A Simple Question for the Supreme Court

• Report this Comment On November 26, 2008, at 4:27 PM, Law2be wrote:

  There are a couple of not so obvious Constitutional issues I feel I should point out.

  The first is a long standing prohibition on the Supreme Court from commenting on issues not currently before the Court. It's referred to as a prohibition on advisory opinions. Basically the Court will not issue opinions until someone actually brings a case that comes before them. The reason for this is solid, but it takes a lot more space than I could offer in an article comment. So the silence is intentional, as hopefully the Justices will be called upon at some point to issue an opinion for real, and they cannot prejudge a case by opining now.

  The second is the Commerce Clause itself. This one is a bit more ephemeral, in that it has pretty much given Congress the power to legislate anything related to Interstate Commerce. There are very little boundries currently, but perhaps the current unprecedented avalanche of cash being buldozed towards specific companies to use as they like may bring about a lawsuit to test that boundry finaly. This will be difficult, as someone needs to be found that has "standing" to bring suit, and taxpayers cannot sue just because thier tax dollars are being given to executives to use for junkets, bonuses, or to purchase other companies. Perhaps a company that could have been saved by purchasing some of it's "toxic debt" but instead was siezed and given to a favored competitor could be found to have standing? Wamu comes to mind here.

  Now as for the wisdom of using this cash to bolster stronger companies, and abandoning the original intent of saving the stuggling ones that would preserve competition and consumer choice? That comment requires the learned opinions of financial minds such as our friends at The Motley Fool.

• Report this Comment On November 26, 2008, at 10:47 PM, TMFPhila wrote:

  Hi law2be,

  Thanks for your very insightful comments. It certainly would be unprecedented for the Supreme Court to issue an advisory opinion, but this is somewhat of an unprecedented issue on an unprecedented scale, where not only are trillions of taxpayer dollars being used with little rhyme or reason, but there's also been a major power shift to unelected officials to shape the economy and to decide which companies live and which ones fail. The fear I have is that even if a case with "standing" made it on the SC docket and the bailout was found to be unconstitutional after all, it would be too late for the Court to do anything about it.

  Robert Levy of The Cato Institute wrote a much more in-depth criticism of the constitutionality of the bailout, which can be found here: http://www.cato.org/pub_display.php?pub_id=9729

  Thanks again!

  Foolish best,

  Todd Wenning

• Report this Comment On November 27, 2008, at 1:08 AM, Law2be wrote:

  Hi Mr. Wenning,

  Thank you for your response. I found Mr. Levy's article to be well thought out, but I feel I cannot agree with all of his premises. I think I can agree with his conclusion that the bailout is unconstitutional however. I'll keep my comments regarding the article to the point that I feel makes his case all by itself.

  As I understand it (insert block of salt here,) the Congress has stated it is aware of it's duty to fix the glaring omission that seems to doom the bailout due to unconstitutionality: The failure to provide an intelligible principle for Secretary Paulson to use in establishing how to proceed. This, in my opinion, is the strongest argument against the constitutionality of the bailout.

  As Mr. Levy noted by quoting Justice Jackson, "The Constitution is not a suicide pact." In an attempt to douse the flames, the Legislature simply dropped back and punted. The intermin measures thus hastily authorized by the Legislature are unprecedented and probably unconstitutional because of this known defect. The current form however, is only intended to be in place until the bailout can be brought into compliance by the next Congress, via the establishment of intelligible principles to guide the Treasury Secretary in establishing it's implementation. Secretary Paulson's frequent change of course only exacerbates the problem, and reaffirms the stout principle of constitutional law that such delegation MUST be with proper guidance.

  I understand that many members of Congress knew they were going to be unemployed in a few months, and the feeling was "something needed to be done now, let the new guys tweak it later. It's not that long..." This thinking was dangerous, and sets a drastic precedent that should be soundly identified as improper, that it might never be used as an excuse in the future. The current form seems to be unconstitutional, but it may be allowed simply because a conservative leaning Supreme Court may find that there was a rational basis for the legislation, and it was intended only to remain unguided for a short time until the new legislature implemented the final rules to guide the Treasury Secretary. I hope that this blanket ratification does not come to pass, as the Court could instead allow the current law to continue, but make it very clear that any such attempt in the future would be patently unconstitutional and void.

  This brings us back to the original topic: Wishing the Supreme Court would speak up. Sadly, the Court has both Constitutional and prudential reasons for it's prohibition on advisory opinions. The Constitution only gives jurisdiction to the Supreme Court to hear "cases and controversies," and controversies are legally defined, not by the common understanding of the term. For the best articulation of the principle, read the concurring opinion of Supreme Court Justice Louis Brandeis in Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (1936). In that opinion, he laid out several reasons for the Court to avoid speaking until the issue was properly and squarely before the Court.

  Thank you for causing me to reflect on this issue. My first comment simply brought up a couple of Constitutional issues to consider in the context of your question. Now after considering Mr. Levy's article, I've expanded my opinion to come to the tentative conclusion that no, the bailout in it's current form is not constitutional. To what end result, that remains to be seen. The damage has begun, and will continue for two more very long months. What can be done in the meantime? Nothing short of an expedited case to bring it before the Supreme Court. Keep in mind the "Pentagon Papers" case from the early '70's was resolved in mere days, so it is possible to see a case progress in just a couple weeks.

  It may well be up to the Supreme Court to decide the issue sooner or later, but the gag against offering their opinion early remains firmly in place.

• Report this Comment On December 01, 2008, at 3:38 PM, gnomic wrote:

  I cannot buy the "no constitional authority" point of view. Congress has the authority to make laws, so inherently it has the right to make bad laws (and authority is has traditionally used for over 200 years).

  Now, one could argue (my 2 year old son for example) that his choices are being taken away by a previous generation and that he will have to pay for all this, a clear violation of the no taxation without representation principle. Of course, he will also benefit from investments made before he was born, so there is a counter-argument as well. I'm not sure its a winning argument to the Supreme Court, but I'd love to see someone try.

  Sadly, there is much precident for Congress interfering in the free market, passing laws giving preferential treatment, and taking money from taxpayers to give to others. There is a mechanism to hold them accountable - the vote. The Supreme Court isn't the right forum; the election box is. And we just had an election and the people have spoken - and they were well informed that this was likely to happen (unlike, for instance, when they voted for a compassionate conservitive and got a corrupt warmonger instead).

  The people have spoken. Now they will get what they wanted. God save us all.

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