Saturday, March 21, 2009

Scattered Tribe

{Obligatory disclaimer: I am not a lawyer much less a Constitutional lawyer much less a Constitutional law professor much less “one of the foremost constitutional law scholars and Supreme Court practitioners in the United States.” I can read, however, and report on what I see on the plain face of a document. That is what I have done here and if I’ve missed some - or all - legal subtleties that completely undermine my argument I’m sure I’ll hear about it if an AIG bonus claw-back ever actually becomes law since that would - I hope - result in an immediate Constitutional challenge.}

Conor Clarke at The Atlantic consulted Laurence Tribe about the Constitutionality of a Congressional measure to tax AIG bonuses at a very high rate specific to them. Clarke specifically raised the bill of attainder question and Tribe replied, in part:

Moreover, the fact that the aim of such a tax would be manifestly regulatory and fiscal rather than punitive and condemnatory, and that the tax would be part of a measure that would be prospective as well as retroactive in its operation, would serve to blunt the force of any bill of attainder challenge. Finally, such a tax would be devoid of the sting of political retribution and would not partake of the classic "trial by legislature" that the attainder ban was designed to avoid.

Realizing that lawmakers sounded both “punitive” and “condemnatory”, Clarke asked Tribe for clarification. Tribe replied:

Some perception of political retribution might be unavoidable, but that's not enough to render such a measure unconstitutional. It's well established that the impassioned remarks and subjective intentions of scattered members of Congress don't suffice to condemn as a purely punitive enactment an otherwise valid regulatory or tax measure. If the law were otherwise, it would be much too easy for lawmakers to doom laws with poison-pill remarks.

I laughed, of course. In which universe were the punitive, condemnatory, and retributive remarks about AIG bonuses restricted to simply “scattered” members of Congress? I’m not laughing now.

In his first post about Tribe, Clarke points out that Tribe “argued one of the most important Bill of Attainder cases at the Appellate level: SBC Communications v. FCC.” I skimmed through both the District Court ruling on this case and the Court of Appeals opinion. SBC won the case originally: the District Court held the FCC regulations “constitute a bill of attainder and thus are unconstitutional”. However, the US Court of Appeals, 5th Circuit, overturned this saying “there simply cannot be a bill of attainder unless it is also the case that the Special Provisions impose punishment on the BOCs.”

Despite their different results, however, both opinions focus heavily on whether the FCC ruling in question was “punitive”. The bottom line was summed up by the Court of Appeals thus:

In deciding whether a statute inflicts forbidden punishment, we have recognized three necessary inquiries: (1) whether the challenged statute falls within the historical meaning of legislative punishment; (2) whether the statute, "viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes"; and (3) whether the legislative record "evinces a congressional intent to punish."

Now that the House has passed a specific bill - H.R. 1586 - we can take a look at it and see how well it holds up to these three inquiries.

First, does it “fall within the historical meaning of legislative punishment”? This looks like an area that is continuously under construction by the courts but passages from the opinions seem to indicate it could:

The Supreme Court has stated that the Bill of Attainder Clause is "not to be given a narrow historical reading," rather, it is "to be read in light of the evil the Framers had sought to bar: legislative punishment, of any form or severity, of specifically designated persons or groups." (from the District Court opinion)

The Supreme Court in Nixon again echoed this sentiment when it stated that "[o]ur treatment of the scope of the Clause has never precluded the possibility that new burdens and deprivations might be legislatively fashioned that are inconsistent with the bill of attainder guarantee." (from the District Court opinion)

the Court examined a federal law that cut off salary payments to certain named federal employees, allegedly due to their "subversive" activities. Finding that the law "'operate[d] as a legislative decree of perpetual exclusion' from a chosen vocation," and thus "accomplishe[d] punishment of named individuals without judicial trial," Justice Black struck it down as an unconstitutional bill of attainder. (from the Court of Appeals opinion)

In other words, it is not unreasonable to argue that depriving someone of a large part of their contracted salary constitutes “punishment”.

Second, can H.R. 1586 “reasonably ... be said to further nonpunitive legislative purposes"? I say it cannot. I can think of two nonpunitive legislative purposes that could be claimed for H.R. 1586. First, Congress can claim it is intended to recover ill-spent Federal money. Yet the bill explicitly leaves a great deal of such money unclaimed by exempting bonus money paid to employees making less than $250,000 per year. Had the bill been intended to recover ill-spent Federal money it would have taken the same percentage of bonus money from every employee and - arguably - would have taken 100%.

Congress could also claim that H.R. 1586 is intended to prevent future bonuses being given by bailed-out companies. Yet the bill does not prohibit such bonuses; it merely taxes them. A bailed-out company that believes it is legally obligated to pay such bonuses going forward is unlikely to be deterred by H.R. 1586. It will make far more sense for the company to honor what it sees as its contractual obligations and let the IRS take the 90%. (The Senate’s claw-back bill - S. 651 - appears more likely to qualify as a preventive measure but it fails the idiocy test, as I’ll explain in a later post.)

Thus I do not believe that H.R. 1586 can reasonably be said to “further nonpunitive legislative purposes”. (Unless, of course, one agrees with Representative Charlie Rangel that “respond[ing] to the fears and anger of the people” constitutes a legitimate government purpose.)

Third, does the legislative record for H.R. 1586 "[evince] a congressional intent to punish”? In reference to the salary case mentioned above, the Court of Appeal’s sums up Frankfurter’s dissent as follows:

Because he found no indication in the text of the statute or the circumstances of its passage that Congress intended it as a punitive measure, Justice Frankfurter concluded that it was not a bill of attainder.

I think the text of H.R. 1586 gives weight to the argument that Congress intended it punitively. As I said above, if the House taxed all the bonuses equally Congress could more believably have argued that it was attempting to recover ill-spent Federal funds. Instead, by making it clear that the tax applies only to those making more than $250,000, the House explicitly leaves ill-spent Federal money in the hands of some bail-out bonus recipients while reserving its wrath for those who make “too much” money.

It is when we consider whether the “circumstances of [the] passage” of H.R. 1586 indicate that Congress intended it as a punitive measure that the importance of Tribe’s clarification becomes clear. If we consider all the statements made by Congressmen about how outrageous the AIG bonuses are, it is quite clear that H.R. 1586 “evinces a congressional intent to punish.” By characterizing this ferocious and widespread Congressional assault on AIG as coming only from “scattered members of Congress” Tribe is launching a pre-emptive strike against attempts to use Congressional intent as part of an argument that a claw-back bill is punitive and therefore reasonably constitutes a bill of attainder.


Reading {heading added 3/24/09 for clarity}:

Another case in which BellSouth challenged the FCC can be found here. Laurence Tribe argued for BellSouth. Judge Santelle’s dissent is particularly interesting.

The Wall Street Journal also consulted Tribe about the Constitutionality of an AIG bonus claw-back law and did not restrict its inquiry to the bill of attainder argument. Instead WSJ raised five possible Constitutional issues: Bill of Attainder; Ex Post Facto; the Contract Clause; the Due Process Clause of the Fifth Amendment; and the Takings Clause of the Fifth Amendment. Tribe dismissed all of them.

Generally I will just say that my first reaction when I considered H.R. 1586 was that surely it must be unconstitutional since it violates what seems to be the spirit of so many provisions, the very ones WSJ raised with Tribe. I know this attitude is a horror to strict constructionists and in general I lean their way but it does seem to me that H.R. 1586 is simply wrong.

Specifically, I find it interesting that in dismissing the issue of substantive due process Tribe says:

And, as to substantive due process, the only relevant requirement would be that the challenged measure be rationally calculated to achieve a legitimate government purpose, something nobody could deny in this instance.

As I said above, I do deny that H.R. 1586 achieves a legitimate government purpose which I believe means Tribe is - as the television courtroom dramas like to say - assuming facts not in evidence.

After finishing this post and while looking for a source for the Rangel quote, I found this article from CNN. It backs up my arguments here and provides a little selection of some of the more egregious remarks made by Congressmen with regard to the AIG bonuses. I was particularly struck by this comment which echoes what I said above about my gut level feeling that H.R. 1586 is simply wrong:

"What a lot of judges are going to think is, 'I'm not exactly sure what clause of the Constitution this fits under, but it smells bad,'" said Seidman.

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