Score One for the Little Guy

In an opinion handed down today, the United States Supreme Court rejected the NFL's bid for exemption from antitrust laws. American Needle Inc. v. National Football League, 560 U.S. ___ (2010). More accurately, the Supreme Court allowed the antitrust lawsuit against the National Football League to proceed at least a little further when it ruled unanimously that the league and its member owners (a.k.a. teams) do not have immunity from a federal lawsuit brought by American Needle, a sports apparel company, understandably annoyed about losing its contract to make NFL-licensed hats and other league merchandise.

Stemming from the days of the Teddy Roosevelt and the big trust-busters, the Sherman Act holds illegal any arrangement, contract, combination, or conspiracy that unreasonably restrains trade. The inquiry before the Court was whether the agreement in question joined together separate economic actors pursuing separate economic interests in a way that “depriv[ed] the marketplace of independent centers of decisionmaking" and, therefore, limited actual or potential competition. If it did, the agreement is covered by §1 of the Sherman Act; and, the court had to decide whether the restraint of trade was unreasonable. The arrangement at issue in American Needle gave Reebok exclusive rights to manufacture and sell NFL-licensed apparel.

The Supreme Court unanimously said "oh no you didn't" to the NFL. The opinion, written by Justice Stevens, noted - i believe correctly - that The NFL teams do not possess either the unitary decisionmaking quality or the single aggregation of economic power characteristic of independent action. Each of them is a substantial, independentlyowned, independently managed business, whose “general corporateactions are guided or determined” by “separate corporate conscious-nesses,” and whose “objectives are” not “common.” They compete with one another, not only on the play-ing field, but to attract fans, for gate receipts, and for contracts with
managerial and playing personnel. The teams are competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the “common interests of the whole” league, but, instead, the interests of each team itself.

However, and most importantly, the Court did not hold the agreement illegal on its face. Instead, the case was sent back down to the trial court for a determination of its legality under the "Rule of Reason." Under the Rule of Reason, the true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. The Court left this decision for the trial court. With that said, a' la' Desmond Hume of Lost, we may see this case in another life brutha'.

By the way, the NFL is a non-profit organization. I just find that absurd.

Bipartisanship Against Health Care Litigation

It seems that I'm not the only one who thinks the health insurance reform litigation is a absurd. See Previous Pose. Harvard Law professor and Former Solicitor General Charles Fried, in a pointed fashion, denounced the litigation and noted that "anybody who proposes something like [the health care litigation] is either ignorant -- I mean, deeply ignorant -- or just grandstanding in a preposterous way . . . It is simply a political ploy and a pathetic one at that." Mr. Fried was appointed to the post of Solicitor General by President Reagan. See Jackson Free Press.

Ohio Attorney General Richard Cordray agrees. Cordray clerked for Supreme Court Justices Byron White and Anthony Kennedy. In expressing his deep concern over the litigation, Mr. Cordray advised that "[upholding the suit] would require tearing up decades of contrary precedent." Unfortunately, Mr. Cordray failed to indicate the cases to which he was referring, but, nevertheless, acknowledged the uphill battle awaiting the lawsuit. In making his remarks, Mr. Cordray also cited to Mr. Fried's comments.

It seems that people are finally beginning the speak out against the partisan attorneys general and governors utilizing the Federal Court system for political gain. It's relieving to see that members of both political parties are joining together against the political grandstanding.

Squeeze it. That's How You Know it's Ripe.

In the previous post, we discussed the procedural hurdle of standing. Today, we'll be discussing it's counterpart, ripeness. Both standing doctrine and ripeness doctrine require a court to ask whether the attorneys general have suffered harm. Ripeness, however, requires an additional inquiry into whether the harm asserted has "matured sufficiently to warrant judicial intervention." Pacific Legal Foundation v. State Energy Resources Conservation & Development Comm., 659 F.2d 903 (9th Cir. 1981). In other words, are the parties injured at the time they filed suit. If they are not, then the case is not an Article III case or controversy and must be dismissed. Id.

In the previous post, we identified two alleged injuries - (1) requiring individuals to have health insurance and (2) forcing the states to expend money to implement the health care bill. The first injury, we noted, did not pass the standing hurdle. Thus, it is not necessary to see if it is also "ripe." We only need to address the latter injury.

Mr. and Mrs. Attorneys General, you might not like to hear this. Your only cognizable injury most likely does not meet the ripeness requirement. Although the bill was recently passed. It appears that a number of its provisions, especially the ones affecting the States, do not take effect until 2011 or even 2014. Until that time, you have no present injury; you have only a potential or future injury. Who know what may happen by that time. The bill could be amended, repealed, replaced, etc. It might not even be enforced at all. Without a present injury, the suit is simply not ripe. In the absence of such an injury, the suit must be dismissed.

Ripeness is one of the first things they teach you in Constitutional law class. You would think that any lawyer - let alone an attorney general of a State - would have even a cursory understanding of the doctrine and it's requirement. Alas, attorneys general, you proved that no area of life, not even the area of Constitutional law, is safe from unsubstantiated political attacks.

Again, if you think this is a mere "technicality" and should not even be a consideration, please see my previous post.

St-St-St-Standing Junior

I've cleared the dust from my law school books, did some research, and here is what I found.

Before discussing the substantive Constitutional issues proposed by the States' Attorneys General, we must first address some procedural issues, standing and ripeness. I apologize in advance if this is dry. I'll do my best to spruce it up and add some life to it.

An initial step in any Constitutional analysis is to determine if the party or parties bringing suit have standing. The doctrine of standing has it's origins in the Constitution, Article III to be specific. Article III requires a "case" or "controversy" to be present before a Court can adjudicate an issue. See Article III, Section 2. As noted in the case of Frothingham v. Mellon, 262 U.S. 447 (1923):

[The Supreme Court has] no power per se to review and annul acts of Congress on the ground that they are unconstitutional. The question may be considered only when the justification for some direct injury suffered or threatened, presenting a justiciable issue, is made to rest upon such an act…. The party who invokes the power must be able to show not only that the statute is invalid but that he has sustained or is immediately in danger of sustaining some direct injury as the result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally.

See Frothingham. Thus, in order to satisfy this Constitutional requirement, the United States Supreme Court created a three-part test: (1) the plaintiff commencing the lawsuit (Attorneys General on behalf of their respective States and Commonwealths here) must have suffered an injury in fact; (2) there must be a causal nexus between that injury and the conduct complained of; and (3) it must be likely that the injury will be redressed by a favorable judicial decision. The first element - injury in fact - seems to be a problem for the States' case.

In determining whether the plaintiff has a personal stake sufficient to confer standing, the focus should be on whether the complaining party has alleged any injury in fact, economic or otherwise. The injury may not be merely hypothetical or conjectural. The States' seem to allege a number of Constitutional issues, none of which actually injury the States themselves. First, the States maintain that "the act represents an unprecedented encroachment on the liberty of individuals living in the Plaintiffs' respective states" and imposes a tax on "uninsured citizens and residents." See Complaint at paragraph 2. Well, let's see, notwithstanding the nauseating political sloganeering rhetoric contained in the Complaint, all the Complaint seems to do here is allege an injury to the "individuals living in the Plaintiffs' respective states." Clearly, there is no injury to the State itself in this assertion. There is simply an injury to individuals. Such an allegation fails to meet the standing requirement.

The second injury asserted by the States, however, may provide them with the money to pay the Standing toll. This injury can roughly be summed up by saying "we the states will be required to spend more money (i.e., labor, supplies, offices, etc.) to implement your health insurance reform. At an extremely basic level, this seems to meet the standing requirement. But for the health bill, the states would have additionally money to spend on other areas of its choosing. If the case fell before an extremely sympathetic Judge, this assertion may provide the states with a way to overcome the standing requirement.

Yet, it is worth noting that the states expend a significant amount of money implementing any number of Federally-created programs such as Medicare and Medicaid and Employment (including unemployment) offices. Thus, allowing the health care bill to proceed on this ground may call into question a number of firmly established Federal programs. A Judge (or eventually the Supreme Court Justices) may be loathe to be the catalyst for such a radical change in the legislative and administrative landscape. (Of course that argument assumes that there may be some Constitutional infirmity with the laws that promulgate those programs).

As such, the Standing requirement, as with so many legal arguments, is inconclusive. As any professor of law would say, "it depends." There is no concrete answer on this one. Before we conclude this session, I'd like to address two additional issues - the technicality argument and overzealous advocacy.

The Technicality Argument

It doesn't take much to imagine that assuming the Federal Court dismisses this action for lack of standing, someone will argue that it was kicked out of court on some "technicality." This argument is simply illogical. The Standing argument, as discussed above, is founded in the Constitution. It has the full weight of efficacy of the document to back it up. Yet, people have a tough time swallowing such a doctrine. But, to simply dismiss this doctrine as a technicality calls into question not only Article III of the Constitution, but also every other provision, including the scope and limit of Federal powers. Thus, taking the technicality logic to an extreme, one could say that the scope and limit of Federal powers are merely a technicality; and, as a result, they should not be enforced. Clearly, such an argument does not have any credibility. Likewise, an argument discounting the standing requirement does not have any credibility.

Overzealous Advocacy

One piece of advice from Chief - then Justice - Rehnquist is particularly applicable to the health care political debate litigation. In discussing the doctrine of Standing, the Chief Justice asserted that "standing is not measured by intensity of litigant's interest or fervor of his advocacy." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.s. 464 (1982). The attorneys general would be well-advised to keep this principle in mind. The health care legislation arose from a decades-long political debate. It has been worked and re-worked numerous times, primarily in a contentious manner. The present debate is no exception. Parties and groups from all political stripes inflicted and suffered serious injuries from the debate. With that said, it is questionable that the attorneys general - many of them partisan - would even commence such litigation. It seems clear that this litigation is simply an attempt to defeat an opposing political party, not uphold the validity of the Constitution. Rarely has the Constitution been utilized in such a one-sided political fashion. It is not a doctrine to be opportunistically referenced whenever a political party looses a legislative battle. In other words, a losing political party should not play fast-and-loose with the document on which this country was founded.

Step 2: Ripeness

My Catalyst

When I first heard that Attorneys General for numerous States were preparing to sue the federal government over the constitutionality of the newest health care bill - which, in my opinion, should be termed "health insurance reform" - I immediately began wondering if the Attorneys General had valid legal arguments. I had an inkling that they lacked a legal foundation, but as I'm not a Constitutional scholar, I wasn't quite sure of the possible legal dilemmas, if any. (Yes, I know I'm a lawyer, but I haven't particularly dabbled in the area of Constitutional law since I left the hallowed halls of my law school, or, at least, my barbri bar exam prep course years ago; wow, it's been that long. Sorry, I just had a self-awareness moment.)

In an effort to satiate my curiosity, I turned to the place any learned lawyer (or red-blooded American) would - the interwebs. I scoured the google sites only to find a lack of well-reasoned material on the subject (Yes, it is possible to "find" a lack of something). I searched and searched and searched only to find less-than-legal analyses of the bill. I was shocked. I thought there was an answer for everything on the internet.

That brings us to the present. I'm starting this blog (and hopefully regularly maintaining it) in order to answer political questions from a legal prospective. My first task is to address the legality of the health care bill a.k.a. The Patient Protection and Affordable Care Act.

Step 1: Standing. (To be continued)