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02/5/2018

CoA Institute Asks Court to Order Enforcement Action in Colin Powell Email Case

Washington, D.C. – Cause of Action Institute (“CoA Institute”) today filed a motion for summary judgment in a lawsuit that seeks to compel Secretary of State Rex Tillerson and U.S. Archivist David Ferriero to fulfill their non-discretionary obligations under the Federal Records Act (“FRA”).  Specifically, CoA Institute has asked the court to order Tillerson and Ferriero to initiate an enforcement action through the Attorney General to recover the work-related email records of former Secretary of State Colin Powell from a personal account hosted by AOL, Inc.

“To date, Defendants have undertaken meagre recovery efforts that have proven entirely ineffectual,” argued CoA Institute.  “None of Secretary Powell’s work-related email records have been recovered.  And Defendants have not proven their fatal loss—the only exception in this case that would excuse their intransigence.  Now is the time to involve the Attorney General, the highest law enforcement authority of the federal government, as contemplated and required by the FRA.”

CoA Institute filed its lawsuit in October 2016 after then-Secretary John Kerry and Archivist Ferriero failed to act on CoA Institute’s FRA notice and Freedom of Information Act request.  Just last month, CoA Institute successfully defended its claims against the government’s motion to dismiss.  In denying that motion, U.S. District Court Judge Trevor McFadden highlighted the State Department’s “anemic” recovery efforts and its seeming disregard for the power of leveraging the law enforcement authority exercised by the Attorney General in recovering government records.

Cause of Action Institute President and CEO John J. Vecchione: “Executive Branch officials have no discretion in choosing when to recover unlawfully removed federal records.  For too long, agency leadership—particularly at the State Department—has not been held accountable for its failure to abide by federal record management laws.  Secretary Colin Powell conducted official government business on a private email account; records of his correspondence belong to the federal government and should have been retained for permanent preservation.  We are confident that the law requires more effort to recover the records at issue, including the initiation of an enforcement action through the Attorney General.”

Background

In September 2016, the House Oversight & Government Reform Committee held a hearing at which then-Under Secretary of State Patrick Kennedy testified that the State Department had undertaken minimal efforts to retrieve the work-related emails of Colin Powell.  After learning that Powell no longer had access to his AOL account or its contents, the State Department merely asked Powell to contact AOL to see if anything could be retrieved.  Despite a request from the National Archives and Records Administration (“NARA”) to contact AOL directly, the State Department never did so.  Ultimately, the agency relied on unreliable hearsay—namely, the reported representations of Secretary Powell’s personal secretary about an apparent phone conversation between someone at AOL and a staff member of the House Oversight Committee—to conclude that no records could be recovered.

CoA Institute’s memorandum in support of its motion can be read here.

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01/31/2018

Records show Richard Cordray scrambled in final days to name successor, thwart Trump’s nominee

The last-ditch coup by Richard Cordray was orchestrated despite apparent pushback from CFPB’s top attorney

Cause of Action Institute (“CoA Institute”) has uncovered documents that reveal Richard Cordray and his lieutenants, in Cordray’s last days as director of the Consumer Financial Protection Bureau (“CFPB”), scrambled to plan a gambit to usurp the president’s appointment authority and allow Cordray to name his own successor.

Cordray announced on November 15, 2017 that he would be stepping down as director of the CFPB, presumably to run for governor of Ohio.  Later that same day, the president announced his intention to appoint an acting director until a new director could be nominated and approved by the Senate.  Here’s where things get interesting.  On November 24, 2017, Cordray named the agency’s chief of staff, Leandra English, as the deputy director of the CFPB.  Then, he announced his resignation and tapped English as the acting director.

President Trump ignored this attempted unlawful action and appointed his own acting director, Mick Mulvaney.  Then the next day, the general counsel of the CFPB issued an opinion supporting the president and holding Mulvaney as the acting director.

Accordingly, as General Counsel for the Bureau, it is my legal opinion that the President possesses the authority to designate an Acting Director for the Bureau under the FVRA, notwithstanding § 5491(b)(5).

English, however, refused to back down, creating the absurd situation where a government agency had two people claiming to be acting director.  She sued in federal court, asking Judge Timothy Keller to make her acting director.  The court, however, denied her request, holding that “[d]enying the president’s authority to appoint Mr. Mulvaney raises significant constitutional questions.”  The agency, relying both on the opinion of its general counsel and the court’s decision, has recognized Mulvaney as the leader.  The Court case continues.  What follows is the result of CoA Institute’s investigation into the final weeks of Cordray’s tenure as director.

Internal CFPB communications reveal that on November 15, the date Richard Cordray announced his intent to retire, English forwarded Cordray a Politico Pro email that contained a report of the president’s intention to appoint an acting director.  A number of top CFPB employees were CC’d on this email, including General Counsel Mary McLeod.

The next substantial action came on November 22, when “RC” (presumably Richard Cordray) circulated an article from creditslips.com that outlines a legal argument for Cordray to appoint his own successor. Just two minutes later, Cordray sent another article from theintercept.com which, relying on the creditslips.com article, posits that David Silberman, then acting deputy director, should succeed Cordray.  The article notes “[t]he legal argument that Silberman would become interim director would be greatly improved if Cordray officially named him deputy director[.]”  CC’d on both these emails is General Counsel McLeod.  The full subject of Cordray’s email includes the line: “Mary [McLeod], need you to have people consider it further please[.]”

On the day of the formal resignation, November 24, documents revealed a scramble inside CPFB to properly time the gambit.  In an email thread titled “Possible presser” sent between Zixta Martinez, associate director for external affairs, Jennifer Howard, assistant director for communications, Kate Fulton, deputy chief of staff,[1] Cordray, and English, the group appears to discuss a document that is distinct from Cordray’s formal resignation announcement.  The group is concerned about the resignation going out before this “presser” document which, presumably, was the announcement of Leandra English as deputy director.

Later that day, in Cordray’s final letter to the staff, he made public his intention to name Leandra English as deputy director and his self-proclaimed successor.  The email below reveals that the agency wanted to wait until virtually the last minute to put this all into process.

Cordray’s team grappled with when, and in what order, to update the website.

And, finally, discussion of the order of the email to staff and the resignation letter.

English confirms:

The general counsel, Mary McLeod, was obviously aware that this is all going on, given that she was CC’d on virtually all of these emails, including the one above.  Yet, in the biggest blow to Cordray’s gambit, General Counsel McLeod sends a letter memo to the CFPB Leadership Team the very next day, November 25, with a concrete conclusion:

I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB . . . . Accordingly, as General Counsel for the Bureau, it is my legal opinion that the President possesses the authority to designate an Acting Director for the Bureau under the FVRA, notwithstanding § 5491(b)(5).

Elsewhere in her letter, McLeod states, “[t]his confirms my oral advice to the Senior Leadership team[.]”  Oral advice that the team ignored when they tried to install English.

To make matters worse, English continued to send emails claiming to be the Acting Director.  The first came in an email to the Senior Leadership Team, which included the General Counsel.

She made the same claim in an email to the staff of Senator Elizabeth Warren:

And finally in a staff-wide email.

This brazen attempt to commandeer an entire agency threatens the Constitutional Order.  Were Richard Cordray and Leandra English successful, they would have essentially created an agency that fell outside of any of the three branches of government.  As D.C. Circuit Court of Appeals Judge Brett Kavanaugh stated, the Director of the CFPB holds “enormous power over American business, American consumers, and the overall U.S. economy. [ ] The Director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law[.]”[3]  Judge Kavanaugh concluded, “the Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.”[4]  Deciding who wields such awesome power should not happen in a series of harried emails between bureaucrats.  It should be decided by the President[5] and, when a permanent successor is ultimately named, the Senate confirmation process.[6]

Eric Bolinder is counsel at Cause of Action Institute.

 

[1] According to LinkedIn.

[3] PHH Corp v. Consumer Fin. Prot. Bureau, 839 F.3d 1, 7 (D.C. Cir. 2016), vacated and granted en banc review, Feb. 16, 2017.  The D.C. Circuit granted en banc review for this case, which automatically vacates Judge Kavanaugh’s opinion.  A decision is still pending.

[4] Id.

[5] See U.S. Const. art. II, § 3, cl. 2. (the Appointments Clause).

[6] This author would like to note he agrees with Judge Kavanaugh that the overall structure of the CFPB is unconstitutional, regardless of who appoints the Director.

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01/30/2018

Commercial Speech Doctrine Needs an Overhaul

Cause of Action Institute joined with the Cato Institute and Competitive Enterprise Institute in filing an amicus brief urging the U.S. Supreme Court to grant the petition for certiorari in CTIA v. City of Berkeley.  The commercial speech case involves an ordinance in Berkeley, California requiring cell phone retailers to make the following statement to their customers:

The City of Berkeley requires that you be provided the following notice:

To assure safety, the Federal Government requires that cell phones meet radio frequency (RF) exposure guidelines.  If you carry or use your phone in a pants or shirt pocket or tucked into a bra when the phone is ON and connected to a wireless network, you may exceed the federal guidelines for exposure to RF radiation.  Refer to the instructions in your phone or user manual for information about how to use your phone safely.[1]

The problem is that it is not entirely clear whether the harm described in this statement is actually true.  The current First Amendment commercial speech doctrine allows governments to compel commercial speech that is both “purely factual” and “uncontroversial.”[2]

The standard of review by which courts determine whether a particular compelled commercial statement meets this requirement can be the deciding factor in a case.  Take Berkeley, for example.  In this case, the record in the district court did “not offer[] any evidence that carrying a cell phone in a pocket is in fact unsafe.”[3]  That is, there is “no evidence in the record that the message conveyed by the ordinance is true.”[4]

Under any serious review of a governmental action impinging on a constitutional right—which compelled speech does—the absence of evidence to show that the government was indeed advancing a legitimate interest would be enough to strike down the ordinance.  But not in Berkeley.  The Ninth Circuit held that any “more than trivial” interest will suffice.[5]  No attention was paid to whether that interest, however trivial, is actually a legitimate one or if the compelled speech is advancing it.

The Supreme Court must step in

The commercial-speech doctrine is notoriously muddy.  Both Justice Thomas and Justice Ginsburg have recognized that the lower courts are in need of “guidance” on the “oft-recurring” and “important” subject of “state-mandated disclaimers.”[6]  And this guidance is necessary, the Justices wrote, because the Court has not “sufficiently clarified the nature and the quality of the evidence a State must present to show that the challenged legislation directly advances the governmental interest.”[7]

This lack of clarity has given rise to governments at various levels forcing commercial speakers to communicate disputed and politically charged statements, sometimes where the underlying factual issues are not resolved.  And lower courts are expanding government’s ability to commandeer commercial speaker’s message.  This contravenes the Constitution’s command that “Congress shall make no law” against free speech (incorporated against the states by the 14th Amendment).  This is precisely the type of behavior one would expect in a legal environment where the lines are not clear.

Commercial Speech Doctrine Must be Clear

The Supreme Court should grant the cert petition in Berkeley and ensure that moving forward when a government tries to compel commercial speech to carry the government’s message, the government must be able to, at a minimum, adduce evidence that (1) the purported harm actually exists, (2) mitigating that harm is a compelling government interest, (3) that the infringement on the speaker’s rights is narrowly tailored to advance that interest, and (4) that the compelled commercial speech actually does advance the interest.  We will continue to see doctrinal confusion and unnecessary compelled commercial speech absent that clarity, which should be avoided.

James Valvo is Counsel and Senior Policy Advisor at Cause of Action Institute.  You can follow him on Twitter @JamesValvo.

[1] Berkeley Municipal Code § 9.96.030(A).

[2] Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985).

[3] CTIA–The Wireless Ass’n v. City of Berkeley, California, 854 F.3d 1105, 1125 (9th Cir. 2017) (Friedland, J., dissenting in part).

[4] Id.

[5] Id. at 1117.

[6] Borgner v. Florida Bd. of Dentistry, 537 U.S. 1080 (2002) (Thomas, J., joined by Ginsburg, J., dissenting from denial of certiorari).

[7] Id.

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01/17/2018

Fishing Wars: Drowning in Regulations

Commercial fishing boats in New England are going under at an alarming rate, and hard-working families are being demonized by a multimillion-dollar environmental industry whose only product to sell is fear.

On this episode of CRTV’s Michelle Malkin Investigates, Michelle travels to the Northeast to hear the stories of people in the fishing industry who are drowning in government regulations, including our client, David Goethel, who is fighting a fishing regulation that, by the government’s own estimate, could put 60% of his industry out of business.

Watch the full episode at CRTV.com 

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01/10/2018

State Department Motion to Dismiss Denied in Colin Powell Email Case

Washington, D.C. – U.S. District Court Judge Trevor McFadden has denied the federal government’s motion to dismiss a lawsuit to compel Secretary of State Rex Tillerson and U.S. Archivist David Ferriero to fulfill their statutory obligations under the Federal Records Act (“FRA”) to recover former Secretary of State Colin Powell’s work-related email records from a personal account hosted by AOL, Inc.  Cause of Action Institute (“CoA Institute”) filed the lawsuit in October 2016 after then-Secretary John Kerry and Archivist Ferriero both failed to act on CoA Institute’s FRA notice and Freedom of Information Act (“FOIA”) request.

Although the government argued it had no reason to believe that copies of Colin Powell’s email records still existed and were recoverable from AOL servers, Judge McFadden rejected that conclusion, describing the State Department’s recovery efforts as “anemic,” particularly in light of the fruitful “leveraging” of law enforcement authority in the case of former Secretary Hillary Clinton.  “The Defendants’ refusal to turn to the law enforcement authority of the Attorney General is particularly striking in the context of a statute with explicitly mandatory language,” Judge McFadden opined.  “[T]here is a substantial likelihood that [CoA Institute’s] requested relief would yield access to at least some of the emails at issue.”

Cause of Action Institute President and CEO John J. Vecchione: “Agencies must take their responsibility to secure federal records seriously. For too long, agencies have allowed federal employees to use personal email accounts without ensuring those records are recovered and maintained in accordance with the law.  We are encouraged that the court recognized that agencies must do more to recover lost records.”

In September 2016, the House Oversight & Government Reform Committee held a hearing at which then-Under Secretary of State Patrick Kennedy testified that the State Department had undertaken minimal efforts to retrieve Colin Powell’s work-related email.  After learning that Powell no longer had access to his AOL account or its contents, the State Department merely asked Powell to contact AOL to see if anything could be retrieved.  Despite a request from the National Archives and Records Administration (“NARA”) to contact AOL directly, the State Department never did so.  Ultimately, the agency relied on unreliable hearsay—namely, the reported representations of Colin Powell’s personal secretary about an apparent phone conversation between someone at AOL and a staff member of the House Oversight Committee—to conclude that no records could be recovered.

Following yesterday’s ruling on the motion to dismiss, the government Defendants must now either comply with their non-discretionary obligations under the FRA, which requires them to initiate action through the Attorney General to recover unlawfully removed records, or they must proffer new evidence to prove the “fatal loss” and irrecoverability of Colin Powell’s email records from AOL servers.

Judge McFadden’s opinion can be accessed HERE.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

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01/10/2018

IRS Dodges Oversight, Refuses to Measure Economic Impact of its Rules: Investigative Report

Washington D.C. – Cause of Action Institute (“CoA Institute”) today released a groundbreaking investigative report, Evading Oversight: The Origins and Implications of the IRS Claim that its Rules Do Not Have an Economic Impact, that reveals how the IRS has developed a series of self-bestowed exemptions allowing the agency to evade several legally required oversight mechanisms. The report outlines in detail how the IRS created this exemption to exempt itself from three critical reviews intended to provide our elected branches and the public an opportunity to assess the economic impact of rules before they are finalized.

Read about the report in today’s Wall Street Journal, including suggestions for how the White House and Congress can work together to end this harmful practice.

CoA Institute Counsel and Senior Policy Advisor James Valvo: “The IRS for too long has evaded its responsibilities to conduct and publish analysis of its rules. Rules issued by the IRS can change the economic landscape for Americans in many ways, including how the agency calculates deductions, exemptions, reporting, and recordkeeping. By creating bureaucratic loopholes, the IRS deliberately sidesteps several oversight mechanisms designed to provide a check on overly burdensome rules. The IRS should be held to the same standard as other regulatory agencies and stop avoiding its responsibilities.”

For years, the IRS has evaded several laws directing agencies to create economic impact statements for rules. These analyses are part of three oversight mechanisms: The Regulatory Flexibility Act, the Congressional Review Act, and review by the White House Office of Information and Regulatory Affairs.  All three are good-government measures designed to provide a check on abuse by the administrative state.

CoA Institute’s investigative report reveals the origins and implications of the unprecedented IRS position that its rules have no economic impact and do not require such analysis because, it claims, any impact emerges from the underlying law that authorized the rule, and not the agency’s decision to issue or alter it.

The full report, including executive summary and key findings, can be accessed HERE.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

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01/5/2018

The Outer Continental Shelf Oil and Gas Leasing Program

In August of 2016, Cause of Action Institute (“CoA Institute”) submitted a Freedom of Information Act (“FOIA”) request, seeking the following information about the Outer Continental Shelf (“OCS”):

Because of the agency’s failure to release records responsive to this request, CoA Institute filed a FOIA lawsuit on November 11, 2016. Recently, the Bureau of Ocean Energy Management (“BOEM”) provided its 10th and final production. While CoA Institute is still in active litigation regarding this request, considering the new administration and its priorities, we thought it of value to discuss our findings to date. However, to fully understand the process, we believe that some background on the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C., is necessary.

The Outer Continental Shelf and OCSLA background

The outer continental shelf is made up of “all submerged lands lying seaward and outside of the area of lands beneath navigable waters…and of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.” OCSLA was enacted on August 7, 1953 and governs the policies and procedures related to the OCS. Under  OCSLA, the Secretary of Interior (the “Secretary”) is responsible for the administration of mineral exploration as well as other OCS development (i.e., wind energy).[1] Further, through OCSLA, the Secretary may grant leases to the highest qualified responsible bidder based on sealed competitive bids.[2] OCSLA also provides guidelines for implementing an OCS oil and gas exploration and development program.[3] This program, the Outer Continental Shelf Oil and Gas Leasing Program, is commonly referred to as the “Five-Year Program”.

Specifications under the Five-Year Program

As provided in the OCSLA, the Five-Year Program shall have a schedule that indicates as precisely as possible, the size, timing and location of leasing activity best suited for national energy needs during the five-year period following its approval or re-approval.[4] In reviewing the five-year program, the BOEM looks at a variety of economic and environmental factors. The timing and location of exploration, development, and production of oil and gas on the OCS shall be based on consideration of eight factors.

These factors are:

“(A) existing information concerning the geographical, geological, and ecological characteristics of such regions; (B) an equitable sharing of developmental benefits and environmental risks among the various regions; (C) the location of such regions with respect to, and the relative needs of, regional and national energy markets; (D) the location of such regions with respect to other uses of the sea and seabed, including fisheries, navigation, existing or proposed sea-lanes, potential sites of Deepwater ports, and other anticipated uses of the resources and space of the outer Continental Shelf; (E) the interest of potential oil and gas producers in the development of oil and gas resources as indicated by exploration or nomination; (F) laws, goals, and policies of affected States which have been specifically identified by the Governors of such States as relevant matters for the Secretary’s consideration; (G) the relative environmental sensitivity and marine productivity of different areas of the outer Continental Shelf; and (H) relevant environmental and predictive information for different areas of the outer Continental Shelf.”

Further, the Five-Year Program provides that the Secretary shall request and contemplate input from federal agencies and the Governor of any State that could be affected under the proposed leasing program. Suggestions from local government executives in states that may be affected, which have been previously mentioned to the Governor of such State and any other person may also be considered. Under 43 U.S.C. §1331,  the term “person” includes, in addition to a natural person, an association, a State, a political subdivision of a State, or a private, public, or municipal corporation.

The Five-Year Program “process includes three separate comment periods, two separate draft proposals, a final draft proposal, a final secretarial proposal, and development of environmental impact statement (EIS).” This process, takes approximately two and a half years to complete. As mentioned above, input from federal agencies, state and local government, and any other person, may be considered. After the Secretary approves the program, the Proposed Final Five-Year Program is sent to the President and Congress. After at least sixty days, the Secretary may approve the program. The Department of Interior cannot offer an area for lease without it being included in an approved Five-Year Program.

The Secretary shall review the leasing program approved under this section at least once a year. After Secretarial approval, the geographic scope of a lease sale area can be narrowed, cancelled, or delayed without the development of a new program. The Secretary shall, by regulation, establish procedures for various steps in the management process. Such procedures will apply to various activities, including any significant revision or reapproval of the leasing program.

This series will continue next week with a comparison between the requirements outlined above and the process that took place during the 2017-2022 planning process.

Any questions, commentary, or criticisms? Please email us at kara.mckenna@causeofaction.org and/or katie.parr@causeofaction.org

Katie Parr is a law clerk and Kara E. McKenna is a counsel at Cause of Action Institute.

[1] Bureau of Energy Management, BOEM, https://www.boem.gov/OCS-Lands-Act-History/ (last visited January 3, 2018).

[2] Id.

[3] Id.

[4] Id.

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