepted drugs taken pursuant to a valid prescription, rather than the use of a drug taken under supervision by a licensed health care professional.] We are not persuaded, however, that this history compels the plaintiffs’ interpretation. Although the expansion of the supervised use exception suggests Congress wanted to cover more than just CSA-authorized prescription-based use, it does not demonstrate that the exception was meant to extend beyond the set of uses authorized by the CSA and other provisions of federal law. The CSA does authorize some professionally supervised drug use that is not prescription-based, and Congress could have intended simply to expand the supervised use exception to encompass all such uses.

One House Committee Report does include a brief passage that arguably supports the notion that [the] supervised use language and [the] authorized use language are independent, stating “The term ’illegal use of drugs’ does not include the use of controlled substances, including experimental drugs, taken under the supervision of a licensed health care professional. It also does not include uses authorized by the Controlled Substances Act or other provisions of federal law.” This discussion is of limited persuasive value, however, because it may rest on the unstated assumption—quite plausible at the time—that professionally supervised use of illegal drugs would always be consistent with the CSA. There is no reason to think that the 1990 Congress that passed the ADA would have anticipated later changes in state law facilitating professional supervision of drug use that federal law does not permit. The first such change came six years later, when California voters passed Proposition 215, now codified as the Compassionate Use Act of 1996.

[D]uring and after adoption of the ADA there has been a strong and longstanding federal policy against medical marijuana use outside the limits established by federal law itself…. Under the plaintiffs’ view, the ADA worked a substantial departure from this accepted federal policy by extending federal protections to federally prohibited, but state-authorized, medical use of marijuana. That would have been an extraordinary departure from policy, and one that we would have expected Congress to take explicitly. It is unlikely that Congress would have wished to legitimize state-authorized, federally proscribed medical marijuana use without debate, in an ambiguously worded ADA provision.

* * *

AFFIRMED.

DISSENT BY: Marsha S. Berzon, Circuit Judge

The statutory interpretation issue at the core of this case is an unusually tough one, as the majority opinion recognizes. Looking at the language of [the definition of “illegal use of drugs”] alone, I would come out where the majority does—concluding that the statute is ambiguous. But unlike the majority, I would not declare a near-draw. Instead, looking at the words alone, I would conclude that the plaintiffs have much the better reading, but not by enough to be comfortable that their interpretation is surely correct. Turning then to the legislative history, I would again declare the plaintiffs the winner, this time sufficiently, when combined with the language considerations, to adopt their interpretation, absent some very good reason otherwise.

1. Statutory Text

James and the other plaintiffs argue that the first clause of the second sentence [of the definition] carves out their marijuana use, which is under the supervision of a doctor and in compliance with California law. The Cities, on the other hand, read the statute as creating a single exception—for drug use authorized by the CSA—and argue that the first clause should be read as excepting drug use under supervision of a doctor only when that use complies with the CSA.

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Although [the definition] is not entirely clear, James has very much the better reading of the statutory language. In James’s view, the phrases “use of a drug taken under supervision by a licensed health care professional” and “other uses authorized by the [CSA]” create two different exceptions, so that the ADA protects use of drugs under supervision of a doctor even when that use is not authorized by the CSA. If Congress intended to carve out only drug use authorized by the CSA, after all, the entire first clause—“the use of a drug under supervision by a licensed health care professional”—would have been unnecessary.

a. The use of “other”

The Cities argue, and the district court held, that James’s reading renders the word “other” redundant, since Congress could have more clearly and concisely conveyed the meaning of two distinct exceptions by leaving it out. Under this view, “other” indicates that the exception contained in the first clause, for uses supervised by a doctor, is meant to be a subset of the exception in the second clause, and is included only for clarification and emphasis. This interpretation would, oddly, prefer a minor redundancy—the word “other”—over a major one—the entire first phrase of the second sentence.

Moreover, the word “other” is not necessarily redundant at all. It could be read to indicate that use under supervision of a doctor is meant to be a category of uses entirely subsumed by the larger category of uses authorized by the CSA, but this is not the only possible interpretation. Put another way, omitting the word “other” entirely would certainly have compelled the reading James advances, but its presence does not invalidate her interpretation. There is, after all, a middle ground between these two readings…. [T]he two clauses could … be seen as partiallyoverlapping, with the group of uses supervised by a doctor partially included within the set of uses authorized by the CSA but also partially independent, encompassing in addition a set of uses not authorized by the CSA. This reading strikes me as the most sensible.

Under this interpretation, “other” is not redundant. Instead, it accurately reflects the overlap. Were the “other” not there, the exception would have divided the relevant universe into two non-overlapping sets. Yet, in fact the CSA authorizes some (but not all) uses of “drugs taken under supervision of a licensed health care professional.” The “other” serves to signal that there is no strict dichotomy between the two phrases, as the bulk of the CSA-authorized uses are within the broader set covered by the first phrase.

* * *

2. Legislative History

James’ reading of the statute also accords much better with the overall thrust of the legislative history. That history, while not entirely without ambiguity, strongly supports James’s interpretation.

a. Evolution of the exception

As the majority observes, Congress replaced a draft of the exception that required that use of drugs be “pursuant to a valid prescription,” … with the broader language eventually enacted. Critically, the House Committee Report restates the exception, once amended, in precisely the cumulative manner. I have suggested most accords with the statutory language: “The term ’illegal use of drugs’ does not include the use of controlled substances, including experimental drugs, taken under the supervision of a licensed health care professional. It also does not include uses authorized by the [CSA] or other provisions of Federal law.” This summary is in no way ambiguous, and indicates at least that members of the House familiar with the statutory language understood it in the manner that, for reasons I have explained, most accords with ordinary principles of grammar and syntax.

b. Congressional awareness of medical marijuana

The majority discounts any significance in the way the current language is described in the relevant Committee report, observing that California voters did not pass Prop. 215 until 1996 and that there were no state laws in 1990 allowing for professionally supervised use of drugs in a manner inconsistent with the CSA. Congress would not have carefully drafted the exception to include non-CSA authorized medically supervised uses, the majority posits, as no such uses were legal under state law at the time.

That explanation for dismissing the best reading of the statute and the only coherent reading of the Committee’s explanation of the statute won’t wash, for several reasons. First, while California in 1996 became the first of the sixteen states that currently legalize medical marijuana, the history of medical marijuana goes back much further, so that use for medical purposes was not unthinkable in 1990. At one time, “almost all States … had exceptions making lawful, under specified conditions, possession of marihuana by … persons for whom the drug had been prescribed or to whom it had been given by an authorized medical person.” What’s more, the Federal government itself conducted an experimental medical marijuana program from 1978 to 1992, and it continues to provide marijuana to the surviving participants. The existence of these programs indicates that medical marijuana was not a concept utterly foreign to Congress before 1996.

* * *

The upshot is that the statutory language and history, taken together, fit much better with James’s version of what Congress meant than the Cities’.

Limits on the Power of Courts By now, you may think that anything goes when courts decide common law cases or interpret statutes. Many factors, however, discourage courts from adopting a freewheeling approach. Their legal training and mental makeup cause judges to be likely to respect established precedents and the will of the legislature. Many courts issue written opinions, which expose judges to academic and professional criticism if the opinions are poorly reasoned. Lower court judges may be discouraged from innovation by the fear of being overruled by a higher court. Finally, political factors inhibit judges. For example, some judges are elected, and even judges with lifetime tenure can sometimes be removed.

An even more fundamental limit on the power of courts is that they cannot make or interpret law until parties present them with a case to decide. In addition, any such case must be a real dispute. That is, courts generally limit themselves to genuine, existing “cases or controversies” between real parties with tangible opposing interests in the lawsuit. Courts generally do not issue advisory opinions on abstract legal questions unrelated to a genuine dispute, and do not decide feigned controversies that parties concoct to seek answers to such questions. Courts may also refuse to decide cases that are insufficiently ripeto have matured into a genuine controversy, or that are moot because there no longer is a real dispute between the parties. Reflecting similar policies is the doctrine of  standing to sue , which normally requires that the plaintiff have some direct, tangible, and substantial stake in the outcome of the litigation.

State and federal  declaratory judgment  statutes, however, allow parties to determine their rights and duties even though their controversy has not advanced to the point where harm has occurred and legal relief may be necessary. This enables them to determine their legal position without taking action that could expose them to liability. For example, if Darlene believes that something she plans to do would not violate Earl’s copyright on a work of authorship but she recognizes that he may take a contrary view, she may seek a declaratory judgment on the question rather than risk Earl’s lawsuit by proceeding to do what she had planned. Usually, a declaratory judgment is awarded only when the parties’ dispute is sufficiently advanced to constitute a real case or controversy.

The Global Business Environment

Just as statutes may require judicial interpretation when a dispute arises, so may treaties. The techniques that courts use in interpreting treaties correspond closely to the statutory interpretation techniques discussed in this chapter. Olympic Airways v. Husain, 540 U.S. 644 (U.S. Sup. Ct. 2004), furnishes a useful example.

In Olympic Airways, the U.S. Supreme Court was faced with an interpretation question regarding a treaty, the Warsaw Convention, which deals with airlines’ liability for passenger deaths or injuries on international flights. Numerous nations (including the United States) subscribe to the Warsaw Convention, a key provision of which provides that in regard to international flights, the airline “shall be liable for damages sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.” A separate provision imposes limits on the amount of money damages to which a liable airline may be subjected.

The Olympic Airways case centered around the death of Dr. Abid Hanson, a severe asthmatic, on an international flight operated by Olympic. Smoking was permitted on the flight. Hanson was given a seat in the nonsmoking section, but his seat was only three rows in front of the smoking section. Because Hanson was extremely sensitive to secondhand smoke, he and his wife, Rubina Husain, requested various times that he be allowed, for health reasons, to move to a seat farther away from the smoking section. Each time, the request was denied by an Olympic flight attendant. When smoke from the smoking section began to give Hanson difficulty, he used a new inhaler and walked toward the front of the plane to get some fresher air. Hanson went into respiratory distress, whereupon his wife and a doctor who was on board gave him shots of epinephrine from an emergency kit that Hanson carried. Although the doctor administered CPR and oxygen when Hanson collapsed, Hanson died. Husain, acting as personal representative of her late husband’s estate, sued Olympic in federal court on the theory that the Warsaw Convention made Olympic liable for Hanson’s death. The federal district court and the court of appeals ruled in favor of Husain.

In considering Olympic’s appeal, the U.S. Supreme Court noted that the key issue was one of treaty interpretation: whether the flight attendant’s refusals to reseat Hanson constituted an “accident which caused” the death of Hanson. Noting that the Warsaw Convention itself did not define “accident” and that different dictionary definitions of “accident”

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exist, the Court looked to a precedent case, Air France v. Saks, 470 U.S. 392 (U.S. Sup. Ct. 1985), for guidance. In the Air France case, the Court held that the term “accident” in the Warsaw Convention means “an unexpected or unusual event or happening that is external to the passenger.” Applying that definition to the facts at hand, the Court concluded in Olympic Airways that the repeated refusals to reseat Hanson despite his health concerns amounted to unexpected and unusual behavior for a flight attendant. Although the refusals were not the sole reason why Hanson died (the smoke itself being a key factor), the refusals were nonetheless a significant link in the causation chain that led to Hanson’s death. Given the definition of “accident” in the Court’s earlier precedent, the phrasing, the Warsaw Convention, and the underlying public policies supporting it, the Court concluded that the refusals to reseat Hanson constituted an “accident” covered by the Warsaw Convention. Therefore, the Court affirmed the decision of the lower courts.

Chapter 3

BUSINESS AND THE CONSTITUTION

Afederal statute and related regulations prohibited producers of beer from listing, on a product label, the alcohol content of the beer in the container on which the label appeared. The regulation existed because the U.S. government believed that if alcohol content could be disclosed on labels, certain producers of beer might begin marketing their brand as having a higher alcohol content than competing beers. The government was concerned that “strength wars” among producers could then develop, that consumers would seek out beers with higher alcohol content, and that adverse public health consequences would follow. Because it wished to include alcohol content information on container labels for its beers, Coors Brewing Co. filed suit against the U.S. government and asked the court to rule that the statute and regulations violated Coors’s constitutional right to freedom of speech.

Consider the following questions as you read Chapter 3:

· On which provision in the U.S. Constitution was Coors relying in its challenge of the statute and regulations?

· Does a corporation such as Coors possess the same constitutional right to freedom of speech possessed by an individual human being, or does the government have greater latitude to restrict the content of a corporation’s speech?

· The alcohol content disclosures that Coors wished to make with regard to its product would be classified as commercial speech. Does commercial speech receive the same degree of constitutional protection that political or other noncommercial speech receives?

· Which party—Coors or the federal government—won the case, and why?

· Do producers and other sellers of alcoholic beverages have, in connection with the sale of their products, special ethical obligations that sellers of other products might not have? If so, what are those obligations and why do they exist?

 LEARNING OBJECTIVES

After studying this chapter, you should be able to:

3-1  Describe the role of courts in interpreting constitutions and in determining whether statutes or other government actions are constitutional.

3-2  Explain the key role of the U.S. Constitution’s Commerce Clause in authorizing action by Congress.

3-3  Describe the incorporation doctrine’s role in making most guarantees of the Bill of Rights operate to protect persons not only against certain federal government actions, but also against certain state and local government actions.

3-4  Explain the differences among the means-ends tests used by courts when the constitutionality of government action is being determined (strict scrutiny, intermediate scrutiny, and rational basis).

3-5  Describe the differences between noncommercial speech and commercial speech and the respective levels of First Amendment protection they receive.

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3-6  Explain the difference between procedural due process and substantive due process.

3-7  Identify the instances when an Equal Protection Clause–based challenge to government action triggers more rigorous scrutiny than the rational basis test.

3-8  Explain the burden-on-commerce doctrine’s role in making certain state government actions unconstitutional.

3-9  Identify the major circumstances in which federal law will preempt state law.

3-10  Explain the power granted to the government by the Takings Clause, as well as the limits on that power.

CONSTITUTIONS SERVE TWO general functions. First, they set up the structure of government, allocating power among its various branches and subdivisions. Second, they prevent government from taking certain actions—especially actions that restrict individual or, as suggested by the Coors scenario that opened this chapter, corporate rights. This chapter examines the U.S. Constitution’s performance of these functions and considers how that performance affects government regulation of business.

An Overview of the U.S. Constitution

The U.S. Constitution exhibits the principle of separation of powers by giving distinct powers to Congress, the president, and the federal courts. Article I of the Constitution establishes a Congress composed of a Senate and a House of Representatives, gives it sole power to legislate at the federal level, and sets out rules for the enactment of legislation. Article I, § 8 also defines when Congress can make law by stating its legislative powers. Three of those powers—the commerce, tax, and spending powers—are discussed later in the chapter.

Article II gives the president the executive power—the power to execute or enforce the laws passed by Congress. Section 2 of that article lists other presidential powers, including the powers to command the nation’s armed forces and to make treaties. Article III gives the judicial power of the United States to the Supreme Court and the other federal courts later established by Congress. Article III also determines the types of cases the federal courts may decide.

Besides creating a separation of powers, Articles I, II, and III set up a system of  checks and balances  among Congress, the president, and the courts. For example, Article I gives the president the power to veto legislation passed by Congress, but allows Congress to override such a veto by a two-thirds vote of each House. Articles I and II provide that the president, the vice president, and other federal officials may be removed from office if, following an impeachment trial in the Senate, two-thirds of the Senate concludes that the impeached office-holder committed “Treason, Bribery, or other high Crimes and Misdemeanors.” Article II states that treaties agreed to by the president must be approved by a two-thirds vote of the Senate. Article III gives Congress some control over the Supreme Court’s appellate jurisdiction.

The Constitution recognizes the principle of federalism in the way it structures power relations between the federal government and the states. After listing the powers Congress holds, Article I lists certain powers that Congress cannot exercise. The Tenth Amendment provides that those powers the Constitution neither gives to the federal government nor denies to the states are reserved to the states or the people.

Article VI, however, makes the Constitution, laws, and treaties of the United States supreme over state law. As will be seen, this principle of federal supremacy may cause federal statutes to preemptinconsistent state laws. The Constitution also puts limits on the states’ lawmaking powers. One example is Article I’s command that states shall not pass laws impairing the obligation of contracts.

Article V sets forth the procedures for amending the Constitution. The Constitution has been amended 27 times. The first 10 of these amendments comprise he Bill of Rights. Although the rights guaranteed in the first 10 amendments once restricted only federal government action, most of them now limit state government action as well. As you will learn, this results from their incorporation within the Due Process Clause of the Fourteenth Amendment.

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The Evolution of the Constitution and the Role of the Supreme Court

Describe the role of courts in interpreting constitutions and in determining whether statutes or other government actions are constitutional.

According to the legal realists discussed in Chapter 1, written “book law” is less important than what public decision makers actually do. Using this approach, we discover a Constitution that differs from the written Constitution just described. The actual powers of today’s presidency, for instance, exceed anything one would expect from reading Article II. As you will see, moreover, some constitutional provisions have acquired a meaning different from their meaning when first enacted. American constitutional law has evolved rather than being static.

Many of these changes result from the way one public decision maker—the nine-member U.S. Supreme Court—has interpreted the Constitution over time. Formal constitutional change can be accomplished only through the amendment process. Because this process is difficult to employ, however, amendments to the Constitution have been relatively infrequent. As a practical matter, the Supreme Court has become the Constitution’s main “amender” through its many interpretations of constitutional provisions. Various factors help explain the Supreme Court’s ability and willingness to play this role. Because of their vagueness, some key constitutional provisions invite diverse interpretations. “Due process of law” and “equal protection of the laws” are examples. In addition, the history surrounding the enactment of constitutional provisions sometimes is sketchy, confused, or contradictory. Probably more important, however, is the perceived need to adapt the Constitution to changing social conditions. As the old saying goes, Supreme Court decisions tend to “follow the election returns.” (Regardless of where one finds himself or herself on the political spectrum, the old saying has taken on a new twist after Bush v. Gore, the historic 2000 decision referred to later in this chapter.)

Under the power of  judicial review , courts can declare the actions of other government bodies unconstitutional. How courts exercise this power depends on how they choose to read the Constitution. Courts thus have political power—a conclusion especially applicable to the Supreme Court. Indeed, the Supreme Court’s justices are, to a considerable extent, public policy makers. Their beliefs are important in the determination of how the United States is governed. This is why the justices’ nomination and confirmation often involve so much political controversy.

Yet even though the Constitution frequently is what the courts say it is, judicial power to shape the Constitution has limits. Certain limits spring from the Constitution’s language, which sometimes is quite clear. Others result from the judges’ adherence to the stare decisis doctrine discussed in Chapter 1. Perhaps the most significant limits on judges’ power, however, stem from the tension between modern judicial review and democracy. Legislators are chosen by the people, whereas judges—especially appellate level judges—often are appointed, not elected. Today, judges exercise political power by declaring the actions of legislatures unconstitutional under standards largely of the judiciary’s own devising. This sometimes leads to charges that courts are undemocratic, elitist institutions. Such charges put political constraints on judges because courts depend on the other branches of government—and ultimately on public belief in judges’ fidelity to the rule of law—to make their decisions effective. Therefore, judges sometimes may be reluctant to declare statutes unconstitutional because they are wary of power struggles with a more representative body such as Congress.

For a great deal of information about the U.S. Supreme Court and access to the Court’s opinions in recent cases, see the Court’s website at http://www.supremecourtus.gov.

The Coverage and Structure of This Chapter

This chapter examines certain constitutional provisions that are important to business; it does not discuss constitutional law in its entirety. These provisions help define federal and state power to regulate the economy. The U.S. Constitution limits government regulatory power in two general ways. First, it restricts federal legislative authority by listing the powers Congress can exercise. These are known as the  enumerated powers . Federal legislation cannot be constitutional if it is not based on a power specifically stated in the Constitution. Second, the U.S. Constitution limits both state and federal power by placing certain  independent checks  in the path of each. In effect, the independent checks establish that even if Congress has an enumerated power to legislate on a particular matter or a state constitution authorizes a state to take certain actions, there still are certain protected spheres into which neither the federal government nor the state government may reach.

Accordingly, a federal law must meet two general tests in order to be constitutional: (1) it must be based on an enumerated power of Congress, and (2) it must not collide with any of the independent checks. For example, Congress has the power to regulate commerce among the states. This power might seem to allow Congress to pass legislation forbidding women from crossing state lines to buy or sell goods. Yet such a law, though arguably based on an enumerated power, surely would be unconstitutional because it conflicts with an independent check—the equal protection guarantee discussed later in the chapter. Today, the independent checks are the main limitations on congressional power. The most important reason for the decline of the enumerated powers limitation is the perceived need for active federal regulation of economic and social life. Recently, however, the enumerated powers limitation has begun to assume somewhat more importance, as will be seen.

After discussion of the most important state and federal powers to regulate economic matters, the chapter explores certain independent checks that apply to the federal government and the states. The chapter then examines some independent checks that affect the states alone. It concludes by discussing a provision—the Takings Clause of the Fifth Amendment—that both recognizes a governmental power and limits its exercise.

State and Federal Power to Regulate

State Regulatory Power Although state constitutions may do so, the U.S. Constitution does not list the powers state legislatures can exercise. The U.S. Constitution does place certain independent checks in the path of state lawmaking, however. It also declares that certain powers (e.g., creating currency and taxing imports) can be exercised only by Congress. In many other areas, though, Congress and the state legislatures have concurrent powers. Both can make law within those areas unless Congress preempts state regulation under the Supremacy Clause. A very important state legislative power that operates concurrently with many congressional powers is the  police power , a broad state power to regulate for the public health, safety, morals, and welfare.

Federal Regulatory Power Article I, § 8 of the U.S. Constitution specifies a number of ways in which Congress may legislate concerning business and commercial matters. For example, it empowers Congress to coin and borrow money, regulate interstate commerce, establish uniform laws regarding bankruptcies, create post offices, and enact copyright and patent laws. The most important congressional powers contained in Article I, § 8, however, are the powers to regulate commerce among the states, to lay and collect taxes, and to spend for the general welfare. Because they now are read broadly, these three powers are the main constitutional bases for the extensive federal social and economic regulation that exists today.

The Commerce Power

Explain the key role of the U.S. Constitution’s Commerce Clause in authorizing action by Congress.

Article I, § 8 states that “The Congress shall have Power. . . . To regulate Commerce . . . among the several States.” The original reason for giving Congress this power to regulate interstate commerce was to nationalize economic matters by blocking the protectionist state restrictions on interstate trade that were common after the Revolution. As discussed later in the chapter, the Commerce Clause serves as an independent check on state regulation that unduly restricts interstate commerce. Our present concern, however, is the Commerce Clause’s role as a source of congressional regulatory power.

The literal language of the Commerce Clause simply empowers Congress to regulate commerce that occurs among the states. Supreme Court decisions interpreting the Commerce Clause have held, however, that it sets up three categories of actions in which Congress may engage: first, regulating the channels of interstate commerce; second, regulating and protecting the instrumentalities of interstate commerce, as well as persons or things in interstate commerce; and third, regulating activities that substantially affect interstate commerce. Largely because of judicial decisions regarding congressional action falling within the third category, the Commerce Clause has become a federal power with an extensive regulatory reach. How has this transformation occurred?

The most important step in the transformation was the Supreme Court’s conclusion that the power to regulate interstate commerce includes the power to regulate intrastate activities that affect interstate commerce. For example, in a 1914 decision, the Supreme Court upheld the Interstate Commerce Commission’s regulation of railroad rates within Texas (an intrastate matter outside the language of the Commerce Clause) because those rates affected rail traffic between Texas and Louisiana (an interstate matter within the clause’s language). This “affecting commerce” doctrine eventually was used to justify federal police power measures with significant intrastate reach. For instance, the Supreme Court upheld the application

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of the 1964 Civil Rights Act’s “public accommodations” section to a family-owned restaurant in Birmingham, Alabama. It did so because the restaurant’s racial discrimination affected interstate commerce by reducing the restaurant’s business and limiting its purchases of out-of-state meat and by restricting the ability of blacks to travel among the states.

By the early 1990s, broad judicial interpretations of the Commerce Clause led many observers to conclude that the clause established a federal power with almost unlimited reach. Then two Supreme Court decisions, United States v. Lopez (1995) and United States v. Morrison (2000), offered clear reminders that the power to regulate interstate commerce is not without limits. In Gonzales v. Raich, which appears below, the Supreme Court distinguished Lopez and Morrison and explained why the law at issue fit squarely within the expansive federal regulatory authority contemplated by the Court’s earlier Commerce Clause decisions. Read Raich and then consider that decision alongside National Federation of Independent Business v. Sebelius, discussion of which appears after Raich in Figure 1.

Gonzales v. Raich 545 U.S. 1 (U.S. Sup. Ct. 2005)

Although federal statutes and nearly all states’ laws criminalize marijuana possession and sale, a 1996 California statute made California the first state to authorize limited use of the drug for medicinal purposes. The Compassionate Use Act created an exemption from criminal prosecution for patients and primary caregivers who possess or cultivate marijuana for medicinal purposes with a physician’s approval.

California residents Angel Raich and Diane Monson suffered from serious medical conditions. After prescribing numerous conventional medicines, physicians had concluded that marijuana was the only effective treatment for Raich and Monson. Both women had been using marijuana as a medication pursuant to their doctors’ recommendations, and both relied heavily on marijuana so that they could function without extreme pain. Monson cultivated her own marijuana. Two caregivers provided Raich with locally grown marijuana at no charge.

In 2002, county deputy sheriffs and agents from the federal Drug Enforcement Administration (DEA) came to Monson’s home. Although the deputies concluded that Monson’s use of marijuana was lawful under California law, the federal agents seized and destroyed all six of her cannabis plants. Raich and Monson thereafter sued the Attorney General of the United States and the head of the DEA in an effort to obtain an injunction barring enforcement of the federal Controlled Substances Act (CSA), to the extent that it prevented them from possessing, obtaining, or manufacturing cannabis for their personal medical use in accordance with California law. The CSA classifies marijuana as a controlled substance and criminalizes its possession and sale. In their complaint, Raich and Monson claimed that enforcing the CSA against them would violate the U.S. Constitution’s Commerce Clause and the Due Process Clause of the Fifth Amendment. The federal district court denied the request for a preliminary injunction. The U.S. Court of Appeals for the Ninth Circuit, however, directed the lower court to issue a preliminary injunction prohibiting enforcement of the CSA against Raich and Monson (often referred to below as respondents). The U.S. Supreme Court granted the federal government’s petition for a writ of certiorari.

Stevens, Justice

The question presented in this case is whether the power vested in Congress by [the Commerce Clause] includes the power to prohibit the local cultivation and use of marijuana in compliance with California law. [This] case is made difficult by respondents’ strong arguments that they will suffer irreparable harm because, despite a congressional finding to the contrary, marijuana does have valid therapeutic purposes. The [issue] before us, however, is not whether it is wise to enforce the statute in these circumstances; rather, it is whether Congress’ power to regulate interstate markets for medicinal substances encompasses the portions of those markets that are supplied with drugs produced and consumed locally.

[Enacted in 1970], the CSA repealed most of the earlier [federal] drug laws in favor of a comprehensive regime to combat the international and interstate traffic in illicit drugs. Congress devised a closed regulatory system making it unlawful to manufacture, distribute, dispense, or possess any controlled substance except in a manner authorized by the CSA, [which] categorizes all controlled substances into five schedules.

Congress classified marijuana [in] Schedule I. Schedule I drugs are categorized as such because of their high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medically supervised treatment. These three factors, in varying gradations, are also used to categorize drugs in the other four schedules. [As Congress

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acknowledged in the CSA, many drugs listed on the other schedules do have accepted medical uses.] By classifying marijuana as a Schedule I drug, [Congress made] the manufacture, distribution, or possession of marijuana . . . a criminal offense.

Respondents . . . do not dispute that passage of the CSA . . . was well within Congress’ commerce power. Rather, respondents’ challenge is actually quite limited; they argue that the CSA’s categorical prohibition of the manufacture and possession of marijuana as applied to the intrastate manufacture and possession of marijuana for medical purposes pursuant to California law exceeds Congress’ authority under the Commerce Clause.

[This Court’s cases] have identified three general categories of regulation in which Congress is authorized to engage under its commerce power. First, Congress can regulate the channels of interstate commerce. Second, Congress has authority to regulate and protect the instrumentalities of interstate commerce, and persons or things in interstate commerce. Third, Congress has the power to regulate activities that substantially affect interstate commerce. Only the third category is implicated in the case at hand.

Our case law firmly establishes Congress’ power to regulate purely local activities that are part of an economic “class of activities” [having] a substantial effect on interstate commerce. See, e.g., Wickard v. Filburn, 317 U.S. 111 (1942). As we stated in Wickard, “even if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce.” In Wickard, we upheld the application of regulations promulgated under the Agricultural Adjustment Act of 1938, which were designed to control the volume of wheat moving in interstate and foreign commerce in order to avoid surpluses and consequent abnormally low prices. The regulations established an allotment of 11.1 acres for Filburn’s 1941 wheat crop, but he sowed 23 acres, intending to use the excess by consuming it on his own farm. Filburn argued that even though Congress [had the] power to regulate the production of goods for commerce, that power did not authorize “federal regulation [of] production not intended in any part for commerce but wholly for consumption on the farm.” Justice Jackson’s opinion for a unanimous Court rejected this submission. He wrote:

The effect of the statute before us is to restrict the amount which may be produced for market and the extent as well to which one may forestall resort to the market by producing to meet his own needs. That [Filburn’s] own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial.

Wickard thus establishes that Congress can regulate purely intrastate activity that is not itself “commercial,” in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.

The similarities between this case and Wickard are striking. Like the farmer in Wickard, respondents are cultivating, for home consumption, a fungible commodity for which there is an established, albeit illegal, interstate market. Just as the Agricultural Adjustment Act was designed “to control the volume [of wheat] moving in interstate and foreign commerce in order to avoid surpluses” and consequently control the market price, a primary purpose of the CSA is to control the supply and demand of controlled substances in both lawful and unlawful drug markets. In Wickard, we had no difficulty concluding that Congress had a rational basis for believing that . . . leaving home-consumed wheat outside the regulatory scheme would have a substantial influence on price and market conditions. Here too, Congress had a rational basis for concluding that leaving home-consumed marijuana outside federal control would similarly affect price and market conditions.

More concretely, one concern prompting inclusion of wheat grown for home consumption in the 1938 Act was that rising market prices could draw such wheat into the interstate market, resulting in lower market prices. The parallel concern making it appropriate to include marijuana grown for home consumption in the CSA is the likelihood that the high demand in the interstate market will draw such marijuana into that market. While the diversion of homegrown wheat tended to frustrate the federal interest in stabilizing prices by regulating the volume of commercial transactions in the interstate market, the diversion of homegrown marijuana tends to frustrate the federal interest in eliminating commercial transactions in the interstate market in their entirety. In both cases, the regulation is squarely within Congress’ commerce power because production of the commodity meant for home consumption, be it wheat or marijuana, has a substantial effect on supply and demand in the national market for that commodity.

To support their [argument that applying the CSA to them would violate the Commerce Clause], respondents rely heavily on two of our more recent Commerce Clause cases, United States v. Lopez, 514 U.S. 549 (1995), and United States v. Morrison, 529 U.S. 598 (2000). [However, respondents] overlook the larger context of modern-era Commerce Clause jurisprudence preserved by those cases. [T]he statutory challenges in Lopez and Morrison were markedly different from the [statutory] challenge in the case at hand. Here, respondents ask us to excise individual applications of a concededly valid statutory scheme. In contrast, in both Lopez and Morrison, the parties asserted that a particular statute or provision fell outside Congress’ commerce power in its entirety. This distinction is pivotal, for we have often reiterated that “where the class of activities is regulated and that class is within the reach of federal power, the courts have no power ‘to excise, as trivial, individual instances’ of the class.” [Citations of authority omitted.]

At issue in Lopez was the validity of the Gun-Free School Zones Act of 1990, which was a brief, single-subject statute making it a [federal] crime for an individual to possess a gun in a school zone. Distinguishing our earlier cases holding that comprehensive regulatory statutes may be validly applied to local conduct that does not, when viewed in isolation, have a significant impact on interstate commerce, we held the statute invalid.

The statutory scheme that the government is defending in this litigation is at the opposite end of the regulatory spectrum. [The CSA is] a lengthy and detailed statute creating a comprehensive framework for regulating the production, distribution, and possession of five classes of controlled substances. [The CSA’s classification of marijuana], unlike the discrete prohibition established by the Gun-Free School Zones Act of 1990, was merely one of many “essential parts of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.” [Citation omitted.] Our opinion in Lopez casts no doubt on the validity of such a program.

Nor does this Court’s holding in Morrison. The Violence Against Women Act of 1994 created a federal civil remedy for the victims of gender-motivated crimes of violence. The remedy . . . generally depended on proof of the violation of a state law. We held the statute unconstitutional because, like the statute in Lopez, it did not regulate economic activity.

Unlike those at issue in Lopez and Morrison, the activities regulated by the CSA are quintessentially economic. The CSA regulates the production, distribution, and consumption of commodities for which there is an established, and lucrative, interstate market. Prohibiting the intrastate possession or manufacture of an article of commerce is a rational (and commonly utilized) means of regulating commerce in that product. Because the CSA is a statute that directly regulates economic, commercial activity, our opinion in Morrison casts no doubt on its constitutionality.

One need not have a degree in economics to understand why a nationwide exemption for the vast quantity of marijuana . . . locally cultivated for personal use (which presumably would include use by friends, neighbors, and family members) may have a substantial impact on the interstate market for this extraordinarily popular substance. The congressional judgment that an exemption for such a significant segment of the total market would undermine the orderly enforcement of the entire regulatory scheme is entitled to a strong presumption of validity.

[T]hat the California exemptions will have a significant impact on both the supply and demand sides of the market for marijuana is . . . readily apparent. [Although] most prescriptions for legal drugs . . . limit the dosage and duration of the usage, under California law the doctor’s permission to recommend marijuana use is open-ended. The [California statute’s authorization for the doctor] to grant permission whenever the doctor determines that a patient is afflicted with “any other illness for which marijuana provides relief” is broad enough to allow even the most scrupulous doctor to conclude that some recreational uses would be therapeutic. And our cases have taught us that there are some unscrupulous physicians who overprescribe when it is sufficiently profitable to do so.

The exemption for cultivation by patients and caregivers can only increase the supply of marijuana in the California market. The likelihood that all such production will promptly terminate when patients recover or will precisely match the patients’ medical needs during their convalescence seems remote, whereas the danger that excesses will satisfy some of the admittedly enormous demand for recreational use seems obvious. Moreover, that the national and international narcotics trade has thrived in the face of vigorous criminal enforcement efforts suggests that no small number of unscrupulous people will make use of the California exemptions to serve their commercial ends whenever it is feasible to do so.

[T]he case for the exemption comes down to the claim that a locally cultivated product that is used domestically rather than sold on the open market is not subject to federal regulation. Given the findings in the CSA and the undisputed magnitude of the commercial market for marijuana, our decisions in Wickard v. Filburn and the later [cases] endorsing its reasoning foreclose that claim.

We do note, however, the presence of another avenue of relief [for the respondents: the CSA-authorized procedures that can lead to] reclassification of Schedule I drugs. But perhaps even more important than these legal avenues is the democratic process, in which the voices of voters allied with these respondents may one day be heard in the halls of Congress. Under the present state of the law, however, the judgment of the Court of Appeals [cannot stand].

Court of Appeals decision vacated; case remanded for further proceedings.

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Figure 1 A Note on the Affordable Care Act Decision

Congress enacted the Patient Protection and Affordable Care Act (hereinafter, Affordable Care Act) in 2010. Several cases filed shortly thereafter in federal courts presented constitutional challenges to two provisions in the statute: (1) the requirement, applicable to most Americans, that they have health insurance in force by a certain date specified in the law or, instead, pay what the statute termed a “[s]hared responsibility payment” (a provision that has come to be known as the individual mandate and will be referred to by that designation here) and (2) the requirement that states participate in an expansion of Medicaid, the long-standing federally created program under which the federal government and the states act together to fund health care for low-income persons and others with special needs.

After the lower courts issued conflicting decisions, the Supreme Court agreed to decide the constitutionality of the challenged provisions. National Federation of Independent Business v. Sebelius(hereinafter, NFIB) proved to be not only an important Commerce Clause case, but also a major decision regarding two other enumerated powers, the taxing power and the spending power. This note focuses on NFIB’s treatment of the Commerce Clause issue triggered by the individual mandate referred to above. An edited version of NFIB appears somewhat later in the chapter. It focuses on the 2012 decision’s taxing-power and spending-power analyses, which dealt, respectively, with the individual mandate and the Medicaid expansion provision.

When Congress enacted the Affordable Care Act, it relied chiefly on the Commerce Clause as the source of power to enact the law. The federal government, accordingly, placed primary emphasis on the Commerce Clause when it sought to defend the individual mandate in the courts. The government invoked its taxing power as an alternative justification.

Although there was no true majority opinion for the Supreme Court on the commerce-power question in NFIB, five justices concluded that the individual mandate exceeded the regulatory authority Congress possesses under the Commerce Clause. Chief Justice Roberts, who wrote for a majority of the Court on the taxing-power question, garnered no official votes for the portion of his opinion dealing with the commerce power. However, the four dissenting justices—Scalia, Kennedy, Thomas, and Alito—joined in an opinion adopting a commerce-power analysis that closely resembled the Chief Justice’s analysis. (The dissenters’ extreme dissatisfaction with the Chief Justice’s treatment of the taxing-power issue probably kept them from joining any part of the Roberts opinion despite their apparent agreement with his Commerce Clause analysis.)

Chief Justice Roberts and the four dissenters separately acknowledged that the Court’s precedents contemplated expansive authority for Congress under the Commerce Clause. They concluded, however, that the individual mandate went beyond what those precedents would authorize. The Chief Justice stressed that in giving Congress the power to “regulate” commerce, the Commerce Clause presupposes the existence of relevant activity to be regulated. The individual mandate, he observed, sought to compel persons not otherwise inclined to engage in commercial activity to do so by purchasing insurance. Noting the seemingly unprecedented nature of a congressional requirement that persons make a purchase from a private party, the Chief Justice asserted that the Court’s precedents dealing with activities substantially affecting interstate commerce could not be stretched far enough to let Congress reach the absence of commercial activity and regulate it by requiring such activity.

The four dissenters took a similar tack, emphasizing that the individual mandate amounted to an impermissible attempt to regulate inactivity rather than the activity necessary, in their view, to make the Commerce Clause a potential source of regulatory authority. (The other four justices—Ginsburg, Breyer, Sotomayor, and Kagan—regarded the Court’s “affecting commerce” precedents as leading logically to the conclusion that the individual mandate should be seen as authorized under the Commerce Clause, given the inevitability that everyone will need health care at some point and the notion that the insurance requirement was largely a payment mechanism designed to help control health care costs. Their Commerce Clause arguments failed, however.)

With five justices concluding that the Commerce Clause did not authorize the individual mandate, it became necessary for the Court to determine whether a separate enumerated power—the taxing power—would provide the necessary constitutional foundation for the provision (which, as noted earlier, required that an individual make a “[s]hared responsibility payment” if he or she did not obtain health insurance). Although the taxing-power argument was its backup argument, the government succeeded with it. Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, determined that the congressional power to tax justified the provision. (See the later edited version of NFIB, which focuses on the taxing-power issue as well as the spending-power issue raised by the Affordable Care Act’s Medicaid expansion provision.)

Critics of the Affordable Care Act and of the notion that the Commerce Clause permits expansive federal power likely were heartened by the government’s failure to succeed with its commerce-power argument in NFIB. But if critics won the Commerce Clause battle, they lost the constitutional war. The government’s success with the taxing-power argument meant that the individual mandate—often described as the centerpiece of the Affordable Care Act—was every bit as constitutional as it would have been if the government had succeeded with the Commerce Clause argument.

It may be too soon to determine the full impact of NFIB’s treatment of the Commerce Clause issue on future cases. Some preliminary conclusions can be drawn, however. NFIB seemingly prohibits congressional attempts to compel purchases of

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products from private parties or to require, in some similar fashion, otherwise disinclined persons to engage in economic activity. That lesson from NFIB is important, though the concerns expressed by five of the justices about the supposedly unprecedented nature of what Congress attempted to do in the individual mandate suggest that congressional attempts to require the commercially inactive to become active had not previously occurred and thus might not have become a frequent regulatory angle anyway. Importantly, too, NFIB does not appear to limit the otherwise broad-ranging authority that the Commerce Clause, as interpreted in earlier decisions, gives Congress regarding economic activity.

The Taxing Power Article I, § 8 of the Constitution states that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.” The main purpose of this taxing power is to provide a means of raising revenue for the federal government. The taxing power, however, may also serve as a regulatory device. Congress may choose to regulate a disfavored activity by taxing it heavily or may opt to encourage a favored activity by lowering or eliminating a tax on it. Today, the reach of the taxing power is seen as very broad, as evidenced by National Federation of Independent Business v. Sebelius, which follows shortly.

The Spending Power If taxing-power regulation uses a federal club, congressional spending-power regulation employs a federal carrot. Article I, § 8 also gives Congress a broad ability to spend for the general welfare. By basing the receipt of federal money on the performance of certain conditions, Congress can use the spending power to encourage states to take certain actions and thereby advance specific regulatory ends. Conditional federal grants to the states, for instance, are common today.

Over the past several decades, congressional spending-power regulation routinely has been upheld. There are limits, however, on its use. First, an exercise of the spending power must serve general public purposes rather than particular interests. Second, when Congress conditions the receipt of federal money on certain conditions, it must do so clearly. Third, the condition must be reasonably related to the purpose underlying the federal expenditure. This means, for instance, that Congress probably could not condition a state’s receipt of federal highway money on the state’s adoption of a one-house legislature. Fourth, though Congress may use conditional grants of funding to states to encourage them to take certain regulatory actions, Congress can neither compel states to enact a desired regulatory program nor otherwise coerce them into doing so. For an example of issues arising under this last limit on Congress’s spending power, see the National Federation case, which follows shortly.

The Necessary and Proper Clause After listing the commerce power, the taxing and spending powers, and various other powers extended to Congress, Article I, § 8 concludes with a provision granting Congress the further power to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers. . . .” The Necessary and Proper Clause is dependent upon Article I, § 8’s previously listed powers but augments them by permitting Congress to enact laws that are useful or conducive to the exercise of those enumerated powers. For instance, in Gonzales v. Raich (which appeared earlier in the chapter), the Supreme Court held that the Necessary and Proper Clause aided the Commerce Clause in sustaining, against constitutional attack, the application of the federal law banning marijuana possession against persons who used marijuana under a state law that permitted such use for medicinal purposes.

National Federation of Independent Business v. Sebelius 567 U.S. 519 (U.S. Sup. Ct. 2012)

Congress enacted the Patient Protection and Affordable Care Act in 2010 (hereinafter, ACA) in an effort to increase the number of Americans covered by health insurance and decrease the cost of health care. As noted earlier in  Figure 1 , one key ACA provision has come to be known as the individual mandate. That provision requires most Americans to maintain “minimum essential” health insurance coverage. For persons who are not exempt, and who do not receive health insurance through an employer or government program, the means of satisfying the requirement is to purchase insurance from a private company. The ACA further requires that those who do not comply with the mandate to have insurance in force must make a “[s]hared responsibility payment” to the federal government. That payment, which the ACA describes as a “penalty,” is calculated as a percentage of household income, subject to a floor based on a specified dollar amount and a ceiling based on the average annual premium the individual would have to pay for qualifying private health insurance. The ACA states that this “penalty” will be paid to the Internal Revenue Service (IRS) with an individual’s taxes, and “shall be assessed and collected in the same manner” as tax penalties. Some individuals who are subject to the insurance mandate are nonetheless exempt from the shared responsibility payment if their income is below a certain threshold.

As noted in  Figure 1 , the ACA also features a provision calling for an expansion of the Medicaid program, which offers federal funding to states to assist low-income families, children, pregnant women, the blind, the elderly, and the disabled in obtaining medical care. The ACA provision at issue expands Medicaid’s scope and increases the number of individuals the states must cover. For example, the ACA calls for state programs to provide Medicaid coverage to adults with incomes up to 133 percent of the federal poverty level, whereas many states historically have covered adults with children only if their income is considerably lower and have not covered childless adults at all. The ACA’s Medicaid provision increases federal funding to cover all of the states’ costs in expanding Medicaid coverage in early years of the expansion and most of those costs in succeeding years. However, the ACA also provides that if a state does not comply with the new Medicaid coverage requirements, the state could lose not merely the federal funding for those requirements, but potentially all of its federal Medicaid funds.

In various federal court cases, plaintiffs challenged the above-referred-to ACA provisions on constitutional grounds. The cases yielded conflicting results. Included among the cases was one filed by 26 states, several individuals, and the National Federation of Independent Business. In that case, the U.S. Court of Appeals for the Eleventh Circuit concluded that Congress lacked constitutional authority to enact the individual mandate. However, the Eleventh Circuit upheld the Medicaid expansion as a valid exercise of Congress’s spending power. The U.S. Supreme Court agreed to decide the case.

As explained in  Figure 1 , five justices concluded in National Federation of Independent Business v. Sebelius that the Commerce Clause could not be interpreted as authorizing the individual mandate. The following edited version of the opinion authored by Chief Justice Roberts focuses on whether Congress’s taxing power authorizes the individual mandate and on whether Congress’s spending power justifies the Medicaid expansion. Justices Ginsburg, Breyer, Sotomayor, and Kagan joined the Chief Justice to form a majority on the taxing-power question. On the spending-power question, Justices Breyer and Kagan subscribed to the Chief Justice’s analysis. Justices Ginsburg and Sotomayor provided the fourth and fifth votes for the outcome reached by the Chief Justice’s opinion on the Medicaid expansion, though they otherwise disagreed with his analysis.

Roberts, Chief Justice

Today we resolve constitutional challenges to two provisions of the ACA: the individual mandate, which requires individuals to purchase a health insurance policy providing a minimum level of coverage [or, instead, make a “[s]hared responsibility payment”]; and the Medicaid expansion, which gives funds to the states on the condition that they provide specified health care to all citizens whose income falls below a certain threshold.

[R]ather than granting general authority to perform all the conceivable functions of government, the Constitution lists, or enumerates, the federal government’s powers. The same does not apply to the states, because the Constitution is not the source of their power. The Constitution may restrict state governments—as it does, for example, by forbidding them to deny any person the equal protection of the laws. But where such prohibitions do not apply, state governments do not need constitutional authorization to act. The states thus can and do perform many of the vital functions of modern government—punishing street crime, running public schools, and zoning property for development, to name but a few. Our cases refer to this general power, possessed by the states but not by the federal government, as the police power.

This case concerns . . . powers that the Constitution does grant the federal government, but which must be read carefully to avoid creating a general federal authority akin to the police power. The Constitution authorizes Congress to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Art. I, § 8, cl. 3. Congress may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” Art. I, § 8, cl. 1. Put simply, Congress may tax and spend. This grant gives the federal government considerable influence even in areas where it cannot directly regulate. The federal government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control. And in exercising its spending power, Congress may offer funds to the states, and may condition those offers on compliance with specified conditions. These offers may well induce the states to adopt policies that the federal government itself could not impose.

The reach of the federal government’s enumerated powers is broader still because the Constitution authorizes Congress to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.” Art. I, § 8, cl. 18. We have

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long read this provision to give Congress great latitude in exercising its powers. Our respect for Congress’s policy judgments [, however,] can never extend so far as to disavow restraints on federal power that the Constitution carefully constructed.

The Individual Mandate and the Taxing Power

The government advances two theories for the proposition that Congress had constitutional authority to enact the ACA’s individual mandate. First, the government argues that Congress had the power to enact the mandate under the Commerce Clause. [Alternatively], the government argues that if the commerce power does not support the mandate, we should nonetheless uphold it as an exercise of Congress’s power to tax.

[Authors’ note: As explained earlier, the government failed to succeed with its Commerce Clause argument. For discussion of the Court’s Commerce Clause analysis, see  Figure 1 .]

Because the Commerce Clause does not support the individual mandate, it is necessary to turn to the government’s second argument: that the mandate may be upheld as within Congress’s enumerated power to “lay and collect Taxes.” Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. That, according to the government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on . . . taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax. Granting the ACA the full measure of deference owed to federal statutes, it can be so read.

The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. The “[s]hared responsibility payment,” as the statute entitles it, is paid into the Treasury by “taxpayer[s]” when they file their tax returns. It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which . . . must assess and collect it “in the same manner as taxes.” This process yields the essential feature of any tax: it produces at least some revenue for the government. Indeed, the payment is expected to raise about $4 billion per year by 2017.

It is of course true that the Act describes the payment as a “penalty,” not a “tax.” But . . . that label . . . does not determine whether the payment may be viewed as an exercise of Congress’s taxing power. [We have decided cases in which something labeled as a “penalty” was nevertheless a tax, and other cases in which something labeled a “tax” was nevertheless a penalty.]

The [use of a functional analysis that is not tied to labels] suggests that the shared responsibility payment may for constitutional purposes be considered a tax, not a penalty. First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. In 2016, for example, individuals making $35,000 a year are expected to owe the IRS about $60 for any month in which they do not have health insurance. Someone with an annual income of $100,000 a year would likely owe about $200. The price of a qualifying insurance policy is projected to be around $400 per month. It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike [a situation in which there would be a large] financial punishment. Second, the individual mandate contains no . . . requirement [of knowing wrongdoing or other corrupt intent]. Third, the payment is collected solely by the IRS through the normal means of taxation—except that the IRS is not allowed to use those means most suggestive of a punitive sanction, such as criminal prosecution. The [types of] reasons the Court [has used in previous cases for concluding that] what was called a “tax” . . . was a penalty support the conclusion that what is called a “penalty” here may be viewed as a tax.

None of this is to say that the payment is not intended to affect individual conduct. Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of domestic industry. Today, federal and state taxes can compose more than half the retail price of cigarettes, not just to raise more money, but to encourage people to quit smoking. And we have upheld such obviously regulatory measures as taxes on selling marijuana and sawed-off shotguns.

Indeed, “[e]very tax is in some measure regulatory. To some extent it interposes an economic impediment to the activity taxed as compared with others not taxed.” [Citation omitted.] That [the challenged ACA provision] seeks to shape decisions about whether to buy health insurance does not mean that it cannot be a valid exercise of the taxing power. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

The Medicaid Expansion and the Spending Power

The states also contend that the Medicaid expansion exceeds Congress’s authority under [its spending power]. They claim that Congress is coercing the states to adopt the changes it wants by threatening to withhold all of a state’s Medicaid grants, unless

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the state accepts the new expanded funding and complies with the conditions that come with it. This, they argue, violates the basic principle that the “federal government may not compel the states to enact or administer a federal regulatory program.” New York v. United States, 505 U.S. 144, 188 (1992).

There is no doubt that the ACA [calls for] dramatic[] increases [in] state obligations under Medicaid. The current Medicaid program requires states to cover only certain discrete categories of needy individuals—pregnant women, children, needy families, the blind, the elderly, and the disabled. There is no mandatory coverage for most childless adults, and the states typically do not offer any such coverage. The states also enjoy considerable flexibility with respect to the coverage levels for parents of needy families. On average states cover only those unemployed parents who make less than 37 percent of the federal poverty level, and only those employed parents who make less than 63 percent of the poverty line.

The Medicaid provisions of the ACA, in contrast, require states to expand their Medicaid programs by 2014 to cover all individuals under the age of 65 with incomes below 133 percent of the federal poverty line. The ACA provides that the federal government will pay 100 percent of the costs of covering these newly eligible individuals through 2016. In the following years, the federal payment level gradually decreases, to a minimum of 90 percent. In light of the expansion in coverage mandated by the ACA, the federal government estimates that its Medicaid spending will increase by approximately $100 billion per year.

The [Constitution’s] Spending Clause grants Congress the power “to pay the Debts and provide for the . . . general Welfare of the United States.” Art. I, § 8, cl. 1. We have long recognized that Congress may use this power to grant federal funds to the states, and may condition such a grant upon the states’ “taking certain actions that Congress could not require them to take.” [Citation omitted.] Such measures “encourage a state to regulate in a particular way, [and] influenc[e] a state’s policy choices.” [Citation omitted.]

At the same time, our cases have recognized limits on Congress’s power under the Spending Clause to secure state compliance with federal objectives. We have repeatedly characterized . . . Spending Clause legislation as “much in the nature of a contract”?’ [Citations omitted.] The legitimacy of Congress’s exercise of the spending power “thus rests on whether the State voluntarily and knowingly accepts the terms of the contract.” [Citation omitted.] Respecting this limitation is critical to ensuring that Spending Clause legislation does not undermine the status of the states as independent sovereigns in our federal system.

That insight has led this Court to strike down federal legislation that commandeers a state’s legislative or administrative apparatus for federal purposes. It has also led us to scrutinize Spending Clause legislation to ensure that Congress is not using financial inducements to exert a “power akin to undue influence.” [Citation omitted.] Congress may use its spending power to create incentives for states to act in accordance with federal policies. But when pressure turns into compulsion, the legislation runs contrary to our system of federalism. Spending Clause programs do not pose this danger when a state has a legitimate choice whether to accept the federal conditions in exchange for federal funds. In such a situation, state officials can fairly be held politically accountable for choosing to accept or refuse the federal offer. But when the state has no choice, the federal government can achieve its objectives without accountability.

Congress may attach appropriate conditions to federal taxing and spending programs to preserve its control over the use of federal funds. In the typical case we look to the states to defend their prerogatives by adopting “the simple expedient of not yielding” to federal blandishments when they do not want to embrace the federal policies as their own. [Citation omitted.] The states, however, argue that the Medicaid expansion is far from the typical case. They object that [instead] of simply refusing to grant the new funds to states that will not accept the new conditions, Congress has also threatened to withhold those states’ existing Medicaid funds. The states claim that this threat serves no purpose other than to force unwilling states to sign up for the dramatic expansion in health care coverage effected by the ACA. Given the nature of the threat and the programs at issue here, we must agree.

In South Dakota v. Dole, 483 U.S. 203 (1987), we considered a challenge to a federal law that threatened to withhold five percent of a State’s federal highway funds if the State did not raise its drinking age to 21. The Court found that the condition was “directly related to one of the main purposes for which highway funds are expended—safe interstate travel.” 483 U.S. at 208. At the same time, the condition was not a restriction on how the highway funds—set aside for specific highway improvement and maintenance efforts—were to be used. We accordingly asked whether “the financial inducement offered by Congress” was “so coercive as to pass the point at which pressure turns into compulsion.” Id. at 211. By “financial inducement” the Court meant the threat of losing 5 percent of highway funds; no new money was offered to the states to raise their drinking ages. We found that the inducement was not impermissibly coercive, because Congress was offering only “relatively mild encouragement to the States.” Id. We observed that “all South Dakota would lose if she adheres to her chosen course as to a suitable minimum drinking age is 5 percent” of her highway funds. Id. In fact, the federal funds at stake constituted less than half of one percent of South Dakota’s budget at the time. In consequence, “we conclude[d] that [the] encouragement to state action [was] a valid use of the spending power.” Id. at 212. Whether to accept the drinking age change “remain[ed] the prerogative of the states not merely in theory but in fact.” Id. at 211–212.

In this case, the financial “inducement” Congress has chosen is much more than “relatively mild encouragement”—it is a gun to the head. A state that opts out of the ACA’s expansion in health care coverage . . . stands to lose not merely “a relatively small percentage” of its existing Medicaid funding, but all of it. Medicaid spending accounts for over 20 percent of the average state’s total budget, with federal funds covering 50 to 83 percent of those costs. It is easy to see how the Dole Court could conclude that the threatened loss of less than half of one percent of South Dakota’s budget left that state a “prerogative” to reject Congress’s desired policy, “not merely in theory but in fact.” The threatened loss of over 10 percent of a state’s overall budget, in contrast, is economic dragooning that leaves the states with no real option but to acquiesce in the Medicaid expansion.

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states [agreeing to accept] such funds comply with the conditions on their use. What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding. In light of the Court’s holding, the [federal government] cannot . . . withdraw existing Medicaid funds [from states] for failure to comply with the requirements set out in the [ACA’s Medicaid] expansion.

The Court today limits the financial pressure the [federal government] may apply to induce states to accept the terms of the Medicaid expansion. As a practical matter, that means states may now choose to reject the expansion. Some states may indeed decline to participate. Other states, however, may voluntarily sign up, finding the idea of expanding Medicaid coverage attractive, particularly given the level of federal funding the ACA offers at the outset.

Judgment of Eleventh Circuit affirmed insofar as it held that individual mandate exceeded commerce power, reversed insofar as it held that individual mandate was not authorized by taxing power, and reversed insofar as it held that Medicaid expansion was justified under spending power.

Independent Checks on the Federal Government and the States

Even if a regulation is within Congress’s enumerated powers or a state’s police power, it still is unconstitutional if it collides with one of the Constitution’s independent checks. This section discusses three checks that limit federal and state regulation of the economy: freedom of speech, due process, and equal protection. Before discussing these guarantees, however, we must consider three foundational matters.

Incorporation

Describe the incorporation doctrine’s role in making most guarantees of the Bill of Rights operate to protect persons not only against certain federal government actions, but also against certain state and local government actions.

The Fifth Amendment prevents the federal government from depriving “any person . . . of life, liberty, or property, without due process of law.” The Fourteenth Amendment creates the same prohibition with regard to the states. The literal language of the First Amendment, however, restricts only federal government action. Moreover, the Fourteenth Amendment says that no state shall “deny to any person . . . the equal protection of the laws.”

Thus, although the due process guarantees clearly apply to both the federal government and the states, the First Amendment seems to apply only to the federal government and the Equal Protection Clause only to the states. The First Amendment’s free speech guarantee, however, has been included within the “liberty” protected by Fourteenth Amendment due process as a result of Supreme Court decisions. The free speech guarantee, therefore, restricts state governments as well as the federal government. This is an example of the process of incorporation, by which almost all Bill of Rights provisions now apply to the states. The criminal procedure–related provisions in the Fourth, Fifth, and Sixth Amendments (examined in  Chapter 5  of this text) are further examples of Bill of Rights protections that the federal government must honor but that state and local governments must respect as well, because of the incorporation doctrine. The Fourteenth Amendment’s equal protection guarantee, on the other hand, has been made applicable to federal government action through incorporation of it within the Fifth Amendment’s Due Process Clause.

Government Action People often talk as if the Constitution protects them against anyone who might threaten their rights. However, most of the Constitution’s

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individual rights provisions block only the actions of government bodies, federal, state, and local. 1  Private behavior that denies individual rights, while perhaps forbidden by statute, is very seldom a constitutional matter. This  government action or state action  requirement forces courts to distinguish between governmental behavior and private behavior. Judicial approaches to this problem have varied over time.

Before World War II, only formal arms of government such as legislatures, administrative agencies, municipalities, courts, prosecutors, and state universities were deemed state actors. After the war, however, the scope of government action increased considerably, with various sorts of traditionally private behavior being subjected to individual rights limitations. The Supreme Court, in Marsh v. Alabama(1946), treated a privately owned company town’s restriction of free expression as government action under the public function theory because the town was nearly identical to a regular municipality in most respects. In Shelley v. Kraemer (1948), the Court held that when state courts enforced certain white homeowners’ private agreements not to sell their homes to blacks, there was state action that violated the Equal Protection Clause. Later, in Burton v. Wilmington Parking Authority (1961), the Court concluded that racial discrimination by a privately owned restaurant located in a state-owned and state-operated parking garage was unconstitutional state action, in part because the garage and the restaurant were intertwined in a mutually beneficial “symbiotic” relationship. Among the other factors leading courts to find state action during the 1960s and 1970s were extensive government regulation of private activity and government financial aid to a private actor.

The Court, however, severely restricted the reach of state action during the 1970s and 1980s. Since then, private behavior generally has not been held to constitute state action unless a regular unit of government is directly responsible for the challenged private behavior because it has coerced or encouraged such behavior. The public function doctrine, moreover, has been limited to situations in which a private entity exercises powers that have traditionally been exclusively reserved to the state; private police protection is a possible example. In addition, government regulation and government funding have become somewhat less important factors in state action determinations.

Means-Ends Tests

Explain the differences among the means-ends tests used by courts when the constitutionality of government action is being determined (strict scrutiny, intermediate scrutiny, and rational basis).

Throughout this chapter, you will see tests of constitutionality that may seem strange at first glance. One example is the test for determining whether laws that discriminate on the basis of sex violate equal protection. This test says that to be constitutional, such laws must be substantially related to the achievement of an important government purpose. The Equal Protection Clause does not contain such language. It simply says that “No State shall . . . deny to any person . . . the equal protection of the laws.” What is going on here?

The sex discrimination test just stated is a means-ends test developed by the Supreme Court. Such tests are judicially created because no constitutional right is absolute and because judges, therefore, must weigh individual rights against the social purposes served by laws that restrict those rights. In other words, means-ends tests determine how courts strike the balance between individual rights and the social needs that may justify their suppression. The “ends” component of a means-ends test specifies how significant a social purpose must be in order to justify the restriction of a right. The “means” component states how effectively the challenged law must promote that purpose in order to be constitutional. In the sex discrimination test, for example, the challenged law must serve an “important” government purpose (the significance of the end) and must be “substantially” related to the achievement of that purpose (the effectiveness of the means).

Some constitutional rights are deemed more important than others. Accordingly, courts use tougher tests of constitutionality in certain cases and more lenient tests in other situations. Sometimes these tests are lengthy and complicated. Throughout the chapter, therefore, we will simplify by referring to three general kinds of means-ends tests:

1. The rational basis test. This is a very relaxed test of constitutionality that challenged laws usually pass with ease. A typical formulation of the rational basis test might say that government action need only have a reasonable relation to the achievement of a legitimate government purpose to be constitutional.

2. Intermediate scrutiny. This comes in many forms; the sex discrimination test discussed above is an example.

3. Full strict scrutiny. Here, the court might say that the challenged law must be necessary to the fulfillment of a compelling government purpose. (Sometimes a court might choose different phrasing, such as by saying that the challenged law must be narrowly tailored to fulfillment of the government’s compelling purpose. Despite the different phrasing, the test is substantively the same.) Government action that is subjected to this rigorous test of constitutionality is usually struck down.

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Business and the First Amendment

Describe the differences between noncommercial speech and commercial speech and the respective levels of the First Amendment protection they receive.

The First Amendment provides that “Congress shall make no law . . . abridging the freedom of speech.” Despite its absolute language (“no law”), the First Amendment does not prohibit every law that restricts speech. Although the First Amendment’s free speech guarantee is not absolute, government action restricting the content of speech usually receives close scrutiny from the courts. One justification for this high level of protection is the “marketplace” rationale, under which the free competition of ideas is seen as the surest means of attaining truth. The marketplace of ideas operates most effectively, according to this rationale, when restrictions on speech are kept to a minimum and all viewpoints can be considered.

During recent decades, the First Amendment has been applied to a wide variety of government restrictions on the expression of individuals and organizations, including corporations. This chapter does not attempt a comprehensive discussion of the many applications of the freedom of speech guarantee. Instead, it explores basic First Amendment concepts before turning to an examination of the free speech rights of corporations. (The First Amendment also contains the Establishment Clause, which bars the government from establishing a religion, and the Free Exercise Clause, which restricts the government’s ability to interfere with persons’ freedom to exercise their religious beliefs. These clauses and the interesting court decisions they have spawned are beyond the scope of this text, however.)

Restrictions on Content of Speech For constitutional purposes, there is a fundamental distinction between conduct and speech (or, to use a frequently employed alternative term, expression). Because conduct usually does not receive constitutional protection, the government typically has considerable latitude to regulate it. Speech, on the other hand, enjoys First Amendment protection. The line between unprotected conduct and potentially protected speech may seem conceptually clear, but it is not always so in actual practice. Consider the cases involving so-called expressive conduct—conduct so inherently expressive that it is treated for First Amendment purposes the same as speech uttered verbally or communicated in writing. As the Supreme Court has held, flag-burning is an example of expressive conduct. Most conduct is not considered to be inherently expressive, however, and thus does not receive First Amendment protection.

In a recent Supreme Court decision, Expressions Hair Design v. Schneiderman, 137 S. Ct. 1144 (U.S. Sup. Ct. 2017), the conduct-versus-speech issue came to the forefront. A New York statute barred merchants from imposing, on customers who paid by credit card, a surcharge in addition to the price charged to cash-paying customers. Expressions Hair Design (EHD) wished to post notices that announced a price for cash-paying customers and that an added fee would be tacked on for credit-card-paying customers. Because it feared that posting such notices could leave it vulnerable to legal proceedings for alleged violations of the statute, EHD challenged the statute on First Amendment grounds. The State of New York argued that the statute merely regulated price and was therefore a conduct regulation undeserving of First Amendment. The Supreme Court disagreed, classifying the statute as a speech restriction—and hence potentially a violation of the First Amendment—because it had the effect of prohibiting the communication of the price information that EHD wished to convey.

If speech stands to be affected by a law or other government action speech, the next key question is whether the government action restricts the content of speech, as opposed to operating in a content-neutral way by regulating such matters as time, place, or manner of speech. Whereas content-neutral restrictions are evaluated under a looser test for First Amendment purposes, content restrictions strike at the heart of the freedom of speech guarantee and are reviewed with strict scrutiny.

An example comes from Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015), which pertained to an Arizona town’s sign code that prohibited the display of outdoor signs without a permit but set forth various exemptions from the prohibition. One exemption was for “Ideological Signs,” another was for “Political Signs,” and another was for “Temporary Directional Signs.” Signs in the first two categories could be much larger than those in the Temporary Directional Signs category, and either had no placement or time-of-display restrictions (Ideological Signs) or could be displayed during a time period of significant length (Political Signs, which could be displayed during an election season). Temporary Directional Signs, however, had to be much smaller. Moreover, they could only be displayed not more than 12 hours before a qualifying event and not more than one hour afterward. A church that was cited for violating the Temporary Directional Signs time restrictions challenged the town code provisions as a violation of the First Amendment. Rejecting the town’s argument that the code’s sign provisions were content-neutral because they did not single out particular viewpoints for adverse treatment, the Supreme Court emphasized that the provisions still were content restrictions because their application depended completely on the communicative content of the signs. The Court concluded that the code provisions could not withstand strict scrutiny because even if it were assumed that the town possessed compelling interests in aesthetics and public safety, there were content-neutral ways of furthering those objectives (such as by consistently regulating such matters as sign size, materials, lighting, and portability). Therefore, the sign provisions violated the First Amendment.

The Court also noted in Reed that viewpoint-discrimination, though not present in the case and not necessary for a content restriction to be identified, is a particularly egregious type of content restriction. Matal v. Tam, which appears later in the chapter, provides an example of viewpoint discrimination and the role it plays in First Amendment analysis.

Political and Other Noncommercial Speech Political speech—expression that deals in some fashion with government, government issues or policies, public officials, or political candidates—is often described as being at the “core” of the First Amendment. Various Supreme Court decisions have held, however, that the freedom of speech guarantee applies not only to political speech, but also to noncommercial expression that does not have a political content or flavor. According to these decisions, the First Amendment protects speech of a literary or artistic nature; speech dealing with scientific, economic, educational, and ethical issues; and expression on many other matters of public interest or concern. Government attempts to restrict the content of political or other noncommercial speech normally receive full strict scrutiny when challenged in court. Unless the government is able to meet the exceedingly difficult burden of proving that the speech restriction is necessary to the fulfillment of a compelling government purpose, a First Amendment violation will be found. Because government restrictions on political or other noncommercial speech trigger the full strict scrutiny test, such speech is referred to as carrying “full” First Amendment protection.

Do corporations, however, have the same First Amendment rights that individual human beings possess? The Supreme Court has consistently provided a “yes” answer to this question. Therefore, if a corporation engages in political or other noncommercial expression, it is entitled to full First Amendment protection, just as an individual would be if he or she engaged in such speech. In the much-publicized Citizens United case, which follows shortly, the Supreme Court ruled on a First Amendment–based challenge to a federal statute that restricted uses of corporate funds for “electioneering communications” close to the time of an election and for advertisements amounting to express advocacy for or against a candidate who was seeking office. Treating the funding restrictions as speech restrictions, a five-justice majority of the Court held that they violated the First Amendment because they could not withstand strict scrutiny. For further discussion of campaign finance restrictions and the First Amendment in light of Citizens United, see  Figure 2  (which appears after Citizens United).

Although corporate speakers have First Amendment rights, not all speech of a corporation is fully protected. Some corporate speech is classified as  commercial speech , a category of expression examined later in the chapter. As will be seen, commercial speech receives First Amendment protection but not the full variety extended to political or noncommercial speech. The mere fact, however, that a profit motive underlies speech does not make the speech commercial in nature. Books, movies, television programs, musical works, works of visual art, and newspaper, magazine, and journal articles are normally classified as noncommercial speech—and are thus fully protected—despite the typical existence of an underlying profit motive. Their informational, educational, artistic, or entertainment components are thought to outweigh, for First Amendment purposes, the profit motive.

Citizens United v. Federal Election Commission 558 U.S. 310 (U.S. Sup. Ct. 2010)

Citizens United, a nonprofit corporation with a $12 million annual budget, receives most of its funds in the form of donations by individuals. A small portion comes from for-profit corporations. In January 2008, Citizens United released a film titled Hillary: The Movie (hereinafter Hillary). It is a 90-minute documentary about then-senator Hillary Clinton, a candidate in the Democratic Party’s 2008 presidential primary elections. Hillary depicts interviews with political commentators and other persons, most of them quite critical of Senator Clinton.

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Hillary was released in theaters and on DVD, but Citizens United wanted to increase distribution by making it available through video-on-demand. Although video-on-demand services often require viewers to pay a small fee to view a selected program, Citizens United planned to pay for the service and to make Hillary available to viewers free of charge. To promote the film, Citizens United produced two 10-second advertisements and one 30-second ad for airing on broadcast and cable television. Each ad included a pejorative statement about Senator Clinton, followed by the name of the movie and the address of a website for the movie.

Before the Bipartisan Campaign Reform Act of 2002 (BCRA), federal law prohibited corporations and unions from using general treasury funds for direct contributions to candidates or as independent expenditures expressly advocating, through any form of media, the election or defeat of a candidate in certain qualified federal elections. 2 U.S.C. § 441b. The BCRA amended § 441b to include any “electioneering communication” as well. The statute defined “electioneering communication” as “any broadcast, cable, or satellite communication” that “refers to a clearly identified candidate for Federal office” and is made within 30 days of a primary election or 60 days of a general election.

When combined, the federal law that preexisted the BCRA and the amendments added by the BCRA barred corporations and unions from using their general treasury funds for express advocacy or electioneering communications. However, they were permitted to establish a “separate segregated fund” (known as a political action committee, or PAC) for these purposes. The funds to be received by the PAC were limited to donations from the corporation’s stockholders and employees or from the union’s members.

The BCRA also set forth disclaimer and disclosure requirements. A televised electioneering communication funded by anyone other than a candidate must include a clearly spoken and clearly readable statement that “____ is responsible for the content of this advertising,” as well as a statement that the communication “is not authorized by any candidate or candidate’s committee.” The electioneering communication must also display the name and address (or website address) of the person or group that funded the advertisement. § 441d(a)(3). In addition, the BCRA requires any person or entity spending more than $10,000 on electioneering communications within a calendar year to file a disclosure statement with the Federal Election Commission (FEC).

Citizens United wanted to make Hillary available through video-on-demand within 30 days of the 2008 primary elections. It feared, however, that both the film and the ads promoting it would be covered by § 441b’s ban on corporate-funded independent expenditures and could thus subject the corporation to civil and criminal penalties. Citizens United therefore sought declaratory and injunctive relief against the FEC, arguing that § 441b was unconstitutional on its face and as applied to Hillary and that the BCRA’s disclaimer and disclosure requirements were unconstitutional as applied to Hillary and to the three ads for the movie. A federal district court granted the FEC’s motion for summary judgment. The court held that § 441b was constitutional under previous Supreme Court precedents, as were the statute’s disclaimer and disclosure requirements. Citizens United sought review by the Supreme Court (rather than a circuit court of appeals) under a review provision in the challenged law.

Kennedy, Justice

Federal law prohibits corporations and unions from using their general treasury funds to make independent expenditures for speech defined as an “electioneering communication” or for speech expressly advocating the election or defeat of a candidate. 2 U.S.C. § 441b. Limits on electioneering communications were upheld in McConnell v. Federal Election Comm’n, 540 U.S. 93 (2003). The holding of McConnell rested to a large extent on an earlier case, Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990). In this case we are asked to reconsider Austin and, in effect, McConnell.

The law before us is an outright ban [on speech], backed by criminal sanctions. Section 441b makes it a felony for all corporations—including nonprofit advocacy corporations—either to expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30 days of a primary election and 60 days of a general election. These prohibitions are classic examples of censorship.

Section 441b is a ban on corporate speech notwithstanding the fact that a PAC created by a corporation can still speak. A PAC is a separate association from the corporation. So the PAC exemption from § 441b’s expenditure ban does not allow corporations to speak. Even if a PAC could somehow allow a corporation to speak—and it does not—the option to form PACs does not alleviate the First Amendment problems with § 441b. PACs are burdensome alternatives; they are expensive to administer and subject to extensive regulations. [Also,] PACs must file detailed monthly reports with the FEC. PACs have to comply with these regulations just to speak. This might explain why fewer than 2,000 of the millions of corporations in this country have PACs.

[P]olitical speech must prevail against laws that would suppress it, whether by design or inadvertence. Laws that burden political speech are subject to strict scrutiny, which requires the Government to prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest. Premised on mistrust of governmental power, the First Amendment stands

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against attempts to disfavor certain subjects or viewpoints. Prohibited, too, are restrictions distinguishing among different speakers, allowing speech by some but not others. The Court has recognized [in various cases] that First Amendment protection extends to corporations. [E.g.,] First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978). This protection has been extended by explicit holdings to the context of political speech.

At least since the latter part of the 19th century, the laws of some states and of the United States imposed a ban on corporate direct contributions to candidates. Yet not until 1947 did Congress first prohibit independent expenditures by corporations and labor unions. For almost three decades thereafter, the Court did not reach the question whether restrictions on corporate and union expenditures are constitutional.

In Buckley v. Valeo, 424 U.S. 1 (1976), the Court addressed various challenges to the Federal Election Campaign Act of 1971 (FECA), as amended in 1974. [FECA limited direct contributions to candidates, established] an independent expenditure ban . . . that applied to individuals as well as corporations and labor unions, [and included a separate ban on corporate and union independent expenditures.] [Buckley considered only the direct contributions provision and the broader independent expenditure ban that applied to individuals as well as corporations and unions.]

Before addressing the constitutionality of [the broader] independent expenditure ban, Buckley first upheld . . . FECA’s limits on direct contributions to candidates. The Buckley Court recognized a “sufficiently important” governmental interest in “the prevention of corruption and the appearance of corruption.” This followed from the Court’s concern that large contributions could be given “to secure a political quid pro quo.” The Buckley Court explained that the potential for quid pro quo corruption distinguished direct contributions to candidates from independent expenditures. The Court emphasized that “the independent expenditure ceiling . . . fails to serve any substantial governmental interest in stemming the reality or appearance of corruption in the electoral process,” because “[t]he absence of prearrangement and coordination . . . alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.” Buckley invalidated [FECA’s broader] restriction on independent expenditures.

Buckley did not consider [FECA’s] separate ban [that specifically applied to] corporate and union independent expenditures. Had [that specific ban] been challenged in the wake of Buckley, however, it could not have been squared with the reasoning and analysis of that precedent. [Nevertheless], Congress recodified [the] corporate and union expenditure ban at 2 U.S.C. § 441b four months after Buckley was decided. Section 441b is the independent expenditure restriction challenged here.

Less than two years after Buckley, Bellotti reaffirmed the First Amendment principle that the government cannot restrict political speech based on the speaker’s corporate identity. Bellotticould not have been clearer when it struck down a state-law prohibition on corporate independent expenditures related to referenda issues. Bellotti did not address the constitutionality of the state’s ban on corporate independent expenditures to support candidates. In our view, however, that restriction would have been unconstitutional under Bellotti’s central principle: that the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.

Thus the law stood until Austin, [which] “uph[eld] a direct restriction on the independent expenditure of funds for political speech for the first time in [this Court’s] history.” (Kennedy, J., dissenting in Austin.) [In Austin], the Michigan Chamber of Commerce sought to use general treasury funds to run a newspaper ad supporting a specific candidate. Michigan law, however, prohibited corporate independent expenditures that supported or opposed any candidate for state office. The Austin Court sustained the speech prohibition. To bypass Buckley and Bellotti, the Court identified a new governmental interest in limiting political speech: an anti-distortion interest. Austin found a compelling governmental interest in preventing “the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas.”

The Court is thus confronted with conflicting lines of precedent: a pre-Austin line that forbids restrictions on political speech based on the speaker’s corporate identity and a post-Austin line that permits them. No case before Austin had held that Congress could prohibit independent expenditures for political speech based on the speaker’s corporate identity. In its defense of the corporate-speech restrictions in § 441b, the government notes the anti-distortion rationale on which Austin and its progeny rest in part, yet . . . the government does little to defend it. And with good reason, for the rationale cannot support § 441b.

If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech. If the anti-distortion rationale were to be accepted, however, it would permit government to ban political speech simply because the speaker is an association that has taken on the corporate form. If Austin were correct, the government could prohibit a corporation from expressing political views in media beyond those presented here, such as by printing books. The government responds “that the FEC has never applied this statute to a book,” and if it did, “there would be quite [a] good as-applied [constitutional] challenge.” This troubling assertion of brooding governmental power cannot be reconciled with the confidence and stability in civic discourse that the First Amendment must secure.

[As noted in Bellotti,] [p]olitical speech is “indispensable to decisionmaking in a democracy, and this is no less true because the speech comes from a corporation rather than an individual.” This protection for speech is inconsistent with Austin’s anti-distortion rationale. Austin sought to defend the anti-distortion rationale as a means to prevent corporations from obtaining “‘an unfair advantage in the political marketplace’” by using “‘resources amassed in the economic marketplace.’” But Buckleyrejected the premise that the government has an interest “in equalizing the relative ability of individuals and groups to influence the outcome of elections.” Buckley was specific in stating that “the skyrocketing cost of political campaigns” could not sustain the governmental prohibition.

The censorship we now confront is vast in its reach. The government has “muffle[d] the voices that best represent the most significant segments of the economy” (opinion of Scalia, J., in McConnell). The purpose and effect of this law is to prevent corporations, including small and nonprofit corporations, from presenting both facts and opinions to the public. This makes Austin’s anti-distortion rationale all the more an aberration. When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought. This is unlawful. The First Amendment confirms the freedom to think for ourselves.

What we have said also shows the invalidity of [another argument] made by the government. For the most part relinquishing the anti-distortion rationale, the government falls back on the argument that corporate political speech can be banned in order to prevent corruption or its appearance. The Buckley Court . . . sustained limits on direct contributions in order to ensure against the reality or appearance of corruption. That case did not extend this rationale to independent expenditures, and the Court does not do so here.

[The Court stated in Buckley that] “[t]he absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.” Limits on independent expenditures, such as § 441b, have a chilling effect extending well beyond the government’s interest in preventing quid pro quo corruption. The anti-corruption interest is not sufficient to displace the speech here in question.

For the reasons above, it must be concluded that Austin was not well reasoned. Austin is [also] undermined by experience since its announcement. Political speech is so ingrained in our culture that speakers find ways to circumvent campaign finance laws. Our nation’s speech dynamic is changing, and informative voices should not have to circumvent onerous restrictions to exercise their First Amendment rights.

Rapid changes in technology—and the creative dynamic inherent in the concept of free expression—counsel against upholding a law that restricts political speech in certain media or by certain speakers. Today, 30-second television ads may be the most effective way to convey a political message. Soon, however, it may be that Internet sources, such as blogs and social networking websites, will provide citizens with significant information about political candidates and issues. Yet, § 441b would seem to ban a blog post expressly advocating the election or defeat of a candidate if that blog were created with corporate funds. The First Amendment does not permit Congress to make these categorical distinctions based on the corporate identity of the speaker and the content of the political speech.

Due consideration leads to this conclusion: Austin should be and now is overruled. We return to the principle established in Buckley and Bellotti that the government may not suppress political speech on the basis of the speaker’s corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.

Austin is overruled, so it provides no basis for allowing the government to limit corporate independent expenditures. As the government appears to concede [in its brief], overruling Austin“effectively invalidate[s] not only [the BCRA’s amendments to § 441(b)] but also § 441b’s prohibition on the use of corporate treasury funds for express advocacy.” Section 441b’s restrictions on corporate independent expenditures are therefore invalid and cannot be applied to Hillary. Given our conclusion, we are further required to overrule the part of McConnell that upheld [the BCRA’s] extension of § 441b’s restrictions on corporate independent expenditures.

Citizens United next challenges the BCRA’s disclaimer and disclosure provisions as applied to Hillary and the three advertisements for the movie. Disclaimer and disclosure requirements may burden the ability to speak, but they “impose no ceiling on campaign-related activities” (quoting Buckley), and “do not prevent anyone from speaking” (quoting McConnell). [W]e uphold the application of [the BCRA’s disclaimer and disclosure requirements] to the ads [for Hillary]. We [also] find no constitutional impediment to the application of [the] disclaimer and disclosure requirements to [Hillary], a movie [to be] broadcast via video-on-demand.

District court’s judgment reversed as to constitutionality of restrictions on corporate independent expenditures but affirmed as to constitutionality of disclaimer and disclosure requirements.

Stevens, Justice (joined by Ginsburg, Breyer, and Sotomayor, Justices), concurring in part and dissenting in part

Although I concur in the Court’s decision to sustain the BCRA’s disclaimer and disclosure provisions, I emphatically dissent from its principal holding.

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Citizens United is a wealthy nonprofit corporation that runs a PAC with millions of dollars in assets. Under the BCRA, it could have used those assets to televise and promote Hillarywherever and whenever it wanted to. It also could have spent unrestricted sums to broadcast Hillary at any time other than the 30 days before the last primary election. Neither Citizens United’s nor any other corporation’s speech has been “banned.” All that the parties dispute is whether Citizens United had a right to use the funds in its general treasury to pay for broadcasts during the 30-day period. The notion that the First Amendment dictates an affirmative answer to that question is, in my judgment, profoundly misguided.

The Court today rejects a century of history when it treats the distinction between corporate and individual campaign spending as an invidious novelty born of Austin. Relying largely on individual dissenting opinions, the majority blazes through our precedents, overruling or disavowing a [large] body of case law. The only thing preventing the majority from affirming the district court, or adopting a narrower ground that would retain Austin, is its disdain for Austin. The laws upheld in Austin and McConnell leave open many additional avenues for corporations’ political speech.

Roaming far afield from the case at hand, the majority worries that the government will use [the statute at issue] to ban books, pamphlets, and blogs. Yet by its plain terms, [the statute] does not apply to printed material. And . . . we highly doubt that [§ 441b] could be interpreted to apply to a website or book that happens to be transmitted at some stage over airwaves or cable lines, or that the FEC would ever try to do so.

So let us be clear: Neither Austin nor McConnell held or implied that corporations may be silenced; the FEC is not a “censor”; and in the years since these cases were decided, corporations have continued to play a major role in the national dialogue. Laws such as [§ 441b] target a class of communications that is especially likely to corrupt the political process. Such laws burden political speech, and that is always a serious matter, demanding careful scrutiny. But the majority’s incessant talk of a “ban” aims at a straw man.

In [our] democratic society, the longstanding consensus on the need to limit corporate campaign spending [reflects] the common sense of the American people, who have . . . fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.

Figure 2 A Note on Post–Citizens United Developments and the McCutcheon Decision

After Citizens United, not-for-profit and for-profit corporations were free to spend unlimited sums from their general treasury funds for express advocacy purposes or for other electioneering communications regarding candidates for federal election, as long as the spending took place independently from the campaigns of favored candidates. Corporations could fund such advertisements directly, without being bound by the invalidated requirement of using a PAC to which only employees and shareholders could contribute. Further, they could engage in such independent expenditures by providing unlimited funds to so-called Super PACs—organizations that were not formally affiliated with candidates for office but accepted money from any individual or organization for the purpose of producing advertisements favoring or disfavoring candidates.

In the run-up to the 2012 elections, some corporations donated significant amounts to Super PACs and other not-for-profit organizations in order to help fund such advertisements. So did many individual persons. This tendency became especially pronounced after a federal court of appeals reasoned that given the conclusions drawn in Citizens United and the Supreme Court’s long-standing position that the First Amendment rights of individuals and corporations are coextensive, individuals should be free to engage in unlimited spending for express advocacy purposes. In the 2012 elections, certain very wealthy individuals proved to be even bigger spenders in this regard than corporate entities were. The total dollars spent in connection with the 2012 elections easily surpassed the spending levels in previous elections. Similar patterns could be observed in the 2014 and 2016 elections.

The Independent Expenditures vs. Direct Contributions Distinction

Citizens United made plain that for purposes of the First Amendment’s application to matters of campaign finance, there is an important distinction between direct contributions to candidates, campaigns, and political parties and independent expenditures supporting the expression of views that favor or disfavor candidates but are not coordinated with the candidates, their campaigns, or their political parties. Citizens United dealt only with independent expenditures. The government asserted that the independent expenditure restrictions at issue were meant to prevent those with large amounts of money from distorting the public debate, but the Court concluded that prevention of distortion was not a compelling interest and thus was of no help to the government under the applicable strict scrutiny test.

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The Court conceded in Citizens United that prevention of corruption may be a particularly important government interest in the campaign finance realm because of the need to guard against the quid pro quo that could result if an elected candidate would feel obligated to do the bidding—perhaps the illicit bidding—of big donors to his or her campaign. However, the Court categorically rejected the idea that quid pro quo corruption could occur in the independent expenditures setting and emphasized that prevention of corruption was a relevant government purpose only in a context not present in Citizens United: the direct-contribution context.

For many years, federal law has dealt with direct contributions by imposing base contribution limits and aggregate contribution limits. Base contribution limits are ceilings on amounts an individual person can give directly to a candidate for federal office, to his or her campaign, or to a political party or party committee. (Corporations and similar organizations are barred by federal law from making direct contributions.) For instance, an individual’s base contribution limit for donations directly to a specific candidate was $2,600 per election at the time of the McCutcheon decision, discussed below. (The amount is somewhat larger now.). Larger base contribution limits apply to an individual’s donations to political parties and party committees.

Aggregate contribution limits are ceilings on the total amounts an individual may give to all candidates, campaigns, parties, or party committees the individual chooses to support in the context of an election or during a calendar year. For example, until the McCutcheon decision discussed below, federal law provided that for direct contributions to candidates in an election, an individual’s aggregate donation limit was $48,600. Considered alongside the base contribution limit of $2,600 per candidate, the $48,600 aggregate limit had the effect of capping the number of candidates to whom an individual could give the maximum base amount. Aggregate limits in higher amounts applied to the total of an individual’s donations to political parties or political committees.

The McCutcheon Decision

The aggregate limits set forth in federal law came under constitutional attack in McCutcheon v. Federal Election Commission, 134 S. Ct. 1434 (2014). McCutcheon wished to contribute the maximum of $2,600 per candidate to more candidates than the $48,600 aggregate limit would allow. He contended, therefore, that the aggregate limits violated the First Amendment. The Republican National Committee joined him in this challenge.

A three-judge federal district court upheld the aggregate limits, citing the government’s prevention-of-corruption purpose and the role the aggregate limits could play in guarding against circumvention of the base limits. The prevention-of-corruption purpose has long been regarded as sufficiently important to afford direct-contribution limits a good chance of surviving a First Amendment–based challenge. (Recall that the Citizens United majority characterized prevention of corruption as a key government interest of relevance in the direct contributions setting, even though the Court did not consider that interest relevant in the independent expenditures context.)

In McCutcheon, however, a five-justice majority of the Supreme Court struck down the aggregate limits. The Court regarded the aggregate limits as a serious restraint on First Amendment rights insofar as those limits prohibited donations to some of the candidates or political party committees to whom (or to which) an individual wanted to donate the maximum base amount. Moreover, the Court concluded that the aggregate limits were insufficiently connected with the prevention-of-corruption purpose and observed that the government could alleviate its concern about circumvention of the base limits through other enforcement mechanisms that would not infringe on rights of free speech.

After McCutcheon, therefore, the aggregate limits are gone. An individual donor now may, for instance, donate the maximum amount allowed by the base limits to each of whatever number of federal candidates the individual wishes to support. The base limits, however, remain in force. However, given Citizens United’s deregulation of the independent expenditures arena on constitutional grounds and McCutcheon’s striking down of the aggregate limits component of the direct contribution restrictions, it seems likely that the base contribution limits—or at least some applications of them—may face First Amendment–based challenges.

Comments by the Court in Citizens United and McCutcheon suggest that the government’s concerns about preventing quid pro quo corruption are likely to ring more true in the base contribution limits setting than in the contexts of independent expenditures and aggregate limits. If so, the general notion of base contribution limits may remain constitutionally viable. Nevertheless, the Court’s skeptical view of the government’s positions in Citizens United and McCutcheon may mean that certain base contribution limits could be vulnerable to a First Amendment–based attack if the specific lines drawn by them restrict political expression to a greater extent than seems reasonably necessary to prevent quid pro quo corruption. One also assumes that because of the emphasis in Citizens United and earlier cases on corporate speech rights being coextensive with those of individuals, federal law’s prohibition on direct contributions by corporations may face a First Amendment–based challenge even if the dollar amounts set forth in base contribution limits remain in force. Commercial Speech The exact boundaries of the commercial speech category are not certain, though the Supreme Court has usually defined commercial speech as speech that proposes a commercial transaction. As a result, most cases on the subject involve advertisements for the sale of products or services or for the promotion of a business. In 1942, the Supreme Court held that commercial speech fell outside the First Amendment’s protective umbrella. The Court reversed its position, however, during the 1970s. It reasoned that informed consumer choice would be furthered by the removal of barriers to the flow of commercial information in which consumers would find an interest. Since the mid-1970s, commercial speech has received an intermediate level of First Amendment protection if it deals with a lawful activity and is nonmisleading. Commercial speech receives no protection, however, if it misleads or seeks to promote an illegal activity. As a result, there is no First Amendment obstacle to federal or state regulation of deceptive commercial advertising. (Political or other noncommercial speech, on the other hand, generally receives—with very few exceptions—full First Amendment protection even if it misleads or deals with unlawful matters.)

Because nonmisleading commercial speech about a lawful activity receives intermediate protection, the government has greater ability to regulate such speech without violating the First Amendment than when the government seeks to regulate fully protected political or other noncommercial speech. Nearly four decades ago, the Supreme Court developed a still-controlling test that amounts to intermediate scrutiny. Under this test, a government restriction on protected commercial speech does not violate the First Amendment if the government proves each of these elements: that a substantial government interestunderlies the restriction, that the restriction directly advances the underlying interest, and that the restriction is no more extensive than necessary to further the interest (i.e., that the restriction is narrowly tailored). It usually is not difficult for the government to prove that a substantial interest supports the commercial speech restriction. Almost any asserted interest connected with the promotion of public health, safety, or welfare will suffice. The government is likely to encounter more difficulty, however, in proving that the restriction at issue directly advances the underlying interest without being more extensive than necessary—the elements that address the “fit” between the restriction and the underlying interest. If the government fails to prove any element of the test, the restriction violates the First Amendment.

Although the same test has been used in evaluating commercial speech restrictions for nearly four decades, the Supreme Court has varied the intensity with which it has applied the test. From the mid-1980s until 1995, the Court sometimes applied the test loosely and in a manner favorable to the government. The Court has applied the test—especially the “fit” elements—more strictly since 1995, however. For instance, in Coors v. Rubin (1995), the Court struck down federal restrictions that kept beer producers from listing the alcohol content of their beer on product labels. (The Coors case was the subject of the introductory problem that began this chapter.) In 44 Liquormart v. Rhode Island (1996), the Court held that Rhode Island’s prohibition on price disclosures in alcoholic beverage advertisements violated the First Amendment. A 1999 decision, Greater New Orleans Broadcasting Association v. United States, established that a federal law barring broadcast advertisements for a variety of gambling activities could not constitutionally be applied to radio and television stations located in the same state as the gambling casino whose lawful activities were being advertised. Sorrell v. IMS Health, Inc., 564 U.S. 552 (2011), involved a challenge to a Vermont law that barred pharmacies from releasing data about physicians’ prescribing practices and tendencies if the release would be to parties wishing to use the information for marketing purposes. The law, however, allowed pharmacies to disclose such information if it would be used for various other purposes. Continuing to display its inclination to afford significant protection to commercial speech, the Court held that in singling out marketing-related uses for adverse treatment while otherwise allowing the disclosure of the information, the statute violated the First Amendment.

In its commercial speech decisions during the past two-plus decades, the Court has tended to emphasize that the government restrictions at issue suffered from a “fit” problem. Sometimes the defective fit consisted of too tenuous a relationship between the restriction and the government interest underlying it. More frequently the restriction prohibited more speech than was necessary because the government failed to adopt alternative measures that would have furthered the underlying public health, safety, or welfare interest just as well, if not better.

Two key conclusions may be drawn from the Court’s commercial speech decisions since 1995: (1) the government has found it more difficult to justify restrictions on commercial speech, and (2) the gap between the intermediate protection for commercial speech and the full protection for political and other noncommercial speech has effectively become smaller than it was roughly 25 years ago. Although the Court has hinted that it might consider

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The First Amendment

Type of Speech	Level of First Amendment Protection	Consequences When Government Regulates Content of Speech
Noncommercial	Full	Government action is constitutional only if action is necessary to fulfillment of compelling government purpose. Otherwise, government action violates First Amendment.
Commercial (nonmisleading and about lawful activity)	Intermediate	Government action is constitutional if government has substantial underlying interest, action directly advances that interest, and action is no more extensive than necessary to fulfillment of that interest (i.e., action is narrowly tailored).
Commercial (misleading or about unlawful activity)	None	Government action is constitutional.

formal changes in commercial speech doctrine (so as to enhance First Amendment protection for commercial speech), it had not made formal doctrinal changes as of the time this book went to press.

Matal v. Tam, which appears later in the chapter, addresses the four-part test utilized in determining the constitutionality of commercial speech restrictions, and illustrates the rigor with which the Supreme Court has applied the third and fourth parts of the test in recent years.

The Government Speech Doctrine Previous discussion has revealed that when the government restricts the content of private parties’ speech, a First Amendment violation is likely to have occurred. But when the government itself speaks, it is free to convey its preferred viewpoints and to reject contrary views that private parties wish to express. Such is the premise of the recently developed, and still not precisely defined, government speech doctrine.

Whether government speech is present depends largely upon the extent to which the government crafted the conveyed messages or supervised, through heavy involvement, the communication of the messages. In Johanns v. Livestock Marketing Association, 544 U.S. 550 (2005), for instance, the Supreme Court upheld a federal statute that set up a program of paid advertisements designed to promote the image and sale of beef products. The Court emphasized that the U.S. Department of Agriculture designed the program, established its contours, and exercised close supervisory authority over the messages that were communicated in the advertisements. Therefore, the Court, reasoned, the government speech doctrine applied and shielded the program against a First Amendment–based challenge by an association that did not want to participate in the government-created program. More recently, in Walker v. Texas Division, Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015), the Supreme Court held that the First Amendment was not violated—and that the government speech doctrine applied—when the State of Texas rejected a group’s request for a specialty license plate consisting of an image of the Confederate battle flag. In deciding that the government speech doctrine applied, the Court stressed the government’s historic use of license plates to convey messages and the supervisory control maintained by the government in running the specialty license plate program.

In Matal v. Tam, which follows, the Supreme Court strikes down, on First Amendment grounds, a provision in federal law that allowed the government to refuse to register a trademark that is disparaging to individuals or groups. (Trademark registration is addressed in  Chapter 8 . Discussion of Tam also appears there.) In so ruling, the Court rejects the government’s attempt to invoke the government speech doctrine and reminds readers that the First Amendment protects a great deal of speech that is offensive in nature. Tam also explores an issue noted earlier in the chapter: the problematic nature, for First Amendment purposes, of laws that discriminate among speakers on the basis of the viewpoints they express.

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Matal v. Tam 137 S. Ct. 1744 (U.S. Sup. Ct. 2017)

Simon Tam is the lead singer of a musical group known as “The Slants.” Members of the band are Asian Americans. Although “Slants” has been used as a derogatory term for persons of Asian descent, Tam and the other band members believe that by taking the term as the name of their group, they will help to “reclaim” the term and drain its denigrating force.

Tam sought to have THE SLANTS registered as a trademark on the federal Principal Register. An examining attorney at the U.S. Patent and Trademark Office (PTO) denied Tam’s application, invoking a Lanham Act provision (referred to here as the disparagement clause). That provision bars the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” In the examining attorney’s judgment, THE SLANTS was disparaging with regard to persons of Asian descent.

Tam unsuccessfully appealed the examining attorney’s denial of registration to the PTO’s Trademark Trial and Appeal Board. He then appealed to the U.S. Court of Appeals for the Federal Circuit, which held the disparagement clause unconstitutional under the First Amendment. The PTO filed a petition for certiorari, which the U.S. Supreme Court granted in order to decide whether the disparagement clause violates the First Amendment.

Alito, Justice

“The principle underlying trademark protection is that distinctive marks—words, names, symbols, and the like—can help distinguish a particular artisan’s goods from those of others.” B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293 (2015). A trademark . . . helps consumers identify goods and services that they wish to purchase, as well as those they want to avoid. Trademarks . . . were protected at common law and in equity at the time of the founding of our country. Eventually, Congress stepped in to provide a degree of national uniformity [through] the Lanham Act, enacted in 1946. By that time, trademark had expanded far beyond phrases that do no more than identify a good or service. Then, as now, trademarks often consisted of catchy phrases that convey a message.

Under the Lanham Act, trademarks that are used in commerce may be placed on the [federal] Principal Register. This system of federal registration helps to ensure that trademarks are fully protected and supports the free flow of commerce. Without federal registration, a valid trademark may still be used in commerce [and] can be enforced against would-be infringers. Federal registration, however, confers important legal rights and benefits on trademark owners who register their marks. [Authors’ note: Those rights and benefits are summarized in  Chapter 8  of the text and will not be discussed here.]

The Lanham Act contains provisions that bar certain trademarks from the Principal Register. At issue in this case is one such provision, which we will call “the disparagement clause.” This provision prohibits the registration of a trademark “which may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”

When deciding whether a trademark is disparaging, an examiner at the PTO generally applies a two-part test [set forth in the Trademark Manual of Examining Procedure]. The examiner first considers “the likely meaning of the matter in question, taking into account not only dictionary definitions, but also . . . the manner in which the mark is used in the marketplace in connection with the goods or services.” If that meaning refers to “identifiable persons, institutions, beliefs or national symbols,” the examiner moves to the second step, asking “whether that meaning may be disparaging to a substantial [component] of the referenced group.” If the examiner finds that a “substantial [component], although not necessarily a majority, of the referenced group would find the proposed mark . . . to be disparaging in the context of contemporary attitudes,” a prima facie case of disparagement is made out, and the burden shifts to the applicant to prove that the trademark is not disparaging. What is more, the PTO has specified that “[t]he fact that an applicant may be a member of that group or has good intentions underlying its use of a term does not obviate the fact that a substantial composite of the referenced group would find the term objectionable.” [The examiner in this case applied the two-part test in concluding that THE SLANTS was a disparaging term.]

[W]e must decide whether the disparagement clause violates the Free Speech Clause of the First Amendment. And at the outset, we must consider [an argument] that would eliminate any First Amendment protection. Specifically, the Government contends that trademarks are government speech, not private speech.

The First Amendment prohibits Congress and other government entities and actors from “abridging the freedom of speech”; the First Amendment does not say that Congress and other government entities must abridge their own ability to speak freely. And our cases recognize that “[t]he Free Speech Clause . . . does not regulate government speech.” Pleasant Grove City v. Summum, 555 U. S. 460, 467 (2009). See Johanns v. Livestock Marketing Association, 544 U. S. 550, 553 (2005) (“[T]he Government’s own speech . . . is exempt from First Amendment scrutiny”).

As we have said, “it is not easy to imagine how government could function” if it were subject to the restrictions that the First Amendment imposes on private speech. Summum, 555 U.S. at 468. See Walker v. Texas Division, Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015). [Although] “the First Amendment forbids the government to regulate speech in ways that favor some viewpoints or ideas at the expense of others,” [citation omitted,] . . . imposing a requirement of viewpoint-neutrality on government speech would be paralyzing. When a government entity embarks on a course of action, it necessarily takes a particular viewpoint and rejects others. The Free Speech Clause does not require government to maintain viewpoint neutrality when its officers and employees speak about that venture.

Here is a simple example. During the Second World War, the Federal Government produced and distributed millions of posters to promote the war effort. There were posters urging enlistment, the purchase of war bonds, and the conservation of scarce resources. These posters expressed a viewpoint, but the First Amendment did not demand that the Government balance the message of these posters by producing and distributing posters encouraging Americans to refrain from engaging in these activities.

But while the government-speech doctrine is important— indeed, essential—it is a doctrine that is susceptible to dangerous misuse. If private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints. For this reason, we must exercise great caution before extending our government-speech precedents.

At issue here is the content of trademarks that are registered by the PTO, an arm of the Federal Government. The Federal Government does not dream up these marks, and it does not edit marks submitted for registration. Except as required by the statute involved here, an examiner may not reject a mark based on the viewpoint that it appears to express. Thus, unless that section is thought to apply, an examiner does not inquire whether any viewpoint conveyed by a mark is consistent with Government policy or whether any such viewpoint is consistent with that expressed by other marks already on the principal register. Instead, if the mark meets the Lanham Act’s viewpoint-neutral requirements, registration is mandatory. In light of all this, it is far-fetched to suggest that the content of a registered mark is government speech. If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently. It is saying many unseemly things. It is expressing contradictory views. (Compare, [for instance, these two registered marks:] “Abolish Abortion” [and]“I Stand With Planned Parenthood.”) It is unashamedly endorsing a vast array of commercial products and services. And it is providing Delphic advice to the consuming public.

For example, if trademarks represent government speech, what does the Government have in mind when it advises Americans to “make.believe” (Sony), “Think different” (Apple), “Just do it” (Nike), or “Have it your way” (Burger King)? Was the Government warning about a coming disaster when it registered the mark “EndTime Ministries”?

None of our government speech cases even remotely supports the idea that registered trademarks are government speech. In Johanns, we considered advertisements promoting the sale of beef products. A federal statute called for the creation of a program of paid advertising “?‘to advance the image and desirability of beef and beef products.’?” 544 U. S. at 561. Congress and the Secretary of Agriculture provided guidelines for the content of the ads, Department of Agriculture officials attended the meetings at which the content of specific ads was discussed, and the Secretary could edit or reject any proposed ad. Noting that “[t]he message set out in the beef promotions [was] from beginning to end the message established by the Federal Government,” we held that the ads were government speech. Id. at 560. The Government’s involvement in the creation of these beef ads bears no resemblance to anything that occurs when a trademark is registered.

[Moreover, trademarks] have not traditionally been used to convey a Government message. With the exception of the enforcement of [the statute at issue here], the viewpoint expressed by a mark has not played a role in the decision whether to place it on the Principal Register. And there is no evidence that the public associates the contents of trademarks with the Federal Government.

This brings us to the case on which the Government relies most heavily, Walker, which likely marks the outer bounds of the government-speech doctrine. Holding that the messages on Texas specialty license plates are government speech [and that the State of Texas therefore did not violate the First Amendment when it rejected a request for a specialty license consisting of a representation of the Confederate battle flag], the Walker Court cited three factors. First, license plates have long been used by the States to convey state messages. Second, license plates “are often closely identified in the public mind” with the State, since they are manufactured and owned by the State, generally designed by the State, and serve as a form of “government ID.” Third, Texas “maintain[ed] direct control over the messages conveyed on its specialty plates.” As explained above, none of these factors is present in this case.

In sum, the federal registration of trademarks is vastly different from the beef ads in Johanns [and] the specialty license plates in Walker. Holding that the registration of a trademark converts the mark into government speech would constitute a huge and dangerous extension of the government-speech doctrine. For if the registration of trademarks constituted government speech, other systems of government registration could easily be characterized in the same way.

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Perhaps the most worrisome implication of the Government’s argument concerns the system of copyright registration. If federal registration makes a trademark government speech and thus eliminates all First Amendment protection, would the registration of the copyright for a book produce a similar transformation? The Government attempts to distinguish copyright on the ground that it is “?‘the engine of free expression,’?” Brief for Petitioner (quoting Eldred v. Ashcroft, 537 U. S. 186, 219 (2003)), but as this case illustrates, trademarks often have an expressive content. Companies spend huge amounts to create and publicize trademarks that convey a message. It is true that the necessary brevity of trademarks limits what they can say. But powerful messages can sometimes be conveyed in just a few words.

Trademarks are private, not government, speech.

Having concluded that the disparagement clause cannot be sustained under our government-speech [cases, we note the existence of] a dispute between the parties on the question whether trademarks are commercial speech and are thus subject to the relaxed scrutiny outlined in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U. S. 557 (1980). The Government and amici supporting its position argue that all trademarks are commercial speech. They note that the central purposes of trademarks are commercial and that federal law regulates trademarks to promote fair and orderly interstate commerce. Tam and his amici, on the other hand, contend that many, if not all, trademarks have an expressive component. In other words, these trademarks do not simply identify the source of a product or service but go on to say something more, either about the product or service or some broader issue. The trademark in this case illustrates this point. The name “The Slants” not only identifies the band but expresses a view about social issues.

We need not resolve this debate between the parties because the disparagement clause cannot withstand even Central Hudson review. Under Central Hudson, a restriction of speech must serve “a substantial interest,” and it must be “narrowly drawn.” Id. at 564–565. This means, among other things, that “[t]he regulatory technique may extend only as far as the interest it serves.” Id. at 565. The disparagement clause fails this requirement.

It is claimed that the disparagement clause serves two interests. The first is phrased in a variety of ways in the briefs. The Government asserts [in its brief] an interest in preventing “?‘underrepresented groups’?” from being “?‘bombarded with demeaning messages in commercial advertising.’?” An amicus supporting the Government refers [in its brief] to “encouraging racial tolerance and protecting the privacy and welfare of individuals.” But no matter how the point is phrased, its unmistakable thrust is this: The Government has an interest in preventing speech expressing ideas that offend. And that idea strikes at the heart of the First Amendment. Speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express “the thought that we hate.” United States v. Schwimmer, 279 U. S. 644, 655 (1929) (Holmes, J., dissenting).

The second interest asserted is protecting the orderly flow of commerce. Commerce, we are told, is disrupted by trademarks that “involv[e] disparagement of race, gender, ethnicity, national origin, religion, sexual orientation, and similar demographic classification” [quoting the Federal Circuit’s decision in this case]. Such trademarks are analogized to discriminatory conduct, which has been recognized to have an adverse effect on commerce. A simple answer to this argument is that the disparagement clause is not narrowly drawn to drive out trademarks that support invidious discrimination. The clause reaches any trademark that disparages any person, group, or institution. It applies to trademarks [such as] the following: “Down with racists,” “Down with sexists,” “Down with homophobes.” It is not an anti-discrimination clause; it is a happy-talk clause. In this way, it goes much further than is necessary to serve the interest asserted.

There is also a deeper problem with the argument that commercial speech may be cleansed of any expression likely to cause offense. The commercial market is well stocked with merchandise that disparages prominent figures and groups, and the line between commercial and non-commercial speech is not always clear, as this case illustrates. If affixing the commercial label permits the suppression of any speech that may lead to political or social “volatility,” free speech would be endangered.

For these reasons, we hold that [regardless of whether trademarks are or are not commercial speech,] the disparagement clause violates the Free Speech Clause of the First Amendment. [The disparagement clause] offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.

Justice Kennedy, with whom Justices Ginsburg, Sotomayor, and Kagan join, concurring in part and concurring in the judgment

As the Court is correct to hold, [the disparagement clause] constitutes viewpoint discrimination—a form of speech suppression so potent that it must be subject to rigorous constitutional scrutiny. The Government’s action and the statute on which it is based cannot survive this scrutiny. The Court is correct in its judgment, and I join [most] of its opinion. This separate writing explains in greater detail why the First Amendment’s protections against viewpoint discrimination apply to the trademark here. It submits further that the viewpoint discrimination rationale

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renders unnecessary any extended treatment of other questions raised by the parties.

Those few categories of speech that the government can regulate or punish—for instance, fraud, defamation, or incitement—are well established within our constitutional tradition. Aside from these and a few other narrow exceptions, it is a fundamental principle of the First Amendment that the government may not punish or suppress speech based on disapproval of the ideas or perspectives the speech conveys.

A law found to discriminate based on viewpoint is an “egregious form of content discrimination,” which is “presumptively unconstitutional.” [Citation omitted.] At its most basic, the test for viewpoint discrimination is whether . . . the government has singled out a subset of messages for disfavor based on the views expressed. In the instant case, the disparagement clause the Government now seeks to implement and enforce identifies the relevant subject as “persons, living or dead, institutions, beliefs, or national symbols.” Within that category, an applicant may register a positive or benign mark but not a derogatory one. The law thus reflects the Government’s disapproval of a subset of messages it finds offensive. This is the essence of viewpoint discrimination.

The parties dispute whether trademarks are commercial speech. [This] issue may turn on whether certain commercial concerns for the protection of trademarks might, as a general matter, be the basis for regulation. However that issue is resolved, the viewpoint based discrimination at issue here [causes the disparagement clause to violate the First Amendment].

Justice Thomas, concurring in part and concurring in the judgment

I join [much of] the opinion of Justice Alito. I also write separately because “I continue to believe that when the government seeks to restrict truthful speech in order to suppress the ideas it conveys, strict scrutiny is appropriate, whether or not the speech in question may be characterized as ‘commercial.’?” Lorillard Tobacco Co. v. Reilly, 533 U. S. 525, 572 (2001) (Thomas, J., concurring in part and concurring in judgment). I nonetheless join . . . Justice Alito’s opinion [insofar as it] concludes that the disparagement clause is unconstitutional even under the less stringent test announced in Central Hudson Gas & Electric Corp. v. Public Service Commission.

Judgment of Federal Circuit affirmed.

CYBERLAW IN ACTION

Some types of speech are classified as wholly outside the protection of the First Amendment. For instance, expression that constitutes obscenity under a test developed by the Supreme Court carries no First Amendment protection—meaning that the government is free to regulate it on the basis of its content (including criminalizing the possession or distribution of obscene material). For more details concerning the obscenity doctrine, see the discussion in  Chapter 5 .

Child pornography is another type of speech that carries no First Amendment protection, in light of the obviously important public interest in protecting minors against physical and psychological harm. Thus, there is no First Amendment barrier to a criminal prosecution against one who possesses or purveys material that constitutes child pornography. Many of such prosecutions are based on photos or other material stored on computers or shared online.

Both obscenity and child pornography depend in part upon graphic depictions of sexual content, though less in that regard is required for child pornography than for obscenity. What about speech that contains gratuitous and highly offensive depictions of violence? May the government prohibit such depictions and impose adverse consequences on those who purvey such material? The Supreme Court has consistently said “no.”

In Brown v. Entertainment Merchants Association, 564 U.S. 786 (2011), for instance, the Court invoked the First Amendment in striking down a California law that barred the sale of violent video games to persons under the age of 18. The statute defined violent video games as ones in which “the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being” in a “patently offensive way” that appeals to minors’ “deviant or morbid interests” and lacks “serious literary, artistic, political, or scientific value.” California appeared to borrow the “serious literary, artistic, political, or scientific value” language from the Supreme Court’s long-recognized test for obscenity. However, video games to which the California law applied would not amount to obscenity because the extremely graphic sexual content required in the obscenity test would not be present. (See the discussion of the obscenity test in  Chapter 5 .) California also sought to analogize depictions of violence that minors would encounter in certain video games to sexual depictions that, according to Supreme Court precedents, may sometimes be regulated by the government on the ground of indecency in order to protect minors against exposure to sexually explicit material even if it is not obscene.

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In rejecting California’s justifications for the statute, the Court showed no inclination to add depictions of violence to the list of expressive subject matters that fall outside the First Amendment’s protective scope. The Court also expressed concern about the law’s vagueness and about the impermissible extent to which it would restrict the rights of adults to have access to protected expressive content even though the statute was meant to protect minors. Decisions such as Brown furnish a reminder that the First Amendment protects a great deal of speech that many people would find offensive, disturbing, or otherwise objectionable.

Due Process The Fifth and Fourteenth Amendments require that the federal government and the states observe  due process  when they deprive a person of life, liberty, or property. Due process has both procedural and substantive meanings.

Explain the difference between procedural due process and substantive due process.

Procedural Due Process The traditional conception of due process, called  procedural due process , establishes the procedures that government must follow when it takes life, liberty, or property. Although the requirements of procedural due process vary from situation to situation, their core idea is that one is entitled to adequate notice of the government action to be taken against him and to some sort of fair trial or hearing before that action can occur.

For purposes of procedural due process claims, liberty includes a very broad and poorly defined range of freedoms. It even includes certain interests in personal reputation. For example, the firing of a government employee may require some kind of due process hearing if it is publicized, the fired employee’s reputation is sufficiently damaged, and her future employment opportunities are restricted. The Supreme Court has said that procedural due process property is not created by the Constitution but by existing rules and understandings that stem from an independent source such as state law. These rules and understandings must give a person a legitimate claim of entitlement to a benefit, not merely some need, desire, or expectation for it. This definition includes almost all of the usual forms of property, as well as utility service, disability benefits, welfare benefits, and a driver’s license. It also includes the job rights of tenured public employees who can be discharged only for cause, but not the rights of untenured or probationary employees.

Substantive Due Process Procedural due process does not challenge rules of substantive law—the rules that set standards of behavior for organized social life. For example, imagine that State X makes adultery a crime and allows people to be convicted of adultery without a trial. Arguments that adultery should not be a crime go to the substance of the statute, whereas objections to the lack of a trial are procedural in nature.

Sometimes, the due process clauses have been used to attack the substance of government action. For our purposes, the most important example of this  substantive due process  occurred early in the 20th century, when courts struck down various kinds of social legislation as denying due process. They did so mainly by reading freedom of contract and other economic rights into the liberty and property protected by the Fifth and Fourteenth Amendments, and then interpreting “due process of law” to require that laws denying such rights be subjected to means-ends scrutiny. The best-known example is the Supreme Court’s 1905 decision in Lochner v. New York, which struck down a state law setting maximum hours of work for bakery employees because the statute limited freedom of contract and did not directly advance the legitimate state goal of promoting worker health.

Since 1937, however, this “economic” form of substantive due process has been largely abandoned by the Supreme Court and has not amounted to a significant check on government regulation of economic matters. Substantive due process attacks on such regulations now trigger only a lenient type of rational basis review and thus have had little chance of success. During the 1970s and 1980s, however, substantive due process became increasingly important as a device for protecting noneconomic rights. The most important examples are the liberty and privacy interests, which consist of several rights that the Supreme Court regards as fundamental and as entitled to significant constitutional protection. The Court has declared that these include the rights to marry, have children and direct their education and upbringing, enjoy marital privacy, use contraception, and, within certain limits, elect to have an abortion. Laws restricting these rights must be narrowly tailored to meet a compelling government purpose in order to avoid being declared unconstitutional. Obergefell v. Hodges, which appears later in the chapter, illustrates the influence of substantive due process interests.

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Equal Protection

Identify the instances when an Equal Protection Clause–based challenge to government action triggers more rigorous scrutiny than the rational basis test.

The Fourteenth Amendment’s Equal Protection Clause says that “[n]o State shall . . . deny to any person . . . the equal protection of the laws.” Because the equal protection guarantee has been incorporated within Fifth Amendment due process, it also restricts the federal government. The equal protection guarantee potentially applies to all situations in which government classifies or distinguishes people. The law inevitably makes distinctions among people, benefiting or burdening some groups but not others. Equal protection doctrine, as developed by the Supreme Court, sets the standards such distinctions must meet in order to be constitutional.

Economic Regulations The basic equal protection standard is the rational basis test described earlier. This is the standard usually applied to social and economic regulations that are challenged as denying equal protection. As the following case illustrates, this lenient test usually does not impede state and federal regulation of social and economic matters.

Fitzgerald v. Racing Association of Central Iowa 539 U.S. 103 (U.S. Sup. Ct. 2003)

Before 1989, Iowa permitted only one form of gambling: parimutuel betting at racetracks. A 1989 Iowa statute authorized other forms of gambling, including slot machines on riverboats. The 1989 law established that adjusted revenues from riverboat slot machine gambling would be taxed at graduated rates, with a top rate of 20 percent. In 1994, Iowa enacted a law that authorized racetracks to operate slot machines. That law also imposed a graduated tax upon racetrack slot machine adjusted revenues, with a top rate that started at 20 percent and would automatically rise over time to 36 percent. The 1994 enactment left in place the 20 percent tax rate on riverboat slot machine adjusted revenues.

Contending that the 1994 legislation’s 20 percent versus 36 percent tax rate difference violated the federal Constitution’s Equal Protection Clause, a group of racetracks and an association of dog owners brought suit against the State of Iowa (through its state treasurer, Michael Fitzgerald). A state district court upheld the statute, but the Iowa Supreme Court reversed. The U.S. Supreme Court granted Iowa’s petition for a writ of certiorari.

Breyer, Justice

We here consider whether a difference in state tax rates violates the Fourteenth Amendment’s mandate that “no State shall . . . deny to any person . . . the equal protection of the laws.” The law in question does not distinguish on the basis of, for example, race or gender. It does not distinguish between in-state and out-of-state businesses. Neither does it favor a State’s long-time residents at the expense of residents who have more recently arrived from other States. Rather, the law distinguishes for tax purposes among revenues obtained within the State of Iowa by two enterprises, each of which does business in the State. Where that is so, the law is subject to rational-basis review:

The Equal Protection Clause is satisfied so long as there is a plausible policy reason for the classification, the legislative facts on which the classification is apparently based rationally may have been considered to be true by the governmental decisionmaker, and the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational.

[Case citation omitted.] [We have also held that] rational-basis review “is especially deferential in the context of classifications made by complex tax laws.” [Case citation omitted.]

The Iowa Supreme Court found that the 20 percent/36 percent tax rate differential failed to meet this standard because, in its view, that difference frustrated what it saw as the law’s basic objective, namely, rescuing the racetracks from economic distress. And no rational person, it believed, could claim the contrary. The Iowa Supreme Court could not deny, however, that the Iowa law, like most laws, might predominately serve one general objective, say, helping the racetracks, while containing subsidiary provisions that seek to achieve other desirable (perhaps even contrary) ends as well, thereby producing a law that balances objectives but still serves the general objective when seen as a whole. After all, if every subsidiary provision in a law designed to help racetracks had to help those racetracks and nothing more, then (since any tax rate hurts the racetracks when compared with a lower rate) there could be no taxation of the racetracks at all.

Neither could the Iowa Supreme Court deny that the 1994 legislation, seen as a whole, can rationally be understood to

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do what that court says it seeks to do, namely, advance the racetracks’ economic interests. Its grant to the racetracks of authority to operate slot machines should help the racetracks economically to some degree—even if its simultaneous imposition of a tax on slot machine adjusted revenue means that the law provides less help than respondents might like. At least a rational legislator might so believe. And the Constitution grants legislators, not courts, broad authority (within the bounds of rationality) to decide whom they wish to help with their tax laws and how much help those laws ought to provide. “The ‘task of classifying persons for . . . benefits . . . inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line,’ and the fact the line might have been drawn differently at some points is a matter for legislative, rather than judicial, consideration.” [Case citation omitted.]

Once one realizes that not every provision in a law must share a single objective, one has no difficulty finding the necessary rational support for the 20 percent/36 percent differential here at issue. That difference, harmful to the racetracks, is helpful to the riverboats, which, as [those challenging the 1994 statute] concede, were also facing financial peril. These two characterizations are but opposite sides of the same coin. Each reflects a rational way for a legislator to view the matter. And aside from simply aiding the financial position of the riverboats, the legislators may have wanted to encourage the economic development of river communities or to promote riverboat history, say, by providing incentives for riverboats to remain in the State, rather than relocate to other States. Alternatively, they may have wanted to protect the reliance interests of riverboat operators, whose adjusted slot machine revenue had previously been taxed at the 20 percent rate. All these objectives are rational ones, which lower riverboat tax rates could further and which suffice to uphold the different tax rates.

We conclude that there is “a plausible policy reason for the classification,” that the legislature “rationally may have . . . considered . . . true” the related justifying “legislative facts,” and that the “relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational.” [Case citation omitted.] Consequently the State’s differential tax rate does not violate the Federal Equal Protection Clause.

Iowa Supreme Court decision reversed, and case remanded for further proceedings .

Fundamental Rights The rational basis test is the basic equal protection standard. Some classifications, however, receive tougher means-ends scrutiny. According to Supreme Court precedent, laws that discriminate regarding  fundamental rights  or  suspect classes  must undergo more rigorous review.

Although the list of rights regarded as fundamental for equal protection purposes is not completely clear, it clearly includes the right to marry. As made plain in Obergefell v. Hodges, which follows shortly, this right exists regardless of whether the couple to be married is of opposite genders or of the same gender. The list also includes certain criminal procedure protections as well as the rights to vote and engage in interstate travel. Laws creating unequal enjoyment of these rights receive full strict scrutiny. In 1969, for instance, the Supreme Court struck down the District of Columbia’s one-year residency requirement for receiving welfare benefits because that requirement unequally and impermissibly restricted the right of interstate travel.

An equal protection claim involving the fundamental right to vote was addressed in high-profile fashion by the Supreme Court in Bush v. Gore, 531 U.S. 98 (2000). A five-justice majority in the historic and controversial decision terminated an ongoing vote recount in Florida because, in the majority’s view, Florida law’s “intent of the voter” test was not a sufficiently clear standard for determining whether a ballot not counted in the initial machine count should be counted as valid during the manual recount. The majority was concerned that in the absence of a more specific standard, vote counters taking part in the recount might apply inconsistent standards in determining what the voter supposedly intended, and might thereby value some votes over others. The termination of the Florida recount meant that then-governor Bush won the state of Florida, giving him enough Electoral College votes to win the presidency despite the fact that candidate Gore tallied more popular votes nationally. The four dissenters in Bush v. Gore faulted the majority for focusing on the supposed equal protection violation it identified, when, in the dissenters’ view, the Court ignored a potentially bigger equal protection problem created by termination of the recount: the prospect that large numbers of ballots not counted during the machine count would never be counted, even though they may have been valid votes under Florida’s “intent of the voter” test.

In Crawford v. Marion County Election Board, 553 U.S.181 (2008), the Supreme Court again addressed the fundamental right to vote. This time, the Court was faced with determining whether an Indiana law violated the Equal Protection Clause by requiring that voters produce

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a government-issued photo ID as a precondition to being allowed to vote. Those who raised the equal protection challenge to the requirement asserted that its burdens would fall disproportionately on low-income and elderly voters, who would be less likely than other persons to have a driver’s license or other photo ID. The Court upheld the Indiana law, ruling that it did not violate the Equal Protection Clause. Six justices agreed that even though voter fraud at the polls had not been a demonstrated problem in Indiana, the photo ID requirement was a generally applicable and not excessively burdensome way of furthering the state’s purposes of preventing voter fraud and preserving voter confidence in the integrity of elections.

Since Crawford, lower courts have decided various cases that presented constitutional challenges to voter ID laws enacted in other states. Some such laws have been upheld. In other cases, however, voter ID laws have been struck down if they imposed more onerous ID requirements than the law at issue in Crawford and if the showing of a disproportionate adverse effect on certain groups of voters was especially strong.

Obergefell v. Hodges 135 S. Ct. 2584 (U.S. Sup. Ct. 2015)

Cases from Michigan, Kentucky, Ohio, and Tennessee—states whose statutes defined marriage as a union between one man and one woman—were consolidated for purposes of the U.S. Supreme Court decision that appears below in edited form. The petitioners before the Supreme Court were 14 same-sex couples and two men whose same-sex partners were deceased. The respondents were state officials responsible for enforcing the laws in question. The petitioners claimed that the respondents violated the Fourteenth Amendment to the U.S. Constitution by denying them the right to marry or by refusing to give full recognition to marriages that were lawfully performed in another state.

The petitioners filed their cases in U.S. district courts in their home states. Each district court ruled in their favor. The respondents appealed these decisions to the U.S. Court of Appeals for the Sixth Circuit, which consolidated the cases and reversed the judgments of the district courts. The Sixth Circuit held that a state has no constitutional obligation to license same-sex marriages or to recognize same-sex marriages performed out of state. This ruling conflicted with rulings by other federal courts of appeals on the same set of issues.

The petitioners sought certiorari from the U.S. Supreme Court, which granted review regarding two questions. The first was whether the Fourteenth Amendment requires a state to issue a marriage license to two persons of the same sex. The second was whether the Fourteenth Amendment requires a state to recognize a same-sex marriage licensed and performed in a state that does grant that right. (Further facts appear in the following edited version of the Supreme Court’s decision.)

Kennedy, Justice

The Constitution promises liberty to all within its reach, a liberty that includes certain specific rights that allow persons . . . to define and express their identity. The petitioners seek to find that liberty by marrying someone of the same sex and having their marriages deemed lawful on the same terms and conditions as marriages between persons of the opposite sex.

[T]he annals of human history reveal the transcendent importance of marriage. Marriage is sacred to those who live by their religions and offers unique fulfillment to those who find meaning in the secular realm. There are untold references to the beauty of marriage in religious and philosophical texts spanning time, cultures, and faiths, as well as in art and literature in all their forms. It is fair and necessary to say these references were based on the understanding that marriage is a union between two persons of the opposite sex. That history is the beginning of these cases. The respondents say it should be the end as well. To them, it would demean a timeless institution if the concept and lawful status of marriage were extended to two persons of the same sex. This view long has been held—and continues to be held—in good faith by reasonable and sincere people here and throughout the world.

The petitioners acknowledge this history but contend that these cases cannot end there. [They do not seek] to demean the revered idea and reality of marriage. To the contrary, it is the enduring importance of marriage that underlies the petitioners’ contentions. [T]he petitioners seek [the right to marry] because of their respect—and need—for its privileges and responsibilities. And their immutable nature dictates that same-sex marriage is their only real path to this profound commitment.

Recounting the circumstances of three of these cases illustrates the urgency of the petitioners’ cause from their perspective. Petitioner James Obergefell, a plaintiff in the Ohio case, met John Arthur over two decades ago. They fell in love and started a life together. In 2011, however, Arthur was diagnosed with amyotrophic lateral sclerosis, or ALS. This debilitating disease is progressive, with no known cure. Two years ago, Obergefell and Arthur decided to commit to one another, resolving to marry

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before Arthur died. To fulfill their mutual promise, they traveled from Ohio to Maryland, where same-sex marriage was legal, [and were wed there]. Three months later, Arthur died. Ohio law does not permit Obergefell to be listed as the surviving spouse on Arthur’s death certificate. By statute, they must remain strangers even in death, a state-imposed separation Obergefell deems “hurtful for the rest of time.” He brought suit to be shown as the surviving spouse on Arthur’s death certificate.

April DeBoer and Jayne Rowse are co-plaintiffs in the case from Michigan. They celebrated a commitment ceremony to honor their permanent relation in 2007. In 2009, DeBoer and Rowse fostered and then adopted a baby boy. Later that same year, they welcomed another son into their family. The new baby, born prematurely and abandoned by his biological mother, required around-the-clock care. The next year, a baby girl with special needs joined their family. Michigan, however, permits only opposite-sex married couples or single individuals to adopt, so each child can have only one woman as his or her legal parent. If an emergency were to arise, schools and hospitals may treat the three children as if they had only one parent. And, were tragedy to befall either DeBoer or Rowse, the other would have no legal rights over the children she had not been permitted to adopt. This couple seeks relief from the continuing uncertainty their unmarried status creates in their lives.

Army Sergeant Ijpe DeKoe and his partner Thomas Kostura, co-plaintiffs in the Tennessee case, fell in love. In 2011, DeKoe received orders to deploy to Afghanistan. Before leaving, he and Kostura married in New York. When DeKoe returned [from his deployment], the two settled in Tennessee, where DeKoe works for the Army Reserve. Their lawful marriage is stripped from them whenever they reside in Tennessee, returning and disappearing as they travel across state lines. DeKoe . . . endure[s] a substantial burden [as a result].

The ancient origins of marriage confirm its centrality, but [its history] is one of both continuity and change. For example, marriage was once viewed as an arrangement by the couple’s parents based on political, religious, and financial concerns; but by the time of the Nation’s founding, it was understood to be a voluntary contract between a man and a woman. [Another example involves] the centuries-old doctrine of coverture, [under which] a married man and woman were treated by the State as a single, male-dominated legal entity. As women gained legal, political, and property rights, and as society began to understand that women have their own equal dignity, the law of coverture was abandoned. These and other developments in the institution of marriage . . . worked deep transformations in its structure [and] have strengthened, not weakened, the institution of marriage. Indeed, changed understandings of marriage are characteristic of a Nation where new dimensions of freedom become apparent to new generations, often through perspectives that begin in pleas or protests and then are considered in the political sphere and the judicial process.

This dynamic can be seen in the Nation’s experiences with the rights of gays and lesbians. Until the mid-20th century, same-sex intimacy long had been condemned as immoral by the State itself in most Western nations, a belief often embodied in the criminal law. For this reason, among others, many persons did not deem homosexuals to have dignity in their own distinct identity. A truthful declaration by same-sex couples of what was in their hearts had to remain unspoken. Even when a greater awareness of the humanity and integrity of homosexual persons came in the period after World War II, the argument that gays and lesbians had a just claim to dignity was in conflict with both law and widespread social conventions. Same-sex intimacy remained a crime in many States. Gays and lesbians were prohibited from most government employment, barred from military service, excluded under immigration laws, targeted by police, and burdened in their rights to associate. For much of the 20th century, moreover, homosexuality was treated as . . . a mental disorder. Only in more recent years have psychiatrists and others recognized that sexual orientation is both a normal expression of human sexuality and immutable.

In the late 20th century, following substantial cultural and political developments, same-sex couples began to lead more open and public lives and to establish families. This development was followed by a quite extensive discussion of the issue in both governmental and private sectors and by a shift in public attitudes toward greater tolerance. As a result, questions about the rights of gays and lesbians reached the courts.

This Court first gave detailed consideration to the legal status of homosexuals in Bowers v. Hardwick, 478 U.S. 186 (1986). There it upheld the constitutionality of a Georgia law deemed to criminalize certain homosexual acts. Ten years later, in Romer v. Evans, 517 U.S. 620 (1996), the Court invalidated an amendment to Colorado’s Constitution that sought to foreclose any branch or political subdivision of the State from protecting persons against discrimination based on sexual orientation. Then, in 2003, the Court overruled Bowers, holding that laws making same-sex intimacy a crime “demea[n] the lives of homosexual persons.” Lawrence v. Texas, 539 U.S. 558, 575 (2003).

Against this background, the legal question of same-sex marriage arose. In 1993, the Hawaii Supreme Court held Hawaii’s law restricting marriage to opposite-sex couples constituted a classification on the basis of sex and was therefore subject to strict scrutiny under the Hawaii Constitution. Although this decision did not mandate that same-sex marriage be allowed, some States [chose to reaffirm] in their laws that marriage is defined as a union between opposite-sex partners. So too in 1996, Congress passed the Defense of Marriage Act (DOMA),

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defining marriage for all federal-law purposes as “only a legal union between one man and one woman as husband and wife.”

The new and widespread discussion of the subject led other States to a different conclusion. In 2003, the Supreme Judicial Court of Massachusetts held that the State’s constitution guaranteed same-sex couples the right to marry. After that ruling, some additional States granted marriage rights to same-sex couples, either through judicial or legislative processes. Two terms ago, in United States v. Windsor, 133 S. Ct. 2675 (2013), this Court invalidated DOMA to the extent it barred the federal government from treating same-sex marriages as valid even when they were lawful in the State where they were licensed. DOMA, the Court held, impermissibly disparaged those same-sex couples “who wanted to affirm their commitment to one another before their children, their family, their friends, and their community.”

Numerous cases about same-sex marriage have reached the United States Courts of Appeals in recent years. With the exception of the opinion here under review and one other, the Courts of Appeals have held that excluding same-sex couples from marriage violates the Constitution. There also have been many thoughtful district court decisions addressing same-sex marriage—and most of them, too, have concluded same-sex couples must be allowed to marry.

Under the Due Process Clause of the Fourteenth Amendment, no State shall “deprive any person of life, liberty, or property, without due process of law.” The fundamental liberties protected by this Clause include most of the rights enumerated in the Bill of Rights. In addition, these liberties extend to certain personal choices central to individual dignity and autonomy, including intimate choices that define personal identity and beliefs. See, e.g., Eisenstadt v. Baird, 405 U.S. 438, 453 (1972); Griswold v. Connecticut, 381 U.S. 479, 484-486 (1965).

The identification and protection of fundamental rights is an enduring part of the judicial duty to interpret the Constitution. [I]t requires courts to exercise reasoned judgment in identifying interests of the person so fundamental that the State must accord them its respect. History and tradition guide and discipline this inquiry but do not set its outer boundaries. That method respects our history and learns from it without allowing the past alone to rule the present. The nature of injustice is that we may not always see it in our own times. The generations that wrote and ratified the Bill of Rights and the Fourteenth Amendment did not presume to know the extent of freedom in all of its dimensions, and so they entrusted to future generations a charter protecting the right of all persons to enjoy liberty as we learn its meaning. When new insight reveals discord between the Constitution’s central protections and a received legal stricture, a claim to liberty must be addressed.

Applying these established tenets, the Court has long held that the right to marry is protected by the Constitution. In Loving v. Virginia, 388 U.S. 1, 12 (1967), which invalidated bans on interracial unions, a unanimous Court held that marriage is “one of the vital personal rights essential to the orderly pursuit of happiness by free men.” The Court reaffirmed that holding in Zablocki v. Redhail, 434 U.S. 374, 384 (1978), which held the right to marry was burdened by a law prohibiting fathers who were behind on child support from marrying. Over time and in other contexts, the Court has reiterated that the right to marry is fundamental under the Due Process Clause. [Citations omitted.]

It cannot be denied that this Court’s cases describing the right to marry presumed a relationship involving opposite-sex partners. The Court, like many institutions, has made assumptions defined by the world and time of which it is a part. This was evident in Baker v. Nelson, 409 U.S. 810, a one-line summary decision issued in 1972, holding the exclusion of same-sex couples from marriage did not present a substantial federal question.

Still, there are other, more instructive precedents. In defining the right to marry, [this Court’s] cases have identified essential attributes of that right based in history, tradition, and other constitutional liberties inherent in this intimate bond. See, e.g., Zablocki; Loving; Griswold. And in assessing whether the force and rationale of its cases apply to same-sex couples, the Court must respect the basic reasons why the right to marry has been long protected.

This analysis compels the conclusion that same-sex couples may exercise the right to marry. The four principles and traditions to be discussed demonstrate that the reasons marriage is fundamental under the Constitution apply with equal force to same-sex couples.

A first premise of the Court’s relevant precedents is that the right to personal choice regarding marriage is inherent in the concept of individual autonomy. This abiding connection between marriage and liberty is why Loving invalidated interracial marriage bans under the Due Process Clause. See 388 U.S. at 12. Like choices concerning contraception, family relationships, procreation, and childrearing, all of which are protected by the Constitution, decisions concerning marriage are among the most intimate that an individual can make. The nature of marriage is that, through its enduring bond, two persons together can find other freedoms, such as expression, intimacy, and spirituality. This is true for all persons, whatever their sexual orientation. See Windsor, 133 S. Ct. 2675. There is dignity in the bond between two men or two women who seek to marry and in their autonomy to make such profound choices.

A second principle in this Court’s jurisprudence is that the right to marry is fundamental because it supports a two-person union unlike any other in its importance to the committed individuals. This point was central to Griswold v. Connecticut, which held the Constitution protects the right of married couples to use contraception. 381 U.S. at 485.

As this Court held in Lawrence, same-sex couples have the same right as opposite-sex couples to enjoy intimate association. But while Lawrence confirmed a dimension of freedom that allows individuals to engage in intimate association without criminal liability, it does not follow that freedom stops there. Outlaw to outcast may be a step forward, but it does not achieve the full promise of liberty.

A third basis for protecting the right to marry is that it safeguards children and families and thus draws meaning from related rights of childrearing, procreation, and education. The Court has recognized these connections by describing the varied rights as a unified whole: “[T]he right to marry, establish a home and bring up children is a central part of the liberty protected by the Due Process Clause.” Zablocki, 434 U.S. at 384. Under the laws of the several States, some of marriage’s protections for children and families are material. But marriage also confers more profound benefits. By giving recognition and legal structure to their parents’ relationship, marriage allows children “to understand the integrity and closeness of their own family and its concord with other families in their community and in their daily lives.” Windsor, 133 St. Ct. 2675. Marriage also affords the permanency and stability important to children’s best interests.

As all parties agree, many same-sex couples provide loving and nurturing homes to their children, whether biological or adopted. And hundreds of thousands of children are presently being raised by such couples. Most States have allowed gays and lesbians to adopt, either as individuals or as couples, and many adopted and foster children have same-sex parents. This provides powerful confirmation from the law itself that gays and lesbians can create loving, supportive families.

Excluding same-sex couples from marriage thus conflicts with a central premise of the right to marry. Without the recognition, stability, and predictability marriage offers, their children suffer the stigma of knowing their families are somehow lesser. They also suffer the significant material costs of being raised by unmarried parents, relegated through no fault of their own to a more difficult and uncertain family life. The marriage laws at issue here thus harm and humiliate the children of same-sex couples.

That is not to say the right to marry is less meaningful for those who do not or cannot have children. An ability, desire, or promise to procreate is not and has not been a prerequisite for a valid marriage in any State.

Fourth and finally, this Court’s cases and the Nation’s traditions make clear that marriage is a keystone of our social order. [J]ust as a couple vows to support each other, so does society pledge to support the couple, offering symbolic recognition and material benefits to protect and nourish the union. [States] have throughout our history made marriage the basis for an expanding list of governmental rights, benefits, and responsibilities. These aspects of marital status include: taxation; inheritance and property rights; rules of intestate succession; spousal privilege in the law of evidence; hospital access; medical decisionmaking authority; adoption rights; the rights and benefits of survivors; birth and death certificates; professional ethics rules; campaign finance restrictions; workers’ compensation benefits; health insurance; and child custody, support, and visitation rules. Valid marriage under state law is also a significant status for over a thousand provisions of federal law. The States have contributed to the fundamental character of the marriage right by placing that institution at the center of so many facets of the legal and social order.

There is no difference between same- and opposite-sex couples with respect to this principle. Yet by virtue of their exclusion from that institution, same-sex couples are denied the constellation of benefits that the States have linked to marriage. This harm results in more than just material burdens. Same-sex couples are consigned to an instability many opposite-sex couples would deem intolerable in their own lives. As the State itself makes marriage all the more precious by the significance it attaches to it, exclusion from that status has the effect of teaching that gays and lesbians are unequal in important respects. It demeans gays and lesbians for the State to lock them out of a central institution of the Nation’s society.

The limitation of marriage to opposite-sex couples may long have seemed natural and just, but its inconsistency with the central meaning of the fundamental right to marry is now manifest. With that knowledge must come the recognition that laws excluding same-sex couples from the marriage right impose stigma and injury of the kind prohibited by our basic charter. Under the Constitution, same-sex couples seek in marriage the same legal treatment as opposite-sex couples, and it would disparage their choices and diminish their personhood to deny them this right.

The right of same-sex couples to marry that is part of the liberty promised by the Fourteenth Amendment is derived, too, from that Amendment’s guarantee of the equal protection of the laws. The Due Process Clause and the Equal Protection Clause are connected in a profound way, though they set forth independent principles. Rights implicit in liberty and rights secured by equal protection may rest on different precepts and are not always coextensive, yet in some instances each may be instructive as to the meaning and reach of the other. In any particular case one Clause may be thought to capture the essence of the right in a more accurate and comprehensive way, even as the two Clauses may converge in the identification and definition of the right. This interrelation of the two principles furthers our understanding of what freedom is and must become.

The Court’s cases touching upon the right to marry reflect this dynamic. In Loving, the Court invalidated a prohibition on

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interracial marriage under both the Equal Protection Clause and the Due Process Clause. The Court . . . stated: “There can be no doubt that restricting the freedom to marry solely because of racial classifications violates the central meaning of the Equal Protection Clause.” 388 U.S. at 12. With this link to equal protection, the Court proceeded to hold that the prohibition offended central precepts of liberty: “To deny this fundamental freedom on so unsupportable a basis as the racial classifications embodied in these statutes, classifications so directly subversive of the principle of equality at the heart of the Fourteenth Amendment, is surely to deprive all the State’s citizens of liberty without due process of law.” Id.

The synergy between the two protections is illustrated further in Zablocki. There the Court invoked the Equal Protection Clause as its basis for invalidating the challenged law, which barred fathers who were behind on child-support payments from marrying without judicial approval. The equal protection analysis depended in central part on the Court’s holding that the law burdened a right “of fundamental importance.” 434 U.S. at 383. It was the essential nature of the marriage right that made apparent the law’s incompatibility with requirements of equality. Each concept—liberty and equal protection—leads to a stronger understanding of the other.

Other cases confirm this relation between liberty and equality. In M. L. B. v. S. L. J., 519 U.S. 102, 119–24 (1996), the Court invalidated under due process and equal protection principles a statute requiring indigent mothers to pay a fee in order to appeal the termination of their parental rights. In Eisenstadt v. Baird, the Court invoked both principles to invalidate a prohibition on the distribution of contraceptives to unmarried persons but not married persons. See 405 U.S. at 446–54.

In Lawrence, the Court acknowledged the interlocking nature of these constitutional safeguards in the context of the legal treatment of gays and lesbians. Although Lawrence elaborated its holding under the Due Process Clause, it acknowledged, and sought to remedy, the continuing inequality that resulted from laws making intimacy in the lives of gays and lesbians a crime against the State. See 539 U.S. at 575. Lawrence therefore drew upon principles of liberty and equality to define and protect the rights of gays and lesbians, holding the State “cannot demean their existence or control their destiny by making their private sexual conduct a crime.” Id. at 578.

This dynamic also applies to same-sex marriage. It is now clear that the challenged laws burden the liberty of same-sex couples, and it must be further acknowledged that they abridge central precepts of equality. Here the marriage laws enforced by the respondents are in essence unequal: same-sex couples are denied all the benefits afforded to opposite-sex couples and are barred from exercising a fundamental right. Especially against a long history of disapproval of their relationships, this denial to same-sex couples of the right to marry works a grave and continuing harm.

These considerations lead to the conclusion that the right to marry is a fundamental right inherent in the liberty of the person, and under the Due Process and Equal Protection Clauses of the Fourteenth Amendment couples of the same-sex may not be deprived of that right and that liberty. The Court now holds that same-sex couples may exercise the fundamental right to marry. No longer may this liberty be denied to them. Baker v. Nelson must be and now is overruled, and the State laws challenged by Petitioners in these cases are now held invalid to the extent they exclude same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples.

There may be an initial inclination in these cases to proceed with caution—to await further legislation, litigation, and debate. The respondents warn there has been insufficient democratic discourse before deciding an issue so basic as the definition of marriage. Yet there has been far more deliberation than this argument acknowledges. There have been referenda, legislative debates, and grassroots campaigns, as well as countless studies, papers, books, and other popular and scholarly writings. There has been extensive litigation in state and federal courts. Judicial opinions addressing the issue have been informed by the contentions of parties and counsel, which, in turn, reflect the more general, societal discussion of same-sex marriage and its meaning that has occurred over the past decades. As more than 100 amici make clear in their filings, many of the central institutions in American life—state and local governments, the military, large and small businesses, labor unions, religious organizations, law enforcement, civic groups, professional organizations, and universities—have devoted substantial attention to the question. This has led to an enhanced understanding of the issue—an understanding reflected in the arguments now presented for resolution as a matter of constitutional law.

Of course, the Constitution contemplates that democracy is the appropriate process for change, so long as that process does not abridge fundamental rights. But . . . when the rights of persons are violated, the Constitution requires redress by the courts, notwithstanding the more general value of democratic decisionmaking. An individual can invoke a right to constitutional protection when he or she is harmed, even if the broader public disagrees and even if the legislature refuses to act. The idea of the Constitution “was to withdraw certain subjects from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts.” West Virginia Bd. of Ed. v. Barnette, 319 U.S. 624, 638 (1943). This is why “fundamental rights may not be submitted to a vote; they depend on the outcome of no elections.” Id.

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This is not the first time the Court has been asked to adopt a cautious approach to recognizing and protecting fundamental rights. In Bowers, a bare majority upheld a law criminalizing same-sex intimacy. See 478 U.S. at 186. That approach might have been viewed as a cautious endorsement of the democratic process, which had only just begun to consider the rights of gays and lesbians. Yet, in effect, Bowers upheld state action that denied gays and lesbians a fundamental right and caused them pain and humiliation. Although Bowers was eventually repudiated in Lawrence, men and women were harmed in the interim, and the substantial effects of these injuries no doubt lingered long after Bowers was overruled. Dignitary wounds cannot always be healed with the stroke of a pen.

A ruling against same-sex couples would have the same effect—and, like Bowers, would be unjustified under the Fourteenth Amendment. The petitioners’ stories [, as detailed earlier in this opinion,] make clear the urgency of the issue they present to the Court.

These cases also present the question whether the Constitution requires States to recognize same-sex marriages validly performed out of State. As made clear by the case of Obergefell and Arthur, and by that of DeKoe and Kostura, the recognition bans inflict substantial and continuing harm on same-sex couples. Being married in one State but having that valid marriage denied in another is one of “the most perplexing and distressing complication[s]” in the law of domestic relations. [Citation omitted.] Leaving the current state of affairs in place would maintain and promote instability and uncertainty. For some couples, even an ordinary drive into a neighboring State to visit family or friends risks causing severe hardship in the event of a spouse’s hospitalization while across state lines. In light of the fact that many States already allow same-sex marriage—and hundreds of thousands of these marriages already have occurred—the disruption caused by the recognition bans is significant and ever-growing.

The Court, in this decision, holds that same-sex couples may exercise the fundamental right to marry in all States. It follows that the Court also must hold—and it now does hold—that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character.

No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. [The petitioners’] hope is not to be . . . excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.

Sixth Circuit’s judgment reversed.

Suspect Classes Certain “suspect” bases of classification also trigger more rigorous equal protection review. As of 2017, the  suspect classes  and the level of scrutiny they attract are as follows:

1.  Race and national origin. Classifications disadvantaging racial or national minorities receive the most rigorous kind of strict scrutiny and are almost never constitutional. For instance, in a recent decision that dealt not only with the suspect class of race but also the fundamental right to vote, the Supreme Court struck down North Carolina’s formulation of certain legislative voting districts because the formulation depended upon impermissible drawing of race-based lines. (The case was Cooper v. Harris, 137 S. Ct. 1455 (2017).)

The Supreme Court has sometimes upheld government-required affirmative action plans and what critics have called reverse racial discrimination—government action that benefits racial minorities and allegedly disadvantages whites. In 1989, however, a majority of the Court concluded that state action of this kind should receive the same full strict scrutiny as discrimination against racial or national minorities. A 1995 Supreme Court decision held that this is true of federal government action as well as state action. These developments have curtailed certain government-created affirmative action programs but have not eliminated them.

In the companion cases of Gratz v. Bollinger, 539 U.S. 244 (2003), and Grutter v. Bollinger, 539 U.S. 306 (2003), the Supreme Court considered whether the University of Michigan violated the Equal Protection Clause by taking minority students’ race into account in its undergraduate and law school admissions policies. The Court recognized in the two cases that seeking student diversity in a higher education context is a compelling government interest. However, in Gratz, a five-justice majority of the Court held that the university’s undergraduate admissions policy violated the Equal Protection Clause because the policy’s consideration of minority applicants’ race became effectively the automatic determining factor in admission decisions regarding minority applicants. In Grutter, on the other hand, a different five-justice majority held that the university’s law school admissions policy did not violate the Equal Protection Clause. The Grutter majority reasoned that the law school’s policy, in considering minority applicants’ race, did so as part of individualized consideration of applicants and of various types of diversity, not simply race. Thus, the law school’s policy did not make race

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Ethics in Action

As discussion in this chapter reveals, Supreme Court precedent establishes that when government action discriminates on the basis of race or sex, the action will receive heightened scrutiny from the court if an equal protection challenge is brought. Despite cases such as Obergefell v. Hodges (in which the Supreme Court held that same-sex couples cannot be denied the fundamental right to marry), the Court has not recognized sexual orientation or transgender status as a suspect class for equal protection purposes. Unless and until the Court does so, the government may have more legal latitude to regulate in ways that draw lines on the basis of persons’ sexual orientation or transgender status than in ways that classify on the basis of persons’ race or sex. Now view this set of issues from an ethical perspective. Should the government be any freer to take actions that discriminate against gays, lesbians, or transgender persons than it is to take actions that discriminate on the basis of race or sex? As you consider this question, you may wish to examine  Chapter 4 ’s discussion of ethical theories and ethical decision making.

the determining factor in the impermissible way that the undergraduate policy did.

In the years following the decisions in Gratz and Grutter, the composition of the Supreme Court changed. When the Court agreed to decide a challenge to a race-conscious student admissions policy at the University of Texas (a policy patterned in large part after what the Court had approved in Grutter), speculation mounted that the Court might use the case as a vehicle for overruling Grutter or substantially cutting back on its effect. The Court did not do so, however. In Fisher v. University of Texas, 136 S. Ct. 2198 (2016), the Court reiterated a key Grutter principle: that seeking diversity in the student body at colleges and universities counts as a compelling government purpose in the strict scrutiny analysis. The Court also left unaltered Grutter’s approach of permitting race to be considered in admissions decisions, as long as it was among a number of other factors taken into account in an individualized consideration of applicants and of various types of diversity. According to the Court, the challenged University of Texas plan passed the constitutional test by being narrowly tailored to achievement of the compelling government interest in achieving student body diversity.

In 2014, the Supreme Court decided an affirmative action–related case that presented a different wrinkle in the form of this question: If consideration of race in state university admission decisions is sometimes permissible (as Grutter and Fisher indicate), can the voters of a state constitutionally bar the use of race as a consideration in such decisions? In a Michigan referendum that took place three years after the decision in Grutter, voters approved an amendment to the state constitution that prohibited the use of race-conscious affirmative action in public education, government contracting, and public employment. Ruling on a challenge to this action, the Court emphasized in Schuette v. Coalition to Defend Affirmative Action, 134 S. Ct. 1623 (2014), that the case was “not about how the debate about racial preferences should be resolved.” Rather, it was “about who may resolve it.” The Court went on to hold that there was “no authority in the [U.S.] Constitution . . . or in this Court’s precedents for the judiciary to set aside Michigan laws that commit this policy determination to the voters.”

2.  Alienage. Classifications based on one’s status as an alien also receive strict scrutiny of some kind, but this standard almost certainly is not as tough as the full strict scrutiny normally used in race discrimination cases. Under the “political function” exception, moreover, laws restricting aliens from employment in positions that are intimately related to democratic self-government only receive rational basis review. This exception has been read broadly to allow the upholding of laws that exclude aliens from being state troopers, public school teachers, and probation officers.

3.  Sex. Although the Supreme Court has been hesitant to make a formal declaration that sex is a suspect class, for roughly four decades laws discriminating on the basis of gender have been subjected to a fairly rigorous form of intermediate scrutiny. As the Court has said, such laws require an “exceedingly persuasive” justification. The usual test is that government action discriminating on the basis of sex must be substantially related to the furtherance of an important government purpose. Under this test, measures discriminating against women have almost always been struck down. The Supreme Court has said that laws disadvantaging men receive the same scrutiny as those disadvantaging women, but this has not prevented the Court from upholding men-only draft registration and a law making statutory rape a crime for men alone.

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Equal Protection and Levels of Scrutiny

Type of Government Action	Controlling Test	Operation and Effect of Test
Government action that discriminates but neither affects exercise of fundamental right nor discriminates against suspect class (e.g., most social and economic regulation)	Rational basis	Lenient test—government action is constitutional if rationally related to legitimate government purpose.
Government action that discriminates concerning ability to exercise fundamental right	Full strict scrutiny	Very rigorous test—government action is unconstitutional unless necessary to fulfillment of compelling government purpose.
Government action that discriminates on basis of race or national origin	Full strict scrutiny	Very rigorous test—government action is unconstitutional unless necessary to fulfillment of compelling government purpose.
Government action that discriminates on basis of alienage	Less than full strict scrutiny as general rule; rational basis when public function exception applies	Rigorous test—though softer application of full strict scrutiny requirements. When public function exception applies, test is lenient.
Government action that discriminates on basis of sex (gender)	Intermediate scrutiny	Moderately rigorous test—government action is unconstitutional unless substantially related to fulfillment of important government purpose.
Government action that discriminates on basis of illegitimacy	Intermediate scrutiny, but to lesser degree than in gender discrimination cases	Moderately rigorous test—though softer application of intermediate scrutiny requirements.

With gender as a longstanding suspect class and with legal developments such as the Obergefell decision’s extension of the right to marry to same-sex couples, will the Supreme Court formally recognize sexual orientation and transgender status as suspect classes for equal protection purposes? Signs of such a development are at least discernible, but how immediately such a development may occur is an open question.

4.  Illegitimacy. Classifications based on one’s having been born to unmarried parents receive a form of intermediate scrutiny that probably is less strict than the scrutiny given gender-based classifications. Under this vague standard, the Court has struck down state laws discriminating against so-called illegitimate offspring in areas such as recovery for wrongful death, workers’ compensation benefits, Social Security payments, inheritance, and child support.

Independent Checks Applying Only to the States

The Contract Clause Article I, § 10 of the Constitution states: “No State shall . . . pass any . . . Law impairing the Obligation of Contracts.” Known as the Contract Clause, this provision deals with state laws that change the parties’ performance obligations under an existing contract after that contract has been made.2 The original purpose of the Contract Clause was to strike down the many debtor relief statutes passed by the states after the Revolution. These statutes impaired the obligations of existing private contracts by relieving debtors of what they owed

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to creditors. In two early 19th-century cases, however, the Contract Clause was also held to protect the obligations of governmental contracts, charters, and grants.

The Contract Clause probably was the most important constitutional check on state regulation of the economy for much of the 19th century. Beginning in the latter part of that century, the clause gradually became subordinate to legislation based on the states’ police powers. By the mid-20th century, most observers treated the clause as being of historical interest only. In 1977, however, the Supreme Court gave the Contract Clause new life by announcing a fairly strict constitutional test governing situations in which a state impairs its own contracts, charters, and grants. Such impairments, the Court said, must be “reasonable and necessary to serve an important public purpose.”

During recent decades, the Court has continued its deference toward state regulations that impair the obligations of private contracts. Consider, for instance, Exxon Corp. v. Eagerton (1983). For years, Exxon had paid a severance tax under Alabama law on oil and gas it drilled within the state. As the tax increased, appropriate provisions in Exxon’s contracts with the purchasers of its oil and gas allowed Exxon to pass on the amounts of the increases to the purchasers. Alabama, however, enacted a law that not only increased the severance tax but also forbade producers of oil and gas from passing on the increase to purchasers. Exxon filed suit, seeking a declaration that the law’s pass-on prohibition violated the Contract Clause. Affirming Alabama’s highest court, the U.S. Supreme Court observed that the Contract Clause allows the states to adopt broad regulatory measures without having to be concerned that private contracts will be affected. The pass-on prohibition was designed to advance a broad public interest in protecting consumers against excessive prices and was applicable to all oil and gas producers regardless of whether they were then parties to contracts containing pass-on provisions. Therefore, the Court reasoned, the Alabama statute did not violate the Contract Clause.

Burden on, or Discrimination against, Interstate Commerce

Explain the burden-on-commerce doctrine’s role in making certain state government actions unconstitutional.

In addition to empowering Congress to regulate interstate commerce, the Commerce Clause limits the states’ ability to burden or discriminate against such commerce. This limitation is not expressly stated in the Constitution. Instead, it arises by implication from the Commerce Clause and reflects that clause’s original purpose of blocking state protectionism and ensuring free interstate trade. (Because this limitation arises by implication, it is often referred to as the “dormant” Commerce Clause.) The burden-on-commerce limitation and the nondiscrimination principle operate independently of congressional legislation under the commerce power or other federal powers. If appropriate federal regulation is present, the preemption questions discussed in the next section may also arise.

Many different state laws can raise burden-on-commerce problems. For example, state regulation of transportation (e.g., limits on train or truck lengths) has been a prolific source of litigation. The same is true of state restrictions on the importation of goods or resources, such as laws forbidding the sale of out-of-state food products unless they meet certain standards. Such restrictions sometimes benefit local economic interests and reflect their political influence. Burden-on-commerce issues also arise if states try to aid their own residents by blocking the export of scarce or valuable products, thus denying out-of-state buyers access to those products.

In part because of the variety of state regulations it has had to consider, the Supreme Court has not adhered to one consistent test for determining when such regulations impermissibly burden interstate commerce. In a 1994 case, the Court said that if a state law discriminates against interstate commerce, the strictest scrutiny will be applied in the determination of the law’s constitutionality. Discrimination is express when state laws treat local and interstate commerce unequally on their face.

State laws might also discriminate even though on their face, they seem neutral regarding interstate commerce. This occurs when their effect is to burden or hinder such commerce. In one case, for example, the Supreme Court considered a North Carolina statute that required all closed containers of apples sold within the state to bear only the applicable U.S. grade or standard. The State of Washington, the nation’s largest apple producer, had its own inspection and grading system for Washington apples. This system generally was regarded as superior to the federal system. The Court struck down the North Carolina statute because it benefited local apple producers by forcing Washington sellers to regrade apples sold in North Carolina (thus raising their costs of doing business) and by undermining the competitive advantage provided by Washington’s superior grading system.

On the other hand, state laws that regulate evenhandedly and have only incidental effects on interstate commerce are constitutional if they serve legitimate state interests and their local benefits exceed the burden they place on interstate commerce. There is no sharp line between such regulations and those that are almost always

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unconstitutional under the tests discussed above. In a 1981 Supreme Court case, a state truck-length limitation that differed from the limitations imposed by neighboring states failed to satisfy the tests for constitutionality. The Court concluded that the measure did not further the state’s legitimate interest in highway safety because the trucks banned by the state generally were as safe as those it allowed. In addition, whatever marginal safety advantage the law provided was outweighed by the numerous problems it posed for interstate trucking companies.

Laws may also unconstitutionally burden interstate commerce when they directly regulate that commerce. This can occur, for example, when state price regulations require firms to post the prices at which they will sell within the state and to promise that they will not sell below those prices in other states. Because they affect prices in other states, such regulations directly regulate interstate commerce and usually are unconstitutional.

Federal Preemption

Identify the major circumstances in which federal law will preempt state law.

The constitutional principle of federal supremacy dictates that when state law conflicts with valid federal law, the federal law is supreme. In such a situation, the state law is said to be preempted by the federal regulation. The central question in most federal preemption cases is the intent of Congress. Thus, such cases often present complex questions of statutory interpretation.

Federal preemption of state law generally occurs for one or more of these reasons:

1. There is a literal conflict between the state and federal measures, so that it is impossible to follow both simultaneously.

2. The federal law specifically states that it will preempt state regulation in certain areas. Similar statements may also appear in the federal statute’s legislative history. Courts sometimes find such statements persuasive even when they appear only in the legislative history and not in the statute itself.

3. The federal regulation is pervasive. If Congress has “occupied the field” by regulating a subject in great breadth and/or in considerable detail, such action by Congress may suggest an intent to displace state regulation of the subject. This may be especially likely where Congress has given an administrative agency broad regulatory power in a particular area.

4. The state regulation is an obstacle to fulfilling the purposes of the federal law. Here, the party challenging the state law’s constitutionality typically claims that the state law interferes with the purposes she attributes to the federal measure (purposes usually found in its legislative history).

Arizona v. United States, 567 U.S. 387 (2012), illustrates the principles set forth in the above discussion of grounds for preemption. In that case, the Supreme Court was faced with deciding whether certain provisions in an Arizona law were preempted by federal immigration law, which has been enacted pursuant to the power granted to Congress over immigration matters in Article I, § 8 of the Constitution. The Court held that the so-called show me your papers provision in the Arizona law was not preempted. That provision called for state law enforcement officers to determine the immigration status of anyone they stopped or arrested if there was reason to suspect that the person might be in the country illegally.

However, the Court held that federal immigration law preempted three other provisions in the Arizona law: a provision making it a crime under Arizona law for an immigrant to fail to register under a federal law, a provision making it a crime under Arizona law for illegal immigrants to work or seek work, and a provision allowing Arizona law enforcement officers to make warrantless arrests if the officers have probable cause to believe the arrested persons committed acts that would make them subject to deportation under federal law. The preempted provisions either conflicted with federal law or posed too great an impediment to fulfillment of the federal law’s objectives.

The Takings Clause

Explain the power granted to the government by the Takings Clause, as well as the limits on that power.

The Fifth Amendment states that “private property [shall not] be taken for public use, without just compensation.” Because this  Takings Clause  has been incorporated within Fourteenth Amendment due process, it applies to the states. Traditionally, it has come into play when the government formally condemns land through its power of  eminent domain , 3  but it has many other applications as well.

The Takings Clause both recognizes government’s power to take private property and limits the exercise of

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that power. It does so by requiring that when property is subjected to a governmental taking, the taking must be for a public use and the property owner must receive just compensation. We now consider these four aspects of the Takings Clause in turn.

1. Property. The Takings Clause protects other property interests besides land and interests in land. Although its full scope is unclear, the clause has been held to cover takings of personal property, liens, trade secrets, and contract rights.

2. Taking. Because of the range of property interests it may cover, the Takings Clause potentially has a broad scope. Another reason for the clause’s wide possible application is the range of government activities that may be considered takings. Of course, the government’s use of formal condemnation procedures to acquire private property is a taking. There may also be a taking when the government physically invades private property or allows someone else to do so.

It has long been recognized, moreover, that overly extensive land use regulation may so diminish the value of property or the owner’s enjoyment of it as to constitute a taking. Among the factors courts consider in such “regulatory taking” cases are the degree to which government deprives the owner of free possession, use, and disposition of his property; the overall economic impact of the regulation on the owner; and how much the regulation interferes with the owner’s reasonable investment-backed expectations regarding the future use of the property. In Lucas v. South Carolina Coastal Council (1992), the Supreme Court held that there is an automatic taking when the government denies the owner all economically beneficial uses of the land. When this is not the case, courts tend to apply some form of means-ends scrutiny in determining whether land use regulation has gone too far and thus amounts to a regulatory taking.

3. Public use. Once a taking of property has occurred, it is unconstitutional unless it is for a public use. The public use element took center stage in a widely publicized 2005 Supreme Court decision, Kelo v. City of New London. For discussion of Kelo, see  Figure 3 .

4. Just compensation. Even if a taking of property is for a public use, it still is unconstitutional if the property owner does not receive just compensation. Although the standards for determining just compensation vary with the circumstances, the basic test is the fair market value of the property (or of the lost property right) at the time of the taking.

Figure 3 Economic Development as Public Use?

Does the government’s taking of private property for the purpose of economic development satisfy the public use requirement set forth in the Fifth Amendment’s Takings Clause? In Kelo v. City of New London, 545 U.S. 469 (2005), the U.S. Supreme Court answered “yes.”

New London, Connecticut, experienced economic decline for a considerable number of years. The city therefore made economic revitalization efforts, which included a plan to acquire 115 parcels of real estate in a 90-acre area and create, in collaboration with private developers, a multifaceted zone that would combine commercial, residential, and recreational elements. The planned development was designed to increase tax revenue, create jobs, and otherwise capitalize on the economic opportunities that city officials expected would flow from a major pharmaceutical company’s already-announced plan to construct a large facility near the area the city wished to develop.

The city was able to negotiate the purchase of most parcels of property in the 90-acre area, but some property owners refused to sell. The latter group included Susette Kelo and Wilhelmina Dery. Kelo had lived in her home for several years, had made substantial improvements to it, and especially enjoyed the water view it afforded. Dery had lived her entire life in the home the city sought to acquire. Both homes were well maintained. After the city decided to use its eminent domain power to acquire the properties of those owners who refused to sell, Kelo, Dery, and the other nonselling owners filed suit. They contended that the city’s plan to take their property for the purpose of economic development did not involve a public use and thus would violate the Fifth Amendment’s Takings Clause. The dispute made its way through the Connecticut courts and then to the U.S. Supreme Court, where a five-justice majority ruled in favor of the city.

Writing for the majority in Kelo v. City of New London, Justice Stevens noted that earlier decisions had identified three types of eminent domain settings in which the government’s acquisition of private property satisfied the constitutional public use element: first, when the government planned to develop a government-owned facility (e.g., a military base); second, when the government planned to construct, or allow others to construct, improvements to which the public would have broad access (e.g., highways or railroads); and third, when the government sought to further some meaningful public purpose. Justice Stevens observed that precedents had recognized the public purpose

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type of public use even if the government would not ultimately retain legal title to the acquired property (unlike the military base example) and the acquired property would not be fully opened up for public access (unlike the highway and railroad examples). The Court acknowledged that the public use requirement clearly would not be satisfied if the government took private party A’s property simply to give it to private party B. However, the Court stressed, the prospect that private parties might ultimately own or control property the government had acquired through eminent domain would not make the taking unconstitutional if an overriding public purpose prompted the government’s use of eminent domain. Similarly, even if certain private parties (e.g., the pharmaceutical company and private developers in the Kelo facts) would stand to benefit from the government’s exercise of eminent domain, such a fact would not make the taking unconstitutional if a public purpose supported the taking.

The Kelo majority stressed the particular relevance of two earlier Supreme Court decisions, Berman v. Parker, 348 U.S. 26 (1954), and Hawaii Housing Authority v. Midkiff, 467 U.S. 299 (1984). In Berman, the Court sustained Washington, D.C.’s use of eminent domain to take property that included businesses and “blighted” dwellings in order to construct a low-income housing project and new streets, schools, and public facilities. In Midkiff, the Court upheld Hawaii’s use of eminent domain to effectuate a legislative determination that Hawaii’s longstanding land oligopoly, under which property ownership was highly concentrated among a small number of property owners, had to be broken up for social and economic reasons. The Kelo majority concluded that significant public purposes were present in both Berman and Midkiff and that those decisions led logically to the conclusion that economic development was a public purpose weighty enough to constitute public use for purposes of the Takings Clause. Therefore, the Court upheld the city’s exercise of eminent domain in Kelo.

In his majority opinion, Justice Stevens was careful to point out that because the constitutional question was whether a public use existed, it was not the Court’s job to determine the wisdom of the government’s attempt to exercise eminent domain. Neither should the Court allow its decision to be guided by the undoubted hardship that eminent domain places on unwilling property owners who must yield their homes to the state (albeit in return for “just compensation”). Justice Stevens emphasized that if state legislatures believed an economic development purpose such as the one the City of New London had in mind should not be used to support an exercise of eminent domain, the legislatures were free to specify, in their state statutes, that eminent domain could not be employed for an economic development purpose. The Court’s determination of what is a public use for purposes of the Takings Clause sets a protective floor for property owners, with states being free to give greater protection against takings by the government.

The four dissenting justices in Kelo issued sharply worded opinions expressing their disagreement with the majority’s characterization of Berman and Midkiff as having led logically to the conclusion that economic development was a public use. In emotional terms, the dissenters accused the majority of having effectively erased the public use requirement from the Takings Clause. The Kelo decision drew considerable media attention, perhaps more because of what appeared to be considerable hardship to property owners such as Kelo and Dery than because of new legal ground—if any—broken in the decision. For many observers, the case’s compelling facts led to a perception that the city had engaged in overreaching. The Court’s decision in Kelo meant that in a legal sense, there was no overreaching on the part of the city. Was there, however, overreaching in an ethical sense? How would utilitarians answer that question? What about rights theorists? (As you consider the questions, you may wish to consult  Chapter 4 .)

Problems and Problem Cases

1. In 1967, Gary Jones purchased a house on North Bryan Street in Little Rock, Arkansas. He and his wife lived in the house until they separated in 1993. Jones then moved into an apartment in Little Rock, and his wife continued to live in the house. Jones paid his mortgage each month for 30 years. The mortgage company paid the property taxes on the house. After Jones paid off his mortgage in 1997, the property taxes went unpaid. In April 2000, the Arkansas Commissioner of State Lands (Commissioner) attempted to notify Jones of his tax delinquency and his right to redeem the property by paying the past-due taxes. The Commissioner sought to provide this notice by mailing a certified letter to Jones at the North Bryan Street address. Arkansas law approved the use of such a method of providing notice. The packet of information sent by the Commissioner stated that unless Jones redeemed the property, it would be subject to public sale two years later. No one was at home to sign for the letter. No one appeared at the post office to retrieve the letter within the next 15 days. The post office then returned the unopened packet to the Commissioner

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with an “unclaimed” designation on it. In the spring of 2002, a few weeks before the public sale scheduled for Jones’s house, the Commissioner published a notice of public sale in a local newspaper. No bids were submitted, meaning that under Arkansas law, the state could negotiate a private sale of the property.

Several months later, Linda Flowers submitted a purchase offer. The Commissioner then mailed another certified letter to Jones at the North Bryan Street address, attempting to notify him that his house would be sold to Flowers if he did not pay his delinquent taxes. As with the first letter, the second letter was returned to the Commissioner with an “unclaimed” designation. Flowers purchased the house. Immediately after the expiration of the 30-day period in which Arkansas law would have allowed Jones to make a post-sale redemption of the property by paying the past-due taxes, Flowers had an eviction notice delivered to the North Bryan Street property. The notice was served on Jones’s daughter, who contacted Jones and notified him of the tax sale. Jones then filed a lawsuit in Arkansas state court against the Commissioner and Flowers. In his lawsuit, Jones contended that the Commissioner’s failure to provide notice of the tax sale and of Jones’s right to redeem resulted in the taking of his property without due process. The trial court ruled in favor of the Commissioner and Flowers, and the Arkansas Supreme Court affirmed. The U.S. Supreme Court agreed to decide the case and its central question of whether Jones was afforded due process. How did the U.S. Supreme Court rule?

2. Two Rhode Island statutes prohibited advertising the retail price of alcoholic beverages. The first applied to vendors licensed in Rhode Island as well as to out-of-state manufacturers, wholesalers, and shippers. It prohibited them from “advertising in any manner whatsoever” the price of any alcoholic beverage offered for sale in the state. The only exception to the restriction was for price tags or signs displayed with the merchandise within licensed premises, if the tags or signs were not visible from the street. The second statute barred the Rhode Island news media from publishing or broadcasting advertisements that made reference to the price of any alcoholic beverages. 44 Liquormart Inc., a licensed retailer of alcoholic beverages, operated a store in Rhode Island. Because it wished to advertise prices it would charge for alcoholic beverages, 44 Liquormart filed a declaratory judgment action against the state. 44 Liquormart asked the court to rule that the statutes referred to above violated the First Amendment. The district court concluded that the statutes failed the applicable test for restrictions on commercial speech and therefore struck them down. The U.S. Court of Appeals for the First Circuit reversed, determining that the statutes were constitutionally permissible restrictions on commercial speech. The U.S. Supreme Court granted 44 Liquormart’s petition for a writ of certiorari. How did the Supreme Court rule?

3. A federal statute, 8 U.S.C. § 1409, sets requirements for acquisition of U.S. citizenship by a child born outside the United States to unwed parents, only one of whom is a U.S. citizen. If the mother is the U.S. citizen, the child acquires citizenship at birth. Section 1409(a) states that when the father is the citizen parent, the child acquires citizenship only if, before the child reaches the age of 18, the child is legitimized under the law of the child’s residence or domicile, the father acknowledges paternity in writing under oath, or paternity is established by a competent court. Tuan Anh Nguyen was born in Vietnam to a Vietnamese mother and a U.S. citizen father, Joseph Boulais. At six years of age, Nguyen came to the United States, where he became a lawful permanent resident and was raised by his father. When Nguyen was 22, he pleaded guilty in a Texas court to two counts of sexual assault. The U.S. Immigration and Naturalization Service initiated deportation proceedings against Nguyen, and an immigration judge found him deportable. While Nguyen’s appeal to the U.S. Board of Immigration Appeals was pending, Boulais obtained from a state court an order of parentage that was based on DNA testing. The board dismissed Nguyen’s appeal, denying his citizenship claim on the ground that he had not established compliance with § 1409(a). Nguyen and Boulais appealed to the U.S. Court of Appeals for the Fifth Circuit, which rejected their contention that § 1409 discriminated on the basis of gender and thus violated the Constitution’s equal protection guarantee. Was the Fifth Circuit’s decision correct?

4. As most other states do, the Commonwealth of Kentucky taxes its residents’ income. Kentucky law establishes that interest on bonds issued by Kentucky and its political subdivisions is exempt from Kentucky’s income tax, whereas interest on bonds issued by other states and their political subdivisions is taxable. The tax exemption for Kentucky bonds helps make those bonds attractive to in-state purchasers even if they carry somewhat lower rates of interest than other states’ bonds or those issued by private companies. Most other states have differential tax schemes that resemble Kentucky’s. Kentucky residents George and Catherine Davis paid state income tax on interest from out-of-state municipal bonds, and then sued the Department of Revenue of Kentucky in an effort to obtain a refund. The Davises contended that Kentucky’s differential taxation of municipal bond interest impermissibly discriminates against interstate commerce in violation of the U.S. Constitution’s Commerce Clause. Were the Davises correct?

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5. Nike Inc. mounted a public relations campaign in order to refute news media allegations that its labor practices overseas were unfair and unlawful. The campaign involved the use of press releases, letters to newspapers, a letter to university presidents and athletic directors, and full-page advertisements in leading newspapers. Relying on California statutes designed to curb false and misleading advertising and other forms of unfair competition, California resident Mark Kasky filed suit in a California court on behalf of the general public of the state. Kasky contended that Nike had made false statements in its campaign and that the court should therefore grant the legal relief contemplated by the California statutes. In terms of Nike’s potential liability, why would it make a difference whether the speech in which Nike engaged was commercial or, instead, noncommercial? What are the arguments in favor of a conclusion that Nike was engaged in commercial speech? What are the arguments in favor of a conclusion that Nike was engaged in noncommercial speech? How did the court rule on the speech classification issue—that is, whether Nike’s speech was commercial or, instead, that is noncommercial?

6. Public school districts in Seattle, Washington, and Louisville, Kentucky, faced litigation in which it was alleged that they violated the Equal Protection Clause by considering race when assigning students to schools. The Seattle district, which had neither created segregated schools nor been subject to court-ordered desegregation, generally allowed students to choose which high school they wished to attend. However, the district classified students as white or nonwhite. It then used the racial classifications as a “tiebreaker” to allocate available slots in particular high schools and thereby seek to achieve racially diverse schools despite the existence of certain housing patterns that would have produced little racial diversity at certain schools. The Louisville district had been subject to a federal court’s desegregation decree during a two-decades-long period, but a court had lifted the desegregation order after concluding that the district had eliminated the vestiges of prior segregation to the greatest extent feasible. The Louisville district then adopted a plan under which students were classified as black or “other.” Using these classifications in making elementary school assignments and in ruling on transfer requests, the district sought to achieve racial diversity in schools that would have reflected less racial diversity in light of traditional housing patterns. The cases challenging the two districts’ policies of considering race made their way through the federal courts and were later consolidated for decision by the U.S. Supreme Court.

What test would the Seattle and Louisville school districts need to pass in order to avoid a Supreme Court determination that their policies violate the Equal Protection Clause? Could the school districts pass that test? Why or why not?

7. Marijuana is classified under federal law as an illegal drug. On what enumerated power would Congress have relied when it enacted the federal statute that outlaws marijuana and other specified drugs?

A number of states have legalized marijuana possession and use up to certain levels designated in their laws. Several other states have legalized marijuana possession and use for medicinal purposes, but for those purposes only. As a constitutional matter, could the federal government—if it were so inclined—adopt an aggressive enforcement posture in which it would override the state laws to the contrary? If so, on what constitutional basis? If not, why not?

5. The Minnesota legislature passed a statute banning the sale of milk in plastic nonrefillable, nonreusable containers. However, it allowed sales of milk in other nonrefillable, nonreusable containers such as paperboard cartons. One of the justifications for this ban on plastic jugs was that it would ease the state’s solid waste disposal problems because plastic jugs occupy more space in landfills than other nonreturnable milk containers. A group of dairy businesses challenged the statute, arguing that its distinction between plastic containers and other containers was unconstitutional under the Equal Protection Clause. What means-ends test or level of scrutiny applies in this case? Under that test, is easing the state’s solid waste disposal problems a sufficiently important end? Under that test, is there asufficiently close “fit” between the classification and that end to make the statutory means constitutional? In answering the last question, assume for the sake of argument that there probably were more effective ways of alleviating the solid waste disposal problem than banning plastic jugs while allowing paperboard cartons.

6. The plaintiffs in the case described below were two married same-sex couples who conceived children through anonymous sperm donation. Leigh and Jana Jacobs were married in Iowa in 2010, and Terrah and Marisa Pavan were married in New Hampshire in 2011. Leigh and Terrah each gave birth to a child in Arkansas in 2015. When it came time to secure birth certificates for the newborns, each couple filled out paperwork listing both spouses as parents—Leigh and Jana in one case, Terrah and Marisa in the other. Both times, however, the Arkansas Department of Health issued certificates bearing only the birth mother’s name. The department’s decision rested on a provision of Arkansas law that specified which individuals will appear as parents on a child’s state-issued birth certificate. The statute stated that “[f]or the purposes of birth registration, the mother is deemed to be the woman who gives birth to the child.” The statute also instructed that “[i]f the mother was married at the time of either conception or birth, the name of [her] husband shall be entered on the certificate as the father of the child.” The requirement that a married woman’s husband appear on her child’s birth certificate applied, according to the state’s interpretation of the statute, if the couple conceived by means of artificial insemination with the help of an anonymous sperm donor.

The Jacobses and Pavans brought this suit in Arkansas state court against the director of the Arkansas Department of Health in an effort to obtain a declaration that the state’s birth-certificate law violated the U.S. Constitution. The trial court so ruled, but the Arkansas Supreme Court reversed the trial court’s decision. The U.S. Supreme Court agreed to decide the case. What constitutional provision or provisions do you see as relevant here? How did the Supreme Court rule?

7. While it was preparing a comprehensive land use plan in the area, the Tahoe Regional Planning Agency (TRPA) imposed two moratoria on development of property in the Lake Tahoe Basin. The moratoria together lasted 32 months. A group of property developers affected by the moratoria filed suit in federal court alleging that the moratoria constituted an unconstitutional taking without just compensation. Were the developers correct?

8. A federal statute criminalized the creation, sale, or possession of certain depictions of animal cruelty. For purposes of the statute, a depiction of “animal cruelty” was defined as one “in which a living animal is intentionally maimed, mutilated, tortured, wounded, or killed,” if the depicted conduct violated federal or state law at the place where the creation, sale, or possession took place. The legislative history of the statute indicated that it was prompted by a congressional objective of eliminating dissemination of so-called crush videos (videos showing live animals being crushed to death by persons stomping on them).

Robert Stevens operated a website on which he sold videos of pitbulls engaging in dogfighting and otherwise attacking animals. After he was convicted of violating the above described statute by selling the videos, he appealed on the ground that the statute violated the First Amendment. The case made its way to the U.S. Supreme Court. How did the Court rule? Was Stevens entitled to the protection of the First Amendment?

9. Florida’s Code of Judicial Conduct bars judges and candidates running for election to a judgeship from personally soliciting campaign contributions of a financial nature. Attorney Lanell Williams-Yulee, a candidate running for election to a Florida judgeship, drafted and mailed a letter to voters. In the letter, she asked for donations to her campaign. The State Bar of Florida brought a disciplinary proceeding against Williams-Yulee because of the letter. The proceedings concluded with a finding that a public reprimand was in order because she had violated the Code of Judicial Conduct. The Bar rejected Williams-Yulee’s argument that the ban on personal solicitation violated her First Amendment rights. The Supreme Court of Florida also rejected that argument. The U.S. Supreme Court agreed to decide the case. What kind of speech was Williams-Yulee engaging in through her letter soliciting contributions to her campaign? Did the Code of Judicial Conduct’s restriction on personal solicitation violate her First Amendment rights?

10. A federal law, the Immigration Reform and Control Act (IRCA) makes it “unlawful for a person or other entity . . . to hire, or to recruit or refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.” Employers that violate

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this prohibition may be subjected to civil and criminal sanctions. IRCA also restricts the ability of states to combat employment of unauthorized workers. It does so by expressly preempting “any state or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.” In addition, IRCA requires employers to take steps to verify an employee’s eligibility for employment. Seeking to improve that verification process, Congress created E-Verify, an Internet-based system employers can use to check the work authorization status of employees. Federal law does not require the use of E-Verify, however.

Arizona was among several states that enacted statutes designed to impose sanctions for the employment of unauthorized aliens. According to an Arizona law (the Legal Arizona Workers Act), the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. The Arizona law also requires that all Arizona employers use E-Verify. The Chamber of Commerce of the United States and various business and civil rights organizations filed suit against those charged with administering the Arizona law. The plaintiffs argued that the state law’s license suspension and revocation provisions were both expressly and impliedly preempted by federal immigration law, and that the mandatory use of E-Verify was impliedly preempted. Were the plaintiffs right? Did federal immigration law preempt the challenged provisions of the Arizona statute?