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07/3/2012

The Legal Eagle Eye: The Impact Of The SCOTUS Healthcare Decision

Why Chief Justice Roberts’s Opinion in NFIB v. Sebelius May Ultimately Advance Economic Freedom and Promote Limited-Government and Federalism Values

By Cause of Action Staff

Although at first blush it may appear that Chief Justice Roberts’s opinion in NFIB v. Sebelius upholding the Affordable Care Act’s individual mandate will lead to a dramatic expansion of federal regulatory authority, proponents of economic freedom, federalism, and limited government may be surprised to learn that Chief Justice Roberts’s opinion reaffirmed and strengthened important limits on the scope of federal power.

First, Chief Justice Roberts concluded that the Commerce Clause—even as augmented by the Necessary and Proper Clause—does not allow Congress to regulate inactivity:  “The Court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity.”   (The four dissenting Justices—Scalia, Alito, Kennedy, and Thomas—agreed.)  Second, Chief Justice Roberts—joined by Justices Breyer and Kagan—concluded that the Medicaid expansion was unconstitutional, reasoning that the portion of the law requiring the States to “either accept a basic change in the nature of Medicaid, or risk losing all Medicaid funding,” exceeded limits on Congress’s Spending Clause authority.  (The four dissenting Justices reached the same conclusion.)  He not only reaffirmed the principle that “Congress has no authority to order the States to regulate according to its instructions” but placed a new limit on Congress’s exercise of its Spending Clause powers:  Congress can no longer use “coercive” financial incentives to compel States to adopt changes that it wants.  Chief Justice Roberts went so far as to describe the Medicaid expansion as “a gun to the head” of the States and “economic dragooning” that is contrary to our system of federalism and principles of dual sovereignty.

With that said, Chief Justice Roberts’s opinion in NFIB v. Sebelius leaves open important questions that the Court may be required to answer in subsequent cases:

(1)  Although Chief Justice Roberts noted that “Congress’s ability to use its taxing power to influence conduct is not without limits,” it is unclear what those limits are.

(2)  It is uncertain whether Chief Justice Roberts’s conclusion that the individual mandate was unconstitutional under the Commerce Clause is part of the Court’s holding (and thus binding precedent) or merely dicta that other courts may ignore.

(3)  It remains to be seen whether the fact that a majority of the Court believed that the individual mandate exceeded Congress’s Commerce Clause authority indicates a willingness to revisit—and scale back—prior case law interpreting Congress’s authority under that clause expansively.

(4) The extent to which Chief Justice Roberts’s new limiting principle for Congress’s use of its Spending Clause power will leave other federal statutes conditioning receipt of federal money on States adopting federal regulatory and policy mandates vulnerable to constitutional challenge is unclear.

Finally, it is worth briefly noting that Chief Justice Roberts’s opinion upholding the individual mandate should not be read as a ringing endorsement of the Affordable Care Act but rather as an invitation for “We the People”—the ultimate sovereign in our constitutional system of limited government—to resolve the issue through the democratic process:

The Framers created a Federal Government of limited powers, and assigned to this Court the duty of enforcing those limits. The Court does so today. But the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.

 

 

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07/2/2012

Cause of Action Sues FDA For Overreach Into Private Lives

 

CAUSE OF ACTION SUES FDA FOR OVERREACH INTO PRIVATE LIVES

FDA prohibits a form of artificial insemination, attempts to define relationships

WASHINGTON – Cause of Action, a nonpartisan nonprofit based in Washington, DC, filed a lawsuit today in the U.S. District Court of Northern California on behalf of a Bay-Area woman whose plans to start a family have been blocked by overregulation by the Food and Drug Administration (FDA).

Citing FDA regulations on sperm donation, Cause of Action states that the plaintiff’s ability to become pregnant through the means of her choice has been directly affected. Cause of Action argues that the right to procreate is fundamental and one that cannot be regulated by a government agency.

“We don’t think the FDA’s intentions are bad—they are trying to protect the public from communicable diseases—but this is literally stepping between two people who have agreed to have a child; the FDA should not regulate that,” said Cause of Action’s Chief Counsel for Regulatory Affairs Amber Abbasi.

Abbasi explains in Cause of Action’s complaint that the plaintiff wants to conceive a child by means of artificial insemination without a medical intermediary such as a donor bank, but is prohibited from doing so by FDA regulations.

Federal regulations set standards for manufacturing and distributing human cells, tissues, and tissue-based products, but they treat noncommercial, individual actors the same as commercial establishments, making any individual a potential human cells, tissue, and tissue-based product producer. Once an individual is labeled as a manufacturer, he is subject to the same regulatory standards as sperm banks. The FDA does exempt people engaged in sexually intimate relationships from the standard, but it is with the government’s attempt to define “relationship” that Abbasi and Cause of Action take the most issue.

“Essentially, the FDA is trying to define a personal relationship and regulate individuals’ intimate decisions,” said Abbasi. “These actions grossly exceed the reach of the FDA’s regulatory authority. If unchecked, it could set a dangerous precedent for the future.”

The lawsuit asks the federal district court to declare the FDA’s regulatory overreach unconstitutional, which will allow the plaintiff to start a family as she desires.

“This case really highlights how arbitrary regulations can take away freedom,” said Dan Epstein, executive director of Cause of Action. “Cause of Action is committed to exposing instances like these where the government is threatening freedom with rogue regulations.”

About Cause of Action:

Cause of Action is a non-partisan, non-profit organization that uses public advocacy and legal reform tools to ensure greater transparency in government, protect taxpayer interests and promote economic freedom. For more information, visit www.causeofaction.org.

To schedule an interview with Amber Abbasi, Cause of Action’s Chief Counsel for Regulatory Affairs, contact Mary Beth Hutchins or Briton Bennett at 202-507-5880.

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06/21/2012

CNN Money: Non-profit sues Delaware Governor, regulators over Bloom Energy deal

Read the full story here. CNN Money

“A non-profit government watch dog group called Cause of Action has filed a lawsuit accusing Delaware Governor Jack Markell, and the Delaware regulatory agency Delaware Public Service Commission, of cronyism over a deal with fuel cell maker Bloom Energy. Bloom Energy is building a factory in Delaware to make its fuel cells, and also has one of the largest fuel cell contracts in the world with local Delaware utility, Delmarva Power & Light.

 

Fuel cells use natural gas or biogas combined with oxygen to create a chemical reaction to produce electricity. The electricity is generally more expensive than grid power, but can be cleaner (if it’s running on biogas) and is also a distributed system. Bloom Energy is an 11-year-old Silicon Valley company that has raised at least $650 million (and is closing another round of funding).

 

Cause of Action says the Governor and the Public Service Commission are “unconstitutionally discriminating against Bloom’s competitors and taxing a segment of Delaware residents to subsidize the crony company.” The suit is being delivered on behalf of a utility customer (named John Nichols) and one of Bloom Energy’s fuel cell maker competitors…

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06/21/2012

Greentech Media: Lawsuit Accuses Bloom Energy, Delaware of Cronyism

Read the full story here. GreenTech Media

“The lawsuit was filed by Cause of Action, which describes itself as a group dedicated to fighting waste, fraud and mismanagement in the federal government. The complaint (PDF) also names Fuel Cell Energy, a Danbury, Conn.-based fuel cell maker and competitor to Bloom Energy, as a plaintiff, Cause of Action spokeswoman Mary Beth Hutchins said in a Wednesday interview. It also names an individual, John Nichols, who is a customer of Delmarva Power & Light, the utility that’s working with Bloom.

“Our desire is that the court will issue a summary judgment” halting the Bloom deal from going forward, Hutchins said. “Our allegation is that the governor and the public service commission have essentially engaged in cronyism.”…Cause of Action’s lawsuit accuses the state of creating a “system of discriminatory eligibility requirements, subsidies, and energy-portfolio-standards multipliers that benefit Bloom,” when it rewrote its renewable portfolio standards act in late 2011. Cause of Action has also filed two Freedom of Information Act requests to examine public comments and economic studies submitted in support of the tariff…”

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06/20/2012

Cause of Action Sues Delaware Governor Markell And Public Service Commission To Stop Cronyism

 

CAUSE OF ACTION SUES DELAWARE GOVERNOR MARKELL

AND PUBLIC SERVICE COMMISSION

TO STOP CRONYISM

 

Illegal Scheme Forces Ratepayers to Pick Up Tab for $133 Million Tariff-Subsidy

 

WASHINGTON – Government accountability group Cause of Action (CoA) filed suit today in federal court to challenge Delaware’s sweetheart deal with Bloom Energy, Inc. (Bloom). Governor Jack Markell and the members of the Delaware Public Service Commission are unconstitutionally discriminating against Bloom’s competitors and taxing a segment of Delaware residents to subsidize the crony company.

The suit is brought on behalf of individual plaintiff John Nichols, one of the Delaware ratepayers subject to a special tariff-subsidy created to pay for the deal, and a fuel cell manufacturer whose competitive place in the energy market has been thwarted by the state of Delaware’s scheme to prop up Bloom.

“Delaware has unconstitutionally undermined competitive markets to subsidize one favored company and forced a specific group of Delaware residents to pick up the tab,” said Amber Abbasi, CoA’s Chief Counsel for Regulatory Affairs. “Cause of Action is exposing this burden on taxpayers and businesses and is holding the Governor and the Public Service Commission accountable for violating the Commerce Clause and the rights of the people of Delaware.”

In late 2011, the Delaware Renewable Energy Portfolio Standards Act (REPSA) was modified solely to accommodate the state’s deal with Bloom. In return for Bloom’s promise to construct a manufacturing facility in Delaware, the state established a system of discriminatory eligibility requirements, subsidies, and energy-portfolio-standards multipliers that benefit Bloom. These requirements deny out-of-state companies equal competitive footing and increase costs for Delmarva ratepayers who might otherwise benefit from the competitive interstate market. According to a report by the Delaware Public Service Commission, the cost through tariffs to ratepayers will amount to $133 million.

“There’s no rational basis for forcing Nichols and other Delmarva ratepayers to fund Bloom Energy, while the rest of the state looks on.” stated Dan Epstein, Executive Director of CoA. “Governor Markell and the Public Service Commission are discriminating against competitive businesses in other states to prop up their cronies at Bloom, in direct violation of the U.S. Constitution, and they must be forced to answer for their actions.”

In addition to filing suit against the Governor andthe members of the Delaware Public Service Commission, Cause of Action also filed two Freedom of Information Act requests regarding public comments submitted during the formation of the Bloom tariff and economic impact studies that were submitted in support of the tariff.

The complaint can be found here.

About Cause of Action:

Cause of Action is a non-partisan, non-profit organization that uses public advocacy and legal reform tools to ensure greater transparency in government, protect taxpayer interests and promote economic freedom. For more information, visit www.causeofaction.org.


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06/15/2012

National Journal: Watchdog Group Says IRS Not Monitoring Lobbying Coalitions

Read the full story here. National Journal

“The pro-transparency group Cause of Action is calling on a Treasury Department inspector general to investigate why, according to the group, the Internal Revenue Service is not overseeing lobbying coalitions.

CoA argues that these loose coalitions are spending money on lobbying but because they are not incorporated, they don’t have disclosure requirements or pay taxes. Saying that it wanted to “provide the public with a better understanding of the rules that apply to coalitions and to ensure that lobbying entities are paying taxes and are in compliance with IRS regulations,” CoA wrote the IRS in March asking for documentation showing how the agency monitors tax-exempt organizations’ lobbying ties.

“Cause of Action is concerned about the risk that lobbying coalitions are exercising political influence without paying taxes under the Internal Revenue Code,” CoA wrote in its request for documents. “In order to avoid the disclosure requirements of the Lobbying Disclosure Act, many organizations are simply not incorporating…”

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06/14/2012

Cause of Action Demands Investigation of IRS’s Failure to Address Lobbying Violations

 

CAUSE OF ACTION DEMANDS INVESTIGATION OF IRS’S FAILURE TO ADDRESS LOBBYING VIOLATIONS

Lack of oversight of stealth lobbying uncovered by Cause of Action

WASHINGTON – Following an investigation into the oversight of lobbying disclosures, Cause of Action (CoA) uncovered that the Internal Revenue Service (IRS) fails to monitor activities that could violate tax-exempt statuses, prompting CoA to send a request for investigation to the Treasury Department Inspector General concerning the IRS’s lack of action.

On March 22, 2012, Cause of Action wrote to Douglas Shulman, Commissioner of the IRS, to inquire about the IRS’s monitoring of tax-exempt organizations that house lobbying coalitions. These coalitions, as has been revealed in numerous media outlets over the past several years, dodge the Lobbying Disclosure Act by existing as loosely organized groups which are not incorporated under the law.  Concerned that lobbying coalitions are exercising political influence without paying taxes under the Internal Revenue Code, CoA sought to ensure that lobbying entities are paying taxes and are in compliance with IRS regulations.

In response to a Freedom of Information Act (FOIA) request Cause of Action submitted, on May 14, 2012, the IRS responded that it was unable to locate any documents relating to the tax-exempt status of unincorporated coalitions residing at tax-exempt corporations, their fiscal sponsors, or any investigations by the IRS into these organizations.

“The inability of the IRS to produce any documents on oversight or investigation into stealth or coalition lobbying points to a gross lack of accountability by the federal government,” stated Dan Epstein, Executive Director of Cause of Action. “The burden now lies upon the Treasury Department’s investigators to examine why the IRS has turned a blind eye to numerous coalitions that have the potential to lobby with tax-exempt dollars, which is a clear violation of the Lobbying Disclosure Act.”

On June 8, 2012, CoA sent a request for investigation letter to J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA) which states that “the IRS has failed to require lobbying coalitions to report their activities and the IRS has failed to conduct oversight over tax-exempt corporations that sponsor coalition lobbying without disclosing those activities. Moreover, the IRS, despite concerns by Congress and the media, has failed to conduct any investigations of lobbying coalition activities that may be inconsistent with the Internal Revenue Code.  As a result, we strongly request that you immediately investigate these matters.”

At the time of this release, CoA has not received a response from TIGTA concerning the request for investigation.

About Cause of Action:

Cause of Action is a non-partisan, non-profit organization that uses public advocacy and legal reform tools to ensure greater transparency in government, protect taxpayer interests and promote economic freedom. For more information, visit www.causeofaction.org.

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