Dorf on Law

By Mike Dorf On Wednesday, the Supreme Court handed down a 5-4 ruling in  AT&T Mobility LLC v. Concepcion .  In an opinion by Justice Scalia, the Court found that the Federal Arbitration Act (FAA) preempts California's contract rule treating class action waivers as unconscionable (where the individual harm is not large enough for the typical claimant to file suit).  The opinion is unpersuasive.  Indeed, the case is arresting because the Court's ruling runs away from principles that conservatives purport to value in other contexts. First, a brief recap of the issue.  The petitioner (an entity I shall oversimplify by calling AT&T) advertised a "free" cell phone, but subscribers were charged roughly $30 as a tax on the retail value of the phone.  Subscribers brought a class action in federal district court alleging false advertising (and other claims) to recover the tax and other relief.  AT&T sought to compel arbitration, citing the agreement to arbitrat

-- Posted by Neil H. Buchanan If the U.S. government were to exceed its legal limit on issuing debt, what would happen? In the context of budget debates, this question is usually posed in its smart-alecky version: "What, are you going to put everyone in Washington in jail?" In a way, this is a variation on Stalin's famous rhetorical question: "How may battalions does the Pope have?" We can say that we have a budget rule, but what happens if we simply ignore it? Earlier this week, Professor Dorf ( here ) and I ( here ) discussed why the Republicans' current attempts to use the debt limit to force concessions on spending are in a new category of outrageous political conduct. The stakes are so high, we both argued, that holding the debt limit hostage to policy disagreements was to tempt a horrible fate. Our analyses, however, assumed that the inevitable consequence of a failure to increase the debt limit would be default -- that is, that some U.S. debt obl

By Mike Dorf In explaining why his law firm was not going to defend the constitutionality of DOMA, after having agreed with House Republicans a week earlier to take the case, King & Spalding partner Robert Hays said: "In reviewing this assignment further, I determined that the process used for vetting this engagement was inadequate."  This explanation doesn't really pass the laugh test , but seems designed to avoid the implication that K&S acted unethically in dropping the case.  Lawyers have considerably greater discretion in choosing what cases to take in the first place than they have in dropping existing clients.  By invoking improper vetting, Hays appears to be saying that his firm goofed in taking the case and so should be understood to be redoing the original intake.  He thus could be read to be saying that the K&S decision was not really a decision to abandon a client but a retroactive decision not to take the client in the first place. That should

-- Posted by Neil H. Buchanan In yesterday's post , Professor Dorf worked through the various ways in which the inflammatory term "terrorism" could be applied to the Republicans' current threats to allow the U.S. government to reach its debt limit next month -- and, presumably, thus to allow the country to default on its obligations soon thereafter. He concluded that it could be accurate to call these threats terroristic if either: (1) all hardball tactics in negotiations are called terroristic, regardless of content, (2) the term terroristic carries with it condemnnation of the substantive goals that the Republicans are trying to achieve, or (3) the Republicans' position is too "demanding," by which he means that they are insisting upon cuts in spending that had "nothing to do with running up the deficit and debt" while preserving and worsening the policies that had everything to do with our having arrived at the current situation, or "t

By Mike Dorf There is a longstanding debate over whether it makes sense to call someone a "terrorist" simply in virtue of the means he uses to achieve his political ends.  On one view, whether someone is a terrorist depends on whether he deliberately attacks civilians for political ends, while on another view, everything depends on the justice of the underlying cause, its history, and so forth.  In this second view, means that, if used for an unjust end, would be properly deemed terrorism, are something else (like "armed resistance") if used for a just end.  I tend to favor the former view, which might allow that terrorism could perhaps be justified in extreme cases for righteous causes but it would still be terrorism.  However, I don't have a substantial intellectual or moral investment in that position and will not attempt to defend it here.  Instead, I want to draw a parallel to an increasingly common usage that has been emerging: The tendency to treat the

-- Posted by Neil H. Buchanan In response to my post last Friday , a loyal Dorf on Law reader/commenter raised some interesting points about consumption taxes. He suggested that, even though consumption taxes are not (contrary to much political hype in the U.S.) inherently less complicated than income taxes, there could nonetheless be good reasons (even for those who believe in progressive redistribution) to support a move to a consumption tax. He posed two questions to explore this possibility, one of which I will address here. (I hope to address the second question in a later post.) Can a consumption tax system can be designed to be more progressive than an income tax system? Answering this question requires some important background work. Because non-rich people tend to save very little of their incomes, all (or nearly all) of their incomes would be subject to taxation under a consumption tax, whereas the high-saving rich folks would see large amounts of their incomes exempted

-- Posted by Neil H. Buchanan Continuing my discussion of the Ways and Means Committee's hearing last Wednesday on tax simplification, previously blogged here and here , I now take up the question of "tax phase-outs." After describing the purpose and mechanics of phase-outs, I will discuss critically the Republican majority's desire to eliminate phase-outs from the tax code. A phase-out is a mechanism by which a tax provision's effect is reduced, and ultimately eliminated, in a gradual manner, rather than by setting a strict cut-off rule. In our federal income tax system, provisions are usually phased out over a range of income. For example, you could have a tax benefit that is fully available for anyone with income up to $25,000, not available at all to anyone with income above $50,000, and available in decreasing degree as income rises from $25,000 to $50,000. Usually, this is done as a simple linear progression, so that taxpayers with $40,000 in income wou

By Mike Dorf Yesterday the Supreme Court decided a case that, on the surface, appears to be extraordinarily technical--so much so that it will be a challenge even to explain what it was about.  But I beg the reader's indulgence because it implicates issues that should be of general interest. Let's begin with some background: The plain language of the original Constitution permits citizens of one state to sue other states.  In 1793, the Supreme Court in Chisholm v. Georgia   ruled that that language means what it says.  Very shortly thereafter, the People adopted the Eleventh Amendment, which forbids federal courts from hearing such cases.  In an 1890 case called Hans v. Louisiana , the Court held that the Eleventh Amendment implies more than its literal text, and (5-4) decisions of the Rehnqhuist Court extended Hans so that the Court now enforces a general principle of state sovereign immunity, making states immune to private lawsuits for money damages.  There are a number

By Mike Dorf Erwin Chemerinsky and James Sample have an interesting Op-Ed in yesterday's NY Times.  They argue: 1) that the noble battle for appointed rather than elected state judges is a lost cause, because the public consistently rejects the idea--e.g., by a tidy margin in Arizona, even with retired Justice Sandra Day O'Connor vigorously campaigning for the change; 2) therefore, reformers should shift their efforts from seeking to replace elections with appointments and instead concentrate on mechanisms for reducing the baleful influence of cash on judicial elections; 3) to that end, state legislatures should enact campaign spending limits that even apply to so-called "independent expenditures," i.e., spending for ads and other efforts by private parties unaffiliated with the judges or their campaigns--including private parties who have or will have cases before the judges whose elections they bankroll; and 4) the Supreme Court should uphold such limits even tho

By Ori Herstein According to The Economist ( here ), in India approximately 600,000 Indian girls are never born every year due to abortions performed for reason of gender selection. According to The Economist, upon performing an ultrasound test, many parents preferring to have a male child choose to abort female pregnancies. Reflecting on this phenomenon potentially brings one’s feminist values into conflict. This apparently growing trend in India is problematic for several reasons. In addition to the fact that a gender imbalance in society will potentially have severe social implications for both younger and future generations, gender selection as a reason for abortion offends women as women. There is something wrong in these abortions that derives from the reason for undergoing them. And, there is a strong sense that – for feminist reasons – such abortions should be discouraged and even prohibited. In fact, India has done just that. Prohibiting abortion when undergone

-- Posted by Neil H. Buchanan The headline political event this past Wednesday was President Obama's speech at George Washington University, in which he outlined his new long-term budget proposal. I anticipate having much to say about the Obama plan in future posts (quick read: a pleasant surprise, in many ways). While the rest of the political world was waiting for the President to speak, however, the House Ways and Means Committee held a hearing on tax simplification for families and individuals. As I noted in yesterday's post , I testified at that hearing. Here, I want to discuss three rather big "wins" for the Democrats that came out of that hearing. The hearing featured three witnesses invited by the Republican majority, and one witness (me) invited by the Democratic minority. Because the committee itself has more Republicans than Democrats, and because the Republicans focused their questions on their own witnesses (while the Democrats split their time more

-- Posted by Neil H. Buchanan Yesterday morning, I testified before the House Ways and Means Committee at a hearing on "How the Tax Code’s Burdens on Individuals and Families Demonstrate the Need for Comprehensive Tax Reform ." I have copied below my prepared testimony. Tomorrow (and perhaps in follow-up posts next week), I will post some thoughts on the hearing. Chairman Camp and Ranking Member Levin, and Members of the Committee: Thank you for giving me the opportunity to address the Committee today. At the outset, at the risk of stating the obvious, I want to acknowledge that there are many areas of the Internal Revenue Code that could benefit from rationalization and simplification. In areas in which multiple provisions have accumulated over time, such as retirement savings and education incentives, the same incentives and benefits surely could be provided in a simpler fashion. That being said, I hope through my testimony to warn the Committee of some red h